Strategic alignment leverage between hotels and companies: The buyer–supplier relationship perspective

Hoteliers are seeking ways to increase their revenue by working with travel agencies to costeffectively expand sales. In addition, they are simultaneously turning to hotel bookings to bolster their revenue in the face of decreasing airline commissions. The research objectives of the present study included determining how the strategic decisions of cooperating contract companies and travel agencies of the hotels are influenced by the service vision and standard service communication. Data were obtained via a mailed questionnaire survey from a sample of travel agencies and contract companies in Taiwan. Of the 300 questionnaires sent, 201 responses (67%) were received, yielding a usable response of 192 fully completed questionnaires. The use of the structural equation model to test the theoretical model of collaboration relationship could lead to a greater understanding of the nature and determinants of choice and decisions related to cooperation between firms. From the perspective of buyer–supplier relationships, hotels are seeking ways to develop long-term relationships and to increase their revenue by collaborating with travel agencies and contract companies, and through the firm's service vision and service-standard communication, hotels can develop services to align with their needs. Moreover, service trends affecting hoteliers may include adapting customer demands, increased expectations of value and quality, and an increasingly highly competitive environment. Hotels would therefore need to be able to make these changes in order to continue this alignment relationship, with substitution possibly being an option for these firms when hotels cannot do this. That is, hotels generally face fierce competition, and to be able to compete they must make continuous efforts to maintain product and service quality; they also need to be innovative to be the leading performers.     

Perceptual mapping of attributes and preferences: an empirical examination of hotel F&B products in Korea

A hotel's Food and Beverage (F&B) product is increasingly recognized as an essential component of strategic planning in the hotel business. However, despite the importance of hotel F&Bs, relatively little empirical research has been undertaken to determine major attributes of F&Bs and investigate customers' preferences for them. This study examines the attributes and customer preferences of hotel F&Bs for eleven super deluxe hotels in Korea. Factor analysis is first employed to identify the underlying dimensions of F&B attributes which determine how customers perceive F&B performance. A second technique, multidimensional scaling, is used to reveal customers' perceptions of how a given hotel's F&B differs from the competitors' and preferences of when that hotel's F&B is evaluated better than the others. A meaningful interpretation is delineated from the perceptual map of major F&B attributes and ideal points of customers. The findings suggest that for the ultimate success of F&B management a hotel's F&B manager must make the effective connection between the attributes of hotel F&B and ideal points perceived by customers in various dining-out situations.     

Management fees and hotel performance in the U.S.

A management company takes care of the day-to-day operations of a hotel and thus has a great amount of influence on the hotel's financial performance. Adopting models from O’Neill, Hanson, and Matilla (2008) and Hua, Morosan, and DeFranco (2015), a set of empirical models, with same-store data from 1471 hotels from 2011 through 2017, was used to test the impact of the total management fee and its subset of the base management fee and the incentive management fee on the hotels' rooms revenue and gross operating profit while controlling for potential confounding factors including chain scale and location.This is the first paper to empirically validate the value of a management contract for both the owners and the management company, including the positive and significant effects that base management and incentive management fees have on hotels’ room revenue and gross operating profit.     

The effects of the minimum wage on the operating performance of hotels in the U.S.

The economic effects of the minimum wage have been the focus of ongoing contradictory debates among policymakers and researchers. This study finds a positive effect of the minimum wage on the operating profitability of hotels in the U.S. However, the pricing practices of full-service hotels are dissimilar to those of limited-service hotels. Although the burden of the minimum wage is substantial, full-service hotels can spread the weight onto other departments, while limited-service hotels mainly rely on rooms revenue. Thus, the effects of the minimum wage on room price (average daily rate; ADR) are more substantial at limited-service hotels than at full-service hotels even though operating profitability (gross operating profit per available room; GOPPAR) is not substantially different between them. Eventually, increased minimum wage can play a beneficial role not only for the hotel industry but also for local society, since minimum wage employees take home a larger salary.     

How do hotels adapt their pricing strategies to macroeconomic factors?

The hospitality industry is naturally highly sensitive to subtle changes in the external environment, and its performance is affected by various external factors. Therefore, hoteliers should carefully monitor the various macroeconomic indicators affecting the market, when making important strategic management decisions. In particular, hotels’ pricing decisions are important because they play a crucial role in the determination of hotel revenue and in the process of profit maximization. In this paper we classify hotels by business model (i.e., chain management, franchise and independent) and analyze how these different types of hotels in Switzerland adapt their pricing strategies to macroeconomic factors (i.e., exchange rate, room supply and market demand). We find that hotels adopting different business models react differently to the same macro shock. Implications of our findings and future research directions are discussed.     

The hotel sector in Tanzania: A comparison of operating performance

A survey of international hotel accounts for 1976 in Tanzania shows considerable revenue and cost differences between town and holiday hotels. These differences are confirmed by comparisons of equivalent occupancy levels which show that higher revenue and profit are associated with higher operating costs. Town hotels generate more employment and value added, than holiday hotels, and as much foreign exchange, but at a greater use per unit of materials and services. There are also significant differences between state sector and non-state sector hotels. Should hotel-investment policy concentrate more on optimizing returns from town-hotel investments, rather than seeking to maximize returns from more risky holiday-hotel investments? These results should be of interest to tourism planners in several African countries.     

How does hotel pricing influence guest satisfaction by the moderating influence of room occupancy?

Whether the product price increases customer satisfaction or rather decreases it has been actively debated for some time. A non-linear correlation between the hotel price and guest satisfaction, explored empirically in this paper, implies that the two phenomena are actually not inconsistent with one another At the low price level, room price and food and beverage (F&B) price leads to an increase in guest satisfaction whereas the high price level could have just the opposite effect The results suggests an inverse U shaped relationship between price level and guest satisfaction On the other hand, the room price guest satisfaction link could be affected by the moderating influence of room occupancy to be a U shaped function This paper reports results from a study on the influence of hotel pricing on guest satisfaction in the context of room products and F&B products in Taiwanese international tourist satisfaction It is found that the hotel pricing has a quadratic effect on guest satisfaction     

The effects of service climate and internal service quality on frontline hotel employees’ service-oriented behaviors

When employees in a service profit chain receive quality internal services, they provide quality services to external customers, but extant research does not address what connects internal and external services. This study espouses service climate as an integral part of the service profit chain by exploring its role in linking internal service management and external service performance, and the boundary conditions in which it operates. Data collected from 538 employees of 81 department managers in 24 Chinese hotels were examined using hierarchical linear modeling. Results suggest that managers’ commitment to service quality affects service climate through empowering leadership, service climate links empowering leadership and employee service-oriented behaviors, and external departments’ internal service quality strengthens the positive effect of service climate on service-oriented behaviors. This study advances the literature by integrating service climate and internal service quality into the service profit chain, helping hospitality managers understand how to foster service-oriented behaviors.     

Passengers’ perceptions of airline lounges: Importance of attributes that determine usage and service quality measurement

The current exploratory study investigates passengers’ perceptions of airline lounges by measuring the importance of attributes that determine usage and service quality in those facilities. Data collection was the result of a survey of airline lounge users at the Incheon International Airport, South Korea. The attributes that determine airline lounge usage categorize as: image and accessibility, atmosphere, food and beverage (F&B) service, and facility’s dimensions. Atmosphere and F&B service prove to be the most important dimensions affecting passengers’ use of the airline lounge. Service quality variables determining passengers’ perceptions of the airline lounge categorize as: atmosphere, F&B service, employee service, and facility’s dimensions. Among the service quality dimensions, F&B service was the strongest predictor of overall satisfaction and lounge revisit intention. Furthermore, the study considers the relationship of overall satisfaction and lounge revisit intention according to airline selection.     

Making innovation happen through building social capital and scanning environment

Both new service development and existing service improvement are critical tools for hotels to gain competitive advantages, but pursuing new services while simultaneously improving existing services is difficult for hotel managers. The success of highly proactive hotel managers has been credited to their ability to change the environment effectively, and such managers may be able to lead hotels to resolve the trade-off dilemma and deliver better services. To elucidate the contributions of proactive managers in making innovation happen, this study explored two key activities that hotels may undertake when prompted by the proactive managers, namely, environmental scanning and social capital building. The process involved in developing new services and improving current services was examined using empirical data collected from the general managers of 226 hotels in Taiwan. The results confirm that environmental scanning and social capital fully mediate the relationship between proactive personality of managers and capacity for service innovation as well as service improvement of hotels, indicating that hotel managers with a proactive personality are helpful at implementing innovation.     

Factors influencing food and beverage employees’ career success: A contextual perspective

This study explored the important influential factors of Food and Beverage employees’ career success in international tourist hotels and identified relationships among these factors from contextual perspectives. Data was obtained from a sample of 481 respondents drawn from 22 international tourist hotels in Taiwan and analyzed with the AMOS program. The structural equation modeling results showed that multiple contexts influenced the career success of F&B employees in international tourist hotels, such as the Micro-System, the Meso-System, including organizational psychological factors, the Exo-System, and the Macro System contexts. In particular, the Exo-System context was the most direct influential factor for career success.     

The other side of technology adoption: Examining the relationships between e-commerce expenses and hotel performance

As information technology (IT) increasingly permeates all aspects of the contemporary society, hotels have spent millions of dollars to deploy electronic commerce (e-commerce) tools and develop appropriate strategies to attract and retain guests. Yet, while the literature reflects the drivers of adopting certain e-commerce tools, it does not provide a conclusive answer regarding the effectiveness of e-commerce expenditures. Specifically, it is unclear whether such expenditures affect performance in terms of revenue and gross operating profit, or whether such effects are consistent over time and across different chain scales. Based on financial data reported by a sample of 275 hotels from 2007 through 2012, this study found that e-commerce expenses significantly and positively impacted rooms revenue for all sample years, except in 2007. When subgroup analyses were performed by chain scale, it was found that e-commerce expenses significantly contributed to the gross operating profit for midscale and upscale hotels but not for the luxury, upper upscale, and the upper midscale categories.     

To survive or to thrive? China’s luxury hotel restaurants entering O2O food delivery platforms amid the COVID-19 crisis

COVID-19 presents luxury hotels with an unenviable task of maneuvering to secure survival. One of the contingency measures of China’s five-star hotels is to salvage revenues by entering online-to-offline (O2O) food delivery platforms. However, both opportunities and risks will ensue. Study 1 has content analyzed customer reviews on the largest O2O food delivery platform in China to probe the key factors of concern. The results show that taste, freshness, and brand credibility remain salient, as in dine-in experiences, while packaging and delivery quality emerge as a result of the integration of the O2O platform, and hygiene due to the COVID-19 pandemic. Interestingly, interaction quality between restaurant staff and customers still plays significant roles with the online channel. Study 2 has further deepened the understanding of luxury restaurants’ O2O services through semi-structured interviews with F&B professionals. The results have paved the way for hotel operators to employ tactics on O2O platforms.     

A stochastic cost efficiency analysis of international tourist hotels in Taiwan

The one-stage stochastic frontier approach (SFA) is used in this study to simultaneously estimate cost efficiency scores and factors of cost inefficiency for 66 international tourist hotels in Taiwan during 1997–2006. An SFA model with three outputs and three inputs is defined. The three outputs are room revenue, food and beverage revenue, and other operation revenue while the three inputs are price of labor, price of other operation, and price of food and beverage. This model also takes into account five environmental variables, including dummy variable of the hotels located in non-metropolitan area, dummy variable of chain hotels, the number of tourist guides, the minimum distance from each hotel to Taoyuan international airport and the minimum distance from each hotel to Kaohsiung international airport. Empirical results show that international tourist hotels in Taiwan are on average operating at 91.15% cost efficiency. All nominal variables are transformed into real variables in 1997 prices by GDP deflators. Chain systems, tourist guides, and international transportation can significantly improve the cost efficiency of international tourist hotels in Taiwan.     

Availability management of hotel rooms under cooperation with online travel agencies

Hotels are required to pay high commission fees when cooperating with online travel agencies (OTAs) to manage online marketing channels. Thus, to maximize their revenues, hotels protect their income through their own (traditional) marketing channels and save on considerable commissions by optimizing room availability for their cooperative OTAs. The present paper proposes a method to manage such availability in the context of a hotel cooperating with an OTA on room booking service. Customers can make reservations directly through the distribution channel of the hotel or indirectly through the OTA, if applicable, during the selling period. The hotel then forecasts room demand base on distribution information after receiving enough room bookings and optimizes room availability with respect to its maximum revenue by determining whether on-hand rooms are available for the OTA. Results indicate when hotel rooms become unavailable for the cooperative OTA. Numerical studies reveal that this method is conducive to the improvement of hotel revenue.     

The managed heart: The structural analysis of the stressor–strain relationship and customer orientation among emotional labor workers in Korean hotels

This study examined the structural relationships among three different dimensions of workplace stressors (customer-related stressor, CRS; work environment-related stressor, WERS; job-related stressor, JRS), negative affectivity (NA), emotional exhaustion (EE), and the negative effect of that strain on customer orientation (CO) in the context of the emotional labor (EL) of frontline employees in the hotel industry. Data were collected from self-administrated questionnaires distributed among frontline employees in room and F&B divisions in Korean deluxe tourist hotels, where EL is intense. The results of the structural equation analysis indicated a positive association between all three workplace stressors and NA and between NA and EE. There was also a relationship in the opposite direction with EE and CO, as hypothesized. The moderating effect of organizational level on the workplace stressors–NA relationships was also confirmed. In addition, in an alternative model, we found that NA partially mediates the relationship between JRS and EE; whereas, NA fully mediates the relationships between CRS/WERS and EE. Practical implications are discussed in detail and limitations of the study and future research directions are also suggested.     

Tipping: The case of hotel turndown service

Turndown services are experiential and value-added practices to make guests feel cared-for in luxury hotels. Previous research has found that when receiving an additional or exceptional service, people may feel obligated to respond with a reciprocal behavior, such as providing tips. This study aims to investigate the effects of hotel turndown services on tips given to hotel room attendants. The results revealed that the room attendants received more tips for providing turndown service, both in terms of the frequency of receiving tips and the amount of those tips. The findings suggest that without the existence of a tipping norm in hotel guest rooms, the relationship between service and tip seems much clearer.     

Business Traveler Satisfaction with Hotel Service Encounters

Abstract

This study examines customer satisfaction with a series of hotel services. Five service encounters were examined in a sample of business travelers (n = 140) who had stayed in Hong Kong hotels. Overall satisfaction and repurchase intention were differentially impacted by the various service encounters. Business center encounters had the greatest effect on business traveler satisfaction, followed by check-out and check-in encounters. Interestingly, room and restaurant encounters had the least impact on satisfaction. The delivery of good core services alone cannot guarantee customer satisfaction. Hotels must also pay attention to peripheral service delivery, because these encounters help to shape the customer's overall level of satisfaction and repurchase intention.     

Designing lifestyle hotels

Art creates irreplaceable added value and serves as a source for satisfying the spiritual needs of hotel customers. To provide customers with memorable services, hotels not only need to continue improving their services (exploit), but also have to design artistic new services (explore). Thus, customer willingness to return to the hotel could be increased, enhancing customer loyalty. However, few hotels simultaneously implement these two types of trade-off activities (i.e., exploitation and exploration). According to the ambidexterity perspective, this study applied a case study approach to investigate the process through which hotel operators design lifestyle hotels. Moreover, this study involved constructing an operational framework that adopted art as the basis for differentiation. The research results revealed that in introducing art concepts into a hotel service system, hotels operators must attach a high level of importance to several key activities, including hiring a full-time executive artistic manager in the top management team to engage in innovation, integrating local culture and the natural environment into the design of an artistic servicescape, catering to customers’ needs, and adopting high-performance human resource practices. These activities enable hotels to enhance their service capability in simultaneously implementing the two mutual trade-off activities, specifically designing new artistic services (explorative innovation) and continually improving their services (exploitative innovation).     

Do competitive strategy effects vary across hotel industry cycles?

We use metropolitan-level panel data of international tourist hotels (ITHs) in Taiwan to examine whether competitive pricing, quality and advertising effects differ across two business cycle phases of the Taiwanese hotel industry. Following Chen et al.’s (2014. Tourism Econ. 20 (3), 655) conclusion, the Taiwanese hotel industry over the period 2000 to 2010 is divided into two regimes: a high-growth regime (2007–2010) and a low-growth regime (2000–2002 and 2004–2006). We adopt the approach proposed by Enz et al. (2009. Cornell Hospitality Q. 50 (3), 325) on competitive strategies by computing the difference between the value of each hotel and its competitive set on merits of average daily rate, service quality and advertising expenditure. The empirical results indicate that: (1) Competitive pricing strategy has a positive influence on ITHs’ room revenue per available room (RevPar) in the high-growth regime (HGR). (2) Competitive pricing and service quality strategies are positively associated with RevPar in the low-growth regime (LGR). Moreover, service quality improvements relative to the competitive set lead to an increase in occupancy for ITHs in the LGR.