The role of strategies in tourism, hospitality, and events

management

An Essay

Submitted in partial fulfillment

of the course requirements for the MBA course of

THM 513: Strategic Decision Making in Tourism and Hospitality

Submitted to

Dr. Muhammad Shoeb-Ur-Rahman

(Course Instructor of THM 513)

Submitted by

Md Afsar Uddin

Id: 111 (MBA 12 th)

(Group-4)

Department of Tourism and Hospitality Management

University of Dhaka
20 February 2021

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The role of strategies in tourism, hospitality, and events management

by

Md Afsar Uddin

ABSTRACT
This essay introduces the key themes in tourism, hospitality and events that are relevant to
strategy. Tourism, hospitality and events include understanding nature of tourism,
hospitality and events products and in this context, the properties of service products in
particular are considered. These four characteristics apply to tourism, hospitality and
events products, as they also apply to other service sectors. Seven further factors are also
identified that apply particularly to tourism, hospitality and events sectors (ownership,
high cost, seasonality, ease of entry, exit, interdependence, impact on society, and the
effect of external shocks). Understanding these characteristics and their implications for
managers is a key issue in determining the success of strategy in the tourism, hospitality
and events. An understanding of these characteristics is fundamental to an understanding
of strategy in tourism, hospitality and events contexts.

Key words: Service products, tourism characteristics, intangibility, inseparability,

perishability, heterogeneity, seasonality.

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Abstract ii

Table of contents
iii

List of tables iv

List of figure iv

Introduction 1

Part A: Strategy and the tourism, hospitality and events contexts 3

1. Strategy and strategic objectives for tourism, hospitality and event organizations 4

2. Introduction to strategy for tourism, hospitality and events 5

Part B: Analyzing the internal environment 6

3. Tourism, hospitality and event organizations– the operational context: 6

Competencies, resources and competitive advantage

4. Tourism, hospitality and event organizations – the human resources context 7

5. Tourism, hospitality and event organizations – the financial context 8

Conclusion 9

Reference 10

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Lists of Tables
Table 1: Summary of key THE characteristics and their implications for managers.

Table 2: Summary of the strategic significance of different sources of finance.

Lists of Figures
Figure 1: A schematic of the strategic process.

Figure 2: The links between resources, competencies and core competencies.

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Introduction
This chapter introduced the three elements of the strategic method – strategic analysis,
strategic choice and strategic implementation and the importance of recognizing strategy as a
continual method requiring a feedback circuit. This chapter mentioned the meanings of the
terms strategy and strategic management and introduced the ideas of deliberate and emerging
strategies. It went on to clarify the parts of strategy before discussing the degree of strategic
decision making in organizations and therefore the vital ideas of strategic harmony and
hierarchy of objectives. The ideas of mission, vision and values were introduced, and therefore
the role of stakeholders in objective setting was mentioned. The most ‘types’ of objective were
explained, and their content was mentioned. The stakeholder versus investor approaches to
objective setting was mentioned, and stakeholder mapping was introduced as a means of
characteristic key groups when setting relevant and realistic objectives.

In specific, strategy knows by the actual fact that THE products square measure services instead
of goods that has certain implications for managers in these sectors. Moreover, THE products
have certain specific options, which, if not distinctive, are actually extremely distinctive
characteristics as compared with different service sectors. An understanding of those options
and therefore the social control implications that result them is necessary in that it informs and
underpins the strategy formulation method.

This chapter has focused on the analysis of resources, competencies, core competencies, the
worth chain and the service profit chain. Core competencies and therefore the configuration
and co-ordination of value-adding activities are known as primary sources of competitive
advantage. It is vital to look at the links between current methods, core competencies and core
activities within the value chain as these are wherever the most important potential for
competitive advantage lies. Similarly, it's vital to look at different resources, competencies and
activities to identify the potential for building new core competencies and core activities. The
analysis also helps to identify opportunities for efficiency gains by re-configuring activities and
by up their integration thus on take away blockages from the system. This analysis permits a
business to think about the potential of collaboration with suppliers, distributors and customers
for improving performance.

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Literature Review
The evolution and structure of strategic management of tourism, hospitality and events have
been the focus of qualitative and quantitative investigations (Farjoun, 2002; Furrer, Thomas, &
Goussevskaia, 2008; Herrmann, 2005;). Furreret al. (2008) assesses the content and evolution
of strategic management of tourism, hospitality and events research. Their analysis includes
26years of strategic management research published in the four leading journals in the field,
namely, Academy of Management Journal, Academy of Management Review, Administrative
Science Quarterly, and the Strategic Management Journal. The concept of strategy
management in tourism, hospitality and events has been largely a semantic issue, and
numerous authors have focused their attention on the concept of strategy (Bracker, 1980).

Strategy management in THE is a broader term than strategy and is defined as a continuous
process that includes senior management’s evaluation of the environment in which the
organization operates prior to formulating a strategy (Cosenz & Noto, 2016).

Strategy management in THE is vital to an organization’s well-being; timely evaluations can

previse management to problems or potential problems before the situation worsens (David,
2011). Although several researchers suggest that it is better for strategy to evolve
incrementally, other researchers, as “Strategic management for tourism, hospitality and
events” (Evans et al., 2003).

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Part A: Strategy and the tourism, hospitality and events contexts
The strategy process
The strategic management process has three main components that are showed in the below:

Strategic
Analysis

Strategic Strategic
Selection Management

Figure 1: A schematic of the strategic process

Strategic Analysis
The purpose of strategic analysis is to gather information and to analyze it systematically and
thoroughly. There are two main stages in strategic analysis:

 Strategic analysis involves an organization’s internal environment.

 Strategic analysis involves an organization’s external environment.

Strategic Selection
Strategic selection includes taking the vital information gathered from the strategic analysis
stage and using it to create an intelligent and knowing strategic selection of the most applicable
courses of action for the longer term.

Strategic Management
The strategic management includes taking the selected strategic options and actually putting
them into exercise. Strategic Management is a complex sector of study that includes actually
carrying out the strategy and this brings into focus a number of other managerial issues.

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Chapter 1

Strategy and strategic objectives for tourism, hospitality and

event organizations

Strategy: “Strategy is the determination of the basic long-term goals and objectives of an
enterprise, and the adoption of courses of action and the allocation of resources necessary for
carrying out these goals.” (Chandler, 1962)

Levels of strategic decisions

 Strategic level decisions: Strategic decisions are concerned with the acquisition of
sustainable competitive advantage, the setting of long-term objectives, the formulation,
evaluation, selection and monitoring of strategies to achieve these objectives
 Tactical level decisions: Tactical decisions are involved with however strategic level
objectives are to be met and how strategic are implemented.
 Operational level decisions: Operational decisions are involved with the shorter-term
objectives of the business and with its day to day management. They’re dependent upon
strategy and tactics. These decisions are created at junior managerial or superior level, are
supported a high degree of certainty, and aren't complicated.

Objectives
Types of objectives

Objectives may be written in two forms:

● Closed: explicit in quantitative terms, specific in type and timescale.

● Open: explicit in qualitative terms, general in type and timescale.

An organization objective is often portrayed as a hierarchy:

 Mission: an overall enduring purpose

● Vision: a desired future position it's attempting to achieve

 Company objectives, business objectives, unit and private objectives: However the mission and
vision are translated into specific targets.

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 Chapter 2

Introduction to strategy for tourism, hospitality and events

This chapter has considered a total of 11 characteristics of THE. It is important that managers
operating within that are responsive to these factors and consider the social control
implications that are related to every. The strategy that organizations place in place ought to
replicate associate understanding of those characteristics and also the impacts they could have
on the organizations involved.

Characteristic Summary Managerial implications

Intangibility Products cannot be tested or sampled Effective promotion & distribution
are essential
Inseparability Production and consumption take place at Front-line staff must deliver good
the same time service
Perishability Products cannot be stored Stimulate demand so all products
are sold at required time
Heterogeneity Products are not identical Good, well trained staff are essential
Ownership Customers use services rather than own Loyalty programs are important
them
High cost product Often a relatively expensive purchase Customers need reassurance about
reliability
Seasonality Products often have very seasonal Different seasonal prices changed
demand patterns
Ease of entry/exit Often relatively low barriers to entry Product differentiation
Interdependence The sub-sectors of THE are closely linked Coordination or control of the
supply chain
Impact on society Tourism has a high impact on society Produce sustainable products
External shocks Prone to external shocks, beyond Have contingency plans in place
managers’ control

Table 1: Summary of key THE characteristics and their implications for managers.

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Part 2: Analyzing the internal environment

Chapter 3

Tourism, hospitality and event organizations-The operational context:

competencies, resources and competitive advantage
The sources of competitive advantage
 the superior application of competencies (skills)
 the deployment of superior resources (assets)
 by creating value for consumers.

Competencies
Except competencies a business cannot enter or survive within the industry. “Competencies
develop from resources, embody skills and technology”

Core competencies
Core competencies arise from the way within which the organization has used its competencies
and resources a lot of effectively than its competitors. The results of a particular capability is an
output that customers worth over those of competitors.

Resources
“A resource is an input employed in the activities of the business.”

Resources fall into five broad categories that are:

 human
 Physical
 Operational
 financial

Superior
Core superioe
application of
deployment of
competence general
resources
competencies
Figure 2: The links between resources, competencies and core competencies.

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Chapter 4

Tourism, hospitality and event organizations

The human resources context

Human resources and service quality

The human resources as a service industry quality in THE sectors depends on a range of human
skills adopted during the service encounter.

Service quality is viewed as a vital strategy for gaining a competitive advantage in companies as
several authors as well as writer (1997) and Crick and spencer (2011) have argued. Service
quality in THE is to a large degree determined by the standard and perspective of householders,
managers and worker.

The human resource audit

The human resource audit is associate investigation into the size, skills, structure and all
different problems encompassing those presently utilized by the organization. The audit
reviews the flexibility of the human resources to implement a selected strategy or a variety of
strategic options.

The outcomes of a human resource audit

 The problem of measurement.

 Human resource benchmarking.
 Identifying human resources as critical success factors.

Organizational culture
“The culture of any group of people is that set of beliefs, customs, practices and ways of
thinking that they have come to share with each other through being and working together. It is
a set of assumptions people simply accept without question as they interact with each other. At
the visible level the culture of a group of people takes the form of ritual behavior, symbols,
myths, stories, sounds and artifacts.”

Stacey (2010)

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Chapter 5

Tourism, hospitality and event organizations

The financial context

The strategic significance of sources of finance

Strategic developments for an organization normally imply that they:

 Are of major importance to a company’s future development.

 Require a substantial commitment of resources by an organization.
 Involve choices that have to be made about the deployment of finite resources between
competing strategic options.
 Include key changes which need to be carefully managed.

Sources of finance Strategic significance

Reserves and retained profits Represent an accumulation over time. If not utilized,
shareholders may demand that they are distributed to them as
owners. Cheap and non-controversial. Typically the largest
sources of finance for many companies. Finances the majority
of strategic developments.
Shareholders Useful to call on when major new strategic initiatives are
envisaged. Relying on shareholders for further funding changes
ownership, so risky in terms of retaining control
Provisions for tax and pensions Funds are committed for other purposes so not really useful for
strategic developments.
Debt: long-term Can be cheap, quick to set up and retains the existing
shareholder structure thereby retaining control.
High levels of debt (relative to equity) can be dangerous when
interest rates are rising or when the economy is weak.
The requirement to pay interest to ‘service’ the debt can be
major burden on companies when earnings are weak.
Debt: short-term Short-term means repayable inside one year, so only a
temporary solution for major strategic initiatives.
Funding could be quickly withdrawn by provider leaving the
organization with a funding difficulty.

Table 2: Summary of the strategic significance of different sources of finance

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Conclusion

Challenge
There are several challenges of strategic management in tourism, hospitality and events.
The primary major challenge has been the overestimation of resource competency.
Processes put in place to handle the new methods have in most occasions not been able
to handle this. For example, the method of implementing the company’s MAP program
has not been open enough to require off because the management had anticipated within
the initial place.
This has been manifested from failure to develop new worker and management skills that
are necessary to make sure that this strategy achieves its objective as started within the
strategic set up. There has been resistance and reluctance from employees additional thus
in cases wherever the new strategy is not well explained to them. The hospitality industry
depends such a lot on client care and skill and in cases wherever staff don't seem to be
concerned in strategy formulation, they need not been able to participate in its
implementation for sure.

Recommendations to these challenges

To solve the matter of coordinative its ventures, the company has to develop an action
arrange which will facilitate in management and continual observance of progress. This
could be done against in agreement key performance indicators. Monthly observance are
necessary for comparison and business review.

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References

Harrington, R. J. and Ottenbacher, M. C. (2011) ‘Strategic Management: An Analysis of Its

Representation and Focus in Recent Hospitality Research’, International Journal of
Contemporary Hospitality Management, 23(4): 439–462.

Freeman, R. E. (2010) Strategic Management: A Stakeholder Approach, Cambridge, UK:

Cambridge University Press.

Okumus, F., Altinay, L. and Chathoth, P. (2010) Strategic Management in the International
Hospitality and Tourism Industry, Abingdon, UK: Routledge.

Olsen, M. D., West, J. and Tse, E. C. (2014) Strategic Management in the Hospitality
Industry, 3rd edn., Harlow, UK: Pearson.

Evans, N. G. (2012) ‘Tourism: A Strategic Business Perspective’, in T. Jamal and M.

Robinson (eds.), the Sage Handbook of Tourism Studies, Thousand Oaks, CA: Sage, Ch. 13,
215–234.

Evans, N. G. (2016) ‘Sustainable Competitive Advantage in Tourism Organizations: A

Strategic Model Applying Service Dominant Logic and Tourism’s Defining Characteristics’,
Tourism Management Perspectives, 18:14–25.

Gummesson, E., Lusch, R. F. and Vargo, S. L. (2010) ‘Transitioning from Service

Management to Service-dominant Logic: Observations and Recommendations’,
International Journal of Quality and Service Sciences, 2(1): 8–22.

Bolat, T. and Yılmaz, Ö. (2009) ‘The Relationship Between Outsourcing and Organizational
Performance: Is it Myth or Reality for the Hotel Sector?’, International Journal of
Contemporary Hospitality Management, 21(1): 7–23.

Baum, T. (2015) ‘Human Resources in Tourism: Still Waiting for Change? A 2015 Reprise’,
Tourism Management, 50: 204–212.

Crick, A. P. and Spencer, A. (2011) ‘Hospitality Quality: New Directions and New
Challenges’, International Journal of Contemporary Hospitality Management, 23(4): 463–
478.

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