Assignment on Hospitality Operations Management

Hospitality Operations
Management

Table of Contents
INTRODUCTION...........................................................................................................................3
AC1.1: Analyse the nature of hospitality product and service areas......................................3
AC1.2: Evaluate the different influences affecting patterns of demand within hospitality
operations...............................................................................................................................4
AC1.3: Compare customer profiles and their differing expectations and requirements in
respect of hospitality provision..............................................................................................5
AC1.4: Analyse factors affecting average spending power (ASP) in hospitality businesses.5
AC2.1: Evaluate the key stages in product and service development applied within a
hospitality operation...............................................................................................................6
AC2.2 Analyse the features which contribute towards the customers’ perception of products
and services............................................................................................................................7
AC2.3 Assess the opportunities and constraints affecting product and/or service development
within a hospitality environment............................................................................................7
AC2.4: Evaluate different merchandising opportunities for hospitality products and services..8
AC3.1 Evaluate different methods of pricing taking into account additional pricing
considerations.........................................................................................................................9
AC3.2: Assess the factors which affect revenue generation and profitability in hospitality
operations...............................................................................................................................9
AC4.1 Apply a range of performance measures and appraisal techniques to individual aspects
of hospitality operations, the product and the whole operation............................................10
AC4.2 Determine the usefulness and limitations of the various quantitative and qualitative
appraisal techniques and their application to hospitality operations....................................11
AC4.3 Apply approaches to business analysis, evaluation and planning appropriate to
hospitality operations, making proposals for action.............................................................11
CONCLUSION..............................................................................................................................12
REFERENCES................................................................................................................................1

INTRODUCTION
Hospitality operations management is a process of developing business skills to work in
an organisation within various areas in hospitality industry. In hotel industry, operations
management includes areas like management of human resources, front desk operations, food
and beverages and housekeeping (Alexakis, 2011). The present assignment is based on
Grosvenor House hotel which is a part of JW Marriott chain, located in Mayfair are of London,
England. It is a luxury hotel opened in 1929 providing flawless service. In this report, nature of
services offered by hotel and the factors that influence their demand have been discussed. Also,
it links various customer profiles and their expectations to the services offered. The report
includes the key stages involved and opportunities and constraints during provision of services.
Along with that, the pricing and planning strategies adopted by the organisation are covered.
TASK 1
AC1.1: Analyse the nature of hospitality product and service areas
Hospitality industry is an essential element of part of the service industry. It emphasizes
upon satisfaction of customers and meeting the preferences and desires of customers (Kimes,
2011). In hotel industry, services like accommodation, room service, food and beverages,
conference and banqueting, entertainment etc. are included. The manager of Grosvenor House
also focus upon such areas which are described below:- Tangible- These are those products that can be seen and touched by people. For e.g.
Rooms: Its the responsibility of management of Grosvenor House to ensure that the
visitors have a comfortable stay. Proper cleaning of rooms is done before arrival of
guests. Also, the rooms provided are spacious, air-conditioned and properly ventilated. Intangible- Those services that can not be seen but only felt. For e.g. Conference and
Banqueting: It is essential that the hotel has the facility of conferencing and banqueting
hall to host any business conference or special events (Lashley, 2012).
 Perishable- For e.g. Food and Beverages. The top management ensures that the food
available in hotel is cooked by adopting proper hygiene and quality measures. Menu
includes variety of dishes so as to suit customer preferences.

AC1.2: Evaluate the different influences affecting patterns of demand within hospitality
operations
The operations of a hospitality organisation are influenced by various factors as it is the
most essential element of service industry. In relation to hotel industry, these factors may include
preferences of customers, trends in market, seasonality and economic conditions of the country.
Some of the factors considered by the management of Grosvenor House are:- Seasonality: This is one of the most influential factor that drives the business of hotels.
Peak seasons allow more customers to move in to experience luxurious comfort and
memorable experience. Time of day/week: It is yet another driving factor for hotel industry. Visitors move in
more during weekends or festive seasons. Also, there is high movement of visitors during
the day time, thus the hotel management need to keep these factors in mind to ensure
quality service for guests (Sigala, 2013). Living Style: The hotel management aims at providing flawless service, lavish lifestyle
and finest of amenities to meet the standards of its brand image in market. Regional and ethnic influences: The regional and ethnic preferences of visitors also
impact the business in hotel industry.
 Economic factors: The economic conditions of a country also affect the demand in hotel
industry as high disposable income of customers imply more use of luxurious services.
On the other hand, low disposable income of visitors means unwillingness of customers
to spend money on premium services.
AC1.3: Compare customer profiles and their differing expectations and requirements in respect
of hospitality provision.
The amount of money a particular person can spent is based upon the income group
which he belongs. There are three type of income group i.e. moderate, high, elite. It is the set of
particular population which is divided with respect to the level of income (Sunder, 2013).
An individual who comes in the moderate income group is able stay over the places
where he can get basic facilities and the rooms for fulfilling there standard lifestyle, there
expectations regarding the meal and price are not much higher only they just need to satisfy
there essential needs like food water and electricity. They only need a comfortable location,
healthy and friendly environment .

While the person who belongs the high income group needs all the basic facility, plus
some additional luxury of food items and the location which they prefer are more close to the
nature and peaceful places. The Grosvenor hotel also provides the facilities of separate
bathrooms and swimming pools in their area separately and they are ready to pay any amount
which gives value to their money (Tsang, 2011).
The person who comes in the elite income group, do not worry about spending the
money. They just need those facilities which are only for the elite class of people in The
Grosvenor Hotel gives premium bathroom, separate gym area, special beverage section, 24 hours
dining facility, private chef and butler services. The expectations of this type of customer always
new at different places and they are able to pay any price for the specific services of the hotel.
AC1.4: Analyse factors affecting average spending power (ASP) in hospitality businesses.
There are various factors which affect the average spending power of customers which
are explained below:-
Size of income- If the Income of people are high then there spending power are also
good, which gives them benefit to spend larger amount of money in the accommodation . While
those people who have low income can also spent money but at the decent rate which could be
afforded by them (Vlachos and Bogdanovic, 2013).
Social and cultural influences- Low income group generally follows the culture of
saving money as they need money for the future securities and plan while the high income group
follows the culture of spending more as they have no shortage of money ,have enough saving
already for the future plans so, Grosvenor hotel offers and address cultural diversity for giving
benefit to both lower and higher income group by giving them different choices and preferences
regarding the rooms and facility of hotels. As part of the current trends of hotel industry, it
provide all basic and some premium facility to high income group, while discount on the room is
provided by company to lower income group. Also, for higher income group extra facilities are
also available as their spending power are much higher.
Economic situation- The economic background of an individual also make influence on
the average spending power of a person. The individuals whose economic background is sound,
their spending power for luxurious accommodation is also effective. If the inflation and interest
rates is higher, then individual will not be able to spend more (Alexakis, 2011).

AC2.1: Evaluate the key stages in product and service development applied within a hospitality
operation.
In context of Grosvenor House, organisation is developing an idea of luxury and
premium pick and drop service to the customer in order to build brand image of the hotel to
counter the competition. The product idea comprises of pick and drop service from the airport,
service for places visits and other purpose. In concern with Grosvenor, there are various stages
which has been followed for the purpose of analysis and implementation of the given product
idea are as follow:
Idea generation- This stage involves the generation of new product and services idea
with the set strategic objectives and addition in the current portfolio of products or services of the
hospitality sector. In context with Grosvenor House, idea of premium pick and drop service is
good and suitable idea.
Idea screening- It is a quick analysis and evaluation of an idea which is made against any
set criteria and take care of the objectives with the development of new product or services.
Screening of pick and drop for Grosvenor house needs proper formulation and implementation.
Concept development and testing- This stage tells about the initial requirement of setting
an idea of new product and services development and an analysis to forward well structured and
defined product idea to research and development idea for the further process. In context with
Grosvenor house, testing and simulation for given idea is important and significant to pursue.
Business analysis- This stage tells about the brief analysis of the idea generated and a
know how it will benefit to the organisation. It also disclose how this idea is good for locate or
situate into the market and its suitability in context with customer. There should be complete
analysis of given business idea in order to implement before open it for the customer.
Product development- This stage actually belongs to the part of R&D department. The
personnel gives it the shape of actual product and add new key features and characteristic such as
colour, shape, size and design etc. (Bartram and Dowling, 2013). In Grosvenor House, it is
important and necessary to implement strategies to initiate the development of the actual
products out of the given idea.
Test marketing- It involves the commercial testing of a product to judge the actual
potential and abilities of a new product after the production stage to the qualified customers. For

the purpose of test, it is required to arrange the resources for the idea of deluxe and premium
pick and drop services for the customers.
Commercialisation- This phase comes before the launch stage of the product. It decides
the strategy of when, where, how and by whom new product and services will be launched and
initially at what price and targeting which market of the customer's.
Launch- This is the final and last stage of this whole process. It includes commercial
launch of the product in the potential market. It is an kind of event where the physical launch of
any products or specific as such in the hospitality sector services take place. After all ads,
promotion and communication, now the actual product is ready to deliver to customer.
After this process, it is concluded that, this product idea is sufficient for building the
brand image of the Grosvenor House and best suitable idea for adding value and growth for the
hotel.
AC2.2 Analyse the features which contribute towards the customers’ perception of products and
services.
There are various features that shapes the perception of customers regarding the services
in hotel industry which are considered by the top management of Grosvenor House explained
below:- Price of the product or service- In the Grosvenor House, pricing of a particular product
or service decides the changes in the mind of the consumer and their quick perception
about the hotel sector (Bharwani and Butt, 2012). If the price is too high, it presumes that
they can get same or high benefits at the lower price. This shows that price is one of the
most important factor of the consumer perception. Service quality- Quality of services in the Grosvenor House Hotel should be more than
the expectation of the customer and be specific, quick and impressive.
 Brand image- Continuous generation and building the brand image is the most common
factor of the perception process. Serving the customer utmost best, providing the best
quality and their ethics and values creates the positive image of the particular hotel to the
customer. This can also lead to mouth publicity of hotel by customers in front of their
acquaintances (Causin and Ayoun, 2011).

There are numerous other factors such as dietary requirements, disabled access, style of
service delivery and quality, standardisation, use of space etc. that frame their minds toward the
service provider.
AC2.3 Assess the opportunities and constraints affecting product and/or service development
within a hospitality environment.
There are a number of factors that impact the growth and development of any business or
industry with respect to market scenario. With reference to Grosvenor House, being a part of JW
Marriott Hotel, it offers lavish services and comfortable lifestyle for the guests so as to maintain
its brand image in market. They provide a memorable experience to customers by offering
flawless service and premium services. The staff of hotel is courteous, jovial and passionate to
deliver high quality services to visitors (Crawford, 2013). The management of hotel aims at
satisfaction of customers by delivering amenities that are beyond the guests’ expectations.
Exceptionally distinguishing lavish environment with variety of cuisines keeping in
consideration the health conscious people makes this hotel one amongst the best in UK. Detailed
attention to every facility offered by the hotel and handling of queries of guests as and when they
arise, has given a competitive advantage to the business.
It is well known that various responsibilities are associated with luxury hotels. These
responsibilities if not handled well can act as constraints for the business. Some of the constraints
in hotels are change in inflation rates, customer preferences, technological advancements. These
factors if not tackled by the management of Grosvenor House can hamper their revenues and
brand image.
AC2.4: Evaluate different merchandising opportunities for hospitality products and services.
Merchandising refers to display of products in such a manner that it arouses the interest
of customers and entices them to purchase that good (Ferdinand and Kitchin, 2012). This
includes ascertaining the quantities, deciding the prices of goods and services, using attracting
display designs and techniques, developing promotional strategies and analysing the need of
discounts and rebates. In hotel industry, the process refers to understanding the preferences of
customers and then delivering services in a way that influence visitors to raise demand for hotel.
In context of Grosvenor House, there are various opportunities available for the top management
to increase its brand name and stake in market.

Nowadays, with various new trends in technology, hotel has given the chance to buyers
to book the rooms via internet through hotel site, mobile applications while they are in their
homes, there is no need to visit the property. Also, by establishing healthy communication with
visitors while they are in property, they can influence the behaviour of guests in such a way that
targets at customer loyalty for the hotel in future. Also, hotel can offer special discounts or
rebates if the visitors book directly instead of through a third party service provider. Thus, the
organisation builds an understanding of the needs of customers, ensures their ease in booking of
rooms and delivers lavish services while the guests are in property. By this, top management of
Grosvenor House aims at improvising their brand image in hotel industry and also open routes
for acceptance by customers at the time of expansion of hotel across different locations (Kimes,
2011).
TASK 2
AC3.1 (a) Evaluate different methods of pricing taking into account additional pricing
considerations
Pricing is the process through which an entity sets selling price for its products and
services. There are various methods of pricing available to managers in hotel industry.
Grosvenor House also recognises the importance of these methods and thus follow some
methods which are explained below:- Cost oriented pricing: Cost-based pricing refers to a pricing method in which a certain
percentage of desired profit is added to cost of product to obtain the selling price.
Management of Grosvenor House uses this technique as the entity runs for the motive of
profit making along with delivery of finest services to maintain its stake in market. Market oriented pricing: Every organisation conducts operations in a manner that keeps
in consideration the pricing strategies being adopted in the industry by rival organisations
(Hospitality and Operation Management, 2018). Grosvenor House doesn't follow this
pricing technique. Service charge: The management of Grosvenor House aims at providing premium
services to its guests even beyond their expectations. So, top management charges prices
according to the quality of services delivered.

 Cover charge: The hotel management does not just focus on delivering luxurious room
services but also makes provisions for entertainment of its visitors by organising various
cultural or music events. Grosvenor House doesn't apply this technique of pricing.
 Minimum charge: This pricing technique is used by Grosvenor House to stay ahead of
its competitors in industry. This method refers to offering the services to customers at
some minimum prices when compared to their rival hotels.
AC3.1 (b) Which of these methods is not applicable in selected organisation and justification
Some of the above methods are not followed by Grosvenor House for deciding its
pricing, the explanation behind which is specified below:- Market oriented pricing: Top management of Grosvenor doesn't believe in deciding the
prices of its services considering the selling prices charged by competitors as they believe
a large base of customers relate high prices with exceptional quality. Thus, company does
not increase or decrease prices as per rival hotels.
 Cover charge: Company does not apply this pricing strategy as it believes that providing
a good ambiance and entertainment services is the responsibility of every hotel manager,
thus it doesn't charge any price for the same.
AC3.2: Assess the factors which affect revenue generation and profitability in hospitality
operations
Grosvenor House Hotel provides elite class services and thus for ensuring its long term
existence in market, it is necessary that management ensures that the sale made is able to meet
cost of provision of service. There are various factors that are considered by them to make sure
that revenue is being generated for business with an element of profit. These factors are
explained below:- Labour Intensity: To conduct the daily operations in Grosvenor Hotel, managers need to
maintain a skilled staff which is courteous and jovial in communicating with guests and
deliver services that match the standards of hotel (Ferdinand and Kitchin, 2012). Thus,
every year, hotel has to spend a lot of money on giving training to its staff. Thus, efficient
delivery of services will generate revenue for the entity and also increase profitability of
business.

 Elasticity of Demand: The demand for services in hotel industry also impact the revenue
and profitability of business. If the demand is high, it will result in generation of revenue
and increase the chances of profit making for Grosvenor House and vice-versa. Price: The pricing of rooms decided by management of Grosvenor House has very vital
role to play in the generation of revenue. High pricing would result in lower revenue
generation for the entity and vice-versa. Procurement: There are a number of products and services offered at the hotel which are
procured by hotels from market (Crawford, 2013). The cost of procurement of these
services also affect the profitability of business for Grosvenor.
 Average Spending power: The spending power of a customer also affects the sales and
profitability of Grosvenor Hotel. A customer who is willing to spend a large sum of
money to ensure that he/she receives premium services in response will result in
generation of high revenue and profits for entity.
TASK 3
AC4.1 Apply a range of performance measures and appraisal techniques to individual aspects of
hospitality operations, the product and the whole operation
Performance measurement is the process of determining how well an individual or
organisation is operating to achieve the desired gaols. This includes quantification of inputs,
outputs, processes, services and performance to assess whether the pre-decided targets are met or
not (Causin and Ayoun, 2011). Appraisal techniques are the methods adopted by an organisation
to evaluate the performance of an employee. Quality Management is imperative to assess
whether the quality of services delivered are up to the standards set by hotel management. The
utmost goal of the entity is customer satisfaction. It is important to determine whether the staff is
delivering services as per requirements of visitors. External comparison is carried out by
enterprises which means comparing the services provided by the entity with those of rival
business organisation is necessary to ascertain whether operations of business entity are aligned
with industry. The overall performance of an organisation is analysed to ascertain whether the
extent of revenue generation is aligned with the profitability goal of company.
Management of Grosvenor House Hotel also use various such techniques to evaluate the
performance of staff against the standards. These techniques are Quality management and

Customer satisfaction as these techniques provide an understanding of the requirements and
preferences of customers to the organisation. With the help of this information, Grosvenor can
develop and update services to keep in track with customer choices.
AC4.2 Determine the usefulness and limitations of the various quantitative and qualitative
appraisal techniques and their application to hospitality operations
Quantitative appraisal techniques are the ones that are determined by comparing inputs
and outputs of employees. On the other hand, qualitative techniques refer to appraisal on the
basis of behavioural pattern of workforce. Grosvenor House use various quantitative and
qualitative techniques to track productivity of their staff. These can be used to reward employees
and work units and to give promotions. Also, these can aid managers in termination or discipline
of poorly performing workers. But these techniques have some adverse effects also like sense of
insecurity among those who don't get promotions or salary raises. Also, it makes them feel
alienated from the group of personnels (Bharwani and Butt, 2012).
AC4.3 Apply approaches to business analysis, evaluation and planning appropriate to hospitality
operations
Business analysis is the process of ascertaining business needs and developing solutions
to business problems (Bartram and Dowling, 2013). Business evaluation means evaluating
performance of operations of an entity. Business planning refers to the process of determining
business goals and making plans that aims at accomplishment of those goals. In context of
Grosvenor House, managers carry out business analysis by gaining an understanding of the needs
of entities and customers. With the help of business evaluation, management of Grosvenor
monitor whether entity is providing services as per the brand positioning of the hotel in market.
develop processes and methods for delivering excellent quality of services. Also, it applies
business planning in accordance with the hindrances that may arise in their future operations.
Training of staff is done to ensure that the queries of guests are handled as soon as they arise.
This results in accomplishment of organisational goals of revenue generation and profit making.
CONCLUSION
From the above report, it is concluded that the provision of services in a hospitality
industry need to be well planned. It is also analysed that pricing strategy in hospitality
organisation should be adopted after considering the internal and external factors of an

enterprise. Also, it has been observed that there are various stages involved in effective delivery
of services which should be planned well in advance so that any hindrance that may arise during
the process can be properly handled. Along with that, it is important for managers to train the
staff effectively to ensure delivery of high quality services to visitors.

REFERENCES
Books and Journals
Alexakis, G., 2011. Transcendental leadership: The progressive hospitality leader's silver bullet.
International Journal of Hospitality Management. 30(3). pp.708-713.
Bartram, T. and Dowling, P. J., 2013. An international perspective on human resource
management and performance in the health care sector: Toward a research agenda.
Bharwani, S. and Butt, N., 2012. Challenges for the global hospitality industry: an HR
perspective. Worldwide Hospitality and Tourism Themes. 4(2). pp.150-162.
Causin, G. F. and Ayoun, B., 2011. Packing for the trip: A model of competencies for successful
expatriate hospitality assignment. International Journal of Hospitality Management.
30(4). pp.795-802.
Crawford, A., 2013. Hospitality operators' understanding of service: a qualitative approach.
International Journal of Contemporary Hospitality Management. 25(1), pp.65-81.
Ferdinand, N. and Kitchin, P., 2012. Events management: an international approach. Sage.
Kimes, S. E., 2011. The future of distribution management in the restaurant industry.
Journal of Revenue and Pricing Management. 10(2). pp.189-194.
Lashley, C., 2012. Empowerment: HR strategies for service excellence. Routledge.
Sigala, M., 2013. A framework for designing and implementing effective online coupons in
tourism and hospitality. Journal of Vacation Marketing. 19(2), pp.165-180.
Sunder, M. V., 2013. Synergies of lean six sigma. IUP Journal of Operations Management.
12(1). p.21.
Tsang, N. K., 2011. Dimensions of Chinese culture values in relation to service provision in
hospitality and tourism industry. International Journal of Hospitality Management. 30(3).
pp.670-679.
Vlachos, I. and Bogdanovic, A., 2013. Lean thinking in the European hotel industry. Tourism
Management. 36. pp.354-363.
Online
Hospitality and Operation Management. 2018. [Online]. Available
through:<https://www.emeraldinsight.com/doi/abs/10.1108/09596119610152069>.
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