Hotel Industry Analysis

Question: Discuss about the Hotel Industry Analysis. Answer: Introduction Service industry is different from manufacturing industry due to intense direct customer participation in whole process, there is direct service encounters and experiences that creates customer satisfaction(Kandampully, 2002). Therefore organizations need to develop robust system that ensure low amount of service failure and high customer satisfaction. This is a service management paper that focuses exclusively on hotel industry service organization blueprint. It aims to evaluate detail service process that take place within hotel, areas that can cause service failure, different functions of front and back office department. It will help in creating a clear picture of the whole service delivering process. Later part also evaluates different strategies for service recovery within organization. Service blueprint can be regarded as tool used for service improvement; it is a visual tool that helps in evaluating systematic process for developing services. It is an integral part of service engineering process that starts with idea evaluation for a service to service implementation in real terms. There are five primary phase of this process, it include new ideas, evaluating firm requirements for services, third phase is service design to plan the performance, fourth is testing the service before launching it to market and final is feedback to evaluate after launch effect through customer satisfaction. Blueprint is the process used for designing the service. Service Blueprint Service blueprinting can be defined as planning instrument that is used to plan innovative services, finding problem in the present services, evaluating quality of services and improving the same. It includes a graphical visual presentation of different services process and activities to foresee future service development requirements. This tool also helps in finding various service failure points that can cause customer dissatisfaction and plan strategy accordingly. Primary objective of this tool is to line up all activities of the whole service execution process, it is planned using strong customer focus therefore covering all areas that might cause service failure, analysing different type of possible service gap and recovery strategies for the same. It is a powerful cost effective tool for service evaluation and planning (Seyring, 2009). Service blue print involve complete service production process, therefore it is crucial to collect information regarding customer requirement from the service provider, required resources for different process and time requirement for the same (Seyring, 2009). There are five key components of service blueprint, it include customer actions which include all actions taken by customers for availing the services; second is onstage action that include visible acts of employees; third is backstage that is invisible employees contact actions; fourth is support process that is divided using internal line process which include actions taken by departments and employees who are not visible but without their action service execution is also not possible and fifth is physical evidence that include all tangible elements that customers come across(Lovelock, 2007). Hotel Industry Blueprint Physical evidence Advertisements/ website Hotel exterior parking Desk registration Papers Elevators Hallway Room Cart for bags Room Amenities Bath Menu Delivery tray Food Appearance Food taste and temperature Bill desk Lobby Hotel Customer action Arrive at hotel Give bell persons bag Check in Go to rooms Receive bags Sleep, shower Call room service Receive food Eat Check out and leave Line of interaction Onstage action greet Take bags Process registration Deliver bags Deliver food Process check out Line of visibility Backstage action IT department Take bags to room Take food order Line of internal interaction Support process and IT Registration system Room maintenance, facilities Prepare food Registration system First step of service process is customer seek information regarding the hotel, availability of room, facilities, pricing etc. This information is collected through various sources such as internet, company website, various online hotel booking sites such as Trivago, booking.com etc. Therefore from the hotel end it is crucial that someone maintains strong IT system, integrate various websites and booking system. Customer can plan wither to pay online or direct cash at counter, therefore proper IT integration must be done between company, banks and booking sites. Usually there is time gap between booking the hotel and actual stay at the hotel. After few days of booking customer make a visit to hotel either using his own car, booked car or hotel car as per service availed. This leads to first physical interaction with parking space of the company. Further, customer goes to reception, which is a major customer interaction point to check in. Proper information system helps in smooth and quick check-in process, after several processes of paper check and registration, customer leave their luggage and go to their room. Luggage is picked and delivered to the room by hotel staff. After this customer have direct experience in the room which is impacted through various amenities available in the room such as lights, Wi-Fi, infrastructure, dcor, bathrobe, size of the room, tea, coffee, other wide range of amenities. Now customer can do several act such as eat, sleep, call for room service etc. every service impact customer perception about the service provider. In in-house experience have strong impact on customer perception and the way they represent the brand in their word of mouth. After completing their stay customer goes to lobby for checkout, complete the payment, staffs leaves the customer to their vehicle and bid goodbye. Each stage of the service process has strong impact on customer perception regarding the brand. Front Stage Functions Front stage can be defined as interaction between customer and services. It includes range of activities and steps perform by contact employees that are visible to customer. Action taken by front stage employees has direct impact on customer perception and satisfaction. Various instances when front stage interaction takes place between employees and customers are as follow; When a customer calls up hotel staff for some booking or other information When customer arrives at the hotel and greeted by the staff When customer give their bags to bellboy At the lobby for registration or check in At restaurant visit, food order or room services During bags delivery system at their room During checkout Front stage staff act as the face of the hotel they need to have strong interpersonal skills, they need to behave in friendly and confident manner. While greeting customers staff needs to ensure to welcome them with a smile, eye contact and willingness to listen. Front stage employee need to have the ability to control stress and behave politely during unusual situation also. While handshake with customers it should convey a sense of responsibility to customers. Departments that have active role in front stage services are discussed below; Front desk have prime role to play in a hotel as it create first impression on customers mind, it is also a deciding factor to avail or not to avail services. In hotel industry front desk jobs are generally designated to young and smart people, who are energetic, presentable, available 24*7, strong interpersonal skills and relationship management. Front desk staffs have highest number of customer interaction; they are responsible for various activities such as booking, providing safety lockers to customers, making reservation, interacting over phone, providing various services to customers. Housekeeping is another front stage department that comes into customer contact after hotel check in till their check out. It involve wide range of services such as 24 hour availability of staff, taking food orders, making their rooms, cleaning, laundry services etc. Food and beverage department: This department is in interaction with customers by taking their food and beverage related orders over phone or at restaurants, conference rooms etc. waiters, bartenders and restaurant managers are primary front stage staff in this department, they need to behave in friendly, courteous and polite manner. Backstage Functions It include the part of service chain that customers cannot see but they provide key services in the value chain process and help front stage staff to complete their tasks (Talwar, 2006). There are several back stage services that supports smooth service delivery in hotels. The job of back end starts prior to room booking also. Hotel use various promotional tools such as websites, booking sites, travel agents and direct booking options. A strong IT department, software and its proper management is crucial to ensure hassle free customer experience, integrating bookings made through various sources, ensuring real time display of online booking status at different platform. Hotels now days also use live chat options on their website to answer customer queries and bookings. These employees need to interact with customer, provide information etc. After taking various orders such as laundry or food the back stage work starts. In case of food, kitchen staff and chef need to follow hygiene standards, high quality of food and safety norms. Different other back stage staff category in hotel include security system managers who checks room, security of customers, staff who take baggage to the room, hotel engineering staff who are responsible for managing lights, electricity, elevator etc. Moment of Truth It can be defined as the period or moment when customer encounters the services that involve a direct interaction. According to Lovelock it is the time when customers have direct interaction with service employee or any self-service platform, whose experience will have direct impact on customer perception regarding the service provider. There are three types of service encounters, over the phone, remote and face to face encounter. Poor staff behaviour can lead to customer dissatisfaction. It is the most critical moment for service provider as experience at this stage can lead to service dissatisfaction or high satisfaction. Each moment of truth is an opportunity to hotel staff to enhance customer experience, deliver high quality and increase chances to get customer loyalty and future business (Widjaja, 2005). Different scenarios when moment of truth takes place in hotel industry are discussed below; First is during hotel information search, sometime customers calls at reservation department for collecting information regarding various facilities, location and tariff from the hotel staff. At this stage staff behaviour, ability to listen to customer with patience and answer their queries has strong impact on customer decision to avail the service. Second is during booking a room in the hotel, this might involve customer interaction with front office staff, who will be responsible for explaining room, its amenities, completing paper work, registration etc. Staff politeness and behaviour needs to provide confidence and faith to customer on the brand selected by them Third is during check in the hotel, here different parameters such as availability of proper signage, behaviour of the valet parking staff, the parking area, the self-check in machine needs to work properly, if customer encounter problem in check in, it might cause dissatisfaction and bitter customer experience (Bebko, 2001). Fourth moment of truth is during availing any of in-house services by customers, whenever customer ask for any service, it involve direct interaction with hotel staff, their responsiveness, service quality that impact their experience. Determinants of Satisfaction/Dissatisfaction To plan a proper service encounter to ensure customer satisfaction it is crucial to define determinants that might lead to positive or negative experience. According to Zeithaml and Bitner, (2003) there are four common themes impacting customer satisfaction from services, which are as follow; Recovery: it deals with the process and actions taken by organization employees during service failure, the way they deal with unforseen situations etc. At this stage hotel staff needs to acknowledge customer problem, explain them a cause, apologise, compensate or take responsibility leads to customer satisfaction. On contrary ignoring the customer, laming and passing the buck leads to customer dissatisfaction. Adaptability: the degree to which employee response to customer request also influence customer perception regarding a hotel. For example, if a customer request food over phone, how much time taken to deliver the food etc. influences customer satisfaction or dissatisfaction level. It requires employees to recognise the seriousness of customer request, adjust the system and accommodate customer requirement, explain rules and policies to customers. Whereas if employee ignore customer request, show unwillingness, promise but did not perform the task, will lead to high level of customer dissatisfaction (Cronin, 2000). Spontaneity: service delivery needs to be fast, it defines the degree to which hotel staff took an unprompted action on customer request. To ensure customer satisfaction hotel staff needs to give time, listen to customers properly, provide information and show empathy. On contrary, impatience from hotel staff, ignorance, rude behaviour and customer discrimination leads to poor customer relationship. Coping: the way hotel staff deals with problem customers, unforseen situations and unpleasant customer behaviour. In such conditions, hotel staff needs to be polite, explain and let go the customer. However taking customer behaviour personally and impacting services to other customer might lead to customer dissatisfaction (Zeithaml Bitner, 2000). Apart from this, intangible factors have strong impact on customer perception on the service provider. According to Bebko (2001) customers have higher standard set for intangible factors in comparison to tangible elements. Third factor that impact customer service satisfaction level is nonverbal communication and cues. The degree to which employee display effective characteristics such as friendliness, responsive, positive, polite etc. impact customer perception regarding service provider (Kueh Bagul, 2013 ). Further different nonverbal cues impacting customer perception include Kinesics elements such as eye and body movement including smiling, handshaking etc. paralanguage elements such as tone of voice, loudness, pitch etc. proximity that include the distance and posture of service provider with customer and physical appearance of the staff (Bebko, 2001). Apart from this, culture also have strong impact on service encounter experience and perception; customer requirements also var y with their culture, for example western culture customers would give highest importance to timely services and efficiency whereas Asian customer give highest score to interpersonal relationship of the hotel staff (Christensen-Hughes, 1992). Motive of purchase is also key element that impact customer perception of service level, for instance if a customer is visiting for a leisure purpose, he would expect different category for services in comparison to one visiting for business purpose. Service Quality Measurement and Gaps Failure to meet customer expectations of the service leads to service gap. According to theoretical model of service gap there are five different type of service gap that can occur during service delivery in hotel industry (Blesic, 2011), which are as follow; Positioning gap: it can occur due to difference in perception of hotel management regarding customer expectation of service with actual customer expectations. It occurs due to lack in marketing research, poor upward communication, lack of coordination and poor information regarding external environment. Specification gap: it occur when hotel management clearly understand customer expectation of the service level but fail to translate or execute them into real service specifications. Lack of formal specification also leads to service variability, low quality. Factors that impact specification gap include designing specification, task standardization, perception of feasibility, levels of management, coordination and HRM (Uran, 2005). Service execution gap: It occurs due to service delivery failure as a variance between actually delivered service and what is said by the customer. Communication gap: difference between actual service delivery and message communicated to customer using various external tools such as website, advertisements, social media etc. Evaluation gap: evaluation gap is to failure to evaluate customer service quality expectations, it can be done using SERVQUAL model; this gap is outcome of two dimensions that are measuring feedback and performance (Daniel Berinyuy, 2010). Service-Recovery Strategy Plan Justice to Customer According to few researches unfairness is the primary cause behind service failure; therefore fairness is the key to re-establish customer faith on the brand. Customer service recovery evaluation is based on three types of justice, it include distributive, procedural and interactional. First is distributive recovery strategy that aims to ensure that customer receive benefit for the amount of cost paid by them, therefore failure to deliver customer expected value for the price paid leads to service failure? To deal with such situation, first employee should true to address customers negative emotions and then they will be willing to accept the solution (Kumar, Lemon, Parasuraman, 2006). Second element is procedural justice that include process used to evaluate customer outcome, it include speed of service recovery, information collection process; it is crucial to accept responsibility of service failure, acknowledge it and address it. Such approach helps in regaining customer faith i n the brand. Third factor is interaction justice that includes the way manager or other hotel staffs behaves with the customer. It is crucial to face emotional experience during service failure (Michel, Bowen, Johnston, 2008). Process Recovery Customers remain dissatisfied if even after service failure the system remains unchanged. Therefore company needs to collect problem data through surveys, direct interaction from customers as well as hotel staff. Different strategies that can be used to collect detail data on process failure include mystery hopper, critical incident, TQM. Organizations need to collect problem, evaluate root causes and take corrective actions. Employee Recovery In hotel industry customers are in direct interaction with front office staff, their service encounters impact service quality. Therefore it is crucial that management implement staff satisfaction strategies to enhance their motivation and ability to encounter service failure situations (Chianga, Back, Canter, 2005). It requires providing adequate training to employees on customer relationship management, rewarding employees for customer acquisition and retention etc. Service recovery require joint effort from marketing, human resource and operational department of the company. Customer feedback is a primary tool to understand service experiences. Conclusion Above analysis helped in understanding service blueprint for hotel industry. All organizations in this industry aim to manage high service quality to achieve high customer satisfaction level. There is direct relationship between control over service quality and customer satisfaction from the service, which leads to customer loyalty, repurchase and profitability for the company (Bei Chiao, 2006). Moment of truth is the prime element that help in understanding the degree of service quality and gaps in the planning done by organization, it help in understanding various failure points that can cause customer dissatisfaction. Further these paper present different strategies that can help hotel industry in reducing the risk of service failure and enhance customer experience with the organization. Further, service recovery only works once but if the company fails twice to the same customer, it might not help. Bibliography Bebko, C. (2001). Service encounter problems: Which service providers are more likely to be blamed? Journal of Services Marketing, 15. Bei, L., Chiao, Y. (2006). The determinants of customer loyalty: an analysis of intangible factors in three service industries. International Journal of Commerce and Management,, 267-287. Blesic, I. (2011). Application of gap model in the researches of hotel service quality. Toruizam, 40-52. Chianga, C.-F., Back, K.-J., Canter, D. D. (2005). The Impact of Employee Training on Job Satisfaction and Intention to Stay in the Hotel Industry. Journal of Human Resources in Hospitality Tourism, 99-118. Christensen-Hughes, J. (1992). Cultural diversity: The lesson of Toronto's hotels. The Cornell hotel and resturant administration quaterly, 77-87. Cronin, J. (2000). Assessing the effects of quality, value, and customer satisfaction on consumer behavioral intentions in service environments. Journal of Retailing, 76(2), 193-218. Daniel, C. N., Berinyuy, L. P. (2010). Using the SERVQUAL Model to assess Service Quality and CustomerSatisfaction. Umea: Umea School of Business. Grove, S. J. (1998). Assessing the Theatrical Components of Service Encounter. Services Industries Journal, 18(3), 116-134. Kandampully, J. (2002). Innovation as the core competency of a service organisation: the role of technology, knowledge and networks. European Journal of Innovation Management, 18 - 26. Kang, G., James, J., Alexandris, K. (2002). Measurement of internal service quality: Application of the SERVQUAL battery to internal service quality. Managing Service Quality, 278-291. Kueh, S., Bagul, D. A. ( 2013 ). The Effects of Nonverbal Communication of Hotel Employees upon Emotional Responses of Hotel Guests. International Journal of Research in Management Technology , 126-132. Kumar, V., Lemon, K. N., Parasuraman, A. (2006). Managing Customers for Value. Journal of Service Research, 87-94. Lovelock, C. (2007). Services Marketing People, Technology, Strategy. New Delhi: Pearson Education India. McLean-Conner, P. (2006). Customer Service: Utility Style : Proven Strategies for Improving Customer Service and Reducing Customer Care Costs. Oklahoma: PennWell Books. Michel, S., Bowen, D., Johnston, R. (2008). Service recovery management: closing the gap between best practices. Retrieved September 21, 2016, from www.dienstleistungsmarketing.ch: https://www.dienstleistungsmarketing.ch/documents/MichelBowenJohnston_ServRecMgt_Reformated.pdf Parasuman, A., Berry, L., Zeithmal, V. (1985). A conceptual model of service quality and its implication of service quality. Cambridge : Marketing sceince institute . Robledo, M. A. (2001). Measuring and managing service quality: integrating customer expectations. Managing Service Quality, 11(1), 22-31. Seyring, M. (2009). Service Blueprinting. SEPT Program. Talwar, P. (2006). Hotel And Hospitality Management: Housekeeping. New delhi: Gyan Books. Uran, M. (2005). The organizational gap model for Hotel management. Managing global transistion , 405-422. Widjaja, D. C. (2005). Managing service quality in hospitality industrythrough managing the moment of truth: a theoretical approach. Journal manajemen perhotelan, 6-15. Zeithaml, V., Bitner, J. (2000). Services marketing: Integrating customer focus across the firm. Boston: McGraw-Hill, .