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Importance of Hotel Industry Essay

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Introduction

In every country the issue of attracting tourists has remained paramount regardless of the security situation in such a nation. As a result the government through the relevant ministries and department has tried to allow the private investors to put up hotels and resort that the tourists will use when they visit the country.

However owing to economic depression in the last two years, Faulk (2000)points out that many hotels and resorts have recorded low bookings and to minimize their losses they have reduced the prices in order to attract local people in their rooms.

He has noted that with lowering of prices, the hotels have managed to record a significant increase in their collected revenue.

According to Croce (2009) a hotel is place where people can have their meals, drinks and above all can spend their night there. On the other hand Wilkins (2004) contends that resorts are places that have been made to provide a chance for the people to relax besides offering all the other services offered in a hotel.

In addition Bardi (2007) contends that hotels are usually found in places popular to a large number of people, for example in the towns, airports, or even in railway station. Resorts on the other hand are mostly located in those places that seems separated from the other parts for example the parks.

Causin (2010) argues that hotels and resort have for a long time been contributing immensely to government revenue. He has noted that every time tourists from another country visit such hotels and resorts a certain percentage of the amount charged on them goes to the treasury.

In return he argues that the government takes the responsibility of providing ample security to them. Through the ministry of finance, the government has been tasked with collecting all the levies charged on the hotels and resorts (Tanke, 2001).

He further contends that the government should be responsible for marketing the country to the outside world. To him the marketing strategy adopted by the government plays a significant role in determining the number of tourists from abroad who will visit the advertised country.

This way the hotel and resort owners will be the main beneficiaries of this program by the government as they are the ones tasked with providing accommodations to the tourists every time they visit the country.

This paper attempts to look into some of the current issues that the hotel and the hospitality industry are facing in trying to achieve some of their set goals. I will in addition try to look into some of the achievement as well as the challenges faced by the hotel owners and administrators as they endeavor to attract more customers.

Some of the achievements as will be discussed are as a result of innovations taken by some of the hotels while some of the challenges are as a result of government failure to put in place measures to cushion the hotel owners. For example poor economic management that results in low bookings in these hotels.

Current issues in the hotel and resort management and management

McDaniel (1997) contends that in the contemporary world the issues in everyone’s lips is how to maintain our environment as a result of the global warming brought about by the destruction of the ozone layer. Therefore, this issue has not escaped the concern of the hotel and resort owners.

He notes that without taking this into consideration their business would likely halts its operation in the long run as a result of unbearable weather conditions as well as polluted environment whether air, water or soil pollution.

Blum (1997) states that to demonstrate they are conscious about the environment issues, hotel and resort owners have held a meeting in Phoenix that was dabbed; Going Green: Environmentally Profitable Hotel.

This conference was aimed at looking at some of the challenges that face the hotel industry in its attempt to remain strong business wise.

He point out that in taking into account people, the environment, as well as the profits, hoteliers can sustain a friendly environment that in the long run might become viable for economic purposes as well as be beneficial to both the people and the environment.

According to Palakurthi (2006) the other issue concerning the hotel and resorts is on how to reduce their expenses especially in labor. He has noted that the cost of labor has increased rapidly with no increase in revenue.

He has noted that most of their employees have been registered as members of a trade union irrespective of the country of their origin. Therefore, the employees’ demands are usually addressed to every time they feel that the management is on their necks.

In some countries, he contends that the constitution allows the employees to go on strike as long as they adhere to the rules and regulations in labor laws. In regard to this, he says that the management of these hotels and resorts are usually left with no option other than to comply and increase the employees’ wages.

In regard to this, O’Neil (2006) agrees that this puts pressure on the hotels normal functioning and as a result this may force the hotel or the resort to reduce the number of their employees. He notes that this may further complicate matters as some of the employees may move to court or use their union to oppose such attempt to retrench them.

To provide a solution to this, he underscores the importance of hiring employees on a fixed contract so that when the contract lapses the management is left with a sole decision to renew or cancel the contract altogether (Nightingale, 1985). That way the management would be able to control the number of employees it needs at any given time.

The issue of dealing with people from diverse cultures has also been a concern to the hotel and resort owners. According to Robert (2011) some of the hotels are located in different parts of the world. He gives an example of Hilton Hotel, Sarova Hotel and the Norfolk.

He says that these hotels have been established in places where people have varying cultures. Therefore, we find that most of the employees in the hotels are the indigenous people who may have little or no understanding of the foods being cooked and served there.

He argues that the management of such hotels has to undertake extra expenses by way of training such people on how to prepare and serve these foods. Watson (2008) agrees that this process may be costly to the company because after training the employee can decide to go and work for another similar hotel that is offering a competitive salary and other benefits.

In addition he states that these hotels usually receives guest from all over the world that have different cultures.

He says that if an Asian visits an African country and resides in one of these hotels or resorts he might come into conflict with the person serving him or her because the employee is not able to understand what the guest likes and don’t like.

In the long run what follows is developing a negative attitude towards that hotel if he did not receive a warmly treatment when in that hotel or resort.

Furthermore, Lew (2004) contends that there is lack of enough qualified and experienced personnel in the hotel and resort management. Therefore he says that the existing as well as the upcoming hotels and resorts are competing to hire as well as retain their staff.

He notes that the new hotels are luring these employees by promising them good salary and other benefits if they agree to work for them. These kinds of competition he says are only good for the employee as he or she is in a better position to negotiate the pay package.

As a result hotels that cannot offer such amounts are left struggling because they got to hire a new crop of staff that has to take some time before they can fit in their system.

Lucasa (2000) has noted that this competition for members of staff can be very detrimental to some o the hotels to a point in which some can even collapse by failure of having an effective manpower to drive its operations.

Marketing strategy has become an issue of concern to both the hotel and resort management team. According to Hoque (1999) there are so many hotels and resorts that have sprung up following the liberalization of the market. As a result he says that marketing strategies have changed in order to win many clients.

Previously some hotels would advertise their business in strategic positions from where potential customers could see them. He however, notes that with change in times new and better methods had to be invented in order to reach as many people as possible.

This therefore gave rise to internet advertising. He says that many people today spend a considerable time surfing the internet and therefore placing an advertisement in the internet gives people around the world a chance of viewing it.

Use of sites like Google and Yahoo provides a platform where a big number of people in the world will access it and if interested might decide to make a booking in such a hotel when they visit the country.

Lucas (2002) has noted that most of the hotels are trying to invent new ways in which they can reduce their operating costs without compromising the quality of the service that they are offering to their customers.

He points out that the cost of running a hotel has almost doubled as a result of increase in some of the primary materials that are used in the hotel. He notes that the hotel administrators fear the repercussions that may befall their hotels once the customers realize that they have hiked the cost of their services.

Since some of these hotels and resorts are small they may loose many customers because of an increase in the cost of their services. He recommends that the government should protect them as well as other consumers from high prices of primary goods. This way he argues that the government will have leveled the playing field between the small and the big hotel and resort owners.

Michael (2011) says that unlike in the past, today customers have become more complicated and sophisticated in manner in which they want to be treated while in the hotel or a resort. He point out that customer would like to be in a hotel or resort that offers recreational facilities at a cheaper cost.

As a result the hotel and resort owners feel stretched especially if their businesses are small and thus not able to provide such services to their clients. He says that those who benefit from these are the large hotels as they are in a position to meet the demands of the customers at a very competitive rate.

In the long run, the small hotels are likely to realize a decrease in the number of bookings and if the situation persists then the business may collapse if no immediate measures are initiated to address such an issue.

To avert such a crisis Beland (2002) notes that the management team should convene an urgent meeting in order to brain storm on what actions to be taken.

He underscores the importance of small hotels merging with the bigger ones in order to enjoy the economies of scale. That way he argues that the hotel will remain relevant in the business and chances of halting its operation will have gone down by far and possibility of people losing jobs will also become water under the bridge.

Use of the modern technology is also an issue of concern to these business people. According to Price (1994) some hotels have embraced the technological innovations of the 21st century to attract customers in their business. Through the use of the internet customers have been able to book for a room from the convenience of their home.

Marzuki (2008) says that a customer in the United States of America can for example pay and make a booking for a room in Egypt without living their houses.

As a result he notes that the customer is able to save time. On the other hand if the hotel has not gone online the customers might go to others hotels thus denying it revenue that it would have earned by making bookings possible in the internet.

In addition to that he points out that in the United States of America alone 20 percent of all hotel bookings are made online and that the bookings have been on the rise year in year out. If a booking is not made online then he says that it would be made in the competitors’ website.

McGunnigle (2000) has noted that today, hotels and resort are competing with one another on how to make their guests feel at home. He says that with technological advances hotels have now introduced an opportunity for their customers to accumulate points every time they spend their time in their hotels.

He says that once the clients accumulate certain number of points he is entitled to redeem them and therefore spend a certain specified duration of time in that hotel for free. With the introduction of this kind of a program he says that customers are likely to shift to that kind of a hotel at the expense of others who are yet to initiate such a program.

He notes that this program goes a long way in helping the hotel or a resort establish and retain its own customers. That is, every time a customer visits a certain country for example he or she already knows which hotel he or she is going to spend the night. He refers to this system as the loyalty program where loyal customers are rewarded.

Worsford (1999) point out that that a number of hotels and resorts have introduced the so called yield management. Under this system the hotel administrators are able to know when to place the cost of the rooms high and low. In doing so the hotel is able to operate at a profit all the times.

He says that under this system, the costs of the rooms goes high during the high season particularly in the month of December and goes down during the low season around the month of February and March. This issue if not properly addressed can cause the hotel loose a lot of guests either because compared to other hotels they might be expensive especially during the low season period (Cho & Wong, 2001).

According to Ogbonna (2002) there have been a significant number of changes that have been taking place in the hospitality industry that have calling for a change also in the hotel and resort management.

He says that the curriculum offered in these institutions are rapidly changing and therefore the hotel and other hospitality fields where majority of the graduates are absorbed need to respond by adapting to these changes.

He contends that the institution of higher learning are not only preparing their students to be employed but also to be self reliance as a way of helping steer the economic growth of their country to greater heights.

Therefore, Wang (2009) points out that with the assistance of financial institutions like banks, the graduating students stand a better chance of putting up a hotel or a resort that will win a significant number of customers at the expense of the earlier established ones.

He says this is possible because by the time a student is graduating from his or her college, they already have had an experience on how to operate and run a hotel.

Another current issue that seems to be a concern to the hoteliers is on how they can avoid dependency on their country’s economy. Harris (2002) has noted that majority of the big hotels particularly the three, four, and the five star hotels have a strong dependence on the nations economy.

Johan (2005) contends that when the economy of a country is growing well, then the number of visitors in these hotels usually increases. He says that this is usually the case with both the foreign and local people.

On the other hand he argues that if the economy is growing very slow or has stagnated then the number of people in the hotels is very low and this goes a long way in affecting the day to day running of these hotels because revenue decreases.

Therefore, hotel owners have been brain storming for a while in order to look for a solution to these problems which hurts their business a lot. Unless a proper and sustainable solution is found he has stated that this problem is likely to be there for a long period of time.

According to Jafar (2005) the advancement in technology has come as beneficial as well as detrimental to the hotel industry. He says that today, we are living in a global village where one can follow up the events taking place in another country very far away.

To him political instability in a country is likely to affect the day to day running of a hotel or a resort. This is because that situation is likely to spread like bush fire to other countries whose citizens were willing and able to come to visit the affected country.

So this issue calls for the parties concerned, that is, the government and the hotel owners to make sure that the country’s image outside the boarders is marketed in such a way that it creates a situation of a peaceful nation.

Alan (2003) has also raised the issue of a new management to run the affairs of a hotel and the resort. He says that if the hotel or the resort fails to realize its goals at the end of the financial year, the owners of these hotels and resorts put all the blame on the senior managers who have been mandated to realize this.

As a result, the managing director who is in charge of all the operations in the hotel may be sent packing in order establish if it was in deed him or her responsible for the hotel’s failure to hit its target (Schechter, 1994).

If the situation persist the hotel owners may decide to over whole the entire management team and bring in a new crop of administrators who he or she believes are in a position to perform better than their predecessors.

Conclusion

In every country the presence of big hotels and resorts is not only good and beneficial to their owners but also to the country at large. This is because it is from them that government collects its revenue. As a result, it is the duty of any legitimate government to provide good environment where investors can come in and put up their business.

As Allard (2005) argues lack of proper guidelines on how people should put up a business may deny many potential investors a chance to do so and hence a loss to the government since it loses revenue in the process.

In addition Marcus (2007) notes that the government should establish a proper policy in order to protect the new as well as small entrepreneurs from a probable exploitation from the large hotel owners. This should happen by a way of subsidizing goods used in these hotels so that they become affordable to the consumers.

On the other hand hotel owners have been accused of paying peanuts to their members of staff in spite of raking in millions of money per month. Therefore, they should try and improve the welfare o their staff by offering them attractive salary in exchange of a better service.

When this happens Lesley (2005) agrees that the employees as well as the managing team are going to enjoy good working relationship and hence the hotel will move forward in terms of achieving the goal of customer satisfaction.

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