Hospitality in its early definition refers to any businesses and services whose primary objective was serving people out of their own home (Barrows, 1995) which constituents generally agree that it is a large, fragmented industry with its own set of challenges that can only be counteracted with enough training and education to work in such a customer driven industry. (Barrows,1995) Due to globalization, the hospitality industry had encountered a lot of changes including the threat of McDonaldization in the society which translates to a society characterized by rationality (Ritzer, 1983), while the definition of rationalization according to the Oxford Learner’s Dictionary refers to the act of making a company, process, or industry more efficient, especially by dispensing superfluous personnel and equipment. The threat that this mass rationalization process brings to the hospitality industry is no other than the fact that people would rather think of their profit and gain first over others convenience, this contradicts the fundamental principle of hospitality itself which is to protect a “home” by guaranteeing property and what is proper on the arrival of others to provide an effective, determined, and concrete welcome (Derrida, 2005).
One of the main factors that helps to encourage and preserve rationalization in the society, including the hotel and tourism businesses is globalization. With the explosion of middle-class emerging nations, brands would need to restructure and accommodate with a more diverse customer base (Ernst & Young, 2014). Even during this period of rising revenues, the hotel and tourism industry have to stay competitive to protect themselves from profit erosion, with investors focusing on better assets (LaSalle, 2014). To confront these challenges hotels needs to put more agresion into their financing system to maximize their profitability, maximizing the revenue by expansion into markets and through RM (total Revenue Management) and striving through personalized products and services (Perez, 2014). The existence of investment and investment trusts such as REITs and Private Equity (PE) funds also encourage rationalization process to persevere inside the hospitality industry with the advantage of having high liquidity, lower risks, and higher returns (Fresnel, 2009). In the post-recession USA, hotel investments have been growing substantially over the past five years with global hotel transactions projecting to reach nearly $50 Billion. While the largest net buyers in 2012 alone was PE funds, utilizing almost $7 Billion in capital for hotel investments (LaSalle, 2014).
The most recent generation to join the global workforce is the millennials, born between 1980 and 2000 with a closeness to the new millennium, raised in a digital age (Kaifi, Nafei, Kanfar & Kaifi, 2012) according to the previous generations millennials have the tendency to be difficult to interact with since they are more entitled and overly service focused (Deal, Altman & Rogelberg, 2010). According to Myers and Sadaghiani (2010) millennials are also known as the “Look at Me” generation, often perceived as overly confident, impatient, lacking in work ethic, self-important, and disloyal. Kaifi, Nafei, Kanfar & Kaifi (2012) also found that because of these traits millennials feels like they need less rules and regulations to guide their decisions. Millennials also have a higher expectation for advancement opportunities in careers. For millennials, the use of technology and social media are natural and essential, due to this reasons millennials do not only require a strong technology usage at work, but must also have it in portable form (Bannon, Ford & Meltzer, 2011) As the generations before them retire, millennials slowly dominate the workforce. If their employers misunderstood their work value it can detrimentally affect the employee’s performance and even result in high turnover rates (Guha, 2010).
The growth of internet is revolutionary, in 1994 there were only 25 million internet users in the US, but the number rapidly increase to 40 million in 1997 (Cortese, 1997) and 95 million in 2001 (Travelers Industry Association of America, Traveler’s Use of the Internet, 2001). Meanwhile the hospitality and tourism industry had always been the first to adapt to new technologies because of its information-rich nature. The industry depends heavily on the innovation of new means to distribute its products and services, giving information to the consumers. According to the Travel Industry Association (TIA), about 64 million online travelers use technology to get information on their destination, checking prices, and schedules in 2002, meanwhile from 1999 to 2002, online booking showed growth in double-digits for four consecutive years with a 58% growth in 2001 alone, followed by another 25% of growth in 2002. Bushaz (2001) mentioned that in Canada travelers have also shown tendencies to turn to the internet for travel planning and booking, bypassing travel agents and making fewer phone calls to organizations and business related to the hotel and tourism industry.
From the digitalization of the processes in the hospitality industry to the growth of revenue and profit focused systems inside the Hotel and Tourism businesses, there is a general conclusion that millennials indeed do not know how to provide, nor to enjoy true hospitality. Since they begin to enter the workforce, they already know the digitalized and inhuman version of the industry, while the true hospitality focuses more on value instead of the money gain. With this lack of knowledge towards the value that the previous generations hold, millennials have failed to impress the older generations with their work-ethic and their self-centered behavior. True hospitality itself focuses on selflessness and the willingness for the industry to provide a home and satisfaction of the customer at all cost, highly values a person-to-person communication and the intimate aspect of a relation to understand better about customer relations in the business, while millennials focuses more on the effectiveness and efficiency of the process instead of the enjoyment, making their work too centralized on the digital world instead of on the person.
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