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cumulatively by 16.3 per cent to 40,507 persons by 2013.11 Note that small changes in desired labour force induce large swings in the demand placed on the human resources function within the industry to identify a new pool of hotel workers.12 If the required rate of activity exceeds the capacity of the industry's HR complement, the delay in filling vacancies would increase and the quality of new hires may well fall.

Supply Chain Response The shock to tourism growth also spurs an increase in the desired stock of beds by 13.0 per cent. However, the impact of the relatively small increase in desired capacity has profound consequences for the capacity management structure. The procurement process creates a significant increase in the amplification ratio from 1.0 to 2.7. That is, a 1.0 per cent increase in desired capacity causes a 2.7 per cent surge in the demand for new room capacity. Thus firm’s suppliers face much larger changes in demand than the hotel industry itself and much of the surge in demand is only temporary. Thus the order rate (for new beds) increases by 18.0 per cent while the acquisition rate increases only by 6.3 per cent. However, the acquisition of new capacity consistently exceeds the loss in capacity due to depreciation. As a result the stock of beds rises cumulatively by 15.1 per cent to 67,122 at an average growth rate of 2.7 per cent. The somewhat more anemic change in overall capacity occurs because adjusting the capital stock is difficult, expensive, and time consuming; and the long lifetime of plant and equipment means mistakes are not easily undone.


The surge in the growth rate of labour occurs within the first year of the growth shock as labour increases by 7.5 per and subsequently declines to an average of 2.5 per cent per annum thereafter.

12 That is, a 10.0 per cent increase in the amount of desired employees results in a 51.0 per cent increase in the hiring rate.


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