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Productivity and Vocational Skills in Services in Britain and Germany: Hotels

Published online by Cambridge University Press:  26 March 2020

Abstract

Following previous comparisons by the National Institute of matched samples of manufacturing plants in Britain and Germany, this study applies similar methods to a branch of the services sector namely, the hotel industry. The objectives were to obtain measures of average productivity-differences between the countries in hotel-work, and to examine to what extent differences in equipment and training are important contributory factors. The paper discusses implications for schooling and training policies.

Type
Articles
Copyright
Copyright © 1989 National Institute of Economic and Social Research

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References

(1) Productivity, machinery and skills in a sample of British and German manufacturing plants, NIER, February 1985; A second look at productivity, machinery and skills in Britain and Germany, NIER, November 1987; Productivity, machinery and skills: clothing manufacturing in Britain and Germany, NIER, May 1989. These are all based on ‘field studies’ involving the measurement of productivity in samples of matched plants; related studies by the Institute have focused on the comparability of vocational quail fications in the UK and other countries and numbers passing at comparable levels (see, for example, comparisons of retaking qualifications with France, NIER, May 1989; and comparisons with Japan, NIER, February 1987).

(2) See the recent examination of the problems of measuring the real output of the service sector, and the apparent decline in productivity in British hotels of 1.2 per cent a year in 1971-86, by our colleague A. D. Smith, New measures of British service output, NIER, May 1989 (esp. p.87). The main problem seems to be lack of adequate adjustment for changes in the quality of hotel services, a matter discussed in section 2 below.

(3) We have here treated the self-employed as full-time, and a part-time employee as equivalent to half a full-time employee. An alternative estimate, taking into account that the average hours worked by part-timer in this industry are only 35 per cent of a full-timer's (16¼ hours compared with 45½ hours, according to a special tabulation of the Labour Force Survey of 1987) yields a total of 220,000 full-time equivalents in Britain. The true numbers in the two countries are perhaps slightly closer, since the German statistics exclude small hotels with a turnover below DM 20,000; these might add 10,000 persons to the number quoted above (Handels und Gaststattenzahlung 1985, vol.1; Arbeitsstattenzahlung 1987, Fachserie 2, Heft 4); the employment totals have been averaged over four quarterly statistical returns. Other sources for the above estimates are Employment Gazette, January 1989, and earlier issues especially Historical Supplement no.2, October 1987, p.16; the self-employed were estimated on the basis of the Census of Population, 1981 and subsequent Labour Force Surveys, with extrapolations; the German figures are from Statistisches Jahrbuch 1988, p.237, and earlier issues, and the DEHOGA Jahresbericht. A fuller analysis of employment in the British industry, by occupation, region, etc., was given by the Hotel and Catering Industry Training Beard (HCITB) in their Research Report, Hotel and Catering Manpower in Britain 1984 (Wembley, 1988), esp. Apps A and B comparing alternative statistical sources. Taking a broader coverage of the hotel and leisure sector, over two million employees were enumerated in the latter publication, ie about one in ten of the total workforce.

(4) The British figure for the rise in employment in hotels is based on employers' returns (from the Censuses of Employment, published in the Gazette), with adjustments for changes in definitional coverage in 1982, 1983 and 1986; other figures are from the official indexes of employment. The rise in ‘other tourist accommodation’ (holiday camps, youth hostels, etc) has been more rapid still in Britain and, if included with the main category of hotels, shows a total rise of 20 per cent in the past decade.

(5) Reality is of course more complex: it is male full-time employees that have been released from manufacturing in Britain, while female part-time employees have gone into hotel-work.

(6) Interpolated from the British Tourist Authority's Digest of Tourist Statistics (no.12), 1988, p. 70; the figures in that table include those known to the English Tourist Board even though not currently registered, and cover hotels, motels and guestheuses (those known to be houses of ill repute are excluded). An alternative estimate of the size of distribution of hotels and boarding houses for 1981, based on the Census of Population (Communal Establishments, HMSO, 1982, table 4) for Great Britain yields the same median of 27 bedrooms, and a very slightly narrower central range of 14-18 bedrooms (we have included an allowance for establishments with less than ten bedrooms not open for seasonal reasons at the time of the Census and assumed an average of seven bedrooms per establishment—as estimated in Hotels and Catering Establishments in Great Britain: A Regional Analysis, Part 1, HCITB, 1985, p. 14). For comparable size-groups of hotels, the Census of Population covered 50-100 per cent more establishments than the English Tourist Board (presumably not entirely because houses of ill-repute were included in the census); the similarity in estimated quartiles is surprising. The German quartiles were graphically interpolated from Beherbergungskapazitat 1987 (German Federal Statistical Office, series 6, no. 7.2), p.156; they include hotels, motel pensions, hotel garnis, but exclude small establishments with 8 or fewer beds. For comparability with Britain, we allowed for the omission of small establishments in Germany by adding 7 per cent to the total, on the basis of the size-distribution for England.

(7) Any future broader enquiry of this kind might consider whether hotels in country areas and in holiday resorts should be included.

(8) Previous international comparisons of the efficiency of hotels have related to the minority of large and luxurious hotels rather than to representative, middle-of-the-range, hotels which are our interest here. Professor Medlink quoted summary comparative figures on operating ratios on large hotels in his valuable textbook on The Business of Hotels (Heineman 1980, 2nd edn 1989. esp. ch. 9); these figures were originally compiled as part of the commercial service to the hotel industry provided by Messrs Horwarth and Horwarth, a leading firm of accountants with international affiliates (issued in their annual publication, Worldwide Lodging Industry from their New York office). Closest to our present study is a regrettably unpublished dissertation by Mrs Pat Wood, Principal Lecturer, Polytechnic of North London, who compared six large hotels in London and six in Berlin in 1987; it provided many valuable pointers for our study, though its concern was more with the provision of vocational education than with the sources of productivity differences. Valuable accounts of training for the German hotel industry were published, following short visits to that country, by the Hotel and Catering Industry Training Board in 1979 and by the Further Education Staff College in 1983; but these did not cover statistical comparisons of numbers qualifying, and comparisons of hotel manning-ratios, which are needed to assess the consequences for productivity (M. Allmond, T. Warnes and P. A. Wood, Continental Craft Training Study. German Report, HCITB, c.1980; Education and Training for the Hotel and Catering Industry, C. Ripper and R. Russell, eds, Studies in Vocational Education and Training in FRG, No 8, FESC, 1983).

(9) Limitations of the available national statistics on hotels are discussed a duplicated appendix available from the Institute.

(10) We believe a similar study of the restaurant and catering side of the industry would yield interesting results; as said allove, it would require a larger sampie becaus of the greater variability.

(11) In one of our pilot visits we came across a hotel in Germany where the Boots'was still a proud feature of its service (it was in a category higher then we eventually settled on for the main part of this study).

(12) So we were assured by the publisher, though an explicit list of criteria was not made available. The terms describing the classes vary slightly according to language and edition. Independent experts confirmed to us the international comparability of this classification, making due allowances for climate and other circumstances which may require varying importance to be attached to different aspects of comfort in different places.

(13) It is not possible to come to a judgement from published information on the difference between the countries in average quality of all hotels, since two-thirds are not covered by the Michelin classification. Our subjective judgement is that the range of qualities is greater in Britain, with both a greater proportion of the highest grade of luxury hotels (as is in fact shown by the Michelin guides) and a greater proportion of the simplest grades. See also note 21, below.

(14) The sampling errors of these averages were 0.27 and 0.21 respectively (standard deviations of 0.96 and 0.99). Slight definitional differences are current among hotels in the way they calculate productivity-measures of this sort; but such differences are unlikely to affect the ratio between the country-averages. For the benefit of individual hotels who wish to compare themselves with our sample-averages, it should be said that we included all personnel, including owner-managers and members of their families, and those away on annual holiday or sick in the week of the visit; in other words, we measured the number of persons normally required to be employed by the hotel per room-night or per guest-night.

(15) English Tourist Board, English Hotel Occupancy Survey, results for 1987; Statistisches Jahrbuch, 1988, p.240, taking an average of the winter and summer periods shown there for 1986-7. Occupancy rates for other large towns in Germany are not published apart from Hamburg and Bremen (42-44 per cent).

(16) It makes no great difference to the ratios of labour requirement if the denominators are inter-changed; for the sake of breveity, we quote only our preferred altarnatives.

(17) A subsidiary calculation on the possible effects on labour requirements of the ‘full English breakfast’ as compared with the ‘Continental breakfast’ may be footnoted. The difference seemed to be of some consequence in the ‘one-gable’ hotels; in the ‘two-gable’ hotels the German breakfast seemed as ample as in Britain. In both countries 13-14 per cent of total staff time was devoted to breakfast making. If we assume—which seems to us an extreme assumption—that in half the British hotels the breakfast was twice as large as in Germany, then the consequence of providing only the smaller (Continental) breakfast would be to reduce total labour required in the British sample by 3.4 per cent; the ratio of labour required per guest night in Germany to that in Britain would then appear as 53 per cent instead of 51 as in the text above.

(18) Half of the German hotels were garnis, compared with a seventh in our British sample.

(19) While there was a significant ‘London effect’ there were no comparable effects for Berlin or Frankfurt that could be detected in our sample (but it should be remembered that its size was limited). We may also footnote here the estimates for hotels garnis. In relation to hotels in Berlin—on which this inquiry focused initially—there seemed to be a saving of about 20 per cent in labour per guest in hotels garnis. When we expanded the sample to other German towns, a saving in labour of about a seventh appeared on our three measures of productivity; but the sampling errors are substantial (see Appendix A). A sample enquiry designed to focus on this aspect would seem to be worthwhile.

(20) A.D. Smith, D.M.W.N. Hitchens, S.W. Davies, International Industrial Productivity (Cambridge, 1982) p.5; that study was based on a detailed comparison of Censuses of Production. The estimated narrowing of the gap since then is basad on movements in indexes of output per employee-hour, and should be treated as approximate.

(21) A sample of five Dutch hotels was compared with five English hotels using broadly the same approach as in this study, with similar quality grades but slightly different definitions of labour-usage, by a Dutch final-year student at the Polytechnic of North London. The average number of guest- nights per housekeeping employee was 10.9 in the Netherlands, very close to the 10.5 reported above for Germany; for the English hotels in that sample which were spread between London and Southern England (but were not the same hotels as in our own sample) the average was 6.6 guest-nights per housekeeping employee, compared with 6.1 in our sample above. We are grateful to Miss Sandra Lont for allowing us to quote these figures. For purposes of comparison with previous studies of productivity in hotels, we may note here that the number of full-time-equivalent employees per room (rather than per occupied room, which is our preferred measure used in the text above) in our British sample was 0.45, and in our German sample 0.24. These may be compared with the very much higher manning levels—but including all restaurant personnel—reported for samples of top-class hotels by Horwath and Horwath for 1985: UK, 0.79 full-time equivalent employees per room; Scandinavia, 0.63; Continental Europe (no detailed countries reported), 0.63. Pat Wood's comparisons (see n.8, above) of top- class hotels showed similarly high averages of 0.76 employees per room in London and 0.73 in Germany (her original figures were in terms of beds: we have here assumed an average of 1.8 beds per room). Comparisons of hotel that are not of the quality covered by Michelin would clearly be of interest in order to arrive at a picture for the hotel industry as a whole in the two countries; from the great differences in manning-levels noted amongst hotels of different quality-gradings, it is clear that comparison of the hotel industry as a whole would not be of much value unless some independent judgement were first made on the average quality of hotels in each country.

(22) In a remarkably interesting study carried out twenty years ago, a firm of industrial consultants studied five British hotels with some care: they concluded that labour-saving of about a third was possible (NEDO, Service in Hotels, HMSO, 1968).

(23) Our calculations of hotel prices were based on a half dozen large towns in each country, excluding London and Frankfurt in which very high ground rentals unduly affected hotel costs. We calculated separate averages, for each of our two quality-grades, for the minimum price of a single room and for the maximum price of a double room; we then took a simple average of the resulting four ratios. The general PPP is taken from Purchasing Power Parities and Real Expenditures 1985 (OECD, 1987). According to detailed (unpublished) tabulations for the latter source, the prices of hotels in Britain were exceptionally high in relation to Germany: the PPP between Germany and the UK for hotel rooms was DM 2.01 /£, equivalent to only 46 per cent of that for total GDP in 1985 (55 per cent in 1980, according to Eurostat's previous compilation, Comparison in Real Values of the Aggregates of ESA, Luxembourg, 1983, pp. 328, 342). Unfortunately these international compilations are not as trustworthy as their glossy covers might suggest (British hotel prices were based solely on central London where hotels are exceptionally costly, while German prices were averaged over a number of towns; the grade of hotel was defined only as ‘standard category’, leaving much leeway to the individual collector). Our estimate in the text above of the difference between the countries' hotel prices is probably more reliable for the purpose of the above discussion.

(24) Technical maintenance seemed to be an undue problem in British hotels as much as in other parts of British industry; for example, both electric hand-dryers were not working in the toilets in one British hotel we visited.

(25) In Germany the computer also prepares the official returns to the statistical office on numbers of guests, length of stay, and country of origin.

(26) One hotel in our sample with forty rooms had previously bought a computer; on our visit a new manager was in the process of eliminating it—and going back to paper records—because the costs of operating a computer were not justified in a hotel of that size. It will be interesting to see whether the smaller computers, now becoming available, will be adopted in smaller hotels in the coming years.

(27) Any further study on the present lines might attempt costings of alternative modes of refurbishing so that the net costs of labour-saving features in each country could be estimated, and related to gains in productivity (it would have lengthened the present inquiry too far to attempt this).

(28) Two-year part-time vocational courses are sometimes taken in Germany by those who do not aspire to positions of responsibility; these lead to ‘assistant’ qualifications. Those unable to obtain apprenticeship or trainee positions on leaving school were previously required to attend non-specific part-time courses at vocational schools; more recently, this has been replaced by an additional full-time year in a vocational school. Only a minority of school-leavers follow these paths; the general statement in the text above thus continues to represent the essence of the contrast between British and German 15-18 year-olds.

(29) As just explained, our comparisons in table 1 relate as far as possible to those qualifying and entering hotel work; had we taken a broader approach and included for both countries those qualifying and proposing to work on the domestic side of hospitals and other public institutions, the German advantage would have been closer to fivefold (30,000 qualifying in German 6,000 in Britain). For the numbers training in other occupations in Germany and Britain, see NIER, August 1983.

(30) Specimen examination papers for this course, translated into English, were published in the HCITB report on German training, op. cit., pp.41 et seq. On the higher entry-levels of trainees for this course, see Bildung und Kultur, series 11.3, German Federal Statistical Office, 1985, p.69.

(31) HCITB, op. cit., pp.19 and 22.

(32) From the German Labour Force Survey (Microzensus, unpublished tables) for 1985 it appears that a considerably higher proportion, 49 per cent, of all employed in hotels and catering (industry group 66) had vocational qualifications; but some persons with vocational qualifications in non-related occupations (e.g. retailing, seamstresses) were excluded from our count. A survey of 302 British hotels and restaurants in 1979-80 showed only 9 per cent of the workforce had qualifications in hotel and catering subjects (compared with the 12 per cent in our sample); a further 12 per cent had qualifications in other subjects—but the latter were widely defined and included CSEs (the lowest school-leaving examination). See HCITB, Manpower Changes in the Hotel and Catering Industry (1983), p.12.

(33) Including also those on Caterbase schemes (described in section 6 below). Trainees taken on by hotels garnis in Germany were sent to other hotels for part of their training in order to be provided with adequate kitchen and restaurant experience. In calculating the total of full-time-equivalent personnel, we have here counted German trainees as equivalent to 0.8 of a full-timer (since they are at college one day a week); counting them as full-timers leads to 11 per cent of the German hotel workforce in training. The German census of workplaces of 1987—covering the full size range of hotels—showed 15 per cent of all employees as apprentices (Arbeitsstatten zahlung, table 4; part-timers were counted as equal to full-timers in that enquiry). These figures are not very different from the 12-30 per cent reported by the HCITB visit to ten large high-grade German hotels in 1979 (Continental Craft Training Study: German Report, p.14). The results for our British sample are consistent with the 3 per cent of employees who were trainees, of whom 2 per cent were on YTS, found in a broader sample of establishments engaged in tourism and leisure activities in 1987 (institute of Manpower Studies, Commentary no. 37, University of Sussex, Brighton, 1987, p.90, 94).

(34) In smaller hotels those responsible for ‘housekeeping’ often spent most of their time on reception and other duties; we have taken account of only the estimated fraction of their time on housekeeping in calculating the above ratios. Confining the calculation to those hotels where there was at least one full-time housekeeper—so as to avoid the uncertainty of estimates—does not really alter the similarity: 5.0 chambermaids per housekeeper in Britain (5.6 including linen-porters) and 4.9 in Germany.

(35) With labour turnover in this occupation at such very high levels it is not easy to summarise in a single figure the seriousness of the problem; usually there is a core of older staff who have been employed for many years, together with many younger staff more than half of whom may be expected to leave within three months. In such circumstances more detailed ‘survival curves’ need to be estimated, showing the cumulative percentage of each group of new entrants who are still with their employer after successive periods of time; the issue was well explained in a booklet on Labour Turnover, published twenty years ago for the Economic Development Committee for Hotels and Catering (NEDO, HMSO, 1969). This contains many suggestions for reducing labour turnover. Unfortu nately too little attention is given in discussions of this problem to the rate at which wages should rise with experience in order to reduce turnover. It would have taken a disproportionate amount of our interviewing-time to compile the data required for a serious comparison between the countries of this aspect of hotel management; it is undoubtedly important, and warrants further study.

(36) Of course this distinction does not apply to very small hotels where one person may combine the activities of general manager, housekeeper and chief receptionist.

(37) In reality, this is a matter of degree. For example, even a German housekeeper in the course of checking might reverse a lampshade so that the seam is at the back, or move the telephone on the side-table so that it is ‘just so’; while a British housekeeper would herself polish (or re-polish) a bathroom mirror, instead of calling the chambermaid back.

(38) In one large London hotel that we visited, cleaning standards were particularly low; we learnt that they relied on contract labour for housekeepers and chambermaids, and the sub-contractor was paid a fixed sum per room. Payment via a sub-contractor provides greater flexibility in recruiting part-timers, who are often below tax and national insurance limits. We also came across two hotels in Germany which relied on a contract agency—but only for chambermaids; the housekeepers were on the hotels' staff and supervised the quality of their cleaning.

(39) Hotels run over-lapping shifts during the day to cope as far as possible with peak-periods; an average of 2.6 persons thus means, for example, that there might be three persons in attendance during peak periods of the day two persons during off-peak periods, and only one on the night-shift.

(40) ‘Approximately half of their time … could be handled more economically by other departments;…much of this work may be merely time-filling’: the view expressed by industrial consultants who examined work-efficiency in sample of five British hotels twenty years ago (NEDO, op. cit., 1968, p.4).

(41) Some had proceeded from apprenticeship to a Fachschule Diploma (roughly equivalent to our HND). Most graduates of courses in hotel management in both countries aspire to larger hotels than included in our sample; most who attend such courses in Germany do so only after completing a three-year apprenticeship in the trade.

(42) An ‘exception which proves the rule’ may be footnoted. After we had completed our statistical summaries we found that one very pleasant hotel in our British sample was exceptionally efficient in terms of staff-ratios; we suspected errors in our recording. A second interview confirmed our original figures, but also revealed the following: the manager had substantial Continental experience and had decided, as a matter of policy to appoint only qualified or highly experienced staff in the same way as the Continent. His pay-scales were accordingly higher; but because of his lower manning levels—which corresponded to our German averages—his total costs per guest were lower.

(43) BTEC Diplomas are almost always awarded following full-time courses, and BTEC Certificates following part-time courses. The combined C & G 708/709 qualifications are also full-time; we have assumed that half of those taking the separate C & G qualifications are full-time. In Germany, the part-time courses are those with footnote references m, n, p and r in table 1.

(44) HMI, Survey of Programmes to Higher National Diploma and National Diploma Awards of BTEC in Hotel, Catering and Institutional Studies (HMSO, 1985, pp. 3 and 7).

(45) But no doubt many other factors are relevant, including student grants that are available in Britain for those following full-time courses.

(46) Ripper and Russeil, op. cit., p.32.

(47) BTEC Natonal Diploma, Front Office Operations, Ealing College of Higher Education, Year 2, End of Unit Phase Test, March 1988, question 3. Hotel Catering and Institutional Operations, Integrated Project Level III, Summer 1987, Weston-super-Mare College of F.E., question II. Food Production, Level II, (College) Phase Test 1, question 2 (ii).

(48) From the final examinations of the Nuremberg Chamber of Commerce (the co- ordinating body for hotel examinations taken by over half of all apprentices in Germany) set in the Winter of 1988 (questions 11, 18, 35, 48). They are multiple-choice questions, with five options; some fifty questions on hotel ‘technology’ have to be answolered in an hour and a half. Other examining bodies, such as Berlin, set essey-type questions which are closer to the BTEC questions just quoted. Our C & G questions are closer in type to those quoted above from Nuremberg.

(49) See Bildung und Kultur, series 11.3, German Federal Statistcal, Office, 1985, p.69.

(50) NIER, May 1985.

(51) This applies strictly only to England and Wales; Scotland exercises more central control.

(52) HMI, op.cit.,p.5.

(53) BTEC National Courses, Hotel, Catering and Institutional Operations Core Unit Specifications and Sample Learning Activities. (July, 1987). This variability has arisen despite the role of ‘moderators’ and central approval of courses by BTEC.

(54) The quotations are from the City and Guild's publications on courses 708 Accommodation Servieces (1987, p.37) and 720 Diploma in Hotel Reception and Front Office Practice (1987, p.40).

(55) Systematic courses of training in hotel work are of relatively recent origin in Britain, at the end of the 1940s hardly more than a hundred students were enrolled in technical colleges on catering courses, and national diplomas in hotel management were astablished only towards the end of the 1960s (these and other historical points may be gleaned from the biography of A.H. Jones of Grosvenor House by K. Jones and T. Hewitt, Barrie and Jenkins, London, 1971, esp. pp.40, 98).

(56) and Guilds, Specific Skill Schemes: 700/2 Room Attendants (1983, p. 12), revd. Scheme Pamphlet: 7002 Room Attandants (1 989, p.3).

(57) There is probably some double-counting between Caterbase and these City and Guilds awards. It is regrettable that the industry's training board, having organised training under its Caterbase scheme, has not so far been able to provide better measures of the number of individual trainees concerned. The other basic courses included here are: City and Guilds General Reception (course no.716), Room Attendants (700/2), General Catering (705; the bulk of candidates proceed to further courses, and we have included here only a tenth of the numbers passing who go directly in hotel-work, according to Colleges' estimates), BTEC First Courses in Hotel Catering and Institutional Operations (a tenth of those passing, for the same reason).

(58) The training board initially receives the subsidy from the government. If the trainee is employed directly by the hotel, and the training board supplies the training in one of its training centres, then the employer receives £10 towards the trainee's wages and the remainder of the subsidy goes to the board. Alternatively, the trainee may be under direct contract to the board, and sent to a hotel for ‘work experience’: in that case the hotel pays the board £18-£25 a week for the trainee's services. (As from April 1990, the industry's training board becomes non-statutory, and the levy will then disappear).

(59) Early-leaving must be seen as an inevitable feature of the present British arrangements because of the financial attractions to youngsters of taking ‘real job’, ie one that pays higher immediate wages without providing systematic courses of training.

(60) There is no requirement in NCVQ's ideology for external making—quite contrary to the German and French approach (see the note by S. J. Prais in NIER, August 1989). There has been some recognition by NCVQ that the ‘validity and credibility [of work-based assessment] have still to be firmly established’ (The National Vocational Qualification Framework, NCV 1987, p.14), but so far the Council has been content to tread its own path.

(1) The sources for the above questions are as follows. City and Guilds, Hotel Reception (709-1-02), May-June 1987, question 8. BTEC National Diploma, test on cost-control, level III, Weston-super-Mare, March 1988. Hotelfachmann Abschlussprufung: Fachbezogene Mathe matik, Nuremberg, Winter 1988, question 10; Berlin, Winter 1987/88, question 6. The translated question papers in the ITB report on Continental Craft Training, op.cit., p.37.

(2) It appears that the arithmetical competence even of examiners (or does the buck stop at the proof-readers?)in Britain sometimes slips in a worrying way; a specimen City and Guilds multiple-choice question asks: if 50 portions of apple pie cost £1.50, how much does one portion cost? The ‘correct’ specimen answer is given there as 0.03p (instead of 3p, or £0.03; from paper 706-1-101, Basic Cookery).