Hospitality Consulting | SQInsight Blog

Based on standard accepted research methodology and survey techniques, most Hotels and Cruise Lines fail to capture the true opinion of their guests due to flawed questionnaires and surveys. This article will explain the reasons why they fail and how hospitality companies can more accurately capture the true opinion of their guests, and consequentially understand guest loyalty better.

Problem
The problem of not capturing the true opinion of guests is mainly caused by the way questions on surveys are developed. Typically, each year managers and executives within hospitality companies meet to discuss the content of surveys and choose the questions that are placed on questionnaires for the following year. In this meeting, thoughts and ideas are exchanged which often result in a wide variety of questions used to measure guest satisfaction. The problem with this approach is the absence of applied research methodology to construct surveys and questionnaires. Based on years of industry experience with Fortune 500 hospitality companies, rarely, if ever, is the actual framework of the survey or the scales used within the questionnaires discussed or scrutinized. This should be a point of conversation because how questions are asked are often more important than what questions are asked.

Framework
During the annual meeting, managers and executives should first determine how questions should be asked; each specific question should be highly relevant i.e. have a clear objective and capture the specific information required. For example, a low score on a question such as ‘Restaurant Service’ does not reveal whether the service was bad because of the waiter (attitude, skills, etc.) or if it was bad because of slow service, which could be due to for example the kitchen not being able to produce fast enough; i.e. outside of the waiter’s control. Therefore how questions are asked is crucial for surveys to capture the true opinion of guests. It is also important to remember the aim of the survey when designing the framework of surveys.

Surveys
The aim of surveys is simple; it should be to collect information suitable for statistical analysis and the results generated should help companies understand their guests better. Note that the latter may be difficult to achieve as extensive research indicate that only the most satisfied and least satisfied guests fill out questionnaires. To be able to overcome this inherent challenge, it is very important to choose the right scales for surveys.

Scales
There are three main scales to pay attention to which are: performance scales; satisfaction scales; and disconfirmation scales:

* Performance scales asks guests questions on how the property or ship performed; such as “Excellent”, “Very Good”, “Good”, “Poor” and “Very Poor”.
* Satisfaction scales asks guests questions on how satisfied they are; such as “Extremely Satisfied”, “Very Satisfied”, “Satisfied”, “Not Satisfied”, “Very Dissatisfied”.
* Disconfirmation scales asks guests questions related to how their expectations were met; such as “Much Better than Expected”, “Better than Expected”, “As Expected”, “Below Expectations” and “Far Below Expectations”

Though many researchers and companies have in the past, and are still today, utilizing single-item scales to measure satisfaction, these scales are not without fault. There are basically two broad types of scales available to measure customer satisfaction. These are single-and multi-item scales. There is strong evidence that a disconfirmation scale (multi-item scale) should be used instead of performance or satisfaction scales (single-item scales) which has two faults:

1. Lacks the ability to provide information on components or assess various dimensions separately.
2. Limited reliability.

A multi-item scale on the other hand has three benefits:

1. Incorporates the disconfirmation theory which takes both expectations and perceptions into account.
2. Mathematically, comparisons with expectations correlate higher with customer retention and loyalty than performance and satisfaction questions.
3. The disconfirmation scale drastically reduces the asymmetry in the perceived measured service.
4. Once the scales are developed according to research methodology standards, the actual questions should be developed.

Questions
The questions should attempt to measure the extrinsic and intrinsic cues that help guests determine product and service quality. The intrinsic cues provide information on the physical attributes of the service e.g. restaurant food offering or quality, promptness of service, etc. The extrinsic cues provide information on the product and price value. The questions should focus on the perceived functional quality of the service delivered (service outcome) rather than on the technical quality (how the service was delivered). The questions should also attempt to measure the source of guests’ satisfaction or dissatisfaction, while taking into account the price paid for the experience.

To fully understand guest satisfaction, high-level questions revolving around the framework of service, product quality and value perceptions should be asked. For companies to be able to gather information which is useful for statistical analysis, ‘high-level’ questions should be asked to understand guest’s overall perceptions. A ‘above expectations’ response from a guest indicates that no factor was significantly negative enough to detract from overall satisfaction of the rated category; therefore, there is no need to ask the guest more questions in that category. Any ‘below expectation’ responses should trigger a subset of more specific questions to capture information on how the hotel or cruise ship can improve in the minds of their guests.

Dissatisfaction
There are three critical areas of dissatisfaction information that surveys must be able to collect:

1. Dissatisfaction caused by the hotel or cruise ship not knowing what guests want, and can therefore not deliver.
2. Dissatisfaction caused by false or incorrect advertising or marketing which causes guests to have unrealistic expectations (asymmetry between product communication and product delivery)
3. Dissatisfaction caused by staff not able or willing to deliver adequate service (based on guests expectations).

With this specific information on hand, hospitality companies can make informed business decisions on how to overcome the challenges causing guest dissatisfaction, but only if they also know if guests were satisfied with the price they paid for the experience.

Price Satisfaction
Guests’ price satisfaction should be understood as it plays a significant role in the perception guests have towards the value and quality products and services. Poor price perception is statistically proven to influence both satisfaction and repurchase intentions negatively. In other words, guests use price as an expectation cue for service and product quality, and as quality is the antecedent to both satisfaction and perceived value; guests’ perception of the ‘quality’ of the hotel or cruise ship becomes one of the most important factors to capture.

Summary
In summary, hospitality companies should first discuss the framework of their survey, establish what scale to use, agree on how to ask questions and finally develop the actual questions. The ‘intuitive’ surveys developed as a result of the methodical approach outlined above should then be incorporated into an online environment which is geared for ‘dynamic’ surveys. This will allow for hotel companies and cruise lines to capture the true opinions of their guests; and by doing so, they will be much better equipped to understand the loyalty and repurchase intentions of their guests.

Please click below link to Hospitality Net for the full article:
Capturing guests’ true opinions | By Patrik Hellstrand.

Please visit our website: SQInsight Hospitality Consulting

As the hospitality industry becomes more competitive, economic pressures increases and the industry continues to expand, there is an obvious need to retain clientele as well as increasing profitability. It is therefore unsurprising that hospitality management professionals strive to improve guest satisfaction, and short- and long-term revenues. The management professionals whom are striving for these results however often have limited understanding of research surrounding the paradigms of guest satisfaction, and the consequent effects it has on guest loyalty and financial performance. This article will discuss some of the driving theories of guest satisfaction.

Existing Research
Though over 15,000 trade and academic papers discussing guest satisfaction has been published since the 1960s (Ekinci et al., 2004, p. 189), one can note by researching that limited attention has been paid to the value perception and expectations guests have towards product delivery, and the effects price guests pay for an experience has on satisfaction and future spending. Furthermore Voss et al. argues that the role of pricing in relation to guest satisfaction has been largely ignored within the little research that does exist (Cited in Mattila et al., 2003, p. 328), which makes existing research less applicable as the price paradigm is often excluded. Considering that guest’s expectations has gone up in the past 30 years within the hospitality industry, and continue to do so, does not make it any easier for management to understand what guests expect.

Loyalty Equals Better Performance
The reason why loyal guests are so important is: 1) because it costs three to five times as much to attract new guests than to retain existing ones; 2) because previous guests strongly influence others by word of mouth recommendation (Conlon et al., 2004, p. 434). Most hospitality professionals do understand the undisputed research on guest service which proves that: 1) Companies that have more satisfied guests experience higher guest loyalty; 2) Companies with higher guest loyalty, perform better financially compared to their competition. Kristiansen et al. (1992), Zeithaml et al. (1996), McColl-Kennedy and Schneider (2000) all found in studies conducted that satisfied guests are key to long-term business success (Cited in Gilbert et al., 2006, 298). This long-term success is based on guest loyalty and retention which consequentially results in future revenue (Ibid). Another theoretical and empirical study on guest satisfaction and performance (including repeat purchase intentions) suggest that satisfaction levels can be directly linked to financial performance (Gupta et al., p. 284, 2007). This is a fairly easy concept to grasp, but understanding guest satisfaction is not as easy.

Perception
The hospitality industry must charge guests different rates depending on demand to stay profitable, thus effective yield management is within the industry extremely important. Due to this, guests are likely to experience fluctuations in their value perception. This supposition is based on research by Zeithaml that argue amongst other things that value is low price (Cited in Petrick, 2004, p. 398). Due to the complexity of the guest experience, guests are likely to search for evidence of value and satisfaction from three distinct sources: 1) people; 2) process; 3) physical environment; or what has been dubbed as the servicescape (Mattila, 1999, p. 42). There are a number of theories surrounding the satisfaction and service paradigm of which five of them will be discussed in this article. These theories of interest are ones that relate to antecedents and decedents of satisfaction.

Servicescape
The ‘servicescape’ is a general and widely used term to describe the physical surroundings of a service environment (Reimer et al., 2005, p. 786) such as a hotel or cruise ship. The service offered is to some extent intangible which makes it very difficult for guests to gauge what is good and not so good about the services offered. Therefore, guests are sometimes unconsciously trying to obtain as much information as possible through experiences to decrease information asymmetries (Reimer et al., 2005, p. 786). This causes guests to look for quality signals or cues which would provide them with information about the service (Ibid), which leads us to ‘cue utilization theory’.

Cue utilization theory
Cue utilization theory argues that products or services consist of several arrays of cues that serve as surrogate indicators of product or service quality (Reimer et al., 2005, p. 786). There are both intrinsic and extrinsic cues to help guests determine quality, where the intrinsic cues provide information on the physical attributes of the product or service, whereas extrinsic cues are product related and provide information such as brand and price (Ibid). Consequentially, due to the limited tangibility of services within a hospitality environment, guests are often left to accept the price of the experience and the physical appearance or environment of the hotel or cruise ship itself as quality indicators.

Stimulus-organism-response theory
One of the basic frameworks that help us understand how behavior is impacted by the physical environment is the stimulus-organism-response theory which in a hospitality environment states that the physical environment acts as a stimulus, guests are organisms that respond to stimulus, and the behavior directed towards the environment by guests is a direct response to the stimulus (Mattila, 1999, p. 42). It can be very difficult for guests to evaluate the service quality, as the experience as a whole can be somewhat overwhelming. To make the service-evaluation process simpler, guests turn to the physical environment, the hotel or cruise ship itself, to look for tangible evidence that indicate that either ’yes’ this is a great hotel or cruise ship or ‘no’ this is not up to expectations (Mattila, 1999, 42). It is therefore important to understand that the physical environment can have a profound effect on guest satisfaction. One study also found that the satisfaction levels lodging guests had were influenced by several dimensions such as room cleanliness, room to be in working order, staff friendliness and attentiveness (Mattila et al., 2003, p. 330). It was also found that guests had a very low tolerance for any of these dimension to be far from their expectations (Ibid). It has been found that not only the quality of above mentioned services correlate to overall satisfaction, but also the room design and the physical property impact satisfaction levels (Mattila et al., 2003, p. 330).

Disconfirmation theory
Moving along to theories on satisfaction, many researchers have argued what the definition of satisfaction really is, and many theories have been proposed. Amongst the most popular theories is the ‘disconfirmation theory’ which argues that “satisfaction is related to the size and direction of the disconfirmation experience that occurs as a result of comparing service performance against expectations” (Ekinci et al., 2004, p. 190). Szymanski and Henard found in their meta-analysis that the disconfirmation paradigm is the best predictor of customer satisfaction (Cited in Petrick, 2004, p. 398). Though many models exist such as the disconfirmation theory and other theories such as the performance-only approach, the technical and functional dichotomy approaches, the service quality versus service satisfaction approach and the attribute performance approach, it is agreed amongst all theories that satisfaction is a post-consumption evaluation by the guest (Gilbert et al., 2006, p. 299).

Fulfillment response
Oliver offers an updated definition on the disconfirmation theory which states “Satisfaction is the guest’s fulfillment response. It is a judgment that a product or service feature, or the product or service itself, provided (or is providing) a pleasurable level of consumption-related fulfillment, including levels of under- or over-fulfillment” (Cited in Ekinci et al., 2004, p. 190). Based on this definition it can be assumed that the fulfillment response is a positive feeling experienced by guests as pain reduction occurs when a problem is solved or alleviated (Ibid). Oliver however also argues that positive feelings can occur not only by the unexpected effects of over-fulfillment, but also by under-fulfillment which can occur when the damage or pain a problem causes is less than expected (Ibid). These definitions are very interesting as they point towards two ideas: “Firstly, satisfaction is the result of direct experiences with products or services; and secondly, it occurs by comparing this experience against a standard (e.g. expectations)” (Ekinci et al., 2004, p. 191). The major shortcoming of the disconfirmation theory should however be noted, which is that the model indicates that if one’s expectations are decreased, satisfaction must inevitably increase (Petrick, 2004, p. 398).

Repurchase intentions
Past research indicates that satisfaction is an excellent predictor of repurchase intentions (Petrick, 2004, p. 397). Anderson et al. (1994), Fornell (1992) and Yeung et al. (2000) also found through several empirical studies that satisfaction, and also quality, are key drivers in a company’s financial performance (Cited in Matzler et al., 2006, p. 180). These findings point towards the importance for hospitality companies to fully understand and recognize what drives guest satisfaction and focus on the areas which are performing poorly and consequentially have a negative effect on guest satisfaction.

Evaluations
When discussing satisfaction, it is important to understand that guest’s evaluation of service comprise of two basic distinct dimensions: service delivery and service outcome (Mattila, 1999, p. 42). Research indicates that how the service was delivered (perceived functional quality) is more important than the outcome of the service process (technical quality) (Ibid). This research clearly indicates that effort by staff have a strong effect on guest’s satisfaction judgments.

Dissatisfaction
Having thoroughly discussed satisfaction, it is important to also discuss dissatisfaction and why it occurs. Dissatisfaction towards the service often simply occurs when guest’s perceptions do not meet their expectations. There are several specifics to why dissatisfaction would occur within a hospitality environment, such as: 1) the company not understanding what guests wants, and can therefore not deliver; 2) false or incorrect advertising which causes guests to have unrealistic expectations; 3) staff not able or willing to deliver adequate service. On a more theoretical level, dissatisfaction can be explained by Parasuraman’s gap model which proposes that ten dimensions determine service quality: “reliability, responsiveness, competence, access, courtesy, communication, credibility, security, understanding/knowing the guests, and tangibles” (Cited in Haksik et al., 2000, p. 218). Above essentially propose that the differences between expected performance and perceived performance on each of the above dimensions will determine the overall received service quality (Ibid). Dissatisfaction could therefore arise if the perceived performance falls short on any or all of the expected performance dimensions; this is based on the disconfirmation theory.

Conclusion
In conclusion, though there is a great deal of research on guest satisfaction within a hospitality environment, the role of pricing in relation to guest satisfaction has been largely ignored. Undisputed research on guest service proves that companies that have more satisfied guests experience higher guest loyalty, and perform better financially compared to their competition.

Guests are likely to experience fluctuations in their value perception as value can include low price in the minds of guests, and as the service offered is to some extent intangible. Guests are also sometimes unconsciously trying to obtain as much information as possible through experiences to decrease information asymmetries, and guests are therefore often left to accept the price of the experience and the physical appearance of the hotel or cruise ship itself as quality indicators.

Amongst the most popular satisfaction theories is the disconfirmation theory which argues that satisfaction is related to the size and direction of the disconfirmation experience that occurs as a result of comparing service performance against expectations. Basically, satisfaction is the result of direct experiences with products or services, and it occurs by comparing perceptions against a standard (e.g. expectations). Research also indicates that how the service was delivered is more important than the outcome of the service process, and dissatisfaction towards the service often simply occurs when guest’s perceptions do not meet their expectations.

References

* Ekinci Y. & Sirakaya E. (2004). ‘An Examination of the Antecedents and Consequences of Customer Satisfaction’. In: Crouch G.I., Perdue R.R., Timmermans H.J.P., & Uysal M. Consumer Psychology of Tourism, Hospitality and Leisure. Cambridge, MA: CABI Publishing, pp. 189-202. [Online]. Available from: http://site.ebrary.com.ezproxy.liv.ac.uk (Accessed: January 8, 2008).
* Mattila A. & O’Neill J.W. (2003). ’Relationships between Hotel Room Pricing, Occupancy, and Guest Satisfaction: A Longitudinal Case of a Midscale Hotel in the United States’, Journal of Hospitality & Tourism Research, 27 (3), pp. 328-341, Sage Publications [Online]. DOI: 10.1177/1096348003252361 (Accessed: December 29, 2007).
* Conlon D.E., Van Dyne L., Milner M. & Yee K. (2004). ’ The Effects of Physical and Social Context on Evaluations of Captive, Intense Service Relationships’, Academy of Management Journal, 47 (3), pp 433-445, Business Source. [Online]. Available from: http://web.ebscohost.com.ezproxy.liv.ac.uk/ehost/pdf?vid=5&hid=2&sid=90fbfe55-16b8-4d22-9994-f32279b38f98%40SRCSM1″>http://web.ebscohost.com.ezproxy.liv.ac.uk/ (Accessed: January 5, 2008).
* Gilbert R.G. & Veloutsou C. (2006). ‘A cross-industry comparison of customer satisfaction’, Journal of Services Marketing, 20 (5), pp. 298-308, Emerald Group Publishing Limited. [Online]. DOI: 10.1108/08876040610679918 (Accessed: January 4, 2008).
* Gupta, S., McLaughlin, E., & Gomez, M. (2007). ‘Guest Satisfaction and Restaurant Performance’, Cornell Hotel and Restaurant Administration Quarterly, 48 (3), pp. 284-298, Sage Publications [Online]. DOI: 10.1177/0010880407301735 (Accessed: December 29, 2007).
* Petrick J.F. (2004). ‘The Roles of Quality, Value, and Satisfaction in Predicting Cruise Passengers’ Behavioral Intentions’, Journal of Travel Research, 42 (4), pp. 397-407, Sage Publications [Online]. DOI: 10.1177/0047287504263037 (Accessed: January 4, 2008).
* Mattila A. (1999). ‘Consumers’ Value Judgments’, The Cornell Hotel and Restaurant Quarterly, 40 (1) pp. 40-46, Sage Publications [Online]. DOI: 10.1016/S0010-8804(99)80013-5 (Accessed: February 9, 2008).
* Reimer A. & Kuehn R. (2005). ‘The impact of servicescape on quality perception’, European Journal of Marketing, 39 (7/8). 785-808, Emerald Group Publishing Limited. [Online]. DOI: 10.1108/03090560510601761 (Accessed: February 12, 2008).
* Matzler K., Renzl B. & Rothenberger S. (2006). ‘Measuring the Relative Importance of Service Dimensions in the Formation of Price Satisfaction and Service Satisfaction: A Case Study in the Hotel Industry’, Scandinavian Journal of Hospitality and Tourism, 6 (3), pp. 179-196, Informaworld. [Online]. DOI: 10.1080/15022250600872850 (Accessed: January 6, 2008).
* Haksik L., Lee Y. & Dongkeun Y. (2000). ’The determinants of perceived service quality and its relationship with satisfaction’, Journal of Services Marketing, 14 (3), pp 217-231, MCB UP Ltd [Online]. DOI: 10.1108/08876040010327220 (Accessed: February 18, 2008).

Please click below link to Hospitality Net for the full article:
Understanding Guest Satisfaction | By Patrik Hellstrand.

Please visit our website: SQInsight Hospitality Consulting

What is business analysis, and what value does it have within the world of Hospitality?

Business analysis is the set of tasks, knowledge, and techniques required to identify business needs and determine solutions to business problems.

Business analysis simply assists executives in formulating informed decisions. Many hospitality professionals don’t recognize the significance of quantitative, specifically inferential, statistical analysis such as regression analysis; as service and statistics are not always easily associated.
 
In case of Hotels or Cruise Ships, guest’s overall satisfaction is based on various factors, and is formed based on all different services and products guests are exposed to along the way starting with reservation, to check-in, bar service, room service, and food quality, etc. It is however also based on price…
 
One facet of business analysis is quantitative research that examines guest’s feelings and attitudes toward each service and product they experience, and how these experiences affect guest satisfaction, and therefore, their loyalty. In order for companies to obtain most accurate results with their research, they must be able to understand the impact of all services and products, and how it influences guest’s experiences.

The best performing companies invest great deal of time and resources on understanding guest’s experiences and overall satisfaction because they understand and observe the direct link between guest satisfaction and guest loyalty.  Undisputed research on guest service proves that: 1) Companies with higher guest satisfaction display higher guest loyalty; 2) companies with higher guest loyalty demonstrate better financial returns compared to their competition

So, if you are uncertain as to what drives the ‘overall satisfaction’ of your guests, you will not have a clear vision of what areas to improve on, and will face the possibility of losing guests to competition.

Please visit our website: SQInsight Hospitality Consulting

The use of dashboards and scorecards will not help companies to improve products and services unless the metrics employed are clearly understood. When using metrics to create dashboards and scorecards, it is important to remember two main concepts:

1) Knowledge – Metrics must provide knowledge about processes; e.g. how long do guests have to wait for room service deliveries? This helps companies to develop even better metrics.

2) Alignment – Metrics must align with strategic goals for performance; e.g. guest loyalty scores. Unless the metrics correspond to the desired performance, they can’t possibly tell you anything you need to know.

Internally, after appropriate metrics are established; baselines should be set and competition should be benchmarked to ensure everyone in the organization is aware of the expected performance, and how the competition is performing. It then becomes much more simple and transparent for companies to focus on improving these benchmarked processes, which in turn result in improved services and products offered to guests.

In summary, metrics used on dashboards and scorecards must provide insight on processes and align with strategic goals for performance. Once appropriate metrics are decided upon, baselines needs to be established and the competition benchmarked. With these standardized tools in hand, companies can more quickly focus on improvement efforts.

Please visit our website: SQInsight Hospitality Consulting

A dashboard is simply a metaphor for critical metrics to measure business performance.  Just the same way you use the dashboard of your car to monitor the status of your vehicle; you can use a dashboard to monitor key performance indicators of your company.

Companies that use scorecards and dashboards can measure the processes involved in providing guest services.  It’s a simple formula:

Processes need to be measurable.  In order for them to be measurable, they need to be understood.  Companies that understand their processes through scorecards and dashboards can correct, control, improve and measure the quality and performance of guest services, and are consequentially able to improve guest satisfaction, reduce costs and improve revenues.

Is your company effectively using dashboards to the extent your competition does?

Please visit our website: SQInsight Hospitality Consulting

…is doing things nearly right and doing it exactly right!  Many managers (in all levels of management) trust their instincts or play their hunches on what might be wrong with the operation, and how to solve the problems.

The question executive management must ask themselves is:  Are my teams guessing at ways to improve products, services, guest satisfaction and revenue?  If the answer it ‘yes’; the company needs to address this problem and instill a culture of using metrics.

So, how do you do things exactly right in a hospitality service environment; what is the key?  Measure first, and measure often.  It’s the best way to improve processes, reduce costs, increase revenues and improve guest satisfaction.

Please visit our website: SQInsight Hospitality Consulting

During economic downturns, many hospitality companies hesitate to promote quality initiatives because they believe that the higher the quality of their services, the more expensive they are to produce. This is simply not true! The real decision for companies is not a decision whether to incur more costs, but a decision based on return on investment (ROI). The companies that see cost as a key factor must first evaluate their commitment to resolving long-term service and product issues; as the commitment is not real. 

The proven idea behind the notion that higher quality is NOT more expensive is that when companies focus on process improvement rather than cost reduction, costs naturally decrease as process inefficiencies decrease. However, when companies simply cut costs in various ways, a reduction in the quality of their services and products are almost certain to follow.

Please visit our website: SQInsight Hospitality Consulting