The Hospitality Industry

TheHospitality Industry

Table of Contents

The Hospitality Industry 2

History of the hospitality industry 2

Stakeholders and industry’s response to their issues 3

The role of the industry in its social, economic, and political setting 4

Domestic and internal ethics in the hospitality industry 6

Ecological and natural resources 8

Social issues 9

Rating of the hospitality industry in terms of terms of social responsiveness 10

Rating the industry in relation to the core values of Saint Leo University 11

Conclusion 11

References 13



TheHospitality Industry

Hospitalityis a broad industry that is comprised of companies offering a widerange of services and products. Some of the organizations operatingin the hospitality industry include hotels, food service management,coffee shops, restaurants, nightclubs, and fast food organizations(Reynolds, 2014). Many investors choose to combine a range ofservices in order to maximize their financial gains. It is currentlyconsidered as one of the fastest growing industries. This isconfirmed by the fact that about $ 743 billion are injected into theindustry in the form is investment capital (Les Roches InternationalSchool of Hotel Management, 2016). This paper will focus on theanalysis of the history of the hospitality industry, its response tostakeholders’ issues, its role in social, economic, and politicalsettings, domestic and international ethics, ecological as well asnatural resources, social issues, and its rating.

Historyof the hospitality industry

Thehospitality industry is as old as the human history and it can betraced back to the ancient Rome, Greece, and in the biblical times.However, the ancient communities had a slightly different objectiveof developing the hospitality industry. These ancient communitiesfelt that being hospitable to strangers could help them meet theirreligious or superstitious goals (Hulyo, 2011). For example,communities that lived in the middle age believed that Christians hadthe responsibility of offering hospitality to pilgrims and travelers.However, the hospitality industry remained an unregulated industryuntil 800s AD when Charlemagne, the king of Franks, established a setof laws that made it mandatory for Christians to provide food andresting place for travelers (Hulyo, 2011).

Hospitalitywas offered to travelers and strangers for free until 1282 AD, whenresidents of Florence, Italy, conceived the idea of incorporating anassociation that could turn hospitality into a business (Hulyo,2011). Initial inns were owned by the city authority, but they wereleased out to traders for three years. Traders were allowed to importand sell wine, among other necessities that travelers needed. Thebusiness of hospitality spread very fast to other states andcountries, such as Germany.

Significantchanges and models that guide the modern investors in the hospitalityindustry were developed between the 16thand the 18thcenturies. Traders perceived the need to enhance the quality ofaccommodation in order to help travelers get the value for theirmoney (Hulyo, 2011). Inns that had been constructed to accommodatetravelers provided meeting places for local nobility, priests, andpoliticians, which increased the number of customers. By the 18thcentury, business people operating in the hospitality industry hadincorporated facilities for events (such as wedding ceremonies) andcoffeehouses in their inns. The industry has expanded to its moderntimes, when a wide range of services (such as lodging, cruise line,theme parks, event planning, and transportation) are considered to bepart of the hospitality sector.

Stakeholdersand industry’s response to their issues

Thehospitality industry has both internal and external stakeholders.Some of the key stakeholders include guests, government, management,employees, investors, and the community. The hospitality responds toissues of the guests by striving to provide quality services (such asaccommodation) that meet their needs. The issues of the community areaddressed through charitable contribution and the provision ofemployment to members of the community (Lynn, 2012). In addition, thegovernment gets revenue from the hospitality industry by issuinglicenses and collecting income taxes. The management in this industryis interested in seeing a continuous growth of the industry, which isconfirmed by an exponential increase in the number leisure travelersand airlines travels (Srinivas, 2016). Employees, on the other hand,find the hospitality industry as a source of income. The industryresponds to issues of investors by generating billions of income eachyear.

Therole of the industry in its social, economic, and political setting

Hospitalityactivities can be divided into several domains, including the social,political, and economic settings. Social hospitality involves theestablishment of settings in which the acts of hospitality can takeplace together with the effects of social forces on the consumptionas well as the production of drinks, foods, and accommodation(Lugosi, 2011). Social needs and social bonds are positivelycorrelated. Hospitality activities facilitate the development ofsocial bonds between people, which leads to the satisfaction ofsocial needs. In addition, hospitality infrastructure (such ashotels) provides a platform for people to meet, share lifeexperiences, socialize, and establish friendships. Additionally, thehospitality industry provides facilities for meetings and socialevents (such as wedding and parties) where people meet and interact.This allows the hospitality industry to enhance the social well-beingof the members of the society.

Thehospitality industry contributes towards the economic settings in atleast three ways. The first type of contribution is the provision ofemployment opportunities. The industry has provided about 266 millionjobs worldwide (Roth &amp Fishbin, 2015). The industry provides jobsat all levels of employment, including the opportunities that requireskilled, semiskilled, and unskilled employees. This implies that theindustry accommodates all types of job seekers across the globe. Thehospitality industry serves as part of the solution to the globalchallenge of unemployment.

Secondly,the hospitality industry is among the key sources of revenue for manyinvestors in the world. It is estimated that the players in theindustry earn about $ 400 and $ 500 billion each year (Sharma,Kukreja &amp Sharma, 2012). The industry contributes about 9.5 % ofthe GDP and its economic contribution will grow by 3.5 % each year(Roth &amp Fishbin, 2015). This makes the hospitality sector anattractive industry for investors. Besides the revenue earned byinvestors, employees and suppliers who supply hotels with differentproducts (such as food and furniture) gets a lot of revenue eachyear.

Third,the hospitality industry provides revenue to the government throughtaxation. The conversion of the hospitality activities into businessin the 13thcentury was followed by the issue of government licenses, whichallowed the government to collect revenue (Hulyo, 2011). In addition,the government earns revenue through the income tax contributed byinvestors in the industry as well as the tax generated from employeesworking in hotels and tourism sectors.

Themajority of the scholars have focused on the impact of politics onthe hospitality industry, while only a few of them have studied therole of the industry in political setting. However, the hospitalityindustry plays at least two roles in the political setting. First,the industry provides suitable places and facilities wherepoliticians meet to make political strategies. This trend started ataround the 16thcentury, when politicians and other leaders (including the religiousleaders) started congregating in the inns that were initiallyconstructed for travelers and strangers (Hulyo, 2011). Secondly,investors in this industry make a financial contribution to do thelobbying and support individual politicians, who intend to assumedifferent political leadership positions. This allows investors inthis industry to influence voters and determine the politicians whowill lead the nation, states, and local jurisdictions. Similarly, thefinancial contributions allow investors to influence the processes ofpolicy development. Investors in the U.S. make the largest financialcontribution towards political activities. It is estimated that hotelowners in the U.S. contributed about $ 8.5 million to Republicans andDemocrats during the 2014 election cycle alone (Combined FederalCampaign, 2016). These investors support politicians and parties thatthey believe will support the growth of the industry throughdifferent measures, such as a tax reduction.

Domesticand internal ethics in the hospitality industry

Similarto other industries, the hospitality sector is susceptible tounethical practices and behaviors. Players in the hospitalityindustry at the international and domestic levels are guided by thesame set of core values in observing ethics in their practices. Someof the key values that enhance ethical compliance in the industryinclude integrity, trustworthiness, honesty, fairness, and loyalty(Roth &amp Fishbin, 2015). All practitioners are expected to playtheir part in ensuring that the services offered to guests meet thehighest ethical standards. For example, employees, especially thosewho work in the front office are expected to provide accurateinformation about the services offered by the companies. Someemployees who engage in unethical behaviors (such as provision offalse information to guests) damage the reputation of their employercompanies and the industry as a whole.

Managersin the hospitality industry look at the issue of ethical compliancefrom a wider perspective than employees and other stakeholders. Apartfrom the use of ethical values in day-to-day running of thehospitality companies, managers consider social responsibility to bepart of the ethical practices that determine the survival of theirbusiness. According to Knani (2014) managers should engage inpractices demonstrating that the hospitality industry exists tosatisfy the needs of the society, and not just making money. Managersdemonstrate their social responsibilities in many ways, includingcharitable contributions and engagement in community developmentprograms. In addition, ethics can be observed by delivering servicesthat meet the expectations of the society and guests. For example,practitioners in the hospitality industry are expected to provide acaring environment and meet the needs of their clients in aneffective and efficient manner (Roth &amp Fishbin, 2015). A failureto meet these expectations can be considered to be unethical.

Thesignificance of ethical practices in the hospitality sector can beconfirmed by the integration of ethical courses in the schoolcurriculum. The main objective of this integration is to impartethical values into students who are the future employees of thehospitality industry (Roth &amp Fishbin, 2015). By introducing thefuture employees to the issue of ethical practices the stakeholderswill be able to foster their ethical judgment by enabling them toapply ethical principles in addressing issues that they face on adaily basis.

Additionally,the study of ethical practices in the hospitality industry does notonly focus on the relationship between the service providers andtheir clients. It also focuses on the relationships that exist amongother stakeholders. A study of employees at the entry level revealedthat sexual harassment, bribes, theft, and disclosure of corporateinformation are common practices in the industry (Roth &amp Fishbin,2015). Other studies have shown that between 35 % and 53 % of thewomen working in the hospitality sector have experienced cases ofsexual harassment at least one time in their life (Ali, Zakaria, Said&amp Salleh, 2015). Although practices (such as sexual harassment ofnew employees) may not affect clients directly, it damages thereputation of the industry as a whole. Racial prejudice is also acommon factor that influences the process of recruiting employees inthe industry. A combination of these unethical practices creates anegative perception about the hospitality industry.

Ecologicaland natural resources

Activitiesthat are carried out in the hospitality industry affect theecological and natural resources negatively and positively. However,the negative effects of these resources exceed the positive ones.Water is one of the natural resources that are affected the most bythe industry. The tourism and hotel sub-sectors of the hospitalityindustry require a lot of water for use in the swimming pools,consumption by guests, cleaning, kitchen, and maintenance of the golfcourses. Studies show that maintaining a single golf course per yearrequires the amount of clean water that could be used by 60,000 ruralvillagers (Srinivas, 2016). The use of large volumes of water resultsin the depletion of fresh water resources.

Moreover,the rapid growth of the hospitality industry contributes towards landdegradation. An increase in the construction of recreational andtourism facilities (such as hotels and gold courses) has intensifiedpressure on ecological as well as natural resources. Some of theresources that are affected by the growth experienced in the industryinclude scenic landscapes, forests, fossil fuels, minerals, wildlife,and wetlands (Srinivas, 2016). These impacts are experienced duringthe processes of building accommodation as well as other facilitiesand extraction of the building materials.

Apartfrom the direct impact of the hospitality operations on land andwater, the industry affects the natural and ecological resourcesthrough pollution. Transportation is one of the key activities thatresult in emission of large volumes of greenhouse gases in thetourism sector. For an instant, studies have shown that tourismaccounts for about 66 % of all air travels in the world, whichimplies that the industry contributes the largest percentage of thecarbon dioxide that is emitted by aircrafts annually (Srinivas,2016). These greenhouse gases result in acid rain, photochemicalpollution, and global warming, all of which lead to biodegradation.The acid rain destroys the natural vegetation while the globalwarming affects all living things by increasing the levels oftemperature and ice melting.

Anemphasis on the pollution that can be directly attributed to themanufacturing sector has created a perception that factories disposethe largest volumes of solid waste into the environment. However, itis evident that the volume of solid waste that is attributed tooperations in the hospitality industry exceeds the amount that isreleased by all other economic sectors. It has been reported that theCaribbean region, which is one of the most popular tourist attractionsites in the world, generates about 82,000 tons of solid wasteannually, where approximately 77 % of it is brought to the coastalareas by cruise vessels (Srinivas, 2016). Hotels, accommodation, andother recreational facilities are known for the release of raw sewageinto water bodies, which damages flora and fauna. The sewage damagethe coral reefs and stimulate the growth of algae, which limit theability of the aquatic animals (such as fish) to survive.

Despitethe fact that the hospitality industry has resulted in thedestruction of the natural as well as ecological resources, playersin this industry have made financial contributions towards theprotection of these resources. However, it is only a few of thecompanies operating in this industry who make a financialcontribution to raise the public awareness about the significance ofprotecting the environment (Srinivas, 2016). Investors in thehospitality industry have a long way to go in protecting, restoring,and conserving the biological diversity and ensuring a sustainableuse of the natural resources.


Thehospitality industry provides leisure amenities that enhance thewell-being of the members of the society. In addition, the sectorbenefits the society by providing employment opportunities to membersof the society. However, this industry is associated with twonegative social effects. The first social issue is the increase inthe prevalence of prostitution, especially in areas that areclassified as tourist attraction sites. Sex tourism has increasedexponentially where men and women travel to different regions for thesole purposes of finding temporary and strange sex partners forpleasure. In Thailand alone, about 450,000 men travel to touristattraction sites to look for prostitutes every day (Lines, 2015).This has increased the prevalence of sexually transmitted diseases,such as HIV.

Thesecond social issue is an increase in drug trafficking and abuse.Some travelers take advantage of the operations of the hospitalityindustry to transport and sell illicit substances to differentcountries. Studies have established a positive correlation betweenthe prevalence of substance abuse and nearness to coastal lines,where hospitality facilities exist in large numbers (Weldon, 2013).This is because it is easier to find customers along these coastalareas. Members of the communities residing near the hospitalityfacilities are affected the most. There is also a high risk ofchildren who live close to the hospitality facilities engaging incommercial sex. This increases the cases of school dropout in theaffected areas.

Ratingof the hospitality industry in terms of terms of socialresponsiveness

Thehospitality industry has been accused of contributing to serioussocial problems (such as prostitution and drug trafficking), but itsoverall social responsiveness can be rated “very good” in a scaleof “worse-to-excellent”. The concepts of social responsivenessand corporate social responsibility in the hospitality industrygained popularity within the last one decade. Studies have shown thatabout 80 % of the large hotels in the world give charitable donationsto ease social problems affecting communities in which they operateeach year, 60 % of them have established diverse policies that makeit mandatory for the management to demonstrate social responsiveness,and 40 % of them include social responsiveness in their missionstatements (Lynn, 2012). This suggests that players in the industryhave embraced the idea of social sustainability, which will benefitcommunities living near the hospitality facilities and investors inthe industry.

Ratingthe industry in relation to the core values of Saint Leo University

Thecore values of Saint Leo University include respect, excellence,community, responsible stewardship, integrity, and personaldevelopment. The stakeholders in the hospitality industry havesuccessfully adopted about two core values, including community andpersonal development. The aspect of community is indicated by thedecision of about 80 % of the largest hospitality companies to make asignificant charitable contribution to ease the problems facingdifferent communities (Lynn, 2012). By providing employmentopportunities to millions of people, the hospitality industry hasgiven members of staff an opportunity to achieve their personaldevelopment. There are two things that need to be changed in order toensure that all the core values set by Saint Leo University areintegrated into hospitality practices. First, the management shouldbe given the authority and resources to fight corruption in theindustry, which will bring integrity in the industry. Secondly, moreresources should be dedicated to public awareness on social issues(such as prostitution and drug abuse), which will make players in theindustry become respectful and responsible stewards.


Hospitalityis among the largest industries in the modern world, which isconfirmed by the large number of people employed and the amount ofrevenue generated by the industry. The industry has undergone asignificant evolution, with major changes including the conversionfrom free hospitality to a money generating sector. The industry hasnegative and positive impact on the society. It offers jobs tomembers of the society, but it creates an environment forprostitution and drug abuse. Although the stakeholders in thehospitality industry have been accused of tolerating unethicalpractices and pollution, trends indicate that major companiesoperating in the industry are continually becoming responsible. Thisindicates that the industry will continue improving and reducing thecases of unethical practice that have been reported in the past.


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