Issues In Hotel Management And Strategies For Overcoming Them

Operating issues - Labor cost and labor shortage issues

Question:

Discuss about the Accommodation Management for Current Issues in Hotel Management.

There were various diverse issues in the past decade, which were being thrown in the way of hotels’ growth. There issues are related to different area of accommodation management. This paper presents the findings of the issues, which the hotels are facing currently.  There are some top issues, which influence the hotels and their business. These major issues include technology issues, operating issues, marketing issues and economic issues. Furthermore, it discusses the impact of these issues on the hotel’s operations and profitability of property.  There are some strategies or alternative solutions, which assist the hotels in overcoming them. The industry should use some key trends, which will shape the industry in the near future and for the years to come.

There are different types of operating issues, which are faced by the hotels currently. Two of the most important issues are labor cost and labor shortage issues. Due to extent of the expenses, issues and labor costs have always taken a considerable portion of time and efforts of hotel managers. This is very difficult to stay in the industry, which is considered as low paid and low skilled human resources and have the diversity issue among employees (O’Fallon & Rutherford, 2011). Now, there is the news of amendments in immigration laws, union contact negotiations, legislation to increase the minimum wages. Due to this, the hotels managers are on edge. The labor cost is the biggest expense for all types of hotels. It is very important for managing the cost of human resources, because they are an integral part of accommodation experience. The interaction between employees and hotel guests has a significant impact on the success of operations and guest’s experience (Wood, 2013). The hotels and its managers must implement the trend, which impact the labor costs.

Another issue, which hotels are facing, is the shortage of labor. The problem of generating and retaining the skilled and qualified employees is becoming a challenge for the hotels globally. This problem is increased because of various factors, such as; wage level, demography, long working hours, low pay and hotels are failed to deal with the employee satisfaction. All these factors lead the hotels towards to face to problem of employee turnover. When the employees do not work with the motivation and satisfaction, then it affects the operations of the firm. It affects the behavior of the employees (Baum, 2016). If the workers will not behave with guests in sophisticated manner, then it will affect their services and reputation. Thus, it will affect the profitability of property.

The issues of keeping up with the fast speed of technology are very expensive and difficult. Despite a growth in the awareness of the value of integrated systems, there are still so many properties or hotels, which do not have the benefit of them (Jing & Zhao, 2009). The reason behind this is that they have to maximize the revenue opportunities. In the hotel management, use of advanced technology is very important to store and secure the data of guests. The hotels face technological issues, like; the guests can now utilize the interactive reservation systems and some hotels are sometimes critiqued for the clicking on keyboard, which is needed to make a reservation. The people are increasingly making the reservations through internet.  There are a high percentage of people, who are making reservations via internet. With this, the hotels cannot afford not being linked (Chan & Quah, 2008). If the guest cannot book the room online then the reservation will be done at the website of competitor. It will affect the operations of hotels.

Technological issues

There are some examples of facilities, which the guests desire gradually, like; multiple telephone lines, cooperative opportunities for room service, free Wi-Fi and room check-out. These are very expensive to install and implement. There is lack of awareness among the people about the integrated systems, from which the efficiency of operations can be improved. The hotels still use the systems, which are much ahead of competitive useful life. It limits these hotels from taking the advantages, which are brought by integrated and advanced systems (Karakas & Tatar, 2015). However, various hotels in Australia are scared of upgrading the system because they fear that their team and employees will not be able to handle and manage these new systems and there will be need of training the employees to understand the use of systems.

Furthermore, the profitability of property and efficiency in the operations is affecting by the environmental issues also. Occurrence of natural disaster may have a negative impact on the hotels and hospitality management. These disasters occur in the area of tourism like; islands and sea sides. Handling a disaster, for example a hurricane or earthquake includes taking care of the tourists or guests and a longer clean up time (Lane & Edgerton, 2015). Hotels are affected by these natural disasters, which can take many years to rebuild. This issue affects both operations and profitability of the building, because in the situation of disaster, the employees are out of work and the management has to close the hotel. The hotels do not make money for a period of time. After that, when they reopen their hotel and start the operations, they will basically have to begin over, when it is about the recruiting the people (Molina-Azorín, Tarí, Pereira-Moliner, López-Gamero & Pertusa-Ortega, 2015).

Global financial crisis is also an important issue for the hotels in global environment. It has hit overall hotel industry. In some time, when most of the households have had to tighten their financial ties, luxuries like vacations have been required on the backburner for the predictable future. As a result of this, many hotel operators are unable to sustain their business for a long time. Primarily, it affected the hotels, which had opened recently (Chawla, 2006). There are various hotels, which have lost lot of money or some of them have taken huge debt. Due to this global financial crisis, some hotels started to offer the rooms with effective deals at lower prices. This crisis declined the arrival of tourists to stay in the hotels. It will impact the profitability of hotels, as they will not be able to meet the operational and service costs because there will be few guests in the hotel and hotels are providing the services at lower rates. In the current years, during the lean season, some of the well-reputed five star hotels have gone so far by reducing their prices up to 80% off their promoted price for accommodation (Mok, Sparks, & Kadampully, 2013). This is affecting the business of hotels adversely but it was good for the guests, who can get great bargains by making a simple web-search. Before Global financial crisis, the hospitality industry was at its boom stage. Now, there are so many competitors in the industry. With so many hotels competing in the decreasing market the competition to generate the bookings of hotel has become severe.

Environmental issues

The hoteliers should find the solutions for the above-mentioned issues, which the hotels are facing currently. There must be fine balance between guest satisfaction and cost controls (Jing & Zhao, 2009). In order to deal with the operating issues, the hotels should implement the attractive employment practices and packages, so they can motivate the employees to work with them for a long term. They should offer the insurance benefits to the employees. It will assist in reducing the employee turnover. Technological issues pose major challenge to the hotels, so there should be more focus on these issues. They should implement new and modern integrated systems in the management for reservation system, so the guests can book their hotels through internet.  Implementing new technologies will allow the sales and marketing personnel to get the new ways in storing the information of guests. It will help them in making effective marketing decisions. The hotels should motivate the employees to learn about new technologies and conduct the training and development programs from them. The hotel industry should give the close attention to the trends of globalization (Collins, 2016). They should reflect the requirements in many factors of the operations like; services, food, amenities, training and staffing policies. Although, there are no solutions for the environmental issues, but the hotels should make a contingency plan, which can be used in the situation of natural mishaps. The hotels should invest money in the marketing and promotional activities for enhancing its operations and increasing the profitability of property (Zapalska & Brozik, 2007).

Conclusion

As a conclusion, there are various issues, which are happening in the accommodation or hotel management. This is the industry, for which the issues cannot be expected and changing time to time. The operations of the hotels are the key to success. The issues, which are faced by the hotels, must be solved successfully prior to move ahead in the industry. The hotels should use the solutions for dealing with issues like; technological issues, operating issues, environmental issues and global financial crisis. All the given issues primarily impact the overall profitability and business operations of hotels. The problems need to be handled by the way of evolving new policies and strategies at the organizational level and making the decisions effectively.

References

Baum, T, 2016. Human resource issues in international tourism. Elsevier.

Chawla, R, 2006, Accommodation Management and Tourism, Sonali Publications.

Collins, A., 2016. Higher education globalization and student mobility: A case study of comparision of tourism and hotel management schools. CAUTHE 2016: The Changing Landscape of Tourism and Hospitality: The Impact of Emerging Markets and Emerging Destinations, p.722.

Jing, W. & Zhao, W.J,  2009, Issues, Challenges, and Trends, that Facing Hospitality Industry, Management Science and Engineering, vol. 3, No. 4.

Karakas, K.M. & Tatar, E, 2015, Impacts of economic crisis on hotel industry – a Hungarian case study,  Budapest Business School, College of Commerce.

Lane, J. & Edgerton, B, 2015, Hotel performance following natural disasters, Retrieved from https://www.cbrehotels.com/EN/Research/Pages/Hotel-Performance-Following-Natural-Disasters.aspx.

Chan, J.K.L. & Quah, W.B, 2008, Key Issues on Managing Small and Medium-Sized Accommodation Businesses: An Exploratory Study, TEAM Journal of Hospitality & Tourism, Vol. 5, Issue 1.

Mok, C. Sparks, B. & Kadampully, J, 2013, Service Quality Management in Hospitality, Tourism, and Leisure, Routledge Publications.

Molina-Azorín, J.F., Tarí, J.J., Pereira-Moliner, J., López-Gamero, M.D. & Pertusa-Ortega, E.M., 2015. The effects of quality and environmental management on competitive advantage: A mixed methods study in the hotel industry. Tourism Management, 50, pp.41-54.

O’Fallon, M.J. & Rutherford, D.G, 2011, Hotel Management and Operations, John Wiley & Sons.

Wood, R.C, 2013, Key Concepts in Hospitality Management, SAGE Publications.

Zapalska, A.M. & Brozik, D, 2007, Managing Family Businesses in the Tourism and Hospitality Industry: The Transitional Economy of Poland, Journal of Economics and Business 25 (1): 141-165.