Hospitality and travel and tourism industries

1. Basic characteristics of the hospitality and travel and tourism industries

The travel and tourism industry is one of the largest global industries. It is comprised of: lodging operations, transportation services, food and beverage operations, retail stores and activities.

The hospitality industry is a part of the travel and tourism industry and consists of:

• Lodging operations,
• Food and beverage operations- including institutional catering which caters to the non traveling public.
• Lodging operations in addition to accommodation typically provide food and beverage services and recreational activities.

2. Basic issues surrounding service

Hotels sell both tangible and intangible products to their customers. Services have certain unique characteristics:

Intangibility: Unlike physical products, services cannot be felt by the senses before they are purchased. To reduce the uncertainty caused by intangibility, customers look for tangible evidence that will provide them the required information and confidence about the service being bought.

Inseparability: In most hospitality services, both the service provider and the customer must be present for the transaction to occur. Customer contact employees are part of the product. Inseparability also means that customers are part of the product. The third implication of inseparability is that customers and employees must understand the service delivery system.

Variability: Service quality depends on who provides service and when and where they are provided. Services are produced and consumed simultaneously. Fluctuating demand makes it difficult to deliver consistent products during periods of peak demand. The high degree of contact between the service provider and the guest means that product consistency depends on the service provider’s skills and performance at the time of exchange. Standard operating procedures and regular training could help in reducing variability to a great extent.

Perishability: Services cannot be stored. If service providers are to maximize revenue, they must manage capacity and demand since they cannot carry forward unsold inventory. Because of service perishability some hotels charge guests holding guaranteed reservations even when they fail to check into the hotel. Some restaurants have also begun to charge customers who do not turn up after making a reservation.

3. Categories of travelers

Based on their reasons for travel we can identify three segments of the market:

1. Corporate travel market: comprised of company executives and individual businessmen. The growing importance of this segment is reflected in the fact that many hotels have developed specific products and services targeted at the business traveler. This segment of the market is generally less price sensitive.
2. Pleasure travel: This includes all those people who are traveling for purposes of leisure and entertainment rather than any business dealings. This is a highly price sensitive segment.
3. Group travel: Business travel related to meetings and conventions is generally classified into two markets- institutional and corporate / government market. The distinction between group travel and business travel is necessitated by the fact that some groups also travel for pleasure.

4. Factors influencing selection of hotel

A potential guest’s buying decision may be influenced by promotional material such as billboards, mailers, advertisements on the radio and television, personal sales calls etc. The ease of making reservations, the reservation agents description of the hotel and its facilities and the helpfulness, courteousness and efficiency of the reservation agent also play a decisive role. The quality of service offered and the overall cleanliness and appearance is largely responsible for repeat business. The business travel segment is an ideal target to cultivate as repeat clientele. Frequent traveler programs aim at creating brand loyalty and have been successful to an extent. Guests may become brand loyal because they recognize that repeat patronage could lead to better satisfaction of their requirements. This can be an especially important factor in the luxury sector of the lodging industry.

5.  Challenges faced in catering to an international clientele

International guests bring with them a whole different set of needs and expectations. Multicultural factors are important considerations in guest service, food and beverage services, and recreational facilities. To meet this challenge posed by an increasing international clientele, hotel managers must decide what markets they want to cater to and establish suitable programs to serve those markets. Employing expatriates and those of foreign descent would help in better serving the international clientele.