What Are The 4 Different Sectors of The Hospitality Industry?

The hospitality industry is vast, covering everything from catering, hotels and retail to sports centres, conference venues and casinos.

While some businesses may target just one particular sector of the hospitality industry, it's common practice that many businesses will span across multiple sectors.

In this blog, we will break down each of the 4 defining sectors and explain more about these multibillion-pound industries.

Waiter serving a drink

1. Food and Beverage

The food and beverage sector is the largest of the four sectors in the UK. It's also the fastest-growing sector with over 50% of businesses expanding into new premises or taking on extra staff within the last year.

The food and beverage industry includes all leisure, hospitality and retail outlets that sell prepared and packaged foods. This includes restaurants, bars, cafes, pubs and takeaways.

It is particularly common to see the food and beverage sector integrated into the other three segments seamlessly. For example, many hotels (the accommodation sector) will provide an on-site restaurant, enhancing the experience of its patrons with excellent food and first-class customer service.

Not all establishments within the food and beverage sector play on the same field. Within this sector, there are different levels that require varying degrees of staff and skills.

Quick-service businesses which offer snack food will often hire fewer employees in comparison to the larger full-service restaurants due to their reliance on self-service to keep food costs down.

Larger scale operations such as fine-dining restaurants will often look for working staff with multiple years of experience as opposed to fast-food style businesses where cheaper and lower-skilled workers are more desirable.

There are even food and beverage businesses that will come to you in the form of catering. From weddings to business conferences. All and every occasion can be met with generally smaller standalone operations filling this need.

2. Travel and Tourism

Travel and tourism is a multifaceted sector that is generally regarded as the act of travelling from one location to another, either for business or pleasure purposes.

The act of travelling to another location must be for at least 24 hours but no longer than one year.

In recent years, the travel and tourism sector has experienced a sharp increase in growth.

This is mainly due to people's desire to travel further away for their holidays with more than 1 billion trips made abroad each year.

However, this growth hasn't been without its problems with many airlines experiencing near-collapses within the past decade.

Buses, taxi's, planes, ships, trains and so on are all considered part of the travel industry.

You may have noticed in movies, or even been asked yourself personally, that travel operators often ask customers if they are travelling for business or pleasure. These two sections of the travel industry segment can have quite a significant impact on the experience of the same journey.

Leisure travellers are more flexible with dates and are much more sensitive to price changes and have different requirements (e.g. child seats).

Business travellers on the other hand are generally bound to specific dates (corporate meetings to attend) and are less sensitive to price fluctuations since companies will pay for their employees to travel for business-related matters.

3. Lodging (Temporary Accommodation)

The lodging segment means providing accommodation for a period or a place to sleep for one or more nights.

Hotels, youth hostels, inns, bed & breakfasts and guest houses are all part of the lodging industry.

Each market themselves based on location and facilities. Business travellers, leisure travellers, budget travellers, special travellers (government, military), all have different needs and requirements and not every business within the lodging industry can accommodate all these markets.

Within the UK, businesses that offer accommodation must adhere to strict Crib 5 (also known as Ignition Source 5) regulations.

In short, these regulations ensure any furniture or furnishings used on the property must be treated in a way to reduce the risk of ignition which is to help prevent death in the event of a fire.

Such furniture as Zip & Link Beds must pass rigorous tests to ensure they comply with all the necessary regulations.

As with other segments of the hospitality industry, the lodging segment can marry well with other hospitality segments to create a seamless and pleasurable experience.

4. Entertainment and Recreation

This segment of the industry is vast and has various sub-segments.

Featuring many attractions from cinemas to theme parks, museums to zoos, casinos to waterparks, indoor play centres to outdoor recreation activities such as paintballing or karting.

Depending on your location some of these facilities may be more prominent than others but generally speaking, they are all part of the entertainment and recreation industry.

People will visit these places for many different reasons such as business, special occasions, leisure or just to have some fun with friends or family.

Again, from a commercial aspect, this can be tapped into by a hospitality company offering special packages that include accommodation alongside tickets to local attractions/facilities.

The entertainment segment relies heavily on its consumers having disposable income. Without an income, the entertainment segment is out of reach and therefore never even considered.

This can be a challenge for smaller hospitality companies as it has to rely on repeat business from existing customers or new business from people that have no experience with the company before.

A good way around this could be to offer complimentary visits or free entry for a period of time for new customers such as a trial period or the first two visits free.

Another way could be to promote the facilities through schools/universities in an attempt to build loyalty before those people move into the adulthood age bracket that requires disposable income e.g. students moving on from University accommodation, living with parents and so on.

Takeaway

The hospitality industry is vast and its segments are each diverse. Each segment helps one another thrive with developments in technology to improve management skills being on the rise.

With all this growth ahead for the hospitality sector, there will be endless possibilities for those who want to enter into this exciting field!