Analysis of Luxury Hotels and Hospitality Industry

The assignment covers various aspects of the luxury hotel industry, including research papers on leadership styles, employee outcomes, and creative role identity. It also includes articles on hotel website evaluation, online rating schemes, and foreign market entry mode theories. The document provides a summary of key concepts and ideas related to luxury hotels and hospitality management.

HOSPITALITY OPERATIONS MANAGEMENT (UNIT 12)

Table of Contents
Task 1: Report [LO1, LO2].............................................................................................................4
Introduction......................................................................................................................................4
LO1: Economic and operational criteria of hospitality processes...................................................4
AC1.1 Hospitality products and services.....................................................................................4
AC1.2 Demand patterns [M1]......................................................................................................5
M1: Strategies...........................................................................................................................5
AC1.3 Comparison of customer profiles, requirements and expectations...................................5
AC1.4 Parameters affecting average spending capacity..............................................................6
LO2: Product development in hospitality environments.................................................................6
AC2.1 Stages in service and product development......................................................................6
AC2.2 Contributing features towards customer perception [M2, D1].......................................7
M2: Application of appropriate techniques..............................................................................7
D1: Critical reflection...............................................................................................................7
AC2.3 Constraints and opportunities that influence product and service development [D2].....7
D2: Responsibility and management of activities....................................................................8
AC2.4 Merchandising opportunities............................................................................................8
Recommendation.............................................................................................................................8
Conclusion.......................................................................................................................................9
Task 2: Questionnaire [LO3].........................................................................................................10
LO3: Understand pricing and profitability concepts within hospitality operations......................10
Introduction................................................................................................................................10
AC3.1 Pricing methods and additional considerations..............................................................10
Question 1..................................................................................................................................10
a) Application of pricing and additional considerations........................................................10
b) Lack of applicability of methods with justification.........................................................11
AC3.2: Factors affecting profitability and revenue generation..................................................11
Question 2..................................................................................................................................11
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Effect of factors on profitability and revenue generation [M3].............................................11
M3: Findings..........................................................................................................................12
Conclusion.....................................................................................................................................13
Task 3: Individual Research [LO4]...............................................................................................14
Introduction................................................................................................................................14
AC4.1 Performance and appraisal methods...............................................................................14
AC4.2 Use, benefits and limitations of qualitative and quantitative appraisal techniques........14
AC4.3 Business appraisal, evaluation and planning..................................................................15
D3: Demonstration of convergent, lateral or creative thinking..............................................16
Conclusion.................................................................................................................................16
Reference List................................................................................................................................17
Appendices....................................................................................................................................19
Appendix A................................................................................................................................19
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Task 1: Report [LO1, LO2]
Executive summary
Hospitality sector is a significant mode of revenue generation in the United Kingdom. The
inseparable parameters of hospitality services and products in Sheraton Grand are closely related
to comfort and preferences of the customers. Visitors with purpose of business or commerce visit
throughout the year, with larger volumes in workdays
Introduction
Hospitality industry is one of the considerable revenue generating sectors in the United
Kingdom. This sector is further boosted by the prominence of domestic and international tourism
prospects. The present report will shed light on hospitality operations in Sheraton Grand London
Park Lane from the perspective of assistant operations manager.
LO1: Economic and operational criteria of hospitality processes
AC1.1 Hospitality products and services
Hospitality products and services involve perishable, inseparable, tangible and intangible genres.
Perishable goods involve eatables, while tangible resources include food, souvenirs, lines that are
made available to the guests during the service period. Intangibility in Sheraton Grand is usually
associated with the services rendered to the customers, such as reception, valet and delivery
services. Bowie et al. (2016) state inseparability demonstrates comparison of qualities among
services and goods. Inseparability in Sheraton Grand enables complementary association
between goods and service provisions, such as sumptuous meals are often complimented with
efficient steward services. The inseparable parameters of hospitality services and products in
Sheraton Grand are closely related to comfort and preferences of the customers. The rooms are
divided as per bedding needs, such as single, twin, queen size, king size and suites. Banquet
facilities provide extensive food and beverage that can be utilised during conference and public
ceremonies.
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AC1.2 Demand patterns [M1]
Demand patterns consider the influences that affect trends in customer demands in the hospitality
industry in the UK. Hotels mainly receive the customers from higher economic tiers of the
society. A majority of the guests visit on purpose of business or travel. Demand patterns are also
affected by seasonal or climatic variations. Davis et al. (2018) state influx of tourist is
comparatively higher during summer and spring, and on weekends. Visitors with purpose of
business or commerce visit throughout the year, with larger volumes in workdays. Evaluation of
fast-paced privatised and commodity-oriented services motivates the staff to provide efficient
services. These services are provided to the customer meet their demands and enhance customer
satisfaction.
M1: Strategies
Sheraton Grand focuses on sustainable practices of healthy living with their various in-house
recreational and rehabilitation facilities. In addition to this, Sheraton Grand promotes several
cultural, ethnic and regional events to create a bond between the customers and staffs (Jauhari
and Bharwani, 2017). Effective preferential approaches are showcased in festive occasions like
Halloween, Easter and Christmas include special decors and facilities to the guests.
AC1.3 Comparison of customer profiles, requirements and expectations
The two major categories of customers that avail the hospitality of Sheraton Grand are tourists
and businesspersons. In addition to this, various entertainment companies also make prominent
guests for portfolios or movie shoots. These three categories have highly contrasting needs, all of
which the hotel strives to achieve through an efficient central monitoring system and round-the-
clock services. Tourists stay for an extended time, ranging from few days to a week. They also
tend to require wider number of facilities, such as healthcare, recreation, spa and meditation
(Sheraton, 2018). In comparison to this, business guests usually avail conference hall services,
free Wi-Fi and networking facilities as per their commercial needs. The expectations of
entertainment industries and their professionals are diverse, depending upon their projects.
However, they require privatised sections, remotely undisturbed by prying guests.
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AC1.4 Parameters affecting average spending capacity
Major factors that can influence average spending capacity of the customers involve overall
income size, economic status and socio cultural behaviour. Lu et al. (2015) comment mean
spending power of visitors is dependent on their income levels. Economic status can help to
convey their needs and expectations from Sheraton Grand. In case of social royalties, the
expectations of visitors would be largely influenced by quality than the pricing strategies. As
stated by Phillips et al. (2017), higher socio-cultural tiers improve average spending power.
Similarly, economical influences like currency exchange rates can also pose an impact on
various socio-cultural parameters. Customers from developing nations tend to opt for economical
services, whereas one from flourishing economies tends to have higher mean spending
capacities. Similarly, presence of festivals like Christmas can motivate visitors to spend more
than usual.
LO2: Product development in hospitality environments
AC2.1 Stages in service and product development
It is the duty of an assistant operations manager in Sheraton Grand, to initiate product
development plans and evaluate stages relevant to the projects.
Market research: Prior to fixate on an idea, it is essential to understand the needs of the
customers from a target market. Quintana et al. (2015) state an effective market research will
help to narrow down several ideas into the one with highest anticipated success rate.
Evaluation of ideas: Market research is followed by the evaluation of ideas. Viability of
conceptual views must be related to new opportunities and threats.
Market segmentation: Success of an idea can be rendered by its appropriate implementation in
the chosen segment of a target market. Sheraton Grand plans its initiatives to cater to the
customers who belong to an above-average economic status.
Brand awareness: The brand awareness of Sheraton Grand is built through appropriate
exposure to public and entertainment media (Sheraton, 2018). These adverts uphold special
features of services and products delivered by the hotel to potential as well as existing customers.
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AC2.2 Contributing features towards customer perception [M2, D1]
Perception of customers can be influenced by utilisation of services or products in the hotels.
This perception directly influences the brand image of the hotel. As commented by Radojevic et
al. (2015), kitchen staff of hospitality sectors must be proficient in dietary and nutritional
requirements. Additional facilities that must be provided by hotels involve disabled and elderly
access to the facilities and availability of clinical resources. In addition to this, professional and
efficient service styles, standardised rates against services and products and effective utilisation
of space also contribute to positive perception from visitors.
M2: Application of appropriate techniques
As mentioned above, the four stages of product and service development have been evaluated as
market research, segmentation, idea evaluation and brand awareness. Wang et al. (2014)
comment market research that requires skilled labour and strategic awareness of the target
market. Similarly, evaluation of idea can be achieved by a stringent knowledge in customer
perception as well as predictive skills to analyse future trends in the market. Segmentation can be
made possible by tallying the guest records in Sheraton Grand. Similarly, features of brand
awareness include utilisation of public and social media.
D1: Critical reflection
During my time in Sheraton Grand as an assistant operations manager, I have concluded that the
hotel uses a customer-driven approach to meet their needs. Market analysts continuously
appraise the target market to raise awareness of the staff about changing needs of the visitors.
This is justified from the perspective that hospitality industry is majorly driven forth by the
preferences of the customers. Yang and Mattila (2017) state these preferences are exposed to
rapid and unpredictable change. Hence, I think it is rationalised that effective evaluation is a
critical need in the hospitality industry.
AC2.3 Constraints and opportunities that influence product and service development [D2]
The major opportunity that has catalysed the growth of product and service influence on
customers is successful campaigns in social and public media. In addition to this, the high skilled
and large number of employees enables Sheraton Grand to provide extensive and round the clock
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accommodation facilities to its guest. According to Akincilar and Dagdeviren (2014), the target
markets in the UK are diverse in nature for hospitality service sector. Different cultural and
regional ethnicities avail the services as per the considerations for luxury. In comparison, major
constraints are listed as strong competitive forces and socio-political pressure that barricades
ventures in far Eastern nations. In addition, economic distress such as Brexit also influences
development of goods and services.
D2: Responsibility and management of activities
The role of an assistant operations manager to promote service and product development can be
considered in terms of the opportunities that are mentioned above. The brand image can be
merchandised through usage of licensed products such as napkins, linens and curtains with hotel
logo. Service styles are also supervised to ensure that customers are provided for as per their
expectations.
AC2.4 Merchandising opportunities
Merchandising involves expectations of visitors to expect optimum service quality influenced by
their purchasing power. As stated by Casalo et al. (2015), hospitality business cannot create an
opportunity for added values against premium charges. In addition to this, merchandising levels
can improve for Sheraton Grand in case economic condition of visitors improves, thereby
rendering competitive advantage to the business.
Recommendation
Based on the information, the following recommendations have been devised.
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Figure 1: Recommendations
(Source: Given by Researcher)
Extensive analysis of target group of customers: This can ensure that the hotel performs as per
the needs and expectations of the visitors.
Introduction of quality and diverse services: Visitors from ethnic communities can increase
revenue generation for the hotel. Thus, the staff must be open towards diversified customer
communities in the hotel.
Conclusion
Thus, it can be concluded that Sheraton Grand is one of the most prominent and influential
luxury hotels in the UK. It provides extensive service facilities through a needs-based approach.
The staffs maintain a professional and warm behaviour to their guests. Product merchandising
and brand awareness caters to its sustainable growth.
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ExtensiveanalysisoftargetgroupofcustomersIntroductionofqualityanddiverseservices

Task 2: Questionnaire [LO3]
LO3: Understand pricing and profitability concepts within hospitality operations
Introduction
The hospitality sector in the UK contributes to a significant portion to the national economy.
Hence, optimum pricing strategies are essential for generating appropriate revenues exchange of
best quality services. Various pricing methods and motivators of profitability and revenue are
discussed.
AC3.1 Pricing methods and additional considerations
These pricing strategies are considered in the retrospective of services and products provided by
Sheraton Grand.
Question 1
a) Application of pricing and additional considerations
Cost-oriented pricing: In this pricing strategy, the price is influenced by net production cost. A
profit percentage is added to the aforementioned production cost in order to determine the final
selling price.
Market oriented pricing: On contrary to cost-driven pricing, marketing-oriented pricing
strategies evaluate competitive prices. Based on existent pricing in the target market, a business
establishes its prices.
Service charges: Sheraton Grand Hotel can follow these two pricing strategies in order to ensure
profitability as well as competitive advantage. As opined by Kruesi et al. (2017), different
pricing patterns can be imposed by additional service charges that can be composed through
guests over their meal and linen charges. These charges can be levied during the time they enter
the premises, or when the service tenure is concluded.
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b) Lack of applicability of methods with justification
As mentioned above, the application of pricing and its additional considerations is discussed in
the lights of Sheraton Grand. In its retrospective cover and minimum charges cannot be
considered if the purpose of the organisation is to generate significant and sustainable profits.
Cover charge: Cover charges are included in the form of entrance fees to certain facilities, such
as bars, restaurants or nightclubs. Madanoglu and Ozdemir (2016) define it to be the fixed
amount that is added to bills in restaurants in lieu of service or entertainment. These usually do
not involve specified food costs. Hence, Sheraton Grand can lose its prominence with its
customers as it usually includes accompaniments in the form of service charges.
Minimum charge: Minimum finance charges can be considered in cases where least payable
amount is charged through interest. These are applicable more prominently in case of credits.
However, Sheraton Grand is not involved in this particular billing phase, being in the hospitality
industry. Hence, this is not applicable for the chosen business.
AC3.2: Factors affecting profitability and revenue generation
Question 2
Effect of factors on profitability and revenue generation [M3]
Figure 2: Factors that affect profitability and revenue generation
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LabourIntensityShelfLifeElasticityofDemandStandardisationPortionControlPriceProcurement

(Source: Given by Researcher)
Labour Intensity: Increase in labour charges is related to better service quality. Hence, it poses
an indirect motivating effect on revenue generation. However, significant interaction cannot be
clarified as this interaction is highly superficial in nature. High cost of labour can also reduce
profitability.
Shelf Life: In an international hotel business, innovative revenue generation is dependent on
shelf life of their products. High shelf life can cater to larger amount of revenue generation. This
further caters to organisational ability to yield larger profits from investments.
Elasticity of Demand: Net revenue must be able to cover costs, in order to prevent bankruptcy.
Elasticity of demand is a pricing concept, which motivates total revenues generated by the
business.
Standardisation: Purpose of standardisation is to exert profitable pricing through adoption of
value-driven pricing strategies. The positive and direct influence on profit margins can be
provided by linearity conditions.
Portion Control: Portion control enables the hotel to prevent wastage, thereby influencing
profitability. However, Ren et al. (2016) argue this is not a direct motivator of profits or
revenues.
Price: Pricing is one of the critical factors that motivate profits and revenues. It must be
balanced in the optimum range to influence maximum profits, as expensive costs against
inefficient services can reduce brand reputation and revenue generation in the long run.
Procurement: Procurement is another essential influencer of profits and revenue generation.
This is because procurement of smaller but efficient manufacturing units can increase the
capacity of the hotel, thereby boosting revenues.
M3: Findings
The findings suggest that factors like price and procurement create direct impact on profits and
revenue generation. On contrary, shelf life, elasticity and labour intensity create indirect effect
that can be considered superficial.
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Conclusion
Hence, it is concluded that Hotel Sheraton Grand includes cost and market oriented pricing in
presence of additional service charges. Similarly, price and procurement are essential factors that
help to determine additional pricing considerations.
Task 3: Individual Research [LO4]
Introduction
This section promotes the undertaking of an individual research regarding the evaluation of
prominent analysis methods and their comparisons. Prominent literature and works of scholars
have been cited to vouch for the validity and reliability of the data gathered.
AC4.1 Performance and appraisal methods
Quality Management: Quality management is considered as an effective measure to evaluate
service qualities provided to the guests. Radojevic et al. (2015) state quality can be appraised
through checklists by regularly supervising the nature and efficiency of services rendered.
Customer Service: Customer feedback can be obtained through database management. The
suggestions and responses can be used to ensure that the hotel provides desired services to its
guests.
Developing Quantitative and Qualitative data: Qualitative data can be obtained from guest
feedbacks, and quantitative data from the quality management checklists. Comparative analysis
of this data can help to conclude overall level of performance.
Data analysis and evaluation: Data analysis can be done through statistical comparison to
determine the increment in efficiency of services of the staff. The evaluation thus determines the
skill improvements in the employees.
External comparison: The evaluated data from the last phase can be tallied against staff
performance in competitive organisations. This practice can ensure that Sheraton Grand is
obtaining best possible performances from its human resources.
Sales performance and net profit: Sales performance and net profits can be calculated through
financial records of the company. This can help to determine overall growth of Sheraton Grand
in terms of sales, revenue generation and profits.
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AC4.2 Use, benefits and limitations of qualitative and quantitative appraisal techniques
Application Benefits Limitation
Qualitative This form of data collection
helps to accumulate
information through a
direct and theoretical
method of communication
● The problems are
easily identified
through direct
communication.
● Easier mode of
data collection,
interpretation
and evaluation.
● Time and cost
consuming
method
● Is exposed to
risks of data
redundancy or
inaccurate
documentatio
n
Quantitative This helps to statistically
evaluate the data and store
it for future comparisons
and analysis.
● Easy to store
data
● Facilitates
analysis in a
more accurate
manner
● It does not
shed light on
the
perspectives
of guests.
● Difficult to
analyse
without
skilled human
resource
Table 1: Use, benefits and limitations of qualitative and quantitative appraisal techniques
(Source: Given by Researcher)
AC4.3 Business appraisal, evaluation and planning
Business analysis: Hotel industry is one of the most influential sectors in the Hospitality
Industry, and amounts to more than 30% of net value in the national economy of the UK.
Markets of travel and tourism are overwhelmed with influx of consumers from multiple portions
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of the globe. Accession to disposable income in customers motivates them to spend it in
recreational and luxurious experiences during travelling (Quintana et al. 2015). Hence, Sheraton
Grand has established its prominence in this sector through extensive services.
Business evaluation: The continuous growth of hospitality industry has worked in favour of
major customer markets. This is because; boost in the sales of hotel industry has motivated
revenue generation in tourism, travel, restaurants and local businesses. In addition to this, Davis
et al. (2018) comment luxury hotels often operate through chains in multiple sites and countries.
This enables in diversification of organisational culture. The country inns and motels also
experience radical growth. Hence, the evaluation of this business sector is seen to have a
progressive effect on its relative sectors.
Business planning: Appropriate planning is essential for running a successful hotel venture in
the national markets of the UK. Arrangements of a business designs caters to the particulars of a
hotel facility that can aid in smoother operation through convenience (Lu et al. 2015). Governing
members of Sheraton Grand must focus on formulation of appropriate arrangement that meets
needs of target market and the segmented group of consumers.
D3: Demonstration of convergent, lateral or creative thinking
Convergent thinking is utilised in the presence of divergent thinking to reach an effective
decision. Convergent thinking analyses to obtain a solitary and well-established solution to the
emergent problem, while divergent thinking looks for alternative measures as backup
arrangements. In comparison to this, lateral thinking considers critical comparison of available
options to understand client needs and extrapolate them on required list of activities. Creative
thinking in hotel industry is essential to analyse the expectations of customers and present the
services in a way that is aesthetically pleasant.
Conclusion
Based on this information studied above, it can be concluded that performance evaluation can be
done through multiple methods based on the resources available. Appraisals of skill development
and employee content can be implemented through quantitative approach. Furthermore,
convergent, lateral or creative thinking can emerge as one of the prominent methods of decision
making in sectors of travel, tourism, hotel and hospitality industries.
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Reference List
Books
Bowie, D., Buttle, F., Brookes, M. and Mariussen, A., 2016. Hospitality marketing. Abingdon:
Routledge.
Davis, B., Lockwood, A., Alcott, P. and Pantelidis, I.S., 2018. Food and beverage management.
Abingdon: Routledge.
Journals
Jauhari, V. and Bharwani, S., 2017. An exploratory study of competencies required to cocreate
memorable customer experiences in the hospitality industry. Hospitality Marketing and
Consumer Behavior, pp. 159-185.
Lu, C., Berchoux, C., Marek, M.W. and Chen, B., 2015. Service quality and customer
satisfaction: qualitative research implications for luxury hotels. International Journal of Culture,
Tourism and Hospitality Research, 9(2), pp.168-182.
Phillips, P., Barnes, S., Zigan, K., & Schegg, R. (2017). Understanding the impact of online
reviews on hotel performance: an empirical analysis. Journal of Travel Research, 56(2), 235-
249.
Quintana, T.A., Park, S. and Cabrera, Y.A., 2015. Assessing the effects of leadership styles on
employees’ outcomes in international luxury hotels. Journal of Business ethics, 129(2), pp.469-
489.
Radojevic, T., Stanisic, N. and Stanic, N., 2015. Ensuring positive feedback: Factors that
influence customer satisfaction in the contemporary hospitality industry. Tourism
Management, 51, pp.13-21.
Wang, C.J., Tsai, H.T. and Tsai, M.T., 2014. Linking transformational leadership and employee
creativity in the hospitality industry: The influences of creative role identity, creative self-
efficacy, and job complexity. Tourism Management, 40, pp.79-89.
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Yang, W. and Mattila, A.S., 2017. The impact of status seeking on consumers’ word of mouth
and product preference—A comparison between luxury hospitality services and luxury
goods. Journal of Hospitality & Tourism Research, 41(1), pp.3-22.
Online Articles
Akincilar, A. and Dagdeviren, M., 2014. A hybrid multi-criteria decision making model to
evaluate hotel websites. International Journal of Hospitality Management, 36, pp.263-271.
[Online] Available from: https://doi.org/10.1016/j.ijhm.2013.10.002 [Accessed 27 October,
2018]
Casalo, L.V., Flavian, C., Guinaliu, M. and Ekinci, Y., 2015. Do online hotel rating schemes
influence booking behaviors?. International Journal of Hospitality Management, 49, pp.28-36.
[Online] Available from: https://doi.org/10.1016/j.ijhm.2015.05.005 [Accessed 27 October,
2018]
Kruesi, M., Kim, P.B. and Hemmington, N., 2017. Evaluating foreign market entry mode
theories from a hotel industry perspective. International Journal of Hospitality Management, 62,
pp.88-100. [Online] Available from: https://doi.org/10.1016/j.ijhm.2016.12.005 [Accessed 27
October, 2018]
Madanoglu, M. and Ozdemir, O., 2016. Is more better? The relationship between meeting space
capacity and hotel operating performance. Tourism Management, 52, pp.74-81. [Online]
Available from: https://doi.org/10.1016/j.tourman.2015.06.005 [Accessed 27 October, 2018]
Ren, L., Qiu, H., Wang, P. and Lin, P.M., 2016. Exploring customer experience with budget
hotels: Dimensionality and satisfaction. International Journal of Hospitality Management, 52,
pp.13-23. [Online] Available from: https://doi.org/10.1016/j.ijhm.2015.09.009 [Accessed 27
October, 2018]
Website
Sheraton (2018) Sheraton Grand London Park Lane, Viewed on 27 October, 2018
<https://www.marriott.com/hotels/travel/longr-sheraton-grand-london-park-lane/>
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Appendices
Appendix A
(Source: https://www.marriott.com/hotels/travel/longr-sheraton-grand-london-park-lane?
program=spg)
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