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Chapter 1. The hospitality industry and you 3
Chapter 2. Forces affecting growth and change in the hospitality industry 33
Part 2. Food service 61
Chapter 3. The restaurant business 63
Chapter 4. Restaurant operations 103
Chapter 5. Restaurant industry organization : chain, independent, or franchise? 127
Chapter 6. Competitive forces in food service 159
Chapter 7. Issues facing food service 183
Chapter 8. On-site food service 213
Chapter 9. Lodging : meeting guest needs 257
Chapter 10. Hotel and lodging operations 293
Chapter 11. Forces shaping the hotel business 333
Chapter 12. Competition in the lodging business 367
Part 4. Travel and tourism 405
Chapter 13. Tourism: Front and center 407
Chapter 14. Destinations: Tourism generators 437
Part 5. Hospitality as a service industry 483
Chapter 15. The role of service in the hospitality industry 485
(NOTE: The figures and/or tables mentioned in this sample chapter do not appear in the web version.) The Hospitality Industry and You
The Purpose of This Chapter
Your own career choice is probably the most important management decision you'll ever make-at least from your point of view. This chapter has been designed, therefore, to help you analyze a career in the hospitality industry and correlate that analysis with your field experiences while in school. It will also help prepare you for the first career decision you make just before or after you graduate. This chapter discusses the career decisions ahead of you over the next three to five years.
This Chapter Should Help You
1. Know what kinds of businesses (and other establishments) make up the hospitality industry
2. Know why people study in hospitality management programs-and what advantages these academic programs may have for you
3. Think of your career decision in terms of a life's work not just a job
4. Start planning your field experiences-again, not just as jobs but as crucial parts of your education
5. Relate your education-both class and field experiences-to your employment goals at graduation
6. Evaluate the employment outlook in the various sectors of the hospitality industry, and learn where the "hot spots" and "soft spots" are
WHAT IS HOSPITALITY MANAGEMENT?
When we think of the hospitality industry, we usually think of hotels and restaurants. However, the term has a much broader meaning. According to the Oxford English Dictionary, hospitality means "the reception and entertainment of guests, visitors or strangers with liberality and good will." The word hospitality is derived from hospice, a medieval "house of rest" for travelers and pilgrims. A hospice was also an early form of what we now call a nursing home, and the word is clearly related to hospital.
Hospitality, then, includes hotels and restaurants. It also refers, however, to other kinds of institutions that offer shelter or food or both to people away from their homes. Moreover, these institutions have more than a common historical heritage. They also share the management problems of providing food and shelter-problems that include erecting a building; providing heat, light, and power; cleaning and maintaining the premises; and preparing and serving food in a way that pleases the guests. We expect all of this to be done "with liberality and good will" when we stay in a hotel or dine in a restaurant, but we can also rightfully expect the same treatment from the dietary department in a health care facility or from a school lunch program.
The hospitality professions are among the oldest of the humane professions, and they involve making a guest, client, or resident welcome and comfortable. There is a more important reason, however, that people interested in a career in these fields should think of hospitality as an industry. Today, managers and supervisors, as well as skilled employees, find that opportunities for advancement often mean moving from one part of the hospitality industry to another. For example, a hospitality graduate may begin as a management trainee with a restaurant company; complete the necessary training; and, in a short time, take a job as an assistant manager in a hotel. The next job offer could come from a hospitality conglomerate, such as ARAMARK. ARAMARK provides food service operations not only in plant and office food services, but also in such varied areas as recreation centers, college campuses, health care facilities, airline food services, community nutrition centers, and gourmet restaurants. Similarly, Holiday Inns is in the hotel business, but it is also one of the largest food service companies in the United States.
The point is that the hospitality industry is tied together as a clearly recognizable unit by more than just a common heritage and a commitment to "liberality and good will." Careers in the industry are such that your big break may come in a part of the industry entirely different from the one you expected. Hospitality management is one of the few remaining places in our specialized world of work that calls for a broadly gauged generalist-and the student who understands this principle increases the opportunity for a rewarding career in one of the hospitality industries.
THE MANAGER'S ROLE IN THE HOSPITALITY INDUSTRY
As a successful manager in the hospitality industry, you must exhibit many skills and command much specialized knowledge, but, for now, let's discuss three general kinds of hospitality objectives:
1. A manager wants to make the guest welcome personally. This requires both a friendly manner on your part toward the guest and an atmosphere of "liberality and good will" among the people who work with you in serving the guests. That almost always means an organization in which workers get along well with one another.
2. A manager wants to make things work for the guest. Food has to be savory and hot or cold according to design-and on time. Beds must be made and rooms cleaned. A hospitality system requires a lot of work, and the manager must see that it is done.
3. A manager wants to make sure the operation will continue to provide service and make a profit. When we speak of "liberality and good will," we don't mean giving the whole place away! In a restaurant or hotel operated for profit, portion sizes are related to cost, and so menu and room prices must be related to building and operating costs. This enables the establishment to recover the cost of its operation and to make enough additional income to pay back any money borrowed, as well as to provide a return to the owner who risked a good deal of money-and time-to build the establishment. (This situation is surprisingly similar to subsidized operations such as most school lunch programs and many health care food services. Here the problem is not to make a profit but to achieve either a break-even or zero-profit operation, or a controlled but negative profit-that is, a loss covered by a subsidy from another source.) The key lies in achieving a controlled profit, loss, or break-even operation. A good term to describe this management concern is conformance to budget.
Managers must be able to relate successfully to employees and guests, direct the work of their operation, and achieve operating goals within a budget.
WHY STUDY IN A HOSPITALITY MANAGEMENT PROGRAM?
One way to learn the hospitality business is to go to work in it and acquire the necessary skills to operate the business. The trouble with this approach, however, is that the skills that accompany the various work stations (cook, server, etc.) are not the same as those needed by hospitality managers. In earlier times of small operations in a slowly changing society, hospitality education was basically skill centered. Most hospitality managers learned their work through apprenticeships. The old crafts built on apprenticeships assumed that knowledge-and work-were unchanging. However, this assumption no longer holds true. As Peter Drucker, a noted management consultant, pointed out, "Today the center [of our society's productivity] is the knowledge worker, the man or woman who applies to productive work ideas, concepts, and information." In other words, studying is a necessary part of your preparation for a career as a supervisor or manager.
Many people argue that the liberal arts provide excellent preparation not only for work but also for life. They're quite right. What we've found, however, is that many students just aren't interested in the liberal arts subject matter. Because they are not interested, they are not eager to learn. On the other hand, these same people become hard-working students in a career-oriented program that interests them. There is no real reason for educational preparation for work to be separate from preparation for life. We spend at least half our waking hours at work. As we will learn shortly, work lies at the heart of a person's life and can lead directly to "self-discovery."
Business administration offers a logical route to management preparation. Indeed, many hospitality managers have prepared for their careers in this field. Business administration, however, is principally concerned with the manufacturing and marketing of a physical product in a national market. By contrast, the hospitality industry is a service industry, and the management of a service institution is different. Food is a restaurant's product, but most of the "manufacturing" (often all of it) is done right in the place that offers the service. The market is local, and the emphasis is on face-to-face contact with the guest. Hospitality operations are also smaller; so the problems of a large bureaucracy are not as significant as are the problems of face-to-face relationships with employees and guests. Moreover, the hospitality industry has a number of unique characteristics. People work weekend and odd hours. We are expected by both guests and fellow workers to be friendly and cheerful. Furthermore, we are expected to care what happens to the guest. Our product, we will argue in a later chapter, is really the guest's experience. Some would argue that hospitality has a culture of its own. An important task of both schooling and work experience, then, is that of acculturating people to the life of the hospitality industry.
Our point is not that there is something wrong with liberal arts or business administration. The point is that hospitality management programs are usually made up of students who are interested in the industry that they are studying. There is a difference between the hospitality service system and the typical manufacturing company-between the hospitality product and the manufacturer's product.
Why do people want to study in a hospitality management program? Perhaps the best answer can be found in the reasons why students before you have chosen this particular course of study. Their reasons fall into three categories: their experience, their interests, and their ambitions. Figure 1.1 lists the various reasons that students cite, in order of frequency. Many students become interested in hospitality because a job they once had proved particularly attractive. Others learn of the industry through family or friends working in the field.
One important consideration for many students is that they like and are interested in people. As we just saw, working well with people is a crucial part of a manager's job in our industry. Many students, too, have a natural interest in food, and some are attracted by the natural glamour of the hospitality industry.
In addition, the employment outlook is solid in most segments of the hospitality industry, particularly for managers. Many people are attracted to a field in which they are reasonably sure they can secure employment. Others feel that in a job market with more opportunities than applicants, they will enjoy a good measure of independence, whether in their own businesses or as company employees. Many students are drawn to the hospitality industry because they want to get into their own business. One way to do that is through franchised operations, in either food service or lodging. Others, with good reason, suspect there are opportunities for innovation off the beaten track of the franchise organizations. There are many successful examples of the latter throughout the hospitality industry.
Many young entrepreneurs have chosen catering as a low-investment field that offers opportunities to people with a flair for foods and careful service. Catering is a fast-growing segment of food service and is also a business that students sometimes try while in school, either through a student organization or as a group of students setting up a small catering operation.
In the lodging area, one enterprising young couple expanded in an ingenious way the services of a small country inn. Once they and their tiny inn had been established in the community, they arranged to represent a large number of rental-unit owners in the area, offering marketing services to the owners and providing "front office" and housekeeping services for their guests in some 50 units, ranging from one-bedroom condominiums to larger condos and even houses. The biggest appeal to being in business for yourself, cited by two-thirds of entrepreneurs, was not money but being your own boss.
There are many other opportunities, as well. For instance, people with chef's training may open their own business, especially if they feel that they have a sufficient management background. In the health care area, home care organizations are expanding in response to the needs of our growing senior citizen population and offer a wide range of opportunities to entrepreneurs. This interest in independent operations reinforces the need for studying hospitality management.
Whether you're studying hospitality management because you want to start a business of your own or because you found your past work experience in the business especially interesting-or perhaps just because the need for managers in the area makes the job prospects attractive-management studies are an important preparation for budding entrepreneurs. Hospitality management students tend to be highly motivated, lively people who take pride in their future in a career of service.
PLANNING A CAREER
Why Do We Work?
We all have several motives for going to work. We work to live-to provide food, clothing, and shelter. Psychologists and sociologists tell us, however, that our work also provides a sense of who we are and binds us to the community in which we live. The ancient Greeks, who had slaves to perform menial tasks, saw work as a curse. Their Hebrew contemporaries saw it as punishment. Early Christians, too, saw work for profit as offensive. By the time of the Middle Ages, however, people began to accept work as a vocation, that is, as a calling from God. Gradually, as working conditions improved and work became something that all social classes did, it became a necessary part of maturation and self-fulfillment in our society.
Today, workers at all levels demand more than just a job. Indeed, work has been defined as "an activity that produces something of value for other people." This definition puts work into a social context. That is, it implies there is a social purpose to work, as well as the crude purpose of survival. It is an important achievement in human history that the majority of Americans can define their own approach to a life of work as something more than mere survival.
Work contributes to our self-esteem in two ways. First, by doing our work well, we prove our own competence to ourselves. Psychologists tell us that this is essential to a healthy life, as this information gives us a sense of control over both ourselves and our environment. Second, by working, we contribute to others-others come to depend on us. Human beings, as social animals, need this sense of participation. For these reasons, what happens at work becomes a large part of our sense of self-worth.
Education for such a significant part of life is clearly important. Indeed, education has become essential in most walks of life. There is, moreover, a clear connection between education and income. According to American Demographics, "college graduates earn twice as much annually as do high school graduates"-and the difference is growing. The evidence, then, is that your commitment to education will pay off.
The next section explores career planning in regard to employment decisions that you must make while you are still in school. We will also discuss selecting your first employer when you leave school. If you've chosen the hospitality industry as your career, this section will help you map out your job plans. If you are still undecided, the section should help you think about this field in a more concrete way and give you some ideas about exploring your career through part-time employment. A large number of readers of this text already have significant work experience, many in hospitality fields. Because not everyone has such experience in his or her background, however, this is a subject that does need to be covered. Perhaps those with more experience will find this a useful opportunity to review plans they've already made. A fresh look at your commitments will probably be worthwhile.
It's hard to overstate the importance of career planning. Young people, particularly in high school, find that their career plans change constantly. By the time they've graduated from high school, their career plans may have begun to take definite shape, but there still may be more changes. For example, people who start out studying for a career in the hotel business may find the opportunities they want in food service. Others may begin preparations for the restaurant industry only to find they prefer the hours offered in contract food service. This kind of change in plans will be easier to cope with if you have a plan that can guide you until your experience enables you to judge the "fit" between yourself and the available opportunities. As a prospective manager, give at least as much time and attention to planning for decisions that affect your career as you expect to give to decisions you will be making for your employer. Remember that no matter for whom you work, you're always in business for yourself, because it's your life.
EMPLOYMENT AS AN IMPORTANT PART OF YOUR EDUCATION
Profit in a business is treated in two ways. Some is paid out to the owner or shareholders as dividends (returns on their investment). Some of the profit, however, is retained by the business to provide funds for future growth. This portion of profit that is not paid out is called retained earnings. We need a concept of retained earnings to consider the real place of work experience in career development.
Profiting from Work Experience
The most obvious profit you earn from work is the income paid to you by an employer. In the early years of your career, however, there are other kinds of benefits that are at least as important as income. The key to understanding this statement is the idea of a lifetime income. You'll obviously need income over your entire life span, but giving up some income now may gain you income (and, we ought to note, enjoyment, a sense of satisfaction, and independence) just a few years later. There is, then, a job-benefit mix made up of both money and knowledge to be gained from any job. Knowledge gained today can be traded with an employer for income tomorrow: a better salary for a better qualified person. The decision to take a job that will add to your knowledge is, thus, a decision for retained earnings and for acquiring knowledge that you can use later.
Every job, therefore, has to be weighed according to its benefit mix, not just in terms of the dollar income it provides. A part-time job as a supermarket stock person (well, it is a "food-related" job in a way) might seem attractive because it pays more than a job busing dishes does. However, if you think about the learning portion of the benefit mix and your total income, including what you learn, your decision may-and probably should-be for the job that will add to your professional education.
There is another important point to consider about retained earnings and the benefit mix. Often, the only part-time job in the industry available to students is an unskilled one. Many people find these jobs dull, and they often pay poorly. If you think about these jobs in terms of their total income, however, you may change your perspective. Although the work of a busboy or a dishwasher may not be very challenging, you can improve your total profits from such a job by resolving to learn all you can about the operation. In this way, you can build your retained earnings-the bank of skills and knowledge that nobody can ever take away from you.
Learning Strategies for Work Experience
When you go to work, regardless of the position you take, you can learn a good deal through careful observation. Look first at how the operation is organized. More specifically, look at both its managerial organization and its physical organization.
Managerial Organization. Who is the boss? Who reports to (or works directly with) him or her? Is the work divided into definite departments or sections? Is one person responsible for each department? To whom do the department staff members report? If you can answer these questions, you will have figured out the formal organization of the operation. Indeed, most large companies will have an organization chart that you can look at. If your employer doesn't have such a chart, ask him or her to explain the organization to you. You'll be surprised at how helpful to hospitality management students most employers and supervisors are. While you're thinking about organization, it is also important to notice the informal organization or the "social organization" of the group with whom you are working. Which of the workers are influential? Who seem to be the informal leaders? Why? Most work groups are made up of cliques with informal leaders. After you identify this informal structure, ask yourself how management deals with it. Remember that someday the management of these informal organizations will be your problem; in time, you will be helping to manage the organization, and you will need their cooperation. In the meantime, this first-hand experience will help you both in your studies and in sizing up the real world of work.
The Physical Plant. You can learn a great deal about a physical plant by making a simple drawing of your workplace, such as the one shown in Figure 1.2. On this drawing, identify the main work areas and major pieces of equipment. Then begin to note on it where you see problems resulting from cross traffic or bottlenecks. For example, if you're working in the back of the house, you can chart the flow of products from the back door (receiver) to storage and from there to preparation. You should also trace the flow of dishes. Dirty dishes come to the dishroom window and go to the clean-supply area after washing. How are they transported to the cooler or to the pantry people for use in service? If you are working in the back of the house, you will be looking mostly at the flow of kitchen workers and dishes from the viewpoint of the kitchen, dishroom, or pantry. A similar flow analysis of guests and servers (and plates) can also be made from the front of the house (i.e., the dining room). A study of guest flow in a hotel lobby can be equally enlightening. Trace the flow of room guests, restaurant guests, banquet department guests, and service employees arriving through the lobby. Where do you observe congestion? These simple charting activities will give you some practical experience that will be useful for later courses in layout and design and in food service operations and analysis.
Learning from the Back of the House. Things to look for in the back of the house include how quality is assured in food preparation, menu planning, recipes, cooking methods, supervision, and food holding. (How is lunch prepared in advance? How is it kept hot or cold? How long can food be held?) How are food costs controlled? For instance, are food portions standardized? Are they measured? How? How is access to storerooms controlled? These all are points you'll consider a great deal in later courses. From the very beginning, however, you can collect information that is invaluable to your studies and your career.
Learning from the Front of the House. If you are busing dishes or working as a waiter, a waitress, or a server on a cafeteria line, you can learn a great deal about the operation from observing the guests or clients. Who are the customers, and what do they value? Peter Drucker called these the two central questions in determining what a business is and what it should be doing. Are the guests or clients satisfied? What, in particular, seems to please them? Employees in the hospitality industry derive personal satisfaction from pleasing the guests. So be sure to find out whether or not your job will allow you this satisfaction. Would you change things? How? In any job you take, your future work lies in managing others and serving people. Wherever you work and whatever you do, you can observe critically the management and guest or client relations of others. Ask yourself, "How would I have handled that problem? Is this an effective management style? In what other ways have I seen this problem handled?" Your development as a manager also means the development of a management style that suits you, and that is a job that will depend, in large part, on your personal experience.
GETTING A JOB
Hospitality jobs can be obtained from several sources. For example, your college may maintain a placement office. Many hospitality management programs receive direct requests for part-time help. Some programs maintain a job bulletin board or file, and some even work with industry to provide internships. The "help wanted" pages of your newspaper also may offer leads, as may your local employment service office. Sometimes, personal contacts established through your fellow students, your instructor, or your family or neighborhood will pay off. Or you may find it necessary to "pound the pavement," making personal applications in places where you would like to work.
Some employers may even arrange for hospitality management students to rotate through more than one position and even to assume some supervisory responsibility to help them gain a broader experience.
Getting in the Door
It is not enough just to ask for a job. Careful attention to your appearance is important, too. For an interview, this probably means a coat and tie for men, a conservative dress or suit for women. Neatness and cleanliness are the absolute minimum. (Neatness and cleanliness are, after all, major aspects of the hospitality product.) When you apply for or have an interview for a job, if you can, find out who the manager is; then, if the operation is not a large one, ask for him or her by name. In a larger organization, however, you'll deal with a personnel manager. The same basic rules of appearance apply, regardless of the organization's size.
Don't be afraid to check up on the status of your application. Here's an old but worthwhile adage from personal selling: It takes three calls to make a sale. The number three isn't magic, but a certain persistence-letting an employer know that you are interested-often will land you a job. Be sure to identify yourself as a hospitality management student, because this tells an employer that you will be interested in your work. Industry Practice Note 1.1 gives you a recruiter's eye view of the job placement process.
Learning on the Job
Let's look at some ideas about learning on the job. One key is your attitude. If you are really interested and eager to learn, you will, in fact, learn a great deal more, because you will naturally extend yourself, ask questions, and observe what's going on around you.
Many hospitality managers report that they gained the most useful knowledge on the job on their own time. Let's assume you're working as a dishwasher in the summer and your operation has a person assigned to meat cutting. You may be allowed to observe and then perhaps help out-as long as you do it on your own time. Your "profit" in such a situation is in the "retained earnings" of increased knowledge. Many job skills can be learned through observation and some unpaid practice: bartending (by a waitress or waiter), clerking on a front desk (by a bellman), and even some cooking (by a dishwasher or cook's helper). With this kind of experience behind you, it may be possible to win the skilled job part-time during the year or for the following summer.
One of the best student jobs, from a learning standpoint, is a relief job, either day-off relief or vacation relief. The training for this fill-in work can teach you a good deal about every skill in your operation. Although these skills differ from the skills a manager uses, they are important for a manager to know, because the structure of the hospitality industry keeps most managers close to the operating level. Knowledge of necessary skills gives managers credibility among their employees, facilitates communication, and equips them to deal confidently with skilled employees. In fact, a good manager ought to be able to pitch in when employees get stuck. For these reasons, one phrase that should never pass your lips is "that's not my job."
Other Ways of Profiting from a Job
In addition to income and knowledge, after-school part-time employment has other advantages. For example, your employer might have a full-time job for you upon graduation. This is particularly likely if your employer happens to be a fairly large firm or if you want to remain close to the area of your schooling.
You may choose to take off a term or two from school to pursue a particular interest or just to clarify your longer-term job goals. This does have the advantage of giving you more than "just a summer job" on your resume-but be sure you don't let the work experience get in the way of acquiring the basic educational requirements for progress into management.
Wherever-and for however long-you work, remember that through your employment you may make contacts that will help you after graduation. People with whom you have worked may be able to tell you of interesting opportunities or recommend you for a job.
Don't underestimate a recommendation. Even if your summer employer doesn't have a career opportunity for you, a favorable recommendation can give your career a big boost when you graduate. In addition, many employers may have contacts they will make available to you-perhaps friends of theirs who can offer interesting opportunities. The lesson here is that the record you make on the job now can help shape your career later.
EMPLOYMENT AT GRADUATION
Graduation probably seems a long way off right now, but you should already be considering strategies for finding a job when you finish your formal education. Clear goals formed now will direct your work experience plans and, to a lesser degree, the courses you take and the topics you emphasize within those courses. If you have not yet decided on a specific goal, then this question deserves prompt but careful consideration as you continue your education. You still have plenty of time.
Global Hospitality Note 1.1 offers some information you may find helpful if you think you might like to work overseas.
The rest of this section offers a kind of "dry run" postgraduation placement procedure. From this distance, you can view the process objectively. When you come closer to graduation, you may find the subject a tense one: People worry about placement as graduation nears, even if they're quite sure of finding a job.
GOALS AND OBJECTIVES: THE STRATEGY OF JOB PLACEMENT
Most hospitality management students have three concerns. First, many students are interested in such income issues as starting salary and the possibility of raises and bonuses.
Second, students are concerned with personal satisfaction. They wonder about opportunities for self-expression, creativity, initiative, and independence. Although few starting jobs offer a great deal of independence, some types of work (e.g., employment with a franchising company) can lead quite rapidly to independent ownership. Students also want to know about the number of hours they'll be investing in their work. Many companies expect long hours, especially from junior management. Other sectors, especially institutional operations, make more modest demands (but may offer more modest prospects for advancement).
Third, many students, particularly in health care food service, want to achieve such professional goals as competence as a registered dietitian or a dietetic technician. Professional goals in the commercial sector are clearly associated with developing a topflight reputation as an operator.
These three sets of interests are obviously related; for example, most personal goals include the elements of income, satisfaction, and professional status. Although it may be too early to set definite goals, it is not too early to begin evaluating these elements. From the three concerns we've just discussed, the following are five elements of the strategy of job placement for your consideration:
1. Income. The place to begin your analysis is with the issue of survival. How much will you require to meet your financial needs? For example, your needs will be greater if you plan to support a family than if you need to support only yourself. If your income needs are modest, you may decide to forgo luxuries to take a lower-paying job that offers superior training. Thus, you would make an investment in retained earnings-the knowledge you hope someday to trade for more income, security, and job satisfaction.
2. Professional status. Whether your goal is professional certification (as a registered dietitian, for example) or a reputation as a topflight hotelier or restaurateur, you should consider the job's benefit mix. In this case, you may choose to accept a lower income (but one on which you can live and in line with what such jobs pay in your region). Although you shouldn't be indifferent to income, you'll want to focus principally on what the job can teach you.
3. Evaluating an employer. Students who make snap judgments about a company and act aggressively during an interview often offend potential employers, who, after all, see the interview as an occasion to evaluate the student crop. Nevertheless, in a quiet way, you should learn about the company's commitment to training. Does it have a training program? If not, how does it translate its entry-level jobs into learning experiences? (Inquiries directed to your acquaintances and the younger management people can help you determine how the company really scores in these areas.) Because training beyond the entry-level basics requires responsibility and access to promotion, you will want to know about the opportunities for advancement. Finally, you need to evaluate the company's operations. Are they quality operations? Can you be proud to work there? If the quality of food or service is consistently poor, can you help improve things? Or will you be misled into learning the wrong way to do things?
4. Determining potential job satisfaction. Some students study hospitality management only to discover that their real love is food preparation. Such students may decide, late in their student careers, to seek a job that provides skill training in food preparation. Other students may decide they need a high income immediately (to pay off debts or to do some traveling, for example). These students may decide to trade the skills they have acquired in their work experiences to gain a high income for a year or two as a waitress or waiter in a topflight operation. Such a goal is highly personal but perfectly reasonable. The key is to form a goal and keep moving toward it. The student who wants eventually to own an operation will probably have to postpone his or her goal while developing the management skills and reputation necessary to attract the needed financial backing.
5. Accepting skilled jobs. Students sometimes accept skilled jobs rather than management jobs because that is all they can find. This happens, quite often, especially during a period of recession. Younger students, too, are prone to suffer from this problem for a year or two, as are students who choose to locate in small communities. The concept of retained earnings provides the key to riding out these periods. Learn as much as you can and don't abandon your goals.
A final word is in order on goals, priorities, and opportunities. Hospitality students' preferences for work upon graduation are summarized in Table 1.1. 8 Hotels are clearly the favored sector of the hospitality industry and luxury operations are preferred over mid-market or midscale operations among this sample of students. Interestingly, fast food (quick-service restaurant, QSR) and contract and noncommercial food service are at the bottom of the list. There is an old saying, De gustibus non disputandem est (In tastes, there is no disputing)-and that certainly should apply to job preferences. Still, the researchers speak of "how fulfilling and rewarding careers in the QSR industry can be" and suggest that, "Perhaps more than any other [this segment] provides an opportunity for hospitality students to 'fast track' to the top." On the other hand, later in this text, we will point out that, although work in institutional management is not any "easier," its hours are more regular and its pace more predictable.
Luxury hotels and luxury restaurants are undoubtedly more glamorous than many other operations-or at least seem so-and it does appear that they are attracting the largest number of graduates as applicants. In the supply-demand equation, they have a plentiful supply of applicants and yet they are relatively smaller sectors of hospitality employment (as are clubs). That is to say, they have less demand for people than many other sectors. In economics, you may recall, a large supply met by a modest demand is generally expected to yield a lower price. Of course, there are no dollar signs on job satisfaction and these are highly personal choices. Still, the truth is that no job offers everything. You have to decide what your highest priorities are and then choose the opportunity that suits you best. If career advancement, achieving a substantial income, and gaining responsibility-or perhaps just having a manageable work life-are priorities for you, you may want to consider at least interviewing with some of the companies that are on the bottom of everybody else's list.
THE OUTLOOK FOR HOSPITALITY
Over the past two generations, the hospitality industry has evolved to accommodate explosive growth, radically changing consumer demand, and a substantially different social and economic environment. We will examine some of the basic forces driving these changes in Chapter 2. The following brief summary points will alert you to some of the key trends discussed in the balance of this text. We can begin with trends closest to the industry and move outward to broader societal developments.
Polarization in Hospitality Service Organizations
Hospitality companies are grouping themselves, to a very large extent, either as limited-service organizations or as service-intensive operations. In lodging, although there are price point divisions-budget, economy and midscale, upscale and upper upscale-the most basic division is between limited-service and full-service properties. In later chapters, we will be concerned with the possibility of over-building and future excess capacity in all but the luxury segment of lodging. In food service, simpler operations specializing in off-premise service to guests-take-out, drive-through, and delivery-have provided most of the growth in restaurant sales in recent years. Fast food, too, continues its healthy growth trend. Table service restaurant growth in the more economical family restaurant segment has flattened, but within the table service group a more service-intensive format-casual restaurants-has shown healthy growth. Restaurants and hotels, then, are tailoring themselves to specialized markets, a practice often referred to as target marketing.
One of the major reasons hotels and restaurants are increasingly targeting specific market segments is that, in most markets, there is more than enough hotel and restaurant capacity to go around. Competition will be even tougher in the years ahead. In food service, operators are adapting their operations by opening new restaurants and bringing them closer to the customer, that is, making them more convenient. Lodging capacity, as we have already noted, offers a highly competitive outlook for all but the luxury sector. The growth in competition makes tightly controlled operations especially important to survival. We will consider those issues for restaurants in Chapter 4 and for hotels in Chapter 11.
Service Is the Difference
As competing firms expand their menus and amenities and dress up their operations, all operations at a given price level tend to become more like one another. The crucial differentiation becomes service-and usually personal service. Understanding service and how to manage it is so vitally important that the last chapter of this book is devoted to it. In the world of today and tomorrow, service will be the difference between barely surviving (or worse) and achieving success.
An educated, sophisticated customer base is placing increasing emphasis on the value of goods or services received in relation to the price paid in the marketplace. This trend probably originates in the baby boom generation. The best educated generation in history has become a generation of careful shoppers. With an intensely competitive industry vying to serve them, consumers are in a position to demand good value for their money.
Another driving force the industry has wrestled with for some years is the explosion of technology. Technology has already changed the way work is done in operations through automation and computerization. Even more fundamental, however, are the changes in marketing and management made possible by technological advances. Lodging marketing, already shaped by a global computerized reservation network, is likely to undergo yet another revolution as the Internet expands the communication capacity of operators, their competitors, and the guest. Restaurants, too, are maintaining web sites, many of which are already interactive rather than simply informational. Some take-out operations are experimenting with taking orders via the Internet. With greatly improved communication and computerized financial and operational reporting, the hierarchy of organizations is collapsing and a flatter organization structure is emerging.
As a direct result of the reduced numbers of middle management, employees and managers at all levels are being asked to assume more responsibility. For example, they are being empowered to solve many of the guest's service problems on the spot. This is an outgrowth not only of improved communication but of a more educated generation of employees. Bright, well-educated people want to do their own problem solving-and generally are able to do so effectively.
The face of North America is changing. Whereas the white male has always been the dominant force in the labor market, the majority of people entering the work-force for the foreseeable future will be women and minorities such as African Americans, Hispanics, and Asians. Managers will need a broad background and an openness to many kinds of people and cultures to prosper in the time ahead.
Concern with Security
People are concerned with security on two levels. Broadly, as the incidence of perceived violence increases, people worry about their personal security-and so we see a proliferation of private security forces in hotels, restaurants, and other public places as well as high-tech security measures such as "keyless" electronic locks in hotel rooms. Security has become a commodity that some people are willing to pay for-and that hospitality establishments must provide.
Concern with Sanitation
The incidence of food-borne illness has increased as the food service system has become more complex as the number of operations have expanded. One case of "food poisoning" can seriously injure a restaurant's reputation. More than one can endanger an operation's survival. The level of food safety demanded by consumer and regulatory agencies alike has escalated in the light of recent cases of food poisoning. That escalation will continue in the years ahead.
With the falling of trade barriers such as that brought on by the North American Free Trade Agreement and the European Economic Community, borders have become less important. The ease of financial transactions and information flow means that some of the largest "U. S. firms" are owned abroad-and that U. S. firms are major players overseas, as well. Burger King and Holiday Inn, for example, are owned by British companies and Motel 6 by a French firm. On the other hand, McDonald's is the largest restaurant chain in Europe, and Pizza Hut has restaurants in more countries than any other food service company in the world.
With all of the dynamism that the hospitality industry offers, an exciting future beckons as you begin this study of the industry and what makes it tick.
As we have seen, the hospitality industry includes hotels, restaurants, and other institutions that offer shelter and/ or food to people away from home. A manager in the hospitality industry, therefore, must keep in mind the following three objectives: (1) making the guest welcome personally, (2) making things work for the guest, and (3) making sure that the operation will continue to provide service and meet its budget.
We mentioned the many reasons for studying in a hospitality program, including past experiences working in the field, interests in the field, and ambitions in the field.
We also discussed why people work and how to get the most from a job, including weighing both retained earnings and the job-benefit mix. We pointed out that in the hospitality industry you can learn a lot from studying the physical plant and from how the front and the back of the house are managed.
We then turned to ways to get a job-including preparing for an interview-and how to gain the most from whatever job you do find. We also talked about what you should consider in regard to a more permanent job: income; professional status; your employer; potential job satisfaction; and accepting an interim, less-skilled job. We noted, as well, that supply and demand work in the job market as they do elsewhere, suggesting that what is most popular in terms of employment may not necessarily translate into the best opportunity.
Finally, we began our book-long discussion of the outlook for the hospitality industry, which we found to be bright but full of change and competition.