There are many non-profit organizations around the world. Due to the development of globalization and to the fact that more and more companies are now looking for new opportunities for organizational development, it is essential to sustain and to withstand the amount of non-profit organizations in a competitive world. Each non-profit organization is thus looking at new instruments of reaching their markets and strengthening their brand and image around the world through competitive memberships and strategic decisions towards new open markets.
However, together with the trend towards globalization and expansion, the new threats are coming to the non-profit organizations. These threats are based on the fact that there are numerous cultural, social, political and economic factors which force the members of non-profit organizations change their membership decisions and start looking for other membership opportunities.
In such a case, being able to provide the necessary standards of work is essential for a non-profit organization. However, such standards can also be old-fashioned and not corresponding to the changing market needs. There are many areas which need to be changed in non-profit organizations of today, and these areas are to be clearly defined in order for the process of organizational change to be successful and bring the necessary results to all the members of the organization.
This report focuses on an important organization for all the hospitality industry players worldwide – American Hotel & Lodging Association. This organization has a historical meaning to the whole lodging industry worldwide. Therefore, in order to demonstrate the necessity of organizational change, such a reputed organization has been addressed in this research.
The report focuses on the following areas: finding what is missing for an organization to be competitive among other organizations of such type, restructuring the existing organizational system and strategy, rebranding the basic principles and adapting the value chain in order to meet the competitive advantage on the market.
The report is focused on searching for the area of change and introducing change within its areas of operations. The reasons are provided for each case that is mentioned in the research paper. At the same time, the particular approach that is chosen for organizational change and development is explained, and its appropriateness for the organization is stressed.
Description of the Organization
In the lodging industry, companies which are the key players on the market tend to obtain membership in various associations in order to promote their activity to the markets and to increase their activity list in terms of social and cultural programs. The historical development of hospitality business worldwide has resulted in hotels and restaurants seeking for standards and for the unified system which would place them in accordance to their rank and service quality (aimed at customer satisfaction).
American Hotel & Lodging Association is one of these organizations. According to Brefere, Drummond & Barnes (2009), ‘the American Hotel & Lodging Association (AHLA) is a 93-year-old federations of state hotel lodging associations, representing about 11,000 property members worldwide’ (p. 191). This organization works not only in terms of the United States borders, but by provision of global hotel and lodging standards it also entails a large amount of hotel properties in other countries of the world.
The organization has three offices in New York, Orlando, and Lansing – all within the United States. It operates its own magazine “Lodging”. And besides that, the Educational Institute (EI) of the American Hotel & Lodging Association offers a number of prestigious certifications, such as Certified Food and Beverage Executive and Chief Administrator, which speak for the professionalism and high qualification in the field of food and beverage and at the same time leadership and communication skills within the area of activity of the person.
Goeldner and Ritchie (2006) call the American Hotel and Lodging Association ‘the leading lodging trade association in the United States’, despite the large amount of organization not only in North America, but also in other parts of the world. It can be concluded that the American Hotel & Lodging Association plays an important role in the overall development of the lodging industry and has a global meaning to its growth and development.
From the way in which the organization is going to develop and grow, many other factors depend, too. The annual income of the solely food and beverage industry, which is presented by Goeldner and Ritchie (2006) at the level of $475, 8 billion in 2005, speaks for itself. Organizations like the American Hotel & Lodging Association need to be global in order to represent the tendency towards hospitality industry of international and globalized meaning.
Summary of Activities
The American Hotel & Lodging Association has a variety of activities and areas of focus. One of the key roles of the professional organization is to provide support for hospitality professionals worldwide. Such organizations as the American Hotel & Lodging Association ‘offer professionals continuing education opportunities through correspondence courses and seminars’.
At the same time, the organization’s key activities include ‘assistance in operations, education, and communications, and lobbying in Washington, DC, to encourage a climate in which hotels prosper’ . Therefore, the American Hotel & Lodging Association operates within the interests of each of its members and within the prosperity and growth of hospitality industry in general.
As mentioned by Jones (2005), AHLA not only works out the standards for most hotels, but also indicates the market research in terms of hotel daily operations. American Hotel & Lodging Organization provides interesting market data for hotel managers by comparing and contrasting various departments and also in-house and outside service providers.
Dopson and Hayes (2009) note that the Uniform System of Accounts for the Lodging Industry (USALI) was introduced by the Educational Institute of the American Hotel & Lodging Association and gave ‘hoteliers and their accountants a consistent and easily understood ‘roadmap’ to record revenues, expenses, and a hotel’s overall financial condition’. At that moment, as the authors mention, ‘the hotel industry was one of the first of the segments within hospitality to encourage its members to standardize their accounting procedures’. The first model was proposed in the early twentieth century; however, this form of standardization required a lot of amendments and updates.
As mentioned by Weygandt et al. (2009), ‘there are recommended procedures to categorize certain expenses of naming of accounts’ (p. 16). However, these systems are developing further, and the introduction of new types of services together with the total technological development of hotel operations call for new strategies of accounting and information systems in hotels and restaurants.
Hayes and Miller (2011) observe that ‘the Educational Institute, the nonprofit training organization that is part of the American Hotel and Lodging Association (AH&LA), provides educational materials and professional certification in a variety of lodging-related specializations’.
At the same time, ‘the American Hotel & Lodging Association offers opportunities for hotel employees to become a Certified Hotel Administrator (CHA) and Certified Rooms Division Executive (CRDE), among other certifications’. According to Hayes and Miller (2011, p. 22), ‘one of EI’s newest certification programs is for revenue managers’ which provides certificates for those who know how to manage revenue and yield accounts in hotel operations and to attract more profits on a daily basis.
The participation in trade shows allows promoting the latest concepts in such areas as technology, hotel services, and products that are supplied to the lodging industry by various companies. At the same time, as Bardi (2011) mentions, trade shows help promoting the concepts by ‘mini seminars on how to use current technology in human resources management, food production, marketing, and general management’.
Change and Development Approach
The development of the hotel industry is so fast and rapid that it is hard for non-profit organizations to catch up with the latest trends. However, it is necessary to understand that ‘this dynamic industry provides a large range of services and exciting entertainment venues, as well as design challenges to interior designers and architects’. It can be concluded that there are currently more players in the lodging industry than before, and that non-profit organizations need to take this fact into consideration.
Product and service suppliers make a large part of the market in the hospitality industry nowadays. They are active participants of various industry-specific trade shows, forums, seminars, and conferences. Suppliers become powerful industry leaders in their own field, and at times they are dictating the rules of the game to the hoteliers and restaurateurs based on their needs and requirements.
The standards of the hotel industry are nowadays largely based on technology. It is not a secret that the modern hotel is a representation of the computer system which operates this hotel. Every transaction, which is part of everyday operational activity, is maintained in the way and according to the standards of the hotel operations software, which is created by one of the major suppliers of hotel software, i.e. hotel management systems.
Organizational change nowadays is not possible without the adaptation to the macro environment. Change management is based on viewing various external factors in the industry and forecasting their behavior on the market. In lodging industry, suppliers making up large multinational companies are already an integral part of the development of the whole global lodging industry.
Taking into account the fact that suppliers play a large part in organizational change for the non-profit organizations such as the American Hotel & Lodging Association, one of the approaches to change and development is the expansion of the membership area towards suppliers, investment companies, and developers.
However, when looking at the external factors and taking into account various risk management issues in the lodging industry, it is difficult not to notice the importance of the tourism as the major driver of lodging development worldwide. Together with business travel, which is more or less stable due to the fact that the companies are operating on a daily basis, tourism is much less predictable and is usually influenced by a variety of different factors and issues worldwide.
Tourism arrivals statistics demonstrates that despite the general tendency of growth, the graph is influenced by very important global political and economic events which can never be predicted. Moreover, nature disasters, which happen more often recently in various parts of the world, also become part of the instability for this trend in general.
The tourism factors are the identifiers of the lodging industry growth. The more people travel, the more hotel services and lodging in general will be in demand. Therefore, due to the fact that the American Hotel & Lodging Association has a very globalized approach in its policy and it services as a unifying institution for many hotel properties worldwide, it also needs to address global issues in the development of the lodging industry in general.
For this reason, focusing on the key problems, which the tourism faces nowadays, helps facilitating more growth for the lodging industry worldwide. Such actions as the accessibility of air travel and making tourism more safe and affordable help lodging industry grow faster.
In order to sum up the proposed approaches to the organizational change and development, two important external factors were taken into account: the growing role of suppliers in the industry and the development of tourism as the key development factor of the lodging industry worldwide. These approaches are set as the main change and development approaches in this report.
Advantages and Potential Problems
The proposed approach is to be reviewed in terms of its rationale, advantages and the potential problems which need to be evaluated prior to taking any action in terms of implementation of this approach. Organizational change does not occur without the understanding of the key considerations which move the organizational development towards certain direction.
The first approach is based on the fact that suppliers can serve as multiple sources of investment. Despite the fact that the American Hotel & Lodging Association is a non-profit organization, it still requires members and membership fees for various projects. Suppliers in this case are the source of such projects due to the fact that they are always eager to get closer to hotels and other types of lodging facilities.
Moreover, suppliers bring a lot to business. They are the sources of master classes, training material, various projects, while the hotels are limited in terms of type of service that can be provided to the non-profit organizations.
However, it is important to mention that there are various types of threats to the development of the American Hotel & Lodging Association in the case of supplier model approach. When suppliers become members, they will start their promotional activity within the organization. Hotels and lodging facilities are the target market for suppliers, and the conditions provided by the organization are favorable for suppliers in terms of business environment. In this case, the potential problems exist in the form of member saturation.
The hotels will not accept the fact that the membership, which was granted to similar organizations only, is now granted to other companies. The exclusivity of the membership in the American Hotel & Lodging Association will suffer. So will the reputation of the organization. Members will not want to be confronted to the potential disturbance in the face of suppliers, and the latter will not stop their promotional activity within the organization. In this case, all the meetings, conferences, forums held by the organization will become a typical supermarket for selling and purchasing products and services among suppliers of hotel products and their potential clients.
Other approach that is mentioned is the orientation on tourism and its major factors as the driving force for lodging development. The advantage of this approach lies in the fact that the tourism indeed plays a significant role for hospitality industry. When traveling is supported by the large portion of disposable income, when the political situation in the world is stable and the cultural aspects and conflicts are nowhere to be present, the people are traveling very actively around the world and visiting various hotels and restaurants.
However, when the situation changes slightly, there is significant effect on the hospitality industry: the hotels lose their occupancy rates, and the forecasts harm themselves. The worse the situation gets, the worse the forecast should be made in this case.
The potential problem with this approach lays in the fact that tourism and the factors affecting it are very hard to predict. Despite the large amount of analytical tools and techniques available at the American Hotel & Lodging Association, the analysis of such type together with its implications requires comprehensive approach and very detailed research.
For this reason, taking the steps towards provision of travel arrivals analysis and tourism growth forecasting can result in ‘double standard’ for the organization: complex analysis and addressing tourism may bring positive results to the image of AHLA, but the research which does not prove its effectiveness in the real world may hinder the reputation of the organization.
Both approaches are interesting in terms of their adaptability to the needs of AHLA members, and both of them have challenges for implication. Therefore, in order to proceed with organizational change and development, some basic internal factors within the American Hotel & Lodging Association need to be addressed to provide a solid background for the implementation of the proposed approaches.
Organizational Development
Organizational change is not a process which has deadlines like various projects related to development. Structural changes, which are part of the organizational change, are set to improve the bottom line of organizational function, and therefore the complex approach is in most cases a combination of the proposed factors and those factors which need to be changed or developed internally.
According to Hamlin, Keep & Ash (2001), ‘organizational change programs fail because management fails to rise to the challenge which change brings’. Therefore, the managers are not facilitating change but fulfilling a list of functions which is completely incorrect. The change and development in organizations is now happening because of technology, globalization, and government (Hamlin et al., 2001). These factors are also a powerful basis for the external factor analysis for organizational change. Based on technology and globalization, the proposed approaches for the American Hotel & Lodging Association were proposed. Government in this case only plays a role in terms of tourism development, influencing travel figures.
It cannot be denied that the power of competition as a factor also acts as one of the drivers for organizational change and development. For this reason, it is recommended to conduct a thorough competition analysis prior to introducing both approaches. It is suggested that both of them are completely new to the hotel non-profit organizations in general, and that is why the consequences need to be evaluated in advance prior to taking any sort of action towards implementing the approaches.
Conclusions
The current stage of development of the American Hotel & Lodging Association indicates a necessity for organizational change. The proposed analysis of both of the listed approaches allowed the review of both of them in detail. The first approach, which is derived from the fact that there are less members in the organization than the potential figures, entitles the organization to change its membership approach towards providing suppliers of the hospitality and lodging services and products the right to enter the American Hotel & Lodging Association with the same membership conditions as the current members – hotels, models, and other types of lodging facilities.
The other approach, which has been proposed, is based on the fact that the more lodging services are being developed around the world the more the need for consolidated approach towards tourism is being facilitated. For this reason, the tourism data on travel arrivals is investigated within the proposed approach.
However, the application of both of the proposed approaches is not possible only from the side of their external environment role. Due to the fact that both the membership extension and the application of tourism-based statistical strategies are the factors of the macro-environment, their application is not possible without the diagnosis of the internal factors of the organization itself, i.e. the micro-environment.
Addressing organizational change and development from the side of the micro-environment is critical due to the fact that lodging in terms of its particular characteristics cannot be dealt with in the short term period. All changes to the hospitality industry are visible in the long run, and that is why organizational change, which entails organizational culture, structure, and information systems need to be improved together with the implementation of both of the approaches.
For this reason, the focus is to be made on communication systems. Membership expansion as seen from the report is likely to affect the image of the organization, and the internal communication needs to prepare a strategy for membership expansion, which will facilitate the process with minimum harm to the organization and its values as the non-profit lodging association.
At the same time, information technology (IT) and information systems (IS) departments are important to the project due to their close relation to the forecasting and Educational Institute responsibilities of collecting and transforming data into reports and findings. All the above mentioned changes will directly influence the internal structure of the American Hotel & Lodging Association.
Recommendations
Recommendations are listed in order to the process to run flawlessly. The general recommendation is the preparation of the approaches as a separate strategy for the development and change within the American Hotel & Lodging Association. Both the membership expansion and the tourism forecasting need to be addressed as separate strategies and to be implemented at all organizational levels.
The responsibility of communicating the strategies to the employees needs to be assigned to the senior management. The information systems of the organization need to be changed and adapted to ensure the flawless strategy implementation. At the same time, new software has to be installed for the implementation of the second strategy.
Finally, the diagnosis of the whole process of approach implementation in the form of a strategy has to be examined. As Singh (2005) mentions that the diagnosis ‘provides a basis for structural, behavioral, or technical interventions to improve organizational performance’.
Limitations
The report has been prepared within a limited time frame. Not all areas of the American Hotel & Lodging Associations have been explored scrupulously. In-depth approach should be applied to review the potential outcomes of the proposed strategies and approaches. Also, the members of the organization need to be informed and asked for feedback prior to taking actions.
