The hospitality industry in the UK is quite broad with many big and small players. It includes establishments specializing in the sale of meals, drinks, light refreshments and provision of accommodation. Some of the businesses in this industry include but not limited to motels, hotels, restaurants, lodges, and fast food joints. The fiscal year 2014 was a good year for the UK hospitality industry. Occupancy rate for UK hotels in 2014 was 77% and this is expected to increase to 78% in 2015 (PwC 2015, 6). This paper examines contemporary issues affecting the UK hospitality industry. In particular, the paper examines the legislative, managerial and operational issues arising from recent developments in the industry, future trends and development, and the impacts of these trends and development on the industry.
AC 3.1 An Assessment of the Legislative, Operational and Managerial Issues Arising from Recent Developments Affecting the Hospitality Industry
One of the most significant operational issues affecting the industry relates to dealing with a diverse and multigenerational workforce. Nearly 50% of all workers in the hospitality industry are below 25 years, and companies face difficulties in making this younger generation work in harmony with the much older but loyal employees. Each generation has its own values and perspectives about their roles and the work environment, and this creates a significant operational challenge (Gursoy, Maier & Chi 2008, 448). In addition, many players in the industry offer internet services to their guests. Technology is a major differentiating factor in today`s hospitality industry. As a result, many hotels and restaurants offer free Wi-Fi as part of their operations to attract customers and differentiate their service offering. Other operational issues include employee expectations, in terms of career development, performance appraisal, good communication and a flexible work environment. For operations to run smoothly, these expectations have to be met (Baum 2011, 16).
Similarly, the industry today is highly specialized, with facilities such as restaurants facing unique legal issues. To succeed in the modern economic climate, businesses in the sector seek legal advice on various issues affecting the industry such as beverage and food licensing, franchise arrangements, licensing agreements, supplier contracts. Legal experts also help businesses in the industry in negotiating leases, selling and purchase of existing restaurants and hotels and handling employment-related issues including employment disputes and management training. There are also new legislation that directly affect restaurant and hotel operations. These include the requirement that restaurants must print nutritional information on their menus to help customers make healthier food choices. Similarly, the UK government is already implementing trial calorie counts for food items sold in restaurants and takeaways as a way of regulating the amount of calories that should be sold to consumers. In addition, there are numerous legislations governing food safety (Assetsure 2015, 1).
In terms of managerial issues, there are many big brands in the hospitality industry. As a result, to succeed, managers must accurately identify their competitors and they must adopt effective strategies to lead their organizations toward their goals and objectives. Moreover, for a company in the industry to be successful, it must have a robust marketing strategy and offer exemplary services to its customers. With the dynamic industry environment, managers have to consistently on the lookout and manage their employees well to maintain customer satisfaction. Customer perception is important to business success in the hospitality industry.
Green Hotels and Green Tourism
In the future, green hotels will become more popular for various reasons. Firstly, they will be cost effective to investors in the industry. It will also preserve natural resources while enhancing environmental conscience for industry guests. Sustainable tourism is also expected to increase significantly given that many people have become aware of the negative effects of tourism on the environment. As a result, many people will become more responsible in terms of sustainability (British Hospitality Association 2015, 2).
Increased investment to improve service
As competition in the industry increases, the quality of service offered will continue to play an important role in attracting and retaining customers in the industry. Quality of service and level of satisfaction continue to be the leading determinants of profitability in the hospitality sector. As more players join the industry with differentiated service offerings, industry players will continue searching for new sources of competitive advantage (PwC 2015, 4). Some of the areas that are likely to be explored further include employee training to enhance service value and quality that customers receive.
Huge Investments in the Sector
Given the profitability of the industry, it is expected that the industry will continue to attract huge investments in the future not just in the United Kingdom, but also across the globe. Destinations such as the Middle East, particularly Dubai are likely to see heavy investments in the industry. In the UK, an additional 9,000 hotel rooms will be added in 2015, representing an increase of 1.7% (PwC 2015, 5). The government also depends on the industry for revenues and is likely to make significant infrastructural investments to support the industry. Because of these investments, the hospitality industry in the UK and across the world is likely to experience significant expansion in leisure activities in the long-term, and this will promote growth.
Other expected future trends include increased development of multi-purpose facilities with services such as theme parks, casino, theatre and shops. Similarly, we are likely to see an increase in the use of technology to develop intelligent hotels. These are hotels with very sophisticated technology such that a customer can use virtual fingerprints in performing nearly all operations such as check-in and checkout. Moreover, given that competition in the industry is expected to get tougher, companies in the industry will offer better salaries as a way of retaining their employees and avoid losing talent.
More travellers-with increased investments in the industry coupled with economic recovery in most part of the globe, the industry is likely to have more travellers. As economies grow, the industry will have more leisure travellers, especially the millennial generation who will be out to enjoy the new service offerings that the industry will offer (PwC 2015, 20). Given that these travellers are willing to pay more for a better experience, the industry will benefit significantly from this market.
Speed, precision and exemplary customer experience–with technological improvements, emergence of intelligent hotels and improvements in room service delivery, future customers will have greater preference for faster booking, faster response to their demands, faster check in and faster internet. Future hotels will have to offer these services in order to remain competitive in the market. In addition, hotels will have to offer more than the desired level of service. Future businesses in the hospitality industry will not be profitable if all they can offer is desired service. To makers guests repeat customers, they will have to get a WOW service by delivering a unique and impressive customer experience that exceeds all guests` expectations.
Increased diversity–with the growth of the hospitality industry, the sector will have more diversity not just in terms of workforce, but also types of guests it serves. As a result, the industry will create significant opportunities for employees and guests to have new experiences of different cultures. This also has implications on the quality of employees in the sector. The sector will have to employ quality workforce that understands and appreciates the various cultures. This will be important in enhancing interactions with guests from different colors, cultures, races, age groups and genders. Businesses in the industry will have to allocate significant resources in training their employees on different cultural backgrounds, particularly, non-English cultures such as Chinese.
Thousands of tourists come to the UK each year, and as a result, thousands of accommodation facilities are required to meet this demand. The trend is expected to continue in the future as consumers` disposable incomes increase and industry players improve on their level of service delivery. Therefore, the industry`s future is bright. However, there are numerous contemporary issues that affect the industry`s present and future. These include operational, managerial and legislative issues that have to be addressed for businesses in the sector to operate smoothly. As a whole, the hospitality sector is very important to not only the UK economy, but also the global economy. As a result, stakeholders, particularly managers in the hotel and restaurant sectors must keep up to date with the changing business environment in order to succeed.
Assetsure 2015. Hotels UK: Regulations, Laws & Industry Practice. [online] Available at:
Baum, T., 2011. Hospitality management. Los Angeles: Sage.
British Hospitality Association 2015. Reports – British Hospitality Association. [online]
Gursoy, D., Maier, T. and Chi, C., 2008.Generational differences: An examination of work values and generational gaps in the hospitality workforce.International Journal of Hospitality Management, 27(3), pp.448-458.
PwC 2015. Growth beds in UK hotels forecast 2015. [online]