Analysis of Hospitality Operations Management at The Arch London

This report provides a comprehensive analysis of hospitality operations management, focusing on The Arch London, a five-star hotel in the United Kingdom. The report explores various aspects of the hospitality industry, including the nature of hospitality products and services, the influences on demand patterns, and customer profiles with their diverse expectations. It examines factors affecting average spending power (ASP) and evaluates key stages in product and service development, as well as customer perceptions. Furthermore, the report delves into pricing strategies, revenue generation, and profitability in hospitality operations. It also assesses performance measures, appraisal techniques, and their application, concluding with an analysis of business analysis, evaluation, and planning within the hospitality context.

HOSPITALITY
OPERATIONS
MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
1.1 Analysing the nature of hospitality product and service areas.........................................3
1.2 Evaluating the different influences affecting patterns of demand within hospitality
operations...............................................................................................................................4
1.3 Comparing customer profiles and their differing expectations and requirements in respect
of hospitality provision...........................................................................................................5
1.4 Analysing factors affecting average spending power (ASP) in hospitality businesses....5
2.1 Evaluating the key stages in product and service development applied within a hospitality
operation.................................................................................................................................6
2.2 Analysing the features that contribute towards the customers’ perception of products and
services...................................................................................................................................7
2.3 Assessing the opportunities and constraints affecting product and/or service development
within a hospitality environment............................................................................................7
2.4 Evaluate different merchandising opportunities for hospitality products and services....8
TASK 2............................................................................................................................................9
3.1 Evaluating different methods of pricing taking into account additional pricing
considerations.........................................................................................................................9
3.2: Assessing the factors which affect revenue generation and profitability in hospitality
operations ............................................................................................................................10
TASK 3..........................................................................................................................................10
4.1 Applying a range of performance measures and appraisal techniques to individual aspects
of hospitality operations, the product and the whole operation............................................10
4.2 Determining the usefulness and limitations of the various quantitative and qualitative
appraisal techniques and their application to hospitality operations....................................11
4.3 Approaches to business analysis, evaluation and planning appropriate to hospitality
operations.............................................................................................................................12
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................14

INTRODUCTION
Hospitality industry is very wide industry which includes hotel, restaurants,
accommodation etc. It is very important for them to manage their operational management
effectively as this can have a huge impact on their business. Present report will focus on The
Arch London which is a five star hotel in United Kingdom. This assessment will explain about
product and services of hospitality sector, different influences which affects patterns of demand
within hospitality operations, customer profiles and their differing along with and average
spending power (ASP) in hospitality businesses in this report. Further, this will also focus on
different methods of pricing strategies. Various r ange of performance measures and appraisal
techniques, usefulness and limitations of the quantitative and qualitative appraisal techniques and
their application to hospitality operations is also being discussed in the last section of the report.
TASK 1
1.1 Analysing the nature of hospitality product and service areas
For a hospitality industry, it is very essential to have all the facility which is required or
must for them in order to perform their duties well in the industry. There are various types of
service market which is offered in the hospitality sector such as perishable, tangible/intangible,
and inseparable elements respectively (Kessman and McCauley, 2016). Here is discussed the
basic nature of hospitality industry:
 Perishable Element: The service of hospitality industry are perishable which can not be
stored for future purpose such as hotel room services of The Arch London.
 Tangible or intangible Element: These elements are those services which customers are
able to see. For example, in hospitality sector, when books a room in a hotel, first
customer goes through the room and its services before booking it (Robinson and et. al.,
2016). Whereas, intangibility are those services which can not be touched or seen before
booking or taking it. For example, when a customer books a flight, he/she is not able to
see the flight or his seat as well.
 Inseparable Element: This means that customers are part of the product. In most
hospitality services, both the service provider and the customer must be present for the
transaction to occur so as The Arch London's.
Services are provided by people who then assume an importance in the service industry.
For The Arch London, it is very essential to perform their duty with perfection in order to

enhance their performance in the industry (Xu and Gursoy, 2015). There are various services
which is offered by The Arch London such as:
 Room services,
 Food and beverages, which includes restaurant and bar service,
 House keeping service,
 Conference and Banqueting etc.
1.2 Evaluating the different influences affecting patterns of demand within hospitality operations
It is very essential for any organization in the hospitality industry to operate their
business with the current trends as this will help them in increasing their business and to attract
more customers to buy their services (Xu and Gursoy, 2015). There are various factors that are
responsible in affecting the demand pattern in the organization such as:
 Seasonality: This has a huge impact on the hospitality industry as it can influence their
business activities. For example, for The Arch London, they have so many customers
during the time of winters as at that time, there are so many tourists who come to visit
London.
 Time availability: This is also an important factor which should be considered very
carefully by the organization. There are many customers who prefer some specific time
for their check in and check out time, so they should be flexible in that demand as it can
affect their business (Robinson and et.al., 2016).
 Economic Factors: This factor can have a huge impact on their business as economic
factors can impact on their tourists and can reduce the rate of tourist as well. One of the
major impact was the Brexit which has affected their business a lot.
 Cultural, regional and ethical consideration: To operate their business successfully, it
is very important ton consider very carefully the cultural, regional and ethical
consideration of their customers.
 Environment: Providing a good and healthy environment to their customers can help
them in improving their performance and this result in better outcome and revenue from
the business.

1.3 Comparing customer profiles and their differing expectations and requirements in respect of
hospitality provision
There are various types of customers present in the hospitality industry as per their
requirement and character respectively. As The Arch London is a five start hotel, it is essential
for them to respect all their customers with respect and dignity (Ali and et. al., 2018). There are
various customers on the basis of their profiles and their differing expectation and requirement
from the hospitality which is explained below:
Determinants Description
Hospitality Business There are customers who are very particular towards their hotel and
they always prefer to stay or choose that hotel only over other which
can have a huge impact on the hospitality sector.
Menu/Accommodation
Range
There are customers who are interested in the menu or
accommodation which they are providing to their customers.
Providing the best service will help them in increasing their
customers.
Spending Power There are basically three different types of customers based on their
spending power, i.e, lower, middle and high class customers.
Expectations and
Requirements
There are customers who has a very high expectation from this
sectors so it becomes very essential for them to provide the best
service which meet their expectation and requirement effectively (Ali
and et. al., 2018).
1.4 Analysing factors affecting average spending power (ASP) in hospitality businesses
There are various factors which impact on The Arch London performance and business
activity as well. Average spending power is the price a certain class of good or service is
typically sold for (Xu and Gursoy, 2015). Average spending power (ASP) in the business of
hospitality is affected by numerous determinants of society in which some are discussed here:
 Customer Status: This is the foremost reason which is considered in this ASP. As there
are various customers who have different financial status and they spend their money
according to their requirements.

 Income Size: Person who has low or moderate income will not be able to spend that
much of amount on any service as compared to the high income customers who has
enough money to spend on buying luxury for themselves.
 Social or cultural Influence: This is also considered as an important factor in ASP.
There are customers who are respect their culture a lot so they choose their services and
products as per their needs and requirement.
 Economic Situation: This can also be a reason which has a huge impact on the average
spending power of the customers in the hospitality industry (Bowie and et.al., 2016). This
can impact their business activity as well to a large extent.
2.1 Evaluating the key stages in product and service development applied within a hospitality
operation
For any organization, it is very crucial to evaluate their services and products effectively
which is being applied in the hospitality operations, respectively. The Arch London, they are
planning to introduce their own mobile application with the help of which they can increase their
customers by making booking process more convenient for them with this mobile application.
There are various stages which has to considered with respect to product and service
development which is explained below:
 Generation of Idea: This is the step in which The Arch London comes up with new and
innovative ideas which can help them in increasing or improving their business.
 Screening of Idea: In this section, The Arch London will screen or go through the ideas
which is being finalized by them and they want to implement that in their system,
respectively (Van der Wagen and Goonetilleke, 2015).
 Testing and Concept Development: This method helps in analysing and testing the
ideas in order to evaluate its effectiveness for The Arch London.
 Business Analysis: Before implementing any ideas or new process, it is very important
for them to analyse their whole business as this will help them in delivering the best
service to their customer as per their requirements.
 Product or service Development: This process helps to develop respective product or
service for their customers according to their taste and requirements.

 Marketing: After performing all these above activities, it is important to perform
effective marketing of their products and services which they offer to their customers in
order to increase their performance and revenue as well (Bowie, D and et. al., 2016).
2.2 Analysing the features that contribute towards the customers’ perception of products and
services
For hospitality sector, it is very important to have all the amenities which is required in
an organization for their customers. This will help in making them satisfied and to earn a good
revenue from their business as well. There are various factors which helps in contributing
customer's perception towards their products and services which is explained below:
 Brand Image: Having a good brand image in the industry will have huge impact on the
business of The Arch London. This will assist them in attracting more customers to buy
their service (Espino-Rodríguez and Gil-Padilla, 2015).
 Availability of Resources: Availability of adequate amount of resource in the
organization which will help in delivering the best service to their customers effectively.
 Service Style: The Arch London has good and skilled employees works with them. This
helps them in treating their customer's well. Good service style can have a huge positive
impact on their business.
 Nutrition and Dietary Requirement: It is also an important factor which has to be
considered very carefully by the hospitality industry in order to provide food services
according to the special need of their customers if any. This will help in fulfilling all
their requirement effectively (Espino-Rodríguez and Gil-Padilla, 2015).
 Standardization and Space Utilization: Proper standardization and space utilization
can help in attracting more customers to buy their service which will help in enhancing
their presence and brand image in the industry.
2.3 Assessing the opportunities and constraints affecting product and/or service development
within a hospitality environment
There are various opportunities which is available in the industry which s very helpful in
the development of the organization in the respective industry. Some factors are explained
below:
 Brand Value: Brand equity refers to the importance of a brand in the customer's eyes,
while brand value is the financial significance the brand carries. This helps in maintaining

a good brand value in the market or in the industry as well. The Arch London has a good
reputation in the industry and also is performing well.
 Disabled Access and Provision – Accommodation Facilities: Providing all the relevant
facility will help The Arch London to satisfy their customers effectively. For example,
customer who needs facilities like if client is wheelchair (Bruns-Smith and et. al., 2015).
 Restaurant Access: Providing a private restaurant for their guests who are staying in
their hotel is a great option which they can implement in their organization. This will
assist them in making them comfortable and will also help in saving their time as well.
 Availability Of Resources (Human, Financial, Physical): Having all kind of resources
available in the hotel premises is very useful for the organization. There are various
resources such as human resource which can help in recruiting the best employees for
The Arch London to have effective working (Bowie, D and et. al., 2016). Financial
resource will help in having a good financial support with the help of which they can
perform their business activities effectively.
There are limitation as well of all these processes for the hospitality industry which they
have to consider carefully. All these factors has limitation as well, such as, excess of branding in
the market can also give them a negative impact. So all these factors has to be managed
accordingly. Restaurant access can a limitation that it can sometimes become very difficult for
their customers in reaching to the hotel, so they have to provide a proper guidelines which will
be very helpful for them.
2.4 Evaluate different merchandising opportunities for hospitality products and services
It is very important to have a good promotional activity in the organization in order to
achieve their aims and target effectively. This will be very useful for The Arch London to
promote their services effectively in the industry to attract more customers. The activity of
promoting the sale of goods especially by their presentation in retail outlets is known as
Merchandising (Bruns-Smith and et.al., 2015). This can be very useful process for the
organization in order to increase their sales and production, respectively.
There are various opportunities which The Arch London can implement in their
organization such as:

 Through Advertising: This is the best option which can be used by the organization in
order to reach maximum number of customers in a short duration. There are various
option which can be opted by the organization in putting their advertisement.
 Through Campaigning: With the help of such activities, The Arch London can interact
with their customers through this process, effectively, which they can implement in the
organization. This can be the best option to choose in doing marketing for the
organization (Denizci Guillet and Mohammed, 2015).
 Through Promotional Activities: These promotional activities can also be considered as
an important element in merchandising. This will help in promoting their services to their
customers and making them aware about their organization as well.
TASK 2
3.1 Evaluating different methods of pricing taking into account additional pricing considerations
For any hotel, it is very important to have a good pricing strategies with the help of which
they can improve their performance as well. This will assist them in giving their services at best
prices to their customers. There are various pricing strategies that is present such as cost oriented
pricing, market oriented pricing, service charge etc. The Arch London is a five star hotel which
makes it mandatory for them to evaluate their prices effectively as this will help them in
providing their customers the best service.
A. Pricing and additional pricing consideration applicable in the organisation and how are
they applied
The Arch London uses market oriented pricing strategy for their organization, as this
process helps them in giving the best price to them as compared to their competitors. This way
they can also increase the competitive advantage as well. With this pricing strategy, it becomes
very helpful for them in competing with their rival companies by giving prices lower than
compared to them. This helps in attracting more customers (Denizci Guillet and Mohammed,
2015). To apply this The Arch London has to perform a market research in order to collect all the
information about their competitors and their pricing strategies as this will help them in setting
the prices of their service and products.
B) Reason of not choosing any other methods

The Arch London has chosen market oriented pricing strategy for their organization other
that all the process, i.e., minimum and cover charge, cost oriented charge, etc. as these
techniques will reduce their customer rate for them which will affect their business as well.
3.2: Assessing the factors which affect revenue generation and profitability in hospitality
operations
To generate a good revenue, it is very important to concentrate on each factor which can
have a huge impact on their business activity. Some factors are explained below:
 Labour Intensity: In hospitality industry, most of the work is performed by the labour so
it is very essential for the organization to have good staff with them in order to perform
their duties perfectly. This factor can affect their revenue and business so they have to
carefully manage it.
 Elasticity of Demand: To make their customers happy and satisfied, it is crucial to fulfil
their demand effectively as this can have a huge impact on their performance. To fulfil
the demands of their customers can help The Arch London to improve their performance
which is great to obtain a good profit.
 Standardization: Standardization strategy is frequently used in the operations of hotel's
chains and groups (Brandon-Jones and et. al., 2016). The global dimension of
standardization strategy is analysed as a unifying offer as it allows providing unique and
high-quality services regardless of location to the customers.
 Portion Control: This is one of the easiest ways to control food cost in the hotel by
establishing standardized portion sizes and to train employees so they know and use them
effectively. This will also help in improving their services.
 Price: This is also considered as an important aspect which has to be managed very
carefully by The Arch London in order to enhance their revenue generation from their
business. For The Arch London, it is very crucial to maintain a good balance of their
price in order to increase their sales and profitability.
TASK 3
4.1 Applying a range of performance measures and appraisal techniques to individual aspects of
hospitality operations, the product and the whole operation
Performance management is a process which helps in measuring the performance of the
organization in order to increase their quality of work. This process is very essential in providing

a good platform for the managers and supervisor to calculate the performance of their employees
and helps them to meet the expectation of the organization (The Top 10 Performance Appraisal
Methods for Startups & Small Businesses, 2017). The method of performance measurement
varies according to the work environment, type of business to some extent, the employee's
occupation. There are various range of performance measures and appraisal techniques which is
explained below:
 Quality Management: This helps in measuring the quality of work of their employees
on the basis of which their performance. This helps in improving their work as well.
 Speed of Delivery/ Customer Service: On the basis of this, company can analyse their
performance by analysing the feedback which is received by their customers about their
services.
 Developing Qualitative and Quantitative data: With the help of both these methods,
conducting survey can be a good option to gather information on the basis of which The
Arch London can analyse their performance (Robinson and et. al., 2016).
 Data analysis and evaluation: This helps in increasing the hospitality operations of the
organization which eventually helps in increasing their business more in the industry.
 External comparison: This will help them in comparing all their gathered data with
other organization of the same industry as this will help in improving their performance.
 Sales performance/gross profit/ net profit: Measuring the overall sales and net profit
is another option which The Arch London can apply in their organization to improve
there sales amount.
4.2 Determining the usefulness and limitations of the various quantitative and qualitative appraisal
techniques and their application to hospitality operations
For any organization it is very important to have effective research methodology which
can help them in delivering the best service. There are usually two processes which can be used,
such as:
 Quantitative Appraisal Techniques: Quantitative technique offers a numerous of data
collection tools which helps the hotel management to increase their operations
effectively, for example, in order to monitor their working pattern which can be useful
options for implementing in organisation.

 Qualitative Appraisal Techniques: Qualitative technique is gathering of information
with the help methods, like, interviews, observation, focus groups, etc.
There are various quantitative and qualitative appraisal techniques and their application to
hospitality operations which can be used by The Arch London in order to enhance their
performance in the industry.
There are various limitation of these process, for example, qualitative method can be a
costly approach for them as it will require conducting surveys and taking interviews which
requires is a costly process (Robinson and et. al., 2016). Whereas, gathering old data and
statistics is also very difficult for them, which they require for their comparison,
4.3 Approaches to business analysis, evaluation and planning appropriate to hospitality
operations
To analyse the hospitality operations effectively, The Arch London can apply three
elements or factors which is explained below:
 Business Analysis: It is a research discipline of identifying business needs and
determining solutions to business problems. Through using different macro and
micro business analysis models such as PESRLEm, firm can attain its business
objectives.
 Business Evaluation and Planning: For any hospitality industry, it is very important to
have a good command over their operations and working. This will help them in
enchaining their performance as well. Evaluating and proper planning has a huge
importance in managing all the work effectively in the organization. The Arch London can
has a good working environment which helps in them in get positive response from their
customers (Robinson and et.al., 2016).
All these three factors are very important to make a good action plan for the
organization in order to improve their operational management.
CONCLUSION
From the above report it can be concluded that having a good operational management
can help the organization to improve their working performance. This present assessment has
explained about hospitality and its products and services which they offer to their customers.

There are customer's perception that can have a huge impact on their business activity which is
affecting their product and/or service development within a hospitality environment. Moreover,
there are various pricing methods available which can be used by the organization in order to
enhance their performance. In the last section of this report, range of performance measures and
appraisal techniques i.e. quality management, speed of delivery/ customer service, developing
qualitative and quantitative data etc. and various approaches to enhance hospitality operations
is discussed which is very useful for the organization for their improvement.

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