Customer Satisfaction: Hotel Industry

The Hotel Industry had a great pickup in early 1980’s, at that time hotel businesses all over the globe tried their best to grew up to international level, different mergers and new continental hotels group came into existence in late 1980’s. As research figures indicate tourism and hotel industries have turned into one of the most profitable sources of income throughout the world especially in last two decades.

In 1990’s Electronic businesses had approach hotel industry very quickly where that became a milestone for the said industry that was beginning of this realistic approach to be followed up by hotel industry.

Capital expands from rich countries to least developed countries and than the life standard of the people improved on the global very quickly, more wellbeing requisites introduced to satisfy human needs in the shape of technology, more comfort necessities became familiarized and if we could try to portray the current picture of the world we could see hotel industry affected directly in this regard, hotel industry is responsible for the fulfillment of the human desire up to maximum level. It is an instinct of human nature to be creative all the time, measuring once level of satisfaction in hotel industry is quite difficult but there are obvious rules which can be followed to find the level of customer’s satisfaction attainment in the hotel industry, Express by Holiday Inn “GSTS” system has great responsibility to judge all customers issues and tell true pictures of the services levels of the hotel.

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Abstract

The study mainly reviews and discusses the topic of customer satisfaction and its application to the Hospitality industries. Defines the concept and analyzes its importance to services and its importance to serves in general and to hospitality / tourism services in particular. Following a discussion on the dimensions and attributes of satisfaction, lists the main methods of measuring satisfaction and concludes with a review of global and cross-cultural issues that affect satisfaction in hotel industry.

consequently this research aims to investigate the customer satisfaction level in Express by Holiday Inn hotel, London City (Firoka Group of companies UK Ltd), to apply a tool of “SERVQUAL” model in Express by holiday Inn hotel, London City. Study has also enlisted descriptive survey, feedbacks, trends, approaches & research collection questionnaire; the research questionnaire data contain 25 questions.

We discussed approaches toward integration and comprehensive model of satisfaction and loyalty,

The quality of the Relation

Customer Orientation

The competitive Advantage

We will focus on rational questions

Why should we measure customer satisfaction and who should be involved?

What will be the process involve?

Where Do I Start?

How Do I measure Satisfaction?

How can I get insight from the result?

How do I communicate and action the results and then what?

The analyzed obtained data revealed that guests perceptions of the offered services were below than expected average level of an index indicating, which gives us an idea that service level not at optimal level.

The overall services quality standards needs to be calculated in terms of satisfaction to encounter the differential gap of optimization.

List of Tables

List of Figures

Declaration

Chapter 1

1.0 Introduction:

Living in competitive world today wasn’t being challenged ever before, Economic, Socio & Cultural environmental effects are deciding future of the world businesses today, this era is more complex due to it’s immense finance requirements, More competitive tools have been evolved to satisfy human needs, Presently Service industry prevailing great deal of challenges where! Every customer has high demands on lowest prices, Life standards are increased with the passage of time so as expectations! and it is very important for one business to calculate it’s expectation level towards it’s customers and judge where it is standing in the markets, In the Hotel industry the trust of the customer is very much fragile, It is almost necessary for all hotel businesses to keep themselves well updated about customers needs and market demands,

To “count” prompt responses of the hotel customers there are many systems are being utilizing by the hotel industry, Express by holiday Inn is a franchise hotel of InterContinental hotel group, IHG Group has centralized reservation department which looking after all customers issues, They also responsible to prepare performance report of an individual affiliated franchise hotel world wide on monthly basis, the report “GSTS” encounter all areas which need to be focus in terms of customer’s satisfaction, later we will discusses in details all main areas of that report.

Customer satisfaction is the leading decisive factor for determining the quality and standard which is actually delivered to the customer through the product, service or by the accompanying servicing. (Vavra, 1997); It’s simply stated, “Customer satisfaction is essential for corporate survival”

Several studies have found that it costs about five times as much in time, money and resources to attract a new customer as it does to retain an existing customer (Neumann, 1995). This creates the challenge of maintaining high levels of service, awareness of customer expectations and improvement in services and product.

Hayes states that; “Knowledge of customer expectations and requirements is essential for two reasons – it provides understanding of how the customer defines quality of services and products, and facilitates the development of a customer satisfaction questionnaire (Hayes, 1997, p7). Furthermore, customer satisfaction is recognized as of great importance to all commercial firms because of its influence on repeat purchases and word of mouth recommendations (Berkman and Gilson, 1986). The researcher interest is to carryout a study of customer satisfaction at Express by Holiday Inn, London.

1.1 Aims

Objectives of the Study

The main objective is to conduct the customer satisfaction and its measurement in the hotel industry with special reference to Express by Holiday Inn Hotel, London.

Subsidiary Objectives

Analyses of costs demonstrating that customer retention is substantially less expensive than customer acquisition.

Customer behaviorists in the area of lodging, restaurant, food services and tourism.

Customer satisfaction is a psychological concept.

Customer purchase goods and service with pre purchase expectations about anticipated performance.

Assessment of satisfaction is made during the service delivery process.

Satisfaction is not a universal phenomenon and everyone is not getting the same satisfaction out of the same hospitality experience.

Reliability, Responsiveness, Assurance, Empathy and Tangibles.

Research Problem

Customer satisfaction research is not an end into itself. The purpose, of course, in measuring customer satisfaction is to see where a company stands in this regard in the eyes of its customers, thereby enabling service and product improvements which will lead to higher satisfaction level. Satisfaction is not a universal phenomenon and not everyone gets the same satisfaction out of the same hospitality experience. The reason is that customers have different needs, objectives and past experiences that influence their expectation. The results of a customer satisfaction survey need to be evaluated to determine what needs to be improved. Goals should be as specific as possible. Hotels are often challenged on how to best increase guest satisfaction, and how to optimize both price and occupancy. Employee satisfaction, guestroom cleanliness, amenities, appearance, food and services all contribute to customer satisfaction, and increase customer satisfaction is a proven driver of guest retention and higher occupancy rates. Understanding customer experience through research is widely recognized as a key factor in improving long-term business performance. Express by Holiday Inn Hotel had a requirement to obtain daily feedback at an individual level by rooms/reception questionnaire in general for its GSTS (Guest satisfaction tracking system). It has to introduce web based questionnaire survey to create an opportunity to built feedback interface for general public to get provided a cost-effective and practical methodology so hotel future guest see the reviews in term of past feedbacks.

“In the customer arena, we believe that regular, quantitative measurement of customer satisfaction provides a much better lead indicator of future organizational health than profitability of market share change” (Tom Peters, Management guru)

Significance of Study

Customer Satisfaction measurement (CSM) consists of on two major roles

Providing Information

Enabling Communication with Customers

The initial or primary reason for taking the time to measure customer satisfaction is based on to collect the information. It means that what customers say that need to be done differently or on the other hand to assess how well an organization is currently meeting its customer needs or requirements. But the secondary is not less important function of CSM in hospitality industry that by surveying customers. An organization is emphasis its interest in communicating with its customers. In hotel industry, it’s always finding out customer’s needs, pleasures, displeasures and overall well being. Though it is impossible to measure the satisfaction of every single customer needs. The customer satisfaction may different from organization to organization or hotel to hotel. Here we would like to quote Neumann (1995) five objectives suggestions as follows:

To get close to the customer

Measure continuous improvement

To achieve customer driven improvement

To measure competitive strengths and weaknesses

To link Customer Satisfaction Measurement (CSM) data to internal systems hypothesis

Customer Satisfaction is a psychological concept.

Customer purchase goods and services with pre purchase expectations.

Assessment of satisfaction is made during the service delivery process.

Satisfaction is not Universal phenomenon.

Recognition of the employees who contribute to the Customers satisfaction

Customer based improvement goals

Plans for improving operational variables

Incorporation of customer satisfaction skills into employees training program

Measurement and plan for improvement of employee satisfaction

Importance of my Study

To satisfy each and every customer or to meet his / her expectation every time is not an easy task especially in hotel industry. This work is to investigate and examine the psychology of the customer, their expectations and behaviour.

Tools of data Collection

The data collection would include the use of questionnaire, scheduled interviews, guest feedback, and management feedback, guest services track system (GSTS), guest survey, and personal experience along with personal observation. In the questionnaire design, I will use the respondent completes’ short closed – ended questions and long open – ended questions. In the interview design, I would like to use personal forms, sharing their experience and work directly with the respondent. In the guest feedback, I would like to get the guest feedback while they are checking out from the hotel, compare their past and current experience. In the management feedback, I would like to get the information from management regarding the standard and complaint level of the guest activities in the hotel.

1.2 Objectives

1.3 Rationale

1.4 Background of the Organisation

1.5 Structure of the Dissertation

1.5.1 Introduction

1.5.2 Literature Review

1.5.3 Methodology

1.5.4 Analysis & Results

1.5.5 Discussions

1.5.6 Conclusion & Recommendations

Chapter 2

2.0 Literature Review

2.1Customer Satisfaction

Customer satisfaction is an important topic for both researchers and managers, because a high

level 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 customers’ satisfaction levels and to apply that knowledge are

critical starting points to establishing and maintaining long term customer retention and long

term competitiveness (Yuksel & Yuksel, 2002). Customer satisfaction brings many benefits.

Satisfaction increases customer retention and customer retention is dependent on the

substance of the relationship between parties which is 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 fulfillment of some need, goal or desire. For most products or services,

aspects of performance can be objectively assessed. Although these attributes can be

objectively measured, customers’ assessments may not objectively reflect measured

performance. Some clients may be taken to several homes that “fit” their criteria but are

unsuitable to the clients’ personal taste which leads to the client’s assessment of the service as

being unpleasant because they did not see listings that they liked.

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. Considering Kano’s model,

one sees how it may not be enough to merely satisfy customers by meeting only their basic and

performance needs. 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 real estate to excite or over satisfy customers, an agent would

need to have a thorough and vast knowledge of all listings in the local area.

In essence, it is the experience and attitudes of the individuals in closest contact with customers

that are most likely to affect whether or not customers are satisfied and willing to return 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.

2-4-1-Customer satisfaction and measuring system:

To realize customer satisfaction, everyone within the organization should consider continuous

improvement as something normal.

As part of this strategy it is important to define the product or service and the customer’s needs,

making an inventory of customer’s data and complaints, and selecting processes which cause

most of these complaints. The central questions in this case are: which products or services do

we provide? Who are our customers? What do they want, what are their requirements? Is it

measurable? Which critical processes need improvement? By answering these questions

continuously, the customer will be better understood, and the product or service will be better in

and to create product attributes targeted specifically at exciting customers and over-satisfying

them (Tan & Pawitra, 2001). In real estate to excite or over satisfy customers, an agent would

need to have a thorough and vast knowledge of all listings in the local area.

In essence, it is the experience and attitudes of the individuals in closest contact with customers

that are most likely to affect whether or not customers are satisfied and willing to return to the

company. It is also the people in direct contact with customers who determine who the retaine

and satisfied customers are, and their experience determines how they treat the customers

(Hansemark & Albinsson, 2004) thus impacting on the service quality delivered.

To realize customer satisfaction, everyone within the organization should consider continuous

improvement as something normal.

As part of this strategy it is important to define the product or service and the customer’s needs,

making an inventory of customer’s data and complaints, and selecting processes which cause

most of these complaints. The central questions in this case are: which products or services do

we provide? Who are our customers? What do they want, what are their requirements? Is it

measurable? Which critical processes need improvement? By answering these questions

continuously, the customer will be better understood, and the product or service will be better in

tune with the market demand.

Which Products/ Services do we provide?

First of all, define the most important product or services as concretely as possible. This

Definition must indicate what you are really doing as a supplier. The more specific the definition,

the better the customer’s need can be met.

Who are our customers?

It is important to understand the entire chain of customers. This means that you should know all

of your customers. The needs of each customer must be examined separately. Not only the

external, but also the internal customers should be considered. In fact, if the company does not

satisfy the needs of the internal customers, how will it be able to comply with the needs of the

external customer? All employees determine the degree of customer satisfaction. Employees

from within different departments must be considered customers of each other. By bringing

individual employees together as customers and suppliers, the traditional barriers between

departments will be broken. Each employee delivers something to a colleague, whereby one

unction as the internal supplier and the other as the internal customer.

What do they want, what are their requirements?

As a supplier, you should try to figure out what the customer needs and wants. Communication

is hereby very important. Talk to your customers and ask them what they think of your product

or service. Try to figure out how they use it and what they really want. Listen especially to what

they have to say and indicate which customer-supplier relationship needs improvements. The

central questions hereby are:

-Which needs and expectations do your customers have?

-Which needs and expectations do you know?

-To what extent do you comply with the needs and expectations of your customers?

-If you do not satisfy their needs, what is the reason according to your customers?

Making an inventory of customer’s data, customers’ complaints and benchmarking are important

opportunities to improve the customer orientation of the organization.

Information about the opinion of the customer regarding a product or service is of essential

importance, and can be obtained in several ways, such as customer surveys, phone interviews,

and customer panel discussions. Customer surveys are a powerful tool to get information about

what the customer thinks and expects. In general, questionnaires are used with different

questions, which may vary from organization to organization.

Is it measurable?

To comply with the needs of the customer, it is necessary to translate these into product specifications. Quality function deployment is a practical technique to do this. Usually, it is necessary to negotiate with the customer, which results in feasible and agreed on customer’s requirements, which are measurable and understood by all parties. All statements of the

customer about qualitative aspects must be translated into quantitative specifications for the

supplier. Define clearly and explicitly what they are talking about.

Customer Satisfaction Measuring System:

A customer satisfaction measuring system is shown in Table (2-1), to illustrate the activities

needed to improve your customer satisfaction. Mark a possibility in this checklist with a cross at

each question, and discuss the results of these measurements, and check why this customer

Many of these recommendations also apply to your relationships with external suppliers. Treat

your suppliers as though they are an integral part of your organization. Listen to their ideas on

how you can work closely and productively together, create joint improvement teams with them,

invite suggestions from them, assist them in improving their own processes, build mutual trust

and respect, reward them if they achieve improvements, let them participate in the celebration

of success, involve them in the development of new products and processes, and become a

better customer yourself. Expanding your culture of continuous improvement to all your

suppliers will ensure that the quality of your inputs is sufficient to meet your own improvement

objectives. If possible, minimize the number of suppliers; go with the few best and improvement

oriented suppliers with a demonstrated continuous improvement culture and effective leadership

by top-management, based on a long term partnership contract.

– Table (2-1) – Customer satisfaction measurement:

I – customers

1. Do you know who your customers are and how many customers you have?

2. Do you listen effectively to all your customers?

3. Do you regularly make up an inventory of all the needs and expectations of your customers?

4. Did you segment your customers based on their needs?

5. Do you routinely conduct surveys among your customers about your products and services?

6. Are all your employees informed about the results of these surveys?

7. Are more than 75 percent of your customers satisfied?

8. Do you anticipate customer needs?

9. Do you treat each customer as unique?

10. Are complaints replied to whit in two days and solved within one week?

11. Do you stimulate customers to register their complaints?

12. Do you use e-business tools to communicate with customers?

13. Do you have a customer’s helpdesk or a call center?

14. Do you know which percentage of the customers who terminated their relationship with your

organization did this out of dissatisfaction?

15. Are complaints systematically registered and analyzed in your organization?

16. Did you establish complaints handling procedures and are these routinely used in your

organization?

17. Do you measure the degree of customer loyalty?

18. Do you make recommendations to customers about the products or services that best suit

their needs?

19. Do you know what the costs are when you lose a customer?

20. Do you know what the costs are to gain a new customer?

21. Do you know how much sales you lose due to unsatisfied customers?

22. Do you regularly visit your customers?

23. Do you regularly organize meetings with customers groups to learn about their needs,

wants, ideas, and complaints?

II. Leadership

24. As a manager, do you know how many complaints are received yearly?

25. is there commitment at top-management for customer orientation?

26. Did you integrate customer satisfaction into the norms and values of the organization?

27. Are these norms and values clearly communicated to all your customers?

28. Does management recognize visible trends and do they anticipate these in a timely manner?

29. Is management convinced of the importance of satisfied customers and do they act accordingly?

30. Does management try to express the importance of satisfied customers to the organization at every occasion?

31. Does management set a good example with regard to customer friendly behavior?

32. Is management open to suggestions and ideas of customers?

33. Does management personally reward those employees who deliver a valuable contribution to increased customers satisfaction?

34. Are relationships with customers reasonably supported and stimulated by management?

35. Is management at all times available to the customer?

36. Does customer satisfaction also belong to the evaluation criteria of management?

37. Are the customers’ wishes continuously taken into consideration when taking decisions?

38. Does top management also personally handle complaints of customers?

39. Do all members of management in the company have personal contact with external

customers at least once a week?

III- Policy

40. Is customer satisfaction part of your organization’s vision?

41. Did you formulate concrete goals regarding the degree of customer satisfaction?

42. Have you developed e-business strategies for the next two years to increase customer

satisfaction?

43. Is the customer satisfaction policy continuously communicated to all employees?

44. Do you have a partnership relation with all your customers based on mutual respect and

trust?

45. Do you involve your customers in the development of promotional activities?

46. Do you guarantee your customers a minimal service level and/or complete satisfaction?

47. is there continuous benchmarking with regard to customer satisfaction?

48. Do you involve your customers with the execution of improvement processes in your

company?

49. Are more than 50 percent of your employees involved with the improvement of customer

orientation?

50. Do you have guidelines with regard to optimally satisfying the customer?

51. Are all employees following these guidelines?

52. Do you have an up-to-date databank in which all characteristics of your customers are

registered?

IV- Products / services and process

53. Are products delivered within the period expected by the customer?

54. Have you fully integrated the telephone, fax, internet, and any other technology that the

customer wants to use to do business?

55. is the phone in you organization answered within three rings in more that 90 percent of the

cases?

56. Is every function and each process in your organization arranged to optimally comply with

the expectations of your customers?

57. Do these expectations form the basis of internal performance indicators?

58. Are these indicators continuously measured and analyzed?

59. Do you use measured customer satisfaction as an indicator for process improvement?

60. Did you appoint process owners for controlling processes?

61. Do you involve your customers in the development of new products and processes?

62. Do you measure the satisfaction of your internal customers?

63. Do supporting departments within your organization guarantee quality of the work they deliver?

V. Human resource management

64. Does customer orientation belong to the profile of the desired employee?

65. Do you have an introduction program in which new employees are also educated

concerning the importance of satisfied customers?

66. Are your employees who continuously perform in a customer-oriented manner rewarded?

67. Is training mandatory for each employee in your organization?

68. Are customer orientation and continuous work towards improvement criteria for

promotion?

69. Do you regularly organize excursions for your employees and your important customers?

70. Do your marketing employees receive a training of at least two weeks each year in customer

orientation?

71. Are your marketing employees free in taking decisions to satisfy customers?

72. Are your marketing employees free to spend what is necessary to correct a mistake made

with a customer?

73. Do you involve your employees in improvement projects about increasing customer

satisfaction?

74. Do you stimulate your employees to generate ideas about increasing customer

satisfactions?

75. Are the employees’ interest and the interest of the customer related?

2-5. Service quality

The concept of service quality as a whole construct is large and varied. The theory has been

elaborated on by many researchers. Berry, Parasuraman and Zeithaml (1985) write service

quality as perceived by consumers stems from a comparison of what they feel service firms

should offer (i.e. from their expectations) with their perception of the performance of the firm

providing the services. Perceived service quality is therefore viewed as the degree and direction

of discrepancy between consumers’ perceptions and expectations. For example in real estate,

this would be what the client is expecting from the agent in comparison to which is actually

delivered by that agent.

In real estate, that interaction occurs from the moment the client and agent s peak 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).

2-5-1. The Customer’s Perspective of Service Quality

Service quality is usually expressed as a function of customers’ expectations of the service to

be provided (based upon their previous experience, the organizations image, the price of the

service for example) compared with their perceptions of the actual service experience

(Gronroos, 1984; Berry et al, 1985; Johnston and Heineke, 1998). Perceptions are defined as

the consumer’s judgment of the service organization’s performance. However, Parasuraman et

al (1988) delve deeper and define the service performance gap as the discrepancy between the

specifications of service and the delivery (Chenet, Tynan & Money, 2000).