Managing Demand and Capacity in Hospitality Organizations

Managing Demand and Capacity in Hospitality Organizations



Managing Demand and Capacity in Hospitality Organizations

            In order to ensure that capacity is consistent with demand, hospitality firms can either increase the former or reduce the latter. As reducing demand goes against the profit optimization objective of any business venture managing capacity becomes the preferred option. It follows that the organization may involve the customer in the process of service delivery by packaging it as part of the experience. Self-service salad bars or vending machines may work as an efficient strategy to reduce the wait for orders. Similarly, automation of the check in and check out process is an alternative. Another effective tactic is cross training employees facilitating fluidity of operations (Crick & Spencer, 2011).  An employee has skills for multiple roles hence can cover for colleagues following their absence of due to unforeseen circumstances. However, if the hospitality industry is in its high season or a particular event requiring extra attention, it may warrant hiring part-time employees. The organization can extend its service hours to cope with demand.

Regardless of the techniques employed an organizations capacity inevitably reaches it limits warranting employment of demand management strategies. The organization could utilize queuing strategy. For the above to be effective the wait requires careful handling to prevent customer dissatisfaction (Ford, Sturman, & Heaton, 2011). Engage the customers in an activity or entertainment while they wait and ensure the said wait is fair. The former entails sending employees to talk to customers whereas the latter demands receptionist desist from taking calls in between clients making the waiting interval equal. Similarly, giving the customers tags on entry prevents unfair service owing to clients known to jump queues. In hotels, overbooking when managed properly can help manage demand. The organization may accept excess people to neutralize the waste of infrastructure caused by customers who cancel at last minute. Nonetheless, caution is advised as it may translate to a loss in reputation.


Crick, A. P., & Spencer, A. (2011). Hospitality quality: new directions and new challenges. International Journal of Contemporary Hospitality Management, 23(4), 463-478.

Ford, R., Sturman, M., & Heaton, C. (2011). Managing quality service in hospitality: How organizations achieve excellence in the guest experience. Cengage Learning.

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