Creation Of Employment Avenues In Hospitality Sector

S. Kannan

From time immemorial the tourism and hospitality sectors together have been providing ample employment avenues to people the world over. The tourism industry, being predominantly service oriented, the employment impact of this sector is spread widely over the national economy. In actuality, the total impact of this sector on employment generation in the national economy will be related to the income created in the first and subsequent rounds of spending to the tourist rupees on consumer goods industry. However, the main contribution of this sector can be guaged by the direct and indirect employment avenues generated. The direct impact in some major sectors can be estimated based on some certain set parameters. The tourist expenses are mainly on boarding and lodging, transport, purchase of handicrafts and souvenirs. This apart, indirect employment in many other correlated sectors such as shops and constructional activities are also generated. Although, not a significant factor in the economy for employment generation, its share in the hotel employment works out to less than half of one percent. It is however, estimated that the rate of employment in the tourism industry has been increasing at a significant pace over the last two decades. Hence there is immense potential for skilled and semi-skilled labour in the years to come. Like the tourism sector, the hospitality industry also creates direct and indirect avenues for employment. Inspite of being a highly capital intensive sector, needing large amount of investments initially, it is a labour intensive one. It provides substantial employment through its backward and forward linkages. As regards, to the direct employment, it is estimated that the room to staff ratio for a hotel varies between 1:1.5 to 1.3. In addition to this, there are a number of other accessory avenues generated. There is a good number of workers engaged in ancillary industries which supply goods and services to the hospitality sector. While the capital-labour ratio of the hotel industry vis-‘-vis other industries have to be studied in depth for assessing the employment generation, studies so far made in the past, indicate that hotel industry has significant potential for employment generated. It is estimated that every Rs. 1,000 spent by a tourist on accommodation, food, beverage, transport, purchase etc, will generate economic activity to pay out about Rs 540 in salaries and wages. This indicates that 54% of the tourist expenditures goes toward wages and salaries alone. In the Indian context, the committee on unemployment set up in 1973 estimated that on an average one hotel rooms should expect to provide employment for 2.5 people. It also observed that connected industries and services supplying fresh and canned foods, other food items, various items of machinery, air-conditioning equipment, lift, kitchen equipment, washing machines, laundry equipment, linen, furniture, furnishing, cutlery, crockery, etc, would offer employment to nine times more than the number of persons who are employed directly by the hotels. A major motivational aspect for hotels is the fact that, as a combination of construction and consumer service industry it is labour intensive, particularly for the educated unemployed. During the construction stage of a hotel, the urban and rural unemployed obtain means of daily livelihood. Today, even in the early stages of the development, thousands of people have found permanent employment. In terms of true figures it would be necessary to add the thousands more who have been associated with the expanding ancillaries and support services. This apart, the industry is playing an active role and gearing its operations that will lead to employment opportunities overseas and the mobilization of resources. Indian nationals working and earning overseas, desirous of investing savings in India, have expressed confidence in providing operational services to overseas properties which will open new avenues for Indian nationals. These people in turn will also remit back their earnings. These chains have their own training divisions, which will help in getting the people trained and provide job opportunities ahead.

(As Told To Lakshman V)

The author is lecturer at the Institute of Hotel Management Catering Technology & Applied Nutrition, Bangalore