All India Estimated Demand for Hotel Rooms – 2010 & 2015

SIGNIFICANCE OF STUDY

The importance of Human Resource Development for Tourism Industry is increasingly being realized. There is a need to mobilize the human resource with the purpose to enable them to participate in the task of organizational development and nation building. Mobilization would include the need to develop the human resource, their skills, knowledge, attitudes, so that they can achieve competently the pre-determined goals. Obviously the efficient and professional management is pre-requisite of successful tourism development. Having equal importance, however, is the quality of staff training, which is often relatively neglected during the early stages of tourism sector development. Tourism basically being a service business, a developing destination must take the necessary steps to build a pool of efficient trained people to fill various jobs, which will be created subsequently. A variety of jobs will have to be created to look after and manage various tourist services. Special attention, therefore, will have to be given to the needs of manpower and personnel to be trained and rendered qualified for the various tourism professions. Special care has to be taken to ensure that there is expansion of facilities and services. In case of a developing country, it will also be appropriate to study at this stage the volume of manpower required for activities complementary to accommodation industry in general and service sector particular.

Inspite of having a lot of tourism potentials India’s share of global international tourism is relatively small in volume about 0.40% of world tourism. The greatest thrust to tourism will come through human resource development in our country.

While planning for human resources development, programmes should be established to screen and train prospective employees so that they could acquire both attitudinal as well as technical skills. Attitudinal characteristics contribute to an employee’s success in tourism position and include pride, flexibility, adaptability and judgement. Technical skills required for equipment operation and maintenance, financial management, food and beverage, and personnel management etc. In order to determine the need for various personal required, a staff planning exercise may be done. This involves a series of steps, which include job analysis, preparing job description, job specifications and preparing staff forecasts. This sequence of activities leads to a detailed forecast of exactly what types of persons, with what specific qualifications and skills will be required at all major facilities within the tourist destination. All this helps in determining the development of requisite education and training programmes within the country for local residents. This will also help in determining whether there is a need for trained personnel from other countries and also whether local people are to be sent for training elsewhere.

Human Resource and Tourism Industry

The 1995 International Tourism labor market conference clearly stated that Tourism industry is facing an acute shortage of skilled manpower and there are many obstacles as far as development of Human Resources in tourism industry is concerned, the conference observed that the people working in tourism industry are highly uneducated, unmotivated, unskilled and unproductive; and these are due to the unattractive salaries and working hours. In India also the salaries paid by the tourism industry are comparatively far less than the salaries paid by the other industries like IT, call centers, retail, banking, insurance, finance, telecom, real estate etc also as tourism sector comprises mostly of small and medium sized enterprises the HR practices are not standardized, lack professional approach, vision, clear career path, secured & long term employment, growth opportunities, learning, development and quality of work life is resulting in high employee dissatisfaction and attrition moreover a poor perceived image of Hospitality & tourism sector and inadequate and inefficient training and education programs are also discouraging the competent people and talented lot to opt the industry as a career option which is resulting in less and poor supply of manpower.

The industry structure and manpower requirement: A statistical overview

According to A Market Pulse report published by Ministry of Tourism; Department of Tourism; Government of India on “Manpower requirement in Hotel Industry, Tour Operator and Travel Sector, Manpower Trained by different institutes and placement scenario”.

There are around 1.2 billion hotel rooms in India in both organized and unorganized sectors, out of which star category hotels accounts for merely 7%; 5 and 4 star and heritage hotel have a total of almost 36000 rooms; three, two and one star category hotels have a room capacity of 43000 and its been forecasted that by the year 2010 and 2020 there will be 2.9 million and 6.6 million hotel rooms respectively in the country; around 750,000 people are working in various hotels of organized and unorganized sectors and the hospitality industry will be requiring 3.5 million people by the year 2020. On the other hand in travel trade business there are around 6000 travel trade companies in the country and the number is growing by 7.5-10% every year, employing almost 83,500 people with most of them performing the function of ticketing, tour operation, accounts and administration and it is forecasted that this sector will be employing around 242,000 by the year 2020, it is also forecasted that annual demand for trained manpower in hotels and restaurants is likely to touch 29,000 by the year 2010 and will be approximately 39000 by the year 2020, similarly the annual demand of trained manpower in travel and tour sector is likely to be 12735 and 20760 in 2010 and 2020 respectively. The report says that around 16850 students are being trained in hotel management and around 17500 people pursue IATA/UFTA certified diploma courses, graduate and post graduate courses annually there are around 300 Government sponsored, university affiliated and privately owned institutes providing training and education to around 32000 people in hospitality and tourism industry.

One more interesting fact has been revealed by the report that nearly 40% of people who have undergone these courses are pursuing careers in other emerging service sectors like call centers or opting for alternative career option due to attractive salary packages and poor perceived image of hospitality sector.

The report indicates that there will be a severe shortage of trained manpower in this industry by the year 2010 and a huge difference between the demand and supply of trained professionals. The major challenge ahead before the Tourism industry in India to bridge this gap of demand and supply of skilled workforce through attracting and retaining the talented skill to serve the industry.

Employment Pattern

As per the Planning Commission an investment of Rs.10 lakh creates 78 jobs in the Tourism sector while the same generates just 18 jobs in the Manufacturing and 45 in the Agriculture sector. Currently Travel & Tourism, being employment intensive, provides employment to approximately 31 million (both direct & indirect) people throughout the country and is one of the largest employers in the country, this number is expected to rise to over 40 million by 2019 and over 43 million by 2022.

Apart from this, certain companies might have a separate Passport/Visa and Foreign Exchange divisions too. The profile of the people in the department will be same as that of Travel Counsellors.

There are companies who outsource the Passport/Visa related works.

TOURISM INDUSTRY IN INDIA

The T&T industry in India accounted for approximately 6% of GDP and 30.5 million jobs (including direct and indirect) in 2008. The Travel and Tourism Competitiveness Report 2009 brought out by World Economic Forum, ranks India as 11th in the Asia-Pacific region and 62nd overall in a list of 133 assessed countries in 2009, up three places since 2008. In terms of travel, India stands 9th in the index of relative cost of access (ticket taxes and airport charges) to international air transport services, having almost the lowest costs in the world.

We will look at the three broad categories to understand the tourist traffic in India

• International tourist arrival in India
• Outbound tourism from India
• Domestic tourist traffic in India.

Foreign Tourist Arrival in India (million), 1998-2008

FTAs in India from different regions of the world during last three years are depicted in the above figure. It is clear that the FTAs in India have been increasing from all regions during the last three years. The FTAs in India in 2007 were the highest from Western Europe (33.2%) followed by North America (19.8%), South Asia (19.3%), East Asia (6.9%), South East Asia (6%).

The Foreign Exchange Earnings (FEE) from tourism in India in 2008 were Rs.50,730 crore. In US $ terms it was US $ 11.75 billion. The FEE from tourism grew by 9.5% in US $ terms, and by 14.4% in Indian Rupee (INR) terms in 2008 as compared to 2007.

Outbound Tourism

The number of outbound Indians has been consistently rising over the last ten years. It increased from 3.8 million in 1998, to 9.8 million in 2007 with a compound annual growth rate of 11 %.

Number of Outbound Indians (millions), 1998-2007

Domestic Tourist Traffic in India

Number of Domestic Tourist Visits to All States/UTs (millions), 1998-2007

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The domestic tourist visits to all States/UTs have risen from 168.2 million in 1998 to 526.6 million in 2007 at a compounded annual growth rate of 13.5%.

India’s Share in World Travel Receipt & World FTA, 1998-2008

World travel receipts have increased from US $ 444.1 billion in 1998 to US $ 856.0 billion in 2007 at a compounded annual growth rate of 7.6%. At the same time the travel receipt (foreign) in India has risen from US $ 2.95 billion in 1998 to US $ 10.73 billion at a compounded annual growth rate of 15.4%.

HUMAN RESOURCE AND DEVELOPMENT

Whilst arguments for best fit advocate a close fit between competitive strategies and HRM, those in favour of best practice approaches to HRM suggest that there is a universal ‘one best way’ to manage people. By adopting a best practice approach it is argued that organizations will see enhanced commitment from employees leading to improved organizational performance, higher levels of service quality and ultimately increases in productivity and profitability, Usually couched in terms of ‘bundles’, the HRM practices that are offered in support of a high commitment and performance model are generally fairly consistent.

Redman and Matthews (1998) outline a range of HR practices which are suggested as being important to organizational strategies aimed at securing high-quality service:

• Recruitment and selection: Recruiting and selecting staff with the correct attitudinal and behavioural characteristics. A range of assessments in the selection process should be utilized to evaluate the work values, personality, interpersonal skills and problem-solving abilities of potential employees to assess their ‘service orientation’.
• Retention: The need to avoid the development of a ‘turnover culture’, which may of course be particularly prevalent in tourism and hospitality. For example, the use of ‘retention bonuses’ to influence employees to stay.
• Teamwork: The use of semi-autonomous, cross-process and multi-functional teams.
• Training and development: The need to equip operative level staff with team working and interpersonal skills to develop their ‘service orientation’ and managers with a new leadership style which encourages a move to a more facilitative and coaching style of managing.
• Appraisal: Moving away from traditional top down approaches to appraisal and supporting things such as customer evaluation, peer review, team-based performance and the appraisal of managers by subordinates. Generally, all of these performance appraisal systems should focus on the quality goals of the organization and the behaviours of employees needed to sustain these.
• Rewarding quality: A need for a much more creative system of rewards and in particular the need to payment systems that reward employees for attaining quality goals.
• Job security: Promises of job security are seen as an essential component of any overall quality approach.
• Employee involvement and employee relations: By seeking greater involvement from employees the emphasis is on offering autonomy, creativity, co-operation and self-control in work processes. The use of educative and participative mechanisms, such as team briefings and quality circles are allied to changes in the organization of work which support an ‘empowered’ environment.

• Position tourism as a major engine of economic growth
• Harness the direct and multiplier effects of tourism for employment generation, economic development and providing impetus to rural tourism.
• Focus on both international and domestic tourism
• Position India as a global brand to take advantage of the burgeoning global travel and trade and the vast untapped potential of India as a destination.
• Acknowledges the critical role of the private sector with government acting as a proactive facilitator and catalyst.
• Create and develop integrated tourism circuits based on India's unique heritage in partnership with States, private sector and other agencies.
• Ensure that the tourist to India gets physically invigorated, mentally rejuvenated, culturally enriched and spiritually elevated.

1. Positioning and maintaining tourism development as a national priority activity.
2. Enhancing and maintaining the competitiveness of India as a tourist destination.
3. Improving India’s existing tourism products further and expanding these to meet new market requirements.
4. Creation of world-class infrastructure.
5. Developing strategies for sustained and effective marketing plans and Programs.
6. Developing Human Resources and capacity Building of Service Providers.

Projected Siize of Tourism Industry(Rs. billion)

Projected Human Resource Requirement for Tourism Industry

Direect and Indirrect Employment in Tourism Industry (‘000 jobs) – 2008-2022

The overall employment by 2022 in the Tourism Industry (in Hotels and Restaurants and Tour Operators) is estimated to be about 7.2 million persons. Segment wise details are given below.

Human Resource Requirements in Tourism Industry (in ’000s)

Apart from the above there are substantial numbers of eating places, to cater to both the commercial as well as leisure road travellers along the national and state highways. These units are estimated to employ 1,300,000 employees in 2002.

It should be kept in that apart from the employment generation for skilled/trained manpower arising out of new establishments, there would be additional employment generation for skilled/trained manpower from the conversion of the unorganised sector to organised sector.

As seen in the above table, the employment in the hotel category (excluding motels along the highway) is forecasted to increase to over 1.9 million in 2012, 2.9 million by 2018 and 4 million in 2022.

ROAD BLOCKS

Pessimistic views of HRM in tourism and hospitality

Generally tourism and hospitality has often struggled with negative perceptions about employment practices and conditions and this perception has often been matched by the reality. Keep and Mayhew (1999) for example in their review of the skills issue in the tourism and hospitality industry suggest the industry has a number of personnel problems, including:

• generally low wages, unless skill shortages act to counter this (e.g. chefs).
• unsocial hours and shift patterns that are not family friendly.
• overrepresentation of women and ethnic minorities in low-level operative positions, with better paid, higher status and more skilled jobs filled by men, pointing to undeveloped equal opportunities policies in the sector.
• poor or non-existent career structures and use of casualized seasonal employment.
• over reliance on informal recruitment methods.
• lack of evidence of good practice personnel/HRM practices.
• little or no trade union presence.
• high levels of labour turnover.
• difficulties in recruitment and retention of employees.

1. Shortage of qualified manpower, particularly at the managerial level, which poses a major obstacle to the overall development of the tourism sector.
2. Shortage of qualified and experienced teaching staff.
3. Shortage of training materials and facilities.
4. Lack of strategies and policies for human resources development in the tourism sector.
5. Difficulty in keeping pace with rapidly changing technological innovations and dynamic changes in the global marketplace.
6. Complexity of the multidisciplinary nature of tourism studies.
7. Gap between the training capacity of training/educational institutes and the actual need of the industry.
8. Shortage of higher-level programmes for management development.

References::

1. Rao, V.S.P. (2004), Human Resource Management, Excell Books, New Delhi.
2. Report (2004-05), Ministry of Tourism, Government of India, New Delhi.
3. Rudrabhasavaraj, M.N. (2004). Human Resource Management Manual, Himalaya Publishing House, Mumbai.
4. PTI Report, The Time of India, New Delhi, October 12, 1999, p.6.
5. UNI Report, “Merged IA, AI will be ready in four months”, The Times of India, New Delhi, March 3, 2007, p. 15.
6. Economic Survey (2005-06), Ministry of Finance, Government of India, New Delhi, p. 156.
7. Seth, Pran Nath and Bhat, Sushma Seth (2004), An Introduction to Travel tourism, Sterling Publishers Pvt. Ltd., New Delhi.
8. Rao R. Raghuttama, Sairam M., Human Resource and Skill Requirements of the Tourism Sector, IMaCS,National Skills Development Corporation, accessed on 25 December 2011 URL: http://www.nsdcindia.org/pdf/tourism.pdf
9. Shrivastwa K. Perween , “The HR chalanges in tourism industry in India” accessed on 03 december2011 URL: http://dspace.iimk.ac.in/bitstream/2259/531/1/1-12.pdf
10. Sinha, P.C. (2004), Tourism Transport and Travel Management, Anmol Publications Pvt. Ltd., New Delhi.
11. Raj Aparna (2004), “The travel Industry – Emerging Human Capital Attracting the Talent and Keeping it too”, Study material for FDP, supplied by ITTM, Gwalior, pp. 133-134.
12. Khan A. Nafees, Human Resource Developmentin Tourism Industry in India: A Case Study of Air India Ltd., New Delhi, accessed on 07 December 2011 URL: http://www.uaemex.mx/plin/psus/periplo14/articulo_05.pdf
13. “Human resource management and the tourism and hospitality industry: An introduction”, accessed on 12 December2011 URL: http://www.arlt-lectures.com/nickson1.pdf
14. Indian Tourism Statistics, 2007 – Ministry of Tourism, Government of India
15. World Travel & Tourism Council and IMaCS (ICRA Management Consulting Services Limited) analysis

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Neha Shivani
Research Scholar,
Centre for Studies in Economics and Planning,
School of Social Sciences,
Central University of Gujarat, Sector-30,
Gandhinagar, Gujarat,
Email: nehashivani1@gmail.com