Hotel Operations and Management
This is a brief research on hotel management and Operations I have carried out. I well come all comments and Suggestions on this Compendium as we strive to dig deeper and understand more about hotel management and its origins and its benefits to the country and the general societies we live in.
? Chapter 1 Parts to success in the hospitality industry
1.1 Introduction
To be successful in the hospitality industry, one must provide both hospitality and service. Using pineapple as a legendary symbol of hospitality was first initiated by sailors. Some sources trace the symbolism to Christopher Columbus who introduced it to Europe when he returned from the Americas (Pezzotti 2011). Colonial era sea captains would put out pineapples a rare fruit at the time when they returned from their voyages, to share with visitors. The practice established the connection between pineapple and hospitality.
According to Pezzotti, hospitality and service are both distinct and interrelated. Hospitality is a strategy, whereas service is tactics, the two are fundamental to the industry. The word guest is used in the hospitality industry instead of the customer, as the word customer is less welcoming. Customer focuses the hotel on the financial transaction, while guest brings out the full dimensions of hospitality.
1.2 What is hospitality?
“The art of making a customer feel welcomed, appreciated, and essential. Exhibition of hospitality is through words, facial expressions, and body language” (Sack 2011). During that person's visit, reinforcing the art of hospitality is continual. It is not a one-time thing; it is an experience that lasts the entire course of the tour.
1.3 The meaning of service
The Latin word ‘servitium’, meaning act of ‘servicing’demonstrates a creative and encompassing function with many nuances and subtleties. The result is attention to details, small and large. Hospitality and service are interwoven into each other when analyzed. Under certain aspects, hospitality is the totality and service is a part of it.
In essence, it is the art of catering to the wants and needs of an individual and going as far as anticipating those wants and needs. Excellent service is friendly, helpful, prompt and anticipatory. It exudes warmth, caring, and concern. In high priced restaurants, service is efficacious and professional, but lacks warmth and caring; it is more robotic than meaningful. Excellent service happens when the experience exceeds customer's expectations.
1.4 The intersection of hospitality and service
In the same words of Sack (2011) “hospitality and service are not descriptions of a business, so much as they are innate qualities and unique attributes that a person possesses, they cannot be bought or invented.” The person either owns them or not. Hospitality comes from inside a human being. With training, continuous commitment and practice, service can be perfected and be taken to the highest level of technical perfection. For true excellence, service and hospitality must combine; one cannot exist without the other.
1.5 Hospitality career opportunities
“By almost any measure, the magnitude of the hospitality industry labor market is enormous. Measuring the scope of the hospitality market is through traditional economic and business perspectives and the number of individuals employed in its organizations”. Globally the sector is estimated to hire 1 of every 15 workers (US Dept. of Commerce, www.bls.gov/oco/cg/cgs036.htm). Although the great recession slowed things down a bit, hospitality companies are continually seeking outstanding talent.
Employment of the right human capital has to be advanced by all hospitality companies. Hospitality industry employment includes not only employees working in hotels and restaurants, but also jobs in suppliers and other ancillary businesses, such as consulting, technology providers, and construction firms.
“In the United States alone, the Government Department of Commerce forecasts that the hospitality industry will grow by 5% annually through 2018” (U.S. Dept. of Commerce). “Growth will be even higher in Asia, particularly in China and India.” There are many opportunities ahead in the industry for multinational careers for anyone studying hospitality.
1.6 Building on the current mix of skills
Virtually anyone who wants to further the career in the hospitality industry has to be own career coach. Many hospitality organizations plan for management succession and create strong management training programs, e.g., Shangri-La Hotels and Resorts, Hilton International, and Fairmont Hotels and Resorts. Junior managers’ promotion to higher positions is held back due to lack of turnover in the upper management ranks.
Employees career could be held back by merely having a boss who fails to promote them to essential decision makers or fails to provide them with new learning-oriented opportunities regardless of whether they involve a new job and promotion. Many hospitality organizations are working to correct these shortcomings; it is still wise to take charge of developing one’s mix of human capital.
1.7 The power of experience
Before worrying about that big promotion, an employee first has to get in the door, gaining all the necessary expertise. Every firm wants to hire people with the right knowledge, skills, and abilities. A candidate must have the right mix of skills. Research shows that interviews are typically unreliable selection devices (Arthur and Rousseau 1996). From a managers’ point of view, interviews often yield little information that can adequately predict an applicant’s potential performance. To the candidate as well, it is difficult to demonstrate all abilities in an interview. As a result, most companies rely heavily on past work experience.
The premise behind assessing work experience is that experience is one of the best predictors of future success, particularly for entry-level jobs. Hospitality-based experience signals that the incumbent knows to handle critical customer interactions, a cornerstone of successful service-based companies.
Companies pay more for employees who come from a similar business, and less of individuals who are switching industries. Resume acts as a reference for the compatibility of the previous job experience, with a potential new job. The lesson from both inside and outside of the industry provides employees with the requisite expertise for many positions within the hospitality industry. Positioning mix of human capital has to be as precise as what a potential employer currently desires is necessary.
Chapter 2 Developing unique human capital
2.1 Introduction
Employees need to identify human capital mix and the type of employment they need and convince their employers that they are capable and needs career development towards the detected field. They have to convince their bosses that investment in them will pay off.
In managing one’s career, workers should seek organizations that provide opportunities to perform work that is meaningful to them. The concept is called ‘protein career’, (it is about the Greek god Proteus, who could alter his shape at will). The concept is also called a ‘boundaryless career’ suggesting that careers cross over multiple organizations and effectively zigzag, rather than proceed linearly within one organization or even job type.
Researchers suggest that those who manage their careers will likely seek out companies that offer the following (Wash and Taylor 2007):
a) Intrinsically challenging work that gives individual employees
opportunities to learn and grow.
b) Learning-oriented relationships with colleagues, supervisors, and clients.
c) The opportunity to obtain valued extrinsic rewards in exchange for the work performed.
2.2 Looking for challenging work
Intrinsically challenging work enables employees to acquire and apply new knowledge and skills. This form of experience and expertise is attained in many different ways, including attendance to special project groups on work-related issues, attending formal and informal training sessions, and accepting chances to lead others and direct the department’s activities. Managing careers seek continuously challenging work because this type of work enables the employee to develop and apply skills such as problem-solving, broad-picture visioning, and long and short-range planning, as well as refining interpersonal skills.
The organization of the hospitality industry provides many opportunities to gain experience at various levels and aspect of the industry. Human capital growth opportunities exists at every property, corporate chain, regional chain and ownership companies, as well as the non-hospitality firms that serve them.
2.3 Learning-oriented relationships
Employees can form connections with other colleagues, superiors, subordinates, and clients. The association helps workers to acquire new knowledge and skills. Learning-oriented relationships are characterized by their reciprocity, meaning that both parties in the connection contribute to the other’s learning, as well as remaining open to examining how they too can change and grow. Beyond employees’ specific relationship building opportunities, the hospitality industry has some professional associations that can assist with networking and human capital growth, e.g., American Hotel and Lodging Association.
2.4 Paying attention to the return of extrinsic rewards
In a reciprocal framework, individuals who manage their careers view their jobs as exchange relationships with their employers. Workers trade job security for royalty in the organization and tend to sell their skills for compensation, including salaries and benefits. The mindset of those who are managing their careers is a ‘fair day’s work for a fair day’s pay.’ These individuals seek out organizations that offer the highest extrinsic net return in exchange for the work they do.
Compensation does not just refer to money; it includes job benefits, benefits packages, learning opportunities and flexible work schedules. If employees need a flexible work schedule to meet family needs, part of the exchange framework they create with the employer would include this form of compensation.
Employers must make the lifestyle and work experiences of their employees as smooth and seamless as possible so that these employees will never want to leave the organization. Most hospitality firms use this career model in their operations. Companies determine the job features that induce line staff and managers to enter into and remain in a resource exchange with them.
2.5 The employee as a leader
As the employees move up the hospitality career ladder, they are increasingly likely to have greater managerial and leadership responsibilities, and these responsibilities begin with them learning how to supervise others. In another sense, having the responsibility of managing others does not ensure that they will be effective leaders. Leadership is a human capital capability that has to be learned and practiced, and managing is different from leading.
Managers are often required to do a budget, plan, and solve problems. In other words, a manager’s job usually involves maintaining the status quo. Successful leaders often shake up the status quo and push their team to improve continuously by setting a vision, communicating that vision, and encouraging others by empowering them to act and meet their motivational needs. Managers enact a plan, and leaders create a new one.
For line-level managers, technical skills are paramount. For instance, the front office manager would best know the check-in process. Food and beverage manager would have a good understanding of the ins and outs of the order-placing system. Managers need not just rely on their conceptual and analytic skills; they have to pay attention to the operation and spot and correct problems as they occur or even before they occur.
In addition to technical knowledge, leaders and managers need conceptual and analytic skills. Leaders need to perform the strategic planning necessary for the company’s long-term health. Some leaders that have technical expertise in the area of their subordinates must not interfere with employees’ work. A general manager’s job involves applying reasoning, inductive thinking, and planning skills. Operational work is for line managers and floor employees.
While it is undoubtedly essential that the general manager understand the roles of subordinates, and not to be ignorant of their job task, it is less critical for general managers to have specific technical expertise in the work of juniors. Even if they are technically skilled in their subordinate’s job, top managers must be willing to let their assistants perform their task and not micromanage the employees.
2.6 Specific skills for strong leaders
A growing consensus that successful leaders must do three things in their jobs: sense-making, visioning, and being inventive emanates from critically looking at the essential conceptual and analytic skills for human capital leadership mix as elucidated below:
Sense-making refers to the ability to read and understand one’s operating environment and map a plan to run within it. Managers and leaders active in sense-making have a good handle on the context in which their business functions and are ready to change to unexpected outside forces, such as economic pressures, new competition, or a change in customer requirements.
Visioning refers to the ability to mold a captivating future image of the organization. Leaders who vision well can lay out what the organization could and should become, given its purpose and competitive strength. They can picture what the future could look like, and they invite others to contribute to and share in this image. They generate excitement around their ideas, and they give people a sense of purpose to their work.
An example of a leader who shows this type of skill is Herb Kelleher at Southwest Airlines. He managed to successfully create and sustain an energized, customer-focused service culture that the company has earned profits for 37 consecutive years (Southwest Airlines, Annual Report 2009).
Successful leaders are inventive; this means they are skillful in implementing company vision. This type of skill involves changing broad ideas into a specific action plan. Inventiveness requires one to think outside the box in both abstract terms and concrete details. Mapping out an action plan is not just about working through detailed steps; it needs one to think big about new ways of working and organizing the work of others. It also involves reinventing how the business works and ideas in which people carry out the organization’s goals. Managers strong at inventing are willing to explore alternative and sometimes nontraditional options to re-framing work.
Human resources executives at Hilton Garden Inn, for example, are using a play-station based virtual gaming experience to teach their employees about guest service competitively. They link their training directly to their guest comment system, thereby redesigning the way they develop their staff (Business Wire 2009).
These three analytical skills are related to one another, and woven through them are the crucial interpersonal skills of inspiring, involving, and mobilizing a workforce. No manager can be all things to all employees in an organization. Successful leaders determine their necessary strength in these conceptual areas, and they surround themselves with others who complement their skill sets.
Chapter 3 Fast listening track
3.1 Introduction
According to a study by Steil and Bommelje (2004) of senior hospitality executives, it confirmed that listening is the essential communication competency for career development. Listening is one of the critical ingredients for success in hospitality management. It enables employees to build a healthy relationship with their colleagues and follow the supervisor’s priorities so that they gain resources for critical initiatives.
Most importantly, listening is critical to understanding guests’ expectations and delighting them by exceeding their expectation. Career success in hospitality begins with listening, and the need for effective listening never ends. Listening is a ‘high-leverage’ activity, the time and effort spend on listening payback by building employee professionalism which results in less complains and more satisfied customers.
Another researcher, Brownell (2010), reiterated that listening help employees to;
Get things right so that they avoid mistakes and misunderstanding that frustrates hotel
guests.
Get along with co-workers so that they can build the relationships that will promote
teamwork and goodwill.
Because listening is such a large part of service, it is particularly critical for anyone in the hospitality business to practice it. Most of the complaints in the hospitality industry emanate from the nonobservance of the practice of listening, which has the effect of reducing customer satisfaction.
3.2 Stop making mistakes
If employees do not listen well, mistakes are inevitable. In some cases, employees become vividly aware of errors right away. At times, mistakes are not seen during the service period until sometime later, long after service recovery is impossible. Managers have to monitor every situation and take corrective measures before the quality of service is compromised. Mistakes misdirect, frustrate, embarrass and confuse guests and co-workers. They make service providers look bad and retard them from getting ahead.
The critical factor that affects preparation and listening success is the accuracy of self-perception (Collingwood 2001). Employees need self-assessment to understand the current listening effectiveness better and to determine what direction to follow and get feedback from those who know well. All this helps to reduce mistakes towards guests and improves guest satisfaction.
3.3 Developing and managing multinational career
Although international work is challenging, the rewards are substantial, both professionally and personally. There is the chance to develop observational and communication skills, creativity, and capability to manage up and down the hierarchy and indeed, have some exciting and enjoyable experiences. For employees to get the most out of their global work, they have to maintain a positive attitude and be ready to live in an unfamiliar and challenging place.
Hospitality is an international industry, even if one does not intend to have an international career; they still have to deal with multinational issues. At times, the front office staff may be checking in guests from three different countries at once. Guests from many nations may be standing side by side at the restaurant’s breakfast buffet or hotel reception talking different languages. Hotels need a front of the housing diversity in language and customs to help respond to global guests, and back of house diversity arises from the jobs’ appeal to immigrants with limited language and workplace skills.
For the expatriates to be successful in the foreign land, they need to have cross-national skills in communication and exchange of ideas to fulfill the organizational mandate. Employees need to become experts in corporate standards because when they are abroad, they will be expected to train local employees and ensure that they stay in line with corporate expectations.
3.4 Preparing for a foreign job
While working on building powers of observation and other international capabilities, the employee needs to let people know that they are interested in an international assignment. As an employee develops a network, talk to people who have done stints abroad will be making steps towards the interest in foreign posting known.
3.5 Final days at home and the first days abroad
As soon as the assignment is explicit, the employee starts to focus on preparing for the destination specific requirements, including legal requirements, such as proper papers, e.g., Spain requires an official certificate that states that the person has no criminal record in the home country. For the employee to get the latest legal requirements for the new destination, it is best to contact the local embassy or consult the destination country.
The human resources department of the destination branch may help the incoming foreign employee in settling down and give all the necessary information that an expatriate requires.
The employee can hire a relocation specialist, who will act as an adviser during the relocation process if enough resources are available.
Once abroad, the initial weeks or months, called the ‘honeymoon period,’ are marked by intense excitement and positive feelings. Everything is new, there is so much to learn, and the novelty is excellent. Soon the innovation becomes wearing, if the expatriate is staying in an unknown language zone, the strain of communication can be substantial. It is tiring to have to parse every gesture and every word for underlying meaning.
Eventually, most people become exhausted, and as frustration pile on, they hit a period of ‘culture shock’. The first symptoms of culture shock will be an emotional downturn, and the employee may feel alienated from the local culture. At this point, the employee must resist any tendency to withdraw or socialize primarily with other expatriates, instead has to pull out of the culture shock through engagement.
3.6 Keeping in touch with headquarters
Once the employee is in the international assignment, the employee is on his own, but must not underestimate the importance of maintaining ties with the head office. The worker needs headquarters’ contacts to get information and resources not only to do the job abroad but also to help career development. The expression ‘out of sight, out of mind’ definitely applies to the expatriate, and if the employee does not remind the HQ colleagues of his existence, they probably not consider this expatriate when exciting positions open up.
Contact with HQ has to be maintained to benefit employee career development. Eventually, the expatriate will have learned so much about the new home, but no matter how familiar this person has become with the destination, the incumbent remains a representative of the international firm. While it easy to see everything from the local perspective that can become a problem when it is time for new policy implementation, the employee has to remain loyal to company policy and standard operating procedures.
The job is to make new policy work and must avoid focusing on why the policy will not work in the unique context and instead negotiate any amendments necessary to implement the new system. It will then mean the expatriate has ceased to be a corporate employee and have become a subsidiary employee. These are some of the behaviors that annoy HQ personnel more, an expatriate who has gone local and deviates from international company policy to suit the local employees’ requirements. HQ and local office should work together for the betterment of the organization and create a health bottom line.
Chapter 4 Becoming a leader in the hospitality industry
4.1 Introduction
The essence of leadership involves influencing people towards the desired objective. Leaders do not push followers; they pull them. Management is often concerned about stability, efficiency, and control, while leadership is related to innovation, adaptation and employee development. Management emphasis is on coping with the day to day operations, while the real leader is looking into the future.
4.2 Self-understanding as a manager
The importance of self-knowledge may seem obvious, but it is amazing how many managers do not have a good understanding of their behavior patterns and internal motivators. Some managers tend to have a single preferred management style that may not be appropriate in every situation, and they often do not realize the impact of their actions on others.
In the current years, there has been heightened research into ‘emotional intelligence’, defined by Goleman (2000) as “the ability to manage ourselves and our relationships effectively.” Emotional intelligence is composed of four traits ;(Goleman named emotional intelligence ‘EQ’ meaning emotional quotient to mean the same as ‘EI’)
ü Self-awareness, which is illustrated by self-control and the ability to adapt appropriately
to a particular situation.
ü The power to adjust quickly to changing circumstances without becoming emotionally
upset.
ü Social awareness, which is empathy for others and an understanding of organizational
dynamics.
ü Social skill, which includes effective communication, conflict management, and
persuasiveness.
EQ is especially crucial to hospitality leaders because of a high degree of interpersonal interaction with both employees and guest in the hospitality industry. For example in 2007, “Starwood Hotels and Resorts hired Paasschem as its new CEO because of his possession of a high EQ even though Paasschem knew little about the hotel industry” (usatoday.com).
The appointment was due to his leadership ability, and the following quotes reflect his way of management, “What I studied is to work hard, treat everyone well, and listen,” Its more about effort than ability. Paasschen has held executive positions at Disney, Nike, and Coors. His leadership philosophy and career success suggest that he has a high EQ. Due to high EQ exhibited by Paasschen, by the end of 2010 Starwood stock price was over 100% from the previous year when many hotel companies were suffering.
Drucker (2006), the noted management scholar, suggests that it is critical to understand strengths and weaknesses, how to interact with others, and what individual values are. In this context, every manager needs to give thought to what is necessary for him, as the manager’s importance is exhibited in employees’ behavior. Subordinates continuously observe managers and see if their actions match their words.
From the observations, employees learn to distrust managers who urge subordinates to be innovative and think out of the box, but then would be angry when someone fails, or a manager who prides himself on being open to suggestions but reacts with hostility when subordinates questions his ideas. Studies by Weaver (2005) have shown that behavior integrity, the consistency between works and deeds is related to some organizational outcomes including employee turnover and increased profitability. The managers are role models whether they are setting a good example or a bad one.
Personality, education, and experience influence every manager’s preferred way of leading. The favorite method of leading does not fit every situation. Hence the manager needs to be aware of when to behave in a particular way or move away from the preferred leadership style.
Goleman finally discusses the following leadership styles:
Coercive
Demands immediate compliance
Authoritative
Mobilizes people towards a vision
Affiliate
Creates harmony and builds emotional bonds
Democratic
Forges consensus through participation
Pace-setting
Set high standards for performance
Coaching
Develop people for the future
A manager’s understanding of his preferred leadership style is essential as it is the starting point for how he will prefer to lead. The principal objective of leadership is to determine when one technique will be useful and when it is time to switch to another form.
4.3 Understanding the organization
To learn more about the organization, managers need to understand the organization as a system (Rummler 1995). An organization is like a human body, with organs serving as functional areas, the skeleton as the structure, and the circulatory and nervous system providing coordination and communication. If any part of the system is not functioning correctly, the whole human suffers.
Hospitality firms live in a dynamic environment that contains competitors, customers, suppliers, and government, all of which can affect the company. Communicating with these entities is as vital as they provide resources and information necessary for the success of the organization.
4.4 Establishing objectives and provide the direction
A manager’s work starts by determining the purpose of the organization and has to know what action is needed to be taken to achieve the intended goals. The leader needs to establish whether the goal is to satisfy the guest or to maximize profitability or both. Employees at all ranks need to understand the overriding objective of the organization, and these goals need to align with departmental goals and working practices as they cascade down through the organization.
The company’s overall objectives should drive the goals for each manager. All managers have a sphere of influence and must be able to know what is being done in the area of control to meet the company’s objectives and attain the intended goals. Subordinates must be able to describe the manager’s goals correctly. Leadership at all levels begins with being able to articulate a purpose or vision that followers can understand and internalize.
Marriott provides an excellent example of articulating a vision that reflects the values of an organization,’ he stated that “if employees are taken care of, they will in return take care of the hotel guests” (ABC News Nightline 2007). Marriott’s primary strategic focus is to take care of employee needs for the employee to satisfy customers.
Organizational goals need to be specific, measurable, attainable, realistic and time-bound. (having a time span for execution) Managers do not have to write a book to state the organization’s purpose; they only need to state the goals clearly and make sure that everyone in the organization has the same goals and vision.
4.5 Acknowledging good performance and correcting poor performance
With a clear objective in place, the company’s reward system must reinforce the organization’s goal and culture. The most successful firms align rewards with goals. American Express (Blanchard 1999) for example, has a set of ‘Blue Box Values.’ Critical to such value is “We value our people, encourage their development, and reward their performance” to reinforce this value, senior leadership is evaluated using a 360-degree performance management process on eight leadership competencies.
Four of the skills focus on quantitative business results, while the other four focus on effectively leading people. The four leadership competencies are: demonstrates personal excellence, communicates effectively, builds and leverages relationships, and creates an environment where cross-team working is effective both internally and externally.
Blanchard exhorts managers to look for opportunities to recognize excellent performance by individual employees, as high performers who do not receive an acknowledgment from management will produce poor performance over time, and eventually leave the organization. Employees must know when they are performing poorly, and it is the leadership’s responsibility to correct the performance deficiency, and this serves as part of acknowledging an employee’s actions.
4.6 Be flexible and willing to adapt
The best hospitality managers assemble a team of individuals who have complementary skills and knowledge. A trap young managers often fall into is confusing intelligence with wisdom. Employees may not have the education the manager has, but most likely possess institutional knowledge that could be helpful for the leader to seek their opinions and truly listen to them.
One cannot know everything no matter how educated, and relying on others for help does not demonstrate weakness but instead creates a community of distributed leadership where capitalization on the knowledge and expertise of others can be gained (Ancona et al 2007). If the manager surrounds himself with people who view everything the same way, then he is redundant.
It is widely acknowledged that the demise of Kodak and General Motors was primarily due to intelligent leaders making poor decisions because they ignored opinions and ideas that were different from their own or never heard any differing views (Orlikowski et al 2007). At a recent Centre for Hospitality Research Round-table where over 200 industry human resources professionals gathered, one consistent theme, ‘Count on continual change, and the more hats you can wear, the more valuable you will be at your organisation’, the manager should focus on strength and understands how and where to get the talent and resources that are short to him.
4.7 Towards stronger leadership
A manager’s understanding of how he prefers to lead gives him the ability to relate well to others and to modify his approach to fit a given situation. Understanding the dynamics of formal and informal organization among other organizations helps in becoming a more effective leader to monitor and nurture critical interdependent relationships in the organization.
Effective leadership requires a clear articulation of a vision of the future as employees want to know where they are going, why they should go there, and how their efforts will help get them there (Ancona et al 2007). By acknowledging good performance and correcting poor performance, employees will see that the leader is focusing on improving the work effort. In another way, not responding in any way will cause subordinate to doubt the management leadership ability.
Chapter 5 Success through operations and service excellence
5.1 Introduction
Customers have multiple options of where to dine and where they can stay. The determinant of customer choices of restaurant or lodging facility is quality of service offered, the price charged, proximity to where they visit and the cuisine served.
5.2 Decision factors
Hotel features on the web and the amenities provided are essential regarding booking a hotel room. Guest also considers value before booking a hotel or restaurant. They believe all this simultaneously including different possible costs relating to price and quality.
Hotel general managers need to develop a clear understanding of customer choice patterns for each market segment so that they can correctly configure the hotels offering for profitability and success. Without explicit knowledge of customer choices, firms often play ‘spray and pray’ games with their offerings.
Companies face complex problems of what to combine when deciding which goods and services bundles to offer in the marketplace, as they do not know for sure which factors drive their customer booking decision. Simple ‘gut feel’ to decide what might be of interest to customers is not sufficient in a competitive hospitality marketplace. Understanding customer choices is key to successful management of hospitality businesses.
Predicting customer choices for competitive markets is complex and therefore requires a more scientific approach than simple rules of thumb. An excellent strategy for predicting customer choices is called ‘discrete choice analysis’ (DCA). The DCA has been found to be useful in predicting customer choices in a wide range of industries.
Application of DCA comprises of the following steps:
ü Identify choice criteria
ü Develop choice experiments
ü Collect responses and estimate choice models
5.3 Managerial insights from discrete choice modeling
Although hotels may want to engage professional assistance in developing DCA experiment, once they have the data, they will be in a position to improve the insights and strategies that are suggested by the resulting information. Developing decision support systems from statistical models help customer choice studies. Market segmentation techniques improve the predictive power of customer choice models.
The relative weight of various choice criteria can be used to identify the decision criterion that customers have in common, and organizations can help assess how these personal product attributes will influence the current and future value of the hotel’s offerings. The choice model can also identify critical features that drive market share in different customer preference clusters. Firms can develop groups of customers based on the preference of guest, and given fanciful descriptive names, and then calculate the relative utilities of various choice drivers for each of those customer clusters (Verma 2007).
5.4 ‘What if’ analysis
The important relative results for each decision factor can be used to develop two useful ‘what if’ analysis for a combination of service offerings, namely customer desirability and willingness to pay. Value display is in the format of a relative index between zero and 100. Calculated this way, a desirability index of zero represents the least desirable service of all possible combinations. Similarly, a desirability index of 100 stands for the most beneficial service combination.
The willingness to pay analysis for a specific market offering is an index of the price customers agree to pay for a particular feature if they desire it. If hotels know a product’s relative utilities, consumers’ propensity to choose a particular product, and the desirability of that product, firms can calculate willingness to pay. It is also possible to get a sense of customers’ willingness to pay by grouping hotels into price ranges, such as the economy, mid-scale and upscale.
An assessment of brand equity is another potentially significant analysis that hotels can conduct once they have the choice of modeling results. Robust and reliable estimate of switching inertia through designing customer choice experiment that asks respondents to choose between current and new service providers. This kind of analysis will give a sense of what keeps guest returning to the hotel, despite the availability of other better offerings. It will also provide an understanding of what might happen if a new service provider, in fact, overcomes existing customer inertia by offering a substantially stronger service bundle, or by customizing its service bundle to gain dominance in the market.
5.5 Guiding the guest experience
One of the jobs of hospitality manager is to seek ways to improve guests experience by making improvements to upgrade guest services or provide better products, facilities, and programs. Guest perceptions can be enhanced without a considerable investment by allowing customers to give attention to the positive aspects of their experiences, their opinion of the hotel’s operation and the likely improvement. People can be attuned to the assumed current taste experience by testing the product thereby boosting their enjoyment and their inclination to buy more (Lyubomirsky 2008).
Helping the hotel guests notice and acknowledge the pleasurable aspect of the hotel can break the customer habituation and insensibility to the best service offered. The service help guests become mindful and consciously aware of the pleasures around them that start right at the front desk.
The type of conversational opening draws guests into awareness moment. The effort by service providers to focus guests’ attention becomes more critical if the hotel is dealing with extended service encounters such as cruise trips or theme parks, where there is a constant opportunity for interaction between guests and service employees. This effort to help guests to be mindful of the pleasures from their experience can continue as they leave the hotel, and this is augmented by providing cues for awareness.
Tour companies, for instance, hand out photographs or even postcards to tour participants showing activities or locations that they have visited. This way guests can relive their travel experience after they returned home. Some hotels also hand out small souvenirs to their guest with the same goal in mind. Hotels and other hospitality institutions need to draw guests’ attention to a precise aspect of experience or the environment. The whole purpose is to recognize the value of guest stay and the need to provide cues that move guest past a general sense of well being and into a conscious thinking mode.
5.6 Sources of guest pleasure
According to Bryant and Veroff (2007), there are three types of guest pleasures, sensory, aesthetic and achievement pleasures. Guest is attuned to the current moment pleasurable experience in any or all of these types of fun.
The sensory pleasure is derived from a lovely sound, beautiful sight, a pleasant taste, smell or touch experience. Aesthetic pleasures come from senses, but it involves an appreciation of the beauty of architecture or nature. The joy of achievement affects actions taken, personal growth, or a renewed sense of self.
Hospitality operators tap into all these types of pleasure and find strategic ways to enhance consumer happiness, especially during service encounters. Kurt (2008) expresses the need for hotel guests to gain more satisfaction from the experiences with the hotel service delivery operation. When guests become aware of the transient nature of positive experiences, they tend to grow more appreciative of the skills and become motivated to enjoy themselves as much as they can.
5.7 Improving the experience before the guest arrives
For most guests, looking forward to their upcoming vacation trips or fancy dinners is part of the pleasure of the journey. Every hospitality player must make sure customers take full enjoyment in their anticipation of quality service. If guests anticipate their future experience and are attentive to their current emotional state, they are not only getting pleasures from anticipation, but they are likely to end up enjoying the event more.
Hoteliers and restaurateurs can find better ways to manage consumers’ pre-event experience and boost their client's satisfaction with high standard of service and sending out invitations for Valentine’s Day or Christmas dinner with a special menu. Destinations and hotels promote special vacation packages with photos of the destination, or hotel. These two tactics try to tap into consumers’ anticipation before the experience occurs.
5.8 Maximizing anticipation after guest reservation
As hospitality operators, hotel managers have the opportunity to make contact with customers well before consumption occurs, to update them on what they should expect, something that other businesses would greatly desire. The hotel manager will know the guest names and contact information after a guest has made a reservation. The time between reservation and arrival is used to improve guests’ experience and strategically shaping this waiting period with several interactions to enhance service delivery.
One way to manage guests’ waiting period is to send informative brochures featuring on-site facilities and nearby attractions, making sure that the website is also well designed and used so that it provides menu descriptions and reviews. The website should offer a slide show or video of the hotel property, its services in operation and its surrounding scenic views.
Mobile apps and Social media are useful tools to manage consumers’ consumption experience. One logical thing to do is to tweet guests who have booked their hotel rooms and update them with the relevant information over time. Communication with guests before arrival has the effect of inducing excitement and anticipation, as well as providing needed knowledge. Interaction with guests before check-in helps to remind guests of the upcoming events and provide them with the frequent moments of anticipation. Designing mobile apps is carried on with the same goal of guest communication in mind, and these festivities should begin the moment the hotel has guest information.
Chapter 6 Harnessing the power of culture for outstanding service
6.1 Introduction
Company culture is one of the most influential forces for ensuring excellent customer service and the resulting financial success. Culture can stand in the way of the firm and deter the achievement of organizational function and financial goals if not appropriately managed.
6.2 Organizational culture
Company cultures come in different shapes and sizes, but all religions come from specific parts, such as language, beliefs, and philosophies. A company’s culture is a way of behaving, thinking, and acting that is learned and shared by the organization’s members. It is the shared philosophies, ideologies, values, assumptions, beliefs, attitudes and norms that knit a community together (Trice and Beyer 1993). All the interrelated qualities reveal a group’s agreement, implicitly or explicitly on how its members should behave when they approach decisions and problems.
Another more straightforward definition of culture from the same authors is ‘the way we do things here.’ Cultural inertia can be substantial; perceptions do change, however gradually due to outside influences and internal decisions. It is influenced by members and it influence members also. Successful corporate culture depends on leaders, executives, managers, supervisors and line employees to convey and reinforce the perception as a method of ensuring successful service.
Strong corporate cultures are driven from the top of the organization and followed by everyone in the corporate organization. A founding visionary created a company culture and expanded and developed by corporate leaders, e.g., Walt Disney began with his vision of ‘Imagineering’, Herb Kelleher advanced a culture for Southwest Airlines that was uncommon for that business, and Bill Marriott Sr. and Bill Marriott Jr. developed the customer-oriented culture found at Marriott hotels.
Merely declaring a corporate culture is not enough, corporate leaders and everyone in the organization must live in that culture. As Sharp (2009) pointed out, “Employees are natural boss watchers. Everything the boss says and does tell every employee their real concern, their real goals, priorities, and values”.
6.3 Communicating the culture
The substance of religion is a set of assumptions that lead to beliefs, values, and norms, other critical elements of culture involve how the culture pervades those inside and outside the organization. Communication of culture elements includes laws, language, stories, legends, heroes, symbols, and rituals.
6.3.1 Laws
Organizational rules, policies, and regulations are the norms that are crucial to a firm and turned into a code of conduct. The pattern that is important to Disney corporate policies in effect is the laws that carry termination as the penalty for violations.
A cast member in costume must not walk in an area where the suit is inappropriate, e.g., an employee in the futuristic Tomorrowland outfit cannot appear in Frontierland. Another strict policy is that cast members portraying Disney characters must stay entirely in style and cannot be seen out of costume or does anything else that might destroy the Disney fantasy. The policy forbids transporting any character costume in a public area unless it is in a black bag that thoroughly covers all its parts so that no one will see a favorite fantasy character ‘in pieces’ (Maanen 1991)
6.3.2 Language
Every firm develops a language of its own as part of its culture. Elements of this language can be incomprehensible to outsider employees. The unique word helps to create a coherent social group that is an essential vehicle for both communicating the common cultural elements to which the communication refers in reaffirming employees’ identity with their culture.
6.3.3 Stories, legends, and heroes
By communicating proper behaviors, stories, myths, and heroes transmit culture. The Ritz-Carlton is especially noted for the best use of many teaching stories, e.g., to teach go the extra mile to serve a guest, the story of the ‘New Gold Standard,’ that explains how the housekeeping department offered to replace a makeup bottle broken by a guest (Michelli 2008).
6.4 Strategy and employee commitment
A company’s competitive strategy provides the basis for critical decisions on how the company is going to be structured, what type of service it wants to deliver, and what market niche it seeks to fill. The firm plans on the production and service delivery system it will use, whom it will hire, and how it will teach, reward, promote and evaluate those employees.
The only way to implement these critical decisions is through employee’s commitment to the mission, and the company needs to use its culture strategically to motivate these employees. The Boulders, a luxury property in Arizona has the vision statement ‘Seek opportunities to create memories,’ this vision emphasize the use of coaches, orientation, training, and employee recognition programs (Enz and Siguaw 2000). Culture on its own does not spell out specific actions to take but emphasizes how the workers should look for opportunities to deliver excellent service.
6.5 Culture as a competitive advantage
Culture can provide a significant competitive advantage if it gives value to its members, is unique, and cannot be easily copied by others. If an organization has a strong culture that others cannot readily duplicate, it can use that culture to attract both customers and employees.
When hotels want to benchmark other companies in the hospitality sector’s cultures, they look at those that have used religion in a way that develops a competitive advantage (Chatman and Jehn 1994). Southwest Airline is an example of an organization that has done this, with its ‘Living the Southwest Way’ culture. The culture espouses both ‘displaying a warrior spirit’(hard work and innovate) and having a ‘servant’s heart,’ following the golden rule, adherence to fundamental principles, treat others with respect, put others first mantra in addition to being egalitarian and demonstrate proactive customer service in all operations (www.southwest.com).
Chapter 7 Scientific approach to hospitality operations
7.1 Introduction
Hospitality scientific operations focus on data, dealing with complexity and taking actions that are driven by rigorous analysis. The most critical requirement of applying science to managing operations is the availability of useful data. Hospitality managers need accurate data to make sure their decisions stand on solid reality, rather than perceptions.
In general, the more data a manager compiles, the better since the analysis to be performed is limited to the data that is available. The best way to ensure accurate data, where data is dependent on employees’ action is to train employees on the importance of how accurate data leads to operational improvements and to provide that information is for developmental rather than punitive purposes. For example, a fast food restaurant that uses a timer to measure how long customers wait to receive their meals orders has the potential to measure the service levels that customers experience.
7.2 Dealing with data complexity
The gist of applying a scientific approach to managing operations is to offer a means of dealing with the complexity of management decision making. Without data, many managers use the ‘photocopier method’ of work scheduling, which show that this week’s schedule is simply a duplicate of last week’s schedule. To them, this serves the trouble of developing a new program, but this might not match up to the operational needs.
7.3 Actions driven by rigorous analysis
The third component of managing operations scientifically is taking actions based on thorough analysis. Once the data is available managers can make sound decisions that fit well with each situation. Having good data saves hospitality managers from inadvertently making a hunch decision on a coincidental observation basis.
Managing operations scientifically does require an upfront time commitment to data collection, analysis, and model building. Scientific management does not make operating a business clinical. Being an excellent operations manager is still as much art as science. The point is through focusing on the science part of it; the manager will be more valuable than everyone to the organization.
7.4 Staff motivation to provide outstanding service
When the service environment is superb, the operations are efficient. The concept reflects a bright idea of the customers’ demands and the back of the house delivery system’s flawlessness. If the guest feels shabbily treated, the guest will also be angry at the hotel, since the employee represents the hotel. The hotel guest determines value and quality of service received, the employee who provides the guest experience must not only be well trained but highly motivated to meet the guest’s quality and value expectations and do so consistently.
The manager’s role in providing an exceptional service experience and explicitly preparing staff to deliver such service is vital. Motivating employees is as critical for excellent service as training them.
A manager has to discover what motivates workers to do their duties efficiently and competently and to go the extra mile for the hotel guests. Employees should know that they are encouraged, expected and trusted to handle all the situations that come up in the guest service areas for which they are responsible. When employees are appropriately selected and trained in the first place, management must make it possible for them to do their jobs with responsibility, skills, enthusiasm, and fun.
7.5 Types of motivation
The most common motivator is money. Employees receive direct compensation of salary or wages. The manager can also offer indirect compensation in the form of deferred compensation and health insurance. The four factors of motivation are individual needs, the power of reinforcement, the expectancy of getting rewards and the fairness of the awards.
7.5.1 The power of individual needs
To meet individual employee needs the most apparent inducement is money. Most employees are working because they need to earn a living, even though they work in a hotel or restaurant for other non-monetary reasons. Motivational speakers talk about higher order needs like social, recognition or achievement needs, but none of that count if a person is concerned about how they are going to get their next meal, pay rent or buy warm clothes in winter.
Every company must pay its employees enough salary to meet their survival needs before they can effectively use incentives or rewards to help satisfy their other need (Maslow 1943). The company may not be in a sound financial position to suddenly increase wages or offer health benefits but can provide other non-financial incentives. Listening to employees' needs and preferences often reveals simple available solutions. This approach can go a long way to satisfy employees’ needs.
7.5.2 The power of positive reinforcement in the workplace
If the manager rewards desired behavior and do not reward undesired behavior, he will get more of the desired actions and fewer of the undesired ones. Using positive reinforcement successfully in the workplace is challenging. Pressure compels the manager to focus on the annoying ‘squeaky wheel’ rather than the quietly active employee. Rewarding the wrong behavior is a big a mistake just like not paying the right action.
7.5.3 The power of goals and expectancy
A fundamental way to motivate employees is by setting challenging yet still attainable goals. According to Latham (2007), research on goal setting has shown that setting target and challenging goals lead to better levels of duty performance than do easy or vague goals. When managers match challenging goals with compensation, the organization has a dominant force to motivate exceptional employee performance.
7.5.4 The power of equity
Reinforcement, goal setting, and expectancy assume that people make decisions based purely on their circumstances. Workers compare incentives received by each employee against others and decide whether it is fair or unfair, just or unjust. When an employee thinks that other employees receive more rewards for a similar effort, the employee feels dejected, and a feeling of injustice prevails.
Staff feeling of being underpaid is linked to lower motivation, higher absenteeism, high turnover and even increased theft. Employees’ sense of lack of equity involves being comparatively underpaid. Few people admit that they are overpaid and feel sorry about it.
Motivation is so complex that no single policy will help the organization to motivate its employees. Hotel managers cannot ignore the reality that financial rewards play a critical role in motivating hospitality employees; they can also not overlook the fact that money is not everything to everyone. Recognition and feedback can also be useful tools if the manager has leadership and management expertise to see when and how to give these non-financial rewards effectively.
Chapter 8 How to build service quality into the competition
8.1 Introduction
There are many kinds of quality assurance programs in operation, including, total quality management, six sigma, lean, quality circle or kaizen. These techniques have been developed to help companies define, create, and execute organizational processes to build and maintain service quality. Regardless of the approach used, service quality initiatives and methods are critical tools for ensuring guest satisfaction and developing a competitive edge over competitors.
Creating and producing a consistent, quality product and service is a key to long-term business success. Hospitality service quality initiatives require excellent service processes and consistently active employees. As a manager, operator or supervisor, most of the time will be spent working to understand, develop and modify the behavior of guests, employees or owners. Total quality approach to the management of hotel guests helps the company gain better control over employees and services offered.
8.2 Complaint management
The adage or expression, ‘the customer is always right’ is petering out and new expression, ‘the customer may be right’ is creeping in. Naturally, there are troublesome customers whose complaints are fake; they want to cause trouble and those whose claims are genuine. According to Makoul and Roloff (1998), a complaint is a social confrontation that is initiated to adjust perceptions and outcomes in the short term and in the long run.
Assigning blame to someone is counterproductive when the hotel is trying to improve its operations. When a service failure occurs, the hotel should spend all of its energy studying to understand what has happened, fixing the problem and preventing it from reoccurring. Each service failure becomes the manager’s responsibility to correct. Correcting the error require the manager to change expectations or correction of behavior in how service processes are carried on in the operations.
8.3 Gathering feedback from guest
There are four primary methods to gather input from guests:
? Direct or indirect communication with management and staff.
? Customer relation call centers.
? Guest satisfaction surveys and other forms of comment cards.
? Mystery shopping programs
Chapter 9 Demand management and hospitality ownership
9.1 Introduction
The hotel manager and the other operational staff need expertise in demand management, which involves strategies and tactics to encourage guest to book the hotel or restaurant by dramatically managing demand to optimize revenue while securing customer relationship for the long term. Revenue managers must continuously oversee and adjust the operational use of distribution channels to reach target customer segments. These managers must build strategies to enhance existing customer relationships and take effective revenue management actions to achieve the objective balance of near-term profitability and long-term viability.
Revenue management is mainly concerned with capacity control and dynamic pricing models to maximize revenue. Segmenting or grouping customers into buckets, each bucket with its price tag thus the starting point of yield management in addition to forecasting the business levels.
9.2 Managing demand in a competitive set
Setting a hotel’s strategic positions goes hand in hand with differentiating the property and developing appropriate rates fences. The hotel may offer the most rooms and most significant event space, giving a particularly strategic position in the market. A hotel’s positioning in the market depends on differentiation or lack of it. If the hotel has the advantage of high quality or excellent facilities, the strategy might involve premium pricing.
If the hotel property is not differentiable, the best strategy is to use market penetration through price discounting and promotional advertising where the hotel promotion is on an aggressive price that is set equal or less to competitors.
9.3 Hospitality property ownership
The number of rooms or seats measures hotel or restaurant property sizes and these are the foundation of the hospitality industry. Owners often do not operate hotel properties as management companies have become nearly essential for large and upscale assets. Restaurant owners are more likely to run their restaurant, although many have become franchisees of large organizations.
Hotel ownership means the owner has the rights to personal and real property usually called real estate. The legal property rights of owners come in the following three primary forms:
? Exclusive possession and control. A holder of the property has the right to admit or
exclude others and collect damage for trespassing and may use the hotel as collateral for borrowing.
? Quiet enjoyment. When the title to the property is registered, the owner does not have to
defend claims from unregistered parties. Other parties cannot claim the rent and sale
proceeds.
? Disposition rights. Owners can freely transfer their property or carve out ownership
interest.
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