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A questionnaire was circulated in electronic form to 250 customers those who stayed at Travelodge Covent Garden hotel from April to September 2010.Only one fifth (#50) of the total customers were the actual respondents .09 employee of Travelodge Convent Garden were involved in this research. That means 59 completed questionnaires were collected. The respondent customers of Travelodge Covent Garden London, provided information of their visit, customer service quality, degree of customer satisfaction, worst thing that can not satisfy customer, why they choose this hotel and their opinion about the employee of this hotel. The respondent employees provided information how they improve their customer service quality and how they motivated their customer to come to this hotel.

The picture of this study was not straight- forward; some differences which were quite different than common supposition were come out. The study found that customers were expected to get high quality of customer service provided by hotel staff. From this study it could be said that that customer service quality of this hotel is good but their room service quality fail to get customer satisfaction.

Based on these findings, some recommendation had been pinched. It was recommended if business want to get competitive in today’s global market they should concern about their customer service policy by providing training to their employees, as research shows that only trained employee can provide better service to their guests. Customer service manager should concern that their customer will get better customer service and at the same time standard room.

1.0- Introduction:

The main aim of this study is to report the impact of customer service quality to gain customer satisfaction of Travelodge Covent Garden.

With so much competition in today’s global economy, customer service is necessary for any business. In today’s increasingly competitive hospitality sector, every organization marketing strategies and tactics is to make profit and contribute to the growth of organization. Customer service quality is a comprehensive issue that effects all organization. Does not matter how big or small the organization is or what is their interest. Today’s business world, not necessarily hospitality organization, all organization are interested in evaluating and implementing marketing strategies that aim to improve customer service quality to gain customer satisfaction which will help them to be differentiate from other. Customer service is a kind of service which involves a series of work designed to get customer satisfaction. It is one of the most important elements of the marketing mix for products and services. To stay in the competitive market organizations have to consider that customers are not only interested for product or service but also have some concern of how they are getting it. Customers are more educated, more aware about their money. Their expectation of the organizations as well as the business they purchase from is greatly higher, they want better customer service. Customer service provides an income for the business, it also provides feedback, which can help the organization to improve service delivery on products, improve customer service bring up to date marketing, Production and transference equipments. In this assignment my problem statement is “Does customer service quality play a vital role in order to gain customer satisfaction at Travelodge Covent Garden, London?”

Quality service is the key to a successful hotel business. When customers get better services from a hotel they become satisfied and want to come back at the same hotel when they needed. A satisfied customer will often be a repeat customer. Also that customer may tell other people and referred them in the same hotel where they get great service, which is one of the cheapest effective advertising for that particular hotel.

Travelodge Covent Garden is one of the greatest budget hotel situated in the heart of London. With Travelodge, consumers can expect an easy, calm, stress-free experience and reliable standards of quality and service. Travelodge provides them the best budget hotel which has the spatiality of good customer service and room quality.

1.2- Research question:

This study is set up to answer the following research questions:

1. What is the definition of customer service?

2. Discuss the importance of having great customer service in hotel.

3. What are the most important principles of great customer service?

4. How to improve customer service in hotel?

5. How customer service builds loyalty and profit?

6. Why hospitality organization such as “Travelodge Convent Garden” should assess the success of their customer service policy and how this organization can use this to improve the provision of staff training and development.

7. What are the disadvantages of negative customer service?

1.3- Significance:

1. Customer service is a service which principally helps an industry to keep a deep understanding with customers and manage their customer’s information to understand what is the need and want of their customers.

2. This project will help an industry to improve their customer service. Customer service can make or break a business.

3. This proposed study has also vital significance for evolution of theories of customer service which would help hotel organizations to adopt effective marketing strategy.

4. This research is beneficial to get some reason of having a good customer service policy in business.

5. This research has managerial implication, as managers can get advantage and have better understanding of their customers.

6. It provides that high quality of customer service create loyal customers which are beneficial for the future of hotel.

7. Apart from the above mentioned significance, this research will give me a chance to explore my ideas and views, as a post graduate diploma in hospitality and tourism student which will help me to gain knowledge for my future profession.

1.4- Research Objectives/Goals/Aims:

The objectives of this study are to examine customer service management as a competitive advantage for hotel business. The research aim and objectives explored in this study are:

1. To help the hotel to enhance their competition.

2. To review literature on customer service and its effectiveness.

3. To get loyal customers and to build good reputation and image of hotel.

4. To evaluate competitive advantage of Customer service. Customer service is as important as product quality of hotel.

5. To examine whether hotel business adopts customer service management as a tool to keep customer longer to increase revenue.

1.5 Ethical implications:

Ethical insinuation in a research is principally to carry out the research in a moral and responsible way. As a researcher I must discover a reasonable way of what methodological theory recommends and what is ethical possible from practical viewpoint.

As a researcher it was always attempted to continuance objectivity by making sure all data were collected accurately fully. Some ethical issues I took into consideration are:

a. Ethical treatment of participants:

I designed my survey questionnaire in such a method that respondents do not suffer discomfort, awkwardness or loss of privacy. In order to protect the respondents I clarified the respondents about the benefits of this research and the participant’s rights and protection.

b. Anonymity and Confidentiality:

I offered complete anonymity and privacy to all participants in my research. During the time of my survey questionnaire I never asked name, address or any personal information which might recognize the specific person. All data which I collect kept confidential and used for only research purpose.

1.6 Hypothesis:

Good customer service can help this particular hotel to beat the competitors between the hotels. In today’s world market it is as important as product quality of hotel. It can make or can break.

By providing great customer service quality a particular hotel can get repeat customer or loyal customer which is helpful to save money that might be spent on advertising. Repeat business and word of mouth advertising are the best ways of maintaining a healthy business.

2.0 Literature review:

Reviewing literature is essential for assignment. It can critically form the foundation on which research is built. According to Jankowicz (cited in Saunders, M.et al.2007) literature review is a review which is written for project report should therefore be a narrative and critical analysis what other authors have written. This literature review will introduce the concepts of customer service, importance of customer service, and development of customer service which can help a hotel organization to gain customer satisfaction and to be profitable in competitive hotel business.

2.1Definition of-customer service:

Many researchers have difined customer service quality in different ways. Customer service is the stipulation of service to customers before, during and after a purchase. According to Jamier, L. Scott. (2002), “Customer service is a progression of actions designed to enhance the level of customer satisfaction – that is, the feeling that a product or service has met the customer expectation”. The book” Rules to Break and Laws to Follow” is written by Don Peppers and Martha Rogers, Ph.D. in 2008.In this book they write that customer never forget the services that they get from an organization. Sometime their trust can be destroyed when they do not get proper service quality or it can be destabilized one day at a time, with a thousand small demonstrations of incompetence.

In today’s hyper-competitive business environment, Customer service quality is a significant factor that helps in differentiating service products. According to various literatures, satisfaction of customer is obtained with the escape of high quality service and products. Now consumer are more alerted, better educated, more value cognisant and stipulate more used for their money. Their expectations of the companies are higher. In short, they want better customer service.

2.2 Importance of Customer Service quality:

Marquardt (1989) points out that Customer service quality improvement becomes the most valuable fact in the service industry .This service quality can improve productivity, decrease the cost, build customer satisfaction and increase profit for organization. This is one of the greatest keys for the success of a business. It can literally make or break business. In business, if anyone wants to generate profits by selling their products and services to people, they must know whatever their customer expectations from their organisation. Now Customers are so concern, desire to know how the organisation or hotel industry can make their lives better or easier or how the organisation can relieve them of their pain.

Customer service is the most important function in today’s hospitality industry. Many researchers(Olsen2002;kang,Nobuyuki and Herbert,2004;soderlund and Ohman,2005) stated that good customer service quality have been correlated to customer behavioural intentions like purchase and loyalty intention, willingness to spread word of mouth.

Those customers who experience good customer service from a hotel are likely to return to this hotel and even spend more money at other attractions in the area.

Jones and Farquhar (2003) told that good customer service quality make an impact to gain loyal customer. Bolton (1998) pointed out; service quality manipulates customer’s consequent behaviour, intentions and preferences. When a customer chooses a contributor that provides service quality that meets or exceeds his or her expectations, he or she is more likely to choose the same provider again. Besides, Cronin and Taylor (1994) also found that service quality has a significant effect on repurchase intentions. Good customer service helps to increase business. People or customers who leave the hotel which provide them good customer service are likely to tell their friends about the good time they have and also tell their friends and family what type of services they have got. In return, their friends and family will also come to the same hotel, building a growing customer base.

That’s why it’s essential to be consistent in providing excellent customer service, quality food and an inviting or friendly atmosphere.

2.3 Importance of customer service policy:

Having customer service policy is important for any hospitality and tourism business. It is a structure that describes the company’s doctrine of doing business. Many researchers are pointed out some reason of having good customer service policy:

1. Good customer service policy helps to increase the brand name of a hotel. It pushes the brand’s name of any company’s into customer mind. It shows a very positive attitude of customers towards the hotel or company.

2. This policy helps company to get more profit continuously which help to amplify revenue.

3. It helps to adjust and acclimatize employee’s principles and approach in accordance to company ‘service policies.

4. Good customer service policy can feel up whatever consumer want, so consumers spend more for getting these services.

5. It helps to get good competitive advantage which is helpful to maintain company’s position up to date and marketable.

6. Repetition of customer is achieved by a good customer service policy.Customer service policy is a fundamental factor which must be maintained a very standard level especially in hospitality sector in order to achieve target market.

Advertising is essential in growing and maintaining a profitable hotel business. Good customer service helps to increasing advertisement for a hotel. Guests expect high-quality service. Lunchars (1996) said that from conference participant’s survey result 1990, it was found that eight of the top ten factors rated most significant factor for customer satisfaction is interrelated to service quality than the quality of facilities. On the other hand Poor customer service can wreck the reputation of a hotel, restaurant. People will talk over the Internet or by word of mouth and after getting poor service people will not visit this hotel. Customers are not only external but also internal as well.

Some researchers noticed that a person who has experienced poor customer service from a restaurant will most likely share their bad experience with an average of 10 other people. Those 10 people are extremely like to pass it on again, and after that a huge wave of negative publicity has grown. It is revealed that 80% of all hotel complaints are related to poor service not for poor products and quarter of those surveyed pointed out they would not ever return to this hotel where they received poor service.

These following policy are essential to provide good customer service quality in hotel:

1. A general early check in or late checkout process is maintained.

2. Customer can cancel or adjust their reservation if required. Any cancellation can be done in respect to the type of reservation made.

3. Special needs can be made in request area when customer information is confirmed as a part of online reservation process.

By following these basic rules in maintaining good customer service, company build a relationship with their guests, a relationship that helps their business grow and prosper.

2.4 Conclusion of literature review:

Although many researchers have been done so far on common information of customer service and many theories have been described by researchers but only a few studies have been provided on explaining the effect of customer service in particular hotel. To make a better position in hotel business, increasing profit and getting a brand name at ‘Travelodge London in Covent Garden it is needed to be researched or studied further on various aspects. There is no complete research have been done till now specially impacts of customer service in “Travelodge hotel”. A fastest budget hotel like Travelodge in Covent Garden in London is situated in tourist attracted place. Many types of tourist come here and enjoy holiday. So it can be said that this area could be the best place to carry out this research.

3.0. Research Methodology:

According to Kumar, R. (2005) research methodology is one technique of finding answer to such questions. There are two major types of data collection methods for this analysis: Secondary data collection methods and primary data collection methods. Both data collection methodologies have been used in this research.

3.1 Secondary data collection:

Secondary data are those types of data which are existed and has already been examined by an academic. Saunders, M.et al. (2007) said that literature sources are divided in to three categories: primary like email, report etc; secondary like newspapers, books, journal etc and tertiary are those like encyclopaedia, index etc. In this research all data were collected through the library of London Victoria College, British library, Internet search engines, commercial bibliographic database and dictionaries.

3.2 Primary data collection:

It is raw data. This data may be collected by survey based on questionnaire or interviews. Survey based questionnaire provide quantitative data; on the other hand interviews provide qualitative data. Guba & Linchon (1994) said, “Both qualitative and quantitative method may be used appropriately with any research paradigm” (cited in Saunders, M. et al.2007,pp.100). Both two types of data collection method were used in this research.

3.2.1 Questionnaire Survey:

A self-administered internet arbitrated questionnaire was planned to collect raw data. A semi-structured questionnaire has been prepared and given to about 250 customers whose had stayed Travelodge Covent Garden hotel at least one night in the previous six months. I am contacted those customer by e-mail as my friend who is the customer complaint manager in this hotel. After explaining him that I am doing this research for my study and it is not harmful for the organisation rather than from this research, organization can be benefited. Then he helps me to get those customer mail address.Questionnaire question was closed format questions as respondent (customer) can quickly and easily answer the questions. The questionnaire consisted two sections: First section was designed to explore the demographic data of respondent like age, gender; status (tourist or local consumer) etc .Second section of questionnaire identified the impact of customer service quality to gain customer satisfaction. This questionnaire took 5-10 minutes to fill up. Different methods were used for every part of the questionnaire. For example, the questionnaire asked consumer to signify the quality of customer service in this hotel, using Liker rating scale (very good= 4, satisfactory= 3, poor= 2, very poor= 1). There were some open ended question are also attached with closed format question like” If you have responded others please specify “and also give them (respondent) an opportunity to express their own idea.

3.2.2 Interview:

An interview strategy has been carried out to collect qualitative data which is connected with philosophically phenomenological. According to Kvale, S. (1996) Qualitative Interviews also depend very much on the connection between interviewer and interviewees in developing the open dialogue which can allow a joint construction of considerate in the interview. This technique was applied when the interview was conducted to the H.R manager and Guest complaint manager and some other employee of Travelodge Covent Garden hotel. The interview was conducted through face to face conversation.

3.3 Data Analysis:

Data analyses are two types, quantitative and qualitative data analysis.

3.3.1 Quantitative data analysis:

Table, graph chart, pie chart has principally used to analyse quantitative data. Quantitative data refers to numerical data which has been given in percentage form for better understanding. Saunders et al. 2007 pointed that Quantitative data is supported on meanings derived from numbers and data collection marks in numerical outcomes and analysis conducted through the use of diagrams and statistics.

3.3.2 Qualitative data analysis:

It is a data analysis process which refers to all nonnumeric data that have not been quantified and this process allow us to develop theory from data. Saunders et al. (2007) argued that qualitative data is based on meanings articulated through words and collection results in non-standardized data requiring classification into categories and study conducted through the use of conceptualization.

4. Finding:

Questionnaire was given to 250 customers and it was circulated on August to September 2010. 50 of the total respondents were customers and 09 people were employee of Travelodge London Convent Garden. That means 59 completed questionnaires were collected. This Questionnaire was designed to get information from respondents that customer service quality makes an impact and help to gain customer satisfaction in Travelodge Covent Garden, London. In this questionnaire three sections were designed, First section was designed to explore the demographic data, second section of questionnaire identified the information of customer’s visit and third section designed to identify the impact of customer service quality to gain customer satisfaction.

4.1 Demographic Characteristics:

Demographic data which provide respondents age, gender, status etc

Table-1 Age of respondents

Age(years)

Number of respondents

Percentage (%)

21-30

21

42

31-40

17

34

41-50

12

24

50+

–
–

Total

50

100

This figure shows that biggest numbers of respondents were aged 21-30; the second biggest group of respondents were aged 31-40, that means large numbers of respondents were aged between the ages of 21-40 (Table-1).

Figure-1: Gender

This figure shows that 30 out of 50, which means 60 percent were male and 20 out of 50 means 40 percent were female.

Figure-2: Customer status

Figure II, it shows that most of the guest who came in Travelodge London Covent Garden were holiday maker, out of the total 50 respondents 70 percent were holiday maker and the other 30 percent were business customer.

4.2 Information-customer’s Visit:

This section of the questionnaire were designed to get information of customer service quality of Travelodge London in Covent garden and also identify the level of satisfaction of those customers who came in this hotel.

Figure 3: Frequency of visit to the Travelodge London Covent Garden.

Respondents were asked how many times they were visited in this hotel. This figure shows that 16 percent of customer visited in this hotel very often and 34 percent were visited often, 38 percent sometimes and 12 percent seldom, that means most of the customer came here sometimes and often ( Once in a year and once within six months).

Figure-4: Planning to stay at this hotel.

Respondent were asked how many time they were stayed in this hotel. This figure showed that the biggest number of customer was stayed here 3-5 days. The second largest number of respondent (24 percent) indicated that they wanted to stay here 2-3 days and 20 percent agreed to stay for a single night.

Figure- 5: Main reason to visit in this hotel

Figure- 5 showed that 42 percent guest visited here with friends and relatives, 16 percent came here for rest and relaxation, 14 percent came for business reason, 22 percent came for fun , sports and recreation. Only 6% came for attending conference, seminar and other forms of educations.

4.3 Customer service quality in Travelodge Covent Garden:

Majority of guest expressed their satisfaction with the overall customer service quality of Travelodge Covent Garden but they were less satisfied with the quality of the room.

In Figure- 6, Respondents were asked how the customer service quality of Travelodge Covent Garden London, figure shows that Majority of customer were satisfied about the customer service quality f this hotel. As shown in this figure 46% respondents were satisfied, 14% respondents said that the customer service quality of this hotel was good and 4% said it was very good.24% commented that it was poor and 12% said it was very poor. Adding three points(very good, good and satisfactory) of measuring scale it could be said that 64% commented positive attitude towards the customer service quality of Travelodge Covent Garden and 36 percent showed negative attitude towards the customer service quality of this hotel.

As found Figure-7, it was apparent that the staffs in this hotel are friendly towards their guest. Largest number of respondents (52 percent) were agree that their staff’s friendliness.22 percent said they were disagree and 12 percent commented that they were strongly disagree.

Figure-6: customer service quality which is offered by Travelodge London Covent Garden.
Figure-7: Staffs in this hotel is friendly towards the guest.
Figure-8: Room quality of Travelodge Covent Garden

As per figure-8, it was showed that the guest of Travelodge Covent Garden did not think that room quality of this hotel is satisfactory. Only 4 percent said it was good.42 percent respondents said that it was satisfactory while largest number of guest (38%+16%=54%) said that was unsatisfactorily (poor and very poor)

Figure-9 Worst reason that cannot satisfy customer

Figure show that most of the customers (70 percent) think that service quality is the main reasons to gain customer satisfaction on the other hand 30 percent think that quality of product is main reason.

*Motivate customer to come again and again.

This question was asked to customer service manager, guest complaint manager, human resource manager and staffs to know how they are satisfying their customers. First of all they are attracting their customers by their web sites which provide all information about their hotel. They offer lowest price with great customer service quality, clean and comfortable rooms and do everything which is needed for a good night’s sleep. Travelodge do things differently to other hotel companies for attracting more customers.

*Any plan to improve customer service system and room quality?
This question was asked to the customer service manager, human resource manager to know about their customer service improving plan and improving about room quality. They inform that they are trying to overcome this problem. Already their company has taken some plan to develop their room quality and customer service system. They also said that by this time customers’ complain rates decreased significantly. They consider that customer service quality and room quality are gradually increasing and get customer satisfaction as their customer’s complaints are decreasing.
5.0 Recommendation and Conclusion:

It is recommended that customer service is an important factor for a hotel to gain satisfied customer and this customer will be loyal customer. Business can be gain more profit by this loyal customer and customer service help to make relationship with customer.

Training is fundamental for improving customer service. Training process help employee how to check in ,how to check out, how the reservation system work, how the equipment work ,how to provide better service to customer and how to deal customer nicely .Smile and eye contact is essential for good customer service.

Employee of Travelodge London in Convent Garden must need to provide their customers’ requirements. Today customer not only want better product they also want services, If company failed to provide better service to their client. In this case they not only lose their customer who get their service but also lose their other customer because of bad reputation .So that company have to concern that the service provided by them is superior to make their customers to be loyal.

The study discovered that company website is an important element to provide better service to their customer. For providing best customer service company should use website. In this website customer can get all kinds of service and idea about this hotel.

From this research, It can be said that customer service quality help to get brand name.

The study showed that the room service quality of Travelodge Covent Garden failed to satisfy their customer’s expectation. So it could be suggested that if they want more customer they should concern their room service quality.

Frome this study it is finding that customer service quality had effective relationship with customer satisfaction. Customer service quality of hotel had positive relationship with guest but room quality revealed an unsuspected result of a negative relation with consumer. It was discovered that room quality was not good but guest’s expectation was high.

Finally, it could be said that further research is still needed to justify the outcome of this research. The research issue may have been similar but the situation in all the research may be different including this research. Further researchers are welcomed to conduct a similar research as this in the identical content.

6.0 References:

1. Saunders, M. et al (2007)”Research methods for Business students”.4th edition, Essex, UK: Person Education.

2. Peppers, Don et al (2008)”Rules to Break and Laws to Follow” Wiley. pp. 24, 164

3. Marquardt, I. A. (1989)” The link between Total Quality Improvement and Market Orientation in Guiry M. and customer service: The Critical Focas for a Firm, Cambridge, Massachusetts: Marketing Science Institute Conference.

4. Olsen, S.O. (2002) “Competative Evaluation and the Relationship between Quality, Satisfaction and Repurchase Loyalty”. Academy of Marketing Science, 30(3), 240-249.

5. Kang, S. S.; Nobuyuki, O. et al (2004)”Service Quality and its Effects on Customer Satisfaction and Customer Behavioural Intention: Hotel and Ryokan Guests in Japan. Asia Pacific Journal of tourism Research, 9(2), 189-203.

6. Jones, H. & Farquhar, J. D. (2003) “Contact Management and Customer Loyalty” Journal of Financial Services Marketing, 8(1), 71-78.

7. Bolton, R. N. (1998) “A dynamic model of the duration of the customer’s relationship with a continuous service provider: The role of satisfaction” Marketing Science, 17(1), 45-66.

8. Cronin, J. J. Jr., & Taylor, S. A (1994) “SERVPERF Versus SERVQUAL: Reconciling Performance-Based and Perceptions-Minus-Expectations Measurement of Service Quality” .Journal of Marketing, 58(1), pp.125-131.

9. Kumar, R. (2005). “Research Methodology” Sage Publications Inc p-276

10. Kvale, S. (1996) InterViews: An Introduction to Qualitative Research Interviewing, Sage, Thousand Oaks, CA.

11. Turban, Efraim (2002). Electronic Commerce: A Managerial Perspective. Prentice Hall. ISBN 0131854615.

Customer satisfaction:

A case study of the Travelodge Hotel. Docklands, London.

Dissertation declaration

“Is it possible for hoteliers to provide a quality of services that meets with customer satisfaction whilst at the same time reducing the quantity of services that are provided?”

Abstract

Budget hotels in the hospitality sector are continuing to make significant inroads into the market shares previously enjoyed by the standard hotel chains, even in select areas such as the City of London. However, the question is whether this new type of accommodation supply is being created at a cost to the consumer in terms of customer value and satisfaction.

Using the Travelodge hotel Docklands as a case study, this research attempts to address this issue. From the result of a SERVQUAL measurement survey conducted with 48 of the hotels customers, the conclusion is reached that, whilst in theory there is no reason why the customer quality of service should be less, in practice the customers expectations that are attached to a lower price do not equate with the perceptions of the hotel management in some areas, particularly in relation to human resources. There is therefore a need for the management of such establishments to achieve a better level of balance between these two determinants.

Table of Contents (Jump to)

Chapter 1: Introduction

1.1 Rationale for research

1.2 Customer retention

1.3 Aims

1.4 Objectives

1.5 Overview

Chapter 2: Background

2.1 Tourism in the UK

2.2 Tourism in Docklands

Chapter 3: Literature Review

3.1 Customer satisfaction

3.2 Service quality

3.3 Methods used to measure customer satisfaction and service quality

3.4 Summary

Chapter 4: Research Methodology

4.1 Research method choice

4.2 Data collection

4.3 Performance of the research

Chapter 5: Data presentation and analysis

Chapter 6: Implications of the research findings

Chapter 7: Conclusion

6.1 Application

6.2 Recommendations

Chapter 1: Introduction

The vast majority of commercial concerns, irrespective of whether their business is product or service orientated, are aware of the fact that continued business success is dependant upon determining that the quality of service they provide for the customer equates to or exceeds the perceived expectation of satisfaction that customers have when they decide to enter into transaction with the business. Furthermore, as Michael Porter (1985 and 2004) suggests in his researches into the subject of competition, quality of service can also be used as a strategy to gain competitive advantage, particularly in a crowded marketplace, which certainly exists within the tourism industry.

In the context of delivering the quality of service that satisfies the customer, perhaps the hotel industry finds itself in a unique, although some would say unenviable position. Most other industries and sectors only engage with the consumer for a matter of moments during the course of their visit. However, with the hotel industry the interaction this business sector has with the consumer can last from several hours to many days. Similarly, with a number of customers in close proximity, it can be also be said that customer-to-customer interactions form part of the product (Kandampully et al (2001, p.28).

In addition, the number of interrelated services within a hotel is invariable far more complex and diverse than other businesses will be offering. For example, in a retail environment, the connection with the customer is the quality of the product and service quality at the point of sale and after sales service. However. With a hotel, customer satisfaction can be influenced by a number of factors. From the product aspect, this will include the standard and quality of the main product, namely the hotel room, in this case relating to the decor, furnishings, facilities available, cleanliness and cost against performance. In terms of services provided, the hotel will also be judged by several diverse elements. These include the relation built between customers and front office staff, cleaners and employees in other facilities being offered, for example the service received from employees engaged within the waiting, bar-tending, local knowledge and health facility aspects of the business.

As a result of these service and quality issues, and in an effort to ensure that these meet with the expectation and satisfaction levels of their customers, one would therefore expect that the market players within the hotel industry would be constantly seeking ways to improve upon the services that their establishments offer. If this is the case, how is it then that, over the past two to three decades, the industry has seen a proliferation of budget and low cost hotel chains emerging, one of the most well known of which within the UK is the Travelodge brand?

1.1 Rationale for research

It is the question regarding how budget hotel chains are managing to deliver customer satisfaction whilst at the same time reducing the levels of services being provided that forms the rationale for this paper.

There has been a reasonable amount of research dedicated to the delivery of customer satisfaction by the method of adding to the levels and qualities of the services being offered, as would be the case in the tourism industry, for example with five star hotels. However, research into the ability of a commercial organisation to maintain the same standard of customer satisfaction levels, particularly within the UK tourism and leisure industry, when that organisation is operating a “low-cost” strategy, which by definition is primarily focused on driving down the business costs by reducing the levels of services being made available to the customer, is more limited.

1.2 Customer retention

Another factor that makes the “low-cost” strategy and its removal of services within the hotel industry sometimes difficult to understand is that most literature concentrates upon the fact that providing a quality service that matches customer satisfaction is important in terms of customer retention (Parasuraman 1997, Schiffman and Kanuk 2000 and Porter 1998).

On the surface therefore the rule of keeping customers returning by offering them less does seem to contain a dichotomy of views that are incompatible. However, many of the some of the recent observers, Including Zeithaml (1988), Agrawal (2000) and Porter (2004) in his later works, have begun to study this particular issue, finding that there can be a relationship between the less services and customer satisfaction. It is the intention for this paper to add value to these opinions.

1.3 Aims

From the explanations given above therefore it can be seen that the aim of this research is to address the following question: –

“Is it possible for hoteliers to provide a quality of services that meets with customer satisfaction whilst at the same time reducing the quantity of services that are provided?

In an effort to assist in the provision of a definitive response to the hypothesis set, it is intended to use as a case study research carried out at a specific location of the budget hotel chain Travelodge, namely their establishment in Docklands, London.

1.4 Objectives

In the process of defining the theoretical and practical response to the hypothesis, as well as adding value to the existing research conducted with the subjects that are covered, these being customer satisfaction and service quality within a tourism and leisure environment, the following three objectives have been set: –

Customer perception and satisfaction

Although there has been considerable literature relating to customer perception and satisfaction determinants, within this research the intention is to broaden this area to take account of how these issues can be best related to the “budget” service provider and by what methods such organisations can determine that a) the reduction of services reaches an optimal level and b) how other areas of service quality can be introduced in a manner that will continue to improve the business relationship with and retention of customers without adversely impacting upon the business “low-cost” strategy.

Gaps within service quality measurement.

Using the “SERQUAL” method of measurement, which is discussed in more detail in chapter three, we shall look particularly at the “gap” element of this methods in an attempt to define how these have can and have been applied effectively and successfully to the budget hotel business model despite the fact that these models concentrate upon the task of reducing the levels of services being made available to customers in return from price advantages.

The future.

From the results indicated above, it is intended to ascertain whether the process of understanding how the use of quality of service in a budget business environment can provide lessons that could be applied to other “premier” brand hotel businesses within the industry or if these results are strategy specific and therefore not transferable across different business models.

The significant data which has been used to provide the foundation for this research paper has been collected through the use of then primary quantitative method of structured questionnaires and interviews, which will be discussed in more detail in chapter four.

1.5 Overview

Following this introductory chapter, the second chapter in this study provides a brief background into UK tourism, including the levels and reasons for tourisms within the docklands area, as well as a history relating to the Travelodge hotel chain and its Docklands unit. In chapter three a critical literature reviews is conducted into the major areas of customer satisfaction, service quality and the various theories and models that have been developed to measure these aspects of the business operations. Chapter four is where the methodology for the main research carried out in support of this research is explained in greater depth. It will include an understanding of the strengths and limitations of the chosen research method, together with details of the manner of the performance of these methods. This will be followed in chapter five by the data findings and an analysis of these findings, the implications of which will be further discussed in chapter six. The paper will be drawn to a conclusion in chapter seven, at which point any relevant and appropriate recommendations will also be presented. Following the conclusion of this study, a reference list of all the resources used, together with appendices that contain additional information and data that is considered to add value to the understanding of this paper will also be attached.

Chapter 2 Background

As stated previously, tourism is one of the most important industries in the UK economy. Therefore, as the core theme of this research is related to an organisation within this industry, it is appropriate to provide some background relating to UK tourism and the Docklands area in particular, as wells as the organisation that is forming the case study, namely the Travelodge hotel group.

2.1 Tourism in the UK

The level of tourism in the UK has seen a diverse change depending upon the criteria that one uses. For example, with regards to domestic travel of UK residents, this saw a reported decline of –4.0% in the last 8 months of 2006 when compared with the previous year, although there were still nearly 102 million overnight trips (Visit Britain 2008 b, p,4). Conversely, the numbers of overseas visitors increased by 9%, rising to nearly 33 million trips (Visit Britain 2008 a, p.8), as can be seen from the following table (figure 1).

In total therefore, tourism in the UK in 2006 saw a participating total of approaching 135 million customers, who visits were for both leisure and business purposes (see figure 2).

With between 59% and 74% of the domestic journeys involving overnights stays of one to three days (see figure 3) and 42% of overseas journeys having the same duration, this provides a significant existing market opportunity for the UK hotel industry and room for continued growth, especially as at present it is estimated that only around 30% of the domestic visitors choose Hotels and guest houses for their accommodation needs (see figure 4).

However, with hotel occupancy rates having fallen in recent years, especially in the capital, although this was partially due to terrorist attacks (Chetwynd and Knight 2005), it is important for hoteliers to ensure that they are providing the necessary level of quality service to capture this market.

2.2 Tourism in Docklands

Visit Britain statistics (2008 a, p.11) indicates that of the total inbound tourism trade during 2006, nearly 16 million visitors chose London as their destination, with many more domestic tourists swelling that number. Similarly, compared with the rest of the UK, the hotel occupancy levels in London remain at a reasonably high level of around 72% (Visit London 2008, p.4), due mainly to the high mix of customers from the domestic and international leisure and business sectors.

Having spent over ?12 billion on regeneration of the area, London Docklands is taking its fair share of visitors, with 24 hotels at present and a further five in development (LDVC 2008), of which the Travelodge budget hotel in Coriander Avenue, E14 is one.

2.3 Overview: Travelodge – London Docklands

The Travelodge brand of hotels, which was originally formed in the US, has seen a number of owners since then, with the latest being a ?675 million acquisition for the group by Dubai International Capital in 2006. It is the UK’s second largest budget hotel chain with over 300 units in the UK offering around 22,000 rooms (Editorial 2007), although the company expects that to expand to 32,000 within the next three years, an plans to more than double this expansion by 2020.

In 1985 the group was the first hoteliers to strip out what it considered to be non-essential services in an effort to reduce costs of hotel stays to the minimum, which in 2007 were around ?26 a night. Another example of the budget cost example can be seen from the group’s Docklands hotel, where normal rates of ?49 – ?59 per night can be reduced to as low as ?29 if they are booked around three weeks in advance.

Travelodge’s mission statement is aptly summed up on their website as “Pay for things you don’t want? That’s crazy!” (Travelodge 2008). They further go on to explain this statement by outlining the fact that the quality of their services to the customer is the provision of nice beds, clean rooms and a value for money price which the inclusion of items such as room service, extra towels, toiletries and other items that are seen by other hoteliers as value added services, would prohibit the business from achieving.

According to press releases (Travelodge 2008 b), the company has seen significant growth during the course of 2006, with revenues increased by 19% and room occupancy by 24%. These results are in line with the reports issued by the Mintel group (Kuhn 2007), which shows that in the four years to 2006 the budget hotel sector grew by 38% , out performing other sectors of the industry that could only manage 12%, to exceed the ?1 billion barrier of revenue for the first time.

It can be seen from this background and the statistics that the budget hotel industry is obviously making inroads into traditional hotel markets. However, the question which this research will address is whether this is simply based upon the price advantage or if other service quality and customer satisfaction issues have also influenced the growing popularity of the budget hotel sector.

Chapter 3 Literature Review

During the course of the past six or seven decades there has been a considerable amount of literature and research produced that has endeavoured to address the issues of customer satisfaction and service quality, as well as a number of models of measurement that can be utilised in respect of the latter. This critical literature review will discuss a selection of these studies and in particular endeavour to identify whether there is a link between these and the model that has been deemed appropriate for the budget hotel sector, or indeed where gaps in current literature exists.

3.1 Customer satisfaction

Customer satisfaction has been the subject of a reasonable amount of academic literature over the past few decades from a number of perspectives. For example, researchers such as Porter (1998), Parasuraman (1997) Agrawal (2000) and Harrison (2003) have all outlined the benefits of customer satisfaction as an integral aspect of competitive advantage. As Hennig-Thurau, and Hansen (2000, p.62) comment in their study on relationship marketing, it is the intention of all businesses “to try and engender a high level of customer satisfaction in order to positively influence our customers’ repurchasing and communicative behavior”.

There is little doubt that the level of satisfaction experienced by customers will impact upon the way they react to a product or service, in other words it drives their behaviour (Schiffman and Kanuk 2000). However, the difficulty that all academics have wrestled with over the years is in defining exactly what “customer satisfaction is” and, perhaps more importantly, which determinates influence the achievement of customer satisfaction. Hennig-Thurau and Hansen (2000, p.8) define customer satisfaction as being the “emotional or empathic reaction” that occurs within the customer as they judge the experience of the product or service against the expectations they had prior to that experience. Richard Oliver (quoted in Holbrook 1999, p.56) rests with the definition that ideals and excellence is equal to satisfaction. Ziethaml (1998) adds further substance to these definition by explaining that satisfaction is all about the perception of value when adjudged against price, quality, need and payment, In summarising this position, Zeithaml (1988, p.14) stated that “Perceived value is the consumer’s overall assessment of the utility of a product based on perceptions of what is received and what is given … value represents a trade-off of the salient give and get components,” in other words the cost of ownership against the value perceived. This is a definition that has been accepted by a number of other researchers, including Christopher (1996), although as Dr Brennen (2003, p.4) observes, there is some departure from this consensus in respect of the component parts that make up customer satisfaction, with some observers only including price as a denominator whilst others include the total cost of ownership.

Nevertheless as Suzan Boztepe (2007, p.56), points out, to identify customer satisfaction, “The emphasis is on the point of exchange, and money is seen as a fundamental index of value.” It is as that moment, when the product of service has been purchased and used, in the respect that a contractual agreement has been entered into, that the customer makes a value judgement about what they have been given in exchange for what they have paid. In this situation it is therefore usually the case that the higher the level of quality of service promotes a higher level of satisfaction (Kandampully et al. 2001, p.8).

In respect of the determinates that engender satisfaction within a customer, there do of course extend beyond the simple and direct use of the product or service. Parasuraman (1997, p.1) refers to this position when he talks above the “attributes and consequences arising from that use,” which indicates that satisfaction levels can be increased or decreased by other internal and external factors. Boztepe (2007, p.58) agrees with this comment, promoting the view that the context and environment within which the use is received will impact upon the customers enjoyment or satisfaction with the experience. In the context of the hospitality environment of hotel industry that is the basis of this study, this aspect is very important. For example, if the human service in a particular establishment is good but the physical environment, in terms of decor, equipment etc is not, this would reduce the customer’s enjoyment and therefore lower the satisfaction and value they gain from the experience. Similarly, in the case of the hotel attention has to be paid to the external factors. For example, if the service from employees and the environment is good, but other guest create a situation that is disturbing or unpleasant to the customer, this nay also adversely affect their satisfaction with the experience and the value they gain from it.

Therefore, it can be seen from the forgoing that when providing a service or product the supplier, or in this case hotelier, has to understand not only how the customer behaves or is likely to react to the value of the service provided, but also be aware of the factors that might adversely influence that behaviour. If that is not understood “the likelihood of consumer satisfaction diminishes, as does the potential for a profitable business” (Holbrook 1999, p.116). After all, as Porter (1998, p.411) succinctly explains the situation, in order to gain competitive advantage, the aim of the business should be to ensure that the whole format of the various elements of the business supply chain should be geared towards delivering a product or service to the end user that adds “to their convenience and satisfaction.” To achieve this position the marketer has to understand the whole of the customer behavioural process, which includes what drives them to make the original choice, known as the pre-purchase period, how they will react to the actual use or consumption of the product and their reaction after that use, the post-purchase period (Holbrook, 1999, p.43). If the business bears these aspects in mind, and reacts positively to them, there is more opportunity to be able to provide the customer with a unique product of service that will be perceived by them to have a greater level of value and therefore being more satisfying (ibid p.121), which has the added benefit of potentially engaging the customers loyalty and therefore makes the retention of the customer more likely. In a practical sense this position cannot be achieved unless there is a quality of service.

3.2 Service quality

Following on from an understanding of the factors that determine what values give satisfaction to a customer, it has been found that, in essence, this is uniquely linked with service and the quality of that service, which is another area where there has been a concentration of literature over the past few decades. In terms of definition of the words, because of the nature of this paper, the definition of service being relied upon is that promoted by Kolter (1999), who stated that: –

“A service is any benefit or activity that one party can offer to another, which is essentially intangible and does not result in the ownership of anything. Its production may or may not be tied to a physical product.”

Harrison (2003) and Holbrook (1999) regard quality as being the originator for meeting the expectation of value and satisfaction for the customer. In this respect, Holbrook (1999, p.13) states that “quality, generally, is an externally mediate perception that a product or service possesses excellent levels of the key quality dimensions which define quality for that product/service.”

From the commercial aspect therefore, it is apparent that businesses have a need to use service quality in order to attract customers and to retain their loyalty in a manner that will lead to them continuing to purchase the service in the future, in other words quality is one of the core competing elements (Berry and Parasuraman 1991). An essential element of this will be to aim to provide the customer with an experience of service quality that they perceive to be of a higher value than they can expect to receive elsewhere, at least for the same price and conditions (Hennig-Thurau and Hansen (2000, p.169).

Service quality has to permeate through all aspects of the business which, as has been identified earlier, will include the way that employees react to clients, the decor and content of the environment where the service quality takes place and the control of external determinates. These latter “situational / environment characteristics” (Holbrook 1999, p.30) are extremely important in a hotel environment as they will directly impact upon the customers perception of value and satisfaction. For example, if when arriving at the hotel the customer is required to wait for some time to become registered and given their room keys, this could adversely affect their satisfaction levels. Furthermore, this experience may reflect in their post–purchase behaviour, for example with the memory of the experience being marred by this one incidence, thus reducing the value they have gained and the likelihood of re-booking.

However, what has to be remembered is that each business is unique and will therefore have to find its own way of using service quality in an effort to gain competitive advantage. What works for one sector of an industry or even an individual business may not work for another. In fact trying to change a business service quality strategy to emulate that of another business may do more harm than good (Porter 1998, p.531). For instance, the service quality format and strategy developed by budget hotels such as Travelodge may not work for the five-star hotel sector of the industry.

Nevertheless, as can be seen from this discussion, it is important for the commercial organisation to research the are of service quality as it impacts upon their particular business model as this will provide them with “valuable insights” into how to promote their goods or services in a way that is deemed to provide the customer with the level of service quality that they are expecting (Hennig-Thurau and Hensen 2000, p.13)

3.3 Methods used to measure customer satisfaction and service quality

There are a number of methods for measuring the relationship between customer satisfaction and service quality that have been discussed in literature over the years, both from the academic and practical viewpoint. For the purpose of this research it has been decided to use the SERQUAL method originally developed and later revised by Parasuraman et al (1991). However, prior to reviewing this particular method and the reasons for its choice, it would be of benefit to briefly discuss some of the other measurements that are available.

Other methods

One method of measurement that is particularly popular in the hospitality sector, especially with guesthouses, is the use of comments and feedback from the customer. As Porter (1998, p.147) acknowledges this system of testimonials does have value in the respect that it provides the supplier with a direct indication of the levels of value and satisfaction experienced by the customer. However, the difficulty with this process is twofold. Firstly, the construction of the process may be misleading for the customer and the business (Kandampully et al 2001). For example, a simple complaints format does not show areas where the business is succeeding. The second aspect of this process is that it is not sufficiently defined. The business managers need to know in which specific service quality areas they are performing well or not. Without such definition it is difficult for them to be able to address areas that are perceived by the customer as a concern.

Two other methods that prove quite popular are the general satisfaction and the continuous monitoring surveys and polls. Both of these have their drawbacks. In terms of the former, whilst it is in many ways similar to the SERVQUAL method chosen, its concentration upon the customers perceptions leaves it weak in terms of providing practical results that can be directly implemented by the business. Continuous surveys on the other hand have the inherent problem of adding to administrative costs within the business and, in addition, there may be issues with sampling (Visit Britain 2008 b). These can result from the fact that, being random in nature, continual update of relevant data is required, which may not always be easy for an individual business to acquire or manage.

SERVQUAL Measurement

The SERVQUAL method of measurement is one that has been “extensively applied” (Shahin 2005, p.4) and has been found by many to be particularly useful in providing a “true measure of customer service” (Kandampully et al 2001, p.68). It is seen to be relevant to the hospitality sector and has been used extensively in this area of commerce.

Although in some cases this model has been extended by researchers to a dozen elements, essentially the foundation of the SERVQUAL process is founded on five key factors (Sahney et al 2004), which are: –

Tangibles. Physical facilities, equipment and appearance of personnel.
Reliability. Ability to perform the promised service dependably and accurately.
Responsiveness. Willingness to help customers and provide prompt service.
Assurance (including competence, courtesy, credibility and

Abstract
Purpose of the paper:

The aim of this paper is to address the potentiality, requirements and expectations of people with disabilities and its implication on customer satisfaction in hotels.

Design/Methodology/Approach:

This article is based on secondary data collection: journal articles, websites, textbooks, pamphlets on people with disability, customer satisfaction and hotel marketing. The methodology of this article is by analysing the people with disability as potential market segment to the hospitality industry and identifying approaches, that hotel could inculcate for better customer satisfaction.

Findings:

In the hotel sector people with disabilities are tend to be seen as a marginal segment with limited service options available, thus the motivation, experience and satisfaction is greatly affected. However, suggestions provided addressing this issue could enable hotels improve on customer service thus facilitating satisfaction.

Research Limitations:

This paper exclusively based on secondary data brings out limited outcomes and limits the findings and interpretation compared to primary research data collection.

Practical Implication:

Hotels catering to tourist with disabilities than just being compliant with the law can do more in order to increase satisfaction and loyalty. This article is useful to organisations to understand this market segment and help develop better service operations.

What is original / value of paper?

The paper addresses the issue of customer satisfaction focusing on particular tourist segment i.e. people with disability in hotels. The main target audience are hotel managers and employees desiring to understand and achieve customer satisfaction through services offered to tourist with disabilities and in-addition would help hotels aspiring to open doors to this niche market segment.

Introduction

Customer satisfaction is of utmost importance, often given high priority and frequently is of a matter of concern to managers, employees, marketers of hotel and hospitality service providers (Yuksel and Yuksel, 2001 and Oh and Parks, 1997). Hospitality industries such as hotels strive towards making guest feel more than welcome, provide customer service in such a manner that would satisfy, delight, and make guests come back. Hotels commonly serving non-disabled customers could take step ahead and provide customer service to older and disabled people by making services offered more than accessible, providing accurate information and assistance in a friendly manner, which would enable the industry to secure a more loyal niche growing clientele that remains not quite touched upon (ADA Business Connection, 2006).

From the late 80’s until early 90’s researchers focused on, people with disability within the hospitality and tourism context, yet the study in this area lost impetus (Yau, McKercher and Packer, 2004). However recently Burnett and Baker (2001), Darcy (2002), Ray and Ryder (2003) and McKercher, Packer, Yau and Lam (2003), have recalled this area of study. Hence, research regarding People with disabilities in hospitality context is limited (Burnett and Baker, 2001; Darcy, 2002; Ray and Ryder, 2003 and Israeli, 2002). People with Disabilities are an emerging market segment, which is of interest, with approximately 50 million individuals and expected to double by 2030 (Stumbo and Pegg, 2005). Moreover, the growth of People with Disabilities would also comprise majorly of ageing senior citizens or ageing baby boomers and this market segment would gradually prove to be of importance for the continuing success of the travel and hospitality industry (Burnett and Baker, 2001).

Hence, this article focuses on customer satisfaction of people with disabilities as holidaymakers in hotels, which is of importance in order to capture a loyal market not only from a business point of view but also as a responsibility towards society. Moreover, the impending 2012 Paralympics games would certainly witness large number of disabled players and an increase in arrivals of disabled tourist. If hotels wish to exploit the benefits from the disabled tourist, it would be of importance to provide an exceptionally satisfying welcoming experience that would capture a loyal market and ensure return in the future (Department for media culture and sport, 2007a). Thus, customer satisfaction of people with disabilities becomes all the more important.

Review of Literature:

Disability Defined:

Disability under the UK Disability Discrimination Act is defined as a ‘physical or mental impairment, which has a substantial and long term adverse effect on a person’s ability to carry out normal day to day activities’ (Office of Public Sector Information, 2009a, p.2).

However, British Council of Disabled People defines disability as a ‘disadvantage or restriction of activity by a society, which takes little or no account of people who have impairments- that is caused by physical, mental or sensory condition; and thus excludes them from mainstream activity’ (Busby et al., 2000,p.3); ‘Thus, disabled people are with impairments disabled by society'(ibid).

Types of disability would include people affected in mobility, manual dexterity, speech, hearing, eyesight, memory or ability to concentrate learn or understand, also people suffering from diabetes, arthritis, multiple sclerosis, HIV, cancer are some of the conditions considered under disability (Department for Work and Pension, 2006). Hence, people with disabilities are not a small group but varied and hotels to achieve customer satisfaction will have considered serving the needs of people with different disabilities.

The implementation of the Disability Discrimination Act to an extent has drawn the attention of the hospitality sector towards People with disabilities and have gradually begun to identify them as profitable potential tourist (Shaw and Coles, 2004).The act enforces that service providers do not discriminate people with disabilities whilst providing service (Office of Public Sector Information, 2009b). Business or organisation that provides service, offer facilities or supply goods to public are liable to duties of the Disability Discrimination Act under Part III and this does include hotels (Department of Health, 1996).

The duties of this act for the service providers were rolled from 1996 to 2004 in three stages. The main essence of the duties that were introduced in three stages were that service providers discriminating or treating people with disabilities less favourably than non disabled customers was unlawful. In addition, service providers had to make ‘reasonable adjustments’ for disabled customers such as providing extra help or making changes to the way service is provided and reasonable adjustment to make the premises barrier free (Disability Rights Commission, 2002).

Reasonable changes as stated by the legislation could be one reason as to why service providers just tend to be compliant with law by providing minute alteration such as ramps and tend to do nothing more extensive. Prideaux and Roulstone (2009) express that despite of broad explanation expressing the vitality of accessibility to disabled, the representation of term ‘reasonable adjustment’ as stated in the UK Disability Discrimination Act legislation is still unclear and service providers tend to relive themselves from the responsibility of having extensive accessible service and facility.

Customer satisfaction and its importance:

Hospitality service providers use customer satisfaction as primary tool, as it helps retain customers, help reduce promotion cost intended to attract new customer since satisfied customers tend to return and aid in promotion of the property (Yuksel, 2001). This can also hold true for disabled tourist, as they tend to get loyal to providers that meet the needs, expectation and have facilities that are accessible, and would aid in promotion. Daniels, Rodgers and Wiggins (2005) establish that people with disabilities when loyal to accessible providers that cater to them, promote and learn about new properties mainly through word of mouth, followed by internet sites and at times also through travel guides. Horner (2004) acclaims that industries benefit with retained customers as these customers who are loyal are likely to return and promote the goodwill of the industry to others which may bring in future business. Thus, customer satisfaction has benefits as it helps minimize extra costs, enables industry know their repeat customer better, which could help in improving future service.

Defining customer satisfaction :

Customer satisfaction is based on the involvement of various processes and at times on the customer experience and expectation and this makes it highly complex (Johnston and Clark, 2001). Moreover, customer satisfaction based on components like controllability, emotion, inference, motivation, performance by management or employee or any happening during the service delivery; all of which could work independently or in combination influencing the complex process of satisfaction (Oh and Parks 1997, Bowen 2001, Bowen 2002 and Bowen and Clarke 2002). Being a complex process, it is difficult to pinpoint one single definition and as result, customer satisfaction can be defined in various interpretations (Yuksel and Yuksel, 2001). However, Oh and Parks (1997, p.37) based on critical analysis of customer satisfaction suggested a convincing definition that ‘customer satisfaction may result from a very simple or complex process involving extensive cognitive, affective and other undiscovered psychological and physiological dynamics’.

People with Disability as Potential Market:

People with Disabilities are potential customers for the hospitality sector and catering to this customer base would tend to generate billions in the sector (Arellano 2003). Moreover, senior citizens are likely to experience disability in some form as they age, and tend to coincide with that life stage when they enjoy a retired life having time to travel with surplus disposable income (Fleischer and Pizam, 2002). United Nations, (2007) claims by 2050 universally the number of old age population would double. Thus, disability in some form would also be increasing (Mann, 2005). Groschl (2004) express that as people with disabilities is increasing so is desire to travel, and this awareness has given rise to the need for making travelling and facilities barrier free as hospitality industries in the future would have to depend on this market segment (Glover and Prideaux, 2009). Based on the research conducted by Oztruk, Yayli and Yesiltas (2008), in the hospitality sector in Turkey made it evident that hotels and travel agents encounter tourist with disabilities and have a positive opinion in the growth of this market segment.

Another market that Huh and Singh (2007) express are families with a disabled members too travel on holidays and choose hotels having facilities that are accessible too all members and this market fails to be realized by service providers. Disabled holiday makers may at times travel with their partner or children who could be normal and would prefer to stay in hotel room of their choice not in a predetermined segregated accessible room, however disabled tourist have very little option in rooms selection due to limited available rooms (Clark, 2008). This point out hospitality industry such as hotels rarely gives thought to the motives and expectation of disabled tourist whilst designing. Thus, Gladwell and Bedini (2004) acknowledges that hotel employees failing to deliver appropriate service to disabled tourist are not only the ones affected, but also the service affects the family members or individuals accompanying them.

With the introduction of Disability Discrimination Act, work places have accepted employees with disabilities, in addition, media has assisted in the gradual change in ideology, attitude of the society and this has vastly given rise to attempts made in order to understand People with Disabilities as a potential market segments thus becoming a new phenomenon (Burnett and Baker, 2001). People with disabilities being a niche market segment in the hospitality sector, a prime .concern that this market segment faces is accessibility to facilities offered, which plays an important role in destination or accommodation decision making; moreover accessibility is measured differently compared to non disabled tourist (Isareli, 2002).

Disability in the U.K.

In the U.K. about 10 million disabled people dwell (Office for Disability, 2008). Possessing an estimate annual spending power of 80 billion (Breakthrough-UK, 2009). This might suggest that having realized the economic value of this market, hotels would cater and try to delight disabled customers.

However an assessment carried by tourism for all estimates that 2% of hotels are found to be wheelchair accessible, moreover the British Hospitality Association assess that out of the new 10,000 hotel rooms built from 2004 only 1% were wheelchair accessible (Department for culture, media and sport, 2007b). This would make one ponder if very few hotel rooms are accessible only to wheel chair users let alone other disabilities, then it might be possible that the customer service offered to disabled tourist too may not be optimal, satisfying or delightful.

According to Employers forum on disability (2009), survey conducted in 100 UK companies revealed 44% offer accessible products, only one- third front line departmental employees take into account the preference and needs of people with disability and only 44% companies accept the fact that their websites are accessible to people with disabilities. Hence with so little done suggest that hotel consider disabled tourist marginal and customer satisfaction might not be of importance. The reason behind this could also be due hospitality industries fear that an increase in disabled tourist could displace the normal core business (Phillips, 2002)

Attitude towards people with disability:

Darcy (1998) reflects how important is recreation for disabled and senior tourist and their attitude towards tourism, but the outlook towards people with disabilities at hospitality destinations (hotels) are a matter of concern. The attitude of the individuals in society and marketers in industries towards People with Disabilities is likely to be prejudiced and hospitality providers such as hotels aim to just be compliant with the discrimination act, but little attention is given on how the act can help satisfy the lucrative People with Disabilities tourist market (Burnett,1996). Attitude against people with disability as in Asia can also be experienced where disabled members are seen as disgrace and believe that people with disability suffer as a result of the doings in previous life (Parker, 2001).

Daruwalla and Darcy (2005) based on study conducted suggests that, the attitude of hotel staff can be changed by organising role play , visual information about various impairments and empowering customer service employees to communicate freely with People with Disabilities would change the mindset, moreover such training could be initiated at hospitality institutions. Kaufman-Scarborough (2001) argues that though the ability and necessities of disabled individuals is addressed, very less attention by hotels is given towards understand their needs and capabilities as consumer. Williams, Rattray and Grimes (2006) suggests organisation must view accessibility as a service beneficial to all members of the society and not just confined to People with Disabilities,, moreover such a service which satisfies all members of society would indeed prove to deliver a competitive edge in the market. According to Israeli (2002) hospitality sectors whilst catering and serving People with Disabilities find it difficult to meet their needs since the service hospitable attitudes does not flow genuinely and hence not able to serve them well. This indicates that tourist with disabilities when on holidays at hotels will certainly evaluate every facility differently from the point of accessibility and if the service towards them does not flow naturally this could leave them dissatisfied.

Thus if hotels take initiative to make- facilities accessible, training employees adequately in order to service and communicate with disabled tourist appropriately will indeed achieve customer satisfaction and be able to capture a growing profitable loyal market.

Barriers and its impact on service:

Although this disability market segment, requiring special needs is gradually becoming of importance to the hospitality sector, majority of the hospitality industry do very little and tend to do adjustments just to be compliant with the law (Burnett and Baker, 2001). Besides that hotel managers do nothing more to cater or meet the needs of this niche market and tend to project indifference whilst meeting expectations and wants (Rice, 2006). According to Sen and Mayfield (2004) lodging facilities have numerous limitations when catering to People with Disabilities such as transportation, misplaced wheelchairs, the issue of accessibility to various public facilities, and the incapability of dealing appropriately towards people with different disabilities. People with Disabilities find it difficult to move around freely and perform activities and gestures within normal time as compared to non-disabled people (Daniels, Rodgers and Wiggins, 2005). Hence A prerequisite at hospitality sites to serve this special market segment so that their desires to enjoy leisure, experience facilities and rejuvenate at hospitality sites which are same as non disabled people is requirement of qualified human resource (Oztruk, Yayli and Yesiltas, 2008).

Non disabled tourist have better experience than disabled tourist and hence if hotels wish to cater and serve people with disabilities then the barriers faced by people with disabilities such as mobility impaired, visually impaired, mentally impaired must be considered (Thapar et al., 2004). This segment comprises of various challenges that industry may face due to need for special equipments, change in structure, incapability of staff to handle customers (Ray and Ryder, 2003). It is vital that tourist sites that intend to cater to such a lucrative segment must address to special needs and consider barrier removals in order to make facilities accessible and enjoyable (Oztruk, Yayli and Yesiltas, 2008). Which would service not only people with disabilities but other’s too such as guests carrying heavy luggage or having baby pushchair (Westcott, 2004). Oztruk, Yayli and Yesiltas (2008) do opine that much more needs to be done for this market segment in order to increase the number of trips taken by disabled tourist, increasing activities in hotels and vitally hospitality sectors need to be educated on interaction and maintaining positive relationship with disabled tourist.

Besides the structural barriers, disabled tourist due to their personality and difference in communication whilst socializing transpire as constraints to have an effective relationship with the society (Daniels, Rodgers and Wiggins, 2005). However, McKercher, Packer, Yau and Lam (2003) underpins that People with Disabilities as tourist are very well capable of establishing relation with people around them. In the tourism industry, service providers, which also include hotels, do little in regards to educating and training their employees in areas of understanding and serving People with Disabilities appropriately (Grady and Ohlin, 2009; McKercher, Packer, Yau and Lam, 2003 and Miller and Kirk, 2002). Lack of communication, knowledge about various impairments and negative prejudice leads to individuals maintaining distant and tend to have a wrong mindset about People with Disabilities. Thus, at times hospitality service providers having a stereotype view of People with Disabilities assume that a disabled person is incapable of any activities one such example is the assumption that ‘wheelchair chair user is unable to communicate’ (Daruwalla and Darcy, 2005, p. 552). This suggests that negative attitude and lack of knowledge will indeed put employees in a position not knowing how to react or serve and communicate with disabled tourist.

Smith, Austin, and Kennedy (2001) assert that tourist with disabilities when confronted with barriers that mar their movement greatly lowers their leisure satisfaction and tend to avoid such destinations. Through the survey conducted by Grady and Ohlin (2009) it was evident that hospitality managers find it difficult to cater to the needs of People with Disabilities as tourist since hoteliers lack the knowledge of dealing effectively thus meeting needs and expectation. Daniels, Rodgers and Wiggins (2005) state that hotel employees are prone to be underprepared in effectively dealing with People with Disabilities as tourist as they lack information and training in dealing with them. This points out that with such service delivered would certainly not satisfy or delight the tourist.

Accessibility and impact on customer satisfaction:

People with Disabilities and their quality of life is greatly impacted by recreation and it is vital for such recreational sites to be accessible, since through empirical research it was evident that accessible recreation sites have positive enriching effect on People with Disabilities (Darcy and Daruwalla, 1999 and Ray and Ryder, 2003). Before embarking on a travel journey, in order to be safe and have an enjoyable experience, people with disabilities must judge and decide on various concerns, determine risks by gathering required information and the criteria’s that influence decision process is more complex than for a non disabled tourist (Yau, McKercher and Packer, 2004). If People with Disabilities as tourist are not provided with necessary accessible information by the hotel or through hotel website, the satisfaction of choosing the hotel may not be experienced and this would restrain the motivation and desire to travel (O’Connor and Frew, 2002). This suggests that if initially itself the motivation and desire to travel is not that high, due to lack of information the customer satisfaction could also be at jeopardy.

Moreover, despite of risk evaluation People with Disabilities encounter many hurdles whilst they travel and sites that are inaccessible could have an impact on them, spoil their holiday and could even diminish their travel as well as stay experience (Oztruk, Yayli and Yesiltas, 2008). Hotels in particular though claim to be accessible, are in-fact not completely and easily accessible to disable tourist, and hence disabled tourist lack trust on hotels and rely on personal inspection of accessibility (Ray and Ryder 2003). This indicates that people with disabilities would be apprehensive whilst selecting places. Hence Ray and Ryder (2003) suggests that marketers can reach out to People with Disabilities and can be attracted to destinations is by highlighting them in advertisements, which could encourage the selection of destination. Therefore, according to McKercher, Packer, Yau and Lam (2003) people with disabilities unlike non-disabled tourist face barriers that are inherent, economic, and environmental – that hinder participation, interactive barrier- that is due to the attitude of hospitality service providers and non-availability of accessible information.

The above-mentioned barriers are ascertained by Clark (2007) based on his life experience he expresses that, holiday for people with disabilities could be miserable. Since often, hotels have few accessible rooms and tend to be occupied by non-disabled people; moreover online hotel reservation websites lack the option for selecting an accessible room and in addition, travel agents charge more for service offered. Thus, Westcott (2004) articulates that people with disabilities tend to be more loyal and would return to those locations, which are accessible, where their needs are catered and make holiday experience memorable.

Hence, it is suggested that to better serve People with Disabilities, which would satisfy and delight them it is important that hoteliers understand what within the establishment would prevent disabled tourist to participate in activities (Goodall, Pottinger, Dixon and Russell, 2004).

Web site barrier:

The advocates of People with Disabilities believe that hotel web sites that fall under the disability discrimination act and must be made accessible, however courts are yet to ensure that (Kreismann and Palmer, 2001 and Sherwyn, Eigen and Klausner, 2000). People with Disabilities such as visually impaired find it difficult to navigate through website (Mills, Han and Clay, 2008). In addition, face way-finding barrier, which can be over come with the help of facilitator (Thapar et al., 2004). This suggests that the satisfaction of visually disabled tourist may not be optimal since hotel websites if not accessible would influence the decision and service experience. Williams, Rattray and Grimes (2007) ascertains that hospitality industry when developing websites rarely take impaired users into consideration and hence few websites can be found that are friendly to visually impaired users.

Mills, Han and Clay (2008)says that websites with accessibility barriers pose as a problem and decreases the opportunity of using websites, however websites when made accessible make People with Disabilities independent and can get-into websites for information despite the impairments. Some facilitators that can be used in websites are screen-read software’s that convert text on websites into speech or can also convert text into Braille (O’Brien 2005). Web content accessibility must be capable to serve individual in society, which also includes People with Disabilities, however hotel website information accessibility is low and fails to meet the needs of disabled tourist for whom information provided plays an important role in travel decision-making (William, Rattray and Grimes, 2007). Despite this, various hotels fail to make provision for people with disabilities and on inspection by William and Rattray (2005), they discovered that many hotels have their web pages that are not accessible and even if they are, it was found to be compliant only with first level of accessibility addressed by world wide web consortium (W3C). Hence, it is evident that without proper web accessibility and inaccurate information for such a large market of people with disabilities who wish to travel may experience dissatisfaction through the service offered by hotels. Nusair and Kandampully (2008) put forth that service offered through websites that are accessible, helpful and providing desired information greatly affects customer satisfaction positively. To facilitate accessibility to all including disabled tourist the world wide web consortium have developed web content accessibility guidelines, following which, enables access to all(World Wide Web Consortium, 1999.)

Apart from facilitators that convert text to speech or Braille which is very convenient for people with disabilities such as blindness, deafness but it is also important to address web accessibility for those have reading difficulty. WebPages commonly use option for changing the text size for accessibility but pay little attention to colour, it is important to note that some users cannot differentiate between colours and options must also be available to view text without colour and colour scheme used must be contrasting enough (World Wide Web Consortium, 1999). These simple guidelines in hotel websites could influence satisfaction, help in decision-making and the people with disabilities as tourist may patronize such hotels.

Practically most of the industries universally lose some of their customers to competitors (Devlin, Gwynne and Ennew, 2002). This may be because the competing service provider is likely to meet the customer’s satisfaction level and expectation. Forsyth (1999) put forth that suppliers tend to cater to specific wants; however, customers commonly wish to do be associated with suppliers and their employees who are creative, honest, responsive, knowledgeable, approachable and cater to all wants and this makes customers see them as professional and tend to switch and maintain relation with such suppliers.

Influence of hotel service on customer satisfaction.

Customer oriented industries such as hotels place customer at the core whilst evaluating customer satisfaction, however in order to do so is it important to understand the customers needs and expectations which would help maximize satisfaction and maintain competitiveness and profitability ( McMullan, 2005). The study conducted by Danaher and Mattsson (1994) reveals that customer satisfaction in hotels is based on evaluation of various services offered which customers are likely to evaluate them separately and not collectively hence strongly impacting customer satisfaction.

According to Forsyth (1999) in hospitality industry such as hotels, customer service is of prime importance to maintain good customer relation and maintain customer satisfaction. Cartwright (2000) argues that delighting a customer is also of importance and can be achieved when product and facilities serve more than expected. Service providers are now realising that delighting customers is more vital since by just satisfying customers and gaining their loyalty though are primary factors whilst satisfying customers cannot be entirely relied on. Disabled customers too travel and wish to enjoy facilities, services and are delighted when all is accessible, hotels need to keep them in mind whilst assessing their services. Shoemaker and Bowen (2003) revealed that in order to delight, maintain loyalty and connection, and gain trust from customers for the organisation it is important that all services and facilities are designed keeping customers into consideration.

Based on survey conducted by Wei, Ruys and Muller (1999) concluded that people with disabilities and including senior travellers gave more importance to facilities and service that the hotel offered than other attributes such as decor, price, food and beverage, when judging the satisfaction they experienced during their stay. Zeitmal and Bitner (2003) explains that in order to achieve customer satisfaction, it is important to maintain quality and standard in every customer service encounter, in-order to do so it is important that employees understand specific requirements and priorities of customers during each service encounter.

Findings and Suggestions:.

From the literature it is evident that people with disabilities experience a lot of constraints, and have to consider various risks when planning to travel, also they face with limited options during travel selection process (United Nations, 2007). The lodging facilities such as hotels too are few that are able to cater to their needs and treat them as expected (Vignuda, 2001). Thus, often-disabled travellers are forced to select only those hotels that they are aware of, which will cater to their needs, since other hotels fail to treat them as expected and would fail to provide a satisfying experience. It is apparent that gradually in the future hospitality industries such as hotel would have to cater to this growing market and customer satisfaction would be of importance to ensure repeat business and draw such a niche market into hotels.

Most of the service providers are reactive and implement installation of ramps or automatic door

Introduction

Hotel is one of the most important organizations in the field of tourism industry in providing service. Therefore, they play a full role in improving and expanding the tourism industry and also in improving and developing economic circumstance.

Today, customer satisfaction is a specific requirement for the improvement of service organizations such as hotels, and increase profitability. Thereby maintaining the system of measurement and evaluation of customer satisfaction is one of the most important aspects of improving the quality, but the basic needs of the recent organization.

On the other hand, by expanding the borders of the global village, the need for only standard regulations to assess the quality of certain products and services, is to measure the situation of the organizations in the international market competition, may be felt more than ever

Study background

Customer satisfaction is a business philosophy, is a measure of how products and services offered by a company meet or exceed customer expectations. It is considered an important indicator of performance in business and is part of four of the Balanced Scorecard. Customer satisfaction with a company’s products or service is often seen as the key to a company’s success and long term competitiveness (Klee, 1998).

Identify and forecast customer demands and to be able to meet them is important to achieve customer satisfaction. Due to the costs of attracting new customers costs more than retaining existing customers, to be successful managers must focus on retaining existing customers, effective implementation of policies Customer satisfaction and loyalty. This is especially true in the hotel industry.

Today, managers in the hotel industry is facing one of the most important challenge is to provide and maintain customer satisfaction. Consequently, quality of service has become a factor important in the overall tourism experience, and one which ultimately dictates the success of the tourism business (Kandampully, 2000). According to Lewis and Booms (1982), service quality is measure of how well the service delivered matches customer’ expectations.

Positive relationships can make higher commitment of customers and increase their rate of return. Long-term relationships between customers and hotel is becoming more important as the positive correlation between overall satisfaction levels of visitors and their ability to return to the same hotel. Hotels are increasing their investments to improve service quality and perceived value for customers to achieve customer satisfaction and loyalty better of them, thus achieving a better relationship with customers.

Competition is increasing dramatically as variety of hotel industry; hence, the hotel management has always tried hard to provide the best service quality and the best satisfaction for customers in the hotel industry including hotels in Singapore.

Study area

This report covers of the main literature on customer satisfaction and retention in the hotel industry in Singapore. The hypothesis of the report will research based on the issues of the customer satisfaction and how a hotel management use effective policies to providing services and goods with a high quality to satisfy the customers and go through a lot of effort in maintaining their customer satisfaction, develop and make profits in their business focusing on Singapore area.

Research structure

The report focus mainly on “Customer satisfaction” emphasize on the area of hotel industry in Singapore. First chapter introduces background of the Customer satisfaction and briefly summarized importance of relevant issues.

Second chapter identifies customer satisfaction in the hotel industry, purpose applying the best strategies to provide quality services to customer, reasons why need to maintain old customers and attract new customers. How to build customer’ loyalty, hotel attributes what services to customers and the legal regulations, strategic considerations will be explained.

And fourth chapter concludes the best methods to proposing improvements in customer satisfaction management in the hotel industry.

Research objectives

The aims and objectives of this research are:

What is customer satisfaction and how to achieve it?

Hotels need to adopt effective strategies and create product attributes to customers to satisfy them.

How the service quality related to customer satisfaction?

Provide good service quality will gain customer satisfaction.

Definition of customer loyalty and how to remain customer loyalty?

To gain customer loyalty, hotel needs to have a good relationship with customers.

What services quality is hotel need to provide to customer in order to get customer satisfaction, loyalty and repeat patronage?

Cleanliness, location, security, room rates, service quality and reputation or chain of hotels.

CHAPTER 2 / LITERATURE REVIEW
2.0 Introduction of main issues

In today’s competitive market, the company provides services throughout the world effort to achieve a better position than its competitors through the only advantage to please their customer’s satisfaction and therefore retain their loyalty.

On the other hand, customers are always looking for suppliers of goods and services of better quality and meet their expectations. But most vendors are now providing quality products with relatively equal, so customers always have multiple choices

Therefore, in the hotel industry, considering the quality of service and customer satisfaction is very important, so it is necessary to adopt appropriate measures and procedures for recognition and improvement many services as possible to meet the hotel guests and customers.

Analyze Customer satisfaction in hotel industry

Customer satisfaction is an important topic for both researchers and managers, because of high levels of customer satisfaction leads to an increase in repeat patronage among current customers and aids customer recruitment by enhancing an organizations marker reputation. Being able to successfully judge customer’ satisfaction levels and to apply that knowledge are critical starting points to establishing and maintaining long term customer retention and long term competitiveness (Yuksel and Yuksel, 2002). Customer satisfaction brings many benefits, the satisfaction increases of customers retentions and customers retentions is dependent on the nature of the relationship between the parties which are also affected by the service delivered.

Satisfaction is an overall customer attitude towards a service provider, or an emotional reaction to the difference between what customers anticipate and what they receive (Zineldin, 2000), regarding the fulfilment of some need, goal or desire. For most products, services and aspects of performance can be made to reflect objectively measured. Some customers may be taken to a house fit their criteria, but not suitable to the taste of individual customers to assess customer service as uncomfortable as they do not see a list of their choice.

Kano, Bentler and Li-tze (1984) developed a model to categorize the attributes of a product or service based on how well they are able to satisfy customer needs. Consideration of the Kano model, we can see how it might not be enough to just satisfy customers by meeting their needs and performance basis only. In a highly competitive marketplace, organizations need to adopt strategies and to create product attributes targeted specifically at exciting customers and over satisfying them (Tan & Pawitra, 2001).

In the real estate to please and satisfy customers, agents will need to have a comprehensive knowledge and extensive list of all the local area. In essence, it is the experience and attitudes of individual’s closest contact with customers that are likely to affect whether customers are satisfied and ready to go back to the company. It is also the people in direct contact with customers who determine who the retained and satisfied customers are, and their experience determines how they treat the customers (Hansemark & Albinsson, 2004) thus impacting on the service quality delivered

Advantages of providing good Service quality to customers

The concept of service quality as a whole building is large and diverse. The theory has been elaborated on by many researchers. Berry, Parasuraman and Zeithaml (1985) write service quality as perceived by consumer’s stems from a comparison of what they feel service firms should offer with their perception of the performance of the firm providing the services. . Quality of service received is considered as the degree and direction of the difference between the perceptions of consumers. For example in real estate, this is what customers expect from the agent compare to which is actually distributed by that agent.

In real estate, that interaction occurs from the moment the client and agent speak either verbally or electronically. It is evident that research on goods quality is inadequate in the service field, which has three inherent characteristics: intangibility, heterogeneity and inseparability between production and consumption (Berry, Parasuraman and Zeithmal, 1985).

In this scenario, providing high quality services and improving customer satisfaction are widely recognized as fundamental factors boosting the performances of companies in the hotel and tourism industry (Barsky & Labagh, 1992; Le Blanc, 1992,; Le Blanc et al., 1996; Stevens et al., 1995, Opermann, 1998). Hotels with good service quality will ultimately improve their profitability (Oh & Parks, 1997). In a competitive hospitality industry which offers homogeneous services, individual hoteliers must be able to satisfy costumers better than their counterparts (Choi & Chou, 2001).

Strategies to maintain customer Loyalty

There are three ways to determine customer loyalty that are Behavioural measurements, attitudinal measurement, and Composite measurements

The measurements considered appropriate behaviour; buying behaviour is repeated as an indicator of loyalty. One problem with the approach to repeat purchase behaviour is not always the result of a psychological commitment to the brand. For example, a traveller can stay at the hotel because it is most convenient place. When a new hotel opens on the street, they switch because the new hotel offers better value. Therefore, repeat purchase does not always mean that commitment.

Attitude measurement use attitudinal data to reflect the attitudes and psychological feelings associated inherent in loyalty. The attitudinal measurements are concerned with the sense of participation, loyalty and faithfulness. There are instances when a customer holding a favourable attitude for a hotel, but he or she does not stay at the hotel. One can appreciate a hotel, recommend the hotel to others, but feel the hotel for him too expensive to use on a regular basis. The above approaches measure loyalty uni – dimensionally.

Composite measurements of loyalty combine the first two dimensions and measure loyalty by customer’s product preferences, propensity of brand switching, frequency of purchase, regency of purchase and total amount of purchase.

The use of both attitude and behaviour in a loyalty definition substantially increases the predictive power of loyalty (Pritchard and Howard, 1997). Two-dimensional composite method has been applied and supported as a valuable tool for understanding customer loyalty in many fields, such as retail, entertainment, luxury hotels and airlines.

For this study, customer loyalty is customer attitude favourable to the company, committed to purchase products or services, and introduce products to them.

According to a survey carried out by Barsky & Nash in 2006, regarding the main hotel chains worldwide, between 2002 and 2005, the importance of loyalty programs for guest’s decision on where to stay increased from 32% to 34%.

Although the search for new locations is certainly the most important factor for many tourists, several studies highlighted that there is a good portion of customers that chose to repeat their holidays’ destination, showing a certain degree of loyalty (Oppermann, 1998; Fyall et al., 2003).

According to the study of loyalty found that, there are five major factors affecting the repetition of trip to the same tourist place. They do not want to make wrong choice when choosing the other tourist destinations. They want to meet those familiar. The emotional affection to a specific place. The possibility to explore the place better, and want to recommend the place to others.

Customer satisfaction is the starting point to build customer loyalty, so a long term relationship. This creates a loyalty’s stock in enterprises to improve corporate image. Strengthening relationships with customers leads to repeat patronage. On the other hand, an unsatisfied customer may represent a danger to the enterprise. A research, conducted by Cherubini (1997), shows that only 4% of unsatisfied customers complains to the business explaining the reason of their unsatisfaction, and each client who doesn’t officially complain generates a negative WOM which can involve also 1000 people.

Important role of Hotel attributes

Research into hotel selection criteria has focused on the relationship between customer satisfaction and service quality of services and facilities. Because of the intangibility, inseparability, variability, and perishables of service, consumers’ perception of satisfaction criteria may include contextual cues that they use to evaluate the service quality and to make decisions about future patronage, whether or not they experienced the hotel’s products and services before (Bitner, 1990; Parasuraman et al., 1985). Alpert (1971 and Kivela (1996) viewed consumer product and services as a bundle of attributes, or features, and benefits, and stated that those attributes that directly influence consumer choice are termed determinant attributes. These attributes, which may be different from competitors’ services, may be important factors in determinant consumer’s intention to purchase in the future.

Wuest et al. (1996) defined perceptions of hotel attributes as the degree to which travellers find various services and facilities important in promoting their satisfaction with hotel stays.

To get loyalty and value than other competitors, suppliers must be able to achieve a high level of customer satisfaction for services provided. There have been many studies on the needs and characteristics of tourists. Reviews of literature that most travellers would consider following hotel attributes when giving the hotel choice decision: cleanliness, location, security, room rates, service quality and reputation or chain of hotels. Atkinson (1988_ found that cleanliness of accommodation, followed by safety and security, accommodation value for money, and courtesy and helpfulness of staff were the top attributes for travellers in hotel choice selection.

Hoteliers need to fully acknowledge which service attributes are most likely to influence customers’ choice intentions (Richard & Sundaram, 1993). Customer satisfaction practices can help them to identify the crucial favorable word of mouth (WOM) publicity (Berkman & Gilson, 1986; Choi &Chu, 2001; Fornell, 1992; Halstead & Page, 1992; Knutson, 1988; Pizam, 1994). A satisfied guest promotes positive WOM at no cost for the enterprise and with effect and credibility that are superior to those of conventional advertising (Lee et al., 2006, Tarn, 2005, Villanueva et al., 2008). WOM effect is also amplified by the World Wide Web (Dominici, 2009; Trusov et al. 2009).

CHAPTER 3 / CONCLUSION
3.0 Conclusions

Hence, both exploring the importance for customers of single attributes in hotel selection and to systematically survey their level of satisfaction are indispensable. Research on the topic of guests leads to negative evaluations of the hotel, thus restricting the chance of repeat patronage guest satisfaction, which translates into the consideration of whether or not customers will return to a hotel or advice it to other tourists, is pivotal to the success of the hospitality business. Neglecting to pay attention to those hotel attributes considered most important by.

CHAPTER 4 / REFERENCES

1.1 Background of the study

Nowadays the world has become a small township by the host of modern technology, economic openness, communications and transport which made it possible to overpass the distances between the countries. whereas, these successful countries and institutions will achieve benefit if they will take the advantage of this opportunity in their development process (S. Melisidou & N. Theocharis, 1992) and even if these institutions must pay the cost of these modernization in term of how to deal with differences of the clients in their culture, religion, language and level of thinking. Therefore, some studies proved that when the organizations examine these differences and provide service to the customers according to their requests will succeed while the other organizations will fail to revolutionize from local to global when ignoring these differences.

In addition, there is a particular importance for measuring customer satisfaction with service related to the institutions seeking for succeeds, because the successful institutions was focused on pleasing its customers to increase their earnings properties which will enable it to endure and challenge in the market (Chingang & Lukong, 2010).

The tourism sector similar to other sectors has a customer’s which they need to provide them a service according to their needs and wishes. On the other side if the countries plan to acquire succeed in the tourism sector, it should focus on satisfying its customers according to their different cultures (John S. & Damiannah, 2003). Besides these many countries were failed to attract a lot of tourists because it was providing financial support for the tourism sector but is not convinced with the idea of modern marketing approach which focuses on customer satisfaction.

The tourists has differ in many points such as culture, the scientific, social and financial stage . . . etc., along with the religion which represents as a one of the cultural variation of the tourists. Hence religion has a significant influence on the way of dealing, consumption, ingestion, housing and the entertainment. However, each followers of every religion has varies from the other with some characteristics which control their needs and wishes, which will automatically affects their satisfaction with the service that provided by the tourism’s organization.

The Muslim tourists has a manner of culture which identifies their desires and behavior similar to other religion, and to give pleasure to the Muslim tourists can be accomplish by providing the requires and desires according to their point of view towards the services process which was provided by tourism organizations that are dealing with such as airports, transportation, accommodation, entertainment and shopping venue.

(Guenter Meyer 2004) were clarified that the Islamic Tourism was receiving more concern from the countries and institutions that seeks to be prominent in the field of tourism.

The Islamic tourism can be expresses by three concepts are:

The economic concept: This means to expand the tourism range and to increase new tourist destinations.

The cultural concept: This refers to the presents of the Islamic heritage of Muslim tourists, such as pilgrimage rite, visiting the great mosques and Islamic museums.

The religious concept: This means to afford services for Muslim tourists according to the Islamic law, such as providing places for the prayer and to separate the place for male and female, besides provides halal food and to prohibits the alcohol.

The (Theresa A Pawitra, Kay C Tan 2003) examined tourist satisfaction in Singapore from Indonesian tourists perspective and he found the Indonesian tourists are more interested in shopping and eating, than in attending, for example, arts or local cultural events. and he recommend in Future researches should considers other major tourist markets, because the differences in culture and nationality would be expected to have an impact on tourists satisfaction and perception.

And (Adi Weidenfeld 2006) said, in the current competitive environment, the tourism and hospitality industries are constantly searching for new customer segments and for ways of improving competitiveness. Thus, the provision of religious aspects in the hospitality product could prove a valuable and integral part of the customer’s orientation. That paper highlighted the importance of satisfying religious needs to increase the satisfaction of customers. This is the first time empirical findings concerning the religious needs of tourists, and the sample of study consists of 179 Christian tourists in Israel. and suggests that the tourists’ religious needs constitute an independent area of research and that satisfying religious needs should be taken into consideration in tourism industry.

And he is advise the other examiners by doing many studies about effect the another religions on customers satisfaction in tourism industry. like islamic religion and because Malaysia is best modern country in islamic world consequently it’s best place for this study.

According to the above mentioned, it was clear that Malaysia has a mixture of cultures and there are large numbers of Muslim tourists has come across malaysia from different countries, which will make it a suitable place to conduct these studies. Therefore, recent studies in malaysia regarding the tourism industry were found that the number of tourists who arrived to Malaysia in year 2009 was reached (21,505,120) tourists and it is noticeable that the tourists from Muslim countries was clearly increased with high percentage if we compared it with the number of tourists for the year 2008, like the tourists from Saudi Arabia increased by 119% and the United Arab Emirates (UAE) 80.3%, Bangladesh 56.8 and Iran 47.4% (Malaysia Tourism Report Q1 2010). The (Muhannad M.A Abdallat. Hesham El -Sayed. Zainal) examined the relationship between the loyalty and the destination of the international tourists that was arriving to Malaysia and he found that there is a positive relationship between loyalty and self-image of Malaysia as a tourist destination.

this research, will examine the customer satisfaction from the perspective of tourists coming to Malaysia, and to measure the satisfaction of Muslim tourists with the services that provided, and what are their expectations of the level of service that provided by the Malaysian tourism organizations and what are the reasons for visiting and for choosing Malaysia as a tourist destination.

1.2 Research problem

There is a relationship between the tourist satisfaction about the service and the tourism destination, and the tourist builds his expectations through the tourism and business advertising and the views of others (John S. et al, 2002), where the pleasing tourist will try to repeat his visit, or at least to inform his friends and relatives about his experience of successful (Patricia, et al, 2006).

The tourists can be influencing by many factors rather than the price, the quality of the product and service, because of the customs and the traditions including the religion itself, which influences the satisfaction concept of the service, for instance the way to express thanks for the tour guide is differ from culture to culture (Gao-Liang et al, ), and the pleasure with the service have an effect on the decision-making by the determination of the tourism destination (Vesna A?abkar, et al ). Therefore, it is difficult to appraise the pleasure for a certain category of religions and cultures and to apply this to the rest of religions, which it gives us incorrect records.

The (Ihsan. Mohamed. Abd- alah) were studied the pleasure of Muslim pilgrims about the accommodation in the kingdom of Saudi Arabia, and he determined the causes that made them live in this region and what is the quality of services that provided to them. The research concluded that the pilgrims are not satisfied with some services, like the time and the difficulty of transportation. While the (Zulkifli Ibrahim and others 2009) studied the pleasure of Arab tourists about the quality of service in the Malaysian five star hotels, this study was conducted on the hotels that was located in Kuala Lumpur, and the research concluded that the Arab tourists prefer to make the gender splitting up of male and female and they prefer to provide a receptionist who can speak Arabic language at the hotel reception, because of most the Arab tourists does not speak good in English conservation. Consequently, this research will concentrates on the study of the customer satisfaction from the perspective of Muslim tourists.

1.3 Research Questions

The research will try to find answer for these questions:

What are the main reasons for the Muslim tourists selecting Malaysia as a tourist destination?

What are the dimensions of the expected quality service from the perspective of Muslim tourists come to Malaysia as a tourist destination?

What are the dimensions of the perceived quality service from the perspective of Muslim tourists come to Malaysia as a tourist destination?

Are there any differences between expected quality and perceived quality from the perspective of Muslim tourists in tourist establishments in Malaysia?

What is the level of service quality has been affected by demographic variables for Muslim tourists (sex, age, education, occupation, monthly income and social status)?

1.3 The importance of research

The measure of the customer satisfaction is an important strategy and also represent as a main engine of profit along with maintaining the characteristics of the trade’s brand (N.Theocharis). Hence, the importance of the research has imply that the tourism services sector plays an important role in the global economy but it needs to focus deeply on the religious factor because it influence the satisfaction or dissatisfaction of the customer with the service that provided to him. Therefore, the Islamic religion is one of these religions, where the tourists Muslim have different desires from the rest of the tourists, such as providing places for prayer and eating halal food and prohibited of mixing male with female (Guenter Meyer, 2004). So, to think about this factor (religious factor) by the researchers is still undersized in most countries except some countries such as Malaysia.

Therefore , it will requires more research especially those related to religious factor and its impact on the tourism sector in order to identify the services that will satisfy the tourists Muslim and to find out their attitudes and to distinguish the reasons for their preference towards some services than others.

1.4 Research Objectives

The main objective of the tourism organizations is to serve the customers more than excellent and to increase the customer’s satisfaction through continuous improvement and rising up the level of service (N. Theocharis ).

This study will focus on the satisfaction of the specific kind of tourists who are Muslims, which will intend to provide accurate data related to this category, through achievement of the following goals:

To know the reasons for selecting Malaysia as a tourist destination by the tourists Muslim.

To measure the expected quality of service from the tourists Muslim’s point of view.

To determine the perceived quality of service for tourists Muslim’s scales.

Analyzing the relationship between perceived quality of service and the Muslim customer’s satisfaction (measuring the tourist’s satisfaction).

Applying a model to assess the quality of service that provided to tourists Muslim.

To achieve some conclusions and suggestions that could contribute to the development of quality service in the Malaysian tourism sector.

1.5 Outline of the study

Chapter One: General Research Framework.

1.1 Introduction

1.2 Problem of the study

1.3 Research questions

1.4 Objectives of the study

1.5 Importance of the study

1.6 Outline of the study

Chapter two: literature review.

2.1- Review of the tourism in Malaysia

2.2- Previous studies.

Chapter three: methodology of the study.

3.1- model of the study.

3.2- The study hypotheses.

3.3- Approaches are will used in this study.

3.4- The questionnaire design.

3.5- Sampling.

3.6- Data collection method.

3.7- limitations of the study.

3.8- statistical methods used in the study.

Rationale of the study:

The measurement and management of service quality are fundamental to the survival and success of service companies (Legcevic, 2008). The hotel sector is a large segment of the service industry which provides services and accommodations to a wide range of customers. To make sure that a hotel is satisfying its customers’ needs, it is necessary to measure service quality periodically to identify areas in need of improvement. There are several methodologies used for measuring service quality, but this research study shall employ one of the more popular models – called the SERVQUAL model. This theory was developed by Parasuraman, Zeithaml and Berry. They were early researchers studies about the concept of quality (Jain and Gupta, 2004). The SERVQUAL model was created to measure service quality as perceived by the customer (Parasuraman et al., 1985).

According to Shangri-La Hotels Annual Report of year 2008 and 2009, the occupancy rate of the Shangri-La Hotel, Bangkok has declined continuously (Shangri-La Asia Limited, 2008, Shangri-La Asia Limited, 2009). The most likely cause of this problem is the political instability that hit Thailand recently. On the other hand, it is possible that this decline in the number of customers was a result of a decline in service quality. Even though the Shangri-La Hotel continued to emphasize customer needs and provide excellent service to their customers, it is still crucial to measure service quality to ensure that the customers are satisfied with the hotel’s services and responsiveness to customer needs. The result of measuring service quality also helps management to understand exactly what their customers expect from the hotel and the level to which they are satisfied with their experience at the hotel. This measurement model functions as a tool to promote communication between the hotel management and their customers.

This research was conducted to observe customer perceptions about hotel services by measuring service quality using the SERVQUAL model at the Shangri-La Hotel, Bangkok. The benefits of this research are not just to understand the level of customer satisfaction; but moreover, it can use as a guideline to enhance service quality and promote customer loyalty.

Title of project:

“A Study of Customer Satisfaction by Measuring Service Quality; A Case Study of Shangri-La Hotel, Bangkok”

Statement of research problem:

A continual decline in the number of hotel customers over the past few months has had a direct effect on the hotel’s income. The main factor which is believed to have caused this decline was internal political instability in Thailand. In an effort to transform a crisis into opportunity, this is an appropriate time to observe customer perceptions of service quality in order to help hotel management improve quality and prepare their business for when the situation returns to normal.

Project objectives:

The objectives of this research are as follows:

To measure service quality of Shangri-La Hotel, Bangkok by using SERVQUAL model,

To understand the relationship between customer satisfaction and service quality, and

To gain a clearer understanding of customer perceptions of service quality from Shangri-La Hotel, Bangkok in order to improve hotel service quality in the future.

Conceptual framework:
Figure 1: Conceptual framework
Reliability
SERVQUAL Dimensions
Responsiveness
Customer Satisfaction
Assurance
Empathy
Tangibles
Scope of the study:

The scope of this research focuses on measurement of service quality at the Shangri-La Hotel, Bangkok by using the SERVQUAL model which considers service quality from the following five dimensions: a) reliability, b) responsiveness, c) assurance, d) empathy and e) tangibility. The sample population would be a random sample of 100 hotel customers during the period from July to August, 2010. The survey technique would employ the use of questionnaires. This study focuses on the relationship between customer satisfaction and service quality.

Definitions of terms used in the study:

SERVQUAL model: An instrument for measuring service quality comprised of five dimensions such as: a) reliability, b) responsiveness, c) assurance, d) empathy and e) tangibility. Parasuraman summed up that customers perceive service quality by comparing their expectations with the actual organizational performance, and they evaluate service quality in different dimensions (Parasuraman et al., 1988).

Service Quality: A product or outcome of all the staff & managers of the Shangri-La Hotel, Bangkok working together to satisfy their customers. In other words, high-quality service is a service that meets or exceeds customer needs and expectations (Wisniewski, 2001).

Customer Expectation: is prediction service of customer that hotel should be provides to them. Predict service directly influence customer satisfaction evaluation (Zeithaml et al., 1993)

Customer Perception: A feeling or sense possessed by the customer which is derived from their experiences at the hotel.

Customer Satisfaction: The level to which a customer perceives that their expectations were met in the transaction with the hotel (Hallowell, 1996).

Assumptions:

A customer who receives a high level of service quality from the Shangri-La Hotel, Bangkok is more likely to be satisfied with the overall level of service at the hotel.

Limitations:

Size of sample: The political uncertainty in Thailand during the past several months resulted in a decrease in the number of tourists all over Bangkok. Furthermore, the occupancy level at the Shangri-La Hotel, Bangkok has been suppressed due to a reduction in room availability for internal renovations. The limited number of hotel customers may limit the sample size, leading to sample error.

Time frame of data collection: The time frame is a major problem for this research because the research time table is quite short, especially considering that this season is the low season for tourism in Thailand. Since the tourist numbers are much lower than during high season, it could be difficult or impossible to reach the appropriate sample size.

Human ethics considerations:

This research is being conducted for educational purposes to learn about customer satisfaction at the Shangri-La Hotel, Bangkok. For this reason, the hotel’s management is allowing researchers to collect data from their customers. Therefore, the researchers should not force the customers to complete the questionnaire if they are hesitant. The questionnaire is being designed so that it does not contain sensitive items which would make customers feel uncomfortable.

Practical significance:

Measuring service quality is more difficult than measuring the quality of manufactured goods because the nature of services is intangible (Bergman and Klefsjo, 1994). The SERVQUAL model is an efficient tool to help measure service quality and clarify customer satisfaction. The result of this research would be useful for the Shangri-La Hotel’s management and staff members so that they can better understand their customers’ level of satisfaction with perceptions about the hotel’s services. It will help hotel management in their efforts to maintain and improve hotel service quality. In addition, other hoteliers and organizations within the service industries sector could adapt this research to use as basis for studies into their own organizations.

Background information:

Shangri-La Hotels and Resorts is a well-established Asian hotel chain in major cities throughout Asia, Oceania and The Middle East. The headquarters is located in Hong Kong. Shangri-La Hotel, Bangkok is one property of many properties of Shangri-La Company, located in the Silom district, has a total of 799 rooms including serviced apartments and other facilities such as restaurants, conference rooms, spa, swimming pool and tennis courts (Shangri-La Hotel, 2010).

Shangri-La Hotel, Bangkok is located in a convenient place next to the Chao Phraya River which is the main river of Thailand, and is only half an hour from Suvarnabhumi Airport and 10 minutes away from central business by BTS Skytrain. For these reasons, this hotel has the ability to attract numerous tourists. Furthermore, Shangri-La Hotel, Bangkok is connected to Sathorn Pier, so tourists can take public boats or long tail boats to travel to and visit several kinds of tourist attractions easily – such as the Temple of Dawn, the Grand Palace, the Flower Market and Khaosan Road. There is a high diversity of tourism industries which promote the economy in this district and along this river.

However, in recent years, the Thai economy has experienced difficulty for a variety of reasons. Figures 1 and 2 compare the performance of Shangri-La Hotels and Resorts in the period from 2007 to 2008 with the period from 2008 to 2009.

Table 1: The Shangri-La Hotel Weighted Average Room Yield 2007-2008

Source: Shangri-La Asia Limited (2008)

Table 2: The Shangri-La Hotel Weighted Average Room Yields 2008-2009

Source: Shangri-La Asia Limited (2009)

The figures above show that there was a significant decline in the performance of Shangri-La Hotels and Resorts, Thailand in 2008 compared with 2007, and this decline in performance continued into 2009 with a drop on average room occupancy.

According to the 2008 Shangri-La Asia Limited Annual Report, occupancy and RevPAR for Shangri-La Hotels decreased in 2008 by 15 and 10 percentage points respectively (Shangri-La Asia Limited, 2008). Moreover, the overall weighted average RevPAR for Shangri-La Hotel and Resorts’ Thai properties decreased a further 11 percent in 2009 (Shangri-La Asia Limited, 2009). The global financial crisis, the extensive renovations at the Shangri-La Hotel, Bangkok and political uncertainty are cited as the main reasons for this decline.

Literature review:

There are several pieces of literature regarding studies of service quality which say that if a customer had a pleasant service experience, they would probably use that service again and would be likely to invite their friends or tell someone else to utilize those same services. In the same way, if customer had a poor service experience, they generally never forget about it, and many customers will complain and go elsewhere (Assael, 1987, Farrington et al., 2009, Peter and Olson, 1987).

Word of mouth is a powerful communications tool. Customers may tell others whenever they experience poor service quality, and this would have a direct effect on the organization’s image – resulting in an eventual decrease in revenue. The power of this communications tool has always been evident from the past until the present. Consequently, organizations must always ensure that their service quality is the most pleasant and best to generate customers’ satisfaction. This is because the backbone of service organization growth is not just a high quality product or pricing strategy, but it is also the combination with good customer service.

Nowadays, companies increasingly emphasize service quality and customer satisfaction throughout, so that they can increase customer loyalty, because it has determined that high customer loyalty is key to success in their market segment(Cronin et al., 2000). Service quality is widely studied and useful in service industries(Carman, 1990, Collier and Bienstock, 2006, Cronin and Taylor, 1992, Cronin et al., 2000, Gronroos, 1984, Parasuraman et al., 1985, Parasuraman et al., 1988). Many scholars have taken an interest in service quality issues because of their intangibility, which makes them very difficult to measure (Bergman and Klefsjo, 1994). For these reasons, several researchers created a model to help clarify the measurement of service quality. The most popular and extensively used models are Gronroos’ Service Quality Model and Parasuraman’s Gap Model (Legcevic, 2008). It could be describes of each model as following;

Gronroos’ Service Quality Model splits customer perceived service into two dimensions: 1) technical quality, and 2) functional quality (Gronroos, 1984).

“1) Technical quality or outcome quality is what customer receives as outcome of the process in the resources.

Functional quality is how customer receives from technical outcome” (Legcevic, 2008).

Parasuraman’s Gap Model indicates that five gaps exist between management and customers during the service delivery process (Parasuraman et al., 1985). For my research, I will employ the SERVQUAL scale by using gap scores to help measure service quality.

Service Quality:

Today quality become recognized as a strategic tool to enhance and improved business actual performance both of goods sector and service sector. The key factor to success in service industry is service quality. The purpose of service quality is to satisfy the customer. Hence, service quality and customer satisfaction influence each other. As mentioned in the beginning, service quality is defined as a product or outcome resulting from all members in the organization trying to satisfy their customers (Wisniewski, 2001). Service quality also could be defined as crucial decision-making criteria for service consumers (Cronin et al., 2000). Customers evaluate service quality by comparing organizational performance with their expectations (Zeithaml et al., 1993). However, Parasuraman proved and indicated that there is a problem with customer perception of service, because five gaps exist between the customer and the service provider during service delivery. The figure below illustrates the Service Quality Gap Model by Parasuraman.

Figure 2: The Service Quality Gap Model

Source: Parasuraman, Zeithaml, and Berry (1985)

According to figure as above, it could be describes each gap as following;

Gap1: Service provider not knowing what the customers expect

Gap2: Service provider not selecting the right service design

Gap3: Service provider not delivering to service standard

Gap4: Service provider not matching performance to promises

Gap5: The difference between customer expectations and customer perceived service (Legcevic, 2008)

A gap which may occur between customer expectation and customer perception is not the only measurement of service quality. However, it is a determinant of customer satisfaction or dissatisfaction. If the service provider’s response to customer needs is below their expectations, the customer would estimate that the quality is low.

SERVQUAL Scale:

The main benefit of the SERVQUAL instrument is that it helps management to measure the quality of service by comparing customers’ expectation of service and customer perceived service which categorizing each problem facet into five dimensions. It lets them classify the problems into dimensions, helping management to focus on the problems and improve service quality in the right way when some elements of service are found to be lacking. The SERVQUAL model was created by Parasuraman, Zeithaml and Berry in 1985. The 1985 version consisted of ten dimensions. The model was further developed, and in 1988 it was refined into five dimensions. The SERVQUAL model has been widely used as an efficient instrument for measuring service quality in many service industries (Asubonteng et al., 1996). The five dimensions are: 1) reliability, 2) responsiveness, 3) assurance, 4) empathy and 5) tangible. According to Parasuraman, Zeithaml and Berry (1985), they defined each dimensions as follows:

Table 3: SERVQUAL 5 Dimensions
Reliability:

Ability to perform the promised service dependably and accurately

Responsiveness:

Willingness to help customers and provide prompt service

Assurance:

Knowledge and courtesy of employees and their ability to inspire trust and confidence

Empathy:

Caring, individualized attention the firm provides its customers

Tangible:

Physical facilities, equipment, and appearance of personnel

(Parasuraman et al, 1985)

The most important dimension that the customer used to evaluate service quality is the reliability dimension (Legcevic, 2008). Parasuraman developed a set of questionnaires using 22 parallel questions to measure customers’ expectation of service and customer perception of service in the five dimensions. The measurement uses a Likert Scale with seven levels ranging from strongly agree to strongly disagree. The service quality measurement of each pair of questions uses performance minus expectation. A positive score represents positive service quality (Parasuraman et al., 1988).

Quality = Performance – Expectation

Nevertheless, there are numerous of academic studies which do not support these five dimensions. These studies determined that problems occur with this measurement method. Chen (2008) argued that SERVQUAL should add more dimensions to give the result more validity and credibility (Chen, 2008). Carman (1990) argued that each dimension should not be general because each service industry is different. Therefore, this model could not be used in the same format across industries (Carman, 1990). Although, there are weak points existing in SERVQUAL model, the concept of dimensions is still useful and when anyone interested in service quality issue, one choice which remind is SERVQUAL scale because its great to demonstrative power (Jain and Gupta, 2004). Then, it is used frequently today.

SERVPERF Scale

When discuss about SERVQUAL scale, it can not forgot to talks about SERVPERF scale as well. SERVPERF is one of service quality measurement scale. The results of both scale (SERVQUAL and SERVPERF), when compare these method to each other, the result which occurs are quite similar. However, there are differences in measuring process. Moreover, it is difference in reliability. To classify divergence between SERVQUAL scale and SERVPERF could be concise explain as following; SERVQUAL use customers’ expectation of service and customer perceived service to find service quality while SERVPERF use only customers’ perception for consideration. Cronin and Taylor (1992) compare between these two scales a found that SERVPERF is enough for measure service quality. However, the SERVQUAL scale is effective than SERVPERF scale because it provide more pragmatic diagnosis of service quality (Jain and Gupta, 2004).

Customer Satisfaction:

There are plentiful researchers’ studies on customer satisfaction. The definition of customer satisfaction is also diverse. Pizam and Ellis(1999) states that customer satisfaction is a psychological concept relating to a feeling of pleasure and well-being which is a result between needs in mind and an appealing product or service (Pizam and Ellis, 1999). The sense of satisfaction brings about positive attitudes which leads a customer seek that satisfying experience again (Assael, 1987).

Customer satisfaction also has an influence on corporate survival. Naumann (1995) states that in order to attract a new customer, an organization has to pay costs in the form of time and resources equal to approximately five times that which is necessary to retain an existing customer (Naumann, 1995). Therefore, it leads the organization to determine quality as the ability to retain existing customers.

However, not every customer will perceive the same level of satisfaction with the same level of service, because their sense of satisfaction is related to word of mouth communication and their past experiences (Pizam and Ellis, 1999). All people have had different experiences, thus they also have different objectives, needs and expectations. To ensure that the organization provides a high level of service quality, customer satisfaction surveys are necessary. Parasuraman, Zeithaml, and Bery (1994) suggested that product quality, service quality, and price are each factors that encourage satisfaction (Parasuraman et al., 1994). Customer loyalty develops when customers become satisfied with these different factors provided by the organization (Farrington et al., 2009). The following is a conceptual framework showing the connection of each element which involves customer satisfaction.

Figure 3: A Conceptual Framework for the Effects of Perceived Product Quality, Service Quality, and Pricing Fairness on Consumer Satisfaction and Consumer Loyalty

Customer Satisfaction

Product Quality

Perceived Product Quality

Perceived Service Quality

Service Quality

Customer Loyalty

Perceived Price Fairness

Price

Source: (Bei and Chiao, 2001)

Understanding the critical elements described above, how they are related, and how they help the organization is a foundation to success in the service industry.

Data required:

The data required for this study would be based in information collected from Shangri-La Hotel, Bangkok customers. This research also requires the use of SERVQUAL as the main model to help measure service quality. Furthermore, may utilize some other theories from journal articles and textbooks which are related to this research. Other sources of information may include Shangri-La Hotel and Resorts’ information, particularly with regards to general information and occupancy data as required supporting in this research.

Data sources:

This research will utilize the following two types of data:

Primary data: The primary data for this research will be collected from 100 hotel customers who stay at the Shangri-La Hotel, Bangkok for least one night. The guests will be selected by simple random sampling technique, and they will fill out questionnaires regarding hotel service quality. Each questionnaire shall contain three parts: the first part will be general information of respondent, the second part will be about the expectations and perception service quality, and third part is level of satisfaction of the customer.

Secondary data: The secondary data will be gathered from literature such as journal articles, textbooks, Shangri-la Hotel, Bangkok data and hotel website sources. The process of data collection shall be conducted from July to August, 2010.

Data collection techniques:

This research would be collects the data from 100 of customers of Shangri-La hotel, Bangkok who stay at the hotel at least one night. The researcher would be select population sample by employ random sampling method and using questionnaire as the tools. The measuring service quality instrument in this research is SERVQUAL. The questionnaire composes of three parts as following;

First part is about demographic data of customers; 1) gender, 2) age, 3) country of resident, 4) reason for stay, and 5) why they selected Shangri-La hotel, Bangkok as a place to stay.

Second part, it would be focusing on customers’ expectation of service quality (customer’s expectations) and received service quality (customer’s perceptions), in this area customer would answer both of these two aspects into SERVQUAL dimensions. This research would use Likert’s scale to measure into five point scales. Likert’s scale is a instrument to help measure attitude and opinion (Laerhoven et al., 2004). On the customers’ expectation question side and customer’s perception question side would be ask customer to give rate ranging from “Strongly Disagree” 1,2,3,4,5 “Strongly Agree”.

Third part would be ask customer one question about their satisfaction of overall hotel service quality. In addition, researcher would leave the area for customer to add any recommendation.

Data analysis:

As for this research would be use R software (R Development Core Team, 2009) to help analyze questionnaire survey. Then would be using descriptive analysis and present it as table form, pie chart, and percentage calculated would be show. The standard deviation (SD) and mean are also would include.

Timeline:

Researcher has 13 weeks to process this report. This research process began on May 22, 2010. Due date of research proposal is on June 20, 2009. As for research final report is require to be submit on August 22, 2010

Table 4: Timeline
Research Methodology:

The precise measurement of hotel service quality is vital in order to be success in the hotel business. Because it helps hotel management to understand the hotel service quality level which hotel staff provide to customer. Without an appropriate measurement, it would be difficult to understand the expectation and satisfaction of customer and moreover, it would be difficult to create the strategies to upgrade hotel service quality.

This research survey adopted the questionnaire 25 parallel items from (Mey et al., 2006) which is proper use to measure in hotel service quality industry, instead of using the original SERVQUAL questionnaire of 22 parallel items which establish by (Parasuraman et al., 1988). This research uses the quantitative as the main methods.

Refer to the questionnaire, this research intends to identify and analyze the gaps between customer expectations and customer perceives service quality. The objective of this paper is to measure customer satisfaction and hotel service quality of the Shangri-La Hotel, Bangkok. The questionnaire survey was divided into three categories. The first category was demographic data and travelling characteristics of respondents. The second category was to investigate the customer expectation and customer perception regarding hotel service quality by using SERVQUAL dimensions. In this part of questionnaire were on 5-point Likert scale ranging from “Strongly Disagree” 1,2,3,4,5 “Strongly Agree”. The last category was asked one question about the overall satisfaction regarding the Shangri-La Hotel, Bangkok service quality.

Generally, the five stars hotel even in Bangkok had a strong policy which concern with guest privacy issues and not allowed the external people to do survey in the hotel. However, the researcher had been trainee and employee at the Shangri-La Hotel, Bangkok for two years; with this reason, the hotel was confidence and permits the researcher to do survey eventually, because the hotel saw that this research survey would gain more benefits to the hotel than disadvantage.

The Sampling

The researcher faced the problems during doing the survey; the questionnaire survey prepared for customer at the hotel check-in/ out counter. In the beginning front office attendant was given the questionnaire survey to customers when they are check-in and aim to get it back after they are check-out. Most of customers got the questionnaire survey from front officer, but indeed they are not completed it questionnaire. To reduce uncompleted questionnaire, the front office attendant was change to given questionnaire survey to customer during they were checking-out instead, and return it from customer promptly. However, the front office attendant was not enforced customer to fill out the questionnaire, if they were reluctant. The samples were 100 hotel customers who stay at the Shangri-La Hotel, Bangkok at least one night. However, the researcher collected data from 100 hotel respondents as aims.

Results and Analysis:

The questionnaire composes of three sections as following;

First Section

It is about demographic data of customers; 1) gender, 2) age, 3) country of resident, 4) reason for stay, and 5) why they selected Shangri-La hotel, Bangkok as a place to stay.

Demographic Data
Gender of respondent

According to result, it indicated that the majority of the Shangri-La Hotel, Bangkok customer were female than male. Female were 63% and male 37%. There were female customers almost 2 times of male customers. See table 5.

Table 5: Frequency and Percentage of Gender
Gender
Frequency
Percentage

Male

37

37

Female

63

63

Total

100

100

The result of elaborating on male and female were showed in figured below;

Figure 4: Gender of hotel customer
2. Age of respondents

This research survey classifies the age of hotel customer into 4 categories; 1) below 30 years, 2) 31 – 40 years, 3) 41 – 50 years, and 3) above 50 years. The result indicated that the majority of the Shangri-La Hotel, Bangkok customer were between 31 – 40 years (60%), were below 30 years (28%), 41 – 50 years (9%), and above 50 (3%) respectively. See table 6.

Table 6: Frequency and Percentage of Age
Age
Frequency
Percentage

Below 30 year

28

28

31 – 40 year

60

60

41 – 50 year

9

9

Above 50

3

3

Total

100

100

The result of elaborating on age of hotel customer was showed in figured below;

Figure 5: Age of hotel customer
Resident country of respondent

According to result, it indicated that the majority of the Shangri-La Hotel, Bangkok customer was had resident country in China (13%). Also were USA (12%); Japan (10%); Australia, Thailand and Singapore (7%); UAE (6%); England, German, Hong Kong, Italy and Korea (5%); India (4%); Canada (3%); Span and France (2%); Belgium and New Zealand (1%) respectively. See table 7.

Table 7: Frequency and Percentage of Resident Country
Resident Country
Frequency
Percentage

Australia

7

7

Belgium

1

1

Canada

3

3

China

13

13

England

5

5

France

2

2

German

5

5

Hong Kong

5

5

India

4

4

Italy

5

5

Japan

10

10

Korea

5

5

New Zealand

1

1

Singapore

7

7

Span

2

2

Thailand

7

7

UAE

6

6

USA

12

12

Total

100

100

The result of elaborating on resident country of hotel customer was showed in figured below;

Figure 6: Resident country of hotel customer
The main objective of respondents for staying at Shangri-La Hotel, Bangkok

The result showed that the most of the hotel customer come to stay at the Shangri-La Hotel, Bangkok significantly for leisure as main objective (84%). And also for business (16%). See table 8.

Table 8: Frequency and Percentage of Objective for Stay
Objective for Stay
Frequency
Percentage

For Leisure

84

84

For Business

16

16

Total

100

100

The result of elaborating on objective for Stay of hotel customer was showed in figured below;

Figure 7: Objective for Stay of hotel customer
Reason of Select Shangri-La Hotel, Bangkok for stay

This research survey c

The Sao Paulo Case

ABSTRACT

The paper sets out to produce an outline customer relationship plan for a Brazilian hotel which has recently been taken over by a globally branded hotel chain.

It begins with a review of selected literature which contains knowledge, techniques and ideas relevant to a customer relationship plan. Terms are defined within this section.

The final section contains the action plan, which derives from ideas in the literature review section.

1. Introduction

This report will consist of a concise, integrated customer relationship plan for Sao Paulo senior management with the specific aims of:

reducing customer switching
maintaining stakeholder relations in the service quality value chain

Within this plan there will be:

an identification of the gaps in Sao Paulo’s current approach to relationship marketing planning
a description of internal and external relationships which impact the hotel
proposed marketing objectives to help relaunch and reposition the hotel brand
suggested developments of the brand
an outline service quality management programme
an outline CRM system
an outline integrated marketing communications programme
an outline internal marketing communications programme

Input for the plan will be taken from the case material and the literature review which follows in section 2.

2. Literature Review

This section will review the literature in a structured way. The first part will draw on lecture notes, text books and journal articles to clarify and explain aspects of:

strategic marketing and branding
relationship marketing and customer relationship management
service quality management

The second part will draw on three cases:

The Ritz Carlton case
Bergstrom Hotels
Sao Paulo Hotel
2.1 Strategic Marketing and Branding

Piercy defines strategy as simply being about:

Being best at doing those things which matter most to customers
Building shareholder value by achieving superior customer value
Finding new and better ways of doing things to achieve the first two^[1]

If one accepts this no-nonsense definition it underscores the need for all companies to:

Understand who your customers are and what matters to them
Know how they perceive your service levels and what you must do to improve your performance
Design and implement communication and management processes which make your strategy work

In other words you need a plan. The planning process is described in the lecture notes as beginning with a Mission Statement and ending with implementation and measurement & control. Before customer relationship objectives (the focus of the action plan below) can be identified and agreed the mission statement needs to be clearly understood as do the dynamics of the current market place. A SWOT analysis and Marketing Audit are effective tools for clarifying the company’s current position in the market, its performance so far and for suggesting possible changes in strategic and tactical moves.

In a services business this will lead to the development of a customer relationship plan, which will be underpinned by a detailed understanding of the various internal and external stakeholders with whom one needs to develop and build relationships.^[2]

2.2 Relationship Marketing and Customer Relationship Management

“Relationship marketing concerns the shifting from activities of attracting customers to activities concerned with current customers and how to retain them. …At its core is the maintenance of relations between a company and its suppliers, channel intermediaries, public and customers.”^[3] Focusing on retention is considered to be significantly more profitable than conversion of non-customers.

CRM is a system to make relationship marketing work. The US writer, George Day sees CRM as a customer-responsive strategy, which seeks to give companies competitive advantage by:

Delivering superior customer value by personalising the interaction between company and customer,
Demonstrating trustworthiness
Tightening connections with customers
Achieving co-ordination of complex capabilities (functions, resources) within the company^[4]

Park Plaza International uses its new CRM system and global database to: “promote the hotels as a group, rather than an individually networked system, with targeted promotions and one-to-one marketing….Through company profiling we will be able to identify who the biggest backers of the group are and who should be given special treatment, so that we can target our promotions accordingly”^[5]

Hwang and Chi^[6] ,in their recent empirical study, highlight the fact that service personnel are the most important resource in the service sector and also the primary marketers. By helping to achieve customer satisfaction service personnel upgrade the entire performance of the organisation. The message to management is that they should engage in aggressive internal marketing to achieve and maintain a synergy of staff satisfaction and improved organisational performance.

2.3 Service Quality Management

Customers will be loyal to a hotel, or a branded hotel chain, if they are satisfied with the quality and value offered. It is therefore important for service providers to know what influences these customer perceptions.

Johnston suggests two approaches to understanding customers’ perceptions and judgements of service quality:

The rational approach
The incident-based approach^[7]

The rational approach suggests that customers consciously or unconsciously use a weighted average, so that a high score on one attribute or factor may offset a low score on another, to arrive at an overall evaluation of personal satisfaction.

The SERVQUAL approach is based on the work of Parasuraman, Zeithamel and Berry^[8] and sets out to measure customers’ perceptions of quality across 5 dimensions:

Tangibles: physical facilities, equipment, appearance of personnel
Reliability: abilities to perform the promised service dependably and accurately
Responsiveness: willingness to help customers and provide prompt service
Assurance: knowledge and courtesy of employees and ability to inspire trust and confidence
Empathy: caring, individualistic attention provided by firm to customers

A third approach suggests that any single incident, delighting or satisfying, could, whatever the weightings given to the other transactions, result in an overall feeling of dissatisfaction or delight.

Another writer argues that “investment of time and money in quality improvement should concentrate on those areas of your business where the effort will have the greatest benefit”^[9] Effort should not necessarily be directed to areas where you are worse than the competition if those factors are not so important to customers.

2.4 The Ritz-Carlton Case

R-C has a total quality approach to the business. They fix causes not problems, i.e. they think about processes and systems to prevent problems and to ensure continuous quality. They set up a system to understand the real needs of their customers, to ensure delivery of these needs, to make it work continuously and to communicate all this to the market – not just an image-driven approach, but one which was conscious of the “experience” which customers were seeking.

2.4 Bergstrom Hotels^[10]

Bergstrom set up a total quality approach and system which was driven by senior management but acted on and supported by teams across the organisation. Vital components of the system are: training of all staff in internal customer relations, culture, process improvement and problem-solving, setting up and development of a data-base based on customer and employee surveys to drive improvement, open lines of communication and regular performance evaluation. Recognising staff contributions to quality of service was a key final element.

The case demonstrates that significant quality improvements can be achieved without significant investment and ongoing cost.

2.5 Sao Paulo Case

Sao Paulo is a recently refurbished hotel which is operating in a highly competitive market (with much price cutting) and unstable economy. It has recently been taken over by a hotel chain with a global brand name and a reputation for high service quality and the ability to build long-term relationships with stakeholders. It needs now to reposition itself in the Brazilian market such that it is clearly differentiated in stakeholders minds from the competition. Service must be the main differentiator, so an integrated customer relationship plan needs to be developed.

3. Action Plan for Improving Customer Relationships
3.1 Gaps in current approach

Sao Paulo needs both to retain the loyalty of its current customer base and to grow via new customer and intermediary relationships. Growth will probably come via extended use of new services (e.g. restaurants and bars) by current customers and attracting new, more focused customer segments. This needs to be spelt out in its overall mission and made explicit with regard to individual stakeholders.

3.2 External and Internal Stakeholders

Apart from the different customer segments important external stakeholders are: tour operators, airlines, travel agents and the many web-based hotel discounters. Local SP-based organisations such as the city hall and tourist office may also be influential in the communication of the hotel brand to intermediaries and potential customers.

The current relationship-building approach appears to be re-active and now needs to become focused and pro-active.

Important internal stakeholders are hotel employees – front-office staff and sales staff – and franchisees in the restaurants and bars. All need to be aligned with the culture of the refurbished and repositioned hotel.

3.3 Relaunching and Repositioning of the Brand

The SP hotel is now part of a global chain. Its service level will need to be aligned with the core brand values of GHG and these values will need to be communicated to all stakeholders and acted upon by internal stakeholders if the communicated brand image is to be consistent with delivery on the ground. Proposed marketing objectives are to: grow the current customer base by 20% by increasing spend per customer and by improving retention by 10%; focus on excellent, caring service at a fair price.

3.4 Service-Quality Programme

A customer survey should be carried out to establish which service attributes are important to customers. This should be linked to an assessment of the cost of correcting what goes wrong. The survey should be ongoing and reinforced by regular staff interaction with customers so as to identify any areas of dissatisfaction.

Overall customer relationship objective will be to: create in the minds of all customers an experience of being cared for by warm, friendly staff who have your best interests at heart and will do all that they can to offer you speedy and professional assistance.

This will be translated into specific CR objectives for the different stakeholders, all of whom will need to participate in service quality training programmes:

Franchisees: communicate always in your words, dress and body language that you are a member of the SP team.
Front-office staff: make the customer feel welcome, respected, valued and at home.
Sales staff: communicate, warm, professional, helpful manner at all times, backed up by prompt follow-up.

Service standards: FRONT DESK:

Always smile at customers
Address by name wherever possible
Apologise for even slightest delay
Never keep customer waiting without apologising
Always do what you promise to do
Be sensitive to cultural differences
Keep desk and hall area clean at all times
Always ask if you can be of further assistance – sincerely
Never argue with a customer
Try always to exceed expectations

Service blueprint: Sales staff to CORPORATES (process service mix):

Tangibles Dress smartly, speak warmly and professionally, ensure that all promotional materials are packaged and presented professionally
Reliability Be punctual, deliver what you promise
Responsiveness Exceed customer expectations with your response times and look always for creative solutions to difficult problems
Assurance Be confident about the hotel and its qualities but radiate courtesy at all times. Avoid over-familiarity and use of christian names, unless requested to do so
Empathy Avoid any remarks/comments about religion, race, culture. Be particularly sensitive to cultural differences and help people with language difficulties. Never make fun of anyone. Apologise for even the most minor errors

Service guarantee for empowering FRONT-LINE STAFF:

If a customer arrives after 19.00 and requests a rate reduction you may offer him/her a room at a rate 20% below normal rate

This service quality approach is in line with the realignment of the brand as a warm and caring hotel which offers fair prices.

3.5 CRM System

A CRM system needs to be developed for the global chain. It would aim to profile customers both in order to communicate with them more effectively and to ensure that service features are adapted to meet individual requirements where possible. It should be seen as a support for the warm and caring approach, not a replacement.

The communications programme would need to be consistent with, and integrated into, the CRM system.

3.6 Internal Marketing Programme

Staff are at the heart of hotel service and underpin customer perception of quality.

Training programmes must be run to ensure that all staff are aligned with the culture and attitudes of the hotel, are aware of service guidelines and have the requisite skills and knowledge. An appraisal and suggestions system will be introduced to help staff maintain requisite standards. Incentives will be introduced to encourage maintenance of these standards.

BIBLIOGRAPHY
Books

Barwise P. and Meehan S. (2004), Simply Better, Harvard Business School Press

Cerasale M. and Stone M.(2004), Business Solutions on Demand, Kogan Page

Johnston R. and Clark C. (2001), Service Operations Management, Prentice Hall

Piercy N. (2002), Market-led Strategic Change, Butterworth Heinemann

Journal Articles

Breiter D., Tyink S. and Corey-Tuckwell S. (1995), “Bergstrom Hotels; a case study in quality”, Journal of Contemporary Hospitality Management, Vol.7 No. 6

Brown T. (1997), “Using norms to improve the interpretation of service quality measures”, Journal of Services Marketing, Vol.11, No.1, p.80

Day G. (2000), “Tying in an Asset”, in Understanding CRM, Financial Times Editorial article, „CRM in Hotels“, in Leisure & Hospitality Business, September, 2001

Hwang I. and Chi D. (2005), “Relationships among Internal Marketing, Employee Job Satisfaction and International Hotel Performance”, International Journal of Management, Vol.22 No.2

Parasuraman A., Zeithamel V. and Berry L. (1988), “SERVQUAL: a Multiple Item Scale for Measuring Consumer Perceptions of Quality”, Journal of Retailing, Vol.64, No.1 Spring

CRM entails all aspects of interaction a company has with its customer, whether it is sales or service related. It even uses technology to streamline processes that impact customer loyalty, service delivery and quality management.

Today, businesses are facing an aggressive competition and they have to make Efforts to survive in a competitive and uncertain market place. People have realized that managing Customer relationships is a very important factor for their success. Customer relationship management (CRM) is a strategy that can help them to build long-lasting relationships with their customers and increase their profits through the right management system and the application of customer-focused strategies.(Berry,1983)

‘Customer is the most important person for a business. He is not an interruption to our work but the purpose of it. He is not an outsider; he is a part of it. We are not doing him a favour, he is doing us a favour by giving us an opportunity to serve him.’ (By Mahatma Gandhi)

It has grown mainstream and is being implemented in a wide range of companies and organizations such as manufacturing, financial services, transportation and distribution,

Though the activity looks to be a simple one, but tools and workflows which are involved in the process can be quite complex, especially for large business. Previously the tools were generally limited to find out basic information’s like companies contact history with the customers or clients, monitoring and recording interactions and communications. (Parasuraman,et all 1985)

Background [P1]:

The reason of me to choose this particular research is very simple. As I have worked in hospitality industry and had a chance to know the day to day operations from a close point, I wanted to find out more ways to explore about how the improved guest service and loyalty creates a bond between a particular organization and the customers.

In this era of globalization where ‘Customer is the King’, customer expectations are going up which is making the situation more and more competitive. As the product is becoming generic in nature, the hotel industry can no longer rely on the traditional marketing strategies to retain the customers. Customer Relationship Management is one of the key tools to fight this cut throat competition and stand out as a superior brand

Research question(s) [P2]:

RQ1) How effective is the use of Customer Relations Management (CRM) in retaining customers in hospitality?

RQ2) What are the new marketing approaches in hotel industry?

RQ3) How will CRM help to retain customers in hotel industry?

Hypothesis [P2]:

H0: CRM has no significant effect in retaining customer in Hospitality Industry.

H1: CRM has a significant effect in retaining customer in Hospitality Industry.

H0: CRM do not help to retain customer in hotel industry.

H1: CRM do help to retain customer in hotel industry.

Research Aims & Objectives [P4]:
Aim:

The study aims to understand the importance of CRM in the success of organisation in a hospitality industry. Moreover, it seeks to determine the effectiveness of the new marketing approaches in retaining customers in a hospitality industry. The study is to do an extensive research on the importance of CRM in Hospitality Industry, then gather relevant papers to support the study a survey will be conducted and data will be gathered from survey and from these data conclusion will be drawn.

Objectives:

To be able arrive to the desired answer, the following steps should be done:

Gather relevant past and current data related to the study

Design research questions for survey

Conduct a survey

Gather the relevant data from the survey

Make a table or graph

Verify data

Draw conclusion

Literature Review [P5]:

Customer Relationship Management (CRM) is one of those magnificent concepts that swept the business world in the 1990’s with the promise of forever changing the way businesses small and large interacted with their customer bases. In the short term, however, it proved to be an unwieldy process that was better in theory than in practice for a variety of reasons. First among these was that it was simply so difficult and expensive to track and keep the high volume of records needed accurately and constantly update them. (Payne,2000)

In today’s competitive business environment, a successful CRM strategy cannot be implemented by only installing and integrating a software package designed to support CRM processes. A holistic approach to CRM is vital for an effective and efficient CRM policy. This approach includes training of employees, a modification of business processes based on customers’ needs and an adoption of relevant IT-systems (including soft- and maybe hardware) and/or usage of IT-Services that enable the organization or company to follow its CRM strategy. CRM-Services can even redundant the acquisition of additional hardware or CRM software- licenses. (Reichheld et all,1990)

Let us now look for the answers of the questions we were conducting the research for with respect to a live hotel.

ITC MAURYA SHERATON Defines CRM as –

“Customer Relationship Management is a process of managing customer relations in an organized way”. They aim at managing each “Moment Of Truth” that is experienced by the customer.

Q11 – How will CRM help to retain customers in hotel industry – There are various contact points where the hotel comes in direct contact with the customer which are known as ‘Touch points’ in the CRM language. These touch points are considered important as there is direct interaction with the customer and they provide valuable input to the hotel. The input provided by the customer has to be captured in such a way that it becomes information and can be used by various processes within the hotel. This can be done with the help of technology and the aim is that whenever there is a customer interface with any of those processes they are able to use that information in servicing the guest in a most efficient manner. (Sheth,1998)

Loyalty Programs

Second vehicle for CRM identified by Maurya Sheraton are the Loyalty Programs. These programs are designed to reward the loyal guests of the hotel. Every time a guest checks in the hotel at his every touch point or interface with the hotel, every time he spends on a service provided by the hotel (use of Room, Restaurant, Laundry, Telephones etc.), the transaction is recorded at each individual point and is added to the final bill presented to the guest at the end of the stay. There are certain points attached to the number of rupees spent by the guest. Therefore higher the amount of the bill, the higher will be the number of points attained by the guest. These points are credited to the account of each guest with the help of technology. These are called Loyalty points. These accounts having the loyalty points are unique to every guest. Therefore, whenever after the first time that guest checks into the hotels, the guest history also affects the loyalty points. The higher the number of points, more loyal is the guest. The points can be redeemed by the guest for either free stays at the hotel or free gifts as listed by the hotel or free meals depending upon the number of points accumulated.

Distribution Points/ Central Reservation System

A customer can simply make a call at the reservation centre to make a booking with the hotel. It sounds simple but it could get complex in case he does not receive the expected or the desired response. Therefore, Maurya Sheraton sees this distribution point as an opportunity to establish CRM as the respondents at the reservation centre could turn a prospective customer into a ‘sale’ or could let go off the opportunity to do so by not being polite enough or not giving out the information as desired by the guest. The information regarding all guest reservations is managed through computer software, therefore, when a customer make calls to query about a reservation, all his hotel usage history pops up in the system which gives a chance to the executive at the reservations to instantly recognize the customer and address him by his name. This moment of truth is experienced by the customer with a feeling of recognition and feels it as good service at the first touch point itself. The input or instruction received from the customer at the stage is recorded in the reservation system for further reference by the hotel operations. Therefore the wheel does not get reinvented every time a standard instruction is to be followed. This leads to removal of an irritant and that ultimately leads to a satisfied customer willing to return. (Sheth and Parvatiyar,1995)

Welcome Award – Rewarding Relationships

Welcome Award has earned the distinction of being India’s premier and most powerful frequent guest programme. The Welcome Award programme recognizes customer as a business traveler and through its strategic alliances with travel partners endeavors to build a rewarding relationship customer. As a Welcome Award member customers can earn ‘Stars’ on every aspect of their business tripaˆ¦hotel stays, business entertainment, Car rentals and even air travel.

Welcome Link- Bring home the rewards

Welcome Link, India’s most popular programme for key professionals offers many value-added benefits. It is designed to help members in making reservations for their company executives. For every materialized room night booked by a member at ITC-Welcome group Hotel, points are earned that can be redeemed for a wide range of rewards. With Welcome Link, the member can look forward to many exciting promotions and prizes coming their way plus an exciting range of rewards… complimentary dining, free holidays, air tickets, car rentals and privilege shopping with Credit Card Gift Vouchers countrywide.

Sheraton Plus- The art of fine dining with a special edge

Welcome group Sheraton Plus brings the pleasures of the palate, in a truly rewarding manner. As a member, customers can savour the finest in cuisine ranging from authentic Indian, Mughlai and Chinese specialties to Continental fare in a selection of over thirty ITC-Welcome group restaurants. From a 24-hour coffee shops called Pavilion to the specialty restaurants such as Dum-Pukht, Bukhara, Dakshin and West View.

Q3 – How CRM can be effectively administered –

Customer relationship management (CRM) is more than the practice of collecting guest-centric data. It’s the art of using historical, personal and experiential information to personalize a guest’s stay while generating incremental revenue opportunities. Knowing a traveller is an avid sports fan creates the opportunity to market tickets to a game. Industry surveys show that guests are less likely to return if they experience a problem during their stay. Recording and storing of relevant database of guest history and information’s and analysis of those provides with the information to eliminate recurring problems and keep guests coming back, so to lower operating costs and increase guest satisfaction at the same time. So the most important factor is how well it needs to be handled and administrated. There has to be a dedicated team and a suitable user friendly software to help the team with the detailed records of the customer choices and preferences and all possible information’s which may require to be kept in mind always and the most important step in this has to be the constant updating of details with each minute details with each visit or contact of the guest with the hotel. Another important part of smooth handling and administration of CRM process would be to keep everyone updated and informed about the collection of information’s of each individual choices and preferences so in every point of contact the guest feels at home. (Sheth et all ,2000)

Rationale [P6]:

One can infer the present scenario of the practices and programs being followed by the leading players in this sector and the steps being followed by them to enhance customer retention, customer satisfaction and in turn, leading to enhanced profits and brand image in the minds of the customers.

Reflections [P6]:

In the true spirit of thinking outside of the box, experts at the Gartner Group believe “the most successful organizations will be those who, through innovation and focus on business effectiveness rather than merely efficiency, manage to break the mold of traditional business thinking”. Being effective is paramount. The end goal of better serving customers and enabling a high percentage of customer retention cannot be met with out creative thinking and effective planning and actions. The task of perfecting the relationship between business and customer is always on going and requires special dedication and innovation as the commerce markets.

Scope and Limitations [P6]:
Scope

To study Customer Relationship Management in the Hotel Industry. The other objectives would be to study the programs and practices of CRM employed by the leading hotels in India and to study the measures to build a better relationship between the customer/guest and the hospitality unit. Finally to conclude the findings and suggest any recommendations regarding the future growth prospects.

Limitations of the Study

aˆ?Due to the availability of mainly secondary data, authentication of the same is not sure.

aˆ?Since the authentication of the data is not sure, the result of the project may not be precise.

aˆ?Customer relationship management is in itself a complex topic, therefore, there may be certain mistakes in the assumption

Action plan [D2]:

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Topic & Title

Abstract & Keywords
Introduction
Background
Research question(s)
Hypothesis
Research Aims & Objectives
Literature Review
Rationale
Reflections
Scope and Limitations
Action plan
Ethical consideration
Theoretical Framework / Methodology
Research design
Analysis and discussion
Implementation of Research project
Implementation of Research project
Conclusions
Recommendations and future work

Customer Relationship Management, or CRM, has many perspectives and definitions that illustrate its fundamental thrust, that of trying to present a holistic strategy for managing customer relationships by getting to know the customers and their needs better, communicating with them more effectively and trying to fulfil these needs (Payne, 2005, Pp. 1 – 2). Because CRM is about getting to know customers and their needs better, it is about implementing specific Information and Communication technology projects within an organisation to process organisational data to deliver knowledge about customers and their needs. It is now possible for organisations to implement more effective and sophisticated technology solutions for processing customer related data because computers are now far more powerful and cheaper compared to what they used to be, with a vastly increased storage capacity. In addition, businesses and organisations can now store vast amounts of data about their customers on computerised systems that can communicate more effectively with individuals and other computer systems using technologies for the Internet. Companies in all sectors, including the hospitality and tourism sector, now routinely engage their customers on the World Wide Web and process customer data to deliver more useful products and services at competitive rates (Gretzel, 2010, Pp. 1 – 48 & 63 – 72). Thus, CRM presents opportunities leading to higher profitability and superior competitive advantage (Roberts, 2005, Pp. 315 – 316).

It is important for modern hospitality organisations to try to increase customer occupancy rates and customer experience in a tough and rapidly changing business environment that presents intense competition (Minghetti, 2003, Pp. 141 – 143). Thus, managers associated with the hospitality sector, including the hotels and tourism sector must have a deep knowledge of customers’ needs, behaviours, and preferences to offer services that deliver value to create customer retention, value and loyalty. In addition, it is important to try to communicate effectively with customers in a timely manner and to encourage them to engage in a dialogue with an organisation that can benefit everyone. Thus, customer-centric information systems are important for the hospitality industry, which must use these systems to develop effective relationships with customers to serve them better, encourage them to use more offerings from an organisation and to get to know about their needs in order to satisfy them and to retain them. It is important to understand that customers are the lifeblood of an organisation and without customers, there will be no revenues and no organisation. Customers who are not satisfied or fulfilled leave to benefit from others who can offer more and this means that efforts directed towards trying to maintain effective customer relationships are now essential for all organisations, including those operating within the hospitality and tourism sectors. It is far more expensive to try to get a new customer than it is to retain and to earn from an existing customer (Buttle, 1996, Pp. 155). The collection and use of customer information, its effective analysis and use for delivering to customers are now more important than ever before (Minghetti, 2003, Pp. 1 – 2).

To understand better the importance of CRM in hospitality industries, it makes sense to try to carry out an in-depth investigation into the topic of discussion from the perspectives of customers, managers and other stakeholders, including employees, from within the context of a place with established hospitality industry that has achieved a reputation for excellence around the world. Edinburgh, in Scotland is a suitable location for such an investigation, not only because the author of this dissertation studies nearby, but also because in addition to being the United Kingdom’s favourite domestic holiday destination, Edinburgh is now a world renowned destination for its festivals, events and conferences (Susan, 2008, “Scotland – A World Class Product”).

Susan (2008, “Scotland – A World Class Product”) goes further to state that Edinburgh is the most favourite city in the United Kingdom to hold a conference and the demand for rooms for guests is fast outstripping supply. Edinburgh is at the forefront of hospitality and tourism in terms of innovation and quality and the hospitality sector in this city employs 31,000 people, which is nine percent of the workforce (Edinburgh Tourism Action Group, 2010, “Edinburgh Tourism Framework for Growth 2007-15”). According to the previously mentioned publication, Edinburgh won the Guardian / Observer Travel Award as the UK best city for seven consecutive years and tourism generates more than ? 1.7 billion expenditure in this city. Efforts are ongoing to maintain Edinburgh as a competitive tourism destination of world class and to try to expand on its potential. Thus, it makes sense to try to examine how the hospitality industry in Edinburgh uses CRM to attract customers and to deliver more to Edinburgh and its tourists.

The research presented in this dissertation attempts to examine the importance of CRM for the hospitality industry in Edinburgh by presenting a review of selected literature, a customer survey, insights from senior managers and executives from the hospitality and tourism industry in Edinburgh and opinions from those who have the real ground-level knowledge, the employees working within the hospitality sector.

1.1 A Discussion of the Problem for Research

Marketing is important for the hospitality industry and for marketing for a successful hospitality organisation should touch the customer (Buttle, 1996, Pp. 155 – 157). The hospitality product is highly personalised with a substantial intangible content judged on experience. Relationship marketing is important for hospitality because the hospitality market with its ongoing and periodic demand in the face of competition presents a greater need for relational efforts and an understanding of the needs of customers. A need for the personal touch exists in hospitality and information technology provides opportunities for using information about customers to deliver the personal touch in novel ways. However, it is important to deliver correctly the CRM effort, based on the right information analytics and using the right channels to make a positive impact for the customer and the hospitality organisation. Despite the fact, that CRM has continued to present a promise of effecting improvements in corporate profitability, performance, customer retention and customer satisfaction, the proper implementation of CRM in an organisation is essential for success (Van Bentum, 2005, Pp. 28). CRM literature not only reports successes, it also reports a large number of failures in situations when well thought ought CRM solutions were not implemented correctly to impact the customer and to benefit an organisation. Thus, it is important to try to find out how the hospitality industry in Edinburgh is effectively making use of CRM in its efforts to compete with destinations from the rest of the United Kingdom, Europe and the world.

It is far easier to articulate CRM than it is to implement it (Dickinson, 1999, Pp. 11 – 12). Today, the hospitality industry needs exceptional marketing that has the capacity for delivering the long-term customer who profits the business over time to emerge as a business partner. Thus, it is important to know the right way for CRM in hospitality and to get to know how the winners are making use of this new marketing reality for hospitality. For the small business operator in the hospitality sector, a customer information database that has evolved over time is likely to serve well using personal computers and internet connectivity if business continuity persists. However, for a large luxury hotel chain, resort or hotels involved with hosting and arranging conferences, the equation becomes more complex. In the present day and age, the design of CRM system emphasises linking knowledge management in organisations with CRM to try to enhance operational and strategic efficiencies (Xu, 2005, Pp. 955 – 956). Thus, hospitality organisations and businesses must not only try to use CRM implementations effectively, but it must also be ensured that the right CRM implementation is serving an organisation by capturing the right data to perform the right analysis to present the most useful of results. With the passage of time, the lifestyles and preferences of customers change, customers become more demanding, new customers become involved with organisations and the business environment places new demands on businesses. Thus, it is not possible to say that knowledge acquisition for CRM in hospitality will be a once only exercise that will not be required on a continuous basis. A requirement exists for understanding CRM implementations, processes, practices and techniques with a view for making projections for the future to benefit most from this essential and important component of hospitality marketing.

1.2 Rationale for the Study

It is important to consider the fundamental reason or reasons serving to account for something, or a statement of reasons when contemplating a research study because such an approach serves to elucidate, the aims of a research project or that which is required to be researched. For this dissertation, rationale for undertaking research into CRM in hospitality industries in Edinburgh is important because this influences the thrust of research into the topic of discussion.

Clearly, an understanding of CRM and its implementation is not only of importance to the researcher who intends to make a career in the hospitality management, but it is also important for Edinburgh, Scotland and all destinations with an interest in enlarging and enhancing hospitality and tourism industries. Thus, a research project involving CRM in hospitality will benefit the industry and the place where the research is carried out to present new insights into what hospitality management should aim for in the future. Many of the more successful and ambitious hospitality establishments from around the world have practices in place to manage customer relationships (Lo, 2010, Pp. 139 – 156) and (Pechruttanamunee, 2008, Pp. 134 – 142). Not only is it likely that the more traditional forms of CRM will continue to play an important role in the evolution and success of hospitality organizations, but it is also likely that eCRM, which is made possible by advances in computer and communication technologies, will present a new global meaning to marketing for hospitality at a destination. Thus, the right way to deliver, manage and to drive the CRM effort in hospitality will make the difference and is worth researching in depth.

1.3 Significance of the Study

An examination of literature available in learned journals and books on the subject suggests that a very large body of published literature is available for CRM in organisations and the number of published research studies on CRM in hospitality is increasing. However, although a keen interest exists in Edinburgh and Scotland for promoting and further enhancing the hard won competitive advantage in hospitality and tourism for this city, little is available in terms of what role CRM plays in hospitality industries in Scotland and how better, more effective CRM strategies may be implemented for greater success. Thus, it is likely that this study will not only serve to add to the knowledge about CRM in hospitality, but it will also serve to highlight and to emphasise the importance of CRM in the hospitality industries of Edinburgh and Scotland. It is very likely that an effort to examine CRM practices and implementations in the hospitality industry in Edinburgh will present new insights and ideas that will be use to all with an interest in the management of hospitality and tourism.

1.4 Purpose and Research Questions

The following research questions are of interest in the research presented for this dissertation:

What is the thrust of CRM strategies in the hospitality industries of Edinburgh?

What impact has CRM made on the hospitality industries in Edinburgh and is it possible to improve or to innovate further?

What are the critical factors that influence deployment, development, planning and implementation of CRM in the hospitality industry in Edinburgh?

What role does technology play in the delivery and implementation of CRM in the hospitality sector in Edinburgh?

How has CRM shaped the corporate culture and vision for the hospitality sector in Edinburgh?

What rewards has CRM presented to the hospitality sector in Edinburgh?

How has CRM influenced the design and delivery of competitive and superior services for the hospitality sector in Edinburgh?

What essential framework for the implementation of CRM has emerged in the hospitality sector for Edinburgh?

What is the alignment that characterises CRM success for hospitality industries and businesses in Edinburgh?

A literature review that attempts to examine and to present relevant perspectives on the importance of CRM in hospitality industries is in the next chapter.

Chapter 2 – Review of Relevant Literature and Research

In the tourism and hospitality industries in general and the hotel industry in particular, Customer Relationship Management (CRM) becomes important as travellers become more price sensitive, less brand loyal and more sophisticated (Sigala, 2005, Pp. 391 – 392). In the present day and age, information technologies have made it possible for shoppers to make instant comparisons between hospitality and tourism offerings on websites and this means that it is important to implement CRM efforts to ret to retain customers and to provide them with better than what the competitors offer. The hotel industry around the world in particular is experiencing increased globalisation, competition, higher customer turnover, growing customer acquisition costs and rising customer expectations not only because the financial recession and competition but also because prospective customers can quickly make comparisons. Depending on the nature of hospitality business in which an organisation is involved, processes for automated data collection and analysis for influencing engagement with the customers are possible.

Ryals (2001, Pp. 531 – 535) states that CRM in hospitality and service industries is important because efforts directed towards trying to enhance customer relationships pay in terms of offsetting high customer acquisition costs for those customers that use certain types of service offerings frequently. After covering acquisition costs, a stream of profit flows emerges for the previously mentioned customer and the longer a customer stays with a hospitality firm, the higher the profit. Thus, CRM helps to offset acquisition costs and to generate higher profits. In addition, the return from CRM increases even further when satisfied customers refer other potential customers who add to the bottom line for an organisation. Because efforts to develop a relationship with customers have generally positive effects on customers, a relationship with a hospitality organisation has a value for customers who associate with a brand to become price insensitive.

The impact of efforts to enhance CRM in hospitality organisations are likely to result in the following (Ryals, 2001, Pp. 535):

Long-term retention of selected customers

Gathering and integrating information on customers

An emphasis on data mining and analysis of customer data

An emphasis on customer segmentation in terms of lifetime value

Identification and micro-segmentation of markets for types of offerings

Efforts towards enhanced customer value creation

An emphasis on the delivery of customer value through channels optimised for serving various market segments

A shift in emphasis from management of product portfolios to the management of portfolios of customers, resulting in efforts directed towards optimising an organisation to serve better customer segments

Sigala (2005, Pp. 409 – 410) goes further to suggest that profound change in service marketing, including marketing for hospitality and tourism, demands that an emphasis exist for customer retention, customisation of products and customer focused processes that incorporate Information and Communication Technologies (ICT) for collecting and processing customer data. Processed data is required to deliver customer insights, superior customer relationships and design of superior products and services. The previously mentioned author suggests an integration of ICT, knowledge management and CRM for hotels and the hospitality industry. However, CRM can and does exist in small hospitality and tourism establishments without the implementation of elaborate ICT applications, and it is important to try to have a good fit between the CRM implementation and the business. It is important to understand that with a good fit, the integrated CRM system will present opportunities for improving staff skills, competencies, the working environment and services in addition to enhancing customer relationships.

The advent of e-commerce has meant that online intermediaries on the web present a threat to hospitality operators because although such intermediaries do present opportunities to customers to select after comparing a number of offerings, they do not always correctly depict the true value of offerings (O’Conner, 2004, Pp. 474 – 476). By implementing CRM efforts, hospitality establishments are in direct contact with customers and they can try to sell the value of their offerings to customers with a personal touch that is missing with online intermediaries. To illustrate the point, it is possible to suggest that by mailing a hotel magazine to selected customers who qualify, it will be possible for a hotel to keep customers informed about developments and at the same time to offer new or discounted products to try to maintain and enhance customer interest. In the age of Internet and the World Wide Web, post visit presentations, including magazines or other advertising literature from hospitality establishments will neither be expensive to deliver nor late in a fast changing world full of new developments. CRM in the hospitality industry has the potential for reducing marketing expenditure and for increasing sales, but it is important to ensure that potential data-ownership dilemmas are in control so that CRM can work optimally at the brand level (O’Conner, 2004, Pp. 480 – 481). Effective data mining using artificial intelligence and sophisticated statistical techniques for data analysis on warehoused data is important for CRM, especially for the large hospitality organisations. However, the previously mentioned author suggests that the regional proliferation of Internet and interest in web-based interactions determines how effective eCRM will be when focusing on a region. The developed world with a more prolific proliferation of the Internet is far more suited to eCRM compared to regions in the developing world with limited access to ICT. In addition, large multinational hotel chains must practice and present effective knowledge sharing for international hotel joint ventures (Magnini, 2008, Pp. 249 – 252). Hence, clearly CRM implementations in hospitality present both risks and opportunities. O’Conner (2004, Pp. 482) states that the hospitality industry spends millions of dollars on information technology acquisitions every year, but not much published material exists about the management of acquired information technology resources.

According to Ozgener (2006, Pp. 1356 – 1358), senior management commitment and adequate budgets are important for CRM implementations in the hospitality industries. CRM implementations in the small and medium hospitality firms are likely to feel the effects of innovation quality, customer relations, communication-distribution infrastructure and business dynamics. Business dynamics, which refers to change imposed on businesses due to economic, social, technological and environmental change, is important for CRM because it is such change that demands new offerings from businesses to retain customers in the face of competition. Although the smaller hospitality firms will have less to spend on CRM, they are likely to be more interested in having CRM systems because existing customers are far more important to the smaller businesses compared to the larger ones. Thus, within the context of the hospitality industries existing in a city or a region, CRM implementation within small and large hospitality businesses may vary, depending on the peculiarities of the place. The previously mentioned, together with barriers for the implementation of CRM in hospitality, is likely to be something that will be worth investigating in the small-scale research project for the importance of CRM in Edinburgh. In addition, the more important goals for implementing CRM in hospitality are also worth investigating because the relative reasons for an interest in CRM are likely to differ. It is possible to use CRM systems in hospitality firms for decreasing costs, sustaining competitive advantage, improving customer services, improving customer retention, acquiring new customers or for increasing profits. However, the relative priority reasons for CRM implementation may vary from firm to firm.

Oronsky (2007, Pp. 944) suggests that CRM implementations in hospitality industries are not just limited to hotels, resorts, airlines or travel agencies because it is possible for restaurants to benefit from such implementations and a strategic thrust for CRM. The previously mentioned author suggests that chain restaurants and independent full-service restaurants may benefit from information technology and CRM implementations that effectively use IT for engaging customers and better understanding their needs. Within the restaurant sector, information technology has made an impact on the dining experience of customers and the way in which meals are prepared, even though according to the previously mentioned authors, some researchers suggest that the hospitality industry is not technology oriented. However, it is clear that if information technology for implementing CRM systems can benefit large hotel chains, then there is no reason why the same technology cannot benefit chain restaurants. Oronsky (2007, Pp. 942) states that within the restaurant industry, information technology has the potential for minimising costs, providing support for superior employee and revenue management, enabling analysis of customer preferences and optimising menus for target costs that will appeal more to customers. Thus, despite reservations expressed by some researchers about hospitality not being a technology industry, other researchers suggest that it is likely that more than 50% of the change that will have an impact food service within the hospitality sector will involve technology influences. Thus, it is clear that a potential exists for using information technology and CRM systems within the food service sector in hospitality organisations.

According to Oronsky (2007, Pp. 944), customer feedback and analysis of customer needs is as important for restaurants as it is for any other hospitality operation. Like hotels, airlines and tour operators, restaurants too can engage customers using websites and receive comments, feedback, suggestions or survey results presented on the web. For large restaurant chains, it is possible to implement systems for deciding about how well menu items are doing across the entire chain, and it is possible to enhance customer relationships by using imaginative ways, including deal offerings, special promotions, joint offerings with other businesses or offerings related to food events, etc. Thus, clearly technology facilitates information management, knowledge management and engagement with the customer even in the food service sector.

In the business environment that prevails today, CRM is as important for airlines as it is for other hospitality industries because serving and having the customer counts and influences the bottom line (Cheng, 2008, Pp. 487 – 490). CRM is likely to make a difference for airlines in their effort to retain and attract the frequent flyers because relationship marketing emphasises maintaining long-lasting relationships with customers and a significant proportion of airline customers, even during the tough economic times, are business travellers who fly more frequently than tourists do. Thus, it is clear that the character of airline service offers many opportunities for practicing the relationship marketing approach and many airlines do maintain frequent flyer databases that are useful for deciding about customer requirements and for engaging the customer. Because airline operations present a substantial dependence on computers and information technology for reservation systems, scheduling and maintenance activities, it is quite possible to incorporate effectively CRM implementations as an addition to existing information technology support systems.

For airline CRM that delivers results, it is important to ascertain what keeps customers loyal to airlines and how airlines can respond better to offerings presented by competitors (Cheng, 2008, Pp. 488 – 489). Loyal customers do appreciate rewards for patronage by loyal customers if airlines present competitively priced offerings that are comparable in quality to offerings from competitors. Although, it is very likely that the touch, the thoughtfulness, benefits and the effort will count in CRM for airlines, customers must be satisfied with the price for quality and type of service offerings. Thus, enrolling customers in frequent flyer programs is not a guarantee of customer loyalty because service quality and service recovery policies in case of service disruption are important for frequent flyers. Clearly, a frequent flyer is likely to prefer an airline that checks them into a decent hotel and presents meals instead of leaving them to wait it out in a departure lounge if a substantial flight delay persists. A balance must exist between rewards for frequent flyers with the care that airlines can offer to such customers who must constantly be on the move to attend to important business matters. In the present day and age, the digital market on the World Wide Web made possible by the Internet is important for airlines, and it is important that airlines lean closer to their customers to try to cut off agents and other intermediaries. In addition, the previously mentioned author suggests that airlines need to emphasise customer orientation, domain expertise, interpersonal relationships, service recovery performance and the judicious use of information technology to make an impact with customers that will result in superior relationship quality. From a customer perspective, domain orientation or the quality of offerings made by an airline and the quality of its employees are of the greatest importance to customers and this means that it is important to tune the CRM system for presenting superior offerings that benefit customers most.

2.1
2.2
2.3
2.4
2.5
2.6

The chapter, which follows, presents a discussion about the methodology for this dissertation.

Chapter 3 – Methodology / Methods Used
3.1 Research Approach for the Thesis
3.2 Preparation of a Literature Review
Chapter 4 –
Chapter 5 – Discussion

A discussion about the conclusions derived from the results of the literature review and the interviews are in the next chapter.

Chapter 6 – Conclusion, Recommendations and Suggestions for Further Work
Appendix A –
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In today’s world economy, information technology (IT) has driven fundamental changes in the nature and also the application of technologies in a business. The use of IT in its value chain provides the company a very strong strategically and tactical tools. If these tool are properly applied and used could bring great advantages in promoting and strengthening the competitive advantages.

In order to gain more market share and sustain its competitive advantages to be very low cost carrier in these days high demanding environment, Air Asia tries to develop new ways of make the customers, suppliers loyal. Focus on supplier and alliances and the customer will drive positive values to Air Asia can achieve. Customer relationship management application will be one of the areas of strategic implementation that company can focus to achieve high values to both Shareholders and Customers.

Customer Relationship Management (CRM)

In order to long term, customer relationship should be fostered for company to maintain competitive advantage and profitability. When planning and implementing CRM application, management is recommended the following approaches:

Customer segmentation-mileage- based segmentation is inadequate, rather should focused on value-based and needs-based approaches can be guide investment decision and drive greater insight into needs of high-value customer.

CRM initiative development-to different from the other competitors’ approach e.g. installing kiosks for the fast check in. Air Asia should implement CRM program in favour of investing in initiatives with a high return, which respond to the needs and desires of their own customers.

Organizational design and management-Air Asia needs to train the employees’ empowerment them with a complete view of the customer and clearly fluent the employees’ role in the CRM strategy.

Advanced and classy CRM information system should include the key functions that are;

Travelling Planning:

Site personalization for on line customer to create travel plan, bundled services information, flights notification systems, and gate information displays etc.

Reservation and Ticketing:

ITA search engines, roving agent check-in, kiosks, internet check-in, and phone check in systems etc.

Frequently Flyer Program:

Membership based or point based rewarding scheme offering to the applicable customer.

Campaign Management:

Email campaigns and promotion system are used for marketing.

Customer Care:

Web based self services such as e-ticket booking and reservation, online baggage tracing. RFID baggage tags, internet lounge, and in air internet services.

Business intelligence:

Dynamic update and multidimensional reports that helps management to do analytics in various areas, such as customer profile.

To justify the investment and implementation scope of the CRM program, Air Asia is recommended to look into the ROI and financial impact to the shareholder value driven by each of the CRM initiatives.

By taking the steps to implement a truly consumer-centric approach to relationship management, Air Asia will be in better position to attain , develop, and hold on to high value of the clients

Company wants to be the lowest short-haul airline in every market it goes, that why they are using some strategies such as Lean cost structure, different ways of promotion, keeping safety, satisfying guests and developing human resource very strongly these days. Air Asia always tries to keep their operations as simple as they can.

SWOT Analysis:

To figure out the internal factors such as Strengths and Weakness, and external Opportunities and Threats to business objective, a SWOT analysis of Air Asia can be conducted;

Strengths:

Low cost operation

Fewer management level, effective, focused and aggressive management

Simple proven business model that consistently distribute that the lower fares

Penetrate and motivate to the potential markets

And multi skilled staff means efficient and incentive workforce

Single type of Air buses minimize the maintenance cost and easy for pilot dispatch

Streamline Operation: making sure that the processes are as simple as possible, that customer can approach and use it with no difficulty

Lean Distribution System: offering a wide and innovative rang of distribution channels to make a booking and take a step toward a travelling easy

Point to point network: applying the point to point network keeps operation simple and low cost, that it connect the booking offices with call centres

Partnering with the world’s most renowned maintenance provider company and complying with the airline operation in the world.

Implementing the regions fastest turnaround at 25 minutes only, assuring lower cost and higher productivity

Weaknesses:

Due to lower costs the services possessions are limited, so someone can think that Air Asia cannot serve as well as they advertise

During irregular situations the company could not handle them well with limited number of personals

Government interference and regulation on airport deals and passenger compensation

Non central location for secondary airports

Its low cost strategy makes the brand critical for market position and development is always a challenge for Air Asia’s management

One of the weak point is that the company trust heavily on outsourcing, it shows the Air Asia depends on other for some of their tasks and seems not good for company’s repute in the customer’s mind

New entrance to provide the price sensitive services

Providing guests with the choice of modify services without compromising on quality and services.

Opportunities:

Long haul flights an experiment to get underdeveloped market share, which is better for the company’s growth.

The Air Asia can differentiate from traditional Low Cost Carrier model by adding customer services or operating as a full services airline with low fare for the haul flights.

Ongoing industry consideration has opened up projection for new routes and airports deals, by making such kind of deals the company expand his business

High inflation rate and also fuel prices will pinch out unprofitable competitors

Threats:

Keeping in view the current economic situations the full services airline cut their cost to compete.

Other companies like Virgin etc may think towards Low Cost Carriers (LCCs)

In the coming time the high rates of fuel decrease the yield of the company is a big threat for them

Accident, terrorist attack and disaster affect customer confidence.

For example on 28 July 2010 a plane crash in Pakistan and almost one month later on 24 of august 2010 there is a another plane crash in China, these kind of accident creates a doubt in the mind of customers. Due to their (Air Asia) low cost model the people may think about that there is risk involve like services and safe journey. I think this is a major threat in these days that Air Asia can face.

Aviation regulation and government policy, Air Asia’s ongoing business in long haul flights have always threat for the changing policies of the those countries and day to day changes in the regulations of the international airport authorities

Increase in operation cost in producing value added services, as Air Asia X using value added services by long haul flights so it results in increase their operation and value added cost.

As Air Asia policy from the January 2002, company belief online seat reservation and also online flight schedule but a threat is always there that the system disorder can arise big problem for Air Asia’s online system

Economical factor of Air Asia

According to the profit and loss account of company it was good in 2009, weather it receive loss in 2008 due to fuel hedging and the crisis situation in Bangkok. The company bear a heavy loss upon their short and long contracts when fuel price shot through to the roof before collapsing around the end of year. On November 2008 the company abolish fuel surcharges. It is the first air line in the world to abolish fuel surcharge. As other air lines are downsize with decreasing in travel, because of global economic circumstances. In 2009 and in 2010 Air Asia expands its operations. The companies target to get around one Million customers in 2008, adding new plans and also introducing new destinations like India etc. At the end of 2009 and start of 2010 Air Asia targets get 5.1 million in 2009 that is 4.2 million up that was in 2008. The new plans were operate usefully towards new destinations like India, China etc.

Current Activities:

The Air Asia invited the customer to come and take part in photography competition in a sense of making journey Happy with Them(AIR ASIA), the winner of this competition will be awarded a ticket to Bangkok with accommodation and other offers such like that to get market penetration.

From 2009 the company starts scholarship for students related to pilot courses this is another try to get more market penetration in term of Air Asia’s sales and make the customer interested in their new routes and keep the existing and as well as new customers.

These Air Asia using Social security checks for buying ticket on special prices.

Red Megastore. They start red megastore for online services for the purpose of make more ease for the new and little educated customers to buy Air Asia’s offered facilities. As we know the target customer of Air Asia is less educated, Middle class and small business men’s, so this plan works very fruitful for the company.

Customer Satisfaction of Air Asia:

The customer satisfaction on company depends on four variables that are Safety, Service Quality, Price and Promotion;

Safety:

The safety factor is related to the Engine and other parts operate during flight

Take a good care of the hand caries and make sure that there is better place for them without any disturbance

The company have much focus on the insurance of passengers while they travel

Service Quality:

Good manners of attendance during flight

The flight attendants’ are very skilled , knowledgeable and charming

The Attendant’s must offer their services with keeping in mind of serving

Price:

Equality of ticket price

Offer the low comparative price

Promotion:

Air Asia was very care while lunching promotions they should be Interesting, After a reasonable time and also good frequency of lunching promotions