1.0  Introduction

This report has been written to discuss the issues prevalent within the various contexts of tourism and hospitality management like operational management, human resource, financial, and the product and marketing concepts. This report can be used as a guide to understand these issues and find out strategies to mitigate them.

2.0  Brief Research and Analysis

2.1 Issues in Operational Context

There are various operations within the tourism and hospitality management sector that needs to be managed properly for the overall profit maximization of the company. However, this industry has been facing some issues related to labour shortage and cost containment. One of the most important assets for any tourism and hospitality industry is the availability of labour, but the labour cost is becoming higher due to a demand of higher wages by the labours and labour trade unions. There is a high rate of exodus of labour workers from Asian countries like India, Pakistan, Sri Lanka etc. to the Middle East country; in a search for higher wages, and therefore these countries are facing the unavailability of cheap labour, mainly in tourism and hospitality industry (Victorino, et al., 2005).

The second significant issue in the operational context of tourism and hospitality industry is cost containment. There is a very little margin of profit in the tourism and hospitality industry, which can only be achieved via cost containment. However, the recent changes in this industry are stopping the companies to do some cost cutting. The companies operating in this sector are facing a dilemma of meeting the standards to meet the expectations of consumers, while sacrificing an opportunity of cost containment (Sigala, 2005). 

2.2 HR Issues in Tourism and Hospitality Sector

The tourism and hospitality sector has been facing some issues related to the human resource. The very first issue in this context is the skills shortage due to lack of higher education. Although the remuneration packages for the employees working in higher positions in tourism and hospitality sector are reasonable, but most people are still sceptical about making a career in this sector. Many people believe that making a career in tourism and hospitality sector is not a good option for their children, and hence they avoid giving higher education to their children in this sector. Therefore, there is a lack of highly skilled professionals in this sector (Kusluvan, et al., 2010).

The second crucial issue prevailing in the HR context of tourism and hospitality industry is the training and development. The introduction of recent technologies and a mandatory need to fulfil some standards like the ISO 9001 2000 or Six Sigma has been forcing the concerned companies to invest a greater amount in the training and development of the new entrants in the company. These prerequisites are pushing the concerned companies in the back foot. These companies are really finding it daunting to cope with the higher costs of recruitment and retention of skilled professionals in the tourism and hospitality industry (Baum, 2007).

2.3 Issues Prevalent in Financial Context

Tourism and hospitality management industry is facing a major breakdown nowadays throughout the world, and there are some issues in the financial context of this industry. The main issue in this context is the following the various strategies of risk management. Risk management has become mandatory for most of the companies dealing in tourism and hospitality management, but following all strategies are very time consuming and expensive procedure. The increasing incidents of terrorist attacks and cyber security threats are making the procedure of following risk management strategies more difficult for the concerned companies nowadays (Long, 2013).

Another issue prevalent in the financial context of tourism and hospitality industry is to manage the working capital. Working capital is the measure of the financial strength of the company. Working capital is generally the difference between the current assets and current liabilities. If the liabilities are smaller, then working capital is negative and vice versa. In today’s world of changing technologies in the field of tourism and hospitality, it sometimes really becomes daunting for the company to manage the working capital in the favour of the company, while investing on necessary resources (Haktanir & Harris, 2005).

2.4 Issues Prevalent in Product and Markets Context

There are some issues prevalent in the product and markets section of tourism and hospitality industry. The very first issue is the increasing competition. The advent of internet has eased the process of buying tickets and reserving rooms, flights, and holiday packages for the consumers. Nowadays, online reservation system has become a prerequisite for most of the companies indulged in this industry. However, this availability of all services related to tourism and hospitality to the consumer at his fingertips has also increased the competition, not only among the national, but also among the international companies. Now, any company, whether large or small must have an online reservation system; to cover the investments (Koc, 2005).

The second issue prevalent in this industry related to product and markets context is the personalisation of brands and services. There are many MNC’s in today’s tourism and hospitality industry market who are willing to push every limit to gain more customers, so they provide some personalized or customized offers to their customers like free stay with flight ticket, free lunch or dinner with hotel stay, etc. However, this type of personalisation is often not easy to achieve for the smaller companies, and therefore they have to incur heavy losses in revenue. This is the reason why many small companies are now giving up their tourism and hospitality business (Haugland, et al., 2011).

3.0 Conclusion

The tourism and hospitality industry are the backbone of every country and its economy. Any nation, whether a developing or developed one; cannot imagine surviving without this industry in today’s business world of globalisation. This report has been written to provide a brief analysis of some of the issues in tourism and hospitality sector. However, there might be some limitations of this report, depending upon the available information.

 4.0 References

Baum, T., 2007. Human resources in tourism: Still waiting for change.. Tourism Management, 28(6), pp. 1383-1399.

Haktanir, M. & Harris, P., 2005. Performance measurement practice in an independent hotel context: A case study approach.. International Journal of Contemporary Hospitality Management, 17(1), pp. 39-50.

Haugland, S., Ness, H., Grønseth, B. & Aarstad, J., 2011. Development of tourism destinations: An integrated multilevel perspective.. Annals of tourism research, 38(1), pp. 268-290.

Koc, E., 2005. New product development in the Turkish tourism market: the case of football tourism.. Journal of Sport Tourism, 10(3), pp. 165-173.

Kusluvan, S., Kusluvan, Z., Ilhan, I. & Buyruk, L., 2010. The human dimension: A review of human resources management issues in the tourism and hospitality industry.. Cornell Hospitality Quarterly, 51(2), pp. 171-214.

Long, L. M., 2013. Culinary tourism. In Encyclopedia of food and agricultural ethics, pp. 1-8.

Sigala, M., 2005. Integrating customer relationship management in hotel operations: managerial and operational implications.. International Journal of Hospitality Management, 24(3), pp. 391-413.

Victorino, L., Verma, R., Plaschka, G. & Dev, C., 2005. Service innovation and customer choices in the hospitality industry.. Managing Service Quality: An International Journal, 15(6), pp. 555-576.


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