IJQRM
14,6
582
Received February 1996
Revised June 1996
International Journal of Quality
& Reliability Management,
Vol. 14 No. 6, 1997, pp. 582-597,
© MCB University Press, 0265-671X
Benchmarking the quality of
hotel services: managerial
perspectives
Hokey Min
Department of Marketing & Transportation, College of Business,
Auburn University, Auburn, USA and
Hyesung Min
Department of Hotel Management, Sejong University, Seoul, Korea
Introduction
Over the last decade, the Korean hotel industry has grown steadily which has
resulted in overconstruction of hotels and increased competition among hotels.
In the wake of increasing competition, a growing number of hotel managers
have begun to realize the importance of service improvements that can be
converted to a competitive advantage. In fact, a recent survey of North
American, Western European, and Japanese managers showed that 78 per cent
of the surveyed managers believe service improvements are the key to
competitive success[1]. Service improvements usually mandate the
establishment of service standards and the measurement of service quality. The
measurement of service quality, however, is not an easy task due to the
intangible and elusive nature of service quality.
There are very few precise measures of service quality mentioned in the
literature. Nevertheless, quite a few attempts have been made to assess service
quality[2-6]. One of the most well-known efforts may be the SERVQUAL
instrument introduced by Parasuraman et al.[6]. SERVQUAL is a concise
multiple-item scale which was designed to assess the quality of firms in a wide
range of service categories. SERVQUAL is intended primarily for identifying
the key dimensions of service quality and their contributions to overall
customer satisfaction as perceived by current and past customers of a service
firm. Although SERVQUAL may help identify the key determinants of service
quality, SERVQUAL alone may not help evaluate the firm’s comparative
service performance. In this era of global competitiveness, the firm should
constantly strengthen its competitive edge by surpassing the service
performance of other firms and should lure prospective customers away from
its competitors by gaining the position of “the best of breed”. This paper
proposes the use of competitive benchmarking as a means of comparing the
service performance of Korean luxury hotels and utilizes an analytic hierarchy
process (AHP) and competitive gap analysis as reliable service quality
measures.
Competitive benchmarking as a service improvement tool Benchmarking
Benchmarking is a continuous quality improvement process by which an the quality of
organization can assess its internal strengths and weaknesses, evaluate hotel services
comparative advantages of leading competitors, identify best practices of
industry or functional leaders, and incorporate these findings into a strategic
action plan geared to gain a position of superiority. Benchmarking is applicable
to a wide array of industry including the hotel industry and has two distinctive 583
approaches: competitive and process benchmarking. Competitive
benchmarking aims to measure organizational performance against that of
competing organizations, whereas process benchmarking aims to measure
discrete process performance against organizations that lead in those
processes[7]. Within the basic frameworks suggested by Camp[8] and Balm[9],
the steps of competitive benchmarking may consist of:
Step 1: Identify and prioritize salient service attributes that influence the
overall service quality in hotels.
Step 2: Develop service quality standards as benchmarks.
Step 3: Conduct competitive gap analysis.
Step 4: Develop strategic action plans for continuous service quality
improvement.
Following the above steps, this paper focuses on competitive benchmarking of
Korean luxury hotels.

Identification and prioritization of service attributes

“Communicating service quality begins with an understanding of the aspects of
service quality that are most important to customers”[10, p. 124]. Accordingly,
we attempted to list service attributes essential in assessing the service quality
of hotels. In identifying these attributes, we started with general determinants
of service quality that may relate to any service. These determinants include
reliability, responsiveness, competence, access, courtesy, communication,
credibility, security, understanding/knowing the customer, and tangibles[11].
These determinants were later expanded to a total of 14 by adding some service
characteristics such as the availability of complimentary items (e.g. toothpaste,
a tooth brush, a comb, soaps, shoeshine cream) and hotel/tour guide
information unique to the hotel industry. Most of these determinants, however,
coincide with those determinants previously identified by Berry et al.[11].
Recognizing the applicability of these generic determinants to the assessment of
any service quality, we initially considered these ten determinants. Then, based
in part on the recent study of Chung and Hahn[12], we excluded some of these
that may not be relevant to the assessment of service quality in Korean luxury
hotels, while adding a few other determinants. Specifically, security, access,
communication, and understanding the customer were excluded from
consideration for various reasons.
IJQRM First, since hotel service seldom poses any danger to the customer, security
14,6 was omitted from the list. This omission may be supported by two earlier
studies[5,13] indicating that security was not a significant source of hotel
guests’ satisfaction. In particular, downtown in Seoul, Korea, where all of the
luxury hotels are located is relatively safe even during the night. Second, unlike
“budget” or “moderately priced” hotels, all the Korean luxury hotels are easily
584 accessible due to their central location in the downtown of Seoul, Korea and
most of them are located near to their competitors and their relative locational
advantage may be relatively insignificant; thus, access cannot be an issue for
these hotels and subsequently was eliminated from the list. As a matter of fact,
Lewis[14] observed that location ceased to be a major service determinant when
hotels were adjacent to each other. Third, because both communication and
understanding the customer, which foster empathy (individualized attention
and care) with the customer are often affected by the hotel employee’s courtesy,
the former may be redundant with the latter. Therefore, we excluded both
communication and understanding the customer from the list. As a result, we
uncovered the two major service criteria and 14 attributes relevant to Korean
luxury hotels. To elaborate, major service criteria include overall room values
and front-office services. First, overall room values were subclassified into
seven different categories: cleanliness, atmosphere, comfort, quality and
sufficiency of room fixtures, size of a guest room, availability of complimentary
items, and price. As suggested by the AAA Tour Book[15] for evaluating the
lodging service, we included cleanliness of a guest room, comfortable beds and
bedding, room atmosphere (e.g. adequate illumination at each task area and
pleasant decoration), and quality/sufficiency of room fixtures (e.g. towels,
hangers, and a hair drier). As a tangible, we added size of a guest room to the
list because the compactness of a room may impose some psychological
restraints on the room occupant’s sense of privacy. Price was included because
it was generally known to be one of the most important extrinsic cues for
service quality[16].
Second, front-office services were subdivided into seven attributes. These
include courtesy, recovery from service failures (i.e. handling of complaints),
responsiveness such as convenience of reservation, promptness of check-
in/check-out, and hotel/tour guide information, and tangibles such as
variety/quality of sports/recreational facilities (e.g. swimming pools, and
aerobic exercise rooms) and efficiency of a business centre (e.g. fax machines,
personal computers, and copiers). Courtesy involves politeness and friendliness
of hotel staff and other contact personnel. Since the hotel service is rendered in
interaction with customers, courtesy of the contact personnnel is an important
service quality indicator. Furthermore, when guests have specific problems
with a hotel such as an unclean room, poor temperature control, or poor phone
service, their problems should be resolved in a proper manner. Simmerman[17]
stressed that proper complaint handling would retain or even build customer
loyalty. Thus, handling of complaints was included as a hotel service attribute.
Responsiveness and tangibles illustrated above have already been recognized
by Parasuraman et al.[6] as two of the five most important service dimensions; Benchmarking
therefore, they were included. Consequently, a total of 14 salient service the quality of
attributes were identified which may dictate the service quality of hotels (see hotel services
Tables I and II). Also, to determine which service attributes are most important
to the assessment of service quality in hotels, a questionnaire was distributed to
a sample comprising 180 hotel employees currently working for six different
major luxury hotels in Seoul, Korea. The questionnaire was designed to address 585
the respondents’ demographic profiles, educational background, experience
level, perceived importance of hotel service determinants, and comparative
evaluation of the hotel service performance. To follow up this questionnaire and
assure firm responses from the sample, we also conducted personal interviews
with this sample group which consists of hotel managers, front office managers,
hotel clerks, and other hotel contact personnel who constantly interact with
hotel guests on a daily basis. Among this group, 162 responded. Of these
responses, 144 responses were usable with an 80 per cent retention rate.
All of these subjects reported working for at least one of six prominent
Korean luxury hotels selected for this study – Intercontinental, Chosun, Shilla,

Sample Degree of importance

Attributes characteristics on average t-value

Cleanliness Employees (n = 144) 4.81 (0.51) 2.72*

Guests (n = 113) 4.62 (0.59)
Comfort of a bed Employees (n = 144) 4.56 (0.61) 2.35*
and pillows Guests (n = 113) 4.35 (0.78)
Atmosphere Employees (n = 144) 4.37 (0.67) 0.33
Guests (n = 113) 4.34 (0.76)
Sufficiency and Employees (n = 144) 4.34 (0.72) 3.47*
quality of fixtures Guests (n = 113) 4.04 (0.66)
Price Employees (n = 144) 4.33 (0.77) 5.84*
Guests (n = 113) 3.66 (1.01)
Size of a guest room Employees (n = 144) 4.07 (0.85) 1.71*
Guests (n = 113) 3.89 (0.83)
Complimentary items Employees (n = 144) 3.94 (0.79) 4.54*
Guests (n = 113) 3.45 (0.91)
Scale for the degree of importance:
5 = extremely important
4 = somewhat important
3 = neither important nor unimportant
2 = somewhat unimportant
1 = not at all important
Table I.
Notes: Numbers in parentheses represent standard deviations Service attributes (room
Differences with asterisk marks are statistically significant at α = 0.05 values) for luxury hotels
IJQRM Sample Degree of importance
14,6 Attributes characteristics on average t-value

Courtesy of employees Employees (n = 144) 4.76 (0.49) –1.23*

Guests (n = 113) 4.83 (0.42)
586 Promptness of check-in Employees (n = 144) 4.58 (0.63) 1.74*
and check-out Guests (n = 113) 4.44 (0.65)
Handling of complaints Employees (n = 144) 4.53 (0.75) 0
Guests (n = 113) 4.53 (0.64)
Convenience of Employees (n = 144) 4.49 (0.64) –0.11
reservation Guests (n = 113) 4.50 (0.75)
Efficiency of a business Employees (n = 144) 4.41 (0.74) 4.41*
centre Guests (n = 113) 3.90 (1.04)
Variety and quality of Employees (n = 144) 4.22 (0.74) 2.03*
sports facilities Guests (n = 113) 4.02 (0.82)
Hotel and tour guide Employees (n = 144) 4.20 (0.82) 4.67*
Guests (n = 113) 3.65 (1.02)
Scale for the degree of importance:
5 = extremely important
4 = somewhat important
3 = neither important nor unimportant
2 = somewhat unimportant
Table II.
1 = not at all important
Service attributes
(front-office service) Notes: Numbers in parentheses represent standard deviations
for luxury hotels Differences with asterisk marks are statistically significant at α = 0.05

Hilton, Hyatt, and Lotte – during the past year (April 1994 through March 1995).
Of the subjects 82 per cent said they have had more than one year of experience
as employees for the surveyed hotels; 41 per cent have had more than five years
of experiences. This sample profile clearly suggests that subjects are frequent
service providers at the hotels and consequently are familiar with both actual
customer needs and the workings of the hotels based on their years of
experience. Although tracking customer perceptions is one way of measuring
service quality in hotels, it is important to see how management (hotel
employees) treated customers from their point of view because hotel employees
are generally more knowledgeable about “proper procedures” in their work than
are customers. As such, employee input and feedback are essential for bridging
the service gap between the management perception and customer expectation.
For example, Covin and Slevin[18] used only management perception in their
assessment of a firm’s service performance.
To analyse employee input and feedback, hotel employees were asked to rate
on a five-point Likert scale the relative importance of the 14 service attributes as
they relate to the evaluation of hotel service quality (Tables I and II). Herein, we
decided to adopt a five-point scale, because it is commonly used in other prior Benchmarking
studies (e.g. [5]). Attributes considered most important in forming service the quality of
quality impressions are both cleanliness of a guest room and courtesy of a hotel hotel services
staff. This finding coincides with the recent survey conducted by Consumer
Reports[19]. Both size of a guest room and hotel/tour guide information were
perceived to be somewhat important by the subjects. Most subjects also believe
that hotel/tour guide information is not significantly important for forming 587
quality impressions of their customers.
The subjects further indicated that promptness of check-in/check-out,
swift/smooth handling of complaints, and convenience of reservation were very
important attributes in evaluating front-office services during their customers’
hotel stay. The subjects also believe that their customers will appreciate swift
handling of customer complaints because such handling may reflect the
reliability of hotel services.
To test the existence of any perceptual differences between hotel employees
and their customers (guests), we additionally surveyed a selected group of 180
hotel guests. From this group, we received 113 valid responses. The
comparative results for the 14 service attributes are presented in Tables I and II.
Although a series of paired t-tests indicate some disparities in the absolute
importance of the service attributes, cleanliness and employee courtesy still top
the list for both hotel employees and their guests. Overall, the Wilcoxon-Mann-
Whitney test shows that the views of hotel employees and guests do not differ
significantly as to which attributes are most important in evaluating hotel
service performance. That is to say, no significant difference was observed with
respect to the priority rank of hotel service attributes at α = 0.05.

Establishment of service quality standards

In an effort to determine a benchmark (i.e. the hotel which best exhibits each
service quality attribute and the best one in terms of overall service
performance), we employed an analytic hierarchy process (AHP) first
introduced by Saaty[20]. Generally speaking, AHP is a scoring method that was
designed to structure visually a complex decision-making problem into a
simple hierarchy and then develop priorities in each level of the hierarchy by
carrying out pairwise comparisons of the relative importance of decision
criteria, attributes, and alternatives. Through the use of hierarchic frameworks,
AHP can combine both tangibles (quantitative factors) having different scales
and intangibles (qualitative factors) that have bearing on the decision. As such,
the use of AHP is appropriate for competitive benchmarking of hotels which
involves the evaluation of both quantitative (e.g. size, price, service time
required) and qualitative attributes (e.g. cleanliness, comfort, employee
courtesy) affecting the overall service quality of hotels. Also, in contrast with
the SERVQUAL instrument, AHP can provide the ranking order of hotels in
terms of their overall service quality as well as their relative standings
measured on a numerical scale. In addition to these merits, AHP may allow
hotel managers to investigate the sensitivity of the ranking of hotels due to
IJQRM changes in importance of service attributes. In this study, the application
14,6 of AHP to competitive benchmarking of hotels involves four major
sub-steps[21,22]:
(1) Break down the service evaluation process into a manageable number of
criteria and attributes and then structure these criteria and attributes in
588 a hierarchical form.
(2) Make a series of pairwise comparisons among the criteria and attributes
according to hotel employees’ peer evaluation of service quality in hotels.
(3) Estimate the relative weights (or priority scores) of the criteria and
attributes based on the employee survey.
(4) Aggregate these relative weights and synthesize them for the final
measurement of service performance.
Based on the above steps, the process of benchmarking was structured into four
levels (see Figure 1).
As shown in Figure 1, the top level of a hierarchy represents the ultimate goal
of determining the benchmark hotel. At the second level of a hierarchy, the

Goal: competitive benchmarking of hotels

Criteria

Room values (0.500) Front office service (0.500)

Attributes Attributes

Cleanliness (0.159) Courtesy (0.153)

Comfort (0.150) Promptness (0.147)
Atmosphere (0.144) Complaint (0.145)
Fixture (0.143) Reservation (0.145)
Price (0.143) Business center (0.141)
Size (0.132) Sports (0.135)
Complimentary items (0.130) Guide (0.135)
Alternatives

Figure 1.
Hierarchy of Inter- Chosun Shilla Hilton Hyatt Lotte
benchmarking Korean continental
luxury hotels
Note: Numbers in parentheses represent given weights
general criteria are placed which are usually considered important in evaluating Benchmarking
the hotel service performance. These criteria are room values and front desk the quality of
services. At the third level, these criteria are decomposed into 14 service hotel services
attributes that may affect the overall service quality in hotels. These attributes
are connected to the bottom level of a hierarchy represented by six major
Korean luxury hotels under evaluation.
589
Service performance evaluation of Korean luxury hotels
For illustrative purposes, the baseline scenario involves evaluating service
performances of six Korean luxury hotels chosen for this study because of their
similar characteristics. Under this scenario, we estimated relative weights
(priorities) of each criterion, attribute, and hotel under each node of the
hierarchy through a series of pairwise comparisons. These weights represent
hotel employees’ judgements of the relative importance or preference of the
elements in the hierarchy. As discussed earlier, these weights were determined
primarily based on the survey of hotel employees. Since these employees’
perceptions of service can be somewhat subjective and inconsistent, the AHP
may allow some degree of inconsistency in the employees’ judgements. To
address this issue, we employed a consistency ratio (CR) which is defined
as[20,23,24]:
CR = consistency index (CI)/random index (RI) where
CI = (λmax )/(n –1),
λmax = maximum eigenvalue of the matrix of pairwise comparisons,
n = number of criteria or attributes in the consideration,
RI = mean CI of a randomly generated reciprocal matrix from a ratio scale
of 1 to 9.
Owing to the complex and time-consuming calculations, determination of
relative weights and CR values calls for the assistance of AHP software such as
Expert Choice [25]. Expert Choice is an interactive menu-driven AHP software
which runs under both DOS and Microsoft Window operating systems. Owing
to its simplicity, any user who is familiar with the personal computer (PC)
environment and understands the basic theory of AHP can use Expert Choice
without documentation[26]. Applying Expert Choice to service performance
evaluation of hotels, we obtained relative weights of criteria and attributes
along with the corresponding CR values. According to a rule of thumb
suggested by Saaty[20], a CR value of 0.10 (10 per cent) or less is considered
acceptable. In general, smaller CR values are desirable. A small CR value means
that computed weights resulting from pairwise comparisons reflect the
employees’ coherent judgements with a high degree of accuracy.
Initially, we derived local weights for the 14 attributes in terms of their
relative importance to service quality in hotels (Figure 1). Each hotel’s local
priority score and its corresponding rank in terms of each weighted attribute
are summarized in Table III.
IJQRM Criteria Attributes Hotels Priority scores Ranks
14,6
Room values Cleanliness Intercontinental 0.015 1
Chosun 0.014 2 (tie)
Hilton 0.014 2 (tie)
Shilla 0.013 4
590 Hyatt 0.012 5
Lotte 0.011 6
Comfort of a Chosun 0.014 1 (tie)
bed/pillows Intercontinental 0.014 1 (tie)
Hilton 0.012 3 (tie)
Shilla 0.012 3 (tie)
Lotte 0.012 3 (tie)
Hyatt 0.011 6
Atmosphere Intercontinental 0.013 1 (tie)
Chosun 0.013 1 (tie)
Hyatt 0.012 3 (tie)
Shilla 0.012 3 (tie)
Hilton 0.011 5
Lotte 0.010 6
Quality of fixtures Chosun 0.013 1 (tie)
Intercontinental 0.013 1 (tie)
Hilton 0.013 1 (tie)
Shilla 0.012 4 (tie)
Hyatt 0.012 4 (tie)
Lotte 0.010 6
Size of a room Intercontinental 0.014 1 (tie)
Chosun 0.014 1 (tie)
Hilton 0.011 3 (tie)
Shilla 0.011 3 (tie)
Hyatt 0.009 5
Lotte 0.008 6
Price Intercontinental 0.014 1
Chosun 0.013 2
Hyatt 0.012 3
Hilton 0.011 4 (tie)
Shilla 0.011 4 (tie)
Lotte 0.011 4 (tie)
Complimentary Chosun 0.013 1
items Shilla 0.012 2
Intercontinental 0.011 3 (tie)
Hyatt 0.011 3 (tie)
Hilton 0.010 5
Table III. Lotte 0.008 6
Local priority scores of
luxury hotels (Continued )
Criteria Attributes Hotels Priority scores Ranks
Benchmarking
the quality of
Front-office Employee courtesy Chosun 0.015 1 (tie) hotel services
services Intercontinental 0.014 2
Hyatt 0.013 3 (tie)
Hilton 0.013 3 (tie)
591
Shilla 0.013 3 (tie)
Lotte 0.009 6
Promptness of Shilla 0.014 1 (tie)
check-in/check-out Chosun 0.014 1 (tie)
Intercontinental 0.013 3
Hyatt 0.012 4 (tie)
Hilton 0.012 4 (tie)
Lotte 0.009 6
Convenience of Intercontinental 0.014 1
reservation Chosun 0.013 2 (tie)
Shilla 0.013 2 (tie)
Hyatt 0.012 4
Hilton 0.011 5
Lotte 0.009 6
Handling of Chosun 0.013 1 (tie)
complaints Intercontinental 0.013 1 (tie)
Hilton 0.012 3 (tie)
Shilla 0.012 3 (tie)
Hyatt 0.012 3 (tie)
Lotte 0.009 6
Efficiency of a Intercontinental 0.014 1
business centre Hilton 0.013 2 (tie)
Hyatt 0.013 2 (tie)
Shilla 0.012 4 (tie)
Chosun 0.012 4 (tie)
Lotte 0.007 6
Quality/sufficiency Chosun 0.012 1 (tie)
of sports/ Intercontinental 0.012 1 (tie)
recreational Hyatt 0.012 1 (tie)
facilities Shilla 0.012 1 (tie)
Hilton 0.011 5
Lotte 0.008 6
Hotel/tour guide Intercontinental 0.013 1
Hilton 0.012 2 (tie)
Shilla 0.012 2 (tie)
Chosun 0.011 4 (tie)
Hyatt 0.011 4 (tie)
Lotte 0.008 6 Table III.
IJQRM Determination of the overall service leader necessitates the specification of the
14,6 set of overall (global) priorities. Subsequently, synthesis of the judgements was
made in pairwise comparisons to arrive at a single numerical value indicating
the overall priority for each hotel. Such a synthesis can be found in Table IV.
From this Table, we can identify Intercontinental as the overall service leader,
with an overall priority score of 0.187 and an overall CR of 0.00. Therefore, we
592 conclude that the Intercontinental hotel is the benchmark among the six hotels
considered in this study. This conclusion is consistent with the hotel guests’
perspectives (Table IV). In fact, the Wilcoxon signed rank test suggests that
both hotel employees and guests agree on their overall priorities of the hotels at
α = 0.05.

Sensitivity analyses
After identifying the service leader with the given weights of service attributes,
we carried out sensitivity analyses to explore the response of the overall
priority to changes in the relative importance (weight) of each attribute. The
sensitivity analyses are necessary because changing the importance of
attributes may alter the service leader. As summarized in Table V, when the
importance of price and availability of complimentary items change, a ranking
of the service leader may change due to relatively high sensitivity to such a
change. On the other hand, the service performance seems to be mildly sensitive
to changes in the importance of cleanliness, comfort, and atmosphere, while it
is somewhat insensitive to the importance of quality/sufficiency of room
fixtures and size of a guest room.
By the same token, we performed a series of sensitivity analyses for seven
other attributes related to front-office services. Table V shows that a ranking of
the hotels is also sensitive to changes in the importance of handling of
complaints, promptness of check-in and check-out, and efficiency of a business
centre. In contrast, the service performance is insensitive to changes in the
importance of convenience of reservation and hotel/tour guide information,
while it is still somewhat sensitive to changes in the importance of both
employee courtesy and variety/quality of sports/recreational facilities. These
results imply that the hotel may increase its competitive advantages over others
by substantially improving the service performance with respect to price,

Overall priority scores

Hotels Employees (n = 144) Guests (n = 113) Ranks

Intercontinental 0.187 0.180 1

Chosun 0.183 0.175 2
Shilla 0.170 0.174 3
Hilton 0.166 0.167 4
Table IV. Hyatt 0.164 0.164 5
Comparison of hotels
Lotte 0.131 0.140 6
with respect to overall
service quality Overall consistency index = 0.00
complimentary items, complaint handling, promptness of check-in/check-out, Benchmarking
and efficiency of a business centre. the quality of
Competitive gap analyses and service improvement action plans
hotel services
In the competitive hotel industry, service quality failure may occur when there
is a discrepancy between the hotel’s own service performance and the service
leader’s superior performance. This discrepancy is referred to as a “competitive 593
gap”. According to Camp[8], a competitive gap can be classified into three
performance gaps: positive, negative and zero (“parity”). The positive gap
represents a clear superiority of service performance over the service leader’s
performance, whereas the negative gap represents a clear inferiority of service
performance over the service leader’s performance.
Once the hotel identifies various types of competitive gaps attributed to
service failures, it should measure the extent of the gaps. Gap measurement
requires two sub-steps:
(1) data collection; and
(2) gap analysis.

Criteria Attributes Degree of sensitivity

Room values Cleanliness Somewhat sensitive

Comfort of a bed/pillow Somewhat sensitive
Atmosphere Somewhat sensitive
Quality/sufficiency of fixtures Somewhat insensitive
Size of a guest room Somewhat insensitive
Price Very sensitive
Complimentary items Very sensitive
Front-office service Courtesy of employees Somewhat sensitive
Handling of complaints Sensitive
Convenience of reservation Insensitive
Promptness of check-in and check-out Sensitive
Variety/quality of sports and recreational facilities Somewhat sensitive
Efficiency of a business centre Sensitive
Hotel and tour guide Somewhat insensitive
Notes: “Very sensitive” = a quality ranking of all the hotels changes drastically in the entire
weight range
“Sensitive” = a quality ranking of several hotels changes constantly in the entire weight
range
“Somewhat sensitive” = a quality ranking of two hotels changes gradually in the
limited weight range
“Somewhat insensitive” = a quality ranking of one hotel changes gradually in the very
limited weight range Table V.
“Insensitive” = a quality ranking of all the hotels remains the same in the entire weight Sensitivity analyses of
range service attributes
IJQRM Data can be collected from three main information sources: internal, public
14,6 domain, and market research[27]. In particular, this study used internal sources
(especially the input and judgement provided by the hotel’s own employees and
its competitors’ peer evaluation) as well as market research sources based on
the hotel guest survey concerning the service performance of the hotel.
After collecting the data, this study primarily used statistical significance
594 testing to perform competitive gap analyses. To elaborate, we used a five point
scale in measuring the respondents’ assessment of the hotel services and
statistically tested the significance of competitive gaps using a series of Z-tests.
In Table VI, the third column from the left shows the average scores of the
benchmark’s service performance evaluated by the respondents. Across the top
of Table VI, competitive gaps between the benchmark and its five other
competitors were summarized. Since a negative gap represents the hotel’s
inferiority relative to its benchmark, both Lotte and Hyatt are dominated by
Intercontinental in virtually every service category. As a matter of fact,
Intercontinental dominated other hotels in terms of cleanliness, comfort,

Benchmarka Competitive gapsb

Criteria Attributes (Intercontinental) Chosun Shilla Hilton Hyatt Lotte

Room values Cleanliness 4.762 –0.053 –0.315* –0.250* –0.661* –1.148*

services Comfort 4.815 –0.022 –0.593* –0.506* –0.824* –0.688*
Atmosphere 4.333 –0.095 –0.525* –0.681* –0.448* –0.904*
Fixtures 4.296 0.085 –0.334* 0.008 –0.450* –0.867*
Price 4.444 –0.349* –0.867* –0.879* –0.675* –0.968*
Size 4.778 0.064 –1.124* –1.816* –0.995* –1.873*
Complimentary 3.926 0.550* 0.305* –0.230* –0.157 –0.926*
Front-office Courtesy 4.370 0.248* –0.293* –0.240* –0.101 –1.418*
service Promptness 4.074 0.355* 0.541* –0.291* –0.189 –1.122*
Complaint 4.333 0.096 –0.141 –0.203* –0.256* –1.428*
Reservation 4.556 –0.413* –0.479* –1.304* –0.710* –1.651*
Business 4.704 –0.894* –0.819* –0.487* –0.704* –2.371*
Sports 4.630 0.037 –0.245* –0.543* –0.092 –1.678*
Guide 4.481 –0.671* –0.558* –0.568* –0.635* –1.719*

Notes: aThe benchmark index represents the average score of a five-point scale defined below:
Scale for the degree of expected customer satisfaction:
5 = very satisfied
4 = somewhat satisfied
3 = neither satisfied nor dissatisfied
2 = somewhat dissatisfied
Table VI. 1 = very dissatisfied
Competitive gap Notes: bThe negative gap occurs when the service performance of a given hotel is worse than
analyses of Korean that of its benchmark (Intercontinental Hotel)
luxury hotels Notes: cGaps with asterisk marks are statistically significant at α = 0.05
atmosphere, price, convenience of reservation, efficiency of a business centre, Benchmarking
and availability of hotel/tour guide information. The Chosun hotel, however, the quality of
appears to be a service leader with respect to room fixtures, size of a guest hotel services
room, complimentary items, employee courtesy, handling of complaints, and
quality/sufficiency of sports and recreational facilities. As such, Chosun seems
to be the most competitive hotel against Intercontinental, because Chosun is the
only one that has more than six positive gaps against Intercontinental. Three of 595
these positive gaps are statistically significant at α = 0.05 (see Table VI).
In light of the above, if Chosun offers more competitive prices to its
customers, diversifies its sports and recreational facilities, upgrades its
business centre, and improves hotel/tour guide information, it may take a
position of superiority over Intercontinental. As such, Chosun’s future action
plan should include improvement in the above service categories. Its success,
however, may depend on the Chosun’s current financial capability in improving
services, the accurate assessment of return-on-investment (ROI) in terms of the
plan’s potential impact on customer service level, and the vulnerability of
Intercontinental to Chosun’s new service improvement strategy.

Concluding remarks
Recognizing that the hotel’s survival greatly depends on its ability to provide
superior service, this paper extended an application of competitive
benchmarking to hotel service quality. To sum up, this paper attempted to
combine analytical work with empirical work in developing objective measures
of actual service quality and the hotel’s relative service performance from the
management’s point of view. Our attempts have four areas of practical
significance for hotel managers. First, the methodologies such as AHP and
competitive gap analysis described in this study provide a useful framework for
operationalizing the level of competition in the hotel industry. In particular,
these methodologies may help the hotel manager determine where the hotel
stands on service performance relative to its competitors and consequently
identify specific areas of comparative advantages and disadvantages; thus, the
hotel manager can formulate viable service improvement strategies using the
proposed methodology.
Second, the hotel employees generally believe that service attributes that
contributed the most to their customers’ impressions of service quality are
cleanliness of a guest room and courtesy of employees. In this regard, the hotel
guests generally agree with the responses of hotel employees. It is not
surprising to find that the effect of “atmospheric” impressions such as
cleanliness, comfort, and decoration on the hotel guest’s perceived service
quality is significant, because those attributes may set the standard for
hospitality of the hotel. Employee courtesy also stood out in our survey as the
service attribute of the utmost importance, because the hotel service requires
frequent interaction with the contact personnel such as the hotel staff. In fact,
this finding coincides with the result of the recent survey conducted by
Consumer Reports[19]. Furthermore, since quality of prior service has a great
IJQRM impact on the repeat customers’ hotel patronage behaviour, the hotel should not
14,6 only keep the occurrence of service failure at a minimum, but also effectively
monitor customer complaints if service failure occurs.
Third, the proposed methodology can be used to measure tradeoffs among
different attributes of hotel service quality. Thus, the methodology may allow
the hotel manager to evaluate “what-if” scenarios associated with changes in
596 importance of hotel service attributes (e.g. from cleanliness to size of a guest
room). In addition, the methodology has applicability beyond hotel services to
various service settings such as hospitals, banks, and restaurants which often
need to identify inter-organizational differences in service quality.
Fourth, this study incorporates the customers’ perception of service quality
into the hotel benchmarking process rather than merely relying on the inputs of
hotel employees. Although hotel employees may see a larger picture than their
customers in evaluating hotel service performance, we cannot still ignore the
notion that the service performance may be largely affected by the interactions
between hotel employees and guests. Congruent with such a notion, we found
no marked difference between hotel employees and guests in prioritizing the
importance of hotel service attributes. Also, there is greater consistency
between hotel employees and guests as to how they rated the overall service
performance of the respective hotel.

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