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Module 12: Characteristics of the Hospitality Industry

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Characteristics of the Hospitality Industry

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Hospitality Management
Characteristics of the hospitality industry

What is the meaning of Hospitality? There is no one single and simple definition to explain the term hospitality.

Some have tried to summarize the scope of the industry and its characteristics of involving both tangible and intangible features in the service delivery process. Others attempted to describe the industry by exploring the stakeholders involved, mutual benefits generated and the industry’s impacts to the society and economy.


Hospitality is the act of kindness in welcoming and looking after the basic needs of customers or strangers, mainly in relation to food, drink and accommodation.

A contemporary explanation of hospitality refers to the relationship process between a customer and a host. When we talk about the “Hospitality Industry”, we are referring to the companies or organizations which provide food and/or drink and/or accommodation to people who are “away from home”.

Consider the hospitality industry in your area.


Think about the different sectors within the hospitality industry. (Hint: A sector of hospitality industry can be profit-making or non-profit-making.) You may also give the names of some enterprises in the hospitality industry. Draw up a list like the one below, (one example has already been given). Work on the list to see if you can come up with appropriate examples.

Have you been to any hospitality enterprises or organizations?

1. What services did you receive from them?

2. Were you satisfied with the way you were treated?

3. Did they understand what services you required?

4. Did they provide what you wanted quickly and accurately?

5. Were the staff members friendly or rude?



Write down five qualities or traits that a successful staff member in the hospitality industry should possess.

1. Do you possess any of these qualities or traits?

We understand that working in the field of hospitality could be quite challenging.

Different from other sectors, the hospitality industry is unique in its nature which tends to be service-oriented and has a strong emphasis on human interaction and exchange in the service delivery processes.

Think about your experience of being a customer in a restaurant or a customer in a hotel. What else, apart from the food in restaurants and the facilities in hotel rooms, do you think can make your hospitality experience more enjoyable and satisfied?

In the hospitality industry, customers rarely consume pure products but a mixture of products and services.

For example, one who dines in a restaurant will not only pay for the food and drinks but the services provided by the servers. The bill has covered both tangible and intangible experience.

Tangible features

For example, a steak as the main course, a glass of house wine, well groomed service staff and decoration of the restaurant.

As products and other tangible features can be easily imitated by competitors, hospitality operations which aim for high-end customers and ‘superior’ quality gradually spend more and more resources in enhancing the service standard as a strategy of differentiation.

Intangible features

For example, a comfortable dining atmosphere or the friendly attitude of staff. A successful hospitality business does not only count on its products and services, but also how they are delivered.

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. Hence, the two features can contribute to the total experience in the service delivery process.

In order to achieve service excellences in the hospitality industry, two-way communication is one critical factor which requires the involvement and participation of both customers and service staff in the service delivery process.

Through interactions with customers, important messages about their needs and expectations

Interactions between internal staff or inter-departments is also critical since total experiences of customers in using any lodging or food and beverage services usually involve team work and exchange of information within the organization.

The hospitality industry depends on repeat customers for survival.

Building long term relationship with customers can benefit the organization in generating stable revenue regardless of the instability of seasons and at the same time, developing brand reputations through word-of-mouth.

In order to develop brand loyalty, different methods are currently applied by the lodging and food service sectors, such as membership programmes which give privileges and incentives to frequent customers.

However, top management of organizations do believe that the informal ways of building “friendship” between front-line staff and customers through high degree of personal attention and customization can win the loyalty of customers in the long run.

As the hospitality and tourism industry are closely related, it is not surprising that people involved in this sector, whether customers or staff, experience a diversity of culture through interacting with others.

Staff who work in a hospitality organization always have interactions with customers from different regions, or work and co-operate with other colleagues who may have different backgrounds or cultures. Due to their differences in religious beliefs and values, some conflicts and misunderstandings can easily occur. Therefore, staff should be open-minded, and come up with solutions together in resolving problems in their duties.

Such cultural diversity implies that staff should generally understand different cultures, so flexible services can be provided to customers based on their national cultures.

From a customers’ perspective

Some customers may abstain from meat due to social beliefs, religious beliefs or habit. Therefore, restaurants should provide vegetarian food as an option in order to satisfy customer needs.

From staff’s perspective

Providing pork or any food products with pork as ingredient should be avoided if some colleagues are Muslims in order to show respect to their religious belief.

Since the hospitality industry is service-oriented in its’ nature, it requires a large supply of labour to create a memorable experience for the customers.

This characteristic is especially true for those enterprises which target high-end customers. For example, staff-to-guest ratios are high in fine dining restaurants and 5-star hotels which aim at providing one-on-one services to their customers.

Although the advancement in technology contributes to the replacement of some simple tasks in the service process, customers generally expect a high degree of human contact and personalized service in their consumption experiences.

This explains why the industry always has a high demand for labour, and spends time and resources in training and recruiting potential candidates to join the hospitality workforce.

The term “Guest” can be defined as a person who patronizes a hotel, restaurant, etc., for lodging, food, or entertainment purposes.

It therefore, has generated a perception that the hospitality industry should include or overlap with the tourism industry to a certain extent.

Without a clear definition about the scope of the hospitality industry, it has been suggested that it should not only cover all lodging and food service operations but other tourism related operations, such as airlines and theme parks.

As we have seen, the hospitality industry includes hotels and restaurants, as well as many other types of organizations or institutions that offer food, drink, shelter and other related services. These products and services are offered not only to people away from home, but also to local customers. There are two main business sectors in the hospitality industry:

Accommodation - To provide accommodation (and usually food and drink) to people who for whatever reason are away from home.

Food and beverage - To provide food and beverage to local, commuting, transient customers and tourists.

A manager in the hospitality industry, therefore, must keep the following three objectives in mind:

Make the customers feel welcome
Make things work for the customer
Make sure that the operation provides a service and meets its budget

Service Experience in the Hospitality Industry

Based on your past experience in using the services in accommodation or food service operations, try to think about and list 4 important requirements for being a professional staff member within the hospitality industry.

The following diagram shows the relationship between the hospitality and tourism industries.Can you think of more services with examples, to add to the diagram?