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Service design is a significant method of increasing service value in hotels. This article aims to review the service design in hotels, drawing from both the service design theory and the various efforts by hotels as antecedents of service design. Despite the relative increase in hotel service quality in recent decades, customer value perception has not increased as expected. One of the main reason of this is ineffective service offerings. At the same time, the new service is a critical competitive issue in hotels, whereas success rate is not much high. Hotels seek rapid, efficient and valuable service offerings, mainly within their available resources. However, in the case of service design, hotels managers' efforts are mostly standalone applications and within the scope of technical service. For better results, hotel managers should focus on the whole service through which the value is created. This study argues that hotels could take advantage of capabilities in which they have a relatively longer history, such as quality, innovation or process analysis, to assist in efforts toward service design development or improvements. Since service design is a developing field, this study primarily addresses the conceptual background, then discusses the underpinnings of service design in hotels.
Meryem Akoğlan Kozak / Dilek Acar Gürel
Vol. 63/ No. 2/ 2015/ 225 -240
UDC: 338.488.2:640.41
Meryem Akoğlan Kozak / Dilek Acar Gürel
Service design in hotels:
A conceptual review
Service design is a signi cant method of increasing service value in hotels.  is article aims to review the
service design in hotels, drawing from both the service design theory and the various e orts by hotels as an-
tecedents of service design. Despite the relative increase in hotel service quality in recent decades, customer
value perception has not increased as expected. One of the main reason of this is ine ective service o erings. At
the same time, the new service is a critical competitive issue in hotels, whereas success rate is not much high.
Hotels seek rapid, e cient and valuable service o erings, mainly within their available resources. However,
in the case of service design, hotels managers’ e orts are mostly standalone applications and within the scope
of technical service. For better results, hotel managers should focus on the whole service through which the
value is created.  is study argues that hotels could take advantage of capabilities in which they have a rela-
tively longer history, such as quality, innovation or process analysis, to assist in e orts toward service design
development or improvements. Since service design is a developing  eld, this study primarily addresses the
conceptual background, then discusses the underpinnings of service design in hotels.
Key words: hotel service operations; service innovation; service design.
Meryem Akoğlan Kozak, Phd, Department of Hospitality Management, Faculty of Business Administration, Eskişehir, Turkey;
Dilek Acar Gürel, Phd, Department of Tourism and Hotel Management, Eskisehir Vocational School, Eskişehir, Turkey;
In the last thirty years, service-related business have grown to comprise 80 percent of the economy
developed countries. While the service sector is gaining such signi cance, de ciencies in quality are
observed in production and delivery of services. Although service quality has improved, problems are
still encountered on meeting customer expectations. Even though this situation is primarily connected
to poor structuring of services, it can be said that not being able to adapt to changing environmental
conditions is also a factor.  is paradoxical situation also arises in the hotel sector. Many hotels are
known to be quite similar to their competitors. In such a market, o ering a unique valuable service for
the customer has become a signi cant issue for hotel managers. Service design is one of the solutions
that could be applied rapidly with the available resources while taking customer’s view into account.
e goal in service design is to reveal the service that meets the customer expectations in conjunction
within the service system.
Since the 1980s, service design has gained strategic importance due to the increased competition that
has brought innovation and creativity as business priorities. Instead of de facto implementations, design
has become prominent in areas such as product and brand management, total quality management,
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process management and organizational architecture. With the global developments of the 1990s,
especially in society, economy and technology, together with the service design, some new design dis-
ciplines developed, such as interaction design, ambiance design and web design. At the same time, the
service-dominant logic view increased, both in service and other industries. Within the service environ-
ment, instead of tangible resources such as physical tools, location and raw materials, other resources
such as information, skill and technology became more important (Vargo & Lusch, 2004).  is fact
drew attention to the functional aspects of service such as delivery rather than the technical features.
However, in the hotel sector, the e orts put into improving the functional features (e.g. psychological
components) of the service are not at the same level as the technical aspects and back-o ce activities.
In spite of this, service design addresses both the functional and technological aspects of service.  us,
it enables more consistent service o erings that increase the value. As Parasuraman (2010) noted, a
hotel could o er numerous services (e.g. pillow menu, massage packages in spa) which may not be the
exact requirements of customers. However, when the hotel fails to deliver not only those o erings, but
also some routine services (such as prompt wake-up calls and delivery of customers’ messages, posts,
etc.), those o erings would not su ce to satisfy the customers; moreover, they could aggravate them.
Such insu cient design e orts are common in hotel sector, and are called “dumb innovations” by
Parasuraman. In the few empiric studies, it is revealed that when systematically performed in hotels,
design enables better value for both the customer and the  rm (e.g. Wind, Green, Shi et, Scarbough,
1989; Lo,2010; Paget, Dimanche & Mounet, 2010; Chen, Wang, Luohi Shih & You, 2013; Masoudi,
Cudney & Paryani, 2013).
Service design is also important for the  rms that aim to grow, and that are depending on the product-
based growth as one of the major strategies. Maintaining internal growth can be achieved by increas-
ing quality, increasing product diversity, designing a new service that appeals to di erent markets, or
starting a new product for a new or existent market. Design is used in all of these methods, whereas
the most common design implementation is to improve existent services such as accessibility, stability,
reliability, etc. However, designing a service that does not yet have a market requires a di erent process.
Design is determining and consistently integrating all the components and features of the service that
o ers a good experience to users. Similarly, service design is the determination of service components
required for o ering a good experience, such as processes or physical evidence to customers, delivered
concordantly, attractively and e ciently.  e focal point of service design is the value to be created.
In service design, the service components are considered, both as single parts and also in terms of
their role in the value as a whole.  us, service is analysed in detail in terms of production as well as
consumer or marketing aspects.  is type of service approach is particularly important in the hotel
sector. Hotels formulate various strategies in order to deal with environmental pressures and to create
value. Strategy is intrinsically de ned in comparison with competitors so that competitive advantage is
achieved through value-creating strategies that cannot be easily imitated.  e major strategies in service
design in hotels and many other service  rms are similar: improvement, copying or modi cation.  ese
are the strategies that have lower risk and cost and are easily applicable (Ottenbacher & Gray, 2004).
rough these strategies, services are renewed constantly and gradually. Service design strategy should
be consistent with the resources and capabilities of the  rm, just as much as it is consistent with its
main objectives and strategies. However, there are two basic approaches in service design in terms of
design needs.  e rst is customer expectations-based design, and the second is product/service-based
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design, such as technology, law and regulations, or strategic decisions. It is hard to say that there is
only one right way in service design. However, design decisions should be made in accordance with
internal and external factors, purpose of the design, resources, and customer expectations. In fact, in
hotels, these activities are addressed at di erent organizational levels within service/process improve-
ment, change, re-engineering, quality function deployment, training and personnel empowerment.
Historically, hotels have some pro ciencies in those e orts that could be a basis for service design.
is conceptual study aims to review service design together with that of its antecedents in hotels.
Such conceptual studies are rare in tourism, despite the fact that they could help answer important,
holistic questions that are not amenable to empirical analysis and provide holistic understanding (Xin,
Tribe & Chambers, 2012). In this study, the conceptual background of service design is addressed  rst
in terms of main business and design approaches, while the design is discussed in the hotel context.
Conceptual background
Service design is addressed among the strategic activities of businesses, while it continues to develop
as a discipline (Larsen, Tonge & Lewis, 2007; Zehrer, 2009). As seen in the hotel sector, even though
service quality is increasing gradually, some decreases could be observed in the quality perception of
the customers, due to reasons that include poor structuring of services and the inability to fully meet
customer expectations (Zeithaml & Bitner, 2003). Strategies like low price are not as e ective as they
were in the past for customers who have achieved a level of satisfaction with certain hotel services.
erefore, the view that the di erentiation factor in hotels is the service itself is increasing (Moutinho,
2000; Frehse, 2005).
New service is one of the main solutions to strengthen the competitive position of service businesses
(Cooper & Edget, 1999; Menor, Tatikonda & Sampson, 2002; Stevens & Dimitriadis, 2005; Smith,
Fiscbacher & Wilson, 2007; Weissenberger-Eibl & Koch, 2007). Customers perceive hotel services
as mostly similar to, and substitutable with, each other (Victorino, Verma, Plaschka & Dev, 2005).
However, according to Kandampully (2004) such similarity is related more to the technical quality
of the service and, thus, the di erentiation required by the hotels depends on “how” the service is
delivered or its functional quality. Gummesson (1994) argues that the de ciencies in service design
would constantly cause problems, especially in service delivery. Despite the fact that service  rms pay
signi cant attention to the concepts such as innovation, new service or service design, the failure of
about 50% of the new services introduced is relatively high (Cooper & Edgett, 1999).  e hotels taking
advantage of service design and implementing it systematically (Ottenbacher & Gray, 2004) are mostly
the chain hotels (Ottenbacher, Shaw & Lockwood, 2005).  e main reasons for unsuccessful e orts are
not handling the design systematically, and lack of service design knowledge and skills (Zehrer, 2009).
e design of intangibles in the service industry is relatively new. Service design is a developing  eld,
in spite of the fact that the history of design in commerce, i.e. product design, goes back to 1850s.
e aim of contemporary design is creating best value for its users (Holmlid, 2007).  e underlying
issue in design theory is that creative skills speci c to certain individuals are not required for design,
as design is a learnable and improvable process. Design is the realization of ideas through various
techniques and tools. Continuous use of design develops the design culture of the  rms and so enables
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e ective and e cient use of resources (Alam & Perry, 2002).  e rms that do not use service design
and implement de facto approaches could have some disadvantages such as tendencies of high service
failure rate, high cost, waste of resources, and unsuccessful service delivery that does not meet customer
needs or business objectives (ITIL, 2007).
Alongside the developments in service business, the service quality and improvement e orts in the 1980s
directly a ected the service design. During the 1980s, it was seen that the manufacturing paradigm
was not enough for the service momentum, and thus service management has developed as a separate
discipline (Jonhnston, 2005).  us the business and management topics in services began to be held
in service context itself. When compared to the product development based on mainly the market-
ing point of view, the service design is distinguished by being human oriented and addressing also
the organizational aspects of service/product and processes (Mager, 2010). In this context, a “service
blueprinting” technique developed by Shostack (1984) in order to examine production and delivery
processes of service as a whole, is accepted as the  rst systematic approach in service design (Fließ &
Kleinaltenkamp, 2002; Slack, Chambers & Johnston, 2004).  e study of Shostack is signi cant in
terms of highlighting the customer interactive structure of service production and delivery. Although
the  rst step was taken by service blueprinting, the service design concept started to be more widely
used after the 1990s.
e de nition of service design is broad; many di erent views can be found. Goldstein, Johnston,
Du y & Rao (2002) point out that the main reason of various de nitions is primarily related to in-
su cient understanding of the service concept itself. But also, di erent service design de nitions are
based on various aspects of service such as process, innovation, customer interactions and/or service
results. Service is not only a product de ned by certain service features, but also a process. Details on
both the product and the process (production and delivery) are addressed jointly (Goldstein et al.,
2002; Grönroos, 2007). Grönroos (2007) states the two main problems in service design as “what
will be done” and “how will it be done.”  e former relates to the technical side, and the latter about
functional quality.  e need to design product and process together is a challenging aspect of service
design. In the most general sense, service design can be de ned as a combination of all the tangible
and intangible service components required for a better customer experience. In service design, details
regarding the service environment, process and employee are determined and integrated e ectively for
a positive customer experience (Koskinen, 2009).  e purpose of service design is to o er a valuable
service experience to customers beyond the product itself. Experience is the underlying aspect of service
design requiring attention to customer behaviour, expectations and perceptions (Teixeira, Patricio,
Nunes, Nobrega, Fisk & Constantine, 2012). Since, the customer is a critical consideration in service
design, customer experience and expectations are the most held topics in current studies (e.g. Kimita,
Shimomura & Arai, 2009; Teixeira et al., 2012,). However, customer experience is not the only focal
point in service design. In service design, the service must be intended to be useful, accessible and
demandable in terms of customers, as well as it is desired to be e ective, e cient and di erent from
the competitors (Mager, 2010).
In service design, service is handled with all operational components, including, but not limited to,
marketing. In this context, service design is a multidisciplinary activity including related business
functions, customer aspect and design theory, as well as special areas related to the subject of design.
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Accordingly, four levels of service design could be identi ed. First is the design of product features,
such as the features of a hotel room. Second is the design of customer experiences: the experience the
customer would have psychologically, sensually or similar.  ird is the design of processes; for example,
front and back o ces and the service system in general. Fourth is the design of service business ap-
proach, strategy and policy (Moritz, 2005). Together, these four levels of service design demonstrate
that design is not a simple process of de ning some service features, but consistently relating them
from the strategic to the operational level.
Since constant innovation is an important advantage, service managers are also required to be service
designers. Service managers are more familiar with internal factors of service operations such as techni-
cal features or e ciency (Fließ & Kleinaltenkamp, 2004) as well as with their design. However, today,
service managers should focus on the service process created with the customer in mind, or, in other
words, the service value rather than internal activities.  e value is the basis of the service orientation
view (Kandampully, 2004; Vargo & Lusch, 2004). Service-oriented businesses constantly seek more
superior quality by monitoring changes in the environment, primarily the customer expectations.  is
renders service design strategically important (Larsen, Tonge & Lewis, 2006). As one of the few stud-
ies on this subject, Edvardsson, Ng, Min, Firth and Yi (2011) compared the service orientation view
of Vargo and Lusch (2004) with the traditional production approach in bus travel service through an
empirical study based on customer perception. Accordingly, the performance of the service system
designed with a service orientation view was much higher than the other. In another study, Edvards-
son, Ng, Choo and Firth (2013) drew attention to the reasons for the better performance of service
orientation view: abstract components of service, operant resources (knowledge, skill, etc.) and a bal-
anced, fast and versatile symmetrical information system.  ese are also the critical aspects of service-
oriented design. As a result of the service orientation view, the importance of service design in hotels
has gradually increased. Since the service is based on experience, it requires constant development and
innovation (Zolfagharian & Paswan, 2008). Fache (2000) suggests that the improvement in traditional
quality management should be handled with innovation. Experienced managers can successfully resolve
some operational problems such as e ciency. However, when innovation is involved, the short- and
long-term e ects of external factors gain signi cance (Hjalager & Nordin, 2011). In this case, instead
of internal processes such as experience and intuition, systematic approaches such as design become
more of an issue.
Although innovation is a signi cant value in service, service design is not about creating completely
new (radical) innovations (Bitner & Brown, 2008). All solutions created as the result of design, which
are valuable in terms of customer and feasible in terms of the  rm, are considered as new service regard-
less whether they are radical changes or simple improvements. All kinds of change in service requir-
ing di erent skills in the current system are considered new service (Menor, Tatikonda & Sampson,
2002). Similarly, the change recognized by the customer is new service (Cooper & Edgett, 1999).
us, there are various forms of innovations ranging from small improvements to radical innovations,
and the relevant risks and bene ts also vary (Fitzimmons & Fitzimmons, 2004). In the service sector,
small continuous improvements are frequently preferred by hotels due to their lower cost and risk
(Ottenbacher & Gray, 2004).
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Service design approaches
e focus on service design is increasing the value o ered to customers, which means that materials
high in quality, low prices or a wide variety of services are in and of themselves, enough to drive value.
Hotel customers usually perceive service as a whole even though they attach particular importance to
di erent service components.  erefore, in the design process, service components should be handled
in terms of their roles in the service value chain. For a good service design, basic characteristics of the
service and structure of the service production and delivery should be analysed. Hence, through an
e cient and e ective structured service system, the intended service value could be o ered.  e basis
of the modern design concept is user orientation (Holmlid, 2007). Customers, as the ultimate users
of the service, have a signi cant role in design. Factors such as their desires and needs, characteristics,
experiences, attitudes and behaviours are major factors into the design process. In addition, experiences
of the employee can provide useful insight, since these people have a signi cant role in the service
system, particularly in customer interaction (Martin Jr. & Horne, 1994). Although the main purpose
in design is to satisfy the customer’s expectations, di erent factors should also be considered. Internal
and external environmental conditions of the enterprise, such as the sector in which the enterprise is
included, competitors, technology, social and cultural aspects, operating assets, and price policy, also
a ect the design (Tonchia, 2008). Hjalager and Nordin (2014) acknowledge the importance of customer
feedback and participation.  ey argue that although customer-oriented innovation is widespread as
indicated by recent tourism literature, there is not su cient validation that it brings the desired out-
comes. Indeed, customer expectations are useful in daily management practices; nevertheless, it may be
risky when this is the sole input for innovation. For example, customer expectations may not always be
realizable/feasible (DeSouza, Awazu, Jha, Dombrowski, Papagari, Baloh & Kim, 2008), or customers
may not clearly express their expectations. However, the service value is based on co-creation of the
customer and the service provider, as views’ of both sides should be handled together (Tung & Yuan,
2008). In this context, the correct analysis and interpretation of customer expectations becomes crucial.
With regard to the above discussion, two fundamental approaches to the service design can be identi ed.
First is the customer expectation-based approach, in which the demographic characteristics, opinions,
complaints, requests or needs of the customer are the basic design input; the second is the product/
service-based approach, in which technology used in service production or delivery, laws and regula-
tions, materials, the  rm’s core strategies or politics are the basic design input. In both approaches,
ideas on new service needs are put forth at the  rst step; those ideas are then transformed into service
features that meet customer expectations. Since the service design is a developing  eld, a wide range of
suggestions have been introduced. Timmerman (2010) remarks that the major organizational factors
a ecting the service design are the business approach, employee quali cations and the organization’s
culture. Besides, factors such as intended goals of the service design, scope of the service design and
resources available may lead to adoption of di erent approaches in the design process.
Implementation of service design
Service design consists of planned and iterative stages. In terms of design theory, design is not a one-o
project but a continuous activity (Tussyadiah, 2014). Design is actually a solution o ered for a de ned
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problem.  e aim of service design is to achieve an optimum solution by balancing the available resources
between the goals throughout the service system. In the service design, the value to be provided to the
customer is designed (Ramirez & Mannervik 2008). Accordingly, in the broad sense, service design is
determining the value to be o ered in terms of service needs by customer expectations and/or prod-
uct/service-based approach, then transforming them into service qualities. Value design requires more
than a simple product description. As generally accepted, services are provided and consumed within
a process. In other words, production, delivery and consumption processes are intertwined due to the
simultaneity of the service. For this reason, both the production and delivery processes are designed
together in the service design.  is requires  rst answering the two basic questions of service design,
which are “what to be provided” (product) and “how to be provided” (production and delivery), and
secondly, ensuring the consistency of product and delivery (Goldstein et al., 2002; Davis & Heineke,
2005; Grönroos, 2007). However, it is also questionable whether the service design can be made with
zero error just like physical product design (Şahin, 2008).
Another dimension, which has equal importance to the process in the service design, is the human
factor (Evanson, 2008). Since the customer and employee exist together in service production, human
factors in design should be addressed in terms of both individual roles and interactions. In the past,
human factor in design was addressed on the basis of assumptions; e.g., “what consumers may want,
“how might the employee act...”  e contemporary design approach requires the participation of the
people a ected by the design in the design process (Moritz, 2005). In reality, design of experience-
intensive services such as hospitality is challenging. According to results found by Voss and Zomerdijk
(2008), the  rms that conduct service design in the context of customer experience consider the fol-
lowing factors: the physical environment, service employee, service delivery process, other consumers
and back-o ce support. In the same context, the authors also point out that in the experience-based
service design, the prediction of  nancial outputs is not easy.
Depending on the idiosyncratic characteristics of service, service design implementations that are not
deliberate and systematic can cause confusion and failure risk.  e literature o ers di erent views on
the best way to conduct service design. In service design, service is analysed in relation to product and
delivery. For this reason, just de ning the service package in terms of product attributes is not su cient.
e service package should be de ned with its production and delivery qualities (Şahin, 2008). After
the conceptual analysis of service, it should be analysed in terms of the provider and the customer view.
e consistent value o ering requires the service to be evaluated in terms of actual quality standards. If
needed, those standards could be updated or renewed. As the service is a process, the production and
the delivery processes should be evaluated in terms of the value perspective. While the service design
generally requires changes in service processes, this situation may also require changes to the service
organization by revealing new knowledge, skill or location needs of the employee (Davis & Heineke,
2005). In summary, considering the design theory and the service context, the following stages could
be carried out in service design: idea generation, gathering the views of the customers and managers,
de ning the service package, de ning the quality features, reviewing/creating the standards, selecting
designers and other specialists, launching new activity processes and monitoring the new service (Slack,
Chambers & Johnston, 2005; Raturi & Evans, 2005, Stevenson, 2007, Young 2008).  us, the service
is analysed in terms of all the major aspects of the service system. In order to e ectively implement this
process, techniques such as quality function deployment, six sigma design or service blueprinting can
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be employed.  ese techniques also facilitate evaluation of di erent alternatives in carrying out the
service design (Zomerdijk & Voss, 2010). It is also suggested to use visual tools for facilitating issues
such as monitoring di erent processes, ideas, etc. (Mager & Sung, 2011) to e ciently deal with the
complex nature of design. It is possible to conduct the service design stages consequently or simulta-
neously. Since it may block creativity and delay the new service launching, rigorous design process is
not suggested (Voss & Zomerdijk, 2008). In order to facilitate rapid implementations of innovations,
exible service processes to some extent in the service system could be advantageous.
Service design e orts in hotels
Even though service design is a recent concept in the hotel sector, the innovation e orts are not new.
is stems from the nature of hotel service and also, according to Frehse (2000), the customers’ being
relatively more dominant than the producers. In their study, Victorino et al. (2005) found that in-
novation is among the most important factors that in uence the hotel choice of customers.  ey state
that, even though the service innovation is more important for leisure, it is also important to business
travellers, and that hotel managers should attach more importance to this service design. Instead of low
price searching as in the past (Claver, Tari & Pereira, 2006), customers seek the options that provide
the best value (Victorino et al., 2005).  is means that the price strategies are no more an attractive
method for service di erentiation than the provided service itself (Moutinho, 2000). According to
Ottenbacher et al. (2005), service design is the major way for hotels to achieve their main objectives.
Changes in the environment, customer pro le and expectations in particular require hotels to constantly
improve their service production (Zehrer, 2009). However, as Ramaswamy (1996) argues, the e orts
related to new services that are generally based on trials, personal judgments or past experiences are
prevalent in the hotel sector as well. All those e orts are evolutionary in nature and bene ts are short
term (ITIL, 2007; Frehse, 2005), especially when considered with the common aim of copying the
competitors’ services in the hotel sector.
e basic antecedent of service design is innovation. Innovative hotels are more successful than their
non-innovative competitors (Grissemann, Pikkemaat & Weger, 2013). In the context of service innova-
tion, there have been some e orts as the background for service design. For example, product develop-
ment as a marketing e ort has been signi cant at the level of destination or individual companies. At
the same time, hotels have certain experience in quality implementations. In conjunction with quality,
the idea of service improvement has widely adopted. However, improvement has been implemented
only within the scope of certain aspects of service, such as e ciency and physical evidences, and/or
e orts related to cost and price cutting. For example, Willbourn (1986) lists some front- and back-
o ce areas that could be improved in hotels. In this context, between the 1980s and 2000s, many
studies conducted on quality, process, e ciency, change management and re-engineering in hotels
can be found. Studies such as process analysis (Akoğlan Kozak, 2001), materials management (Gül,
2005), re-engineering (Nebel, Rutherford & Scha er, 1994; Aytemiz Seymen, 2000) and productiv-
ity (Sigala, Jones, Lockwood & Airey, 2005) have contributed to the improvement of the technical
service system. Another case encountered after the 1980s showed service design dealing with improv-
ing physical evidences. Physical evidences like materials, tools, equipment, space and atmosphere in
service delivery enable the abstract hotel service to become touchable/sensible/visible (Kozak, 2008).
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In this vein, the number of studies on atmosphere/ambience design in hotels is increasing (e.g. Heide,
Leardal & Gronhaug, 2007; Strannegard & Strannegard, 2012). Although the physical evidences in
hotels are extremely important for the customer’s perception of quality, they should be analysed in
terms of their role in the whole service delivery.
Apart from the above, there are only a few studies concerning the emotional/psychological service
design. As stated before, those aspects are essentially related to functional quality (Grönroos, 2007)
and play a crucial role in hotel service (Kandampully, 2006). In other words, the experience as the
“the core” of the service product (Tussyadiah, 2014) has not been su ciently studied. Similarly, when
studies related to service design and innovation in general are examined, the focus is more on technical
aspects of service such as aesthetics, technology, productivity or duration, while the concepts such as
customer expectations or experiences are rarely considered. Such a narrow approach leads to a di erent
understanding of service design. In fact, service design in some  rms is considered as a tool for facilitat-
ing the customer interaction only (Young, 2008). Especially, as a common tendency on-going from the
past, hotel managers intensively focus on the technical service aspects and internal activities. Instead,
they should focus directly on the service on both the product and process basis (Kandampully, 2006).
Service design has become a signi cant concept within service-oriented management. Service design
is a relatively structured activity in large-size hotels. In terms of chain hotels, Lee (2011) discusses
design and hotels from the destination point of view, and suggests that “the same service all around
the world” theme is increasingly turning into a disadvantage, and local features should be taken into
account. When compared to large-size hotels, design e orts are less present in small- and medium-
size hotels, which constitute a signi cant portion, approximately 90%, of the sector. To compete both
with similar and large scale hotels, small and medium sized hotels, they should attach importance to
service design and adapt design implementations to match their size. Small and medium-size hotels
have some advantages to design, and it is relatively easy to examine their services extensively and take
centralized decisions on issues such as resources, processes and similar (Zehrer, 2009).
e service design continues to develop, although there are few studies (Drejer, 2004; Paget et al., 2010;
Teixeira et al., 2012). With regard to the new service and value approaches, such as service-dominant
logic and co-creation, there is the need for more studies on the e ectiveness of various approaches to
hotel service design (Edvardsson et al., 2013; Chathoth, Altınay, Harrington, Okumuş, F. & Chan,
2013). Most of the studies are explorative, and only few of them are empiric, mainly case studies.  ey
generally focus on how to conduct service design (e.g. Goldstein et al., 2002; Tussyadiah, 2014). While
design is increasingly gaining importance for hotels, this issue is neglected by researchers (Ottanbacher
& Gnoth, 2005; Hassanien & Eid, 2006).  e service design is mainly addressed within studies related
to innovation (Victorino et al., 2005), service quality and improvement (Jones & Dent, 1994).
For example, Ottenbacher and Gray (2004) analysed the relation between service design and  rm suc-
cess on a sample of 185 hotels.  ey found that the hotels which carry out market-oriented and formal
processes are more successful.  ey pay more attention to customer expectations, competitors’ strategies
and opinions of the service employee. In another study, Ottenbacher et al. (2005) investigated the
service design aims in chain and independent hotels. It was found that chain hotels prefer to include
all the customers in their markets to the design implementations and use structured processes in the
service design. To the contrary, independent hotels do not use structured processes and seek mainly
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the opinions of current customers.  e importance of personnel empowerment in service design is
also emphasized.
In terms of crucial components of service, there are few studies of the ambiance in hotels. Heide,
Laerdal and Gronhaug (2005) examined the ambience of seven hotels as created by hotel managers
and design specialists.  ey found out that hotel ambience has two critical features—uniqueness and
feel of reality (i.e. do not feel like imitation or fake). Customers generally need a certain duration of
time to reveal their perception of the ambience. Although experts are used in ambience design, the
view of customers and personnel could be helpful as well. Another remarkable result of that research
is that there is a signi cant di erence between the opinions of the managers and the design specialists.
However, both the groups agree that the hotel ambience is related to “the total perception.” Emotional
design in hotels was also addressed. For example, Lo (2010) seeks the satis ed/unsatis ed/expected
experiences of customers and o ers a design approach based on psychological service components.  ere
are also few studies on technological developments’ re ection on design. Or la-Sintes, Crespi-Cladera
and Ros (2004) researched the technological innovations in the hotels located on Balearic Islands and
revealed that 3, 4 and 5-star hotels have put more e orts toward technological innovation than lower
quality hotels. Technology is also an e ective tool in service design process. For instance, Stickdorn and
Zehrer (2009) discuss a mobile phone application in the service design based on customer expectations.
e studies on service design are commonly held in developed countries. However, in Turkey, service
design has been addressed mostly during the last ten years. One of the  rst studies, conducted by
Aygen (2006), refers to service design in her study of innovation management in hotels in Antalya/
Turkey. In the scope of service design, Aygen discovered that the hotel managers’ core strategies that
should be used in the service design are innovation, customer value, service di erentiation and promo-
tion/advertisement. However, price leadership is the least preferred strategy. At the same time, hotel
managers’ views on the main obstacles to service design are high costs, inappropriate organizational
structure and de ciencies in shared vision, availability of skilled and creative employees, technological
infrastructure and customer demand. Since the customer expectation is a signi cant factor to design,
customer participation is suggested in design process (Alam, 2002).  e participatory service design
was thoroughly examined in the example of a hotel in Turkey by Acar Gürel (2010). In this study,
an implication was held in a hotel to o er a new service package based on customer expectations. In
another study, Kapucugil İkiz and Masoudi (2008) suggest a combination of Quality Function De-
ployment and SERVQUAL model for service design in hotels.
As discussed so far, physical evidences and their design in hotels are the most known design implementa-
tions, and that which is addressed in most of the studies. However, it is seen that some of these studies
are carried out from an architectural point of view. For example, Tunalı (2009) examined bedroom
designs of hotels selected from  ve di erent chains in terms of architecture. She points out that the
design in these chain hotels do not re ect a common brand language. Hassanien (2006) examined
the physical innovation (renovation) of nine luxury hotels in Egypt and found out that the hotels
were being renovated with input from customers and employees. He suggests the factors required
for the successful renovation are a clearly de ned goal, positive relations between management and
the subsidiary  rm, su cient resources and participation of customers. Chen et al. (2013) examined
whether satisfaction of the package tour customers in the senior tourist group demographic increase
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when their expectations of the hotel room are satis ed. For this purpose, some of the room features
(e.g. easy-use telephone, holders in bathroom) suitable for the senior tourists were included. It was
found that senior tourists’ satisfaction signi cantly increased with the inclusion of these features. Park
(2010) examined the lighting design within the context of North American and South Korean cultures.
ere are signi cant di erences between lighting preferences. North Americans prefer low intensity,
dim and warm colour lighting, South Koreans prefer high intensity, bright and warm colour lighting.
In another study, Masoudi et al. (2013) suggest a comprehensive customer-based landscaping design
using Quality Function Deployment in a hotel case together with architectural, aesthetic features
and action plans. In the physical design context in hotels, it is also seen that interest on the issues
such as sustainable/environment-friendly design increases. For example, Benson (2013) addresses the
environmentally friendly design in the technical infrastructure features of the hotel such as heating,
decoration and materials.  e physical design is crucial in the hotel sector. However, in terms of the
service design perspective, it is interrelated with the service concept, and thus it is suggested to address
it within the service concept.
Discussion and evaluation
Service design has become a signi cant part of value-increasing e orts of hotels.  e concepts, which
could be addressed among the antecedents of the service design, such as quality, improvement, inno-
vation, consumer expectations, have been important for hotels, especially since the 1980s. However,
over the past  fteen years, in spite of the progress in hotel service quality, customer satisfaction did not
increase at the desired rate, and hotels have become similar to each other in terms of physical features,
service types and delivery.  e low price strategy is not as attractive as before, especially when the options
for hotel customers are growing. Today, the hotel customer primarily seeks service that exactly meets
his/her needs (Frehse, 2005).  is stresses the importance of service experience and, consequently, the
importance of service operations. Whereas service production is not su ciently researched by academics
and other professionals, various authors point to its signi cance from di erent aspects (Gummesson,
1994; Kandampully, 2004; Johnston, 2005; Grönroos, 2007). In hotels, this primarily requires service
managers’ e orts to be focused on service operations.  e service-oriented approach as suggested by
Vargo and Lusch (2004) is based on “the service co-created with the customer” instead of “the service
provided to the customer.” Service design is a critical issue in service operations management (Evanson,
2008) and, as such, this new skill is required from the service managers (Johnston, 2005).
e goal of service design is to meet the service needs in accordance with customer and business require-
ments. In service design, the production and delivery characteristics should be addressed in a way that
is valuable in the view of the customer, e ective and e cient for the enterprise, and di erentiated from
the competitors (Mager, 2010). Since the service is based on experience and environmental factors that
are variable, design needs in service are continuous. In the context of hotel management, despite the
importance of subjects such as innovation, quality and customer perceptions, the relative knowledge
and skills on those issues are limited. Studies regarding the service in hotels as well as in the above-
mentioned  elds are predominantly conducted from the marketing perspective. From the marketing
view, in the widely applied product development approach, the service is handled primarily by product
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and commercial analyses (Bowie & Buttle, 2007).  is is mainly the answer of “what will be done?”
as Grönroos (2007) stated; while the answer to “how will it be done” is relatively ignored. In addition,
the customer view is also handled more often by marketing, it’s also critical in service operations. It
becomes harder to ensure the value promised to the customer is actually delivered, in other words, to
ensure the consistency in service operations. As it is emphasized by Gummesson (1994), a main reason
for the problems encountered in service delivery is inadequacy in the service design. Although the hotel
managers place high importance on innovation and increased value, insu cient skill and knowledge
of service design fundamentals cause incorrect design approaches and unsuccessful results. In relation
to this, the hotel sector is handling the service design mostly in terms of tangible service components
like physical evidences, instead of addressing it within the service system.
Despite the above criticisms, the hotel sector has some advantages in service design.  e e orts toward
quality, productivity, process analysis and innovation are rising in importance and being addressed by
the hotel management, and this could be bene cial in terms of development of design skills. For this
purpose, it is suggested to consider those past pro ciencies and experiences systematically and continu-
ously from the service design perspective. Suggestions for conducting those e orts within the service
design emerge; for instance, Sila and Ebrahimpour (2008) recommend addressing quality improve-
ment within service design. When e orts for quality or innovation are examined, another remarkable
point is that these are mostly related to the internal processes, or the back-o ce, of service. Addressing
service processes mostly in terms of back-o ces stems from challenging service characteristics such as
simultaneity. When depending on simultaneity as well as intangibility, performing excellent service
design is challenging.  e service characteristics require multidimensional evaluation of service, such
as psychology and interaction perspectives. In addition, physical service environment, information
technology, touch points, and other factors speci c to service all demonstrate the interdisciplinary
components of service design.
In summary, as reviewed in this study, service design is not new, but it is of critical importance in the
hotel sector. When service design becomes a core competency for hotel managers, they can and should
ensure that the related design pro ciencies, organizational arrangements, coordination, and resources
required for service design are supplied. In order to rapidly design and launch new services, service design
should be conducted as a continuous activity. While units such as R&D are rare in the hotel sector, it
is expected that such a unit may be formulated as part of the e orts to increase service value. Service
design is not an activity that can be carried out alone, as it is an issue that a ects every component,
from daily operations to the strategic level. Since design and change are interrelated (Moritz, 2005),
it would be useful to address service design together with learning and change culture. In this regard,
studies such as change management and organizational learning can be useful in terms of supporting
the cognitive levels of input required in the design.
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Submitted: 20/02/2015
Accepted: 15/04/2015
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... In service design, aspects concerning the service environment, process and employee are defined and linked effectively for an improved customer experience. The service must be useful, accessible and demandable by customers, as well as it intended to be effective, efficient and different from the competitors (Akoğlan Kozak & Acar Gürel, 2015;Okoe et al., 2018). So, several factors have been studied by researchers in order to maximize the efficiency of the process as well as the success of the new service. ...
... Previous findings conclude that technological capability positively affects customer service and service process innovation. Quite honestly, these results have important managerial implications as managers try to increase performance by using technological resources (Akoğlan Kozak & Acar Gürel, 2015;Alam & Perry, 2002;Avlonitis et al., 2001;Chen & Tsou, 2012;Ryzhkova, 2015). ...
... Moreover, experiences of the employee can provide useful information, since they have an important role in the service system, especially in customer interaction. The main goal in design is to satisfy the customer's needs (Akoğlan Kozak & Acar Gürel, 2015). Employee understanding, motivation, commitment, and support for NSD projects are important for the development of hospitality services. ...
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This paper presents the state of the art in new service development (NSD) by analyzing 178 papers that have been categorized by discipline and method, implementing a structured methodological framework to identify existing knowledge. The findings of this paper come at odds with the notion that NSD is something that just ‘happens’, and can be used as a tool to raise awareness about organizational characteristics that need to be taken into consideration when developing new services. This work contributes to the study of service innovation and NSD and opens avenues for further research on the topic. The managerial implications of this paper highlight the importance of interdisciplinary collaboration for the implementation of successful NSD.
... There are studies (e.g.: Gołąb-Andrzejak and Gębarowski, 2018; Kozak and Acar, 2015;Zhong et al., 2017) in various dimensions to create impressive experiences in the hotel business which can be grouped as 1) the designing experience research in various issues, mostly focused on policy, process, and innovation experience that hotel services consist of many touchpoints, where experiences should be examined, and each of moments of contact with the brand should be incorporated into an integrated process of hotel guest experience management (Gołąb-Andrzejak and Gębarowski, 2018); 2) the service experience research related to Thai culture mostly focused on the results, processes, methods, and effects of guests' behavior which the hotel had implemented Thai culture in the service areas and was able to deliver guest satisfaction (Sukkha and Peinroj, 2015); and 3) the service design elements research mostly related to staff participation, the management of guests, and the close engagement of back of house employees and front of house activities which represented promising new frontiers in experience design (Beltagui and Candi, 2017), the hotel should focus on the whole service experience through the created value (Kozak and Acar, 2015). However, guest experience research related to the hotel business has been explored (Sukkha and Peinroj, 2015); yet its lack of Thainess experience-centric service study which unclear and limited forms in guest's experience, especially in the boutique hotel business in Thailand. ...
... There are studies (e.g.: Gołąb-Andrzejak and Gębarowski, 2018; Kozak and Acar, 2015;Zhong et al., 2017) in various dimensions to create impressive experiences in the hotel business which can be grouped as 1) the designing experience research in various issues, mostly focused on policy, process, and innovation experience that hotel services consist of many touchpoints, where experiences should be examined, and each of moments of contact with the brand should be incorporated into an integrated process of hotel guest experience management (Gołąb-Andrzejak and Gębarowski, 2018); 2) the service experience research related to Thai culture mostly focused on the results, processes, methods, and effects of guests' behavior which the hotel had implemented Thai culture in the service areas and was able to deliver guest satisfaction (Sukkha and Peinroj, 2015); and 3) the service design elements research mostly related to staff participation, the management of guests, and the close engagement of back of house employees and front of house activities which represented promising new frontiers in experience design (Beltagui and Candi, 2017), the hotel should focus on the whole service experience through the created value (Kozak and Acar, 2015). However, guest experience research related to the hotel business has been explored (Sukkha and Peinroj, 2015); yet its lack of Thainess experience-centric service study which unclear and limited forms in guest's experience, especially in the boutique hotel business in Thailand. ...
The COVID-19 outbreak has inevitably impacted the global hotel industry, which will result in a shift from traditional services to personalized and specialized services to reduce the confrontation. This study was to examine the characteristics of Thainess experience-centric service (TECS), based on the perspective of boutique hotel guests during the COVID-19 pandemic, to develop and test scales for measuring TECS, a new component of boutique hotel services in Thailand. The quantitative method was administered. Multi-stage sampling was approached, and questionnaires were used to collect data from 112 self-identified boutique hotel guests via an online survey by Google form to examine the TECS attributes. Exploratory Factor Analysis (EFA) was used to refine the final instrument. The development process results in a reliable and valid TECS feature scale under the perspective of boutique hotel guests. It consists of 28 measurement scales that combine the services of a Thainess experience service, Thai atmosphere value, and Thai hospitality. To investigate attributes of Thainess experience-centric service (TECS) referring to the perspectives of boutique hotel guests to develop and test a scale for measuring the TECS, a new component of boutique hotel services. The quantitative approach was employed by using exploratory factor analysis (EFA). A study of 112 self-identified boutique hotel guests with a multi-stage sampling approach via an online survey by Google form during the COVID-19 pandemic. The TECS attributes under the perspectives of boutique hotel guests consisting of a 28-item measurement scale incorporating Thainess experience service, Thainess atmosphere value, and Thai hospitality. Boutique hotel guests also demonstrated their preferences towards hotel services as well as the basic demographic profiles and characteristics, which are useful for implementing hotel strategy enhancing guests’ satisfaction and exceed their expectations prior to the COVID-19 pandemic. The authors would recommend applying the TECS to refocus its practices to creates the guest experience in the hotel business. This research contributes towards value creation by using the strategy of cultural value in creating high-quality standards and it can create a positive experience and guest’s satisfaction. Hence, the cultural value of each society can be considered for creating the guest experience.
... However, many authors research the identification of critical success factors. Many of them indicate in their results that the service must be helpful, accessible, and demandable by customers, as well as an intention to be effective, efficient, and different from the competitors [19][20][21]. Noteworthy is the classification of critical success factors in NSD, proposed by Kitsios and Kamariotou [22], based on the analysis of 144 articles in this area. ...
... Sensors 2021, 21, 6713 ...
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Services, unlike products, are intangible, and their production and consumption take place simultaneously. The latter feature plays a crucial role in mitigating the identified risk. This article presents the new approach to risk assessment, which considers the first phase of introducing the service to the market and the specificity of UAV systems in warehouse operations. The fuzzy logic concept was used in the risk analysis model. The described risk assessment method was developed based on a literature review, historical data of a service company, observations of development team members, and the knowledge and experience of experts’ teams. Thanks to this, the proposed approach considers the current knowledge in studies and practical experiences related to the implementation of drones in warehouse operations. The proposed methodology was verified on the example of the selected service for drones in the magazine inventory. The conducted risk analysis allowed us to identify ten scenarios of adverse events registered in the drone service in warehouse operations. Thanks to the proposed classification of events, priorities were assigned to activities requiring risk mitigation. The proposed method is universal. It can be implemented to analyze logistics services and support the decision-making process in the first service life phase.
... In service design, aspects concerning the service environment, process and employee are defined and linked effectively for an improved customer experience. The service must be useful, accessible and demandable by customers, as well as it intended to be effective, efficient and different from the competitors (Akoğlan Kozak and Acar Gürel, 2015). So, several factors have been studied by researchers in order to maximize the efficiency of the process as well as the success of the new service. ...
... [see:] results have important managerial implications as managers try to increase performance by using technological resources (Akoğlan Kozak and Acar Gürel, 2015;Chen and Tsou, 2012;). ...
Full-text available
Purpose The purpose of this paper is to review the dominant role which technology plays in the new service development (NSD) process and indicate the critical success factors that managers should have in mind during the implementation of service projects, as well as the extent to which NSD lead to technological investments. Design/methodology/approach Studies were identified using a three-phased literature review methodology, which was suggested by Webster and Watson (2002). A total of 144 papers have been categorized and analyzed based on their content. Findings The findings of this paper indicate that information technology (IT) is a critical factor for the success of new services, but managers ignore its benefits. It could be used during the development process, to support managers to produce innovative services. Practical implications This study provides practical implications for IT managers, to increase the success rate of service innovation. The understanding of the effect of technology on firm performance can help managers to use technology to increase firms’ performance and provide an opportunity for organizations to benchmark their own processes of service innovation technology with their competitors. Originality/value This paper may be of interest to academics who are already studying service innovation or NSD-related scientific areas or researchers who have been introduced to the field but they are interested in examining more specific insights into where current research topics in this literature can be located and how they may contribute to them.
... The focus on quality management is also proposed by Ingram (1997). Kozak & Gürel (2015) are focusing on process standardisation and quality management. As the business process management is closely connected to quality management, process modelling and optimisation play a crucial role in human resources management as well (Kim, Tavitiymana & Kim, 2009). ...
Full-text available
The study focuses on the application of Business Process Management and modelling within the hospitality industry. The lack of recent research shows the need for a deeper understanding of this topic and its application in the hospitality industry. This paper focuses on the use of BPM in a four-star hotel located in city-centre of Prague. An overview model was created to distinguish the core, managerial and supporting processes.
... A partir desse ponto os principais problemas de backstage foram explorados, destacando a relação entre colaboradores 2 e como isso refletia na experiência do hóspede. Kozak (2016) nota a importância de trazer a perspectiva do design de serviço para a indústria hoteleira, e como a implementação da filosofia do design thinking, faz uma grande diferença para as empresas que adotam-na. ...
... Thus, aligning with previous findings, it can be concluded that in order to create an actual value of student experience, proper construction of not only main services but also peripheral services offered by the education institute is required (Ng and Forbes, 2008). Similarly, these findings are consistent to previous findings conducted in other service contexts as in restaurants, hotels and transportation (Kozak and Gurel, 2015;Fatma, 2014;Yuksel and Yuksel, 2016;Tombs and McColl-Kennedy, 2003). In the broadest sense, they have identified that service quality, Hypotheses β p ...
Full-text available
Purpose The purpose of this paper is to investigate the impact of peripheral services offered by distance education (DE) institutes on student involvement in DE and, examine whether this impact is mediated by student experience quality. Design/methodology/approach Quantitative research approach based on cross-sectional survey design was used where data were collected using a structured questionnaire. Sample consisted of 400 undergraduates of the Open University of Sri Lanka, drawn using simple random sampling technique. Collected data were analyzed using the structural equation model. Findings Data analysis revealed that there is a significant direct impact of peripheral services offered by DE institutes on student involvement in the Sri Lankan context. Furthermore, it is validated that this impact is mediated by student experience quality. Research limitations/implications Focus of the study is only on the impact of contextual elements rather than personal or demographic factors of students which can have an important impact on their experience quality as well as involvement. Practical implications Findings are useful in designing and redesigning service offering and policy development by DE institutes to make their services more appealing. Originality/value Even though previous studies have identified student dropout and lower academic excellence as issues in DE, how service offering can be used to overcome them via student involvement has not received considerable attention. Hence, the tested conceptual model developed on multiple theories is a novel contribution to the existing knowledge base.
The quickly shifting nature of the business environment generates ambiguity in the market place and poses a significant risk for decisions that will be made in the future. Managers do not know which factors are really key ingredients for the innovation process and how to allocate their resources to improve the success of service projects. This article aims to develop a predictive model which identifies the critical factors that impact the success of New Service Development (NSD) and promotes the entrepreneurial ecosystems in hospitality. In‐depth, systematic interviews with hotel managers from all over Greece, based on questionnaires, were used to look into a total of 178 service projects. Factor and discriminant analysis were employed to evaluate the relative significance of the important factors of successful NSD and to determine whether new hotel services in Greece will succeed or fail. This research led to the creation of a prediction model that takes into account the unique qualities of services and can highlight the difference between new hotel services that are successful and those that aren't, which support managers to improve the NSD process, increase service performance and therefore enhance entrepreneurial ecosystems. The findings conclude that hotels offering more successful innovative services enhance specific ecosystem‐related value. In the context of tourism, which mainly contributes to the Greek economy, service innovation might bring a competitive advantage to all the entities involved increasing the collaboration among actors, the level of employment and hotels' competitive advantage.
Japanese food culture has recently become more popular in Vietnam. To be successful, Japanese restaurants need to satisfy increasingly sophisticated and demanding customers, by designing the required service components to create the customer’s overall experiential journey effectively. Therefore, the service design process in Japanese restaurants, which aims to improve tangibility attributes and service delivery to delight customers by exceeding their expectations, could be considered a necessary research issue. There has been relatively little research on service design in the Vietnamese hospitality industry, especially in the restaurant industry. Moreover, the different service design applications between franchised and self-owned businesses has not been investigated previously. Thus, this paper explores the restaurant owners’ or managers’ self-assessment of business advantages and disadvantages, their perceptions of service design, and its application in the daily operation of Japanese franchise and independent restaurants in Ho Chi Minh City, Vietnam. Based on extant literature, the major service design-related aspects examined in this paper are service process, product features, and the physical environment. The researcher conducts in-depth interviews with managers from six Japanese restaurants. The study results enable existing or potential Japanese restaurants with scarce resources to apply service design effectively and efficiently to improve business success.
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In this study, the impact of the IT on innovation performance was investigated as an important issue in the technology-based industry, especially the DigiKala Company. The participants were asked by the proposed design approach for reporting with their questionnaire about five IT indicators as independent variables and two indicators of innovation performance as a dependent variable. Factor analysis was performed to identify the IT infrastructure of DigiKala with innovation performance for testing. The research population included the DigiKala Company in Tehran. 108 individuals were selected from 150 people in the statistical population. The hypothesis for testing the variables in the questionnaire was provided with the Cronbach's alpha coefficient of 75% based on a number of measures related to the subject of the study. Different methods were used to analyze the statistical data and the results were extracted using SPSS software. Regression analysis results showed that there is a significant positive correlation between IT infrastructure and innovation performance. Accordingly, we recommend to technology-based companies, including DigiKala, to use the IT as a strategic tool to enhance the performance of innovation and the spreading the empirical knowledge.
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Innovative hotels are more successful in outperforming their non-innovative competitors due to their ability to develop new products and services. The aim of this study is to shed light on which determinants foster innovation and, therefore, account for innovation management strategies. Quantitative data was collected through application ofselfcompletion questionnaires in 244 hotels located within the Alpine region focusing on the federal state of Tyrol, Austria and South Tyrol, Italy. The results of the study revealed five firm-internal dimensions influencing innovation behavior: Employee engagement, customer engagement, information technologies, innovation management, and innovation networks.
The service sector in general has become far more important in recent decades. This development can also be seen with respect to services in the investment goods industry or in the so called provision of industrial services. This paper raises the issue that industrial services are the main growth driver of today's economies and have a major potential for companies to increase their revenues. After the introduction and a short definition of services and service systems the paper will clarify the importance of industrial services on a theoretical basis. The paper aims to enhance the service systems model to broaden the understanding of the development of service innovations in the investment goods industry. The service systems approach will be used to discuss the influences on the development of service innovations on a theoretical basis.
PICTURE Stefano Tonchia, Ph.D., is Professor of Innovation & Project Management at the University of Udine, Italy. He is the Dean of the School of Project Management at Alenia Aeronautica, the Italian Aeronautics Company. He has written many articles on international journals, and published several books, including "Process Management for the Extended Enterprise" (Springer, 2004). He works jointly with major international Institutions, Universities, and leading Companies. His research interests include Project Management, Business Process Reengineering, Performance Management and Measurement. Preface by Russell D. Archibald, founder of the Project Management Institute (PMI), considered one of the fathers of modern Project Management since his early book on Network Diagrams (1967). Foreword by Gianpietro Benedetti, President and CEO of the DANIELI Group. DANIELI is one of the three largest worldwide suppliers of equipment and plants to the metals industry This book describes - in a precise but practical way - the most recent principles and techniques of project management, at the highest international standards, with a fully company-wide, process-based, multi-project approach. It is unique because of the integration of project management fundamentals with the practices of international contracting, which characterize planning, design and construction of large works (such as plants and machinery) in the industrial sectors. The rigorous academic approach is mixed with the managerial contribution of Danieli, one of the largest worldwide suppliers of equipment and plants to the metals industry. The project management of the latter is described alongside how it can be effectively applied to win and manage large international contracts. «There are very few, if any, books in the project management field that describe in detail a company-wide approach to project management within a large, multi-national corporation, with the amount of detail and giving the useful, practical understanding of the underlying principles and specific processes and practices that are presented here». Russell D. Archibald. © 2008 Springer-Verlag Berlin Heidelberg. All rights are reserved.
A contract is a legally binding agreement stipulated by two or more parties and characterised by specific obligations. Contracts usually consist of a list of conditions, which may be general (conditions that are standard to all, similar contracts), special (disciplining that particular contract) and technical (regulating how the contract is materially executed). Contractual clauses are listed both in the general and special conditions. A sales contract provides for the mere transferral (obligation to give) of goods or services that already exist in the firm’s catalogue (standard goods or services); in the case of goods, it is unimportant whether these are made before or after the customer’s purchase order (make-to-stock or make-to-order, respectively). Contract work, on the other hand, provides for the delivery of a good or a service that does not exist in a catalogue, and whose characteristics are specified by the client (obligation to do). In practice, contracts are often a combination of both, so – given the legal implications – it is necessary to define the prevailing component. This assessment must be based more on the object of the contract than on economic considerations (i.e. whether the value of the work is greater than that of the materials): for this reason, it is appropriate to consider contract works – also known as work orders or job orders – as those that are necessary to deliver works that are not ordinarily massproduced, but are custom-built in response to a specific order (because in this case, work prevails on materials).