Enhancing Productivity in the Australian Hotel Industry: the Role of Human Resource Management

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Nankervis, A. R., (1993). Enhancing Productivity in the Australian Hotel Industry: The Role of Human Resource Management, Research and Practice in Human Resource Management, 1(1), 17-39. Enhancing Productivity in the Australian Hotel Industry: The Role of Human Resource Management Alan R. Nankervis

The Australian hotel industry is at the crossroads. As part of the tourism strategy of the present Federal Government, it is charged with catapulting Australia out of its economic malaise. The industry is, however, constrained in its development by market fluctuations, an oversupply of accommodation and outdated human resource management practices. Several recent research studies have underlined the significant costs of labor in overall industry costs, and the pressing need to reduce these costs and improve profitability and competitiveness by effective and innovative human resource management strategies. Hotels in Australia, as compared to their international counterparts, are less productive, less profitable and less labor intensive. The challenge is to develop innovative human resource management practices which will enhance productivity and profitability without increasing staff levels. Significant contributions to industry viability will be achieved through comprehensive and integrated human resource management systems which ensure that the right staff are recruited, trained, monitored and appropriately rewarded in line with institutional and industry requirements. This paper examines the constraints to development, including a culture of casualisation, negative perceptions of the industry and its occupations, gender imbalances, and fragmented human resource management practices. It proposes an integrated and innovative strategy for the further development of the hotel industry in Australia which will result in improved productivity and increasing international competitiveness.

The primacy of the service sector, and in particular tourism, to economic recovery in Australia has became almost a truism in the last decade. Successive federal and state government ministers, from John Brown to Alan Griffiths, have emphasised the potential economic contributions and demands of this industry sector to productivity, growth and regional competitiveness. Alan Griffiths, the current federal Tourism Minister, recently described the tourism industry as the “economic star of the 1990s”, (ABC Lateline, 1992) predicting inbound tourist growth to reach more than half of all travellers in Australia by the magical year 2000. Despite current hiccups in infrastructure growth, especially oversupplies of hotel accommodation in capital cities and leisure resorts resulting from the hotel-building boom of the late 1980s, the same minister projected a need to continue building hotels at a frantic pace in order to cater for anticipated levels of tourism from Southeast Asian countries. (ABC Lateline, 1992). Whether or not the industry is primed to pull Australia out of its economic malaise or merely to survive in continuing difficult economic times, the importance of tourism, and in particular the contributions of its accommodation segment, is unlikely to diminish in the next decade. Industry analysts, citing the negative impact of events such as the 1980s Pilots’ Dispute and the current recession and the Barcelona Olympic Games, (ABC Lateline, 1992) seriously question these predictions, especially in view of industry indicators such as hotel receivership levels1 and staffing reductions. There are varying statistics2 on the employment and financial contributions of the hotel industry to the Australian economy. Anne Rein, Chief Executive of Tourism Training Australia, is perhaps closest to reality — current employees, 320,000 people in some 25,000 mainly small establishments, contributing 5.4% of GDP, accounting for 6% of the overall Australian workforce and amounting to...
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