Maximizing the Success of Balanced Scorecard Implementation in the Hospitality Industry

Abstract

The balanced scorecard (BSC) is increasingly being adopted by firms in the corporate sector, with some studies estimating that more than 40% of the Fortune 100 companies will implement the BSC by 2001. Analogous to the instrument panel of a plane, the BSC provides management with a holistic view of what is happening inside and outside the organization. A well-designed BSC can help management to translate the organization's mission into goals, actions and performance measures, align individual and organizational goals, and measure/guide progress towards goal attainment. However, the BSC is not without its share of pitfalls and problems. This article discusses how hospitality establishments also can reap the benefits from implementing the BSC while avoiding its pitfalls. We provide an overview of the nature of the BSC, and review two case studies from the hospitality industry. Findings from discussions with hotel general managers also are reported. These managers strongly support the potential usefulness of the BSC in their industry. Then we draw on examples and experiences of organizations that have implemented the BSC to provide a comprehensive discussion of the pitfalls to avoid in BSC development and implementation.     

Relation between social-environmental responsibility and performance in hotel firms

In the present work we first theoretically contextualise the importance of social and environmental responsibility in the firm, at the same time analysing the relation between this variable and firm performance, for which the literature provides contradictory results. In the hotel sector this controversy is particularly relevant, given the intense relations and dependencies that this industry has with its environmental context. Subsequently, we conduct an empirical study centring on the Spanish hotel sector, whose findings point to a strong and positive relation between both variables.     

A Causal Relationship Between the Balanced Scorecard Perspectives

Abstract

An increasing number of hotel organizations endeavor to achieve long-term competitive advantages in the marketplace through the implementation of strategic performance measurement systems. These systems are designed to integrate and monitor strategic objectives throughout the business processes. This paper investigates the causal relationships between the strategic performance measures of hotel organizations, using The Balanced Scorecard (BSC) framework. This comparative study illustrates how hotel organizations plan, improve and monitor their strategic performance targets through the use of comprehensive performance measurement systems. The paper also recommends specific approaches for the implementation of the BSC for hotel organizations.     

Human resource managers’ perceptions of the applications and merit of the balanced scorecard in hotels

The extent to which performance measures that align with the “learning and growth” dimension of the balanced scorecard (BSC) are applied in the hotel industry has been examined by conducting interviews with 14 hotel human resource (HR) managers. Minimal appreciation of the BSC concept was in evidence. When an explanation of the BSC framework was provided, the interviewees unanimously held the view that the term “learning and growth” did not adequately encompass the HR oriented performance measures that they seek to apply. Further, it was found that most hotels were using a single measure of employee satisfaction to represent “learning and growth”, which does not enable examination of the five separate dimensions of “learning and growth” represented in the BSC model. These findings suggest a significant schism between BSC theory and the application of HR oriented measures in the hotel industry.     

Measuring hotel performance: Using a balanced scorecard perspectives’ approach

This paper provides an examination of hotel performance research published in the seven leading hospitality and tourism journals from 1992 to 2011, through the lens of the balanced scorecard (BSC). The review seeks to answer three questions. What BSC perspectives are included in hotel performance research published in major hospitality and tourism journals? What are the trends and implications for future hotel performance research? What are the main geographical areas of publication outputs?Eleven hypotheses were tested using a database of 138 articles that fully met the key word selection criteria of hotel, BSC and performance. The results suggest hotel performance attracts widespread attention from hospitality scholars, but significant gaps remain. Researchers have recognised the benefits of including financial and non-financial indicators. Yet, more research is required in this area to offer hotel organisations better approaches to the management of their performance. We conclude by identifying three research gaps.     

不保与盈利：环境管理对酒店绩效的影响

环境管理对酒店绩效的影响越来越受到人们的关注。国外学者使用了不同的方法来研究其关系,但至今没有一个明确的定论。以“波特假说”为代表的学者认为,环境管理所带来的效益可以弥补环境管理所需的费用,并让酒店产品产生差异化,增加新的竞争力。然而,一些学者却认为,对环境管理的投入会减少酒店的利益和酒店的竞争力。因为其所节约的成本不足以弥补所要付出的费用。为了对这两种观点在实践中的表现进行验证,该文通过对广州高星级酒店的调查,获取第一手数据,借SPSS统计软件的相关功能,确定酒店环境管理对其绩效的影响表现。结果显示,酒店环境管理的投入越多,其对绩效的积极影响越明显。同时,酒店环境管理中的几个变量对酒店绩效存在着不同程度的影响,可得到酒店环境管理对其绩效产生影响的回归方程。最后,文章提出了一些建议及研究展望。     

Destination characteristics that drive hotel performance: A state-of-the-art global analysis

The increased market saturation and competition in both domestic and international tourism destinations have renewed interest among hotel operators in identifying the key drivers of hotel performance. This paper presents a comprehensive analysis of the determinants of hotel performance and their relative importance across multiple tourist destinations. We employ a two-step estimation method to identify key determinants of hotel performance, using a rich sample of international hotels. Our empirical analyses show that the main drivers of hotel performance are the quality of the educational system, government support, disposable income, and number of international arrivals within a tourism destination. Results indicate that the most important barriers to hotel performance are the competition among accommodation providers, tax rate and fuel price. We argue for the need for hotel providers to develop strategies that take cognisance of the key drivers and barriers to enhancing hotel performance in an ever-changing global tourism sector.     

Economies of Scale Could Be Key to Profitability

Abstract

The growth of China's tourism hotel industry has been accompanied by declining profitability. Using cross-province tourism hotels data of 2000, this study attempts to empirically quantify the impact of operation scale on hotel performance. Controlling for the effect of overcapacity, this study found a significant and positive association between operation scale and profitability. The findings suggest that to improve performance, the Chinese tourism hotel industry needs not only to reduce the overcapacity but also reverse the property-downsizing trend and pursue economies of scale.     

Strategic groups in the hospitality industry: Intergroup and intragroup performance differences in Alicante, Spain

The hotel sector is currently immersed in a very uncertain, highly competitive environment, due to which it needs information for the correct management of its establishments. This information can be obtained from the classification of hotels in strategic groups. The present empirical research presents strategic groups in the hospitality industry as a useful tool for the planning and implementation of strategies by hotels that helps to determine their competitive strategies and advantages. This research paper additionally shows how the levels of performance between the hotels belonging to each group can be evaluated from strategic groups. In this study, the tool is applied to the hotel sector of the Spanish province of Alicante, a very important geographical area in the context of international tourism. The dimensions resource commitment and tourist activity scope have been used to define the strategic groups.     

The effects of Airbnb on hotel performance: Evidence from cities beyond the United States

Although Airbnb's impact on hotels has been quantified for major hotel markets in the United States, these effects have not been quantified in international hotel markets. Accordingly, the purpose of this study is to examine the effects of Airbnb listings on key hotel performance metrics in an international context. In particular, we examine the effects of Airbnb listings on hotel revenue per available room (RevPAR), average daily rate (ADR), and occupancy rate (OCC) in major international hotel markets, namely London, Paris, Sydney and Tokyo. The results show that Airbnb listings in these major cities have been increasing more than 100% year over year and that the effect of Airbnb on hotel RevPAR and OCC is negative and statistically significant. In particular, a 1% increase in Airbnb listings decreases hotel RevPAR by between 0.016% and 0.031% in these hotel markets. The implications of these findings for destinations and hoteliers are discussed.     

Towards an understanding of total service quality in hotels

The importance of service quality for business performance has been recognized in the literature through the direct effect on customer satisfaction and the indirect effect on customer loyalty. The importance was recognized by Parasuraman et al. [1985. A conceptual model of service quality and its implications for future research. Journal of Marketing 49(4), 41–51] in the development of SERVQUAL, a measure of perceived service quality across industries. Although the importance of service quality and service quality measurement has been recognized, there has been limited research that has addressed the structure and antecedents of the concept for the hotel industry.This research addresses the antecedents and structure of service quality in the context of the luxury and first class hotel sectors. The data are analysed using exploratory and confirmatory factor analysis approaches and a structural model is used to test the structure of service quality.The paper clarifies the dimensions and structure of service quality in the hotel industry. The clarification of the dimensions is important for managers in the hotel industry as it identifies the bundles of service attributes consumers find important. The clarification of the structure is also important as it confirms, in a hotel context, that customers see service quality in its entirety as a second order dimension.     

Hotel property performance: The role of strategic management accounting

In the current study, we contend that to enhance their competitiveness and performance, hotel properties need to develop and implement internal policies and procedures such as strategic management accounting that are consistent with their business strategies and account for changing competitive demands. We employ a sample composed of 80 hotel properties to investigate the key precursor of hotel property strategic management accounting use and its impact on hotel property customer and financial performance. The results highlight that market orientation business strategy is a key determinant of hotel property strategic management accounting use and illuminate the mediating influence of hotel property strategic management accounting use and hotel property customer performance on the relationship between hotel property market orientation business strategy use and hotel property financial performance. Recommendations are provided for both researchers and hotel managers concerning their future study of, or use of, strategic management accounting.     

Resort hotel service performance (RESERVE) – an instrument to measure tourists’ perceived service performance of resort hotels

Based upon a rigorous psychometric process of scale development through preliminary qualitative studies and a subsequent survey in the resort hotel setting, the authors propose the RESERVE scale as a comprehensive instrument for assessing resort hotel service performance. The proposed scale conceptualizes resort hotel service performance as a second-order, three-dimensional construct that assesses tourists' perceptions of setting, audience, and actors. The data supports the dimensional structure of RESERVE, providing empirical evidence for the scale's validity. The paper concludes with a discussion of implications and future research directions.     

Social responsibility and total quality in the hospitality industry: does gender matter?

This empirical study examines the role of gender diversity in top management teams (TMTs) and their impact on corporate social responsibility (CSR), which is an underexplored topic within the hotel sector. Based on stakeholder theory, we argue that the relationship between gender diversity and hotel performance is indirect and mediated by CSR. Our study also analyses how the implementation of total quality management (TQM) and CSR influences hotel stakeholder results, and hence business performance. Using a sample of Spanish hotels, we provide evidence that gender diversity in TMTs increases the level of implementation of CSR within the hotel industry. The results show that the impact of gender diversity on hotel performance is mediated by CSR. The findings also suggest that the adoption of TQM and CSR management philosophies improves the capacity of hotels to benefit their stakeholders, and that this improvement has a positive effect on hotel performance.     

Hotel Guest Satisfaction and Brand Performance

ABSTRACT

The value and significance of guest satisfaction, brand management, and franchising in the hotel industry have been well documented and researched as independent topics. While previous research has suggested that franchising has an overall negative effect on hotel quality, it has rarely investigated the important links between hotel brand performance and guest satisfaction, and the role of brand franchising strategy in the relationship between hotel brand performance and guest satisfaction. This study examines the relationships among guest satisfaction, revenue performance and growth, and franchising strategy at the hotel brand level. Results indicate that guest satisfaction is a key to brand growth, while the positive effect of guest satisfaction on brand revenue performance is moderated by the extent of franchising within each brand.     

The impact of regulation and ownership structure on market orientation in the tourism industry in China

The nature of market orientation and its impact on business performance and other related outcomes have been extensively researched in a range of service contexts including tourism. In contrast, our understanding of the factors that influence market orientation is still limited. This paper reports on a study that contributes to our understanding of the determinants of market orientation within the tourism sector by focusing specifically on the role played by two strategically important variables, namely government regulation and ownership structure. The study analyses two national samples of hotels and travel services in the rapidly growing tourism industry in China. The hotel sector has been open to foreign investment for two decades and has a diversified ownership structure, whereas the travel services sector has been dominated by government owned firms and relatively closed to foreign investment. The results of the survey suggest that of the two new antecedents, only government regulation has a significant role to play in driving market orientation. Internally, access to appropriate managerial and marketing capabilities was identified as a significant predictor of the development of market orientation.     

Environmental awareness and initiatives in the Swedish and Polish hotel industries—survey results

Despite its importance, environmental stewardship is not always the top priority in the hotel industry in Europe. This study investigates the influence of the geo-political, economic and socio-cultural context of a country on the environmental attitudes and pro-ecological initiatives incorporated in this sector. To illustrate the differences, hotels in Sweden and Poland were targeted and a total of 349 hoteliers participated in an e-mail-based survey. The study reveals that hotel operators generally recognize the need for environmental protection and are involved in a number of activities. The economic situation and pro-environmental efforts initiated by the government were found to have an impact on certain aspects of hoteliers’ attitudes and actions. The survey has further indicated the two major directions that need to be followed when introducing environmental sustainability into the hotel industry. The first involves incorporating responsible technical and behavioural practices in the sector. The second highlights the necessity of initiating greater demand for “green” practices from the customers.     

Market diversification and financial performance and stability: A study of hotel companies

The primary objective of this study was to investigate the effect of a diversification strategy by hotel companies on corporate financial performance and stability. Using 36 publicly traded hotel companies, this study analyzed the differences in financial performance and stability between market-diversified and undiversified hotel companies. Accounting measures, market measure, and risk-adjusted performance measure were employed to gauge financial performance. The results of this study indicated that diversification strategy does not provide profit growth, but diversification partly improves the stability of performance. This study supported the nature of the trade-off between financial performance and stability in the company diversification, and also implied that the market diversification strategy by hotel companies does not function as a means to improve financial performance.     

An examination of the links between corporate social responsibility (CSR) and its internal consequences

The purpose of this study is to examine the links between Corporate Social Responsibility (CSR) and its internal consequencesusing the hotel employees' CSR perception, Quality of Working Life (QWL), affective commitment, organizational citizenship behavior (OCB), and job performance. Although CSR has been widely studied from the perspective of employees, no previous study has related it to QWL in the field of hospitality research. Applying relevant theories, the study empirically substantiates the connection between the constructs and provides theoretical and practical implications. The results, drawn from data collected from hotel employees in upscale hotels in South Korea, show that hotel employees' CSR perception of the firm positively influences their QWL, affective commitment, and organizational citizenship behavior, which, in turn, enhance their job performance.     

Effects of Booking.com's new scoring system

Booking.com provides a massive database compiling millions of reviews about thousands of accommodations worldwide that hotel managers and academics have extensively consulted during the past decade. In 2019–2020, however, the famous website changed several aspects of its methods of calculating hotel scores, the most important one being a change from its peculiar 2.5–10 scale to a more conventional 1–10 scale. Such novelties may cause changes in hotel scores that do not reflect changes, if any, in customer satisfaction. This article offers an initial investigation into the nature and consequences of those changes that professionals and academics should consider to avoid errors in future studies that involve using Booking. com's database.