Service Challenges of the New Millennium - Assignment Example

Service Challenges of the new millennium Literature Review Introduction Quality service is a major challenge facing the hospitality sector in this millennium. Competitive advantage and competitive success relies heavily on the service quality in this industry. The delivery of service depends upon various factors and the most important factor is the people or human resources. Every interaction is a service encounter in the hospitality sector and interactions take place at various levels. Assessing the customer expectation and efficiency in delivery of service is a big challenge in this highly competitive and fast moving industry. This section will review literature on service quality in the hospitality sector at various levels including, hotels, front office, housekeeping, tourism, restaurants, bars and pubs apart from travel experiences. It will determine how the contribution of employees, of the managers, technology, innovative ideas, and the consumers themselves can help meet the challenge in the new millennium. It will address the impact of environment on service quality and address customer delight as a measure of customer satisfaction. It will also demonstrate how travel is now considered a powerful personal experience rather than just a destination to be covered. Managing people - employees The hospitality industry recognizes the importance and value of the people – both employees and guests in the service delivery process. It remains a challenge for the managers to respond to the changing expectations of the customers while considering the changing values and attitudes of the employees. A survey of managers revealed that they preferred to hire graduates with strong practical skills and ‘soft’ people management skills rather than analytical skills although the survey did not take into account the educational background of the respondents in the survey (Connolly & McGing, 2006). Degrees in hospitality are not important; hands-on experience is required. Tertiary qualifications are not mandatory in the hospitality industry. At the same time, Garavan, O’Brien and O’Hanlon (2006) observe that managers experience a significant amount of stability in their careers. There is investment in training and development both by the individual and the organization. The hospitality sector is labor intensive which makes it important to have effective policies and practices to achieve the desired level of service. Alleyne, Doherty, Greenidge (2006) find a direct relation between the HRP practices and the service quality in this sector. Delivery of excellent service depends upon the effective management of people. Investment in people through the HRM approach is essential. Cost reduction strategy would lead the organization to minimize labor costs thereby compromising on quality whereas those that adopt quality enhancement strategy would select good staff and lay emphasis on training and development. Forte Hotel Group and the Fivestar Hotel recognize the importance of people and there are others who have adopted a more consultative management style. If the HR practitioners are multi-skilled, they spend much less time in HR matters and the work environment remains peaceful as was determined by a comparative study of the Barbados and the UK hotels. Buick and Thomas (2001) cite Cherniss who suggests that prolonged job stress is higher in the service industries where the job involves high degree of interaction with clients. High-burnouts also result in absenteeism and high turnover of staff. The middle managers in hotels are the most stressed as they have to attend to paper work, supervise, praise and reprimand employees and attend to customers. Switching from one role to another creates stress. An annual staff turnover of 27% in 1996 resulted in a loss of £430 million to hospitality providers in UK. Surveys showed that single managers are more stressed due to lack of family support. To combat this problem, more number of people are being employed, while stress is also being laid on training and development of the staff. Compensation programs, employee relations and group tasking are some of the other methods that this sector is using to reduce the stress level amongst the middle managers although monetary remuneration is an area of dissatisfaction. This leads to job withdrawal. Shorter working hours, more flexible working options and more support and assistance may ultimately cost the hotel much less than the cost of high turnover of staff. The front office staffs are the representatives and reflect the corporate image and culture. It is the main contact point for the guests within the hotel. They have to be amiable, quick-witted, and aware of the hotel product, be efficient in marketing and be able to understand the guest (Hai-Yan & Baum, 2006). Knowledge of foreign language is an added advantage. To maintain efficient service and continuity, training and development of the front office staff is essential. This is yet another department in the hospitality industry where turnover of staff is high due to low wages. The front office staff has apprehensions about their career and growth prospects in the hotel industry as most are from professional or vocational schools. Although this study pertains to the China hospitality industry, the scenario in UK is no different. Hospitality operations are complex and involve a large amount of interactions between staff and consumers. When hospitality firms try to please as many customers as possible, they have to compromise on quality standards (Ingram, 2000). Tourists have become increasingly demanding and do not focus on the price alone. To improve the corporate image, to gain competitive advantage and to enter new markets, hotels must create a quality culture (Claver, Tari & Pereira, 2006). Quality management system has a positive effect in service quality, employee morale, reduction in working costs and waste, apart from customer satisfaction. This in turn affects the sales and competitive position. Service needs to be evaluated through indicators and surveys. Employees need to be trained to enhance professionalism to improve the service quality. Managing people – customer satisfaction The hospitality industry is vying to attract repeat customers and for this they need to maintain a quality approach to customer needs and expectations. Quality and good consumer rapport is essential to eliminate the threat of profitability and long-term survival, observe Douglas and Connor (2003) while Kandampully and Suhartanto (2000) contend that dedicated focus on customer loyalty will become a prerequisite for the survival of the hotels. A 5 percent increase in customer loyalty could bring an increase of 25-30 percent in profits (Lee, Barker & Kandampully, 2003). About 60 percent of increased sales can be attributed to customer recommendations. Quality of service also depends on how the service is delivered during the process, apart from the end result. How the intangible elements of service – inseparability, heterogeneity and perishability of service are perceived by the consumer is important. Customer satisfaction and experience with the performance of reception, food, beverage, housekeeping and price determines whether a customer will repurchase or recommend. There exists a gap between the managers’ perception and the consumers’ expectations. This results in loss of business. Proactive consumers help to some extent when they bring to notice the inadequacy of service. Customers make the choice of hotel depending upon the location, facilities and the service quality. It has been observed through a study by Ekinci, Prokopaki and Cobanoglu (2003) that the dimensions of intangibles contributes towards greater tourist satisfaction and the tangibles are not up to the British tourists expectations. According to Gray, Matear and Matheson (2000), since the hospitality firms face less turbulent markets, managers do not feel it is essential to form closer relationships with customers. Market turbulence has since increased due to rapid changes and globalization. Small UK hotels face a barrier towards developing market orientation because they nurture a short-term view, contented with status quo, have an unclear view of the customer and a lack of competitive differentiation. As markets become turbulent these perceptions would have to change too. Other services Environmental concerns like energy conservation, sewage discharge and air and noise pollution have been a major issue in the hotel industry. Customers today prefer hotels which show concern for the environment. Environmental management Systems (EMS) has become recognized in the hotel industry. Due to resource limitations, hotels do not go beyond water-saving campaigns, energy-efficient lighting and reuse of paper (Chan & Ho, 2006). Studies demonstrate that most organizations lack the knowledge, expertise and experience to develop an EMS. In 2001, only 40 percent of the large hotel groups in Europe had a formal EMS despite the hotel industry recognizing the value of EMS. Various associations like Green Globe 21 assist in environmental work but lack of training resource is a major concern in hotel management curricula. Smoking was permitted in the UK in the pubs and bars but the UK Government’s Department of Health reported that environmental tobacco smoke (ETS) exposure was a cause of lung cancer, ischemic heart disease, serious respiratory illness and asthma. Carrington, Watson and Gee (2003) report that as a step towards improving service to the customers, a Public Places Charter (PPC) was presented to the UK government. While it is necessary to accommodate smokers, the customers should not have to breathe other people’s smoke in the pub or restaurant environment, which can be detrimental to their health. Since it is essential to provide service to both smokers and non-smokers, a balance has to be maintained. Non-smoking signs in the designated areas were found to be ineffective as the smokers were confused and better communication is felt necessary. Despite segregation and adequate ventilation, the non-smokers are still exposed to ETS. This is an area of great concern in the hospitality sector as customer satisfaction is vital to the industry. Food sector – pubs, coffee houses, and tea Food is another important sector where customer service is a powerful tool for differentiating a company (O’Connell, Henchion & Collins, 2006). Customer service is not a generic abstraction but a series of specific services – before, during, and after the transaction. This helps to identify the individual elements of customer service. Branded coffee houses have sprung up at every street corner leading to a new type of Scottish coffee culture. High levels of service and sociability at the coffee houses led to loyal customers who admitted that friendliness of the staff was a crucial factor (Scott, 2006). Service promotion in the pubs is also a highly specialized area. There has to be a relationship with both customer and staff. As services are performances, the quality of service is utmost important especially as the basis is people and not equipments. New customers rely on others’ experience before venturing into a new pub (Knowles & Howley, 2000). Retailers can gain an edge by achieving differentiation. Service in pubs has to be more tangible by showing physical evidence. Performance records and success rates have to be made available to attract those without prior experience. The standard of pubs was so slow that the need to attract and retain customers in the pubs with a view to improve customer service called for new techniques in recruitment and training of staff (Pratten, 2006). The trend changed to recruit young, single and educated workforce with emphasis on service skills, staff management and profitability. This resulted in clear improvement in the level of customer awareness. Apart from the external customers, internal service counters are equally important where one department serves another, which ultimately means enhancement of service to the end customer. These depend on interpersonal relationships and have both benefits and drawbacks. Factors that influence the internal service counters include professionalism, dependability, conscientiousness of the internal suppliers, their communication skills, and the consideration they show to the internal customers (Paraskevas, 2001). Adding value to the service helps the hospitality firms gain competitive advantage. Hospitality managers have come up with an innovative idea to use tea to increase profits for their organizations. The offering of a cup of tea is a universal sign of hospitality, quotes Jolliffe (2006). Consuming tea in a resort is a leisure experience while in city centre properties tea consuming can nurture business deals. Trends in this area has already been set by the Fairmont group of Hotels who offer three forms of afternoon tea in their British Columbia property while their Toronto unit has the only tea sommelier on staff. The traditional welcome in homes is with a cup of tea, which the hospitality setting is exploiting to gain competitive advantage. Strategies to enhance service in the hospitality sector Six Sigma is a business strategy which is considered a strategic approach service performance through the effective utilization of statistical and non-statistical tools and techniques. Antony (2004) says Six Sigma is used as a means of improving the service quality and customer satisfaction in the UK service industry. Anything that does not meet the customer requirements can be detected and the correctional steps taken. Performance measurement is another tool which helps organizations to more effectively meet the changing demands and challenges that globalization poses, say Atkinson and Brown (2001). Increased sophistication of customers and management practices have led to rethinking of the performance measurement systems in the UK hotels but UK hotels are still following the traditional forms of performance measures. Although UK hotels appear to monitor their performance, they do seem to measure the wrong think and need to do some serious rethinking. Instead of focusing on financial measures, non-financial sectors like service quality and customer satisfaction have to be considered. Each department should be aware of what it contributes individually and collectively in attaining the strategic mission. The performance measurement systems need to reflect the complex nature of the service delivery process within the hotels. It is necessary to evaluate performance in terms of employee morale and customer satisfaction. Another strategy to remove the barriers to efficient services in the tourism and hospitality sector as cited by Hwang and Lockwood (2006) is the business networking for experiences sharing in quality. Instead of imitating competitors or attempting to gain competitive advantage through distinctive performance, firms would allow for motivation and share experiences to solve mutual problems and gain excellence. Training of people has to start at the education level itself, which implies that the hospitality education must be relevant to today’s economic environment. Both academicians and industry practitioners should be involved at the education level. The students need to understand the theory and principles behind a theory, which would enable them to apply it in any situation they may encounter during the work life (Jayawardena, 2001). They have to keep abreast of the latest tools and techniques as they are the future managers responsible for service in the industry. Advance technology helps in providing efficient service to the customers. Research suggests that technology enhances service quality, improves efficiency, effectiveness, productivity and convenience. Technology is applied for in-room services and at the managerial and operational level (Lee, Barker & Kandampully, 2003). One such example is the centralized reservation system. The creative use of distance, time and information through technology helps firms to reap the highest value from its activities which translates into efficient service. However, Martin (2004) found in performance terms UK still ranks lower than some of its competitors where the use of technology is concerned. Interactive websites and emails help the owners impart better customer service and rapid and effective follow-up when inquiries are made. Erdly and Kesterson-Townes (2003) also agree that globalization and technological advancements would change the way people travel. Technology provides unhindered access to information. In the travel trade customers are central to the corporate strategy, product development, to the supply chain including sales and marketing. Service is targeted to be tailored to suit individual requirements. Wireless broadband, biometrics, and customer relationship management will allow the travel companies to make travel a powerful personal experience. While technology helps in service, it has also made service today ‘self-service, says Schulze (2000). All phone calls are computerized but monitored. Nevertheless, employees should be accountable while being empowered about how they do their jobs, even if it means total spot refund. When a woman at a beach resort hotel lost her engagement ring on the beach, after a fruitless search, the cabana attendant went and purchased a metal detector which helped to locate the ring. He was empowered to spend up to $2000 if needed to correct a service problem. The production line approach is a new technique to improve service quality and efficiency in service industries. This is particularly useful in the fast food sector (Lai & Baum, 2006). Human resources are treated as one kind of raw material in the production line of the hotels and when this is combined with the just-in-time (JIT) philosophy, it indicates the importance of human resources in delivering quality service. Managing diversity is yet another effective way which increases the scope for greater insight into various populations of customers thereby improving the quality of service but it requires senior management commitment in hotels (Maxwell, McDougall & Blair, 2000). Managing diversity has to be incorporated into the organization’s value statement so that it sends the right signals to the customers and employees alike. Customer service has increased due to enhancement in personal communication channels like face-to-face, mail, phone and the web that impact on the way a customer may interact with a business (Spencer-Matthews & Lawley, 2006). These help to identify and meet individual customer needs. Information can be collected, maintained and retrieved through a marketing database. Information accessibility is the key to success which was not available in the traditional form of business. Interactions occur at various points in service and these have to be managed while identifying the common barriers to service. According to O’Connor (2006), hospitality is a human virtue which should spring naturally from within. Skills and experience can be developed but the trait of being hospitable but the level of natural hospitableness should be evident at the time of recruiting, as customer delight is a better measure of customer satisfaction feel Torres and Kline (2006). Delight is a stronger state of customer engagement. A need-based model gives a better understanding of the dynamics of customer emotions. Strategies have to be developed to bring delight to customers and this can be achieved only through organizational effort. Conclusion Most papers reviewed contain limitations as research and studies were conducted on selected samples. Most of the studies have been conducted during high season and the outcome might differ in low season. It is essential to monitor the effect of any changes in service that has been introduced. Firms which are proactive have better chances of success as ecommerce has increased. Employees should be allowed to participate and empowered. Hotels must strive to develop and maintain customer loyalty. Staff should be exposed to a system where information and knowledge are easily accessible to them for regular upgradation of their skills. When employees are encouraged to think for themselves and have the power, it can lead to an army of professionals in the hospitality industry. The literature review reveals a wide gap between the theory and application of these theories into practice for enhancement of services in the hospitality sector. Research through literature review has shown how people management, customers, technology, innovative ideas, and environment can make a difference in service quality. While efforts are being made by every sector to improve service quality, lot needs to be addressed and the focus in the new millennium should be customer delight which is way beyond customer satisfaction. References: Alleyne, P. Doherty, L. & Greenidge D. 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