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QUALITY OF WORK LIFE IN HOTEL INDUSTRY
Compiled by: APARNA KAPOOR 3 RD YEAR IHM, LUCKNOW GUIDE’S CERTIFICATE
I have the pleasure to certify that
a student of
____________________ has pursed his research work and prepared the PROJECT under my supervision
and guidance . The work is the result of this own research to the best of my knowledge. This is
being submitted to the Institute for Integrated in Learning Management for the Partial fulfillment of the requirements of the three year full- time
degree in hotel Management.
I gratefully thank ________________ who guided me for the complication of this project. He gave us all the important information required for the project. Without his help the project would not have been possible. I am grateful to all the people who have given suggestions to improve the project.
• To find the Characteristics of Hotel Industry • To find the Service quality • To find the Service Marketing • To find the Human Resource Strategies. • To find the Training & Development • To find the Working Condition • To find the Welfare Association • To find the Action Plan • To find the Factors Affecting Demand & Supply • To find the SWOT Analysis of Hotel Industry CHARACTERISTICS OF HOTEL INDUSTRY .
business or otherwise. . Never before has the hotel industry’s bottomless bulged so much from the boom in tourism. c) The industry is seasonal in nature. being a service-oriented industry. Though the fact remains. d) Most of the approved hotels have collaborations with foreign hotels and have Franchise agreements with international hotel chains. Almost every businessman uses their services. b) The industry is also highly capital intensive due to soaring real estate prices and has a gestation period of 3 to 5 years. the hotel industry depends on the tourism sector.A H otel is a funny industry. especially for hotels in tourist places where the occupancy rate touches 100% in peak season and 30-40% in off season. The major characteristics of Hotel Industry are: a) The Hotel Industry is a labour intensive requiring skilled labour. but a few know how they really work.
hotels can be broadly classified in two categories viz. T hese are referred to in packages designed for the consumers: 1. The Department of Tourism has assigned ratings to the hotels from 1 star to 5 star deluxe depending on the facilities offered. . Category of Rooms i) (a) Normal (b)Deluxe (c)Executive (d) Suite (g) Elite (e)Deluxe Suite (f) Presidential Suite (h) Classic (i) Comfort ii) Air-conditioned or Non Air conditioned rooms. Approved by Department of Tourism (DOT). Department of tourism has also added one more category of Heritage class hotels which comprises old palaces converted into hotels. Government of India and non approved hotels. Hotels are categorised into a number of segments. Hotels have various working codes .In India.
Tariff of Hotels are presented as follows: FIT (Free Independent Traveller). Plans of Hotels Hotels have various Meal plans which they work on: EP (European Plan) Room only basis CP (Continental Plan) Room plus Breakfast basis MAP (Modified American Plan) Room Plus Breakfast.e. Also full board. launch or Dinner.2. 3. . AP (American Plan) Room plus three meals (Breakfast. This is applied for individual travelling. plus one meal i. Also called Half Board. launch & Dinner).
Some of the areas/ processes where this approach may add value: - . ITES. automobile. rest all gather data Variation is the enemy of all processes Manufacturing. how can we leave out an industry which is the epitome of customer service and thrives purely on achieving customer delight consistently. aviation. medical transcription. each customer touch point is critical for building personalised service credibility and developing customer affinity.INTRODUCTION The 3 commandments of this philosophy are: • • • The Customer is the King In God only we trust. banks and even other financial institutions are following this methodology. The question then is why not Hotels? If the first commandment of Six Sigma talks about the customer. software. In an industry where customer interactions occur on an hourly basis.
Hotel-wide • • • • • • • • • Enhance Customer Loyalty Reduce Employee attrition Productivity/Efficiency Improvement Improve Work-life balance Reduce Billing errors/losses Developing better performance measures/ metrics Increase Revenue Reduce Cost Capture 'Voice of Customer' data Front Office Operations/ Sales & Marketing • • • • • • Reduce wait time during peak check-in time Reduce wait time during peak check-out time Eliminate billing errors and improve accuracy Reduce No shows Increase Occupancy Optimal utilisation of the current product mix (rooms) to increase revenue .
• • • Increase customer delight at the Executive Club Reduce/eliminate loss calls (Operators area) Accuracy of information Food and Beverage Service / Production • • • • • To maintain optimal inventory Minimise wastage/pilferage Standardised output of Food and Beverage Reduce the time from order to service Optimal utilisation of current product mix (F&B/Outlets) to increase revenue Accommodation Operation (Housekeeping) • Reduce the turnaround time of making/turning down a room • Standardisation of cleanliness across areas .
Park etc can also benefit from this program. ITC. Meridien. Taj. In order to enhance Customer Experience and Reduce Cost. Intercontinental. Hyatt. Oberoi.Purchase/Stores • • Reduce Inventory surplus Cost Benefit Analysis between cost of inventory and cost of storage of products where prices vary seasonally • Standardise the operating procedure of issuance to various departments • Reduce the turnaround time of issuance to various departments Human Resources/ Personnel • • • • • Accuracy of payroll Documentation management Reduce the turnaround time of recruitment Reduce the turnaround time of relieving Increase the employee satisfaction rate Leveraging the approach of the Starwood group. our leading hotel chains in India viz. all they need . Leela.
to do is welcome Six Sigma with open arms and make it a part of their culture. . an industry which would remain their first love.A number of Hotel Management graduates like me are today a part of the Six Sigma galaxy and we wait for the day when Six Sigma becomes a household name in the hotel fraternity .an industry which launched their careers.
. Today there is an increasing trend to attempt to differentiate product by service elements. is an important step towards finding possible sources of competitive advantage. and the position of competitors.SERVICES MARKETING THE CONCEPT OF SERVICES To define service narrowly as only relating to service industries is clearly incorrect. Understanding the position of a particular service on each continuum.
then the firm should be able to develop a profitable niche for itself in the market. • Superiority – the difference is not easily copied by competitors. It is therefore. • Distinctiveness. Here we have to understand that the buyers have different needs and hence they are attracted to different offers. which satisfy the following criteria. • Communicability – it is possible to communicate the difference in a simple and strong way. which are available.POSITIONING AND DIFFERENTIATION OF SERVICES The positioning of a restaurant is a very important aspect for the marketers since it helps them to recognize the component characteristic of the services the customers need.the difference is distinctly superior to other offerings. . • Importance – the difference is highly valued to a sufficiently large market. important to select distinguishing characteristics. Combining an analysis of customer needs on a segment-by-segment basis with an understanding of competitive offerings enables the marketer to identify opportunities for serving a particular segment’s needs better than anyone else. If offering such a service is seen as compatible with the organization’s resources and value.
• Affordability – the target customer will be and is willing to pay for the difference. • Profitability – the company will achieved additional profits as a result of introducing the difference It is very important for the restaurants to position their services and products to recognize the component characteristic of the services the customers need. It helps the Hotel managers to identify opportunities for serving a particular segment’s needs better than anyone else. Any additional cost of the distinguishing characteristic(s) will be perceived as sufficiently valuable to compensate for any additional cost. .
1. which in turn affects buying intentions. Industrialize the service by adding equipments and standardizing production. Productivity: There are seven approaches to improve service productivity. Studies have shown that service quality affects customer satisfaction.SERVICE QUALITY: One of the major ways a service firm can differentiate it is by delivering consistently higher quality than its competitors do. 3. Work more skillfully. The key is to exceed the customer’s service quality expectations. 2. Outstanding service quality can give a service company to superior sales and profit performance. . Increase the quantity of service by surrendering some quality.
4. Make obsolete the need for a service by inventing a product solution. 5. Design an effective service. 6. Present customers with incentives to substitute their own labor for company labor. 7. Harness the power of technology.
HUMAN RESOURCE STRATEGIES The subject matter of personnel policies is as wide as the scope of personnel management. In most companies, polices are established regarding various functions of personnel management which are as follows:
Employment: this function.
All policies concerning recruitment, Employment policies should provide
selection, and separation of employees are included in clear guidelines on the following points: a. Minimum hiring qualifications. b. Preferred sources of recruitment. c. Reservation of seats for scheduled castes, scheduled tribes, handicapped persons and ex-servicemen. d. Employment of local people and relations of existing staff. e. Reliance on various selection devices such as university degrees, tests, interviews, reference checks, physical examination, etc.
f. Basis (length of service or efficiency) to be followed in discharging employee. g. Probation period. h. Layoff and rehiring. 2. Training and Development: a. Attitude towards training- whether it is regarded as a device overcome specific problems or as a continuing relationship between superior subordinate. b. Objectives of training c. Opportunities for career development. d. Basis of training e. Methods of training - on the job or off the job. f. Programmes of executive development. g. Orientation of new employees. and
Job evaluation system. Seniority required for promotion. Promotion from within or outside the organisation. Periodicity of transfer. e. g. c. Minimum wages and salaries.3. Channels of promotion. Compensation a. Relative weightage to seniority and merit in promotion. b. Rationale of transfer. Seniority rights. . Method of wage payment. Transfer and Promotions: a. c. b. d. f. 4.
Profit sharing and incentive plans. d. 5. Shift work. Whether to pay prevailing or more than prevailing salary scales. e. Number and duration of rest intervals. c. Non monetary rewards f. Overtime work. f. b. Working hours. Working Conditions: a. Executive stock option plan g. Leave rules. Procedure for getting pay h. Safety rules and regulations. . e.d.
Handling of grievance b. Recognition of trade union. credit facilities. etc. e. Industrial Relations: a. c. Financing of employee services c. social security. transportation. purchase of company's products at discount. d. medical facilities. Workers' participation in management. f. . b.housing. Employees' news sheet and house journals. Employee Services and Welfare: a. company stores. group insurance. education of children. Suggestions schemes. Incentives to motivate. 6. Discipline and conduct rules.g. Types of services .
while on the micro level. Mysore. the hotel majors are chalking out strategies to counter the slump with aggressive marketing by the way of discount & freebies. most hotel chains are now turning to the less glamorous segments for growth. Cochin. on the macro level. which is known for its strictly luxury . Falling occupancy rates. 1500 crore over the next four years. Delhi. When East India hotels. at an average of 10-15% in the past year. The trend is . The thrust of this investment will be for leisure destination properties & budget hotels in Jaipur. that is investing Rs. it implies that. Udaipur.oriented hotels. Madras. Coimbatore.Hotel majors are looking towards expanding . has made it clear that hotels can no longer rely on their premium categories alone to rake in the kind of money that they were: Consider the case of ‘ The East India Hotel’ owned Oberoi chain of hotels. concentrates the better part of its future investment on the budget segment.Present Marketing Strategies of Major Players As occupancy rates is premium hotels drop. and the demand for mid range and budget hotels is growing. Varanasi Jaisalmer & Jodhpur. a distinct trend is shaping up.
800-900 crore. looking down towards the mid-market category. In a market a particular service industry does marketing based on three basic strategies. They are: ⇒DIFFERENTIATION ⇒SERVICE QUALITY ⇒PRODUCTIVITY Differentiation This can be done through: a) Offer b) Delivery . The Taj Group of Hotels.their base hence. Its Rs. has definite future plans for its Gateway & Residency brand to keep pace with its competitors. 5 year expansion plans includes the setting of one hotel in Rajasthan. part of the Indian Hotel Company Limited (IHCL).
. a more attractive physical environment can be developed in which the services are delivered. fax machines.c) image ♦ The offer can include innovative features to distinguish it from competitor’s offers. in a hotel.g. bed-sheets. E.. . advertisements and incluvery tangible that is included in their service. the Taj Group of Hotels have their own symbols which they use in their stationery. ♦ A service company can distinguish its service delivery quality by having more able and reliable customercontact people than its competitors.g. What the customer expects is the primary service package and to this can be added secondary service features. ♦ Service companies can also work on differentiating their image.g. e-mails. by a hotel in their accommodation. They often do this through symbols and branding. the high-tech travelers can be provided with computers. E. E.. crackers.
a dismal performance by any standards. With the turn around in the economy in the second half of the year and a new Government installed things will hopefully be better in the new year as foreign investment creeps up slowly.Hotels Low Occupancy in a Row IT was a year of waiting for the Indian Hotel Industry for the guests who never came and the Government that dithered and stumbled as it tried to put forward a tourism policy to lure foreign tourists to India.55 million of them are expected to touchdown by the end of the year as per the Government estimates . . The year saw the red carpet rolled out for foreign tourist with their dollars but only 2. A silver lining was offered by the domestic tourists whose number continued to swell as the Indian middle-class zig zagged across the country discovering and rediscovering the eternal tourist dream foreign Indian hoteliers to recognise the home market.
The year also witnessed major international chains setting up shops in India as the Marriott in Goa readies itself for an opening by the end of this year. have started focussing on budget hotels and four-star hotels exemplified by the Trident Hotels. Tourism Development Corporation (ITDC) managed hotels which have been put on the block for . The Hilton. Major hotel groups have also been on an expansion and revocation spree during the year in preparation for better times in the new millennium. Including the big hotel chains. all major chains have also expressed interest in acquiring stake in the Government-owned India sale. heralded the return of the American hotel major even as the Radisson group expanded its presence in India through several subbrands.This could be gauged from the fact that hoteliers. Chennai. Along with this. Like ITC Hotels is currently expanding its Maurya Sheraton Hotel in New Delhi besides planning to open one more five-star hotel in the Capital and also in Mumbai by the middle of next year.
. especially Madhya Pradesh which has already put up various properties for long term lease to the private sector as the State Government takes on the role of facilitator leaving actual management of the hotels and resorts to the private entrepreneur.The New Year will have to see the Government take a final decision on this front if it wants privatisation in the sector to take off. Another problem which remains unresolved during the year was the open sky policy which the entire tourism sector has been advocating to bring in foreign tourists. Several States have shown considerable progress on this front.
. Food and Beverages.7 per cent. . a decrease in revenues of 2 per cent in 2001-02 was recorded.1 per cent.2 per cent during this same period. the Indian Hotel Industry showed an inability to manage departmental operating expenses such as rooms. marketing. Undistributed operating expenses like administration. perhaps reflecting the supply and popularity of independent restaurants in many Indian cities. with these expenses rising 10. Inspite of falling revenues. telephone etc. Telephone revenue showed a fall of 8.Hotel Occupancy Decreases The Indian Hotel Industry has registered a fall in occupancy levels from 52.7 in 2000-01. While average room in the same period increased by 2. as well as consumer resistance to the exorbitant pricing and tax levels at in-hotel restaurants. reflecting the increasing use of Email and mobile phones. operation and maintenance too were uncontrolled and rose by 10.9 per cent. Food sales showed a growth of only 0.7 per cent.2 per cent in 1999-2000 to 49.
3 per cent. The significance due to reliability and viability of the database drawn from the audited results of participating hotels form almost all the major chain and key independent hotels. Pakistan.5 per cent. The government must rationalise tax structure. Kenya and Morocco. India. . while the bottom five are Egypt. which in some cases as high as 40 per cent."In the changing market scenario in the country the hospitality industry has to demonstrate an ability to drastically cut costs and improve productivity otherwise many hotels will soon find their existence threatened. Russia. Sweden.9 per cent to 33. service and pricing. operating profit recorded a staggering fall of 20 per cent from 40.7 per cent and Kenya at 47. India ranks third from the bottom after Kuwait at 42. The five leading countries on rooms yield are Italy. As a result. There must be paradigm shift towards a value proposition to consumers and the industry must reinvest itself in terms of product. UK. Even in occupancy. France.
but hopes were dashed since the . There is no justification in levying service tax as they are already paying 10 per cent expenditure tax and sales tax on the same bill.Hotel Industry Seeks Service Tax Abolition The hotel and restaurant industry has sought abolition of five per cent service tax. If the hotel industry is included in the list of infrastructure sectors. who did not pay any tax on transactions. On recession in the industry. the industry was hoping to come out of it in 2002. then 100 per cent exemption from income tax will be available for the first five years. mainly targeting the unorganised sector of caterers. The revenue collected by the Government by way of service tax is the range of Rs. The hotel and restaurants industry to be included in the list of infrastructural facilities.100-150 crores. Loans from financial institutions can also be availed of. But the Government exempted service tax for shamiana contractors last years. The Government had imposed service tax on the industry in 2002.
The industry is expecting a growth rate of over five per cent in the coming years. .growth in the peak season of December to February was just three to four per cent. The trend of brand hotels entering into contracts to manage other hotels seems to be gaining ground and would be a welcome boost to the smaller hotels to become a part of the organised sector.
In its pre-budget memorandum although the hospitality industry had been granted the status of export industry last year. The industry had last year been given income tax incentives facilities of EPCG (Export Promotion Capital Goods) imports. in reality it had only got the status of export industry last year. "Hotels and tourism units earning foreign exchange are not treated as exporters and are not treated as exporters and are not given all the incentives available to other exporters. The Government should new give us the balance of the incentives available to exporters. in reality it had only got the status of export house as the Government had not extended all incentives as available to other exporters.Hotel Sector Demands All Export Incentives The hotel industry has demanded the status of an export industry with all tax incentives at par with computer software exporters besides withdrawal of expenditure tax on guests making payments in foreign exchange. EEFC (Export Earner Foreign Currency) accounts and some other benefits. .
Reduction of service tax leveled on the hotel and restaurant industry since 1999. . The threshold limit of turnover for service tax should be the same as for exemption of excise duties for small-scale units as a large number of restaurants have a very small annual turnover for services on which the tax is levied.Pointing out that exporters are not required to pay any local taxes on their foreign exchange earnings.
Transferring to other units. Redundancy Plan: a. 2. b. Retraining for new jobs.ACTION PLANS 1. Possible sources of recruitment d. Redeployment Plan: a. Number and type of person required b. 3. Any special problems anticipated and how they are to be overcome. Time periods when required c. Selection techniques to be used e. Recruitment Plan: a. Number and names of redundant .
Voluntary separation f. in promotion. Reservations. Retraining whenever possible e. 5. Transfer policy and rules b. if any. Departments/units where redundancy exists c. Basis of promotion c. Promotion Plan: a.b. Time of redundancy d. Retrenchment and layoff 4. Transfer Plan: a. Ratio of promotion to external recruits b. Channels of transfer .
6. Training and Development Plan: a. Mechanisation and automation c. Methods of training f. Training period g. Number of people to be trained b. Training and refresher training . Job redesign d. Work simplification b. 7. New courses to be developed and changes to be made in existing courses. Availability of trainers e. Skill areas for training d. Existing employees to be retrained c. Productivity Plan: a.
e. Participation g. Retention Plan: a. Providing opportunities for career development c. Changes in work requirements d. Incentives and profit-sharing schemes f. Improving compensation levels b. Productivity bargaining 8. Opportunity for participation .
Inventory Profile Changes + Needs + Deployment Need for Defining HRP Basis for Planning .ACTIVITY FLOW CHART Corporate Mission .Environment (Ext.) Methods .Int.Strategy Structure Planning Horizon .Supply .Judgement Ratios Organisation Process Approvals Redeployment/Retraining/Voluntary Retirement Scheme .HRI System .Demand . .
SWOT Analysis of the Hotel Industry Strengths • India’s rich cultural Opportunities • Boom in tourism • Privatization of airlines heritage • Second largest forex • Increase in disposable incomes • Demand exceeds supply Weaknesses • Capital intensive • Labour intensive • Non-availability of land Threats • Sensitive disturbances country • Competition from in to the earner International chains High taxes may render India as an unviable destination. .
most of the hotels in the metros have positioned themselves as corporate hotels. Industrial Activity: With the opening up of the economy.liberalisation era. in the post . On the other hand.September accounting for around 40 per cent of total arrivals and the second half for 60 per cent. there has not been a corresponding increase in the number of rooms. with the entry of corporate travellers. There was pronounced seasonally in tourist arrivals into Indian with April . 2.Factors Affecting Demand & Supply There is an enormous demand supply mismatch in the industry. However. This is mainly due to the continuously inflow of tourist into the country. As result. off-season occupancies in business hotels in the metros have shot up to around 80 per cent as compared to 60 per cent earlier. MNCs have made an entry into India and this has led to flurry of industrial . Factors Affecting Demand 1. Corporate Travellers: Large hotel companies have historically earned around 65 per cent of their revenues from foreign travellers.
golf club. has to provide certain facilities and service to its users. A number of companies are now setting up new hotels to cater to the increase in demand. etc.ups with international chains. Companies are also wooing customers by Corporate discounts range giving them discounts. who expects the best. 3. hotels are striving hard to provide a “home away from home” and an “office away from office” to the customers. being a service industry. who has stayed in international hotels. There is a direct relation between customer satisfaction and the occupancy rates. Management is also paying particular attention to individual / group preferences.activity in the country. between 10 to 15 per cent while the discounts to tourists . Therefore. To lure the international customer. and fax. Latest communication facilities like E-mail. The business traveller. demands for similar facilities in the domestic hotels thus necessitating tie . hotels have introduced various facilities like health club. Service: The industry. are becoming common in most of the 5 star hotels. as these are return visitors.
the demand for the budget hotels and holidays resorts has increased. . rising incomes will have beneficial impact on the industry. over relined on foreign tourist might cripple the industry. 4. Of late. like the Oberoi's have gone one-step ahead by computerizing all the operations. It is hare that the domestic travellers come to the resource of the industry. In addition. with the rising disposable A 250 incomes. Others have also set up cyber clubs to enable the tourists to surf the net. hotels are also offering innovative value . the industry. there has been a perceptible shift in the spending pattern of the domestic travellers. million strong middle class offers a potential market for With the domestic travellers preferring reasonably priced accommodation.are around 25 per cent. Disposable Income: Given that political disturbances act as deterrent. Therefore. Only Hotels offering the best services are expected to survive in the long run.added series to lure the customer.
etc. catering to corporate travellers and foreign tourists usually have high occupancy rates. availability of land. the land prices in Mumbai are the highest in Asia next only to Hong Kong. have a bearing on land prices. Delhi. This leads to high occupancy rates in these towns resulting in unprecedented increases in average room's rates (ARRs). Various factors like location importance as a tourism or business center. Calcutta. Mumbai and Delhi alone account for 42 percent of the total rooms. since these two cities have a high incidence of business traffic. .Factors Influencing Supply: 1. etc. are astronomically high. Bangalore. 2. Land: Land is the Most critical for the growth of the industry. presence of an international airport. In fact. Regional Concentration: Around 70 per cent of the rooms are situated in 12 manor cities. Mumbai. Hotels in centres of business. The prices of land in prime cities like.
The ARRs in these two destinations has grown at an average compound annual growth rate of above 20 per cent in the past.25.000 rooms which is expected to increase to 70.000 rooms. Occupancy rates and ARRs: The high occupancy rates. Mumbai has 7. 3. 39.000 rooms by 2002.000 crore by the end of 1997 out of reach.Supply Gap: With the eight plan target to add 55. there is likely to be a shortage of 37. Hong Kong has more than 40. The government has estimated that at least 1. In contrast.000 classified hotel rooms are required to accommodate the foreign business and leisure travellers and domestic travellers in the coming years. Demand .102 rooms while Delhi has 7. as seen above. This clearly represents . 4. have led to hikes in the room tariffs leading to higher profitability for the companies.328 rooms in 5-star category. Lured by high profits a number of players are entering the industry.000 rooms at an outlay of Rs.
the share of the 3 star segment will increase from 16 per cent to 30 per cent. 10.026 rooms involving a total investment of Rs. . To meet the demand. This implies that the new projects are highly skewed towards the budget hotels and on completion.000 crore. These projects are expected to come on stream by the year 2005. the government has approved in all a total of 592 hotel projects (31. which will result in a 66 per cent incase in supply.000 rooms. The 5 star segment accounts for only 20 percent of this increase while 53 per cent of the new rooms are in the 3 star segment. Even if the existing projects are completed there is expected to be a shortage of about 30.the gross demand supply mismatch prevalent in the industry.
CUSTOMER SATISFACTION & RETENTION CUSTOMER SATISFACTION ‘Satisfaction is defined as a post consumption evaluation that the chosen alternative is consistent with prior beliefs and expectations (with respect to it). 2. the new customers need to form a positive impression of the organisation. Consumer satisfaction is the outcome when expectations are matched by service experience. This impression may be formed either through marketing and sales initiatives or because satisfied customers . of course. Increase sales to existing customers: In order for the organisation to do this. Dissatisfaction. dissatisfaction occurs when there is a mismatch and expectations are not fulfilled by the service delivered. an organization can increase its turnover in two ways: 1. Win new customers: In order to the organisation to do this. the customers need to be satisfied and still want to buy more products and services from the organisation. The Importance of Customer Satisfaction In principle. conversely. is the outcome when this confirmation does not take place.
speak favorably of the organisation’s products. . • Satisfied customers are often “goodwill” ambassadors and help the organisation to win more customers. The “information service” provided by dissatisfied customers can spoil the effect of even the most powerful marketing campaigns. services. Dissatisfied customers rarely return as customers. and staff. • Potential customers are more inclined to listen to existing and previous customers than to the organization’s marketing campaigns. Customer satisfaction is crucial to the organisation’s future. because: • Satisfied customers come back. Dissatisfied customers do not come back. • Satisfied customers are usually prepared to buy new products/ services from the organisation. • Satisfied customers are a source of inspiration to the organization and contribute to giving the employees increased job satisfaction. Dissatisfied customers share their dissatisfaction with anyone who will listen and in the process give the organisation a bad reputation.
Strategically. they should try to provide all the services and products in the same way. The organization should deliver quality products and services to their customers in order to maximize the repeat clientele. which they promised during the campaigns and advertisements. .It is very important for an organization to satisfy the needs and expectations of their customers.
Pay and benefits. A study by Bruce and Blackburn. for instance. such as recognizing contributions. and management keeping the lines of communication open. employee involvement in decision making.RELATION BETWEEN EMPLOYEE AND GUEST SATISFACTION Customer satisfaction has emerged as an important component in the bottom-line success of service businesses. business and fosters word-of-mouth advertising. indicated that the absence of those economic factors will lead to discontent. however. but their presence will not add to long-term satisfaction. Satisfying customers is especially important because it encourages repeat Employees feel good when they feel that they are involved in decision making. continue to be important factors in employee satisfaction. jobenrichment factors. are only one factor among many. receive adequate training. . and most employees feel that they are underpaid for the job they do regardless of their compensation. Empowerment is recognized as an important tool for improving employee morale and performance. and are recognized for their contributions. On the other hand. Pay and benefits are a strong consideration in employee satisfaction.
. and guests are happier if employees respond to guests individual needs.On the other hand the guests feel strongly about the treatment they receive from the hotel’s employees. We can thus conclude that a happy employee does influence the guest’s attitude towards the hotel and thereby increasing customer loyalty.
They must deliver superior value to their target customers and must become adept in building customers and not just building products. The restaurant requires fewer . they are satisfied.CUSTOMER RETENTION Companies must be customers centered to be successful in current market scenario. If customers received what they expected. and partnership activities of loyal customers. they are extremely satisfied. Many companies think that obtaining customers is the job of the marketing or sales department. The customer’s expectations must be met or exceeded in order to build loyalty. Customer loyalty. But in reality although marketing plays a leading role. decreased price sensitivity of loyal customers. The restaurant industry benefits from continued patronage of loyal customers because of reduced marketing costs. If their expectations were exceeded. Customer satisfaction is requisite for loyalty. on the other hand. measures how likely customers are to return and their willingness to perform partnershipping activities for the organization. But the real issue is retention of customers that all marketers need to consider. Customer satisfaction measures how well a customer’s expectations are met. it can be only a partner in attracting and keeping customers.
Relationship marketing enables Developing companies to build loyalty with their customers.marketing dollars to maintain a customer than to create one and the creation of new customers through the positive word of mouth of loyal customers thereby reducing marketing costs. thus companies today must work to develop stronger bonds and loyalty with their ultimate customers. . customers as partners is different from traditional marketing. which is more transactions-based. As the competition is strong and often there is little differentiation between products in the same product class in the restaurant industry it becomes imperative to reatin customers. Thus relationship marketing is a useful tool to retain customer. Beyond building a stronger relation with their partners in the supply chain. Increased competition with little differentiation between core product is one of the factors that led to the development of relationship marketing in the 1990s. It is found that that building a relationship with customers should be a strategic focus of most service firms. Reichheld and Sasser found that a 5% increase in customer retention resulted in a 25 to 125% increase in profits in nine service industry groups they studied.
Competitive pay packages will also help in retention of staff and better services to the customers. working as a team. ♦ Hotel must be given a higher ratio of importance as future trends signify that the mentioned sector will be a cash cow for the investors. ♦ Advertising costs should be minimized as they account for nearly 10 percent of a businesses profit. To ensure this. .RECOMMENDATIONS ♦ The Hotel Industry as a whole must understand the importance of Customer Satisfaction and Loyalty and make all efforts to retain customers. ♦ Ensuring exceptional guest care by each and every employee should be the norm. flatter structures are recommended to stimulate communication process and close • Staff levels must be offered better pay packages since they are the ones in direct contact with your customers.
• Empower employees. This will definitely lower payroll costs and may also improve efficiency of operations. . encourage and -support them in their decisions to build confidence. • Outsourcing options should be considered seriously. This will lead to better customer service at guest contact points. and in as many services as possible.
It gives us a birds eye view of the Hotel Industry. . Time was a biggest constraint but all efforts were made by me to collect all the relevant information for the dissertation.LIMITATIONS The dissertation is based on the use of secondary data.
FHRAI magazine 3. Indian Journal of Marketing .BIBLIOGRAPHY 1. Cornell Hotel and Restaurant administration Quarterly 4. Various Journals and Magazines By INSDOC Library 5. Business Week Magazine 6. Various Publications and Journals By Confederation of Indian Industry [CII] 2. Various Magazines and Newspapers 3. Hotelier and caterer 2. Publications and Journals By Various Hotels Trade journals & magazines: 1. Schuster 6. Journal of Marketing 5. Human Resource Management By Frederick E. Various Journals and Magazines By British High Commission Library 4.
uk • www.com • www.com • www.thomsonlearning.Websites • www.com .co.fhrai.com • www.hcima.hotelinteractive.ehotelier.
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