RSS

10 Rules for Creating Memorable Experiences

As we move from the ‘service economy’ to the ‘experience economy’, Tourism and Hospitality businesses can no longer rely on ‘great service’ as a source of sustainable competitive advantage. Businesses must understand the key fundamentals in creating ‘memorable experiences’ to their customers.

Virgin Galactic, The Burj Al Arab (or Dubai as a whole for that matter), Las Vegas and Macau to name a few, have all found innovative ways of creating ‘experiences’. So how have these businesses been successful? Well after some research I have created 10 rules from creating ‘memorable experiences’:

1. Cooperation is key – in today’s economy businesses should strongly consider cooperation as a form of creating experiences. Hotels, attractions, transport links, restaurants and bars combined into some form of package can create memorable experiences to consumers. In addition this can also give the consumer a perception of ‘value for money’ and reduce the number of transaction costs associated with an ‘experience’. In many cases this exists today, however, businesses should consider this carefully.

2. Keep it current – one word…………..technology! Consumers have considerable power and choice with the internet and access to information. You must take advantage of this and use technology to promote the experience. In many cases businesses can allow the consumer to ‘taste’ the experience before even arriving through video, virtual walk through, pictures and even sounds.. You need to carefully consider the possible uses of technology (including social media) as a vehicle in promoting the experience.     

3. Create an ‘experience culture’ – business must promote an ‘experience culture’. Successful delivery of experiences is very much dependant on the culture of your business. Therefore, businesses should ‘win’ over internal customers (your staff) in order to deliver successful experiences. How to do this? Create an ‘experience culture’ and allow your internal customers to experience the experience and most importantly, provide feedback.

4. Have a system for innovation – ideas will always fly around and come from a variety of sources. Make sure you have a system to capture, collate and identify potential winners. Allow your internal customers to generate ideas and reward them for doing so….your next big idea could be hiding somewhere.

5. Training…..and more training – words can not express how important training is in the delivery of an experience. Every business claims to have a great training program but does your training program concentrate on the experience you wish to provide to your customers? Do your staff deliver memorable experiences to your customers? Of course, every business will be different but training should also be focused on the experience. I like to call this ‘experience focused training’, an area which should not be considered lightly.

6. Know your customers – know your different types of customers, know when to change your experience according to their needs, know your internal customers and know anyone that has input into your experience (including your suppliers). All of these groups are important in providing feedback, ideas and innovations to your overall experience.

7. Take advantage of feedback – feedback is absolutely essential in creating and fine tuning memorable experiences. The important point to note here is that feedback comes from your internal and external customers. Businesses must find way to capture feedback from both parties and use it to fine tune experiences.

8. Learn from the best – if a business is getting it right, be sure to find out why. I named a few in the introduction to these rules, which should give you a start. Now, I don’t mean copy everything that business does, but learn what is good and find ways to implement similar ideas into your business.

9. Create a lasting experience – successful experiences last forever! Find methods to creating lasting experiences which people will talk about and tell their friends. This could include something to take away (physical), something to talk (mental) about or something to show. You need to ensure that your customers go away, talk about the experience you offer and return with an army of followers.

10. Break it down – linking a number of rules together is the ability to break the experience down in to sections. Use technology to create a ‘pre experience’, use your internal customers and cooperation in the ‘live experience’ and give your customers something to take away for the ‘post experience’. Bring these three together to form a coherent and powerful experience and watch your customers grow.

Please note: This article is published for information only and any recommendations given are the opinion of the author and therefore, should only be used if the reader feels they are applicable.

 
1 Comment

Posted by on August 2, 2011 in Experience Economy

 

Is Las Vegas Still Competitive as a Tourism Destination?

Article: Adam Beck discusses Las Vegas and its competitiveness as a tourism destination in the future.

Welcome to Las Vegas!

Las Vegas, Nevada ‘the gambling capital of the world’ has an interesting and lucrative history stretching back over 100 years. The city has grown dramatically in population over the past 50 years, in fact over 1000% from 54,405 residents in 1960 to 583,756 in 2010 (LVCVA 2011). Over this time large multi-national companies such as MGM Mirage, Wynn, Hilton and Marriott have shaped the skies of the Las Vegas with unique and eye-catching ‘mega’ hotels – some with over 5000 rooms.

Las Vegas currently has 148,935 hotel rooms across the city and despite talk of over capacity, various projects have been completed in recent years and others are planned for the future. MGM City Center, the most expensive privately funded project in USA history opened in late 2010 adding some 7800 rooms to Las Vegas. Other future projects include a replica of the famous Plaza Hotel in New York and an entire hotel themed on Elvis.

Las Vegas has enjoyed significant tourism growth in the past 50 years from 5 million visitors in 1970 to 37 million visitors in 2010 – an extraordinary statistic for any tourism destination. However, in recent years it can be argued that Las Vegas has began to suffer. The city is experiencing little growth in the number of visitors and the amount they spend (Las Vegas Convention and Visitors Authority Statistics 2011).

This article presents an investigation of the external environment, the internal operating environment and a SWOT analysis of Las Vegas. These findings can be used to identify potential issues which may affect the competitiveness of Las Vegas as a tourism destination in the future.

External Environment: PESTEL Analysis

Johnson et al (2008) state that a PESTEL Analysis ‘categorises environment influences into six main types : Political, Economical, Social, Technological, Environmental and Legal’ Therefore, this tends to provide a detailed view of the external environment which could potentially have an effect on the competitiveness of Las Vegas as a destination :

Political – Negative impact

  1. Threat of terrorism attacks
  2. Threat of war in areas of the world
  3. Loss of trust in financial institutions

Economical – Negative impact

  1. Global recession and recovery?
  2. Rising oil prices – increasing airline fairs
  3. Unemployment rates and lack of disposable income
  4. Luxury commodities such a tourism falling

Social – Positive impact

  1. Younger population looking for experiences
  2. Population (all ages) able to travel

Technological – Positive impact

  1. Access to the internet growing
  2. Increasing in technology improve experiences
  3. Mobile internet and GPS – seeing before you go
  4. Travel websites such a trip advisor to share experiences

Environmental – Negative impact

  1. Increased awareness of natural environment
  2. Access to natural resources
  3. Climate change – affecting airfares and opinions

Legal – Positive impact

  1. Increases in minimum wage allowing more disposable income
  2. Changes in government policies

Internal Environment: Five Forces Analysis

Johnson et al (2008) describes that a Five Forces Analysis ‘helps indentify the attractiveness/success of an industry in terms of competitive forces : buyer power, supplier power, threat of new entrants, substitutes and inter-firm rivalry’. This framework also tends to be useful when analysing the competitiveness of a destination.

Inter-firm rivalry (High)

Competition between firms in Las Vegas tends to be very high creating great choice for consumers. Las Vegas has over 113 hotels with 38 large (over 100 rooms) on the strip itself. The destination also holds a wealth of restaurants, retail outlets, attractions, wedding chapels, conferences centres and casinos. High levels of competition often create greater choice for consumers, improved quality and perhaps more importantly lower prices. Hotels on the strip continually have discounts on rooms and often a nights stay in a strip hotel can be as low as $20. The high number of firms ought to suggest that unemployment is relatively low in Las Vegas.

Threat of potential entrants (Low – Medium)

Threat of potential entrants to Las Vegas tends to be medium to high. The Las Vegas strip is very limited for space which pushes prices to over $34 million per acre (Hotel Interactive, 2007). Often hotels are bought and imploded to allow space for new developments on the strip. Due to these high entry costs firms wishing to enter the Las Vegas market would need high levels of capital. Therefore, this creates large barriers to entry which would deter many firms.

Bargaining power of buyers (High)

Bargaining power of buyers to Las Vegas as a destination is quite high. The introduction of internet and increases in technology now makes it easier for more people to travel. However, Las Vegas benefits from domestic tourism and has a repeat guest’s average of 81%. Although, as other destinations such as Macau in Chine become more popular, Las Vegas will need to continue to adapt in attracting visitors.

Bargaining power of suppliers (Low)

Las Vegas is a well established destination therefore this would assume that it has a well-integrated supply chain for its needs as a competitive destination. One example of this is the Hoover Dam which supplies enough energy for over 500,000 homes each year. This is not only efficient and sustainable but is considerably cheaper than other forms of power supply. However, it is important to understand that energy sources such as the Hoover Dam will not be sufficient if Las Vegas continues to grow in the future.

Threat of substitutes (High)

Threat of substitutes occur both internally in Las Vegas and external between different destinations. It has already been mentioned that competition in Las Vegas tends to be very high and the destination offers many forms of entertainment. Therefore, on experience such as the theatre can be substituted for shopping or dining out. This forces firms in Las Vegas to be very competitive in terms of price and quality which makes the destination more competitive.

Las Vegas is also in competition with many other destinations throughout the world. However, Las Vegas does hold a benefit of being one of the only places in the world where gambling is legal. Although, area such as the Middle East and China are beginning to compete more seriously with Las Vegas as desirable destinations for entertainment.

Internal Environment: SWOT Analysis

Planning, development and management of Las Vegas will continue to be important in the future. The Financial Times (2008) have already reported plans for officials to encourage more visitors to Las Vegas with increased marketing. It is possible to use a SWOT Analysis to identify potential areas which could be exploited in order to increase and maintain a competitive position.

Strengths                                                                                     

  • Image of Destination
  • Good infrastructure
  • Well established organisations
  • 81% annual repeat visitors
  • High USD contribution.
  • High domestic tourism from close by states in America (50%).
  • Loyalty to the destination (81% repeat visitors)
  • Ability to provide a wealth of experiences
  • Little elements of seasonality on tourism
  • High competitive forces which encourage lower prices and greater quality

Weaknesses

  • Location of Las Vegas and natural resources to support the city’s growth
  • ‘Gambling’ image restricted to limited market segments
  • Difficulty in travelling from locations such as Europe (as Las Vegas is in far west of USA)
  • Only 19% annual new visitors
  • Over 21 alcohol laws deter 18-20 year old travellers
  • Low threat of potential entrants could make the market stagnant or even decline.

Opportunities                                                                             

  • Appealing to wider markets by adding attractions and changing image
  • Maintaining repeat visitors and increasing new visitors
  • Holidays which appeal to family audiences
  • Taking advantage of new forms of technology to improve hotel design etc.

Threats

  • Development of other destinations around the world such as Dubai, Abu Dhabi and the East
  • Development of alternative ‘gambling’ capitals such as Macau, China.
  • Credit Crunch and rising oil prices may reduce visitors from abroad.
  • Possible reduction in visitor volume
  • Global terrorism and war
  • Access to natural resources (water)

Assessing the Competitiveness of Las Vegas as a Destination

This article has provided an analysis of the competitive position and success of Las Vegas as a destination. Initial analysis into key trends demonstrates that Las Vegas has been a successful and growing destination for many years. The destination continues to attract vast numbers of visitors, however, figures of visitor volume and a number of reports show that Las Vegas may have started to suffer in terms of competitiveness.

A number of factors which are uncontrollable have been considered in a PESTEL analysis. Results show that economical, political and environmental factors will all potentially affect Las Vegas in the future. However, social and technological factors seem to benefit the destination in its competitiveness. A Five Forces Analysis shows that the operating environment of Las Vegas is highly competitive. These competitive forces create high levels of competition between firms in Las Vegas which are ultimately passed onto the consumer through low prices, increased choice and greater quality. All factors which make Las Vegas more attractive as a destination and therefore more competitive.

Finally, a SWOT analysis highlights a number factors which should be considered for the future. Las Vegas holds a great number of strengths, however, there are a number of weaknesses and threats which currently affect its competitiveness and will continue to so in the future. A number of opportunities, some of which are already being exploited will allow Las Vegas to increase its long-term competitiveness.

Although Las Vegas appears to have been successful and has held a strong competitive position for many years, it will be increasingly important in the future to monitor this position. However, a number of issues which are outside of the destinations control such as the recovery of the recession, rising oil prices and access to natural resources may control the direction of Las Vegas in the future.

Please note: This article is published for information only and any recommendations given are the opinion of the author and therefore, should only be used if the reader feels they are applicable. A full reference list is available on request via email.



 
1 Comment

Posted by on May 20, 2011 in Destinations

 

The Experience Economy: Is your Hotel Business Ready?

Article: Adam Beck discusses the ‘experience economy’ and what Tourism and Hospitality businesses should think about for the future.

Welcome to the Experience Economy

Over the past two decades, academics and industry professionals have encouraged the notion of creating ‘memorable experiences’, and argue that it is these experiences that ultimately sell the product or service (Morgan et al, 2010). Pine and Gilmore first highlighted the importance of the ‘experience economy’ in a famous article released in 1991, which stated ‘Work is Theatre and Every Business a Stage’ (Pine and Gilmore, 1991).

The main driving force of this is undoubtedly the growth of internet (Pine & Gilmore 1991). Although consumers have always had a choice over products and services, the internet has considerably shifted the balance of power (Pantelidis, 2010). Therefore, it is more important than ever for Hospitality and Tourism businesses to find innovative ways of creating and consistently delivering unique ‘memorable experiences’ to gain long-term competitive advantage (Hemmington, 2007).

Forward Thinking Organisations: Who is Leading the Way?

Forward thinking and revolutionary organisations are already leading the way in providing ‘memorable experiences’ that add value to consumers lives (Hemmington, 2007):

  • A major contributor in food service is Michelin star and celebrity chef Heston Blumenthal. His unique and unconventional style of preparing, presenting and serving food at The Fat Duck has caught the attention of consumers (Harris, 2003; The Fat Duck, 2011). The Fat Duck also incorporate smells and sounds to engage the five senses
  • Other examples included Naked Sushi (eating sushi from models) and Inamo Restaurant (where you can order on an interactive tale).
  • Las Vegas themed hotels such as the Venetian (Venice) and Treasure Island (Pirate) attempt to capture consumers through unique experiences. Many of these hotels also have themed rooms, pools, restaurants and bars which help to define the experience (Pine and Gilmore, 1991).
  • Hotels such as the Atlantis and Burj Al Arab (United Arab Emirates) have a unique ability of using the internet to build ‘experiences’ through interactivity, pictures, videos and sounds (Burj Al Arab 2011; Atlantis the Palm 2011).
  • Theme parks such as Alton Towers now cooperate with local accommodation providers to create ‘packaged experiences’. Also, many London attractions cooperate with other attractions and transport links providing deals and packages to consumers.
  • Disney has been successful due to the culture of its employees in promoting genuine ‘experiences’. Staff are considered the ‘cast’ and they are either ‘onstage’ or ‘’backstage’, they are trained using scripts and rewarded for creating exceptional ‘experiences’ (Morgan et al, 2008; Pine & Gilmore 1991).

Recommendations for Tourism and Hospitality Businesses

Keeping it Current: Using Technology as a Vehicle

Currently over 27% of the world population have access to the internet (see appendices) which equates to some 2 billion people (IWS, 2011). Although, these statistics present great opportunities, the Tourism and Hospitality industry is notorious for ‘falling behind’ with technology in general (Law & Jogaratnam, 2005; Buhalis & Law, 2008; Daniel Thomas, 2010). To remain competitive organisations should consider the following:

  1. Using virtual walk through to create a sense of ‘already being there’ (Cho et al., 2002)
  2. Adding music and sounds to create atmosphere
  3. Using words which are connected to the type of feelings to expect (Law & Hsu, 2006)
  4. Have quality pictures to build the experience
  5. Adding videos to allow the consumers to ‘see’ what they are likely to experience (Pantelidis, 2010)
  6. Designing interactive websites which is key to keeping the interest of consumers (Pantelidis, 2010)
  7. Managing social media and online advertising which will become increasingly important (Pantelidis, 2010)

Working Together: Cooperation in Building Experiences

One method which will become increasingly important, particularly in the case of small businesses, is generating ‘experiences’ through cooperation. This contemporary practice creates an ‘experience’ and has proven popular in recent years under the ‘all inclusive’ package. Tourism and Hospitality businesses of the future will need to build ‘experiences’ by cooperating with other local businesses such as hotels, restaurants, attractions and transport links. Not only can this reduce the number transactions a guest pays during the ‘experience’ (Hemmington, 2008; Tisch, 2007), it can also add a perception of value for money which is so important in today’s economy. This strategy also supports the notion of sustainable tourism which is so vital for many destinations today. Organisations should consider:

  1. Cooperating with others to build ‘memorable experiences’
  2. Building ‘packages’ with other organisations to create an ‘overall’ experience
  3. Marketing ‘experiences’ by cooperating with other organisations
  4. Reducing the number of transaction costs to give a perception of ‘value for money’

Making it Happen: Building a Solid Infrastructure for Success

Organisations should also understand that the most important factor is building a solid infrastructure around the delivery of the ‘experience’. Organisations should consider:

  1. Deliberately designing experiences using core competencies (strengths) as a basis (Pine and Gilmore, 1991; Lugosi, 2008).
  2. Thinking of the transaction as an ‘admission charge’ and how this would change the way things are done (Pine and Gilmore 1991).
  3. Creating ‘roles’ for key members of staff in the delivery of an ‘experience’ (Lugosi, 2008).
  4. Carefully considering staff as they are ultimately the individuals and teams that will be delivering the ‘experience’. Continual training, guidance and coaching are all important for success (Morgan et al, 2008; Shaw & Ivens, 2002).

Conclusions

It is clear from this report that a number Tourism and Hospitality organisations have already taken measures to adapt to the ‘experience economy’. Technology, cooperation and a solid infrastructure are key to designing, delivering and maintaining quality and consistency. Organisations must learn from these forward thinking ideas in or risk being left behind in rapidly changing global economy.

Please note: This article is published for information only and any recommendations given are the opinion of the author and therefore, should only be used if the reader feels they are applicable. A full reference list is available on request via email.

 
Leave a comment

Posted by on April 22, 2011 in Experience Economy, Technology

 

Successful Website Design for Small Hotels

Article: Adam Beck bridging the opinion gap of small hotel owners and the general public on what makes a successful hotel website.

In the current dynamic and fast paced global economy, hospitality businesses are facing increasingly higher levels of competition. With over 22,000 hotels and 16,000 are bed and breakfasts in the UK domestic competition is extremely high (British Hospitality Association, 2009). Small hotels in particular are forced to seek methods of competitive advantage which provide the foundations of survival and long run profitability in such a competitive market.

One strategy which is still relatively new in the industry is the use of the World Wide Web (WWW) as a form of marketing communication tool (Morrison et al., 2004). Currently over 24% of the world population have access to the internet (IWS, 2009) and small hotels owners have only recently realised the advantages which the WWW can provide to both short and long-term competitive advantage in the market.

The majority of consumers use the internet to evaluate hotels and attempt to picture the experience which the hotel is likely to provide (Musante et al, 2009). Although there are numerous third-parties which sell rooms on behalf of hotels, recently hoteliers have began to appreciate that the actual hotel website is the best method to increasing internet sales (Law & Hsu, 2009). Large hotels have reacted to this by dramatically improving the quality and usability of their websites in attracting and maintaining guest (Musate et al, 2009).

Many large hotels and destinations now have virtual walk through applications (Cho et al., 2002), which allow potential guests to experience the ambiance and style of the hotel before making a commitment to reserve a room. However, historically small hotel owners tend to be reluctant to adopt and full utilise technology (Buhalis & Main, 1998; Law & Huang, 2003). This is potentially damaging to the success of these hotels as guests increasingly rely on the internet to make an informed choices about hotels. This article offers some recommendations for small hotel owners on successful web site design.

Research Methods

The research for this article was conducted in three stages. Firstly, literature of small hotels and web design was reviewed to provide a basis from which to take the study forward. Secondly, primary data was collected through a postal questionnaire to small hotels and an internet based public survey for the general public. Finally, the results were analysed and evaluated to identify a number of opinion gaps from which a number of recommendations have been made.

Key Gaps in Opinion

The gaps identified from analysing the date provide a number of key insights for small hotel owners on the differing opinions on the general public. The gaps fall into four areas which small hotel owners may wish to take into consideration:

  • Many small hotel owners were found to be aged 41 and over, although this does not necessarily explain the reluctance in the use of technology it does seem to suggest a lack of knowledge and training in these areas. This is perhaps due to the idea of those who are in the industry as a ‘lifestyle’ (Peters et al., 2009). Although these type of owners have differing business objectives it is important to understand the benefits of the internet in meeting these.
  • Although online booking was considered to be less important than other factors on a website many small hotel owners rely on the internet for over 61% of total sales. This would suggest that online booking may provide increased opportunity to generate sales and this is likely to become important in the future.
  • Almost half of hotel owners thought that an improvement to the hotel website would not generate more sales. Although those who did feel that an improvement would be beneficial were those owners who had the least sales come directly from their website. The majority of the general public said that an improvement would perhaps change their opinion of the hotel and therefore this is an important factor to consider.
  • Perceptions on content differed quite considerably between small hotel owners and the general public. The general public rated price as being most important which differed from small hotel owners opinions. Also small hotel owners considered that local area information was not important ranking it 9th out of 10, however, the general public considered this to be 4th most important. See the table below for full results:
HOTEL OWNERS
Rank Website Content Rank Website Content
1st Hotel Information 6th Overall Usability
2nd Hotel Pictures 7th Promotions
3rd Prices 8th Overall Style
4th Availability Information 9th Local Area Information
5th The Hotel Name 10th Online Booking
GENERAL PUBLIC
Rank Website Content Rank Website Content
1st Prices 6th Promotions
2nd Hotel Information 7th Overall Style
3rd Hotel Pictures 8th Availability information
4th Local Area Information 9th Online Booking
5th Overall Usability 10th The Hotel Name

Recommendations for Small Hotel Owners

The gaps which were identified allow for a number of recommendations to be made for small hotel owners which may help with the overall success of their website design. Although these recommendations have been made it is important to understand that these are only from results of this study and secondary research. Each small hotel is uniquely different and therefore some or all of the recommendations may not suit each hotel. The aim of the recommendations is to provide some useful suggests as to possible ways in which small hotel website can be improved in attracting potential guests:

  • Training in information technology (IT) is important for those small hotel owners who perhaps do not have these skills (Main, 2001). This study has continually highlighted the importance of technology in the modern hotel industry. Small hotel owners that discount technology as a form of competitive advantage are likely to lose competitive advantage in the long run.
  • General awareness of the internet and it importance is also key. Small hotel owners must read literature and understand the importance of the internet as a source of competitive advantage.
  • Small hotel owners should be actively involved in the design of their individual website. Research suggested that 66% of hotel owners in the study had a professional design the website. Although this is perhaps obvious due to the complex nature of web design and demographics of hotel owners this perhaps restricts the any changes which wish to be made to the website. Therefore, a more involved approach to website design would provide owners with more information and confidence to make regular updates to the website.
  • Staying up to date with industry trends is extremely important to the success of a small hotel website. Many articles are published on a continuing basis and it is important for small hotel owners to stay up to date with these articles and implement some of the advice offered by academics and industry practitioners. Previous studies have found that small hotel owners have not been on a training course (Main, 2001; Glancey & Pettigrew, 1997). Therefore, formal training may help small hotel owners to gain a better understanding of technology.
  • Website design should not only be considered as a general need and expense. Time should be taken to maintain the website and add value were necessary (Gilbert & Perry, 2002).
  • Continuing improvements and information updates are important to the success of a website. Research has proven that now many potential guests look to find all the information they are looking for from one single website (Hsu et al., 2004). Therefore, it is important for small hotel owners to go the extra way in providing potential guests with up to date information on both the property and the local area in order to create the impression of improving experiences for guests (Pine & Gilmore, 1998).
  • The results in the this study found that local area information was considered to be important for potential guests but small hotel owners thought that this was one of the least important. Also in the observation of small hotel websites local area was often lacking in-depth and quality. Previous studies have stated the importance of local area information and pictures to add value to a website (Perdue, 2001; Musante et al., 2009). Small hotel owners should make every effort to have as much local area information on the website as possible. However, it should user-friendly for the potential guests (Kline et al., 2004; Morrison et al., 2004), for example putting attraction under categories.
  • Small hotel owners must consider the key content factors which make up a successful website. Although owners and the general public had a similar perception on content there were a number of key differences. The observation also identified a number of key weaknesses in the top three factors chosen by owners and the general public. These key areas must be developed by small hotel owners in order to make the website appealing to the varying needs of guests (Sigala, 2004).
  • Changing needs of potential guests mean that although they did not consider online booking to be very important it is likely that this will change over time. Providing online booking or at the very least real-time information is likely to be important for small hotel owners (Hsu et al., 2004).

Conclusion

These recommendations provide small hotel owners with a number of possible solutions to successful website design. Many of the recommendations are relatively easy to implement into website design with little or no cost. However, it is important for small hotel owners to carry out a costs/benefit analysis to identify if the benefits outweigh the costs of these changes. In most cases it is likely that the benefits outweigh the costs, however, these will be occasions where this is reversed. Perhaps a useful method to do this is through the modified balanced score card approach which allows small hotel owners to evaluate their website from a number of a successful marketing strategy (Morrison et al., 1999). It is also important to understand that a website should only be one element of an organisations online activity. Review websites and social media are also becoming increasingly important as marketing tools and should not be discounted by small hotel owners. Managing these with the hotel website being the central tool is perhaps a strategy for success.

Please note: This article is published for information only and any recommendations given are the opinion of the author and therefore, should only be used if the reader feels they are applicable. The article has been produced using research and analysis from an MSc Tourism and Hospitality Dissertation by Adam Beck (2009). A full reference list is available for all cited research in this article on request via email.

 
2 Comments

Posted by on April 4, 2011 in Technology

 

Can Technology Improve Guest Service Quality in Hotels?

Article: Adam Beck discusses if technology can improve guest service quality in hotels and if this applies to all levels of the industry.

Technology has arguably been one of the main driving forces in the growth of many economies and organisations around the world. The tourism industry, and hotels in particular, have seen an abundance of benefits which technology can bring to internal operations and guest service quality. In the hotel industry, guest service quality often involves exceeding expectations in an attempt to increase guest satisfaction and ultimately build loyalty. Increasingly, technology is playing a role in guest experiences and overall satisfaction. Buhalis (1998 in Cobanogulo 2006) stresses a continuing need to increase levels of technology due to the increasing volume of travellers and the contemporary needs of those travelers. In many cases, where technology is implemented effectively it has become a main source of competitive advantage (Buhalis and Main, 1998; Siguaw et al, 2000).

Technology can often be difficult to define due to its vast nature, however, for the purpose of this article it will be considered as any activity which involves the use of electronic equipment which adds value to guest service quality. Examples of how technology can be implemented in hotels include; integrated hotel property management systems, guest data management, internal communications, inventory management, hotel design and amenities. Many new forms of technology such as Springer Miller Systems (SMS), Micros-Fidelio and Opera provide opportunities to manage all of these areas from a single program or system. This ultimately provides opportunities for hotels to lower costs, increase revenues, improve communications and create business opportunities (Nyheim et al, 2005; Minogue, 2007).

Although technology provides many opportunities for hotels, many authors focus on the full service (4-5 star, large hotels) sector of the industry. This sector of the industry only accounts for up to 30%, the remaining 70% are considered small to medium hotels which are usually owner operated (Buick, 2003). Therefore, it is important to consider how effective technology is at different levels of the hotel industry and thus if it can improve service quality in general.

A recent report from TRI Hospitality Consulting found that hotel revenue for large chain hotels was down by 17% (Hotel Magazine, 2009). This would suggest that the hotel industry is feeling the affects of the economic depression and will continually need to find sources of competitive advantage. Pine and Gilmore (2009, p.6) state that ‘all businesses must orchestrate memorable events for their customers’ in order to remain competitive in the long run.

It is well documented that the hotel industry has tended to fall behind in technological advances, opting more for labour intensive operations and service delivery (Chathoth, 2006). Therefore, it is perhaps now more important than ever for hotels to make use of technology as a means to provide better guest service quality and increased satisfaction. This may provide loyalty and repeat business which will be increasing important to hotels in these troubling times.

This article will critically evaluate to what extent technology can improve guest service quality in the future and whether this is effective at all levels of the industry. The article will not discuss in great detail the different forms of technology as it is intended to highlight the main implications to guest service quality. Firstly, the advantages of technology will be discussed in relation to the benefits which they provide to service quality. Secondly, the disadvantages which technology may cause will be introduced. Thirdly, the success of technology in small hotels will be considered. Finally, a number of conclusions and recommendations will be given as to whether technology can provide benefits to the hotel industry as a whole and how this may change in the future.

The Role of Technology in Improving Guest Service Quality

The traditional approach to building guest satisfaction tends to be through the use of physical labour and to some extent this is still the case. However, technology has provided hotels with many opportunities to improve the level of service throughout the guest journey (stay at the hotel). It is important to consider a number of recent technological advances and the benefits this provides to hotels and guest service quality.

Although technology is used in hotel rooms and through the hotel and its amenities, it perhaps plays a far more important role in gathering guest information to increase guest satisfaction. This is particularly the case for large full service hotels which require guest information in order to exceed expectations and build loyalty.

Technology which is at the forefront of the hotel industry includes the use of finger print technology and Closed-circuit television (CCTV). The use of fingers prints, which are linked to property management systems can provide many benefits for both the hotel and the guest (Kang et al, 2007). The guest will be able to use a finger to check-in, enter their room, pay for items in multiple outlets and check out. This will allow the guest to be free of carrying room keys, forms of payment and identification details whilst staying at the hotel. The hotel will also see many benefits from this. Firstly, room keys or key cards will not need to be purchased, which often are expensive to purchase (Kang et al, 2007). Hotels will also be able to gather forms of guest intelligence on elements such as food and beverage preferences, retails purchases, time spent in room and in hotel facilities. This provides opportunities to analyse guest preferences and ultimately exceed guest expectations (Domke-Damonte and Levsen, 2002 in Chathoth, 2006).

CCTV works very much in the same way; however it adds a number of benefits as guests activities in the hotel can be turned into data and statistics. Crowne Plaza at Dulles Airport has tested the use of CCTV to add signage to the hotel to avoid guest frustration. This would also allow hotel managers to review facilities and evaluate how effective they are, when peak periods are and how guests experience the hotel (Kirby, 2009).

Other forms of technology include self-service check-in facilities, which can reduce check-in time from approximately 10 minutes to 60 seconds (Caterer and Hotelkeeper, 2009). In some cases a guest can check-in using wireless devices once arriving at the hotel (Chathoth, 2006). This may even be made easier for guests in the future who could check-in from home, working on a similar system as airline companies. If this works in tangent with finger print technology then it is likely that a guest will be given a time for when the room will be ready and the guest will be able to by-pass any form of check-in procedure once arriving at the hotel. This would work particularly well in business where guests can often arrive very late in the evening.

These forms of technology benefit the operations of the hotel. Mintzberg (1979 in Sigala et al, 2000) promotes these forms of technology as standardisation of work. This also involves elements of deskilling which require less technical input from physical labour. A well-known example of deskilling is McDonalds who attempt to deskill every level of its operations to promote efficiency (Ritzer 2006). This provides a number of benefits for hotels including reduced labour costs, reduce dependence for skilled labour and increased efficiency. However, in some cases this may not have any substantial impact on guest satisfaction as it can be argued that it is very much dependant on the type of hotel and the guests which it attracts.

This article focuses on generic forms of technology, however, it is also important to consider in room technology as a form of guest satisfaction. It has been identified that guests are becoming more demanding in terms of what is expected in the way of in-room amenities and organisations such as Microsoft are attempting to integrate hotel technology to make rooms more personal (MICROSOFT, 2005). The aim of this article is not to go into any great detail about the different forms of technology, however, it is important to understand that this will be a great factor in the future and is likely to affect business and full service hotels more than smaller hotels.

Implications of Technology Implementation

Although technology provides a number of benefits and hotels and their ability to improve guest quality, there are also a number of implications which can be considered. Perhaps the most important point to consider is the fact that technology is continually changing. This provides great challenges for hotels in providing quality guest service. Munyan (2008) states that ‘the “next-generation” reality demands continual technology upgrades for every business and personal user, and hotels often cannot afford to be that nimble’.

Technology upgrades for hotels often include high investment and continual changes mean that hotels are often unable to maintain the latest levels of technology both for guest use and for operational use. This creates a problem with guest satisfaction as guests often expect the same technology (or better) which they have at home, particularly in the hotel room (Munyan 2008). Many hotels also tend to be older buildings which provide limitations to infrastructure changes. New build hotels are able to introduce high levels of technology as this can be planned into the design and layout of the hotel. However, older hotels often hold limitations in the amount of changes that can be made. Some hotels would even struggle to introduce an air conditioning unit into some bedrooms due to the design and layout of the hotel.

In terms of economical and social issue, technology can be seen as a disadvantage because it often reduces the levels of labour which are needed. For example, the self check-in services which are appearing in a number of hotels in the UK reduce the need for labour on reception. Although some levels of staff may be maintained for control and maintenance, it is likely that the same levels of staff will not be needed. This is may to become more prominent as labour costs rise in the UK and hotel organisations seek methods to reduce the level of employment needed to run the hotel operations (Caterer and Hotelkeeper, 2008).

However, when considering ‘guest service quality’, it can be argued that self check-in can reduce the level of quality offered. This will often be dependant on the type of hotel which it is implemented; for example, it would seem to be a good idea for business hotel but when considering a full service 5 star hotel it would perhaps reduce the level of personal service and guest satisfaction. Although, overall it is likely that full service hotels will be able to reduce levels of staff in other areas where machines and computers will replace the work of humans.

Technology Strategies for Small Hotels

This article focuses on the larger (full service) aspect of the industry where technology plays an important role and will continue to do so into the future. However, as mentioned earlier the majority of hotels tend to be small to medium enterprises. In a recent survey of technology implementation it was concluded that luxury full service hotels tend to adopt technology more than small to medium hotels (Sigala et al, 2000). If this is the case it is perhaps important to consider whether small to medium hotels will be able to compete with larger hotels in the future and if guest service quality will be affected in any way.

An important factor to consider is the level of investment which technology requires both in installing and maintaining. It is likely that the majority of small to medium hotels have neither the capital requirements nor technical knowledge to maintain such high levels of technology. Also many small hotels are old buildings which perhaps do not prove practical in hosting high levels of technology.

Research by Buick (2003) found that owners of small hotels in Scotland were reluctant to purchase a system which would help to run their business and in fact over 40% claimed not to use a computer to run the business. However, many of the hotel owners where very successful and had high levels of turnover. This would suggest that technology may not always be required to provide successful guest service quality. It is important to understand the type of guests which occupy small hotels. On the whole it is likely that families and couples would visit small hotels in Scotland and therefore would not necessarily be seeking high levels of technology. However, many large chain hotels attract contemporary business and leisure travelers who expect higher levels of technology, similar to that of the home. Research which has been carried out suggest that small hotels need to invest time into web design in order to attract guests.

Summary

It is clear from the evidence in this article that technology is becoming increasingly important for hospitality organisations and in particular hotels. It can be argued that the industry has somewhat been reluctant to follow technology trends and as a result has fallen behind. A number of technology advances which are currently being tested and are in the early stages of usage have been discussed to highlight the importance of technology as a method to increase guest service quality. However, a number of negative implications have been discussed which suggest that technology creates a number of issues for hoteliers, guests and employees of hotels.

Having said this, many hotels are now beginning to realise the benefits which technology can bring to operations and guest service quality although many hotels still fail to make full use of it. It has been identified that many small to medium-sized hotels tend to operate with little or no technology at all. This may be detrimental to the future success of these hotels due to travellers becoming more inclined to expect levels of technology as part of a hotel ‘experience’. However, small to medium hotels attract different markets to that of chain or large full service hotels and therefore technology may not be as much of an expectation or necessity to these types of guests.

Thoughts for the future?

Therefore, it can be concluded that although technology provides a number a benefits for the hotel industry there are still a number of challenges which need to be addressed. Also although technology can be useful at some levels for the whole hotel industry, it is not vital for success. However, it is likely that this conclusion may change in the future and technology may become vital for the whole hotel industry. The Caterer and Hotelkeeper (2001) suggests that by 2020 technology will be paramount for the success of the hotel businesses. A number of recommendations will be offered as to the likely direction of the industry in the future and how the industry can adapt for these changes.

The findings and conclusions in this article suggest that although technology will be increasingly important in the future for the hotel industry it will be more so for large chain or full service hotels. Technology for these hotels will be paramount in sustaining competitive advantage. However, smaller hotels will rely less on technology but it is recommended that these types of hotels make use of technology which is economically and operationally viable. These hotels will rely on quality service which will increasingly be channelled through technology.

Please note: This article is published for information only and any recommendations given are the opinion of the author and therefore, should only be used if the reader feels they are applicable. A full reference list is available on request via email.

 
9 Comments

Posted by on March 26, 2011 in Technology