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*Dept. of Family Resource Management
Faculty of Home Science, L.A.D. College
for Women of Arts, Commerce and Science
& Smt. R.P. College of Home Science &
Home Science Technology, RTM Nagpur
University. Nagpur, India
**STES' Sinhgad Institute of Hotel
Management & Catering Technology
University of Pune, Pune, India.
Study of Service Quality Management in Hotel Industry
Dr. Suneeta Borkar*
Prof. Sameer Koranne**
Abstract
It is an attempt to understand the role of quality improvement process in
hospitality industry and effectiveness in making it sustainable business
enterprise. It is a survey of the presently adopted quality management tools
which are making the hotels operations better focused and reliable and meet
the customer expectations. Descriptive research design is used to know the
parameters of service quality management in hospitality industry. Exploratory
research design is undertaken to dig out the service quality management
practices and its effectiveness. Data analysis is done and presented; hypothesis
is tested against the collected data. Since the industry continuously tries to
improve upon their services to meet the levels of customer satisfaction; Study
presents tools for continuous improvement process and how it benefits all the
stake holders. It can be inferred from the study that the hotel implement
continuous improvement process and quality management tools to remain
competitive in the market. The study involves hotels of highly competitive
market with limited number of respondents. This limits the study to hotel
industry and has scope of including other hospitality service providers as well.
Keywords:
Customer Satisfaction, Perception, Performance Measurement, Continuous
Improvement Process.
Pacific Business Review International
Volume 6, Issue 9, March 2014
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Introduction
Hospitality industry has gone through many changes since its inception. There
are tremendous changes occurred over a period of time due to various reasons.
The reasons may include changing patterns in customer preferences,
industrialization, revolution in transport and aviation, changing laws and
regulations and so on. During the last few decades there is phenomenal change
experienced in the hospitality industry and the reason being is Service Quality.
It has brought paradigm shifts in the operations of hospitality industry. The
overall perspective of the industry is changed due to introduction of new
techniques and methods of handling various processes. Awareness among the
hoteliers and the guests has fuelled the inventions focused on operations. The
increased sagacity of customer satisfaction led to the use of high standards of
service in industry. The new service parameters made the hoteliers to
implement quality management as an effective aid.
It has significantly affected hotels' ability to control and adapt to changing
environments. The use of new techniques began with the simple motive of
sophistication and precise activities in the given field of operation which may
result in high standards of service in global economy and has allowed the rise
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of a leisure class.
Conceptual Framework
This study of Service quality management in hospitality industry is
an attempt to understand the presence of quality improvement
process in hospitality industry and effectiveness in making it
sustainable business enterprise. It is a survey of the presently
adopted quality management tools which are making the hotels
operations safer, focused and reliable and meet the customer
expectations.
As the hospitality industry becomes more competitive there is an
obvious need to retain clientele as well as increasing profitability
and hence management professionals strive to improve guest
satisfaction and revenues. The management professionals whom
are striving for these results however often have limited
understanding of research surrounding the paradigms of guest
satisfaction and loyalty and financial performance. This research
paper shall enlighten some of the variables and important facts of
service quality resulting into guest satisfaction.
Review of Literature
Customers of hospitality often blame themselves when dissatisfied
for their bad choice. Employees must be aware that dissatisfied
customers may not complain and therefore the employees should
seek out sources of dissatisfaction and resolve them. (Zeithaml V.,
1981, p.186 -190)
It is said that service quality is what differentiates hospitality
sector, however there is not an agreed definition of what service
quality is. There is however a few different suggestions of how to
define service quality. Dividing it into technical, functional and
image components; (Greenrooms C., 1982) another is that service
quality is determined by its fitness for use by internal and external
customers. It is accepted that service quality is depends upon
guest's needs and expectations. A definition of service quality state
that quality is simply conformance to specifications, which would
mean that positive quality is when a product or service specific
quality meet or exceed preset standards or promises. This however
seems like an easy view within the hospitality industry. The
alternative definitions read as follows: 1) quality is excellence; 2)
quality is value for money; 3) quality is meeting or exceeding
expectations. This appears better aligned with ideas which exist
within hospitality management than the first mentioned simplistic
approach. Service quality and value is rather difficult to calculate,
companies must therefore rely on guest's quality perceptions and
expectations to get consistent results which is best achieved by
asking guest's questions related to expectations and their
perceptions of the service quality, which can effectively be
achieved through carefully designed surveys.
A major problem with service quality is variability and limited
capability and robustness of the service production process.
(Gummesson E., 1991) Hotels consumers have well-conceived
ideas about service quality and quality attributes are considered
important for most types of services, the absence of certain
attributes may lead consumers to perceive service quality as poor.
The presence of these attributes may not substantially improve the
perceived quality of the service. Most customers would be willing
to trade some convenience for a price break, and that the behavior,
skill level and performance of service employees are key
determinants of perceived quality of services. This is a major
challenge in improving or maintaining a high level of service
quality. (Tigineh M. et al 1992)
Studies focusing on service quality management suggest that
service firms spend too little effort on planning for service quality.
The resultant costs of poor service quality planning lead to lower
profitability as part of the service failures. (Stuart F., et al 1996)
When discussing satisfaction, it is important to understand that
guest's evaluation of service comprise of two basic distinct
dimensions: service delivery and service outcome (Mattila, 1999).
Research indicates that how the service was delivered (perceived
functional quality) is more important than the outcome of the
service process (technical quality). This research clearly indicates
that effort by staff have a strong effect on guest's satisfaction
judgments.
Companies delivering services must broaden their examination of
productivity to help settle conflicts – the leverage synergies –
between improving service quality and boosting service
productivity. ( Parasuraman A. 2002)
A key activity is to conduct regularly scheduled review of progress
by quality council or working group and management must
establish a system to identify areas for future improvement and to
track performance with respect to internal and external customers.
They must also track the changing preferences of customer.
Continuous improvement means not only being satisfied with
doing a good job or process. It is accomplished by incorporating
process measurement and team problem solving an all work
activities. Organization must continuously strive for excellence by
reducing complexity, variation and out of control process. Plan-D-
Study-Act (PDSA) developed by Shewhart and later on modified
by Deming is an effective improvement technique. First Plan
carefully, then carry out plan, study the results and check whether
the plan worked exactly as intended and act on results by
identifying what worked as planned and what didn't work.
Continuous process improvement is the objective and these phases
of PDSA are the framework to achieve those objectives.
(Besterfield D. et al 2003)
The 'servicescape' -is a general term to describe the physical
surroundings of a service environment (Reimer 2005, p. 786) such
as a hotel or cruise ship. Guests are sometimes unconsciously
trying to obtain as much information as possible through
experiences to decrease information asymmetries This causes
guests to look for quality signals or cues which would provide
them with information about the service, which leads us to 'cue
utilization theory'. Cue utilization theory states that products or
services consist of several arrays of cues that serve as surrogate
indicators of product or service quality. There are both intrinsic and
extrinsic cues to help guests determine quality. Consequentially,
due to the limited tangibility of services, guests are often left to
accept the price of the experience and the physical appearance or
environment of the hotel or cruise ship itself as quality indicators.
Though there are many trade and academic papers discussing guest
satisfaction has been published, one can note that limited attention
has been paid to the value perception and expectations guests have
towards product delivery and influence price guests pay for an
experience has on satisfaction and future spending. Furthermore it
is also known that the role of pricing in relation to guest
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satisfaction has been largely ignored. Considering that guest's
expectations has gone up in the past few decades within the
hospitality industry, and continue to do so, does not make it any
easier for management to understand what guests expect.
American society for quality control defines quality as the totality
of features and characteristics of the service or product that bears
on its ability to satisfy customer needs. (Kotler P., 2006, p.34 -35).
Unlike physical products, services pretested before purchase.
(Kotler P., 2006, p.59) Therefore, buyers look for some tangible
evidence that will provide information and confidence about
service. Something like the exterior of the restaurant or hotel is the
first thing on arrival of the guest; cleanliness of the public areas etc
provides clues about service.
High quality builds loyal customers and creates positive word of
mouth. It determines customer satisfaction, which affects repeat
business, many studies have shown that it costs four to six times to
create a customer as it does to maintain an existing one. (Kotler P.,
2006, p.420).
On an average, one satisfied customer will tell five others while a
dissatisfied customer will tell ten or more others. To balance the
negative word with positive word, two or more person should
leave as satisfied for very one person leaving unsatisfied. Most
hospitality professionals do understand that hotels that have more
satisfied guests experience higher guest loyalty and perform better
financially compared to their competition. The long-term success
is based on guest loyalty and retention which consequentially
results in future revenue.
Methodology
Objectives of the study: It is an attempt to understand the role of
service quality in improvement of customer satisfaction in today
competitive hospitality industry. However, the specific objectives
of the study are
1. To understand the influence of service quality management on
improvement of customer satisfaction.
2. To know the benefits of practicing continuous improvement
program in hotel operations.
Sampling Design: The research on service quality management in
hospitality industry required multiple methods of data sourcing.
Various resources contributed in different ways of collection of
data and analyzing it for the research paper. Convenient sampling
method is used for conducting this study.
Methods of Data Collection: Primary data sources- The study
required survey of current quality management approaches used in
hotel industry. It also involved the continuous discussions with
service providers and the developers of various standard operating
procedures. The visit to hotels proved as major source of
information. For this study observation method and questionnaire
survey were selected for primary data collection.
Major sources of primary data include the respondents: Hoteliers,
front line staff and management level executives. Multivariate
questions were presented to the respondents and responses formed
the main part of data. Purposive sample method with more than 30
respondents from various leading hotel is used for this study. It also
included the brief interview and discussion to know and
understand the presence of quality improvement practices
implemented in their hotels. The study required survey of current
service practices used in hotel industry.
Telephonic conversation with peers and friends in hospitality
industry worked a wonder giving lots of inputs in drafting this
paper.
Secondary data sources- For this study, data sources such as
hospitality journals, Books on service quality management,
organization behavior, URL on internet of various hospitality
majors. Referring hospitality publications were helpful in
knowing the current inventions in industry.
Research Tools: Descriptive research design is used to know the
attributes of service quality management in hospitality industry.
Exploratory research design is undertaken to dig out the service
quality management practices and its effectiveness.
Data analysis is done and presented in tables. The hypothesis is
tested against the collected data.
Hypotheses: The hypotheses framed for the subject are -
Hypothesis 1: Implementing service quality management as a tool
for improvement in Customer Satisfaction.
Hypothesis 2: Practicing Continuous Improvement program has
benefited hotel.
Limitation & Scope of the Study: Though there was a specific
questionnaire used for collecting information, the objective of the
paper was well discussed with the every contributor and whatever
the information was provided by these sources is arranged for
further analysis. The analysis of the available data is done on the
relevance to the topic. The effectiveness of the technology in
conservation of resources was always a point of consideration. The
data is sifted for making it as precise as possible.
Analysis and Discussions
There is a significant relationship between service quality
management and customer satisfaction. In hospitality industry, the
customer satisfaction variables such as Availability, Access,
Information, Time, delivery of service, availability of personal
competence, Comfortable and safer atmosphere and pollution free
environment are of prime concern to every hotelier. The industry
continuously tries to improve upon their services to meet the levels
of customer satisfaction.
The intangible nature of the service as a product means that it could
be very difficult to place quantifiable terms on the features that
contribute to the quality and measurement of the quality of the
product is a problem for Service quality management. The
customer is frequently directly involved in the delivery of the
service and as such introduces an unknown and unpredictable
influence on the process.
The customer variability in the process makes it difficult to
determine the exact requirements of the customer and what they
regard as an acceptable standard of service.
This problem is magnified as it is often judgmental, based on
personal preferences or even mood, rather than on technical
performance that can be measured.
Every hotel has a target market to cater which has very specific
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Pacific Business Review International
requirement in terms of expected and perceived quality of service.
The customers come with different perception of quality every
time they come to hotel and this makes it quite difficult to define
quality and set the level of it. It requires hotel to continuously
compare their perception against customer perception in terms of
satisfaction measurement with performance measurement. The
study has shown that the effective tools which management of
various hotels uses for continuous improvement process and how
it is dissipated amongst all the stake holders.
On discussion with hoteliers it is also found that quality has direct
impact on the product or service performance. It is closely linked to
customer satisfaction and value. Quality can be defined as
'freedom from defects', however, customer oriented hotels have
gone beyond this narrow definition of quality. It is defined in terms
of customer satisfaction.
It is understood that the surveyed hotels have adapted to Service
Quality Management principles for development of quality culture
as detailed below.
Continuous Improvement Process is implemented as Deming's
well known PDSA cycle. It is modified to certain suitable steps viz.
Defining quality attributes & variables: The attributes represent
discrete values such as presence or absence of personnel to attend
certain duties. Variables denote quantitative data such as price paid
for products and services.
Measure: Critical to quality characteristics are established and
factors contributing to good or bad service are identified.
Analyze: Attributes and variables are measured to find any
possible causes of defect or low quality of service.
Improve: The influence of the causes for defects and questionable
quality are quantified and acceptable benchmarks for the same are
defined.
The technical framework within which quality assurance systems
develop is well recognized. Likewise, although not as well
recognized, the non-technical framework which affects quality
assurance systems is nevertheless an important element to be
discerned. While there may be some awareness of the technical and
non-technical interface in quality assurance systems, this is
generally not acknowledged and, at worst, treated as separate. It is
the argument of this paper that the interface between the technical
and non-technical framework must be acknowledged explicitly to
achieve effective quality management. In essence, the systemic
view which links these two frameworks must be recognized for
managing total service quality.
With escalating competition in the hotel industry, the quality
becomes top priority in maintaining competitiveness.
This questionnaire handed to 30 respondents of given hotels is to
understand the performance of their establishments on given
attributes, variables and are measured with multivariate questions.
The research questions and hypothesis of the study is presented as
under:
Hypothesis 1: Implementing service quality management as a tool
for improvement in Customer Satisfaction.
This hypothesis is tested by responses to specific questions related
to SQM and its implementation and is presented as below.
Change in Customer Satisfaction Index on practicing SQM
program: 19 were improved, 7 were indifferent and 4 were
declined.
Importance of SQM in Customer Satisfaction: 22 reported high
satisfaction, 5 reported mid-leveled satisfaction and 3 reported low
satisfaction.
Frequency of Evaluating the SQM program: 3 did it frequently 10
monthly and 17 quarterly.
Specially designed SQM Programs to improve Customer
Satisfaction: 18 said they have done this, 5 said they have not and 7
said they were planning to do so.
Means to Evaluate Customer Satisfaction on implementation of
SQM: 16 said that they have used the in-house questionnaire
method, 10 have used outside agencies and 4 have used suggestion
box.
Dedicated staff for matters of SQM and Customer Satisfaction: 17
reported that they have taken measures, 10 reported they haven't
any and 3 have planned to do it.
Reasons to implement Service Quality Management Programs: 3
reported they are doing it for the sake of competition, 4 were doing
it for branding and 23 were doing it for customer satisfaction.
Effect of Quality Improvement on Bottom Line: 22 said they
observed positive effects, 6 said it was indifferent and 2 said they
found it negatively effective.
For Customer Satisfaction; area which requires Continuous
Improvement Program: 22 replied that it is more at the Guest
Relations & Service, 5 replied it is production and 3 replied
marketing.
From the above data analysis with simple majority of opinion, it
can be inferred that Service quality management is an important
factor in improving the customer satisfaction and which results in
improved bottom line. Many variables of customer satisfaction are
tested again and again and are modified to suit changing customer
requirement. The matching of customer perception to the actual
delivery of service is a major task in the improvement of quality.
Hypothesis 2: Practicing Continuous Improvement program has
benefited hotel.
This hypothesis is discussed with respondents to length and tested
by responses to specific questions as presented as below.
Leadership in the field of service quality excellence: 14 thought it
was required, 10 had indifferent thoughts and 9 thought it is not
required.
Majority created opportunity to learn from best practices and
increased customer satisfaction by increasing efficiency in service
delivery and improved employee satisfaction and engagement.
Many identified strengths and weaknesses across each department
and have set common goals and created a customer service culture
amongst staff, which results in repeat business and creates loyal
customer.
The collected data is analyzed with simple majority of opinion. It
can be inferred that continuous improvement programs adds value
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to the organizations in many ways. Hotel business being capital
intensive and which requires long wait for returns on investment
requires improving continuously as per the changing patterns of
guest requirements and perception of quality. New processes are
designed; tested and them the staff is trained to practice it.
Conclusion
It can be inferred from the study that the hotel implement
continuous improvement process and quality management tools to
remain competitive in the market. The ever changing perception of
customer for hotel industry requires the hotels to match the
perception of customer by delivering quality services. This leads to
higher levels of customer satisfaction and customer loyalty.
The study involves hotels of highly competitive market with
limited number of respondents. This limits the study to hotel
industry and has scope of including other hospitality service
providers as well. The direct response from hotel guest could not
be collected since it was unavailable for external public.
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