Chapter 3

STRATEGIES FOR QUALITY

SERVICE IN TOURISM AND
HOSPITALITY
INTRODUCTION
In planning the guest experience, STRATEGIES are employed to be
able to deliver processes for each issue that is needed to be resolved
by the management. Strategies are plans designated to achieve a
specific aim of the company. It usually involves setting goals,
planning actions to achieve such goals, and maximizing resources to
achieve these goals. With strategies, resources become optimized,
productivity is maximized, and processes are simplified. Now, with
guests at the center, the experience would be better than initially
planned.
Learning Objectives
At the end of this chapter, the students should be able to:

 Understand the concept of strategy;

 Realize the importance of designing the guest experience; and
 Identify key factors that must be examined to ensure best service.
 Reality Bites
Hotel DAVC, designed by popular local architects, boasts of its stylish design and enjoys the harbor view of
Manila Bay. It showcases a rooftop heated pool, pampering spa services, and a gym. The hotel is a three-minute
walk from the train station. The shopping district is also 10 minutes away via train. Shuttle service between the
other hotels runs every 30 minutes. It also offers one hundred percent (100%) electric transportation as part of its
green marketing strategies that can be booked prior to arrival. The chic guest rooms features free Wi-Fi and stun
in bright-colored palettes. Targeting foreign guests, the room also features free international calls, a FREE fully
stocked minibar, and a smartphone with unlimited data for

travelling in the city. Inside the room, the guest will see the hotel
management’s concern for the environment as direct drinking water is
dispensed through room tap to avoid the use of plastics. The hotel also
features a fitness center, a spa, and an infinity pool. For business travelers,
a well equipped business center and concierge service are made available.
The LMGC Restaurant serves light food among green veranda, featuring
indoor plants, while dishes are served by international chefs. Are the
strategies for guest comfort a highlight in the hotel? Explain how.
Hospitality, Tourism and Strategies
Strategic planning has been utilized extensively for developing tangible products rather
than used in service-related industries like hospitality and tourism. With the marketing
nature of tourism products and services, it is evident for establishments to draw their market
toward services, strategy plays a critical role. By utilizing strategies, a company is able to
identify its competitors while satisfying the needs and wants of its guests.
Strategic planning is the process of identifying a company’s internal and external
characteristics which will contribute to the attainment of its goal pointing to a specific
direction while formulating different policies on how best to achieve it. A restaurant, for
example, to become one of the best in a certain area or region, should think of different
strategies to be able to meet the requirements needed in a certain area as dictated by the
market and the present situation it belongs.
Hospitality, Tourism and Strategies(cont)
With strategic planning in mind, three elements make up its components. Firstly, the
identification of long term goals and objectives concerning the conceptualization of
coherent and achievable strategic objectives. Secondly, the adoption of different courses of
action should also be in place to assure that actions taken to arrive at objectives are already
set. Lastly, the allotment of resources is also set in place. This means that there will be costs
associated with the actions to be able to achieve the objectives.
Porter’s Generic Strategies
In order to be successful and to make a profit in the
industry’s competitive market, every organization needs a clear
strategy. But how do establishments decide the best strategy for
their businesses, may it be a spa, a restaurant, or a resort? The
decision they make will affect every aspect of their company so
it is important to get it right. Porter’s generic strategies can help
a decision maker to make the best choice for his or her
company. Michael Porter identifies three strategies in achieving
competitive edge in his book, Competitive Edge. These are cost
leadership strategy, differentiation strategy, and focus strategy.
Michael Porter
Porter’s Generic Strategies
Cost leadership strategy focuses on increasing
profits by reducing operational costs and charging lower
prices. To implement this strategy successfully, a
company will need to invest in new technology and to
have efficient logistics. A company must also make sure
that its spending on items such as labor, materials, and
facilities is kept low. It is essential that a

company beats its competitors on cost so it will need to continually monitor and reduce
its costs. An example would be an economy level hotel that charges low rates but has
only basic amenities for a regular guests. Its room will typically have a standard bed,
color television, air-conditioning unit, and private bathroom. Wi-Fi connection is
optional.
Porter’s Generic Strategies (cont.)
The differentiation strategy focuses on making a company’s service being
attractive and unique in comparison to those of its competitors. For example, a company
might specialize in a particular feature or unique service, be renowned for its excellent
customer service, or have a highly valued brand image. It will need to be creative and
innovative and be able to provide a high quality services for this strategy to work. Sales and
marketing also play a vital role in this strategy’s success and a company will need to make
sure to stay ahead in new trends in the industry. One best example would be a hotel utilizing
green technology in its operations. This hotel can boast of adhering to the call on
sustainability and environmental stewardship by integrating this concept in its day-to-day
operations, such as the use of reclaimed wood, metal roofing and steel grills of another
reclaimed building, passive cooling through building orientation and insulation on metal
roofing, as well as harvesting rain and groundwater for toilet flushing, plant irrigation, and
general house cleaning.
Porter’s Generic Strategies (cont.)
The focus strategy concentrates on developing services for niche market.
Using this strategy requires a deep understanding of the customer’s needs of a company.
Its aim will be to meet these needs by providing that something special and extra that the
customers cannot get anywhere else. A company will also need to decide whether to
adopt cost leadership or differentiation. This is because the focus strategy is not normally
enough to win substantial market share on its own.

cost leadership
The first type of focus is on or cost
leadership in a narrow or focused market. An example would be the
study hubs in the university belts. They have a very focused market
place. They specifically target student guests that are looking for
cheaper alternatives to hotel lounges wherein they could spend their
time studying. They do not provide for everyone
but only for students, which is why their price is relevantly low.
Porter’s Generic Strategies (cont.)
The second type of focus is on differentiation in
a narrow or focused market. An example would
be a coffee shop which adapted the drive-through business
model. It focuses on guests who do not really necessarily
want to sit down and have a cup of coffee. The guests like
the brand and offering but do not have the time to sit down
and enjoy a cup of coffee. They have it on the move.

Choosing the right strategy for an organization is crucial in gaining a

competitive edge over its rivals. By using Porter’s generic strategies model, an
organization will be able to identify the strategy that it needs to lead the organization to
success.
Internal and External Assessment
Internal analysis is where an organization takes stock of the resources and assets that it
possesses. These include the strengths that enable an organization to function well. Experts refer to this
as the “secret sauce” of an organization. Moreover, internal analysis also flaunts the weaknesses of an
organization. These weaknesses are identified not to dwell onto, but to be addressed and resolved so
that they do not harm an organization.

An airline company, through internal analysis,

may find out that it needs to have a stronger passenger
relationship management with its clients. By delving
deeper, it found out that the problem was because it is
not in the culture of the employees to establish a
relationship with their passengers. Utilizing a strategy
to develop relationship marketing in their operations,
it enabled the entire company to combat this problem
and convert the weakness into a strength.
 An external analysis, meanwhile, does not rely on the “secret sauce”. How a company positions
itself in the market with respect to its rivals in its particular space is of primary concern. Attention should be
focused on what a company is good at relative to its rivals in that industry. Doing external analysis not only
determines a company’s position in the external environment, but also showcases its opportunities and threats.
Identifying a company’s opportunities and threats, through different tools such as the Political, Economic, Social,
Technological, Environmental and Legal (PESTEL) analysis, exhibits what it needs to be wary about which
somehow are uncontrollable to a certain level.
 One best example is what happened in
Boracay when it was closed for six months
because of the environmental rehabilitation
projects of the Philippine government. Many
hotels and their respective employees and
guests were affected by this situation. It is
said that about 400 lodgings and food services
were ordered

to be closed for violating laws, three casinos were shut down, and other tourism establishments built
within the 30-meter shoreline were demolished. The government predicted about Php 18-20 billion
loss of potential gross receipts due to the six-month closure.

Strategizing for the Future

Ford (2011) stated that the things hospitality and tourism organizations must plan to cope with
changes in the future include demographics, technology, social expectations, economic changes,
competition in the industry, stakeholders, and other factors
Demographics
Changes in the workforce and the market of the hospitality and tourism sector will continue to affect
the operations of the industry, and this is relevant not only to the service providers, but also to its market.
Park and Yoon (2009) made an article on the segmenting the motivation of Korean tourist. In their article,
they noted that motivation in tourism is largely determined by a number of factors, including demographics.
Results show that with changing demographics, themes as to their socio-economic characteristics and
behaviour in tourism also change. The findings of the research show that most Korean tourists value family
togetherness, some are passive, and some are want-it-all tourists. In the Philippines, as reported by the
Department of Tourism in 2017, millennials proved to be the most well-travelled. The 15-24 age group
travelled across the country the most, followed by the 24-34 age group and the 45-55 age group. These only

show that demographics has

changed already whereby
before these activities are
prolific with the baby
boomers but now millennials
take the scene.
Economic and Natural Forces
Economic forces also change the nature of the industry and how it is managed by the key stakeholders of this
fast growing sector. In 2018, the Philippine Statistics Authority reported that the Tourism Direct Gross Value
Added (TDGVA) of the Philippines jumped to a great amount of 12.7 %. This translates to Php 2.2 trillion, higher
by 14.3 % as compared to 2017’s record of Php 1.9 trillion. A lot people are actually benefiting from tourism, and
in the Philippines, this service-oriented sector is a source of employment and income of a lot of Filipinos.
The Boracay tourism sector and its residents were deeply affected when it was temporarily closed in April
2018. The six-month closure of the island was based on the need for “rehabilitation” with the environmental
problems which were already surfacing and becoming too much for Boracay to bear.

In January 2020, Tagaytay, one of the famous places in the

Philippines, also suffered a tourism disaster as one of its prized natural
destinations, the Taal Volcano, erupted. Tourists flock in Tagaytay
because of its cool temperature and the magnificent Taal Volcano. In
just the first three months of 2019, Tagaytay had 6.9 million visitors –
a sudden rise as there were only 7.5 million visitors in the entire 2018.

Unfortunately, as the Taal Volcano erupted, most of the areas in Tagaytay and the nearby municipalities in Batangas were
deeply affected and had to find means on how to cope with this economic and natural downturn.
Competitors
Competitors also shape the tourism and hospitality
industry. The presence of this major key player brings
about major changes in the industry. Moore (1996)
utilized biological analysis in explaining shifts in
today’s business. He mentioned in his article that
businesses are a big part of the ecosystem and business
need to co-evolve in order to thrive and survive. This is
because of the fact that the economy consists of unpredictable
key players which constantly shift.

Thus, movements between competitors shift from time to time and create different relationships which
also affect other relationships that will be made in the future.

Bengtsson (1999) explained and identified these relationships existing in competition. She
mentioned that in analysing the relationship between competitors, four types can be distinguished.
Coexistence exists on social exchanges between competitors. As economic exchange and bonds are not
present, each competitor knows about each other but does not interact with them. Usually, power is
identified dependent on the competitor’s position and strength. Somehow, dependence is present and

smaller companies are at the mercy of larger players. There is also

a distance between the competitors, although psychologically.
Trust is also regarded high, although informal, as one player is
also dependent on another competitor but does not interfere with
him or her.

Another relationship is cooperation, which also exists in this scenario. As this concept is present, there
are frequent exchanges between the players which comprise of business, information, and social exchange.
All competitors are cooperating but it does not mean
that they are not competing. Formal agreements exist if the competitors have
formed strategic alliances. Independent hotels usually do this, such as in the case
of referral groups or marketing consortiums. Although informal agreements also
exist, they are built on social norms and trust. These norms adjust the distribution
of power and dependence among themselves, which means that conflicts rarely
arise.
 As expected, competition is another relationship that is based on an action-reaction pattern,
which means that if a player launches a product or service, the other competitors will definitely
launch a similar, if not the same, product with some developments. Because of this, interaction
is usually simple and direct. Dependence and power are also equally distributed but are also
based on their position in the ecosystem.
Lastly, a new relationship has existed. It is called co-opetition. Simply, it means cooperation
between competing players. This relationship includes economic and other forms of exchanges.
Usually, power is in the cooperative side of the relationship which is based on how it functions
in the ecosystem. The competitive side, meanwhile, highlights that power is dependent on the
player’s position and strength. Dependence usually arises in two ways. Whenthere is
cooperation, dependence usually takes the form of formal agreements or trust. However, when
there is competition, dependence is again related to the player’s strength and position in the
network. With goal setting, competitors cooperate as it is stipulated in their formal agreement
that this will be done jointly.
 This is why key players in the industry need to have an assortment of different
relationships which depends on how they are set in the present environment. Because of
this, the content of a relationship can vary from time to time. Also, relationships can
grow stronger, eliminating weaker relationships. Usually, this has no clear pattern or
cycle and is highly dependent on the players.
Other Stakeholders and Relevant Groups
Aside from the factors previously mentioned, several other groups also affect how the future of the
tourism and hospitality industry will be shaped

1. Resource Suppliers. A company cannot continue its operation without raw

materials, equipment, and other supplies. This is actually not limited to the manufacturing sector,
but is also an important requirement in service operations, as we established already the concept
of service product. The availability of the resource supplier can also affect the smooth operations
of the company. This is also why there is seasonality in some service operations, as well as the
offering of some products, especially food items. Somehow, a disruption in the operation of the
resource supplier will ultimately affect the company. Thus, companies in the tourism and
hospitality industry usually identify a selection of existing backup suppliers, which somehow
subjects companies to increased costs due to price overcharging. Aside from the common
reasons, this situation usually arises because of a natural hazard.
2. Capital Suppliers. Another player that we need to consider is the suppliers of capital. Now
that the capital market is international and electronic transfers are now available, suppliers can now move
in a faster pace, which makes a company vulnerable. A company may need to spend more time to forecast
the availability of this valued resource. Because capital availability is crucial, a company’s decision-
making should be exact so as not to dampen the entire operations. The stock market now has a great
impact on how certain industries, including tourism and hospitality, go around.

3. Labor Supply. As the pool of skilled employees is also of utmost importance, as they
also shape the market, Chapter 4 discusses issues on staffing and employee concerns. Without a stable
labor supply, the tourism and hospitality operations will be greatly affected as they drive the operation
itself. There will be no one to man the operations and will fill the empty slots of the retired employees.