Skills and Productivity in the Hotel

Sector
Professor Johnny Sung
5 July 2012
Skills and Productivity Research

• Part of a wider programme (Skills & Productivity in 7

sectors)
Objectives • Understand the operational concept of productivity of
the hotel sector
• Identify the ‘levers’ for productivity

• 13 case studies in different market segments

• Group A- Luxury, Mid-tier, Upscale/Boutique, *
Methodology • Group B- Economy/Budget, Backpacker
• Interviewed senior managers or owners of hotels
• Between June and September 2011

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 Objectives of the Session
• To what extent is productivity a problem in
hotels?
• How do hoteliers define productivity?
• What are the drivers?
• To what extent are skills related to hotel
productivity?
• What is the role of technology?
• What is the role for CET/WSQ?
• The future: greater role for employees and new
working model

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What is Productivity?

• Labour productivity
(value added or output
achieved per worker)
• Capital productivity
(how efficient fixed
assets generate value
added or output of the
company)

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 Productivity in Hotels

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Labour Productivity [1] - - -11.1 7.3 0.9 0.7 -4.9 -9 -5.9 7.1 -

Room Manning 0.79 0.78 0.70 0.64 0.71 0.73 0.71 0.78 0.71 0.70 -
Ratio [3]

Revenue Per 102 94 78 98 115 140 176 199 144 182 -

Available Room [2]

Customer Satisfaction - - - - - - 73.5 71.4 68.9 74.1 74.5

Index [4] (68.7) (67.8) (68) (67.2) (69.1)

[1] Economic Survey of Singapore, Ministry of Trade & Industry

[2] Annual Report, Singapore Tourism Board
[3] Singapore Hotel Association
[4] Institute of Service Excellence, Singapore Management University

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“Productivity” – how they see it in hotels
Organisational Profits
Constraints
•Head office Philosophy
•Branding
•Business Strategy Cost Vs Service
Revenue Quality

Managing Labour Managing

Productivity Revenue

Facilities, Human
locations Factors
etc

New
Multi-
Processes F&B Rooms Sources of
tasking Mutual
Revenue
gains
Discretiona
ry Effort
Group B Group A

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To what extent can productivity be further
improved?

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

0.79 0.78 0.70 0.64 0.71 0.73 0.71 0.78 0.71 0.70 -
Room Manning Ratio [3]
?
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The Role of CET: leaders and managers in
the hotel sector?

New mental model ….

e.g. review job design and job skills
content

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Observations & Recommendations

Observations Policy/Practice Implications

Lack agreements on and use of the Industry to establish operating models

concept of productivity and measures

Lack of specific attention on productivity Productivity managers?

Complacency mindset – “business is Raise awareness of future challenges –

good” tightening labour market and aging
workforce

New business model Need to move away from workers as

‘labourer’

Future WSQ and professional PME – what new practices and models?
developments
Workers – moving beyond the
‘standards’ training

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Centre for Skills, Performance and Productivity Research, IAL
The Centre for Skills, Performance and Productivity Research focuses on the impact of skills
at work, and the implications of this for policy and practice in CET. In particular, research will
be directed to examining the role of skills in enterprises and the relationships between skills
and a wide range of desirable workplace outcomes. These outcomes include productivity,
innovation, learning, skills retention and the use of qualifications.

Institute for Adult Learning, Singapore

The Institute for Adult Learning (IAL) aims to contribute to the competitiveness of Singapore
by developing an effective, innovative and responsive Continuing Education and Training
(CET) sector that is able to meet the needs of industries and the workforce. It achieves this
by raising capabilities, catalysing innovation, and leading research in workforce learning.

For more information, please contact Ms Fiona Loke at fiona_loke@ial.edu.sg or call her at
65790184.
© 2012 IAL
The author has made his best effort to prepare this document. The content is based upon latest information whenever possible.
The author makes no representation or warranties of any kind with regard to the completeness or accuracy of the contents here
in and accept no liability of any kind including but not limited to performance, merchantability, fitness for any particular purpose
or any losses or damages of any kind caused or alleged to be caused directly or indirectly from this document.

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