The hospitality industry is a broad category of fields within the service industry that includes lodging, food and drink service, event planning, theme parks, transportation, cruise line, traveling and additional fields within the tourism industry.
The hospitality industry is an industry that depends on the availability of leisure time and disposable income. A hospitality unit such as a restaurant, hotel, or an amusement park consists of multiple groups such as facility maintenance and direct operations (servers, housekeepers, porters, kitchen workers, bartenders, management, marketing, and human resources etc.).
Before structuring as an industry, the historical roots of hospitality was in the western world in the form of social assistance mainly for Christian pilgrims directed to Rome. For such a reason, the eldest public hospital in Europe was the Ospedale di Santo Spirito in Sassia founded in Rome in the 8th century on the model of the oriental world.
2019 marks a decade since the US travel industry emerged from the depths of economic recession. And what a decade it’s been. Over the past ten years, the recovery collided with an economic turning point in global emerging markets— fueling a historic burst in travel demand felt by segments across the travel industry.
The numbers tell the story well. From 2009 to 2017, US hotel gross bookings grew from $116 billion to $185 billion. Airline revenue jumped from $155 billion to $222 billion. Other sectors, from cruise to ground transportation and restaurants, also benefited as US consumers reconnected with an inherent love for travel, international travel demand flourished, and more companies leaned on the power of business travel to help their organizations connect and grow. But growth was not limited to traditional players. It’s also been a remarkable decade for travel tech. Digital innovation helped form a lattice for entirely new segments to enter the market—and thrive. Some private accommodation and ride-hailing brands just finding their legs in 2009 now sit side by side with the titans of travel.
It’s easy to lose perspective on just how much technology has shaped travel in such a relatively short time. In 2009, the first hotel and airline apps were just hitting the market. Instagram and iPads didn’t exist. Most travelers scoured newspapers and magazines for vacation rentals. Taxis were hailed by hand, and small luxury hotels were among the only businesses that could attempt to create a personalized experience for every guest—and even then, mostly in the physical realm. Perhaps even more remarkable, ten years of travel innovation could be dwarfed in the next three or four.
Unprecedented growth, driven by a robust economy, rising global consumer purchasing power, and digital innovation, however, comes with strings attached. While market conditions are generally expected to remain strong in 2019, significant challenges capable of throwing the US travel industry off its growth trajectory loom on the horizon—many the unfortunate growing pains of an expanding industry.
THIS PROFILE IS COURTESY OF ATTENSITY.COM AND IRS.GOV – CLICK HERE FOR MORE ON THIS PROFILE
CLICK HERE FOR MORE OF THIS PROFILE FROM ATTENSITY
ASSOCIATIONS & INSTITUTIONS:
There are many jobs to choose from in hotels and restaurants. You can get your foot in the door by starting as a busboy or waiter in a restaurant, or as a bellhop or an office assistant in a hotel. There are also plenty of employment opportunities in other areas of the hospitality industry, such as on cruise ships, in casinos, and even in spas within hotels and resorts.
No two days are alike in most hospitality jobs. The nature of the work and environment changes daily, so people are rarely bored. Many of the jobs are outside of the cubicle. There are plenty of opportunities to meet new people and to also find work anywhere in the world.
A career in hospitality can be rewarding if you enjoy making sure that people are having fun, enjoying their stay, appreciating their meal, and having a positive experience. Dedicated, enthusiastic people with strong communication and people skills thrive in this type of work.
If you want to live in a beautiful place, such as Hawaii or the Florida Keys, chances are you can find work in a hotel or restaurant nearby. Hospitality jobs also offer opportunities for travel and working in exotic locations.
Large hotels and restaurants usually pay higher wages than small businesses. Larger businesses may also offer more options for career paths. On the other hand, small businesses may offer more opportunities for workers to contribute creative ideas and solutions to help improve the business.
The work can be hard and grueling. For instance, not all guests are clean and neat. Housekeepers and maids never know what to expect when they show up to clean a room. The jobs can also be physically demanding. Many hotel and restaurant workers are on their feet for hours at a time.
It's not always possible to please everyone. Some customers are demanding and difficult, no matter how excellent the hotel or restaurant and no matter how accommodating the staff may be. Diplomacy, tact, and professionalism are of utmost importance in these situations.
Hotels and restaurants are open for long hours, with many operating 24/7. Job shifts may be in the evenings and over the weekends. Some people may enjoy the odd hours because it enables them to get chores done during offbeat hours, when there are fewer crowds. The hours present more of a challenge, however, for people with families and small children.
Stress and pressure are part of the job. Hotel and restaurant managers must work hard to meet specific standards set by their employers. Restaurant workers also have intense pressure to create and deliver meals under deadline pressure.
The hospitality industry is directly linked to the economy. When the economy is weak, the first things people scale back on are their travel and leisure activities. The domino effect continues from there, with hotels and restaurants tightening their budgets and laying off workers.
Labor gaps are not new to travel, but the magnitude of the current workforce shortage certainly is. In 2009, the US Bureau of Labor Statistics estimated 353,000 job openings across the leisure and hospitality sector.
As of 2018, with the travel industry surging, that number swelled to 1,139,000. In fact, travel leads all industries in open positions. While a multifaceted problem, rapid industry growth and an evolving workforce remain key drivers. And the problem doesn’t just center around unskilled labor. In the airline industry, for example, pilot shortages are constricting growth, even threatening the viability of some smaller, regional carriers. How does industry tackle the problem? Forward progress might be limited without collaborative effort from travel providers, industry associations, and the public sector all aimed at attracting tomorrow’s talent to the industry, improving employee retention, and exploring ways to use emerging tech to empower smarter workforces.
While the practice of renting space to travelers stretches back to antiquity, what could be considered the modern concept of a hotel derives from 1794, when the City Hotel opened in New York City. While the practice of renting space was not new, the City Hotel was purported to be the first building devoted exclusively to hotel operations. For it’s time, the building was quite large and possessed 73 rooms. Similar operations soon appeared in such nearby cities as Baltimore, Boston and Philadelphia.
Interestingly, New York City’s first skyscraper was a hotel - the six story Adelphi Hotel.
Hotels took a distinct step up in style and class when the Tremont House opened in Boston in 1829. This hotel was considered by many to be the beginning of what was regarded as first class service. With 170 rooms, the Tremont House was a large facility. In addition, the hotel offered features which, for the time, were amazing. Private single and double rooms were available, which offered not only privacy, but also security. In addition to water pitchers and a washing bowl, free soap was provided in each room. The Tremont House offered French cuisine and, reportedly, was the first hotel to have a Bellboy.
In 1908, the Buffalo Statler opened, marking the beginning of the modern commercial hotel era. Many services now considered standard were introduced by the Statler, including such amenities as a light switch next to the door, private bathe, ice water and a morning newspaper. The Statler set the standard of the day by being clean, comfortable and affordable. The Statler served as the pattern for hotel design and operation for many years.
In the 1920’s, hotel building entered a boom phase and many famous hotels were opened, including the Waldorf Astoria, New York’s Hotel Pennsylvania, and the Chicago Hilton and Towers, which was originally named the Stevens.
Motels began to replace roadside cabins as use of the automobile spread throughout society. Offering clean rooms with adjacent parking, motels enjoyed great popularity with the traveling public.
In the 1950’s and 1960’s, the practice of franchising appeared within the industry. Franchising enabled entrepreneurs to expand their operations without the use of substantial capital.
For much of their history, hotels were owned and operated by individuals. However, as franchises and chains began to appear, individually owned hotels found themselves increasingly at a competitive disadvantage. By the 1960’s, independent prospects began to improve as the result referral organizations such as Quality Courts, Best Western, Master Host and Best Eastern.
From the 1980’s forward, mergers and acquisitions became common within the industry, and brands become hotly traded commodities.
Recently, use of management companies has entered the mainstream. As a result, many chains are more involved in management than in ownership. These chains realize a much more predictable and steady income stream than had normally been yielded by ownership.
Today’s travelers are increasingly vocal and willing to share their experi-ences with hotels and travel providers, and they are more apt to share those experiences online through social networks like Facebook and Twitter, in online reviews on sites such as TripAdvisor and Yelp, as well as directly with the provider through surveys, emails, calls and other more traditional means. From the check-in process to the quality of a property’s spa, this feedback contains valuable insights that hospitality providers can use to improve the guest experience with their brands, better target customers with offers, and differentiate their properties, products and services from the competition.
Smooth-running airports and even well-paved roads and waste management are integral to keeping the United States competitive as a global destination. But recent travel growth, combined with other factors like urbanization, has US travel infrastructure bursting at the seams. The problem is twofold—capacity and modernization. According to the American Society of Civil Engineers, the United States needs $4.5 trillion in infrastructure investment by 2025—before the problem potentially impacts GDP and job growth. Key travel infrastructure, including airports, parks and recreation, rail, ports, roads, and transit, requires some of the biggest improvements.
Improving security, particularly at airports, is a challenge of its own. Doing so while absorbing growing travel demand, creating a more seamless experience, and staying ahead of evolving threats is a true test facing the industry in 2019. A community of stakeholders, from transportation and aviation authorities, to airlines, government agencies, and technology players must combine efforts around promising security solutions such as biometrics, e-visas, and advanced cyber reconnaissance and analytics. Balancing traveler safety with traveler experience will continue to define the challenge throughout 2019.
Common American hotel classifications are as follows:
Commercial Hotels cater mainly to business clients and usually offer room service, coffee-shop, dining room, cocktail lounge, laundry and valet service as well as access to computers and fax services.
Airport Hotels are located near airports and are a conveniently located to provide any level of service from just a clean room to room service and they may provide bus or limousine service to the air lines.
Conference Centers are designed to specifically provide meeting space from groups; they provide all services and equipment necessary to handle conventions.
Economy Hotels provide a limited service and are known for clean rooms at low prices meeting just the basic needs of travelers.
Suite or All-Suite Hotels are hotels which offer spacious layout and design. Business people like the setting which provides space to work and entertain separate from the bedroom.
Residential Hotels used to be very popular. The typical residential hotel offers long term accommodations.
Casino Hotels are often quite luxurious. Their main purpose is in support of the gambling operation. Casino hotels often offer top name entertainment and excellent restaurants.
Resort Hotels are the planned destination of guests, usually vacationers. This is because resorts are located at the ocean or in the mountains away from inner cities. Resort hotels may offer any form of entertainment to keep their guests happy and busy.
Several years ago, customers generally called a toll-free number to make room reservations. In 2006, about 50% of hotel rooms were booked through the internet.
The number of domestic hotel rooms reserved for smokers is declining as major hotel chains are beginning to decrease their total number of smoking rooms or becoming non-smoking facilities altogether.
Other recent trends in the industry include luxury mattresses, complimentary breakfast, high definition TV, high speed internet access, Wi-Fi (wireless internet access), and room suites.
A recent 2006 trend is hotels re-imaging their lobbies to destination places. For example part of the lobby may be used for a breakfast area in the morning and a bar at night. This may include sliding walls, decorative lighting, and music. One reason for this is to generate more income per square foot.
A July 2005 article from Knight Ridder Newspapers highlights what the major chains are upgrading in the sleep department. The article provided the following information:
Marriott International has been replacing mattresses at its Marriott and Renaissance hotels for several years and is adding new bedding at its 2,400 hotels, including higher thread count sheets, down comforters and duvet covers at a cost of $190 million.
Hilton Hotels is introducing new bedding across its brand, including Hilton, Doubletree and Embassy Suites. There will be higher thread count sheets, plush top mattresses, extra pillows and user-friendly clocks.
Crown Plaza replaced some 50,000 beds and bedding in 2004, hired a sleep doctor for advice on relaxation, and tossed in a sleep kit for guests.
Radisson in 2004 began moving in custom-designed Sleep Number beds at 230 of its hotels and resorts, with most of its 90,000 beds to be replaced by 2006. New bedding is also included in the makeover.
Hyatt recently rolled out its Grand Bed, a 13 ½ inch pillow-top mattress, and added more luxurious linens and decorative pillows.
Starwood Hotels announced the debut of a new bed at its moderately priced brand, Four Points by Sheraton. The Four Comfort Bed, a $13 million investment, joins the Heavenly Bed and Sheraton Hotel’s Sweet Sleeper Bed in Starwood’s lineup.
Red Roof Inns will offer pillow top mattress pads, 230 thread count sheets and hypoallergenic pillows at select hotels.
Some Best Western hotels will add new mattresses, comforters, feather pillows and triple sheeting.
The hotel industry is a mature industry marked by intense competition. Market share increases typically comes at a competitor’s expense. Industry-wide, most growth occurs in the international, rather than the domestic, arena.
As the global traveler pool grows, so do the number of attractive destinations competing for their dollars. Hotels and airlines continue to expand supply in promising growth markets while destination marketers fine-tune digital and social strategies, helping them tap into rising global demand for “off the beaten path” experiences. Popular destinations like New York are competing with a crop of rising stars like Portugal and Vietnam—some of which are growing visitation by 20–30 percent annually.
Inbound tourism has always been a bright spot for the US travel industry. But competition for the lucrative international travel segment is rising—and the United States is feeling the pressure. While international arrivals into the country increased by 0.7 percent in 2017, the global share of long-haul travel is dropping, down to 12.2 percent in 2017 from 13.8 in 2015.4
In the 1980's there was extensive merger and acquisition activity between hotel and non-hotel companies. Many companies are now selling specific brands to get back to their core business.
Another trend in the hotel and beverage industry is paperless inventory systems. Improvements in scanning equipment have made this possible. In many instances, ordering, delivery, payment and stocking are all initiated and accomplished by software prompted by information captured by scanning equipment with very little human involvement.
Some chains have sold ownership in their hotels to foreign investors while still maintaining control. This provided the capital that was needed for further expansion.
REIT’s (Real Estate Investment Trusts) have been created to allow smaller investors to participate in mortgages and equities.
Product segmentation has become more popular. Luxury and first class hotels have created more amenities and products for their customers while economy and budget motels have cut back services in order to maintain lower prices. Also specialized extended stay and suite hotels have become more popular. Hotels with indoor water parks are one of the newest trends. Timeshares is another segment that many hotel companies are involved with recently. The development, sale, and management of timeshares have become particularly popular with the large chains. Franchising continues to flourish in the hotel industry.
Audit issues cover a variety of areas, as would be expected. In addition to matters such as cost segregation, which impact numerous industries, hotel companies have undertaken such activities as donating used bedding as they upgrade their equipment, using trusts to defer income, delaying recognition of last day of the year receipts, franchising, condo conversion, and so forth.
Rising operating costs are putting travel brands under immense pressure—even in an era of record-breaking revenue. Fuel costs are rising. Labor gaps drive wage increases. Real estate appreciates. Finding relief won’t be easy. Travel brands are already leaning on a mix of cost-cutting strategies to rein in expenses, including improved revenue management practices, supply chain optimization, and higher airline load factors. Creating leaner, more efficient businesses may require bolder thinking in 2019.
At some point, all expansion cycles come to an end. With the hospitality industry reaching almost 10 years of consecutive growth, and the potential of broader economic slowdown looming, brands must prepare for the possibility of softening demand. While many proved their ability to drive growth in favorable market conditions, downturns, while typically short-lived, create the environment for loyalty programs, revenue management, and product and customer experience initiatives to prove their worth. Brands that can weather any potential storm while keeping perspective of the long term can be well positioned in the next cycle.
Bigger businesses, bigger risks: Decades of industry growth and consolidation have created travel brands of unprecedented size. They’re operating in more corners of the globe, leveraging extended enterprise partnerships for growth, and increasingly connected through new digital platforms. Ultimately, the strategies that underpin brand growth also create vulnerability to risk—from cyberattacks and fraud to natural disasters and geopolitical tension. Recent Deloitte research found that roughly half of US CEOs (across industries) felt they lack robust plans to develop or acquire tools to address reputation risks, including crisis response capabilities.8 Fortunately, risk-sensing tools and processes to monitor and predict risks are maturing, opening new doors for risk management in 2019.
With rumblings of potential economic downturn gaining some momentum, travel brands must keep eyes on consumer spending and sentiment. The last downturn served as a stark reminder of the strong connection between economic insecurity and discretionary travel spending in the United States. Unlike their European counterparts, US consumers are well known for cutting vacations out of their budgets entirely—rather than downgrading accommodations or destinations. Case in point: Nearly half of US adults went the entire year without spending on a vacation in 2008.
Overall, consumer spending should remain strong for the majority of 2019. Over the past few years, the household sector provided a steady foundation for US economic growth. Even while business investment remained a bit weak, exports faced headwinds, and housing stalled—consumer spending grew steadily.10 Job growth provided a strong foundation. Even with a relatively low uptick in wages, those jobs put money in consumers’ pockets and helped households spend. The continued (if modest) growth in house prices is helping, too, since houses are most households’ main form of wealth.