Management and Leadership in the Hospitality Industry

Executive Summary

This paper aims to evaluate the validity of leveraging competencies of leadership and management in an attempt to achieve competitive advantage. The definition of management implies the need to create tasks for employees and control their implementation, mainly supervising the personnel. Although various authors examined in this paper provide different definitions of management, one can summarise that managers are responsible for planning and coordination the workflow, while leading their employees to ensure better results to help a company achieve its goals.

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While adequate management implies being a leader for the supervised personnel, it is evident that the two notions are different, and managers should develop competencies that correspond to those of a leader. The distinct feature of this concept is the influence that an individual has on his or her followers, which helps to achieve the goal of the business by formulating a unified vision. Personal characteristics, such as being charismatic or having integrity, cognitive capabilities to approach complex tasks, having dominance and selflessness, are among the key characteristics that define a leader.

However, apart from these, one must develop competencies such as communication skills, understanding of strategy, and technical knowledge of an industry to be a successful leader. Hence, the focus of this paper is on determining the correlation between leadership and managerial competencies and achievements of hospitality organisations based on real-life examples from case studies.

Firstly, it is necessary to recognise the challenges that modern hospitality businesses face due to globalisation and increasing competition from companies employing innovation such as Airbnb. Within this landscape, it is difficult to achieve competitive advantage through price or quality while leadership and managerial competencies of executives may be leveraged to emphasise the philosophy of a brand and its approach to operations.

Servant leadership in the context of the hospitality industry has been examined by several studies presented in this paper that provide evidence suggesting that this strategy can be used by organisations since it promotes the enhancement of employees’ capabilities. The indirect impact of this approach on the customer’s perception is facilitated through the enhancement of productivity and job satisfaction.

Secondly, the assessment of actual qualities that correspond to the notion of leadership competencies reveals that different industry examples suggest various models. For instance, research that focuses on hotels in Thailand and China reveals that ability to communicate with clients and employees is essential for a hotel manager. Examples from large hotel chains, such as Marriott highlight the need for developing a unified vision that the person would use in their daily work.

Thirdly, this paper assessed the competencies and perceived qualities of leaders who are viewed as bad managers by their employees. This assessment reveals that technical knowledge, meaning the understanding of how hospitality businesses operate, is cited among the crucial capabilities of the executives. Additionally, inadequate leaders usually apply the autocratic leadership style, resulting in reduced employee engagement due to a lack of decision making freedom. As opposed to this, other literature examined in this paper suggests that using a servant leadership approach, which implies leveraging one’s competencies for the benefit of the personnel is more suitable.

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An issue of ethical behaviour is an emphasis on assessments focusing both on good and bad managers in the hospitality industry. This suggests that some personality qualities play a role in determining leadership capabilities. However, in most cases, researchers and examples of development programs such as the one used by Marriot Hotels suggest that most leadership competencies can be developed.

The VRIO framework and Porter’s five forces were examined to determine leadership and management competencies can be leveraged as a competitive advantage. Both these tools and assessments of employee satisfaction, as well as the review of Marriott’s profits suggests that this is a valid approach to enhancing operations efficiency and achieving an advantage over competitors. One aspect of this is the focus on human resources, which is the main element of the VRIO framework. Many studies point out the improved turnover and employee satisfaction in hospitality businesses that have adequate management. This is consistent with the primary competencies – communication, attention to developing employees, and advanced understanding of the strategies for improvement.

The example of Marriot Hotels, which is a hospitality business operating worldwide, provides evidence suggesting that adequate leadership is an essential part of a hotel’s competitive strategy. The CEO of the hotel chain, Bill Marriot, has a distinct approach to leadership and management and his organisation has a training program for managers that focuses on developing leadership competencies. The sustained success that this hotel brand has shown over the years suggests that focus on adequate leadership is indeed an important strategy that should be used by hospitality businesses to improve their competitiveness if their costs are already minimised and diversification is achieved.

This paper provides an in-depth assessment of the leadership and management concepts, as well as competencies associated with each domain. The industry examples help determine the application of these skills and strategies for developing them within the existing personnel. The benefits of applying proper competencies are derived mainly from the employees’ perception of the management. However, it can be argued that among the conventional strategies of achieving competitive advantages such as maximising cost efficiency and differentiation, enhancing leadership approaches can be a suitable approach for further improving the operations. This element improves the perception of the managers themselves and the brand for which they work.

One can conclude that the examination of professional literature on the topic of leadership competencies and competitive advantage suggests that no unified strategy for a leadership style of specific competency set exists. However, transformational, transactional, and servant models are commonly cited as the most suitable ones. Such prevalence suggests that skills related to change management are crucial. Additionally, understanding of motivation techniques and enhance between a leader and follower are essential skills for a manager. Finally, the ability to understand the needs of followers and work towards ensuring that their work conditions are satisfactory is another critical feature.

The primary implication of this research is that companies in the United Kingdom should focus on developing competency programs for managers at all levels, teaching them how to improve their leadership capabilities and become more efficient. The various examples and case studies from other countries and quantitative and qualitative research substantiate this need and provide valuable frameworks and models that can be leveraged by hospitality businesses.

Management and Leadership in the Hospitality Industry


Leadership is thought to be an essential element of any business’ success because it defines both strategic and daily choices made by the executives. In the context of the hospitality industry in the United Kingdom and other countries, leadership plays a vital role in allowing to achieve competitive advantage over other companies. In order to understand this component, leadership and managerial competencies will be examined in-depth in this paper to define the two concepts and present an overview of research findings suggesting best practices in developing and applying these competencies.

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The examples of bad managers and their impact on employees will also be investigated to determine the differences between appropriate and faulty leadership. This investigation will help understand the implications of inadequate managers on employee’s engagement and job satisfaction. Leadership and management competencies of executives at all levels of operations allow hospitality businesses to achieve significant competitive advantage by developing a cohesive and unified vision of the goals that an organisation aims to achieve and by supervising and guiding the personnel when working towards these objectives.

The main objective of the literature review on the topic of hospitality competencies is to locate and examine industry-specific examples that will enhance the understanding of skills that the professionals in the hospitality industry use to achieve success. Another aspect of the investigation is whether these competencies can be developed through training or if these are inborn qualities. Finally, an essential part of this research is the connection between managerial and leadership competencies and employee job satisfaction and its impact on competitiveness.

Literature Review

The necessity to look for other approaches to developing competitive advantage is facilitated by the changes within the industry, both in the context of the services and consumer preferences. For instance, Rauch (2015), Lemon (2019), Moody and Gomez (2018) argue that the emergence of Airbnb, one of the best-known services for short-term rent transformed the attitudes of the travellers in regards to choosing a place for stay.

Hence, it can be argued that in the contemporary hospitality landscape, hotels compete not only with each other but also with homeowners and applications that provide easy access and best prices to the consumer. Therefore, the service quality and the employees working in hospitality become an essential element defining the attitudes of consumers towards hotels (Bilgihan, Smith, Ricci, & Bujisic 2016; Walsh, Chang & Tse, 2015). Also, the ability of leaders to develop a unique strategy and vision for their establishments becomes vital.

Lowering the prices in order to compete in this changing market is not a valid approach for large hotels since their expenses are difficult to minimise and the need for upholding high-quality standards that correspond to a brand’s image exists. Morgan Stanley’s report (2015) found that at least 12% of respondents choose Airbnb as their primary when looking for a holiday rental, signifying a new trend and Deloitte Center for Industry Insights’s (2017), Peoples 1st (2015) and Mintel (2015) reports highlight changes in the hospitality industry. While this problem can severely impact the hospitality industry in general, one aspect of the operations that cannot be provided by Airbnb or other services is exceptional leadership and management that presents visitors with the highest quality of services.

A similar conclusion was made by Espino-Rodriguez and Gil-Padilla (2015) and Ivanova and Ivanov (2015), who argue that hotel executives can foster an appropriate culture within their institutions that will help retain clients who value quality and good hospitality experiences. This not only refers to senior managers who have to know how to develop a vision, align it with the strategy, and communicate the two to the employees but also the middle and low-level management as well (Shum, Gatling & Shoemaker 2018; Burgess 2017; Nicely & Tang 2015).

The analysis of these competencies and their application can provide an important insight into the approaches to managing hotels within the current competitive environment. Therefore, the main focus of this research is on identifying which qualities allow hotel managers both in the UK and worldwide to compete within this industry.

Leadership and Management Competencies Review

The hotel industry, unlike many others, has not changed its primary approach to leadership and hierarchy over the years. The general manager is usually responsible for all operations, while department managers report to him or her (Fuchs 2016; Bratton & Gold 2015; Subramanian, Gunasekaran & Gao 2016; Baum et al. 2016). While it is unclear whether this structure is beneficial for hotels or not, it is evident that the leadership style used by the general manager is the key determinant that defines the strategic vision and daily activities within the establishment.

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The quantitative and qualitative analysis that Fuchs (2016) performed based on the responses of employees and managers at a 4-star hotel emphasise the vital role of leadership competencies. The findings of Fuchs (2016, p. 10) suggest that hotels that maximise their cost leadership and differentiation possibilities can further develop by applying adequate leadership approach and applying “transformational, transactional and charismatic leadership concepts” allows successfully achieving competitive advantage. This information provides an insight into the specific approach that a leader chooses is not essential.

This corresponds with the findings of O’Mahony (2015), Gold (2015) and Pavlatos (2015) who examine successful leaders who adopt a number of styles. However, the specifics of each style imply that he or she have competencies that relate to change management, understanding of rewards and punishments within the context of workplace and knowledge regarding the interpersonal relationships between leaders and flowers.

The question of competitive advantage within the hospitality industry should be reviewed as well since the correlation between achieving it and developing appropriate competencies is the focus of this paper. According to Rauch (2015) and D’Arcy and Omar (2015), most hotels rely on Porter’s five forces model when defining their distinct characteristics. Although the approach is valid, the authors argue that in the contemporary globalised world, hospitality businesses should search beyond this model and apply other strategies of achieving an advantage over competitors. Weerakit and Beeton (2018) and Eissner and Gannon (2018) argue that the main competency of hospitality leaders is the ability to communicate clearly.

However, most researchers cite other competencies as well, while Weerakit and Beeton (2018) suggest that focusing on communication is vital because it allows connecting the vision of the management with that of employees. It should be noted that previously cited research was conducted in Thailand, which places limitations on its findings, suggesting that in other countries, for instance in the UK the importance of these skills may be less significant.

One crucial question that requires an in-depth investigation is whether a unified model of leadership competencies applicable to all industries exists and can the hospitality leaders use skills and knowledge outlined as essential for other businesses. Shum, Gatling, and Shoemaker (2017) developed a model of leadership competencies essential for the industry in question. The approach offered in this article is consistent with the requirements for future managers, both executives and director-level employees.

This article suggests that possession and development of appropriate competencies are vital at all levels because managers impact the customer’s perception of the brand and employees attitudes, which affect the operations of a hotel. According to Shum et al. (2017, p. 57), “both frontline and director-level managers need to monitor and react to both their internal and external environment”. In addition, the findings by the authors recognise the fact that the outlined competencies are not inborn characteristic and can be developed with training.

High, Gajjar and Okumus (2019) explored the issue of managerial competencies in the hospitality industry by assessing employee’s opinions regarding bad managers. The findings suggest that there are six distinct characteristics cited by many respondents. Poor leadership skills and autocratic style are among the most common characteristic’s that were used to describe inadequate hospitality managers. Additionally, unethical behaviour and lack of knowledge connected to operations are other aspects that were considered in this study. In essence, High et al. (2019) contribute to this research by allowing to compare the competencies of good managers and leaders working for successful hotels with those perceived as inadequate.

One approach to developing and sustaining managerial competencies is the adoption of transformational leadership style. Ariyabuddhiphongs and Kahn (2017) Slåtten and Mehmetoglu (2015) argue that transformational leadership, with its focus on the change process, contains all the core competencies required for hospitality managers. In the context of a rapidly changing industry environment and competition from non-hospitality businesses causing disruption, this can be a necessary quality of a leader.

Next, establishing the differences between female and male managers and their approaches will allow identifying best practices. Remington and Kitterling-Lynch (2017) and Calipher (2015) dedicated their study towards examining the specifics of female leaders and their approach to leadership to determine specific competencies they choose to apply. The conclusion is that successful female leaders in hospitality are more likely to risk and display more persuasiveness and assertiveness.

Based on this literature review one can conclude that the core competencies of hospitality leaders and managers are the ability to motivate, advanced communication skills, understanding of strategy, ethics, flexibility, interpersonal skills, employee and team development and ability actually to empower the followers (Beck & Harter 2015; Garg, & Dhar 2016; Cheng & Wong 2015; Alhelalat 2015). This should be combined with the technical knowledge and understanding of operational specifics prevalent in the industry, which is demonstrated by studies such as Lee (2016), Poutanen (2016), Croft and Seemiller (2017), and Carasco-Saul, Kim and Kim (2015) who examined various characteristics of hospitality leaders.

A model of competencies is a useful framework for improving operations of hospitality establishments because it does not focus on specific personality features or traits that an individual has (Wisdom Jobs 2019; Hotel Guru 2015). Instead, research on the topic, for instance, articles by Montes, Arjona-Fuentes, Han, and Law (2017) and Singal (2015) suggest that leadership competencies described above and others that will become a necessity in the future can and should be developed. Hens, organisations, including those that operate in the hospitality industry, should focus not only on personal characteristics, credential, and subject knowledge of potential executives and managers, but also understand their capabilities in terms of the outlined competencies or ability and desire to develop those through training.

Case Studies of Hospitality Businesses

Review of case studies provides several implications – understanding of the leadership competencies applied by hospitality managers in the UK and around the world, strategies for training and development, and impact of these qualities of the operations. An important case study is introduced by Huang, Li, Qiu, Yim and Wan (2016) who examine servant leadership within the context of hotel management.

The authors have research interests in both marketing and management and this article aid this research by examining a non-traditional approach to hospitality. The implication is that ethical and follower cantered leadership is more suitable for the hospitality business. Huang et al. (2016, p. 945) state that “a considerable body of empirical research has shown that servant leadership is associated with a variety of favourable employee outcomes”.

Next, another implication is that leadership qualities similar to those displayed by servant leaders can be developed and therefore, executives should focus on designing training programs that emphasise this model (Huang et al. 2016; Ling, Liu, & Wu 2017). The value of this research for the examination of leadership and management competencies in the context of achieving competitive advantage in hospitality is that the particular concept has not been researched by scholars before.

Examples from hospitality business can provide a better insight into the issue. Gutierrez, Alcaraz, Suseta, Suarez, and Pin (2015) examine factors that impact the ability of hotels to achieve competitive advantage using the example of top hospitality businesses in Mexico. This article contributes to this research paper because it outlines the main trends in hospitality and provides implications for further investigating the issue.

The authors introduce the VRIO framework, which stands for value, realness, imitability, and organisation. In the context of management and leadership, VRIO can be used to determine whether the examined competencies indeed provide benefits to businesses. It is because human resources and information are the primary VRIO components that relate to leadership and management (“What is VRIO analysis” n.d.; Mirkovic 2018).

This element and the use of VRIO to establish competitiveness suggests that leadership qualities, especially those relating to employee relationships, are vital. Similar conclusions were made by Fuchs (2016) who in his thesis presents a case of Vienna’s hotel industry and Cheung, King and Wong (2018), Noordzy, Ricaurte, James, and Wu (2016), Sun, Liu, Law, and Zhong (2017). Ling, Liu, and Wu (2017) and Wang (2016) who examine the Chinese hospitality organisations.

Marriot Hotels

While examining the case studies is a useful model for determining the impact of leadership and management styles on competitive advantage within the hospitality industry provides valuable insights, it is necessary also to determine the effect of these models using specific examples of hotels in the United Kingdom and outside. For instance, the Marriot hotel chain is well-known for its novel approaches to managing employees and development programs (Core values & heritage n.d.; Bill Marriott – leaders n.d.).

According to Elwell (n.d.), the organisation has a specific philosophy that highlights the values and beliefs of the executives and aims to communicate the leader’s vision to the employees. Arguably, this component is an integral part of the organisation’s leadership strategy since it aims to unify the employees by creating a culture supported by leadership. The hotel’s statement presented by Elwell (n.d.) suggests that the organisations recognised the value of proper management and thus implemented programs teaching employees how to improve their competencies.

It is evident that the senior executive of this hotel chain developed an appropriate environment that enables the growth of the business. McGregor (2016) points out that Bill Marriot – the CEO of the business is an incredible executive whose personality and approaches to management allowed developing a unique and sustainable culture within the organisation. The author outlines the primary approaches that Mr Marriot uses in his work, which are consistent with the contemporary practices of a servant and transformational leadership.

For instance, McGregor (2016) states that one of the critical aspects of this philosophy is the need to treat associates with respect, challenge them, and celebrate their success. The specific leadership style applied by Marriot is definitely a distinct quality that affects operations at all levels. Its success can be evaluated by examining the revenue and reviews of this hotel chain.

The revenue of this hotel chain in 2018 was estimated at over $20 billion, while in 2010, it was only $10 billion (“Marriott revenue 2006-2019” 2019’ Hotstats, 2015). Brown, Thomas and Bosselman (2015), Kong, Wang and Fu (2015), Sheehan, Grant and Garavan (2018), Spector (2016) state that the executives of the organisations recognise the value of being people-centric, both in regards to customers and employees. The servant leadership approach chosen by Bill Marriott and executed at different levels of the organisation’s operations serves as a good case study suggesting the importance of distinct leadership strategy in the context of competitive advantage.


Overall, the evidence examined in this paper suggests that leadership and management are a vital part of the contemporary hospitality industry and should be approached from the perspective of achieving competitive advantage. Some studies suggest that servant leadership is an excellent approach to managing hotel operations because of its positive impact on the employee’s well being and job satisfaction as well as performance. Regardless, the impact on employee satisfaction and engagement suggest that applying core leadership competencies, such as technical knowledge, strategic thinking, interpersonal and communication skills is significant and helps improve the operations.

The reviewed literature provides an understanding of the need to hire managers and leaders capable of developing necessary competencies, such as the ability to communicate, strategic vision, strong ethics, care for communicates, and commitment for all employees. This paper reviewed several leadership approaches, most notably transformational and servant and both appear to be valid in the context of hospitality management. Hens, regardless of the leadership style an individual chooses, he or she should be aware of the critical skills and capabilities that determine the competitiveness of their business in the market.

The examined research suggests that no single approach to leadership can be cited as the primary strategy for achieving a competitive advantage, since the in the examined case studies, servant, transactions, and transformational approaches were reviewed. Similarly, different authors dedicate special attention towards one distinct competency, for instance, communication or interpersonal skills. However, the in-depth analysis of cases studies reveals the need to develop all competencies associated with successful leadership and management as they contribute to different aspects of operations.

The example of Marriott Hotels, the most prominent hospitality business reviewed in this paper provides an understanding of the role that a leader plays in developing the philosophy of a company. The articles containing employee reviews and main principles of operations, as well as assessing the training program that these hotels developed present a unique culture that was created and is supported by the CEO. The financial success that Marriot Hotels displays over the years is an excellent indicator of the validity of the discussed strategy.

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