HR assignment report help: Revenue generation with customer loyalty

1. Executive Summary

This report majorly focuses upon the quality improvement systems to be incorporated in the hospitality sector. Due to increased competition, and with the growing complexities in the working environment, it is very hard to fulfill the customer’s expectations & serve them with the best of the ability.This report would be focusing upon the three key indicators i.e. Customer Loyalty, Employee Pride & Motivation, and the Revenue per Available Room which would help in the quality improvement program.

The three key indicators mentioned above would help the hotel in order to measure its performance on the basis of the following indicators such as the employee turnover rate, total customer satisfaction, the various challenges being faced by the hotel, etc. A formal audit should be conducted by the hotel officials in order to see where the hotel lags behind.

2. Introduction:Quality is one of the major concerns for the various hotels under the hospitality sector in order to sustain in the competitive environment. Treating customers with high or full satisfaction is one of the crucial issues being faced by in the hospitality sector (Enz, 2009).

Service quality plays an important role in order to attain competitive advantage over the others. In the hospitality sector, quality refers to meeting with the customer’s expectations & exceeding it. In the hospitality sector, an effective service quality system would help the hotel to achieve enhanced customer satisfaction (Ottenbacher, 2008).

In order to attain high levels of service quality, the hotel should first recognize the clientele’s expectations & then work accordingly (Enz, 2009). The quality improvement programs should be formulated by the hotel, which would include various issues such as regarding service culture, empowerment of employees, communication to customers, customer segmentation, recruitment & training of service personnel, and appraisal systems (Enz, 2009).

Majorly the service quality program would consist of increase in market share, enhancement amongst the customer loyalty, reduction in costs, providing high returns to the investors, and having a competitive edge over the other hotels (Enz, 2009).A fair audit should be conducted which would include a comparison of actual versus planned development. A standard should be maintained by the hotel & all the officials should try to achieve it (Enz, 2009).

A conceptual gap model of the service quality should be practiced by the hotels which would help them in order to compare the quality of service provided & the services expected by the hotel. The gap recognized if any should be taken into consideration (Enz, 2009).

A likert scale also should be used in order to measure customer’s expectations on the basis of various dimensions. Fish Bone & Pareto diagram should be used as a strategic tool which would help in constructing a better quality improvement program in hotel.

3. Concept of Quality Improvement in Hotel

Providing the utmost quality to their customers is one of the main concerns for all the hotels which help them to sustain in the competitive environment. Treating the customers with the best of the quality & providing the customers with full satisfaction is one of the major issues for all the hotels these days (Ottenbacher, 2008).Providing the customers with high level of satisfaction is the key challenge in the hospitality sector. With the emerging & growth of technology, the process used in the hospitality sector has become more complex. With the rise in the complexities, many issues have also been faced by number of big hotels in the hospitality sector (Macky & Boxall, 2007).

Improving the quality continuously is one of the key to successes. It plays a crucial role in attaining sustainable competitive advantage. In the hospitality sector, quality means, to understand the required specifications, as well as exceeding & meeting with the customer’s specifications. According to Enz, 2009, having a proper quality improvement program would be very useful & is one of the tools for achieving maximum amount of customer satisfaction.

In the hospitality sector, the first major requirement is to understand of the requirements of the customers, understanding the essential needs such as what is more important to its clients (Macky & Boxall, 2007). After, fair understanding of the same, the hotel official should try to implement the same. In order to attract the customers & retain its clients, new quality measure techniques should be adopted so that the clients would be fully satisfied with the service provided (Macky & Boxall, 2007).

In the absence of not fully satisfying its customers/ clients, there would be some complaints from their customers which would lead to hammering of the customer loyalty. This would lead to a decrease in the customer’s preference for that particular hotel, leading to a decline in the competitiveness amongst the other hotels performing under the same category (Macky & Boxall, 2007).In order to outperform, one needs to plan & implement certain quality improvement systems in their organization in order to attain their major goal i.e. satisfaction of its customers.

The service quality system has been incorporated in the various hotels all over the globe. Subjective surveys have been taken up by various hotels within the globe which would help the hospitality sector as a whole to look into the various inefficiencies and take care of them in order to satisfy the customers. Such surveys include the various issues such as the level up to which the officials have defined the term quality, authorize the employees to deliver the appropriate quality which would help the customers to prefer a particular hotel (Lowenstein, 2010).

Some of the common issues faced by the hotels & the reason as to incorporate the service quality system are as follows, serving food in stumpy category of tangibles such as beds, room size, utensils, etc (Lowenstein, 2010). If certain issues would not be resolved, then there would be a negative impact on the customers which would further lead to low reliability, limited customer assurance, responsiveness & empathy which would cost the hotels money as an effect of small reiterate purchases.

3.1 Employee Pride and Motivation:One of the major focuses while going into quality system improvement is the employee pride & motivation. Unless & until the employees of the company would be satisfied, they will not be able to satisfy the ultimate customers (Lowenstein, 2010).

The employees should be motivated on daily basis so that they can start with fresh thoughts as well as the zeal to serve their clients. In order to increase the employees pride & motivation, each and every hotel should share their experiences on a daily basis (Lowenstein, 2010).

To quote some example as to how the hotel officials incorporated the same in their hotels & such system turned out to be a success. In case of Ritz-Carlton hotel, the employees of each & every department stand together for at least 15 minutes every day & share some of their success stories, day to day experiences, known as the “wow stories”.  These wow stories refer to the real experiences, stories of faced by the employee while dealing with a particular client of the hotel   (Lowenstein, 2010).

Here is another example as to how the hotel officials go beyond & serve their clients with the utmost service. In one of the hotels in Bali, the chef arranged for special kind of eggs as well as milk as the guest was allergic to the food being served at the hotel premises (Lacey & Sneath, 2006). The chef took some pain in arranging the eggs & milk from a grocery store which was placed in a different country & then got it to the hotel. For providing such kind of service, the chef was being praised by the hotel officials who in other terms lead to an increase in the customer loyalty towards this particular hotel (Lacey & Sneath, 2006).One of the other ways through which the employee pride & motivation could be increased is through the local fame which the employee would get if he tries to deal with the customers in the utmost manner (Lacey & Sneath, 2006). For example, in one of the hotels, the laundry boy was unable to remove the stain from the customer’s shirt before he had to leave. The manger of the hotel went to the clients place directly & personally handed over the shirt to the client with a compensation cheque for the total damage caused by them.

Sharing such kind of stories with the hotel officials would help them accomplish certain goals such as, it would help the hotel in reinforcement of the service provided to the customers, encourage the employees of the hotel to provide better services to their clients (Lacey & Sneath, 2006). The most essential requirement which would be fulfilled is to provide local fame to the employees which would boost their confidence to serve their clients with the best of the ability. Providing them with local fame would help the employees to be encouraged in front of the public & work with motivation (Lacey & Sneath, 2006).Another attribute which should be covered under the quality improvement system is to reveal passion. At Ritz-Carlton hotel, San Francisco the managers working at any level of the organization gives & greets each and every employee of the hotel with a pleasant smile. A pleasant smile on their face reveals passion to work & inculcates the same in other members of the hotel too (Lacey & Sneath, 2006). This strategy helps them to uplift the others working in the organization too. A staff meeting at the Ritz-Carlton hotel showed that the person operating at the manager level revealed happiness & greeted everybody. This situation shows that enthusiasm starts from the top most level in any organization (Lacey & Sneath, 2006).

Another aspect of the quality system is to take feedback from the employees. The employees should be persuaded to talk & give feedback during the various meetings which are held in the organization or a hotel. The hotel officials should try to listen to the various concerns of its staff members. After listening to their concerns, they should be able to implement some new policy or a regulation which would be in favor of its staff members (Lacey & Sneath, 2006).

The quality system improvement should also include another attribute such as to praise the employees. At Ritz-Carlton hotel, the managers majorly focus on the improvement in the individual while performing a particular task rather than focusing on what wrong the employees have done. The staff meetings should be conducted by the hotels or any organization in order to praise the employees in pubic which would boost its motivation level. Whereas, criticism if any should be done in private, so that the employee does not feel bad. The way of expressing the views is to be taken into consideration (Lacey & Sneath, 2006). The supervisor or the management should try to use soft words which would inspire the employees to work effectively & work upon its grey areas, which would help them to over exceed the customer expectations (Lacey & Sneath, 2006).

3.2 Customer LoyaltyCustomer Loyalty is another key aspect which should be included in the quality service system so as to increase its customer loyalty (Christensen, 2008). The major chunk of the business in the hospitality sector comes from the number of person who visit & book the hotel rooms. The revenue per room earned by the hotel refers to the main source of income. If the customer loyalty would increase, it would be imperative that the profits earned by the hotel or any organization would also increase side by side (Christensen, 2008).

It would be suggested that all the hotels should opt for the various loyalty programs which would help them to build an emotional attachment with that particular hotel or a brand. Thus, it can be concluded by saying that the various loyalty programs would not only focus upon the customers as well as its repurchase (Christensen, 2008).

Creating a customer loyalty program would never have been a simple task for the marketing executives (Christensen, 2008). The customers are open to & very easily swap to the other hotels in the market as there are many options available to them within which they can choose.

There are various challenges which are being faced by the customers while visiting the hotels. The hotels should have certain systems which would help them as well as the customers to keep a track of all the records, to see where the problem is and a gap analysis is to be made (Christensen, 2008).

3.3 Tools for Quality ImprovementThe two basic tools which any hotel should use in order to make improvements in the quality system of any hotel is the Fishbone & the Pareto diagram.

3.3.1 Fishbone Chart

The fishbone chart also known as the cause & effect chart, Ishikawa diagram, refers to a type of diagram which helps any industry in order o show a fair relationship amongst the cause & effect of a certain event. This diagram would help the hotel industry in order to see & try to develop a quality improvement system which would help t5he hotel in providing better services to its clients (Macky & Boxall, 2007).

The ishikawa diagram would help to explore the real as well as the actual output that was being thought by the hotel officials (Macky & Boxall, 2007). The various causes which lead to a decline in the quality system should be arranged together in the order of its importance which needs to be resolved. In case of the hotel industry, the causes tracked could be categorized on the basis of the following criteria, which would help them to formulate a specific quality improvement system i.e. Machine (technology used by the hotels), Management (whether the people working in the hotel are soft spoken while communicating with the clients, etc.), Maintenance (proper maintenance of the hotel is being made or not) (Macky & Boxall, 2007).

The above refers to a Fishbone diagram which would help the hotels, to look into the various causes as well as its effects on the hotel. The fishbone diagram would give a fair idea to the hotel officials regarding, the causes which need to be taken into consideration while formulating a quality improvement system for the same (Macky & Boxall, 2007).

3.3.2 Pareto ChartPareto chart refers to another tool which would help in the formulation of the quality improvement system. Pareto diagram is a type of chart which focuses on the big problems faced by the hotels or any industry. The problems so identified are to be arranged according to its importance or priorities. The most essential problems need to be solved first as it would help in improving the whole quality system. After solving the problems, it would lead to a reduction in the number of problems arising in any organization (Juran, 1988).

The Pareto analysis state that in terms of quality improvement, the large proportion of problem (80%) arises due to the due to few of the causes (20%). This technique would help in the identification of the 20% of the causes/ problems which needs to be addressed in order to resolve the 80% of the problems (Juran, 1988). This technique would help the hotels to focus upon the 20% of the root causes due to which the problems have been aroused.

4. Revenue Per Room Available (RevPAR)

Revenue per room available refers to a tool which is being used in the hotel or th hospitality sector in order to measure its financial performance. There are various ways to calculate the revenue per room available. The number of rooms available as well as the occupancy rate describes the health of a hotel.It is one of the most important ratios being calculated in the hospitality sector. It gives a brief description as to well the company/ the hotel is performing as compared to the other hotels in the respective country.

It must be noted that, there might be a possibility that, one hotel may have a higher RevPAR than the other, still generating low amount of revenues.

The market should be segmented into different segments depending upon various factors such as age, income, etc. The hotel should have various categories of rooms which would be available o their customers & satisfying their needs.

The quality improvement system being incorporated in the hotel should take into consideration the RevPAR as it would help them to see the financial performance of the hotel.

The number of pre-bookings would give the officials an idea as to how many people know about this hotel & prefer it as compared to the other hotels available in a particular country.

This tool would help any hotel in order to calculate the amount of profit, which the hotel would yield on the basis of the rooms available. Given the number of rooms available, average room rate & the room occupancy, the hotel would be able to calculate the amount of profit it would get from each room it possess.

5. Audit

After reading the above three main factors which needs to be taken into consideration while formulating the quality improvement system, a fair audit should be done which would help the hotel officials to take care of the gaps if any (Camp, 2006).A proper gap analysis is to be done which would help them to compare between the actual & the potential performance. This analysis would help the organization to know what all resources are under estimated as well as over estimated. The main goal of this analysis is to identify the gaps & then bridge it by optimization of the resources available (Camp, 2006).

In order to bridge the gaps benchmarking is a tool which should be practiced for assessing the performance. Such type of analysis would help them at the strategic or at the operational level of the organization (Camp, 2006).

It refers to a formal study which would take care to two main questions i.e. where you are & where you want to be.

6. Conclusion

The report majorly focuses upon the quality improvement systems to be incorporated in the hospitality sector. Due to increased competition, and with the growing complexities in the working environment, it is very hard to fulfill the customer’s expectations & serve them with the best of the ability (Blešić, Romelić & Garaća, 2009).

In order to attain high levels of quality, the hotels should incorporate various high quality improvement systems which would help to put some more focus on Customer Loyalty, Revenue per available room & employee pride and motivation, which would help in customer satisfaction (Blešić, Romelić & Garaća, 2009).

A fair gap analysis is to be performed by the hotel which would help them to assess where & what is wrong in the whole system. Customer loyalty programs should be implemented in the hotel which would help them to retain more number of customers thereby leading to more revenue for the company (Blešić, Romelić & Garaća, 2009).

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