The Management Issues Which Are Crucial to the Positioning of Hospitality Organisations - Assignment Example

TOPIC : HOSPITALITY INDUSTRY INTRODUCTION: Hotels have to add value to their current services offered its clients(Osawa, 2003). To begin, the current trend in the hotel industry is hotels must now assess whether or not services it formally offers to the general public is aimed at particular customer categories with the intention of meeting the needs of these prospective or customers. The hotels should now concentrate on incorporating the importance of the different cultures brought by each customer entering the hotels’ premises and to accommodating international customers and upon the methods of accommodating these customers. The temperament, religion, race, age, gender, status in life should be taken as a factor in determining the kind of services the company will offer. The following paragraphs details the uniqueness of the hospitality industry. BODY: Critically evaluate the management issues which are crucial to the positioning of hospitality organisations. The top five major management issues( this is a worldwide occurrence as people trave from one part of the world to another such as a US citizen doing business in UK)that are crucial to the positioning of the hospitality organizations are in reality not issues at all because they can easily be hurdled with good hotel management decision making(Merkel, 2004). First, the issue continued recovery in the U.S. economy is not that gloomy. Although the United States economy is generally strengthening, the Western nation’s recovery has been weaker and slower than what had been hoped for. Sadly, a slip or stall in the country’s recovery will surely further slow progress in the hospitality industry. This is not good especially if job creation does not accelerate. Second, the issue strengthening of the office and industrial real-estate sectors can be handled well. Currently the demand for office space as well as industrial space is largely driven by a jobs-led recovery plus the bigger demand for products and services. Economically, the absorption of space is economically healthy, but it needs to continue and also double its pace in order to rocket upwards the demand for hotel services. Third, the new construction and new supply is not what our economics books said is as simple as increase and decrease in prices and goods. Profitably, in order for the hotel room customers to continue to increase, new supply must be needed to remain in check. In terms of business, there has been an increase in new building and construction during year 2005. Further, even if the macroeconomic industry supply growth will be maintained during the year 2005, it is of utmost important that the hotel industry must focus on supply growth inside the perimeters of each submarket otherwise, the supply will not come evenly. Fourth, The issue of rational underwriting is not as tenable as it had been thought of. Meaning, loaners and investors have to maintain a minimum benchmark of discipline with regards to their respective parts for the success of the hospitality industry. Furthermore, if the hotel office, retail industry, industrial and multifamily will give any indicators, the maintenance this discipline will prove to be a difficult challenge to hurdle. Fifth, the issue of return of the business traveler can be resolve with improved quality of service that is pegged at reasonable prices. The increase in the hotel room occupancy rate has been driven more by leisure or vacation travel and lesser by business travel. Similarly, the Travel Industry Association of America has projected an rough forecast of a low six percent increase in business travel during the year 2005. Sixth, the issue of return of average daily rate is beginning to fade away. In reality, the natural increase of the average daily rate should definitely win as the higher-rated corporate transient business will start to compliment existing leisure business trips. The average daily rate will automatically grow. This will be the biggest influence for hotel value creation. Therefore the average daily rate must be monitored closely closely. Seventh, the issue of rising operating expenses can be overcome with increase in sales. Many hotels had to tighten their belts after the September eleven United States event where many lives were lost in three major United States locations. Presently, as the hospitality industry starts to recover lost ground, there is increase pressure on expenses. Whereas the cost of insurance remains the same, the increase in energy costs, employee salaries and additional benefits as well as increasing brand standards are steady picking up speed. Eight, the issue of High interest rates can easily be countered. The current stable and low is a necessary component of a healthy economic expansion activity. For, as the economy builds up strength, hotels must surely improve their performance. Further, the offsetting of any increased expense associated is influence by the rising interest rates. Definitely, hotel net operating incomes will rise faster than interest rates if stringent measures like lessening unnecessary expenses and increasing sales revenue through adverting and promotion activities. Lastly, The issue of event rise is an easy target to hit. Admittedly, Although terrorism is the top item in industry reports, There are other types of risk that an untoward event will happen have recently been more important. For example, the occurrence of natural disasters like hurricanes and constricted oil supplies have been impacting businesses decisions and consumers behavior. In reality though, event risk is a very unpredictable but very real probability. How an organisation can add value to a service such as in hotel industry. The hotel industry should invest money on feasibility other empirical researches in order to improve its customer ratings. In fact, the United Kingdom, Specifically those hotels in London, hotels should exert all efforts to understand the temperament of many Japanese tourists in order to entice them to return and check in many of its hotels. Also, hotels could harness the help of revenue optimization oranisations to add value to its hotel services(No author, 2004). Langham Hotel in London has approved the plan to harness the power of the IDeaS Revenue Optimization program. IdeaS is the top provider of income opitimisation programmed solutions in the hotel industry using the latest information technology softwares. Langham Hotel had decided on this turn of events after deeply analysing the whole income aspect of the hotel industry. Langham Hotel’s Revenue Manager Ola Ibraheem declared that "Functionally the system is unmatched in the industry. For a hotel like ours, fully automated and accurate forecasting for both transient and group business is critical, added to that, IDeaS' industry-wide reputation for delivering the results they promise and their high service level impressed us. With IDeaS we feel confident that we will always make the right decisions to optimize our demand". Historically, The Langham Hotel London had been founded in the picturesque year of 1865. It was then recognized as one of the first Grand Hotels in London. It had been pinned as the epitome of Victorian chic. Currently, the Langham Hotel London is an active and energetic member of a group of leading hotels of the World thereby keeping it up to date with the latest hotel events and trends. Hyatt International Converts Properties to IDeaS ASP Solution with Plans to Add More Hotels Throughout 2005 and 2006; Integration with Centralized CRS Allows Them to Optimize Entire Inventory. Clearly, to add value to its hotel industry service, competitors will also implement the technogolies used by its competitors in order to keep up with such competitor’s bigger hotel industry market share. Hyatt International has started implementing the information technology that IDeaS provided for Langham Hotel of London. In terms of competitiveness, Hyatt International has already implemented in its present properties the IDeaS v5i ASP based Revenue Optimization solution. This strategy has been piloted in the Grand Hyatt Hotel of Singapore. In addition, Hyatt International will had already set up the IDeaS information technology software during its new hotel openings in 2005 and 2006 in conjunction with its planned transformation. The Hyatt hotels are profitably distributed in diverse locations around the world. Also, Hotels that had been infused with the IDeaS ASP product in 2005 include the Hyatt Regency Perth, Park Hyatt Zurich, and the Park Hyatt Paris Vendome. To meet its targets, Hyatt Hotels had to integrate the IDeaS product directly to Hyatt's proprietary Central Reservation System (CRS), Reserve. This allows Hyatt a single centralized and optimized imagery. This single image inventory can allow a hotel chain to centrally consolidate its available rooms in order for its distribution channels to sell from the same optimized inventory. In terms of desirability, Consequently, the world-outstretched Hyatt International glaringly benefits from its rightful and just in time decision to implement the IDeaS ASP solution. In terms of technology, the IDeaS ASP software has provide the ability to help busy hotels to manage their revenue and the related inventory from anywhere, anyplace, anytime around the world in our borderless economy. And, to add value to its services, the hotel could offer budget prices for the same high quality services in terms of facilities and hotel staff attentiveness(Spicer, 2002). Kate Spicer stated that Little Wonder Hotels of London in the hotel market segment of budget lodging, London frankly disgraces itself when compared to the budget lodging programs in the other European cities such as Rome and Paris. Sometime ago, The outspoken mayor, Ken Livingstone, had hit at London's "shabby" value-for-money hotels located in the High Class society of London. He had promised to pumped into the London lodging industry a large infusion of much needed infrastructure cash. He stated that The people of the United States had been used to being pampered with great amenities and a wide range of budget accommodation. Ken Livingstone is digging on the Thames to entice the cropping of sticker shock. In terms of Budget lodging, there are a few gems, hidden away from much of the public’s view. This hidden away gem is definitely not advertising. Further, some budget lodging facilities are staying live on revenues from loyal clientele. These patron clients know that it had discovered a gem in terms of low lodging costs. For clarity, Some of these budget lodging facilities can accommodate its clients for a low price of only sixty British Pounds or even less. For this price range a client can use a double room plus the same accompanying warmth of service and comfort which are offered in other competing hotels but priced at one hundred British pounds or even more. Additionally, to give value added service to hotel clients, hotels must put into place the latest hotel industry strategies and trends. Carlo Wolff stated that many of the hotel industry members and suppliers will meet and exchange ideas, comments and suggestions in the much awaited Strategic Conference on Hospitality Operations & Technology. This conference will include the much expected showcase of the hotel industry’s newest innovative products and services. These will now be made available to hospitality owners and operators. In terms of purpose, HOT Conference participants will excitingly be able to visit with sponsors of the well planned event. The sponsors will give details of benefits of acquiring their latest offerings when the conference breaks and snacks occurs. Also, to increase the value added to the service of hotels, they could improve communication and information and technology costs. Business Wire in its May 31, 2005 issue stated that InterContinental Hotels Group had improved its communication process and also lessened its information technology expenses. They did this by putting into place the costly Collaboration Software of Centra Software, Inc. Centra Software, Inc., is the most popular and in demand provider of information technology software and services for online learning and training. Centra Software, Inc., had divulged that InterContinental Hotels Group, which includes InterContinental Hotel of London, had widened its implementation of Centra Software Inc.,’s business collaboration software to increase the scope of InterContinental Hotel Group's training and communication capabilities and to lessen the cost of its information technology infrastructure maintenance successfully. Hotel InterContinental is currently the world's largest and most global hospitality chain. Centra's Enterprise has succeeded with its offer of the low priced Advantage Subscription promo. The promotional price is just a flat fee in exchange for volume licensing software program that will be designed to permit large organizations to meet their increasing demands for online collaboration solutions. In terms of communication among its worldwide branches, InterContinental Hotel Group has complete unabridged access throughout its hotels in any place around the Earth. In terms of worldwide hospitality service, InterContinental Hotel Group owns, manages, leases and franchises more than three thousand five hundred hotels. This group of worldwide hotel domination includes many well-recognized and respected brands like Holiday Inn and Crowne Plaza. InterContinental Hotel Group has gone even further by recently expanding to the implementation of its enterprise license which creates the capability to provide permission to its hotels in a uniquely fundamental way. In terms of a client of an enterprise application service provider (ASP), InterContinental Hotel Group has generated savings in cost of approximately thirty thousand US dollars a year in are of Information Technology maintenance. This has also resulted to advantageous impact on the hotel’s information technology infrastructure, data center as well as support desk. In line with the hotel’s savings in terms or cost, Centra Software Inc., has helped largely in the hotel’s increase in terms of efficiency of hotel work force. As announced by John Courtney, Learning Technologies Manager at InterContinental Hotel Group, "IHG had 220 collaboration and training events last year with 3,200 users attending those sessions. Out of that, we had very few support calls to Centra, a testament to Centra's functionality and ease-of-use as a franchise community. To add value to its service, John Courtney declared that each of their hotels has different informational needs but they still had to provide the consistency of service in the arena of proprietary systems and brand-wide initiatives. The hotel administration has completely agreed that the timely help of Centra Software, Inc. has added value to their hospitality service. This is because the Centra Software enables the hotel to deliver training efficiently and effectively thereby it has enhanced the hotel’s position in this dynamic and competitive market in terms of sales and services. Agreeably, the added value injected by Centra Software is that it has made it easier and quicker for the hotel to connect with all parties concerned. Actually, The Centra software program has begun opening up the lines of communications between the InterContinental Hotel’s corporate headquarters and its many hotels profitably scattered across all seven of their brands worldwide. CONCLUSION: In conclusion, the above management issues are not issues at all. Further, the hotels must innovate in order to survive in this tight economic hotel competition we are in. The bottom line is service. The hotel must give high quality service at reasonable prices. The reasonable prices must also take into consideration the prices of the hotel’s competitors. REFERENCES: Merket, J., Oct 18, 2004. Ten issues will have influence over industry's performance, Hotel & Motel Management Osawa, T., Ball, S., August, 2003. The provision of hotel services to international tourists: an investigation of Japanese tourists visiting London hotels, Journal of Hospitality and Tourism Management No author, July 19, 2004. London's Historic Langham Hotel selects IDeaS Revenue Optimization; Selection Comes Following Thorough Industry Review and Product Assessment Business Wire Spicer, K., 2002. Little Wonder Hotels of London Arthur Frommer's Budget Travel, Wolff, C., February 2004. Ahead of the curve with exhibitors at the HOT Conference.(HOT Conference preview: technology innovation showcase)(Strategic Conference on Hospitality Operations & Technology), Lodging Hospitality, No author, May 31, 2005. InterContinental Hotels Group Improves Communication and Reduces IT Cost by Implementing Centra's Collaboration Software; World's Largest Hotel Company Expands License to Enterprise Advantage Subscription, Business Wire, No author, June 21, 2005. Hyatt International Converts Properties to IDeaS ASP Solution with Plans to Add More Hotels Throughout 2005 and 2006; Integration with Centralized CRS Allows Them to Optimize Entire Inventory, Business Wire xxxxxxxxxxxxxxxxxxxxxxxxx Pages: 9 University, Bachelor's Style: Harvard Language: UK Total: $45.00 7 30 am eastern mar 15. Read More