Performance Evaluation of Hotel Industry

The assignment is about evaluating the performance of the hotel industry in an emerging tourism destination like Oman. It involves analyzing research papers and studies related to hospitality management, online reviews, water management, supply chain management, and revenue management. The document provides a comprehensive overview of these topics, including best practices, performance benchmarks, and improvement potential.

HOSPITALITY OPERATIONS MANAGEMENT
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Table of Contents
Introduction................................................................................................................................3
Task 1.........................................................................................................................................3
AC1.1. Analysis of hospitality services area and product’s nature........................................3
AC1.2. Evaluation of different affecting factors pattern related to hospitality operations
demand...................................................................................................................................3
M1. Identification and appliance of appropriate strategies for solution.................................5
AC1.3. Comparison of customer profiles according to their various requirement and
expectation..............................................................................................................................5
AC1.4. Analysis of ASP affecting factors..............................................................................6
AC2.1. Evaluation of service and product development key stages......................................6
AC2.2. Analysis of product and services’ customer perception features...............................6
M2. Select and apply exact techniques...................................................................................7
D1. Critical evaluation and justification of the conclusion....................................................7
AC2.3. Identification of affecting opportunities or constraints product and service
development...........................................................................................................................8
D2. Manage and organize activities......................................................................................8
AC2.4. Evaluation of various stuffing opportunities..............................................................8
Task 2.........................................................................................................................................9
AC3.1. A different method of pricing....................................................................................9
AC3.2. Factors affecting profitability and revenue generation..............................................9
M3. Presentation of appropriate findings.............................................................................10
Task 3.......................................................................................................................................10
AC4.1. Performance measurement and applicable techniques to individual aspects...........10
AC4.2. Determination of different qualitative and quantitative techniques and the
usefulness or limitations.......................................................................................................11
AC4.3. Approaches to business analysis and exact planning and evolution to hospitality
operations.............................................................................................................................11
Conclusion................................................................................................................................11
Reference List..........................................................................................................................13
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3

Introduction
Hospitality operation management mainly denotes to the offers of programs related to
business skills within the multifaceted industry. It deals with product and services, which is
associated with some professional area like desk management, human resource, food and
beverage management etc. In this study, a UK based hotel named “HOLIDAY INN” is taken
for analysis of the role and various aspects of hotel management or operations management.
The study aims to show the role of hospitality management along with economic and
operational characteristics, patterns of demand, customer profiles, and opportunities for
hospitality development and so on.
Task 1
AC1.1. Analysis of hospitality services area and product’s nature
The nature of products and services associated with the hospitality management can be
describes through some keywords. All products and services offered or handled by hospitality
management follow some key factors.
Inseparability- It means consumption and production cannot be separated and the services or
products served by the management have to be eroded there (Bowie et al., 2016).
Intangibility- It denotes to the services, which are not tangible and measured via customer
satisfaction (Styles et al., 2015). It has some argued about hotel furniture like the bed,
Almirah, and food also etc which are tangible but after completion of time frame, it measures
as a customer satisfaction.
Perishability- It denotes to the key concept which shows service is not stored for future sale.
As an example, an unsold room or meals cannot be sold in later dates (Espino-Rodríguez et
al., 2015).
Never sleep- Never sleep means the Hospitality Industry never closed and stopped to provide
their products and services and not even in holidays (Xu and Gursoy, 2015). The hospitality
management is ready to serve services in 24X7.
Human interaction- It related to the reflection of customer service, which was provided
during before or after purchase (Ali et al., 2018).
In this study, the UK based hotel named Holiday Inn is sound in the human interaction and
customer satisfaction related to their product and services (holidayinn.com, 2018). This hotel
is also known as America's Favorite Hotel. It provides services in 1200 hotels worldwide
AC1.2. Evaluation of different affecting factors pattern related to hospitality operations
demand
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The patterns of demand are described through some key facts such as opening hours, healthy
eating and drinking patterns, accommodation trends, pricing and economic factor and so on.
Most significant factors are expressed below:
Seasonality- It denotes to the difficulties of outcomes, which is related to the sale. The
various products is liable for peak seasonal within an organization (Law et al., 2014).
According to the Holiday Inn hotel, some factors influence or affect the demand pattern such
as demand for slippers peak at the time of Christmas. Another one is planted demand, which
is raises during planting season, and the highest affecting factor is decorating material, which
will be in high demand before Easter weekend.
Time of week /day- Time plays a significant role in the hospitality industry, which can affect
the demand pattern of an organization. Time or day bindings according to the product and
services affect demand pattern (Thomé et al., 2016). According to the Holiday Inn hotel, no
special service has been provided during certain hours of a day or week of holidays.
Healthy living- Healthy living mainly denotes to the food and beverages of any particular
organizations. It is a great trend, which hold growth or decline both within an industry (Wang
et al., 2015). According to the Holiday Inn hotel, food and beverage issue of some areas
affected the demand pattern.
Figure 1: Affecting factors pattern related to hospitality operations
(Source: Thomé et al., 2016)
Regional cultural and ethnic influences- It is devoted to the regional or social influences to
any particular area such as social mobility, income distribution, lifestyles etc. According to
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the Holiday Inn hotel, some regional, cultural and ethnic factors affected the business grow or
demand pattern of it.
Economic factor- Some economic factor influences the business growth of the hospitality
industry. According to the Holiday Inn hotel, some economic factor such as interest rates and
monetary policies, taxation, government spending, and consumer confidence affected the
demand pattern of the organization.
M1. Identification and appliance of appropriate strategies for solution
Some strategic solution can be implemented by a Holiday Inn hotel to prevent the affecting
factors. According to the seasonal factor, the organization must store sufficient slippers at the
Christmas time for the consumers. Another one is the organization has to arrange plant
session program for the consumers during the planting season, which helps to fulfill customer
satisfaction. Besides, before Ester week the hospitality management of the hotel may supply
sufficient amount of decorating material to each room. On the other hand, one issue related to
the time of day or week to prevent this issue the hotel may arrange some lucrative offer for a
certain time to their restaurants or service centers (holidayinn.com, 2018). The management
authority can fix a period of any particular day for some additional facility for the consumers,
which helps to grow the demand pattern.
Besides, the management authority must pay attention to the food and beverages or cultural
ethics of the hotel according to their regional demand. Every area has its own culture and
ethics or choice of food so; the authority can arrange the popular demandable circumstances
or flooding according to the variable region (holidayinn.com, 2018). On the other hand, some
economical factor influences the demand pattern of the authority. So, the authority needs to
take action against it by clearing government tax within the time frame and following
government rules positively. Moreover, the organization suffering through the issue of
interest rates and monetary policies so, the finance department must implement some
profitable monetary policies to avoid such kind of issues.
AC1.3. Comparison of customer profiles according to their various requirement and
expectation
Customer satisfaction depends on the services or hospitality provided by the operation
management. The customer can be satisfied only then when their requirement will be
successfully fulfilled. The spending power of Holiday Inn authority is high in amount and the
accommodation system is high quality. Besides, their food and beverage services are too
much lucrative for a customer. Moreover, the type of hospitality business of the organization
deals with hotel management, travel agencies, events and meetings, restaurant, bars clubs,
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and pubs. The hotel provides high-quality services, as per the customer's requirement but due
to the excess spending power, all the services are very much costly to the effort. So, it can be
said that to enjoy the accommodation and services of the hotel the customer profiles must be
high and it is quite negative for its business growth.
AC1.4. Analysis of ASP affecting factors
The average spending power mainly denotes to a compromise between equal partners related
to the pricing process like restaurants and hotels or the customers. In the field of hospitality,
the customers are offered by hotels with various food and beverages including different price
(Tatoglu et al., 2016). Some factors humiliate the ASP such as the size of income, status,
cultural influences, and economic situation. According to the Holiday Inn, the ASP is
humiliated by the size of income due to its costly accommodation, which is affordable by
high profile customer only (holidayinn.com, 2018). On the other hand, cultural factors also
reflect a negative impact to the hotel due to its unmatched food and beverage offerings
according to the variable region.
AC2.1. Evaluation of service and product development key stages
Some of the key steps can be applied in order to develop product and services within a
hospitality operation. According to Holiday Inn product development issue, three key steps
were used to develop their product and services.
Test marketing- The organization organizes some market research to the nearest locality for
understanding the customer demand for satisfaction.
Product development- The organization develops their product and service quality based on
pricing and expenses according to the variable region (Ryan, 2015).
Idea generation- The organization implement a profitable idea to decrease its unnecessary
expenses to spread their business.
AC2.2. Analysis of product and services’ customer perception features
Perception of the customers related to product and services depends on various features such
as brand image, style of services, resources availability, dietary and nutrition requirement etc.
According to the product and services of Holiday Inn the customer, perception depends on
three criteria.
Brand Image- Brand image holds the corporate identity or a visual logo, which makes the
organization memorable. Brand image can reflect an impact on quality, services, product and
support within an organization. The brand image of Holiday Inn assures the customer
perception for best quality.
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Figure 2: Product and services’ customer perception features
(Source: Kandampully et al. 2014)
Style of services- Style of service mainly denotes to the food serving activity or meal
function related to reception service (Kandampully et al. 2014). The organization provide
beautiful service including the buffet style and garnishing on the table which attracts most of
the customers.
Resource Availability- It denotes the sufficient availability of resources within an
organization even at the time of limited availability to the market. According to Holiday Inn,
a huge amount of sufficient resources exists all the time.
M2. Select and apply exact techniques
The appropriate methods applied by Holiday Inn were test marketing, product development
and idea generation. Implementation of test marketing helps the organization to understand
the competitive market and competitor’s activity in the same industry. On the other hand,
based on market research the organization applied some new strategies or ideas to gain the
competitive advantage of the hospitality industry (Molina-Azorín et al., 2015). Besides, one
more strategy the product development helps the management to understand the needs of the
customer based on the culture and ethics of a particular region. Product development is based
on the various regions need, which helps to grow business according to the particular areas.
D1. Critical evaluation and justification of the conclusion
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Analysis of point 2.1 it is clear to me that the organization implement exact strategies to
prevent monetary difficulties. At the time of market research, I saw the competitors to
achieve the advantages implemented different kind of psychological strategies. At the time of
gathering customer’s opinion, I saw that various area people have various expectations for the
accommodation and service and expect their cultural ethics in the environment. So, the idea
generated for product development is based on the customer’s need.
AC2.3. Identification of affecting opportunities or constraints product and service
development
According to the Holiday Inn product development feature, three features were discussed in
the previous like brand image, style of services and resource availability. On the other hand,
these opportunities can be turned into constraints for an organization. The brand image holds
the corporate logo, which is easy to find out for everyone. It holds the product and service
quality so, if any fault is made at the time of providing service in any branch of the
organization it can affect the organization. One negative effect can spoil the whole brand
image in the market industry (Annarelli and Nonino, 2016). Besides, Style of services is also
connected with the brand image issue and if an employee does a single mistake it can affect
the entire service management. On the other hand, resource availability is liable for positive
and negative impact both. Positivity is sufficient resources but it can be also negative when
shelf life is generated on the resources. Shelf life affects the product sale in spite of its good
usable condition, which affects the company stock.
D2. Manage and organize activities
According to the point 2.2 and 2.3, some organizational activities can be implemented to
prevent the negative effects of brand image, style of services and availability of resources.
According to the brand image, the organization must mention the branch code of every
branch to avoid the negative impact created by any particular branch. In the field of servicing
style, the organization must arrange the feedback sheet for the customers to identify and
rectify the mistakes. The most significant action must be organized for resource availability
issue is to follow up the marketing trends then stock the essential items to avoid shelf life.
AC2.4. Evaluation of various stuffing opportunities
Merchandising mainly denotes to the practice that contributes to the product sale to a retailer
and it refers to the product variety for sale availability and product display for stimulation of
interest for purchasing. There are four types of merchandising opportunities exists such as
convenience goods, Impulse goods, specialty goods, and shopping products. According to the
Holiday Inn, all four opportunities are suitable for products except shopping products because
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this industry does not hold any retail shopping opportunities. On the other hand, the
developed product and services help to define the specialty and impulse of the goods, which
convince the customer for purchase.
Task 2
AC3.1. A different method of pricing
Pricing mainly stands for the process where a business fixes the selling price of services and
products and it can be a part of the marketing plan. The market pricing methods are divided
into some key facts.
Cost-oriented pricing- It is a method of price setting which takes into the account of the
company's profit. It covers the objective of the organization based on production cost. As, an
example, constant percentage markup to the paid amount of retailer can be cost oriented.
Service charge- Serving charge is mainly denotes for the extra fees demanding from the
customers for serving in the restaurants (El Haddad, 2015). A service charge can be served in
the form of the written document before serving the product or services to the customer.
Minimum charge- Minimum charge denotes to a psychological pricing where a company
applies psychological strategy to increase sale.
Market-oriented pricing- It is also called a competition based strategy where the price
compares similar products for the market offer and then sets its price for the market
(Schuckert et al., 2015).
Cover charge- Cover charge denotes to a sum of money amount which is payable to the
restaurants or nightclubs along with food and drink charge.
From the above method, Holiday Inn used all methods except cover charge because of cover
charge is less important to the organization, which creates customer satisfaction issue.
Besides, the cover charge seems unnecessary where the minimum charge is already
applicable to the organization. Other charges used by the organization for increasing its profit
percentage without humiliating customer satisfaction (holidayinn.com, 2018). The
organization pays most attention to the minimum charges where a psychological strategy is
used which satisfy the customer and provide profit to the organization without any losses.
AC3.2. Factors affecting profitability and revenue generation
The profitability and generation of revenue of an organization may be affected by some key
factors such as
Labour Intensity- It is a relative proportion of used labor in a process and it is related to the
capital intensity.
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Shelf Life- It is a time length for a store of the commodity which is unfit for sale but not for
use yet (Khan et al., 2015).
The elasticity of Demand- it is one kind of sector where service or goods demand varies
with the price.
Standardization- It is a process of developing, promoting and mandating standards-based
process and technologies within an industry.
Besides, Portion Control, Price and Procurement are three significant factors which affect the
profitability and generation of revenue. According to the Holiday Inn, labor intensity is a
foremost issue, which humiliates the profitability of the organization. A huge amount of
employee and less amount of revenue generation affect the profitability of the organization
(holidayinn.com, 2018). On the other hand, due to sufficient resource availability of the
company shelf life issue is created and it results in a lack of revenue generation for the
organization.
M3. Presentation of appropriate findings
From the above two points, it can be said that the organization has some lack of smart
business strategies for business growth. The organization practiced some good strategies also
which increase its sales but the practice of few marketing strategies decline its sale (El
Haddad, 2015). The pricing method is quite good for the organization but the influence of
labor intensity decreases its profit amount. Besides, the shelf life affects companies
profitability due to its sufficient resources but sufficient resource is very much significant for
hospitality growth. So, a critical review is seen here and it is very much critical to analyze the
appropriate findings in a one side manner.
Task 3
AC4.1. Performance measurement and applicable techniques to individual aspects
Performance appraisal denotes to a systematic process, which evaluates the performance of
an individual employee relating to productivity, which is associated with a predetermined set
of objectives (Ali, et al., 2016). Some techniques are used to measure the performance of an
individual such as quality management, external comparison, the speed of delivery, data
analysis and evolution and so on. According to the Holiday Inn, three techniques can be
applied to measure product performance.
Quality management- The organization has to use the Quality management technique to
measure product quality and employee performance for future growth. Quality management
holds 7 basic tools for measurement such as the fishbone diagram, histogram, check sheet,
Pareto chart, flowchart, control chart and scatter diagram (Joglekar et al., 2016).
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External comparison- the External comparison is very much significant to measure
organizational performance compared to other competitor organization. The organization
needs to implement an external comparison technique by generating a follow-up team to the
business market.
The speed of delivery- Speed of delivery mainly denotes to customer satisfaction by
measuring work potentiality of the employees related to service (Oukil et al., 2016). Quick
service can reflect a positive impact to the brand image so, the organization must implement
the speed delivery tracker to track the servicing record for performance measurement.
AC4.2. Determination of different qualitative and quantitative techniques and the
usefulness or limitations
Usefulness of different quantitative techniques is defined via some key factors such as
complexion analyze expert, flexibility, smooth experiment system and the policy-making
power. On the other hand, it has some limitations or disadvantage such as problematic to
generate an optimal solution, take a long time to generate a sound model (Khan et al., 2015).
Besides, it is very expensive and depends on the model cannot provide an answer by itself.
Qualitative techniques are also defined through some key factors such as broader study, a
huge number of subjects and generalization of results. On the other hand, it has some
limitations also such as rigor difficulty to maintain, asses and demonstrate and time-
consuming.
AC4.3. Approaches to business analysis and exact planning and evolution to hospitality
operations
Business analysis is mainly denoting towards the practice of enabling change within the
organization by simply defining the needs and the recommended solution for serving to the
stakeholders. The business evaluation is mainly denoting towards the determination of the
economic value of an organization. On the other hand, for conducting the business in a proper
way there is a requirement of properly planning the business to make sure everything in a
correct order (Kandampully et al., 2014). In order to make a proper plan for the development
of the hotel there is a need to satisfy the needs of the customers. First, there is a requirement
of conducting a market research to get an idea of the needs of the customers. Then after the
research, there is a requirement for making the budget to make sure the organization is not
crossing the budget. The main motive is to increase the sales rate of the organization to
compete with others.
Conclusion
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From the above study, it has been concluded that the study focused on the entire role of
operation management within the hospitality industry. The role and activities of the
hospitality management may be influenced positively or negatively birth by some significant
demand pattern. Moreover, it also has been said that opportunities for product development
may affect negatively if they were practiced without analysis of current market needs. From
the analysis of the above study, the economic and operational characteristics are identified
which play role in the product development. Finally, it can be said that the outcome of the
study factors reflects a critical analysis by showing positive and negative impact both.
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