New Zealand’s hospitality industry has many challenges to overcome, which I have mentioned in this essay. This industry is one of the main contributing industries to the New Zealand economy (Statistics New Zealand, 2013). In this essay I will identify three major challenges, which I think are important to providing a successful hospitality business. I will describe and define these challenges and use data that I have found to corroborate what I have suggested. The challenges that I think are important to providing a successful hospitality businesses are staff costs, sustaining sales volume and running costs. In the second section of this essay, I will explain how the challenges that I have identified, help managers or owners in the hospitality industry. I will provide a deeper understanding so that managers or owners can address these challenges.
Challenge 1: Labour Costs.
According to Conn (2009) labour costs is the money that is earned by the employee, which the employer has to pay. This can be paid to the worker by wages or salaries (Conn, 2009). I think labour costs is a major challenge for a hospitality business. If you can manage to keep your labour costs low and have it not negatively affect your service or product then you may save a lot of money. In the Restaurant Association New Zealand (RANZ) report 60.8 percent of businesses said that labour costs is one of the biggest challenges that a hospit...
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...and Gaur (2012), stated that offering guest superior service over competitors is a great business ethic (Rishi & Gaur, 2012). This will create customer satisfaction and also sales. Managers and owners need to understand that it is not all about profit. The key is to maintain that income by creating customer loyalty.
In conclusion the three major challenges that I have identified are labour cost, lack of skilled employees and building and maintaining sales. Firstly I talked about labour costs and how business need to maximise their skilled labour. Secondly I talked about the lack of skilled workers in the work place and how managers need to promote more in- house staff. Lastly I talked about building and maintaining sales and how creating a loyal customer base was key to achieving this. I think these are the main challenges that hospitality businesses need to work on.
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