The Relationship Between Globalisation and The Hospitality Industry

Introduction

Globalization refers to the process through which businesses develop international influence or start operating on a global scale. On the other hand, the hospitality industry is a wide ranging category of fields in the service industry that revolves around event planning, lodging, transportation, theme parks, cruise line, and myriad other fields in the tourism industry. Globalisation is currently a vital influencing factor for the hospitality industry; this means that the growth and development of the hospitality industry is directly proportional to globalization. In the modern world, there is no product or service in the world left that does not, to some extent, have global exposure. Every sector is influenced by cross-border transactions. It is thus important to understand the actual concept of globalisation. This essay conducts a detailed analysis of the impact of globalisation on the hospitality sector and vice versa. It explores different perspectives on both concepts and their interconnections and mutual dependence in terms of the economic, political, and social growth of nations through long-term sustainability (Ganga, 2017).

Globalisation and the hospitality industry

Globalisation is a process that is related to the interconnection of different sectors globally for the growth and development of nations, and every field is expanding as a result of the influence of globalisation. It can be understood as a process through which borders and geographical lines become insignificant to promote the growth of businesses worldwide. The legal, economic, political, social, technical, and cultural domains are all affected by globalisation. Globalisation is collaboration through a process of homogenisation; in other words, it is the impact of one society or culture on another, with the acceptance of both. Thus, it can be considered as an influencing factor that has the potential to change in the nature of society and related essential factors (Cerovic, et al., 2015). It also ‘erases’ countries’ borders to allow open and effective trade; however, globalisation does not take into account local culture and practices.

Changes in the global economy are achieved through eliminating certain obstructions, which facilitate the universal exchange of goods, healthy competition, the free flow of workers and capital over national borders, the free development of speculations, and so forth. The travel industry, being undeniably important, reflects these changes.

The travel industry serves as an example of the effects of globalisation, particularly when considering the advances that have been made in recording data and correspondence, efficient transport, and so forth. As an example of development and its impact on the hospitality industry, the travel industry now affects, the travel industry significantly affects other sectors in a roundabout manner. The initial belief on the global community that the travel industry's growth is an effect of economic advancement has been confirmed over and over again through studies that have indicated the travel industry is a key driver of economic growth.

With consideration of how much the travel industry is turning into a solid pull of advancement for many sectors, any individual entity or business entity looking to venture into the hospitality industry should take advantage of the many travellers and tourists involved to tap money. Similarly, the travel industry is promoting the potential for advancement of gains from trade in the hospitality industry.

Globalisation is bringing the world closer with the help of the hospitality industry because it helps different nations to exchange cultures, goods, and resources (Cline, 2017). It also assists to balance inequality in employment, as, if a country is facing an employment crisis, the residents of that country could move to another to seek employment, which benefits the economies of both countries. Also, globalisation contributes to reducing the prices of various products that were previously limited to a particular area or nation. Now, as a result of the advancement of technologies and globalisations, products that were once limited to a particular region can be found throughout the world. This helps various sectors to reduce import costs, which is also an influencing factor for the hospitality industry. This represents a win-win situation for both consumer and buyers. Furthermore, globalization enhances competition among companies, and they can participate in the growth of their respective businesses to promote long-term sustainability and their profitability in the future.

When considering the case of the hospitality industry, it can be noted that people who work in this sector frequently move from one country to another in pursuit of employment. This phenomenon has increased the occupation rates of restaurants and hotels. Hospitality and globalisation affect each other in various ways, including economic, political, environmental, social, and legal factors. When a country's hospitality industry is globalised, the host country enjoys greater revenues (Sheel, 2013). Through many sources, both direct and indirect, nations collect significant amounts of revenue through the hospitality industry. The hospitality sector is attracting more clients who are interested in leisure travel and business tourism. Now, many companies are sponsoring the business tours of potential clients or representatives by paying for their global business tours. Companies spend lavishly on these business meetings.

Along with that, MICE (Meetings, Incentives, Conventions, and Exhibitions) tourism segment is a new trend in globalisation and is a helpful way by which a country can attract economic benefits. It enhances the foreign exchange of a nation, which increases the GDP of that country. The hospitality sector involves collaboration among the many firms, both small and large, that is the suppliers of and provides basic support to the hospitality industry. Through their trips, visitors from different nations support and benefit both these large and small firms, as well as the hotel sector. This helps to promote the financial development of a nation. The table below is a sure-fire way of telling that development of international tourism has been on the rise from the year 1990 to date.

Global hospitality also provides a framework for the cultural development of nations. The worldwide hospitality industry provides a framework in which people of different cultural backgrounds and with different traditions can connect. It allows people to understand the faiths, beliefs, and prejudices of other countries. Through the exchange of culture, the internal peace and harmony of countries are maintained, which reduces border disputes between different nations. Cultural development helps organizations to strengthen internal relationships, which may assist in future development and business processes.

The hospitality industry has contributed significantly to the social development of many countries, and it has improved the quality of life globally. In the contemporary world, individuals of all backgrounds are influenced by the hospitality sector regarding their leisure and relaxation choices. It has brought people from different societies closer. Moreover, this industry has provided job opportunities for a large number of individuals throughout the world. As a result, many people who came from poor families are now able to support themselves and their families. Thus, it could be argued that the global hospitality industry has promoted people’s social values.

The contemporary hospitality sector has become more modern and global. The hospitality industry cannot survive without collaboration among providers of transportation, so it is the collaboration of transportation providers, providers of food and beverage, shopping store owners, visitor feedback, travel agents, government support, holiday planners and infrastructure that makeup success. All of these components are essential for the globalization of the hospitality industry. Through the Internet, every country is now connected, either directly or indirectly, for business and development (Bird & Thomlinson, 2014). The hospitality sector of a particular country can potentially attract customers not only from that country but also from other nations. For this purpose, actors in the hospitality sector are dependent on travel agents operating in both their local market as well as the global market. Travel agents who operate on a global scale can provide a country's hospitality sector with more profitable customers, as such travel agents can offer hotels major projects, including conferences, business meetings, and fashion exhibitions among other events. Through travel agents, large numbers of people can sell their services, and this enhances the profits of players in the hospitality industry. For the move of the potential customer, the global transportation sector is the backbone of private travel. Without the support of this medium, the interconnection of hospitality and globalization would not be possible, as they are interdependent on each other. With the hospitality sectors of many countries attracting increased numbers of visitors, the transportation sector also raises its costs and reaps the benefits regarding profitability. The global transportation industry is not only focused on earning profits through customer journeys. However, airlines, cruise companies, and local transportation providers are all improving their standards to better the experience of customers. Moreover, taxi owners are earning major profits from the tourism and hospitality sector globally.

The vital need of a living individual is food. The hospitality industry is founded on food and beverages. People choose to use the services of the hospitality industry due to the ease and luxury that they offer, and food and beverages are the essential aspect of this sector. The agricultural sector is directly associated with this factor. This is not the case in only certain countries; rather, this sector is also globally connected with the hospitality industry in that it fulfils the basic food needs of customers. The agriculture sector is the basis for the incomes of both skilled and unskilled workers and middle-class families (Peric, 2005). Globally, due to advancements in the hospitality industry, middle-class families earn their income through agriculture, whether they engage in it as a profession or whether engaging in farming is part of their family tradition. The agricultural sector increases the import-export volumes of the hospitality industry, as this industry attracts customers from all over the world, and, to cope with their requirements and standards, they have to provide the best supply of products.

The hospitality industry has a significant influence on the global retail market. The hospital sectors of each country attract visitors from various countries; such visitors often tend to spend money in local markets and may enter into business relationships with entrepreneurs who sell goods. This results in foreign direct investment (FDI), which is a leading factor for the GDP of any country. The hospitality industry has promoted FDI. The three main concerns when it comes to FDI are ownership, location, and globalisation. Investors prefer investing in countries in which securing ownership of a business is easy (Team, 2017). A country that is welcoming to FDI provides competitive advantages with which to cope with local competitors. Companies prefer large markets when developing new businesses and this is a reality that has been witnessed globally. Finally, the globalisation of international relationships is of the utmost concern to the foreign investors, as it allows them to control new ventures remotely.

A study was conducted by Yu et al., in the global hospitality industry. As per this spatial analysis, it was evident that the number of hotel rooms is increasing when compared to the number of hotels. As a result of globalisation and the resulting rise in tourism, this sector is increasing the availability of infrastructure and reframing the existing structures worldwide.

During the 1970s, universal lodging organizations endeavoured to utilize institutionalisation procedures in their administrations to ensure consistency about quality. Institutionalisation can make a lodging brand unmistakable, and this is what customers are searching for. Thus, consistency in the delivery of quality is important for companies in the hospitality industry which need repeat customers. Lodging organisations need to make adjustments to their institutional arrangements to cater to clients' preferences or inclinations. The travel industry faces numerous challenges, including language differences, competition, and social contrasts. It is sometimes difficult for a lodging organisation to enter another nation, particularly when a country has different social customs. For instance, liquor is prohibited in Muslim societies, Indians do not eat beef, and betting is illegal in many nations. Organisations need to adjust to new conditions, including different customers, laws, culture, and customs. For example, accommodation providers in Western nations usually rely on settlement incomes to generate profits, whereas their Asian counterparts rely on sustenance charges. Hospitality organisations in Asia tend to concentrate on providing more attractive dining options and focus on nearby coffee shops and also medium-term remote visitors. Numerous hotel companies that have made changes to their promotional approaches and have restricted their service offerings have been successful, while others have failed as a result of employing inappropriate business strategies and failing to adapt to the culture of a new region (Zhang, 2005). ‘When it comes to advertising, it is essential to take globalisation into account, as doing so is necessary to satisfy different tastes, to address issues that may arise in different regions, and to attend to purchasers’ non-indistinguishable necessities. Furthermore, it is worth mentioning that some clients are very particular about exotic menus and will dismiss a hotel if it does not meet their expectations. For example, a hotel in Bangkok should have a considerable part of Thai food in its menu so that foreigners who visit it feel like they are in Thailand; they should not eat the French fries they are accustomed to eating in their home.

On the same note, the celebrated ‘7-star’ Burj al Arab hotel represents a remarkable achievement. This hotel was established in the state of a surging Arabian dhow cruise; it is homage to the country's nautical legacy. It has become a symbol of Dubai, and serves to represent Dubai to the rest of the world.

Human resources departments in the hospitality industry also need to take globalisation into account. Those employees who are responsible for Human Resource Management are the backbone of an organisation; they should learn and comprehend the employment laws of their countries and the employment laws of the countries in which their companies operate in. Nations differ when it comes to workers’ rights and employment laws. Human resources administrators in the hospitality industry must be extremely cautious when it comes to workers' rights and employment laws, or they could cost their employers millions in fines and punishments. Many contemporary hotels are limited regarding staffing. Hiring local employees can be helpful, as they know their ways of life extremely well, and they can speak local languages, which is helpful when serving local customers; also, multilingual staff can serve tourists from other countries. It is almost always helpful to have employees from different areas, as this results in variety; however, they will have their convictions, foundation, and traditions. Thinking globally is essential when addressing social conflicts, and HR administrators in the hospitality sector need to plan effectively.

Hotels’ globalisation procedures are occasionally insufficient, particularly for attracting tourists. When people travel for tourist purposes, they wish to encounter contrast and experience something new. In the absence of such opportunities, travelers miss out on opportunities to enjoy themselves. Contemporary rivalries between hotels are getting fiercer; as a result, some hospitality organisations have attempted to distinguish themselves from competitors. Distinguishing factors among hotels depends on the capacity to give visitors the time of their life. The unique features of hotels can make their guests perceive them as memorable. For instance, in the United States, there is a hotel called the Dog Bark Park Inn, which resembles a gigantic beagle. Visitors rest and eat in the ‘body’ of the beagle.

Another example is the Alcatraz Hotel in Germany. It was previously a jail; the proprietor maintained the original atmosphere of the building, as the rooms resemble prison cells. Visitors likewise received striped night robes that make them look like detainees rather than typical shower robes. The main distinction between this hotel and a genuine jail is that visitors can abandon the former whenever they choose to do so (O'Neil, 2018). The more uncommon one is a hotel formed entirely of ice. While this may sound improbable, one such institution, the Ice Hotel, can be found in Canada. This hotel has become world-renowned due to its winter attractions; the structure of the hotel as well as the works of art within it is very intriguing. Most visitors perceive this hotel as beautiful and memorable and consider the experience of visiting it to be unique and charming. These stories indicate that hoteliers must think and act globally and must try to distinguish themselves from their competitors.

It is evident that there are advantages and challenges of multinational hotel involvement, i.e., globalization and the hotel industry. The challenges or costs that come from going global as a player in the hotel industry include negative environmental and cultural consequences, foreign domination, decreased economic benefits, sunk costs and investment risks, overdependence on multinationals, and inappropriate form and scale of tourism development among other things. On the flip side, globalisation makes it easier for multinational companies to invest in many new locations. Additionally, it facilitates the transfer of management and technical skills from one country to another. This helps any country willing to be involved to gradually develop their employment sectors and generate revenue. Multinational corporations are usually the first beneficiaries to the success of globalization.

The globalisation of the hospitality industry offers many advantages; however, these advantages are not easy to come by because there are a lot of drawbacks (Theuns, 2008). Globalisation results in considerable disadvantages for various nations and leads to many environmental issues. The International Holocaust Remembrance Alliance, United Nations World Tourism Organization, and United Nations Environmental Program have collectively implemented an initiative intended to promote the use of renewable sources of energy and their use in the hospitality industry. In the year 2007, the Hotel Energy Solutions project, which focuses on protecting the environment and reducing the carbon footprint of individual entities and organizations, was initiated. Developed nations realize the full advantage of free trade in comparison to growing nations.

Legislation concerning environmental issues in developing nations may be less strict in comparison to developed nations. In this way, issues related to the environment can be considered an effect of globalisation. The division of labor can also be an inconvenience to employers. Nations may experience difficulty in retaining their best workers, as other countries may attempt to lure them by offering higher wages.

The hospitality business is associated with globalisation to different degrees. As clarified previously, globalisation leads to higher guest rates all over the world. The hospitality industry ought to adjust to various societies and religions with the end goal of working effectively in a globalized world. Findings and data concerning various nations and societies can be shared, which can make it simpler to address the needs of different societies. Different hospitality businesses focus on different target groups. For instance, the Intercontinental Hotel Group has centres that focus on the needs of Chinese tourists. Intercontinental discovered that Chinese visitors were not satisfied with the Western approach to hospitality. The organization thus chose to consider new ideas to satisfy the desires of Chinese guests.

If the issues associated with hospitality and globalisation are discussed in depth, one may conclude that the natural environments of various nations have been worst affected. Natural resources are degrading on a daily basis. In many regions and countries, riots and unrest have occurred due to native populations becoming annoyed by outsiders, as tourists sometimes do not treat the countries they are visiting with respect and spoil their natural beauty and public features and engage in antisocial activities there. Many countries, such as Iceland and Greece, are facing the problem of excessive tourism due to the impact of globalisation on the hospitality sector. Many people from different countries are booking island hotels in Greece for destination weddings. The governments of these countries are unable to address the issue of excessive tourism, which is degrading the quality of service in hotels, restaurants, and in other places. Accommodation issues are the other main problem confronting the global hospitality industry (Srivastava, 2017). Moreover, the inflation rate is also increasing due to increased tourism expenses. Hotel and lounge owners run monopolies; these, in turn, affect the tourism experiences of individuals.

Conclusion

Hospitality industry and globalisation at large are helping when it comes to bringing employment into an economy. If a country is facing an employment crisis, then the people of the said country could move to another country for jobs and in turn, give support to the economy of both countries. Additionally, globalisation is helping in the reduction of the price of various products which was earlier confined to a particular area or nation.

The global hospitality industry also provides a framework for the cultural development of nations. Through it, there are provisions of frameworks to connect with people of different cultures and traditions. It gives a way to understand the faith, beliefs and normative social constructs of the different countries. Through the exchange of cultural knowledge, the internal peace and harmony of the different countries are maintained, and this reduces the border disputes of the different countries. The hospitality industry has contributed a lot to the social development of the society. It has raised the lifestyle standard of the world. Now every individual is influenced by this sector for the relaxation and leisure as per their financial strata. It has brought the people of different societies closer. Globalisation causes a considerable measure of drawbacks for various nations and the issues related to the environment (Theuns, 2008). Developed nations acquire focal points of the unhindered commerce economy than growing nations. It very well may be viewed as an unreasonable rivalry, since the developed nations have more assets to utilize. Besides, because of globalisation, organisations may re-appropriate an office to another nation. Natural resources are degrading day by day. In many regions and countries, the situation of Riot and unrest has been raised as the local natives of the countries are annoyed by the outside people.

In summary, globalisation and hospitality have both positive and negative interconnections with each other, but the benefits outweigh the disadvantages. With globalization every company in the hospitality industry has a chance to attend to more customers (both on the domestic and international front). The advantage of this is that the odds of being successful in the industry increase significantly; tapping from a global pool of customers enables hotel owners to maximize on their comparative advantage and still realize a competitive edge against rivals.

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