Service Management for Hospitality and Tourism

This report provides an insight on the Strategic Service Vision Framework for a new hospitality organization which is to be established in Manly Beach of Sydney. It includes business overview, target market segments, service concept, possible issues and implications for The Pearl Hotel.

Running Head: SERVICE MANAGEMENT 1
Service Management for Hospitality and
Tourism

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Executive Summary
The major objective of this report was to provide an insight on the Strategic Service Vision
Framework for a new hospitality organization which is to be established in Manly Beach of
Sydney. This paper focused on first two components of this framework i.e. target market
segments and service concept which are given by Heskett (1986). The report included the
business overview of The Pearl Hotel that will be made up of 30 rooms. It will offer the
accommodation services to its potential customers. The hotel is situated in a location that is
approachable from various cafes, restaurants, beaches, lakes and attractions in the city. Under the
first component of this Strategic vision framework i.e. target market segment, the company is
focusing on young couples, senior aged people, healthy lifestyle and people who wish to spend
quality time with their family. Moreover, there was the discussion about the service concept on
which this hotel will be offering its services to the customers. The Pearl Hotel will provide the
personalized and welcoming accommodation services to its guests.
In the next section of report, possible issues were discussed and presented which the hotel may
confront in the future. The major issues are like changing customer needs, technology changes
and competitive environment. This hotel needs to develop the strategies so that it can overcome
these issues in the future.

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Table of Contents
Introduction.................................................................................................................................................4
Organization Overview................................................................................................................................4
Core and Peripheral Services:..................................................................................................................5
Service Scape...........................................................................................................................................5
Target Market Segments.............................................................................................................................5
Current and Future Implications..................................................................................................................6
Service Concept...........................................................................................................................................8
Conclusion...................................................................................................................................................8
References...................................................................................................................................................9

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Introduction
Service management plays an important role in effective management of any hotel or hospitality
organization. The organization needs to implement different techniques and methods to enhance
the service processes and performance in the industry. The major objective of this report is to
provide a Strategic Service Vision for a new hotel on Manly Beach of Sydney (Australia) that is
named as The Pearl Hotel. The first part of the report introduces the overview of new business
venture, core and peripheral services and its targeted segments. It will be followed by analyzing
the current and future trends in the business. In the next section, the service concept of the
chosen organization is presented. The overall objective of the report is to facilitate the readers to
know about the viability of organization’s hospitality business.
Organization Overview
The Pearl Hotel is a new business venture that is planning to be involved in hotel and hospitality
business. The company object of this Strategic Service Vision Report is a hotel called The Pearl
that is situated in South end of Manly Beach. The Pearl Hotel offers an outstanding waterfront
location within the easy approach of best of Manly (Presbury and Richardson, 2014). The
organization will be offering good accommodation services with spacious bedrooms and other
services (Australian Bureau of Statistics, 2018). The guests staying at this hotel will be within
the walking distance of many cafes, restaurants, shops and bars of Manly. There are various
other attractions which are approachable in the area like Sea Life Sanctuary, Manly Kayaks,
Manly Surf School and picturesque coastal walks of Manly. Guests travelling to this country can
take the fast or regular ferry, taking only 20 to 30 minutes to arrive to Sydney CBD. About this
hotel, it can be stated that its location will facilitate a complete alignment with the nature
(Schuckert, Liu and Law, 2015).
The hotel will be built of 30 bedrooms in the beginning that can be extended after 2 years of
operations. The rooms will be prepared with different types of beds like king size bed, single
beds, double bed etc. Some of the rooms will have the capacity for the stay of a complete family
together. Each and every room will have a separate bathroom and other amenities. The guests

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can order their food in their room and there will be a common dining area also where they can
have their breakfast and meals (Aragon-Correa, Martin-Tapia and de la Torre-Ruiz, 2015).
Core and Peripheral Services:
The services of The Pearl Hotel will be divided into two categories i.e. core and peripheral
services. At The Pearl, the core services will be accommodation, hospitality and meals provided
in the rooms and common dining area (Newsroom, 2016). Moreover, peripheral services will be
picking and drop facilities, gym, swimming pool, free breakfast, free parking, laundry services,
private balcony, in-room facilities like Wi-Fi, air-conditioning, LED, playing area for children
direct dialing telephones, travel guide etc.
Service Scape
Service scape plays an important role in the evaluation of customers for a specific service. It is
composed of various physical components like music, environment, color, design and layout.
The service scape of The Pearl will provide a good environment and surroundings to its guests
that will be a major factor which will affect their perception. It will please the guests by
developing an attractive and peaceful environment with comfortable temperature, hygiene
conditions, relaxing music and friendly staff (Mok, Sparks and Kadampully, 2013). Additionally,
it will consider some other components like interior, decor style, furniture, appearance, artifact,
layout and design concept.
Target Market Segments
Under Strategic Service Vision Framework of Heskett (1986), target market segment is the first
element that needs to be addressed for identifying the customers and market segments on the
basis of different segmentation characteristics like demographic, geographic, behavioral and
psychographic (Jang, et al, 2018). By using this, the organization targets the segment that suits
its overall business goals.
The target market segment for The Pearl Hotel is discussed below:
Demographic:

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Under demographic segmentation, the organization will target its customers on the basis of age
and income. The major target segment of The Pearl Hotel will be newlyweds and young couples
between the age group of 35 to 45 with the children 3 years to 14. Additionally, the hotel will
focus on the senior aged people with the higher income level and who belong to the upper social
class.
Geographic:
Considering the geographic variables, The Pearl Hotel majorly emphasizes on establishing the
hotel in the area where a larger population can reach. It will target the people from the nearby
cities of Sydney (Presbury and Richardson, 2014). Additionally, it will focus on the people from
neighboring countries like New Zealand.
Psychographic:
Under this, the service organization will target the people who are interested in travelling to
famous destinations for leisure and business purpose. By offering some wellness tourism
activities, the hotel will emphasize on the people who love to live healthy lifestyle.
Behavioral:
This approach includes implementing the segmentation based on the benefits which the potential
customers aim to get by using the products and services provided by any firm. Primarily, it will
target the visitors from nearby cities who are seeking for some days of escape from their busy
routine life and wish to spend relaxed and fun time.
Thus, The Pearl Hotel will be offering its hotel and hospitality services by focusing on multi-
segments. There are various differences among the above target market segments which need to
be addressed properly (Kim, Vogt and Knutson, 2015). It will assist the organization to adapt and
customize the hospitality services to different wants and needs which the customers may have.
By following the first component of Strategic Service Vision Framework of Heskett, this hotel
will be able to determine its customers. Additionally, it will enable the organization to offer its
services to targeted segments directly.

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Current and Future Implications
In Australia, the hospitality industry is one of the fast growing industries and it plays an
important role in the development of country’s economy (Newsroom, 2016). With the growth of
industry, there are some emerging issues which are confronted by the companies. Operating its
business in Australian hospitality industry, The Pearl Hotel may face some issues which can
affect its operations in the future. Some of the major future issues are given below:
Changes in the customer demands
With the passage of time, the demands and needs of customers are changing towards hotel and
accommodation. According to a report, people prefer to stay at the hotels which provide
luxurious accommodation at affordable prices. Additionally, they prefer to take the hotel that
provides them all the facilities like fitness center, Yoga classes, and wellness activities, playing
area for kids, theatre and electronic gadgets (Australian Bureau of Statistics, 2018). Considering
this trend, The Pearl Hotel will need to make changes in its service offering in the coming future.
Competitive Environment
The academic research stated that competition is one of the major issues that may influence the
business of this new hotel in Sydney. There are various emerging players in the area like The
Sebel Sydney Hotel, Hotel Steyne which have already established buildings in the city. It can
pose competitive threat to The Pearl Hotel (Presbury and Richardson, 2014). So, it is significant
for The Pearl Hotel to search for the ways so that they can enhance their business. It will assist
the organization to gain future competitive advantage over these players. There are various
business enhancement tools in the market which this hotel can use. One of the most important
tools is human sigma that the organization can use to measure the guest satisfaction, employee
satisfaction, employee engagement (Boella and Goss-Turner, 2013). These are the key
performance indicators which the hotel can use to measure its performance and success in the
future.
Technology Changes
Technology is undergoing a significant growth and it is expected to grow in the future. However,
this trend is contributing to the economic development of a country, but it can cause some issues

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to the hospitality organization like The Pearl Hotel, Sydney. Millennial customers get attracted
towards advanced technology so hotels need to adopt and install new technologies in the hotel
rooms. The Pearl Hotel needs to make higher investment on technology development. If the
organization will be able to align the technology changes in its environment, it will be able to
overcome the issues (Lovelock and Patterson, 2015).
Thus, the organization needs to be aware about these future issues and implement effective
strategies to overcome them.
Service Concept
Service Concept is the second component of Strategic Service Vision Framework of Heskett that
defines the personalized approach of a company towards the needs and wants of customers. The
rooms of The Pearl Hotel will provide the services depending on the needs and interests of
customers. For the guests, the expectations are to feel comfortable and relaxed in an attractive
environment where service delivery and encounter is very professional but employees are very
friendly to the guests. They will always make efforts to make the guests valuable. The intent of
this hotel will be to provide an exceptional combination of activities so that they can provide an
exceptional experience at hotel rooms.
Conclusion
From the above analysis, it can be concluded that The Pearl will be establishing its business in
Australian hospitality industry. The objective of the report was to provide the explanation about
first two components of Strategic Service Vision Framework for a new hotel that will be
established in Manly Beach, Sydney. The major target market of the company is the people who
are interested in leisure and outdoor activities. The hotel will be situated in a strategic location of
the city. Its service concept is described as friendly, welcoming and personalized service where
the guests can feel valued and like they are at their home.

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References
Aragon-Correa, J. A., Martin-Tapia, I., and de la Torre-Ruiz, J. (2015) Sustainability issues and
hospitality and tourism firms’ strategies: Analytical review and future directions. International
Journal of Contemporary Hospitality Management, 27(3), 498-522.
Australian Bureau of Statistics. (2018) Hospitality Industries, Available from
http://www.abs.gov.au/ausstats/abs@.nsf/dossbytitle/D793CA20B7FEF365CA256BD000277C8
C?OpenDocument [Accessed on 24 July 2018].
Boella, M. and Goss-Turner, S., (2013) Human resource management in the hospitality industry:
A guide to best practice. Routledge.
Jang, S., Liu, T., Kang, J.H. and Yang, H. (2018) Understanding important hotel attributes from
the consumer perspective over time. Australasian Marketing Journal (AMJ), 26 (1), 23-30.
Kim, M., Vogt, C.A. and Knutson, B.J., (2015) Relationships among customer satisfaction,
delight, and loyalty in the hospitality industry. Journal of Hospitality & Tourism
Research, 39(2), pp.170-197.
Lovelock, C. and Patterson, P., (2015) Services marketing. Pearson Australia.

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Mok, C., Sparks, B. and Kadampully, J., (2013) Service quality management in hospitality,
tourism, and leisure. Routledge.
Newsroom, (2016) Why Australia's hospitality industry is booming, Available from
https://www.hotelmanagement.net/transactions/why-australia-s-hospitality-industry-booming
[Accessed on 24 July 2018].
Presbury, R. and Richardson, S., (2014) An appraisal of important hotel attributes: A perspective
from managers and customers of Sydney hotels. CAUTHE 2014: Tourism and Hospitality in the
Contemporary World: Trends, Changes and Complexity, p.516.
Schuckert, M., Liu, X. and Law, R., (2015) Hospitality and tourism online reviews: Recent
trends and future directions. Journal of Travel & Tourism Marketing, 32(5), pp.608-621.
Simons, T., McLean Parks, J., and Tomlinson, E. C. (2017) The Benefits of Walking Your
Talk: Aggregate Effects of Behavioral Integrity on Guest Satisfaction, Turnover, and Hotel
Profitability. Cornell Hospitality Quarterly, 59 (3).

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