Overview of the Hospitality industry

HTM130 Introduction to Hospitality and Tourism Industry

Laura Law

OUTLINE

• The Scope of the Hospitality Industry

• Characteristics of the Hospitality Industry

• Service-The Mission and Product of Hospitality

• Pursuing Opportunities in Hospitality

THE SCOPE OF THE HOSPITALITY INDUSTRY

Topic 1 Overview of the Hospitality Industry

TEXT BOOK PG3

About hospitality

History of hospitality• The meaning of the

word “hospitality” comes from HOSPICE (a home providing care for the sick or terminally ill - end-of-life care)

The Pineapple Tradition

• The pineapple has enjoyed a rich and romantic heritage as a symbol of welcome, friendship, and hospitality

• Pineapples were brought back from the West Indies by early European explorers during the seventeenth century

• From that time on the pineapple became the favored fruit of royalty and the elite

• Today, it is globally recognized as a symbol of hospitality

What is hospitality industry

• Hospitality Industry can defined by its scope, mission an providers

• Continually updated and refined, expanded and honed

• In hospitality, the service provider is “part of the product itself”.

For guests to be satisfied, they not only must believe that they have received a valuable service for their dollar, but also feel valued and respected by the workers providing the service

(Kernbach & Schutte, 2005; Langhorn, 2004; Varca,2004; Winsted, 2000).

The objectives of hospitality industry

1. Making the guests feel welcome personallyThis requires both a friendly manner on your part toward the guest and an atmosphere of “liberality and good will” among the people who work with you in serving the guest. That often translates to an organization in which workers get along well with one another.

2. Making things work for the guestsEverything needs to be clean and in working order before the guests step foot on the establishment. A hospitality system requires a lot of work and the manager must see that it is done properly and maintained at all times.

3. Making sure that the operation will continue to provide service and meet its budgetAs a manager, the key to achieving this objective lies in achieving a controlled profitable operation. A good term to describe this management concern is “conformance to budget.”

CHARACTERISTICS OF THE HOSPITALITY INDUSTRY

Topic 1 Overview of the Hospitality Industry

Characteristics of the Hospitality Industry

1. Shift Work

2. The physical products of hospitality, e.g. food and drink in a restaurant or the actual hotel room, are products that are sold at a price to the guests or customers (e.g. the price a guest paid for renting a hotel room, or the price a customer paid for buying a meal in a restaurant).

3. These are often regarded as the tangible aspects of hospitality

1. The qualities of staff and the way they deliver the service are often more important than the tangible products in making a hospitality experience satisfactory or unsatisfactory or these are the intangible aspects of hospitality

2. Inseparability of Production and Consumption

3. Highly perishable product

4. No such thing as business hours. Hospitality operations run on a 24 hour basis all year round

SERVICE-THE MISSION AND PRODUCT OF HOSPITALITY

Topic 1 Overview of the Hospitality Industry

Business Structures

• Two basic structures– Single Unit– Multiple Units

Single Unit

• Single unit business: business that only has one location and one unit (Also called an independent business)

• Not part of any other business• Owner is responsible for all the

business decisions• Make decisions about décor, recipes,

staff, how much to charge, etc.

Multiple Unit

• Multiple Unit Business: business that consists of more than one unit or more than one location

• 2 Structures– Chain – Franchise

Chain

• Chain: business that has more than one location under the same name and ownership

• Example: Olive Garden (owned by Darden Restaurants, Inc.)

• Darden decides on décor, menu items, prices, and even what servers will wear

• Most important aspect of a chain is the brand• Brand: name, logo, tagline, or any

combination of these that distinguishes a product from its competitors (association)

Franchise• Franchise: the right to do business using the brand and

products of another business• Franchise is actually part of a chain• Chain owner can give the outside person the right to

use the chain’s name and sell the chain’s products• Franchise Agreement: legal document that sets up a

franchise. It includes the rules and standards that the outside person must follow in running the franchise

• Franchise Fee: Amount of money the outside person pays the chain owner

• Franchisor: The person who owns the chain• Franchisee: The person who busy the rights to use the

brand

CORPORATE PHILOSOPHY

Topic 1 Overview of the Hospitality Industry

A Cup of Kindness

• Customer service is a central focus of hospitality

• Our job is to enhance the lives of those people (guests, customers, passengers, etc.) to whom we serve– We begin by understanding what they

need– Kindness is demonstrated by making

everyone feel welcome– Quality customer service requires that

we make all guests feel comfortable– We all have a need to feel important

Moments of Truth• Term created by Jan Carlson –

Scandinavian Airlines System• These are guest encounters • Every hospitality organization has

thousands of moments of truth every day

• Some of them include:– A guest calls the restaurant for a table

reservation– A server takes an order– A server brings the check – A guest departs the restaurant

CAREER DIRECTION IN THE HOSPITALITY INDUSTRY

Topic 1 Overview of the Hospitality Industry

Size & Economic Impact

• Travel & Tourism is the world’s largest industry

• Expected to group by 4% each year through 2019

• Has a major impact on national economies around the world

• More than 18 million people in the US work in the hospitality industry– It is the second largest

employer (health care is 1st)

• Hospitality generates more than $1 trillion each year in the US

• Whenever people travel, they spend money

• Federal, state, and local government collect taxes on many hospitality purchases

• Major impact on countries

Diversity

• Diverse: made of elements that are different from each other

• Many businesses in the hospitality industry are different from other businesses

• Think about when you used the hospitality industry

• People who work in the industry are also different

Complexity

• Term used to describe the hospitality industry

• Complex: made of 2 or more parts (departments)

• Some of the parts are complex in that they cannot be separated from one another

Hospitality Spirit

• Works to create memories• Everyday guests rely on us for

service• Passion is in the service element• People with a service spirit are

happy to do something extra to make the guest’s experience memorable

Figure 1-1

Career Paths

Conclusion

A business approach toward hospitality industry:

- be able to communicate with customers in the hospitality environment;

- develop positive image and organisational reputation;

- contribute to good customer service;

- avoid misunderstandings and complaints;

- follow organisational standards for personal presentation, etc.