Category: Free Essays

Introduction

Shangri-La Hotels (M) Berhad is an investment holding company and also a public limited company. This company was incorporated on June 29, 1971 and currently having a total of 2364 employees. Its headquarters is located at the Batu Ferringhi Beach, Penang. This company is engaged with the operations of services such as hotels and beach resorts, golf course and clubhouse, property management and investment and commercial laundry. The Company’s segments has two segments, which include hotels, resorts and golf course, which is engaged in hotel, beach resort and gulf course business; investment properties, which includes rental from offices, shoplots and apartment and rental of car parks, and others, which include commercial laundry services and investment holding.

Shangri-La Hotels (M) Berhad has many hotel branches located at many different states and locations in Malaysia. Also, customers may have an infinite choice of luxury possibilities with Shangri-La Hotels as there are over 66 hotels located across the globe. Most importantly, customers may find themselves living in a hidden paradise once they chose to stay in Shangri-La Hotel. They can feel relaxed in the luxurious guestrooms, pampering themselves in a 5 star rated hotels with all the supreme services and facilities.

As of December 31, 2010, Shangri-La Hotel (M) Berhad hotel had its properties included Rasa Sayang Resort & Spa, Shangri-La Hotel Kuala Lumpur, Traders Hotel Penang, Golden Sands Resort, Palm Beach Resort and Rasa Ria Resort. However, its subsidiaries include Shangri-La Hotel (KL) Sdn Bhd, Komtar Hotel Sdn Bhd, Golden Sands Beach Resort Sdn Bhd, UBN Holdings Sdn Bhd, UBN Tower Sdn Bhd, Pantai Emas Sdn Bhd, Madarac Corporation and Wisegain Sdn Bhd.

The principal activities of the Company are investment holding and the operation of a beach resort, namely Rasa Sayang Resort. In Malaysia, Shangri-La Hotels (M) Berhad owns the 29-storey, 720rooms Shangri-La Hotel Kuala Lumpur. On the other hand, it also owns the Golden Sands Hotel, Komtar Hotel and Palm Beach Hotel in the island state of Penang. Shangri-La hotels always differentiate their service to match with customer’s taste and demand.

Company Background

The company was incorporated in Malaysia on 29 June 1971 under the Companies Act, 1965. The company was limited by shares with the registered name Taman Developments Sdn Bhd. On 7 September 1974, the name was then changed to Rasa Sayang Beach Hotels (Penang) Sdn Bhd. The company was converted to public company on 23 February 1977 under the name of Rasa Sayang Beach Hotels (Pg) Berhad. On 1 September 1982, the company was listed on the Kuala Lumpur Stock Exchange (KLSE).

Yet, the company was delisted from KLSE on 21 December 1987 due to a general offer made by Perlis for the entire issued share capital of the Company and acquired more than 90% of the issued share capital of the company. On 2 January 1992, the company assumed its present name. The company had successfully merged with UBN Holdings Sdn Bhd which comprised the acquisition by the company from Kuok Brothers Sdn Bhd and Landmarks Berhad, the entire issued share capital of UBN Holdings Sdn Bhd on 21 September 1992. However, the company was re-listed on the KLSE on 1 December 1992 with the company undertook a bonus issue and subsequently a public issue.

Shangri-La Hotels (M) Berhad has its own vision for achieving the goals to be the best hotel. Its vision is ‘to be the first choice for our guest, colleagues, shareholders and business partners. Whereas Shangri-La hotels also has its mission at all the time which is ‘to delight our guests every time by creating engaging experiences straight from our hearts’. The company is operating based on the following principles:

Ensuring leadership drives for results.
Making guest loyalty a key driver of the business.
Enabling decision-making at the guest contact point.
Creating an environment where colleagues may achieve their personal career goals.
Demonstrating honesty, care and integrity in all relationships.
Ensuring policies and processes are guest and colleague friendly.

On top of that, Shangri-La hotels (M) Berhad is operating under all professional persons in order to make Shangri-La hotels to be the top hotel in the world. Board of directors include :

Tan sri A. Razak bin Ramli (Chairman)

Kuok Oon Kwong (Managing Director)

Datin Rozina Mohd Amin (Executive Director)

Dato’ Haris Onn bin Hussein (Independent Non-Executive Director)

Dato’ Seri Ismail Farouk Abdullah (Independent Non-Executive Director)

Datuk Supperamaniam a/l Manickam (Independent Non-Executive Director)

Dato’ Dr Tan Tat Wai (Independent Non-Executive Director)

Tan Yew Jin

Dato’ Khoo Eng Min

Ravinder Singh Grewal Sarbjit S

Joseph Patrick Stevens (Alternate Director to Ravinder Singh Grewal Sarbjit S)

Business

What is the basic requirement of a hotel in order to satisfy customers? Hotel is basically belongs to service industry which mostly provide accommodation services to people for a comfortable stay. Service is very important to a hotel as it will bring to customer satisfaction and customer loyalty. Shangri-la Hotels (M) Berhad are definitely the best hotel which provides high standards of services to customers as it had awarded Best Business Hotel Brand in Asia Pacific by the Business Traveller 2012.

Under Shangri-La Hotels (M) Berhad, it has currently 9 brands of hotels in the service industry. It includes, Shangri-La Hotel Kuala Lumpur, Traders Hotel Kuala Lumpur, Shangri-La’s Rasa Ria Resort Kota Kinabalu, Shangri-La’s Tanjung Aru Resort and Spa Kota Kinabalu, Putrajaya Shangri-La, Traders Hotel Puteri Harbour Johor, Golden Sands Resort Penang, Shangri-La’s Rasa Sayang Resort and Spa Penang and Traders Hotel Penang. Every hotel under Shangri-La Hotels (M) Berhad are doing very well as mostly hotels are ranked five stars hotel and have a very good reputation among customers. Every hotel has its own special attractions such as Traders Hotel always located in the city which easier attach to the entertainment. Whereas Shangri-La hotel offers stylish and luxurious environment for customers.

In order for a hotel to maintain and improve its business, Shangri-la hotels always push their services to a higher level as services are the main key to bring in more businesses. It’s five-star reputation always maintaining a world-class service at all the time. Stylishly decorated, the luxurious guestrooms at Shangri-La hotel present large clear windows with beautiful city views. Memorable and satisfaction of every customer became the crucial mission of Shangri-La hotel. Shangri-La hotel differentiate its rooms according to customers preference. Rooms can be chosen in Deluxe room, Executive room, Horizon Executive room, Premier room and Executive Suite. Customers are able to choose their rooms to prefer a better environment and comfortable stay in the hotel.

There are varieties of services provided by Shangri-la Hotel in order to satisfy customers and bring customers loyalty to the business. Facilities provided by Shangri-la Hotel are partially free of charge for customers to fully utilize such as the facilities of fitness centre, outdoor swimming pool, tennis courts, steam room, sauna, massage, aerobics or dance studios and many more. The beautifully landscaped outdoor swimming pool is the facility always satisfied the customers as they are able to relax and enjoy the fascinating environment. The fitness centre is also an important facility for hotel as many people nowadays are going to fitness centre every week. This had become a habit to them and the fitness centre is an important place for them to workout.

In Shangri-La hotel, there have the facilities of clinic to provide medical service for customers who in ill. This will make customers convenient as they do not need to go clinic outside and able to rest in the hotel after getting medical treatment. Shangri-La hotel also provide disabled facilities for handicapped such as handicapped toilet as to satisfy them although they are people with disabilities. Customers are able to choose non-smoking rooms or smoking rooms according to their preference. Safe deposit box also provided to let customers safe keeping their important documents or expensive goods. Parking facilities and valet service are provided for customers who looking for a stay in the hotel.

Services such as the complimentary shoeshine service is provided for customers who staying in the hotel for a period of time and looking for shoeshine service. Postal and courier service also provided in order for customers to deliver documents or packages. Laundry service provided for customers who want to wash their clothes. Those services are provided to easier customers as they are not necessary to looking those service outside. Child care or babysitting service also provided in the hotel as some parents have some urgent things to do, they can looking for babysitting of their babies.

A hotel can be occupied without few facilities, but cannot be occupied without restaurants and bars. Shangri-La hotel features the impressive selection of international, award winning restaurants, including the award-winning Restaurant Lafite, which serves the finest western cuisine. There are five awesome restaurants and two bars located inside the hotel. The wide selection of dining options makes Shangri-La hotel a best location for travellers who enjoy fine cuisine, and also makes the hotel an excellent location for businessman to convene meetings and conferences. Not only that, Shangri-La hotel provides free breakfast or drinks for customers at the cafe while they preparing rooms for customers. This implication done by Shangri-La hotel is to concern the desired expectation of customers and try to satisfy customers by exceeding customer’s perceived expectation.

Shangri-La hotel also provides 24-hour room service which customers are able to request dishes or drinks with a simply phone call. 24-hour room service is best required by businessman who went out for business meeting and came back late night. It will satisfy them with a delicious meal and the fast delivery. Few shops are located inside the hotels such as the foreign exchange counter and gift shop. Foreigners are able to exchange their currency in the hotel and tourists can purchase gifts in the shop. As now technology became more important, Wi-Fi is the best tool for tourists and businessman. Free Wi-Fi access is provided for every room guests in order for them to access to the internet.

Shangri-La also provides travel and transportation service for customers. Airport connection is one of the service included, guests can choose to reach hotel by hotel limousine pick-up, express train or taxi. This usually is made for foreigners and tourists. Hotel limousine pick-up can be chosen with different types of cars. Car rental service and travel agency also provide for customers in order for them to visit any places nearby the hotel. This services provided for customers so they do not need to look at outside of the hotel and can be avoid scamming. Many business amenities are offered to businessman such as the meeting rooms, binding service, laser printing, scanning and photocopying services in order for them to prepare important documents in their trip.

Prompt and fast check-in and check-out service also attract customers as they don’t have to wait for so long with the service process. Helpful and cheerful receptionists are also type of service that the hotel provided for customers. Receptionists and customer service can help the customers to solve problems such as the changes of rooms or handle complaint. Outstanding staff will satisfy customers as they provide great and wonderful service for them. Hotel employees with smile and cheerful look will make the customers feel happy and satisfied in terms of hospitality service.

By according to the feedback received online, Shangri-La hotel can said to be the highest positive feedback received by the customers. Most customers are satisfied and happy with the services provided by the hotel. Satisfied customers will promote and recommend to others with the great services they received at the hotel. Positive word of mouth can improve the reputation of the hotel and this enable the hotel to attract more customers. Customers satisfactions always brings Shangri-La hotel the effort to do better and it leads to customers loyalty where customers will come back to visit the hotel next time. Shangri-La hotel always maintain a high standard of services as they believe service is the crucial rules of a successful hotel. This is how Shangri-La Hotels (M) Berhad do business in a fully competitive environment and yet did so well in the service industry.

SWOT Analysis

A company’s successfulness always depends on the strategy that the company used to improve its business. SWOT analysis is one of tools that most companies like to use to determine the company’s strengths, weaknesses, opportunities and threat. Hotel industry such as Shangri-La hotels (M) Berhad also need SWOT analysis to use as a guide for the business and distinguish between today situation and future situation. SWOT analysis will be very effective and useful for Shangri-La hotels (M) Berhad to improve its strengths and opportunities and yet minimize the weaknesses and threats.

Strengths, which are the beneficial aspects of the organization or the capabilities of an organization, which includes human competencies, process capabilities, financial resources, products and services, customer goodwill and brand loyalty. One of the strengths of Shangri-La hotels (M) Berhad is the brand name. Brand is very important for every business as it helps to internationally recognized for its luxurious hotels and resorts. Shangri-La hotels (M) Berhad is said to be an aspirational brand to the public. Besides, the leadership and management skills of Shangri-La hotels (M) Berhad is well known for its fine and tuned management that is capable enough to run the whole corporation. It helps Shangri-La hotels provide great and excellent service for every customer. Next, the high quality service of Shangri-La hotels (M) Berhad also attract a large number of repeat customers which form a loyalty between them.

In addition, another strength of Shangri-La hotels is its five-star venture that won numerous awards including the leading spot as the Top Asia Hotel in Malaysia, Best Luxury Hotel in Malaysia by the 2012 Trip Advisor Traveller’s Choice Awards and World Luxury Hotel Award’s Global Winner in the Best Luxury Business Hotel and Best City Hotel category 2011. These awards build up a branded image for Shangri-La hotels and reputation in the hotel field. Not only that, Shangri-La hotels (M) Berhad also is the leading corporation on its line of food expertise in various cuisine from eastern to western. Many customers visit Shangri-La hotels are mostly due to the delicious and relaxing restaurants. Clean and tidy of the hotel rooms are the main reason of customers likes to visit Shangri-La hotels as they always satisfied with the environment.

Weaknesses, which deteriorate influences on the organizational success and growth. There are little of weaknesses of Shangri-La hotels (M) Berhad as they always minimize their weaknesses and transform to their strengths. One of the weaknesses is the inadequate of staff with qualifications as Shangri-La only hires personnel with skilled expertise and the draught for manpower. This may affect the shortage of workers and influence the performance of the hotel.

Furthermore, the concept of Shangri-La is outdated and does not appeal to younger generation. They rather go for hotels such as Hard Rock Hotel or G Hotel. Next, the maintenance cost is too high to handle as Shangri-La’s hotel and resort must be excellent to its quality for accommodation. This will increase the expenses of Shangri-La hotels and thus the price of the hotel room will also increase.

Opportunities, that are presented by the environment within which our organization operates. These arise when an organization can take benefit of conditions in its environment to plan and execute strategies that enable it to become more profitable. As economy of Malaysia had improve steadily nowadays and tourism sector is growing and booing in the recent years making the demand for hotels to increase significantly. Economy of the country will directly enhance the tourism sectors, thus service industry such as hotel will be attractive. Besides, online market is one of the opportunities that helps the growth of Shangri-La hotels as it ranks No.1 in the Tripadvidor website. Technology helps Shangri-La hotels to attract customers as it is kind of marketing and promotion strategy.

On the other hand, partnership with international airways, KLIA, is one of the opportunities that more foreigners will be able to visit Asia. This in return increases the occupancy in hotels. Besides, as the steadily growth of economy had increase the job opportunities in Malaysia and this will occurs the lack of human resource. Thus, the lack of human resource will encourage expatriates to come and work in Malaysia. These are the upper class people and usually require hotels for their choice of stay.

Threats, one of the threats facing by Shangri-La hotels (M) Berhad is the competition of the business. Rival hotels are setting up their base in Asia and lower their prices making it more competitive. Those competitors will influence the sales of Shangri-La hotels. Guesthouses will also compete as they provide much lower rate and affordable to all people. Low budget hotels are the competitors which offering lower costs of accommodation for customers to compete with Shangri-La hotels. In addition, spreading virus such as SARS and H1N1 and robbery cases will discourage people not travel overseas and thus affected the business of Shangri-La hotels.

SWOT analysis is one of the tools that are very important and effective for every business to determine the situation of the business and thus making improvement for it. Shangri-La hotels (M) Berhad will keep providing great service for customers after doing SWOT analysis as understand the internal and external determinants of the business.

Marketing Strategies (7 Ps)

A company’s success is not only depends on the effectiveness and efficiency of the company’s management. It also need to focus in marketing which is the important process of communicating the product or service with customers. Customers are important as without customers, a company will not grow and success. In order to grow a company, customers satisfaction need to get into details. Shangri-La hotel is a company which marketing its services to the customers. Therefore, Shangri-La hotel must has its marketing strategies to achieve the company’s goals.

Marketing strategies defined as the marketing logic by which the business unit hopes to achieve its marketing objectives. Marketing strategy consists of specific strategies for target markets, marketing mix and marketing expenditure level. Marketing mix is the most common strategy used by many company. Shangri-La hotel is one of the companies which implement marketing mix strategy. Marketing mix consists of 7Ps for developing an effective marketing strategy. It consists of product, price, people, process, promotion, place and physical evidence.

The first P – Product, usually defined in the capacity of goods or services. Product can be differentiated with quality, design, variety and features. The product of Shangri-La hotel is providing services to customers instead of goods. Shangri-La hotel provides online customer service for customers and customers can get to know the hotel with their website provided. Accommodation service is the main service a hotel provides for customer. So, in order to satisfy customer, types of rooms are playing an important role. There are five types of rooms provided for customers according to their preferences.

A hotel must always satisfy customer and build a good relationship with customer through service provided in order to get loyal customer for the hotel and yet maintaining a long term business. Shangri-La hotel provides variety of facilities for convenience their customer to enjoy the stay from the time check-in until check-out. Facilities can be included exclusive room facilities, hotel facilities, dining and entertainment, sport and leisure for customers. Services with intangible are the helpful services provided by receptionists and the smiling face welcoming customers by the staff.

The second P – Price, is the amount of money for customers to pay for accommodation service in the hotel. Shangri-La hotel always fixed the price according to the types of rooms chosen by customer. Customers are able to make booking online as to convenient them for make comparison and know the price. Online booking usually will requested customers to choose few options according to their choices and they can pay the total amount of the room by using credit card. Besides, online booking will convenient foreigners as it provide currency converter for them to convert into their currency.

Pricing strategy using by Shangri-La hotel is based on the service ordered by customers, so customers will be more satisfy with the service because the hotel provide service according to customers’ order. Discounts and allowances will be given by Shangri-La hotel in the off-peak seasons as to attract more customers to increase sales. By giving discounts in a special room rate, customers can have the chance to stay in the hotel with a relatively lower price and the hotel can build the customer loyalty at the moment. Customers also can made their payment with cash or card as to convenient customers and prevent hassle of customers.

The third P – People, relate to persons who involve in the process of interaction. People can be classified into target customers and service personnel by Shangri-La hotel. Target customers of Shangri-La hotel are mostly from upper-class or those who posses higher financial ability. Shangri-La hotel is mostly targeted customers of tourists and businessman. Tourists who come from overseas are willing to stay in a luxurious and expensive hotel as they are of higher financial group and likes with relaxing lifestyle. Besides tourists, businessman is another target customer who mostly required to stay in a five star hotel as their expense will be paid by company. By choosing a five star hotel by business travelers, it will create a good image of the company he/she represented.

Whereas the people of service personnel involve in the interaction, Shangri-La hotel must recruits and hires employees with skills and attitudes. Skills can be relate to the qualification, ability and competency. Attitudes are those behavior that every staff in the hotel must be acquired such as helpful, responsive and smiling. Shangri-La hotel has provided training programmes for all the hotel employees to make improvement. With skills and attitudes, employees are able to satisfy customers in any issues and lead them back to loyalty.

The fourth P – Process, refers to the systems used to assist the organization in delivering the service. For example, when enter a hotel, you welcomed by staff with smiles, check-in service is fast, baggage is taken to room, have a great service from the restaurant and facilities, and finally ended trip and baggage delivered to you. This is the process in Shangri-La hotel. Shangri-La hotel demonstrate process involve in delivering services.

Fast check-in process is the key of first impression of customer as reservation will be served directly by the receptionist. Besides, when customers are in hunger and order dishes through room service, a fast delivering process is enough to satisfy customers. If customers want to make a complaint regarding the non-working of air-conditional, the fast process of making complaint and solve the problem is very important. Shangri-La hotel always help customers to solve problem as they care of customers.

The fifth P – Promotion, usually made to attract more customers to increase sales. Shangri-La hotel usually have promotion and special offer to build long term relationship with loyal customer. Shangri-La hotel is using advertising and online marketing to make promotion. Advertising can be regarded as the banner and brochures of the hotel. Technology had become very important nowadays as most people know how to surf internet.

Online marketing is the trend to promote Shangri-La hotel. Customers can book hotel rooms at other website such as booking.com and agoda.com. Those websites are able for customers to leave feedback regarding their stays. Positive feedback will successfully attracted more customers to visit the hotel. Furthermore, customers are able to pay less for more with special offer and promotion made by Shangri-La hotel. Customers can enjoy delicious meals at the restaurant with the special offer made in particular day such as Valentine’s day. Positive word of mouth is one of the ways for promotion as satisfied customers will recommend other customers to visit the hotel.

The sixth P – Place, where customer can receive the service. Shangri-La hotel is a world-class hotel as hotels are distributed all over the world such as Malaysia, Hong Kong, Taiwan, China, Australia and etc. New hotels are built by according to the demand chain management as the company knows what places are demanded by people for a hotel. There are three Shangri-La hotels in Penang, two at Batu Feringgi and one located in Georgetown. Batu Feringgi Beach is one of the tourist attractions in Penang. Foreign travelers love to visit the beach and this had made the popularity of Rasa Sayang Resort and Golden Sands Resort. Traders hotel is located in Georgetown where most of the businessman likes to visit. Hotels located in the city will be more preferable by travelers as they can go visit any place nearby. Places of the locations of Shangri-La hotel are wonderful and it has its own specific environment.

The seventh P – Physical evidence – refers to services in tangible. The most common physical evidence of Shangri-La hotel is the brochures which mostly customers can requested at the counter. Business cards of receptionists or managers can be regarded as physical evidence as it can be used for next visits or recommendations. Customers can enjoy the beautiful and extraordinary designs of the outdoor swimming pool as it is regarded as the physical evidence. When customers made payment of the hotel room, an invoice of payment will be received by customer. It belongs to physical evidence as shows that customers are able to enjoy the optimum level of satisfaction of services.

Service Issue

Shangri La Hotel Berhad is a limited company that operates throughout Malaysia. Although Shangri-La Hotels (M) Berhad is doing good in the service industry, there have some issues that need to be improved and overcome. One of the issue faced by Shangri La Hotel Berhad is the insufficient manpower to conduct the daily operations. This is because Malaysia is facing lack of workers and is importing workers from other foreign countries. The link between manpower and Shangri La Hotel Berhad is fairly simple as manpower is proportional to productivity.

The more people are available to work, the faster projects can be completed or the more projects a company can take on. Conversely, a lack of adequate manpower prevents businesses from completing tasks. The lack of productivity translates into a reduction in revenue and profit, which in some cases means the business can’t stay operational. Hence if Shangri La do not handle this issue adequately, the efficient and effectiveness of the company will be affected.

The second issue faced by Shangri La is the standards of the hotel staff not on par. With the increasing challenges the hotel sector is facing globally and the escalating demand for tourism products and services, especially in the emerging markets, there is urgent need for players in the region to offer high quality performance standards to survive.

As stated, because of insufficient workers, Shangri La has to hire foreign workers in order to balance up the workforce. Foreigners on the other hand are usually hired from third world countries because of their low cost. This in return has taken toll on the overall performance of the company. Therefore, Shangri La should also look into this matter.

The third issue is about the maintenance handled by Shangri La. As noted Shangri La Hotel Berhad is engaged in the operation of hotels and beach resorts, a golf course and clubhouse, property management and investment and commercial laundry. In the field of golf courses and clubhouse, maintenance is the upmost important.

Shangri La on the other hand is doing just average based on the reviews. Because Shangri La Hotel Berhad is a five star company, they should be able to improve their maintenance and achieve excellence. As stated, maintenance is important in the hospitality trade as it reflects the service provided by Shangri La to their customers.

Besides that, Shangri La also engages in beach resorts, having one in Batu Ferringhi and one at Sabah which is the more popular ones. Based on the reviews of the hotels, Shangri La Hotel Berhad has received complaints on the lack of entertainment provided on the beachfront which is also one of the issue faced by Shangri La. The beach itself is already amazing to enjoy. However, being viewed for their excellence, Shangri La Hotel Berhad should enhance a solution to that matter. Several reviews stated that there is nothing for the people to do at the beach but loafing around making the stay boring and unworthy.

All these issues should be addressed by Shangri La Hotels Berhad as to maintain their international standards. If these service issues are solved, there is no doubt that Shangri La Hotels Berhad will achieve excellence in their line of trade.

Latest Venture / Business Plan

Although Shangri-La hotels (M) Berhad already owns 66 hotels all over the world and has long term customers, Shangri-La hotels (M) Berhad want to keep expand and differentiate its business in order to provide more service to the public. This is also a way to get more income and try to satisfy customers in a long run. Recently, Shangri-La hotels (M) Berhad have some new business plan and latest venture for its business.

For example, they planned to have some major renovation programme for certain resorts. For example, some renovation would be held in Rasa Ria Resort’s Garden Wing guestrooms. When the renovation is fully completed, those improved room products will give the resort a stronger business platform for the company’s future growth and well to compete strongly in this competitive marketplace. They try to satisfy customers of their specific services provided which can’t be found among competitors. This will lead to a competitive advantage for them and customers will looking forward for new venture and service provided by Shangri-La hotels (M) Berhad.

Besides, Shangri-La Hotels (M) Berhad has planned to

Introduction

Leisure and tourism is considered as one way of getting away daily routines. Numerous tourists feel bored and tired of their everyday life so they travel to escape those environments. Their jobs and duties have become a hindrance to joyful feelings in life. Tourism is not merely an economic activity, but it is not all of the host culture, elements of culture and cultural guest that comes and accepts that culture.

?n the Tourism Industry, a dark sector raises called Sex Tourism. Martin (1998) state that, look back to the history the first signs of sex tourism began to appear on first and second World Wars through of the soldiers who needs a place to relax and recreate after a long walk and trajectories in camps. When the military started developing into seas, such as trade trips, the cities changed into busy roads with places of entertainment for sailors and dealers.

Sex tourism is a constantly developing phenomenon which defined as “trips organized from within the tourism sector, or from outside this sector but using its structures and networks, with the primary purpose of effecting a commercial sexual relationship by the tourist with residents at the destination” (World Tourism Organization). Sex tourism also furthers gender inequalities and promotes violence towards women.

There are two forms of sex tourism:

1) Sex tourism “promoted” by those countries in which prostitution is legally recognized and considered as a professional activity;

2) Sex tourism taking place in states that are often considered as developing countries, where prostitution is not regulated by a specific law, but by an illegal system.

This particular type of tourism has both social and cultural effects on the countries of origin and destination, particularly in those situations in which differences related to sex, age, social and economic status of the populations living in such countries are exploited.

The diversity of modern activities is causing impacts on the cultural environment: a common example is the use of cultural as a trade good for the tourism industry. The host community is generally the weak part of the relationship host-guest: taking any influence from the guest side in order to fulfill is requirements (unep 2015). The impacts arise when changes in the cultural v Globalization in the field of economic, cultural, social and political, have a positive relationship and in the field of the environment but a negative relationship with the development of tourism. Tourism can cause change or loss of local identity and values, as well as can convert local cultures into commodities. Tourism can cause change / loss of local identity and values by:

COMMODIFICATION
STANDARDISATION
LOSS OF AUTHENTICITY / STAGED AUTHENTICITY

Commodification

Tourism can turn local cultures into commodities when religious rituals, traditional ethnic rites and festivals are reduced and sanitized to conform to tourist expectations, resulting in what has been called reconstructed ethnicity (unep 2015). Once a destination is sold as a tourism product, and the tourism demand for souvenirs, arts, entertainment and other commodities begins to exert influence, basic changes in human values may occur.

Standardization

Destinations risk standardization in the process of satisfying tourists’ desires for familiar facilities. While landscape, accommodation, food and drinks, etc., must meet the tourists’ desire for the new and unfamiliar, they must at the same time not be too new or strange because few tourists are actually looking for completely new things. Furthermore, tourists often look for recognizable facilities in an unfamiliar environment, like well-known fast-food restaurants and hotel chains.

Loss of authenticity and staged authenticity

Adapting cultural expressions to the tastes of tourists or even performing shows as if they were “real life” constitutes “staged authenticity”. As long as tourists just want a glimpse of the local atmosphere, a quick glance at local life, without any knowledge or even interest, staging will be inevitable.

Cultural clashes:

Cultural clashes, promoted through of convergence of cultural, and can arise from economic inequality which based on consumption patterns and local community. The result can be an overexploitation of the social carrying capacity (limits of acceptable change in the social system inside or around the destination) and cultural carrying capacity (limits of acceptable change in the culture of the host population) of the local community (unep 2015).

Economic inequality

Like all transactions, sex-tourism is both an economic and political phenomenon, this because it must have a market and the transactions must be considered indirectly or directly socially and politically legitimate (Outshoorn 2004 p 267). Many tourists come from societies with different consumption patterns and lifestyles than what is current at the destination, seeking pleasure, spending large amounts of money. Especially in less developed countries, there is likely to be a growing distinction between the ‘haves’ and ‘have-nots’, which may increase social and sometimes ethnic, tensions (unep 2015).

Ethical issues

Finally, ethical issues are also the aspects as crime generation, the practice of child labour and prostitution. With the growth, urbanization of an area, and growth of mass tourism is often the main reason that crime rates typically increase. Furthermore The presence of a large number of tourists with a lot of money to spend, and often carrying valuables such as cameras and jewelry, increases the attraction for criminals and brings with it activities like robbery and drug dealing.

Job level friction

In developing countries especially, many jobs occupied by local people in the tourist industry are at a lower level, such as housemaids, waiters, gardeners and other practical work, while higher-paying and more prestigious managerial jobs go to foreigners or “urbanized” nationals. Due to a lack of professional training, as well as to the influence of hotel or restaurant chains at the destination, people with the know-how needed to perform higher level jobs are often attracted from other countries. This may cause friction and irritation and increases the gap between the cultures.

Child labour

The United Nations has defined child sex tourism as “tourism organized with the primary purpose of facilitating the effecting of a commercial sexual relationship with a child”. For children from families too poor to send them to school, tourism can present opportunities to earn an income. In many destinations, this is a stark example of how the supposed wealth generated by tourism is not being equally shared across society. It can also leave children open to one the most abhorrent forms of exploitation such as child sex tourism.

Every year, countless numbers of children are sexually abused by tourists. Child sex tourism is the commercial sexual exploitation of children in tourism. Despite concerted international efforts to combat child sex tourism, it is an increasing phenomenon. Factors such as internet, low cost travel, border relaxations and visa free travel are making it more challenging to monitor and prevent.

Prostitution and sex tourism

Though tourism is not the cause of sexual exploitation, it provides easy access to it. The lure of this easy money has caused many young people, including children, to trade their bodies in exchange for some money and many times for some material goods such as clothes and food. In other situations children are trafficked into the brothels on the margins of the tourist areas and sold into sex slavery, very rarely earning enough money to escape.

Certain tourism destinations have become centers for this illegal trade, frequented by pedophiles and supported by networks of pimps, taxi drivers, hotel staff, brothel owners, entertainment establishments, and tour operators who organize package sex tours.

Philippines

Philippines has become one of the most popular destination with 40 percent of the visitors are sex tourists. The last years while the Philippines’ economy has made a big progress, a quarter of the population still lives below the international poverty line of US$1.25 per day. Today Philippines has over 300 bars clubs that offer sexual liaisons. An alarmingly problem to the country is that the fathers often don’t take responsibility of the child with result the mothers to can’t take care of the child because of economic issues. This kind of social circumstance usual force the children too in prostitution, with many of them facing such ordeals at an incredibly young age with result to trap the young generation in the sex industry. Moreover, must to be note that $400m spent on prostitution each year in Philippines. There are 500k workers which almost a fifth of whom are minors.

Owners of sex bars in the Philippines often use fake identification documents in order to employ minors. Some former child victims have reported being offered jobs as waitresses in “red light” districts and then being coerced into providing sexual services to customers. Prostitution of children in the Philippines is in some cases associated with domestic work.

It has been estimated that in Manila alone there are 1.5 million street children with result to increase the vulnerability of children to all forms of commercial sexual exploitation of children, in particular, child prostitution, pornography and trafficking for sexual purposes. John Hopkins University state that the number of minors exploited in the commercial sex industry in the Philippines is between 60,000 and 75,000.

Trafficking of children

According to the US Department of State, the Philippines are mostly a source country, and to a lesser extent a transit and destination country for children subjected to sex trafficking. Domestic child trafficking in the Philippines presents more challenges than cross border trafficking. Internally, women and children are trafficked from poor farming communities and rural areas to urban areas such as Manila, Angeles City and Cebu City.

Men are subjected to forced labor and debt bondage in agriculture, including on sugar cane plantations, and in the fishing industry. Women and children were trafficked within the country for forced labor as domestic workers and small-scale factory workers, for forced begging, and for exploitation in the commercial sex trade. Hundreds of victims are subjected to sex trafficking each day in well-known and highly visible business establishments that cater to Filipinos’ and foreign tourists’ demand for commercial sex acts. Filipino migrant workers, both domestically and abroad, who became trafficking victims are often subjected to violence, threats, inhumane living conditions, nonpayment of salaries, confinement, and withholding of travel and identity documents.

Traffickers, at times in partnership with organized crime syndicates and corrupt government officials, recruit family and friends from villages and urban neighborhoods, sometimes masquerading as representatives of government-registered employment agencies.

Apart from poverty, the main causes of child trafficking in the Philippines are low economic development in communities of origin, gender inequalities, limited employment opportunities, large family sizes, inadequate awareness among families, and sex tourism. Also persistent law enforcement officials’ complicity in human trafficking and corruption at all levels of government enables traffickers to prosper and exploit children in the sex industry

Trends

The last years in Philippines has emerged a new form of online child exploitation which seems to have devastating effects. The people who promote child sex tourism in Philippines usually offer money or other rewards to the victims in order to promote direct live streaming videos of children. Since there is no direct sexual contact, often parents see it not as a problem but the damage which webcam sex make to the children in fact is large.

Legislation and mechanisms to protect children from sexual exploitation

In 2004, the Interaˆ?Agency Council Against Trafficking in Persons (ACT), in collaboration with other government agencies, NGOs and other stakeholders, created a six year (2004-2010) Strategic National Plan of Action against Trafficking. This specific plan is split into three components:

Prevention
protection, including law enforcement and prosecution
repatriation, recovery and reintegration

In relation to the prevention of trafficking, relevant objectives of the plan include:

1) Increasing public awareness of trafficking

2) Undertaking research on the root causes of trafficking in women and children

3) Instituting programs at the local level to prevent women and children from being procured by traffickers.

Conclusion and recommendation

Many question the Filipino Government’s lack of involvement in reducing the accessibility of the sex trafficking and sex tourism industry. Currently, the punishment stands at a ?12 fine for the bar or club where the girl is taken from to have sex. Furthermore, being a deeply religious country, access to contraception isn’t widely available and therefore increases the chances of pregnancy among the women.

In conclusion, we have seen that the existence of child sex tourism in the Philippines is directly related to the inequalities in wealth that are present between the developing and developed world. Additional factors include the historical context of foreigners in the islands and the images and stereotypes of Orient sexuality. The way forward must include all actors shows as local people, governments and the tourism industry. However these do not necessarily have the opportunity or motivation to act. Therefore there is a crucial campaigning role to be played by civil society and, in particular, the media. Philippines must to realize that their image such as tourism destination has been damaged by the negative publicity for child sex tourism in order to take drastic measures.

the UN refer that Decriminalization enables sex workers to organize within their communities and register their organizations, obtain identification documents so that they can fully access services and entitlements, engage in advocacy and respond to the health and safety needs of their peers.

By legalizing prostitution, a government can help bring sex workers under labor protections offered to other workers. Some claim that prostitution in inherently unsafe and so should not be sanctioned by labor laws, but many other industries are unsafe such as the mining industry, and this was precisely the reason why government labor laws and unions were created to protect them. Moreover, a legalized form of prostitution will help lessen the incidence of human trafficking through of the rules which will be applied with result to reduce sex trafficking and take out prostitution of the black market. Legalization won’t cure all of the buses involved in the sex industry. But, if it will make the environment marginally safer, which is an appropriate step in the right direction. In other words, legitimizing prostitution in the Philippines will pave way to equal treatment to sex workers.

Reference:

Martin Oppermann (1998). Sex Tourism and Prostitution: Aspects of Leisure, Recreation, and Work (Tourism Dynamics). Edition. Cognizant Communication Corp

Outshoorn, Joyce (e.d), 2004. Politics of Prostitution: Womens movment, Democratic states and the Globalisation of sex commerce, Cambridge: Cambridge University Press.

UNEP, (2015). United Nations Environment Programme: environment for development. [ONLINE] [Accessed 29 April 2015]. Available at: http://www.unep.org/resourceefficiency/Business/SectoralActivities/Tourism/FactsandFiguresaboutTourism/ImpactsofTourism/Socio-CulturalImpacts/NegativeSocio-CulturalImpactsFromTourism/tabid/78781/Default.aspx.

The Lost Generation – Sex Tourism in the Philippines. The Global Panorama. 2015. [ONLINE] [Accessed 29 April 2015]. Available at: http://theglobalpanorama.com/the-philippines-generation-of-sex-tourism-children/.

ECPAT Website http://www.ecpat.net/

Trinidad, A.C., University of the Philippines, and UNICEF Manilla. (2005). Child pornography in the Philippines. Psychosocial Trauma and Human Rights Program, UP Center for Integrative and Development Studies and UNICEF Manila.

USA department of state, DIPLOMACY IN ACTION case Philippines, (2015). [ONLINE] [Accessed 29 April 2015]. Available at: http://www.state.gov/j/tip/rls/tiprpt/countries/2013/215544.htm.

TRAVEL Health Clinic: sex tourism. WLV – Article Linker Results (2015). [ONLINE] [Accessed 29 April 2015]. Available at: http://wk6kg9sd8m.search.serialssolutions.com/?ctx_ver=Z39.88-2004&ctx_enc=info%3Aofi%2Fenc%3AUTF-8&rfr_id=info:sid/summon.serialssolutions.com&rft_val_fmt=info:ofi/fmt:kev:mtx:journal&rft.genre=article&rft.atitle=Sex+tourism&rft.jtitle=Practice+Nursing&rft.au=Willcox%2C+Adrienne&rft.date=2009-05-01&rft.issn=0964-9271&rft.volume=20&rft.issue=5&rft.spage=251&rft.epage=255&rft.externalDBID=n%2Fa&rft.externalDocID=10_12968_pnur_2009_20_5_41986&paramdict=en-US

Exploitation of children (2015). [ONLINE] [Accessed 29 April 2015]. Available at: http://tourismconcern.org.uk/exploitation-of-children/.

SEX TOURISM AS ONE FACTOR OF TOURISM INDUSTRY (2015) [ONLINE], Available at: http://www.academia.edu/4067691/SEX_TOURISM_AS_ONE_FACTOR_OF_TOURISM_INDUSTRY

Sex tourism, (2015). [ONLINE] [Accessed 29 April 2015]. Available at: http://www.osservatoriopedofilia.gov.it/dpo/en/turismo_sessuale.wp;jsessionid=1E5E9596040D117D8397640725FC2AEF.dpo1.

Schuster Institute Investigative Journalism (2015). [ONLINE] [Accessed 29 April 2015]. Available at: http://www.schusterinstituteinvestigations.org/#!human-trafficking-boston-to-bangkok-3/c4jy.

Who is to blame for sex tourism. Al Jazeera English, (2015). Who is to blame for sex tourism? – Al Jazeera English. [ONLINE] [Accessed 29 April 2015]. Available at: http://www.aljazeera.com/programmes/insidestory/2011/10/201110992858495767.html.

Michael, S. Elsa, J. Eike, A. (2004). Implementing Strategic Environmental Assessment (Environmental Protection in the European Union). 2 end vol 2 . Springer.

About The Term Hospitality:

Hospitality refers to the support, warmth and help tourists look forward when visiting a country they are not familiar with. It’s a process in which the host country deals with their guests with good behavior offering them all the basic facilities and also exclusive offerings. This industry in the fruitful business explains the concept of accommodation, catering service, transportation, resorts and sometimes guides as well who help the tourists explore the sight seeing places of the host country (Lankford S.V, 1994).

It explains how pleasantly the local community has accepted you and their behavior towards you because of which you feel comfortable and safe in a strange country. Hospitality is the dealings between the local people and visitors depending upon care, respect and sense of belongingness they put forward (Lankford S.V, 1994).

Different Hospitality Establishment in Discussion:

The three establishments selected to be thoroughly observed in this reports are:

Marriot International Corporation

Hilton Worldwide

Holiday Inn

These are three establishment founded in U.S and are known worldwide. The main categories this industry is classified are two that is commercial and non-commercial category. In this report we will discuss commercial category which is composed of variety of sectors that is food sector, accommodation sector, entertainment sector and transportation sector.

Structure

This assignment is divided into four different sections from section 1 to section 5. Section 1 would discuss the brief introduction about hospitality and names of the hospitality organization selected, section 2 would describe the three hospitality establishment thoroughly, section 3 would describe the service/facilities provided by them. Whereas section 4 will do the comparison between each establishment’s service provision and the conclusion recommending the better establishment among the three selected establishments.

2) THREE HOSPITALITY ESTABLISHMENTS:

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2.1) MARRIOT CORPORATION:

It was formed in 1927 and worked as a single corporation till 1992.The founder of this corporation was Mr. J. Willard Marriot and his wife, but at that time it was a small food stand named as Hot Shoppes which later expanded into different small ventures, services and finally formed a proper company in 1967 names as Marriot Incorporation. However Marriot ended its single entity in 1993 and separated into two entities

Marriot International Corporation: Hotel business of the corporation and vacation tourist resorts.

Host Marriot Corporation: changed name for Marriot Corporation.

It has a accommodation service which has more than 3000 properties in United States and in service in more than 60 countries worldwide and include 10 brands. Some of the famous brands of Marriot Incorporation include names like

Residence INN

JW Marriott Hotels and Resorts

Ritz-Carlton Hotel

Marriot Incorporation has its headquarter in United States and it has more than 140000 employees working for it all over the world. Among the world wide hospitality incorporations Marriot International is listed as top most. People with high standards such as celebrities, sportsmen, politicians and rich socialites are the common guests of Marriot Incorporation (Marriot Corporation Online)

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2.2) HOLIDAY INN:

It is one of the most prestigious and reputed service provided which offer comfort, value and pleasure to its customer proficiently. It is one of the brands of InterContinental Hotel Groups. Holiday Inn came into being in 1952 by Mr. Wilson in partnership with Mr. Wallace E. Johnson however the demise of Mr. Wallace, Wilson named the place as Holiday Inn which flourish spectacularly. The main slogan of Holiday Inn clean, friendliness and customer satisfaction was always taken care of and this is the main reason of its prosperity as it has always kept its customers satisfaction to the first priority (Holiday Inn Online).

Holiday Inn is categorized among two types that is well developed, full service hotels and comparatively less developed, full service hotels however both the types include basic facilities such as room service, swimming pools, restaurants etc. It contains more than 200,000 rooms total in 1300 hotels worldwide and has more than 90 million guests visiting annually (Hoiday Inn Online).

2.3) HILTON WORLDWIDE: C:Documents and Settingscomputer pointDesktopasgnments250px-Hilton_Worldwide_Logo.svg.png

Hilton worldwide formally known as Hilton International Corporation is owned by Blackstone Private Equity founded in Texas by Conrad Hilton in 1919. Hilton Worldwide own different brands including Hilton hotel & resorts, Embassy suites hotels and Conrad hotels. Among which Conrad hotels is a luxury hotel, Hilton hotel & resorts and embassy suites are full service hotel. It has 3000 hotels in more than 80 countries and has more than 130000 team of employees working for it worldwide in its every chain of hotels (Hilton Worldwide Online).
Vision & Mission: Hilton has a vision of spreading warmth, comfort and affection while its mission is to make itself world’s best hospitality organization and satisfying its customers with nothing lower than the best
Values: Hiltons values is hidden in its name Hospitality, Integrity, Loyalty, Teamwork, Ownership, Newness forming HILTON.
Hilton Worldwide manages it services very professionally as it pays attention to every minor detail including hotel management to supply chain management. They take care of your comfort as their own and provide you with the best and is increasing their satisfaction level annually by 10%. It is working to cater its mission statement by designing new buildings, improving operational efficiency and satisfying their customers by enhancing their experience. Moreover Hilton worldwide make sure they follow safety programs involving earth like reduction of energy consumption, waste by 20%, water consumption etc (Hilton Worldwide online).
3) Services Provided By All Three Establishments:
3.1) Services By Marriot:
Vacation Packages:

Marriot Incorporation offers various vacation packages to its customers depending on their affordability. Their packages usually include airfares and stay in their accommodation for few nights and also offer special discounts to its members. Out of all the 60 countries in which Marriot Incorporation is operating you can chose any place and can privilege yourself with the vacation packages they are offering. Marriot Incorporation is located at the worlds most preferable tourists spots having beautiful beaches, golf clubs, museums, restaurants while the accommodation service already being offered to you by Marriott making it and over all a promising trip with all the best facilities depending upon your selection (Marriot International Online).

Vacation Club Ownership:

This is an exclusive offer of Marriot which has a slogan of “Carefree, Memorable stay”. This package includes best facilities for the customer providing them with the finest option of villas comprising of one, two or three large bedrooms, fitted with all the necessary amenities like kitchen, dryer room, small projector. Some of them also include small swimming pools, fitness center, area for playing golf and kids activities center therefore, having facilities for every generation.

You have to purchase the ownership by collecting vacation club points which has three offering:

1500 points : This package is for 15500 and offers vacations in Las Vegas and Colorado with accommodation in studio apartment or 2 bedroom villas.

2500 points: You can get this offer for 25500 while the vacation destinations can be Florida and Palm Beach(Aruba) with accommodation in studio apartment or 2 bedroom villas.

3500 points: This package is for 35500 and offers vacations in Hawaii and California with accommodation in studio apartment or 3 bedroom villas.

Other exclusive Offerings By Marriot:

Dining: Marriot has the worlds top chef working for them, master in cooking all kind of cuisines for their customers like Italian food, Mexican, Chinese , Japanese, Thai Cuisine including the specialty of the particular country you have visited.

Spa: The Spa at Marriot include many varieties of Spa like stone massage, morocco bath, mil sword massage, herbal massage making your trip relaxing by all these offerings.

Pools, Exercise & Recreation: It has fitness centers which will not let you get idle by your trip, as it will provide you with best fitness facilities along with swimming pools (Marriot International Online).

Wedding & Honeymoon At Marriot:

Marriot has certified experts and wedding planner to arrange your wedding in a dream wedding that is best to the last point. From decoration to food to music selection everything will be perfect at Marriot with the help of specialist working for you according to the customized wedding packages you have opt for. Later you can chose a honeymoon package as well making your wedding complete with Chocolate coated strawberries and banquet in bed ( Marriot International Online).

3.2) Services By Holiday Inn:
Family Vacation

Holiday Inn states to understand the need of spending time together by families and therefore there major offering are beneficial for families including special discount packages for kids. Kids under 19 years of age can share the room with their parents and stays for free while those who are under 12 can even enjoy free meals anytime at restaurant in Holiday Inn while their menu is composed of fruits, healthy and grilled items that is full of proteins so that you does not have to worry about their health and can easily plan and bring your family for enjoying vacations at Holiday Inn (Holiday Inn Online).

Reward Nights

A reward night in Holiday Inn is based on point systems. You have to collect points by purchasing some amount and your package will be entertained accordingly. There are 3 kinds of reward packages 10000 points, 15000 points and 25000 points. However the major drawback in this package is this that this deal does not offer you food or any other extra facilities, the charges are jut for accommodation and other basic room services while rest you have to pay again from your pocket. Despite of this fact reward rooms are over booked and reservation for it has to be made beforehand in order to get a room (Holiday Inn Online).

Senior Discounts

On of the commendable facilities provided by Holiday Inn is their senior package. This package is for seniors of age 62 or above you can enjoy your retirement by spending splendid time at Holiday Inn in more than 100 countries. This discount offer is applied to even rooms which are not up for discounts (Holiday Inn Online).

Other Exclusive Facilities By Holiday Inn:

Internet Service: People out on vacations wants to stay connected with their loved ones and also likes to update them with latest photographs and details about their trip so here holiday inn is providing them with internet facilities in rooms which help the people stay connected. Moreover its also good for people staying for business.

Fitness Centers and Swimming Pools: These facilities allows you to enjoy yourself in the striking blue water forgetting all your worries and diving while also taking caring of your fitness away from your home and regular gym.

Basic Facilities leads to comfort: These basic comforts comprises of perfect beds, pillows and shower for you to sleep well and starts a fresh day.

3.3) Services By Hilton Worldwide:
Packages:

Hilton has wide range of packages at your service

Advance purchase packages: This packages offers you 20% discount if you have registers in advance

Indulge package: This package has a special validity date and if you register within that date you will be able to benefited with special services excluding the charges of package.

Bed and breakfast package: As the name suggests this package offers you a breakfast for two excluding the accommodation charges.

Romance Package: Specially designed for the couples this package make sure that the couple is left undisturbed with complimentary beverages, breakfast served in room with special services like spa, swimming pools etc (Hilton Worldwide Online).

Other Exclusive Packages & Offerings:

Apart from the above mentioned packages Hilton Worldwide has other exclusive packages as wells like Romantic journey, Funny bone Package, Bed and Brunch, Stay and dine and give her the sun, moon and stars which has different kinds of offering for their consumers.

SPA: Hilton offers an exclusive range of Spa. It does not depend that whether you are at Hilton of Florida or Hawaii, all the chains of Hilton hotel has a spa located in its building promising you a relaxing experience (Hilton Worldwide Online).

Wedding At Hilton:

Hilton promises to meet your high expectations that you have thought about your wedding day. They have wedding planners which are expert in their work and their chefs will make the tongues of your guests tempt with delicious cuisines. You customize everything about your wedding in your own way and let the experts represent everything you have up till now fantasized about your wedding, from flower decoration to choice of music everything will be planned considering your wish and happiness (Hilton Worldwide Online).

4) Comparison:

By going through above collected data the following comparison can be concluded that each establishment organization is working hard and trying to stay ahead of each other by providing innovative services and packages to attract its customers.

Marriot and Hilton both offers Wedding Ceremonies package while Holiday Inn does not making it lack on this part. On the other hand Holiday Inn and Marriot both offer points system which is not the present in Hilton. Holiday Inn has this exclusive senior package offer along with special kids discounts making it a good and attractive selection for its customer while Hilton will easy win the hearts by its different, exclusive and unique kinds of packages. Both holiday Inn and Marriot has other activities offering like spa, fitness center helping it to make it at the top again therefore it was correct to state that these three establishments are updating themselves with nothing less than the best in order to stay and make its place in this competitive market.

TARGET MARKET:

The target market of all these three establishments is upper class economy on which they are focusing immensely by providing them with all the luxuries they wish for and charging them for every facility they offer. However at some reference you will also come to notice that target market of these establishments are considered to be middle class economy which is absolutely wrong or miss understood because the price per package offered by all three establishments are beyond the affordability of any middle class family. These establishments are design for upper class or business men and are providing them with best service any hospitality organization can offer.

CONCLUSION:

From the data mentioned above and by discussing about the three hospitality establishment we can conclude that all three of them are providing their customers with the best service, brining new and innovative ideas in order to keep themselves ahead in hospitality industry. There packages are attractive and are economical for upper class however the one with the best offering in my opinion would be Marriot Corporation as it has all the facilities that the other two establishments have as well as other exclusive offerings as well making it superior than the other two. Second in the list would by Holiday Inn while the third position will be to Hilton among the three. However the basic facilities provided by all the three establishments are more or less same and the other exclusive offering on which we are ranking them, depends upon your affordability.

REFRENCES:

Hilton Worldwide online (http://www1.hilton.com/en_US/hi/index.do)

Holiday Inn Online (http://www.holidayinn.com/hotels/us/en/reservation)

Lankford, S. V. (1994). “Attitudes and perceptions toward hospitality and rural regional development. Journal of Travel Research, 31(3), 35-43

Marriot Corporation Online (http://www.marriott.com/default.mi)

Table of Contents

I. Executive Summary ……………………………………………………………..

2

II. Introduction ………………………………………………………………………..

3

III. Analyses………………………………………………………………….………

4

IV. Overall Assessment…………………………………………………………….

8

V. Conclusion……………………………………..……………………..……….….

9

VI. References……….…..…..…………………..…………………………….……

10

VII. Appendix………………………………………………………………….……..

11

Executive Summary

Purpose: The purpose of this report is to critically analyse an establishment’s different servicescape dimensions and to provide an overall assessment of its servicescape.

Analyses: The report aims to find out the different servicescape being utilised by the establishment which makes them successful and what’s need to change. The information in this report is collected through literature reviews mostly journal articles and an actual participation in each experience.

Overall Assessment: Discussion will provide a value insight and practical knowledge regarding the topic and will provide more qualitative understanding of the findings to help future researchers improve upon the present study.

Conclusion: In conclusion

The servicescape plays a major part in shaping customers’ perception of the firm’s image and positioning. A service quality is often difficult to assess as customers frequently use the servicescape as an important quality signal. A well designed servicescape makes customers feel good and boosts their satisfaction and allows the firm to influence their behaviour on enhancing the productivity of the service operation. Numerous tactical decisions must be made when designing the organisation’s environment. Individuals based perceptions of the organisation’s services on sensory cues that exist in the organisation’s environment. Specific tactical decisions must be made about the creation and sometimes the avoidance of scent appeals, sight appeals, sound appeals, touch appeals and taste appeals. The design of management of the organisation’s sensory cues are critical to its long term success.

The servicescape must be designed with consideration of the impact on each of the five (5) senses.

The Saints Brasserie is located at Edensor Road, serving lunches and dinner, Saints offers Australian and French cuisine with spectacular views. Their staffs provide guests with unsurpassed service, sumptuously prepared dishes served in a warm and friendly atmosphere. It can be a favourite destination spot and a great place to enjoy delightful meals, share a cocktail or glass of wine with friends. Their extensive wine cellar offers a wide selection of vintages and elegant food pairing possibilities. With inside seating, guests can enjoy expertly prepared poultry, fresh seafood, and meats all cook to order. For dessert, enjoy fresh fruits, cappuccino, simple chocolate and deep dark espresso or relax under the stars.

Introduction

The term “brasserie” is a French word meaning a French restaurant serving singled dishes with a relaxed seating. This gives Saints a French appeal. Saints Brasserie has a simple servicescape. The restaurant is designed to target the average income class and anyone who is looking for great food at affordable prices.

Physical Dimension

A.1 Signs, symbols & artifacts

As soon as patrons arrive at St. John’s RSL, they are given immediate directions on where to go. The plentiful amount of signs throughout the establishment show where things are located and how to get around.

One of the highlights at Saints is the use of collaterals highlighting the daily specials hanging high up on the wall outside of the entrance for everyone to clearly see. This will gain the attention of patrons and track those who are interested with the special being offered.

Patrons also need to first find a table before ordering. However, the signage is so small and unnoticeable which creates confusion and disorganisation to both the cashier and customers especially during their peak hours, which is from 11PM – 1PM and 5PM-8PM.

There is a signage that says “Order here” which clearly shows where to line up for dining in or taking out. Customers can only make one line, but there are two cash counters that speed up the ordering process. Guests are assisted by friendly staffs who have knowledge both the menu and food.

Also, outside the entrance is the monitor with the entire menu of the restaurant with every item Saints has to offer. Though occasional, it is poorly chosen as it is in the middle of the line and those who choose to see the menu without waiting in line are not able to as there is no crowding allowed in that hall.

Moreover, the menu of Saints is detailed with few visual aids and variety. Included in the menu is their monthly specials. The menu is not cluttered so customers can easily find the desired items.

Here is the sample of what Saints has to offer for dinks and food. Both are presented well and taste great.

A.2. Space/ Function

Saints does an excellent job of transforming the BINGO area into seating and therefore utilises it for more than one purpose. This is made available when the area is not being used for gaming. However, Saints has no separate room for special events and larger party.

There are three different types of atmospheres and tables within the restaurant. There is the regular seating, the boost banquet seating which is located along the windows of the bar near the back as well as the bar seating which are raised tables and taller chairs.

In every meal, patrons can get a free drink which you have to claim at the RSL’s main bar. The bar is central to seating which is beneficial as it allows customers to have easy access to the bar without going all the way into the restaurant. It is accessible right by the door so if one wanted to just attend the bar then they could do so. However, the restaurant does not offer seating at the bar. That is why instead of the usual bar set-up where TVs are located just above the bar, the television at Saints are located on the right side of the main bar where customers can wait for their orders and drinks. The televisions in Saints are often displaying sports channels, which is very indicative of the Sports bar appeal the restaurant has. Different TVs often shows different sports so customers can choose what is most important to them to watch and focus on that.

A.3 Ambient Conditions

During the day, there is a non- direct natural light from the windows while the general view of the interior lights provide a warm bright atmosphere. The entire restaurant is very clean with modern styling. There is a lot of available space and is open in concept. For the dinner atmosphere, the lighting is reduced to a more amber special area lighting approach creating a more comfortable atmosphere for customers can feel that they can stay longer. The restaurant music and noise stays at reasonable levels allowing for table conversations.

The creative and vibrant lighting at the bar changes further emphasising the nightlife mode. It is suggestive of a fun, upbeat nightclub and a place to let loose and grab a drink with friends.

After dinner is over, the lights are reduced further for the bar crowd. Lighting is changed to spotlighting approach for areas that need vision. Reducing the lighting makes people feel less self-conscious and more inclined to dance and drink. The music and people of the night time bar are all of similar age as expected at a RSL.

B. Social Dimension

Employees at Saints know the responsibilities and are delegated to specific tasks such as clearing and serving food orders.

The main bar is spacious enough where bartenders can easily move behind the bar to efficiently make drinks and take orders.

However, Saints has its downfalls and unfortunately there are unnoticeable faults that hindered my experience during atleast one of my visits. The first being, keeping the cleaning supplies out of the eyes of the guests especially not putting the dirty rags right beside the clean cutlery.

The initial greeting and wait times can take very long and guests never know how long they actually have to wait. Moreover, food orders also take too long to come out. We have waited for more than an hour before it came out.

Socially – symbolic Dimension

D. Natural Dimension

Overall Assessment

First impressions are key to a positive experience.

Luckily, a solution to each negative influence to the servicescape can easily be made. Overall, Saints has transformed into a bar with a true identity. One that is connected and integrated with its customers with modern sports bar decor, functional layout with various seating options and a conveniently located bar among other great features. Staffs are friendly, the aromas are enticing and food are delicious. Knowing this, Saints has a solid foundation but does need some direction to really make it a place to be.

Introduction to Services and Facilities in the hotel

Nowadays, people choose to stay in the hotel not only for the accommodations, some of the tourists would choose a particular hotel because of its unique services given or special facilities that other hotel might not have or might not provide as good services compared to other competitor hotel. Example of facilities in most hotels that are five stars and above are swimming pool, outdoor games pool, restaurants, lounges, bars, golf clubs, spa and Jacuzzi, parking garage, conference rooms , banquet rooms. TV lobbies, snooker tables, special manicure services, porter services, personal convention centre and etc.

Services and Facilities in a Hotel

I am going to elaborate and illustrate the services and facilities in a large hotel named Hotel De Paris, Monte Carlo. Hotel De Paris is a luxury hotel that is located in Monaco which is located in a sovereign city on the French Riviera in Western Europe, France. According to Hayes, D. and Ninemeier, J. (2007), 1st ed, Hotel operations management, Upper Saddle River, N.J.: Pearson/Prentice Hall.

Accommodations – Rooms

Starting from the accommodations of this amazing luxury hotel, there are a total of 182 rooms in this hotel, this 182 rooms includes the superior room which is facing the courtyard view. These superior rooms are the perfect examples of the “Belle Epoque Era”. “Belle Epoque Era it’s in French language and it means “Beautiful Era” in English. It was a period of time in French and Belgian which world war one just ended in the beginning of the year 1914. The size of these superior rooms is from 371 to 571 sq. and it is located in the 2^nd and 3^rd floor of the hotel. The rack rates of this superior rooms cost around 579 Pounds which is 2880 MYR for 1 night stay. Next, is the Exclusive room which is facing city view, all the furniture and decorations is made from white leaded wood and mahogany. The toilets is specially made from pale marble from the 19^th century to give guests a warm and welcoming feeling upon arrival. Rooms from this exclusive are from 377 to 538 sq. and is located on the 2^nd, 3rd and 4^th floor of Hotel De Paris. Rates of rooms are 657 pounds and after converting is 3447 MYR for one night stay. Last but not least of the rooms and that is the Exclusive Room that is facing casino view, all the facilities and decorations are most likely same as the other exclusive room but the only difference is that this room is facing the casino view. ( Hotel de Paris, (2014). Practical Details. [online] Available at: http://www.hoteldeparismontecarlo.com/practical-information/practical-information/ [Accessed 14 Oct. 2014].)

Junior Suites

Besides the normal exclusive and deluxe rooms, there are a few types of junior suites in Hotel De Paris. There is inner courtyard view which is fully furnished with red velvet carpets to give a feeling of total relaxation to the guests or conduct important meetings. The lounges in these junior suites are well equipped with perfect office tools with exquisite touch of elegance. The rates for this junior suites cost 846 Pounds which is 4422 MYR. Next up it’s the country view junior suite that is specially made for the night view lovers. (Hotel de Paris, (2014). Junior Suite – Inner Courtyard View. [online] Available at: http://www.hoteldeparismontecarlo.com/luxury-rooms-suites/junior-suite/junior-suite-courtyard/ [Accessed 14 Oct. 2014].)

Diamond Suites

The most expensive room in this hotel is the diamond suites. The diamond suites resemble the sense of luxury in Hotel De Paris. The diamond suite which is named by Charles Garnier normally is used by people who are going to have a wedding or any special family reunions. The diamond suites are located at the 2^nd floor of Hotel De Paris and it is around 1890 sq. It has two big bedrooms, with an enormous lounge with a well-established dining area. All the toilets in this suite is made by light grey and white mosaic marbles tiles. The rates of this diamond suite is simply stunning a night in this diamond suite cost around 7400 pounds with is around 38687K MYR.

Restaurant and Bars

In Monte Carlo, the most famous restaurant bar is named Le Louis XV- Alain Declasse. Le Louis XV is especially dedicated to the taste of exquisite and fantasy. It is open around 25 years ago in the Monte Carlo. The unique setting of this restaurant is focusing mainly on elegant cuisine with excellent wine list and outstanding menus. According Alain Declasse(2014),to the chef of Le Louis XV that the philosophy of this restaurant is to fill this restaurant with reinterpreting that what is essential, the food they serve can be simple and easy to understand to every guests but it has it’s subtle of balance on the tradition,culture,modernity of the restaurant. There are three main menus in Le Louis XV, The seasonal club lunch which cost about 145 pounds approximately 785MYR, evening menu “Les Jardins de Provence” which is 230 pounds approximately 1.2k MYR,Menu “Pour les Gourmets which does not include drinks cost around 310 Pounds approximately to 1.6k MYR. There are mainly three types of cuisine served in Le Louis XV and that is Gastronomic cuisine. Gastronomic is a study of food it can also mean someone who unites the theories and practices on the study of gastronomic. Le Louis XV also serves the French Riviera cuisine. French Riviera cuisine means a nice view of beach amazing cultural amenities or with fabulous sight-seeing views that is the definition of French Riviera. All the food and cuisine is inspired by the French and Italian Riviera’s with has been nominated in the Michelin Guide with three stars. Michelin Guide is one of the series guide books that is published in France by the publisher named Michelin for more than 100 years for now. (According to Services Management [Including Skill Development]. (2014). 1st ed. [ebook] Mumbai, IND: Himalaya Publishing House. Available at: http://library.olympia.edu.my:2051/lib/olympia/docDetail.action?docID=10415572&p00=hotel+management [Accessed 14 Oct. 2014]) Le Louis XV is closed everyday but only open on Tuesday and Wednesday. If you want to enter this restaurant you would have to wear a jacket or a tie, it is strictly required for the guest; this is to ensure that the quality of guests is up to the restaurant’s standard.

Grills

Located at the 8^th floor in the Hotel Le Paris, this grill is named by Le Grill. Le Grill is one of the best grills that offer a reinterpretation of the famous Mediterranean gourmet dishes .During the summer season, Le Grill has its grill side that will reveal the beautiful sky and it is one of the most beautiful views on the French Riviera. The type of cuisines that Le Grill offers is mainly focused on Mediterranean-style gourmet cuisine. The menu has a range of different types which the set lunch is around 75 pounds, and for the dinner or a-la-carte is around 130-150 pounds. Special functions and birthday parties can be held in the Le Grill’s Churchill lounge, cocktails and private parties can also can held there too. Outside of the Le Grill is the open-air terrace which has a good view of the sky or sunset when u visit it at the right hour. The lunch hour is normally from 12pm to 2pm and dinner starts from 8pm-11pm.

Banquet Rooms

Banquet room is purposely for the use of when you are going to hold a meeting or private birthday parties or even personal meetings. The banquet room in Hotel De Paris is named La Salle Empire and terrace, it is listed as a historical sites since the end of 19^th century, it symbolize the history that is left during the 19^th century back then. La Salle Empire is a magnificent place to hold banqueting services. Normally for banquet orders, there are two different types of menu one of them is in season and another one is summer menu.

Live Band

In a large hotel, there is normally live band performance maybe on the Saturday night or Sunday night according to the hotel secludes. The purpose of having live band is to entertain the guests when they have their free time or maybe they can be at the lobby to listen to the live band at night while drinking wine or chatting in the lounges. The live band in Hotel De Paris is named Le Bar American. Le Bar American is fully furnished by the low key ambiance of the beautiful wood. The chairs they used in the bar is all 100% leather armchairs, with all red light bulbs soft lighting, all the windows are facing to the sea view. This fabulous live band bar will play all Doctor’s Gab acoustic piano music to let the guests feel relax and homey. All the snacks will be served from 12 noon to 6.30 in the evening, following by a break; they will be back to business at 10pm at night to 1am in the midnight. Live jazz is the main theme in this beautiful bar.

Private Beach

In our country there might not be this facilities in any of the hotel in Malaysia, but in overseas, there are a few luxury hotel that offers private beaches in their hotel. Private beaches are an absolute delight for guests that like to enjoy the sunlight or like to swim. The setting in this awesome private beach is based on chic striped canvas beach cabins. All the cabins in this hotel are charged in the hotel accommodation and it ensure the entire guest to reach their max level of satisfactions and enjoyment. Guests can enjoy the sun while refined cuisine will be sent to your personal tent by the private beach. The organic pizzas and gourmet wood-oven pizzas is the must try food in the private beach side bar. On the beach, there are around 200 tents surrounding the beach, 120 beach cabins and almost 30 solariums available for rent, but the charges is not included in the accommodations fees.

Sports and Leisure –

Swimming Pool

The swimming pool of Le Hotel Paris has a 25 by 13 meters swimming pool filled with 29 Celsius seawater taken from its depth which is around 37 meters and 400 meters out. Only customers that are staying in Hotel De Paris Monte Carlo and the Hotel Hermitage Monte-Carlo can access to the Thermes Marins Monte-Carlo only. Swimming pool is normally open from 7am to 9pm.

Fitness

Nowadays people are very health conscious; fitness gym is one of the essential needs of running a hotel. This 5 star gym fitness is facing to the sea, it consists of thread mill, dumbbells, bike machine and so on. There are dozens of coaches everyday there to help guests with what is their routine and what should they do to keep fit. The personal coaches will give advice on weight training, swimming, water aerobics, pool biking, lipo training and so on. They also supervise guests on their heart rates for preventing them to over exercise themselves. There are also special traditional Tai chi classes in Hotel De Paris and also Five Element Tai Chi for the guests who want to experience the Chinese traditional Tai Chi.

Tennis and Squash

Tennis is also a requirement for a large hotel establishment because most of the business peoples like to talk about business while playing outdoor activities. In the Hotel De Paris, there are around 21 clay courts that are overlooking the sea of the Monte Carlo Beach. In this hotel, there are tournaments against club tennis schools and completions junior versus seniors and all soft of activities.

Golf Coast

Gold coast is a place of relaxation for the guests where they can enjoy the many services and the facilities founded in regular Golf Courses. Golf Courses provide many great servicing such as Golf Cart services, where they can enjoy the relaxing ride while enjoying the scenery at the Golf Course. Golf court provides services of golfing with the assistance of personnel to aid with the golfing experience.

Conclusion and Recommendations

Despite the accommodations of the hotel, the facilities in the hotel are the point attraction to attract people to put up a night in the hotel. According to Larkin, E. (2009). How to run a great hotel. 1st ed. Oxford: How To Books. This type of facilities will attract more guests and tourist to stay in the large hotel. With good facilities and services it will gain reputation for the hotel and to keep the guests and tourist to stay with pleasure and will visit us again next time during vacations or business trips. As a conclusion, the Relationship between customer satisfaction and hotel attributes is being focused on the service or facilities, the better the facilities and services the better impact of the preference of someone in choosing a hotel because based on Atkinson (1988); Barsky and Labagh (1992); Choi and Chu (2001) studies, it has been found that the most important attributes a customer seeks are staff service quality and friendliness.

Service recovery has taken over the whole world by storm. People hear the word service recovery and service failure over and over again. In the globalized world as people know it, the world seems to be getting smaller and yet it is expanding, the world is developing. Information can travel fast and easily, boundaries are being reduced gradually. This not only happen in the world generally but also in the business world specifically. By looking at this arising phenomenon, service recovery of companies in the management of business is getting more and more important for airline companies who are trying to explore the global market. The airline companies have to come up with the right strategy for different market in different countries. Without a good strategy in service recovery and the way how to decide complaints and resolved problems which called service failure, the airline companies will falter in the international market. While on the other hand, if an airline company has a good service recovery and can solved service failure, it will achieve success.

The airlines industry involves a high degree of interaction between employees and consumers and so provides many opportunities for service failures to occur. The quality of service encounters is frequently determined by the action of front-line staff, whose experience and commitment may be limited and whose attitude may vary from one encounter to another. The inseparability of production and consumption means that failures occur at the point of consumption, providing little scope for correction without inconveniencing the passengers. However, failures, errors, mistakes, and complaints can frequently happen in the process of service delivery. A poor service or a service failure will result in dissatisfaction and this in turn will prompt a variety of responses which may include complaining, negative word-of-mouth and decisions not to repurchase. If it is impossible to avoid service failures and dissatisfaction, then it becomes increasingly important for organizations to understand how to manage such occurrences and minimize their adverse effects. There is a growing body of evidence to suggest that effective service recovery will generate a range of positive passengers’ responses with complaint handling being seen as a key element in service recovery. This research paper an overview of existing research relating to service failure, service recovery in airlines industry.

The Emirates Airlines was founded in 1985, but it didn’t start to show up on Americans’ radar until 2005, when they began service to New York’s JFK. They are the fastest-growing airline in the world, and today Emirates has a fleet of 138 aircraft and serves over 100 destinations in 61 countries across six continents. Their North American gateways are: New York, Tokyo, Kuala Lumpur and Seoul. Their hub is Dubai (DXB), which is now the 15th busiest airport in the world by passenger traffic (40.9 million passengers in 2009).

Literature review

Service recovery and service failure in air line industry

The service recovery and the service failure may directly influence each other. Generally, the service recovery in airline industry is concerned with the process of addressing service failures, which can be happened in that time when is the flight on the plane or before flight; more specifically, service recovery can be thought of as being concerned with the productive handling of complaints and includes all actions taken by a service provider in order to try to resolve the problem a passenger has with their organization. It is generally recognized that complaints are essential to institute a recovery effort. Without complaints, a firm may be unaware that problems exist and unable to appease unhappy passengers.

Ennew and Schoefer (2006) stated that basic of service recovery strategy, which the model is used in airline industry as well, can be classified as:

– Apology: A first person apology rather than a corporate apology, and one which also acknowledges that a failure has occurred.

– Urgent reinstatement: Speed of action coupled with a ‘gallant attempt’ to put things right even if it is not possible to correct the situation.

– Empathy: A sincere expression of feeling for the passenger’s plight.

– Symbolic atonement: A form of compensation that might include not charging for the service or offering future services free or discounted.

– Follow-up: An after-recovery call to ascertain that the consumer is satisfied with the recovery process.

That service recovery also includes situations where the passenger has not expressed a complaint but the provider has recognized the failure and initiated a recovery procedure. Service recovery in airline industry refers to steps that are intended to identify and correct service failure. According Kuenzel, S and Katsaris, N, (2009), the necessity for service recovery is brought about by service failure. Service failure is defined as those situations when the service fails to live up to the passenger’s expectations or any service-related mishaps or problems that occur during a consumer’s experience of the firm. Service failure situations are especially inevitable in the airline industry due to the ‘people factor’ nature of services, the high level of contact between employees and passengers due to the increasingly high demand of today’s passengers.

As one of the service industries, the airlines industry involves a high degree of personal interaction between staff, which are working in air company and passengers; miscommunication can lead to service failure. Responding effectively to consumer complaints can have a significant impact on satisfaction; repurchase intentions and the spread of word-of-mouth. However, in order to understand how best to deal with service failure and how best to handle complaints, it is essential to understand the way in which consumers react to service failure and how they respond to different approaches to service recovery. The service recovery in Emirates Airline Company, which is defined as all those actions taken by a service provider in order to try to resolve the problem that caused the service failure, aims not only to resolve the problems in order to minimize negative outcomes and retain passengers who are prefer this air company, but also to “seek out and deal with service failures”. After all, a good recovery, as well as reducing passengers’ negative emotions, also tries to increase the positive ones. While service recovery’s effectiveness depends on several parameters, excellent recovery tactics can leave those passengers who experienced a service failure followed by successful service recovery with greater satisfaction than those who did not experience a service failure incident at all.

However service recovery’s major importance is owed to the fact that it affects passenger satisfaction and, as a consequence, passenger loyalty. Furthermore, a number of findings have shown that satisfaction with the service recovery directly affects a passenger’s intention to repurchase and to recommend the service provider. These relationships constitute the vital reasons why providers pay so much attention to service recovery because in financial terms loyal passengers can increase profits. (Kuenzel, S and Katsaris, N, 2009). The Emirates Airline Company believes that satisfaction plays a key role in the service industry and especially in the airline industry. As the airline industry has evolved, Emirates Airline has made great strides to define and understand satisfaction from the consumer’s perspective. The emphasis to comprehend what truly creates satisfied passengers has lead to an ever increasing body of literature surrounding satisfaction, how service providers create satisfied passengers and the effects that satisfaction has on businesses today. Competitive environment analysis is the factors which influence the air company’s competitiveness in the market. It enables the airline company to understand its current competitors.

The Emirates Airline, as air company is defined that the most important part in the value of service recovery and failure are consisted of professional staff which can be opened in a time for solving problems with passengers, improving passenger satisfaction, minimizing negatives emotions and making loyalty decisions for complaints.

Methodology

Service recovery and service failure in Emirates Airline Company

For the past several years, many air line companies executives have ascribed to the widely circulated notion that a strong problem-recovery process is the key to enhancing passenger loyalty. Some claim to possess statistics that show a higher intent to return among passengers who experienced a problem followed by excellent resolution, compared to passengers who had a problem-free flight. The Emirates Airline has outperformed their rivals British Airways, Korean Airline and Delta Airline in a service quality report. This airline company is analyses the passenger experience from flight booking all the way through to check-in, baggage drop, boarding, plane conditions, in flight services such as food and beverage, entertainment and shopping, right through to disembarkation and final baggage claim. The Emirates Airline known that the service recovery builds passenger loyalty that brings passenger back from the brink of defection is putting a smile on a passenger’s face. A poor service recovery in structure of organization will result in dissatisfaction and this in turn will prompt a variety of responses which may include complaints, negative word-of-mouth and decisions not to repurchase. The effective service recovery will generate a range of positive passenger responses with complaint handling being seen as a key element in service recovery.

Analyzing the structure inside of Emirates Airline as a large air company in the world and which model of organizations they used, I found that this company is provided and followed by service recovery strategies as an important element in service process. The service recovery strategies are consisted of eight components:

1. Act quickly (usually use as an apology)

2. Provide adequate explanations

3. Treat passengers fairly

4. Cultivate relationships with passengers

5. Learn from recovery experience

6. Learn from lost passengers as passengers

7. Fail-safe the service

8. Track complaints

According this type of service recovery strategies, which was chosen by the Emirates Airline Company, I can say that this air company is tried to involves and to improve new methods of psychological behaviours in organizational process between employee and passenger, because it is interested in passenger’s positive recommendations about their air lines to family and friends are an important, cost-effective method of promotion which are suggested to make profit. The goals of service recovery strategies are consisted how to satisfy the passenger in during that time when the flight is on the board, identifies and corrects the problems in a time without negative effects and improves professional air staff to be helpful and friendly with passengers.

The Emirates Airline company, as the biggest air company in the world, is recognized the service recovery as a significant determinant of passenger satisfaction and loyalty. The most common and frequently what they used in service recovery are:

1. apology
2. assistance
3. compensation

The apology can be in two forms: verbal and writing. For example, in the Emirates Airline, I found the tactical way which the air staff used in the during flight’s time. If some kind of the drinks or some kind of the meals are finished in the during flight, and that time one of the passengers needs persistently, so air staff solve the problem by nicely and kindly form in offering to choose another drinks and meals which they have in menu. The writing form is used when the situation or problems are decided by official form from Emirates Airline management.

The assistance is used in finding the luggage by air staff which are in the airports (local or international terminals). Emirates Airline is suggested to find luggage by modern technology as operational efficiency between operations and general system of technical supporting inside the airport where were going lost luggage.

The compensation is frequent form of the service recovery, which can be financial form, it’s meant that the Emirates Airline is able to pay the compensation from the negative effects in during the flight’s time if the occurrences were happened without passenger’s fault. Another form of compensations are vouchers, free upgrades to gifts or loyalty miles, can also be defined against a complaint category and stored for each complaint. Vouchers can be auto-generated and points can be auto-credited into the member’s account. Tier upgrades can be provided as compensation, and tier downgrades or expiry of points can also be restricted for members.

Why are the air staff so qualified and professional in the service recovery? The Emirates Airline Company invests much more time and money in training each new employee than many of its competitors. There are 18,179 employees work in the Emirates Airline who are qualify after 3 months of 13 indoctrination will receive 450 hours of training in their first year and 160 hours of training every year after. Training programs include methods of the communication with passengers in the board during the flights, how they can make service without negative effects just use the smile or literate speech which are based on the psychological principles. The motivation employees, train them, care about them, and make winners of them are successful steps in the service recovery. The Emirates Airline knows that if they treat their employees correctly, they will treat the passenger’s right. And if the passengers are treated right, they will come back.

Effective service recovery is not just an after-thought but is rather an intentionally designed part of service delivery system that has been planned into the service design in support of the service recovery strategies. The Emirates Airline believes that the service recovery is one of the most important key factors differentiating business performance and success between competitors.

Understanding the system of the service recovery in the Emirates Airline Company, how they can solve and decide situations with passengers before the flight, during the flight’s time, and after the flight without negative effects, I was analysing that this air company however has failures, mistakes and complaints which could be happened in the process of service delivery. The service failure occurs when the passengers do not get basic services from air company. The passengers consider centre of the service failure because they have been promised or contracted, either directly or implied and are basic to the whole service experience, for example, in the Emirates Airline, this is reservations air tickets which could be booked in official website or in the official agency. According statistical report which was established by the Emirates Airline, I could see which kind of service failures and complaints were happened in during flighting process, which are widespread and how this air company tried to minimized effects.

The service failures, which were founded in the Emirates Airline Company:

1. Ethical problems (conflict of interests)

2. Personnel failures

3. Safety issues

4. Baggage handling

5. Ticketing matter

6. Doing work too slowly in-flight

7. Responses to service failure

8. Employee responses to customer needs and requests

The most serious failure in the Emirates Airline was slow the service in-flight, the drink and the meal brought lately, the air staff were unhelpful and unfriendly because on the board were about 175 passengers who were flied on the long destinations. Other frequently mentioned problems related to agent operations which were provided booking and reservation air tickets. After according that statistic report, the Emirates Airline was developed absolutely new model of the service recovery strategies which were helped to solve and minimized the service failures in the organizational process and satisfied the passengers in-flight and on the ground. This air company was organized Service Recovery Management, that the functions are detection, analyzing and solving service failure without negative effects between organization and passengers.

Finding

aˆ? It is very difficult to exceed passengers’ expectations in service recovery. The Emirates Airline typically exceed passengers’ expectations in problem situations in only one of 10 problem occurrences. This air company are at least four times more likely to fail to satisfy a passenger in recovery efforts than they are to exceed expectations.

aˆ? When the Emirates Airline resolves problems in a method that meets, but does not exceed expectations, satisfaction scores are significantly lower than when an experience is problem-free.

aˆ? The only time satisfaction and loyalty are improved after a problem is when service has been outstanding throughout the entire experience. Outstanding problem resolution is seen as a part of a larger service culture within the air company, not as a stand-alone reaction.

aˆ? Recovery efforts arguably represent a much greater cost compared to the type of service recovery and service failure.

aˆ? Good training provides air staff with the skills and confidence to perform well. Giving them the opportunity to practice their customer service skills in a safe environment will help them to apply those skills in the sales environment.

aˆ? Good service in the Emirates Airline is tightly linked to good sales. If service standards are poor, sales performance will inevitably be poor as well.

aˆ? Satisfied, loyal air staff will take proper care of their passengers, resulting in high levels of passengers satisfaction and repeated successful sales.

aˆ? On the service recovery in Emirates Airline Company is influenced the elements as the air company will be successful in the organizational process:

Environment
Qualification staff
Performance
Motivation
Conclusion

This research paper has reported the main reasons of service failure within international airline company which is the Emirates Airline Company. The findings shown that service recovery excellence can only be achieved through passenger satisfaction, professional staff and loyalty as a result of senior management commitment. The paper has determined the air company’s process of service recovery with respect to the main causes of service failure, in its goal to achieving passenger satisfaction. There are two component consisted service recovery. The first one is service failure and the second factor is satisfaction. In this structural model, I also mentioned about two predictors which can directly influence on service recovery. Qualification employees and loyalty directly impact on service recovery, that I explained earlier the way that how they can increasing high-level, be perfect in relationships with passengers of the Emirates Airline company in details.

This research paper is confirmed previous assertions that passenger’s satisfaction and loyalty require high levels of management commitment, as well as frequent communication and indicated that for service recovery to be effective, it must be external (to the passengers) as well as internal (to the air company) so that internal improvement can be ensured. The Emirates Airline has to conduct surveys from time to time to get the uttermost feedback from employees and first time passengers as well. The Emirates Airline has to improve passenger’s satisfaction without negative effects after covering failure, tries to provider training programs for air staff, because the service recovery is so important for reputation air company. They should be more focus on the solving problems between air company and passengers by professional way because one of the weaknesses that a bid company faces is the decentralized organizational structure. So controlling the big company such as the Emirates Airline would be very difficult without having the centralized and good structure in the organization. For the huge air companies such as the Emirates Airline that is geographically apart, using the virtual organization in order to control the all aspect of the company is essential. In conclusion, for each air company, especially for large air companies, the service recovery is one the most important part in organization that can make the air company more successful because I can reach all the important success key such as passenger’s satisfaction and encourages of passengers and employees, better behavior, better communication and highest service quality through the air company. Once a air company decides how it wants its members to behave, what attitudes it wants to encourage, and what it wants its members to accomplish, it can then design its structure and encourage the development of the cultural values and norm to obtain these desired attitudes, behaviors, and goals.

1.0. Background of the story

The definition of service quality means customer perception on how well does a service can meets or exceeds the expectation (Czepiel 1990). As for the words “public transport” itself, it is being describes as a vehicle that caters the passenger to reach a destination and every usage of this particular public transportation will be charge with a minimum or a special fares to each passenger at the same times. In transport, there are a special word being known as mobility it is usually defined as the ability to move anything for example like people, goods and other living thing or non living thing from one place to another place and it is measured by the number of trips made by a person each day (Vasconcellos, 2001) whereas ‘personal mobility’ refers to the use of personal transport; it can be a car or a motorcycle or others. The term of “public” is widely used; this term is not considered as secret or private, the term itself open to or concerning the people as a whole, sharing their very own common interest with everybody.

Based on Md Aftabuzzaman, Graham Currie, Majid Sarvi, the main urban public transport problem is the road traffic congestion and this is one of the reason why people do not switch to using public transport (Cervero 1991; Downs 1992). By having public transport system, efficient public transport (PT) can be regard as one of the potential solutions that can solve the problem of urban road traffic congestion (Hyman and Mayhew 2002,; Pucher et al. 2007; Vuchic 1999. The main public transport such as buses, taxis, trains was provided by the government towards the public’s use. For convenient of people who are staying in urban and rural areas ( White 2002), governments have provided a better service quality to people to make sure the service they provided are able to satisfy the consumer needs and expectation as well as to increase the level of service quality of public transport. In public transport, service quality can be focus in term of tangibles, reliability and responsiveness (Parasuraman et. al., 1985) and it has becomes a significant issues which is to have a better and comfortable environment. Mostly customers do not satisfy with the physical facilities in public transport. Cleanliness, comfortableness, frequencies, responsiveness of the driver and conductor of public transports are the major issues customer always complaints and disappointed on it. Besides that, buses mostly not provided convenience facilities such as wheelchair, which is needed for disable person.

However, Malaysia Prime Minister himself dissatisfied with the current issues and problems after being experienced on using the LRT service. Problems for Light Rail Transit (LRT) and Keretanapi Tanah Melayu (KTM) are the time arrival always delays and not to forget, service likes punctuality, frequencies of train arrives on time and insufficient of space to carry passengers are also the main issues that caused congestion occurs (Utusan 2008). Even though the public transportation is modernized and has been updated in urban areas but with the lacking of service quality and well-implemented by the government, it will lead a negative perception tot the customers and they won’t satisfy of using public transport service that they provided which are insufficient and inefficiency ( Karen Thompson, Peter Schofield 2002). Despite the routing scheduled stating the bus would arrive on every 15 minutes but users has been waiting the half an hour and yet the bus still not arrives. This is one of the punctuality problems faced by the public buses in Malaysia (The Star 2008). Another incident occurred in urban area Kuala Lumpur, which are included LRT train and Rapid KL. The train and bus clashing with each other in 200 meter from Bukit Jalil Station (The Star 2008). This shows that the safety measurement of public transports become worst and action should be taken into consideration.

Transit service quality and reliability is essential for transit passengers and it did shown that both factors do affect passenger satisfaction substantially (Tyrinopoulos, 2008). Furthermore, transit service reliability regard as one of the significant factor for commuters to decide on which types of public transportation they prefer to use the most (Benjamin, 1998). Due to inefficiency of system, buses did not arrive on time, departure delays, lacking of passenger seats, thus, these factors would cause passenger overloads. Commuters would more preferable to drive their own vehicles instead of using public transport to access to work, recreation, school during the peak service periods. It must be given extra attention on inefficiency system of buses in order to improving the reliability towards of passengers and commuters. However, service extension wouldn’t be necessary if the passenger loading was equally distributed and buses were regularly spaced enough.

According to Margareta Friman and Markus Felleson, new services of public transport are being developed and old services are being improved or upgraded in order to meet the potential and present customer’s requirement. To encourage more people to use the public transport, services should be designed and performed in a way to meet the levels of service required by customers (Beirao and Sarsfield Cabral 2007). In addition, there are few factors of how customers perceive public transport. Factors such as frequency, reliability, travel time and fare level (Hensher et al. 2003, Tyrinopoulos and Aifadopoulou 2008), comfort and cleanliness (Eboli and Mazzulla 2007, Swanson et al. 1997), network coverage or distance to stop (Eriksson et al. 2009, Tyrinopoulos and Antoniou 2008), and safety issues (Smith and Clarke 2000, Fellesson and Friman 2008) are the main factors for users do not use the public transport and also customer express their points of view about services as well as to providing judgment of public transport according to the service quality.

According to Tew Shi Yi, to enhance the percentage level of using public transportation, they managed to come up with a plan which is to offer an effective, accurate and user-friendly system for users especially for the citizens of Kuala Lumpur and it indeed bring the significant benefits to the public. Laura Eboli and Gabriella Mazzulla, one of the factors influencing the travel user choices to use the public transport is the transit service quality. Those customers who manage to use the transit service, they will probably use transit services again. In contrast, users may not use the transit services next time if they are not capable to use it well. However, improving the service quality is important for attracting new users. According to Che Rosmani Che Hassan, Mahar Diana Hamid, Norazlin Dzulkifly, Noor Zalina Mahmood, bus is one of the main alternatives of mass transportation as it is not only has better coverage areas such as Light Rail Transit (LRT) and commuter train but also cheaper for public to use it. Also, they found out that existing bus interchanges often inadequate to meet the growing needs of customers. There are thousands of people use the bus interchanges around Kuala Lumpur to reach their destination in a day. Such interchanges are Hentian Puduraya, Hentian Duta, Klang Bus Stand and more.

Based on research made by the student from the University Malaya, the survey results happens to be true that, the reason why do most of the Malaysian used private cars instead of Public Transportation were mainly, they lack of knowledge about the availability of the public transportation around their area. Not familiar on how to use the public transportation. Although there are several types of public transport but yet people rather to drive their own car and stuck in the traffic jam for few hours than using with public transport that might somehow causes problems when it is less unpredicted. However, government has comes up with a plan which is to introduce a new set of traffic management policy measures to promote the use of public transport. To encourage the residents to use the public transport, several facilities has been provided by the government in public transport station such as extra parking spaces are added nearby the public transport station so that people can park their car and ride easily, bus shuttle from bus stop to the train station or add more bus or train frequencies in either neighborhood or the city area.

Ng Choy Peng and Dadang Mohamed MA’SEOM, private vehicles have led to severe congestion and pollution. Kuala Lumpur first started to operate the light rail transit (LRT) in 1996 following by the STAR LRT and PUTRA LRT. These are the two LRT systems that operate in Kuala Lumpur after LRT. It has been found that most of the LRT stations in Kuala Lumpur areas provide inadequate parking space and this is one of the reason public do not switch to using public transport. However, to promote the use of public transport, the local authorities recommended improving the existing bus services like bus lane needs to develop even better and so on. As for the construction of the commuter train, it must be well-developed and to make sure light railway transit (LRT) is able to cater the need of residents from suburban area to urban area.

Last but not least, it is also shown that the public transportation nowadays face a very big negative impact from all the consumer and passenger that travels around with the public transport, this proven a result that the public transportation has show a lot inefficiency services that provided by each company, poor connection from certain destination to a destination itself.

1.2 Research Problem

The problem regarding to this proposal is the customer perception service quality towards public transport in Kuala Lumpur. This research is to find our factors that influencing customers not to use with the public transport. Researcher found out that private cars has become the main choice of traveler’s mode of transport is because they dissatisfied with the service quality such as reliability, cleanliness and comfortableness, facilities, travel fare and time of the public transport. There might have been frequent complaints from the commuters and passengers that the public transport did not provide a good service such as departure always delays, insufficient passenger’s seats and others. Most of them lack of knowledge about the availability of the public transportation around their area. Consumer does not know the exact traveling time and duration from the origin to the destination itself and not familiar on how to use the public transportation. So therefore most of them would not take the risk into taking public transportation as their mode of transport. Besides that, they are easily confused on what type of transport to use to reach their destination; slightly it is due to there are too many choices of public transportation to choose from in Kuala Lumpur. Furthermore, the consumer does not want to waste time waiting for the transportation with no exact arriving time everyday when they own a private car where they do not worries anything about the availability of the car, the traveling duration, and it is far more accessible from time to time.

1.3 Research Question

What are the factors that affect public not to using public transport in Kuala Lumpur?

How does the service and requirements can be improved?

What is the extension level of the service attributes must be improved in the future?

What is the overall satisfaction level of users to public transport?

What is the item of service quality that leads to customer satisfaction?

1.4 Research Objectives

The main purpose of the objective for this proposal is to measure the user’s global satisfaction with public transport as well as to examine the customer perception of using Kuala Lumpur public transport according to certain factors. The main point of this research is to find out what is the level of expectation perception of Kuala Lumpur customers about service of public transport delivered and what kind of services that affect most of the people do not use public transport. It is very important to find out how does the service and requirements can meet the customer’s satisfaction, any improvement for government to maintain the public transport, factors government would take into consideration in deciding to use public transport more or drive less in order to encourage and promote people, especially the citizens of Kuala Lumpur to use public transport services more often. Government should update the latest information such as possible routes coverage, departure and arrival time of the public transport and travel fare to the user. Suggested route will be giving out to the users to ensure users using public transport in a shortest time and cheapest way with a limited budget to reach the destination itself.

Objectives of this research are:

To determine the reason for public to choose to travel with private car but not using public transport in Kuala Lumpur.

To identify the types of service and requirements to meet the customer’s satisfaction.

To identify the extent gap of between the customer’s perception and expectation.

To identify the best solution to improve the service quality of the public transportation, like more seats and comfortable seats.

Theoretical Framework and Conceptual Framework

Basically, the above diagram is the research shows how readers are to determine the factors that encourage car users’ switch from driving car to using public transportation in Kuala Lumpur more often. Factors that can encourage the car users to switch and use the public transportation are to upgrade and expand the service quality of that particular transportation. For example, KTMB need to put in a lot of effort into upgrading their services, especially during the peak time (working hours) so that the consumer can access to it with hassle free.

Customer satisfactions are also an important aspect in the customer perception, in order to make the customer satisfied into using the transportation are to make sure that comfort are there, the warm service are they and accessibility are surrounding the public transport itself. Furthermore are the Reliability of Public Transport, in order to make the public transportation a reliable one, the management of the transportation company, must always upgrading their services and expand their services, so that the consumer can feel reliable towards the particular transportation.

Diagram above is the model of conceptual framework, which is illustrating the relationship between service and quality development, customer satisfaction, responsiveness, route accessibilities of public transport, reliability of public transport (arriving on time), and the maintenance from time to time to public transport.

1.6 Significant of study

This research helps to indentify existing problem of what factors encourage car user’s switch to use public transport which may lead to the satisfaction of car users. Through this research, the government has to put its effort to make an improvement on the public transport system such as development of an integrated and efficient public transport system. Action should be taken into consideration to upgrade the public transport to car users in order to meet the requirements and provide an efficiency services which will give customer a wide perspective of satisfaction especially focuses on the expansion of Light Rail Transit (LRT) and commuter train services. By doing this, it will not only helpful and useful at this time and future planning as well. The result of this research will improve the car user’s satisfaction. In the meantime, this planning will encourage more people to use public transport. Furthermore, it does helps to indentify additional changes that can be done to avoid further impacts to the current site emphasized in this study.

Scope and Limitations

The scope of study is the public perception towards Kuala Lumpur public transport. Due to the time constraint, the researcher might not able to gather sources of the information from journals, online journals, further details, and newspapers. Beside of this, the researcher also facing some difficulties on the research paper because of the short time provided on the research process. Obviously, it is caused by the lack of resource that provided in KDU library and the researcher also facing some difficulties on getting the further details information about public transport in Kuala Lumpur with a limitation of resources. It also caused by the data that provided in KDU library is not the latest and the data didn’t up to date regularly.

Chapter 2 – Review of Related Literature
2.1. Factors influencing the customer perception service quality towards Public Transport in Kuala Lumpur

This review indicates that efficient public transport (PT) considered as one of the potential solutions to the problem of urban road traffic congestion (Hyman and Mayhew 2002,;Pucher et al. 2007; Vuchic 1999).The factors that influencing the customer perception towards public transportation are mainly because of the times due to the seemingly break down and the delay of train all the time, the customer do not want to take the risk taking public transportation without taking the public transportation, it will helps reduced the time of travelling and can avoid the malfunction of the public transportation all the time

The second factor that influence their perception are crowded and comfort, due to the public transportation are always crowded, there are some of the customer that afraid to take the public transportation, reason are because they have to be inside the public transport hot and stuffy, sometimes will occurred cases like sexual harassment towards the woman that travel using the public transportation. Not only that, when it is too crowded some of the customer unable to enjoy the seats due to lack of seats and also when there are too many people sometimes it will cause drowsiness when not enough air ventilate in the bus, train or taxi itself.

The third factor that influence the customer into taking the public transportation are the desirable routes are not covered by the public transportation, it is only covers some part of the city, suburban areas and town but not to most of the places, it is hard for those customer to travel using public transportation when some of the destination that offers by the public transport itself need transfers and also need walking.

The last factors that influence the customer perception are the infrequent public transportation. There are public transport that travels follow the time that set by the system, example like KTM there are a board stating that what time exactly will the train itself will arrive, but the train always reach late and never follow. So as the Monorail and also the Star LRT which provides the wrong information of time all the time? As for Putra LRT, is the only rail that shows the correct timing due to the, system will update its timing once the trains reach certain destination? Based on Apogee Research (1996), there are three main tools central to the assessment of public transport such as travel demand models, transport cost analysis techniques, transport sketch planning and impact spreadsheets and each of the tools will have their own benefits and disbenefits.

2.2. Service Quality

Surprisingly, few studies have so far analyzed this relationship. The concept of service quality involved outcomes, satisfaction of the users, and other intangibles of public transport expectations. In addition, facilities and more tangible aspect of public transports physical elements are also one of the concept of service quality (Fodness & Murray, 2007). Service quality also involves the perception and expectation of the service level delivered to the user which is meets their needs. Some models have been developed that attempt to link perceived quality dimensions to specific product attributes in the product development literature (Hauser and Clausing 1988, Nagamachi 1995). Government should increase the capacity of the public transportation, the lack of seats is what bothering the customer and why they do not ride on public transportation because it is tired to stand all the time. The service quality of the public transport is not really executed well. For example: The Light Rail Transit (LRT) and Keretapi Tanah Melayu Berhad (KTMB) always delays, insufficient space to carry more passenger seats and this is one of the reason caused the congestion occurred (Utusan, 2008).

Should also think of refurbish each and every of the station and stops and install the service which necessary for the convenience of all the customer and comfort while waiting for the public transport. Not only that they environment of the public transportation are good, but also the driver, staff and the one who work in the service line must possess a good heart in helping and assisting. Cleanliness and comfortable of public transport are the main appearances for users. Usually, users will focus on the cleanliness of interior, seats, and windows of the public transport. Therefore, the management has to make sure the equipment is up to date and in working order as well as the waiting areas were appropriately furnished, cleaned and well all the times. Employees and staffs of the public transport must always possess with lot of skills and knowledge on the service production in order to provide a better services to users. One of the measurements in service quality is the interior of the public transport, which is considered as the physical appearances (Parasuraman, et. al., 1988).

2.3. Reliability of Public Transport

According to Beimborn et al. (1993), it is important to provide a framework for benefit analysis and described the measurement techniques after reviewing the principle and issue for public transport benefit measurement. Reliability is focusing on frequencies and punctuality of the public transport which is arrives on time and able to meet the expectation of the users. It means the ability to perform the promised service which are more dependably and accurately (Parasuraman, et. al., 1988). Reliability of Public Transport is an important aspect, in order to gain the trust and the satisfaction of consumer. The public transportation itself must always understand what the customer need, like be punctual all the time, make sure that there are no difficulties happen, no extravagant fares being imposed at the guest or tourist. When there are a shorter way to reach the destination itself, don’t try another longer way to increase the far. Being honest all the time, this way, it will make the customer happy and thinks that the public transportation is reliable and also will gives a positive impact to the public perception and expectation.

2.4 Customer Satisfaction

(Richter et al. 2008a, 2008b) to meet potential and present customers’ requirements, quality investments that really raise the perceived service performance regarding these attributes constitute an important issue. In order to make the customer satisfied towards the public transportation, the management must always update their service and also their transport, so that the passenger can enjoy a comfort and happy ride. Staffs must always provide an efficiency service to the customers. With a reasonable fare, comfort, cleanliness and easy access to a destination or place through the scheduled, customers will gain the confidence of using public transport instead of driving their own vehicle.

Passenger takes the public transportation due to a lot of reason and the reason that drives them to take it. In order to maintain the passenger keeps taking the public transportation always make sure that there are no problems occurred during the ride or before the ride. Try doing survey to survey on the consumer on what can be upgrade and what can they do to make the customer more satisfied.

2.5. Responsiveness

According to (Parasuraman, et. al., 1988), another quality of dimension in measuring service quality is responsiveness. It means the willingness of the staff or employee to help the customers and to provide a better and prompt service to customers at the same time. However, the attitude of the driver or staff in public transport must be always possess with a good behavior. Staff and driver are required to behave in politeness and friendly with the customers instead of showing anger or rudeness to the customers. The way they speak to the customers and the way they give customer a hand are important in the service quality of responsiveness. In spite of this, it indicates that customers or user perception and expectation to the service quality in the public transport are become more important and couldn’t be neglected by the management.

2.6. Route Accessibilities

With the demand for public transportation is gaining day by day, the bus operator and rail operator must think of creating new bus routes and also train routes to let the customer access to other places which are hardly had any transportation access to it. Especially now the government had come out with an idea of building public transportation for Cheras and also Kota Damansara rail line. Even though the bus caters mostly to all the routes in Klang Valley, whether it is deep inside or outside the boundaries, but there are still some of the road that still haven accessible by the bus and also other public transportation itself. Even though some of the place had already available for public transportation but some of it needs interchanges, this will bother the customer for changing or transfer to another station.

2.6. Maintenance From Time to Time

Services that are dependent on already-existing, complex systems of infrastructure and organizational arrangements are likely to require a different logic (cf. de Brentani 1995, 2001). For a better public transportation results and attract more and more people into taking public transportation, what a operating company must do are to make sure that they always check their transport. Make sure that maintenance do from time to time to cause the train or bus or even taxi break down or having difficulties when there are passenger that are using the public transportation. Because once the train is having any difficulties problem, it will take approximately an hour or two to fix the problems. With such kind of problem will always gave the customer or passenger negative feedback towards the public transport. Even though it is not always the negative feedbacks all the time but is important to avoid such thing happen. The company must take extra precaution.

Chapter 3: Research Methodology
3.1. General Methodology

Hybrid research approach is the general methodology in this research. The definition of Hybrid research approach is the combination of both qualitative and quantitative methods and these are the two methods research that the researcher used for the proposal. Besides this, it is also known as a mix of approaches and there are also some benefits by using this research. The researcher will have a deeper understanding and knowledge of the results when using these two types of method. The efficiencies in time and cost are also one of the benefits. Other than that, this research approach allow the researcher to solve the problem occurs with the qualitative research. Hybrid research approach can solve the problem of unfamiliar to the background of the research.

3.2. Research Design

There are two types of methods the researcher used in this research. Firstly, Qualitative method, which is more to observation and also the data that collected is fact and unchangeable. The collection of the data will be based on quality and it will be presented in words. The researcher will study and interpreted the data that have been collected through online research. Qualitative method is subjective. Due to the perception of everyone is different from each other. Hence, it is difficult to generalize. The researcher will be more understanding by using this method. Quantitative method relies on the research instruments used to collect and measure the data. It is necessary to use the quantitative methods in order to understand and comprehend the core purpose of this study.

Both qualitative and quantitative methods will be use as the central focus of the research method. The survey techniques that the researcher used for the qualitative method are fully representing it. On the other hand, the researcher are doing interview for the qualitative methods. The respondents for the interview will involve Kuala Lumpur frequent public transportation user. Interview allows the researcher to gather more information and also have a better understanding on the topic. Researcher not only can get information that is not available in literature method by interview the interviewee as well as the questionnaire also can be tailored to meet the different needs of the respondents. As for the questionnaire, it will be semi-structure and more flexible during the interview.

3.3 Sources of Data
3.3.1 Primary Data

At first, the primary research is done in order to obtain the raw information from the public directly for the research proposal. For the research part, the researcher will focus on the customer perception service quality towards public transportation in Kuala Lumpur and the negative thinking of people to use public transport. Meanwhile, the researcher will find out methods that are useful to promote and encourage more people switch to use public transport especially car users. In this research, a survey that containing 10 simple multiple choices questionnaire and also an interview will be use it to collect the primary data. It takes about 5-10 minutes to fill in the survey questionnaire for each respondent. There are some choices for each of the questions and each respondent just have to choose one of the answers that they preferred the most.

Respondents are required to jotting down their own comments in the questionnaire form that stated with their own opinion towards public transport in Kuala Lumpur. This research is useful because all the survey forms will be collected and gathered by the researcher once they have done. Besides that, an interview will be conducting around the Kuala Lumpur City Centre and the group that the researcher targeted would be the all centric and mid-centric. Primary Data is also collected for this research by interviewing the Kuala Lumpur frequent public transportation users. The definition of the public transportation user will be the Malaysian users that use the public transport almost every day. Through the interview, they can provide a better idea and personal view which can help the researcher to gain more information while doing the proposal. The interview would involve questions asked by the researcher ‘one-on-one’ to a subject regarding the customer perception towards public transport and also to enquire for their opinion what types of the requirement can meet the satisfaction of public transportation users. The targeted group of the public for this interview would be college students selected randomly. The researcher will collect and analyze the information from the interview and use it to support the result of quantitative data.

3.3.2 Secondary Data

Besides using the primary researches, secondary researches are used widely in this report by the researcher too. Secondary data defined as the data that acceptable by most of the researchers and the data will definitely published in the public by other researchers. Normally, secondary data can be easily found on websites, journal, articles, books, textbooks, magazines, and also some other online resources. However, the main seco

Banyan Tree was very successful and grew very fast in the Asian sector. In this report we will look at the difficulties Banyan Tree has expending globally. At this stage Banyan Tree needs to overcome certain challenges in order to continue its expansion. We will provide suggestions on how to overcome these challenges in this report.

Table of Contents

Executive Summary 2

Table of Contents 3

Background 4

Action and Implementation Plan 10

Appendix 1 Banyan Tree Current and Upcoming Destinations 11

Reference List 12

Background

Banyan Tree Hotels and Resorts was established in 1992 as a family business by Ho Kown Ping. Enz & Farhoomand (2008) stated Ho’s family believed Banyan Tree Hotels and Resorts needed to have a unique strategy so it could stay long term in the market, and Ho was influenced by his family on this idea.

The company grew rapidly under Ho’s leadership. Ho opened Banyan Tree resort in 1994 for high spending customers and provided premium customer service. It opened another brand called Angsana in 2000, this brand focused on young families and it was not as luxurious as Banyan Tree. Enz & Farhoomand (2008) stated that Banyan Tree Spas and Angsana Spas provided different products and customers’ experiences. The ambiance of Banyan Tree Spas was more about the traditional, luxurious and classical while Angsana Spas provided service in a modern and colorful environment. Banyan Tree Oberoi Spas is a brand to provide spas skills to Oberoi Group of India.

“Banyan Tree managed and owned interests in upscale niche hotels and resorts which included 18 resorts and hotels, 49 spas, 53 galleries and two golf courses spread across nice counties” (Enz & Farhoomand , 2008). ( See the Appendix 1 for Banyan Tree current and upcoming destinations). Enz & Farhoomand (2008) mentioned that Banyan Tree was rewarded with over 250 awards and accolades. Ho received the Innovation Award from the Hotel Investment Conference Asia in 2003, Entrepreneurship Award from the Hotel Business School and Ernest in 2005 and Young Singapore, Lifestyle, Hospitality and Retail Entrepreneur Award in 2005.

Banyan Tree has a few key success factors in their operations, management, service, branding and marketing. Banyan Tree provided various services, the revenue come from residence and property sales and spa and gallery operations based on Enz & Farhoomand (2008). Its operation has six business strategies including hotel investment, hotel management, spa operation, gallery operations, property sales, design fees and others starting from June 2006 based on Enz & Farhoomand (2008).

Enz & Farhoomand (2008) noted that revenue of hotel investment took up more than half of the company’s revenues in at the end of 2005; The revenue of hotel management from Banyan Tree was based on management, incentive and other fees including reimbursement of fees received from the sale and marketing service in other resorts and hotels which Banyan Tree provided.

Spas were regarded as one of the main characteristics. According to Enz & Farhoomand (2008), Banyan Tree Phuket won the Crystal Award for Best Spa in Asia from Spafinder’s Reader’s Poll in 2005. Banyan Tree spas could only be found at Banyan Tree resorts and hotels except for the one at Westin Shanghai as it wanted promote the brand in China, while Angsana spas could be found in all other resorts managed or owned by the company and other operator’s resorts and day spas. Oberio spas by Banyan Tree ran under spa management. It is different from room rates, Spas treatment prices were not influenced by seasons. So the pricing structures were different in the individual spas.

Enz & Farhoomand (2008) stated Banyan Tree Gallery and Angsana Gallery rewarded as the Pacific Asia Travel Association Gold Award for Heritage. Branded gifts, spa products, specialties and others souvenirs could be found in resorts, hotels and spas. Museum shops provided a unique collection of museum duplications and arts. In this way the company’s brands got exposed and at the same time it made revenues.

Enz & Farhoomand (2008) also stated that the company had sold 470 resort residences at Laguna and Phuket. Banyan tree’s strategy was to connect properties where close to its resorts and spas. The company got profits through selling the resorts residences while it kept unsold properties as resorts rooms to get more hotel investment.

According to Enz & Farhoomand (2008), Banyan Tree Hotels and Resorts provided design service, lease office service and golf course service. All the costs of construction, renovation, alternation and construction management fee were charged by the owner. They believed it could reduce costs, have good quality, be more efficient and keep the design consistency in this way.

Diversity brings a broader range of expertise, resources and viewpoints to projects (Townsend, Demarie, & Hendrickson, 1998, cited in Grosse, 2002). According to Grosse (2002) having people from different cultures enhances the experience for everybody and strengthens a team. Enz & Farhoomand (2008) mentioned that top management members of Banyan Tree came from 20 different countries which brought Banyan Tree rich experience and leadership while 5,000 staff from Banyan Tree came from 35 different countries.

According to Enz & Farhoomand (2008), Banyan Tree branding was the core competence since Banyan Tree was created and it had been the key to its success and framework for its global expansion. Enz & Farhoomand (2008) identified cross-selling as one of the strategies from Banyan Tree. Banyan Tree launched a customer reward program called “Sanctuarly Programme” in 2003 to promote other Banyan tree hotels, resorts and spas through giving qualifying customers free stays and incentives. The company tried to make these customers become loyal to its different brands.

Word of mouth is very important within the hospitality industry. According to Enz & Farhoomand (2008), Ho believed word of mouth would be one of the strategies for Banyan Tree’s marketing. Banyan Tree’s vision is based on its brands and its strengths were the corporate social responsibility, property advantage and staff shared the Banyan tree ethos of CSR.

Enz & Farhoomand (2008) suggested that Banyan Tree brand appealed business collaborators such as American Express and other quality business partners. These business collaborators helped Banyan Tree getting high spending customers and provided it other global systems and marketing program as well. Enz & Farhoomand (2008) also stated that the world Travel Market and other major international tradeshows promoted the Banyan Tree Brands as well as provide it a chance for wholesalers. Other famous hotel companies approached Banyan Tree to open a Spa, and it was free advertising for Banyan Tree as well as bringing it to new places.

Banyan Tree had distinctive competencies including corporate Social Responsibility Philosophy (CSR) and The Green Imperative Fun (GIF). Enz & Farhoomand (2008) stated that CSR was designed to minimize the damage for the environment and help local business and communities. It is also a free advertisement for Banyan Tree. The Banyan Tree website mentions that GIF was created to continue formalizing its corporate social responsibility efforts in 2001. The GIF focused on environmental action and community projects in Banyan Tree’s neighborhood.

” Apart from competition within a specific location, there was also competition between locations.” ” Typically, Banyan Tree didn’t compete with large -scale hotel operators, as most of its resorts had fewer than 100 rooms or villas and focused on niche markets in premium resorts and hotels” (Enz & Farhoomand, 2008). Enz & Farhoomand (2008) stated that Banyan Tree’s closet competitor were the Aman resorts, COMO Hotels and Resorts, Six Senses Hotels & Resorts, One-and -Only Resorts and the Four Seasons Resorts while Angsana resorts and spas’ had different competitors at each outlet such as One-and-Only Kanubura and Shangri-La Hotels.

Enz & Farhoomand (2008) mentioned that Amanresorts resorts focused on local surroundings including open view of rice files etc. It was designed to provide distinct atmosphere and customers experience in different locations. COMO’s resorts ranged from cities to secluded places, it claimed to offer the best Yoga teachers in the world. It also mentioned that Six Senses Hotels and Resorts focused on staffs’ behaviors and atmosphere at each resort. One -and -Only Resorts’ core values is “blow away the customer”, it offered customer a unique and luxury experience. The resorts which were rewarded were located in the most beautiful places in the world. Enz & Farhoomand (2008) stated in the interview that Four Seasons is a global company and resorts were located in urban city centers which established in 1960. The company stated to be on the top of running luxury hotels and it provided a “home cooking” service. Shangri-La Hotels and Resorts was the largest Asian hotel group in Asia and the Middle east, and half of their business would come from China by 2010.

Enz & Farhoomand (2008) identified Ho was not afraid to face these competitions as he was sure Banyan Tree could lead small to medium sized luxury hotels as long as he overcome a few challenges which includes to be developed into globalizing service operation as well as avoid diluting its brands.

Issue Statement & Problem Analysis

Currently Banyan Tree is mainly located in Asia and is expanding rapidly in that part of the world. Banyan Tree seems to have two core businesses which overlap each other, being resorts and real-estate. The management is looking into globalizing Banyan Tree and expending further into western countries. This however doesn’t come with the needed challenges.

Banyan Tree suffered together with the travel and tourism industry the Asian financial crisis of 1997, Bali bombings in 2002, SARS outbreak in 2003 and the Indian Ocean tsunami of 2004. These kinds of crisis had a big impact on Banyan Tree and others in the hospitality and travel industry resulting in “low occupancy” (Enz & Farhoomand, 2008). In the appendix of Enz & Farhoomand (2008) it can be seen that during the SARS period in 2003 a 10 to 50% drop in travelers was occurred in Asia, which shows in Banyan Tree’s operating profits. As Banyan Tree is currently mainly located in Asia, this drop in travelers didn’t support Banyan Tree in their effort to globalize and in fact slowed them down.

Banyan Tree would find new locations based on the criteria of “room rates” of the “typical industry player”, which room rate could be ten times lower of what Banyan Tree would ask for (Enz & Farhoomand, 2008). It is mentioned that this “strategy” worked on many occasions and “premium pricing” could be demanded for between 5 to 7 years, before competition entered. This strategy would indicate that the Banyan Tree organization still highly benefits from undeveloped areas and a competition which is less competent. From this we can conclude that if the hospitality and travel industry in China, India and other developing countries in Asia become more developed, the competition will become fiercer for Banyan Tree. This intensification of competition in their home market would surely slow down the globalization of Banyan Tree.

Enz & Farhoomand (2008) mentioned in their interview that the property sales generated more than half the operating profits of the year 2003. For the year 2005, with the depression in the hotel segment, profit from the property sales represented 91.6% of the total operating profits (Enz & Farhoomand, 2008). In the China Daily (Oct 20, 2010) it is mentioned that more Chinese cities implement tougher regulations through “loan caps and higher down payment hurdles”, in order to cool down an “overheated property market”. Government restrictions like these imposed in China can become a bottleneck to foreign investors. As China is a major market in the Asia sector and thus for Banyan Tree, developments as these will have a negative impact on Banyan Tree’s property sales department. In the worst case scenario it could have a negative impact on their growth.

It is mentioned in the interview that Banyan Tree itself is mainly afraid for “brand dilution” (Enz & Farhoomand, 2008). The paper also mentions that this brand dilution would mainly occur through not having enough “man power”, not having proper “infrastructure”, spreading itself to thin or venture into locations that could have negative impact on their brand. Banyan Tree being afraid for brand dilution shows very clearly the issues they are having in expending their organization further, especially to new areas outside of Asia . It can be assumed that their current strategies are mainly focused on Asian culture and aren’t truly global. Therefor true globalization strategies would need to be implemented in order to be successful in expending organization globally.

In short, strategy for new locations is based on finding competition in interesting areas with extremely low room rates, which works in undeveloped areas. Global expansion has slowed down due to several major crises in Asia while property sales have supported the organization in total operating costs. While expending the organization globally still have some issues which need resolving.

Recommendations

Key issues in globalization include the constraints imposed by language, culture, and government regulations (Lovelock & Yip, 1996). In the Glion institute higher education online study website (2010) mentioned one of most popular ways to being global is franchising and franchising accepts fast and extensive growth. Franchising is a system by which a firm grants to others the right and license to sell a product or service and, possibly used the business system developed by the firm (Fitzsimmons & Fitzsimmons, 2010, as cited in The International Franchise Association). Benefits are as stated in Fitzsimmons & Fitzsimmons, (2010) less business risk because of the ability to become part of an established service brand through franchising, enjoying benefits of national advertising, the acquisition of a proven business and benefitting from a centralized purchasing system which saves cost while giving gives up personal independence. Through franchising as a vehicle it allows Banyan Tree to be able to expend swiftly into new markets, but only on the condition their global marketing plan has been fully worked out and proved to be fully working.

Information-based services offer management greater flexibility to split the back office and front office, with opportunities to centralize the former on a global or regional basis (Lovelock & Yip, 1996). In order to improve Banyan Tree’s infrastructure their current backend information system should be renewed in order to facilitate expansion, competiveness and globalization efforts. Through this system customers could be tracked with their personal wishes and habits making it possible to provide services towards the customer next time he visits without the need to ask and being able to prepare the customer’s needs before arrival. This is one step towards global premium service to Banyan’s customers. Besides customer preferences training, policy updates and information sharing could be made possible guiding all of Banyan Tree’s venues towards standardization and compliance, which in the end would provide the customer with a single Banyan Tree experience, not matter which Banyan Tree would be visited.

Enz & Farhoomand (2008) mentioned that globalization of the Banyan Tree organization will “spread the risks of natural catastrophes” and also “reduces the impact of cyclical and seasonable fluctuations in the tourism industry”. Focused network is “a service firm that must be readily accessible to customers” (Fitzsimmons & Fitzsimmons, 2010). They also state that a “focused network allows management to maintain control, which ensures consistency of service”. It is advisable to implement a multisite strategy and become a focused network which has as benefit that it supports the franchising method and thus rapid growth. As a global service strategy importing customer service strategy type would fit Banyan tree. Fitzsimmons & Fitzsimmons (2010) stated that the importing customers type as “a service evolves that is focused on the attraction” of customers. This method works well together with the service type called “beating the clock” at which 24 hour service is provided to customers. The ability to be able to have a 24 hours reachable reservation desk online or by phone is a must for a global organization. Note that this reservation system would go hand in hand with their information systems. This reservation system would also promote their quest in globalization of their organization as they make themselves at anytime at any place reachable.

According to Hallowell (2000) that Four Seasons has a low staff turnover compared to industry standard because of its training strategy and promotion program. Attracting and training new staff is more expensive and difficult compared to retaining current staff. Banyan Tree could follow Four Seasons’ employee strategies to train and develop its staff to maintain a low turnover rate.

Action and Implementation Plan

True global products and services have a standardized core product or service that requires a minimum of local adaptation (Lovelock & Yip, 1996). They mentioned further in their paper that managers may find that the best way to achieve global consistency in the core product is to create easily replicable service concepts, backed by clear standards, which allow for either franchises or country managers to clone the original core product in a new setting. Banyan Tree needs set up a global team in order to prepare for a global strategy. This would be done through using all of their general managers at each resort. At the end a strategy should be finalized after which the implementation phase can be started.

In order to service and track their customers an online accessible backend system should be implemented. A well designed and implemented system would provide major benefits to the Banyan organization in their pursuit to go fully global. Banyan Tree should contact an off the shelf software supplier which meet their demands with options to customize their software. This way their information system doesn’t need to be developed totally from scratch and future updates can be implemented easier as the software is based on existing software.

“Labour intensive activities can be supported by major investments in communications and computer systems that facilitate the transfer of information into and out of the process” (McLaughlin & Fitzsimmons, 1996). In order to keep a low turnover of staff it is advised to create a special program for that. Step one would be to provide continues training to the staff, in order to support their career. If staff have the potential to keep growing within the company including its rewards there is no reason to look outside for another job. Secondly staff needs to be respected as peers, no matter the position. Thirdly a certain company atmosphere needs to be created in order for people to feel happy and close to each other. This supports their needs as well as the company as it promotes team work.

These strategies and plans will support Banyan Tree in its quest to expend globally, However it still has long way to go in order to develop into a global origination.

Appendix 1 Banyan Tree Current and Upcoming Destinations
Year
Destinations

Existed destinations

Banyan Tree Hangzhou – China

Banyan Tree Lijiang – China

Banyan Tree Ringha – China

Banyan Tree Sanya – China

Banyan Tree Bintan – Indonesia

Banyan Tree Ungasan, Bali- Indonesia

Banyan Tree Club & Spa Seoul-Korea

Banyan Tree Madivaru, Maldives

Banyan Tree Vabbinfaru, Maldives

Banyan Tree Cabo Marques-Mexico

Banyan Tree Mayakoba-Mexico

Banyan Tree Seychelles

Banyan Tree Bangkok-Thailand

Banyan Tree Phuket-Thailand

Banyan Tree Samui- Thailand

Banyan Tree Al Wadi-UAE

2011

Banyan Tree Macau-China

Banyan Tree Riverside – China

Banyan Tree Kerala – India

2012

Banyan Tree Lang Co – Vietnam

Banyan Tree North Bund – China

Banyan Tree Tianjin – China

Banyan Tree Alqueva – Portugal

Banyan Tree Jiuzhaigou – China

2013

Banyan Tree Yangshuo – China

Banyan Tree Huangshan – China

Banyan Tree Costa Navarino – Greece

Banyan Tree Tamouda Bay – Morocco

Banyan Tree Sifah – Oman

Banyan Tree Panda Town – China

Source: www.banyantree.com

Service is the main essence of Hospitality .Guest service means being attentive to the guest request and needs. Good quality service is the main essence to run a good hotel and it can achieve by creating such a environment for the guest that should give feeling of “Home away from home”. Guest should feel comfortable and relaxed while staying in the hotel. Every guest should be handled as special customer which help in making good relation with the guest. It does not matter how good is the ambience, how tasty the food is, it’s always the service and attentiveness which guest experiences which determines their return in the hotel. Hospitality is known for its generously providing kindness and care, who is in need. Knowing what exactly the customer expects is the first and most important step in delivering good quality service.You cannot give quality service without knowing customer expectations.

Hotels or inns are believed to have started around 12000 years ago.Traveling concept started in Greece and ancient Rome in 800BC-146BC.Early warriors and traders were the travelers.In thosedays accommodation means offering a cot or a bench in corner of a room or astable, most of them were private residences that used to give temporary residence or give loading to strangers.In the Dark Ages travelers had little choice except to stay in monasteries that offered food and shelter.The idea of aˆ‹aˆ‹hosting travelers was taken even further when trade and commerce began to boom, prompting taverns and inns to arise, especially in ports cities. That time sanitation and privacy was not in exist.When money came in establishment in 6th century BC, hospitality was one of the first enterprises where money was exchanges for receiving service.Inthose days Hotels or inns not used to operate for 24 hours, after a certain hour the main door of residence would close andafter that one cannot enter although you are a customer. These Residences or inns were generally situated near intersection of two major roads or near railway station or at the entry of a city. Since then Hospitality industry has grown into a highly competitive industry (WelingkarI., 2011).

Hospitality now just not about getting from point A to point B,its about how you go to your destination forwarded by how much you enjoyed your stay. Tourism plays an important role in the growth of throughout the hospitality industry because people will never stop traveling and while traveling they always require a place to stay. Intelligent commercial planners have realized the industries’ potential and are taking advantage of the same by providing all the wants and needs of potential guests.

Hotel operators are radically changing the service manner in which they provide food,drinks,and accommodation within the organization,the main reason for doing so is that hospitality industry is movingvery promptly. Customers are varying, technology and markets are changing rapidly.Managers are reexamining their existing service offering and deciding which innovation will create more value.Managers are researching on innovation, which are economically sustainable to the organization but also delivering additional value to their customers. Each year Market Metrix evaluates industry best practices and publishes “Hospitality Trends and Opportunities.” One important trend is to focus on is “Personalization” and it is impacting customer engagement and loyalty for hospitality companies.(Merchant, 2011)

Hotel industry has changed a lot compared to recent years and is changing continuously. Numbers of changes are coming in way to give service to guest. New applications are coming in the market that is helping in providing better customer service.They make a big difference in terms of winning new businesses and new customers.Technologies continue evolving to make it as easy to use as possible for the hotels’ staff.In the past, the systems that hotel staff uses have been traditionally designed and required a great deal of training in order to be used successfully.Hotel technology will continue to evolve and improve so that training is minimized and the type of training that the hotels can concentrate on will be on hospitality-oriented, customer facing services.The main emphasis is on how to treat the guests, not how to deal with computer systems.

Service innovation not only involves new ideas or new technology but modifying and renovating existing ideas by new and unique thinking.The main objective of innovation is to improve operations, guest service and revenues. However, Hotel industry is one of the oldest industries so it is not easy to innovate in industry with traditional methods. Service science gives us a good chance to innovate services in a new day. As a growing industry, hotel industry includes all types of accommodation’s from 5 star luxurious properties to youth hostels, which offers a variety of services including but not limited to food, beverage, laundry and valet services.

Servqual and TQM-Total quality management are the two widely used concepts within service industries to understand the perceptions of target customers regarding their service needs. And to provide ameasurement of the service quality of the organization.Servqual is an empirically derived method that may be used by a services organization toimprove service quality.The method involves the development of an understanding of the perceived service needs of target customers.These measured perceptions of service quality for the organization in question, are then compared against an organization that is “excellent”.The resulting gap analysis is used as a driver for service quality improvement(lalvanzonline,2011).TQM processes are mainly divided into four general categories: plan, do, check, and act also called as PDCA cycle. In the planning ,people define the problem to be addressed, collect relevant data, and ascertain the problem’s root cause; in the doing phase, people develop and implement a solution, and decide upon a measurement to gauge its effectiveness; in the checking phase, people confirm the results through before-and-after data comparison; in the acting phase, people document their results, inform others about process changes, and make recommendations for the problem to be addressed in the next PDCA cycle (Margaret Rouse,2005)

The boutique hotel is an excellent example of innovation offering in hospitality industry. A boutique hotel is one that is generally not chain-affiliated, features an intimate, stylish appearance and provides impeccable amenities(Cathy Rogers,2011). The target market for most boutique hotels is the 25-55 age range, most within the middle to upper income level.These hotels are generally situated in a stylish location .The goal for a boutique hotel is a level of personalized service not necessarily doable in a larger hotel. At many boutique hotels, the staff knows each guest by their name. Most offer 24-hour guest services. Some offer the comforts of canopy beds, bathrobes and fireplaces in the lobby. Others offer healthy food choices, mind and body themes and on-site bookstores.As a boutique hotel varies in other features, so does its technological amenities. While some offer the latest in technology, others focus on a calm, soothing environment. To some patrons, the bed and breakfast concept may be similar to that of the boutique hotel. Many boutique hotels have on-site, reputable dining, as well as bar and lounge areas that are also open to the public. As the trend continues to grow, many hotels market themselves as boutique; most being small, luxury type hotels worldwide.

Eva Floor is also a new concept which has started in India, by The ITC group, called Eva Floor which means a floor only for ladies travelers. Seven hotels have currently been outfitted with the ‘Eva Floors’.The main concept to come up with such idea is to provide maximum safety and security to ladies travellers. Amenities on the Eva floors include extra security in the form of double latches, special floor access cards, all-women staff and a separate check-in counter. Women like pretty colors, hate harsh lighting, are prone to lay around a lot, and spend most of the time in the bathrooms, the rooms are decorated in soft pastels, have special lighting, separate ‘day beds’ for an afternoon nap, larger counters for cosmetics, high-end toiletries, silk robes and bathroom slippers, more powerful hair dryers, and ironing boards (Juliana, 2005).

A good and important invention in Hotel services is the use of Information Technology. IT innovation are beneficial and have future benefits for Hotels.IT is playing a very important role in hospitality industry.Technology powers and contributes to the growth to practically every industry in the present age. Hotel industry too isn’t insulated from its effects. Many new technologies have invented to run the system smooth and flexible. IT has minimized the human efforts in many levels. Some of the good examples of IT innovations includes Express check In/Check Out, , internet check in/check outs, wake up system , electronic door locks ,in-room pay-per-view, electronic safe guards, express check-in/out systems, CD/Dvd Players, voice mails, multiple phone lines,electronic mini bars. Technology powers and contributes to the growth to practically every industry in the present age. Hotel industry too isn’t insulated from its effects. Many new technologies have invented to run the system smooth and flexible.

Now, with the invention of the internet and other electronic channels, new media offers an avenue for hospitality companies to gain an advantage. At one time travel agents were almost controlled the hospitality industry. They were largely responsible for creating guests’ travel plans and offering specified rates. While large chains and big time destinations can afford traditional marketing channels, smaller, independent entities can gain an advantage through new hospitality concepts. Companies such as Expedia, Tripadvisor, and TravelCLICK help level the playing field and empower the host as well as the traveler more than ever before in the history of the hospitality industry. Globallypeople are working overtime to take advantage internet, in order to catalyze their sales and to improve customer relations.Internet is playing a key role in development of hotel industry today. Social networking sites like Facebook, Twitter etc. are interestingly playing a dominant role in strategies of hotels all over. User generated feedbacks and reviews on such websites play a huge role in popularizing the services of hotels by word of mouth. Further, it also becomes easier to stay in touch with and maintain relationships with ex-clients by making use of online tools.

The number of travelers booking and researching online is growing impressively. According to one research, more than 114 million people will research travel online this year, while 94 million will actually book reservations. While more than 50 percent of travel bookings are made on the Internet, the online travel market has matured and expects modest growth and stabilization.

More and more travelers are using their mobile devices to not only research lodging and travel options, but to book and communicate room preferences directly with the hotel. Mobile channel booking has increased four times between 2008 and 2010 according to Forrester Research. Google is projecting that mobile will overtake PCs as the most common Web-access device by 2013. With travelers adopting smartphones and tablets at such a rapid pace, it’s crucial for hoteliers to optimize their website for mobile usage to capture potential mobile transactions(RobertRauch,2011).

About a decade ago, hotel industry was much more concern on people who are now mostly in their 50s and 60s but now hotel industry has started to anticipate a group of travelers who are in their 20s to mid-30s and are very important for economic growth. They are more attracted towards technology, social media and design. Many hotels are renovating their existing hotels or introducing new ones with free hotel wide Wi-Fi connections, large & welcoming lobbies with modern age ambience, comfortable fittings, state-of-the-art fitness areas; in-room power consoles to plug in iPads, laptops and other devices; and stylish bar. Some are also coming up with night social events, like happy hours and free wine tastings, aimed at attracting smartphone generation to their hotels . The changes involves higher-quality beds, brighter lighting and bigger work spaces. And those travelers were loyal to brands that offered reliable, comfortable services. Wi-Fi service is not only demanded but expected. High-speed Internet is as essential as beds and towels (Janet Morrissey, 2012).Younger travelers tend to visit three or four different restaurants and bars a night, so hotels are opening up multiple bars and lounges with different themes at different times of the day to attract new crowd . Many many new concepts are which offers free daily events, including tea tastings, yoga sessions and wine tastings etc.(Stowe Boyd, 2011).

The Arrabelle at Vail Square is implementing IntelityICE (Interactive Customer Experience) mobile technology for guests to use on Android, Apple smartphones and tablets. The Arrabelle’s traditional amenities, from in-room fireplaces to snuggly robes, will be complemented by the arrival of the most innovative, modern in-room technology available.After simply downloading the ICE app, all of the hotel’s services can be accessed directly from the palm of a guest’s hand. At the touch of a finger, guests can make a housekeeping request or look up information about the hotel and local attractions. They can also conveniently view signature dishes, like Executive Chef Douglas Dodd’s lobster mac and cheese, available at Vail’s hot new food and drink spot, Tavern on the Square (Hospitality Technology, 2011).

Breadcrumb, an easy-to-use, powerful and affordable iPad point-of-sale (POS) system helps hotels to run their restaurants, bars and cafes more effectively. Breadcrumb combines intuitive and sophisticated software with outstanding support. Breadcrumb removes the complexities, frustrations and high costs common to legacy POS solutions. Breadcrumb streamlines all activity at local restaurants, cafes and bars, from taking and placing orders, to table management, payment processing and analyzing sales so merchants can learn about and improve their businesses.Servers can search for menu items or rearrange tables with a finger swipe, software updates are free and automatic, and we even ship new customers an all-in-one Breadbox that contains all hardware required to get started.Everything a restaurant or bar needs to operate more efficiently and deliver impeccable customer service. Breadcrumb has a full range of features that allows hospitality businesses to manage labor, take orders, process payments and analyze performance. Users can merge or split checks, add or adjust menu items, set employee access levels, view real-time sales and labor reports and more.

The Plaza, the landmark New York City hotel located on Central Park South,have taken hotel lodging to a whole new, high tech level began by offering iPads in each of its guest’s rooms.The first hotel in the world to provide not only a tablet for each guest room, but a tablet with Intelity’s ICE (Interactive Customer Experience) software to offer guests services and room controls.These iPads gives the abilities to guests to control hotel services and customizable content.These iPads are incorporated with the functions like to check flights, order room service, make dinner reservations, coordinate transportation, reach the concierge, request wake-up calls, explore destination guides and call a housekeeper (Katie Kindelan, 2011).Intelity has released the highlights of a two-year study of guestroom iPad usage. The first such study conducted using data from actual hotel guest usage.The study showed that 82% of guests used the tablet during their stays on a year-round basis. April had the highest average guest usage at 91% (Hotel Technology, 2012).

The industry’s concern towards security has increased impressively due to severalterrorist attacks worldwide in recent years, and also because of the tourists’ kidnappings, robberies and assaults.Security of all types of hospitality and tourismoperations is critical and plans should bemade for each kind of threat.Personal safety of guests is the first priority (Walker, 2010). Increased security measures have forced hotel industry to upgraded their security measures by investingmillions of dollars in order to give the topmost security to the guests (Hall etal, 2003).

Expectation is one of the most important thing related directly to the guest that the hotel has to know in order to be able to provide the service that fulfill the needs and desire of the guest. It’s the key to know what’s the hotel has to provide in order to make the guest feel satisfy. Before experiencing the service, each guest must have their own expectation. As what Pizam and Ellis had discussed in their research, the meaning of expectation can be describe as “a mutable internal standard which is based on a multitude of factors including needs, objectives, past personal or vicarious experiences with the same establishment restaurant, with similar establishments, and the availability of alternatives.

Besides on past personal experience and other factors have been mentioned, the expectation of the guest can also be based on what’s the hotel had been promised to the guest. Not only that, another factor such as advertisement which is based on external communication can affect the expectation of the guest. For example, the guest who is looking for five star hotels for the accommodation during their holiday will search some particular hotels through the website, brochure, etc. If the advertisement of that particular hotel is very attractive and the physical of the hotel looks luxury and interested, most probably it will build higher expectation to the guest. Halstead (1994) also stated that the guest who, didn’t have any experience before they go to one particular hotel, will rely on external source of information.

H1: Good advertising could probably affect and increase the expectation made by the guest.

Moreover, through the research made by Getty and Thomson in 1994, it is known that “the expectation should be elicited prior to the service being provided; otherwise it will be influenced by perceptions of the actual service being provided.”For instance, the guest may change her expectations during the service encounter and use those changes (perhaps more realistic) expectations as the standard of comparison. Many researchers support that statement because some think that the information that the guest receive during the current service will affect the expectation they have made before the service experience.

Halstead (1993) found that “expectations that are measured after service experience was higher for dissatisfy customers than for satisfy customers.” On the other side, the guest, who has little or no experience of product and service before, will generate little information that leads to lower expectation made on the first time they experience the service. For instance, the guest who has never been stayed in five star hotel will have lower expectation about the five star hotel they are about to stay. This happened because the guest doesn’t know whatare the products and service offered by the five star hotel, the guest just has little information that might be gotten from the advertisement they have seen before.

Though there are differentiations for both the factors influence expectation and the times the guest makes their expectation, but normally the expectation of the guest can be grouped as several parts. As written in the research made by Lewis and McCann (2004), they classifying the expectations that based on what the guest expect from three or four star hotels. Below are the results of the ranking both business and leisure guests expect through their staying in three or four star hotels:

Clean, comfortable bedrooms with all items in working order.

Good quality food and beverages.

Friendly, helpful, polite and efficient staff.

High level of room security.

Speedy, efficient check-in and out.

The data above was made in the research made by Dolnicar (2002) to show that most of people expect to have clean room (including bathroom). Meaning to say that the guestwho are staying in three or four star hotel are more concern to the cleanliness of the hotel. Even the data was obtained through the questionnaire; it can change according to how many star of the hotel. Besides, she had completed her data with the expectation from the business traveler’s hotel expectation by hotel star category. The data is shown below.

*/**
***
****
*****

Good food

8.0%
10.0%

5.6%

3.7%

TV

5.3%
6.0%

2.1%

0.0%

Good service

1.3%

4.0%

2.6%

4.9%

Good location

2.7%

3.0%

2.1%

4.9%

Staff

2.7%
2.0%

1.0%

0.0%

Good value for money

5.3%

1.5%

3.1%

0.0%

Pleasant atmosphere

0.0%

1.5%

3.6%
3.7%

Large room

0.0%

1.5%

3.1%
3.7%

Toilet

1.3%
1.5%

0.0%

0.0%

Cheap

1.3%
1.0%

0.0%

0.0%

Shower

9.3%

1.0%

1.5%

1.2%

Internet

0.0%

1.0%

1.5%

2.5%

High quality

0.0%

0.5%

1.5%

2.5%

Food

6.7%

0.0%

0.0%

2.5%

Comfortable bed

2.7%

0.0%

1.0%

1.2%

Comfort

0.0%

0.0%

0.5%

3.7%

It is shown in the data above that the expectation from business traveler’s hotel expectation is different according to the star of the hotel they’ve been staying at. Both of the data above broaden the factors influence expectation of the guest; star of the hotel and type of the guest are also influence the expectation made by guest. Jonathan D. Barsky also stated that the perception of product or service performance will influence the response made by guest if it combines with the expectation or pre-experience standard. When the guest has no pre-experience standards or expectation, the response of the guest will directly reveal their perception of the product or service experience without being affected by their expectation.

Satisfaction

In hospitality industry, the guest will evaluate more on its service than its product. Quality of service becomes the most important things that the guest will experience and give their valuation through. Since every guest wish to perceive the best service or in the other word; excellent service, hotel has to make efforts in giving them what they wish. The meaning of the excellent service is given in the research made by Berry, Parasuraman, and Zeithami which is a profit strategy because it results in more new customers, more business with existing customers, fewer lost customers, more insulation from price competition, and fewer mistakes requiring the re-performance of services” (1994, pg. 32 Vol 8. No. 2). It is clearly said that through the excellent service, hotel will increase their customer and decrease the lost of the customer. In other words, if hotel gives excellent service to the guest, it will result in having more profit for the hotel itself.However, excellent service will lead to satisfaction of the guest which will cause in the increasing of guest’s loyalty.

When it comes to satisfaction, every guest who feels satisfy with the service given will disposed to be loyal to the hotel. So, it can be said that the satisfaction the hotel wants to obtain from the guest is to gain the loyalty from them.It was said by Jones and Sasser (1995) that “increased customer loyalty is a critical driver of a firm’s long-term financial performance.” Besides, the guests who feel dissatisfied with the hotel will reduce loyalty and the reputation of the hotel through the action they may do after experienced service failure. Therefore, satisfaction is the goal that the hotel wants to achieve. The meaning of customer satisfaction had been written in the article as “a psychological concept that involves the feeling of well-being and pleasure that results from obtaining what one hopes for and expects from an appealing product and/or service” (WTO, 1985). Through this definition, it is known that satisfaction can be obtained by fulfilling guest’s hopes and expectation.

Furthermore, satisfaction is not a definite thing that will go constantly the same; each person will perceive different level of satisfaction even when they are in the same hospitality experience. The reason behind it is that each guest has their own needs, objectives, and past experience that will affect their expectations. Based on this statement, it’s very important for the hotel to know how to measure customer satisfaction.

Of course, the reason for measuring customer satisfaction has to be clear in order to get the right information from the guest. According to Naumann (1995), five objectives that are the reasons the hotel measures customer satisfaction are:

To get close to the customer

It was well explained that the hotel has not only just know but also understand the most important attributes to customer, why those attributes affects customer’s decision making, the importance of those attributes, and get a feedback of how well the hotel perform to deliver each attribute.

Measure continuous improvement

The attributes that are necessary for the customer are linked directly to value added processes in the firm and are put into a form consistent with the internal measurements used to evaluate the process.

To achieve customer driven improvement

Not all customers are from the same source of valuable innovation. This will need creation of a comprehensive database that not only tracks sales, but sources of innovations.

To measure competitive strengths and weaknesses

Perceptions of the customer will be determined by the competitive choices. This is achieved through the possible survey and future customers as well as current and past customers.

To link customer satisfaction measurement data to internal systems (Naumann, 1995, pp.22-7).

Knowing that satisfaction is very important to be learned in the industry especially service industry such as hospitality industry, there have been research discussed about this topic. There have been nine distinct that researchers developed about the theories of customer satisfaction. The nine theories include: expectancy disconfirmation, assimilation or cognitive dissonance, contrast, assimilation-contrast, equity, attribution, comparison-level, generalized negativity, and value-precept (Oh and Parks, 1997). Based on expectancy disconfirmation theory, “satisfaction is caused by confirmation or positive disconfirmation of consumer expectations, and dissatisfaction is caused by negative disconfirmation of consumer expectations.” (Pizam and Ellis, 1999). When the outcomes received by the guest are different from what the guest have been expected, negative disconfirmation occurs.

According to the research made by Yuksel (2001), there is positive disconfirmation when the service performance is better than what the guest had been expected before which lead to the satisfaction of the guest. When service performance is the same as the guest’s expectation, there is a confirmation which still leads to the satisfaction of the guest. Moreover, the guest will feel dissatisfy when the service performance is not good as what the guest had been expected which there will be a negative disconfirmation occurs. At the time the guest feel dissatisfy, it means that the need and wants of the guest can’t be fulfilled by the hotel.

Even though the satisfaction of the guest depends on the service performance and the expectation, minimum tolerable level also give impact to the satisfaction of the guest. Minimum tolerable level is the situation where the guest still can accept the failure that the hotel made. According to Yuksel (2011), “depending on the situation, some of the guests will still feel satisfy when the service performance falls short of their predictive expectation but above the minimum tolerable level.” Each person has different minimum tolerable level as they have different expectation. Basically, this minimum tolerable level can’t be predicted and measured, so the hotel can’t provide the service based on this minimum tolerable level just to prevent the guest feel dissatisfied.

H2: When the hotel can’t meet the high expectation made by guest, they will still feel satisfy if the service meets their minimum tolerable level.

According to Pizam (1999), “Dissatisfiers were more likely to earn a complaint for low performance or absence of a desired feature than anything else. But an operation that exceeds the threshold performance standard apparently will not receive compliments on the attributes.” Meaning to say, the guest can be easily feel dissatisfy of the failures or the small things that not happened smoothly but will be very hard to appreciate the higher performance level achieved by the hotel. For example, the guest will easily feel dissatisfy when they expect the bathroom was clean but they found a rubbish near the basin. However, the guest will not be easily impressed when they expect the room was clean and the hotel provide more than that with decorating the room with a flower.

Service Recovery

Service Recovery was made because it’s impossible to give a maintain service that will never change nor have a mistake. In order to compete with other industries, each has to improve their performance all the time. Not only creating new stuff, products, or refurbished the building but also improving the service. Unfortunately, even there is a significant improvement, mistakes and failures will always be made since there’s no so called perfect service.Through this realized condition, hotel creates recovery service to obtain positive response from the guest.

“Service recovery involves those actions designed to resolve problems, alter negative attitudes of dissatisfied customers and to ultimately retain these customers” (Miller et al., 2000, p.38), and “it includes situations in which a service failure occurs but no complaint is lodged by the customers” (Smith et al., 1999, p. 359). There are always the strategies made before doing the recovery of the service. According to Lewis and McCann (2004), service recovery strategies are the “actions that services providers take, in response to defects or failures, comprise a combination of psychological recoveries and tangible efforts.”

In addition, service recovery strategy is made to avoid bad response showed by the guest after they’ve experienced service failure. When the guest experienced service failure, they may switch their option and move to the competitors, make a complaint that will give bad impact for the hotel if they speak out in public media, and the worst thing; they may use negative words to share about the bad experienced they’ve had. As word of mouth is one of the media that works fast among people, negative words shared by the guest can influence hotel’s profit and reputation.There have been many researches stated that dissatisfied customers might tell ten to twenty people about their bad experience with their colleagues (Zemke, 1999). In order to decrease dissatisfactionthat lead to the negative consequences for hotel, some strategies have to be performed to the guest that experienced service failure as the recovery.

H3: Service recovery strategy will prevent the hotel from the negativeopinion shared by the guest who had experienced service failures.

At the first time the guest chose the place to stay, they have made their expectation and when the guest don’t get what they have been expected or the quality that they evaluate is very poor, the guest will feel dissatisfy. After feel dissatisfy, the guest will either make a complaint or give their feedback to the hotel. From those situations, then only the hotel know that there’s some failures occur.Sundaram, Jurowski, and Webster (1997) had mentioned in their research that “Dissatisfied customers expect that service failures will be recovered when they complain.”

Moreover, there are five broad service dimensions that the guests use to evaluate or judge the service quality. The five dimensions are:

RELIABILITY : The ability to perform the promised service dependably

(32%) and accurately.

RESPONSIVENESS : The willingness to help customers and provide prompt

(22%) service.

ASSURANCE : The knowledge and courtesy of employees and their

(19%) ability to convey trust and confidence.

EMPHATY : The caring, individualized attention provided to

(16%) customers.

TANGIBLES : The appearance of physical facilities, equipment,

(11%)personnel, and communication materials.

Those five broad service dimensions will affect to the evaluation made by the guest. Once one of the dimensions can’t be fulfilled by the hotel, the evaluation from the guest through the hotel will decrease and vice versa. As human being, we will absolutely make a mistake. That’s why the service which is done by the staff will never be constantly perfect. It’s a common thing for a hotel to do some failures to the guest.

However, when some failure occurs, the hotel will definitely do the recovery to enhance customer satisfaction, build customer relationship, and keep the loyalty of their guest. Service recovery strategy is described by Gronroos (1988) in their research as the actions that hotels take in response to defects or failures. The action of recovery strategy is done with the range of doing nothing to do some efforts to fix the problems or the failures occur.

A lot of researchers have made the research connecting with service recovery strategies theme. The summary of the research, about the strategies the hotel do after the failures occur, made by Bitner et al. (1990), Kelley et al. (1993), Johnston (1994), Hoffman et al., (1995), Tax et al. (1998), Miller et al. (2000) and Lewis and Spyrakopoulos (2001), generate the result that the strategies may be classified as :

Apology;

Corrections;

Empathy;

Compensation;

Follow-up;

Acknowledgement;

Explanation;

Exceptional Treatment; and

Managerial Intervention.

Apology is a basic strategy the hotel does after some failures occur. The moment the hotel does some failures, the first action to be taken is to apologize to the guest. When apologize is compulsory to be implemented as a service recovery strategy, the other action needs to be done according to the failures made by the hotel. Berry, Parasuraman, and Zeithaml (1994) stated that even though the guests appreciate an apology, the apology will not make the guest forget the memory about the service failure happened. That makes the other recovery strategy was made to be fit in the type of failures. Even though some strategies may need to be done at the same time, some may not need to be done at all. For example; compensation will not necessary be donewhen the failure occurs is just the small failure such as mention the name of the guest wrongly.

Effectiveness

After service failure occurred, hotel will give the prompt service recovery strategy that match the failure and the guest will react according to what they’ve received. The response of the guest will determine whether the service recovery strategy is effective. Meaning to say, the effectiveness of service recovery strategy can be measured with seeing guest’s response. When the guest feel satisfy with the service recovery strategy given by the hotel, it means the service recovery given was effective. Dissatisfaction of the service recovery given by the hotel is evidence that the service recovery was not effective.

The guest who feel satisfy with the service recovery strategy offered will forget about the failure and may increase their satisfaction level after dissatisfaction occurred. In contrast, when the service recovery offered didn’t match what the guest’s expected, they will feel dissatisfy and may not be loyal to that particular hotel.Other than that, Tax et al. (1998) had mentioned in his research that “even though a customer may be satisfied with the type of service recovery strategies offered, the recovery evaluation might be poor because of the process endured to obtain the recovery outcome.” So, the process how the hotel delivers the service recovery will affect the overall satisfaction of the guest.

However, the service recovery strategies given by the hotel will be affected by some factors. Each strategy may give different result for different people. A man who has been travelling for 2 years will have different expectation and will have different result in receiving service recovery strategy than a man who has never been for travelling. Many researches about the effectiveness of recovery strategy were built upon this kind of situation. Further, factors that influence the type and effectiveness of service recovery strategies are :

The service (e.g. Mattila, 2001);

Purpose of purchase (e.g. McDougall and Levesque, 1999);

The failure (e.g. Smith et.al, 1999);

The magnitude of the failure (Kelley et al., 1993; Smith et al., 1999; Michel, 2001; Mattila, 2001);

Previous experience with an organization (e.g. Tax et al., 1998); and

Service recovery expectations (e.g. Miller et al., 2000).

When the hotel offered one of service recovery strategies, they have to choose the right strategy that can possibly increase guest’s satisfaction. Magnitude of the failure will definitely affect the type and effectiveness of service recovery strategy. For example; hotel has made the failure throughthe bad temperature of the food given to the guest. Since it was a small failure, the recovery strategy given will be different from the time the hotel did big failure such as; the room where the guest stayed wasn’t clean. According to Zemke (1999), only the guest themselves who can describe and tell how annoying is a particular service failure has been. Miller et al., (2000) stated that if the failures made by hotel are very serious, it will later require more drastic reparation. That will make service organization need to train more of their front-line employees so they can be able to handle the guest’s complaint and asses their situation correctly.

Moreover, service recovery expectation also gives big impact on the effectiveness of recovery strategy. Kelley and Davis (1994) found that the guest who rated highly for the service quality will mainly have higher expectation on service recovery strategy. It can be understood by the guest to have a better service recovery on five star hotel that to have service recovery by four star hotel. In other way, it can be said that the quality of the hotel will surely affect the expectation of the recovery strategy.

It is stated by Hart, Heskett, and Sasser (1990) that the main reason of the guest dissatisfaction is the problem resolution which can’t satisfy the guest and up to 50% of the guest who experience service failure not feel satisfy with the recovery strategy (Best and Andreasen, 1976; Zeithaml, Berry, and Parasuraman, 1990). Based on this situation, hotel has to follow up the guest to make sure that the service recovery they have made was successfully increasing the satisfaction of the guest. After the hotel has given the recovery strategy to the guest, they will not know the response of the guest until they follow up their guest and receive their evaluations.

Giving the service recovery to the guest for the first time when the hotel made some failures will not always give the same result on the guest for the second time. When the first time the hotel made mistakes, some guests can be offered the minimum service recovery strategies or another service recovery strategy depends on the failures made by the hotel. That can reduce dissatisfaction of the guest, but it will give different result on the second, third, and on the next arrival. On the second arrival, the guest may not be able to accept the same way of service recovery strategy they’ve ever offered. With the same recovery strategy given by the hotel on the second time with the same service failures experienced, the guest may not feel satisfy.That’s why, the evaluation and feedback is needed to know the guest’s response.

Of course there will be more advantages on hotel when they can successfully give service recovery strategy that match the failure they’ve made. First, they can get loyalty from the guest. “Loyal customers are those who continue to stick with an unsatisfying product/seller with the hope that things will soon improve (Boshoff, 1997; Hirschman, 1970).” When the guest feel satisfy with the service perceived, they will be loyal to the hotel and willing to come for another time. Loyalty of the guest will directly impact the profit of the hotel. It will lead to the increasing of the profit of hotel.

Besides the loyalty and profitability, the effective recovery strategy can prevent the spread of negative word of mouth that is believed to be the most important post-purchase behavior. “Service entities could increase their profits up to 85% by reducing the customer defection rate by 5% (Reichheld and Sasser, 1990).It has been proved that word of mouth has an effective power in spreading their opinion as a free advertisement tools. So, if hotel make the guest satisfy, the advertisement via word of mouth will be very useful to be used for spreading good advertisement. In the other way, if the hotel make the guest dissatisfy, the advertisement via word of mouth will not be useful anymore. It will even give bad impact to the hotel and may decrease the profit of the hotel.

The last thing, when the hotel can handle the complaint of the guest and give the best service strategy match with the failure was made, they can build the trust from the guest. Moorman, Deshpande, and Zaltman (1993) defined trust as the “willingness to rely on an exchange partner in whom one has confidence” (p. 315). The moment the guest trusts the hotel, the guest will willing to come again to the same hotel. The trust built by making the guest satisfy can also make the guest increase their minimum tolerable level.

Both loyalty and trust will give long term benefit for the hotel. Basically, when the hotel had successfully build trust in the guest, loyalty will directly follow. As the guest has trust the hotel, they will be loyal to that particular hotel. They will feel safe and comfortable with the hotel because they have trusted that the hotel will do their best to provide and deliver the best service.

It is proved by Gilly (1987) that the guests who experience the service failure and did complainthen feel satisfy with the service recovery given, have higher repurchase intention than the guest who already satisfied with the service and did not complain.

H4 : “Guest expectation will be higher after he experienced service failure and offered recovery strategy.”