Assessment of

the
environment in
tourism and
hospitality
Ms.Samah Sejiny
 CHARACTERISTICS OF HOSPITALITY AND
TOURISM ORGANIZATIONS
• 1. Inseparability—customer participation in the service
process
• 2. Simultaneity

• 3. Perishability

• 4. Intangibility (the tangible–intangible continuum)

• 5. Heterogeneity

• 6. Cost structure

• 7. Labor intensive
 Inseparability
• In H&T organizations, customers need to be present and
participate in the service delivery process.
• The production and marketing functions, which are important
characteristics of the traditional manufacturing industry, is not
possible in the service delivery process that is found in H&T
organizations.
• Therefore, H&T organizations must communicate with and
motivate their customers to actively participate in the service
delivery process.
• Ex. physical appearance of employees, the interior design and
decoration of facilities, furnishings, layout, and noise.
 Simultaneity
• Services in H&T organizations are created and con sumed
simultaneously, which can prevent employing active quality
control mechanisms.
• Ex. A typical manufactured good, such as a refrigerator or a
television, can be inspected before it is delivered to retail
outlets, where they are then sold to customers.
• It is almost impossible to have one manager for every
employee to monitor the service delivery process and make
sure that frontline employees are doing their jobs well, in
addition to guiding the customers participation in the
process.
 Simultaneity
In order to make sure that services are produced and
offered to customers at an expected quality H&T
organizations should rely on other measures

such as investing in human resources, use of

technology, building desired physical facilities, and
decoration to ensure the quality of services delivered.

This has implications on decision-making practices,

resource allocations, operations, marketing, and
human resource management practices.
 Perishability

• As production and consumption in H&T

organizations are simultaneous, services
become perishable if they are not sold.
Subsequently, their value is lost forever.
• For example, an airline seat or a hotel room
will perish if a customer does not purchase it
at the time of production. Therefore, the full
utilization of service capacity is a strategic task
for many H&T organizations.
 Perishability
• When the demand is low or there are sudden
fluctuations in demand, it is neither easy nor
recommended for H&T organizations to lower their
rates greatly, since it may influence their image, change
their customer segment, and upset their regular
customers.
• This puts much responsibility on the management of
these firms in planning for the future and allocating
their resources .fluctuations in demand have
implications on cost structure, pricing, staffing, and
resource allocation decisions.
 Tangibility

• Hospitality and tourism organizations offer a combination of tangible

and intangible products.
• For example, a hotel room or a meal in a restaurant has both tangible
and intangible qualities. Again, there may be major differences
between a budget hotel and a luxury hotel or between a fast-food
restaurant and an upscale restaurant in terms of tangible and
intangible qualities offered.
• Services are often ideas, concepts, interactions, relationships, and
experiences that are not often patentable.
• The main difficulty related to the intangibility of services is that
customers cannot often see, feel, and test these services when they
order or buy them
 Tangibility
• Prior to their purchase, they may try to
evaluate services as much as they can by
looking at the interior of a hotel or a
restaurant and the appearance and behavior
of the employees.
• Therefor, some H&T companies publicize their
service promises and offer a 100 percent
satisfaction guarantee.
 Heterogeneity

• services will be heterogeneous, and variations in service delivery

from customer to customer and from time to time will always
occur. It is often difficult to standardize every employee–
customer interaction in the H&T business
• This customer-to-customer interaction in certain service organi-
zations, such as pubs, discos, nightclubs, and cruises, can be an
important aspect of the total service delivery process.
• H&T organizations are also highly susceptible to external
changes. One example of an external factor is the weather.
Visiting an outdoor theme park can be very pleasant and
entertaining on a nice day, but it can be a miserable experience if
it is raining and cold.
 Cost Structure

• The cost structure of H&T firms influences their managerial and resource
allocation decisions. For example, luxury H&T organizations are capital,
labor, and energy intensive.
• Typically, they have high property costs and also employ large numbers of
full-time employees. It can be difficult for them to reduce such cost items
even if the demand is low.
• In addition, they may need to renovate their facilities every five to ten
years to stay competitive in their field.
• Investors and owners often look at very carefully at their return on
investment. Therefore, these companies need to maintain a steady flow
of customers to maintain the profitability of their businesses. This often
leads to creative marketing and product development strategies as well
as pricing strategies.
 Labor Intensive

• Compared to many organizations in other industries, H&T

organizations require a great many employees. To put it simply,
H&T organizations are labor intensive.
• This is because personal interactions and experiences are
important parts of services, and employees play a key role in
this process.
• Despite using many machines, computers, and technological
developments, H&T organizations still rely primarily on their
employees to deliver a memorable and positive experience.
• Being served and treated nicely by employees is a major factor
in getting repeat customers.
 Areas Where the Industry Characteristics
Impact on Managing H&T Firms
1. Analyzing the internal and external environment as an ongoing process

2. Making decisions in the areas of service delivery, pricing, and marketing

3. Strategic planning practices

4. Developing a sustainable competitive advantage
5. Achieving and evaluating intended outcomes
6. Managing capacity to maximize revenue
7. Managing the cost structure of the company
8. Allocating available financial and human resources for future strategies

9. Evaluating and improving the service delivery process 10. Interacting and
satisfying customers
11. Training, developing, and motivating employees and managers (our internal
guests)

12. Designing and decorating facilities

Thank you