Industry Data Collection and Analysis - Yield Management - Assessment Answer

Industry Data Collection and Analysis Assignment

Assignment Task

industrydata collection and discussion

Use the topics listed below in their allocated weeks to collect current industry information from a range of sources and present this via a website or portfolio. You can ‘cut and paste’ data (as long as it is correctly referenced) or create links to the source data URL, however the discussion on each article must be original work.

For each of the eight ‘articles’ you will provide the week and topic, a very brief overview of the main points of the article and a detailed analysis / discussion (within word limit restrictions) of the topic to the current industry information.

Inclusion of discussions relating to industry speakers and site inspections is required.

Your discussion of the article should include items such as-

Link to the theory covered in lecture or tutorial discussions

Link to guest speakers and site inspections

Your opinion on the topic being discussed

Industry implications

Is this a short-term solution, or fad, or does it have long-term ramifications?

Topics to be covered:

Weektwo-Consolidation of the hotel industry worldwide

Weekthree-Challenges facing the hotel and resort industry

Weekfive-How hotel organisational structures are changing

Weekfive-How guests rate hotel or resort service

Weeksix- Human Resource challenges

Weekseven-Yield Management

Weekeight- Sustainability

Weeknine- Legal issues

Week 2: Consolidation of the hotel industry worldwide

The global hotel industry has witnessed an increased consolidation activity over the past 2 years (Travel, 2015). Consolidation strategies such as mergers, acquisitions, joint ventures and strategic alliances are on the rise. Hotels are now seeking economies of scale to better resist economy shocks, tackle newer forms of competition and improve bargaining power with online travel agents. Here, Marriott’s announcement of acquiring Starwood in USD 14 billion by the end of 2016 to form the world’s biggest hotel management company deserves a special mention (Australian, 2016). French giant Accor Hotels is 15% owned by Jin Jiang Group of China (Australian, 2016). Accor Group has recently taken over FRHI Hotels in a deal worth USD 2.9 billion (Bentley, 2015). Likewise, Blackstone has agreed to sell its Strategic Hotels & Resorts division to China’s Anbang Insurance Group for around USD 6.5 billion (Bloomberg, 2016). Online apartment sharing startups such as Airbnb are seeing a growing share of global accommodation. As such, hotels are feeling driven to press the consolidation button in response to the increasing fragmentation caused by their proliferation.

Week 3: Challenges facing the hotel and resort industry

Tourism is the world’s largest industry today, contributing 9.5% to global GDP and about 11% to global employment (Rajko, 2015). However, it’s a fact that about 80% of travelers come from only 20 countries globally (Rajko, 2015). An increasing share of this customer base is now being catered to by online apartment sharing companies in alliance with online travel agents. Moreover, an intense organic competition among hotel players is shaping up in terms of products, services, facilities and amenities offered. Star rated restaurants, world class spas, designer golf courses, sparkling nightclubs, entertainment centers and art galleries are only a few of such hygiene factors. These factors also shape up customer expectations and preferences. The reputation of hotels over social media always remains under the customers’ scanner and as such, hotels need to closely manage and monitor their social media presence. Technology-related challenges such as potential breaches of customers’ data privacy and security also hound hotels today. Employee satisfaction is also an area where hotels need to focus and improve on a collective basis, as hotel staff today has more alternative employment options than ever before.

Week 4: How hotel organizational structures are changing

A bottom-up organizational change is based on the theory that the hotel employees are empowered and encouraged to be creative and take initiatives (Zou & Zhang, 2015). This approach not just makes the hotel organization and management flexible, but also responsive and effective. As a result, the competitiveness and brand equity of the hotel gets enhanced as well as a higher level of customer’s loyalty gets cultivated (Zou & Zhang, 2015). As discussed earlier, ensuring employee satisfaction through properly designed incentives and perks is an indispensable step towards achieving this structural change in the hotel organization. Moreover, the buildings blocks of hotel’s vision, mission and values need to be aligned with the bottom-up approach. That’s when the change will prove to be both inclusive and effective. An example is that of Accor Hotels, which has aimed at enhancing growth by becoming a leaner and more efficient organization (Hotels, 2013). This restructuring has involved setting up of ‘HotelServices’, a hotel operator and brand franchisor that will be top-line and bottom-line driven. It also involves ‘HotelInvest’, a hotel owner and investor that will be productivity-oriented and balance sheet driven. Effectively, the 2 organizations address the 2 core competencies of Accor – asset management and services to owners.

Week 5: How guests rate hotel or resort service

A hotel may be luxury, economy or somewhere in between. Accordingly, the customers build their expectations and review the hotel services. There are certain hygiene factors in addition – behavior of staff, promptness in service, cleanliness in general and relevance of amenities and services offered. Price, hotel reputation, room quality and location are some other basic factors that are a must-have (Gallup, 2014). Hotels need to understand that in order to get a positive rating from the guests they need to develop a deeper understanding of the customer’s needs and behavior. Furthermore, they need to customize their services and business proposition according to their target segment. Guests need to be engaged, so they begin to feel an emotional connect with the hotel brand (Gallup, 2014). This connect also makes them less sensitive towards price, leads them to repeat purchase and recommend the hotel to newer customers. This pattern precisely reflects the development of a healthy, long term customer-hotel relationship. There has been a rise in the customer satisfaction index on an average globally and the same reflects that the cost of new entry in to the hotel business has become higher (Touryalai, 2013).

WeekSix- Human Resource challenges

Three major issues associated with human resource management challenges in hotel industry are service quality, recruitment & selection and training & development (Yang & Cherry, 2008). These are faced by all leading market players in the industry in varying degrees and they cope with them in their own customized way. It is a well established fact that service quality of hotel industry is dependent on the satisfaction & motivation level of the employees. That is why; it can be considered that training & recruitment are two important components of hotel business. It has been observed in (Gioia, 1996) that retention of long term employees is a greater challenge and requirement for leading hotels as compared to efficient hiring and on boarding of the new staff. The ideal solution of HRM challenges is to view them in a completely different light and bring innovation to solve them (Enz, 2009). Therefore, it can be opined that the hotel industry should work in collaboration and in an organized manner to solve the long existing problems relating to human resource management.

WeekSeven-Yield Management

Yield management in hotel industry is concerned with maximization of the yield or the revenue by allocation of proper price for the proper customers. It has been explained in (Kimes, 1989) that the problems faced by the yield management of hotels are unique and do not relate to allied sectors such as airline industry. The key elements associated with yield management of hotels are multiple night-stays, multiplier effect and decentralized information etc. Similarly, there are several managerial problems can also be mentioned which relate to yield management in hotels such as need of employee motivation, reward management, training requirements and customer alienation etc. As recommended by (Ingold, Yeoman, & McMahon-Beattie, 2000), it can be stated that efficient yield management helps the organization in many ways and hotel organizations should embrace technological advancements & issues to achieve the best results out of it. Thus, a hotel can maintain higher growth in revenues in short time duration. Moreover, as per the explanations in (Chestler, 2015), it can be opined that inventory control and comprehensive reporting & analytics are two crucial factors for successful yield management.

Week8- Sustainability

Sustainability is a key issue associated with hotel industry all over the globe. Development initiatives and operations of a hotel have definite social, environmental and economic impact. In the article (Stottler, 2015), the evolution of “green thought” among communities has been given due importance. As per the author, several factors are associated with the concept relating to hotel industry. Such factors are cost savings, economic incentives, organizational & corporate brand image, regulatory issues, customer experience etc. All these factors affect hotel industry in multiple ways. For example, regulatory affairs & guidelines are assumed to be directed against hotel authorities. But, economic incentives available for aligning with the green norms work for the benefit of the hotels. On the other hand, for successful implementation of sustainability initiatives, the hoteliers need several resources such as sufficient financing, CAPEX Decision making, benchmarking & auditing as well as technological features & training (Goldstein & Primlani, 2012). Thus, it can be opined that the driving forces should match with the needs of the hotel authorities for proper sustainable development.

Week 9: Legal issues

A hotel’s legal issues may be classified as customer-related, service-related and employee-related. In service-related legal issues, hotels need to secure liquor license well prior to serving liquor to customers in their premises (Hawes, 2015). All hotel staff that serve liquor also need to be trained in ‘Responsible Service of Alcohol’ in compliance with the ‘General Code of Practice for Liquor’ (Hawes, 2015). Hotels also often play music to entertain guests in their premises and need to pay the requisite license fee for the same. In customer-related legal issues, hotels need to keep an exclusion clause that limits their liability towards any damage of guest’s property on premises. The same needs to be verbally communicated across to all customers. Moreover, franchising your hotel for the day-to-day operations needs hotels to sign a detailed ‘Management Operating Agreement’ which includes the period of contract, the legal and operational clauses, payment terms and responsibility areas of each party. In employee-related legal issues, hotels need to give all their employees legal protection from potential workplace hazards in various forms including insurance and other benefits. Employees also need to be well protected from bullying at work.