17DUP19F1002
5.1.2 Discuss
the implication of issues and trends in the tourism and hospitality industry
IMPLICATIONS OF
ISSUES AND TRENDS IN THE TOURISM AND HOSPITALITY INDUSTRY
This article presents findings of issues
and trends that hospitality industry might fact in the year ahead respectively.
Top issues that will influence the global hospitality industry in the year
ahead include sustainable development calls for green hospitality, labor cost,
multicultural issues and higher education. Challenges that facing hospitality
include will include operating issues, marketing issues, technological issues
and economic issues.
INTRODUCTION
The world of tourism has undergone some
significant changes in recent years. It used to be dominated by tourists from
the western countries and visiting largely conventional destinations in Europe,
America and some other places in Asia (such as Malaysia) and the Caribbean
islands. However, since the rapid emergence of China after its opening to the
outside world in 1978, and the increased number of terrorist attacks that
followed after the landmark September 11 2001 incident, the tourism industry is
beginning to experience some noticeable shifts in recent years. These shifts
which are emerging trends are likely to continue in the future, especially if
terrorist attacks remain unchecked. This paper highlight trends and discusses
the issues and implications that will be faced by tourism promotion boards of
nations and companies that rely heavily on the tourist trade.
IMPLICATIONS OF
ISSUES IN THE TOURISM AND HOSPITALITY INDUSTRY
1.1 Sustainable Development Calls for Green
Hospitality
Going
green is a white-hot issue in the hospitality-design industry. People are
beginning to look at sustainable solutions in a whole new way. The perception
of green has changed; it has gone from a fringe movement to mainstream. As a
sign of its sweeping popularity, one of the best attended sessions at the
recent Lodging Conference in Phoenix was: “Going Green: Environmentally
Profitable Hotels.” Some of the pioneers of the green hospitality movement,
there were to share their challenges and triumphs in working toward a carbon
constrained future. The basis of sustainable hospitality operation is a
three-part balance, expressed as “profits, people, and planet.” By taking those
three elements into account, thus, a sustainable green hospitality development
program becomes economically viable, as well as beneficial to the community and
environment.
1.2
Labor Cost Issues
In
2005, labor expenses remained the largest single expense item for hospitality
managers, accounting for 44.6 percent of total operating costs. Consequently,
any trend or issue that could potentially impact labor costs must be taken
seriously by hospitality owners and managers alike. Due to the magnitude of the
expense, labor costs and issues have always consumed a substantial portion of
the time and efforts of hospitality managers. Now, with news of union contact
negotiations, changes to immigration laws, and proposed legislation to increase
the minimum wage, hospitality managers are on edge. The cost of labor is the
biggest expense in all categories of hotels. Even with the advent of
select-service properties, hospitality developers cannot avoid the human
component of hospitality operations. While managing labor expenses is
important, hospitality managers are also aware that employees are an integral
part of the lodging experience. The interaction between hospitality guests and
employees has a dramatic impact on the customer experience and the success of
the business operation. Therefore, a fine balance must be drawn between cost
controls and guest satisfaction.
1.3 Multicultural Issues
The
newest trends and topics surrounding hospitality research and development is
the management of multicultural talent and the political landscape affecting
the hospitality industry. Franchise is becoming the biggest industry in the
world, the success of franchise lie in the understanding of ownership, internal
and external customer- and workforce-related - and top legislative matters,
insights of marketing and promoting. With the development of globalization,
multicultural issues are facing and disturbing the industry operators. Bringing
the far corners of the world together is part and parcel of what the
hospitality sector does. Blending amenities to cater for the needs of the
world’s different cultures is central to success for large, international
hospitality chains. Cultural issues have never before been such a crucial
determinant of how a large hospitality should operate. In some Asian cultures,
for example, eye contact is not sought, as it can make guests feel
uncomfortable, while in Western tradition it is equated with openness and
honesty. This could be important in defining how staff addresses themselves to
certain Asian guests.
1.4
Higher Education
Tremendous
changes are taking place in hospitality industry which poses several challenges
for transformation of the whole educational process including educational
curricula, learning materials, instructional practices and education
stakeholders. Education systems and institutions must take the challenges of
the knowledge economy seriously. This would, however, include restructuring the
learning process to reflect the use of information in the real world, changing
the role of the educator from presenter of pre-packaged facts to facilitator of
active learning and transforming the library specialist to an active
collaborator in curriculum planning for effective use and availability of
information resources. Indeed, educators need to realize that teaching is not
telling, that learning is not absorbing and that knowledge is not static and,
in turn, reflect these to their instruction mechanisms and student appraisal
systems. The new educational providers have risen in order to fill the
undeniable demand for open, flexible, distance and life-long learning and
include for-profit universities; corporate universities (e.g. the Accor University,
the Kellogg University, McDonalds Hamburger University); virtual universities
(such as Universities 21, a collaboration project of Thomson Learning and
Universities 21, Singapore and University in the UK); and multinational
organizations such as Microsoft, whose primary business is not education but
who control facilities central to it.
1.5
Global Uncertainty
While
the global hospitality industry continues to recover following the effects of
the terrorist attacks of September 11, 2001, SARS, the war on terrorism in
Afghanistan, and the war in Iraq, global uncertainty remains a major concern.
Terror attacks are the most direct example of global uncertainty; however,
there are other areas of concern such as geopolitical relations, CBS E-Journal,
Biz n Bytes, Vol. 6, Dec., 2010 ISSN 0976 – 0458 governmental travel
restrictions and currency exchange rates. The industry needs to take a
proactive approach in addressing these issues and their potential impact.
1.6
Human Resources
Human
resources are an area that is growing in importance. As the industry continues
to recover, it needs to focus on its employees and their roles as service
providers. Increasing demand requires increased staffing levels at a time when
the labour pool is shrinking. To address this issue, the industry must attempt
to work with the unions as allies, devote more time and money to recruitment
and training and educate politicians as to the impact of governmental economic
and immigration policy on the industry.
1.7
Technology
The
hospitality industry must do a better job of managing technology and addressing
the challenges posed by new and changing technology. Specifically, the industry
must align technology investment with business objectives, address aging and
inadequate infrastructure (at both the corporate and the property levels); and
learn to better utilize technology in marketing to guests, training employees,
yield management, and meeting customer requirements.
1.8
Customer Issues
Customer
issues present a challenge to the industry in several ways: Increasing loss of
control over the customer - use of the Internet, homogenization of the hotel
product and increased corporate oversight has reduced the amount of control
that operators have over the customer. CBS E-Journal, Biz n Bytes, Vol. 6,
Dec., 2010 ISSN 0976 – 0458 Changes in the customer - hotel customers are
changing due to demographics (the aging of the baby boomer generation) and due
to lower transportation costs that promote travel. Changes in customer
expectations - these are changing as consumers become more sophisticated and
better educated.
IMPLICATIONS OF
TRENDS IN THE TOURISM AND HOSPITALITY INDUSTRY
1.1 Advances in Information Technology
Advances
in information technology over the last 20 years have also brought great transformation
and benefits to the tourism industry. Websites such as Agoda.com, Airbnb.com,
Booking.com, ebookers.com, expedia.com, Hotel.com, Lastminute.com, and
Trivago.com are just some examples of platforms that are easily accessible to
customers around the world. With a mushrooming of countless websites for the
booking of holidays, ranging from air ticketing, cruise holiday bookings, car
hires, hotel accommodation, guided tour packages, and many other offerings, new
challenges have emerge. First, direct marketing by the various tour service
providers are now possible, and the role of agents may diminish over time.
Consumers can now book on-line directly with the respective tour service
providers. Website operators and tourist service providers will have to be on
their toes in order to ensure that their offerings are not only up to speed,
but competitive too.
Second,
in order to counter the increased competition, websites operators and tour
service providers will have to find ways and means to differentiate themselves
in order to make them appealing to the consumers. At the moment, price is
commonly used as the main differentiating factor. Moving forward, these sites
may have to include other differentiators and benefits, such as loyalty
programs and other kinds of attractions in order to attract consumers to their
sites.
Third,
and this is contrary to differentiation, website operators and tour service
providers may have to collaborate or even integrate with other tour-related
operators so as to widen their range of services. In the ultimate, it is to
have a one-stop portal that can cater to all kinds of travel needs, both in
packaged and individually customized formats. In sum, the quest for
differentiation and integration may have to be pursued simultaneously in order
to enhance the competitiveness of the industry players in the tourism business.
Finally, the role of social media cannot be ignored. As consumers travel more,
and to more places, they have become critics in their own rights. No longer do they
have to rely on the recommendations of tour operators or tour advisors like
Trip Advisor. Rather, online recommendations by past visitors can become
increasingly powerful in influencing how potential tourists would make their
decisions.
1.2 Enhanced Transportation
Transport
development and better transport links have been a very noticeable development
in Asia as well as in other developing countries. To begin with, more budget
airlines have been set up in Asia. Air travel is now much better. As these
budget airlines fly to secondary and smaller airports, they help to accelerate
developments in the surrounding areas. In addition, they have made
accessibility to newly develop tourist sites more accessible too.
Second,
integrative and complementary transport modes have improved tremendously. An
excellent example is that of China. The massive development of highways, high
speed rail (HSR) and related railway networks, and airports have greatly
facilitated transportation within China that has spurred the growth of both
inbound and outbound tourism. More importantly, they have become more
integrated as well.
Many
other countries in Asia are also enhancing their transportation development.
For example, Singapore and Malaysia are planning to develop a high speed rail
that connects the island nation to Kuala Lumpur, the capital of Malaysia)
within the next 10 years or so. China’s One Belt and One Road initiative will
certainly not only boost trade, but tourism as well.
Finally,
it is important to point out that the emergence of budget airlines, highways,
and high speed rail tend to favor domestic and regional travel more than
international travel. Effectively, they will serve to promote more domestic and
regional tourism. As much of these developments are happening in Asia, it would
not be surprising to find that intra-Asian tourism is likely to grow much
faster than outboard tourism to the rest of the world.
1.3 Rapid Growth in Vacation Ownership
Vacation
ownership is the fastest growing segment of the lodging industry and is likely
to continue growing as the baby boomers enter their fifties and sixties in the
USA. The World Tourism Organization has called timeshares one of the fastest
growing sectors of the travel and tourism industry. Hospitality companies are adding
brand power to the concept with corporations like Marriott Vacation Club
International, the Walt Disney Company, Hilton Hotels, Hyatt Hotels, Promus’
Embassy Suites, Inter-Continental and ever Four Seasons participating in an
industry that has grown rapidly in recent years. Resort Condominiums
International (RCI), the largest vacation ownership exchange (that allows
members to exchange vacations with other locations), has more than 2.8 million
member families living in 200 countries. Three thousand seven-hundred
participating resorts and members can exchange vacation intervals for vacations
at any participating resort. North America remains the global leader with
nearly half of all the participating resorts and more than 2 million owners.
Europe is second with approximately 22 percent of owners worldwide and more
than 1,000 resorts. Timeshare resorts are found around the globe in popular
vacation areas near beaches, rivers, lakes, and mountains, and even in major
cities.
1.4 Integration & Globalization
Vertical
integration is a trend that began a few years ago. Lodging companies realized
that guests’ accommodation needs were not just at one level; rather, they
seemed to vary by price and facilities/amenities. Almost all major lodging
companies now have properties in each segment of the market. The future of the
lodging industry involves globalization. Companies cannot grow unless they
venture beyond the United States. American hospitality chains and their
management techniques were in demand by many developing countries who wanted
premium-name hotel. An extensive survey of the condition of the hospitality
would have shown that substantial amounts of money would be necessary to
maintain the hospitality’s condition. The hospitality industry is thus at the very
core of the globalization of international business. Hospitality companies
therefore need to consider the implications of the global context in which they
operate and must be prepared to address the questions that arise from this
changing environment. Globalization will ultimately touch virtually all aspects
of the hospitality industry. Increasingly, customers, management processes,
employees, products, and sources of capital will be competed for and will move
across national boundaries. Competition in the future will come from global
entities with the advantages that globalization brings.
1.5 New Management
The
complex forces of capacity control, safety and security, capital movement, and
technology issues WANG Jin-zhao & WANG Jing/Management Science and
Engineering Vol.3 No.4 2009 53-58 58 will require a future management cadre
that is able to adapt to rapid-paced change across all the traditional
functions of management. The growing complexity of the customer/employee
interaction, driven by technology and the information age, will shape human
resources needs in the future. The customer, armed with more information, will
expect frontline and other hospitality staff to be at least as knowledgeable
about the firm’s offerings as they are themselves. This will be difficult in an
industry characterized by low-skilled, low-paid personnel and a high degree of
cultural and behavioral diversity among its employees.
CONCLUSION
If government takes significant steps in
this direction like improve accessibility, promotional measures, low taxes, and
others, then the conditions will significantly improve and this will lead to
the increase in number of tourists which in turn increase the number of hotels
and also improve the quality of services provided by the hotels.
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