Operational Management in the Hotel Industry

This paper analyzes the issue of operational management in the hotel industry and suggests recommendations for effective resolution. It discusses the issues of employee turnover, changing customer expectations, and lean synchronization. The paper recommends using the Six Sigma approach, process engineering, and lean synchronization to improve operational management.

Running head: OPERATIONAL MANAGEMENT
OPERATIONAL MANAGEMENT
Name of the student
Name of the university
Author Note

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Table of Contents
Introduction......................................................................................................................................2
Discussion........................................................................................................................................2
Analysis of the Operations management issues...............................................................................4
Recommendations............................................................................................................................6
Conclusion.......................................................................................................................................9
References......................................................................................................................................10

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Introduction
This paper aims to analyze the issue of operational management within the context of the
chosen organization which will be elaborated by using the operational management theories and
suggest probable recommendations for an effective resolution of the operational management
issues of the company. Operational management is the process ofmanaging the system of goods
and services production [1]. It is the primary part of all the organizations since operations and
process management is the core of all service industries. This is the process of management of
the administration of all the business practices within an organization to ensure maximum level
of efficiency [1]. However, it is imperative to note that every organization face some or the other
organizational management issues while operating.
Since, I had the opportunity to observe one of the issues of organizational management
while working as employees in one of the best hotels of the town; this provided an ample
opportunity to realize and sense the gravity of problem and develop an understanding of the
organizational issues that a particular organization might face.
Discussion
During my job in Atlanta Hotel as a human resource recruit, I realized that the hotel
industry faces certain unique organizational management issues and this requires extra concern
for resolving them can become difficult at times. It was observed that the company faced a major
crisis due to the higher level of employee turnover. It was clear that the employee turnover to a
certain degree is acceptable since people always strive for better opportunities and higher pay;
however it is important to note the employee turnover might have bigger issues underlying it

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[5]. Along with the job satisfaction, there are issues like longer working hours which can be
difficult for the employees to manage at time [6]. However, the problem for the operational
managers of the company is the higher labor cost attached to the higher employee turnover or the
monetary cost associated with advertising for the post [8]. This labor cost associated with the
employee turnover for the company can actually hurt its other operational issues.
The second issue of the operations management of the hotel industry is associated with
the changing expectations of the customers. Even though all the service industries face some
or the other operational issues, however it is important to note that the gravity of issues for some
industries are larger and more complex than others [6]. According to data, in the service industry,
customers only find 16% delight in their overall experience, it is estimates that the general
perception of the customers are higher however their actual expectations in reality happens in
less than 20% [1]. This decreasing customer satisfaction has wide ranging impact starting from
reduction in number of customers and reduction in the overall revenue of the company [3].
Hence, there is a need to handle the issue by looking into the operational management of the
company which is described in the analysis part.
Fig: customer satisfaction ratio

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Source: (JOBS, 2019)
Following the issue of changing expectations of the customers, another important issue is
achieving the flow of the goods and services for delivering exactly what the consumers want and
in exact quantities at the right time and at the lowest possible cost, that is, lean synchronization.
The growth of the hotel industry heavily depends on the service to the customers and satisfaction
of the customers. If there is mismatch in the goods and services demanded by the customers and
supplied by the hotel, then customer satisfaction will be affected and that in turn will affect the
business of the hotel [12]. It has been found that Atlanta Hotel has been facing some issues in the
customer satisfaction due to the discrepancies between the demand and delivery of the exact
products and services at the right time and right cost. Many times it has happened that the hotel
is not being able to deliver what the customers want exactly and also in the right amount, at right
time and at the lowest and right price. This results in wastage of valuable resources which is a
loss for the business. Thus, this operational issue also needs to be paid attention to achieve
maximum customer satisfaction and growth of the business.
Analysis of the Operations management issues
Analyzing the operations management issue of the hotel industry, it can be said that
employee turnover has manifold in the last five years. Total percentage of employee turnover in
the year of 2012, 50.8 % while this has increased to 62.8 % by the year 2015[5]. There are
certain probable factors responsible for the high employee turnover is due to the issues like low
work life balance, long working hours and less health care benefits for the employees. Hence it is
recommended that the company should adopt the “Six Sigma approach” which is the data

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driven approach and systematic methodology for eradicating and eliminating the defects in the
six deviations within the process [1].
It is analyzed from the above mentioned situation that the reasons responsible for the
poor customer satisfaction is due to the lower service delivery by the employees of the hotel.
Moreover, the operational management of the company is responsible to make strategic effort to
resolve issues like low quality service.It is also found that lacks of empathy of the employees
towards the customers are one of the prime reasons for the low service delivery.Keeping in mind
the perception of satisfaction and actual satisfaction of the customers, it is the duty of the
managers to prepare a two wayapproach focusing on the previous customer experience and
motivating tools for the employees of the company.
The mismatch in the demand of the customers and the delivery of required products and
services in the hotel is a significant factor that affects the business performance. This situation
often leads to a waste of important resources. In a hotel like Atlanta Hotel, the operations do not
occur in a large scale, and hence, efficient resource allocation and utilization is extremely
important so that waste is reduced. For establishing an efficient operation between the products
demanded and delivered in exact quantity, at right time and at the lowest cost, the hotel needs to
involve every human resource in the efficient manner and implement a system for continuous
improvement [12]. It happens quite often that the hotels cannot meet the exact demand of the
customers. They provide the goods and services that are not demanded and thus lead to the waste
of resources as well as valuable products and services. On the other hand, the purpose customer
satisfaction is also not achieved and thereby the hotel reputation and business are
affected.Atlanta Hotel also faces this issue. The interruption in the smooth flow operations can
happen both in smaller or larger hotels. As stated by Rauch et al. (2016), due to economic and

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financial crisis, the hospitality industry was also affected and thus, emphasis has been put on
reducing the wastes and establishing an efficient operational management.The wastes in this
industry can be reduced by implementing streamlined flow, matching the demand exactly,
increasing the process flexibility and reducing the effects of variability. However, the lean
approaches of management are not much found in the hotel industry [13]. de‐Miguel‐Molina et
al. (2018) mentioned an example of the Apex Hotels of UK, where one of the largest spending is
done on the laundry services. It has been found from the analysis that in the process between the
laundry of the dirty linens and delivering clean linens to the hotel every day, there are many non-
value-adding activities, which are contributing in the waste of resources. Similarly, there are
many other services, there are either non-value-added services or mismatch in the demand and
supply of the exact products and services at the right time [14]. Thus, for efficient operations in
the hotel industry, lean management is required.
Recommendations
The managers of the Atlanta hotels Pvt. Ltd should ensure that they have collected first-
hand data of the total employee turnover of the company on a monthly, quarterly and annual
basis. On this collected data and their assessment, the operational managers of the company will
have the chance of restructuring their staffing strategy[3]. This restructured theory should
include the Herzberg’s theory and aim at reducing the employee dissatisfaction by enhancing
employee satisfaction [2]. The operational manager should also focus in the issue of human
resource management of the company and arrange from time to time communication and
meetings to find out any possible future issues with the employees of the organization. The
company policy, their working conditions, human resource management are some of the issue

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that are to be catered since higher employee turnover is harmful for the company’s future and
damaging their reputation by lowering the efficiency and quality of services. The operational
managers of the company should adopt the “bottom-up” approach where there are scopes for
learning through the day to day approach and build the capabilities of the employees reflecting
on the overall interest of the business [1]. Using the six sigma approach the operational managers
of the company should approach the issue through defining the problem, measuring the gravity
of the problem, analyzing the underlying factors for the employee turnover and improving the
system with restructuring the employee retention strategy [4].
Fig: Six Sigma approach
Source: (JOBS, 2019)
The operational management is responsible for the technical assistance to the company in
order to resolve the issue of lower customer satisfaction. In this regard, the operational
management department of the company should focus on the method of “Process Engineering”
which is a method of redesigning the activities of the business entity for better service
delivery[3]. This will help the company to rethink their customer’s response and adapt the same
for planning a new strategy to serve the customers better. As stated by Cobos et al. (2016),
process engineering involves many tools and processes, and depending on the nature of the
organizational system, the processes are selected and implemented. To assess the customer

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satisfaction, the hotel can implement a process based system. In this process based system, the
organization can develop an integrated and holistic approach and creates a framework for the
process analysis for achieving customer satisfaction [15]. These processes are usually divided
into three categories, namely, planning, designing and monitoring. The hotel should focus on
establishing on objectives for achieving customer satisfaction, which includes activities like
improving the quality of products and services, providing cost benefits or value additions.Lastly,
it should implement monitoring activities for the process of evaluating customer satisfaction.
For the lean management issues, the hotel should implement lean synchronization
process. This process enables the organization to make the products, services, customers and all
type of information flow smoothly [12]. This will help not only to reduce the time throughout the
entire process, but also to avoid the negative impacts of the in-process inventory. The queues and
the inventories are considered as the obstacles in the process and thereby inhibit the process
improvement [17]. Thus, by implementing the lean synchronization, the organizations reduce
many types of wastes, such as, resources, inventories and time. In a smaller organization like
Atlanta Hotel, the aim of implementing lean synchronization can be obstructed in three ways,
such as, firstly, inability to reduce waste in all sections of operation, and the causes of the wastes
are more extensive than expected; secondly, inability to involve all the people in the process for
establishing a smooth flow and waste elimination, and lastly, inability to adopt continuous
improvement activities.Thus, the organization must focus on these areas to establish an efficient
lean synchronization for meeting the customers demand in an exact manner and reduce wastes in
the operations.

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Conclusion
From the above discussion, it can be concluded that there can be many issues in the
operational management in the hotel industry, which can be dealt by applying different methods.
Atlanta Hotel is facing the operational issues like high employee turnover, changing expectations
of the customers and absence of lean synchronization leading to wastes and reduction in
customer satisfaction. By addressing these issues with six sigma approach, process engineering
and lean synchronization process, the hotel can improve its operational management and growth
its businesses. In a service industry, customer satisfaction is highly important and for that the
employee turnover should be reduced and the demand of the customers should be met exactly,
which also helps to reduce wastes in the system. Thus, the organizations should apply different
control methods to address different operational issues for establishing an efficient system.

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References
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[9] GreyCampus. (2019). DMAIC – A Six Sigma Process Improvement Methodology. [online]
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APPENDIX
Fig : The 4 V’s model of operations management