Industry Analysis

HOSPTALITY INDUSTRY ANALYSIS Name: Course title: Instructor: Institution: Date Due: Economic Characteristics The impact of learning and experience of workers at Hospitality Industries A number of researchers in both economics and sociology have established a link between education level of an individual and job performance. Many industries in the present perspective consider education level an important factor before recruiting the workers. There is an expectation that the more a person is learned the more efficient he or she will become. Posthuma, (2000) observed that education level of an individual was a critical factor in employee job evaluations. However, there is an assumption that education level of an individual is not a guarantee of efficiency of a worker. This is because people who are highly educated will ultimately demand higher pay and slow down their ego if they feel that they are dissatisfied (Kahya, 2007). Established Hospitality firms in USA tend to hire a pool of human resources work at the various departments in the firms. Although the industry recruits only workers who possess expertise in their area of operations, the managements in these firms have a challenge of retaining these workers. This is because the workers once gaining experience migrate to other industries in search of greener pastures. Owing to these facts, many of the management in these hospitality firms have incorporated training and educational programs to enhance the efficiency of workers with low education background. Additionally, the managements ensures that new staff passes through the induction processes and training with regard to their jobs. Capacity Utilization Economists have articulated that the process of production is mostly efficient if the available resources are maximally utilized for the production. In other words, production is more efficient when the capital and labour inputs are greatly minimised. In order to achieve this aspect, an organisation ought to ensure resources at its disposal are used exhaustively, that is, at the lowest possible unity of output (Glowa, 2001). The present study sought to examine the capacity utilization at the hospitality Industry. Due to the rising cost of production and operations, many of the hospitality firms are under pressured to exploit profits generated from their capacity, goods or services. When it comes to profit management, many of these hospitality firms have been involved in with the concept of "adapt or perish" phenomena. This means that the firms identify products and services that are most preferred and include them in their services. This is meant to attract as many clients as possible. Firms that undertake revenue management would find themselves at a loss due to loss of customers. Industry Profitability HYPERLINK "/blog/index.php/site/author/11/"Riley, (2012) explains that each firm or market is different. This is because of the obvious differences of these firms such as the size, Structure, distribution of channels, alternative consumers, product life cycle, and growth rate. Such differences are the determinant of the variances in terms of profit margins among various organisations. The hospitality industry seems to be improving from the bad economic times to good times. This is because many of these firm’s profits have started to soar up in recent times. Shares of publicly traded hotels such as Marriott International, Hilton Hotel, Intercontinental, and so on have outperformed S&P 500 stock index in this year. In accordance to a financial statements evaluation by Sageworks, a research firm offering financial related information, the hospitality industry in 2011 generated profit increment of 11%. According to the report, Increments with regard to full capacity utilization and reduction production and operations contributed to the realisation of the increments. Although many hotels have not seen many increments in terms of sales from 2010, it does not indicate sales decline either as those realised in 2009. Sageworks analyst Mulholland also noted that occupation level for the hospitality industry improved steadily in 2010 and 2011. Between 2010 and 2011, occupation level per available room increased by 4% and 7% suggesting strengths in their rating. Mulholland also adds that this aspect is attributed to the fact that fewer new hotels are established during low periods. III: Six Forces of Competition The six forces of competition is a model used in analysing marketing opportunities for an organisation. This was an extension to porter’s five forces model. It is also more extensive than ASWOT analysis. In this model, some factor that may be perceived to be the only source of competitive advantage is omitted (Preston, 2002). The forces identified under this model are Threats of New Entrants, Rivalry among existing firms, Threats of substitute’s products or services, bargaining power of Buyers, the Bargaining Power of Suppliers and Stakeholders. The chart below illustrates this model. Figure 3.1 Six Forces of Competition Model  Source: Chau, Lusanaxay, Malik, Saelee and Saepharn, (2012) Threat of New Entrants The hospitality industry has until recently become highly competitive areas. Competition in this industry tries to attract clients from other hotels. The continuous new entry of similar firms in this sector will require a much higher fixed cost in order for the Marriott to continue thriving in the locality. However, this can also present a chance of collaboration with these in case their capacity becomes overloaded. The competitive advantage for hospitality firms tend to focus on the preferences of customers and demands patterns. Certain Mechanisms that are aimed at minimizing costs or creating a barrier to entry may not be very advantageous to the company in relation to the other strategies deployed by competitors (Harrison and Enz, 2005). Many of the Hospitality Hotels have in recent times developed into multimillion ventures, with different departments and high rate of operations. The process of operation has a high rate of competition from amongst the hospitality players. The high rate of new entrants in the hospitality industry has resulted in low demands for other firms. This is because the firms are now forced to share customers who have found similar products at other firms. Additionally, the extra supply of hotel accommodation has had a negative economic influence on the firm’s operations. These extra capacities are in many instances not utilized fully during “low seasons”. However, in order to curb these phenomena, the hotels have endeavoured to provide unique services in order to create competitive advantage. Such services include online reservation services, internet access in its hotel rooms to guests and unique branding techniques. Rivalry among Existing Firms Rivalry among the firms in the hospitality industry is high. Most of them try as much as possible to consider customers preferences and tastes in the locality. This ends up for the businesses engaging in similar products....