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The Hospitality And Tourism Industry Tourism Essay

The Hospitality And Tourism Industry Tourism Essay

Hospitality and tourism industry nowadays has become one of the large and essential industries that contribute to Malaysian economy. With more and more jobs on offer, hospitality and tourism industry are among the growth industries in the world. The Malaysian Department of Statistic has reported that Labor Force Participation Rate (LFPR) in tourism industry is 7.4%. So, this indicates that workers participation in this industry is quite high and same important with other industry in Malaysia. Hospitality and tourism industry has grown from the days of the late 80’s until 2012. Hospitality is between guest and host and a service that includes in terms of accommodation, restaurants, event planning, casinos, catering, resorts, theme parks, transportation, cruise line, and additional fields within the tourism industry. Each unit hospitalities like hotel or restaurant has its own management as waiters, receptionists, cleaners and others. However tourism can be define as the leisure, business purpose and also the recreational time for people that need rest.

In Malaysia, statistics show foreign tourists come to Malaysia increased from year to year. As in 2009, foreign tourists coming to Malaysia is 23.6 million while in 2010 it rose again to 24.6 million people. For 2010, Malaysia earns the profit of MYR57bn of the total expenditure from foreign tourists. In 2011 Malaysia had recorded a total of 24.7 million foreign tourists came to this country and it showed a slight increase from 2010. Revenue from foreign tourists, this country has been incurring a total MYR58bn in 2011. Malaysian Association of Hotels (MAH) was established in the year 1974, it is intended to further enhance hotel service and this also show Malaysia government take a serious action in attracting foreign tourists to come and show this industry will become one of important industries contribute to national economy. Par with the current technology, the government has implemented a development plan and the progress of the hospitality and tourism industry, it also includes the improvement of the hotel industry in Malaysia.

Hotel industry is booming in Malaysia, especially in places that have an attraction to tourists, such as in coastal areas and historic sites. Malaysia is famous for its country has many islands such as the island of Langkawi, Redang Island, Perhentian Island and others. Focus area for foreign tourists is in Malacca, because Malacca have many places to visit as well as the history of the formation of this country is in Malacca. Referring to the hotel industry in Malaysia, the rapid development in every state has led the industry also be involved, it is expanding from time to time. In the Klang Valley area, there are hundreds of hotels for tourists, it is made up of budget hotels, 3 star hotel and above. Among the famous hotels around the klang valley between them is Concorde Hotel Shah Alam, Quality Hotels, Holiday Inn Hotels, Hilton Hotels, DePalma Hotel, One World Hotel, Sunway Resort Hotel & Spa and more. There are various facilities provided by the hotel such as a gym, swimming pool, spa, family karaoke, bar, technology center and convention rooms. It is because around the hotel there are interesting places to visit for tourist such as KLCC, KL tower, National Museum, I-City, Sunway Lagoon and luxury shopping complex. These places have attracted tourists to come to Kuala Lumpur and Selangor. The state government said the influx of foreign tourists promote the construction and hotel to cater for the undertaking of these tourists.

Existing hotel needs many people to manage and provide services that are consistent with the objectives of the hotel. A hotel 3 star hotel and over has more than 50 employees to ensure smooth running of the hotel management. The problems was faced by the hotel management is about worker turnover. This is raises worries to all hoteliers. So, this research is conduct to study and examine the antecedents of workers turnover in hospitality and tourism industry in Malaysia specifically in the area of Klang Valley. After make some reading and analysis from previous study, it is found that there are some factors influencing to this situation which is worker turnover. Remuneration system, job satisfaction, incentives and working conditions are considered as the determinant. However, the concern and attention of this study is the most important factors that influencing to workers decision to come in and out from the industry.

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1.2 Problem Statement

Currently, hospitality and tourism is one of the world biggest and fastest growth industries especially in Malaysia. This industry offers vast job opportunities but still have problem of worker turnover, there are many factors that contribute to workers leaving their work. The problem to be analyzed in this research will be the reasons on workers are turnover. It is surprising given that hospitality and tourism industry has been characterized in terms of high turnover rates, a part-time and causal workforce and an absence of the internal labor market (R.D. Iverson). Estimates of average annual employee turnover range from around 60 to 300 percent (B. Ronra).

1.3 Purpose of study

Each of research and study should have their own reasons and purposes. The purpose of this study is conducted in order to gain more understanding of the relationship between the remuneration scheme, job satisfaction, and incentives with workers turnover rate happen to employees in this industry. The result derive from this study will show whether all the factors will effects to workers turnover in Hotel industry.

Research questions

Is there any relationship between workers turnover rate with the remuneration scheme given to employees in hospitality and tourism industry?

Is there any relationship between workers turnover rate with the job satisfaction level among workers in hospitality and tourism industry?

Is there any relationship between workers turnover rate with the working environment given to employees in hospitality and tourism industry?

Is there any relationship between workers turnover rate with the incentives to employees in hospitality and tourism industry?

What is the most important factor that effect to workers turnovers rate in hospitality and tourism industry?

Research objectives

To identify whether workers turnover rate in hospitality and tourism industry can be effected by the remuneration scheme, job satisfaction, working environment and incentives.

To identify the most important factor that contributes to workers turnover rate in hospitality and tourism industry.

To suggest some recommendations for future study.

Research Hypothesis

A series of testable hypothesis were developed from the proposed research model, as shown below:

Hypothesis 1

Ho: workers turnover in hospitality and tourism industry was not influenced by

the remuneration scheme.

Hi: workers turnover in hospitality and tourism industry was influenced by the

the remuneration scheme.

Hypothesis 2

Ho: workers turnover in hospitality and tourism industry was not influenced by

the level of job satisfaction of employees.

Hi: workers turnover in hospitality and tourism industry was influenced by the

level of job satisfaction of employees.

Hypothesis 3

Ho: worker turnover in hospitality and tourism industry was not influenced by

working environment condition to the employees.

Hi: worker turnover in hospitality and tourism industry was influenced by working

environment condition to the employees.

Hypothesis 4.

Ho: workers turnover in hospitality and tourism industry was not influenced by

other incentives given to the employees.

Hi: workers turnover in hospitality and tourism industry was influenced by other

incentives given to the employees.

Significant of study

1.7.1 Policy maker

The result obtain can help policy maker (government) to make a needed action to any problem incurred in labor force participation especially in hospitality and tourism industry.

1.7.2 Hospitality and Tourism industry

The result of this study can allow the management of hotel and tourism industry to understand more and also to be closer to the real situation about worker turnover issues. They also can implement any suitable action in order to improve workers arrangement in their management system.

1.7.3 Researcher

Researcher can understand deeply about the real situation in labor force. This knowledge is useful in future when this researcher enter the labor force and maybe he/she can provide own opinion and advice to his/her employer regarding worker turnover problem.

1.8 Limitations of Study

Every research will have own limitations. This study also has limit by some factors.

The limitation is as follows:

1.8.1 Population

First factor is population, as the sample is only focus to the respondents who works in the area of Klang Valley. This study may have different result or can be more strengthened if the sample area is enlarging to other hotel around Malaysia. A detail empirical analysis among variable that have multiple categories can be perform when the sample size is to be increase.

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1.8.2 Lack of time

Next limitation in this study is about the time. There is about 5 months to complete this research and it will cause to the lack of time in order to collect more information and to properly prepare the full report for it. More time may provide with more detail and better research.

1.8.3 Lack of experience

Because this is the first individual research to the researcher, so the study will be conduct in the very minimum knowledge and lack many of experiences. It also may cause the researcher make many mistake further needs for corrective action.

1.9 Definition of term

1.9.1 Worker turnover

Cited in Minyen Ku, according to Phillips and Connell (2003) this term can be define as “the percentage of employee leaving the organization for whatever reasons”.

1.9.2 Remuneration

An exchange of service performed by employee in terms of monetary or also refers to as wages and salary.

1.9.3 Job satisfaction

Different perception felt by every employee of job that is entrusted, whether it is satisfied with the job or not.

1.9.4 Working environment

Factors that can determine an employee’s performance analyzed as physical environment, equipment provided, great facilities, materials used and others.

1.9.5 Incentive

The reward given by employer to his worker and example like a bonuses, holiday package, insurance cover and health care.



Currently there is a lot of people come in and out of labor force. According to F.B Puteh (2011) every individual in their life will follow five main stage of career development. The first stage of the career development is starting in the age of 16 to 25 years old. At this stage an individual is trying to find a suitable job in labor force. It is followed by the second stage when that individual has chosen the best job and enters to any organization. Next stage of career development is begin when individual reach an age around 25 to 40 years old. In this stage, early career for an individual begin beside they try to adapt with the work environment and condition at this time. Further continue with the fourth stage when an individual start to put some effort and hoping for appraised by others people in an organization they work. However, at this stage there might be many things to happen and cause a workers turnover to be occurs. Last stage is the growth of the career until the day of retirement.

The Malaysian Department of Statistics has revealed in their latest report 2010, Malaysian total of population is stands at 27,565,281 (K.S. Chen, The Star 2011), with around 11,517 of them is in the labor force. In Malaysia, the tourism industry has been identified as the key driver in the growth of the service sector (Economic Planning Unit, Prime Minister’s Department, Malaysia).

2.1 Perspectives of worker turnover

The hotel industry is one of the sectors that contributed to the economic growth of a country. Throughout the world there are thousands of hotels antecedent labors. This is to accommodate the arrival of tourists from inside and outside the nation. However there is a problem faced every hotel management around the world is about worker turnover. Globally, the turnover rate in the hotel industry is estimated to range from 60 percent to 300 percent annually, far higher than the 34.7 percent reported in the manufacturing industry (Foley, 1996). Many organizations in the hotel industry face difficulties in retaining employees since they are unable to identify the factors that contribute to both employee satisfaction and loyalty (Rahman, 2011). Annual turnover rates as high as 50 percent remain the standard in the hospitality industry, and many hotel operations have chosen to simply accept this as a fact of doing business (Levine, 2005). According to Cornell University estimates, turnover in the hospitality industry averages more than 100 percent with the cost of turnover at about $5,000 per associate in lost productivity and wages (Davies, 2006). Effect of worker turnover included to all system or management of hotel industry. From the organisational perspective, employee turnover can represent a significant cost in terms of recruiting, training, socialisation and disruption as well as a variety of indirect costs the higher the turnover will caused more pressure placed on recruiting because it increase cost of training, loss of productivity plus its take time. (C.Y. Chang, 2010).

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2.2 Perspectives of remuneration.

Every the job done whether related with the service, production, management, wages paid with, whether they are paid according to the hours worked or monthly. In the hotel industry, most workers are paid by the hour. If the wages paid to non-favourable, it can cause worker turnover. Remuneration scheme is one of the factors that will influence worker turnover in hotel industry. According to Jichul Jang, B.S (2008) the nature of hotel work such as labor intensive, low in wage, and promotion opportunities are limited will automatically increase worker turnover in hotel industry. Not worth it income or pay and also hours worked will be the strongly reason for hospitality and tourism industry will make worker leaving the organization (Pavesic and Brymer, 1990). ”Highest influencing factors affecting employees’ turnover was the insufficient tools and resources to do the daily job, followed by inadequate recognition and rewards for a job well done, the benefits received were not met with the employees’ needs, the salary and responsibilities were not compatible and the career path advancement was not compensate for lack of salary increase”, (Boondarig Ronra and Assoc. Prof. Manat Chaisawat, 2011). Moreover, based on Assoc. Prof .Cengiz demir , the reason why many employees quit the job because lack of wages. Most employers assume that higher workers turnover reflect of lower paying job and it if proved that workers turnover is very costly (Mobley, 1982).

2.3 Perspectives of job satisfaction.

According to M. M. Alam and Jamilha (2009) stated that job satisfaction is an attitude of an individual towards his jobs that extending to the feeling of different perception. Hospitality and tourism industry has face some difficulties in retaining and maintaining loyal employees since inability to identify the factors contributing to employee job satisfaction and loyalty (Rahman A. , et al 2011). Workers turnover is assumed related to the level of job satisfaction. Satisfied workers usually become more loyal towards their employer. Whether met or unmet, employees’ expectations of the job itself will influence their subsequent job satisfaction (Wanous,1992). Knoop (1995) stated that job satisfaction is found to be a significant predictor of organizational commitment and also become an important factor to the intention of workers turnover. As cited in Boondaring Ronra the absenteeism and high workers turnover is reported to be related to job dissatisfaction level. While lower absenteeism is associated with high job satisfaction. The research also study and shows a consistent relationship between leadership support and job satisfaction which is also affecting employee turnover. Another element and factor to deciding job satisfaction is career motivation (Jichul J., 2008). Higher level of management should understand what motivates their employees in their jobs for the purpose of increasing job satisfaction and reducing employee turnover.

2.4 Perspectives of working environment

Since the hospitality and tourism industry is labor intensive in nature, the customer retention and defection are highly dependent on how the frontlines deal with customer (M. A. Hemdi, 2006). The employees feeling towards their work environment will affect the level of service they may provide (Yin.T. C, 2008). The more satisfied workers to the work environment are assuming to give and serve their customer better than those who are less satisfied. “Stress theories assume that individual can try to cope with the stress they are experiencing”, Desmette and Gaillard (2008). Workers usually have leads to leave their job if they feel uncomfortable. O’Reilly et al (1991) in their result revealed that employees will have reduced commitment and higher intent to leave if they do not fit the organization’s cultural requirement. According to Terry Lam et. al (2002) reduction of work – related stress, increase job satisfaction and motivation, and improve performance is normally reflected by a positive perceptions of workplace relationship.

2.5 Perspectives of incentives.

Incentives for employees go a long period of time in increasing the productivity and thereby lowering the worker turnover. Incentives for employees such as flex hours and/or telecommuting, health and wellness program, insurance package, paid holidays and relaxation, social and networking events and others. If hotel management not offers good incentives for their worker, it will make worker turnover to ensure their loyalty to the hotel. The manager should hold social activities as a reward to them, it was thus able to increase their loyalty to employees (Catherine, 2002). From the journal Executive White Paper, they said “turnover is less when employees have a high level of value for their work, these employees persist more than colleagues who report low levels of value, employers can help employees value their work through consistent praise, recognition, and special incentives”. A promotion is one of the best incentives to encourage employee’s loyalty. Moreover, promotions serve two rules in organization. First, they help assign people to the roles where they can best contribute to the organization’s performance. Promotion serves like incentives and rewards is a second rule (Fairburn and Malcomson, 2001). Other than that, if management unable to offer more money, so that give incentives is the best way to forced up the employees. Other word, incentives is benefit to the employees. The lot of benefit that management provided will make employees to stay. According to Heneman and Schwab (1985) defined benefits as most employees view or examine the benefits of a company given, it is not a form of money, but like insurance, health care, holiday package and so on.

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3.1 Research Model

The model examines the relationships of human decision in labor force which is workers turnover in hospitality and tourism industry with all the independent and moderate variables shown in Figure 1.











As shown in Figure 1 above, the workers turnover in hospitality and tourism industry will be the dependent variable for this research is analyzed for the purpose of deriving the result and answer to the research questions. Meanwhile, the independent variable for this research is the remuneration scheme, job satisfaction also working environment. Incentives will become the moderate variable for this research.

3.2 The Data Collection

Because this research is about the perception among workers in the industry the data for this study will be gathered in November 2012 by using primary data collection method which is a self-administered questionnaire. The set of questionnaire will be passed around and distributing to selected workers in hospitality and tourism industry in different gender, age, race, education level and department only in the area of Klang Valey, Kuala Lumpur. An appropriate questionnaire will be constructing and distributing to all suitable respondent.

3.2.1 Primary Data Collection Method

A set of questionnaires adopted from the combination of several previous studies has been constructing. The first part of the questionnaires included five questions about the demographic characteristics of the respondents such as their age, race, gender and others and this part will be answered by using category scale which is by just ticking an appropriate answer. Further part including and will be ask in the questionnaire is Part B which is the respondent’s perception and own opinion about the most factor that contribute to workers turnover in the industry in Malaysia. The main part of questionnaire is part C and it can be use to measures and derive the result that we want to test in this research. Likert scale which is the range from 1 to 5 is to be use to answer this part. This section is also used to test the hypothesis and measure the relationship of dependent, moderate and independent variable of the research.

3.2.2 Secondary Data

This research is also completed by using a secondary data and it is use for identifying other problem. Secondary data is also used as references in the literature review. Useful information and needed data is also obtained from various journals, articles, research methodology and labor economics textbooks, economic bulletins, websites, brochures and newspaper.

3.3 Sampling Techniques

3.3.1 A snowball technique has been used and the total of 100 set of questionnaires will be distribute to respondent which is a workers that work in this hospitality and tourism industry in Klang Valley. The respondents will be comes from different level of department in order to get any different perception towards workers turnover. The distribution of questionnaire is specific to the respondent from the age of 15 to 58 years old, worked in Hospitality and Tourism industry, and they will come from different kind of race, age, gender education level and department.

3.4 Measures

3.4.1 Procedure for analysis

Further step of this research is to process the gathered data. All data will be key in and process by the software of SPSS to examine the frequency, mean, standard deviation and others. This is really helpful in order to get the most influential reasons contribute to workers turnover in the industry. This research also provides a descriptive and frequency table for all the demographic profile information in order to analyze the data. It is use to determine the types and characteristic of respondent. The value of Cronbach’s alpha will be deriving to test the consistency and reliability of this research. This method will ensure whether all the questions ask in the questionnaire is consistent and suitable. Correlation analysis is to be use for the purpose of deriving the positive or negative relationship and also the significant of all independent and moderate variables with the dependent variable. R- Square, F statistic and t- test can be performed by measuring the regression analysis. Using the Multiple Linear Regression and looking at the t -test of the analysis, the research hypothesis and the most important factor that contributes to workers turnover can be determined

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