Hospitality Operations Management - Carlton Hotel - Case Study Example

Introduction Globally, hospitality industry is booming and is rapidly growing. This growth is mainly contributed by the fact that overall economic environment has improved and the purchasing power and affordability of individuals and families have considerably increased. Due to this increased purchasing power, many individuals and facilities prefer to avail the quality service from the hospitality industry. In order to avail this opportunity and provide quality service, it is highly essential that the hospitality operations should be improved. In the following parts of this paper, first nature of hospitality industry has been provided in which different factors, such as perishability and intangibility, have been detailed. It is followed by the part elaborating factoring influencing demand within hospitality operations. Customer profiling, average spending power, pricing methods, factors affecting revenue generation, performance measurement, Hospitality operations example, change management in hospitality operations are provided before the conclusion part. Nature of Hospitality Hospitality is a service-based industry featuring perishability, tangibility and intangibility. In the service-based industry, prime focus is given on all attributes that are related to services and that is totally different from the industries dealing with product-oriented activities. For example, in the service industry, such as hospitality, tourism and other similar types relating to the service industry, the service providers do not sell something that is tangible instead intangible services are catered. More specifically, when someone goes to retail outlet and buys a pen and pays amount for the pen whereas in case of hospitality, service receivers do not receive any product from the service providers instead they only experience a service, which in perishable, non-durable and intangible. In the foregoing example relating to the purchase of pen, the buyer receives pen, which is tangible and more durable when it is compared with the features of services. At the same time, service represents perishability and perishable is something that does not lost for forever but perishes with minimum time. For instance, if a room attendant fetches clothing for a service receiver living in the restaurant room, the service receiver is not getting anything but a service from the room attendant and that did not lost for long but consumed as soon as the delivery of clothing was received by the service receiver. As a result, it is highly essential that all those related features that directly or indirectly add attraction and improve the service outlook must be included while serving to the service receivers. Factors Influencing Demand within hospitality operations Multiple factors affect demand within the hospitality operations including seasonality, healthy eating, ethnic influences and time of day or week. It will not be incorrect to say that the hospitality industry is one of those industries that are directly affected with the change in the weather patterns or change in season. In either case, the effect of such changes is considerably substantial on the hospitality operations. For example, in the winter season, hot food items, such as hot chicken soup and other food menu items which are directly related to the season patterns, increase demand as they have direct association with the seasons. More clearly, in the cold winter season, hot food items are preferred to light food items which are more in demand particularly in the summer season. As a result, the hospitality operations do not retain the same pattern in any of season instead they are required to adapt to the changing season requirements. At the same time, healthy eating is also becoming common in which more vegetables with less oil, fresh and natural food menu cooked in the normal and average temperatures are certain items that are commonly demanded in the healthy food menu items. Moreover, cultural values are also important (Yu 65). And this importance is caused by the fact that they are closely related to ethnicity. Ethnic influences on hospitality industry and its operations cannot be avoided as well. For example, for Muslims, poke is religiously prohibited and they do not eat. As a result, it is highly essential that food menu must exclude this item while serving to any Muslim client. At the same time, hospitality operations increase particularly at the dinner time when most of the people prefer to receive hospitality services in order to enjoy their night time. On the other hand, the lunch time does not put additional and unusual pressure on the hospitality operations because trend reflects that during that time, office work and business hours remain operational and more focus is given to business activity than to availing the hospitality services. Customer profiling Hospitality industry serves different requirements and expectations of customers. Business class customers in the shape of business executives and business firms have particular expectations that the service provider should cater all those needs that come with a competitive and reasonable service charge. In this regard, it is important to mention that the business class customers, sometimes, book a suite for duration of one month in which they provide accommodation to their top executives. In this type of situation, the service provider is required to understand their expectations and pay special attention to their business meetings and services before; during and after the business meetings as such customers heavily rely on the top quality services from the service providers and expect that all services are completed on time with a professional demeanour. Within this context, it is important to highlight that the service quality, under such circumstances, is of paramount importance as such customers greatly value service quality and service delivery as well. For example, it has been observed that the business class customers expect economical service charges with professional service quality. And this expectation is based on the belief that they (business class customers) intend to develop and retain long term relationship with the hospitality service provider and in return, they expect that the hospitality service provider should provide reasonable service charge. And from the perspective of hospitality service provider, it is vital to understand the significance of such customers as they provide an important source of revenue for the service provider. Consequently, reasonable service charge should be offered so as to retain such customers for a longer period of time. Average Spending Power Customers represent a wide range of income status. Some customers are financially strong and stable enough to avail the luxury service while some are only limited to average hospitality services. In this regard, it is important to highlight that understanding of economic and financial strength of customers is of crucial significance as it enables the hospitality service providers to develop and provide those hospitality services that fit and come within their affordability. If the customers find the menu items within their budget and affordability, it will certainly encourage them to avail the services. In this regard, the hospitality service providers are required to ensure that they have access to all relevant economic data that will enable them to provide the most affordable services. And to obtaining and processing such data, the hospitality service providers have two sources: internal and external. Internally, they can collect such information from clients availing the services and externally they can obtain from any marketing research firm. In both cases, the hospitality service provider should be able to process such data and convert them into useful information that can and that should enable the decision makers to make and implement decisions relating to hospitality operations management. Pricing Methods Service costing is centrally important aspect in the hospitality industry as it provides main source of revenue to the industry. Both approaches (cost oriented and market oriented along with additional pricing) are currently followed by the hotels and restaurants serving in the hospitality industry. Keeping in view the sensitivity and importance of this aspect for the hospitality industry, it is vital to develop such pricing method that should only be competitive. Here, the word competitive refers to a situation in which both service provider and service receiver remain satisfied with the pricing and for this situation, it is essential that the service providers should offer a balanced service charges which must not be higher in the market instead they should be reasonable enough to attract and retain customers. In this regard, it is important to mention that the developed pricing strategy must not be at the cost of the service provider’s revenue and the same must not be felt by the customers as in either case the major loss in terms of revenue and in terms of loss of customer will be paid by the service provider. At the same time, more focus should be given to those methods that enable the service provider to decrease and control the cost of providing services. And through controlling service cost, the service provider will be in a position to improve the hospitality operations and subsequently it will be in a position to improve the revenue statistics as well. Moreover, the additional service charge should be followed. However, if the additional service charge decreases the flow of the customers, in that case, the service provider should reconsider it and if possible withdraw this charge so as to retain the required level of customer flow. Factors Affecting Revenue Generation In the hospitality industry, cost side is also important as it directly affects revenue and revenue generation capacity as well. Adding capacity for providing more services, it is highly essential that cost side to service must be carefully monitored and evaluated as well. This monitoring must enable and facilitate the most cost effective decisions besides improving hospitality operations management. In this regard, it is important to mention that shelf life, labour intensity, portion control, elasticity of demand and standardization must be given a substantial amount of consideration so as to evaluate and effectively manage the internal operations. For example, shelf life consumes a considerable amount of cost as heating, lighting and cooling are certain activities that facilitate the shelf life of food and non-food items. More clearly, some items placed in shelf are fragile and require close attention care as any small mistake can result in a substantial amount of loss. And more specifically, hospitality industry employs different types of employees. For example, chef, room attendant, waiter, service manager, receptionist and support service members are those staff members that are the main individuals providing services to the customers. And both understaffing and overstaffing are important but critical factors because both have substantial amount of ramifications for the revenue generation and cost control as well. In this regard, revenue generation does not mean income from the receipts instead it is the net profit which is generated after deducting all costs which are consumed by services for providing hospitality. More clearly, a specific human resource policy should be framed and that must detail all aspects relating to the hiring, promotion, benefits and other incentives that are provided to staff members. In addition, regular employees must be hired along with the seasonal workforce in which the former must be regularly trained and provided with all those incentives which motivate them to remain part of the organization whereas the latter should be hired on the temporary basis as demand for certain requirements does not remain the same but increase due to certain seasonal factors, especially during the Christmas Eve and other festivals which are normally celebrated. Performance Measurement Service quality and service need is inbuilt significant aspects in hospitality (Pizam 348). Performance measurement improves operational performance in the hospitality industry. Sales performance, gross profit and external comparison are some of the measures that can be carried out for assessing business performance whereas quality management, data analysis and evaluation, speed of delivery or customer service are availed for evaluating product or service appraisal. By measuring the sales performance, the organisation will be in a better position to identify its current standing and performance with regard to competitors and industry as whole. Subsequently, through this comparison, the weaknesses and strengths can also be detected which should be collected and relative measures should be taken to accommodate the required change. Additionally, external comparison with the competitors’ performance can facilitate the process of organization-wide loopholes and cost factors. It has been observed that the internal cost factors are major sources that increase cost side in the hospitality industry. Thereby, to remove and reduce this impact, it is highly essential that such external comparisons should be carried out regularly. By routinely comparing externally, the organisation will be able to eliminate those service costs that increase cost side and decrease revenue side. Product or service comparison with quality management should also be carried out. For example, quality management is a standardised practice in which certain benchmarks are satisfied for attaining the required level of quality. At the same time, it is also essential that quality management should not be undermined instead hospitality services should be designed in a way that fully complies with the standards of quality management. Additionally, it is also vital that the previous data and customer feedback should be used for examining the service quality level and benchmarking should be used for increasing or retaining the level of service quality. In this regard, service delivery and customer feedback should be complied and the data analysis should be carried out by keeping in view the requirements of service quality objectives. Hospitality Operations Example Quality management requires satisfying quality requirements, applicable regulatory conditions besides increasing customer satisfaction and regular performance improvement (Poornima 517). And the ready-made performance standards can be improved through providing training (Walker and Miller 247). Total quality management remains a prime target in the hospitality industry. This focus and emphasis is mainly caused the fact that the hospitality industry primarily relies on service and service quality for effectively competing in the industry. Since customers have different views and standards relating to the type and delivery of quality service, the hotels, restaurants and other organisations working in the hospitality industry fully understand the need and significance of their service quality and its subsequent effect on the perception of customers. Within this context, the Ritz-Carlton Hotel received the Malcolm Baldrige National Quality Award in 1992 and 1999 from the United States Department of Commerce (Ritz-Carlton). The recipient of this award is required to meet seven categories including strategic planning, leadership, human resource focus, customer and market focus, process management, measurement analysis and knowledge management and business results (Carlton). After satisfying these criteria, the Ritz-Carlton Hotel received this award for satisfying the requirements including providing congenial workplace to employees who are empowered to contribute to the successful quality delivery of services; more importantly, 50 per cent check-in time was reduced by a front desk project team at the Ritz-Carlton represents the type of quality service that is required for retaining the total quality management. More importantly, empowerment is highly essential in the total quality management as it encourages employees to provide their best quality services to the customers (Lockyer 107). However, it is important to mention that the concept of total quality management is complex and broad as well. For example, some hotels do not follow the international quality service standards while others are more encouraged to do so. This is mainly caused by the different service quality standards envisioned by the owners of hotels working in the hospitality industry. Change Management in Hospitality Operations Change management is unavoidable in the effective management of hospitality operations. Change management refers to the activity incorporating effects of change in the routine business operations so as to avoid the effect of any harm caused by the impacts of change. For example, change in customer tastes and demand for new recipes are some of the examples that can be better to elucidate the significance of change management. For example, a trend reflects that customers prefer more Chinese food than the Italian food items and situation becomes more challenging when the organisation mainly serves the Italian food items. Under this situation, to understand and include this change in demand for food items, the organisation will be required to evaluate and estimate the change in demand for the Chinese items and subsequent changes in the preparation of Chinese food items, chefs, labour requirements, supplies and other factors that will also increase will also be considered. In this simple example, it can be deduced that the organisation is required to understand all those aspects that will be directly caused by a single external factor i.e. change in demand for Chinese food items. Conclusion Hospitality industry is growing so are the demand for the related hospitality services. It is recommended that the range of factors must be considered in order to provide quality services to the clients. For example, the concept of total quality management is of crucial importance as it entails various measures that must be satisfied before becoming eligible for receiving Malcolm Baldrige National Quality Award. Carlton Hotel received this award as it was successful in maintaining the seven categories that are inbuilt to this award: strategic planning, leadership, human resource focus, customer and market focus, process management, measurement analysis and knowledge management and business results. For example, leadership, employee empowerment and customer and market focus are those important parts that are highly essential. For example, the case study of Carlton Hotel reports that around 50 per cent check-in time was reduced by the employee of the Hotel. This proves that the employees were empowered and they were more inclined to provide quality services which aggregately satisfied the total quality management at the Hotel. Works cited Carlton. The Malcolm Baldrige National Quality Award. The Ritz-Carlton. Web. 2 January 2015. Lockyer, Timothy. The International Hotel Industry: Sustainable Management. New York: Routledge, 2007. Print. Pizam, Abraham. Ed. International Encyclopedia of Hospitality Management. 2nd ed. Miami: Elsevier, 2010. Print. Poornima, M. Charantimath. Total Quality Management. 2nd ed. New Delhi: Pearson, 2011. Print. Walker, R. John and Miller, E. Jack. Supervision in the Hospitality Industry: Leading Human Resources. 6th ed. New Jersey: Wiley, 2010. Print. Yu, Larry. The International Hospitality Business: Management and Operations. New York: Routledge, 1999. Print. Read More