Hospitality Operations Management

This assignment discusses the nature of hospitality product and service areas, influences affecting patterns of demand, customer profiles and their expectations, and factors affecting average spending power in hospitality businesses. It also covers the stages in product and service development, features towards customers' perception, opportunities and constraints in product and service development, different merchandising opportunities, different methods of pricing, and factors affecting revenue generation and profitability in hospitality operations.

HOSPITALITY OPERATIONS
MANAGEMENT
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TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Nature of hospitality product and service areas.....................................................................1
1.2 Different influences affecting patterns of demand within hospitality operations..................2
1.3 Compare customer profiles and their differing expectations and requirements....................2
1.4 Analyze factors affecting average spending power (ASP) in hospitality businesses............3
AC2.1 Stages in product and service development applied within hospitality operation...........3
AC2.2 Features towards customers’ perception of products and services..................................4
AC2.3 Opportunities and constraints affecting product and service development.....................5
AC2.4 Different merchandising opportunities for hospitality products and services.................5
TASK 2............................................................................................................................................6
AC3.1 Different methods of pricing............................................................................................6
AC3.2 Factors affecting revenue generation and profitability in hospitality operations.............6
TASK 3............................................................................................................................................7
AC4.1 Performance measures and appraisal techniques of hospitality operations.....................7
AC4.2 Usefulness and limitations of various quantitative and qualitative appraisal techniques
and their application....................................................................................................................8
AC4.3 Approaches to business analysis, evaluation and planning..............................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11
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INTRODUCTION
Operations management is the most important component of the hospitality sector. It can
be considered as the pillars of the hotel industry (Operation Mangement, 2018). In this regard,
Hotel Hilton will be taken into consideration to understand the various aspects of operations like
division of rooms, foods and beverages and many more. This assignment will describe about the
nature with different factors affecting the services, comparing customers’ profiles and key stages
in the product development. It will also include about the overall assessment of the hospitality
environment of Hotel Hilton in context of targeting audience and achieving profits and revenues
in effective manner.
Overview of Hotel Hilton: It is one of the finest groups of hotels and resorts that have been
operating at global level since 1919. This was founded by Conrad Hilton and is operational at all
the major locations of the world with more than five hundred properties and large workforce to
maintain its stark reputation (Brotherton, 2012).
TASK 1
1.1 Nature of hospitality product and service areas
Foods and Beverages have been considered here as one of the vital operations of Hotel
Hilton.
Perishable Element- It is definitely perishable and easily consumable. However, it is the
attractive entity to target the desired set of people.
Tangible/Intangible Element- This comes under both tangible and intangible as well. Foods and
beverages have a physical and concrete presence which can be touched, smell and feel in proper
mode(Kessman and McCauley, 2011). Along with this, it has intangible traits as sometimes the
taste, look and overall presentation is indescribable and ethereal.
Inseparable Element- This put light on the quality assurance factor and involves empathetic
emotion with reliable validation leading to generate profits for this hotel.
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Service Areas- It consists of division of rooms for providing comfort and security to guests with
variety of foods and beverages with provision of banqueting hall to organise functions, events
and conference rooms to conduct formal meetings, seminars etc.
1.2 Different influences affecting patterns of demand within hospitality operations
Hotel business does get affected from many factors as the following that influence its
overall profitability and revenue generation. There are wide pools of influential components that
accelerate the businesses at Hotel Hilton to flourish.
Seasonality Factor- This depends on the prominent four seasons such as summers, spring etc. or
the number of festivals or any personal events like weddings, anniversaries, birthdays that
impacts the demand of the services provided by this Hotel.
Time of Day/Week with Healthy Living Factor- This puts emphasis on the working pattern of
people and their families’ schedule. For instance, during weekends, people tend to go out and eat
and during weekdays, until any occasion is there, they avoid any outings.
Cultural Factor- This can be one of the effective elements to attract population as hotel ambience
with food preferences on the basis of regionalism or celebrating any important date/historic event
can attract potential customers’ to visit affecting their sales volume.
Ethnic Influences Factor- Work ethics can affect any business, thus this hotel’s stout providers
can impress the people making them come again to try their other services leading to profits.
Economic Factor- It is the driving force to plan any vacation or organizing event by people that
has direct influence on the demand pattern for their services.
1.3 Compare customer profiles and their differing expectations and requirements
Hotel Hilton has wide exponential expectations from their customers’ outlook and
provides many services.
Spending Power- It is one of the oldest names and has a huge spending power as its operations
are expanded in more than 85 countries in almost all leading countries worldwide.
Type of Hospitality Business- It deals in mainly hotels and resorts with complete services. This
in terms of accommodation, entertainment, organizing, restaurants and more on full time basis.
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Menu/Accommodation Range- It has a wider reach that has impressed its clients, guests in
profound fashion.
Pricing Considerations- This is for all types of customers like high end clients, travelers,
families, conducting meetings, seminars for larger or small companies.
Expectations and Requirements- It’s a 99 years old group of hotels and resorts, clearly
demonstrating the desired expectations from customers’ viewpoints and has been sustaining the
competition so efficiently (Brown and Bessant, 2013).
Meal Experience- This hotel is known for its impeccable taste and variety of cuisines with the
suitability of the geographical location it is operating.
1.4 Analyze factors affecting average spending power (ASP) in hospitality businesses
ASP is defined as the purchasing power parity in terms of the currency’s value to enjoy
services at optimum level.
Size of Income- This factor is directly proportional to the value of spending power of the
customers.
Status- It depends on the situational status of an individual in the eyes of the society or
community. This is mainly in context of the economic status and the ability to spend money to
enjoy services provided by Hilton’s management.
Social/Cultural Influences- It is directly connected with the influential power of customers in
their social circle which promotes celebration of any occasion/festival/event on large scale and
making them use the hotel’s services.
Economic Situation- It depends on the earnings capability of guests and clients of Hotel Hilton
(Gunasekaran and Ngai, 2012). Thus, they offer variable costing strategies to satisfy all their
expectations with respect to costing of their services.
AC2.1 Stages in product and service development applied within hospitality operation
Product and service development is an on-going process which includes a detailed plan to
identify, implement and analyze all the important stages required for the completion in
appropriate manner.
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Idea Generation: It is the foremost step that laid the foundation for any development procedure to
meet expectations of Hilton’s investors, shareholders, customers and entire workforce.
Idea Screening: This leads to proper segregation of various components like deadlines,
budgeting, people requirements, materials needed and whatsoever.
Concept Development and Testing: This is imperative to understand the implications attached
with that specific product or service development. It involves the implementation part after
testing it for couple of times to check its validation points and authentic results.
Business Analysis: This includes demand, pattern of customers’ needs and requirements, their
perspective towards alternations, current trends of marketplaces.
Product Development: This is long process but once it is finished, it reaps benefits in the best
possible manner including packaging, storage and reaching the shelves.
Test Marketing: This puts insights on the analysis and segmentation of product or service. It also
involves the customers’ preferences, their shareholders targets and owns goals that is totally
depended on profitability with enhanced productivity.
Commercialization and Launch: This is the last step yet not the confirmatory signal for the
success of that service or product (Mok, Sparks and Kadampully, 2013). However, the launch
must be done vigorously using marketing gimmicks and promotional tools to attract potential
audience.
AC2.2 Features towards customers’ perception of products and services
Hotel Hilton has occupied a sparkling positing in the marketplaces due to the following
features:
Brand Image- This can provide them a loyal customer base which will come again and revisit
their services.
Nutrition and Dietary Requirement- It includes the variety of cuisines with many healthy and
organic value with nutritive value that enhances Hilton’s slid image amongst its customers’.
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Disabled Access- This has given extra wings to their expanding laurels list by giving special
attention to the specially challenged people and making them feel comfortable at their hotel.
Availability of Resources- Hotel Hilton’s supplementary services are also well established,
especially their small kits provided by the reception and making their customer to revisit.
Style of Service- This includes the etiquette and friendly behavior of Hilton’s staff which time
and again push the forwarding button for customers to willingly access to their services (J.
Harrington and C. Ottenbacher,2011) .
Standardization and Space Utilization- This hotel is popular for its rich architecture and huge
lobby areas, providing ample space in all types of services including TV, mini-fridge, AC and
more.
AC2.3 Opportunities and constraints affecting product and service development
Product and service development is one of the integrated frameworks that put any hotel
globally. This can be done by grabbing opportunities and eliminating the obstacles in a confined
yet feasible manner. Additionally, Hotel Hilton has reputable name and thus do not need
promotion when launching of product or service. Along with, it attracts investors easily thus
leading to clutch the competitive advantages through its market positioning and by giving
services of top notch. On the other hand, this hotel does face any challenges such as medium
class families are still struggling to afford their services and they have limited options in
choosing room divisions. Moreover, they need wide spaces and thus are mostly situated in the
extreme points affecting the locals to visit and enjoy their services.
AC2.4 Different merchandising opportunities for hospitality products and services
Merchandising is defined as that activity which is needed for selling of goods and
services to customers by employing the retailing methodologies. The retailing sector and
hospitality industry goes hand in hand and has an influential impact on the customers’ mind.
Hotel Hilton’s merchandising ranges from laundry like linens, bedding, robes etc. to its visual
merchandising of hotel properties through information technological tools which has been
accelerated due to an upsurge rise of internet. Moreover, this section deals with the consumers’
PPP (Purchasing Power Parity) as their expenditure habits would assist in selling of Hilton’s
customized products and add value to their supplementary side businesses. Along with this, the
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concept behind merchandising in hotel sector has impacted the other establishments dealing ij
the same sector like clothing, cosmetics and more. It has led to a spiraling effect and has resulted
in low usage of their products while visiting this hotel (Kessman and McCauley, 2011)..
Additionally, it is one of the effective techniques used by the sales and marketing department of
Hotel Hilton that has impacted its profits and sales volume in leaps and bounds.
TASK 2
AC3.1 Different methods of pricing
Hotel Hilton has been in this hospitality sector for more than nine decades now and with
advent of open economy and globalization, it has expanded its operations in almost all major
cities with proper arrangement of staff, personnel and employees to fulfill their loyal customers’
expectations in exponential growth. Along with this, they have always put exclusive
concentration on their pricing strategies as it has led to gain a momentum over their competitors.
They use the skimming tactic due to their seasonal demands and make them operate at prices
more than the usual. It has direct effects on their profitability. Whereas during off seasons, they
cut down their prices by applying various discounts, offers to accept the customers’ requests in
smart and appropriate order. Nonetheless, this seasonal demand also affects their handling of
operations and might result in lay-offs during low season and high hiring in times of any grand
event or arrangement of any event (Sisson and Adams, 2013). Another reason is flexible
approachability factor that determine the pricing strategies of this hotel’s administration. Their
regular customers’ get special pricing while new ones also fetch discounted offers to lure them to
come again and use their hotel’s services. Lastly, price discrimination is one of the latest fads
that have provided the subsidized hotels to offer their services and products at reasonable costing
to the locals when comparison has been done with the tourists in order to cover their proximity at
regional level with extension of global image by maximizing their revenues.
AC3.2 Factors affecting revenue generation and profitability in hospitality operations
The following elements have impact on the operations of Hotel Hilton in both positive
and negative aspects.
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Labor Intensity- This is important component that is based on the amount of the used capital and
the number of labors. In regard to the same, it has been followed that Hotel Hilton is more
inclined towards the utilization of capital in the form of consistent investments, renovations and
additional services for attracting consumers’. Henceforth, it is refereed as a labor intensive
industry.
Shelf Life- This is important feature for hospitality industry. It includes the brand image at the
global status and number of customers with their satisfaction level, along with this, their efforts
for developing new service or product support in the maintenance of their value through the
management who is taking its name in the forward direction (The Influence of Customer
Satisfaction towards Positive Word-of-Mouth in Hospitality Industry,2016).
Elasticity of Demand- This is that factor which is totally depended on the pattern of demand
pattern from the customers’ side. It also includes the demand on the pricing and costing of their
services in foods and beverages, bars, recreational activities and more.
Standardization- It leads to the reputation of hotel in the market. This has affected the hygiene
and sanitation measurements for satisfying the guests and clients at optimum level through a
transparent and coherent channel that bridged the gap of understanding through making them
feel like home with ease. Hotel Hilton has been known for its royal look and flawless
maintenance of rooms division, planning of lobby or conducting seminars, conferences etc, with
special emphasis on the food department (Mahadevan, 2015). It has put light on a detailed
analysis and planning of menu by incorporating the ethnicity of local flavors with international
taste to bring innovation that has set their standards among their competition.
TASK 3
AC4.1 Performance measures and appraisal techniques of hospitality operations
Performance Appraisal is refereed as the methodology in which the identification and
assessment of workforce of any organization occurs. It mainly deals with the performance
management of employees’ and gives rewards to them on the basis of the complete evaluation of
their skills, knowledge and etiquette in dealing with clients. Hotel Hilton does the same process
by considering the following elements:
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Quality Management- Here, the main focus is on the development of quality parameters by
following the methods and techniques in appropriate mode.
Speed of Delivery/ Customer Service- This depends on the delivery timings of providing
services to the customers with proper manner.
Developing Qualitative and Quantitative data- In regard to this, it infers the complete
performance of conducting operations of hotel and is dependent on pricing of products,
number of high end customers and tourist, reliability and validation from customers and
more.
Data analysis and evaluation- With respect to this, the collection of data with an evaluation
would assist the hotel staff to understand their requirements beforehand, leaving an
impression and raising their chances of promotion. However, if customer is unsatisfied and
may complain then it would affect them adversely.
External comparison- This is related to the competition and outward elements that may
foster or hinder their image and brand value. This is the benchmark set for comparative
studies with the targeted business.
Net profit- It is that component which determines the overall growth in raise or hike of
employees. If hotel incurred their profits as estimated then it would reap benefits or else few
compromises must be done.
AC4.2 Usefulness and limitations of various quantitative and qualitative appraisal techniques and
their application
Usefulness: These techniques not only assist in motivating their employees to work better and
lead to an amiable and positive work environment. Overall, the productivity at workplace in
increased with a sense of responsibility and accomplishment to fulfill the objectives and goals of
Hotel Hilton. Effective feedback and regular informal meetings or parties can give an
opportunity to connect with each other that later impact the work ethics and team bonding.
Nonetheless, employees’ behavior and treatment towards their colleagues and clients as well,
managing their roles with deadlines etc can be considered while assessing the qualitative aspects.
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Along with this, such qualitative and quantitative techniques affect the entire progression in
multiple effects with high profits and low conflicts and challenges at workplace.
Limitations: Hospitality sector, especially large hotels like Hilton has loopholes too. Their
organizational structure is hierarchical which influence their upper management with great
powers and thus it can lead to partial and biased recommendations and appraisal. This can
hamper the entire workplace environment and has discouraging impact on employees’ working
practices. In addition to this, when the customers’ take undue advantages of their privileges and
harass or abuse the hotel’s staff then it also affect the records of that employees in mishandling
or giving unclear instructions to such clients. Such situations can promote distrust and ambiguity
in the minds of taskforce, resulting in lower levels of productivity and profitability.
AC4.3 Approaches to business analysis, evaluation and planning
Business analysis is defined as the practice of understanding the needs, specifications and
requirements in order to recommend the business owners regarding the analytics and logistics for
smooth running of operations at the organizational context.
Business evaluation is the procedure of set of rules and regulations that are used to measure the
financial part of an organization. This is the estimated value that the market is ready to pay or get
in return of proving service or selling of product.
Business planning is considered as the step by step guide for writing the documentation of a
business and has components like goals, approach abilities, techniques and more in order to
achieve the mission and goals of the organization.
With context of Hotel Hilton, it can be clearly understandable that these three
components have facilitated them in growing their businesses by expanding in many countries
and keeping their core values and regional ethnicities intact by incorporating the strategic
planning with adopted marketing procedures to optimize their resources allocation and enhanced
productivity to gain profits and increased generation of revenues. Along with, they are trying to
bring creativity in their food, room services and lodging facilities through usage of diagatl tools
and use of internet for booking and promoting about their latest discounts and offers. Thus, it did
assist and support invariably to positive direction.
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CONCLUSION
It has been summarized that Hotel Hilton has been in the global competitive market for
the right reasons. It not only provided the best services but also assist their staff and employees
with the best facilities that in return give the best to their clients and guest in effective and
efficient order.
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REFERENCES
Books and Journals
Brotherton, B. ed., 2012. International Hospitality Industry. Routledge.
Brown, S. and Bessant, J., 2013. Strategic operations management. Routledge.
Gunasekaran, A. and Ngai, E.W., 2012. The future of operations management: an outlook and
analysis. International Journal of Production Economics. 135(2). pp.687-701.
J. Harrington, R. and C. Ottenbacher, M., 2011. Strategic management: An analysis of its
representation and focus in recent hospitality research. International Journal of
Contemporary Hospitality Management. 23(4). pp.439-462.
Kessman, M.D. and McCauley, S.P., AMERANTH Inc, 2011. Products and processes for
operations management of casino, leisure and hospitality industry. U.S. Patent
7,878,909.
Kessman, M.D. and McCauley, S.P., AMERANTH Inc, 2011. Products and processes for
operations management of casino, leisure and hospitality industry. U.S. Patent
7,878,909.
Mahadevan, B., 2015. Operations management: Theory and practice. Pearson Education India.
Mok, C., Sparks, B. and Kadampully, J., 2013. Service quality management in hospitality,
tourism, and leisure. Routledge.
Sisson, L.G. and Adams, A.R., 2013. Essential hospitality management competencies: The
importance of soft skills. Journal of Hospitality & Tourism Education. 25(3). pp.131-145.
Online
Operation Mangement, 2018. [Online]. Available through:<
https://www.investopedia.com/terms/o/operations-management.asp>.
The Influence of Customer Satisfaction towards Positive Word-of-Mouth in Hospitality
Industry,2016. [Online]. Available through:< https://papers.ssrn.com/sol3/papers.cfm?
abstract_id=2713613>.
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