Critical Evaluation Of Contemporary Issues In Hospitality Management Tourism Essay

Hospitality is a dynamic industry that is ever changing as a result of several external factors. The industry has become more competitive than ever before. Some companies often fail while others are very successful. Tanke (2001) argues that successful firms acquire, manage, and develop resources that provide competitive advantage. They also control and build up relationships with a large number of organizations, various stakeholders, and groups. Globalization has intensified the competitiveness and for firms to remain competitive they have to expand their relationship networks and collaborate with each other to remain competitive. Many firms are starting to monitor and manage key indicators to cut on cost and save money.

According to Ottenbacher and Gnoth (2005) There are several contemporary issues in the hospitality industry which include, human resource management, strategic management, use of ICT and gastronomy and tourism. Much of changes in issues have been brought about by globalization. For example in the case of human resource, globalization has brought diversity in the human resources. Information communication technology has advanced much in development. The high number of people travelling to foreign lands has brought changes in the gastronomy and tourism. Hospitality businesses must therefore manage all these issues to succeed in their operations.

Tanke, (2001) argues that hospitality businesses will need to focus more on brand, human resource, emerging markets and information communication technology. These are the primary determinants of the winners and losers in years to come. Strategic management is thus important in determining the success of these firms. Strategic management has been hailed to provide higher levels of satisfaction than other management tools.

Literature Review

HRM Issues In the Hotel Industry Globally

The importance of valuable human resource management to business success in any use of human resources can give an organization a competitive advantage. The importance of human resources is particularly significant in hospitality industry. Duncan (2005) suggested that there are several main areas of challenge and worry in the global hospitality industry, relating to employment issues, taxation levels and environmental issues.

Employee turnover

According to Hinkin and Tracey (2000) employee turnover has become one of the challenges in the hospitality industry. The industry globally suffers from high level of staff turnover, which result to intangible costs and high direct expenditure. Riegel (2002) argues that turnover is a result of several factors such as job dissatisfaction, poor working environment, poor supervision and lack of commitment that influence employee attitude and behavior.

Iverson and Deery (1997) carried out a research on the labor requirements of the hospitality industry and established that the high turnover rate is one the most difficult issues in human resource management in that context. They reported that the turnover problem in large hotels was much worse than in small hotels. Many hotels are planning to increase the number of people employed simply to cover the turnover situation.

Hoque (1999) contends that service quality focuses on the nature of the interaction between the individual employee and the customer at the point of service, in terms of politeness and overall professionalism. Hoque also argues that service quality is the main factor in creating competitive advantage in the hotel industry, and that any hotel that does not make an effort to improve continually its service quality will lose ground. Competitive advantage generated from internal sources includes such characteristics as value rareness, exceptionality, and non-substitutability (Iverson, & Deery 1997), and the employee at the end of the service delivery system may well be the only differentiated and unique asset of a hotel organization that cannot be easily copied.

Hinkin and Tracey (2000) have also recommended that there are in fact only two ways to compete in and differentiate between hospitality services. One is by competing on price and minimizing costs, which locks a hotel into a particular market segment. The other is to compete by providing exceptional service. They note that customer care is not a new concept in the service industry, but it is still a complex thing to control and sustain.

In the face of the high level of turnover in the hotel industry, it is possible that some customers are served by employees who are fairly untrained, less committed, and less capable in their social skills. But dealing with this requires the use of quite organized approaches to service quality management. Huang (2001) suggested that if an organization’s first and foremost objective is to provide a service, a holistic approach to service quality management must be developed and employed, insightful at all levels of the organization from the chief executive to the entry level employees.

Training and development

Garavan (1997) argues that training and development of employees is linked to service quality because its activities can be used to strengthen attitudes and behaviors that lead to effective service. Several researchers have suggested that developing a service culture during training and development and knowledge building are good practices. Employees training and development of skills help firms to enhance quality of service, increase productivity, and reduce costs. Elsewhere, Davies, Taylor and Savery (2001) investigated certain human resource management functions in improving employees relations in western Australian accommodation industry and found out that sustained training and development led to an important improvement in productivity, with a reduced turnover of employees. Huang (2001) argued that in Taiwan training and development was the main significant driver for economic development.

Staff recruitment and selection

Alleyne, Doherty and Greenidge (2006) contend the due to the nature of the hospitality industry; labor demand is much unpredictable and subject to seasonal variation. As a result the hospitality industry has had negative image among prospective employees. Elsewhere Debrah and Budhwar (2004) argue that changes in the macro environment for example ageing workforce, lower birth rates have also contributed to employees’ shortage heightening the imbalance between the employee demand and supply. This has made employee resourcing a great problem and highlights that effective management of demand and supply of best employee is a great problem in the hospitality industry (Tanke, 2001).

Global competitiveness in the hospitality industry

Successful hospitality firms eventually find that their domestic markets are either saturated or that foreign markets offer opportunities for growth and profits which are not available domestically. Several forces are leading businesses into the global arena. These include trade barriers falling especially in Europe and North America, newly industrialized countries, shift towards market economies, availability of financial capital; standards are becoming uniform globally and advancement in information technology (Tanke, 2001).

Organizations that want to remain competitive must therefore acquire state of the art resources at a lower price, for example they may consider expanding to emerging nations where labor is cheap.

The strategic management repercussions of increasing globalization are extreme. Managers cannot afford to overlook opportunities in foreign markets. Nonetheless, business methods and customs vary from country to country. These disparities make stakeholder analysis and management even more important. Analysis of wide environmental forces such as society, technology, and political influences ought to also be extended to the different regions in which an organization carries out business. People also vary greatly from region to region. The challenge of an ever increasing competitive global marketplace can be tackled through a well-devised strategic management process. Nevertheless, tactical planning must not always lead to the kinds of changes that are essential to stay aggressive over the long term.

Technology

Although there has been an increasing awareness of the value of state of the art integrated systems many hospitality firms still do not take advantage of them. There inadequate understanding of how much competence could be improved via use of these systems. Tanke, (2001) argues that hospitality administration systems have over the years developed into complex, well incorporated tools which help firms to make more revenue, attract more guests, and improve effectiveness.

Nevertheless, some business still hang on systems that have are much ahead of their competitive useful life. This limits them from having the benefits that are brought about by these systems. Though several firms are scared of upgrading their systems because they fear that their employees will not be in a position to handle these systems, there is need for training the employees how to use these systems (Tanke, 2001).

Alleyne, Doherty and Greenidge (2006) contend that as systems become more inclusive their support and security management become necessary and complex. However it must be noted that it is almost impossible for organizations to have their own technical support staff skilled in all the system they use. Guest report has become an aim for thieves and attacks on computers are becoming more complex. These trends call for a shift towards more professional system management; this may be a corporate team or an agreement party. Elsewhere Debrah and Budhwar (2004) argue that innermost revenue management teams, for example, can provide specialist help to numerous properties in a regionally unified way. Centrally-hosted systems permit highly-skilled technicians to offer a far more protected and managed systems environment than would be accessible to an individual firm. This trend is expected to prolong as understanding grows of the value of maintaining systems operating at peak proficiency, and of the possible harm from security violations.

Methodology

According to Hoque, (1999) two essential questions were put to a sample of hotels: What are the key human resource management issues and concerns in the hospitality industry of Taiwan? And what are the main human resource management roles and practices used to engage with them? Rather than default to a single issue approach to the interviewees, the interviewer tried to examine human resource management in the hospitality industry in an entirely open-ended way. The respondents were free to raise any human resource management issues, concerns, functions and practices that they thought to be significant. This method allowed the researcher to notice what came up in order of priority for the respondents, or what failed to come up at all (Hoque, 1999)

The method used was qualitative and the main technique was in-depth interviews. Leading questions were avoided by the researcher on order to gain a deeper understanding of some phenomena as experienced by a group of people (Creswell, 2003). It was not possible to examine all the hotels in Taiwan because of financial and time constraints. The researcher selected the chain hotels which he expected to have formalized human resource management practices than smaller hotels. The researcher further segmented the hotels according to number of rooms, geographic location, and brand.

The researcher interviewed senior managers but in some cases some hotels that were approached refused to be interviewed arguing that they would consider questionnaires because of their tight schedules. Although there are few definitive rules for sample size in qualitative enquiry (Patton, 2002), it has been suggested that 12-20 examples are needed when trying to obtain the broadest range of information and perspectives on the subject of study (Kuzel, 1992). At the time this research was conducted, there were 46 chain hotel properties in Taiwan and the sample selected totaled 14 hotels, which represents 30.43%of the total population of such hotels.

Analysis

The findings were presented together because some issues were common to all the respondents and had cause and effect relationship. Fourteen participating hotels identified several main issues namely shortage of employees 100% of the respondents, 64% of the respondents talked of challenges in approach to training and development. While 50% of the respondents emphasized on the high level of employee turnover.

Shortage of employees

Participants pointed out that the overall education level in Taiwan has risen in the last decade. This has caused a problem to the hospitality firms in recruiting entry level employees. The increased growth of the hospitality industry has made the shortage even worse. Respondents however, believe that at middle level the case is different there is o shortage at this level. However those who hold these positions are not qualified but only fill these positions because a vacancy has to be filled.

Shortcoming in Approaches to training and development

Most of the employees have no hospitality background this calls for a sophisticated training and development approaches. Nevertheless, some hoteliers believe that that is not a major problem because they believe that skills can be gained on job training.

High level of employee turnover

Participants pointed out that this was unavoidable because of the nature of the hospitality industry. In certain cases the turnover might be positive to the industry as it may remove de-motivated staff. Respondents also pointed out that older employees led to lack of innovation, infusion of fresh ideas and creation in the firm.

Discussion

From the in depth interviews it can be argued that challenges in training and development, inadequate employees and problems in internship employment can be attributed to customer service quality discussed in the literature. Kuzel, (1992) argues that employing interns is a solution to the shortages in the hospitality sector. Interns provide stable employment especially at the entry level. Some hotels just view interns as supportive force as opposed to long term investments. It is recommended that hospitality managers should create a sense of belonging to the interns so that they could come back and work in these establishments.

Most participants in this study appeared to accept Hoque’s (1999) view that the high level of turnover is a fact of life and a regular and acceptable phenomenon in the hospitality industry (Iverson & Deery, 1997). In the fact, turnover still can be improved by better management, as long as human resource managers can see it as an opportunity, not just an unavoidable problem.

Some researchers have recommended that specific human resource management practices can improve employee satisfaction which in turns minimizes the turnover rate. Empowerment is one of the efficient approaches suggested by many researchers (Enz & Siguaw, 2000a, 2000b; Lashley, 1999). They recommended that it is significant to give power to the employees who provide services by focusing on customers’ needs. Service encounters are the key activity in a customer service business and employees may encounter a lot of diverse unique situations which cannot be covered by the organizational policies and actions (Iverson & Deery 1997). If organizations are able to give power to their employees, then they are able to exercise prudence in delivering customer service and do whatever is required to satisfy customers’ needs (Enz & Siguaw, 2000a; Lashley, 1999). It has been disputed that empowered employees also have a propensity to have a strong sense of control and personal worth because they can take liability for the service encounter and have the power to effect customer satisfaction (Lashley, 1999). At another level, it has been recommended that empowered employees are motivated by doing meaningful work that eventually enhances their job satisfaction and reduces the turnover rate s

According to Lashley, (1999) as a result of global economic changes there has been increased competition and uncertainty, the firms have to be flexible in employee resourcing and responding to customers. The human resource managers must use methods that give them flexibility to employ employees to respond to variations. This type of employment helps the organization to cut on direct labor cost and also provide flexibility for employees and employers.

One of the possible negative characteristic is that dispatching workers have a limited relationship with hotels in which they will work ensuing in low trust and low commitment. These might, in turn, lead to disagreement between direct-hire and dispatching workers, and between management and employees (Kalleberg, 2000). Another likelihood is that it is more expensive to manage the outsourcing activity than initially expected, so that the goal of cost saving is not achieved (Albertson, 2000).

The tendency towards flexible working has become inevitable in such a fluctuating environment (Purcell & Purcell, 1998), and dispatching is one of the arrangements which are prone to be a permanent dynamic of the hotel industry in the future. While becoming more popular in Taiwan, but there is no rule of the process at the time of writing. It has been argued that it is essential to regulate dispatching employment, because of the complex triangular employment relationship between dispatching company, dispatched worker, and the firm to which they have been dispatched (Kalleberg, 2000; Purcell & Purcell, 1998).

Conclusion

This study set out to find out the contemporary issues in the hospitality industry. Due to its nature the hospitality industry and globalization effect the industry has several contemporary issues. These contemporary issues have a direct impact on the hospitality industry and for that reason they must be strategically managed for these businesses to succeed. This study however lays emphasis on the contemporary issues in human resource management.

The findings of this study suggest that many of the participating hotels’ thinking and mindset are at the operational level, rather than the strategic level. Even though a good number were able to identify particular human resource management issues as vital, it seems that many do not have strategic approaches to deal with these challenges. Equally, although most perceived specific human resource management functions and practices as being very important, some of these are not utilized in a complicated way. Some of those interviewed had novel thoughts and creative ideas but had a limited voice or participation in decision-making. It seems that their role is seen as being to go behind the policy that has been already set by top management, rather than being an active voice or head in the organization’s thinking.

It was very strange for respondents in this study to have a seat at board level or to play a key role in creating and supporting competitive advantages for the business. The interviewer concluded that human resource management is not usually seen as a source of competitive advantage, and many look forward to maintain competitiveness mainly through new facilities and amenities. Nonetheless, Ottenbacher and Gnoth (2005) have argued that the efficiency of a hotel’s approach to human resource management is just as significant as a source of sustainable advantage.

This study has stressed that the highly competitive nature of the industry affects both customers and staff. In particular, talented people are much preferred in a labor-intensive customer service industry. This research has expectantly provided some practical and strategic suggestions for hoteliers to cross the gap between the operational level and the strategic level of thinking and practice. Nevertheless, it is concluded that hotel owners need to be aware that human resource management must be managed well in order to keep up with changes in the global environment. The human resource management function is no longer one of traditional personnel administration; instead, it must be strategic and proactive in dealing with complicated human resource management issues.