Introduction
The development and management of hotels/resorts is an important business practice that is carried out as a requirement for the sustainability and the realisation of profits. It involves a balance of several resources in the business and investment on the creation or acquirement of others.
The hotel industry offers unique challenges to managers as they try to maintain a balance that does not compromise on their effectiveness and their performance.
Unfortunately, the management of the hotel/resort business for maintaining current profitability and the development of the organisation requires a lot of dedication and risky decision-making (Santiago & Pitta, 2011). This paper presents the various issues that affect the development and management in the industry.
Challenges Facing Development and Management in the Hotel Industry
According to Zhang and Wu (2004), human resources challenges facing the hotel and catering industry in China include the lack of an adequate supply of qualified staff. The insufficiency is found in both managerial and operational levels of enterprises in the industry. This challenge arises mainly out of the difficulty that training institutions have on recruiting students into the hospitality field.
In addition, new graduates from most Chinese higher learning institutions lack practical skills as required by the industry. Given this fact, hotels have resolved to promote their staffs to fill vacant managerial positions to tap on their experience.
The underlying problem facing the shortage of qualified staff in China lies in the low remuneration for hotel and catering staffs, which makes a career in the industry to be viewed as a stepping stone to better promotions. Hence, majority of line staff have a negative attitude toward their jobs and show very little commitment on further learning (Nolan, 2002).
Enz (2009) conducted a survey that human resource is the most pressing challenge for the hotel industry. The author notes that different aspects of human resource are prominent in different regions of the globe. Furthermore, issues of human resource attraction have remained as topmost challenge of hotel industry for the last eighty years.
The main challenge lies in the attraction and the retaining of talented personnel into the industry. Despite the raising of concern of retaining people over the long term, executives still have to weigh their options in relation to competing interests in the management of their enterprises.
In addition, top-level candidates are increasingly being attracted to other industries and top executives have to deal with the competing pressures. Executives are mostly concerned with the staffing of the hotel thus they look at the shortage of human resource while general managers are concerned about the quality of service and therefore notice more the inadequate supply of relevant skills.
As a result, there is an operational challenge of balancing skilled and inexperienced staff. The author notes that worldwide, labour is the major concern for HR managers in Africa, career opportunities for those in North America while South Americans managers were concerned with the employee skills.
Remuneration was the least of concerns for African managers but was salient among the human resource issues for North America and Asia.
Kusluvan et al. (2010) have pointed out several issues affecting the human dimension of human resource in the hotel industry. They identify that there exists a contradiction of theories, research and actual explanation by managers. They attribute the differences to the pool of low skilled, easily replaceable employees because of a huge labour pool.
The authors have recommended several measures to manage human resource challenges. Once selected, employees need to be given a proper orientation and further training of the practices in the industry such as organizational values and culture. Secondly, the industry should offer competitive and fair pay benefits. They attribute the high employee turnover to the meagre compensation that is demoralizing.
Thirdly, hotels need to adopt a more friendly and humane supervision and management style. Fourthly, in hiring and job placement, the job characteristic and design should be deliberated. Jobs have to match the characteristics of individuals and rotation reduces the chances of boredom caused by redundancy. Fifth, management needs to involve and empower employees through participatory decision-making approaches.
This increases employee satisfaction and decreases their turnover. Sixth, there should be recognition, respect and rewarding of employees. Given the service nature of the hotel and tourism industry, lack of or an inadequate accolade is explicitly noted by employees and contributes to the reference of the job in the industry as low privileged.
All factors that lead to the damage of employee self-esteem especially by unprofessional supervisors need to be corrected. Seventh, Stress related to job and work role needs to be addressed because it is a salient condition – affecting employee job satisfaction, therefore, hiring and promotion should be rational.
Eighth, employee accommodation needs to be improved where necessary to provide employees with the right conception of their jobs. Lastly, companies need to create a culture that is conducive for overall organization performance (Chalkiti & Marianna, 2010).
Chand (2010) investigated, empirically, the relationship human resource management practices possess as an antecedent to the service quality. The study confirmed that HRM plays a vital role in ensuring that quality service is delivered and customers are satisfied thus resulting to a higher performance of the Indian hotel industry.
The study is important because it underlines the paradigm that strong relational ties are beneficial to the hotel industry performance. HRM practices that contribute to guest satisfaction increase the overall effectiveness of hotels and improve their performance. They author also notes that the performance of hotels has a salient effect on the performance of the economy.
These findings are significant for the hotel industry as it encounters competitive pressures. The industry is very fragmented and enjoys a high growth market with various challenges that are a threat to its survival. These include consolidations, mergers and acquisitions, franchises and international collaborations.
Therefore, hotel managers need to expand their focus from operational capacities of the hotel to include learning within and between departments as well as the improvement of relationships among employees.
This study might have been limited by its focus of Indian hotels, which may not be reflective of the overall global hotel and resort industry. However, India is part of the global economy therefore the issues affecting its hotel industry also contribute to the issues challenging the global industry.
Robinson, Arcodia and Tian (2010) offer their research findings to contribute to the literature on cookery labour market in the developed world. The study indicates that there is a significant imbalance in the supply of cookery staff and the industry demand, with the statistics favouring the later.
The study notes that the issue of legality and residence of workers serves as criteria in the selection of applicants for advertised cookery jobs in Queensland. The study contributes to other literature findings that the tourism industry considers the employment of seasonal mobile workers as a cost reduction measure.
However, this finding is not fully supported because the authors also note that 71 per cent of the advertised cookery jobs in Australia were categorised as permanent. In Australia as the study points out, advertisements for cookery jobs are still handled mainly by the relevant businesses and only a minority of the task is handled by recruitment agencies.
Copying Strategies in Use and Recommendations for Managers
From the study by Lin et al. (2011) it is evident that the hotel industry employs a variety of human resource strategies to cope with the diversity of the labour force and challenges in the industry. Tourism setbacks, peak and off-peak seasons and the number of tourists visiting the locations in question affect international tourist hotels (ITH) demand.
The hotel industry is labour intensive and therefore a huge proportion of costs are attributed to human resource. In order to survive during recessive periods of the economy, hotels reduce their permanent staff and as a result tend to overwork them by allocating them more responsibilities. It is important, in relation to this realization; hotels design their jobs to have cross-department and on-job training for its permanent employees.
This is likely to cultivate skills and employability of the employees within different departments and thus reduce cost associated with huge employee turnover. On the other hand, training institutions need to increase their range of practice skills taught to students so that they increase their employability. The food and beverage industry is very volatile and thus labour demand prediction is challenging.
That explains why many employees are hired on part-time or seasonal basis. Unfortunately, this becomes a major source of the unprofessionalism of the industry as the part-time employees have a difficult time in integrating into the organization. The difficulty in cultivating middle to higher-level employees requires that hotel operators plan in advance.
Although this study offers key insights, its limitation lies in the fact that it relied on secondary data and that it has only one variable under study, total number of employees. Moreover, the study only looked at International Tourists hotels and Standard Tourist Hotels leaving out other types that may have contributed significantly to the literature studied.
However, it is important to note that hotels exist of different types, having diverse demand for human resource because of their diversity in operation. For example, high-end hotels concentrate more on the completeness of their services and demand more human resource to provide other services like butler.
Nanakervis and Debrah (1995) explored the contemporary management practices of a sample of hotels in Singapore and Australia to identify and analyse main issues. They attributed their issues to the diverse nationality, cultural and labour market environments. The authors divided their results into hotel type, personnel management practices and feedback of guests and lastly the nature of hotel employees.
Under hotel type, the authors categorized their sample hotel according to their sizes, ownership nature and their guest markets. On the nature of employees, the authors categorised the hotels based on the experience, origin and union membership.
In their findings, the authors note that most hotels in their study would rather employ local however, they are forced to recruit from abroad because of a shortage or a lack of specialized personnel.
They note that in hotels, due to the shortage of low-level staff, hotels are recruiting employees with prior experience or those that display a wide array of skills. While addressing the issue of personnel and human resource management practices, the authors note that this category includes HRM issues like the use of mission statements, specialists, policies and procedures.
They note that hotels in Singapore employ more specialists to make their mission statements part of the organisational culture compared to their Australian counterparts. With less specialists hired for hotels in Australia, the efficacy of the hotel has been jeopardised as more responsibilities are assigned to line managers who have inadequate authority and accountability.
The authors conclude that employment of skilled human resource managers is important in the delivery of success for hotel as evidenced in the Singapore hotels compared to their Australian counterparts. On the other hand, hiring of competent managers needs to be matched by adequate remuneration of all employees to ensure that there is a good working relationship and no income disparities.
Yang and Cherry (2008) note that customers are expecting more service quality from hotels and on the other hand, it is becoming difficult to recruit and retain well qualified personnel into the hospitality industry. As the supply becomes scarcer, the recruitment process is becoming more challenging.
Hotels in Taiwan resolve to internship employment to cushion against the supply shortages of suitable labour; however, the practice is only a stopgap measure that does not contribute to the long-term benefits salient to the organisation. Intern and employer relationship lasts for a short-term and affects the consistency of the organisational culture.
The short internship period provides a limited opportunity for employers to instil value and commitment in their interns. The study suggests that the hoteliers should engage the interns more as they graduate and consider rehiring the same interns during successive high seasons for the hospitality industry so that they reduce labour turnover and increase their employee performance.
It is important to note that competiveness in the industry does not only come from customers but also from employees. This study is important because it gives hoteliers practical and strategic advice to seal the gap between operational level and strategic level practices.
In another study, Hoque (1999) has identified the relationship of HRM practices and the performance of hotels in the UK. The author noted that the success of HRM depends on the business strategy of the hotel management. When the strategy emphasizes on cost control, then HRM appears to be ineffective. The study also demonstrates that HRM is relevant in all aspects of the hotel industry.
The author notes that hotels having an ethos of service and incorporating a variety of HRM practices are showing the best performance results in the UK hotel industry. Therefore, business strategies that aim to enhance HRM are significant to the competitive success of hotels but there is no similar success rate for strategies focused on cost reduction and price competition.
It appears that quality is important in the sustainability of hotel success in UK and that extends to the hotel industry globally. Additionally, further gains arise where HRM practices are presented as packages supported by the institution and therefore are incorporated in all aspects of the institution’s operations.
On the contrary, when HRM practices are carried out as piecemeal inputs and have a poor coordination with other operations of the institution, then gains of HRM are considerably low. This study might have been limited by its focus on large hotels in UK and therefore is may not reflect on the realities of smaller hotels. Nonetheless, it is significant in understanding the overall issues affecting hotel industry performance.
Sananuamengthaisong and Ussahawanitchakit (2010) conducted a study to evaluate the background and results of strategic HRM capabilities that lead to organizational effectiveness through top management support and organizational climate. The authors conclude that human resource development excellence has a greater contribution to the level of employee commitment to their work.
As employees become committed, they show an increased sense of enthusiasm for their work and seem to be more loyal and the overall result is an improvement of the organisation’s effectiveness. When organisation’s top management recognize the importance of human capital, they replicate the efforts of employees by increasing their development incentives and this increases the human resource development excellence.
Therefore, there is a correlation of the strength of the top organizational management support for human resource and the improvement of the organizational awareness of human capital, its performance and efficiency of its appraisal. The study concludes that there is a significant positive correlation of the performance appraisal efficiency and the working enthusiasm and high levels of employee commitment.
As organisations in the hotel industry become more aware of human capital as an important input for their success, they create a positive influence of the human resource and increase the organisation’s management capabilities.
Willie, Jayawardena and Laver (2008) studied the Niagara region that denotes the fourth largest Canadian hotel market. The authors identify the approaches for human resource management that yield the most significant performance improvement in hotel effectiveness and performance. The study identifies five points to be considered by a hotel manager that is facing qualified labour shortage challenges. The authors recommend that the manager should understand the basics of the labour market.
A good understanding of the nature of the labour market at a specific period equips the human resource manager with the relevant knowledge to design their job offerings in a way that ensures their overall competitiveness in the market is not compromised. Secondly, the authors identify the key role that fair compensation packages play in the attracting and retaining of staff.
The fair market value at any specific time should be known and reflected on the employee compensation to reduce their tendency to move to other areas or other competitors within industry. In addition, loyalty schemes should be incorporated and broadcasted during the recruitment campaigns so as to increase the employee long-term commitment to the institution.
Thirdly, the study highlights the benefits of having a working relationship with local institutions of higher learning that offer hospitality-related programs. The working relationship enables hotel managers to tap into the existing labour pool without having to incur extra costs for marketing their available positions elsewhere.
Fourth, during the hiring process, the maturity of the workers should play a key role in the assessment. It is should be noted that mature workers are more settled in their professions and localities and therefore are the most appropriate workers to fill long-term responsibilities of the institution (Taylor & Finley, 2010).
Mature workers contribute to the creation of a consistent organization culture as they engage in mentoring, training and development programs together with younger colleagues. Lastly, the study highlights the need to have a strong working relationship with seasonal employees.
In order to demystify the notion that an individual can never earn a decent salary in the hotel industry, hotel managers need to have initiatives that demonstrate that such half-truths are not reflective of the overall industry and highlight cases that prove the notions as false (Taylor & Finley, 2010).
Onyango and Okech (2008) present study findings that support other literature indicating that human resource systems that are flexible in their functions when combined with differentiation strategies result to high organizational performance in the Kenya hotel and catering industry.
Contrariwise, cost-reduction strategies when combined with many flexible human resource systems lead to a depreciation of the organizational performance.
Another key revelation of their study is that chain hotels, which are generally large and international, pursued the functionally flexible human resource system in combination with strategies focused on differentiation. The authors note that this characteristic differentiates the chain hotel performance from that of independent smaller hotels that recorded poor performances.
Other Issues in the Development and Management of Hotel/Resort
Butcher and Sparks (2011) present the forms of media preferred by small and medium hospitality (SMH) firms. They indicate that SMH firms prefer activities that are friendly and less formal in their operation. Their preferences extend to staff meetings, industry associations communication, and other engagements.
The findings of the study highlight that SMH firms allocate more importance to the relevancy of an approach as the main reason for its adoption. Therefore, SMH firms show a heightened level of personal relationship in their management and interaction with other business entities and this promotes a micro-management style in their day-to-day running. Cassidy & Guilding (2011) have reported similar findings.
According to Karatepe (2011), emotional dissonance is important to frontline hotel employees. The authors indicate that emotional dissonance leads to exhaustion and disengagement. However, organizational support buffers reduce the impact of emotional discord. This effect is also realized with job autonomy that provides a variety of opportunities to cope with stresses and job burnout.
Despite the reduction on the impact of emotional dissonance, the organizational buffers and job autonomy have failed to eliminate the problem. The authors recommend a deeper engagement initiative that includes training, rewards and performance feedback.
According to Burgess (2010), role allocations in hotels have started assuming professional descriptions. They require distinct qualification and demonstration of relevant characteristics that fit the description and the expected performance of the role. It therefore appears that the hotel industry is shedding off its earlier image of its inability to offer professional career development for its employees.
However, the study notes that the move to professionalism comes from individual aspirations of employees rather than from the management of the hotel or the professional associations present in the industry. The move to professionalism has yet to reach similar levels of other industries.
The study also highlights the challenge of hotels to manage their business management to optimize their profits and on the other hand respond to the competitive need of investing in the future of their staff.
The paper concludes that even though management staffs of hotels demonstrate similar characteristics with similar professions in other industries, there are specific additions or missing aspects unique to the hotel industry that makes them different.
While most research has focused on the downside of the hospitality industry, Mkono (2010) provides an upside of the industry with a focus on Zimbabwe. The author finds out that the lovable attributes of a career in the hotel industry include the constant interaction with people coming from many countries and having different cultures and lifestyles. This includes both the staffs and the hotel guests.
Therefore, for a person with a charming and friendly personality, a career in the hotel and resorts industry is very enticing. Hotels are also viewed as nice environments that are not equally matched in other industries. What the hotel employee lacks in salary and work-life balance is compensated in the available benefits in the industry such as high quality meals, holiday packages, grooming allowances and recreational functions.
Hotel careers also offer numerous opportunities to establish social and professional networks as employees engage with guest and staff from all over the world. Lastly, the glamour and prestige that hotels give cannot be ignored.
Staffs sometimes interact with high profiled guests that people outside the industry have to pay to access. The recognition of the benefits of the hotel industry depends on how an individual perceives and are difficult to advocate for to a diverse workforce.
Conclusion
Throughout this paper, human resource management has come out as a key challenge in the management and development of hotels. The paper has demonstrated that despite the challenges posed by human resource scarcity in the industry, there are available strategies that when employed lead to the realization of optimum performance.
In addition, the hotel industry need not be an industry of difficulties; managers should understand that a correct application of attitude, benefits and professionalism makes careers in the hospitality industry as desirable as in any other industry.
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