CHAPTER ONE

THE CONCEPT OF HOSPITALITY INDUSTRY

INTRODUCTION

Hospitality is:

- the act of kindness in welcoming and looking after the basic needs of guests or strangers, mainly
in relation to food, drink and accommodation;

- the reception and entertainment of guests, visitors, or strangers with liberality and goodwill
(Oxford English Dictionary);

- derived from the Latin word hospitare meaning to “receive as a guest”

The term hospital, hospice and hostel are deriving from 'hospitality' and these establishments
protect more of the meaning of personal care. It refers to a types of establishment where provide
shelter and foods for people which is in needed or away from their home.

The hospitality industry is a collection of businesses providing accommodation, and /or food and
beverages to people who are away from home. It includes famous hotels and restaurants and a
wide range businesses like small guest houses, snack bars and fast food outlets. All establishments
that provide food and beverage service to the general public fall under the hospitality industry.

Objectives of the hospitality industry

1. Making the guests feel welcome personally

This requires both a friendly manner on your part toward the guest and an atmosphere of
“liberality and good will” among the people who work with you in serving the guest. That
often translates to an organization in which workers get along well with one another.

2. Making things work for the guests

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Everything needs to be clean and in working order before the guests step foot on the establishment.
A hospitality system requires a lot of work and the manager must see that it is done properly and
maintained at all times.

3. Making sure that the operation will continue to provide service and meet its budget

As a manager, the key to achieving this objective lies in achieving a controlled profitable operation.
A good term to describe this management concern is “conformance to budget.”

The activities of the hospitality industry

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

There are 3 main types of operations

i. Product processing operations

ii. Customers processing operations

iii. Information processing operations

Lodging Operations

Full service
Full service is a level that provides a wide range of conveniences for the guest. These services
include, but are not limited to, reservations, on-premises dining, banquet and meeting facilities,
and recreational facilities.
All-suites

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The all-suites category indicates a level of service appropriate for guests who desire an at-home
atmosphere. Services include separate sleeping and living areas or working areas, kitchenette
facilities, wet bars, and other amenities at the mid- price level.
This concept appeals to the business traveller as well as to families.

Select service
Select service emphasizes basic room accommodations, guest amenities, and minimal public areas.
A continental breakfast and/or an evening cocktail is often included in the price of the room. Guests
have the opportunity to trade the public meeting room for free in-room movies, the dining room
for free local phone calls. Hampton and aloft are examples of select-service hotels.

Extended stay
Extended stay is a level of service that offers a home-away-from-home atmosphere for business
executives, visitors, and families who are planning to visit an area for an extended period. A fully
equipped kitchenette allows international guests to prepare comforting foods in a new
environment. The spacious bedrooms and living areas provide space for work and recreation. Light
breakfast and evening meals are included.

Rating of Hotels

Hotel Star Rating

Hotel star ratings are systems that rank hotels according to quality. Star rating systems are intended
to serve as guidelines for guests who are making hotel reservations. While star ratings can be
helpful when booking hotels rooms, there is no standardized star rating system. In Europe, hotels
are usually ranked on a scale from one to four stars, with four stars being the highest rating
possible. In the United States, hotels are generally ranked on a scale from one to five stars,
sometimes using half star increments.

Star ratings in Europe are determined by local government agencies or independent organizations,
and they vary greatly from country to country. In fact, star ratings in Europe can also vary from
city to city within the same country, and even between hotels in the same city. In other words,

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there is no uniform measure that determines a hotel's star rating. Each hotel is rated based on details
that often don't matter to consumers, such as the amount of tax a hotel pays annually.

Even though star ratings can seem arbitrary, they can still be beneficial and can help to inform you
about a hotel. For instance, a four or five star hotel is always going to be more luxurious than a
one or two star hotel. And there are some basic inferences you can make about American star
ratings. One star hotel is going to be an economy motel and a two star hotel will be a higher end
motel or budget hotel. Even one and two star hotels will usually have all of the amenities you
require for a night's sleep.

Classification According to Star Ranking

5-Star Rating: A luxurious hotel, offering the highest degree of personal service. Elegance and
style abound, and rooms are equipped with quality linens, VCR, CD stereo, Jacuzzi tub and in-
room video. There are multiple restaurants on site with extensive, gourmet menus, and room-
service is also available 24-7. A fitness centre, valet parking and concierge service round out the
experience.

4-Star Rating: Formal, large hotels, with top-notch service. There will usually be other hotels of
the same caliber clustered nearby, as well as shopping, dining and entertainment. Above-average
service, beautifully furnished rooms, restaurants, room service, valet parking, fitness centre and a
concierge are some amenities to expect.

3-Star Rating: Usually located near a major expressway, business center and/or shopping area,
these hotels offer nice, spacious rooms and decorative lobbies. On-site restaurants may be average
in size but will offer breakfast, lunch and dinner. Valet and room service, a small fitness centre
and a pool are often available.

2-Star Rating: These hotels are generally part of a chain that offers consistent quality and limited
amenities. They are small or medium in size and rooms will have a phone and TV. While you will
not have the convenience of room service, there should be a small restaurant on site.

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1-Star Rating: Expect a small hotel managed and operated by the owner. The atmosphere will be
more personal and the accommodations basic. Restaurant service should be within walking
distance, as well as nearby public transportation, major intersections and entertainment that is
reasonable in price

Diamond Ratings

A diamond rating is assigned to a property based on the conditions noted at the time of inspection.
All physical attributes and the quality of services are considered.

One Diamond

Properties provide good but modest accommodation. Establishment is functional, emphasizing

clean and comfort rooms. They must meet the basic needs of comfort and cleanliness

Two Diamonds

Properties maintain the attributes offered at the one diamond level while showing noticeable
enhancements in room décor and quality of furnishings. They may be recently constructed or older
properties, both targeting the needs of a budget-oriented traveler.

Three Diamonds

Properties offer a degree of sophistication. Additional amenities, services, and facilities may be
offered. There is a marked in the physical attributes, services and comfort.

Four Diamonds

Properties are excellent and display a high level of service and hospitality. These properties offer
a variety of amenities and upscale facilities in the guest rooms, on the grounds and in the public
area.

Five Diamonds

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Properties are prominent. They exhibit an exceptionally high degree of service, striking and
luxurious facilities, and many extra amenities. Guests’ services are executed and presented in a
flawless manner. The guest is pampered by a professional and attentive staff. The property’s
facility and operation help set the standards in the hospitality and service for the industries

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 CHAPTER TWO

OWNERSHIPS AND AFFILIATIONS

Three type of ownership arrangements occur in food service operations, franchises, chains and
independent ownership

Affiliations

FRANCHISING
Some investors prefer to use the franchising concept in running the hotel. Franchising in the
hospitality industry is a concept that:

- Allows interested investors to use a company’s (the franchisor) name and business format. Is
made up of properties where the franchisees agree to run the hotel in accordance with the strict
guidelines set by the franchisor. It allows a company to expand more rapidly by using others’
capital

Definitions
It is the authorization given by a company to another company or individual to sell its unique
product /services and use its trademark for a specified time, and a specified place. Under it the
owner operates as a member of the chain, utilizing the brand image, name, and goodwill and
obtaining for a certain fee. Some of the franchising companies are Holiday Inn, Choice
international, Ramada,
Or
Franchising in the hospitality industry is a concept that allows interested investors to use a
company’s (the franchisor) name and business format-- Is made up of properties where the
franchisees agree to run the hotel in accordance with the strict guidelines set by the franchisor

Franchisee: A person or entity to whom the right to conduct a business is granted by the franchisor
or licensor.
Franchisor: the Company owning/controlling the rights to grant franchises to potential
franchisees.
Advantages of a Franchise to a Franchisee (son Company)

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As a business structure, a franchise can certainly be an appealing option. With a number of
advantages, it is often the choice of those looking to start a new business without the risks
associated with going out on their own.

An Established Business

A franchise offers the advantage of operating under the banner of an already established
business. The ideas, the brand, the operating techniques and much more are already tried and
tested and in place ready to be implemented again and again at a new location as each franchisee
takes up the mantle.

Simpler Business Financing

Another advantage of franchises is the fact that acquiring business finance is generally easier.
Investors are far more willing to invest in a business with an established network, secure brand
and effective support structure. In some instances, finance may be acquired from the franchisor,
making life even simpler for the new business.

Business Relationships

The franchisee can also take advantage of the numerous business relationships already
established by the franchisor. In all likelihood, relationships with suppliers (and perhaps
distributors) will already be in place and easy to manage. The advantages of already established
relationships with advertisers and marketing teams may also be of benefit to the new business
start-up.

Support and Security

Franchises offer the advantage of a support and security system. Often franchisors will offer
training schemes and support with things like the management of accounts, sales, advertising and
more. These sorts of things may well be included in the price of the franchise fee.

Less Likely to Fail

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The old myth is that 95% of businesses fail within the first 5 years – this (false) point is often
championed by franchisors who are trying to encourage new people into their network. The
security offered by the franchise can give the impression that the business will be less likely to
fail.

Disadvantages to the franchisee

No Control

The first and most significant disadvantage of a franchise is the fact that the franchisee has no
control of the business or how it is run (or very limited control). The rules of the business are
already established and part of the franchise agreement. How the business operates is set out by
the brand of the franchise and it is very rare that a new franchisee will be able to operate outside
of these borders.

Risks from Others

Another serious disadvantage of a franchise is the risk that others might damage the reputation of
your business. As a franchisee you would rely on the brand of the business to bring you
customers. If other franchisees did something to damage the reputation of the brand, this would
have a knock on effect on your own business. Potentially this could damage your sales and
overall profits.

Franchise Costs

This is a big disadvantage for most franchises – the costs. A franchisee will often be expected to
pay an initial cost to buy into the franchise agreement. As part of the continuing franchise
agreement, they will then be paying on-going fees for the support and training provided by the
franchisor. In the long term, this means a restriction to the amount of profit (and money in your
pocket) that you can make as a franchisee.

Advantages of franchising to the Franchisor (Mother or well-established company)

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Faster growth: Franchising typically requires less money and personnel to set up the franchise
system and sell franchises than it takes to open and operate even one new outlet by the franchisor.
The cost to set up a franchise system can be recovered over time through franchisees paying initial
franchise fees, royalties, and other fees to the franchisor.

Allocate risk: Risks that are a normal part of opening and operating an outlet—such as the market
demand in the area, permit and license issues, capital needs, employee and supplier issues, etc.—
are passed on to the franchisee.

Franchisee motivation: Typically, the franchisee is the owner and operator of the franchised
outlet, meaning the individual buying the franchise is the one managing the outlet.

Less supervision: If the franchisee is properly trained, the day-to-day operations of the business
are handled by the franchisee, and the franchisee normally requires less supervision than, for
example, an employee in a company-owned outlet.

Disadvantages

Less per-unit revenues: The franchisee keeps more of the gross revenues from the business, after
paying you only a small percentage as a royalty and other fees, than you would have received had
you opened and operated that outlet yourself.

Brand contamination: A franchisee that fails to adhere to the Franchise Agreement, ancillary
contracts, or the operating manual may adversely affect the brand as a whole. Customers generally
view an independent and franchised-owned business as being owned and operated by the
franchisor (because the brand name is the same).

OWNERSHIP
Another classification of hotels is by their ownership, which can be:

- Private: An independent hotel owned by a person/partnership/private company;

- Local group: Several hotels owned by a local company

- International group: A hotel which is part of an international chain of hotels

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Two basic structures of ownership
Chains Hotels
Chains usually impose certain minimum standards, rules, policies and procedures on their
affiliations. In general, the more centralized the organization, the stronger the control on the
individual property. Chains with less dominant central organization allow managers to exercise
more creativity and solve more problems on their own.

A chain is usually classified as operating under a management contract, as a franchise or referral

group.

An advantage of operation chain restaurant

➢ Some costs are consolidated. Once an efficient design is developed, it is duplicated other
restaurants in the chain, thus reducing the cost of facility development for each operation.
➢ Purchasing is usually pooled, again reducing cost. Advertising and promotions are
coordinated to maximize their effectiveness.
Disadvantages
➢ A disadvantage of operating chain restaurants is that some management decisions are made
at the top corporate level, far from the locations of the restaurant.
➢ The diversity of the various regions of our nation generally makes standardization of menu
and food items difficult.

Independent Hotels
Independent hotels have no ownership or management affiliation with other properties. They have
no relationship to other hotels regarding policies, procedures or financial obligations. A typical
example of an independent property is a family-owned and operated hotel that is not required to
confirm to any corporate policy.

The unique advantage of an independent hotel is its autonomy. Since there is no need to maintain
a particular image, the independent operator can offer a level of service geared towards attracting
specific target market. An independent hotel, however, may not enjoy the broad exposure or
management insight of an affiliated property and does not enjoy purchasing power of a chain.

Advantage
Independent hotel can quickly adapt to changing market conditioning.
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Disadvantages
They are unable to purchase in bulk, and broad advertising

Characteristic / Features of the Hospitality Service

Service is an act or performance offered by one party to another. They are economic activities that
create value and provide benefits for customers at specific times and places as a result of bringing
about a desired change in or on behalf of the recipient of the service. The term service is not limited
to personal services like medical services, beauty parlors, legal services, etc. According to the
marketing experts and management thinkers the concept of services is a wider one. The term
services are defined in a number of ways but not a single one is universally accepted. The distinct
characteristics of services are mentioned below.

Intangibility

Products are tangible and Services are intangible in nature. Intangibility of services is derived from
the fact that you cannot see or touch a service. A service is made and delivered on spot and hence
it cannot be measured as easily as a tangible product. For e.g. an airline sells a flight ticket from
A destination to B destination. Here it is the matter’ of consumer’s perception of services than
smelling it or tasting it.

Challenges associated with service intangibility and how to overcome it

Lack of ability to be stored:

Services cannot be stored as buffers for periods of high demand. This translates into constant
supply and demand problems (physicians, movie seats)

Lack of protection by patents:

Since the service is intangible, it cannot be patented. New or existing services can be copied, hence
difficulty in maintaining a differential service advantage over competition

Difficult to display or communicate services:

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How does one get the customer to notice the service? Due to intangibility the task of explaining
the merits of the service to consumers is highly challenging

Difficult to price the services:

Products are priced based on cost-plus basis, while in services the cost can be only attributed to
labour (doctor charges)

INTANGIBILITY: Possible Marketing SOLUTIONS

Use of tangible clues:

Consumers look a tangible clues or physical evidence surrounding the service. (quality of furniture,
appearance of employees, logos)

Use of personal sources of information:

• Sources like friends, family, opinion leaders are used by consumers to gather information,
word-of-mouth advertising
•Creation of strong organisational brand image: If the brand is well known and respected, it lowers
the perceived risk in the eyes of the consumer and results in loyalty

❖ Inseparability of manufacture and sale

Service inseparability is an important property which basically states that services are produced
and consumed at the same time and can’t be isolated from their providers. Providers can be people
or machines. Further, both the consumer and the provider equally affect the service outcome.
Inseparability means that the services provided to the customers cannot be separated or detached
from the service provider. The employee becomes a part of the service if service employee
provides the service. The physical presence of the consumer is a must for service inseparability.

Perishability

Revenue for guest rooms that are not rented or empty airline seats on a particular date are lost
forever in the service industry. Whereas a car, a dress or a television can remain in the inventory
to be sold another day.

❖ Repetitiveness

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Opportunity for creativity is limited in routine or operating procedures. Standardization is therefore
required. This is because steps involved in making guest room ready for sale or for preparing a
specific dish or drink is basically the same every time.

❖ Labour intensiveness

In many industries for example electronic and automotive industries technology and sophisticated
equipment have replaced people. In the hospitality industry less of this has happened. This is
because the hospitality industry requires the employee to provide service. For example, making of
bed, cleaning of rooms, preparation of meals.

The traveling public is willing to pay employees for services delivered. Therefore the ability of a
hotel to attract and retain qualified staff who can consistently deliver excellent service is a key to
the success of any hotel.

❖ Dynamism:

i. Technology

ii. Change in generation / needs and wants , needs to adapt to demand to stay in market

iii. Globalization – travel to learn things

iv. Society also changes

v. Culture – cultural influences.

vi. Education

❖ Heterogeneity:

It is very difficult to make each service experience same, since services are not produced by a
single entity and then distributed to consumers, the quality of services may vary depending on who
provides the service as well as when, where, and how they are provided. There is a strong
possibility that the same question would be answered slightly differently by different people and
even by the same person at different times.

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❖ Ownership: In the sale of goods, after the completion of process, the goods are transferred
in the name of the buyer and he becomes the owner of the goods. But in the case of services, we
do not find this. The users have only an access to services. They cannot own the service.
For e.g. a consumer can use personal care services or medical services or can use a hotel room or
swimming pool, however the ownership remains with the providers.
According to Philip Kotler, “A service is an activity or benefit that one party can offer to another
that is essentially intangible and does not result in the ownership of anything. “From this it is clear
that the ownership is not affected in the process of selling the services.

❖ Simultaneity:

Services are rendered and consumed during the same period of time. As soon as the service
consumer has requested the service (delivery), the particular service must be generated from
scratch without any delay and friction and the service consumer immediately consumes the
rendered benefits for executing his upcoming activity or task.

Hotels Classification by target market

Target Markets are the groups of people that an organization hopes to attract as guests. The most
common type of properties based on target market include commercial, airport, suite, residential,
resort, timeshare, condominium and convention hotels. There are also several alternative types of
lodging properties that directly compete with hotels.

• Business Hotels: - These hotels are the largest group of hotel types and they primarily
cater to business travellers and usually located in downtown or business districts. Although
Business hotels primarily serve business travellers, many tour groups, individual tourists
and small conference groups find these hotels attractive. Guest amenities at business hotels
may include complimentary newspapers, morning coffee, free local telephone calls,
Breakfast etc.

• Airport Hotels: - These types of hotels typically target business clientele, airline
passengers with overnight travel layovers or cancelled flights and airline crews or staff.
Some hotels might give free transport between hotel and airport. Some Airport hotels also
charges the guest by hour instead of normal daily night charges.

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• Suite Hotels – These are similar to residential apartments but duration of the stay is shorter.
It is ideal for families who need a temporary accommodation before moving to the
apartments. Suites hotels also have more facilities and services than residential hotels.

• Serviced Apartments: - Serviced Apartment / Residential hotels provide long-term or

permanent accommodation for Guest. Usually guest makes a lease agreement with the hotel
for minimum of one month up to a year. Rooms generally include living room , bedroom,
kitchen , private balcony , washing machines , kitchen utensils etc. Unlike normal hotels
Serviced apartment only provide weekly one housekeeping service.

• Resort Hotels: - Resort hotels are usually located in the mountains, on an island , or in
some other exotic locations away from cities . These hotels have recreational facilities ,
scenery , golf , tennis , sailing , skiing and swimming . Resort hotels provide enjoyable and
memorable guest experiences that encourage guest to repeat to the resort.

• Bed and Breakfast / Homestays :- These are houses with rooms converted into overnight
facilities , this can size up to 1 to 10 guest rooms . They are also known as 'Home Stay's'.
The owner of the B&B usually stays on the premises and is responsible for serving
breakfast to guest.
• Timeshare Properties – Time share properties are a new concept of ownership of holiday
rooms. They are located at islands, hill stations, beaches etc. People own the property for
a specified period usually a week to a fortnight. Owners book their time slot any time in
the year.
• Condominiums – Here the owner owns a unit which is an apartment in a complex of
several such accommodations. The occupant furnishes the flat according to his/her taste
and informs the owner the time he or she will occupy the apartment. Condos have restricted
entry to occupants only. Occupants pays annual maintenance fee.
• Residential Hotels – guest stays for longer period of time in this hotel. Rooms are attached
with kitchen for cooking. Maintenance of these hotel are carried by outsourced and cost of
living in this type of apartment is very less because duration of the guest is for longer period
of time almost for one year. E.g these kinds of hotels are found near University campuses,
near colleges.

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• Convention Hotels – are especially generated to hold conventions. A convention is an
international or national event that brings large number of people of a similar vocation
together to learn latest development in that field. This kind of hotel has more than 2000
guestrooms with large meeting rooms, ball rooms, large registration areas, and spacious
dining halls for the guests.

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 CHAPTER THREE

QUALITY MANAGEMENT

QUALITY CONCEPT

Quality is the degree of excellence fitness for use or purpose, conformance to requirements in
meeting or exceeding customer expectations at a cost that represent value to them.

Significance or importance of quality

Quality is important to the customer, the manager and the organization

- The customer wants a product or service that is reliable. That will

- Meet their requirements and

- have value for money

The manager

- Want job satisfaction

- Want to enjoy work

- Want to get rid of hassle and stress

- Want a secure job

- Want to feel proud to work for the organization.

The organization desire quality because

- Its customers demand it

- The future of the firm depends on it

- Reputation and image depends on it

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 - Poor quality increase cost of production or service delivery

- Productivity is dependent on it.

Measures taken to improve quality in the organization

- Research and development

- Exploring new or different designs for , equipment, materials, processes, methods of

packaging

- Measurements to improve quality. Measures standards with performance.

TYPES OF QUALITY

Product based quality: Refers to the quality of the critical components of an item. This means
that the product contains that something extra that differentiates it from similar products, e.g.
premium beers, special coffees and teas, extra- rich ice cream and chocolates and so on. The
claim on such products is that they contain higher levels of specific ingredients which make
them superior to other brand names

User-based quality: This concept is based on the •argument that only the consumer can judge the
true quality of a product. This means that quality has the capacity to satisfy certain wants and that
the quality of a product depends on the way it is accepted in the marketplace. The message is
conveyed that the films that produce the item ensures that it best meets the needs of consumers
and that the; product has natural qualities that makes it t e best choice for consumers.

Operations-based quality: Indicates that the product conforms to measurable Standards or how
well the product meets the specifications set for its use. Concept of zero defects is also brought
into this perception or concept of quality. Defects are perceived as deviations from tie set standard
or specification.

Value-based quality: This signifies that quality is expressed in terms of conformance to

requirements including the cost of meeting them. The product therefore has a supreme quality if

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it meets the requirements at a price or cost that is lower than that of the competitor. In other words
the quality depends on the actual use of the product and the price - affordable excellence.

Quality Control/Approach Systems

Quality Inspection: Actual output of a product or service is checked against a standard

specification. Defects are then reworked or sent for scrap. Whilst quality inspection is undertaken
via line managers, quality inspectors and mystery customers, the approach is frequently limited by
the nature of the hospitality products and services. It is not always possible to rework a faulty
product or service and there is no way of identifying the cause of the fault.

Quality Control: Quality is designed into the detailed specification in the production of products
and services through detailed standards. Quality checks are introduced through the various stages
of the process. The approach is concerned with the detection and correction of faults. It will not
improve quality but it does not show when quality is not present.

Quality Assurance: Rather than waiting for faults to occur, quality is designed into the process
in such a way that fault cannot occur. If faults do occur they are corrected as they happen. The
approach involves developing a documented and planned quality system. Quality assurance
requires total organizational commitment and involvement of all employees in the process. A
key problem is that although quality assurance may deliver consistently faultless products and
services, the standard may not be what customers' desire. Total Quality

Management: Focuses on customers and the satisfaction of customer needs. The system is
'
totally directed at customer satisfaction and customer needs. The system is totally directed at
customer satisfaction and the removal of any barriers to delivering customers satisfaction. People
in the organization are keys to successfully achieving customer satisfaction, employee training,
motivation and empowerments are important. Again successful implementation requires total
cultural commitment and this can be difficult to achieve because it is often hard to change the
organization's culture.

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 Total Quality Management

Total Quality management (TQM) is a holistic approach to long-term success that views
continuous improvement in all aspects of an organization as a process and not as a short- term
goal. It aims to radically transform the organization through progressive changes in the
attitudes, practices, structures and systems. TQM transcends the product quality approach,
involves everyone in the organization and encompasses its every function: administration,
communications, distribution, manufacturing, marketing, planning, training etc. The principles
of total quality management are that:

• Commitment and direct involvement of highest -level executives in setting quality goals and
policies, allocation of resources, and monitoring of results

• Realization that transforming an organization means fundamental changes in basic beliefs and
practices and that this transformation is every one's job.

• Building quality into products and practices right from the beginning
• Understanding of the changing needs of the internal and external customers, and stakeholders,
and satisfying them in a cost effective manner.

• Instituting leadership in place of mere supervision so that every - individual performs in the best
possible manner to improve quality and productivity, thereby continually reducing total cost.

Establishing Standards for Quality Control

Management must determine standards and establish some order of priority for control
procedures. Key areas will be controlled more often and more extensive than less
important areas. This means that control should be exercised according to a specific
programme which outlines the priorities and defines the responsibilities of specific
personnel. In order to establish standards'," certain processes should be followed which
will include planning budgeting, policy making/strategic planning, operational analysis
and research

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Planning

Overall plans should be developed and implemented to formalize the control process. Plans will
become standards for performance) and should be directed at prioritization the control functions
according to the specific needs of a particular the catering operation. Apart from an overall plan,
specific plans or programmes should be implemented for each area of catering unit.

Measuring Quality Control Standards

Once standards have been set, it should be measured to be useful for the evaluation of performance.
The overall functioning of an operation cannot be measured. The performance of a catering
operation can only be judged according to the effectiveness of the various procedures that are
followed to perform the work. Measurements must be true indicators of performance and should
be quantifiable. The indicators used by management may be unique to a specific operation, just as
standards should be. Measuring can be done by, auditing, observations, surveys and internal
checking. The measuring method must also be suitable for the specific aspect that is measured

Specific Control Measures Applicable to Catering Operations

Auditing

Financial auditing measures operational procedures in terms of money or financial units.

Although accounting is a suitable measurement to assess the quality of some aspects of
operational performance (usually expressed as cost per unit) all aspects of operational
performance cannot be measured in terms of money or expenditure.

Internal checking

In its simplest form, internal checking boils down to counting or ticking off certain aspects
for control purposes, e.g. counting the number of items in a store room when taking stock or
ticking off items on a hygiene checklist. Since internal checking is so extensively used in
catering operations, the danger exists that personnel may view it as the total control system.

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Surveys

Aspects that cannot be judged in monetary terms or by means of internal checking are
measured by means of surveys. Customer opinion polls are examples of surveys conducted
by catering units. 'Human performance can be measured or quantified in terms of hours, Cedi
or units per output, but attitudes and perceptions cannot be quantified.

Observation

Performance is most often judged by mere observation. A manager watching the

performance of a food service worker may immediately notice a wrong procedure that will
affect the quality of the service or product. The quality of most prepared foods are in fact
measured by observation to asses doneness, crispness etc. Most hygiene aspects are also
judged by means of observation.

Correction and evaluation: A well-designed control system provides for the correction of
deviations from the operations, standards. Once measurements have been taken, it needs to
be compared with the set standards to indicate the level of performance. The seriousness of
the variance between the standard and measurement dictate the follow-up procedures. If no
variance is present, or if the measurement exceeds the standard (in instances where the level
of acceptable performance is lower than the possible standard), no correction is needed.
However, in instances where the measurement is below standard, correction should be
automatic. If correction is not automatic, management should follow up and control that area
more closely to assess whether the incident represents a trend. Correction action is a control
process if it primarily involves the directing of people or resources in some readily apparent
and straightforward manner. It is the task of the manager to ensure that the behavior and
performance of employees conform to the standards. Thus, these managers are likely to leave
their foreign facilities alone and let foreign employees figure out how best to do things. The
last type of global attitude that managers might have is the geocentric, attitude, which is a
world-oriented view that focuses on using the best approaches and people from around the
globe. Managers with this type of attitude believe that it's important to have a global view
not at the organization's headquarters, in the home country and in the various foreign work
facilities. Major issues and decisions are viewed globally by looking for the best approaches

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and people regardless of origin. Successful global management requires enhanced sensitive
differences in national customs and practices. Management practices that work in Ghana
might not be appreciated in Nigeria or Benin.

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 CHAPTER FOUR

THE GLOBAL ENVIRONMENT

Managers in all sizes and types of organizations are faced with the opportunities and challenges
of managing in a global environment.

Globalization defined

The gradual integration of economies and societies driven by new technologies, new economic
relationships, and the national and international policies of a wide range of actors, including
governments, international organizations, business, labor and civil societies (NGOs

Trends influencing the hospitality industry

Demand for leisure travel services will continue to outpace that for business travel

There are now significantly more leisure travelers filling airline seats, checking into hotel rooms,
and consuming other travel services than business travelers, and this gap will grow

More leisure travelers will select cruises and timeshares as alternatives to vacations that
include conventional lodging

the popularity of cruising will continue to grow, driven principally by the construction and arrival
of magnificent, new floating "resorts" (and remarkably attractive pricing), while timeshares will
be in big demand as more savvy travelers discover both the value and flexibility of "owning"
vacation time that reflects their lifestyles and travel habits

Activities that promote stress reduction will gain in popularity

Growing interest in "adventure" travel notwithstanding, the pursuit of stress reduction will remain
the number one motivator for the one-half of all active leisure travelers who now feel they "don’t
have enough vacation time." This is likely to translate into growing patronage of both amenity and
destination spas (by both women and men), as well as the growth of amenity spas in urban hotels
that cater to business travelers and meeting attendees

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Meetings and conventions will drive the recovery of demand for business travel services

Individual business travelers will continue to seek ways to do business without traveling, while
demand for travel services from meeting and convention attendees will continue to grow

Expect to be "fired" if you’re not wired

hotels, resorts, conference centers, even airline terminals that don't provide high-speed Internet
access will rapidly discover the error of their ways as more travelers, both business and leisure,
demand such access (and for free!) in an increasingly wired world. And they’ll probably head
elsewhere if they don't get it.

Air travel will remain remarkably affordable

Hard to believe given the unpredictable nature of the cost of jet fuel and the fact that half of all
domestic airline seats are now operated by bankrupt carriers, yet unprecedented competition
brought about by transparent pricing for "undifferentiated" brands will insure fares remain low
relative to the escalating cost of other travel services

Lodging rates will rise

Hotel room rates will continue to escalate as operators manipulate yield to capitalize on growing
demand. "Upscale" and "Luxury" operators are likely to be the biggest beneficiaries of this trend
as consumers who traded up in the go-go '90s begin to indulge once again

Consumers' utilization of the Internet will continue to reinvent the distribution and sale of
travel services

although the actual percentage of business and leisure travelers who use the Internet to plan some
aspect of travel is expected to remain flat if not decline, the percentage who go online to make
reservations will continue to grow

Effect of the Pace of Globalization on Hospitality Activities

❖ The Growth of Chain Operations

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 Globalization will quicken the sale & purchase of existing hotels & operations in addition to
building and selling of properties rapidly. The situation will warrant a score card to keep up with
the transactions the industry will be dominated by chain operations with decline in independent
operations thereby requiring efficiency in operating systems. Independent operators will cut
down maintenance expenditures and force up rates by spreading the experts of its human
resources over its properties and chains then hire experts in every area of the hotel operations.
The situation will call for national advertising campaigns in magazines, newspapers, radio and
television. Centralized reservations can direct substantial business from one property within the
chain operation to another. Groups can raise money more easily than individuals and thus chain
can raise capital for empowerment or expansion more efficiently. There will be the need for
centralized accounting, research and development, and real estate development.

Referral Groups:
It consists of independent hotel which have grouped together for some common purpose. Though
the properties in the referral group may be different from each other but there is sufficient
consistency in the quality of service to satisfy guest expectations. The member hotels recommend
guest to other member hotels. Some examples are Best Western international, one of the largest
hotel chains, is the best example of referral groups

❖ Franchising

Franchising will increase growth and market penetration of businesses by adding to the number
of company owned properties by leasing properties from other sources. Development companies
or individual developers will finance and build a hotel and rather than operating it as an
independent enterprise, enters into a franchise agreement with a hotel company. The developer
pays fees to use the franchisor's name and agrees to follow the franchisor's business pattern and
maintain its standards at the property.

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Management contract
Management contracts are hotel management companies which operate properties owned by other
entities. In some cases, the hotel owners may arrange to run their properties through a management
contract with a company that specialises in managing hotels.

The reason for this is that the owner may not:

- Have the necessary expertise
- Desire to become involved in the operation of the hotel
Benefits for the hotel management company:
- Little or no up-front financing or equity involved
- Manage the property for the contract period such as five, ten or twenty years
- Receive a management fee during the contract period

Timeshare / Vacation Rentals: - Another new type or segment of the hospitality industry is the
timeshare hotels. These are sometimes referred to as “Vacation-interval" hotels. Timeshare hotels
are where the guests who purchase the ownership of accommodations for specific period. These
owners may also have the unit rented out by the management company that operates the hotel.

Condominium Hotels

These are quite similar to Time share. These units are developed on joint ownership basis. Each
owner purchases and has full right of an unit he has purchased and shares the cost common to the
complex, such as taxes, insurance, maintenance and upkeep of public areas including swimming
pool, health club, parking, security, air conditioning, heating, cable, broad band .Each owner can
occupy or sell his unit independently but is required to follow the rules and regulations laid by the
management

Market Segmentation

Competitions will become a permanent factor in marketing strategies, and segmentation

will evolve to lure guests with specific lodging packages. Airline travel will bring hotels
to airport locations. Every major metropolitan area will have new architecturally splendid
hotels. Many properties will cater to large groups and convention business and once —

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grand hotels will be refurbished to attract some travelers who enjoy the luxury and
ambience of older hotels. The lodging industry will grow and will after very clean, new
attractive and comfortable facilities to guests who desire budget accommodation. Suite
hotels and residence inns will offer living areas separate from sleeping rooms as well as
kitchenette facilities since many travelers like a "home away from home. The industry will
be segmented by room rate, the upper tier, middle tier and lower tier.

❖ Amenities

The competition among the industry- will become more and more intense and organizations will
seek to find ways to increase their appeal in order to keep their regular guests and to attract new
ones. The war of the amenities will begin, guest service will improve. There will be serious
demand for services like in-room entertainment systems, automatic check out, free parking,
airport transportation, 24hour service, executive floors, concierge service and multilingual staff.

❖ Advanced Technology

The revolution will affect all segments of the industry with several components like
computerized reservation systems, computerized guest accounting, computerized accounting
systems, computerized energy management system, automated check-out, electronic card keys
and point-of-sale terminals.

REFERENCES
1. M. Zulfikar (1998), Introduction to Tourism and Hotel Industry, Sangam Books Ltd.
2. S.K. Bhatnagar (2002), Front Office Management, Frank Bros. & Co. (Publishers) Ltd.
3. Alan T. Stutts, James Wortman (2005), Hotel and Lodging Management: An Introduction,
Wiley.
4. Tom Powers, Clayton W. Barrows (2002), Introduction to the Hospitality Industry, Wiley.

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