QUALITY SERVICE MANAGEMENT IN HOSPITALITY AND

TOURISM COST OF QUALITY

LESSON 1 • The reason quality has gained such prominence is that
organizations have gained an understanding of the high cost
TOTAL QUALITY MANAGEMENT of poor quality.
• An integrated effort designed to improve quality • The most obvious consequence occurs when poor quality
performance at every level of the organization. creates dissatisfied customers and eventually leads to loss of
• Is about meeting quality expectations as defined by the business.
customer: this is called customer-defined quality. • The first category consists of costs necessary for achieving
high quality, which are called quality control costs. These are
DEFINING QUALITY of two types: prevention costs and appraisal costs. The
• Common definitions of quality in terms of: second category consists of the cost consequences of poor
• Conformance to specifications quality, which are called quality failure costs. These include
• Fitness for use external failure costs and internal failure costs.
• Value for price paid
• Support services COST OF QUALITY (QUALITY CONTROL COST)
• Psychological criteria Prevention cost
• Costs incurred in the process of preventing poor quality from
Conformance To Specifications occurring.
•How well a product or service meets the targets and • Employee training in quality measurement is included as
tolerances. part of this cost, as well as the costs of maintaining records
• Ex. The wait for hotel room service may be of information and data related to quality.
specified as 20 minutes, but there may be an
acceptable delay of an additional 10 COST OF QUALITY (QUALITY CONTROL COST)
minutes. Appraisal cost
• Costs incurred in the process of uncovering defects.
Fitness For Use • They include the cost of quality inspections, product testing,
•A definition of quality that evaluates how well the product and performing audits to make sure that quality standards are
performs for its intended use. being met.

VALUE FOR PRICE PAID COST OF QUALITY (QUALITY FAILURE COSTS)

• Quality defined in terms of product or service usefulness for Internal failure cost
the price paid. • Costs associated with discovering poor product quality
• This is the only definition that combines economics with before the product reaches the customer.
consumer criteria; it assumes that the definition of quality is • One type of internal failure cost is rework, which is the cost
price sensitive. of correcting the defective item. Sometimes the item is so
defective that it cannot be corrected and must be thrown away.
SUPPORT SERVICES This is called scrap.
• Quality defined in terms of the support provided after
the product or service is purchased. COST OF QUALITY (QUALITY FAILURE COSTS)
• Quality does not apply only to the product or service External failure cost
itself; it also applies to the people, processes, and •Costs associated with quality problems that occur at the
organizational environment associated with it. customer site.
•They include everything from customer complaints, product
PSYCHOLOGICAL CRITERIA returns, and repairs, to warranty claims, recalls, and even
•A way of defining quality that focuses on judgmental litigation costs resulting from product liability issues.
evaluations of what constitutes. Product or service excellence. • Ex. manufacturers of lunch meats and hot dogs whose
products have been recalled
Manufacturing Organizations Service Organizations
Conformance to specifications Tangible factors due to bacterial contamination have had to struggle to regain
Performance Consistency consumer confidence.
Reliability Responsiveness to customer needs RECAP:
Features Courtesy / friendliness Quality Control costs
Durability Timeliness / promptness
• Prevention costs
Serviceability Atmosphere
• Appraisal costs

Quality failure costs

• Internal failure costs
• External failure costs
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 EVOLUTION OF TOTAL QUALITY MANAGEMENT
(TQM)
• In the 1940s, during World War II, quality became more
statistical in nature. Statistical sampling techniques were used
to evaluate quality, and quality control charts were used to
monitor the production process.

• In the 1960s, with the help of so-called “quality gurus,” the

concept took on a broader meaning. Quality began to be viewed
as something that encompassed the entire organization, not
only the production process. Since all functions were
responsible for product quality and all shared the costs of poor
quality, quality was seen as a concept that affected the entire
organization.
THE CIRCULAR NATURE OF THIS CYCLE SHOWS THAT
CONTINUOUS IMPROVEMENT IS A NEVER-ENDING PROCESS.
• In the 1970s and 1980s many U.S. industries lost market share
(PDSA CYCLE)
to foreign competition. In the auto industry, manufacturers
such as Toyota and Honda became major players. In the
SPECIFIC STEPS IN THE CYCLE (PDSA CYCLE)
consumer goods market, companies such as Toshiba and Sony
Plan
led the way. These foreign competitors were producing lower-
• The first step in the PDSA cycle is to plan.
priced products with considerably higher quality.
• Managers must evaluate the current process and make plans
based on any problems they find.
• Since the 1970s, competition based on quality has grown in
• They need to document all current procedures, collect data
importance and has generated tremendous interest, concern,
and identify problems.
and enthusiasm. Companies in every line of business are
focusing on improving quality in order to be more competitive.
Do
In many industries quality excellence has become a standard for
• The next step in the cycle is implementing the plan.
doing business. Companies that do not meet this standard
• Managers should document all changes made and collect
simply will not survive.
data for evaluation.
CUSTOMER FOCUS
Study
• TQM recognizes that a perfectly produced product has little
• The third step is to study the data collected in the previous
value if it is not what the customer wants.
phase.
• Companies need to continually gather information by means
• The data are evaluated to see whether the plan is achieving
of focus groups, market surveys, and customer interviews in
the goals established in the plan phase.
order to stay in tune with what customers want. They must
always remember that they would not be in business if it were
Act
not for their customers.
• The last phase of the cycle is to act based on the results of the
first three phases.
CONTINUOUS IMPROVEMENT
• The best way to accomplish this is to communicate the results
• A philosophy of never-ending improvement.
to other members in the company and then implement the new
• Continuous improvement, called kaizen by the Japanese,
procedure if it has been successful.
requires that the company continually strive to be better
• Note that this is a cycle; the next step is to plan again. After
through learning and problem solving.
we have acted, we need to continue evaluating the process,
• Because we can never achieve perfection, we must always
planning, and repeating the cycle again.
evaluate our performance and take measures to improve it.
BENCHMARKING
THE PLAN–DO–STUDY–ACT (PDSA) CYCLE
• Studying the business practices of other companies for
• A diagram that describes the activities that need to be
purposes of comparison.
performed to incorporate continuous improvement into the
• Another way companies implement continuous improvement
operation.
is by studying business practices of companies considered “best
• There is a cycle, shown in the next slide is also referred as the
in class.”
Shewhart cycle or the Deming wheel.
• The ability to learn and study how others do things is an
•Now let’s look at two approaches that can help companies
important part of continuous improvement
with continuous improvement: the plan –do– study – act (PDSA)
cycle and benchmarking.

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EMPLOYEE EMPOWERMENT
• Part of the TQM philosophy is to empower all employees to
seek out quality problems and correct them.
• The new concept of quality, TQM, provides incentives for
employees to identify quality problems. Employees are
rewarded for uncovering quality problems, not punished.
• In TQM, the role of employees is very different from what it
was in traditional systems. Workers are empowered to make
decisions relative to quality in the production process.
SERVICE QUALITY CONCEPT, DIMENSION PERTINENT TO
TOURISM HOSPITALITY AND LEISURE SERVICES
LESSON 2
Service Quality
⚫ Service quality is assessed by the customer to improve the
quality of the product and services.
⚫ Companies who offered quality product and services are
highly capable and able to meet the customers’ needs and
expectations.
⚫ Increasing the customer’s expectation and the increase if
competition activities are the reason why the service
quality is important in every organization.
⚫ The satisfaction of the customers will always be dependent
in the quality of the product and services offered to the
customers.
Dimensions of Service Quality
1. Tangibles - Presentation is good, Appealing and neat service
providers
2. Responsiveness - Ability to help the customers
3. Empathy - Providing and giving attention to the guest by
heart
4. Assurance - Make the guest feel that they are safe, and you
are confident
5. Reliability - provide service as promised
⚫ Access
⚫ Financial Aspects
⚫ Employee competences
Perception of Service Quality
- Zeithaml, Bitner and Gremler, 2009:87, Perceptions are always
considered in relation to expectations.
- Zeithaml and Bitner, 2003, p.84, Perceptions are formed
through customers’ assessment of the quality
of service provided by a company and whether they are
satisfied with the overall service.
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Challenges in Delivering Service Quality
According to Parasuraman et al., 1985:44, there is a set of gaps
was seen as the major obstacles in attempting to deliver a
service which customers perceive as being of high quality.
Gap 1: Customer expectation – management perception gap
Inconsistencies between the managers perception towards the
customers’ needs might lead to affecting the customer
perception.
Gap 2: Management perceptions – service quality
specification gap the conflict between the service quality
specification and the management perception towards the
customers’ expectations might affect the quality of the service.
Gap 3: Service quality specifications – service delivery gap
The gap is sometimes due to some employees who provide the
product and services to the customers.
Gap 4: Service delivery – external communications gap This is a
gap between the service delivery and for what the
establishment offers to external communications that affect
sometimes the delivery of the service.
Gap 5: Expected service – perceived service gap -
Gap 5, the most important gap, can be regarded as a function of
the first four gaps and Parasuraman et al. (1985:46) argue that
there is indeed a relationship between Gap 5 and the first four
gaps. The quality that a customer perceives in a service is a
function of the magnitude and direction of the gap between
expected service and perceived service (Parasuraman et al.,
1985:46).
Service Commitment
• Customer satisfaction from the product delivered to
them is depending on the service commitment of the
provider.
• Technology has greater impact that leads to more
efficient and effective production of product and
services.
• Companies in tourism and hospitality industry should
or must committed to their work to be able to produce
quality service, to meet the needs, demands and
expectations of the customer.
 The Impact of People, Process and Physical
Evidence on Tourism, Hospitality Industry
Lesson 3
Impact of People
• The word impact is something that affects or the
reason for changes in the organization.
• In tourism and hospitality, the role of management in
human resources is the key term that affects or impact
the tourism and hospitality industry.
• Any relating to employment and work provides
important or signifant change or evidence to the
industry.
TOURISM GENERATED EMPLOYMENT IN THE INDUSTRY
1. Direct Employment
Providing the quality product and service directly to customers.
• Accommodation Sector Front Office Department, Food
and Beverage Department, Food and Beverage
manager, Banquet Services and Housekeeping
Department.
• Tour and Travel Sector Flight Attendant, Pilot,
Ambassador/ Ambassadress and Travel agent and Tour
Guide.
2. Induced Employment
Workers who worked which is related to tourism and hospitality
industry. They do not provide service and product directly to
customers.
• Construction workers
• Merchants
• Professionals (Engineer, Architect, Doctor)
3. Indirect Employment
This type of workers in the industry who support the direct
employment or the employees who provide the product and
service directly to customers.
• Food suppliers
• Tour wholesaler
• Contract food services
• Travel Publications
Employee Turnover
Employee who leaves the company and replaced by someone.
Employee turnover is costly sometimes it ruins the operation of
the business.
Types of Employee Turnover
1. Voluntary
Employee chooses to vacate her/his position and leave the
company willingly. Voluntarily resign from the organization for
so many reasons, example to transfer to other company.
2. Involuntary
It is where the company or employer ask the employee to resign
and leave the organization. In this type of turnover, the
company decides to remove the employees for so many reasons.
Mostly, the reasons of the company are Budget Cuts, Poor
Performance, Behavior Issues, Force Deduction and Changing
Business.
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3. Internal Transfers
This involves employee who transfers or getting position from
within the company. This type of turnover is quite healthy
because the employee will be promoted to a higher position.
4. Retirement
The employee exits the company because of retirement, and
this is out of the firm’s control.
Positive Impact of Employee Turnover
1. Reduce of salary to employee
Some companies reduce the number of employees because of
financial challenges.
2. Eliminate the negative influencer in the organization
This is referring to an employee who has negative behaviors
towards colleagues and employer.
3. Upgrade employee
The common reason why company specially in tourism and
hospitality industry has employee turnover, due to poor
performance of the staff.
4. Perspective is fresh
Company decides to remove the employee due to the reason of
the organization to have fresh ideas.
Process
- Parasuraman et al.,1985, Service quality has been
defined as a gap between the customer’s perceptions
of the service received and the customer’s service
expectation.
- Consumer expectations are predictions that are about
to happen during the time the service will be deliver,
whereas the service quality is a desire by the
customers that is needed to expect.
Negative Impacts of Natural Disasters to Tourism and
Hospitality
1. Economic effects
O Loss of jobs and profits will result to greater impact to the
economy that sometimes leaves people in despair and jeopardy.
- Resources and assets maybe destroy.
- Loss of lives and injury that needs physical attention.
- Business establishes in tourism and hospitality
industry will be close resulting to bankruptcy that leads
sometimes to depression and anxiety.
2. Environmental effects
- Destroy of wildlife’s and natural resources
- Destroy of the natural and manmade attractions
Positive Impacts of Natural Disasters to Tourism and
Hospitality
1. Ecological Effects
Rains have a beneficial effect to agriculture and land because
it gives nutrients, and it also produces useful chemicals into
the atmosphere. Example of this is hydrogen and carbon
dioxide.
2. Bring People Together and have a greater
appreciation towards nature.
3. Productivity Effect
- Tourism and hospitality industry will be able to cope up or
resilient to what has been lost.

Physical Evidence
- The physical evidence such as temperature, colors,
texture, odors, accessibility and comfort may
influenced the customers perceived the quality of
the product and services offered by the
establishment.

- Brady and Cronin (2001), suggested that ambient

conditions, facility design and social conditions
directly influence the physical environment.

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