CONTEMPORARY HOSPITALITY INDUSTRY
CONTEMPORARY HOSPITALITY INDUSTRY 15
Thesize and scope of the UK hospitality industry
TheUK hospitality industry is a wide and miscellaneous sector thatincludes both worldwide corporations and single-person entities. Theworkers engage in over eighty distinct jobs in the profession. Theindustry is significant to the UK economy as it ensures investorsvisitors and local people receive warm welcome when doing business orjust travelling for leisure purposes.
Althoughthe hotel and restaurants are the most popular hospitality industriesin the UK, there are twelve other pillar industries. The sectorsinclude tourist services, events, hostels, membership clubs, hotels,contract catering, self-catering, gambling, travel services, events,as well as pubs, nightclubs and bars. Each UK hospitality customerhas varying needs in terms of comfort, service diversity and cost. According to the British Hospitality Association (BHA) 2013/2014annual report, the UK hospitality industry aims at “Shaping theFuture of Hospitality and Tourism.” BHA statistics indicated thatthe UK hospitality industry is worth 53 billion pounds per year andit serves thirty-two million foreign visitors annually, as well asprovides 300,000 direct employment opportunities.
Inthe 2013/14 BHA report, Alan Parker CBE, Chairman claimed, “Wewant the UK hospitality and tourism industry to be recognised asworld class. We will do this by connecting Government and industryleaders to focus on securing valuable new jobs for our people, growthfor our industry and competitive advantage for the UK.” Theindustry is significant to the UK economy because as it is the fourthlargest income generator. It generates a gross income of fifty-threebillion. There are more than 180,000 leisure and hospitalityfacilities employing above two million people, which is approximately7% labor force.
“Asthe UK economy begins to see the green shoots of recovery, now is acrucial time for our industry to step up and make good on thepreparations for growth that were made in the tough times.”Alan Parker commented in the report. The returns acquired in the2013/14 financial year were ales compared to previous years such as2006, which the hospitality industry returns amounted to £65billion. Other major economic sectors the hospitality industrysurpassed included fishing and agriculture amounting to £5billion and education that generated £21 billion1.
Accordingto the State of the Nation 2013 Report, the hospitality sectorcontributed 2,076,000 jobs that are equivalent to 0.7% labor forcebetween 2010 and 2011. The average employment of from the industrysurpassed the average employment percentage per sector, which was0.5%. The report also claimed that 35% of the hospitality businessesproject that their businesses will increase by approximately by about20% by year 2020. This implies that the sector will require 660,200extra employees. The Oxford’s 2010 final report on the UK’sHospitality industry, the sector has created an addition 1.2 millionjobs via multiplier effects such as supply chains and manufacturersof supplies such as furniture the industry requires in largequantities. The sector is valuable to the UK economy considering thatit generates £34 billion in tax returns that include VAT on sales,corporation tax, ‘on-site’ alcohol consumption exercise duty,national insurance contributions and income tax among otherpayments2.
TheUK Office for National Statistics, UK’s GDP 2013 amounted to 2.678trillion USD while the 2014 GDP was $3.002 trillion. Using thepurchasing power parity (PPP), the UK economy is the eighth biggestin the world, and the fifth biggest national economy when determinedusing
Variousprofessional bodies professionally manage the UK hospitalityindustry. One of these key members includes the British HospitalityAssociation. The primary duties for the organization includeincorporating The Food and Service Management Forum, NationalRestaurants Group, The Restaurant Association, Serviced Apartmentsand Clubs Panel. According to the BHA portal, the institution is “thevoice of the hospitality & tourism industry in the UK.” Inaddition, BHA’s website states that its mission is, “to championthe UK hospitality and tourism industry as the best in the world. Itaccomplishes this objective through integrating tourism andhospitality business. The intention of this organization’s actionsis achieving substantial growth for the industry, to ensure provisionof new and safe new jobs for their employees and achievingcompetitive advantaged for the UK hospitality industry. BHA claimsthat it provides essential services that make providing hospitalityservices convenient3.
The“Hospitality Guild” is another essential organization in the UKhospitality industry. According to Simon Vincent, the HospitalityGuild Chair and the President Europe Hilton Worldwide, the guildoffers a unique strategy for integrative operation that employershave been searching for creating long-term hospitality knowledgelegacy. The cooperative, it makes it easy for the employers todevelop the skills of their staff, as well as make certain that thediverse and valuable resources in a company are tapped and developedto develop the whole sector. The organization is a non-profitorganization for providing professional career developmentopportunities4.
TheUK hospitality industry is designed in a progressive approach thatprovides prospective employees with an opportunity to advance theircareer. The least qualification for employees working in the field isa certificate acquired from renowned and accredited tertiaryeducation institutions such as colleges and universities. The Britishcurriculum specifically requires an intensive curriculum that equipsemployees with varied hospitality skills. The objective of thefollowing booklet is a career development guide in food and beverage,hotel, housekeeping and reservation fields.
Thiscareer focuses on equipping students with food and beveragepreparation techniques. The course is a comprehensive as potentialworkers are equipped with both production and service managementskills. UK ensures the industry maintains high performance standardthrough ensuring that students learn the practical part of food andbeverage production and service theory in colleges. In fact, severaleducation institutions offer theoretical education that iscomplemented by practical lessons in a hospitality facility such as ahotel5. Some of the major qualifications that potential students should haveinclude excellent organizational skills, capability to buildrelationships and ability for creating connections within businessenvironment.
Hoteljobs in UK offer a wide range of career opportunities ranging fromchef, receptionist, cooks, directors, receptionist and cleaners amongothers. Potential hoteliers joining the industry in the UK canprogress their career from one point to another. For example, areceptionist can acquire a bachelor or even Masters in administrationdegree that can help him or her qualify for a bigger job positionsuch as a manager. In fact, many hotels in the UK embrace internalpromotion method that encourages the mangers to draw qualifiedgraduates from their staff. This means that a hotel can hire anintern for the position of a cleaner, but the individual is graduallypromoted to the position of a senior manager6.
Hotelsare classified using five-star scale. Individuals working in two-starhotels have lower qualifications and experience compared to theircounterparts working in three-star facilities. This implies thatthree-star hotels prefer recruiting workers that have practicalexperience orking in the hospitality industry. The UK hospitalityindustry is dedicated to progressing potential workers’ skills,without following the traditional path. This means that individualswith practical skills accumulated in the job over several years wouldstill require formal training in order to occupy high profile careerssuch as operations manager or chief executive officers.
UKhospitality industry is a benchmark for professionalism. It hasnumerous hotels that are renowned for providing classy servicesacross the globe. The facilities provide an excellent fusion ofcontemporary design and fashionable flair intended to appeal toworldwide community. In addition, highly trained professionals thatensure customers receive maximum satisfaction clean the rooms.Individual person for excellence, coupled by the UK hospitalityindustry determination to nurture a big group of professionalsprovide employees an opportunity to switch careers from one field toanother7.For example, a cleaner can opt to join the food and beveragedepartment or catering service. The options are unlimited for theversatile and self-driven employees.
Reservationsis a delicate job that requires sharp, accurate and efficientcommunication skills. The work of these professionals is informingthe customer support regarding the diverse services they provide, aswell as book accommodation at their favorite hotels. Professionalsin this career can grow from mere phone handlers to travel agentsresponsible for planning leisure trips, accommodation, businessmeetings and layout for a group’s visit to the UK. Theprofessionals are essential because they assist guests in assessingtheir requirements, and then assisting them to reserve their desiredservices. Individuals that can maintain a flexible schedule, as wellas proper etiquette have higher opportunities of advancing in thereservations field. Some experts venture into travel agencybusinesses while others rise to managerial positions of large hotelsat a go from scratch8.
Hospitality careers in the UK
Food and Beverage
. background skills in serving drinks
. practical skills working in a restaurant
. formal college training training
Three to five star hotels provide new job openings
Companies manufacturing food and beverage products
Presence of research and development organizations focusing to
Higher education standards available
. Formal college training
. personal drive and good interpersonal relationship skills
. Practical hotel industry experience
Private practice businesses
Abroad job opportunities
Higher education programs available
Internal promotions available for hard working employees
. Personal skills for maintaining a clean environment
. Excellent fashion sense
. Ability to track and ensure guests receive appropriate services
Big hotels providing guests’ accommodation
Excellent cleaning skills
Presence of internal promotion intended
TheLegislative issues highlighted in the article include theannouncements that will later become law. It is the law that willgovern how business will be carried out. First, among the lawsinclude the reviewed business rates. According to the law, there willbe extended business rate caps further to those introduced in theprevious years. In addition, the law holds that there will be nofurther payment of National Insurance contribution by businesses foryoung apprentices. Third, the government has abolished the charge forair passenger duty for children below 12 years old.
Theimpact of raising business cap rates on the hospitality services maybe diverse. The industry players must consider a number of factorsbefore deciding which way to act. Before increasing the prices, thereis a significant requirement to evaluate the possible outcomes of thevarious interpretations of the market. It is necessary to ensure thatthe market will support the increased prices because in case theydon’t, the hospitality industry players will be bound to experienceserious cash flow implications. The best way is to understand thebudget characteristics of the customers. There is no positive impact on increasing prices if the buyers are currently struggling to paythe current price. A possible strategy would be to offer a new tierof products with added value at a higher rate. If the new product isaccepted then that can serve as a way to scrap the old product.
First,there can be a positive impact on the industry players who take theopportunity to increase their prices as a way of observing the law.An increase in prices can attract the upmarket clientele. Customerswho can afford higher prices have greater possibility to continueconsuming the products.
Second,a rise in price may have an impact of positioning the hospitalityproducts as premium products hence attracting more premium clientele.A high price does not always lead to fewer buyers. The new buyersmay even end up buying additional hospitality services.
Third,a rise in the market caps can lead to more profitability in thehospitality industry since the service is the same and only the priceincreases.
Fourth,the freedom to raise prices for the hospitality industry is a step tospur competition. This is so because the industry players will obtainmore financing from their revenues that they can invest in improvingthe value of their services to either match with the increased pricesor to attract more customers. This will be an advantage to the statesince there will be job creations.
Theresults of scrapping the National Insurance contributions foremploying young people could be a step by the government to promoteemployment for the young people. National insurance contributionsare an expense to the hospitality business, their reduction henceincreases the profit. As a result, the companies will end uppreferring to employ young people in an effort to reduce theirproduction cost.
Thereduction of the Air passenger duty for children under 12 and furtherthose under 16 results into a further decline in prices of air travelservices. It is a promotion that allows families to move with theirchildren. This further implies that the hotels and air travelproviders will benefit from increased customers and revenues.
Thetravel and tourism industry represents 266 million jobs andcontributes 9.5% of the world gross domestic product. It isforecasted to experience a growth rate of 4% in the year 2015.According to Price Waterhouse Coopers overall growth forecast for UKhotels for 2015 alone, the hotel industry is expected to see a 5.6%growth in revenues per each available room. This will be driven by a4% growth in rates and a 1.6% increase in occupancy.
Thekey external influences to the United Kingdom Hospitality industryhave been the observed trends all over the world including theincrease in disposable income, low-cost airlines calling for moretravel and mobile booking sites. Competition trends have beenstimulated by an increase in technical survey that has furthercontributed to more knowledgeable consumers and accommodationproviders. This has thus increased innovation to enhance efficiencyand sustainability. Further trends indicate doubling touristarrivals over the past 20 years. In the US, there are 15.7 rooms forevery 1000 people according to research by Earnest and Young.
Theeffects of the changing external environments are depicted by theexistence of events such as the rugby world cup. It is expected tostimulate a major demand that will push the London hotels occupancyfurther up. Hotel occupancy is forecast to pick up quickly at 1.5%that will push occupancy to a further 84%. In social terms, there isa major shift in the customer base to a type called the millennial.This generation at is said to be the most socially networked. It isalso believed to be the most confident generation after being broughtup with a mantra “follow your dreams” and believing they arespecial. They are more optimistic about the future. Further effectsinclude the resilient nature of the economy. Amongst the majorreasons given for a lower than expected performances in the hotelindustry in 2014 include the impact of the Eurodollar exchange rates.This made London a very expensive destination compared to others.However, it is said to be obtaining the momentum. The competitionfrom the external world has reduced the volumes of tourists. Generalcompetitions from other destinations like the ease in obtaining visashave made the United Kingdom less attractive. Also, the earliertiming of Ramadan is said to have impacted negatively by squeezinginto the school term which kept the wealthy Middle East visitors awayas opposed to the Ramadan period in 2013.
Amongstthe key internal influences, it is indicated that the hospitalitysector is riding a broad wave of growth innovation and demand. Hence,it is in a strong position to make further gains in 2015 as freshcapital from new locations increases the number of the industryparticipants and creates an attractive atmosphere for acquisitions.This is according to research on global hospitality trends in 2015 byEarnest and Young consulting. The key internal influences, accordingto Price Water House Coopers report on growth beds in 2015 includethe poor weather and floods experienced at the beginning of the yearthat served as a threat to the travel industry. In addition, therehas been adverse publicity on issues of security, which might havecaused alarm thus reducing tourist volumes in the hospitalityindustry. However, it is reported that there have been morepositives that have assisted in lifting the hotelier`s fortunes.First is the continued economic recovery of the provinces, which havebuffed up supply. Followed by the sunny weather and then theGlasgow’s commonwealth games to the Ryder cup and successfulfestivals such as Edinburgh. The travel dynamics of the Hotelindustry are positive although the geopolitical uncertainty couldcause disruption. There are value concerns on the surging value ofthe sterling. This may act as a brake on the experienced growth sofar, and there has been observed reduced spend per visit. Inaddition, the Britons may also reduce their domestic leisure so longas they feel that they have more value for each pound. They hence maytake preference for outbound tourism.
Changesin technology have impacted on the mode of hosting business modelsthrough digital platforms. The platforms connect demand and sharecapacity dynamically in real time. Transactions have also beenconducted in through improved methods, which offer access toownership such as the p2p sharing, subscribing, reselling andswapping.
Changesin fashion have been caused by the emergence of a new traveler called“generation Y” millennial or digital. The traveler is said tohave the ability to see through hotel marketing literature, and canobtain the best deal with a single click by use of price comparisonwebsites. The traditional hoteliers have indicated that demand fortradition business model has been impacted negatively. However,luxury operators indicated that changes in fashion has not affectedthem to a greater margin.
Brotherton,B 2006, Theinternational hospitality industry: structure, characteristics andissues,Oxford,Butterworth-Heinemann.
Barrows,CW & Powers, TF 2009, Introductionto the hospitality industry,Hoboken, John Wiley & Sons.http://www.ECU.eblib.com.au/EBLWeb/patron/?target=patron&extendedid=P_333774_0.
Clarke,A & Chen, W 2007, Internationalhospitality management: concepts and cases,Amsterdam, Elsevier/Butterworth-Heinemann.
Tesone,A 2009, Principlesof Management for the Hospitality Industry,Routledge.
Parker,A 2014, BritishHospitality Association Annual Report2012/13, A united voice for hospitality.
1 Parker, A 2014, British Hospitality Association Annual Report 2012/13, A united voice for hospitality. P. 87
2 Barrows, CW & Powers, TF 2009, Introduction to the hospitality industry, Hoboken, John Wiley & Sons. http://www.ECU.eblib.com.au/EBLWeb/patron/?target=patron&extendedid=P_333774_0. P. 9
3 Parker, A. (2014). British Hospitality Association Annual Report 2012/13 A united voice for hospitality. P. 12
4 Brotherton, B 2006, The international hospitality industry: structure, characteristics and issues, Oxford,Butterworth-Heinemann. P. 29
5 Tesone, A 2009, Principles of Management for the Hospitality Industry, Routledge. P. 11
Clarke, A & Chen, W 2007, International hospitality management: concepts and cases, Amsterdam, Elsevier/Butterworth-Heinemann. P. 44.
Clarke, A & Chen, W 2007, International hospitality management: concepts and cases, Amsterdam, Elsevier/Butterworth-Heinemann. P. 19
8 TESONE, A. (2009). Principles of Management for the Hospitality Industry. Routledge. P. 32