International Hospitality Management

Also known as the value of receiving people wholeheartedly and treating them importantly, hospitality has been recognized as a desirable attitude in dealing with others, be it within the community or among neighbouring countries. At present, the practice of being hospitable is not only applicable in entertaining others. In most businesses and corporations, particularly in tourism, hospitality management has been a valuable means of maximizing the return on investment. Such trend is perhaps attributable to the common conception that the value of attracting potential clients is equal in keeping existing ones.

While some major businesses have not yet familiarize themselves or applied hospitality management, various industries, other than those related to tourism, have already made use of hospitality as a means of motivating and retaining clients or employees meaningfully. One of the main reasons is the marked difference of providing hospitable services rather than merely distributing manufactured products. The specific points of difference as well as how these have been beneficial to various industries will be the core topic of this essay.

Hospitality Industry

Hospitality industry is among the fastest growing economic sectors worldwide. In fact, the hospitality industry by itself is recognized as multi-billion dollar and still progressing industry (Flora, 1998). While this industry enables the provision of vast services for the clients, work opportunities are also diverse. Indeed, the provisions of the industry for the customers are as unlimited as its opportunities for employees. People are able to work is different areas of interest while still be in a job within the industry. At present, more workers are employed in service provision than in manufacturing, indicating the continuous growth of the hospitality industry. In fact, about eight out of ten workers in the United States are in various sectors of the service industry including education, entertainment, retail, transportation and health care. In the United States, seventy percent of the country’s gross national product is covered by service industries. By 2012, it is expected that this percentage will increase to ninety percent (Microsoft Encarta Online, 2004). Likewise, hospitality industry is among the major economic forces in the UK as its enables growth and creation of job opportunities. According to the British Hospitality Association (2002), the business has employed over 1.8 million workers who were distributed within 300,000 hospitality establishments, totalling to revenue generation of more than £64 billion. From these records, hospitality has indeed become one of the most competitive businesses in the world.

Historically speaking, the hospitality business is considered as one of the oldest industries there is. This is because, long before the use of the term hospitality management, people are already travelling for leisure or work purposes; they are already going out to eat or shop. However, as the world continues to change, the hospitality industry had started to grow and become more diversified. Considering the accessibility and improvement hospitality services had undergone, the industry indeed has opened itself to newer business areas and innovations (Flora, 1998).

In general, hospitality management is a process that involved planning, organizing directing and regulating human and material resources. These activities are performed within the restaurant, travel and tourism, lodging, recreational management, institutional management as well as in meeting and convention planning businesses. Though separated, these sectors are actually related to hospitality industry as they all aim to provide generous and kind services to the customers (Flora, 1998). The hospitality industry basically involves hotels and other forms of accommodations, fast food outlets, bars, retail stores, restaurants. These diverse segments of the hospitality industry made the business grow and eventually into a highly competitive global business (Rowley et al, 2003, p. 9)

Several business and industries have adopted the trend of hospitality management primarily because corporate entertaining and hospitality is capable of effectively establishing networking opportunities. This trend also enables businesses to create and strengthen business relationships. While, these advantages are valuable and essential to businesses, an owner may find himself in the midst of disaster as corporate hospitality is capable of causing major damages as well, particularly on corporate reputation.

Hospitality management has been a highly significant priority as it involves all the elements needed in a company’s marketing mix. It also offers an essential component that corporate marketers are after, and that is to attain the opportunity to get quality time with their clients and prospects. A good corporate hospitality program is beneficial as it strengthens the relationship shared between the sponsor and its chief constituencies. Hospitality management enables companies to spend time with them away from the stress and pressure of the business, creating an environment that is conducive for business transaction (Rocky Mountain News, 2004).

The importance of practicing hospitality in businesses has been increasing due to the equally increasing cost of customer acquisition. More specifically, the cost of acquiring new client cost about four to five times as much as it does to keep acquired clients. Within the business, face to face or personal hospitality and entertainment has played an essential role in developing and acquiring client and employee relationships.

Products vs. Services

Hospitality as a marketing service stands out due to its difference from both manufactured products and services. Products are basically the items that industries create, design, produce and distribute to the consumers. These products may be based from current trends or from more objective marketing researches. In product development, several factors are to be considered. These include the nature, content, material, processes, packaging and distribution means that will be used for its efficient marketing. Products come in various forms like food, drink, appliance and accommodation. Thus, products are generally regarded as tangible items. In the past, the marketing efforts of most companies are concentrated mainly on the selling of these manufactured items (Microsoft Encarta Online, 2004).

However, at present, businesses and industries have learned to prioritize various economic goods other than those produced by the manufacturing sector. This is also known as services. Unlike products, services are generally intangible. Service involves performance, action, or effort that a customer cannot obtain physically. While both products and services are different in terms of tangibility aspects, these business terms also have similarities. For instance, both require effective marketing.

The only difference between the application of marketing to both products and service is that in service marketing, physical handling is not involved. Services must also be planned and created with care so as to meet consumers’ needs and demands. The degree of marketing needs for products and services can be stressed through an example. Within temporary personnel field for instance, studies are conducted in order to identify the types of skills employees must have or possess. This is because appropriate skills must fit in to various fields and geographical locations of the business. This makes services difficult to sell in comparison to manufactured products. Thus, promotional campaigns to sell services should be more aggressive than when promoting physical goods (Microsoft Encarta Online, 2004).

Hospitality industry on the other hand, is a combination of both product and service provision. Knowing the difference between both business terminologies, the hospitality industry can then be defined as a spectrum of both tangible and intangible goods. The hospitality industry is considered a spectrum as it does not cater to product or service alone; rather it is a combination of both. This is one of the major differences of hospitality management from manufactured products and services. While most of the characteristics of service industries are incorporated in hospitality management, the addition of the production element further makes this industry a bit more complex.

Specific Points of Difference

Hospitality management is entirely different from products and services alone as it is a combination of both. In addition, there are several other factors that make hospitality management difference from manufacturing or service industries.

· Pricing

The hospitality industry calls for the need to provide a suitable environment in order to deliver hospitable services efficiently. Hence, this means that most hospitality industries must allocate considerable investments in plant and premises. This in turn creates a low variable cost and high fixed cost structure. Taking the hotel in the luxury market as an example, the variable costs for providing room services is minimal, whereas the hotel itself has a high fixed cost. Generally, hospitality businesses have a quite high financial break-even point. Exceeding this break-even level will naturally result to high revenue. Lower volumes on the other hand will result to considerable business losses. This type of cost structure hospitality businesses apply has implications for pricing decisions. In addition to the cost structure, pricing in hospitality management is also challenging as demands tend to fluctuate over time. This is in terms of the type of customer as well as the departmental functions. Hence, aside from bringing difficulties in pricing, this tendency makes forecasting difficult as well, making the business’ subsequent staff and stock scheduling a challenge.

· Balance in Supply and Demand

In order to obtain a satisfactory balance between the supply and demand patterns within the industry, hospitality managers must practice operational capacity and resource scheduling. These tasks are generally difficult to accomplish. This is because the management of customer demands in relation to maximum volume of optimal value is a challenging task. When customers are too few, the cost structure of the business operation will definitely suffer. Alternatively, the inability to supply the required resources and skills to serve numerous customers will only leave to quality deterioration and dissatisfied customers. In balancing the supply of resources, scheduling becomes an important strategy. The absence of this valuable technique will only bring disadvantages to the operation. For instance, if too many personnel are placed on duty to attend to an expected demand, profitability will be affected. If demands are not met due to the inadequate number of staff, morale of the employees will decrease. Thus, forecasting in the hospitality industry is an important tool for success. While product and service industries are also encountering similar problems, hospitality industry would have to encounter all sorts of problems experienced by both business sectors, making the achievement of balance a difficult accomplishment.

· Intensive Skills and Education

In addition to pricing difficulties, hospitality management is different from manufactured products as it requires intensive preparation in terms of enhancing competency in delivering hospitality services. While efficient marketers and products developers must undergo intensive studies and training to produce a good product, hospitality management must possess competency for the provision of both products and services. Thus, the degree of effort and preparation needed is slightly different.

The significance of education in hospitality management has long been recognized worldwide. Through proper hospitality management education and formal education, skilled human resources are generated. In most countries, various systems and programs are being applied and integrated so as to enhance hospitality management education. Preparing competent human resources for hospitality management is necessary and is considered a responsibility of the education systems of each country (Christou, 1999).

In order to achieve the goal of generating competent and skilled human resource, the role of formal education must be stressed as significant. Hence, the value of hospitality management education in most countries is of crucial significance so as to create proper human resources (Christou, 1999). The pressure of this need adds to the fact that the satisfaction of customers from hospitality services is reliant on the skills of the human resource (Baum, 1995). Mariger and Miller (1999) noted that within the contemporary global business environment, sufficient and proper education is among the major requirement in the tourism business. Furthermore, Partlow and Gregorie (1994) argued that the complexity involved in the tourism business brought about by the consistent tourism management needs, industry executive must constantly develop and enhance their knowledge skills. The success of the hospitality industry is then hugely dependent on the development of skills with value-adding factors among its human resource (Baum, 1995).

One of the important skills workers of the hospitality industry must possess is the human relation skill. This principle has been supported by several authors. According to Doyle (1992), in selecting competent workers for hospitality services, recruiters mainly look for interpersonal competency, teamwork and elective communication. In a report done by Williams and Hunter (1991), the need for additional professional development in terms of human resource skills among the supervisory personnel has been described. One study revealed that students often feel less competent when it comes to human relation skills, particularly on guest interaction and employee management (Knutson and Patton, 1992).

Within the food and beverage industry, study showed that the hospitality educators, students and practitioners claimed that managerial and human relations skills are considered vital for students taking up hospitality management programs (Okeiyi, Finley and Postel, 1994). Baum and Nickson (1998) stated that student of hospitality management needs an actual and in-depth comprehension, both theoretical and conceptual, of the hospitality industry and the various human relation issues involved in it. This should be taken into account before students are given the prescriptive and operational models of how to operate the business itself (p. 79). In other words, learning hospitality management should start from the basic down to the specific areas. Furthermore, the authors suggested that the hospitality management curriculum must have a stronger educational basis for the students’ learning experience (Baum and Nickson, 1998, p. 79). More specifically, the learning experience of the hospitality management students must be founded on six content areas. These include service marketing, human resource management, interpersonal skills, total quality management, financial analysis and leadership (Umbreit, 1993).

· Employee Action

As mentioned in the discussion on intensive skill and education requirement, the success of the hospitality industry is dependent on the customer satisfaction. This is determined through the interaction between the customer and the employees. Aside from providing customer satisfaction, the good relations between the service provider and the customer give the operation the opportunity to sell its services, resulting to additional revenue generation. In order to effectively deliver the products and services of the business, the majority of the effort must come from the service providers. Hospitality management requires the coordinated efforts of various teams of staff, including the operational and support personnel. Attending the needs of an individual customer is difficult enough. Responding to numerous customers is a different challenge altogether. With different requirements and needs, multiple customers results to multiple complexities as well. Hence, team effort among employees of the hospitality industry is vital to success.

How exactly employee actions can help achieve customer satisfaction can be illustrated through an actual business example. Take for instance, Wal-Mart, a retail giant. Certain protocols such as the “Satisfaction Guaranteed” policy are one way how Wal-Mart delivers great services. This policy means that every associate will do everything that they can possibly can to satisfy the needs of the customers. Moreover, products that need to be repaired, exchanged or refunded are entertained by the store with a smile and a thank you (Newsome, 2000). This policy gives importance to Wal-Mart clients that make them come back again and again. This particular behaviour is naturally derived from the common observation where people that are given respect and importance are more appreciative, cooperative and loyal.

Walton, as Wal-Mart’s founder, was able to integrate valuable work practices among the company’s employees, which later became part of what the business has became known for. Eventually, these policies and practices were followed and applied by other stores as well. One example of this notable work practices is called the “people greeter” where a Wal-Mart associate welcomes its shoppers as they come in the store. Aside from providing personal service, the presence of these greeters helps reduce store pilferage. Walton encouraged store associates to practice the so-called 10-Foot Attitude where customers 10 feet away from them must be looked in the eye, greeted and offered assistance. Customers who need help in looking for a certain item will be guided to where the item can be seen. This is contrary to the common practice where store employees would just point to where these needed items are. When the associate knows the client’s names, they use them when speaking to them. In addition, Wal-Mart associates thank the shoppers as they leave the store (Newsome, 2000). The success Wal-Mart is currently enjoying is a major proof that the integration of hospitality in business can make a huge difference.

· Customer Satisfaction

One of the most important elements for the hospitality industry is the presence of the customers. Without the clients, efficient services of the business cannot be delivered. Moreover, the hospitality industry needs the response of the customers as this will determine the demand pattern of the business. The customer then serves as the final judge of satisfaction in relation to the quality of the products and services provided. This pattern shifts the focus on total quality management and quality assurance.

In order to achieve customer satisfaction, the business should consider individual customer demands and needs. As every customer need is different from another, customization is very important. In applying customization, two factors must be taken into account. First, one must consider whether customization is possible based on the services’ characteristics and delivery systems. Second, one must identify the amount of judgement that can be exercised by the customer contact personnel in defining the nature of service individual customers receive. This is necessary as some service concepts are standardized while others are able to provide various alternatives and options (Spillane, 2001).

Some class of services do not only require a high level of customization but also needs customer contact personnel to deliver the services to the customers. This type of service provision is also known as prescriptive, where the focus of control is transferred from the user to the provider. Professional services of the hospitality industry as well as accounting, medicine, law and architecture are included in this category. These knowledge industries need to have sufficient education and training so as to satisfy individual customer needs. This is one of the reasons why literature on service industry pertains to the interaction between the service provider and the customer as this relation determines the degree of customer satisfaction. This in particular is applicable to the hospitality industry (Spillane, 2001).

According to Mainardi (1980), hospitality professionals are dependent on the contact and the reception they receive from the customers. Hence, hospitality personnel must have a certain degree of availability towards the customers, a substantial margin of initiative and a strong sense personal responsibility. In a tourist interaction, employees in fact serve as a mediator between the clientele and the structure of the industry. This role is very much significant in obtaining the desired results of both the customers and the business. In satisfying the wishes of the customers, the ethical and psychological factors must also be involved among hospitality professionals. There is considerable evidence that clients appreciate actual interaction with people; thus, the treatment clients should receive from service providers must be different from what they receive on daily routines.

Indeed, customer satisfaction is an important element of the hospital industry that makes it different from manufactured products. However, while interpersonal skills are learned from, hospitality and customer service programs, the effectiveness and the quality of service provided should go beyond eye contact and warm greetings (Taylor, 2000). The generation of customer satisfaction should then be produced out of effort and good rapport. Most people equate customer service with personal interaction, while few of them realize the complexity of business systems involve in it. Without these helpful systems, the smile or the warm greeting service employees provide will lead to minimal results.

Conclusion

Hospitality in business is an important aspect as this enables the establishment of interconnectedness between clients and the operation. Due to the integration of various hospitality efforts, businesses are able to generate additional value and promote customer satisfaction and loyalty. Hospitality management is indeed a growing industry as evidenced by its huge market segments and workforce coverage.

The hospitality industry is a different marketing service from manufactured products primarily because this type of business was able to integrate the provision of both products and services. The efficacy of the industry may be beneficial in pleasing and servicing various customers, However as this business caters to both products and services, mismanagement may cause numerous difficulties. Moreover, the skills needed for providing products and services must be incorporated so as to meet the needs and demands of the customers. Intensive education and training, planning, organising and directing and balancing are among the most important elements for the success of the industry.

Without the customers, the hospitality industry will not work. In this kind of business the role of the customers is valuable as they serve as the source of revenue for the continuous operation of the business. Furthermore, as the customers are directly involved in service delivery, they are responsible for providing the judgment on the quality of service they receive. This judgment is essential in assessing the capability of the business as quality service providers. In conclusion, the hospitality industry is different from manufactured products as it involves not only the mere act of providing and distributing physical item. It also involves the use of interpersonal skills that enhances customer value and experience.

References:

"Marketing". (2004). Microsoft Encarta Online Encyclopedia. Available at: http://encarta.msn.com Accessed: January 11, 2005.

Baum, T. & Nickson, D. (1998). Teaching human resource management in hospitality and tourism: a critique. International Journal of Contemporary Hospitality Management, 10(2), 75-79.

Baum, T. (1995). Managing Human Resources in the European Hospitality Industry: A strategic Approach. London: Chapman and Hall.

British Hospitality Association. (2002). British Hospitality Association’s Chief Executive Industry Review—2002. Available at: www.bha-online.org.UK Accessed: January 14, 2005.

Christou, E. (1999). Hospitality management education in Greece: an exploratory study. Tourism Management, 20(6), 683-692.

Doyle, K. (1992). Mastering motivation. Incentive, 166(3), 20-23.

Flora, G. (1998). The hospitality industry. The Black Collegian.

Knutson, B.J. & Patton, M.E. (1992). How prepared am I to succeed in the hospitality industry? What the students are telling us. Hospitality and Tourism Educator, 4(3), 38-43.

Mainardi, A. (1980). The Tourism Operative as Witness to the Gospel. People on the Move, 29, 47-61.

Mariger, H. & Miller, J. (1999). Distance education evaluation: the next step. Proceedings of the 4thannual graduate education and graduate students’ research conference in hospitality and tourism, USA, 4, 428-437.

Newsome, D. (2000). Think Small One Customer at a Time, One Associate at a Time. Business Perspectives, 12(4), 20.

Okeiyi, E., Finley, D. & Postel, R. T. (1994). Food and beverage management competencies: Educator, industry and student perspectives. Hospitality and Tourism Educator, 6(4), 37-40.

Partlow, C. & Gregorie, M. (1994). Is graduate hospitality and tourism education relevant? Ask the graduates. Hospitality and Tourism Educator, 6(3), 13-16.

Rocky Mountain News. (2004). Hospitality latest Trend in Sports. Business, (October 2).

Rowley, G. et al. (2003). Employers skill survey: Case study-Local and central government. Employment Studies Research Unit, Bristol Business School, University of the West of England, Coldharbour Lane, Bristol.

Umbreit, W. T. (1993). Essential skills: what the graduates need to succeed. Hosteur, 3(1), 10-12.

Williams, P. W. & Hunter, M. (1991) Recruitment and retention insights for the hotel industry. Hospitality Review, 9(1), 51-58.