Overview of the Hospitality and Tourism Industry Essay
In the following paper, I will determine the challenges involved in managing restaurant operations that are specific to my state, as well as how I would address those challenges. Secondly, I will determine the impact of computerization on food service and lodging operations in my state. Next, I will analyze the interdependence of food service, lodging, and meeting segments of the hospitality industry and make two recommendations for how the synergy between the three sub-segments could be improved, using examples from my state to illustrate my case.
In addition, I will consider how these segments can improve their relationships between one another and how they can combine their services in order to be more marketable in my home state. Finally, I will determine the likely consequences of the introduction of gaming entertainment into my state and the impact of significant economic expansion of the segment upon other segments of the hospitality industry. Overview of the Hospitality and Tourism Industry There are many challenges involved in managing a restaurant in my state of Georgia.
One of the biggest challenges is ensuring compliance with various state laws and regulation concerning health and safety in the Hospitality Industry. Restaurateurs and management feel they are at the mercy of legislators and say legislators fail to consider the ramifications of the laws they pass and just how much of an impact the industry has on the local economy and job market. Over the past five years, some major changes have been implemented for the industry. Restaurateurs and management must stay up to date and current on issues.
The Georgia Department of Community Health as well as local community health departments regulates restaurants. There are extensive licensing fees associated with the business such as liquor licensing, music and entertainment licensing, business licensing, food service permits and environmental fees. The Independent Restaurant and Bar Association of Georgia is an organization who encourages membership. Members enjoy cost saving discounts on various insurance requirements such as liquor liability, disability, fire, music licensing and work compensation insurance.
Some of the toughest restrictions are due to local ordinances. We have smoking bans in all public areas, restaurants and bars. Many feel this causes a loss of business. However, others feel smoking is a potential hazard which must be addressed. Alcohol regulation is another area that has experienced recent changes. For many years, certain counties and local ordinances regulated Sunday sales of liquor. Chatham County recently passed legislation allowing Sunday sales. We still have “dry counties” which prohibit sales all together. In all areas liquor cannot be sold prior to noon on any day.
With the passage of Obama Care and the Section 4205 provision menu labeling became a requirement for qualifying restaurants and food retail establishments. Both Republican and Democratic legislators from states such as Texas, Georgia and Ohio, have called for less burdensome legislation. The Georgia Restaurant Association has become an advocacy group for many restaurateurs. Another challenge involved in managing a restaurant in Georgia, is managing risk effectively and identifying potential hazards so these organizations can provide the best quality product.
Georgia has extensive food codes containing very strict regulatory laws. One area of major concern is food borne illnesses and sanitation issues. There are numerous regulations concerning food borne illnesses such as hand washing techniques and frequency, sanitary food handling, preparation and storage techniques such as temperature limits and date marking. We are a coastal area serving seafood, some of which is raw or undercooked. There are additional food regulations requiring proper disclosure on menus.
In addition, there are regulations concerning dishwashing and chemical storage. There are numerous regulations for sanitation such as outdoor waste container regulations, grease trap requirements and even placement requirements for indoor trash receptacles. Employees must adhere to strict new law regarding jewelry, fingernails, and hair restraints. To ensure compliance management and employees must be well trained and stay current on new laws and requirements. Workshops, webinars, food safety classes and ServSafe Certifications are just some examples of how we address this area.
The Georgia Restaurant Association provides a web site listing contact links and access information for regulatory, policy and food safety experts as well as a legal problem solver tools. The recent Georgia drought is an example of an unexpected risk which has had an impact on the industry. Water is vital for food safety and as local surficial aquifers dry up the quality of water must be carefully monitored by our local health departments. Another challenge involved in managing a restaurant in Georgia is finding and retaining quality staff in a high turnover industry. The better the company is at finding people, the better the organization performs and the better the organization serves the customer’s needs. ” (Shoemaker, 2010) Many feel this is the number one challenge in the industry. “In Georgia, the average restaurant has thirty-eight employees with a 107% turnover rate. ” (Pye, 2011) Even during these tough economic times, employee availability is an issue. The best technique to address this challenge is to hire quality individuals who possess a good attitude and provide quality training, compensation and benefit package to those employees in order to retain them.
Companies spend a great deal of money addressing this particular issue. The Georgia Tourism Council and its members work with local schools and universities for work force development. The last major challenge I will address is developing and marketing various strategies to create a niche in a very competitive market and high tourism area. Yes we are a very high tourism area. We have industrial centers, an Atlantic seaport, national and historic landmarks which are architectural havens to many, as well as various resorts, sandy beaches and museums just to mention a few.
The entire sector draws in two billion a year in revenue. The restaurant business is Georgia’s second largest employer. In order to remain competitive and create a niche in a highly competitive market, restaurateurs and management develop and maintain a strong distinguishable character that makes them unique. They must know their area and all possible competition. The must maintain pleasant visual appearances, cleanliness and above all learn the desires of their ever changing customer base. Management must be careful that a newly emerging competitor will not be able to absorb their customer base.
Computerization has revolutionized the food and beverage industry by streamlining work flow and planning. The biggest advantage of a computerized system is it allows fully integrated solutions that are able to handle operations from the front of the house to the back of the house. Point of Sale systems help management handle operations, lower costs, increase sales, increase covers, control inventory, speed order taking and food preparation. Computerized reservation systems increase business operations, improve booking by providing confirmed bookings, improves turn-over and ensures accuracy and efficiency.
Guest satisfaction has shown improvement. Since reservation systems and online booking systems can be used by any size business, small businesses are able to effectively tailor the systems to fit their needs. It levels the playing field so to speak. As far as personnel management, computerized systems improve scheduling and assist in various labor reporting requirements for accounting. The performance of the employees shows improvement. Training sessions and retention levels also indicate the value of computerized systems.
The accounting department benefits greatly form the use of computerized system. There are definite benefits associated with mining data. This is a key management tool used to increase profits, forecast future patterns based on historical data. For example, forecasted business volume can be used to predict staffing requirements and labor costs. Stored statistical data is not only used to calculate revenue but is also used to calculate contribution margin, percentage of food costs, daily rates, average guest checks and pour costs.
The accounting department also used this data to ensure immigration requirements and E-Verify systems as well as ensuring labor laws are adhered to. The quality of Georgia’s technology infrastructure is stable and well governed by GTA; the Georgia Technology Department. There is a definite interdependence between the food service, lodging, and meeting segments of the hospitality industry. This means they often work as a team; they rely on one another for success and form a mutual dependence on one another. It is a cooperative, reciprocal relationship or a synergy.
If one area or sub-sector fails, the entire sector shares the possibility of failure. Customers that attend meetings will need food options as well as lodging options during an extended stay. They want one stop shopping and less stress. This synergy is ensuring the success of their organization and more importantly customer satisfaction. How can this synergy be improved? By working as a team and fully cooperating with each other. This synergy usually increases standardization and successful standardization usually increases flow.
An increase in flow leads to an increase in revenue. Standardization is cost effective and leads to the real possibility of decreased expenses. There are also various associations sub-sectors can join which will improve their synergies. The Tourism Leadership Council in Savannah, Georgia is an entity specifically designed to unify members of the hospitality industry. This organization allows members to share common goals, promote various elements of the hospitality industry and create ideas that increase revenue and decrease expenses.
Members include hotels, restaurants, tour companies, printers, caterers, banks, cell phone companies, food and beverage distributors and many more. A local restaurant in Savannah, Johnny Harris, has a cooperative effort with our local trolley company and area museums. When a group books their facility for dining they are also booking for touring and entertainment. It is a group package at a discount. One final way to improve the synergy is to consistently strive to improve the team. The team is the backbone of a successful synergy.
They must stress the importance of passion for the job and industry and always strive for professionalism. Most of our local sub-sectors are relatively small in Savannah. They can improve their relationships by joining various hospitality associations. Memberships allow a sharing of expenses and a pooling of resources. A great example of sharing expenses is advertising and promotional costs sharing. Another very good example is pooling resources; sharing employees. I worked on a river boat in two positions; a cocktail waitress and a cashier in the gift shop.
This allowed me to maintain full time employment. The can also improve relationships by increasing trust and communication. Georgia does not allow most gambling on dry land other than lottery and poker card clubs. At present we have a casino cruise boat called the Emerald Princess Casino Ship located in Brunswick Georgia. The ship must sail three miles into international waters before casino gambling is legal. In the past, we had the Millionaires Casino Boat which was located in Savannah Georgia. However multiple raids, extensive legal problems and tax problems caused the company to shut down in 2010.
There are many advantages we will experience if we allow gaming in our state. Each sub-sector of the hospitality industry would benefit extensively if true gaming was allowed to enter our state. It increases tourism which increases revenue. This increase in revenue leads to a decrease in taxes for our local residents. There is also another very obvious economic benefit; jobs. Many argue that these jobs are not quality, high paying jobs but low paying, non substance jobs. They would much rather an industrial park development with high paying jobs.
Other disadvantages include a need for additional public safety, an increase in traffic and the possible damage of our protected waterways. In conclusion, many of the challenges involved in managing a restaurant in Georgia are due to legislation and evolving regulations such as smoking bans and alcohol sales. Computerization of the food and beverage industry has revolutionized the industry by streamlining the entire process. The independence and synergy of each sub-sector improves the entire industry. Finally, the introduction of gaming in our state, in my opinion, would enhance the entire hospitality and tourism industry.