Facilities Management Assignment
Category : Hong Kong Hospitality Industry, Management Samples
Facilities Management in the Hospitality Industry: The Case of Ibis North Point
Role of Facilities in the Local Hospitality Industry
Facilities play a crucial role in the hospitality industry because these comprise the tangible representation of the value accruing to the hotel based on the reputation that hotel management seeks to establish in the market and on the current response of the market to hotel facilities ( 2002). The value created by the hotel through its well-managed facilities when considered by the market and the industry as better than its competitors constitutes the competitive advantage of the hotel enhancing its leadership status in the industry (1998).
Hong Kong derives majority of its income from tourism. In 2004, total expenditures associated with the 21.81 million inbound tourists amounted to HK$91.8 billion. Tourist arrivals in 2004 surpassed the previous highest tourist arrivals of 16.57 million in 2002. Majority of arrivals came from Mainland China as well as the United States, Canada, South Korea, Singapore, Japan, Malaysia, India and Australia. In 2005, the number of tourist arrivals further increased to 23.4 million people spending HK$97.8 billion due to the opening of Disneyland and the active tourism advocacy of the Hong Kong Tourism Board. In the same year, the hospitality industry also experienced concurrent growth. Hong Kong has 107 hotels offering an aggregate of 41,444 rooms. Average occupancy rate in 2004 is 88 percent while between January and April of 2005, the rate is 84 percent representing a decrease in occupancy rate but this does not include the remaining half of the year. Average length of stay of visitors is 3.7 nights. (2006) This numbers mean that competition in the hospitality industry in Hong Kong is strong so that individual businesses need to establish a foothold over the market and increase their brand equity through their facilities and services in order to perform well relative to their competitors in terms of occupancy rates and return customers.
Management Responsibilities in Overseeing & Operating Facilities
To achieve competitive advantage from the value accorded by customers to the facilities of hotels, it is necessary that management oversee and operate their facilities efficiently (2004). Facility management necessitates the organization of the human resources under an efficiency-based facility management structure. Figure 1 below represents the general organization management structure of hotels while Figure 2 below represents the organizational management structure of Ibis North Point.
The general manager together with the assistant manager oversees the overall management of the different departments of the hotel. The departments directly linked to facilities management are the rooms or housekeeping and engineering departments. Invite
Managing the fulfillment of the tasks of the rooms division involve ensuring an efficient housekeeping service to maintain the cleanliness and tidiness of bedrooms and other facilities to avoid unnecessary destruction or devaluation of property that lessens the value that customers place upon hotel facilities; coziness and attractiveness of well-designed front office and lounge since this is the first area that customers will experience giving them an impression of the hotel; and maintaining security and uniformed personnel to create the impression that the hotel facilities are well-manned and maintained. ( 2002)
Ibis Hotel in North Point is located in a developing commercial district so that the infrastructure and facility ambiance caters to the needs of customers engaged in business in the area such as internet connection, beverage-making facilities, and other in-room facilities for the convenience of time-conscious customers together with currency exchange, shuttle and front office services. Hotel management ensures that the facilities are cleaned and replenished for customers and the service facilities are manned to cater to the requests of customers. The primary concern of management is to provide convenient, appropriate and efficient facilities.
Another department handling tasks linked to facilities management is the engineering department tasked to enhance and maintain the water, drainage, heating, ventilation and other electrical facilities of the hotel. Enhancing these facilities involves the selection of equipment and accessories that meets both economy and quality so that achieving this involves expertise of the engineering department over technological innovations as well as economical supply partners (2002).
In the case of Ibis North Point, the engineering department’s maintenance concerns are the water supply and circulation, water heating, drainage routing and pipe maintenance, lighting and other electrical concerns, ventilation keeping, elevator keeping, and building structure keeping while enhancement concerns includes the replacement of outdated and on-the-brink of damage facilities for high-technology and more cost effective facilities.
Overall, in Ibis North Point the facilities management function involves the protection and enhancement of the value of the hotel building and its premises, supporting the engineering and maintenance needs of other divisions, controlling repair and maintenance costs, controlling the use of energy, and ensuring the health and safety of hotel employees and guests (2006).
Trends Affecting Facilities Management in Hong Kong Hospitality Industry
Two major trends currently affect facilities management in the hospitality industry in Hong Kong. First trend relates to construction and maintenance cost. Since 2004 and extending towards 2007, construction costs encompassing the costs of equipment, fixtures and furnishings continuously increase (2007). This means that hotels currently under construction would likely incur additional costs until the completion of the hotel project. In the case of existing hotels, price increases would increase the cost of facilities management from fixture and equipment replacements and enhancements. The price increases further means that hotels need to implement facilities management strategies directed towards maintenance to maximize the long-term life span of existing equipment and fixtures as well as the development of cost-efficient relations with suppliers. In the case of Ibis North Point, it has already established good relations throughout its supply chain with well-reputed, local and international manufacturers of hotel equipment and fixtures ensuring its ability to achieve cost-efficiency despite price increases. The hotel is currently implementing strict regular inspections of its facilities to prevent unnecessary repairs and replacements.
The second trend affecting the hospitality industry is in technology optimization ( 2007). Many hotels in Hong Kong are not able to maximize the revenue opportunities opened by the technology available to them despite the increasing awareness of the value attached to modern and integrated systems. Hotels either fail to upgrade their systems or fail to maximize their systems. Hotels failing to upgrade their systems into modern, automated and integrated systems such as in automated checkout services and sensor equipment for emergency and security purposes still carry the additional facility management costs that these could minimize through system upgrades. Hotels failing to optimize the benefits they could potentially derive from the technology these have acquired fail to materialize the cost saving features of the technology. Hotels with computers but un-networked comprise the non-optimization of available technology wasting the potential contribution to revenue generation and efficiency of the technology. In the case of Ibis North Point, the hotel building is modern with most of its computer systems networked to ensure functionality in terms of guest management and overall operations management. The hotel also takes advantage of online reservation and customer services to reach out to potential and returning customers.
Future Policy Directions in Facilities Management in HK Hospitality Industry
Future policy directions in facilities management in the hospitality industry in Hong Kong cover the areas of building, environment and health regulations. Building regulations will work towards cost and performance efficiency in building infrastructures (Hayes & Ninemeier, 2004). The building energy standards and codes (BESC) applicable in Hong Kong and mainland China, provides a certain degree over building design through the encouragement of awareness in energy-conscious design in building architecture and design. The building structure and design of Ibis is compliant with the BESC.
Environmental regulations will work towards the minimization and management of pollutants in compliance with Kyoto Protocol responsibility to cutback on greenhouse emissions by 2010. This means that the hospitality industry in Hong Kong needs to assume the social responsibility over pollution management (2004) in terms of water and solid waste disposal amidst the increasing severity of the environmental issues of water shortage, water supply contamination and air pollution. Ibis North Point has established environmental compliance by linking with the established sewage systems and meeting requirements for solid waste segregation and disposal.
Health regulations will work towards the increased consciousness and active advocacy of the businesses in the hospitality industry towards health risks that could potentially affect their operations ( 2004). In Hong Kong, two health issues have achieved prominence, the bird flu and SARS outbreak that decreased the number of inbound tourists. Future issues like this would likely be handled through hotels being informed of impending health risks and implementing preventive measures to make hotel premises health friendly and show customers the concern of the hotel of the health of its clients.
Figure 1: General Organizational Management of Hotels
Figure 2: Organizational Management Structure of Ibis North Point