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Emerging Human Capital Problems in Hotel Industry

by Daniyal


Tourism is a field that incorporates citizens going to areas that, among other factors, are perceived to have aesthetic, mystical, theological and historical significance. Based on the importance they assign to the experience as well as the facilities rendered by the companies participating in tourist attraction businesses such as hotels, holidaymakers are prepared to invest capital. The hotel industry is labour intensive and is one of the world’s leading industries in work development, requiring both professional and unskilled labour. As more creative and knowledgeable staff are active in travel companies and hotels, strategic human resource management in the hospitality sector has increased the overall competitiveness of the industry. This paper addresses emerging problems in the hotel industry with respect to human capital.

Current Issues of Hotel Management

In the tourism industry, human capital growth is the basis for profitable business. In comparison to many other companies that sell a single commodity, hotels offer a package of services. Accommodation and catering facilities, accommodation as well as connections to professional tour guides may be needed by a client. Each department must be staffed with professional personnel who contribute to the overall consistency of the customer experience. Failure to comply with the requirements of each of the departments will have a detrimental effect on the whole programme delivered by the hotel and, thus, on hotels’ recent attempts to participate in strategic practises of human resource management. Tourism is projected to recruit more than 290 million citizens by 2020, according to (Busquets, 2010), which already contributes 30 percent of global export services.

Emerging Human Capital Problems in Hotel Industry

To deal with the growing demand for premium facilities, the hotel industry requires to accelerate the production of human capital. Competition is increasingly rising as more business people choose to invest in the market, providing a wider variety of options to consumers. In order to retain market share, hotel operators have to ensure that they gain as many clients as possible while providing premium facilities and retaining creativity. Clark and Chen (2007), however, notice that market productivity is highly dependent on the capacity to please consumers, which in turn is related to personnel skill, especially in the consumer interaction region. To ensure that front line workers meet the expected expectations to gain and keep clients, managers ought to maintain a supporting position. Employee loyalty is essential to the success of the hotel sector’s targets. Human resource management could be mistaken to anticipate consumer loyalty as dissatisfied workers provide services.

The nature of work necessitates employee motivation through arrangements such as compensation for working odd hours and reward schemes for positive feedback from guests are some of the human resource strategies that are currently being applied to enhance employee satisfaction. Bonuses during peak season also motivate employees to put extra efforts to cope with the increased workload. Hotel managers are also enlightening their staff with regards to tourist attractions by offering occasional sponsorships during low season. Apart from the staff acquiring knowledge and enjoying the tour experiences, they are able to appreciate their role in the tourism industry and hence greater motivation. They are also in a position to encourage clients by demonstrating understanding of the areas of interest in tourism. In other words, employees no longer promote tourism ignorantly after visiting the various tourist attractions (Lockyer, 2008).

According to Haves & Ninemeir (2012), conventional human resource practices in the hotel sector ignored the significance of skills in hospitality management. The sector was considered as any other business that involves buyers and sellers. Hotel and catering professionals have been lacking for many years as companies focused on rural unskilled people to work as waiters, cooks and cleaners among other jobs in the hotel sector and hence there was no motivation for young people to pursue a career in this field. However, hotel entrepreneurs realized that competitiveness in the industry can only be accomplished through recruitment and selection of skilled personnel. The demand for professionals in the sector encouraged institutions of higher learning to include hotel and catering in their academic programs (Berezan et al. 2014).

Apart from the young people graduating in hotel and catering to join the sector, companies have allowed their employees to enrol for studies on part time basis for career progression while others have established training institutions to run parallel with their hotel business. Such institutions have helped to alleviate the problem of training facility shortages in academic institutions as they collaborate with hotels to allow students undertake practical work in the hotel while on the other hand they help to promote the company’s brand name. Companies are also participating in the development of curricula for hotel and catering. Managers understand the training needs as dictated by the nature of jobs the graduates are expecting to be engaged in and therefore hotels play an important role in ensuring that the training curricula are aligned to the market demands.  This trend has encouraged professionalism as participants in the hotel sector strive to achieve international standards with regards to human resources (Luo & Milne, 2014).

Regular employee training is significant in keeping them up to date with new developments in technology. For example, overall employee productivity has increased through the application of ICT as more work can be accomplished by fewer employees especially at the front office operations thereby saving on hotel overheads. However, these technological advances necessitated employees’ training for multitasking abilities. Managers keep on the lookout for new knowledge that may enhance an organization’s competitive advantage and impart it on the employees. Innovation in the workplace is also encouraged as a source of better strategies to accomplish organizational goals (Nelson, 2008).

The tourism industry uniquely involves customers from diverse cultures globally. Successful hotel managers need to promote cultural diversity in their workplace to develop a positive outlook for customers and other stakeholders in the industry. Moreover, different cultural backgrounds represent various capabilities that can be amalgamated to the organization’s advantage. Employee diversity in terms of gender, age and religion also offers different competences that are desirable in the workplace and reflects the range potential customers the hotel is expected to serve (Zainal & Radzi, 2012).


Increased competition in the hotel sector necessitates strategic human resource practices that enable hotel management to recruit competent employees that add value to the process of accomplishing organizational goals. Professionalism in the sector is being encouraged through collaboration between institutions of higher learning and hotels for practical engagement of students. Regular employee training has also been significant in developing customer focused strategies among employees. Cultural diversity in the workplace is an important aspect of human resources in the hotel sector and tourism industry in general.    

  • Berezan, O., Millar, M. & Raab, C. 2014. “Sustainable Hotel Practices and Guest Satisfaction LevelsInternational”, Journal of Hospitality & Tourism Administration, 15, 1, pp. 122-122
  • Busquets, J., 2010. Accommodation and consumption diversification in the sector of tourist accommodation and restaurant industries, and its effects on labor relations, study commissioned by the ILO.
  • Clark, A. & Chen, W. 2007. International Hospitality Management: Concepts and Cases, Burlington, MA : Butterworth-Heinemann
  • Haves, D. K. & Ninemeir, J. D. 2012. Human Resources Management in the Hospitality Industry, New York, NY: Wiley
  • Lockyer, G. 2008. Global Cases on Hospitality Industry, New York, NY: Routledge 
  • Luo, Y. & Milne, S. 2014. “Current Human Resource Management Practices in the New Zealand Hotel Sector”, Journal of Human Resources in Hospitality & Tourism, 13, 1, pp. 81-100
  • Nelson, R. 2008. “Developing a Successful Infrastructure for Convention and Event Tourism”. Journal of Convention & Event Tourism, 3,2, pp. 122-136
  • Zainal, A. & Radzi, S. 2012. Current Issues in Hospitality and Tourism: Research and Innovations. Florida, FL: CRC Press

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