Globalization is having both positive and negative impacts on the hotel industry. Positively, it increases the customer base, boosts economies, and promotes cultural exchange. However, it also introduces challenges like language barriers, cultural differences, and seasonal employment. As the hotel industry globalizes, companies must adapt organizational cultures, management styles, structures, and training to diverse international markets and customers. While globalization opens opportunities, hotels must mitigate risks from events in other countries and changing technologies.

1. THE IMPACTS OF
GLOBALISTION IN HOTEL
INDUSTRY
AND ITS NEGATIVE EFFECTS

2. In the 21st century, with the increasing levels of globalization in hotel
industry, hotel companies will need to learn different management
approaches to survive and develop in environmental circumstances with
high levels of uncertainty as well as understand the implication of future
impacts, both positive and negative, of the changing environment in
which they operate. As international trade and business expand, there is
no question that international linkage will become more important for the
hotel industry. This project focuses on globalization in the hotel industry
and explains how the increasing levels of globalization, in this particular
industry may affect the internal operating environment (e.g.
organizational culture, structure, management styles etc.) of hotel
companies.

4. INTRODUCTION
Globalization has become part of everyday vocabulary.
Every day we hear the term globalization on the news, read it in the
papers, and overhear people talking about it
.
What is globalization?
We have tried to focus on the effects of globalization in the hotel industry
and find how the increasing levels of globalization has effected the
industry.
Globalization refers to the shift toward a more integrated and
interdependent world economy

5. INCREASING LEVELS OF
GLOBALISATION IN HOTEL
INDUSTRY
As international trade and business expanding, so there is no question that international
linkage will become more important for the hotel industry.
 In the early stages, most hotels have received foreign guests at one time or another.
Then, as the industry evolved, and with the development of technology and
transportation systems, the industry's structure has become increasingly more complex
with respect to scope, ownership, management and affiliation.
There are many models including:

6. TYPES OF
HOTELS
ACCORDING TO
MANAGEMENT
Chain-owned
and –
operated
properties
Independently
owned
properties
Chain-
operated
properties
Franchised
properties
Referral
group
properties

7. •However, in terms of the number of rooms, chain hotels are the
dominant sector.
•There were two main reasons why hotel chains began looking for
opportunities to enter into the global marketplace.
•They are comparative advantages, especially in developing countries,
and the overcapacity or saturation in their home markets.
•Unfortunately, hotel investment outside one’s home country incurs high
risks with a wide range of environmental influences affecting
organisational strategies and performance.
•Those environmental factors include

8. Political
factors
1)Foreign
trade
regulations
2)Taxation
policy
Economic
factors
1)Business
cycles
2)Inflation
Socio-
cultural
factors
1)Social
mobility and
lifestyle
2)Lifestyle
Environme-
ntal factors
1)Environment
al protection
laws and legal
Technologic
al factors
1) New
discoveries
Other
factors
1)Employment
law
2)Monopolies
3)Legislation
4) Cultural
.

10. IMPACTS ON ORGANIZATIONAL
CULTURES
There is an often-told story of a person, new to a company,
asking an experienced worker what an employee should
do when a customer calls. The old-timer responds:
In most organizations, the “Company Way” is derived from the
CORPORATION’S CULTURE.
Corporate culture is the collection of beliefs, expectations, and values learned and
shared by a corporation’s members and transmitted from one generation of
employees to another ,A strong culture can create the basis for a superior
competitive position. When a hotel company makes a decision to invest outside its
home country, it has to adjust more or less of its company’s culture to adapt to the
cultural diversity in the new work environment. This new work environment thus
becomes enriched by the multiple cultures.
“There are three ways to do any job—the right way, the wrong way, and
the company way. Around here, we always do things the COMPANY
WAY

11. However such cultural diversity can also bring some negative effects,
which can generally be attributed to individuals, and how they relate to
difficulties arising from departmental concentration of minority ethnic
groups, especially from language and cultural differences.
But this kind of adjustment is not an easy task to fulfilL. Even for a
domestic hotel, when businesspeople are all from the same culture and
speak the same language, the actual construction of the facility can be
difficult.
The many interdependent players sometimes have conflicting objectives
and a number of timetables to coordinate. An international hotel is even
more complex because the developers and employees come from
different cultures with different business.

12. Good communication between the regional office and the individual hotel’s
sales department helps producemore business for the individual property.
The policy of Equality Of Opportunity is also an essential part of its
organization’s culture.
This policy ensures that there shall be no unfair discrimination, in respect of
gender, marital status, sexual orientation, colour, religion, race, nationality,
ethnic origins, disability or age, and that equal opportunity shall be given to all
employees.

14. IMPACTS ON MANAGEMENT STYLE
An organization’s culture is translated into practicelargely as a result of actions taken
by managers. Thus,the quality and style of managerial leadership is crucial
in shaping perceptions that will support cultural valuesand hence, the organization’s
strategy. Managers havebeen classified by their decision-making style:
AuthoritarianDemocratic ( the leader actively involves subordinates in
the decision-making process)Sharing problems (soliciting input and sharing authority)
and laissez-faire.
Managers have been classified by
1) Authoritarian Democratic ( the leader actively involves subordinates
in the decision-making process
2) Sharing problems (soliciting input and sharing authority)

15. Sometimes, a hotel company operating around the whole world may focus on democratic
management style rather than an authoritarian stylesince it has to relate to different employees
from different cultures or social backgrounds. For example, Six-Continents PLC, the second
largest hotel group by the number of rooms, has a “Disclosure Procedure” to ensure such a
democratic management environment. If in doubt, in this organization, employees are
encouraged to discuss the matter with the person to whom they report or to the company’s
secretary. The other issues can be as such
1)They also all have a responsibility to draw attention to issues

16. 1)They also all have a responsibility to draw attention to issues
that come to their attentions or that comes to their knowledge.
2)They are also responsible for helping to maintain a safe and healthy workplace for
their employees. Thus employees can enjoy the work in a pleasant and comfortable
environment.
Moreover, despite the increasing levels of globalization, the management style in the
hotel industry tends to be localization, which can meet the specific needs of local
employees. While labour supply is not a problem in most developing countries, skilled
personnel are sometimes difficult to find, due to a shortage of training facilities and
trainers.

17. However, local labors usually have quite different needs from those of imported
laborers or immigrants. Facing such an issue, a multinational hotel company has to set
up some new management approaches or adjust its management style. For
example, the reward system will be different in China and in Australia.
IN AUSTRALIA
Australian employees have been required to reduce their working hours each week,
although most of them have been promised overtime payments.
IN CHINA:
Two of the greatest ways to show appreciation to a Chinese employees is through
1)Giving higher salaries
2)Promotions
instead of giving them vacations or leave to spend with their families.
At the same time, training and education has become more important for transnational’s
hotel companies.

18. Such training is provided from within their own organizations . With good
communication sense, multilingual staff will become increasingly satisfied.
Communications and cultural sensitivity may become an escalating problem, especially
where there is a large no. of immigrant labour or a large numbers of foreign guests.
Solutions to the labour problems are as varied as the causes, for the various and
different locations around the world. Ultimately, it will be up to the hotels to make
themselves more attractive employers and to improve in the recruitment, retention,
training and rewarding of staff.

20. IMPACTS ON ORGANISATIONAL
STRUCTURE
Organizational
structure means
three things:
The formal
division of
the
organization
into subunits
The location
of the
decision-
making
responsibiliti
es within that
structure.
The
establishmn
t of
integrating
mechanism.
What is an organizational structure ?

21. Every organization depends on its environment to somedegree. The evidence demonstrates that a
dynamicenvironment has more influence on a structure than
does a static environment.
In the volatile world of Transnational corporations (TNC) there isno such thing as a
"universal" global manager. Rather,
there are three groups of specialists:
a)Business managers.
b)Country managers .
c)Functional managers.
There arealso top executives at corporate headquarters whomanage the complex interactions
between these three specialists.

22. specialists and can also identify and develop thetalented executives a successful
transnational requires.
This kind of organizational structure characterizes aTransnational rather than an old-
line multinational,international or global company.
A multidivisionalstructure is built up of separate divisions on the basis ofproducts,
services or geographical areas.
•for example,Six Continents PLC is the leading hotel group in the world with over
3,300 hotels across nearly 100countries and territories. Its organizational structure is
described as follows.
•In the board, Chairman is backed by a finance executive and a CEO.

23. The business of Six Continents PLC is divided into three main regions:
•America
•Asia and pacific
•Europe
•Middle East
•Africa.
In each area, there is a head office, which is supported by two management teams:
1) a management committee and 2) senior managers who manage different
brands of the group in specific areas.
This kind of organizational structure has its disadvantages.
The two main disadvantages are that it is costly and the divisions
grow too large. The Six Continents PLC, established itself in a similar structure with
head offices.

24. DISSCUSSING THE IMPACTS OF
GLOBALISATION ON HOTEL INDUSTRY
Globalization is a very debatable topic as it has goods and the
bads to the people. It depends upon the person whether the
Globalization is good or bad or it has :
• Positive Effects
• Negative effects

26. 1.Exposure to different cultures:
Due to Globalization the managers of the hospitality industry are
able to learn about different cultures – as they get to mingle with
people from various walks of life – and thus, increase their
knowledge.
2.Larger Market:
Due to Globalization the customer base has increased greatly.
People travel not only for holidays, but business, health and
various other purposes too. Thus, this has increased the market
for the hospitality industry, which gets its major income is from
international visitors.
3.Boosts the economy:
Visitors come in and spend money – multiplier effect – and foreign
exchange increases. Thus it is of great value to the economy as
Globalization helps to pump in money into the country.

27. 4.Technology Advancement:
Since one wants to attract as many tourists as possible,
hospitality organizations constantly need to upgrade and
improve their products and services
Example: Singapore Flyer, using faster and newer technology
in hotels to so that the customer is satisfied.
5.Promotes Creativity:
Organizations are constantly thinking of new and creative
ideas to attract more tourists
6.More Job Opportunities:
Due to Globalization, more visitors come into our country
and thus more people are needed to serve and cater to
their needs. So, with the advent of globalization, there are
a lot of more jobs available for people within the hospitality
industry

28. 7.Boosts the Travel Industry:
Due to globalization more people move around, to facilitate
this, the travel industry needs to grow as well. People who
come into our country – by air, or ship, or land
– use the transport services offered as well.
8.Variety of International Services/Cuisines:
Since there are a lot of different visitors with various
cultures, customs, cuisines, and languages, the hospitality
industry includes recipes and various other services to cater
to them. These services are available to the locals too, which
makes it even better.

30. 1.Language Barriers:
Due to Globalization in the hospitality Industry we can employ
people from different countries – as it is usually cheaper – they
may sometimes have problems in communicating with
the customers. Many customers get quite irritate as a result of this
2.Cultural Barriers:
As there are people from various cultures, one needs to
be careful not to offend them. For Example, a Muslim will
not eat pork – one needs to make sure not serve food which
contains pork.(unless specifically asked). Whats acceptable by
one culture may be frowned upon by another.

31. 3.Events/Disasters in other Countries:
A disaster or event taking place in one country may affect
our country (the home country) also. For example, the financial
crisis makes less people want to spend money or travel; due to
increase in terrorism some visitors get are not ready to travel to
certain countries.
4.Seasonal Employment:
During peak periods, a lot of jobs are available but as soon
as the tourists go back the jobs disappear as
well. For example: Goa – India; the locals in Goa get their
income only during the peak season, (Dec- Feb and April – July)
after which they have no jobs and no income.
5.Increasing use of technology to communicate:
Due to international barriers, there has been a steady increase
in the use of technology for communication (through the internet,
voice recordings). This removes the human touch.

32. 6.Developing Countries:
Countries that are unable to keep up with the advancement in
technology tend to lose out. Example: Africa does not have the
infrastructure or technology as yet to welcome a large amount
of foreign visitors, though it does have a lot of natural attractions.
To increase the flow, it would have to improve conditions;
otherwise tourists have a vast sea of areas to choose from.
7.Increase in Crime Rate:
With the increase in tourists, crimes increase too.
Example: pick-pocketing, hustling, rape, smuggling.
8.Bad Habits:
People from other countries sometimes influence the local
youth in a bad way. Increase in drugs and promiscuous
behaviour, etc.

33. 9.Effects on SMALL HOTELS...
There are many hotels which are not having more lavish and
has high luxurious facility. Big hotel groups coming to India
creates a huge mess for the small hotels owners. There is
always a problem for employees as big hotels owners will take
away the employees giving higher salary and opportunities.
Now-a-days small hotels are being extinct and there is
a huge increase in hotels coming from outside of India.

34. 1) Language barrier : As people are employed from all
over the world, they should be trained efficiently,
such that we can solve language problem.
2) Cultural barrier : Any hotel starting its business in
any new country or location they should first have
deep research about that place like, religion, type of
cuisine ,and standard of living.
3) Events/disaster in other country : if there is any
events or disaster taken place in any country,
neighboring countries should try to help in all
events. For example : Recently, a huge destruction
took place in Japan due to earthquake and tsunami
India helped them by sending food packages.

35. 5) increasing use of technology/communication: As world is
changing fast every type of industry should be modernize/or
should be updated other wise there can be threat to face
heavy loss and be out of market.
6) Developing countries: These countries attracts foreign
business in them .developed countries help these countries in
getting modern technology and making them successful.
7) Increase in bad habits: it is in individual to have bad habits or
not.
8) Effects on small hotels : If small hotels try to merge with big
or brand hotel group they can increase there business and
compete in market.

37.  Do you think globalization is having a positive or
negative effect on your hotel?
 Regardless of their social back ground do you
believe all people in your hotel have same
opportunity to fulfill their potential?
 Does globalization has encouraged hotel company
to invest and explore opportunity world wide?
 Hotel that do not modernize or do have top notch
would likely to fail, do you think so?
 Do you feel optimistic or discouraged ,to see
globalization spreading in hotel industry?

38. 0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
5
Category
1
Category
2
Category
3
Category
4
category
5
POSITIVE
NEGATIVE
NOT SURE

39. CONCLUSION
In the 21st century, with the increasing levels of globalisation in hotel
industry, hotel companies will need to learn different management
approaches to
survive and develop in environmental circumstances with high levels of
uncertainty as well as understand the implication of future impacts, both
positive and
negative, of the changing environment in which they operate. The only
certainty about today’s hotel industry is that only those who plan for
uncertainty and change,
and who are able and willing to respond to global events with speed and
decisiveness, will reap the full rewards of success. Successful hoteliers
will be those who are
able to anticipate, determine and solve problems of a varied nature in the
context of their organization’s goals and in the environment of an
increasingly globalized
and complex society.