Understanding the Hospitality Industry

2.1 The Nature of the Hospitality Industry

What is the meaning of HOSPITALITY? There is no one single and simple definition to explain the term of hospitality in this stage. Many people have tried to describe the hospitality industry in different ways. Some tried to summarize the scope of the industry and its characteristics of involving both tangible and intangible features in the service delivery process. Others attempted to describe the industry by exploring the stakeholders involved, mutual benefits generated and the industry’s impacts to the society and economy.

Broadly speaking, Hospitality is the act of kindness in welcoming and looking after the basic needs of customers or strangers, mainly in relation to food, drink and accommodation. A contemporary explanation of Hospitality refers to the relationship process between a customer and a host. When we talk about the “Hospitality Industry”, we are referring to the companies or organisations which provide food and/or drink and/or accommodation to people who are “away from home”. However, this definition of the “Hospitality Industry” only satisfies most situations. In this chapter, a brief summary about the characteristics and scope of the hospitality industry would be provided.

2.1.1 Characteristics of the Hospitality Industry

We learned about different types of products and services provided by the hospitality industry and explored some key attributes of being a professional staff in the hospitality industry. We understand that working in the field of hospitality could be quite challenging. Different from other sectors, the hospitality industry is unique in its nature which tends to be service-oriented and has a strong emphasis on human exchange in the service delivery processes. A summary of key characteristics relating to the hospitality industry are listed in Figure 1.1 as below:

  1. 1. Product-Service Mix

Think about your experience of being a customer in a restaurant or a customer in a hotel. What else, apart from the food in restaurants and the facilities in hotel rooms, do you think can make your hospitality experience more enjoyable and satisfied?

In the hospitality industry, customers rarely consume pure products but a mixture of products and services. For example, one who dines in a restaurant will not only pay for the food and drinks but the services provided by the servers. The bill has covered both tangible and intangible experience.

Tangible features- for example, a steak as the main course, a glass of house wine, well groomed service staff and decoration of the restaurant. Intangible features- for example, a comfortable dining atmosphere or the friendly attitude of staff.

A successful hospitality business does not only count on its products and services, but also how they are delivered. The qualities of staff and the way they deliver the service are often more important than the tangible products in making a hospitality experience satisfactory or unsatisfactory. Hence, the two features can contribute to the total experience in the service delivery process.

As products and other tangible features can be easily imitated by competitors, hospitality operations which aimed for high-ended customers and ‘superior’ quality gradually spend more and more resources in enhancing the service standard as a strategy of differentiation.

  1. Two-way Communication

In order to achieve service excellences in the hospitality industry, two-way communication is 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 or food and beverage services usually involve team work and exchange of information within the organization.

  1. Relationship Building

The hospitality industry highly depends on repeated customers for survival. Building long term relationship with customers can benefit the organizations for generating stable revenues regardless of the instability of seasons and at the same time, developing brand reputations through positive word-of-mouth of the repeated customers. In order to develop brand loyalty, different methods are currently applied by the lodging and food service sectors, such as membership programmes which give privileges and incentives to frequent customers. However, top management of organizations do believe that the informal ways of building “friendship” between front-line staff and customers through high degree of personal attention and customization can win the loyalty of customers in long run.

  1. Diversity in Culture

As hospitality are closely related to tourism industry, it is not surprising that people involved in this sector, no matter customers or staff are experiencing a diversity in culture through 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 be easily occurred. Therefore, staff should be open-minded, and come up with solutions together in resolving problems in their duties. For example:

From customers’ perspective, some of them abstain from meat due to their religious beliefs or habit. Therefore, restaurants should provide vegetarian food as an option in order to satisfy their needs.

From staff’s perspective, eating pork or any food products with pork as ingredient should be avoided if some colleagues are Muslims in order to show respect to their religious belief.

Such a cultural diversity implicates that local staff should generally understand different cultures so flexible services can be provided to customers based on their national cultures and harmony in cooperation with colleagues from different nationalities can be achieved.

  1. Labour Intensive

Since the hospitality industry is service-oriented in its’ nature, it requires a huge supply of labours to create a memorable experience for the customers. This characteristic is especially true for those enterprises which target for high-ended customers. For example, staff-to-guest ratios are high in fine dining restaurants and 5-star hotels which aimed at providing one-on-one services to their customers. Although the advancement in technology do contribute to the replacement of some simple tasks in the whole service process, customers who concern the element of ‘care’ generally expect high degree of human contacts and personalized services in their consumption experiences. It explains why the industry is always in high demand for labour and is willing to spent time and resources in training and recruiting potential candidates to join the workforce of the hospitality industry.

2.1.3 Relationship between the Hospitality industry and Tourism

Scope of the Hospitality Industry

“Guests” means those who are away from their homes and it therefore, has generated a perception that the hospitality industry should include or overlap with the tourism industry to a certain extent. Without a clear definition about the scope of the hospitality industry, some suggested that it should not only cover all lodging and food service operations but other tourism related operations, such as airlines and theme parks. Besides, there were also some who considered putting hospitality and tourism into one industry. One example of categorization is shown in Figure 1.2.

As mentioned earlier, the hospitality industry is a part of a wider group of economic activities called tourism. In addition, not all hospitality businesses are profit-making business.

In this Unit, we have learned that there are two main business sectors in the hospitality industry:

  • Accommodation – To provide accommodation (and usually food and drink) to people who for whatever reason are away from home


  • Food and beverage – To provide food and beverage to local, commuting, transient customers and tourists

These two sectors will be covered in more as we progress. As we have seen, the hospitality industry includes hotels and restaurants, as well as many other types of organisations or institutions that offer food, drink, shelter and other related services. These products and services are offered not only to people away from home, but also to local customers. A manager in the hospitality industry, therefore, must keep in mind the following three objectives:

  1. Making the customers feel welcome personally;
  2. Making things work for the customers; and
  3. Making sure that the operation will continue to provide service and meet its budget.

2.1.4 Career Prospect of the Hospitality Industry

There are always some pros and cons for working in the hospitality industry. The concern whether a position suits to you or not is mainly dependent on your own character and personal interest. Some general views, both positive and negative, about the career prospects of hospitality industry are summarized below as reference for those who may have intentions to join this unique and challenging industry.

  1. Positive Views
  2. a) Variety of Career Choices

Due to the booming development of the hospitality and tourism industry, many new hotels and restaurants are opened for catering the needs of both the visitors and locals. It facilitates a huge demand of labour in the market, especially in some developing countries. Career choices are not limited to Hong Kong but other countries offered by international chains. And the job natures are broad, ranging from different back-of-the-house to front-of-the-house positions in the hospitality industry. Some positions that can be selected by graduates with their certificates or diplomas relating to hospitality are highlighted in Table 1.1 below:

Table 1.1-Career Opportunities of Graduates Studying Hospitality Programs____________________________

  1. b) Opportunities to Meet People with Different Backgrounds

As mentioned earlier that the success of a hospitality service highly depends on the human contact between staff and customers. Having a chance to work in the industry, particularly in some front line positions means that there would be many opportunities for one to meet and communicate with people with different backgrounds and cultures. For example, a hotel receptionist can perceive his/her position as a tourist ambassador, which can be enjoyable and challenging. The job satisfaction through winning customers’ smiles, as well as its’ interactive nature make hospitality industry attractive to youngsters with an out-going character.

  1. c) Long-Term Career Development

It is common that most people have to start their careers from the entry-level. However, the career paths are always quite clear for employees and there are always opportunities for them to get promoted and proceed to management levels based on their experience and performance. Successful stories are numerous in this sector and someone starting from room attendant can finally turn into the general manager of a hotel. Figure 1.3 shows a sample career path provided to employees by a famous fast food chain available in Hong Kong.

  1. d) Fringe Benefits Enjoyed by Employees

Different from other business and service operations, staff working in hotels and food service operations can usually enjoy some other benefits in addition to the basic salaries, annual bonus and insurance coverage. For example, hotel and restaurant staff are normally provided with 2 duty meals in their work days. Some hotel staff are also allowed to enjoy a discount rate or associate rate for booking rooms, which can be even applied to hotel outlets under the same brand all over the world.


  1. Negative Views
  2. a) Long and Non-Regular Working Hours

Shift works are very common in food and beverage and accommodation sectors. Despite of morning and evening shifts, some positions require staff to work overnight, such as night auditors in the front desk and security officers. As there are no such things of public holidays, staff are always required to work on weekends or special days, such as Christmas and Easter, etc. “Long working hours” seem to be the implicit norm of many positions in the hospitality industry. Over-time works due to the shortage of labour and peak seasons of businesses are frequent to both operational staff and managers. The concerns about the bad effects on one’s health and family life lead to people’s hesitation in joining the industry.

  1. b) Work Under Pressure

In most situations, staff are expected to provide “quick” and “high quality” services without keeping their customers from waiting. The pressure of maintaining the service efficiency and consistency, especially in peak seasons could be tremendous. The need for frequent communications with customers has especially created intense pressure to staff in front line positions. Receiving complaints or handling angry customers are resistances for people in starting their careers in this industry.

  1. c) Low Starting Salary

Hospitality industry offers many relatively low-skilled entry level jobs. With the exceptions of management or positions which require fluency of languages or specific skills, staff with no experience generally have low starting salaries. The differences between large-scaled and small-scaled hotels or food service operations lead to further variations in staff salaries.

  1. d) Perceptions of Low Job Status

As mentioned above that many positions are low-skilled in the hospitality industry, some people would think their job status are relatively lower when compared with other industries, such as banking and finance. The misperceptions of ‘being a servant to others’ in the Chinese culture plus other negative views introduced above have also discouraged many graduates from joining the industry.

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