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Responsibility in Hospitality Industry

The functions of every organization revolve around personalities whoare charged with specialized mandate, which is dictated by theirrespective positions. The focal point of authoring success inbusiness is rendering total focus, on creating value for thecustomers. The basis of the hospitality industry is to servecustomers. In order to live the true meaning of this social-businessrole, every stakeholder in the hospitality industry must dischargeand undertake their responsibility responsibly. Hospitality industryis made up of different stakeholders who include regulatoryauthorities, hotel workers, hotel management, government agencies andcustomers. Stakeholders within and without the hospitality industryare obliged by social ethics, personal values, organizational cultureor legal dictate, to efficiently take the responsibilities thatvested on them. Within the hotels, responsibilities are clearlydefined by employment agreements, while external responsibilities aredefined by the mission of the organization and legal framework withinwhich the hotel operate.

Responsibility can be defined as the assigned duties to a particularperson or party. Despite individual responsibilities that are begotby the virtue of occupying a particular position, there is collectiveresponsibility in the hospitality industry. Collectiveresponsibilities are undertaken by an alliance of differentindividuals or parties. Undertaking responsibility ensures that thebusiness does not attract unfavourable externalities such as civillitigation, the public uproar, customer dissatisfaction and employeesdisgruntle. This study will take an outlook of the responsibilitiesof various stakeholders in the hotel industry and evaluate theexternal impact of neglecting these responsibilities. The study makesthe conclusion that responsibilities are not only dictated by theorganization policies, but they are also defined by the businessenvironment, culture of the people within which it operates and theregulations that are issued by various regulatory bodies. The ensuingsegment evaluates the responsibilities of the hotel owners (Carroll &ampBuchholtz 98).

Responsibilities of Hotel Owners in Hospitality Industry

In operating the business, the hotel owner’s acts as principalswhile the management act as their agents. Hotels are owned by eitherindividuals or the organizations. The owners are vested with themandate of formulating the missions and the visions of the hotel.However, for the publicly listed hotels, the roles of theshareholders are limited to holding the management in the account toensure that they discharge the duties accordingly. The ownersauthorises the management to undertake long-term initiatives thatwill affect the nature of the hotel business significantly (Carroll &ampBuchholtz 108). The moves that require the authorisation of theowners of the hotel include hotel takeover, merger or acquisition. Inthe takeover, for example, the hotel owners have the responsibilityof protecting their assets.

The owners of the hotel have the role to hire or retain themanagement (although this is to the laws within which the hoteloperates). The dispute between the roles of the management and ownershas been prevailing, owing to the slim line that exists between theroles of the two parties. This was evident in the owner-subsidiarydispute between Santa Barbara Beach &amp Golf Resort, Curaçao andits subsidiary Hyatt Regency Curaçao. In the case the owners of thehotel, accused the management of been in breach of their managementagreement and their appointed new agency to manage the hotel (Carroll&amp Buchholtz 105). A Trial Court of Curaçao disregarded thelitigation by the Hyatt hotel against the owner’s decision citingthat the management had the responsibilities of giving and revokingmanagement responsibilities.

The owners of the hotels have the responsibility of making sure thatthe business of the hotel is run in an ethical way. Ethical businessmeans that the hotel is operating within the law and it fulfilssocial support needs and initiatives. Social support initiatives aresuch as the corporate social responsibilities. They instruct themanagement on how to conduct the business. Given that the managementact under the instruction of the owners, the owners can be sued forthe actions of the management, however, this is limited to only whenthe management acted under the instruction of the owners. The ownershave the hotel have the responsibilities of attending the generalmeetings either in person or in proxy. Attending the general meetingsallows them to discharge their voting mandate on important plans andprojects of the hotels. The owners can also raise any concern thatthey have during the general meeting such as the rectification of thecompany’s vision (Enz 15).

The owners of the hotel can be sued for the infringement of any lawby the hotel. In the United States, for example, the foreign CorruptPractices act prohibits any business from involving in the bribery orpreparing fraudulent books of account. If a hotel violates theprovisions of this act, the management and the shareholders are heldresponsible by the Department of Justice. This is because the ownersof the business, either as a principal or when acting in person, havethe inherent responsibility of ensuring that the business operateswithin the provisions of its articles of association.

Responsibilities of the Management

The management of the hotel acts as the agents of the hotel owner.They have the responsibilities of ensuring that legal instructions ofthe owners are implemented. The management of the hotel makes thestrategic decisions that concern both short and long term functioningof the hotel. The responsibilities of hotel the management are listedin the hotel`s article of association. One of the most centralresponsibilities of the management is to ensure that they preparebooks of account. The management is vested with the mandate ofpreparing true and fair statements of the company’s financialperformance. The management report on the periodical financial andethical performance of the company to the owners (Enz 15-28). Themanagement is held responsible for financial mishaps of the hotel orpreparation of the financial statements that do not reflect fairlythe financial operations of the hotel during the period under review.

The management has the fiduciary role of using the assets of thehotel owners in a prudent manner. This includes investing in theprofitable portfolios. The management act on behalf of the owners andtherefore they are required to execute the interests of theshareholders or owners. In case the management does not pursue theinterests of the shareholders, the owners can sue them or seek alegal injunction to remove them from their positions. Failure by themanagement to use their responsibilities effectively has resultedinto various agency conflicts. The fiduciary responsibilities holdthe management liable for mismanagement of the hotel operations. Theyare supposed to execute all matters with while figuring out theinterest of all the stakeholders (Rodríguez 112). They are alsoresponsible for making sure that the formulate strategies are in linewith the government and other relevant authorities. In the UnitedStates hotel operation are regulating by amongst other authoritiesOccupational Safety and Health Administration. The management makesthe strategic decision within the hotel. These strategies includewhether to expand lodging series or to increase the number ofemployees and whether to diversify the business or to concentrate inone field.

Legally the management has six basic duties, that is, the duty ofhonesty, care, loyalty, skill, diligence and prudence. The honestyresponsibility requires them to observe honesty when conducting allthe business of the organization. The duty of acre requires themanagement to run the organization in good judgement and good sensein the same way the reasonable person would act. The loyaltyresponsibility calls for the management to accord undivided loyaltyto the organization. In line with loyalty responsibility, themanagement is prohibited from running hotel business or any otherhospitality business that will compete with the hotel that theymanage. Management is required by the civil law to use the reasonableskills while making the organizational decisions (Enz 92). The duediligence responsibilities require the management to ensure that thehotel takes all the measures possible to prevent present all futureinjury or damage person or their property within the hotel. Themanagement can be sued for duty of care in such access as when theysell poisonous or poor quality food. The customers have the duty todemand the care in all services that are offered by the hotel thatthey visit.

The management has the responsibility of taking care of employeesare workers in a hotel. These responsibilities include paying theemployees full packages and ensuring that they have good workingconditions. The management should also protect the employees from allmanner of discrimination. This would prevent civil litigation andstrikes like the Congress Hotel workers strike which took a wholedecade. The employees of the hotel accused the management of cuttingtheir wages and freezing their fridge benefits. The hotel managementwas also accused of poorly treating the employees and the customers(Ayuso 207-220). The tax authorities give the management of the hotelthe responsibilities of deducting tax from the employees andremitting it to these authorities. Failure to remit the tax to therelevant authorities can lead to criminal litigation under the taxlaws. Other major responsibilities of the hotel management includethe responsibilities of ensuring the business observes high corporateethics, undertake social corporate responsibilities and lead thehotel in such occasions as volunteering of its employee. They aresupposed to ensure that the business takes care of the environment.

Authorities’ Responsibilities

Like any other sector, hotel business is regulated by variousauthorities. Each authority is vested with responsibilities ofensuring that the hotels within their jurisdiction observe the law.The environmental authorities ensure that the hotel uses theenvironmental friendly way of carrying out business. The hotels havethe responsibility of reducing greenhouse emission, keeping theenvironment clean and recycling their wastes. Many jurisdictions haveformulated laws that regulate the manner in which the hotels andother business take care of the environment. Other authoritiesinclude tax authorities, employees’ welfare authorities andconsumer protection authorities. The consumer protection authoritiesensure that the hotel prepares and offers services that are notharmful to the customers. The authority has the responsibility oftaking legal action against any hotel or organization that does nottake care of the customers. On the other hand, the tax and governmentagencies have the responsibilities of certifying that all the hotelsoperate within the law taking care of all the legal responsibilities(Rodríguez 824-839).

Employee Responsibilities

The workers have various responsibilities that are given to them bythe employees’ contract, industry laws, company policies andindividual values. Under the law, the employees are required toconduct their business in a legal way. They are supposed to take careof the customers and certifying that they are satisfied. The essenceof having the employees in the hotel industry is to address theconcerns of the customers and to forward them to the management. Theemployees are legally liable for their actions that will devastatethe plight of either the hotel or the customers. Despite the legalresponsibilities, the employees are also required to observe theprofessional ethics as they are carrying out their daily duties. Theprofessional ethics give the employees the responsibilities ofensuring that they do not disclose any information that they mightcome across in their line of duty to any unintended person (Ayuso207-220). Other responsibilities of the employees include remittingtheir tax, observing courtesy in their work, subordinating theirinterests and objectives to the common objective of the organizationand discharging the duties that are bestowed on them by theirposition or by the management.


When entering a particular hotel they enter into an implied contractthat they accept the services that are offered in that particularhotel. As such, the customers are supposed to keep their side of thecontract. The main obligation of the customers is pay considerationin exchange for the services and products that they get from thehotel. The customers are, therefore, obliged to payment for anyservice that is offered to them. The customers are also given theresponsibilities of raising any complaint that they have on the stateof services offered to them. Complaints are used by the hotel tobetter their services. The customers have the legal responsibility ofreporting any illegal activity that they see in the business of anyhotel (Enz 118).


Taking responsibility is one of the most critical components ofsuccess in a hotel. Hotels are operated by different parties who aregiven various duties. Undertaking the responsibilities ensures thatthe business runs in a smooth and coordinated way. Despite thesuccess of the business, undertaking responsibility helps a hotel toavoid unnecessary costs that are accrue due to responsibilityomission. The costs include litigation costs, loss of reputation,loos of customers, internal conflicts and conflicts with differentauthorities. When the owners of the hotel undertake theirresponsibility effectively, they will keep management on the task ofensuring that the business follows its mission and takes care of allthe stakeholders. On the other hand, the management function in thehotel is to coordinate, Poland and direct other subordinateseffectively. They are therefore, mandated with the mandate of leadingall the other employees into taking their responsibilities. Inconclusion, all the stakeholders in the hospitality industry areobliged by law, ethics and organization values to take theirresponsibilities which will ensure that the hotels remain in businessfor the foreseeable future.

Works Cited

Ayuso, Silvia. &quotAdoption of voluntary environmental tools forsustainable tourism: Analysing the experience of Spanish hotels.&quotCorporate Social Responsibility and Environmental Management13.4 (2006): 207-220.

Carroll, Archie B., and Ann K. Buchholtz. Business &amp society:ethics and stakeholder management. Mason, OH: South-WesternCengage Learning, 2009. Print.

Enz, Cathy A. The Cornell School of Hotel Administration handbookof applied hospitality strategy. Los Angeles: SAGE, 2010. Print.

Rodríguez, Francisco J. García, and Yaiza del Mar Armas Cruz.&quotRelation between social-environmental responsibility andperformance in hotel firms.&quot International Journal ofHospitality Management 26.4 (2007): 824-839.