Challenges for the global hospitality industry: an HR

perspective

Presented ByPei Li & Qianqian Su

Table of ContentsO Introduction

O The Human Factor

O Methodology

O Shifting Paradigms in the Hospitality Industry

O Conclusion and Implications of Research

IntroductionGlobalization has unleashed the latent economic potential of the international hospitality industry. However, it has brought to the fore several challenges faced by the hospitality sector, especially in the Human Resource Department.

The Human Factor

With globalization and increasing international competition, the ability of the human factor to deliver quality product and services is emerging as a key source of competitive advantage in the context of the hospitality industry world-wide.

Intangibility

InseparabilityHeterogeneity

Human Resource-Centric Industry

MethodologyThe research is based on data gathered using a qualitative research methodology.

• Primary Data: semi-structured interviews and informal discussions with senior level managers in India

• Secondary Data: academic literature and industry reports

• HR Roundtable (5th International Conference on Services Management)

Shifting Paradigms in the Hospitality Industry

Trend 1 — Global ExpansionCatering to the needs of the contemporary world traveler whose business and leisure pursuits increasingly traverse global boundaries, several international hospitality chains have attempted to capitalize on rising demand in high growth markets such as China and India.

Challenge 1 — Attraction & Retention of Employees• Manpower shortages both in terms of quantity and

quality is one of the biggest HR challenges faced by the hospitality industry.

• Manpower shortage is further exacerbated by the high attrition rate in the industry. With the increase in demand for good hospitality labor, staff turnover is very rapid, especially in India and China.

Challenge 1 — Attraction & Retention of Employees

• Creating unique organizational value proposition

• Based on behavioral profiling and psychometric testing during recruitment

• Using innovative human resource practices

• Developing institutionalized education framework

• Hiring from outside the industry

• Emphasizing on internal communication after merger and acquisition

• Rationalizing and revising pay scale

Trend 2 — Evolving Patterns of Consumer Demand & Technological Development

O With the increasing commoditization of goods and services, “experience” have emerged as the next stepping stone in the “progression of economic value”

O Experiences provide a sensory, emotional and relational connection to the service or product offering, well beyond its mere functional value.

Challenge 2 — Training & Development for Capability EnhancementTechnological developments, international expansion and the resultant culture diversity and emerging experience-centric guest expectations have brought into focus the importance of developing competencies other than only those related to core hospitality operations.

Trend 3 — Building Brands

O Brand is emerging as an important value driver which is expected to influence the hotel choice of the consumer, now and in the future.

O Hospitality product is becoming more and more experience-centric and customer-focused to match the emerging needs of the world traveler. Challenge 3 — Employee Engagement

The existence of touch point or “moments of truth” which influence customers’ perception of service makes consistency even more difficult to achieve in the context of hospitality services.

6 core elements that drive employee engagement:

Challenge 3 — Employee Engagement

• Tangible rewards

• Quality of work

• Work-life balance

• Inspiration and values

• Enabling environment

• Future growth and opportunity

Employee engagement has a positive correlation with desirable organizational outcomes such as heightened customer satisfaction and loyalty, reduced employee turnover, improved return on assets, and higher profitability.

Conclusion

Employee Engagement

Training & Development

Attraction & Retention of Employees

Thank you!

Question: Besides the challenges mentioned above, what challenges do you think play an important role in the hospitality industry?