Measuring Customer Satisfaction in the Hotel Industry - Research Proposal Example

Measuring Satisfaction in the Hotel Industry: A Quantitative Approach in Ascertaining Satisfaction from Hotel Products and Services MA Management AIMS AND OBJECTIVES The UK Hotel Industry has shown a remarkable performance in the years before 2008. It is observed to be untouched by the economic crisis then, registering double-digit revenue per available room (revPAR) growth in 2007 at 10.8% (4hoteliers.com). It is one of the most resilient industries in UK, overcoming scariest incidents such as the 2005 terrorist attacks in London (Hospitality Net). However, in 2009, the strong and usually sturdy industry has had its share of losses with a sizeable decline in leisure and corporate travel (Deloitte Touche Tohmatsu). Worse, the industry is showing to be susceptible to economic downturns in contrast to its resilience in the past years (Deloitte Touche Tohmatsu). This savaging effect of global economic crisis has proven to be a real challenge to the UK hotel industry. With a decline in demand due to decrease in the number of travellers, UK hotels are pushed to intensify their marketing strategies to tap the available market. One factor then that hotel owners should look at is how to drive the demand up basing on the quality of their products and services. A careful investigation of this aspect of hotel business is of paramount interest both to the government and to the private sectors as well. It is also essential information to the UK Hotel customers, both local and foreign. It is an interest to the government so that they will have information as to where to help in improving the customer relations of UK Hotels. While for the private sectors, this study will give valuable information as to how customer satisfaction can be improves, both in the hotel and in the non-hotel industry. This study specifically touches on the aspect of customer satisfaction from the UK Hotel Industry, particularly to know if hotels are aware of the level of their customers' satisfaction and to know what particular methods they use to ascertain this. It also aims to look whether customer satisfaction varies with the type of hotels as to local or international, and as to big, medium or small hotel Specifically, we wish to answer the following questions: a) Is customer satisfaction important in the UK hotel industry b) How important is customer satisfaction to UK hotels c) What is the level of implementation of customer related process within the hotel industry d) What is the level of awareness of the UK Hotels to TQM e) What methods of ensuring total quality are employed within the hotel f) What is the difference between local and international hotels in terms of customer satisfaction Small, medium and big THEORETICAL BASIS Business Dictionary defines customer satisfaction as "Degree of satisfaction provided by the goods or services of a firm as measured by the number of repeat customers" (BusinessDictionary.com). BNET Business Dictionary defines it as "the degree to which customer expectations of a product or service are met or exceeded" (CBS Interactive Inc.). The increase in competition is forcing more businesses to give much attention to satisfying the customers (Authenticity Consulting, LLC). Customer satisfaction in the UK was found to be a key weapon for competitive differentiation and customer retention (Horsnell 1998). Because of this, guest satisfaction is found to be a common practice as managers found out that excellent customer service is essential for their organization's health (Horsnell 1998). Customer satisfaction is the paramount criterion used to determine the quality that is actually given to customers through products/services and other accompanying services (Vavra 1997). More and more studies have revealed the importance of customer satisfaction. It is of great importance to business firms as it fuels repeat purchases and word-of-mouth recemmendation (H.W Berkman 1986). "Satisfaction reinforces positive attitudes toward the brand, leading to greater likelihood that the same brand will be purchases again" (H.Assael 1987). It is also realized by many that customer satisfaction happens to be the cheapest means of promoting one's product or service ranging from about 10 to 1 (Knutson 1988) to 5 to 1 (Naumann 1995) (Abraham Pizam). Management of Customer Satisfaction has a various aspects: providing good customer service, strategizing customer loyalty, handling customer complaints, responding to angry customers and measuring customer satisfaction (Authenticity Consulting, LLC). In order to achieve customer satisfaction and therefore repeat customers, knowledge of customer expectation and requirements are essential (Abraham Pizam). It is believed to "provide understanding of how the customer defines quality of service and products, and facilitates development of a customer satisfaction questionnaire" (Abraham Pizam). There are various ways of ascertaining the level of service quality and customer satisfaction through subjective or soft measure of quality which is dominantly focused on perceptions and attitudes of customers instead of the more concrete objective criteria (Abraham Pizam 1999). The soft measure of customer satisfaction is doen through the use of surveys and questionnaires to determine customer attitudes and perception on the products and services that they have used (Hayes 1997). "Expectations have a central role in influencing satisfaction with services, and these in turn are determined by a very wide range of factors" (Nick Thijs1998 ). The basic key factors that influence customer expectations are personal needs, previous experience, word of mouth communications, explicit service communication and implicit service communication (Nick Thijs 1998). "The impact of brand image or service reputation (covered by word of mouth communications above) on expectations is seen as central in a number of public and private sector studies" (Nick Thijs 1998). Satisfaction is a widely accepted concept despite real difficulties in measuring and interpreting typical approaches to its assessment and the most common approach is the use of general satisfaction surveys undertaken every few years and designed to track changes over time (Nick Thijs 1998). The Service Quality Gap One known method of ascertaining quality is the service quality (Servqual) gap. It is better understood through the following explanation: "The model that has underpinned the satisfaction approach is the disconfirmation theory, which suggests that customer satisfaction with a service is related to the size of the disconfirmation experience; where disconfirmation is related to the person's initial expectations. If experience of the service greatly exceeds the expectations clients had of the service, then satisfaction will be high, and vice versa. In the service quality literature, perceptions of service delivery are measured separately from customer expectations, and the gap between the two, P(erceptions) - E(xpectations),provides a measure of service quality and determines the level of satisfaction" (Nick Thijs 1998). "Servqual is a service quality measurement tool that assesses both service perceptions and expectations across a range of different service characteristics. Using Servqual, the gap between expectations and perceptions can be analysed to help managers see where to target and prioritise improvement efforts for the best effect" (Nick Thijs). The Servqual is also known as the "gap method" as it is built on four underlying gaps before the final gap between perception and expectation is established. These gaps are; a) Customers' expectations versus management perceptions, b) Management perceptions versus service specifications c) Service specifications versus service delivery d) Service delivery versus external communication e) The discrepancy between customer expectations and their perceptions of the service delivered. RESEARCH METHODOLOGY The bulk of the research inquiry will be done through survey questionnaires. Distributing survey questionnaires ot ascertain the level of satisfaction either through the Servqual method or other method for that matter is the most receommended method of gathering information. Questionnaires will be sent directly to the public relations or customer service department of the hotels. The questionanires will be used to answer our queries as to whether the hotels observe customer satisfaction, to know how important it is to them, to know what type of measurement practices they use and to know the differences between the hotels. This is important in the study because it is my goal to know the stand of the firms in customer satisfaction. Their answers will give us basis for analysis as to whether there are differences in management of customer satisfaction in different firms: international vs. local hotels, small vs. medium vs. large hotels. Statistical tools will be used to process the quantitative data. Quantitative analysis will be employed since it is highly recommended by previous research and so that it will be easy to compare the different hotels. This will also be coupled with questionnaires to the customers which will be done periodically to compare their answers with the data from the hotel companies. Questionnaires will also contain measurements of satisfaction particularly of expectations and perceptions and the gap between to fulfill the servqual method mentioned above. The early part of the study will be guided by secondary sources especially by desk researches done through the internet and journal articles. This is composed mainly of review of related literature to build the methodological foundation of the study. Secondary sources also include data from the companies themselves, particularly the studies that they have done on similar topic. This will be considered an internal secondary data. This will be sandwiched with the primary data specifically providing the questionnaires. When meeting the executives of the company, I will also ask if there were studies conducted by them in the same line. Since there are research groups studying about the UK Hotel Industry, this data can also be important in the study. One of these is the Hotelresearch.co.uk. RESEARCH PLAN The study is well-planned and is definitely feasible. The first part is the literature review and the design of the theory. This will be done in a week and will mostly be desk researches. The second part is the questionnaires. The questionnaires will be sent directly to the Public Relations or Customer Service Department, with a lead time of two weeks. During this time, Phone calls will be made to make sure that it will be done. At this stage of the research, only letters and questionnaires plus phone are needed. After this, the remaining one week will be spent on data analysis and making of the report. Over-all the entire month will be enough to do the project. Duration of the project may vary according to the number of participants that we would employ in the project. BIBLIOGRAPHY 4hoteliers.com. http://www.4hoteliers.com. 10 january 2008. 21 May 2009 . Abraham Pizam, Taylor Ellis. "Customer satisfaction and its measurement in hospitality enterprises." International Journal of Contemporary Hospitality Management (1999): 326-339. Authenticity Consulting, LLC. http://managementhelp.org. 21 May 2009 . BusinessDictionary.com. http://www.businessdictionary.com. 21 May 2009 . CBS Interactive Inc. http://dictionary.bnet.com. 21 May 2009 . Deloitte Touche Tohmatsu. http://www.deloitte.com. 4 May 2009. 21 May 2009 . H.Assael. Consumer Behavior and Marketing Action. Kent, Boston: PWS, 1987. H.W Berkman, C.Gilson. Consumer Behavior: Concepts and Strategies. 3rd. Kent, Boston, 1986. Hayes, B.E. Measuring Customer Satisfaction: Survey design, USe and Statistical Analysis Method. 2nd . Milwaukee, WI: ASQ Quality Press, 1997. Horsnell, Stefan. "Customer Satisfaction Measurement Practice in United Kingdom Hotels ." Journal of Hospitality & Tourism Research 22 (1998): 450-464. Hospitality Net. http://www.hospitalitynet.org. 21 May 2009 . Knutson, B.J. "Ten Laws of Customer Satisfaction." Cornell Hotel and Restaurant Quarterly 29 (1988): 14-17. Naumann, E. Customer Saitsfaction Measurement and Management: Using the Voice of the Customer. Cincinnati, Ohio: Thomson Executive Press, 1995. Nick Thijs, Patrick Staes. "Customer Satisfaction Management." 2008. Vavra, T.G. Improving Your Measurement of Customer Satisfaction: A Guide to Creating,Conducting, Analyzing and reporting Customer Satisfaction Measurement Programs. ASQ Quality Press, 1997. Read More