Report in pdf format

Human resources development, employment and globalization
in the hotel, catering and tourism sector

Report for discussion at the Tripartite Meeting on Human Resources Development, Employment
and Globalization in the Hotel, Catering and Tourism Sector

Geneva, 2-6 April 2001

International Labour Office   Geneva

Copyright ©2001 International Labour Organization (ILO)

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Preface

The ILO is concerned with decent work. The goal is not just the creation of jobs, but the creation of jobs of acceptable quality. The quantity of employment cannot be divorced from its quality. All societies have a notion of decent work, but the quality of employment can mean many things. It could relate to different forms of work, and also to different conditions of work, as well as feelings of value and satisfaction. The need today is to devise social and economic systems which ensure basic security and employment while remaining capable of adaptation to rapidly changing circumstances in a highly competitive global market (ILO: Decent work, Report of the Director-General, International Labour Conference, 87th Session, Geneva, 1999, p. 4).

Contents

Preface

Abbreviations and acronyms used in the report

Introduction

1. General developments in the sector

1.1.Delimitation of the hotel, catering and tourism (HCT) sector
1.2.Tourism Satellite Accounts
1.3.Tourism economy
1.4.Employment in hotels and restaurants
1.5.Importance of international tourism
1.6. A changing tourism industry
1.7.Changing consumer preferences
1.8.Technology in tourism

2. Globalization 20

2.1. The driving forces of globalization impacting upon travel, hospitality and tourism

(a)Liberalization of air transport
(b)Liberalization of trade in services
(c)Economic integration
(d) Information and communication technologies in the HCT sector
(e)Emerging use of the Internet for marketing and sales

2.2.Consolidation strategies
2.3.Impact of technology on SMEs

3.Employment and working conditions

3.1.Composition of the labour force
3.2.Impact of new technology on skills requirements

(a)New technologies in restaurants
(b) New technologies and travel agencies

3.3.Salaries and wages
3.4. Job and income stability and staff turnover
3.5.Prevailing working conditions

(a)Working hours
(b)Reduction in workloads
(c)Accidents, violence and stress at the workplace
(d)The challenge of HIV/AIDS at the workplace
(e)Subcontracting

3.6.Non-standard employment and working conditions

(a)Casual staff
(b)Seasonal variations
(c)Advantages and disadvantages of non-standard forms of labour
(d)Measures to alleviate the negative impact of non-standard working arrangements

3.7.Employment effects of more recent forms of tourism

(a)Cultural tourism and ecotourism
(b)Negative effects of ecotourism
(c)Adventure tourism
(d)Rural or nature tourism

3.8.Policies to strengthen the tourism sector and the employment effects of such policies

(a)Regulatory and deregulatory measures
(b)Taxation of business in the hotel, catering and tourism sector
(c)Importance of SMEs in the HCT sector
(d)Support to small enterprises
(e)Access to credit
(f)Policies concerning the informal sector

3.9. Vulnerable groups

(a)Young people
(b)Women
(c)Child labour
(d)Migrant labour
(e)Undeclared labour

4. Human resource development 80

4.1.Introduction
4.2.Estimating labour productivity
4.3.New forms of work organization

(a)Flexible work
(b)Seasonal employment
(c)Multiskilling

4.4.New management methods
4.5.Career development

(a)New and changing occupational profiles
(b)Women’s careers
(c)Measures to promote career building in the enterprise
(d)Developing language skills
(e)Career enhancement through increased employee responsibility

4.6.Tourism education and training

(a)Recognizing the need for tourism education and training
(b)New skill requirements
(c)The importance of continuous training
(d)Learning for competencies
(e)Certification
(f)Providers of continuous education and training
(g)Private and semi-private institutions
(h) Training provided by the employer

4.6.Defining the training gap

(a)New techniques of training delivery
(b)Social dialogue on training

5.Social dialogue

5.1.Introduction
5.2.Organizations
5.3.Obstacles to workers’ organizing
5.4.Subcontracting and franchising
5.5.Workers’ representation at the enterprise level
5.6.Collective bargaining
5.7.Social dialogue plus: Community involvement
5.8.Regional social dialogue: The case of Europe
5.9.European Works Councils
5.10.Internationalization of information on labour issues
5.11.Social dialogue on tourism development policies

6.Summary and suggested points for discussion

Summary

Suggested points for discussion

Appendices

1.Tourism industry GDP, visitor exports and employment by country, 2000

2.Table 1: Hourly remuneration indices of hotel and restaurant personnel compared with socially similar occupations in other sectors: Male workers

Table 2: Hourly remuneration indices of hotel and restaurant personnel compared with socially similar occupations in other sectors: Female workers

Table 3: Male-female ratios for monthly or weekly earnings, weekly working hours and earnings adjusted for weekly working hours (E/H): Hotel and restaurant workers compared with socially similar occupations in other sectors

Tables

1.1A.Travel and tourism industry gross domestic product per region, 2000

1.1B.Travel and tourism economy gross domestic product per region, 2000

1.2. Tourism industry GDP, visitors’ exports and employment in selected countries, 2000

1.3. Hotels and restaurants: Total employment and paid employment by gender,
selected countries, 1998-99

1.4A.World’s top 15 receiving countries for international tourism: Arrivals

1.4B.World’s top 15 earners from international tourism

1.5. International tourism receipts by region

1.6. International tourism receipts by region: Market shares

2.1. Network economy and tourism industry

2.2. Changing roles and relationships in the electronic market space

2.3. The major types of Internet market structures in Africa

2.4. Major multinational hotel chains

2.5. Number of countries where companies operate

2.6. Technology utilized as a competitive method

2.7. Hotel industry mergers and acquisitions, 1995-99

2.8. Companies that manage the most hotels

2.9. Companies that franchise the most hotels

2.10.Cost and benefit analysis for developing Internet presence for small and
medium-sized tourism enterprises

2.11.Obstacles to the introduction of electronic data interchange (EDI)

3.1.Official hours of work in tourism in 13 European Union countries

3.2. Full-time and part-time employment in hotels and restaurants, European Union, 1995-97

3.3. Percentage of employees on fixed-term contracts in 13 European Union countries

3.4. The hotel and catering sector in the European Union in 1996 – Average size of
enterprises by employment and receipts

3.5. Occupations of children and young people in tourism

4.1. Tourism characteristic industries: Share of gross value added and employment

4.2. The hotel industry by global regions, 1995

4.3. The restaurant industry per region, 1997

4.4. Core occupations in hotels and restaurants

4.5. Types of training received

4.6. Bahia (Brazil): Composition of the labour force and training offered,
by occupational levels and minimum schooling

5.1. Trade union membership density in Europe’s hotel and restaurant sector
compared to McDonald’s

5.2. European Works Councils

Boxes

1.1. Selected tourism data: OECD countries with incipient Tourism Satellite Accounts

1.2. World Tourism Organization regions

2.1. Principles of liberalization in GATS

5.1. Employment and subcontracting in one Paris hotel

5.2. Communications and workers’ participation in a UK restaurant chain (Pizza Express)

5.3. African collective agreements

5.4. An international agreement on trade union recognition in the Accor Group

5.5.A living wage campaign in the hospitality sector of Los Angeles (United States)

5.6. Policies adopted in the EWC Compass Group

Abbreviations and acronyms used in the report

ASEAN	Association of South-East Asian Nations
BHA	British Hospitality Association
CSR	CSDComputerized reservation systems
CSD-7	United Nations Commission on Sustainable Development, Seventh Session, New York, 19-30 April 1999
ECF-IUF	European Committee of Food, Catering and Allied Workers’ Unions within the IUF
ECTAA	Group of National Travel Agents’ and Tour Operators’ Associations within the European Union
EDI	Electronic data interchange
EEA	European Economic Area
ETLC	European Trade Union Liaison Committee on Tourism
ETOA	European Tour Operators’ Association
ETUC	European Trade Union Confederation
EU	European Union
EWC	European Works Council
FERCO	European Federation for Contract Catering Organizations
FORCEM	Foundation for Continuous Training
GATS	General Agreement on Trade in Services
GDS	Global distribution system
HCT	Hotel, catering and tourism
HERE	Hotel Employees and Restaurant Employees International Union (also: HEREIU)
HOTREC	Confederation of National Associations of Hotels, Restaurants, Cafés and Similar Establishments in the European Union and European Economic Area
IATA	International Air Transport Association
ICFTU	International Confederation of Free Trade Unions
ICT	Information and communication technology
IHEI	International Hotel Environment Initiative
IH&RA	International Hotel and Restaurant Association
IRU	International Road Transport Union
ISIC	International Standard Classification of all Economic Activities
ISP	International service provider
IT	Information technology
IUF	International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco and Allied Workers’ Associations
MERCOSUR	Common Market of the Southern Cone
NAFTA	North American Free Trade Agreement
OECD	Organisation for Economic Co-operation and Development
PMS	Property management system
PTO	Public telecom operator
SIT	System of information technologies
SME	Small and medium-sized enterprise
TSA	Tourism Satellite Accounts
TUAC	Trade Union Advisory Committee to the OECD
UNCED	United Nations Conference on Environment and Development
UNCTAD	United Nations Conference on Trade and Development
UNEP	United Nations Environment Programme
UNI	Union Network International
UNICE	Union of Industrial and Employers’ Confederations of Europe
WTO/OMC	World Trade Organization
WTO/OMT	World Tourism Organization
WTTC	World Travel and Tourism Council

Introduction

This report has been prepared by the International Labour Office as the basis for discussions at the Tripartite Meeting on Human Resources Development, Employment and Globalization in the Hotel, Catering and Tourism Sector.

At its 273rd Session (November 1998) the Governing Body of the International Labour Office decided that the Meeting would be included in the programme of sectoral meetings for 2000-01. At its 274th Session (March 1999) the Governing Body decided that the purpose of the Meeting would be to exchange views on policies and methods of human resource development, employment creation and globalization in the hotel, catering and tourism sector; to adopt conclusions that include proposals for action by governments, by employers’ and workers’ organizations at the national level and by the ILO; and to adopt a report on its discussion. The Meeting may also adopt resolutions. The Governing Body also decided that the Meeting should be tripartite, that it should be composed of 75 participants and that the following 25 countries should be invited: Austria, Barbados, Brazil, Canada, China, Costa Rica, Dominican Republic, Egypt, France, Greece, India, Italy, Japan, Kenya, Republic of Korea, Lebanon, Mauritius, Morocco, Netherlands, Poland, Portugal, South Africa, Spain, Switzerland and the United States. In the event that a government declines the invitation, an alternate will be invited from the reserve list which was established at the same time: Argentina, Chile, Croatia, Hungary, Mexico, Namibia, New Zealand, Philippines, United Republic of Tanzania, Thailand, Tunisia, Turkey, Viet Nam, Zimbabwe. The Governing Body also decided that 25 Employer and 25 Worker participants would be appointed on the basis of nominations made by the respective groups of the Governing Body. They do not necessarily come from the above list of countries.

The Meeting is part of the ILO’s Sectoral Activities Programme, the purpose of which is to facilitate the exchange of information among constituents on labour and social developments relevant to particular economic sectors, complemented by practically oriented research on topical sectoral issues. This objective is being pursued inter alia by holding international tripartite sectoral meetings with a view to:fostering a broader understanding of sector-specific issues and problems; promoting an international tripartite consensus on sectoral concerns and providing guidance for national and international policies and measures to deal with the related issues and problems; promoting the harmonization of all ILO activities of a sectoral character and acting as the focal point between the Office and thesectoral ILO constituents; and providing technical advice and practical assistance to the latter in order to facilitate the application of international labour standards.

The report attempts to illustrate how the issues of globalization, employment and human resources development in the hotel, catering and tourism sector are linked to the strategic objectives of the ILO and to its overall conceptual framework of decent work. At its 87th Session (June 1999), the International Labour Conference agreed that in future the ILO should focus its work on four strategic objectives:

– to promote and realize fundamental principles and rights at work;
– to create greater opportunities for women and men to secure decent employment and income;
– to enhance the coverage and effectiveness of social protection for all; and
– to strengthen tripartism and social dialogue.

All of the ILO’s strategic objectives are closely linked to strengthening the social dialogue framework. Promoting a participatory process that gives a voice to those most directly involved in the world of work is an essential part of the conceptual framework of decent work. More especially, it provides the means of integrating the strategic objectives into a coherent approach for decent work initiatives with the full involvement of the social partners at the country level.

The report points to recent developments in the hotel, catering and tourism sector and highlights factors driving the internationalization of tourists’ travel and of tourism services, including information technologies, as well as the internationalization of hotel and tourism enterprises. Without neglecting the huge subsector of small and medium-sized enterprises, it describes typical features related to the composition of the labour force and to working conditions. It raises questions concerning the difficulties faced by the sector in attracting and retaining skilled workers in enhancing the skills of newcomers to the labour market in order to stabilize the sector’s labour force, while increasing the productivity of enterprises and the quality of services. Particular emphasis is put on new forms of management entailing new skills requirements, with a general tendency towards increased worker responsibility in an environment of flat hierarchies, multiskilling and teamwork. Some institutions, achievements and shortcomings of social dialogue in the hotel, catering and tourism sector are described in a perspective which also points to opportunities for increasing its scope and effectiveness. As for the causal relationships between globalization, employment and human resources development, it would be difficult on the basis of the available information to draw conclusions concerning such relationships more than is done here. On the other hand, other factors such as technological and educational progress or changes in tourism demand have also been highlighted.

Hard data on the hotel, catering and tourism sector are not easy to come by as it is rarely singled out from the services sector in general. Data specifically on tourism depend on accounting which covers a broad range of economic activities geared towards consumption by tourists. Only a few countries can provide systematically collected tourism data and little attention is given to labour issues.

The report draws on a wide variety of sources for information, including government institutions, intergovernmental organizations, trade unions, employers’ organizations, companies, international non-governmental organizations, and individual scholars. The sources used are certainly not exhaustive but probably quite representative.

The report was prepared by an ILO team composed of Dirk Belau, Senior Specialist on Hotels, Catering and Tourism, Sectoral Activities Department (coordinator), Tom Higgins and Rajendra Paratian, with contributions from external experts, Lionel Becherel, Chris Cooper, Auliana Poon, Laennert Rijken and Klaus Weiermair. Editorial assistance was provided by Bill Ratteree, Sectoral Activities Department. The report is published under the authority of the International Labour Office.

1. General developments in the sector

1.1. Delimitation of the hotel, catering and tourism (HCT) sector

When the ILO Governing Body created the ILO Industrial Committee for the Hotel, Restaurant and Tourism Sector, which subsequently became the Committee for the Hotel, Catering and Tourism Sector, the sector included:^[1]

1. hotels, boarding houses, motels, tourist camps, holiday centres;
2. restaurants, bars, cafeterias, snack bars, pubs, night clubs, and other similar establishments;
3. establishments ... for the provision of meals and refreshments within the framework of industrial and institutional catering (for hospitals, factory and office canteens, schools, aircraft, ships, etc.);
4. travel agencies and tourist guides, tourism information offices;
5. conference and exhibition centres.

Statistics are being organized according to the International Standard Industrial Classification of all Economic Activities (ISIC), the latest edition of which is ISIC Rev. 3. In that classification, the sectors most relevant for the ILO definition of the sector are Hotels and restaurants (division 55)^[2] and Activities of travel agencies and tour operators, Tourist assistance activities (class 6304).^[3]

Other organizations concerned with tourism, including governments, intergovernmental organizations and NGOs, often use much broader definitions of the term than that used by the ILO. They subsume under it all services and products consumed by tourists, including transport. In the ILO denomination of the sector, the part referring to “tourism” only covers travel agencies and tour operators. Hotels and catering, including restaurants, are considered by most organizations to belong to the “tourism characteristic industries” and therefore subsumed under tourism, although in some countries only a small part of their services is for tourists. However, the fact that the ILO definition of the sector thus differs considerably from the concept of tourism used by other organizations does not prevent most concerns about the development of tourism from being shared by those organizations. One such concern is the sector’s potential to provide employment. Nevertheless, the ILO’s focus on labour issues is unique as it includes all working and employment conditions in the HCT sector.

1.2. Tourism Satellite Accounts

As an economic concept, tourism is defined in “demand side” terms, as it comprises all services and goods consumed by tourists as well as all investments made to satisfy that consumption. A tourist has been defined by the United Nations as a traveller or visitor.^[4], ^[5] The credibility and international comparability of “tourism statistics” depend heavily on: (1) a consensus regarding the choice of “tourism characteristic industries”, i.e. those industries on which tourism demand has the most important direct impact, and an estimation of the “tourism ratio” of their output; as well as (2) the methods used to calculate the indirect effects on the output of many other industries. Statistical presentations differ in whether they include such indirect or induced effects in the measurement of tourism in the economy. Probably the most inclusive choice of industries is the one adopted by the World Travel and Tourism Council (WTTC), a private organization.^[6] It takes into account industries whose “tourism ratio” is low but whose products and services represent high value, such as the construction and operation of transport infrastructure.

The demand side nature of tourism is the basis of a methodology for Tourism Satellite Accounts (TSAs) developed by the World Tourism Organization and OECD and adopted by the United Nations Statistical Commission early in 2000.^[7] The ILO has been cooperating with those organizations in accordance with the mandate given to it by the Tripartite Meeting on the Effects of New Technologies on Employment and Working Conditions in the Hotel, Catering and Tourism Sector in 1997, with a view to providing a methodology for the production and presentation of tourism-relevant labour statistics to supplement the TSAs. A proposal has been formulated by the ILO for a tourism labour accounting system (TLAS) within that framework,^[8] based on its work on a general labour accounting system. A detailed “employment module” presenting labour-related issues was already attached to the TSA by the OECD, but this module does not provide the necessary framework for linking the different units, variables and classifications used when collecting labour statistics from many different sources.

Some early efforts towards TSA presentations have already been made by a number of pioneer OECD countries on the basis of figures from national accounts systems as required in the methodology adopted by the United Nations Statistical Commission in 2000. The World Travel and Tourism Council (WTTC) has been producing Tourism Satellite Accounts using a simulation method and based on a non-systematic variety of statistical sources.^[9] Relevant figures from some pioneer countries are presented in box 1.1. Because of differing definitions only very broad comparisons can be made between countries.^[10]

 

Box 1.1. Selected tourism data: OECD countries with incipient Tourism Satellite Accounts Shares of tourism, tourism characteristic industries, or hotels and restaurants in national economies: Mexico: 8.2% tourism New Zealand: 8.1% (3.4% direct; a further 4.6% indirect) Norway: 3% characteristic tourism industries, GDP Poland: 5.4% tourism characteristic activities Sweden: 3.3% tourism Austria: 3.1% hotels and restaurants United Kingdom: 2.9% main tourism-related industries (hotels, restaurants, bars, recreation activities, etc.) Contribution of hotels and restaurants or tourism characteristic industries in total tourism value added or total tourism consumption: Mexico: 49.9% hotels and restaurants, value added Norway: 66% characteristic tourism industries, consumption Poland: 8.4% tourism characteristic industries, value added Sweden: 23% hotels and restaurants, value added GDP tourism ratio of hotels and restaurants or characteristic tourism industries: Austria: 76.4% hotels and restaurants Norway: 43% characteristic tourism industries Distribution of tourism consumption: New Zealand: 47% spent by overseas visitors   39% spent by resident households travelling for recreation and pleasure   14% spent on work-related travel by business and government Norway: 32% non-residents’ consumption   49% resident households’ consumption   19% resident industries’ expenditure on business trips Sweden: 24% foreign visitors   50% resident households’ demand   26% business travel Employment in tourism as a share of total employment: France: 5.3% hotels and restaurants Mexico: 6% tourism industry (salaried jobs) New Zealand: 8.3 % direct (4.1%) plus indirect (4.2%) Norway: 3% tourism characteristic industries Based on: OECD: Measuring the Role of Tourism in OECD Economies: The OECD Manual on Tourism Satellite Accounts and Employment, Ch.13, TSA Experiences in Selected OECD Economies, Paris, 2000.

1.3. Tourism economy

The contribution of tourism activities to national GDPs, direct and indirect, varies by country and region as illustrated by the WTTC’s estimates (tables 1.1A and 1.1B).

Table 1.1A.Travel and tourism industry gross domestic product per region, 2000

Table 1.1B. Travel and tourism economy ¹ gross domestic product per region, 2000

The Caribbean is the most tourism oriented region in the world. It is estimated that in 2000, tourism employed 3.1 million people either directly or indirectly, thus accounting for 13.4 per cent of total employment. Direct employment in the tourism characteristic industries alone amounts to 5 per cent of total employment. Visitor expenditures contributed an estimated US$17 billion, or 18.4 per cent, to export revenues.^[11] Countries whose international tourism receipts exceed 5 per cent of GDP or 10 per cent of export revenues are considered to be “tourism countries” for the purposes of the World Trade Organization. Tourism-related portions of GDP estimated by the WTTC for a number of countries are shown in table 1.2. A table of all the countries covered by the WTTC is reproduced in Appendix 1.

Table 1.2.Tourism industry GDP, visitors’ exports and employment in selected countries, 2000

Tourism is expanding in almost all countries including the developing countries. In fact, mass tourism involving domestic and regional travel is becoming an important phenomenon in several developing countries of Asia, Latin America, the Middle East and Africa, where the proportion of the population actively participating in domestic and regional tourism is predicted to grow considerably. In particular, regional tourism originating from China is expected to change the Asian tourism industry profoundly within the next one to two decades.

1.4. Employment in hotels and restaurants

An overview of employment in hotels and restaurants is presented in table 1.3. The table shows data supplied to the ILO by a limited number of countries using the International Standard Industrial Classification of all Economic Activities, Revision 3 (1990), which allows a distinction to be drawn between hotels and restaurants and commerce in general. What is striking about the information given in table 1.3 is the high proportion of unpaid labour in the hotel and restaurant trade in some countries, including the industrialized countries. This reflects a large number of small entrepreneurs and their non-remunerated family members. In some countries, this proportion is increasing as paid employment is growing more slowly than total employment, although in general growth rates for both are high.

Table 1.3.Hotels and restaurants: Total employment and paid employment by gender, selected countries, 1998-99