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Today, the hospitality industry is experiencing immense challenges and opportunities, and this is attributable to the phenomenon of globalization. It is worth noting that globalization has facilitated market integration in the modern society. It is perceived that the forces of globalization and the new scenario of market integration are likely to persist into the 21st century and beyond. Over the years, the hospitality industry has undergone transient revolution due to the impact of globalization, in order to maintain its role and function in the modern society. It seems that there is creation of a universal lifestyle in the industry (Dubcová, Petrikovič & Šolcová 2011). This phenomenon has also been witnessed in other sectors. However, it is worth noting that different sectors have been influenced by globalization differently. Currently, business dynamics in the hospitality industry seem to have been transformed through market integration. For instance, interactions within the hospitality industry, as well as with other related sectors have changed significantly to open new opportunities (Munoz 2006). These changes are attributable to trade liberalization, emergence of new technologies which have reduced communication and lowered transportation costs, and created opportunities beyond borders. From an analytical perspective, the transformation of business dynamics has contributed to competitive activities and economic growth worldwide. On the other hand, the new wave of globalization has enhanced political and economic interdependencies through accelerating capital flows, and this has led to policy changes and governance in the hospitality industry. As a result, the hospitality industry has been forced to re-evaluate its role and function to meet the rapidly changing market place. Therefore, this paper will describe and analyze how the hospitality industry has evolved under the forces of globalization to remain relevant to the modern society.
Hospitality industry activities, especially travels are as old as the history of mankind. Changes in the tourism industry reflect the impact of technological advancement. For instance, early travels were relatively different from pleasure travels and so were the middle travels. More important to note were the changes that occurred during the Industrial Revolution including the emergence of seaside resorts and spas. Moreover, advances in the automobile industry especially in air transport spurred the hospitality industry to a high level leading to aggressive investment across borders. In retrospect, the current status of the hospitality industry is quite different compared to that of pre-Cold War era. Foremost, it is apparent that the hospitality industry has adopted advanced contemporary business approaches. Unlike the situation in pre-Cold War era when hotels lodging services to guests, hotels are now offering recreational services and other welfare services to meet the needs of the modern society (Mourier n.d). In addition, investment in the hospitality industry has changed from local or domestic to international coverage. In the new wave of globalization, hotels are becoming internationalized with local enterprises going global in order to harness the benefits of trade liberalization and market integration. Second, the modern hospitality industry is characterized by changes and expansion of means of communication (Munoz 2006). This is attributable to advances in the information technology that have introduced new ways of communication such as the internet and video conferencing which were missing in the mid 20th century. Third, it is apparent that there is a remarkable evolution in hospitality governance approaches. Political and economic interdependencies seem to have forced governments to adopt appropriate reforms in the hospitality industry, in order to tap all the economic benefits related to the industry. Ordinarily, the tourism industry serves as the largest global export industry owing to the large international flow of capital (Cline 2004). As such, countries seek to gain economic benefits from the hospitality industry through controlling its governance. Third, technology has led to drastic changes in hospitality business environment (Friedman 2000). Technology serves as one of the key drivers of globalization. Therefore, it is apparent that the emergence of new technologies will introduce further changes in the hospitality industry. Therefore, there is tangible evidence that the hospitality industry has undergone significant evolution over the past five decades. Despite the fact that not all changes have been beneficial to the industry, globalization has forced the industry to re-evaluate its role and function to meet the rapidly changing market demands. As a result, the current status of the modern hospitality industry seems entirely different from that of the Cold War era. This phenomenon can be described through an in-depth analysis of the impact of globalization in the hospitality industry.
From an analytical perspective, the impact of globalization on the hospitality industry can be evidenced by a number of aspects that have influenced business dynamics in the industry, more or less the same as in other sectors. However, hospitality industry which focuses on welfare activities may not be influenced by globalization as manufacturing industries. Nevertheless, forces of globalization are felt by all enterprises, as well as the global community. Initially, hospitality industry was characterized by a high conservative strategy. Prior to the Cold War, and even during the Cold War era, hotels operated in a conservative manner in which services were relatively the same everywhere. It was hard to differentiate between hotel services offered in one country to those offered in the other countries, especially in Europe and the United States. This conservative approach was attributable to the influence of westernization that realigned the hospitality industry in the same platform. However, the growth of hospitality industry in other parts of the world introduced diverse approaches in service provision in which culture became a dominant distinguishing feature across countries and regions. Despite these differences, globalization has forced enterprises in the hospitality industry to re-evaluate the role and function of hospitality industry, in order to meet the requirements of market integration.
One of aspects of globalization that have forced the hospitality industry to adopt changes is the nature of business practices. It is apparent that market integration has generated different business forces in the global market compared to the situation in traditional hospitality industry where trade was localized within countries or regions. In the mid 20th century, companies in the hospitality industry looked at business in a regional perspective. In contrast, changes that have occurred in the past five decades have seen companies in the hospitality industry adopt a global perspective to business (Beamish 2000). This has led to drastic changes in management practices in both private and government sectors. For instance, the hospitality industry has been forced to respond to cross-cultural demands in the global market. In today’s hospitality strategies, culture is considered as an integral component of business success. This is so because globalization has enhanced movement of people across borders. This implies that any business in the hospitality industry needs to address cross-cultural demands of its customers. Therefore, personnel in the hospitality industry especially hotel managers are supposed to adopt management practices that meet the needs of diverse customer base with different cultures.
Another aspect of globalization that has enhanced evolution in the hospitality industry is the communication technology. In the traditional industry, business communication was restricted within borders with verbal communication existing as the only means of communication. In the information era, reliable communication strategies have emerged to facilitate cross-border business communication within the hospitality industry. In the present era, people are able share information with others in a convenient, faster and cheaper means, especially through mobile communication devices. This has prompted the hospitality industry to adopt global communication strategies that allow people to communicate across borders. This phenomenon has now emerged to be referred to as ‘information democratization’ in a free-flowing global environment (Friedman 2000). It is quite plausible that the hospitality industry has been capitalizing on new technologies (Smirnov 2011).
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