Globalization in the Hospitality Industry

Tourism is an industry that gives people the opportunity to explore and discover different cultures and many different countries. People are able to view attractions, dabble in local cuisine and experience life in a different country. Tourism is an industry that is rapidly growing as more and more people are traveling abroad. People have a genuine interest in learning about new cultures and experiencing all that a country has to offer. More countries are moving closer to globalization and this in turn is beginning to blend many cultures together. Developing countries are expanding their role in the tourism industry as countries are discovering that this is one of the quickest ways to earn revenue.

Tourism blends many countries together in the service sector. The hospitality industry relies heavily on tourism and is the driving force behind sectors such as food and beverage as well as the hotel industry. It is imperative that all of these industries work in a cohesive fashion because if one fails, so goes the others. When a country experiences a growth in tourism there is automatically an increase in food and beverage and the hotel sector among others. There are both positive and negative effects to the linkage in the hospitality industry and globalization plays a major part.

The hospitality industry creates a multitude of positions and job opportunities for people in the local area. As discussed above, the different sectors are strongly linked to one another. Promoting tourism in a country not only boosts the economy of that country, but also creates jobs for people. Jobs such as chefs, housekeepers, waiters and waitresses, and hotel front desk clerks are all jobs that are in high demand when countries see a boost in tourism. This helps that country’s economy grow as more people become gainfully employed. Any decline in the hospitality industry results in job loss and high unemployment rates. This has an adverse effect on that country’s economy and its people.

As discussed earlier, the hospitality industry is one of the most profitable industries in any given country. The hospitality industry generates a substantial amount of profits for the government in a relatively short amount of time when compared to other industries. The hospitality industry provides a source of revenue that can be used to finance government spending, create a reduction in the country’s national debt, and bolster the economy if the government uses those profits wisely. Governments are under a lot of pressure to promote their countries in order to bolster the tourist dollar. They rely heavily on tourists to eat in their restaurants, sleep in their hotels and visit their attractions. Without tourism, the hospitality industry is under-utilized. Tourism dollars also enable the maintenance and upkeep of local attractions that don’t see many dollars from local residents such as parks and zoos. This is why it is important that a country does what it can to promote these local attractions and appeal to people traveling into their country.

Hospitality organizations who believe that growth without globalization will need to research their efforts further if they are to survive. Many markets are seeing a rise in competition from other countries looking to steal business from them. Globalization impacts every sector of the hospitality industry. As all aspects of the industry evolve, all resources will see competition from many countries across the globe. Hospitality companies who do not anticipate and are not prepared will find themselves out in the cold.

In the hotel sector, companies that have established a presence in the global economy, globalization has not been a concept is new to them. Well established hotel chains face a variety of issues that they have to deal with in the global market. A hotel chain that operates globally must rely heavily on international tourism in order to fully function and thrive in different cultures and geographic settings. Hotels have the ability to establish their business model in practically any market across the globe if executed effectively.

Additionally, hotel employees are represented by many different cultures and backgrounds so it is important that hotel organizations implement different management skills and policies and procedures in order to effectively manage its personnel. Global issues such as communication, geography, language are all issues that an effective hotel manager will need to address.

These factors are vital in forming the appropriate global affiliations. A number of hospitality organizations are looking for ways to form such affiliations in order to gain entry into markets that are new to them. It is difficult for them to go it alone as doing so creates somewhat of a risk for them. By forming these alliances with local and regional partners, they are able to gain the necessary wisdom and insight in order to potentially conquer that particular market. Hospitality organizations that don’t form these alliances find that it is difficult to establish a presence in unfamiliar markets. Forming these alliances allow hospitality organizations to seize upon the strong suits of larger multinational corporations while benefiting from their own success.

Customers in the hospitality industry are looking for services that enable them to move about freely around the world. The lifestyle of the global traveler has somewhat shaped globalization and how hospitality companies operate. The opportunity to implement single brands in a global market is something that is achievable by many hospitality organizations. Although the opportunity presents itself, there seems to be an uncertainty on the part of the consumer in terms of its benefits. Companies such as IKEA think globally and have managed project their brand in a global market while maintaining their Swedish identity. They were able to organize themselves in a way that benefited the consumer in their global markets. This is an area where the general accord is that people who travel regularly for both business and leisure, prefer a product that is predictable and uniform and this is where companies like IKEA have thrived.

“Customers have expectations that are relative to the quality of the product, therefore, products presented by the hospitality industry that are at the lower end of the spectrum are easier to standardize globally; in part because these properties are more clearly defined by physical attributes, which can be duplicated.” (Cline, n.d.)The hospitality industry continues to expand in a global market. It is imperative for all sectors to develop brands the span the globe in order to fully encompass the true meaning of what globalization is. Hospitality organizations must understand what it means to have a global brand and how it should react to impending changes within its market. As the world moves toward globalization, it will be important for hospitality organizations to move quickly and function in a productive manner that will give their employees the greatest opportunity to improve the benefits that it gives to the customers. Hospitality organizations that deal with these issues now will have the greatest opportunity to expand globally.

References

Cline, R.S. (n.d.). Hospitality Adjusts To Globalization. Hotels Online. Retrieved fromhttp://www.hotel-online.com/Trends/Andersen/global.html