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Chapter 2 - Group 2

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40 views15 pages

Chapter 2 - Group 2

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jayarisga2
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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CHAPTER 2

STRATEGIC
MANAGEMENT IN
HOSPITALITY AND
TOURISM
SLIDESMANIA
INTRODUCTION
In this chapter, we define the H&T context and
evaluate characteristics and types of H&T
organizations. We then question how these
characteristics may impact on strategic management
practices in H&T organizations. Next, we discuss
how generic strategic management models and
theories can best be applied in the H&T context.
SLIDESMANIA
DEFINING THE HOSPITALITY AND TOURISM CONTEXT

The hospitality and tourism industry, which is a significant sector in terms of


generating income and employment globally. It highlights the growth of
international tourism in both developed and developing parts of the world.
However, there is a lack of consensus on the exact definition of the industry, as
different sectors within it have unique perspectives. The author suggests that
the hospitality industry encompasses travel, accommodations, food service,
clubs, gaming attractions, entertainment, and recreation. Hospitality
organizations operate within a network of service organizations, including tour
operators, travel agents, tourism organizations, leisure and entertainment
venues, restaurants, bars, hotels, and resorts.
SLIDESMANIA
Kandampully (2007) notes that hospitality organizations operate
within a network of service organizations. To a large extent, they
are interrelated and interdependent, and include the following;

● Tour operators, travel agents, and tourism organizations


● Travel and transport operators
● Leisure, recreation, and entertainment venue
● Restaurants, bars, clubs, and cafes
● Hotels, resorts, motels, camping grounds, bed & breakfast
(B&B) establishments, and hostels
SLIDESMANIA
TYPES OF HOSPITALITY AND TOURISM
ORGANIZATIONS
Organizations that operate in the H&T industry can be grouped under
different categories depending on their primary activities, size, profit,
motives, and geographical coverage. In terms of their primary services,
organizations can be categorized as follows:
1. Travel and transport
2. . Accommodations (lodging)
3. Food and beverages
4. Entertainment and recreation
5. Tourism offices or destination management organizations
6. Nongovernmental tourism organizations

SLIDESMANIA.C
The different sectors within the hospitality and tourism
industry, such as tourism offices, non-governmental
organizations, and accommodation providers. It highlights
the significance of small and medium-sized enterprises
(SMEs) in the tourism market, with over 90% of
organizations in Europe being SMEs. The management of
SMEs differs from larger enterprises, with distinct
organizational structures and cultures influenced by their
owners. Smaller hotels may prioritize different business
objectives, such as profitability and market share,
compared to larger hotel groups
SLIDESMANIA
The classification of Hospitality and Tourism (H&T)
organizations based on profit motive, geographical
coverage, and non- profit objectives. It highlights the
challenges faced by smaller H&T organizations compared
to larger ones. The diverse nature of the industry is
emphasized, with examples of non-profit organizations
such as the United Nations World Tourism Organization
(WTO) and for-profit global firms like Intercontinental
Hotels.
SLIDESMANIA
CHARACTERISTICS OF HOSPITALITY AND
TOURISM ORGANIZATIONS
.
Essentially, service sector organizations, including the H&T organizations, possess certain
unique features. Ignoring the differences between service organizations and manufacturing
organizations can lead to unexpected outcomes. The following are some closely related,
unique characteristics of H&T organizations (Fitzsimmons and Fitzsimmons, 2004;
Gronoos, 2007; Kandampully, 2007):

1. Inseparability—customer participation in the service process


2. Simultaneity
3. Perishability
4. Intangibility (the tangible–intangible continuum)
5. Heterogeneity
6. Cost structure
7. Labor intensive
SLIDESMANIA
The Impact of these Unique Characteristics on
Managing H&T Organizations

Previously, we examined several unique characteristics of H&T


organizations. It should be noted that given the differences among
organizations in this industry in terms of their size, service type, profit
motive, and customer segment, the level and importance of these unique
characteristics may be different. For example, the tangible aspect of
service in a fast-food restaurant may be more apparent compared to
eating in an expensive restaurant. The cost structure of a small-budget
hotel is certainly different from the cost structure of a five-star luxury
hotel.
SLIDESMANIA
Table 2.1 Areas Where the Industry Characteristics Impact on Managing
H&T Firms

1. Analyzing the internal and external environment as an ongoing process


2. Making decisions in the areas of service delivery, pricing, and marketing
3. Strategic planning practices
4. Developing a sustainable competitive advantage
5. Achieving and evaluating intended outcomes
6. Managing capacity to maximize revenue
7. Managing the cost structure of the company
8. Allocating available financial and human resources for future strategies
9. Evaluating and improving the service delivery process
10. Interacting and satisfying customers
11. Training, developing, and motivating employees and managers (our internal
guests)
12. Designing and decorating facilities
SLIDESMANIA
THE CASE FOR STRATEGIC MANAGEMENT IN H&T
ORGANIZATION

Despite its size and growing importance, the H&T industry faces major
challenges and problems worldwide. Businesses in the H&T industry operate
in a dynamic and complex environment. Macro trends such as changes in
legislations, regional and global economic and political crises, sociocultural
trends, sophistication of customers, stiff competition, terrorism, security,
global warming, multiculturalism, globalization, mergers and acquisitions,
labor shortage, and advanced technological developments all pose important
challenges to the management strategies of H&T organizations.
SLIDESMANIA
Table 2.2 Areas Where Strategic Management Can Help H&T Organizations;

• Providing a holistic view for the entire H&T organization


• Providing a sharper focus on what is strategically important
• Providing a link between the external environment and the internal
environment
• Analyzing a complex and rapidly changing external environment
• Analyzing an organization’s strategic resources
• Giving a clear sense of strategic vision and direction
• Defining organizational purposes
• Developing measurable goals and objectives
• Identifying key resources and investing in core competencies
• Formulating decisions and making them happen
SLIDESMANIA
• Managing change
• Coordinating organizational activities and allocating resources
• Understanding the complexities of decision making and the structuring of an
organization
• Understanding the role and importance of the organizational structure and
culture on the strategy process
• Reducing and managing uncertainty inside the organization
• Measuring intended and unintended outcomes of the strategy process
SLIDESMANIA
APPLYING STRATITEGIC MANAGEMENT IN THE
H&T CONTEST

The impact of industry context on strategy-making in the Hospitality and


Tourism (H&T) field. It presents conflicting views on whether industry
context or individual firm characteristics are more important in strategic
planning. The authors propose a holistic view, emphasizing the significance of
both industry structure and unique H&T sector characteristics in strategy-
making. They stress the importance of understanding how the external
environment affects the H&T industry and how it impacts management
practices and performance. The document also addresses the application of
strategic management theories and models in the H&T context, highlighting
the unique features of the H&T industry compared to other sectors.
SLIDESMANIA
STRATIGY RESEARCH IN THE H&T
TOURISM FIELD

Strategy research in the hospitality and tourism field, tracing its origins
back to the early 1980s. Initially, studies focused on strategic planning
rather than management. Over time, there was a shift towards empirical
work, particularly on environmental scanning and structure alignments.
Research in this area has been descriptive, with limited theoretical
development. Methodologies vary between the US and Europe, with a
preference for survey-based research in the US and case study-oriented
approaches in Europe. Recent reviews have highlighted a lack of
comprehensive grouping of previous research in the field. Most studies fall
under strategic analysis, with limited focus on implementation and
evaluation.

SLIDESMANIA.C

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