Logistics and Operations Management - Assignment Example

Operational input includes staff cost, material, equipment, no. of rooms in the hotel while operational output includes number of rooms rented by patrons, no. of service availed by customers, increase in brand awareness among tourists etc. Choy and Chu (2001) defined customer satisfaction as the intention of the customer to repurchase/recommend services of the hotel after availing it first time. Hotels can be classified as Budget, Mid-Scale, First Class and Luxury on the basis of their revenue and size of operation (.

In this report, the discussion will only be concentrated on Budget and Luxury hotel (PKF Consulting, 2010). It is evident from the above theoretical argument that operation management plays vital role in hotel industry. Hence, this report will try to indicate the difference between Budget and Luxury hotel in terms of various facets of operation management. A real life case study will also be used in this report in order to validate the argument of the researcher. Budget Hotel versus Luxury Hotel From the consumer viewpoint, budget hotels are perceived as the low cost accommodation place for tourist while customers ready to spend extra money on luxury are attracted to luxury hotels which have more to offer rather than offering only accommodation facility to customers.

However, the demarcation between luxury and budget hotel is decided on the basis of different factors such as total cost of the project, price of the rooms, availability of services, no. of rooms, additional amenities, augmented facilities etc. TRI Hospitality Consulting (2007) defined budget hotel as the conjunction of ‘limited-service hotel’ and ‘select-service hotel’. For example, City Hotel located in central London can be classified as the budget hotel with room rent in the range of ?30 to ?50 (Hostel Bookers, 2013).

TRI Hospitality Consulting (2007) defined luxury hotels as the accommodation place which offers additional facilities such as sports, leisure, travel etc along with accommodation service and charges high price in order to reflect its service quality. Luxury hotels emphasize heavily on creation of customer touch points such as infrastructure, design and aesthetics of the building etc which can reflect the premium service quality to customers. For example, Bellagio located in Las Vegas can be classified as luxury hotel which charges minimum hotel room rent of ?200 to ?250 per day.

It is clear from the above discussion that there is significant amount of difference exist between operations of a budget hotel as against operation of a luxury hotel. Gronroos (2007) stated that service driven business organizations need to focus more on creating customer touch points and customer service in order to deliver quality service to tourists and patrons in hotel. Mongiello and Harris (2006) found that traditional management concepts known as Fayol’s five elements of management can be successfully implemented by hotel managers in order to achieve business success.

These 5 elements are defined as Planning, Organizing, Commanding, Coordinating and Controlling. Each of these elements can be used in order to contrast and compare the differences and