TE-ACCOP

Accommodation Operations & Management

WEEK 2: DEFINING HOSPITALITY

I. The Hospitality Industry Intangible features - for example, a comfortable
• Broadly speaking, Hospitality is the act of kindness dining atmosphere or the friendly attitude of staff.
in welcoming and looking after the basic needs of
• A successful hospitality business does not only
customers or strangers, mainly in relation to food,
count on its products and services, but also how
drink, and accommodation.
they are delivered.
• A contemporary explanation of Hospitality refers to
• The qualities of staff and the way they deliver the
the relationship process between a customer and a
service are often more important than the
host.
tangible products in making a hospitality
experience satisfactory or unsatisfactory. Hence,
• When we talk about the “Hospitality Industry”, we
the two features can contribute to the total
are referring to the companies or organizations
experience in the service delivery process.
which provide food and/or drink and/or
accommodation to people who are “away from
home”.
❖ Two-way Communication
• In order to achieve service excellences in the
hospitality industry, two-way communication is
II. Characteristics of the Hospitality Industry
one critical factor which requires the
involvement and participation of both
customers and service staff in the service
delivery process.

• Through interactions with customers, important

messages about their needs and expectations
can be received by service staff for their
immediate actions to create customer
satisfaction.

• Interactions between internal staff or inter-

departments is also critical since total
experiences of customers in using any lodging
❖ Product-Service Mix or food and beverage services usually involve
teamwork and exchange of information within
In the hospitality industry, customers rarely the organization.
consume pure products but a mixture of products
and services:

Tangible features - for example, a steak as the main

course, a glass of house wine, well-groomed service
staff and decoration of the restaurant.
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Accommodation Operations & Management

❖ Relationship Building
• The hospitality industry highly depends on III. Relationship Between the Hospitality Industry
repeated customers for survival. and the Tourism Industry

“Guests” means those who are away from their homes

• Building long term relationship with customers
and it therefore, has generated a perception that the
can benefit the organizations for generating
hospitality industry should include or overlap with the
stable revenues regardless of the instability of
tourism industry to a certain extent.
seasons and at the same time, developing brand
reputations through positive word-of-mouth of Without a clear definition about the scope of the
the repeated customers. hospitality industry, some suggested that it should not
only cover all lodging and food service operations but
❖ Diversity in Culture other tourism related operations, such as airlines and
• As hospitality are closely related to tourism theme parks.
industry, it is not surprising that people involved
Besides, there were also some who considered putting
in this sector, no matter customers or staff are
hospitality and tourism into one industry. One example
experiencing a diversity in culture through
of categorization is shown in the figure below.
interacting with others.

• Staff who work in a hospitality organization

always have interactions with customers from
different regions, or to work and corporate with
other colleagues who may have different
backgrounds or cultures.

• Due to their differences in religious beliefs and

values, some conflicts and misunderstandings
can easily occur. Therefore, staff should be
open-minded, and come up with solutions
together in resolving problems in their duties.

❖ Labor Intensive
• Since the hospitality industry is service-oriented
in its’ nature, it requires a huge supply of labors
to create a memorable experience for the
customers. This characteristic is especially true IV. Trends Influencing the Hospitality Industry
for those enterprises which target for high- 1. Sustained disruption from online travel agents
ended customers. (OTAs) and digital players

• Although the advancement in technology do o Online Travel Agents (OTAs)

contribute to the replacement of some simple - Well-established OTAs are continuing to look for
tasks in the whole service process, customers new ways to challenge the hotel industry.
who concern the element of ‘care’ generally
expect high degree of human contacts and o Airbnb
personalized services in their consumption - The digital giant has made aggressive efforts for
experiences. non-traditional hospitality industry players to play
on traditional hotel business territory by
drastically expanding the type of properties
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Accommodation Operations & Management

available to customers - from vacation homes and • Hotel chains have launched brands designed to
B&Bs to experiences or collections. appeal to this demographic segment, often
reducing guest room sizes and putting more
emphasis on creating convivial common areas.
2. Big Data, AI and customization in the hospitality On the horizon however, the post-millennials
industry of Generation Z are already picking up speed.
• Big Data Analytics can help operators correctly
predict whether high-rolling guests spending • Both generations’ need for unique experiences
thousands of dollars on expensive food and has led to the surfacing of the experience
drinks are merely celebrating a special occasion economy.
or if this is the clients’ usual behavior while
Experience economy - describes the transition
traveling. This sort of information is crucial in
from a product- and service-driven economy to
efforts to determine a customer’s lifetime value.
an experiential one.

• A deep understanding of customer needs

through collected information also enables
5. Beyond the traditional hotel brand
hoteliers to stay relevant through their ability to
• Wherever service and design elements are key
offer personalized services to every guest, thus
to the experience delivery, hospitality brands
increasing their likeliness to return.
have an opportunity to add and improve on the
existing product.
3. Digital transformation in the hospitality business
• As a way of circumventing hypercompetitive
• An area where traditional hoteliers are lagging
markets, hotels will also increasingly have to
behind their more advanced counterparts is
focus on niche markets, where customers are
online visibility and brand recognition.
looking for a specific experience or service.

• In the past some brands were able to create

their markets based on the number of
6. Towards sustainable hotels
properties or an outstanding service offering.
• With the impact of climate change becoming
With the dawn of the internet and the
more and more apparent, societal pressure
connected rise of OTAs however, this trend has
on providers in all industries is mounting.
been disrupted. Because of the immense
Many major corporations and businesses are
amount of indifferentiable hotel brands, hotel
opting to ditch single-use plastics from their
chains can already barely compete with online
day-to-day operations and the hospitality
travel and booking players, making new
space is part of that.
competitive strategies inevitable.

• A growing number of hotels are rising up to

the challenge of running a sustainable
4. Millennials and Gen Z travel trends: experience
business. All across the board, resources of
economy & customization
all kinds are being used more efficiently in
• Millennials are a hugely attractive market,
the hospitality industry.
representing two billion people globally. Many
hoteliers are discussing how to best approach
this group of customers and how to stay
attractive in the light of changing values and
behavior.