Hospitality Operations Management Report

This report analyzes the key aspects of hospitality operations management, using The Berkeley Hotel London as a case study. It covers topics such as the nature of hospitality products and services, factors influencing demand, customer profiles and expectations, pricing strategies, performance measurement techniques, and business analysis approaches. The report provides a comprehensive overview of the challenges and opportunities faced by hospitality businesses in today's competitive environment.

Hospitality Operations
Management

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Nature of Hospitality Product and Service Areas.................................................................1
1.2 Different Influences which Affecting Demand Within Hospitality Operations...................2
1.3 Compare customer profiles and their differing expectations and requirements....................2
1.4 Factors Affecting Average Spending Power (ASP) in hospitality businesses......................3
2.2 Features which contribute towards the customers’ perception of products and services......4
2.3 Opportunities and constraints affecting product and/or service development within a
hospitality environment. .............................................................................................................5
2.4 Different merchandising opportunities for hospitality products and services......................5
TASK 2............................................................................................................................................6
3.1 Various methods of pricing taking account other into consideration of pricing...................6
3.2 Factors that have an impact on profitability and revenue generation in hospitality
operations....................................................................................................................................7
TASK 3............................................................................................................................................7
4.1 Range of Performance Measures and Appraisal Techniques to Individual Aspects of
Hospitality Operations................................................................................................................7
4.3 Approaches to business analysis, evaluation and planning appropriate to hospitality
operations....................................................................................................................................8
4.2 Usefulness and Limitations of Various Quantitative and Qualitative Appraisal Techniques
.....................................................................................................................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Operations management in hospitality and tourism sector refers to the activities perform
in various areas of hotel sector. Hospitality refers to the various positions that deals with visitors
and this mainly consists restaurants, catering, casinos, resorts hotels and many more. Concept of
hospitality cover the relationship between guest and a hotel (Raj and Griffin, 2015). This sector
create wealth for shareholders by offer quality services to the customers. The Berkeley hotel
located in London is taken in this report for study. Nature of various products and services of
hospitality and the influences which affect demand pattern of hospitality services is all given in
this report. Further, elements which have a impact on spending power of customers with
different stages involve in development of products and services is also mentioned in this. In
addition to this, various methods of pricing within the hospitality industry and factors which
affect the profitability of various sectors operate in this sector is all given in this report.
TASK 1
1.1 Nature of Hospitality Product and Service Areas
Product is define as an item which is offered for sale and service is produce by hotel to
their consumers. It can be in tangible or virtual form. There are different nature of product and
service in The Berkeley Hotel, situated in London are as follows:-
Product Areas
Perishable Elements- It can be describe as a service which cannot be gathered or stored
for sale in upcoming future. For instance: food and beverage products are not durable but these
are perishable.
Tangible or Intangible Elements- Tangible goods and services includes exterior and
interior design and equipments of Berkeley Hotel. These all are visible to the customers. It may
be divided into different kinds like quality, style, design, brand name etc. For example: furniture
is tangible, which be seen or touched.
Service Areas
Room Division: It is an action or activity which is responsible for clients service, revenue
and division forecasting. This department play primary roles in providing service to guests
during a hotel stay. It includes reservations and housekeeping etc.
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Food and Beverage: This service is provided by service manager of The Berkeley Hotel
to their guest (García-Lillo, Úbeda-García and Marco-Lajara, 2016). There are different kinds of
food and beverage service which include: plate service, Buffet service, Plater service etc. Role of
service department is to deal with visitors complaints and fulfil special clients' request.
1.2 Different Influences which Affecting Demand Within Hospitality Operations
There are different prospect which affect the patterns of demand in hospitality operations.
These are as follows:-
Seasonality- Main visitors of The Berkeley Hotel London are hikers, climbers, ramblers
etc. All these customers are mainly visit in different seasons. Seasonality is distinguishing of a
time series in which there is a daily and predictable changes (Xu and Gursoy, 2015). It play an
important role in identifying behaviour of customers. Seasons are categorised into three
environment: Down, Green and High. These are related with various expectations and demand.
In high season, demand of the hotel services are automatically high.
Time of week- One of the essential groups of customers are famed as families and couple.
They primarily choose weekend and other type of holiday like summer and winter vacations to
travel. Through this, demand of hotel rooms become high.
Healthy Living- It is an important part which directly affect the patterns of demand.
Different types of people are living in an environment like high income level group, low income
level and some others (Perez and del Bosque, 2014). Most of consumers are health conscious
and they select the hotel where they get standard ground of sanitation and healthy food.
Culture- Culture is a characteristic of a specific group of citizens which are similar with
language, belief, cooking, social habits arts etc. It also affect demand because people mostly
prefer that hotel where they get similarities with their culture.
1.3 Compare customer profiles and their differing expectations and requirements
There are various characteristics which help The Berkeley Hotel London in differentiate
customer profiles in their expectations and requirement. These are as under:-
Customer profiles Characteristics
Pricing consideration: It is an essential
element that highly impact on customers needs
and expectation.
Most of the customers in Berkeley hotel are
couple and families. These type of guests are
concerned for their top-grade services rather
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than consideration of price. This leads to the
relatively highest prices for whole services. It
impacts on customers needs and expectation
level (Xie, Zhang and Zhang, 2014) .
Meal experience: It is define as a customer
profile about their experience of meal in hotel.
This factor also influence on customers
requirement and expectation. The standard of
meal of business clients is more higher, along
with this, there have various type of gusts such
as sportsmen and their group members. In this,
they require light food meals.
High income level customer- It refers to the
spending power of customers which impacts
on their needs and expectations (Köseoglu,
Sehitoglu and Craft, 2015).
High income level customer have more
spending power in comparison to others,
because they always try to pay amount for any
service. For instance: high income level group
want luxury services and it is responsibility of
hotel manager to provide them better services
as per their needs.
1.4 Factors Affecting Average Spending Power (ASP) in hospitality businesses
ASP is refers to the decision of pricing process between hotel and customers. It is an
ability of individual to spend money after paying taxes. There are various factors that affect ASP
in the Berkeley hotel. These are as under:-
Size of Income- There are different income level of customers which are connected to the
average spending power (Chan and Hsu, 2016). If there is is high income of consumer then ASP
is increasing of that consumer and vice versa.
Status- One another feature which is based on the ASP of visitors is status. When
customers are belongs to a royal family then they want high cost facilities and their Average
spending power is also high as per their status.
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Social and cultural effects- Social and cultural factors also affect the average spending
power of a customer. In case festival and occasion, consumers spend more amount on goods and
services so, it automatically enhance ASP.
Economic situation- This factor affect the average spending power of consumers in
Berkeley Hotel because economic condition of a country is depend on the income of customers
(Hertzman Moreo and Wiener, 2015). If there is a high generation of income then it make
positive impact on hospitality industry and vice versa.
2.1 key stages in product and service development:
As the operational managers of Berkeley Hotel London, their major involvement in
development of new service and product in market. For example: This hotel wants to develop
guide facility for consumers satisfaction (Raj and Griffin, 2015). Then operational management
need to follow some steps for developing the innovative product and service which are
mentioned below:
Idea generation: Idea generation is a first step, in this operation managers are create new
idea of service and product process. In this, they analysis the new treats and opportunities.
Idea screening: In this step, managers are choose best ideas and conduct market
research. This market research helps in identifying the consumers demand and preference for
innovative product.
Concept development and tasting: In this stage, managers generate their concept and
determine wants of the consumers about new services and product.
Business analysis: In this, managers are find their competitors who manufacturing the
same kind of services and products for the consumers. In order, Berkeley Hotel London produce
their services and products at reasonable price for compete their competitors.
Product development: Under this, Berkeley Hotel London develop and generate their
new product and services for achieving effective desire result.
Test marketing: Under this, hotel managers collect feedbacks from the consumers and
determine their needs for fulfilling their demands of products and services.
Commercialisation and launch: Under this, company put marketing mix because
products and services are ready to launch in market. Marketing mix tool helps the company to
introduce their product and service in market place.
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2.2 Features which contribute towards the customers’ perception of products and services.
Berkeley Hotel London need to attract their consumers by providing them good quality
of products and services and maintain good brand image and goodwill in market.
Brand image: Under this, strong and good brand image of hotel services and products
can create better and positive perception of the consumers.
Style of the service: It is an important factor that affects the consumer's preference. If
hotel services are provided individually and separately to the females, males, families and
couples the it can make good and effective perception in customer's mind.
Nutrition and dietary requirement: For attract and influence maximum consumers,
hotels needs to provide effective menu of evidently, nutritious and delicious dietary.
Space utilisation: Letting the clients to follow decent space is also effective and
important feature for the organisation because it helps to influence and make positive perception
of consumers' towards company.
Availability of resources: If special services provided to some person like disabled
person etc. is create higher popularity of the hotel. And if hotel can provided sufficient resources
to support entire consumers then customers will again and again visit the hotel.
2.3 Opportunities and constraints affecting product and/or service development within a
hospitality environment.
Opportunities helps the company to boost up their business procedure and maximize
sales volume. Several number of restraint limits the operation of hotel that reduce the
profitability. For increasing the profitability, Berkeley Hotel London needs to analysis the
opportunities and treats for developing products and services.
Opportunities: Berkeley Hotel London is a 5 star hotel in UK that should be create
planing for providing different varieties of rooms and space to the customers i.e. individual,
couples and families. This type of planing can helps the company to making effective position at
large scale.
Constraints: Major issue of Berkeley Hotel London was its limited accommodation
services and less facilities. While its competitors provided many extra facilities to attract large
numbers of consumers (Brown, Arendt and Bosselman, 2014). It is not easy to attain
competitive benefits for this company needs to make planning for maximising facilities in order
to maximise profits and attract consumers.
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2.4 Different merchandising opportunities for hospitality products and services.
Merchandising: Merchandising define to the variety of products accessible for sale in
the market and display that products in effective manner which increase the interest of
consumers to make a purchase. For increasing the profit and effectiveness of the company,
merchandising should be adopted by the company. In this include grouping related products
collectively, provide samples, spotlighting promotional items, well-stocked shelves etc.
Different merchandising opportunities: In this globalization process, large number of
peoples are travelling more for the intention of business. And it will effects of leads the
maximisation the popularity in hospitality sector (Ryan, 2015). Thus, Berkeley Hotel London
can get different or several merchandising chances or opportunities over the other competitors.
Here are some opportunities that can be get by this company.
 Some times, visitors or customers want more and less service quality according to their
purchasing power. Then there is a chance and opportunity for the company to develop
their maximum value and increase efficiency by providing services with premium and
reasonable charges to the customers.
 If the economic condition of the visitors and visitor's nation is increased, then there is a
opportunity for the company to providing better merchandising benefits to the visitor and
they can easily maximise their profits.
TASK 2
3.1 Various methods of pricing taking account other into consideration of pricing
So many type of pricing strategy and methods are there which can be by The Berkeley
hotel to set the prices of its products and the services which it offer to its customers for satisfy
their needs and wants. Various methods of pricing with additional pricing considerations can be
understood by the following given points: Cost oriented pricing: This pricing strategy cover determination of all variable and fixed
costs related with a service or good. After determination of all cost require to offer a
service to final customers, managers add a percentage of profit to each unit. Cost + Fix
percentage of profit = Selling price this is the formula which is use under this pricing
method (Brown, Arendt and Bosselman, 2014). This is one of the simple pricing strategy
which can be use by The Berkeley hotel to fix the prices of its products and services.
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 Market oriented pricing: This is another method of pricing in which company set the
prices of its products same as the prices of competitor's products (Market Oriented
Pricing Strategy, 2018). The Berkeley hotel can use this in order to stay competitive in
market.
Pricing consideration
Main pricing consideration that require to be consider by the businesses operate under
hospitality sectors include service charge, minimum charge and cover charge.
3.2 Factors that have an impact on profitability and revenue generation in hospitality operations
Various factors are there which affect the revenues generation and profitability of
hospitality operations. These factors can be understood by the points given below:
Shelf life: This refers to the time during which stored food remain useful, valid or
suitable to eat. Shelf life of products can be manage by managing the stock of perishable
products and with this wastage of these goods can be minimised (Ryan, 2015). In order to
maintain the number of its profits The Berkeley hotel can apply the FIFO method which is first
in first out. Further, food items can be store in refrigerator with use of plastic wraps. In case
when product is not useful it will left as waste and this affect the profitability of companies.
Labour intensity: In hospitality industry, human efforts are require on large amount to
produce and offer goods to the customers or tourists (Singal, 2014). When there is a
requirement of large human efforts to develop products the businesses require to pay more to the
employees which lower the profits margins of companies.
Elasticity of demand: This cover the availability of a product and services against its
demand. In case when demand of customers does not met properly then it results in decrease the
sales and profitability of enterprise (Denizci Guillet and Mohammed, 2015).
TASK 3
4.1 Range of Performance Measures and Appraisal Techniques to Individual Aspects of
Hospitality Operations
Performance Measurement
It refers to a process of collecting, analysing and reporting of information regarding to the
performance of an individual or a group.
Performance appraisal techniques
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There are following techniques to measure performance appraisal in Berkeley Hotel.
These are discussed as below:-
Quality Management- It is process of evaluation which is which is required to evaluate
whole quality of an organization (Raj and Griffin, 2015). It helps to analyse the quality of goods
and services in Berkeley Hotel. It mainly divided into four parts: quality planning, assurance,
control and service.
Speed of Delivery- Another technique of measure of performance appraisal is speed of
delivery. It evaluate the time of serving and analyse that how fast customers get their deliver.
Hence, it is the most significant technique to measure the outcome within specific time in
Berkeley Hotel.
Developing Quantitative and Qualitative data- This technique is used to measure whole
performance of functional administration in Hospitality industry (Brown, Arendt and
Bosselman, 2014). Researcher collect qualitative data from various sources like customer
satisfaction and reliability etc. and quantitative date which are related with price of a product,
number of luxury customers etc.
External comparison- Company can also measure their performance by comparing with
external factors like competitors. If competitors earn more profit then Berkeley hotel should also
improve their service quality and beat competition.
4.3 Approaches to business analysis, evaluation and planning appropriate to hospitality
operations.
Business analysis: Business analysis is a process of identify the needs and problems of the
business. It is a set of methods and tasks which are regulate for the solve the business problems.
Business evaluation: Business evaluation is an activity in which estimate the economics values.
In this identify the market price and willingness of pay which is effect the sale of business.
Business planning: Business planning is a process in which include all the information of future
needs. In this include background information of the company or its goals. A business plan can
help the company to secure efforts, prioritise and finance to evaluate the opportunities.
When following different techniques of hospitality sector, it is difficult to consider
operations of this company such as provided services of accommodation and demand of creating
sources. In some countries, provide only lodging services to the consumers (Singal, 2014) . But
later, they increase efficiency in their service by adding more value like safari etc. here are
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different types of categories that create maximum profits for the hotel i.e. organized group, non-
residents and in-house guests.
4.2 Usefulness and Limitations of Various Quantitative and Qualitative Appraisal Techniques
Qualitative Appraisal- It is also known as traditional method of performance appraisal
technique. It is based various qualities of an individual such as knowledge, judgment, attitude,
loyalty, capacity, leadership etc.
Quantitative Appraisal- This is also known as modern method of performance appraisal
technique. It is based on judgment of employees performance which are developed.
Mainly, these methods of appraisal are based on a sample data and it is not consider
actual measure of performance. These methods are useful to gathering information from different
sources and measure performance of an organization (Raj and Griffin, 2015) . It give an estimate
idea with future prospectus and evaluate performance of employees. Researcher use quantitative
technique for performance measurement because is more appropriate and based on development
of employees performance. Drawback of qualitative technique is that this is not free from
personal judgment and researcher cannot get proper evaluation and training of an individual.
CONCLUSION
From the above given information, it can be concluded that management of various
operations perform under different hospitality sector is very essential as growth of this industry is
related to it. Businesses that run under this industry require to identify and examine all the
factors that affect the demand pattern in this as this help in develop effective plans and policies
that ensure achievement of business objectives in specific time period. Management of key
features of products and services should also done by company in appropriate manner as this
affect the perception of customers towards that product or brand. Those elements that have a
impact on profitability of company should be examine by various businesses that come under
hospitality sector to maintain the level of their profit.
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REFERENCES
Books and Journals
Brown, E.A., Arendt, S.W. and Bosselman, R.H., 2014. Hospitality management graduates’
perceptions of career factor importance and career factor experience. International
Journal of Hospitality Management. 37. pp.58-67.
Chan, E.S. and Hsu, C.H., 2016. Environmental management research in hospitality.
International Journal of Contemporary Hospitality Management. 28(5). pp.886-923.
Deery, M. and Jago, L., 2015. Revisiting talent management, work-life balance and retention
strategies. International Journal of Contemporary Hospitality Management. 27(3).
pp.453-472.
Denizci Guillet, B. and Mohammed, I., 2015. Revenue management research in hospitality and
tourism: A critical review of current literature and suggestions for future research.
International Journal of Contemporary Hospitality Management. 27(4). pp.526-560.
García-Lillo, F., Úbeda-García, M. and Marco-Lajara, B., 2016. The intellectual structure of
research in hospitality management: A literature review using bibliometric methods of
the journal International Journal of Hospitality Management. International Journal of
Hospitality Management. 52. pp.121-130.
Hertzman, J.L., Moreo, A.P. and Wiener, P.J., 2015. Career planning strategies and skills of
hospitality management students. Journal of Human Resources in Hospitality &
Tourism. 14(4). pp.423-443.
J. Harrington, R., K. and et. al., 2014. Strategic management research in hospitality and tourism:
past, present and future. International Journal of Contemporary Hospitality
Management. 26(5). pp.778-808.
Köseoglu, M.A., Sehitoglu, Y. and Craft, J., 2015. Academic foundations of hospitality
management research with an emerging country focus: A citation and co-citation
analysis. International Journal of Hospitality Management. 45. pp.130-144.
Perez, A. and del Bosque, I.R., 2014. Sustainable development and stakeholder relations
management: Exploring sustainability reporting in the hospitality industry from a SD-
SRM approach. International Journal of Hospitality Management. 42. pp.174-187.
Raj, R. and Griffin, K.A. Eds., 2015. Religious tourism and pilgrimage management: An
international perspective. Cabi.
Ruetzler, T., and et. al., 2014. Perceptions of technical skills required for successful management
in the hospitality industry—An exploratory study using conjoint analysis. International
Journal of Hospitality Management. 39. pp.157-164.
Ryan, C., 2015. Trends in hospitality management research: a personal reflection. International
Journal of Contemporary Hospitality Management. 27(3). pp.340-361.
Singal, M., 2014. The business case for diversity management in the hospitality industry.
International Journal of Hospitality Management. 40. pp.10-19.
Xie, K.L., Zhang, Z. and Zhang, Z., 2014. The business value of online consumer reviews and
management response to hotel performance. International Journal of Hospitality
Management. 43. pp.1-12.
Xu, X. and Gursoy, D., 2015. Influence of sustainable hospitality supply chain management on
customers’ attitudes and behaviors. International journal of hospitality management. 49.
pp.105-116.
Online
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Market Oriented Pricing Strategy. 2018. [Online] Available
through<https://smallbusiness.chron.com/management-market-oriented-pricing-
strategy-14342.html>./
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