Trends and Issues in Hospitality and Tourism

Lesson Objectives:
At the end of this module, I should be able to:
1. Identify the issues that owners and managers of the tourism and hospitality establishments
are likely to face.
2. Identify possible steps to address the major issues confronting the industry.

Issues in Tourism Industry

The tourism and hospitality is not immune to problems and these issues can be categorized into
five: marketing, legal, human resources; operations and consumer affairs.

Marketing issues

The marketing issues being faced by the tourism and hospitality industry are changing
demographics,changing vacation patterns, market segmentation,frequent guests programs,
maturation in segments of the fast food industry and consolidation.

Changing Demographics

The population of the developed countries are is now aging, currently 33 years and is projected
to increase in the coming years. This is an issue that is important to the industry because an
older population has preferences that differ from those of a younger population. Service
providers would need to find ways to adjust their service products to the changing preferences
of the market.

Another change in demographics is the increase in the number of single-

parent households. This household generally have lower levels of
discretionary income. To reach this market, service providers will have to develop new service
products that will appeal to this segment at affordable prices.

The other change is the continuing growth in the number of people traveling for personal rather
than business purposes. Approximately 74% of domestic travelers primarily for a nonbusiness
purpose. This group is responsible for the increased percentage of the travel market in the past
45 years and the growth is sure to continue.

The last change is the growth in the number of international travelers.One of the primary
reasons is the decreased cost of transportation relative to income,making travel more affordable
to everyone.Another is increased vacation time and a greater number of holidays in many
countries.

Changing Vacation Patterns

Citizens of industrialized countries are changing their vacation patterns.The traditional
once-a-year vacation of two weeks is declining in popularity.For a growing number of
people,vacations are becoming shorter and more frequent. At present,more people usually plan
mini-vacations,adding two of their annual vacation days to a three-day holiday weekend.In this
way,they manage to get away for a mini-vacation of five days while using only two actual
vacation days.

Market Segmentation

Since 1980,the principal term in tourism marketing has been marketing segmentation.Until the
late 1970s, lodging establishments attempted to appeal to broad general markets.Their aim was
to appeal to a broad group of potential visitors.Inrecent years, the success of the limited service
properties has led to the development of other properties intended to appeal to selected market
segments. Some of the types of lodge properties to become apparent include all-suite
properties, residence properties, sub-budget properties,and a variety of budget properties,
which differ by their varying services and amenities.

Examples of market segmentation have been evident in food service in the past 10 years. A
number of restaurants that additionally offered extensive something-for-everyone menus has
begun to see reduction in business, as customers have chosen to patronize restaurants offering
specialized service products.As new market segments are identified, properties designed to
appeal to those segments are likely to be developed.

Frequent Guest Programs

Because of the proliferation of properties and the increasing competition among them, some
lodging operators have begun to develop programs to gain repeat business. Modeled on the
frequent-flyer programs which were successfully used by many airline companies,these plans
give credits to regular guests.They can be redeemed in the form of reduced rates,upgrades,
free accommodations, free meals, or any variety of amenities. As competition becomes
keener,the number of these kinds of programs will certainlygrow.Many believe that these
programs will gain in the lodging business the same favor that they have achieved among airline
customers.

Maturation in Segments of the Fast-food Industry

Segments of the fast food industry are no longer expanding to the extent that was formerly
possible.The demand for hamburger is not growing as fast as it once did,so operators find it
necessary to develop new products to maintain the desired sales level.At
present,establishments that previously offered few products to other than hamburgers now offer
pizza, salads, poultry or other meat products.As public tastes continue to change,food service
operators will have to develop specialty products to retain an adequate share of the market.

Consolidation in the Commercial Lodging Industry

Some experts are now predicting that the number of large nationwide lodging companies will
decrease in the coming years;that a small number of firms will dominate the lodging industry by
acquiring smaller chains of regional or national properties.This will enable successful companies
to obtain the funds required to expand their operations internationally.

The trend toward consolidation will have a tremendous impact on all commercial lodging
operations. Both independent operation and owners of smaller chains will find it difficult to
compete with heavily advertised national and international brands.

Legal Issues

Liquor Liability

In the past,there was a growing public concern over the increasing number of alcohol-related
automobile accidents. At present, alcohol and use of drugs is a factor in more than half of all
automobile accidents.

This led the public to pressure state legislatures to act. Legislators have responded by lowering
the levels of blood alcohol in which an individual is considered intoxicated and by increasing
penalties on offenders. In addition, several states in the US have imposed new regulation have
made the discounting of drinks —the so-called happy hour—illegal. In several states,
establishments and their owners can be held financially accountable if they serve alcoholic
beverages to an intoxicated individual who causes damage or injury after leaving the
establishment. Some restaurants and bar owners have changed their market strategies. They
now feature and promote non-alcoholic drinks. As societal attitudes toward alcoholic drinks
continue to changes, it will be necessary for food service and lodging operators to adjust.

Ethics in the Tourism and Hospitality

Ethics is an academic discipline that deals with the study of codes of moral conduct practiced by
individuals or groups. Business ethics refers to the application of a particular moral code to
relationships,activities and discussions made by individuals in business or industry. It is the code
that enables the individual in business to distinguish right from wrong: to differentiate between
ethical and unethical behavior.

Ethics in the tourism and hospitality industry has been the issue for the thousand years. The
business practices of some operators of tourism and hospitality establishments are
questionable. For example, a manager of a new restaurant may hire 20 waiters but intends to
keep only 12 most able after the second week of operation. An owner may fail to report all sales
on his income tax returns. A tour guide may cheat on his income tax by failing to report all his
tips.Another owner may cheat on his taxes by charging personal expenses to the business.An
employee in the purchasing department may accept gifts from vendors in return for buying
inferior products. Business ethics is likely to remain forever in the list of tourism and hospitality
issues.

Human Resources

Some human resource issues are sexual harassment, employee turnover, employee assistance
plans and employee empowerment.

Sexual Harassment

Sexual harassment may be defined as unwelcome sexual advances,requests for sexual favors
and other verbal or physical conduct of sexual nature that take place under any of the following
conditions:
1. Submission is made a condition of the person's employment;
2. Submission to or rejection of such conduct is used as a basis for employment discussions
affecting the person; and
3. It unreasonably interferes with the person's work performance or creates an
intimidating,hostile, or offensive work environment.

Most cases of sexual harassment involve complaints by females about co-workers or superiors.
In the last 10 years, the number of cases has grown because an increasing number of women
have
become willing to speak out.

Employee Turnover

Employee turnover is one of the major issues confronting managers of the tourism and
hospitality industry. With turnover rates averaging approximately, 100% per year,
managers are always faced with the problem of losing experienced employees and hiring
less-experienced employees as replacements. Faced with inexperienced replacements, several
managers believe they have only
two choices — to shoulder the high training costs associated with developing
new employees into efficient workers or to incur the equally high costs
associated with working with untrained employees. Very few realize that there is a third
alternative - to retain valuable employees and reduce turnovers.

Many managers in the tourism and hospitality industry understand the requirements to reduce
turnovers.
These include adequate wages and benefits, reasonable working conditions, reasonable work
schedules and reasonable treatment of employees by managers. However, only few managers
put these requirement into practice.

Employee Assistance Plans

Employee assistance plans (EAPs) are included in the discussion of major issues in the tourism
and hospitality industry because they are one of the secular steps to pay to pay attention
regarding the problems of their employees. The problems of those employed in the tourism and
hospitality industry include psychological problems,
family issues, financial problems, legal issues, health, as well as educational issues.

The tourism and hospitality manager who establishes EAPs to benefit

employees will eventually develop a more loyal workforce, one that is willing to make a great
effort to attain the operational goals of the enterprise. In addition, the manager who helps the
employees will reduce employee turnover.

Employee Empowerment

In some tourism and hospitality establishments, managers have developed rules and
procedures that employees are directed to follow. These include directives such as inflexible
rules for checkout time, rules prohibiting free refills on coffee, strict limits on the number of hand
towels per guest, or directives prohibiting substitution on special dinner menus. These may
affect the overall impression of a guest regarding a particular food service or lodging enterprise.
For some guests, these rules may be enough to make them decide never to return.

Many owners and managers have realized the ineffectiveness of setting strict rules governing
every detail of guest service, thus, they now set policies that are guest-oriented. They empower
their employees to make decisions that will improve the quality of service to guests without
having a negative impact on operations.

Operations

The operations issues are automation, smoking/nonsmoking areas, sanitation and public health,
and recycling solid waste.

Automation

Automation is the process of using electronic and mechanical equipment and machinery to
complete some or all of the tasks associated with a given enterprise. The main reasons for
automating an enterprise are to increase the speed of work and to reduce the cost of work.

Automation in the travel industry is here to stay. Computerization will affect the industry
principally in communications, interactive television and elimination of tickets. Also, the food
service and lodging establishments have automated to the extent that guests and customers no
longer have direct contact with any staff member. There are lodging operations in which a guest
inserts a credit card in an electronic device, enabling him to check in without speaking to the
room clerk at the desk. Check out can be done through a touch-sensitive screen
on the television set in the guest's room. Food and beverage can be taken from the vending
machines.
Smoking/Nonsmoking areas

As the number of customers of the tourism and hospitality industry are demanding smoke-free
areas for dining and sleeping accommodations, the industry will continue to exert efforts to meet
these demands. This is specifically true in places in which legislation orders that appropriate
facilities to be made available. That is why restaurants apportion sections of their dining facilities
to accommodate the requests of nonsmokers. Some even install or improve ventilation
equipment.

Many lodging establishments have also set aside accommodations for the nonsmokers. In some
hotels, smoking is prohibited in the lobbies, corridors, elevators, and other public areas. Airports
have also established nonsmoking areas. The prohibition of smoking in tourism and hospitality
enterprises is an issue that is increasing in importance to owners and managers in the coming
years.

Sanitation and Public Health

A very important issue in food service is sanitation. Everybody agrees that all steps should be
taken to prevent illnesses that are caused by the manner in which food is handled or the food
itself.

National and local governments apply strict sanitary standards to food and beverage operations.
They conduct regular inspections and apply sanctions on those found violating the regulation.
The sanctions range from imposing fines, publishing lists of violators in newspapers and closing
the establishment of consistent violators. And to ensure that food and beverage operators
comply, they usually hire consultants to
conduct regular inspections and to help them in the immediate correction of any violation.

Recycling Solid Waste

In previous years, there has been a gradual closing of the landfills that were used for disposing
solid wastes and a growing awareness of the harmful effects of either burning solid waste or
dumping it into the sea. This has resulted in major waste disposal problems in some areas. The
trend toward recycling is likely to increase and many in the tourism and hospitality industry who
have not been previously affected by this issue will eventually find it necessary to adopt a
recycling program.

Consumer Affairs

Fire Safety

Fire safety has always been an important issue in the tourism and hospitality industry. In the
20th century, hotels, motels and other accommodation facilities have instituted many changes,
and these are improvements in design and construction as well as improvements in the fire
control systems installed in buildings. Examples are electronic smoke detectors, automatic
systems to contact fire departments, better sprinkler systems and so on. These system helped
make people feel safer.

However, a number of dangers associated with fire remain to be considered. In case of fire, the
guests in hotels and other lodging.
operations may face danger from the toxic smoke resulting from the burning of man-made
materials. In a fire, these toxic fumes can be more dangerous than the fire itself.

Aside from that, another problem is construction. New buildings were well-insulated to decrease
heating and cooling expenses and some windows were not designed to be opened.
Temperature and air were controlled by very complicated central systems. In case of fire, there
is a danger that smoke may spread quickly throughout the building.

Truth in Menus

Food service operators are know that preparing truthful menus is an ethical practice that should
never be violated. Unfortunately, a small minority have produced menus that are not accurate
indicators of the food served in their establishments. Some serve US Choice Beef when their
menu states US Prime Beef. Others serve portions with fewer ounces than the number listed in
the menu. While some have not used the actual ingredients suggested by their menus and have
substituted one product for another such as turkey for chicken, margarine for butter, generic
products for name brands and domestic products for imported ones. It is important that those in
the tourism and hospitality industry conduct their operations ethically in order that consumers
will have faith in the truth of their menus, the wholesomeness of their food and the honesty of
their business

Diet/Nutrition/Heath

The public is now more concemed about healthy diets containing less fat and less calories that
is why many food service operators are adjusting their menus to the changing public tastes.
Some are devoting sections of their menus to food for the diet-conscious while others are
assigning certain menu items for those interested in food that is low in sodium and cholesterol.
An increasing number of restaurants exert efforts to attract health-conscious diners. Some have
taken out unhealthy food from their menu.

The trend of healthier dining will definitely continue. Successful food service operators will have
to give greater attention to the nutritional content of food in the years to come.