Why HR Management Is Crucial for Tourism Industry Success

HR management is essential for the tourism industry because it supports a skilled, engaged, and satisfied workforce that drives customer satisfaction and long-term business success.

"The customer is always right," as César Ritz himself famously said, is a phrase you've probably heard many times. However, in the tourism sector, where people and the human experience define everything, it’s just as important to look after the employees who make it all happen. Human Resource Management (HRM) in tourism plays an invaluable role in keeping a balance between the needs of customers, which is the primary concern of the business, and those of employees. 

Individuals working in HRM roles work to make sure that the staff are supported, because happy and well-managed employees are the foundation of great guest experiences.

The Importance of HRM in the Tourism Industry

HRM is necessary to ensure the success of all businesses. It is especially important for the tourism industry, where the services provided are so often directly influenced by the quality of interactions between the employees and customers.  For example, a hotel guest may have a fantastic experience not just because of the room’s amenities but because of the warm, attentive service of the staff. A friendly greeting, prompt assistance, and the ability to resolve issues quickly can leave a lasting impression on the guest, influencing their decision to return or recommend the hotel to others.

These positive interactions are critical because they create memorable experiences, foster customer loyalty, and build the brand’s reputation.

Effective HRM helps companies manage their workforce to provide exceptional services, retain talent, and maintain a positive organizational culture. From hotels and resorts to travel agencies and tour operators, tourism businesses encompass a range of HR needs that require tailored strategies. For example, resorts may grapple with managing seasonal labor, restaurants may struggle to maintain consistent service quality, and international travel agencies may need to improve the cultural competence of their staff, and so on. Thus, HRM in tourism goes way beyond the typical recruitment and training activities.

Key HR Functions in Tourism

To fully understand the importance of human resource management in the tourism industry, one should know its functions. HRM, as described by David A. DeCenzo and Stephen P. Robbins in the 10th edition of their book "Fundamentals of Human Resource Management," is seen as a process that consists of four key functions: acquisition, development, motivation, and maintenance. These functions are what lay the foundation for the business to build an efficient and effective workforce. 

Recruitment and selection

The acquisition of talent, according to DeCenzo and Robbins, involves the management estimating the demand and supply of labor, recruitment, selection, and the socialization of employees into the business. 

The recruitment and selection function in tourism businesses is even more pressing because of the nature of the industry. Just think of how many people work summer jobs. As a result, there is a constant need for fresh talent as businesses face high turnover rates.

Recruiting the right people, however, does not mean simply finding people to fill certain positions. It means ensuring that those hired actually possess the skills, knowledge, and, most importantly, attitudes for success. That is why the selection process is so often focused on evaluating the applicants’ soft skills as they impact guest satisfaction. 

Training and development

This function of HR in tourism encompasses the training, development, and career progression of employees. Training guarantees that the employees have the skills required to perform their tasks and responsibilities efficiently. In tourism, where the customer experience is essentially the product, employees must be well-trained to meet all their customer expectations.

Many tourism businesses actually invest in training programs that can help enhance the staff's customer service skills, cultural sensitivity, and language proficiency. For instance, the HRM of an international hotel chain may provide language training for its staff, especially for those who did not attend a hospitality business school. The aim is to help them improve their communication skills, particularly with guests from other countries. Similarly, the HRM at a travel company may offer training on digital tools and booking systems, as they help improve operational efficiency.

Employee engagement and motivation

Motivation, according to DeCenzo and Robbins’s book, involves addressing the needs of each individual, including both financial and non-financial ones. In the tourism industry, motivating employees is essential for maintaining a high standard of service.

Employee engagement in tourism can be facilitated by recognizing achievements and celebrating success, providing opportunities for personal growth, and creating an overall positive work environment. Financial rewards, such as bonuses and commissions, are also common incentives in the tourism industry. For example, a tour guide may receive a bonus for positive guest feedback, or hotel staff could be rewarded for maintaining high guest satisfaction scores. Non-financial rewards, such as flexible working hours, recognition programs, and opportunities for travel, can also help motivate tourism employees.

Maintenance

The last function, maintenance, is concerned with HR providing working conditions that employees believe are necessary in order to retain their commitment and loyalty to the organization. 

Tourism businesses that prioritize employee well-being are more likely to retain their staff and reduce turnover. Showing that management cares and ensuring that employees have access to healthcare, meals, and transportation can also help maintain a committed workforce in the tourism industry.

Maintenance also involves facilitating an overall sense of belonging and community within the organization. Team-building activities, staff appreciation events, and wellness programs can help with this particular function.

HR Challenges in Tourism

Tourism continues to be a major contributor to the global economy. In 2023, it directly and indirectly generated approximately 330 million jobs globally. This number is expected to have climbed to 348 million in 2024, surpassing pre-pandemic employment levels, and even go up to 449 million by 2034.

With such growth, the industry faces several HR challenges, particularly when it comes to managing an ever-changing workforce. These challenges include workplace instability due to seasonal and temporary staffing, high turnover rates, a lack of cultural sensitivity, and insufficient training and career development opportunities.

Workplace instability due to seasonal and temporary staffing

In tourism, the ebb and flow of demand often create the need for seasonal and temporary staffing. Picture a beach resort bustling with guests in the summer but sparsely populated in the winter. Staffing for these fluctuations is a complex juggling act. 

Businesses must hire enough employees to provide services during peak seasons but also manage the challenge of temporary contracts, which can lead to workforce instability. It's not uncommon for hospitality employers to scramble in high season, leading to stressed-out staff and inconsistency in guest experiences. 

The transient nature of seasonal work adds another layer of difficulty as businesses struggle to attract skilled workers who know they will be employed for only a part of the year.

High turnover rates

As mentioned before, the tourism industry, especially hospitality, is notorious for high turnover rates. According to a study conducted with 100 employees working in the hospitality sector in the Maldives, low salaries, poor supervisor behavior, and lack of career growth are the main reasons for high turnover. For instance, a restaurant may lose a talented chef, because they see no path to promotion, leaving managers scrambling to maintain service quality.

In addition to these factors, other reasons, such as fewer social hours, lack of benefits packages, and insufficient training contribute to the churn, making it a challenge for tourism businesses to retain staff and ensure consistent services.

Cultural awareness gaps

Tourism, by its very nature, draws in guests from every corner of the world. A luxury hotel in Dubai might serve guests from Asia, Europe, and the Americas in a single day. As a result, the workforce in these businesses must be diverse as well as culturally sensitive.

While this is an amazing opportunity for those who want to work abroad and experience diverse, international settings, it can sometimes lead to social missteps. Imagine a tour guide misinterpreting a cultural norm, unintentionally offending international tourists, or an employee at a multicultural resort not understanding how to interact with guests from other backgrounds. These situations point to the critical need for cultural sensitivity training that reflects the wide-ranging backgrounds of both employees and guests in tourism.

Insufficient training and career development opportunities

According to the same study cited above, 35% of employees complained regarding the lack of opportunities for career advancements, while 50% reported that the promotional process itself was unclear. Additionally, they claimed that their companies provided no structured training programs. It's no wonder employees often feel unprepared for their roles. Consider a new employee at a bustling ski resort who is thrown into guest service without adequate training. The lack of preparation can damage customer satisfaction as well as lead to burnout and higher turnover, thus perpetuating a vicious cycle of dissatisfaction among both employees and customers. 

Providing structured training and career guidance can help mitigate these issues, especially for those who haven't attended a hospitality business school where such skills are emphasized

The Role of Technology in HRM for Tourism

The hospitality and tourism industries are inherently people-centered, requiring a human touch that technology cannot replace. Unlike certain industries that may automate most customer interactions, tourism businesses will always rely on employees to create memorable experiences, resolve unique customer needs, and offer personal attention that builds customer loyalty. However, in today's world, these industries must adapt by integrating modern technology into operations to enhance efficiency and service quality

Research shows that the integration of technology into recruitment is enabling businesses to better match candidates with specific roles, automating tedious tasks like screening resumes and setting interviews, all while expanding the talent pool. 

Training employees is another area in which technology helps. Virtual simulations, e-learning platforms, and on-demand training modules offer new ways for staff to develop the skills needed to handle real-world challenges. 

Upon finding and training people for their jobs, motivating them and ensuring their well-being is just as important. Tech-powered HR systems help with that, too, by tracking performance and gathering real-time feedback. 

Sustainable HRM Practices in Tourism

Tourism businesses are increasingly adopting HR strategies that align with their environmental and social responsibility goals. Ethical hiring practices, such as fair wages, local hiring, and gender equality, help make sure that employment opportunities benefit local communities and contribute to their economic development.

In addition, eco-friendly policies are becoming more and more important every day for various HR practices. Therefore, management is giving emphasis to carbon footprints and the need to promote green behaviors within organizations. 

By promoting sustainable hospitality and tourism through environmentally conscious choices, businesses can align themselves with the growing eco-tourism trend. Consequently, they can attract a customer base that values sustainability.

The Future of HRM in Tourism

As more tourism employees choose to work while traveling, HR departments must develop innovative solutions to support their unique needs, such as offering virtual onboarding, remote training, and suitable digital communication platforms. This growing phenomenon of digital nomads (professionals who combine work and travel) also stresses the importance of adaptability in HRM. 

As globalization and digital connectivity continue to expand, diversity and inclusion are expected to play an increasingly vital role in the evolution of HRM. With a future workforce that will be more multicultural and multilingual than ever, HR departments face the challenge—and opportunity—to create inclusive environments where diverse teams can thrive. Today’s connected world enables tourism businesses to recruit talent from across the globe, bringing a wide range of backgrounds, languages, and perspectives into the industry. Fostering inclusivity within this global workforce is essential not only for employee satisfaction but also for creating authentic guest experiences that resonate with a diverse clientele. 

Additionally, technology and sustainability will remain central to future HR strategies. Advanced HR tech solutions will continue to streamline HR operations as well as enhance decision-making. Meanwhile, sustainability will continue to influence how businesses approach recruitment, employee engagement, and workplace wellness.

Conclusion

HRM functions shape the employee experience and, by extension, the customer experience. If you choose to study hospitality and tourism management at César Ritz Colleges, you'll gain insights into how HR practices can make or break the guest journey, with courses specifically designed to develop your understanding of human resources. 

HR is all about caring for the people who, in turn, care for your guests—a philosophy César Ritz Colleges prepares you to embrace with passion and expertise.

Frequently Asked Questions (FAQs):

What are the four major areas of human resource management?

The four major areas of HRM are acquisition, development, motivation, and maintenance.

What are the best HR practices for tourism?

The best HR practices for tourism include improving employee engagement, providing ongoing training, promoting cultural sensitivity, and supporting wellness initiatives.