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Turnover in Indian Hotel Industry: A Study Of Employees Opinions


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Tourism and Hospitality industry in India has tremendous growth potential Associated Chambers of Commerce and Industry of India (Assocham) (2012) also enforce it in its latest paper Title “Emerging Opportunities in Rising Sector”, in which, it expect that Healthcare and Hospitality sectors are likely to grow at 20-25% Per annum and expected to create 16, 00,000 new jobs in the year 2013. Accommodation sector is consider to be one of the major component of hospitality industry in which wide variety of hotels (From Five Star Deluxe to Budget, Heritage Hotels, Motels etc.) are available. According to Hospitality Valuation Services (HVS) (2011) survey the supply of new branded hotels in 2008-2009 was 94115 rooms, which rose in 2010-2011 to 102438 rooms. Thought the growth on the hotel industry is robust and rosy but at the same time the industry is also facing many challenges the employee turnover is also one of them. Federation of Hotel & Restaurant Associations of India (FHRAI) (2001) survey report clearly states the problem of high turnover in this sector. The present paper is an honest effort to identify various causes of high turnover in the Indian hotel industry focusing the capital New Delhi. The entire research revolves around three major objectives that are to investigate employees‟ opinion on various causes for the high employee turnover in hotel industry; to examine consequences of the high employee turnover
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Special Issue: Hotel Operations Management Issues and Challenges Vol. 5, January 2013
Indian Journal of
Applied Hospitality and Tourism Research
Vol. 5, January 2013
Research Papers
Kumar, S.
Meeting, Incentive, Conference and Exhibition (MICE) Tourism:
Present & Future Prospects in Chandigarh Capital Region
Kumar, B. and
Lockyer, T.
Mega Events - The Impact of the Commonwealth Games on the
Hotel Industry
Patwardhan, V. and
Rao, S.
Student perspectives of industrial training experience in
hospitality industry: A Study
Lockyer, T. and
Elebiary, A.
Hotel Loyalty
28- 37
Khanna, S. and
Akhtar, S.
Frontline Employee Demographics and its Impact on Job
Satisfaction and Organizational Commitment in Hotel Industry
Kumar, S and
Chahal, P.
Turnover in Indian Hotel Industry: A Study Of Employees
48 -54
Mohsin, A. and
Kumar, B.
Lessons from Literature: How to Manage Staff Turnover in
55 - 67
Rao, S. and
Patwardhan, V.
A study of factors moderating student’s selection of Hospitality
Program in India
68 - 73
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Indian Journal of Applied Hospitality and Tourism Research
Effective service ensures guest satisfaction and is essential to remain relevant and gain competitive
advantage to keep pace with the ever changing environment. As service is people oriented,
management of a true Hospitality Professional through channelizing organizational objective and
employees aspirations together is crucial for the proficient management of the operations. The WTO
Campaign One billion Tourists- One billion opportunities will invite more relevance to Human
Resources Management in Hospitality Industry. In view of the increasingly changing needs and
expectations of guests, we need to adapt to ensure best levels of service and customer loyalty.
With varieties of tourist destination and increasing business opportunities in the country, MICE
activities have potential for growth and is also becoming one of the focus area in the Hospitality
Industry. A favourable MICE destination can be popularized by incorporating better facilities,
infrastructure and competitive cost of travel and stay.
Availability of trained manpower, job satisfaction and staff turnover continues to pose a huge
challenge to hotels despite steps that are being taken to create more hospitality professionals.
The special issue of the journal comprises of innovative research papers that offers an integrated
perspective in Hotel Operations Management: Issues and Challenges and addresses the task by
bringing together a collection of research papers that investigate the prospects of MICE business and
analyze the impact of Commonwealth Games on the hotel industry beside exploring the issues
of Human Resources Management in the Hospitality Industry through well Researched Papers on
studying perspective of Industrial Training in Hospitality Industry, focusing on crucial impact of
Hotel Loyalty Programme, impact of demographics on job satisfaction, study on the various causes
and management of staff turnover and on moderating students selection of hospitality programme.
The papers are comprehensive coverage of certain timely, crucial and challenging issues of the
Tourism and Hospitality Industry.
We humbly acknowledge the work of all researchers on whose contribution this Journal builds on. We
would like to express our gratitude to all authors for their excellent contribution as well.
We would also like to thank every single person who has assisted in the publication of this special
issue. It could not have been possible without the dedication and enthusiasm of our editorial team and
the referees.
Good contribution with some really valuable insights, the Journal is a unique opportunity to share
knowledge, understand and develop new strategies for growth with a specific focus on hospitality
industry. The journal is an expression of our vision of the advancement in the Hospitality, Travel and
Tourism Industry.
Chief Editor
Special Issue: Hotel Operations Management Issues and Challenges Vol. 5, January 2013
Meeting, Incentive, Conference and Exhibition (MICE) Tourism: Present & Future
Prospects in Chandigarh Capital Region
Chandigarh is always crown as first planned city in India and is known internationally for its architecture and urban design.
Today, it is an administrative capital of two states and emerging business city of North India. According to MGI (2010)
report on “Indian cities urbanization” Chandigarh is one of the fastest and dynamic cities of North India and currently it is
a favorite place to live and hold an important place for investment and growth in years to come. This results in the growth of
business tourism, especially Meeting, Incentive, Conference, Exhibitions (MICE) tourism in the Chandigarh capital region.
MICE is one of the most innovative & demanding form of business tourism. Currently, MICE tourism in India is having the
annual growth 15 to 20 percent. To promote a city as MICE destination requires a good amount of infrastructural facilities.
Government of India (2006) plans to develop few cities as MICE destinations, Chandigarh is also one of them. This paper
tries to find out the present & future prospects of MICE tourism in Chandigarh “the city beautiful”& nearby regions. For
this an opinion survey of MICE stakeholders such service providers (which include hotels, travel agents) and MICE
customers is done and analysis is done with the help of Situation Actor ProcessLearning Action Performance (SAP- LAP)
Key words: MICE, Chandigarh region, Situation Actor ProcessLearning Action Performance (SAP- LAP) tool.
MICE (Meetings, Incentives, Conferences and Exhibitions) are an important segment of tourism
business currently experiencing remarkable competitive growth. MICE market is estimated to be $280
billion worldwide (WTO, 2008) growing at approx 10-15% annually with 14,000 meetings organized
on a regular basis (ICCA, 2007). It is a part of business tourism that is worth $ 672.5 billion. The
share of Asia Pacific and India is small in MICE at $ 60 billion and $ 4.8 billion respectively (The
Economic times, 2008). India rank 9th with 4.3% market share in Asia- Pacific region (ICCA, 2006)
as shown in table 1.
Table 1: Countries Share in MICE in Asia Pacific Region 2006
Percentage share MICE
in Asia Pacific Region (2006)
Percentage share MICE in
Asia Pacific Region (1997)
Republic of Korea
Hong Kong, China-P.R.
Chinese Taipei
New Zealand
United Arab Emirates
Macao, China-P.R
Sri Lanka
Total (in percent)
ICCA (2006)
The above table shows that India‘s share has remained stable at 4.3% since 1997 despite increase in
overall market. It also depicts that many countries have made substantial gains in this market. Their
services have been the result of systematic planning to cash on the market opportunities. Regions,
countries and even cities all are in race to slice their piece of MICE market.
Dr. Surjeet Kumar, Asst. Professor, Department of Tourism & Hotel Management, Kurukshetra University,
Kurukshetra. Email:
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Indian Journal of Applied Hospitality and Tourism Research
Table 2 presents status of top 20 MICE cities in Asia pacific regions. It places Delhi at 16th
position. Cities like Busan (South Korea) have experienced almost 95% growth.
Table 2: Top 20 MICE Cities in Asia Pacific Region 2006
Number of events
organized in 2006
Number of events
organized in 1997
Per cent
Kuala Lumpur
Hong Kong
Brisbane, QLD
Busan. South Korea
Adelaide, S.A.
New Delhi
Perth, WA
Cairns, QLD
Source: ICCA (2007)
Figure 1: Chandigarh Capital Region
Special Issue: Hotel Operations Management Issues and Challenges Vol. 5, January 2013
The difference in growth rates values the basic issue of what makes a good MICE destination. From
the view point of demand side, organisers and clients are knowledgeable and specific about their
requirements. They want even the minutest need to be met. Supply side of MICE demands co-
ordination at a very large scale. In India the supply efforts at top are initiated by the government by
including MICE as are theme of incredible India campaign. It has identified few cities of New Delhi,
Agra, Jaipur, Mumbai, Chennai, Bangalore & Hyderabad as potential MICE venues and building
necessary infrastructure. According to MGI report (2010) Chandigarh capital region (Diagram 1) is
witnessing the fastest growth rate and is one the most preferred destination to live after Delhi
(National Capital Region). Chandigarh Capital Region or Greater Chandigarh consists of the Union
territory of Chandigarh and adjoining areas lying in states of Haryana, Himachal Pradesh and Punjab
(figure 1). The region acts as the central hub of northern India (north of Delhi). It includes cities of
Panchkula, Mohali and other suburbs.
Chandigarh is one of the planned cities in India, with world renowned architecture.
Chandigarh is home to world famous Rock Garden, built from mostly from waste material. Another
well known garden is the Rose Garden, Garden of Annuals, Fragrance Garden, Hibiscus Garden,
Chrysanthemum Garden, Botanical Garden and Shanti Kunj.Chandigarh is already hosting mega
international and national exhibitions and conventions like Agro Tech, Auto Shows and Consumer
Fairs. The city has excellent Convention and Conference facilities.
Mohali which is also known as S.A.S. Nagar, surrounds Chandigarh from three The key
existing Infrastructure Installations in Mohali are International Airport, PCA Stadium One of the
Best International Cricket Stadium in India., Currently it doesn‘t possess any landmark MICE facility
but Bids are already invited to make world class International convention center with a capacity of
4000 persons.
Panchkula is one on the buzzing town of Haryana state. It is a hub of furniture & steel
industry. Today many MICE service providers are such as hotels, travel agents, airlines, event
management companies, convention centres and transport companies are providing services to
transform the city into MICE destination.
This paper explores what needs to be done to transform the ―city beautiful‖ Chandigarh into MICE
Literature Review
The importance of MICE is well reflected from researches taking place throughout the world. Due to
its multiplier effect it has great significance in economic development of any nation. But for this, a
huge infrastructural development is needed. MICE tourism has high expectations for the host place, it
must possess the modernized exhibition venues, convenient traffic, accommodation of different grade,
beautiful urban environment etc. (Xinli Xie & Qunchao Lu, 2006). This is supported by state studies
of various centres.
Singapore had 3,245 MICE events, up 7.8% and won 79 new because of good infrastructure
is in place, efficient transportation networks, the latest information technologies and world class
hotels. It says its superb conference and exhibition facilities as well as the premier shopping; dining
and sight-seeing attractions provide the perfect complement to the conference experience (Singapore
Tourism Board, 1999). Colliers International, (2008) puts Dubai‘s share in Middle East region
MICE tourism at 30% of overall tourism visitor mass.
IMEX research (2006) in its research identifies Germany as a MICE venue is rated on 10
factors. These are well organized, efficient and punctual, quality of public services, multi-cultural and
tolerant society, reputation as a business-oriented destination, experience, reliability of transport,
major airports, international outlook, professionalism of destination marketers and PCO‘s & technical
know-how. This clearly shows the importance of MICE services & facilities.
BCVB (2005) identifies Bulgaria has USP of MICE tourism is due to Accessibility (280
flights weekly), Accommodation (1500 rooms), Packages, & Entertainment (150 restaurants & clubs)
Business Tourism Partnership (U.K)(2003), highlight that in U.K the investments in a
destination‘s infrastructure designed primarily for the MICE / Business tourist (hotels, transport and
communications facilities, restaurants, attractions and amenities, even conference auditoria) provide
benefits which can also be enjoyed by the leisure tourist and the indigenous population.
Asia pacific MICE magazine (2008) in an interview with Frederic Bardin is Vice President
of Arabian Adventures and Congress Solutions Dubai says that unprecedented expansion of Dubai‘s
tourism and MICE infrastructure has prompted further development of Arabian Adventures. Now
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Indian Journal of Applied Hospitality and Tourism Research
there objective is to make Dubai as world‘s leading MICE destinations. It is perfectly positioned to
capture business from Europe, the US and Asia. We have over 105 airlines now flying to Dubai every
week so it‘s very difficult to beat. Hong Kong, which is considered a hub, for example, has around
50-60 airlines flying in every week. We can get 40,000 to 45,000 people in to Dubai within three days
for mega events.
Kaisheng Zeng, Xiaohui Luo (2008), studies finds that Beijing Olympic Games has given a
tremendous boost MICE reason the improvement in transportation and made travel more
economically feasible. The increasing number of low cost airlines around the world also provides an
alternative for travellers. Further they adds that the experiences and the ―legacy‖ of the Games, such
as the large population of trained workers during the Games and the facilities used by the Games, will
benefit China‘s MICE tourism industry, which will, in turn, stimulate China‘s inbound tourism
GIBTM (2009) identifies the top twelve most important influencing factors when placing an
MICE event in the Gulf/ Middle East. Which are Cost , Quality of accommodation, Quality of
meeting facilities, Quality of service, Overall appeal of the destination ,Travel time to destination,
Time of year, Security/safety, Availability of hotel rooms/venues, Visa procurement, International air
routes & Weather.
Government of India’s National Action Plan (1992) proposed that convention and
conference tourism had great significance and therefore to encourage convention tourism, it was
desirable to set up fully integrated convention complexes so that, more and more international
conferences and conventions could be attracted to India.
National Tourism Policy, Government of India (2002), mentions that India, despite its size,
significance and attributes with world cities such as New Delhi and Mumbai, receives a minuscule
proportion of global meetings, incentives, conventions, exhibition (MICE) market with only 97
international conventions bringing approximately 25,000 people in 2001, therefore, it is imperative for
India‘s tourism development but also for development of international and domestic trade and
commerce, that India construct a world class international convention center in Mumbai.
WTTC (2003), ―The MICE segment will be the important driver for corporate travel in India,
enhancing traffic to key cities Mumbai and Delhi, while increasing traffic to emerging nodal towns
like Pune, Hyderabad and Bangalore.‖
In line with this, in the year 2005 Budget Speech the Finance minister of India has shown
intention of setting up of world-class convention centre at New Delhi, Jaipur, Agra and Mumbai on
the basis of Public private partnership (PPP) format.
MICE in ASIA Magazine (2008, Jun) India enter into MICE tourism in 1991 with the start
of economic reforms. As the economy starts flourishing, the country has started upgrading its MICE
facilities. Hyderabad International Convention Centre (Hyderabad), Epicentre (Gurgaon), India
International Expo Centre (Greater Noida) is few states of art world class facilities to name few.
Department of tourism (2003) in ―20 year Perspective Tourism Master Plan for
Chandigarh‖ has suggested few strategic projects develop Chandigarh which include to transform the
Chandigarh into convention city to attract the MICE segment. ICPB (2007) in its newsletter has
mention Chandigarh as an important MICE destination. Punjab tourism (2011) has already invited
bids for the construction of convention venue at Mohali near Chandigarh with a capacity of 3000
persons. From the above review it emerges that Chandigarh can play a significant role in MICE
tourism as this is one of the fastest growing fields.
The study is exploratory in nature in the absence of directly related previous studies for reference. The
purpose of the study is to analyze the opinion of MICE service providers and MICE customers
regarding MICE tourism in Chandigarh region. After careful analysis of secondary literature two
service providers travel agents & hotels were taken and MICE customers are chosen.
Objective of proposed for the study is:
To study opinion of MICE service providers (hotel & travel agencies) & customers on present
and future prospects of MICE tourism in Chandigarh region.
For Service providers (Hotels & travel agencies) data collection was done from Chandigarh Capital
region and for MICE customers the data was take from India as corporate have their headquarter in
different parts of India Chandigarh has been a favorite destination in north India to live. It holds
Special Issue: Hotel Operations Management Issues and Challenges Vol. 5, January 2013
number of MICE event. A structured questionnaire was designed for Hotels & travel agencies (service
providers). The sample composition is as in table 3.
Sample elements
MICE organizers hotels & travel agencies are the sample elements. The composition is given in table
3. In all, forty service providers were identified & selected from above mention cites. While selecting
MICE customers (forty) convenience sampling was used since they are spread throughout India.
Table 3: Sample Elements in Composition
Sample Elements
Chandigarh Capital Region
Travel Agencies
Total = 80
The detailed profile of the sample elements is given below in table 4:
Table 4: Profile of Sample Elements
Sample Elements
Sub Total
Grand Total
Star / chain hotels
Travel Agencies
Big / Medium
Methods of data collection
Primary Data: is collected through preparation of specifically designed questionnaire consisting of
various aspects of MICE segments and also through conducting various interviews and discussions
with executives related with MICE industry.
Secondary data: is collected through a detailed analysis of plans related to Chandigarh
Data Analysis
Profile of MICE Service Providers
Twenty hotels and travel agencies dealing in MICE were surveyed (table 5).
Table 5: Profile of MICE Service Providers
T. A
N (Valid Percent)
N (Valid Percent)
Deal with MICE
20 (100%)
Areas of MICE dealt with
20 (100%)
Incentive travel
Level of MICE
10 (50%)
1000 & above
Majority hotels (100 per cent) and travel agencies are dealing in MICE. Further it is observed that
both of them are operating in all the major areas of Meeting, Incentives, Conference and Exhibitions.
Hotels and travel agencies bring all service providers together and offer a package. Majority of them
have handled less than 500 corporate clients (table 6).This only suggests towards the pyramid
structure of industry where bigger players are few.
Profile of MICE customers
From the table 6, it can be inferred that all forty corporate (100 per cent) are buying MICE related
activities. Majority of them (35.9 per cent) are buying MICE product before 1980. All corporate are
buying all the components of MICE such as Meeting, Incentive, Conference and Exhibitions. All (100
per cent) are buying MICE products both at national & international level. Majority of them (57.5 per
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Indian Journal of Applied Hospitality and Tourism Research
cent) are from Information Technology and Information Technology Enable Services. This also
highlights India‘s current strength in Information Technology sector.
Table 6: Profile of MICE customers
Features of MICE customers
MICE customers
N (Valid Percent)
Organize M.I.C.E
Organizing M.I.C.E
Before 1980
2006 onwards
Type of M.I.C.E activities
Incentive travel
Level of M.I.C.E
Company type
14 (35%)
Engineering & Auto Engineering
7 (17.5%)
5 (12.5%)
3 (7.5%)
2 (5%)
Others (Banking, Reality, Steel, Mobile,
fertilizers etc.)
9 (22.5%)
The opinions of twenty hotels and travel agencies each were taken on a five point Likert scale on
following 20 items which include 10 questions on present status, 5 on future status, 03 descriptive
questions were asked about marketing strategies & 02 questions were asked about government
policies. After careful analysis, a SAP LAP analysis was prepared for Chandigarh city.
For analysing the data for meaningful results SAP-LAP analysis is done.
The SAP-LAP model (Situation Actor ProcessLearning Action Performance) is an innovative and
holistic framework for case analysis (Sushil, 2001). In this model, the case is analyzed with respect to
the mentioned heads and their interdependence is studied to gather learning from the case. Based on
SAP-LAP framework, following generic steps can be used for analyzing any case.
Understanding Situation: In this step, we bring out key points of the emerging situation of the
case in terms of historical perspective, external environment, competition, government policies,
market condition, organizational performance and so on.
Major Actors and their Roles: Identification of key actors in the case and their roles,
relationships, world views and freedom of choice are to be summarized. Usually, this aspect of
case analysis is not well addressed in the traditional case methods.
Evolving Process: In this step, we critically analyze the key process (es) evolving in the case and
portray their key issues. The processes could be of any type as discussed previously.
Key Learning Issues: The analysis carried out in SAP framework leads to synthesis in terms of
key learning issues for the case. These can be of two types: (i) generic, and (ii) specific. The
generic issues are in terms of lessons learnt from the case that can be generalized by synthesizing
the lessons from other cases. The specific learning issues are linked directly with the case under
consideration and are either expressed in terms of the problem areas or in terms of the objectives
to be achieved.
Suggested Actions: Based on the specific learning‘s of the case, alternatives are to be generated
and evaluated. Based on this, actions are to be suggested to improve/resolve the case problem.
Expected Performance: Finally, the impact of suggested actions on performance is assessed so as
to justify the actions.
The above methodology can be applied for case analysis using a variety of quantitative or qualitative
tools and can be presented in a bullet form or using tabular presentation.
Special Issue: Hotel Operations Management Issues and Challenges Vol. 5, January 2013
Implementation of Sap-Lap Analysis Tool
With an objective to find different measures to make Chandigarh (the ―city beautiful‖), a MICE
destination the opinion of MICE service providers (Hotel & Travel agencies) and MICE customers
are presented with the help of SAP-LAP Analysis tool. In this model, the case is analyzed with respect
to the mentioned heads and their interdependence is studied to gather learning from the case.
Q1. How MICE tourism is managed?
The MICE tourism in Chandigarh is highly fragmented. Thought CITCO is the nodal agency works
under UT administration to help the MICE service providers to bring the international MICE events to
Chandigarh. At domestic level these MICE events are directly managed by MICE service providers.
Q2. What is the current status of MICE tourism in Chandigarh?
At domestic level, Chandigarh has a nice charm for MICE events but at international level
Chandigarh has hardly any MICE event to display.
Q3. What is the potential of MICE tourism in Chandigarh?
MICE tourism can be an answer to many answers. It is cleared from the review of literature & MGI
report (2010) on Indian cities that it is one of the most preferred destinations of northern India after
Delhi (NCR). This also reflects the huge potential for MICE tourism.
Q1. Who are the actors in MICE tourism management?
MICE service providers Major MICE service providers are hotels, travel agencies, airlines,
transport/ car rental companies, event management companies and convention venues.
Policy Makers- Centre & State governments, union administration and others nodal organizations
involved in planning of MICE such as ICPB, FHRAI, HAI and CITCO etc.
MICE customers- all the persons who are going for MICE activities.
Q2. What are their views?
All are Positive about MICE growth in Chandigarh.
Q3. Is there any freedom of Choice?
- Service providers can work on site & off site from where they want to generate MICE business.
- Increase comfortable level and will become more competitive.
Q1. What is being done to improve MICE tourism in Chandigarh?
- Improving the existing infrastructure of city.
- Encouraging Public Private Partnership (PPP) mode for construction of dedicated venues as they
require a huge investment. Already bids are invited for Chandigarh international convention centre.
- Centre & state governments are giving financial assistance to these projects.
- Improving connectivity of these cities. Metro project are already in pipeline.
Q2. What should be done to improve MICE tourism in Chandigarh?
- A new department or cell should be carved in CITCO.
- A research cell should be setup for keep the record of MICE components & it can also find new
ways for continuous improvement of the MICE
- Northern Indian Universities and Institutes should be encouraged for launching dedicated courses
related to MICE.
- Students should be made more aware about MICE in Chandigarh and nearby region.
Q3. What else should be done to improve MICE tourism in Chandigarh?
MICE suppliers like hotels, travel agencies, airlines, transport/ car rental companies, event
management companies and convention venues should come forward in improving educational
infrastructure of MICE in Chandigarh and nearby region.
Chandigarh administration should closely observe about the strategy of their competitors are
taking to match the demand and supply gap of MICE.
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Indian Journal of Applied Hospitality and Tourism Research
Q1. What is the key issue related to the MICE tourism in Chandigarh?
- Absence of available data related to MICE tourism.
- There is a great interest for holding MICE tourism in Chandigarh and India as the confidence of
world business community is increasing in Indian economy.
- Indian students are still unaware of MICE concept.
- Chandigarh is still not prepared for holding world class MICE events.
Q2. What are the key issues related to the actors involved in MICE tourism?
- The MICE policy Makers and MICE service providers should come together to analyse the shortfalls
in Chandigarh.
- There is a need to frame a dedicated MICE policy for Chandigarh
-They should launch an aggressive market campaign to know the youth more about it.
Q3. What is the key issue related to the process?
- No exact figures available related to MICE tourism in Chandigarh.
- Collectively all the stakeholders of MICE should try to bring more and more MICE events to
- Chandigarh should identify their key competitors and chalk out plan to compete with them.
Q1.What should be done to improve the current and future status of MICE?
- Big awareness campaign is needed.
- Government should provide more incentives to encourage foreign investment in Chandigarh.
- More benefits should be given to international organizations that are holding MICE events in
- The government of nearby states should establish dedicated institute for MICE training.
Q2. What should be done to improve the actors involved in MICE tourism?
- Collective marketing plan for cities.
- All should come together to bit for an international MICE events.
- More awareness campaigns are needed general public to develop a positive & pride for their city.
Q3. What should be done to improve the process?
- Attract more MICE service providers in promoting Chandigarh as MICE destination.
- All the service providers should form a MICE consortium for promoting Indian cities which includes
- Single window clearance for MICE events should be there.
Q1. What will be the impact on the MICE tourism?
- More MICE events will come to India and Chandigarh.
- The Indian states will have the economical benefit.
- Multiplier effect in economy as these tourists is spendthrift.
- Contribution in employment generation.
Q2. How will the actors of MICE be affected?
- More opportunities for them.
- They will become more cultural sensitive.
- This will lead to more diversification & specialization.
Further it can be understood with the help of figure 2.
The Chandigarh region holds a great potential to emerge as future MICE destination of North India.
Looking at the economic significance government should take initiative to promote MICE. Based on
SAP LAP analysis finding, the following recommendation can be made for tourism policy makers
and MICE tourism service providers like hotels & travel agencies.
Suggestions for Policy makers
Cognizance shall be taken of the importance of MICE tourism so that essential policy &
infrastructure support is rolled out.
Special Issue: Hotel Operations Management Issues and Challenges Vol. 5, January 2013
Freedom of
Absence of available
Chandigarh as MICE
destination is
becoming popular
Need to frame
dedicated policy
Chalk out plans to
compete with
More MICE events
in Chandigarh
Multiplier &
economic benefit
More opportunities
Increase in cultural
MICE tourism is
highly fragmented.
MICE can be answer
to many problems of
Chandigarh future
MICE Service
Policy Makers
(includes Center &
state government)
MICE customers
Improving existing
infrastructure of
Creation of dedicated
MICE tourism cell
Big awareness
Incentives in MICE
Collective marketing
Creating awareness
among general public
Single window
The role of Chandigarh Industrial Tourism Development Corporation. Ltd (CITCO) shall be
relooked to make more competitive and result oriented in development of MICE related product in
Chandigarh region.
Knowledge base shall be created in the area to be shared with service providers.
Figure 2: SAP-LAP analyses of MICE Market in Chandigarh region
Suggestions for service providers
Service providers shall develop more effective network for cooperation in Chandigarh region.
World class deliverables shall be developed for Chandigarh.
The city administrator should develop the strategies to market Chandigarh.
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Indian Journal of Applied Hospitality and Tourism Research
Asia pacific MICE magazine page 36-37
BCVB (2005), General Framework of Convention Tourism.
Business Tourism Partnership (U.K), (2003) Business Tourism Briefing An Overview of The UK‘s Business Visits And
Events Industry.
Colliers international UAE (2008), Dubai Real Estate Overview, Vol 2 p5.
Department of information technology (N/A) Think Chandigarh A comprehensive Guide retrieved from
GIBTM(2009), 3rd Middle East Meetings Industry Research Report 2009
ICCA, (2007). The international Association Meetings Market, 1997-2006. Statistics Report.
IIMB & ICPB, (2001). India as a Global Conventions destination, Prospects and Strategies, Ministry of tourism, Govt. of
IMEX Global Data Exchange (2006, Aug) How international decision-makers view Germany as a destination for meetings
and incentive travel, IMEX research
Kaisheng Zeng, Xiaohui Luo (2008) Chinas Inbound Tourist Revenue and Beijing Olympic Games 2008 China & World
Economy / 110 126, Vol. 16, No. 4, 2008
National Action Plan for Tourism (1992). Ministry of Civil Aviation and Tourism Govt. of India.
National Tourism Policy (2002). Dept. of Tourism, Ministry of Tourism and Culture, Govt. of India.
Singapore Tourism Board (1999), Gaining Momentum.
Sushil (2001), SAP- LAP Frame work, Global Journal of Flexible Systems Management vol. 2, No. 1, pp 51-55
The Economic Times (2008, Aug 6). India aggressively tapping MICE tourism market.
Xinli Xie & Qunchao Lu (2006), the Economic and Social Effects Analysis of MICE Tourism, International Journal of
Business and Management (April)
Special Issue: Hotel Operations Management Issues and Challenges Vol. 5, January 2013
Mega Events - The Impact of the Commonwealth Games on the Hotel Industry
This research considers the factors that affected the hotel industry over the period of the Delhi India Commonwealth Games.
It begins by evaluating the accommodation pre-games anticipations for hotel rooms; it then looks at what happened during
the Games and the impact on hotels. The data were gathered through a number of structured interviews held with hotel
senior management. The analysis used a thematic approach to understand and make sense of the large amount of data
collected. The research demonstrates that the decisions made by senior hotel management at an early stage of the planning
had a large impact on the overall success of the hotel during the Games period. It also demonstrates that a number of
unexpected external factors also influenced the success of hotels during the Games period.
Key Words: hotel, occupancy, Commonwealth Games, sports, mega-event.
The Delhi India Commonwealth Games represented a very major investment for both public and
private businesses in Delhi with both parties having different expectations of the outcome. Hiller
(1998) looked at the multi-faceted influences of these types of events and suggested an economic
model showing how the different external influences come together. To be able to obtain the
maximum economic return as suggested by Chalip (2004) there needs to be appropriate strategic plans
in place. A review of the literature identifies that there are actually a number of positive and negative
impacts (Preuss and Solberg, 2006). However there is a perception that the organisation of such
events becomes event leverage strategy goals (Chalip, 2004).
This research specifically focuses on the hotel sector and the impact that the games had. While
projections indicated there would be a need for large numbers of additional hotel rooms and that all
hotels would be full, when the time came, the reality did not meet the expectations (Singh, 2010).
The data for this research comes from focused interviews held with senior managers of major five-star
hotels in the Delhi NCR (National Capital Region) which comprises the cities surrounding Delhi, e.g.
Gurgaon, Ghaziabad, Noida etc. Through the interviews it was evident that the number of new hotels
planned for the Commonwealth Games did not actually materialise, some opening only partially. If all
of these properties had been available at the time of the Games then the situation for the whole
industry would have been a great deal worse. The Commonwealth Games Organising Committee
undertook firm contracts with many hotels at least a year before the Games and then cancelled many
of the reservations at short notice. During the interviews it was suggested that the adverse media
reporting un-nerved many international guests, which lead to many sports followers and relatives
cancelling their plans to visit during the Commonwealth Games period.
Literature Review
The hosting of large sports events such as the Commonwealth Games has traditionally been viewed
by the host city as a way of stimulating the economic environment in the city (Nemeth, 2010). To be
able to obtain the maximum economic return as suggested by Chalip (2004) there needs to be
appropriate strategic plans in place. A review of the literature identifies that in relation to international
sports events there are a number of strengths and weaknesses along with positive and negative
impacts (Preuss and Solberg, 2006). There is however an interest from cities to host large mega events
as they can accelerate infrastructure projects (Terret, 2008), enhance destination image and awareness
levels and offer economic stimulation to the host city (Malfas et al., 2004). As a result of this
perception the organisation of such events becomes event leverage strategy goals (Chalip, 2004).
There is a perception that the event will have an impact on expenditure within the community by
those attending the event and this in turn will have an impact on employment (Hiller, 1989). In
addition the extra media coverage is thought to have a medium to long term impact on the perception
of the city as a tourist destination (Horne, 2007). It has been argued that the economic impact analysis
of events and tourism has been the source of not only one of the more frequently reported types of
research in tourism, but also one of the least correctly applied (Crompton and McKay; 1994).
The literature indicates four economic tourism impacts of mega events such as the Commonwealth
Games in that the event will increase tourism at the time of the event, it will encourage event visitors
to return, tourists visiting the event encourage friends back home to visit the country and finally the
media coverage given during the event (Preuss 2004). The cost of hosting mega events such as the
Commonwealth Games has increased very significantly but even with the large cost cities ‗line up‘ to
be able to hold such events (Holloway 2006; Yongjian 2008).
Bhupesh Kumar, Banarsidas Chandiwala Institute of Hotel Management, Kalkaji, New Delhi, Email:; and Dr. Tim Lockyer, Department of Tourism and Hospitality Management
Waikato Management School, University of Waikato, New Zealand. Email:
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Indian Journal of Applied Hospitality and Tourism Research
An important part of almost all mega events is the hotel and other forms of accommodation available
for the tourists. As the planning for a mega event begins so does the awareness of the need for
accommodation for the influx of visitors. From 2003 when the 2010 Commonwealth Games were
awarded to Delhi there were a lot of projections in relation to the impact this would have on the hotel
industry. Comments such as ―The hospitality sector is another area that is estimated to grow rapidly
in the coming years, with the help of the Commonwealth Games‖ were widely expressed (Ghosh,
2006) with what was referred to as ―experts‖ saying that there was a wide gap between supply and
demand of hotel accommodation in Delhi and forecasting that an additional 20,000 rooms would be
required to cater to the tourist inflow into the city during the time of the games (Singh, 2007).
Another estimate put the requirement at 30,000 rooms for 2010 (Ghosh, 2006). In the light of these
projections the Delhi Development Authority auctioned over 20 sites for hotels, many in the vicinity
of the games village. This was to add approximately 7500 rooms, while at the same time raising
hundreds of millions for the Delhi Development Authority. In 2006, which was 4 years before the
start of the Commonwealth Games, there were 6,500 rooms which had a star rating and about 7,000
rooms in the budget category (Ghosh, 2006).
While projections indicated there would be a need for large numbers of additional hotel
rooms, when the time came, the reality did not meet the expectations (Singh, 2010). The purpose of
this research is to evaluate the decisions and actions taken by hotel management in Delhi and the
resulting influences that these decisions had on individual hotels and the industry overall in light of
external factors which were not easily discernible for the period leading up to the games. This paper
discusses how different hotels dealt with the issues around the Games, the decisions that management
made and the results of these decisions.
The data for this research derive from twenty digitally recorded interviews held with senior managers
including general managers, assistant general managers, accommodation managers and food and
beverage managers during 2011. The interviews took place in major five star hotels in the Delhi NCR
(National Capital Region) which comprises the cities surrounding Delhi, e.g. Gurgaon, Ghaziabad,
Noida etc. both in the central business area and in the surrounding NCR areas. The selection of the
hotels was designed to include a number of different types and locations of hotels.
The research included hotels that had a contract with the Commonwealth Games Federation
for the supply of accommodation and those that did not. The research also included well established
hotels and those that were developed specifically for the Commonwealth Games. The four hotels that
will be discussed will be referred to as hotel A, B, C and D. Hotels A and B were central city, five star
hotels; hotel C was located a little further out from central Delhi but inside the Games area and was a
five star hotel; Hotel D was located near to the centre of Delhi and was also a five star hotel.
The interviews were semi-structured with the same basic starting questions being asked in
each of the interviews. These questions included such items as ―During Commonwealth Games, was
your hotel occupancy similar to same period last year?‖; ―What were some of the main issues you
experienced over the Commonwealth Games period?‖, ―How did you deal with staff and training
before and during the Commonwealth Games period?‖, ―What was the revenue from other outlets?
Was it higher or lower during the Games period?‖, ―What issues did you experience with the
Commonwealth Games Organising Committee?‖
For this research thematic analysis was used. The purpose of thematic analysis is to identify a
limited number of themes which adequately reflect textural data (Boyatzis, 1998). Familiarity with the
data is an important part of the analysis. This was done in a two-step process. First a research assistant
who did not participate in the interviews reviewed the text and from that identified the themes. This
analysis was then discussed with the main researchers and the data were coded after discussion
(Howitt and Cramer, 2008). From the coding, themes were identified which integrated substantial
sets of the codes (Neuendorf, 2002). The main coded themes identified two clear parts to the thematic
analysis. These fell into the external factors outside the control of the hotels and the factors that were
controlled by the hotels. The themes were as follows:
1. Factors external to the hotel:
Impact of public holidays during Games period;
Holiday trends during the Games;
Impact of security during the Games.
Special Issue: Hotel Operations Management Issues and Challenges Vol. 5, January 2013
2. Factors under the control of the hotels:
Hotel occupancy;
The impact and decisions relating to other hotel outlets;
The hotel staff and their role in the hotel operations during the Games period.
The details of the themes will be discussed in the following section of this paper. Direct quotations
from the interviews are presented in inverted commas and detail exact responses and thoughts held by
those in management positions who were interviewed.
Data Analysis
As previously indicated two themes were identified. The analysis of the data will begin with an
analysis of the factors external to the hotel. These factors are important as they help to put the
decisions made by various hotel management into context.
1. Factors External to the Hotel:
The international experts who were employed by various organisations to give consultancy
projections from 2006 right up to six months before the start of the Games proved to be hugely
incorrect. Demand forecasting seriously over-inflated the number of rooms that would be required.
When it came to the time for the Games, in fact no significant change in occupancy was noticed. It
seems that the experts did not foresee the number of people from Delhi who would travel outside of
India during that time, the number of businesses that would stop operating in Delhi and the limiting
effect that security measures restricting movement in and around the Games areas would have on
requirements for hotel rooms.
Planning for the Commonwealth Games started many years before the date of
commencement. At a very early stage in the planning, public announcements were starting to be made
from various government organisations that an additional 4,000 quality hotel rooms would be required
(Anurupa and Singh, 2008). As a result a number of hotel groups started planning for additional hotels
to be built for the Games. Local managers advised during the interviews that ―...there would be
approximately 100,000 additional tourists over the games period but this actually was about 20,000‖.
As evident from the thematic analysis the reasons for the Games not meeting the volume of
business that was expected falls into a number of specific areas. During the interviews it was clear
that ―... the number of corporate guests had also decreased significantly‖ and this was impacted by ―...
companies sending out the message that staff should not travel to Delhi during the Commonwealth
Games period because the room rate would be very high‖. At the same time there was a ―... reduction
in the number of local tourists as many had left Delhi for Singapore, Malaysia and Hong Kong‖.
These cities directly promoted themselves saying ―... get away from the Commonwealth Games and
come here.‖ Also during the Games period ―... cities such as Hong Kong reduced their rates so that
anyone could afford to go there‖.
In addition to the attractive promotional deals offered by various destinations in the region,
during the period of the Games schools were closed for fifteen days. Because the young people were
not attending school many parents took the opportunity to take a holiday. At the same time because of
projected road closures and impacts of the Games on day-to-day operations many businesses in the
central Delhi area stopped operating or transferred their operations to other parts of India including
completely moving their staff to other cities for the period the Games were running. As a result there
was little normal business being conducted in Delhi during the Games period. In Delhi corporate
businesses told their staff to take holidays and not to come to work because of the problems with
travelling and the concern that they ―... would be late to work every day‖. In addition the number of
international visitors to Delhi was a lot smaller than anticipated.
It is also important to note that the Games Organising Committee pre-booked a large number
of rooms in October-December 2009, approximately a year prior to the Games, in some cases almost
all the rooms available in a hotel. At that time the hotels gave the Organising Committee specific
details of what the room rate would be and the number of rooms available.
During the time of the Commonwealth Games there was increased security within Delhi and
this level of security impacted negatively upon hotels. There were many roads that were closed. Also
the movement of hotel guests was restricted. The additional security meant that potential guests were
discouraged from travel and booking into and using hotel facilities.
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Indian Journal of Applied Hospitality and Tourism Research
2. Factors under the Control of the Hotels:
As indicated previously a major theme that was evident from the analysis related to hotel room
pricing strategies. This first section of the data analysis will consider how each of the hotels included
in the research dealt with the question of room pricing and allocation of rooms for the Games. At
hotel 'A' the management followed a specific policy relating to room pricing which was that ―The
room rate should be moderate‖ and hotel management reported that they increased the room rate very
little for the Games. In their interview management commented that from their observation this
approach was different to other hotels that saw the Games as an opportunity to ―... make a killing‖.
Hotel ‗A‘ also indicated that they viewed the Games as part of a ―... long term strategy to attract
guests in the future‖. It is important the note that for this hotel this strategy was adopted from the
beginning of the planning process including the allocation of rooms from when the Games Organising
Committee first approached the hotel asking them to tender for rooms to be booked. Management of
the hotel reported that part of their strategy was to also ―... give support to the Games village‖ and by
doing so felt that their involvement and support for the Games assisted them in the long term. It is
important to note that for this hotel there was no reduction by the Organising Committee in the
number of rooms allocated. In the interviews it was stated that it was the belief of the management
that their pricing strategy was the reason although there was no firm evidence of this.
At hotel 'B' they followed quite a different pricing strategy to Hotel ‗A‘. Management from
the original start of planning made the decision to increase prices for rooms very significantly. This
was done, they reported, because they ―... had expected the occupancy to be very high we increased
the room rate very high.‖ As a result the room rates were increased by an average of 75 percent. In the
interviews management reported that the normal occupancy of the hotel would have been 82 percent
but during the Games period the occupancy reduced to 70 to 72 percent. Some of the reasons given by
management for this were explained as ―... the high paying cooperatives were not travelling at that
time‖. In addition, ―A lot of companies moved their sales teams out of Delhi‖ for the period of the
Games along with many other businesses moving their staff out of Delhi. Management at this hotel
reported that when the original bids for rooms were undertaken in October 2009 there seemed to be
―No complaints about the room rates they <the Games Organising Committee> were expecting
higher rates‖ and that the rates quoted were accepted and rooms reserved. However, as reported in the
interviews, it is of particular note that ―... 20 days before the Games the Organising Committee said
they did not have any bookings to give to them and requested the hotel to release all reserved rooms‖.
The hotel re-visited their planning although they said it was already too late they looked at what
the competition was offering and tried to find ways to differentiate their product from other
offerings.‖ The management reported that overall the Commonwealth Games was not a success for
their hotel. The way this hotel adapted to the cancellation of room reservations by the Organising
Committee was to focus on those relatives and supporters of those participating in the Games.
Management believed that ―... 20 percent of the guests were those related to someone competing in
the Games‖.
At hotel 'C' during the games period ―... all 208 rooms were fully sold out‖. In the case of
Hotels ‗A‘ and ‗B‘ the Games Organising Committee contacted the hotels and made bookings a year
before the Games, but in the case of this hotel (‗C‘) as it was new the bookings came a lot closer to
the Games starting date and they had confirmed bookings for about ―100 rooms for the two weeks.‖ It
was reported in the interview that 90 percent of occupancy was from media or through the Games
Organising Committee room allocations. They also reported that they did not have the cancellations
the other hotels had because their bookings from the Organising Committee were made very close to
the start date of the Games and were confirmed from the start because of the opening dates of the
hotel. In relation to room rates this hotel reported that they ―... kept them normal. The rooms for the
Games period were not increased in price‖. It was of note that in the interview with the front office
manager who had developed this strategy he said that ―... initially there was resistance from the
general manager on the pricing strategy he took some persuading. But his decision was very wise
it could have gone completely the other way‖. It was also of note that when the Organising
Committee approached this particular hotel to discuss the allocation of rooms ―… they made it very
clear what they could and what they could not pay.‖ Management in this hotel made the statement in
relation to other hotels that ―... raising of the price seems to have backfired on some hotels giving
them overall very low occupancy.‖
Hotel 'D', an established hotel that was renovated in 2009 in preparation for the Games, with
planning beginning in 2003 made a conscious decision to limit the number of rooms to the
Commonwealth Games as they decided that ―... if the Games did not go well the impact would not be
Special Issue: Hotel Operations Management Issues and Challenges Vol. 5, January 2013
such a problem for the hotel‖. The hotel‘s pricing strategy for the Games period was initially
optimistic anticipating a much higher room rate than normal over the October Games period but in
reality the ―... room rate was similar to a normal October‖. The hotel, again like others, reported that
there was a lot of anticipation in relation to a large increase in the number of guests staying in the
hotel. However the normal occupancy in October is about 85 percent and during the Games period it
was also 85 percent. During the Games period many of the guests that stayed were delegates, officials,
sports persons and media people and these were on a contracted room rate. Although initially there
was 30 percent of the hotel booked by the Games Organising Committee, one month before the
Games this booking was cancelled. At that time hotel management ―... started to plan how they could
increase occupancy‖. It was of note that the hotel at that time was less interested in room rate but
rather in filling the rooms. To this end they contacted all of the various country committees to see if
they had any family members attending the Games. However because these people were not being
paid for by the government they were more price sensitive. The next incentive they looked at was
sponsor teams and people that were brought in relating to sponsorship. Finally the hotel started
contacting the technical teams directly rather than relying on the Games Organising Committee.
Other Outlets
A hotel does not only operate successfully by selling rooms. There are any other aspects of a hotel‘s
operation (restaurants, bars, banqueting) which can significantly affect the financial success of the
hotel. This section will consider how each of the hotels participating in the interviews approached the
management of other outlets. At hotel 'A' management reported that the policy of moderate pricing
that was applied to room rates was also applied to other outlets, for example ―... selling prices were
controlled in the lounges with only a 10 percent mark-up over cost‖. One of the reasons for this
pricing strategy was that during the Games period there were a lot of security restrictions ―... on
people getting into the hotel‖, and this significantly reduced the normal trade in the hotel outlets. An
additional reason for the moderate pricing strategy in hotel outlets was that in addition to normal
facilities the hotel provided a lounge for the media for 17 days for 24 hours a day. Special menus were
arranged and the hotel felt that they ―... did everything possible to satisfy the guest‖. As a result as
reported in the interviews the ―... revenue from them was less‖ during the Games period. This hotel
included a number of items in the room price which impacted on their other outlets for example
breakfast was included in the room rate; in addition 300 lunch boxes were prepared every day (also
included in the room rate). There was some additional income for the hotel through arranging various
sightseeing tours. Overall management reported that the decisions and actions they had taken
contributed positively to their operational success.
At hotel 'B' during the Games period it was reported that the ―... revenue from local guests
was down because of traffic restrictions‖. Because people were not able to travel and because of the
security restrictions it was very difficult for people to actually enter the hotel. It therefore was
noticeable that people were not using the hotel‘s outlets. As a result of the low room occupancy and
the lack of local traffic the revenue in the other outlets was reduced during the Games period.
At hotel 'C' the other outlets increased significantly. The food and beverage outlets had
complimentary arrangements for people staying in the hotel as part of the contract. Management
particularly emphasised that ―The Australian group were big spenders in the bar.‖ As the hotel was
away from the central business area there were ―... not many food and beverage options around the
hotel.‖ An additional advantage of this hotel seems to be that because it is located away from the main
central area of Delhi the level of security was less and this meant that ―food and beverage did very
well; they were a lot of additional people coming in to meet the various people staying in the hotel.‖
At hotel 'D' it was reported in the interview that there was a positive financial gain on food
and beverage outlets. This was higher than normal as guests were regular and corporate, but it was
still less than anticipated. The reason that the revenue was higher was that ―... there was the same
people staying in the hotel for an extended period and they were regular users.‖ Overall the volumes
did increase but the spend per person did not increase as anticipated.
Staff and Training
An important part of any hotel is the staff that they employ. This section of the paper deals with the
interview questions that related directly to the staff and their training. At hotel 'A', part of a chain of
hotels, management reported that it proved fairly easy to move staff to the hotel period from other
properties during the Games. The staff brought to Delhi ―... were given accommodation and arrived
about a month before the games.‖ In addition to the hotel staff there were ―... 150 security persons in
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Indian Journal of Applied Hospitality and Tourism Research
the hotel provided by the government.‖ The management was asked about the training given to staff
in the light of the multi-national nature of those attending the Games. The approach taken was of
particular interest, as management reported that ―Because of the multiple languages spoken by the
guests it was impossible to give specific language training. As a result training was given to
understand body language‖. This was reported to be very successful as ―... if you do not know the
language but can judge from the body language what the guest wants you can customise your service
towards that.‖ Other training included teaching ―... the staff how not to say no‖ and ―how to be
attentive‖. In addition training was given to the staff on ―... how to conduct themselves so that no
negative impressions were left.‖
At hotel 'B' the researchers were surprised that management reported that ―... there was no
additional training undertaken with the hotel staff‖. The reason given for this was stated as being the
―reduction in the occupancy.‖
At hotel 'C' because of the newness of the hotel and the fact that the hotel only became fully
operational shortly before the Games no additional training was given to the staff. However,
management did report that ―The staff became over enthusiastic in relation to guest service and they
needed to back off a bit.‖ The staff needed to realise that for many international visitors ―Service is
good when you ask for it.‖
At hotel 'D' a lot of additional members of staff were added but the result was that there were
too many staff during the Games period. The hotel ―... went through a lot of customer sensitisation
training which was very broad-based because the nationalities came from all over.‖ This training was
―... attitudinal and body language based as well as situational and food based.‖ Of particular note was
that training was given in relation to eye contact. The reason for this was that India has a history of the
practice of Namaskar, with folded hands and eyes bowed for respect. In India there was never a man-
to-man talk, it was always the master-to-servant. For many of the staff this was very difficult and as a
result the hotel undertook ―meeting and greetings training and exercises.‖ As reported ―If there is no
eye contact, there is no recognition of body language and there would be no communication.‖ Another
problem with local customs was because ―... when an Indian means yes they never actually say yes,
they move their head side to side and foreigners are not able to interpret the meaning‖. The training
involved learning how the guest wants to be treated, ―... but also to show what our values are‖. When
asked if the training given has had a long term positive effect it was reported that between staff
members yes it has but between guests no, ―... it is probably too early to expect a positive
Impact on Hotels Overall
For hotel 'A' when asked what was the overall financial benefit of the Games to the hotel they
reported that the hotel received over the Games period ―... at least 15 percent more revenue than over
a comparable period‖, however the overall benefit was counteracted by the additional staff, security
requirements and other operational factors. It was very noticeable to the researchers that the
management were confident that they had made the right decisions, especially on room pricing. There
was a strong feeling that those decisions had benefited the hotel over the long term. When asked what
advice the management would give to fellow management internationally they said that the hotel
should ―... have packages for different requirements of the guests‖ and to ―Ensure that people visiting
experience the local ‗flavour‘ ‖.
For hotel 'B' again management were asked in the future for another Games what they would
do differently, it was stated by one manager that ―I would study the market most of the hotels had
put their eggs in the Commonwealth Games basket and when it backfired it financially impacted a lot
of hotels. The same thing happened in the China Olympic Games we just did not do our research
For hotel 'C' although initially there was resistance to the pricing strategy that was adopted by
this hotel, because it opened late the overall result was successful. ―Having realistic room rates is key
to getting any big event in a country. Everyone got so greedy with the Commonwealth Games - if
hotels had been more realistic I am sure no hotel would have been empty. High room rates definitely
deter people returning. Just to charge whatever you feel like because there is a shortage of rooms
impacts on the market.‖ Also, the location of this hotel and thus the slightly reduced security required
seems to have benefited the other outlets particularly with people being able to visit the hotel without
so many restrictions. Because they were not included in the original allocation of rooms this made the
planning process easier because they had not taken on any incorrect assumptions early in their
planning process.
Special Issue: Hotel Operations Management Issues and Challenges Vol. 5, January 2013
To hotel 'D' one of the questions asked was what actions the hotel would take if there was a
similar event to the Commonwealth Games in the future. It was of note that there was a clear
understanding that the planning process would have to be improved. Although they did look at what
had happened at other such international events, within Delhi up to six months before the Games ―...
everyone was still saying that Delhi did not have enough hotel rooms.‖ Because of this the market
was much more optimistic at that stage than it was one month from the Games. It was clear that for
those guests who stayed during the Games there were no complaints, everything worked very well,
the only ―... thing was that the negative publicity about the Games village and facilities that happened
before the Games should not have happened.‖ It was also reported that the negative publicity was
emphasised because many international media persons arrived in Delhi before the start of the Games
and the Games organisers did not properly give these people something to occupy themselves by way
of positive reporting. As a result the media was in Delhi, their employees were expecting reports and
the only thing available was the negative aspects of the way things were being prepared for the
Games. As stated ―It is my personal view that no one from the Games organisation was saying
positive things about the Games and this was a fault of the Games organisers. Very late the
government took control‖ and at that time ―... things began to turn around with bookings starting to
come in.‖ It also was reported that although there were large projections of extra rooms opening, the
end result was that there were only about an extra 1,000 rooms in five star hotels available. Many of
the new developments were stalled, put on hold or hotels were only partially opened. The occupancy
level in January 2011 was very similar to January 2010 ―... but what has changed is that the room
rates have decreased.‖ Hotels in India were ―... among the highest rates in the world but there has now
been a correction to the prices with a reduction of about 5 percent. It will take about three years for
the room rates to return to where they were but also the effect of room stock that did not open during
the Games means that about 3,000 more rooms will be entering the market and this will also impact
on room rates.‖
Conclusions and Industry Implications
From this research there are a number of important lessons that can be learnt for the hospitality and
tourism industries. The first of these relates to the original estimates of the impact that the Games
would have on hotel occupancy. There is strong evidence that these estimates were undertaken by
consultants who considered at that time the hotel occupancy added to that the anticipated growth and
also added to that sum the anticipated number of visitors to the Games. These estimates did not take
into account that many businesses would either move or to a large extent cease operating during the
Games period. Also it did not take into account that schools would be closed and that other
destinations such as Hong Kong and Singapore would aggressively offer themselves as cheap holiday
destinations. And finally as was mentioned in one of the interviews ―… India is a cricketing nation,
the average person is not that interested in the types of sports undertaken at the Commonwealth
The second factor was the negative news coverage of the preparations leading up to the start
of the Games. Many reporters went very early to Delhi, some several weeks before the start of the
Games. There is anecdotal evidence that these reporters had nothing to report but those paying for
them to be there were requiring stories. As a result the incomplete state of the various venues and
villages became international headline news with night after night reports on the state of the
incomplete bathrooms and other facilities. It was evident through the interviews that ―… the negative
reports on the lack of readiness of the facilities, in particular the state of the bathrooms, caused a lot of
Third it was evident that hotel management accepted the consultants‘ estimates on the number
of additional hotel rooms required and increased the room rates to a much higher level than normal.
Initially these rates seemed to be appropriate and were accepted by the Commonwealth Games
Organising Committee. However, when the Committee realised that the estimates were incorrect and
revised their figures many of the reservations they had previously made were cancelled. This left
hotels with an unexpected and sudden shortage of guests and they had to ―scramble to attract guests‖
from any source.
Lastly there was evidence that those hotels that put effort into staff training and the
management of other outlets benefited from their efforts.
It is clear from the research that the Delhi Commonwealth Games was not a boom period for
the hotels in Delhi. However, those hotels that were realistic in their plans were more successful
overall than those that aggressively increased their room rates etc. One of the questions that was asked
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Indian Journal of Applied Hospitality and Tourism Research
in all the interviews was ―Considering the six months before the Games, the Games period and six
months after the Games, what impact did the Games have on your occupancy and revenue overall‖.
At this point almost all reported that the Games did not increase occupancy or revenue and for some it
actually declined during that period.
This research has shown that especially at times of mega-events, hotel management need to
undertake careful and continuous environmental scanning to verify that the information that is being
provided by ‗experts‘ is actually credible and also keep a constant vigil on all the factors that impact
upon the hotel. Tourism mega-events may do not necessarily mean massive benefits for the hospitality
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Special Issue: Hotel Operations Management Issues and Challenges Vol. 5, January 2013
Student Perspectives of Industrial Training Experience in Hospitality Industry: A Study
The academic curricula of hospitality management courses include essential industrial training work experience to
complement traditional classroom learning and to help students gain hands-on experience, put theories into action and
reflect on their future careers. Petrillose and Montgomery (1998) have recognized that internships are an important
component in the hospitality curriculum, and most hospitality programs require students to undertake placements before
graduation. But at the same time Richardson (2008) concludes that, having direct experience working in the tourism and
hospitality industry may cause students to acquire negative views toward pursuing a career in the industry. Therefore it is
felt that educational institutions and industry must have a strategic partnership and collaborate more effectively to provide
high quality training programs.
Focusing on student reactions, this paper aims to examine the expectation and perception of students toward their
industrial training experience by identifying the factors responsible for the overall satisfaction. The areas chosen for the
study includes student perceptions of relevance of training, learning aspects, practical/technical skills, working
relationships, management aspects, nature of work, work environment and difficulties encountered.
A questionnaire was sent to 140 final year bachelors of hotel management students, who have completed 6 months
of industrial training in various 5 star hotels of the country and abroad, of which 112 usable questionnaires were returned.
Statistical techniques including correlation and linear regression were used to analyze the data collected from the
respondents. Based on the findings of the study, suggestions were provided to make the training experience more meaningful
by improving the overall quality of the training program for the benefit of both the industry and students.
Keywords: Industrial training; Hospitality Industry; Satisfaction Levels; Human Resources
Hospitality education in India plays an important role in ensuring the continuous supply of human
resources to meet the ever increasing industry requirements. The number of hotel management
colleges has been increased from 64 in 2006-07 to 138 in 2013-14 (AICTE, 2013). In spite of this,
there is a shortfall of almost 62,000 hotel management graduates in hospitality sector (Market Plus,
Figure 1: Demand Supply gap - Hospitality sector
Source: Market plus 2012 (According to Market plus 2012 there is already a gap of nearly 478,000 between
manpower demand and supply in 2009 - 10)
According to FHRAI report, only about 60% of students passing out from hotel management
institutions are joining the hospitality industry in India which may be another reason for the shortfall
in manpower in the industry. An important concern at this juncture relates to the quality of education
provided by these institutes for preparing qualified hospitality professionals.
Experience has been valued in this industry for a long time, but today, with the complexity of
the industry and the fierce competition, the need for new ideas of doing business is highly
appreciated, which makes education even more highly valued. In order to bridge the gap between
students‘ academic experience and the requirements of employers, colleges that provide
hospitality/hotel management courses make great efforts to develop industrial training programs
(Yafang, 2007) and it has become an integral part of all hospitality programs in India. The benefits of
this training in the form of experiential education are numerous for both the industry and trainees in
order to understand each other to pursue a career within the industry. It is a triangular partnership
between education providers, students and the hospitality industry which has positive effects for all
the stakeholders. Internships or industrial trainings as termed in Indian context are a great opportunity
for educators to increase the contact and cooperation with the hospitality industry which could enrich
the industry‘s input in course development and assist educators to keep abreast of hospitality trends
and future developments. Ultimately, for internship to be successful, both employer and employee
must share the same perceptions about the internship and what the student can bring to internship
experience (Jauhari, 2006).
Vidya Patwardhan and Shreelatha Rao, Welcomgroup Graduate School of Hotel Administration (WGSHA),
Manipal University, Karnataka, India. Email: &
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Indian Journal of Applied Hospitality and Tourism Research
Industrial trainings are the first contact point between the industry and the student who is a
prospective employee for the industry. Therefore emphasis should be placed in ensuring that the
students are given meaningful tasks and an opportunity to train in various departments or sectors of
the business (Richardson, 2004). Students spend four years preparing to become professionals and
these training programs serve as a preparation ground where students can build on the skills they
already possess and help them make the transition from student to full time employee. A word of
caution here according to Fox (2001) is that a bad internship experience can just as quickly turn a
young person away from the industry.
As per AICTE guidelines of the model curriculum for undergraduate programs, all hotel
management institutes offering four years of BHM program should have a minimum of 22 weeks of
Industrial training over a period of four years (AICTE, 2011). As a result of this, majority of AICTE
recognized hotel management colleges in the country have made provisions for a structured
industrial training program of six months which will play a significant role in their attitudes‘ toward
pursuing a career in the industry upon graduation. In order to attract maximum number of students to
start their career in the hospitality industry, both educators and industry professionals should
collaborate closely to develop a well-organized training program to meet students‘ expectations. Even
though internships/trainings are considered important, research findings so far both from India and
abroad, have consistently highlighted a discrepancy between student perceptions of and satisfaction
with internships. Therefore the significance of this study is that it attempts to investigate students‘
satisfaction level toward their industrial training experience by identifying the underlying factors so
that academic institutions, receiving organizations and students themselves can reap the benefits.
Review of Literature
Internships/Industrial Training Programs
From its humble beginnings till today‘s plethora of curriculum offerings, hospitality education has
embraced internships as an inseparable aspect of the educational experience (Zopiatis, 2007). It has
also become a trend of the co-operative education in university, which provides a solution of labor
shortage for hospitality industry (Peng & Lin, 2009). In general terms, an internship is viewed as a
short-term practical work experience in which students receive training and gain experience in a
specific field or career area of their interest (Zopiatis, 2004). Internships, industrial exposure,
supervised work experience (SWE) are opportunities given to hospitality students while carrying out a
full time academic course to get introduced to real life situations which helps in making them
successful professionals in the future (Singh & Dutta,2010). In India almost all hospitality related
courses have incorporated industrial training programs in their curricula, in one form or the other.
These programs are of the duration of about six months and students get exposed to more than two
departments during this period which gives them a good exposure and an idea about work systems
across the departments. At the same time, these programs are more structured in UK as compared to
India majorly due to disparity in compensation (stipend), lack of pre-designated work assignments,
awareness levels of work values and long work hours in Indian hotels (Jahauri,2006). A tool
developed by Zopiatis (2004) provides useful insights into the current status of the triangular
relationship between the stakeholders.
Figure 2: The hospitality education-industry relationship: the five relationship/GAP model
Benefits of Successful Internship Programs
The internship programs are a key to providing training opportunities to the next generation of
industry leaders (TII, 2007). The major benefit for student interns comes from the opportunity for
experiential learning. Whether students have some, little, or no idea about the kind of work they want
to do, by interning they can gain firsthand knowledge about a particular type of career or work
Special Issue: Hotel Operations Management Issues and Challenges Vol. 5, January 2013
environment (Jones, 2006). Furthermore, they provide an opportunity for students to apply classroom
theories to practical inputs in the actual business setting, and more importantly to evaluate whether
their career choice is compatible with their interests and personality. These trainings are also
considered as an opportunity to assist the industry by providing qualified labor with low costs, while
at the same time enhancing the students‘ learning experiences and career opportunities. Students are
quality candidates for temporary or seasonal positions, overseers of short term projects and are a
proven, cost-effective way to recruit and evaluate potential employees (True, 2010).
Perspectives of industrial trainees
Cho (2006), for instance, studied 285 student interns from seven colleges in South Korea and found
that there was a significant discrepancy between their expectations (before placement) and satisfaction
(after placement) of the internship, indicating that expectations were not fully met. Lam and Ching
(2007) investigated the difference between expectations and perceptions of Hong Kong hospitality
students towards their internship program, and they found that overall students‘ expectations toward
internship were unmet. A study by Jenkins (2001) pointed out that many hospitality students, through
exposure to the subject and student work experience, become considerably less interested in selecting
hospitality as their first career choice. From this, it appears that there is an imbalance in the
expectations perceived by students of hotel management schools and the industry expectations from
these trainees. Therefore these internship programs have to be structured by meeting the needs of both
educators and industry and work as "consulternships" (Neumann and Banghart, 2001). In India, one
issue which seems to bother internship students is compensation and monetary rewards (Srivastava,
2007). May be a pragmatic approach towards compensation to be paid to trainees will help to reduce
the intensity of this problem.
As the nature hospitality jobs usually involve long working hours with high visibility
especially for front positions with minimum job rotations, the interests of students toward the training
may get disturbed/decreased since it affects their social life as well as an increase in stress levels. In
many internship experiences, there is an inconsistency between what students believe they are capable
of doing and what internship supervisors believe the student intern can do (Beggs et al., 2006). The
above findings in general suggest that the industry and educators must work together to ensure that
students have positive and enriching experiences during their industrial trainings which in turn will
retain hospitality graduates in the industry.
The sampling frame of this study consists of students from four leading hotel management colleges
from India, having 6 months of industrial training program over a period of four years. The
questionnaire was mailed to around 230 students of these colleges and 160 completed questionnaires
were obtained with the response rate of around 70%. The questionnaire was mailed to them
electronically and the responses obtained were analyzed using SPSS software. Among the 160
samples, 117 (73%) were male and 43 (27%) were females. Among them, 63 (39%) trained in five
star, 4 (3%) trained in four star, 82 (51%) trained in Luxury and 11 (7%) trained in other category
of hotels.
Survey and procedure
A quantitative research design was adopted in this study. A structured questionnaire was developed
based on the review of literature and the one developed by Yafang and Gongyong (2007). The
questionnaire consisted of four sections. The first section comprised of 12 ―Job Related‖ variables, the
second section comprised 7 ―Training and Development‖ related variables, the third section
comprised 4 variables related to ―Supervisor- Subordinate Relationship‖ and the fourth section
comprised 3 variables related to ―Peer Relationship‖. The above variables were measured on a 5 point
Likert scale ranging very high to very low, etc. Respondents were also asked to rate their satisfaction
on a 5 point Likert scale in the 5 major departments in a hotel viz. Food & Beverage , Front Office,
House Keeping, Sales & Marketing/ HR, Others. The questionnaire also had a section on background
information of the trainees, and also their views on the overall training experience. The responses
were analyzed using SPSS software.
Analysis and Discussion
The figures below show the male and female ratio as well as the category of hotel they have trained.
The majority of the respondents (90.7%) trained in luxury and five star hotels and only 9.4% of them
trained in other category of hotels.
..... 24
Indian Journal of Applied Hospitality and Tourism Research
Figure 3: Gender of the respondents
Valid Percent
Cumulative Percent
Figure 4: Category of hotel
Valid Percent
Cumulative Percent
Five star
Four star
Figure 5: Student ratings of training satisfaction
Std. Deviation
Job Related Variables
Co-ordination between college and company
Nature of work performed
Opportunity for work rotation among departments
Challenging and interesting work assignments
Work environment
Autonomy involved in the work
Sense of achievement from work
Scope for technical skill development
Work pressure
Stress level
Training and Development
Organization culture
Training induction
Training program (managerial inputs)
Opportunity for self-development
Application of theory to work
Opportunity to interact/ serve guests
Feedback of progress by the supervisors
Supervisor subordinate relationship
Communication between superiors and trainees
Supervisory support
Appreciation/encouragement from supervisors
Peer Relationship
Relationship between colleague/trainees
Communication with colleagues
Cooperation between trainees
Figure 5 presents respondents‘ satisfaction ratings with their training on a 5-point Likert Scale. The
satisfaction mean scores for individual variables ranged from 3.09 to 4.32, while the overall training
satisfaction was 3.61. In a scale of 0 to 5, ―Communication with colleagues‖ had a maximum
arithmetic mean of 4.32, followed by ―Relationship between colleagues/ fellow trainees‖ with a mean
of 4.15 and ―Co-operation between trainees‖ with a mean of 4.06. ―Co-ordination between college
and hotel concerned‖ had the lowest mean of 3.09. This suggested that there should be a better
coordination between the college and the hotel company where their students are getting trained. The
respondents have given maximum ratings for the variables under ―Peer Relationship‖. Scale
reliability analysis was done to measure the existence of internal consistency of the scale employed.
Cronbach‘s Alpha computed to 0.867, which indicates a high level of internal consistency for the
scale used in this survey.
Figure 6: Model Summary (b)
R Square
Adjusted R Square
Std. Error of the Estimate
a) Predictors: (Constant), cooperation among peers, coord college hotel, work rotation, dependability,
work pressure, scope technical, communication peers, application of theory, training induction,
Special Issue: Hotel Operations Management Issues and Challenges Vol. 5, January 2013
supervisory support, opportunity serve guests, relationship with peers, autonomy, stress level,
organization culture, training program, challenging &interesting, feedback supervisors, sense of
achievement, nature work, work environment, appreciation, communication_sup_trainees, self-
b) Dependent Variable: Overall rating of the training
Figure 7: ANOVA (b)
Sum of Squares
Mean Square
a) Predictors: (Constant), cooperation among peers, coord_college_hotel, work rotation,
dependability, work pressure, scope_technical, communication_peers, application of theory,
training induction, supervisory support, opportunity_serve guests, relationship with peers,
autonomy, stress level, organization culture, training program, challenging & interesting,
feedback_supervisors, sense of achievement, nature work, work environment, appreciation,
communication_sup_trainees, self-development.
Figure 8: Coefficients (a)
Std. Error
Std. Error
Coordination (college & company)
Nature of work
Work rotation
Challenging work assignments
Work environment
Sense of achievement
Technical skill development
Work pressure
Stress level
Organization culture
Training induction
Training program
Application of theory
Opportunity to serve guests
Supervisory feedback
Communication( Sup-trainees)
Supervisory support
Relationship with peers
Communication (colleagues)
Cooperation among peers
b) Dependent Variable: Overall rating of the training
During the analysis, independent t- test was performed to find whether there exists any significant
difference between ―Gender‖ of the trainees with regard to the four factors viz: ―Job Related
Variables‖, ―Training and Development‖, ―Supervisor subordinate Relationship‖ and ―Peer
Relationship‖. Average value of the variables under the above factors was subjected to independent t-
test. It was found that ―Job Related Variables‖, ―Training and Development‖, ―Supervisor
subordinate Relationship‖ did not show any significant difference with ―Gender‖ as all P values were
more than 0.05. But ―Peer Relationship‖ did show a significant difference with respect to gender.
Here t = 2.022 and P = 0.045.
In addition to this, linear regression was conducted with the overall rating of the departments
as a criterion variable. From the analysis it was found that R square value was 0.321 (figure 6) which
indicated that 32% of the variations in the overall rating were accounted for by the independent
variables under consideration. This was significant as indicated by the F value of 2.657 (P value <
0.05) in figure 7. An examination of the t values in figure 8 indicated that ―Work rotation‖ and ―Co-
operation among Peers‖ were significant in contributing towards ―Overall Rating of the training‖.
..... 26
Indian Journal of Applied Hospitality and Tourism Research
Overall, the mean scores of seven variables (less than 3.45) were low, which indicated that
students are not fully satisfied with their training experience especially on these seven items: ‗co-
ordination between college and company‘, ‗application of theory to work‘, ‗challenging and
interesting work assignments‘, ‗feedback of progress by supervisors‘, ‗sense of achievement from
work‘, ‗autonomy involved in the work‘, and ‗stress level‘.
There was a question on stipend received during the training program for which 154
respondents have ticked yes and 6 of them mentioned that they have not received any stipend. When
discussed with some of the respondents, it appeared that the stipend received was a meager amount
which was just symbolic.
Interpretation of General Opinion of Students
Majority of the students have positive opinion about their training experience in general and felt that it
was an eye opener for most of them about the nature of the industry. But there are also comments
which are not so encouraging for both the industry as well as academia that need immediate attention.
They have mainly commented upon working conditions, meager stipend ( many students), supervisors
attitude towards trainees, work hours, weekly offs, poor managerial communication, work pressure,
lack of appreciation for good work done, loyalty, lack of inputs regarding training objectives from the
Some of the representative comments from the respondents regarding their overall opinion about the
training program are as follows;
―Colleges should provide a training schedule to the hotels as it would be helpful for the students or
else equal time to each department is not given. Also induction should be provided by hotels and this
should be checked by the college. Colleges need to play an upper hand for a good and equal
exposure to all students in all departments‖
―Made no difference, it was an experience that helped us better understand the harsh realities of the
hospitality industry. Now better equipped to handle the mental and physical pressure of any work
―As far as industrial training is concerned as a part of syllabus of hospitality & hotel administration
course, it lacks in knowledging the amateurs prior to training about the functioning of the hotel
organization & many other aspects. I may suggest that there should be a revision of the syllabus
entirely & the government should also be considerate about the same for development in the hotel &
tourism industry as other developed countries have‖
―Industrial Exposure should be compulsory in every year, so that students are aware of latest trends
as well as they have fair idea about how to work during 6 months industrial training.‖
"Overall a satisfactory experience. Didn‘t have any induction (which was essential). Working
atmosphere was different for each department. Main lesson learnt: never trust anyone (managers,
team leaders) "
"It should be a step wise process oriented journey which, it is often not. College should keep a track
on the trainee's program throughout training and evaluate continuously as in the college or at least try
for the same. Most of the trainees do not take training seriously hence, its credibility is lost‖
Conclusion and Recommendations
Internships/industrial trainings are a vital part of hospitality management programs and play an
important role in the transition of students from the college environment to the work environment.
The regression analysis in the study indicated that ―Work rotation‖ and ―Co-operation among Peers‖
had significant contribution towards overall rating of their training experience. Therefore it is
important for the colleges and the industry to ensure that the remaining factors, mainly some of the
individual factors which have more significant relationship with training success need to be
highlighted and given more attention so that the training program becomes more interesting and
challenging. There has to be a proper training plan that identifies the objectives required and expected
to be achieved by students so as to avoid getting any surprises once they begin their training program.
Plan should have all details regarding learning outcomes, job rotation, mentors, feedback process,
grievance handling etc. This will surely help in preparing students to understand the nature of the
industry/work and also to face the stressful situations and works like realistic job preview. The
incongruities between student expectation and their actual experience may also be reduced by having
better co-ordination and supervision both by academic and industry representatives. The members of
academic fraternity and industry experts meet periodically and exchange ideas for improving the
quality of these training programs. As mentioned by some of the respondents, the induction program
when they begin the training should be made more structured and comprehensive to give a fair idea
about the work culture of the property/hotel group concerned. Industry leaders also need to think
Special Issue: Hotel Operations Management Issues and Challenges Vol. 5, January 2013
about and implement better compensation systems via improved monetary rewards in order to
motivate trainees to work well and learn well.
The quality of internship is also contingent upon the type of evaluation/feedback sessions
after completion of the training program which plays a crucial role in determining the educational
value of the program. Therefore both the industry and the concerned colleges should pay more
attention towards evaluating the usefulness and learning derived from the training programs through
comprehensive evaluation procedures.
More attention from college authorities may be given to students during training programs
with regular communication via internet or on-site visits by school authorities are necessary. At the
same time, the student trainees must also be committed towards learning by demonstrating a
responsible attitude and professionalism. Ultimately the quality of training experience depends upon
the learners‘ ability and willingness to learn. If properly selected and supervised, an internship with
hands-on experience can truly be ―a gateway to the real world‖ for students (Collins, 2002).
AICTE report 2012. AICTE Approval Process Handbook 2013 2014.
AICTE: BHMCT Syllabus 2011. Accessed from
Beggs, B.A., Ross, C.M., and Knapp, J.S. (2006) Internships in leisure services: An analysis of student and practitioner
perceptions and expectations, 21, 1-20.
Cho, M. (2006). Student perspectives on the quality of hotel management internships. Journal of Teaching in Travel &
Tourism, 6(1), 6176.
Collins, A.B. (2002). Gateway to the real world, industrial training: Dilemmas and problems, Tourism Management,23(1),
93 -96.
FHRAI report 2011-12. Accessed from
Fox, T. (2001). A Sense of Place. Caterer and Hotelkeeper, 189 (12): 4160.
Jauhari, V., & Manaktola, K. (2006). Comparison of Internship Experiences in Food Service firms in India and UK. Journal
of Foodservice Business Research, vol.9, No.2/3, 187-206.
Jenkins, A. K. (2001). Making a career of it? Hospitality students‘ future perspectives: An Anglo-Dutch study.
International Journal of Contemporary Hospitality Management, 13(1), 1320.
Jones, E. (2006). Internships: Previewing of a profession. Occupational Outlook Quarterly. Retrieved from:
Lam, T., & Ching, L. (2007). An exploratory study of an internship program: The case of Hong Kong students. International
Journal of Hospitality Management, 26(2), 336-351.
Market plus, 2012. Accessed from
Newmann, B.R. and Banghart, S. (2001). Industry-university "consulternships": An Implementation Guide. International
Journal of Educational Management, 15(1), 7-11.
Peng, K. L., and Lin, M. C. (2009). Discussing intern program from measuring the hospitality managerial performance
perception. Journal of Hospitality and Home Economics, 6(1), 13-32.
Richardson, S. (2008). Undergraduate tourism and hospitality student‘s attitudes towards a career in the industry: A
preliminary investigation. Journal of Teaching in Travel and Tourism. 8(1), 23-45.
Singh,A., & Dutta, K. (2010). Hospitality internship placements: Analysis for United Kingdom and India. Journal of
Services Research, 10(1), 85-99.
Srivastava, N. (2007). Hospitality Internships: Is it really motivating?. FHRAI Magazine, 7 (5), 46-49.
The Internship Institute. (2007). Intern productivity study capsule. Retrieved from
True, M. (2010). Starting and maintaining a quality internship program. Grantham, PA: Messiah College. Retrieved from
Yafang, B. & Gongong,F. (2007). A study of Hospitality Students‘ Satisfaction towards their Internship: A case from Hang
Zhou, China. Accessed from
Zopiatis, A. (2007). Hospitality Internship in Cyprus: a Genuine Academic Experience or a Continuing Frustration?.
International Journal of Contemporary Hospitality Management, 19 (1), 65-77.
Zopiatis, A. (2004). An exploratory research investigating the status and future of hospitality internships in Cyprus.
Unpublished Doctoral Dissertation (D.Prof ), Middlesex University: UK.
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Indian Journal of Applied Hospitality and Tourism Research
Hotel Loyalty
This study focused on the crucial impact of loyalty programmes offered by hotels as a way to enhance repeat business. The
study collected data using self-administered surveys completed by domestic hotel guests in New Zealand (i.e. residents who
lived in New Zealand at the time of the study) who had stayed more than once in a particular hotel (as an indication of
loyalty) over a three year time frame. Data collected from the survey were analyzed using both regression and structural
equation modelling. Results indicated that loyalty programmes have a significant impact before, during and after the service
encounter. First, loyalty programmes before the service encounter had a significant positive impact on guest loyalty. Second,
loyalty programmes during the service encounter had a significant positive impact on guest satisfaction, and third, loyalty
programmes after the service encounter had a significant positive impact on guest affective and continuance commitment.
Results from the survey showed that loyalty programmes have a significant impact on guest loyalty, more than staff loyalty
and staff interaction, but guest satisfaction and guest affective commitment had more significant impact on guest loyalty than
loyalty programmes. The contribution of this study is that it generates an improvement over the current knowledge in the
field of services marketing by explaining the significant impact of loyalty programmes on hotel guests in the hotel sector.
Loyalty programmes (during the service encounter) have more significant impact on guest satisfaction than staff interaction,
and guests appreciate having a hassle-free stay. Also, satisfaction and commitment should be realised before a sense of
loyalty develops and it is the sense of loyalty which further drives guests to initiate the decision to become members of a
hotel loyalty programme, although the study asserted the significant impact of loyalty programmes on guest loyalty. The
second contribution of the study is that it found different guests tend to join hotel loyalty programmes for different reasons.
For example, males look for better service, special treatment and collecting points, while females look mainly for price
incentives and experiencing a unique stay.
Key words: loyalty programmes, guest loyalty, guest satisfaction, affective commitment, continuance commitment, and
staff interaction.
Introduction and Literature Review
In today's competitive hotel business environment, understanding guests‘ expectations, perceptions
and demands along with the level of service provided can have a significant impact on the sustained
success of the hotel. These qualities or standards allow industry leaders to distinguish themselves
from their competitors, and not only satisfy their guests, but also delight/surprise them through the
level of service provided by meeting or exceeding expectations. However, guest satisfaction is not a
constant phenomenon but is indeed progressive in nature (i.e. time specific) and the ever-growing
volume and pace of competition and the continuous increase in customers‘ expectations, services and
products that are deemed satisfactory by the customer today will undoubtedly prove unsatisfactory to
the same customer tomorrow (Kandampully, 1997).
Academics and practitioners alike agree that loyalty is an integral part of doing business. Few,
if any, businesses can survive without establishing a loyal customer base, especially when the cost of
acquiring a new customer far outweighs that of maintaining a new customer (Gremler & Brown,
1996). Loyalty programmes can represent an inexpensive means by which an organisation can collect
information about its customers (Palmer, McMahon-Beattie & Beggs, 2000). Loyalty programmes
based on the storage of individual consumer‘s demographic status and spending patterns can
contribute significantly to an organisation‘s knowledge base. Knowing who the loyal customers are,
what they buy and how often, can provide a way to gain strategic advantage. However, relatively little
is known about customer loyalty especially in the service sector in spite of its obvious importance to
all businesses. Experts have struggled to define precisely what being a loyal customer means and
what specific factors can lead to customer loyalty. So, although customer loyalty is considered the
backbone of business, it still remains a mystery (Gremler & Brown, 1996).
The definition of service loyalty has varied widely and there has been no generally accepted
definition for it (Lee, Barker, & Kandampully, 2003). However, by reviewing the literature, service
loyalty can mean: a service organization's commitment to its customers which are manifested in
activities undertaken by the organization for the development of a long-term relationship with the
customer, offering loyal service, every time, all the time (Bowen & Chen, 2001). In other words,
firms should give loyalty before they can expect it from customers (Kandampully, 1997). Gremler and
Brown (1996) introduced a definition for service loyalty which is ―…the degree to which a customer
exhibits repeat purchasing behaviour from a service provider, pass on positive recommendations,
possesses a positive attitudinal disposition toward the provider, and considers using only this provider
when a need for this service arises‖ (p.173).
Loyal guests are of special interest to hotels. They are less price sensitive, have a higher
probability to stay, they usually recommend the service to others, and they don‘t seek other
alternatives offering the same service. There has been a lot of research investigating the relationship
Dr. Tim Lockyer, Department of Tourism and Hospitality Management, Waikato Management School, The
University of Waikato, New Zealand, Email:; and Dr. Ahmed Elebiary, Consulate
General of Saudi Arabia in New Zealand, Auckland, Email:
Special Issue: Hotel Operations Management Issues and Challenges Vol. 5, January 2013
between staff commitment and guest loyalty in the hotel sector and whether guest loyalty is affected
by staff commitment or other variables like service quality (Anderson & Weitz, 1992; Cronin &
Taylor, 1992; Reichheld, 1993; Morgan & Hunt, 1994; Bowen & Chen, 2001; Fullerton, 2003).
However, little research has been conducted on how significant loyalty programmes offered by hotels
are to this relationship. Do hotels use loyalty programmes to enter into one-to-one dialogue with their
guests through customization/personalization (Melnyk, 2005) and do guests appreciate this kind of
preferential treatment as a result of this customization and seek a long term relationship with
hotel/staff, or are they more interested in redeeming the rewards (i.e., discounts) of loyalty
programmes offered by hotels (Palmer et al., 2000).
Understanding how or why a sense of loyalty develops in customers is a crucial management
issue, as the psychology behind this development is not yet well understood (Reichheld, 1993). Berry
(1995) noted that on-going relationships between businesses and their customers are receiving major
interest in marketing, and the building of strong customer relationships has been suggested as a means
for gaining a competitive advantage (Reichheld, 1993). Relationships emerge through interactions
between the customer and the service provider happening over a single or multiple encounters
following each other in a continuous or isolated way (Gronroos, 2000). This suggests services are
inherently relational; where the interactors come to know each other to some degree or other and have
expectations of each other‘s behaviour. Thus, a relationship is a social phenomenon which exists
when there is an intermittent interaction between two parties, involving interchanges over time, with
some degree of continuity between successive interactions, and with some mutuality (i.e., the
behaviour of each takes account of the behaviour of the other) (Hinde, as cited in Varey, 1998).
This study seeks to contribute to the development of a conceptual framework that integrates
commitment, satisfaction, staff and guest loyalty, service quality, and the impact of loyalty
programmes before, during and after the service encounter. Thus the main contribution of this
research to marketing theory and practice (hospitality industry) is to provide an understanding of the
drivers of guest loyalty in the hotel industry which is currently lacking in the literature, and how the
so-called ―loyalty‖ can be observed and fostered through the optimal use of loyalty programmes. The
second contribution is to provide an understanding of whether or not loyalty programmes have a
significant impact on enhancing guest loyalty.
Theoretical Framework
The overall goal of the research is to suggest a theoretical model (Figure 1) which represents the
various interrelationships between the variables identified from the literature - commitment,
satisfaction, staff and guest loyalty, and the crucial impact of loyalty programmes on enhancing guest
loyalty, and further proposed in the hypotheses covering before, during and after the service
Figure 1: Proposed model with hypotheses
There has been a consensus among practitioners and academics that satisfaction is an antecedent for
loyalty. Service loyalty denotes an organisation‘s commitment to its customers through offering loyal
services, every time, all the time (Bowen & Chen, 2001). Commitment is an enduring desire to
maintain a valued relationship (Moorman, Zaltman, & Deshpande, 1992). Bowen & Chen (2001)
noted that service loyalty through employee commitment precedes customers‘ loyalty through their
Staff Loyalty
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Indian Journal of Applied Hospitality and Tourism Research
satisfaction. Thus, employee commitment leads to better service to customers which induces them to
stay loyal to the company (Reichheld, 1993). In 2003, Fullerton‘s study demonstrated that committed
customers are less likely to switch than consumers who lack commitment to the organisation.
Likewise, a substantial body of research has demonstrated that commitment of an affective nature is
positively related to customer retention (Anderson & Weitz, 1992; Bendapui & Berry, 1997; Gwinner,
Gremler, & Bitner, 1998; Morgan & Hunt, 1994) and is a more powerful determinant of customer
retention than continuance commitment (Fullerton, 2003). This leads to the following hypotheses
regarding this study:
H1a: Guest affective commitment has a positive effect on guest loyalty.
H1b: Guest continuance commitment has a negative effect on guest loyalty.
H2: Guest satisfaction has a positive effect on guest loyalty.
The concepts of service quality, satisfaction and loyalty have been linked to each other in the
literature. Berry and Parasuraman (1992) also noted that owing to the very nature of services (where
they are performances rather than objects), service quality can be viewed as a total experience which
may have little to do with what the provider believes; rather, it may depend solely on the beliefs of the
individual customer (Zeithaml, Berry & Parasuraman, 1988). Although quality can be viewed as a
form of overall attitude, satisfaction is an emotional reaction to a specific situation. Oliver (1981)
noted that satisfaction soon decays into one‘s overall attitude. Thus, satisfaction, especially for
employees, can have an influence on providing service quality for consumers. Gupta, McDaniel and
Herath (2005) added that employee commitment is essential for service quality, in the sense that there
is a high correlation between employee commitment and the customers` perception of service quality.
Service quality acts as an antecedent construct and service loyalty as an outcome variable of customer
satisfaction (Caruana, 2002).
There has been a consensus among practitioners and academics that both service quality and
customer satisfaction are antecedents for loyalty as was tested by Cronin and Taylor (1992). Cronin
and Taylor‘s (1992) study revealed that service quality is an antecedent of consumer satisfaction.
Therefore, in this study, service quality can have a significant effect on guest loyalty via guest
satisfaction. Thus, it is proposed that service quality can have both a direct effect and indirect effect
(via guest satisfaction) on guest loyalty, and this leads to the following hypotheses:
H3a: Technical quality has a positive effect on guest satisfaction.
H3b: Tangible quality has a positive effect on guest satisfaction.
H3c: Staff interaction has a positive effect on guest satisfaction.
H4a: Technical quality has a positive effect on guest loyalty.
H4b: Tangible quality has a positive effect on guest loyalty.
H4c: Staff interaction has a positive effect on guest loyalty.
Loyalty has a two-way connection, in the sense that there is a cause-and-effect relationship between
customer and employee loyalty (Reichheld, 1996). Due to the psychological and physical closeness
that exists between employees and customers in service encounters, employees‘ attitudes often have a
spill-over effect on customer satisfaction. If employees experience favourable affective responses in
their jobs, their customers are likely to receive positive service experiences (Lenka, Suar, &
Mohapatra, 2009). Thus the researcher expects, in accordance with previous studies (Bove & Johnson,
2006; Bowen & Chen, 2001; Reichheld, 1996; Wong & Sohal, 2003) a positive relationship between
staff loyalty and guest loyalty, and this leads to the following hypothesis:
H5: Staff loyalty has a positive effect on guest loyalty.
Loyalty programmes were created by various companies to tie the buyers of a wide range of consumer
goods and services to a particular brand or supplier. Consumers receive both psychological and
economic benefits from a loyalty programme, and these rewards function as a positive reinforcement
of consumers‘ purchase behaviour and condition them to continue doing business with the firm (Sheth
& Atul, 1995). Loyalty programmes not only help build customers‘ commitment but also demonstrate
a firm‘s commitment to establishing a long-term relationship with its customers. Oliver (1999)
demonstrated through a conceptual framework that behavioural loyalty is preceded first by
commitment, followed by affective (i.e., attitudinal) commitment. Thus, loyalty programmes that are
directed toward enhancing customer‘s attitude toward the company rather than at direct stimulation of
behaviour might be a key to creating behavioural loyalty (Melnyk, 2005). Previous studies (Bolton,
Kannan, & Bramlett, 2000; Sheth & Atul, 1995; Yi & Jeon, 2003; Melnyk, 2005) indicated the crucial
role played by loyalty programmes through the three stages indicated in the model; before, during,
and after the service encounter. Therefore, the following hypotheses are proposed:
Special Issue: Hotel Operations Management Issues and Challenges Vol. 5, January 2013
H6: Loyalty programmes before service encounter have a positive effect on guest loyalty.
H7: Loyalty programmes during service encounter have a positive effect on guest satisfaction.
H8a: Loyalty programmes after service encounter have a positive effect on guest affective commitment.
H8b: Loyalty programmes after service encounter have a positive effect on guest continuance commitment.
Two methods of analysis were considered for the survey; regression (using SPSS version 18) (Coakes,
Steed, & Dzidic, 2010) and Structural Equation Modelling (SEM) using AMOS version 18 (Blunch,
2008). Both methods are required to test the validity of the model suggested in the study. Regression
analysis was used as a statistical technique to analyze the relationship between a single dependent
variable and one or more predictor variables (Alonso, 2000). In this case, regression analysis helped
to determine whether the variance of the dependent variable (guest loyalty) is being explained by the
predictors suggested in the model. A high coefficient of determination (R²) implies a good
The term structural equation modelling involves two important aspects for the procedure: (a)
that the casual processes under study are represented by a series of structural (i.e., regression)
equations, and (b) that these structural relations can be modelled pictorially to enable clearer
conceptualisation of the theory under study (Byrne, 1998). The hypothesised model can then be tested
statistically in a simultaneous analysis of the entire system of variables to determine the extent to
which it is consistent with the data. If goodness-of-fit is adequate, the model argues for the
plausibility of postulated relations among variables; if it is inadequate, the tenability of such relations
is rejected.
The first step in SEM is to form a graphical depiction a model showing how the various
concepts fit together, referred to as a path diagram (Figure 6-1) which is a form of graphical
representation of a model under consideration. Such a model is equivalent to a set of equations
defining a model, and is typically used as an alternative way of presenting a model pictorially
(Raykov & Marcoulides, 2006). A model, then, is a set of theoretical propositions that link the
exogenous variables to the endogenous variables and the endogenous variables to one another. Taken
as a whole, the model explains what relationships we expect to see in the data and what relationships
we do not expect to emerge (Kelloway, 1998).
The model as shown in Figure 1 illustrates guest loyalty as the dependent variable and staff
loyalty, service quality, guest satisfaction and guest commitment as the dimensions making up the
independent variables. A characteristic of these variables is that they are not directly measurable by a
generally accepted instrument; a characteristic they share with many of the concepts from the social
and behavioural sciences. Such non-measurable variables are called latent variables. As latent
variables cannot be measured directly, they are measured by a set of indicators, usually questions in a
questionnaire; these are the so-called manifest variables. Similarly, Blunch (2008) suggested that a
theory is a number of hypothesised connections among conceptually defined variables. These
variables are usually latent, i.e., they are not directly measurable and must be operationalised in a
series of manifest variables. A total of 51 statements made up the questionnaire that was used for
measuring the variables in the model proposed in this study.
Six thousand self-completion surveys were delivered in New Zealand. Alreck and Settle (2004)
asserted that the more the sample deviates from purely random selection, the less representative it is
likely to be, and the less legitimate the results of statistical computation will be. Therefore, the
delivery areas for the surveys were randomly selected, in the sense that the distribution of the survey
to the letter boxes was done after drawing grid lines on a map and randomly selecting the grid where
the survey would be deposited. From the 6000 surveys distributed, 635 (10.6%) usable responses were
returned and 59 surveys were not usable because large sections had not been completed.
The survey sample consists of more female participants (63.6%) than male participants
(36.4%). The highest numbers of survey participants are older than 60 years (25.9%), and the next
largest percentage are for those between the ages 51 and 60 (24.8%). There is also a considerable
number of participants between the ages 41 and 50 (19.6%), and relatively fewer participants between
the ages 20 and 30 (9.3%) and under 20 (3.8%) who do not use hotels much. Most of the survey
participants earn between $30,001 and $50,000 yearly (20.2%). There are 113 participants (17.8%)
who earn more than $100,000 per year and 17.8 per cent earn between $50,001 and $70,000 yearly.
The lowest percentage for participants was for those whose annual individual income was under
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Indian Journal of Applied Hospitality and Tourism Research
$30,000 (13.9%). For most survey participants (66.7%), family visit/vacation is the main reason they
choose to stay at hotels, while 209 (33.3%) of participants said they stayed at hotels for business visits
or work purposes. Most survey participants have professional occupations (53.7%), and the lowest
percentage is for no paid employment (2.9%).
In regards to loyalty programme membership, results showed a higher percentage for those
who do not hold loyalty programme membership (72.4%) than those who are currently loyalty
programme members in one of the loyalty programmes offered by hotels (27.6%). However, a total of
264 participants (41.6%) indicated that they have had a loyalty programme membership with one of
the hotels in the past.
Table 1 lists the 51 items in Section ‗B‘ of the survey by descending mean. The items with the
highest mean were ―The hotel‘s premises were clean‖ (mean 5.80, strongly agree), and ―The hotel‘s
furniture was comfortable for the guests‖ (mean 5.39, strongly agree). These were followed by ―The
hotel staff provides services as promised‖ (mean 5.37, strongly agree), and ―The hotel‘s premises
were noise acceptable‖ (mean 5.35, strongly agree), and ―The hotel staff were courteous, polite, and
well mannered‖ (mean 5.34, strongly agree). The four items with the lowest mean scores were, ―I feel
emotionally attached to the hotel‖ (mean 3.75, neither agree nor disagree), ―If I was in the hotel X
loyalty programme, I‘d feel emotionally attached to the hotel‖ (mean 3.71, neither agree nor
disagree), ―I feel a strong sense of belonging toward the hotel‖ (mean 3.68, neither agree nor
disagree), and ―If I wanted to stay at another hotel, it would be very difficult‖ (mean 3.37, neither
agree nor disagree). The four items with the highest mean and the four items with the lowest mean
have been highlighted in Table 1.
The data were analyzed for sample reliability and adequacy using SPSS (version 18). As
indicated earlier, the Cronbach‘s alpha for the 51 statements was 0.97, which is usually perceived as a
good result. The alpha coefficients for each half were 0.94 and 0.94, indicating internal consistency
within the data set. Also, the alpha coefficients for items with odd and even numbers in the survey
were quite similar; 0.94 and 0.93 respectively. Since the survey is made up from an odd number of
items, a split would produce an unequal number of items on each half, and SPSS revealed an
Unequal-length Spearman-Brown of 0.90. The Kaiser-Meyer-Olkin test of sample adequacy was 0.97,
classified as ‗marvellous‘ (Ryan, 1995, p.256). From these statistical tests it can be concluded that the
sample data possess rigor as measured by these criteria.
Structural equation modelling was conducted to test the several paths hypothesised in the
model. Structural equation modelling was selected to test the hypotheses because it is recognised as a
more comprehensive and flexible approach to research design and data analysis than any other single
statistical model in standard use by social and behavioural researchers (Hoyle, 1995). The superiority
of structural equation modelling over other statistical techniques is based on its ability to include
several observed and latent variables simultaneously in predicted paths. Although the method cannot
test causality, structural equation modelling can provide necessary (not sufficient) evidence in that
Figure 2 illustrates the results of the AMOS program including the standardised estimates for
the different constructs leading to guest loyalty. Service quality was divided into three dimensions of
service quality covering the technical, tangible, and staff interaction. Guest commitment was divided
into affective and continuance commitment. All arrows with solid lines indicate that the paths reached
the significance level at p < 0.05, which indicates that their representative hypotheses were supported,
while the dotted lines mean that the paths were insignificant at the level of p < 0.05 and thus their
corresponding hypotheses were not supported, except for H3c which although was significant at the
level of p < 0.01, β was negative and opposite to what was hypothesized and thus rejected.
The first hypothesis covers the impact of guest commitment dimensions on guest loyalty. The
standardised coefficient the first path from guest affective commitment to guest loyalty (H1a) is β =
0.31, significant at the level of p < 0.001. The second path from guest continuance commitment to
guest loyalty (H1b) is not significant (β = -0.05), so the first hypothesis is partially supported. The
second hypothesis indicates a path from guest satisfaction to guest loyalty. The standardized
coefficient for this path is β = 0.46, significant at the level of p < 0.001. So the second hypothesis is
The third hypothesis covers the impact of service quality on guest satisfaction. The first path
from technical to guest satisfaction (H3a) is significant at the level of p < 0.001 (β = 0.21). The
second path from tangible to guest satisfaction (H3b) is significant at the level of p < 0.001 (β = 0.43).
The third path from staff interaction to guest satisfaction (H3c) is significant at the level of p < 0.01 (β
= -0.16). However, although the regression weight showing the impact of staff interaction on guest
Special Issue: Hotel Operations Management Issues and Challenges Vol. 5, January 2013
satisfaction is significant at the level of p < 0.01 it is with a negative sign which indicates the negative
impact of staff interaction on guest satisfaction, so hypothesis three is partially supported. This
negative sign is probably due to the fact that guests appreciate having a hassle-free stay, which is clear
from the indirect effect of staff interaction on guest satisfaction (β = 0.00), while the direct impact was
negative (β = -0.16), and the total effect of staff interaction on guest satisfaction with a negative sign
(β = -0.16). Therefore, although H3c was significant at the level of p < 0.01; it was with a negative
sign which unfortunately is opposite to what was expected, so this hypothesis is not supported.
Figure 2: Empirical results of the full model with Standardized Regression Weights
Note: The solid lines mean the paths reach the significance level at p < 0.05, and the dotted lines means
the path is insignificant at the level of p < 0.05
The fourth hypothesis covers the impact of service quality dimensions on guest loyalty. The first path
from technical to guest loyalty (H4a) is not significant (β = 0.00). The second path from tangible to
guest loyalty (H4b) is not significant (β = -0.08). The third path from staff interaction to guest loyalty
(H4c) is significant at the level of p < 0.05 (β = 0.13). This is clear from the indirect effect of staff
interaction on guest loyalty (β = -0.07), while the direct impact was negative (β = 0.13), and the total
effect of staff interaction on guest loyalty had a positive sign (β = 0.06). Therefore, hypothesis four is
partially supported.
Hypothesis five indicates a path that goes from staff loyalty to guest loyalty. The standardised
coefficient for this path is significant at a level of p < 0.001 (β = 0.21), so the fifth hypothesis is
supported. Hypothesis six indicates a path that goes from loyalty programmes before service
encounter to guest loyalty. The standardised coefficient for this path is β = 0.25, significant at a level
of p < 0.01. So this hypothesis is supported
The objective in this study was to investigate whether or not loyalty programmes have a significant
impact on enhancing guest loyalty. Results indicated the significant impact of loyalty programmes
through the three stages indicated in the model; before, during, and after the service encounter. Figure
2 illustrated these three phases. Loyalty programmes before the service encounter had a significant
positive impact on guest loyalty (β = 0.25, significant at a level of p < 0.01). Loyalty programmes
during the service encounter had a significant positive impact on guest satisfaction (β = 0.22,
significant at the level of p < 0.001), and loyalty programmes after the service encounter had
significant positive impact on guest affective and continuance commitment (β = 0.68, significant at a
level of p < 0.001; β = 0.22, significant at a level of p < 0.001 respectively). These results provide
support for studies undertaken by Bolton et al. (2000), Yi and Jeon (2003), and Liu (2007).
Therefore, results showed that loyalty programmes had a significant impact in the three stages
indicated in the model; before, during, and after the service encounter, but loyalty programmes did not
have the highest impact on guest loyalty considering the other variables in the model. Figure 2
illustrated the standardised regression estimates calculated by AMOS for the variables in the model.
Guest satisfaction had the highest direct impact upon guest loyalty (regression estimate β = 0.46),
followed by guest affective commitment (regression estimate β = 0.31), loyalty programmes before
service encounter (regression estimate β = 0.25), staff loyalty (regression estimate β = 0.21), while
Staff Loyalty
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Indian Journal of Applied Hospitality and Tourism Research
staff interaction had the lowest impact (regression estimate β = 0.13). Therefore, loyalty programmes
were shown to have significant impact on guest loyalty, more than staff loyalty and staff interaction,
but guest satisfaction and guest affective commitment had more significant impact on guest loyalty
than loyalty programmes. Results also confirmed that loyalty programmes (before service encounter)
have more significant impact on guest satisfaction than staff interaction, while staff interaction has a
significant negative impact on guest satisfaction. This negative impact from staff interaction to guest
satisfaction is probably because those guests appreciate having a hassle-free stay. These results
support the argument noted by O‘Malley (1998) and Nunes and Dreze (2006) that one of the main
reasons why companies introduce loyalty programmes is to gain an insight into customer behaviour
and preference by collecting information about them. This kind of information can help companies
customise their customer services and segment their customers and thus consecutively enable a more
personal relationship with them.
Guest satisfaction had the highest impact on guest loyalty and this further provided support
for previous studies (Gremler & Brown, 1996; Bowen & Shoemaker, 1998; Bowen & Chen, 2001)
which argued that customer satisfaction is both an antecedent and perquisite for loyalty. However,
Ball, Coello and Vilares (2006) noted, customer satisfaction is considered a necessary step but not
sufficient for gaining full loyalty. Cengiz, Ayyildiz & Er (2007) argued that merely satisfying
customers is not sufficient to secure customer loyalty. According to Te Peci (1999), a sense of
commitment should be realised before loyalty develops. Results in the present study provide support
for the arguments presented by previous researchers (Gremler & Brown, 1996; Bowen & Shoemaker,
1998; Te Peci, 1999; Bowen & Chen, 2001; Ball et al., 2006), that satisfaction and commitment are
both an antecedent and prerequisite for loyalty. From the study it was clear that guest affective
commitment has a more significant impact on guest loyalty (regression estimate β = 0.31) than loyalty
programmes before service encounter (regression estimate β = 0.25) as shown in Figure 2, which
provides support for the previous studies that suggested that a sense of commitment should be realised
before loyalty develops even with satisfaction.
The present study generates an improvement over the current knowledge in the field of
services marketing by explaining that loyalty programmes (during service encounter) have a more
significant impact on guest satisfaction than staff interaction, while staff interaction has a significant
negative impact on guest satisfaction. This negative impact from staff interaction to guest satisfaction
is probably due to the fact that guests appreciate having a hassle-free stay. Further, although loyalty
programmes (before service encounter) were found to be neither a necessary step nor sufficient in the
formation of loyalty as satisfaction and commitment; results still asserted the significant impact of
loyalty programmes on guest loyalty, more than staff loyalty and staff interaction. It can thus be
concluded that both satisfaction and commitment should be realised before a sense of loyalty develops
and it is the sense of loyalty which further drives guests to initiate the decision to become members in
a hotel loyalty programme.
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Appendix A
Table 1: Mean and Standard Deviation for the 51 survey items
The hotel’s premises were clean.
The hotel’s furniture was comfortable for the guests.
The hotel staff provides services as promised.
The hotel’s premises were noise acceptable.
The hotel staff were courteous, polite, and well mannered.
I am satisfied with my decision to choose the hotel.
The hotel services adequately fulfilled my expectations.
I truly enjoyed staying at the hotel.
The hotel staff were knowledgeable and competent.
The hotel staff helped me and responded to my requests.
The hotel‘s facilities were reliable.
The hotel‘s facilities were easy to use.
The hotel staff cared and were concerned about guests‘ comfort.
The hotel‘s facilities were visually appealing.
The hotel staff provided services right from the first moment of contact.
The hotel staff provided a prompt response to guest needs.
The hotel services were exactly what I needed.
The hotel staff understood the needs of their guests.
If I was in the hotel X loyalty programme, I‘d never return to it if staff were rude.
The hotel staff had a smart appearance.
The hotel staff were able to take proper actions when needed.
I‘d expect the service to be better and quicker as a loyalty member.
The hotel provided fast check-in and check-out.
If I was a member of hotel X programme, I‘d return to the hotel.
The hotel staff responded to my requests promptly.
I recommend hotel X to my friends and workmates.
If I was in the hotel X loyalty programme, hotel X would be my first choice.
If I was in the hotel X loyalty programme, I‘d still look for better deals.
I always think of hotel X as an ideal accommodation.
The hotel staff were enthusiastic and committed.
I‘d feel more strongly connected to a hotel for which I hold a loyalty card.
I consider hotel X as my first choice when I need to stay in a hotel.
If I like hotel X service, I rarely switch from it just to try another hotel.
Experiencing something unique is what makes me return to hotel X.
The hotel services were some of best hotel services I‘ve ever received.
The hotel staff went beyond their specified duties to serve me.
The hotel staff gave me personal attention.
I‘d feel special if I was a member of hotel X programme.
The hotel staff knew exactly what my needs were.
I always stay at hotel X, even though there are other options.
Being recognised as a return guest is what makes me return to hotel X.
If I was in the hotel X loyalty programme, I‘d feel a strong sense of belonging.
If I was in the hotel X loyalty programme, I‘d judge hotel X services differently.
If I wanted to stay at another hotel, it would be more costly.
I hate to switch once I get used to a hotel service.
I feel that I care about the success of the hotel.
I stay at the hotel more as a matter of necessity than of desire.
I feel emotionally attached to the hotel.
If I was in the hotel X loyalty programme, I’d feel emotionally attached to the hotel.
I feel a strong sense of belonging toward the hotel.
If I wanted to stay at another hotel, it would be very difficult.