Theoretical foundation of formation and development of hospitality industry

The aim of the article is to research the theoretical foundations of the formation of the hospitality industry. Theoretical and methodological basis of the research were the works of domestic and foreign scientists who deal with the problems of the hospitality industry. In the article were used monographic, abstract and logistics research methods, which are conducted on the basis of a bibliographic review of the extent of a problem, clarify the content of term «hospitality.» The result of research identified the need to consider internal and external factors of the formation of the hospitality industry in the selection of its development strategy, given rationale for the selection of internal factors. The obtained results can be used in the practice of hotel enterprises and the organization of hospitality industry, in the formation of educational training programs for specialists of tourism industry and teaching such subjects as «Hospitality», «Organization and planning of tourism activities».

The hospitality industry, which is one of the largest sectors in the world economy is currently booming. Simultaneously with increasing of total number of tourists was a noticeable development of tourism infrastructure and its main components has a noticeable development of hotel industry, striving to get their share of business. Therefore, issues related to the provision of tourism accommodation facilities is one of the main tourism activity.

Hotel service industry is an important part of the entire services sector, which is a collection of activities to serve the population.

The hotel service industry plays an important role in society, providing opportunities for business meetings, meetings, conferences, as well as for recreation and entertainment.

Currently, tourism has taken a giant leap to become one of the largest and most profitable sectors of the global economy.

The increase of total tourist’s number has had a significant impact on the development of tourism infrastructure and its main component — the hospitality industry, seeking to get their share of business and tries to persuade customers to purchase their hotel services provided. In international practice hospitality industry is one of the most profitable.

In the field of accommodation and catering it has been formed a giant hotel and restaurant chains, travel agencies have identified a number of tour operators that have established control over the main markets for tourism product and market of air traffic had been divided among the leading airlines in the world.

The hospitality industry — is а powerful system of the country's economy and an important component of the tourism industry. Hospitality industries are various accommodation facilities: hotels, motels, youth hostels and hotels, tourist forms, as well as the private sector involved in the tourist accommodation.

In economic literature, the hospitality industry is considered in relation to services, hospitality, and as а component element in tourism development.

The hotel industry as an economic activity includes the provision and organization of short-stay accommodation in hotels, motels, campgrounds, hotels and other accommodation facilities for а fee.

Hospitality — one of the fundamental concepts of human civilization is now under the influence of scientific and technological progress has become а powerful industry that employs millions of professionals, creating warmth and comfort for the benefit of people. The hospitality industry brings together different professional fields of human activity: tourism, hotel and restaurant business, catering, leisure and entertainment, seminars, conferences and exhibitions, sports, museum and exhibition, sightseeing activities, as well as the scope of professional education in hospitality.

The global hotel industry todаy is а globаl-scаle holistic, integrated and dynamic service industry, which is based entirely on the principles of the market economy, the objective laws of the international division of labor and the internationalization of production.

On this basis, it is legitimate to allocate the hotel industry or the hotel business as the largest component of а comprehensive tourism and hospitality industry, and to consider its own, largely from as а single tourism and hospitality.

Study aspects of the formation and development of hotel business put forward the need to identify the economic substance and nature of concepts such as «hotel services».

Present time one of the most important factors of ensuring country attraction, including investment, becomes development of tourism sphere, specifically, hospitality industry.

Hospitality sphere is a major factor and tourism foundation. The «hospitality» notion is as old as human civilization. It is interesting that English word «hospitality» comes from Old French «hospice» that means a place where travelers could get shelter and food. Paronymous words are «host», «hostel». The most famous establishment of such type was Hospice de Beaune in Burgundy built in 1443 and, famous as Hotel Dieu that means «House of God» [1].

The term «hospitality» in everyday understanding is defined as sympathy to a guest but economic meaning of the definition has more difficult character, in connection with it, specialists have some differences in comprehension of hospitality industry content (table).

According to M.Webster’s glossary, «hospitality industry is a sphere of entrepreneurship consisting of such kind of services which are based on principles of hospitality characterized with generosity and friendliness to guests» [2].

G.A.Yakovlev,  sharing  this  opinion,  unveils  the  hospitality  essence  with  the  following definition: «Hospitality is what creates guest’s (client’s) view of enterprise (hotel, restaurant, café, tourist’s enterprise etc.), rendered services, benevolent attitude as of one of the best in this sphere» [3; 12]. 

The definition of the term «hospitality industry» review

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 The definition of the term «hospitality industry» review 

Foreign researchers P.Kotler, J.Bowen, J.Makens denominate the hospitality industry as the main part in the tourism sector and point at inseparable connection with travelling. These authors in their work identify the hospitality industry with the sphere of hotel and restaurant business [4; 9]. J.Walker has the same meaning; in his works the researcher specifies the hospitality as the sphere combining tourism, hotel and restaurant business [1; 92].

Hospitality is considered as a branch uniting two spheres as hotel and restaurant business in V.A.Kvartalnov’s work, the author takes them to the main part of tourism industry along with entertainment industry identifying them as a leading factor and base of tourism [5; 92–94]. Whereas I.V.Zorin and V.A.Kvartalnov in their collective work define the hospitality industry as an activity of hotel complex [6; 40].

Another researcher Yu.F.Volkov also attends hotel industry in tourism industry and hotel services defining hotel industry as a separate sphere in tourism business development [11, 53].

Most of specialists agree that hospitality industry is co-operative activity of different spheres purposed to satisfy different tourist’s needs. For instance, E.A.Dzhandzhugazova understands the hospitality industry as a difficult complex sphere of professional activity of people, whose efforts directed to satisfy clients’ (guests’) different needs such as tourists’ and local inhabitants [7, 32]. The followers of such approach are A.Robert [8], D.I.Yelkanova, D.A.Osipov, V.V.Romanov, Y.V.Sorokina [9], Т.А.Frolova [10].

Thus, it should be mentioned, that present time there is no one approach to define the term «hospitality industry». In professional literature the researchers in the tourism sphere and hotel business interpret this notion in different ways.

In our view, the complication of the «hospitality industry» definition is connected with the scale of this sphere characterized with a huge amount of its components, representing different areas and parts of the service sphere. In addition, the system of interactions presenting between hospitality industry and other industries should be considered.

Conducted research founds the conclusion that the term hospitality has double meaning: on the one hand, it is a well-wishing attitude to a guest and, on the other hand, it is a co-operative activity enterprises of different spheres aimed at getting profit by satisfying client’s needs.

In our opinion, the hospitality industry should be considered as an integrated field including complex of enterprises in the service sphere which function specifically, based on hospitality principles directed to satisfying different needs of consumers. On the assumption of such understanding, composing parts of hospitality industry should be marked out: accommodation, food, transport, entertainment and leisure, trade.

It is fair to think that predominate position in the hospitality industry takes hotel business. And hotel business is treated as hotel industry in many works of specialists [12; 24, 13; 34].

As L.P.Shmatko mentions: «Hotel industry is a hospitality system. It comes from an ancient tradition inherent almost in every social structure within the human history — regard, paid to a guest, welcome and service» [14; 85, 86].

Other Russian economists Chudnovsky A.D., Senin V.S. define the hotel industry as a type of economic activity including rendering the hotel services and offering a short-term placing in hotels, camping, motels, school and student hostels, houses for visitors etc. for a fee [15; 204, 16; 45–48]. Kuskov A.S. adds restaurant services to the hotel industry [17; 54].

Thereby hotel industry or hotel business should be separated as a large complex part of tourism and hospitality industries and examine it separately.

Individual researchers emphasize such term as hotel service industry. So, Volkov Y.F. defines hotel service industry as «an important composite part of whole sphere of service and totality of kinds of activities directed to populace servicing. Hotel enterprise offers its customers the product as a service» [11, 54].

In our opinion, there is no important difference between hotel service industry and hotel industry that is why one term should be consolidated, that is hotel industry determining it as a main sector of hospitality and tourism industry development.

Various experts’ analysis of above mentioned definitions and our understanding of research subject allow to allocate a number of points which are definitely important for explication of the hospitality industry notion and determining its place among other economic categories:

  • hospitality industry is a complex activity of various sectors, aimed at comprehensive meet the tourist’s diverse needs;
  • hospitality industry involves friendly attitude to the tourists, and accordingly, offering a wide range of high quality services;
  • there are differences in the sense of hospitality, and therefore in an essential component of the list of services due to existing differences in mentality of various

We have developed a scheme of external and internal factors of the hospitality industry basing on the conducted survey of the theoretical calculations of the research results of various experts (fig.).

The development of effective competitive strategy is built on the results of a survey of managements factors.

There is no doubt that there is an influence of external factors such as socio-demographic, financial, economic, political and legal, technological, infrastructure and communication, culture. An important factors for tourists are safety of traveling and intermediary, trade organizations, providing additional services and tour arrangements.

In addition to external factors determining the development of international tourism, it is necessary to identify and specify rather large group of intrasectoral factors which include: hotel product improvement; development of the sphere of hotel services; creation of hotel networks and associations; development of distribution systems; factor of labour resources; marketing factors.

An important factor influencing the hospitality industry is the hotel product. In this regard, a lot of attention is paid to quality and further modernization of hotel product. 

 External and internal factors of hospitality industry development

Figure. External and internal factors of hospitality industry development 

It should be remembered that consumers and producers of tourism services have different perceptions of tourism product.

If tourist product for consumer is a complex service, a set of services sold to tourists in a single package, then the manufacturer — tourist enterprise — a particular type of services, an integral part of the package. Tourists understand the tourism product much wider than manufacturers. In addition, buying tours, they really look for quite different from a simple set of services. Some people, going on vacation, buy a ticket to the resort to relax and regenerate physical strength. Others go to business for negotiations and contracting. Consequently, it is necessary to offer tourists not only products in the classic sense of the word, which are the object of trade deals, and new experience, adventures, opportunity of business expansion, etc. Therefore, the hospitality industry can be called industry of impressions. Tourist impressions depend on the work of the entire set of enterprises servicing visitors.

In addition, according to the results of long-term observations of experts UNWTO, the demand for the hospitality industry is estimated differently, depending on the specific factors. Thus, the demand for ethnic and business trips, not having an acceptable alternative for tourists, has a lower price elasticity than travel for the purpose of entertainment and recreation [18; 162]. It is explained with the fact that the trips with a purpose to explore ethnic materials and conduct business activities due to professional interests of tourists, the implementation of which requires the unconditional implementation of travelling plans, even with an increase in their value. Educational tourism, organized in order to explore, study, practice at any unique natural, historical, industrial objects, often has no alternative for the tourist. At the same time, types of mass tourism are characterized with high price elasticity. That is why, in our opinion, this feature should be considered while forming strategies for improving the hotel product and sphere of hotel services developing. Infrastructure objects designed to provide as normal life of travelers (accommodation service, food, transport) and specific recreational needs (treatment services, rehabilitation, excursions, cultural and personal services). Tourist in any conditions should feel familiar comfort, and this is possible only if there is developed infrastructure. The infrastructure should comply with intensities of usage. According to the World Tourism Organization, during a seven-day stay in a remote tourist visitor center 30–50 different companies were involved starting with travel agencies, specialized shops, insurance companies and, ending with souvenir shops, currency exchange, taxi and others [5; 71].

The tourist staff performs a function of traveler servicing and industrial and technological support of tourist enterprises.

Professionalism of the personnel, its sociability, affability create additional tourist satisfaction with provided services, create a generally favorable impression of the received services; satisfied consumers possibly repeat the tour, either by itself or tell about it to their friends, what will be an additional advertisement.

In accordance with current trends in the sphere of placement development, very important factors are creation of hotel networks and associations; development of distribution systems, providing additional serviceability and commitment to specific hotel chains, ensuring high quality of service.

A special place among the internal factors of the hospitality industry is given to factors of seasonal prevalence, which can be referred to a number of specific factors, as it requires careful attention and systematic research.

Seasonal factor has a very significant impact on the functioning of any accommodational enterprise, as hotels depend, first of all, on the capacity of tourist flows to destination. There are three groups of factors influencing the seasonal service: climatic; particular type of tourism; hospitality consumers’ specifics of work and leisure [7; 12].

Currently, there is a tendency in reducing seasonal fluctuations in tourism services due to the rapid development of proposals relatively to demand, on the tourist market of economically developed countries.

Lengthening of the main tourist season has a strong influence on the work efficiency of the hospitality industry, since, firstly, a more full employment is provided and unemployment is liquidated; secondly, the «conservation» or reduction of material and technical base load leads to direct losses in the core business; thirdly, the level of main assets usage in different areas: transport, food, household facilities, etc. increases; fourthly, smoothing of seasonal fluctuations leads to a more rational usage of natural resources.

The valuation of development factors of the hospitality industry is not only informational base for strategic decision making and verifying the effectiveness of implementation, but also for developing of the hospitality industry. This aspect becomes especially relevant in the eve of EXPO — 2017 and Universiade in Kazakhstan.

Thus, the hospitality industry can play an important role in solving the problems of the output of the national economy to a new level, contributing to its restructuring that now has a crucial importance for Kazakhstan, because despite the huge recreational potential and the inflow of foreign tourists, the hotel industry is very far from the level of international standards.



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Year: 2015
City: Karaganda
Category: Economy