EMCC European Monitoring Centre on Change

Hotels and catering - policies, issues and the future

The third and last article in this series on the hotels and catering sector draws on the first two to present the major policy issues and challenges facing the industry. The analysis considers the time profile of each major issue and how it affects regions, businesses and the sexes. The policy issues identified include working conditions and human resource development, legislation and new technologies.

The hotels and catering industry in the EU generated 6% of the total value added in the non-financial services sector in 2001 and employed more than 7.5 million workers. Distinctive features include a high proportion of small and medium-sized enterprises (SMEs) and an above-average rate of part-time employment. Among the key drivers affecting the industry are changing consumer lifestyles, new technologies and globalisation. These drivers are forcing the sector to continue to evolve, and as a result it faces some uncertainties. The industry is also affected by legislation introduced in response to these drivers.

Three major policy issues and challenges are presented in detail in this article. The first issue, working conditions and human resource development, is highlighted because it is fundamental to the sector’s viability and future. The second issue, legislation, was selected because although the sector can lobby against it, it cannot avoid legislation once it is in place, thus it must be informed and prepared. Furthermore, the legislation discussed here is directed at the hotels and catering industry. Third, the profound effect new technologies have had on the sector and the challenges they raise are forcing businesses to re-evaluate the way they operate. The discussion of each topic includes sections on affected regions, firms and individuals.

Major policy issues and challenges

Working conditions and human resource development

The features characteristic of work in hotels and catering - long, antisocial hours, low pay, instability and low status - make it unattractive as a career choice, and as a result the sector continues to suffer from high staff turnover and difficulties in recruiting suitable staff. This tends to perpetuate the skills gaps that currently exist. Together, these negative factors damage the reputation and perception of the sector. The primary challenge is to reverse this negative perception, first by improving working conditions to attract suitable staff and retain them, and second by investing in their development and taking interest in their well-being.

One of the challenges in improving working conditions is to ensure that both employees and employers engage in the process so that improvements are consistent with the aspirations and wishes of both groups: higher margins and productivity for businesses, higher wages and a better work-life balance for employees. This puts great pressure on the social dialogue process and the role of unions.

Businesses tend to be wary of any extra burden or higher net labour costs incurred through raising working conditions. For example, in a letter to Members of the European Parliament in May 2005, Hotrec, the Confederation of National Associations of Hotels, Restaurants, Cafés and Similar Establishments in the European Union and European Economic Area, raised concerns about the impact of an amended Working Time Directive on the hospitality sector (pdf 69kb). The challenge is to convince businesses that it is in the long-term interest of the sector, and thus themselves, to improve working conditions. If they fail to do so, this industry will continue to be relatively unattractive as a career choice and the consequent skills gap could have an adverse impact on tourist demand for the industry. Implicit in this challenge is the issue of trust between employers and employees, as employers can be sceptical about the claim that better working conditions will elicit better performances from staff, and employees may doubt whether firms are committed to improving their well-being and working conditions. A study carried out by the World Travel and Tourism Human Resource Centre has indicated that these suspicions can be overcome through greater employee empowerment.

Having set about improving working conditions, the next challenge is to attract and retain the correct staff. This is likely to prove difficult, as despite employees’ vertical career aspirations, there is generally a lack of promotion prospects within the sector. To deal with this, some employers have focused on job satisfaction and designed systems to reward staff for their performance. In improving job satisfaction and employability, one approach is to offer employees more variety by training them to do several tasks, i.e. so called ‘multiskilling’. This can lead to one person doing the jobs of several part-time people. While employers like this approach, its ability to create or preserve full-time roles reduces the flexibility offered by part-time employment. The fear of the IUF (International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco and Allied Workers’ Associations) is that multiskilling will deskill workers by making them less specialised, thus lowering their remuneration. Yet some unions concede that an employee able to perform a variety of tasks should be more valuable and so remunerated accordingly. The challenge here would be to ensure that multiskilling lives up to the latter perception. In addition to this, however, businesses must identify the key skills required as well as best practice in order to train their staff in the correct skills and to the highest level.

Time profile

In essence, this is a permanent issue that is always under review. While working conditions can be assessed absolutely against industry or government benchmarks, workers in the industry will be more concerned with their conditions relative to those in other sectors, particularly salaries and hours worked. Consequently, concern about working conditions is likely to be an ever-present issue that fluctuates in importance for employers and employees.

However, the persistence and prominence of current skills gaps suggests a failure by the hotels and catering sector to tackle the related issues of working conditions and staff development, which implies that these issues are current and ongoing. For example, a report on the skills and labour market profile (pdf 313kb) by People 1st revealed that in England, 29% of businesses in hospitality, leisure, travel and tourism report skills gaps problems compared to 22% for enterprises in the rest of the economy. The industry should tackle these gaps sooner rather than later to ensure the future viability of the industry through its staff. However, even when it does begin to tackle these issues, the benefits are unlikely to be seen for several years, since it would still take time for this knowledge to be widely communicated and integrated. Thereafter, there would be another time lag as new employees gain higher skills and apply their knowledge with confidence. To some extent, therefore, the time profile is as long as the industry wants it to be, but whenever it starts, it should not expect results overnight.

The European Employment Strategy (EES) has been under way since 1997, with the aim of providing European citizens, especially groups at a disadvantage, with more and better jobs (European Commission, 2000b). Within the strategy, the European Social Fund (ESF) provides financial support for education and training in order to close skills gaps. The year 2000 marked the beginning of a new seven-year period for the fund, part of whose mission is to help make Europe’s workforce and businesses better equipped to face new challenges. The broad aims of the EES are to assist the disadvantaged and the long-term unemployed, to tackle the causes of unemployment, to raise skills levels and to give support to regions facing particular problems. These aims are to be achieved by focusing on three key objectives:

  • developing regions whose progress is lagging behind;
  • supporting social and economic conversion in areas facing structural upheaval, rural decline or in need of urban regeneration;
  • adapting and modernising education and employment policies.

The EES supports individuals in acquiring and enhancing skills, but funding can be granted to institutions working on improvements to training or in fields such as awareness development. For projects to be eligible, they must offer equal opportunities, incorporate local employment initiatives and take account of modern information and communication technologies (ICT) technologies. Allocation of funds is dealt with at the national level; citizens benefit by participation in specific training projects. Project promoters must apply to their national employment ministry for funding assistance.

Provided that the application process is not too onerous, there may be some scope for hotels and catering companies to secure funding under this programme where they sponsor initiatives that deal with any of the issues and objectives outlined above. Alternatively, they could help and encourage employees to take advantage of initiatives and programmes, thereby reducing the cost to themselves of training staff. A second approach is for a group of companies to work with local or national bodies in creating a project that is both beneficial to them and consistent with the ESF strategy. Examples could include initiatives to adopt family-friendly policies in return for skills training in order to allow women to enter the workplace without necessarily sacrificing their family life, or to allow staff to acquire new ICT or food-processing skills in order to face new challenges. Meanwhile, companies or institutions located in underdeveloped areas or facing structural upheaval may be able to target funds to support employment growth, the development of new skills and social cohesion.

By and large, the funds are available. How firms acquire them is mainly down to their choice of approaches and the design and presentation of projects. If their proposal can be made consistent with the ESF framework and be seen to meet any of the objectives, then they have a good chance of securing financial assistance.

Geographical

Working conditions and human resource development are issues that affect the sector across all countries and regions. However, the geographic distribution means that some countries are affected more than others. The most affected are likely to be the five major economies of the EU: France, Germany, Italy, Spain and the UK, which together account for 72% of all enterprises in hotels and catering and 75% of the sector’s employment. The UK alone employs 24% of the EU hotels and catering workforce, while Italy and Spain each have more than 18% of all the enterprises. Cultural differences between countries and regions could lead to variations in enforcement and interpretation. For example, unions are often viewed less favourably in the UK than in France, while attitudes towards firms are generally more sympathetic. Furthermore, cultural differences between workers in different regions may lead to differences in preferences about working conditions. This could present a challenge for worker representatives involved in social dialogue.

Assuming that standards of working conditions were raised to the same level across all regions, the concentration of services in the five major economies and the competition this engenders would lead to there being more and better work opportunities in these countries. That these countries will attract workers from other, less wealthy countries seems inevitable. One challenge, therefore, is to prevent an exodus of talent from these other regions by ensuring that conditions there are attractive enough (or better), thereby ensuring that the hotels and catering industry prospers in regions outside the five major economies.

Sectoral

This is an industry-wide issue that affects businesses of all sizes. However, data for the UK show that a far higher percentage of large firms report skills gaps (see A skills and labour market profile pdf 313kb by People 1st). In terms of development and implementation, the process of improving working conditions is likely to place a greater burden on small firms that are less equipped to deal with such issues. In May 2005, Hotrec canvassed on behalf of small firms in particular against some amendments to the Working Time Directive. Hotrec supported ‘the sound protection of workers’ health and safety’, but asked that the Directive should not ‘impose disproportionate demands on entrepreneurs in these respects’. An additional issue of trust arises regarding workplace training and who pays and who benefits. Many firms, especially smaller firms, wary of skilled talent being ‘poached’ by larger firms will be reluctant to invest too heavily in their staff, if at all.

Gender

In principle, improvements to working conditions in hotels and catering could benefit men and women alike. Nevertheless, moves to improve working conditions are more likely to benefit women, given that they account for a slightly larger share of the workforce and many are employed on a part-time basis in the low-value core jobs. The high turnover associated with these jobs means their conditions are often not at the top of company agendas. Furthermore, the perception of these roles as jobs rather than careers means investment in training and human development is often only just enough for the individual and the firm to survive. There is an issue of causality, but the challenge is for firms in the sector to take proactive measures to improve conditions for such workers in the hope of benefiting from lower staff turnover. As stated in a study by the European Commission on employment development in tourism hospitality, this was achieved by a UK hotel which targeted women with children at school and paid for a play leader to look after the children during school holidays (European Commission, 2000a).

Political initiatives and legislation

Compared to some industries, the hotels and catering sector is subject to less regulation and government intervention. However, the sector is now being directly affected by initiatives and legislation in areas relating to smoking, alcohol consumption and food safety and labelling. For the sector as a whole, the primary difficulty is to unite against proposed legislation it does not favour. However, this could create conflicts between employers and workers, firms of different sizes, etc. Dialogue between different parties is therefore crucial for defining the sector’s own policy objectives in order to inform the sector’s representatives, such as Hotrec. Beyond this, the challenges would be to lobby for legislation to be as favourable to the sector as possible, and then implement it as efficiently as possible.

With regard to alcohol consumption and responsible drinking, the EU has focused its efforts on young people. However, the EU is currently working on a strategy to reduce alcohol-related harm in general across the whole population. So far, measures in this field only complement national law, and now that the Constitution has effectively been rejected, EU initiatives will carry less legal weight. Hotrec publicly shares these concerns and has committed itself to dealing with this issue in a 2004 position paper on responsible drinking (pdf 126kb).

The sector must not only address the issue of alcohol consumption, but for the purpose of the sector’s image, it must also be seen to deal with it. Establishments need to be proactive in monitoring alcohol consumption and controlling the sale of alcohol. This may require tighter control over who enters establishments, with consequent human rights implications, and possibly higher prices, which firms are reluctant to charge for fear of losing customers to more competitive rivals. The next step in this process is to develop a strategy to deal with any loss of sales as a result, which could involve new products and services or alternative promotions. The second part of the challenge is to be seen to be addressing this issue, which is likely to require marketing campaigns and newspaper coverage to highlight successful initiatives to reduce irresponsible drinking. Companies and organisations in the sector are already participating in programmes to deal with this.

Until now, the EU has merely invited Member States to tackle the issue of passive smoking and smoking in public places. Some Member States have taken the initiative by banning smoking in public places such as bars and restaurants. The EU has recently become more active in this area of policy and is looking to restrict smoking in workplaces to protect workers. This is likely to be a thornier issue than alcohol consumption. Hotrec is opposed to EU-wide legislation, believing instead that the sector can solve this on a voluntary basis. If legislation is introduced, Hotrec would prefer it to be at a national level to reflect cultural differences according to a position paper in April 2004 on smoking and non-smoking preferences (pdf 70kb). The challenge here is for the sector to reconcile its desires with those of consumers and politicians. How that is to be achieved is unclear, given that businesses oppose politicians and unions, and consumer opinion is often divided. To some extent, this may be a futile cause, given that Member States are introducing bans on public smoking at a national level. This appears to reflect a mood sweeping over Europe, so that should the EU codify anything on an EU level, bans may already be in place all over Europe. The challenge is for the industry to show that it can tackle this on a voluntary basis and be seen to do so, for example, with smoking and no-smoking sections in establishments as in France. Having proved its competence, the sector could then lobby for EU-wide legislation to overrule national law and permit smokers access to establishments by means of designated areas. However, this is likely to be opposed by unions. In the short term, with nations imposing their own bans, it would appear that the challenge is to accept this trend and prepare for the consequences as best as possible. Evidence from Ireland and Norway shows that bars and pubs experienced a 5%-10% fall in turnover after smoking bans were introduced (see Hotrec position paper in April 2004 on smoking and non-smoking preferences pdf 70kb). Establishments in affected regions would do well to plan and budget for such eventualities. A fall in turnover is likely to lead to job cuts, but given the low union membership in the sector, firms are likely to face little resistance. The challenge for employees keen to stay in the sector is to signal this desire and their competence.

Other policy challenges arise in the areas of food safety and labelling legislation. The EU has been working to strengthen existing food-labelling rules, partly in response to increasing consumer concern and interest in the provenance of their food. While the rules do not currently apply to restaurants, there is concern in the sector that strong lobbying from pressure groups could lead to proposals currently in the pipeline being amended to cover restaurants. In addition, there is the risk of Member States imposing national rules on restaurants. The sector is worried that food-labelling requirements may impose heavy burdens on restaurants, as menus and suppliers tend to change on a regular basis. There is also concern that extra information on menu cards would overcomplicate them for customers. The challenge for the sector is to consult with policymakers in Member States and the EU, and put forward the sector’s thoughts on what is acceptable and workable. Beyond this, the sector could take voluntary steps to open itself up to more public scrutiny and assuage consumers’ concerns over the food they are served.

In the area of food hygiene, Regulation No. 852/2004 on the hygiene of food-stuffs comes into force in 2006. Further amendments to be adopted relate to compliance with microbiological criteria. While both Hotrec and Ferco (European Federation of Contract Catering Organisations) accept the importance of food safety, they are concerned with the scope and implementation of the regulation (according to Ferco’s president). The difficulty is to uphold what is essentially consumer protection without undermining the operability of establishments. Hotrec has raised several issues that are likely to prove problematic. Its main worry is that the legislation covers a range of activities without distinction and that it is consequently inflexible and inappropriate for the restaurant sector, in which 95% of establishments are micro-enterprises. Hotrec is campaigning on several provisions in the Regulation to make it more sensitive to the needs and realities of small businesses. Its concern about the amendments relating to microbiological criteria is that they are being drafted without consulting the industry and provide no dispensations for small businesses. In a 2001 press release on food safety (pdf 12kb), Ferco voiced similar concerns about the ‘systematic and generalised application’ of these amendments and is asking for more flexibility. Hotrec’s second objection is to the amount of paperwork and record-keeping associated with the policy. These are concerns that policymakers must address.

Other areas of policy that could affect the industry include any legislation to improve working conditions and the work-life balance across the whole of society as well as initiatives to make firms and homes more efficient regarding energy consumption and waste management. However, any such regulation would probably be aimed at society or industry as a whole, rather than at the hotels and catering sector specifically. Therefore, the discussion of these is not appropriate in this article.

Time profile

The time profile for these areas of legislation is the short to medium term. Smoking bans have already been introduced on a national level and are having an immediate impact. In the medium term, businesses are likely to see bans introduced with the aim of protecting workers.

With regard to dealing with irresponsible drinking, some initiatives have already been undertaken at the national and sector level. Legislation may appear over the medium term once the EU has formulated a strategy to reduce alcohol consumption. Member States themselves, however, may take a tougher stance where the problem is especially severe, such as in Ireland and the UK.

There is no explicit or immediate impact on the sector of food-labelling legislation, but lobbying from consumer groups may reverse this over the medium term. Food-hygiene legislation is set to take effect from 2006, with further provisions to be added over the short to medium term. There may be scope for the sector to lobby on this regulation over the same time period.

Geographical

The impact of anti-smoking legislation and drinking control is likely to vary according to the cultural differences that exist between countries in their attitudes towards smoking and drinking. For alcohol, the impact depends on the degree to which the EU targets irresponsible (or so called ‘binge’) drinking, associated with relatively high levels of violence and social problems, or alcohol consumption in general. A study on Alcohol consumption and harm in the UK and the EU (pdf 1.28Mb) from the Institute of Alcohol Studies suggests that an emphasis on alcohol consumption in general is likely to affect drinking patterns in northern and eastern Europe the most, e.g. the Czech Republic, France, Germany and Hungary. An emphasis on binge drinking would affect drinking patterns in northern Europe and the British Isles the most, e.g. Belgium, Finland, Ireland and the UK.

With regard to smoking, some countries (Ireland, Italy and Norway) have already introduced smoking bans in public places, and others are set to follow suit (Scotland and Sweden). Tobacco consumption figures (pdf 565kb) from the World Health Organisation (WHO) suggest that cigarette consumption across Europe is more even, with most nations recording a rate of 1,500 to 2,499 per person per year. However, cigarette consumption in Spain, Greece and Hungary is higher than in other EU Member States, particularly in comparison with the Scandinavian countries (except Denmark). Therefore, setting aside cultural differences, any ban on smoking in public places could be expected to affect the southern European countries the most and the Scandinavian countries the least. Given the correlation that exists between smoking and drinking alcohol, cultural differences in where cigarettes and alcohol are consumed may lead to variations in the impact of anti-smoking legislation.

Sectoral

With fewer resources and fewer specialist divisions, small businesses are generally likely to be at a disadvantage regarding monitoring and implementing policy. This is indicated by the tone of lobbying by Hotrec and Ferco, which has highlighted the impacts on small businesses. Large firms and chains are better able to dedicate specialist resources to these functions.

Regarding alcohol and anti-smoking legislation, bars are likely to be affected the most, followed by restaurants and hotels. Food safety and hygiene legislation can be expected to affect restaurants the most.

Gender

In most cases, policy or legislation relating to any of these issues is gender neutral in that it is not aimed at benefiting one sex, but rather effecting change across the whole sector or the whole of society. In most cases, firms will be the channel for directing policy, thus men and women, as employees and customers, will be affected in equal measure. One exception to this is any legislation relating to the labour market that improves working conditions, intentionally or unintentionally, for women, with, for example, more family-friendly working hours or schemes targeted at occupations dominated by women.

Technology

Technology, both information technologies (IT) and production technology, has profoundly impacted on the industry and is expected to continue to have a major influence. The changes wrought by technology are forcing companies to re-examine their business models and deal with the challenges it raises, such as how to maximise technology’s potential without devaluing staff or alienating the consumer.

Production technology in the kitchen, like technology generally, raises the issue of how the company values and relates to its staff. Developments in production technology have enabled outsourcing and the simplification of kitchen operations. Such processes allow the firm to cut the cost of production and increase margins. In some cases a company may create new high-skill roles. The challenge here is how businesses respond. Do they maximise profits by turning the kitchen into an assembly line and relying on less-skilled staff with lower wages? Do they retain some skilled staff and complement them with some unskilled staff? Or do they rely on a much smaller number of skilled staff only? The most realistic option is the second one, as it allows for cutting costs while retaining some in-house expertise should it be required. However, in the long term the first option must be the most appealing to businesses. The key challenge facing firms and the industry is to reconcile this aim with attempts to improve working conditions and the reputation of the sector as a place to work. Another issue arising from this is the role of lower-cost migrant labour. The availability of willing, low-wage workers promotes the use of such technologies. Both influence each other to some degree, so the sector and policymakers must decide to what extent the use of low-wage labour and its wider social implications are acceptable.

Information technologies are also creating demand for experts in these technologies, including data analysis and marketing. In these fields, the sector has an opportunity to train existing staff and raise their skills levels, wages and job satisfaction. Such positive measures could help to counteract any negative fallout from the deskilling of kitchen staff. Indeed, they could be used to market the sector in a more positive light to potential entrants. Information and communication technologies (ICT) also provide a further motive for improving working conditions, raising levels of job satisfaction and improving staff retention. The industry’s profile can be raised through publicity on the Internet that will inform people about improvements in the sector.

Another area where information technologies present challenges for the sector is in its relationships with other businesses. Within businesses, it raises an opportunity to centralise or share many operations, but this faces some resistance from all kinds of agents, with some entrepreneurs, suspicious of competitors, reluctant to enter e-markets. Consequently, agents must be made aware of the potential benefits of any such cooperative relationships and they must also win each other’s trust so that they may share in the benefits together. This may be particularly important, but difficult, for small businesses, which potentially have the most to gain by extending their reach and lowering their costs, as they compete against larger, more resourceful firms.

The proliferation of ICT has fundamentally changed the way businesses and customers interact, and as new technologies evolve, perhaps one of the biggest challenges is to use technology effectively in relations with the customer (sales, marketing and services). The continuing penetration of computers and the Internet into people’s homes and the rise of mobile telephony and computing offer new marketing challenges. One such challenge for establishments is to monitor what is said about them on the Internet. Customers increasingly use the Internet to pass on testimonials, which undermines firms’ and countries’ control over their image and reputation. It will be necessary for sector bodies and businesses to monitor this flow of information and use it as a feedback channel while protecting against misinformation. The nearly infinite nature of the Internet means decisions must be made about how many resources to dedicate to this.

Information systems also allow the collection and warehousing of vast amounts of data on customers. While the Internet and mobile communications devices allow for more targeted marketing, firms must decide how far to push this. However eager they may be to sell to the customer, they must be cautious not to alienate the customer by being too aggressive or targeting them incorrectly. If managed correctly, this ability to take a targeted marketing approach and replicate it inexpensively permits the enterprise to develop a long-lasting relationship with potential customers for repeat purchases, and to move away from viewing the interaction as a one-off transaction. As a result, firms should recognise the importance of human interaction as a complement to the use of IT in identifying customer sentiment. The additional challenge is to ensure that high standards of service and public relations are maintained.

In identifying profitable business areas, information technologies are an important strategy tool. This presents a challenge in itself, as a successful strategy will require the correct collection and analysis of data. The wrong conclusions could have serious repercussions for the enterprise where they are used to inform its marketing and sales strategy. In this context, the sector and establishments need to ensure that the correct analytical techniques are used and that key staff have been trained accordingly.

Customers, too, are wary of technology, and the security issue surrounding Internet purchases prevents many from booking online. While solving the security threat is an issue for IT companies, the impact falls on companies in the hotels and catering sector because it reduces the impact of the Internet as a sales device. Hotels and caterers need to work with IT companies to find solutions. Another problem for businesses in dealing with customers is gauging the right mix of technology and personal service. While the use of technology allows firms in the hotels and catering sector to personalise the service, this is not the same as personal contact. Customers tend to favour a high level of personal service, which is expensive for firms. The key task for businesses is to blend the technological and human elements that make up their service so as to reconcile the company’s profit motive with the consumer’s desire for human interaction.

Time profile

The issues and challenges raised by technology are ongoing, often changing when new technologies are adopted. The Internet is changing the ways businesses market themselves and how they relate to customers. The full potential of the Internet has yet to be realised, so challenges and issues are probably still to be discovered. Information technologies have automated some tasks and created demand for some new types of skills. The effects of these technologies on the labour market are by no means at an end, and they will continue to pit unions against businesses. However, while technology will continue to lead to new developments and issues in the sector, the boom in ICT investment that took place in the 1990s is unlikely to be repeated and so the pace of development may slow. Other challenges that may appear over the medium to long term arise where the adoption of technology has social consequences leading to legislation or policy initiatives, e.g. where workers’ rights or jobs are threatened.

Geographical

Within the EU, there are no barriers to the adoption of technology, so new technologies are likely to be diffused equally across all countries. However, national or cultural differences may well affect how the sector operates or how the consumer uses technology to interact with the sector. Countries with higher rates of Internet penetration among consumers, for example, are likely to see businesses adapt to this more keenly. Other differences may occur where there are national tax advantages that favour the adoption of new technologies, but this could be tempered in countries with a stronger sense of worker and job protection.

The impact of technology may differ where its adoption and use is affected by company size. To this extent, countries where large enterprises play a smaller role, e.g. the Czech Republic, France and Italy, may see lower rates of uptake and application. The opposite is true for countries where large enterprises play a bigger role in the sector, e.g. Finland, Malta and the UK.

Sectoral

To some extent, the use of technology in the sector will tend to favour larger companies because they are likely to have greater financial resources for investing in technology and because they enjoy economies of scale that small and medium enterprises (SMEs) cannot attain. In IT, this also means that SMEs are more likely to be locked into legacy systems. Furthermore, increased levels of complexity regarding the data collected and its manipulation also favour larger companies that can afford to employ specialists to deal with increasingly sophisticated levels of data analysis.

However, not all IT hardware and software is beyond the budget of SMEs, so steps could be taken to make them aware of what technology is within their price range and what it can do for them. In this way, the use of IT in small businesses could be encouraged and the take-up of modern IT systems could be accelerated. The challenge for large businesses that invest heavily in information systems is not to lose the personal touch that customers like. Conversely, smaller, less IT-intensive businesses can place more emphasis on the personal touch to counter the depersonalising of customer relations brought about by IT in larger organisations.

Gender

It is not clear how the continued proliferation of technology will affect men and women. The increasing use of information technologies in administration and the front end, which often have a higher percentage of female workers, can be expected to lead to higher productivity and thus lower labour demand. At the same time, it may favour men by increasing the demand for IT skills, as men tend to account for a much higher share of IT workers. Historically, men also tend to be the first to adopt new technologies and roles, so in this respect the use of IT would favour them where new jobs and functions appear. Furthermore, as they occupy the more casual jobs and some may leave to have a family, women could suffer where a firm makes an investment in new IT hardware and funds it through labour cost savings. On a more positive note, however, IT is creating demand for more flexible work patterns, which may benefit women by allowing them to work around their family commitments.

In contrast to the areas discussed above, kitchen staff are generally composed largely of men, and there may be a reduction of their employment opportunities in kitchen work or them having to accept lower wages as new technology reduces the demand for their time and skills in the kitchen. An extreme case may be the kitchen where one kitchen supervisor manages a squad of ‘assembly line’ workers.

For both men and women alike, the increasing use of technology has both negative implications, where it deskills them and reduces them to being button pushers, and positive implications, where it allows them to acquire new skills that command a premium. The additional dimension here is the age issue, in that younger workers tend to be more receptive to and enthusiastic about technology, which could have implications for businesses’ staffing decisions.

References

All links accessed on 14 December 2005.

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