Strategic Drivers and Barriers

Identification of drives and barriers affecting the development of the hospitality industry

The hospitality industry provides a wide range of products and services to people in the market. It includes restaurants, hotels, amusement parks, country clubs, resorts, cruise ships, etc. One of the main purposes of businesses operating in this industry is to gain a high degree of customer satisfaction. This is the only reason why hospitality organizations make frequent changes in their products and services to meet the needs and demands of people in the market. In the last few decades, the entire industry has grown significantly as more private organizations have entered it. Parsa, (2015) has explained that the entire image of a country is affected by the operations and activities of the hospitality industry. In simple words, it can be stated that better products and services will enhance the overall image of a nation whereas poor services will result in degradation of the same.

Key drivers in the hospitality industry

In the UK, the hospitality industry contributes a lot to the overall development of the country. However, Lee-Ross and Lashley, 2010 have argued that like other sectors, the hospitality industry is also facing various kinds of issues and challenges. The nation has more than 10000 hotels that are operating to satisfy the needs and demands of tourists. As per the views of Sloan, Legrand, and Chen, (2013) key drivers include marketing, sustainability, technology, etc. It can be stated that marketing has started to play an important role in the success of businesses that are operating in the hospitality industry. The growing rate of internet and mobile users has provided organizations with more potential and cost-effective platforms to advertise and promote their services. Nowadays, businesses can interact with customers with the help of social networking sites such as Facebook and Twitter.

Organizations can display their new products, services, or any offers with the help of these sites. According to Pizam and Holcomb, (2010) one of the major benefits of using social media to market products is that it helps the firms to reach a mass audience easily. Another key driver linked with the hospitality industry is sustainability. Further, it can also be explained that with the increasing rate of pollution and scarcity of resources, businesses are now required to utilize resources appropriately. In addition to this, they are also required to ensure the fact that their operations and practices do not have any kind of negative impact on the environment as well as on the society under which they operate.

Barriers to the hospitality industry

At the time of operating in the global business environment, businesses in the hospitality industry are facing various kinds of barriers. As per the views of Brotherton, (2012), one of the key barriers to the success of an organization is the shortage of skilled and talented workforce. It can also be stated that the rate of employee turnover is very high in the hospitality industry. In the present scenario, managing and hiring effective and talented personnel has become very challenging. The reasons behind the lack of skilled human resources are low pay and inadequate work timings. Jauhari, (2014) Has argued that businesses operating in the hospitality industry are required to take corrective measures to retain the workers and to lower the rate of employee turnover. This can be done with the help of providing motivation and rewards to workers at regular intervals.

Another barrier that is affecting the success of businesses is related to customer satisfaction. Nowadays, people in the market want these businesses to deliver high-quality products and services at low or convenient prices. Management of these businesses is required to upgrade their technology at regular intervals to lower their cost of operations. In addition to this, they also need to respond quickly to the changing needs and demands of people in the market. As per the view of Madera, (2011) one of the major barriers to the success of businesses in the hospitality industry can be termed its high degree of competition. In today's era, it has become very difficult for organizations to retain their old customers and to attract new ones. People have a wide variety of alternatives that are available to satisfy their needs and demand. This has made it very difficult for businesses to increase their sales and profitability. Pizam, Okumus, and Hutchinson, (2013) have asserted that organizations are now required to offer something new and unique to meet the demand of people in the market and to gain a competitive advantage over other market players.

According to Taylor and et.al., (2011), the hospitality industry is also facing challenges related to the up-gradation of technology. To operate cost-effectively and to survive in the long run, businesses are required to invest large amounts of human and financial resources in their technology. This is having a direct impact on the overall cost of operations of these businesses. The threat of substitutes has become very high for organizations that are operating in this industry. Further, the majority of businesses offer the same kind of products and services at similar prices. Now, the major challenge for these businesses is to encourage customers to choose and buy their services over other players in the market. Warren, (2010) has explained that the bargaining power of customers in this industry has become very high. The major reason behind this is the development of online businesses. It can be stated that the need for travel agents and tour operators has decreased to a great extent. Customers have options to search and book services online.

This has resulted in increasing the overall bargaining power of customers. People in the market have enough power to drive away the price of products and services that are offered by businesses in this industry. Other than this, it can be also stated that the competition among the firms operating in the hospitality industry is also very high. Due to the low investment required, many small and large firms are having tough competition among themselves to steal market share and customers. The high degree of competition has also resulted in affecting the sales and profitability of all the businesses that are operating in this industry. Other than this, the bargaining power of suppliers is very low in the hospitality industry. Organizations have a wide range of suppliers available that can provide them with better quality products and services. This means that suppliers do not have adequate power to drive away the prices of the products and services that they have supplied. Therefore, organizations are required to take care of various opportunities and threats that can have direct or indirect impacts on their entire operations.

Yip framework to identify key drivers of the hospitality industry in the UK and USA

It can be stated that there are several driving forces associated with The development of the hospitality industry in the UK and USA. This includes market drivers, cost drivers, government drivers, and competitive drivers. It can be stated that the needs and demands of customers in bmarketsrket are the same. The customers of the hospitality industry want better and quality services to be provided to them at more convenient prices. Along with this, customers of the UK and USA want the hospitality services should be highly creative and innovative. The market drivers have helped in addressing the needs, demands, tastes, and preferences of people in both countries. Further, cost drivers are the one that helps in standardizing those identified needs and demands of customers in the UK and USA. All the rules and regulations that have been developed by the government and other regulatory bodies are covered by government drivers. By considering all regulations, businesses can operate more effectively and smoothly in the long run. This also supports them to achieve higher profits and sales.

On the other side of this, it can be also stated that the globalization of the needs and demands of people in these two markets has also affected the economy of the hospitality sector. On the other side of this, government drives such as trade policies, technical standards, and policies developed by the host government have also affected the operations of the hospitality industry. The government of both the UK and the USA encourages the growth and development of the entire hospitality industry. Policies related to trade in these countries are more fair and transparent. This results in increasing the sales and profitability of businesses operating in the hospitality industry for both the nation. At the time operating at both local and international levels, many key drivers support businesses in the hospitality

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