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HRM in tourism and Hospitality Industry; Issues and Challenges

Author: - Ms. Madhuri Aggarwal

Assistant professor, Management
Rayat Bahra Institute of Hotel Management, Mohali, Punjab
Co-Author:- Mr. Akash Dutta
Assistant Professor, F&B Management
Rayat-Bahra Institute of Hotel Management, Mohali, Punjab

Tourism is a travel for recreational, leisure or business purpose. Tourism has become a popular
global leisure activity. Hospitality is the relationship between guest and host, or the act of
practice of being hospitable. Human resource management is the management of an
organization’s workforce, or human resource. Quality is needed in ever organization, and quality
comes with qualified employees. The sector provides a large and diverse number of jobs and will
be important for future job creation throughout the developed and developing world. Whilst the
number of jobs produced by the tourism and hospitality industry is impressive there are some
concerns about the type of employment experience within the sector. The nature of the labour
market and the reliance on ‘marginal’ workers has led to a number of pessimistic views of HRM
practice. More upbeat accounts point to the manner in which concerns with providing good-
quality service are improving HR practices.
Generally tourism and hospitality has often struggled with negative perceptions about
employment practices and conditions and this perception has often been matched by the reality.
The hospitality industry has failed to retain good professional. HR faces for so many problems in
Tourism and Hospitality industry like: - shortage of skilled employees, unsocial hours and shifts
patterns that are not for family friends, etc. Organizations and managers in the industry are well
aware of new managerial thinking on HRM. However organizations and managers in the
industry find themselves wrestling with ‘traditional Problems’, which are underpinned by HRM
in the Industry. According to author these problem can be overcome by providing proper training
to employees, environmental analysis, staff appraisals. This research paper will emphasize on the
changing patterns of Training and development with recent trends of SDP, Case Study, SWOT,
and will develop new theory based upon the changing patterns of HRM. It will help in
understand the impact of HRM on Industry, society, economy, an on individual.
Keywords: - SDP, Traditional Problems, SWOT, environmental analysis, staff appraisals

“Hospitality is an art of making guests feel welcome”



The hospitality industry is considered to be the world’s fastest growing industry contributing for
nearly 10.3% of the world’s GDP (Economy Watch, 30 June 2010). This increasing importance is
the result of a vigorous process of expansion undertaken in the last decades. As a consequence,
hospitality organizations expanding to a global market have started to face the challenge of
selecting and managing an increasingly multicultural workforce. Employees can make or break
an organization. Tourism and hospitality Industry is considered to be a service industry which
needs human force to deliver a quality service and this can only be achieved if its human
resources are managed properly. Human Resources can be defined as People working together,
individually or collectively to meet Goals, Objectives, Mission and Vision of an organization.
Hence HRM-Human Resource Management ensure that an Organization achieve success through
its employee. People are the most important resource in business. Effective use of people makes
seems to be primary assets of a business aside from its financial, technological and physical
resources therefore it has to be managed effectively and strategically.

Human power in the Tourism and Hospitality industries in an essential element to deliver the
required service and ensures that they are satisfied with the service delivered. Hence Human
Resources are dominating factor that makes the difference between success and failure of an

Hospitality Industry in India

The history of the hotel industry is an old as the history of tourism and travel industry. In fact,
both are two sides of the same coin. Both are complementary to each other. Hotel is an
establishment which provides food, shelter and other amenities for comfort and convenience of
the visitor with a view to make profit. Hotel is a commercial establishment and intends to
provide visitors with lodging, food and related services with a view to please them so as to build
goodwill and to let them carry happy memories. In general, a “hotel” is defined as a public
establishment offering visitors against payment two basic services i.e. accommodation and
catering (Ghosh, Biswanath). However, during the last few years great changes have taken place
in the scope of hotel industry. During 6th century BC, hotels were known as “inns” or
“Dharamshalas” and we’re providing only food and overnight stay facilities. At that point of time
the standard of an inn was quite normal with earth or stone floor, common bedroom and simple
food. As travel became easier, inns grew in size and number. The spirit of competition raised the
standard of inns. Industrial revolution and trade expansion resulted into increase in the number of
visitors crossing international border. In this era, room furnishing and catering received greater
attention. Emphasis was made on accommodation with spacious assembly hall and dining hall
for organizing functions and parties etc. But the real growth of the modern hotels started in the
last decade of the eighteenth century with the establishment of City Hotel in New York. After
that a large number of hotels of various types and grades came into existence in different
countries to meet the requirements of different categories of visitors. Modern hotels provide a
number of services to the visitors. The services vary according to the aim, location, type size and
grade of the hotel. Generally, the important activities of a hotel include-
Direction, Reception, Provision of accommodation rooms/floors, Cuisine Meals and
Refreshments, Restaurant, Bar, Bell to provide information to the guests, Entertainment and
Recreation, Sightseeing, Transport facilities, Parking space, Swimming pool, Bathroom facilities,
Lounge facilities, Garden, Shopping facilities, New stand, Tobacco and Cigarettes, Telephone,
Television, Radio, Laundry and Cleaning, Telex service, Wi-Fi, Sporting installations, Tennis
court, Golf and Squash, Installation for children, Banquet hall, Conference facilities, Convention
facilities, Exhibition areas, Health club, Business centre etc.

1. Employment Security:-is a sign of longstanding commitment by the company.

2. Selectivity in Recruitment: -right people in the right way to meet competitive success.
3. High wages :- right package for outstanding talents.
4. Incentive Based Payment: - profit sharing/productivity based payments.
5. Employee Information Sharing: - well informed employees for successful
results/competitive advantage.
6. Participation and Empowerment: -increase employee participation to improve employee
satisfaction-empower to broaden participation/control their work/workload.
7. Multi Skilling:- Cross-Training and Cross Utilization for effective teamwork.
8. Promotion from within: To retain talent.
9. Measurement of practices: more use metrics.
10. Work life balancing: Programs to manage work/life better.
Organizations and managers in the tourism and hospitality industry face real challenges in
recruiting, developing and maintaining a committed, competent, well managed and well-
motivated workforce which is focused on offering a high-quality ‘product’ to the increasingly
demanding and discerning customer.

This sector as a whole is made up of 14 sub-sectors :; 2.restaurants; 3.pubs, bars and night-clubs; 4.contract food service providers;
5.membership clubs;; 7.gambling; services; 9.tourist services; 10.visitor
attractions; 11.youth hostels; parks; 13.self-catering accommodation; 14.hospitality
Moreover within this broad classification of travel, tourism and hospitality there is massive
diversity in the types of jobs generated, in relation to their technical and skills’ demands,
educational requirements, terms and conditions and the type of person that is likely to be
attracted to employment in them. To illustrate this point we can consider description of the range
of people a person buying a package holiday is likely to interact with:
1.the retail travel agent; companies;
3.ground transport to and from the airport; least two sets of airport handling agents (outbound and return);
5.airport services (shops, food and beverage outlets) (outbound and return);
6.the airline on all legs of the journey;
7.immigration and customs services;
8.local ground transportation;
9.the hotel or apartment;
10.tour services at the destination;
11.companies and individuals selling a diversity of goods and services at the destination
(retail, food and beverage, entertainment, cultural and heritage, financial, etc.);
12.emergency services at the destination (medical, police, legal);
13.service providers on return (photography processing, medical).

HRM Models

There are two famous HRM models that exist today. One of these is the Michigan School
Model which was developed by and (1984). This is also referred to as the hard HRM which
emphasizes on treating employees as a means to achieving the organization’s strategy.
Organizations that practice this model monitor investment in employee training and development
to ensure it fits with the firm’s business strategy. The management’s principal reason for
improving the effectiveness of HRM in this model is increasing productivity. The Michigan
model also assumes that HRM will respond to the external and internal environment
appropriately and a contingency approach to HRM. The Michigan model is hard HRM because it
is based on strategic control, organizational structure and systems for managing people. Although
it acknowledges the importance of motivating and rewarding people, it concentrates most on
managing human assets to achieve strategic goals (2000).
Another HRM model was developed by a group of academics from the thus it was
called the Harvard Model. The Harvard Model (1984) proposes that people can be dealt with
within fur human resource categories. The first category is the employee-influence which refers
to the amount of authority, responsibility and power voluntarily delegated by and is compatible
with the purpose and interests of the management. The second is the element of human resources
flow, which refers to decisions on recruitment, selection promotion, exit, job security, career
development, advancement and fair treatment. The reward systems is concerned with intrinsic
and extrinsic rewards such as the work itself, sense of purpose, achievement and challenge, pay,
bonuses, insurances and flexible working hours. The reward system should always be aligned
with the overall business strategy and management philosophy. The last category is that of work
system which deals with the arrangement of people, information activities and technology
(2006). This is a highly prescriptive model of HRM which emphasizes a number of presumed
long-term benefits of acting on stakeholder interests and situational factors, assuming that there
is a set of predetermined and superior human resource policy choices (1994). Organizations
adopting this model would ensure that employees were involved in work, have opportunities.

Source: -

The Michigan School Model emphasizes the strategic resource aspect of human resources and is
considered to be the ‘hard’ variant of HRM (2006) which considers employees as one of the key
resources of organizations, arguing that human resources should be used effectively in order to
achieve organizational goals. On the other hand, the Harvard model stresses the human element
in the human resources formulation (2006) and is considered as the ‘soft’ variant in HRM. The
soft version of HRM is linked to the human relations school while hard HRM version is seen as
emerging from the strategic and business policy thoughts (1989).
These two models are the most commonly use HRM models in business today aside from other
models that has been theorized and formulated by some academics. Based on the definitions and
explanation of each model, it can be concluded that the soft model is more advisable to be
practiced by industries within the service sector while the manufacturing sector would be better
to use the Michigan Model HRM for increased production.
Human resource management is frequently seen in terms of a three-part cycle, which contains all
functional responsibilities that managers with responsibility for this role are required to address.
This human resource cycle comprises the following three parts:

1. Attract an effective workforce labour markets human resource planning recruitment and
selection flexible approaches to employment workforce retention.
2. Develop an effective workforce performance and appraisal education, training and
development career development and succession planning.
3. Maintain an effective workforce rewards – formal and informal welfare teamwork and
empowerment employee involvement and employee relations grievance and discipline
equality and diversity.
1. To study the challenges in human resource management that tourism and hospitality
industry are facing.
2. To know about the problems faced by the hoteliers.
3. To know the various type of hotel operation in present trend.
Literature Review
The review of literature is a key process of any research project as it allows research to be placed
in context. Equally, it does not only become familiar concepts, theories and arguments associated
to the research topic but also identify any gaps in the audience’s knowledge. Understandably
there has been a veritable explosion of published research work relating to the broader domain of
hospitality industry and impact of tourism activities in most economies together with
sociological planning and geographical studies. Research in and for the hospitality industry has
undoubtly grown in recent years. The pioneering work relating to Indian Hotel Industry was
done by Singh1 in which he has given a historical description of the growth of hotel industry in
the world. He opines that tourism is a combination of interrelated industries and trade.

Krishnaswamy in his article believes that hotel is an essential destination facility that a country
must provide to build up its tourist image.

Nadkarni makes out a case for having a realistic policy towards hotel industry in India. He is of
the view that Indian hotel business has suffered a setback because of the cumulative neglect in
building adequate infrastructure such as airports, domestic and road transports, communications
etc. There is still shortage of room facilities in luxury and deluxe hotels.

Dayal holds the opinion that hotels in India should keep a constant watch on emerging trends and
should continuously keep updating their facilities so that they conform to international standards.
Tariffs should always be within reasonable limits.

Seth opines in his article that the private challenge before the private sector is to reconcile its
expansion plans with the futuristic plans of the twenty first century otherwise much of the
investment under conventional arrangements would be wasteful. It is heartening that at least
some of the major hotel chains in the country are taking a long term prospective growth of the

The data collected during this process was extracted from a variety of sources. Some of them
included: electronic databases (e.g. Articles in Hospitality & Tourism), journals (e.g.: Employee
Relations, Human Resources Management Journal, Industrial Relation Journal, International
Journal of Contemporary Hospitality Management, International Journal of Hospitality
Management, International Journal of Human Resources Management, Journal of International
Business Studies, Personnel Review), books reports, conferences and websites.
Case study of JW Marriott
In 1927, J. William Marriott (JW Marriott) set-up a nine-seat root beer shop in Washington. After
some time, William started serving hot food along with the root beer and named the shop as 'The
Hot Shoppe.' In 1929, Hot Shoppe was officially incorporated as Hot Shoppes Inc and in 1937,
Hot Shoppe, ventured into airline catering at Washington airport, serving the Eastern, American
and Capital airlines. In 1982, Marriott acquired host international, a leading hospitality services
provider in the US, becoming the largest operator of airport terminal food, beverage and
merchandize facilities in the US. in the 1980s, Marriott acquired several companies including the
American Resorts Corporation (vacation business,1984) Gladieux Corporation (food service
company ,1985) Service Systems (contact food service company 1985) Howard Johnson
Company (hotels & inns, 1985) and Residency Inn Company (1987).With the acquisition of the
Saga Corporation a diversified food service management company in 1986,Marriot became the
largest food service management company in the US.Marriotts history of taking care of its
employees dated back to its early days ,when its founder ,JW Marriott , counseled the company’s
employees individually on their personal problems at his first hotel. He valued their presence
,kept them posted about the latest happenings in Marriott and gave them excellent training.JW
Marriott always ensured that employees who enjoyed the company felt themselves a part of
Marriott family. He made managers responsible for the satisfaction of their subordinates. JW
Marriott was always conscious of the fact that in the hospitality industry, providing the best
service to guests was paramount.

HR Issues and challenges faced by Marriott

1. Lack of trust on existing or new employees
2. Changes in Human Needs
3. Changes in Technology, Globalization
4. Employment security
5. Selectivity in recruitment
6. High wages
7. Employee information sharing
8. Participation and empowerment
9. Multiskilling: cross training and cross utilization
10. Measurement of practices
11. Promotion from within
12. Work life balancing
13. Difference between in the requirement of industry and cirriculm

Other issues which are faced by hotel:-

Curbing absenteeism, recruiting for retention, loyalty through motivation, managing employee
flexi time, managing employee staggering hours, managing shift swapping, managing self-
roistering, managing annualized hours, managing job sharing, managing telecommuting,
managing workplace flexibility.etc

1. Marriott hotels & resorts
2. JW Marriott hotels & resorts
3. Renaissance hotels & resorts
4. Courtyard by Marriott
5. Residence inn
6. Fairfield inn
7. Conference centers
8. Town place suites
9. Springhill suites
10. Marriott vacation club

Apart from providing a competitive pay package, Marriott strived to give its employees a good
work life. The company gave equal importance to non-monetary factors such as work life
balance, good leadership, better growth opportunities, a friendly work environment and training.
Employees stayed longer with Marriott as they were happy with these monetary factors and
thought them more important.

Staff Appraisals
Performance appraisal is a tool that provides management with valuable information regarding
the quality of the human resources the organizations possess which may serve as a basis for
important human resource decisions that may result in motivation and / or demonization of the
The staff appraisal is a periodical advisory and support discussion between staff members
and management, which also reaches agreements about objectives and the achievement of
targets, which are then incorporated in target agreements. The staff appraisal provides the
opportunity, in a systematic and structured way outside of every-day working routine, to discuss
matters that support and advance target-oriented cooperation.
The features of the staff appraisal are:
 Preparation
 Structured discussion
 Documentation
 Agreement of targets
 Confidentiality
 Regularity
 Work agreement
Staff development program’s:- Staff development is the practice of constantly training a
workforce in such a manner as the staff always refines itself. Staff development is part of the
concept of CQI or continuous quality improvement and is a way to quantify workforce
Employee Development
Employee development is a joint, on-going effort on the part of an employee and the
organization for which he or she works to upgrade the employee's knowledge, skills, and
abilities. Successful employee development requires a balance between an individual's career
needs and goals and the organization's need to get work done.Employee development programs
make positive contributions to organizational performance. A more highly-skilled workforce can
accomplish more and a supervisor's group can accomplish more as employees gain in experience
and knowledge.

In a broad sense, professional development may include formal types of vocational education,
typically post-secondary or poly-technical training leading to qualification or credential required
to obtain or retain employment. Professional development may also come in the form of pre-
service or in-service professional development programs. These programs may be formal, or
informal, group or individualized. Individuals may pursue professional development
independently, or programs may be offered by human resource departments. Professional
development on the job may develop or enhance process skills, sometimes referred to as
leadership skills, as well as task skills. Some examples for process skills are 'effectiveness skills',
'team functioning skills', and 'systems thinking skills'.
Professional development opportunities can range from a single workshop to a semester-long
academic course, to services offered by a medley of different professional development providers
and varying widely with respect to the philosophy, content, and format of the learning
experiences. Some examples of approaches to professional development include
 Case Study Method - The case method is a teaching approach that consists in presenting
the students with a case, putting them in the role of a decision maker facing a problem.
 Consultation - to assist an individual or group of individuals to clarify and address
immediate concerns by following a systematic problem-solving process.
 Coaching - to enhance a person’s competencies in a specific skill area by providing a
process of observation, reflection, and action.
 Communities of Practice - to improve professional practice by engaging in shared
inquiry and learning with people who have a common goal
 Lesson Study - to solve practical dilemmas related to intervention or instruction through
participation with other professionals in systematically examining practice
 Mentoring - to promote an individual’s awareness and refinement of his or her own
professional development by providing and recommending structured opportunities for
reflection and observation
 Reflective Supervision - to support, develop, and ultimately evaluate the performance of
employees through a process of inquiry that encourages their understanding and
articulation of the rationale for their own practices
 Technical Assistance - to assist individuals and their organization to improve by offering
resources and information, supporting networking and change efforts
Professional development is a broad term, encompassing a range of people, interests and
approaches. Those who engage in professional development share a common purpose of
enhancing their ability to do their work. At the heart of professional development is the
individual's interest in lifelong learning and increasing their own skills and knowledge.
Environment analysis
Evaluation of the possible or probable effects of external forces and conditions on organization's
survival and growth strategies.

Source: -

SWOT analysis (alternately SLOT analysis) is a strategic planning method used to evaluate the
Strengths, Weaknesses/Limitations, Opportunities, and Threats involved in a project or in
business venture. It involves specifying the objective of the business venture or project and
identifying the internal and external factors that are favorable and unfavorable to achieve that
 Strengths: Characteristics of the business, or project team that give it an advantage over
 Weaknesses (or Limitations): are characteristics that place the team at a disadvantage
relative to others.
 Opportunities: external chances to improve performance (e.g. make greater profits) in the
 Threats: external elements in the environment that could cause trouble for the business or
Strength weakness
 Technological skills  Absence of important skills
 Leading brands  Weak brands
 Distribution channels  Poor access to distribution
 Customer loyalty/ relationship  Low customer retention
 Production quality  Unreliable product/services
 Scale  Sub-scale
 Management  management
Opportunities Threat
 Changing customer taste  Changing customer tastes
 Liberalization geographic market  Closing of geographic market
 Technological advances  Technological advances
 Change in government policies  Change in government policies
 Lower personal taxes  Tax increases
 Change in population age- structure  Change in population age- structure
 New distribution channels  New distribution channels

Identification of SWOTs is essential because subsequent steps in the process of planning for
achievement of the selected objective may be derived from the SWOTs.
Strengths Weaknesses Opportunities Threats Reputation in marketplace Shortage of consultants
at operating level rather than partner level Well established position with a well defined market
niche Large consultancies operating at a minor level Expertise at partner level in HRM
consultancy Unable to deal with multi-disciplinary assignments because of size or lack of ability
Identified market for consultancy in areas other than HRM Other small consultancies looking to
invade the marketplace.

SWOT analysis of hospitality industry

The SWOT analysis is very important especially in the hotel industry. When it comes to tourism,
the hotel industry is very important. In fact, it is a supporting service that affects the presence of
tourism in a certain place.

Strengths Weaknesses
1. Natural and cultural diversity 1. Poor support infrastructure
2. Demand – supply gap 2. Slow implementation
3. Government support 3. Susceptible to political events
4. Increase in the market share
Opportunities Threats
1. Open sky benefits 1. Increasing competition
2. Rising income 2. Fluctuations in international tourist


1. Natural and cultural diversity: India has a rich cultural heritage. The “unity in diversity” tag
attracts most tourists. The coastlines, sunny beaches, backwaters of Kerala, snow capped
Himalayas and the quiescent lakes are incredible.

2. Demand – supply gap: India hotel industry is facing a mismatch between the demand and
supply of rooms leading to higher room rates and occupancy levels. With the privilege of hosting
Commonwealth Games 2010 there is more demand of rooms in five star hotels. This has led to
the rapid expansion of the sector.

3. Government Support: The government has realized the importance of tourism and has
proposed a budget of Rs. 540 crores for the development of the industry. The priority is being
given to the development of the infrastructure and of new tourist destinations and circuits. The
Department of Tourism (DOT) has already started the “Incredible India” campaign for the
promotion of tourism in India.
4. Increase in the market share: India’s share in international tourism and hospitality marker is
expected to increase over the long-term. New budget and star hotels are being established.
Moreover, foreign hospitality players are heading towards Indian markets.


1. Poor support infrastructure: Though the government is taking necessary steps, many more
things need to be done to improve the infrastructure. In 2007, the total expenditure made in this
regard was US$215 billion in China compared to US$83 billion in India.
2. Slow implementation: The lack of adequate recognition for the tourism industry has been
hampering its growth prospects. Whatever steps are being taken by the government are
implemented at a slower pace.
3. Susceptible to political events: The internal security scenario and social unrest also hamper
the foreign tourist arrival rates.


1. Rising income: Owing to the rise in income levels, Indians have more spare money to spend,
which is expected to enhance leisure tourism.
2. Open sky benefits: With the open sky policy, the travel and tourism industry has seen an
increase in business. Increased airline activity has stimulated demand and has helped improve the
infrastructure. It has benefited both international and domestic travels.

1. Fluctuations in international tourist arrivals: The total dependency on foreign tourists can
be risky, as there are wide fluctuations in international tourism. Domestic tourism needs to be
given equal importance and measure should be taken to promote it.
2. Increasing competition: Several international majors like the Four Seasons, Shangri-La and
Aman Resorts are entering the Indian markets. Two other groups – the Carlson Group and the
Marriott chain has already joined this race. This will increase the competition for the existing
Indian hotel majors.

Tourism and Hospitality industry, as an industry, remains dominated in most countries by small
family-run businesses within which the capacity to effectively deliver HRD is often limited.
While the focus in these operations tends towards the informal, such investment may be
insufficient in a rapidly changing business environment and a volatile labor market. Limitations
to generalization are also the result of different traditions and philosophies of education and
training between countries and regions. Tourism is generally ‘locked into’ the structures and
philosophies of public sector education and training setting in which it operates. These
approaches any not be fully sensitive to the vocational HRD needs of tourism. If tourism and
hospitality and organizations are to achieve service quality, attain human knowledge growth,
reduce staff turnover costs, and achieve a resulting core competency that attains a sustainable
market advantage then a mixture of human resource strategies such as job rotation, succession
planning, genuine empowerment, and career progression need to be considered. These options
are much easier for larger organizations like hotel chains.

It is important to ensure that business communicates with employees and find out what it is that
they value, and then determine how that fits in with the company’s values and goals. It is
important for managers or supervisors to talk to employees on a regular basis to determine if the
business is seen as an “employer of choice” and if it is the company that employees (past and
present) hold in high regard. The goal should be to create a positive work place where people can
feel valued for their contribution to the success of the business.
 There should be up gradation of the curriculum in universities as per industry
 Govt. should take some steps to spread Awareness about tourism and hospitality industry
as careers.
 Up gradation in the scale should be done in tourism and hospitality industry.
 Training should be compulsory in every department, and stipend should be paid
according to work schedule of trainees.
 Seminars should be conducted in institutions and universities for adopting tourism and
hospitality as careers.
 The duty roster should be prepared for trainees highlighting their time periods in all
departments so that they not feel burden or pressure while working.

P.Subba Rao, 2008, Essentials of Human Resources Management and Industrial Relations 3rd Ed.
C.B.Mamoria, S.V.Gankar, 2007, Personnel Management. 27thEd.
R.K.Malhotra, 2005, Tourism Planning and Management.1sted.
S.Kannan, 2005, Hotel Industry in India. 1stEd.
Dr.Jagmohan Negi, 1997, Hotel for Tourism Development, 2nd Ed.
Emerald Library, Articles in Hospitality & Tourism
Worldwide Hospitality and Tourism Trends-WHATT), journals (e.g.: Employee Relations)
Human Resource Management Journal
International Journal of Contemporary Hospitality Management
International Journal of Hospitality Management
International Journal of Human Resource Management
JW Marriott’s, Chandigarh