Benchmarking: An International Journal

A business excellence model for the hotel sector: implementation to high-class Greek
hotels
Yannis Politis Charalambos Litos Evangelos Grigoroudis Vassilis S. Moustakis
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Yannis Politis Charalambos Litos Evangelos Grigoroudis Vassilis S. Moustakis, (2009),"A business
excellence model for the hotel sector: implementation to high-class Greek hotels", Benchmarking: An
International Journal, Vol. 16 Iss 4 pp. 462 - 483
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BIJ
16,4 A business excellence model for
the hotel sector: implementation
to high-class Greek hotels
462
Yannis Politis, Charalambos Litos and Evangelos Grigoroudis
Department of Production Engineering and Management,
Technical University of Crete, Chania, Greece, and
Vassilis S. Moustakis
Department of Production Engineering and Management,
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Technical University of Crete, Chania, Greece and

Institute of Computer Science,
Foundation for Research and Technology – Hellas (FORTH), Heraklion, Greece

Abstract
Purpose – The purpose of this paper is to present the development of a business excellence model
applicable in the hospitality industry.
Design/methodology/approach – Two surveys using questionnaires were conducted: the first
one for the development of the model’s criteria and sub-criteria and the second one for the
assessment of the criteria and sub-criteria weights. The model was tested on a number of Greek
high-class hotels.
Findings – Compared with other business excellence models the proposed model includes criteria
and sub-criteria that are more applicable to hotels. The model studies the factors that drive excellence
in the hotel sector as well as the importance of these factors as they have been defined by the managers
of the hotels. The implementation of the model in a number of high-class Greek hotels shows its
applicability and suitability to be used as a benchmarking system.
Research limitations/implications – Time limitations, as the project was co-funded by the
European Union, have limited the implementation of the proposed business excellence model to a small
number of Greek hotels in the area of Crete.
Originality/value – The critical success factors for high-class hotels have been identified and a
business excellence model applicable in the hospitality sector has been developed.
Keywords Business excellence, Self assessment, Total quality management, Greece, Hotels
Paper type Research paper

1. Introduction
Today’s extremely competitive business arena and the rapid changes in markets
worldwide have forced organizations to adjust their way of working. To confront with
these changes, organizations in any sector, of any size and structure need an
appropriate management system. Different business excellence models are

Benchmarking: An International
Journal
Vol. 16 No. 4, 2009
pp. 462-483
q Emerald Group Publishing Limited
1463-5771
DOI 10.1108/14635770910972414
This research has been co-funded by the European Social Fund and National Resources –
EPEAEK II and PITHAGORAS II. Views, methods, and results expressed herein are the
responsibility of the authors. The authors would like to thank the anonymous reviewer for
providing a set of challenging and constructive reviews to the first draft of the manuscript they
submitted.
 implemented in many countries worldwide trying to assist organizations to improve A business
their performance (Bohoris, 1995; Vokurka et al., 2000; Cauchick, 2001). These models excellence model
provide the guidelines for effective quality management and may be used as
self-assessment models. However, organizations still face considerable difficulties and
problems when they try to measure their overall performance, to identify their
strengths and areas of improvement and to prioritize efforts. Another crucial issue is to
investigate the key performance indicators, which ensure inclusion of all potentials for 463
growth (Rickards, 2007) and the implications of various quality management systems,
as a pervasive feature of modern organizational life, for business excellence (Soltani and
Lai, 2007). These difficulties are more obvious when trying to implement the business
excellence models in particular business sectors, such as the hospitality sector.
The hospitality sector is one of the most growing sectors worldwide. It constitutes
the basic factor of Greek’s economic growth and has important contribution in the
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overall balance of exterior transactions. According to the World Council of Tourism,

the contribution of Greek hospitality sector in gross national product is 7.2 percent
(ICAP, 2006). In addition, its contribution in total employment in Greece is 18.2 percent.
More than 14 million tourists visit Greece every year and there are 8,890 hotels (with
380,000 rooms) nationwide. However, most of Greek hotels still lack in organization,
long range planning and fail to implement most of total quality management (TQM)
principles as current worldwide competition requires. A business excellence model,
which would be applicable in the Greek hotel sector, could contribute to the
improvement of their provided services and the enhancement of their competitiveness.
Different studies concerning the implementation of business excellence in hotel sector
have been conducted in Spain and Cyprus (Camison, 1996; Soriano, 1999; Arasli, 2002)
and in Benchmarking National Tourism Organizations and Agencies (Holmes, 2007).
This paper presents the results of a survey that has taken place in a large number of
Greek hotels and presents the development of a business excellence model applicable in
the hospitality industry. It also analyses the factors that drive excellence in the hotel
sector, as well as the importance of these factors as they are defined by hotel managers.
This paper consists of six sections. Section 2 presents the most distinguished
business excellence models applied worldwide, such as the Deming Prize, the Malcolm
Baldrige National Quality Award (MBNQA), the European Foundation for Quality
Management (EFQM) model, the Australian Quality Award (AQA) and the Canadian
Quality Award. Section 3 is devoted to the development of the business excellence
model for the Greek hotel sector and of the linear programming modeling used for the
estimation of the weights of the model’s criteria. The results of a survey conducted in a
number of Greek hotels for the determination of the criteria weights are presented in
Section 4, while the pilot implementation of the model is presented in Section 2. Finally,
Section 6 presents some concluding remarks, as well as future research in the context
of the proposed model.

2. International business excellence models

The Deming Prize was the first to be established back in 1951. It was set up by the Union
of Japanese Scientists and Engineers to commemorate Dr Deming’s contribution to the
Japanese industry and to promote further the continuing development of quality control
in Japan (Porter and Tanner, 1998). The Prize is given to companies that have achieved
distinctive performance through the application of company-wide quality control.
 BIJ The MBNQA was established in 1987 by the US government as a statement of
16,4 national intention to provide quality leadership and improve the competitiveness of the
USA companies. It is currently administrated by the National Institute of Standards
and Technology (NIST), with the American Society of Quality assisting with the
application review process, preparation of award documents and other administrative
duties (Vokurka et al., 2000; NIST, 2006). The award is assigned annually to companies
464 and organizations that excel in quality management practice and performance. Up to
two companies can receive an award in each of the categories of manufacturing, small
business, and service.
The EFQM was founded by 14 of the leading Western European businesses in 1988
when a lot of the major companies in Europe realized that their only way of surviving
in business was to pay much greater attention to quality (Bohoris, 1995). In recognition
of achievement as a feature of the policy of the EFQM, the European Quality Award
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(EQA) was established in 1991 with the support of the European Organisation for
Quality and the European Commission. The EQA, known as the EFQM business
excellence model, is based on nine criteria. Five of these are “enablers” and four are
“results”. The “enabler” criteria cover what an organization does, while the “results”
criteria refer to what an organization achieves and the revealing assumption is that
“results” are caused by “enablers” (EFQM, 2006).
The AQA was introduced in 1988 to encourage the indigenous companies to
improve the quality of their offerings, raise their performance to world-class level, and
provide a benchmark for their achievements (Cauchick, 2001). It is administrated by
the Australian Quality Awards Foundation, a subsidiary organization of the
Australian Quality Council (AQC, 2004). AQA is revised every year by a committee
specialized in management and effective leadership in order to be up to date with
current management practices. The award measures quality performance through
seven categories of criteria. It is worth to mention that organizations that excel in each
one of the different categories of criteria are also awarded.
The Canadian Ministry of Industry introduced the Canada Awards for Business
Excellence in 1984, but revised the program in 1989 to reflect the MBNQA concept. It is
administrated by the Canada’s National Quality Institute (NQI), which awards
continuous quality improvement in Canadian organizations. The NQI, created in 1992,
is a not-for-profit organization, which provides strategic focus and direction for
Canadian organizations to achieve excellence, enabling Canada to set the standard for
quality and healthy workplace practices throughout the world. The award refers to
companies, public organizations, educational, and healthcare institutes (NQI, 2004).
All the above models follow similar procedures for the assignment of the awards.
This procedure includes the development of a report describing what an organization
achieves with regard to a predefined set of criteria. The different sets of criteria as well
as their importance to each one of these models is presented in Table I.
Current business excellence models are too prescriptive and too general to be used
by different kind of organizations with different structures and needs. Generally, they
refer to large industries with many departments and employees (Sharma and
Talwar, 2007). Problems arise when trying to implement such models in SMEs and
especially SMEs of the service sector. SMEs could not easily sustain their
competitiveness if they focus only on certain aspects of their functioning and work in
isolation (Singh et al., 2008).
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Deming Prize MBNQA EFQM Canadian award Australian award

Weights Weights Weights Weights Weights
Criteria (%) Criteria (%) Criteria (%) Criteria (%) Criteria (%)

Policies 10 Leadership 12 Leadership 10 Leadership 10 Leadership and

innovation 14
The organization and its Strategic planning 8.5 Policy and Planning 10 Strategy and
operations 10 strategy 8 planning 8
process
Education and Human resource focus 8.5 People 9 People focus 17 People 20
dissemination 10
Information gathering, Process management 8.5 Processes 14 Process Processes and
communications and management 17 product
utilization 10 services 20
Analysis 10 Measurement, analysis Partnership Supplier/partner Data,
and knowledge and focus 5 information
management 9 resources 9 and knowledge 8
Standardization 10 Customer and market Customer Customer focus 17 Customer and
focus 8.5 results 20 market focus 18
Control/management 10 Results 45 People Overall Business
results 9 business results 12
performance 24
Quality assurance 10 Society
results 6
Effects 10 Key
performance
results 15
Future plans 10
A business
excellence model

465

most distinguished
quality awards
Evaluation criteria of the
Table I.
 BIJ Nowadays there is a trend for the development of specialized business excellence models
16,4 that have practice to organizations with specific characteristics or to particular business
sectors. Several researchers have tried to adopt the business excellence principles into
SMEs (Shea and Gobeli, 1995; Ahire and Golhar, 1996; Brown and Van der Wiele, 1997;
Garvare and Wiklund, 1997; Garengo et al., 2005). Others have tried to develop specific
business excellence models for specific business sectors, such as the hospitality sector
466 (Camison, 1996; Soriano, 1999), the health care sector (Naylor, 1999; Meyer and Collier,
2001; Raja et al., 2007), the public sector (McAdam et al., 2002; Prabhu et al., 2002), the
banking sector (Al-Marri et al., 2007), the higher education sector (McAdam and Welsh,
2000; Hides et al., 2004), the manufacturing sector (Gilgeous and Gilgeous, 1999; Sohal and
Terziovski, 2000), etc. In most of these cases there is an attempt to adopt the principles of
TQM and of the business excellence models in order to develop models that fit best to the
particular needs of the specific business sectors.
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Especially, for the hotel sector, the emerged need for a specialized excellence model is
derived from international literature. As it is stated in most of the literature, only a few
studies have been developed subject to TQM readiness assessment criteria in hotels
(Arasli, 2002). A cross analysis, using EFQM, of the views of quality in Valencia’s hotel
industry reveals that the application of ideas on and well tested approaches to quality
improvement play a crucial role in tourist business (Camison, 1996).

3. The business excellence model for the Greek hotel sector

3.1 Evaluation criteria
A business excellence model for a business sector of great importance to Greek
economy is developed and presented in this section. This model concerns the Greek
hotel sector and it includes dimensions that are important for the effective operation of
the hotels. The main difference from the other international business excellence models
is that it focuses on specific dimensions that are of interest and of importance to hotels
and that it uses predefined qualitative and quantitative scales in order to assess the
hotel’s operations. This facilitates the implementation in hotels and makes it easy to be
used as a benchmark tool.
A robust business excellence model requires the existence of a set of discrete,
independent and nonredundant criteria. The evaluation criteria of the proposed
business excellence model are based on the criteria of other international business
excellence models and include dimensions that may be absent in some of them. In this
way, a more thorough framework for self-assessment is developed. The final structure
of the model has been defined according to the steps presented in Figure 1.
3.1.1 Preliminary analysis. In this step, the most distinguished business excellence
models have been reviewed and the important dimensions that they examine have been
defined.
3.1.2 Development of an extended questionnaire. According to the preliminary
analysis, an extended questionnaire has been developed (more than 170 questions)
including all the dimensions that the most distinguished business excellence models
examine.
3.1.3 Survey conduction for the development of the model’s criteria and sub-criteria.
A qualitative survey with personal interviews of 20 general managers of high-class
hotels based on the extended questionnaire has been conducted for the development of
the model’s criteria and sub-criteria. The survey took place between February and May
 A business
Preliminary analysis excellence model

Development of an extended questionnaire

467

Survey conduction for the development of

the model’s criteria and sub-criteria
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Survey conduction for the assessment of

the criteria and the sub-criteria weights
Figure 1.
Steps for the development
Development of the final business of the business excellence
excellence model for the hotels model

2006 with nine four-star hotels, seven five-star hotels and four more than five-star
hotels participating in it. High-class hotels from areas of all over Greece participated in
this survey (six from Athens, four from Thessalonica, five from Crete, three from
Rhodes, and two from Corfu). The results of this specific survey define the criteria and
sub criteria which are appropriate for a business excellence model applicable to hotels.
Noncrucial dimensions were rejected and others were adjusted according to the
perceptions of the hotels’ general managers. The final structure of the evaluation
criteria and of the performance qualitative scales were defined in such a way which
enables the analysis of the causes for the achieved high or low performance.
3.1.4 Survey conduction for the assessment of the criteria and the sub-criteria
weights. A second survey has taken place in order to define the weights of the criteria
and the sub-criteria of the business excellence model. This survey took place between
November 2006 and March 2007, with 80 general managers of different hotels
participating in it. In the sample used, 60 percent concerned four-star hotels, 24 percent
five-star hotels, and 16 percent more than five-star hotels. Furthermore, 28 percent
were hotels from the area of Crete, 19 percent from Athens, 16 percent from
Thessalonica, 14 percent from Rhodes and 23 percent from the rest areas of Greece.
The methodology used for the determination of the weights and the analysis of the
survey’s results are described in Sections 3.2 and 4, respectively.
3.1.5 Development of the final business excellence model for the hotels. The last step
summarizes the development of the final business excellence model for the hotels,
including the construction of the criteria and sub-criteria, the weights of all the
dimensions and the definition of the performance qualitative scales.
The proposed business excellence model for the hotel sector consists of two major
groups of criteria: the enablers criteria, which prescribe the organization’s approaches,
and the results criteria, which reflect the outcomes that the organization achieves by
deploying the specific approaches. Moreover, continuous improvement appears as an
 BIJ essential condition regarding that all the results achieved are compared with past
16,4 performances or the performances of competitors.
The proposed model assumes that excellent results of a hotel with respect to
financial outcomes, operating performance, customers, employees, suppliers/partners,
and the society are achieved through leadership, which will specify the hotel’s goals,
policy and strategic planning, and which will manage effectively its human resources,
468 its available resources and its suppliers and partners. These must be accomplished
through defined processes and should focus on customer satisfaction. The proposed
model has many similarities with the most distinguished business excellence models
considering that it is based on them, but it consists of a greater number and of a more
discrete set of criteria. This makes easier the implementation of the model for the
assessment of the hotels’ performance as well as the analysis of the causes for
the achieved results. Especially, for the results criteria, the dimensions under
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examination concern specific quantitative indices of great importance to the hotel

sector. The seven enablers and the six results criteria of the proposed business
excellence model are described in Tables II and III, respectively.

3.2 A linear programming modeling for the determination of the criteria weights
The determination of the weights of the criteria that are selected for the hotel’s
self-assessment constitutes a significant part of the proposed business excellence
model. These weights represent the importance of different dimensions for the effective
management of the hotel (enablers criteria) as well as the importance of the achieved
results to hotels (results criteria). The general managers of the hotels constitute the
decision makers for the determination of the criteria weights.
In literature, the weights of the criteria can be calculated through direct or indirect
methods. Even though direct methods have the advantage that the weights derive
directly from the decision makers, there is an objection to how deeply these weights are
fully comprehended by them and therefore how easily they can distinguish the
different importance of the criteria.
Direct methods may include:
.
The distribution of a total degree of importance (10 or 100) to different criteria
(e.g. the SERVQUAL model, Parasuraman et al., 1985).
.
The pair wise comparison of the criteria importance (e.g. the AHP method, Saaty,
1980).
.
The expression of the importance preferences through the ranking of the criteria
from the most important to the least important one or the classification of
the criteria to specific classes of importance by using ordinal scales
(Grigoroudis et al., 2004; Grigoroudis and Spyridaki, 2003).

Indirect methods may include:

.
Using regression analysis techniques to calculate the criteria weights according
to the relation of specific actions taken with the derived results (e.g. the MUSA
method, Grigoroudis and Siskos, 2002).
. The composition of the decision makers’ preferences into a collective value
function by using value tradeoffs for the importance of the criteria (Keeney and
Raiffa, 1976).
 A business
Criteria Interpretation Sub-criteria
excellence model
1. Leadership How leaders develop and communicate the 1. Development of mission,
mission, vision and the values required for long vision, goals, values and
term success, and implement these via appropriate culture
actions and behaviors. The way that leaders are 2. Personal involvement of
personally involved in ensuring that the hotel’s leaders 469
management system is developed and 3. Public responsibility and
implemented citizenship
4. Continuous improvement
of the management system
2. Human How the hotel manages, develops and releases the 1. Human resources
resources knowledge and full potential of its people at an planning, management,
management individual, team-based and organization-wide and improvement
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level, and plans these activities in order to support 2. Education and training
its policy and strategy and the effective operation 3. Involvement,
of its processes. The hotel’s efforts to develop an participation, and
appropriate working environment to support its empowerment of people
people, to develop their knowledge and 4. Communication
competencies and to improve the hotel’s 5. Employee’s well being and
performance by achieving business excellence satisfaction
3. Strategic How the hotel implements its mission and vision 1. Existence of a systematic
planning via a clear stakeholder focused strategy procedure for the
(customers, suppliers, employees, shareholders, identification of the
society, etc.) and translates its policy and strategy strategy
through clear practices, plans, goals, and 2. Development, review, and
procedures improvement of policy and
strategy
3. Deployment of policy and
strategy
4. Communication of policy
and strategy
4. Resources How the hotel plans and manages its internal 1. Finances
resources in order to support its policy and 2. Buildings, equipment, and
strategy and the effective operation of its materials
processes 3. Technology
4. Information and knowledge
5. Suppliers and How the hotel manages and structures 1. Suppliers/partners selection
partners (e.g. relationships with its suppliers and partners who 2. Suppliers/partners
tour operators) are crucial for the achievement of its strategic management
goals 3. Review – improvement of
partnership
6. Customer and How the hotel determines requirements, expectations 1. Customer and market
market focus and preferences of its current and potential knowledge
customers and markets, builds relationships with 2. Customer relationship
customers and identifies customers’ preferences for management
the quality of the provided services and products so 3. Product/service design
as to satisfy the particular requirements of the 4. Customer satisfaction
different categories of customers determination
7. Processes How the hotel designs, manages, and improves its 1. Development, design, and Table II.
processes in order to support its policy and strategy, management of processes Business excellence
with particular emphasis on monitoring, preventing 2. Process review model for the hotel sector
nonconformities, and continuous improvement 3. Process improvement (enablers criteria)
 BIJ
Criteria Interpretation
16,4
1. Customer What the hotel achieves in relation to its
results external customers. These results include
customer satisfaction measured through
satisfaction surveys, the analysis of
470 specific indicators and the benchmarking
of the results at different periods of time,
different departments and competitive
hotels
2. People What the hotel achieves in relation to its
results people. These results concern employee
satisfaction with the working conditions
and the way they are managed, the
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Sub-criteria
1. Customer satisfaction
2. Percentage of repeated customers
3. Percentage of customers that had
knowledge about the hotel before
visiting it
4. Complaints
5. Compensation for accidents or
losses of personal items
1. People satisfaction
2. Absenteeism and sickness levels
3. Staff turnover
4. Training days and cost per

analysis of specific indicators and the employee

benchmarking of the hotel’s performance 5. Number of achievements and
on human resources management proposals from employees
3. Society What the hotel achieves relatively to local, 1. Society perceptions about the
results national and international society and the social and environmental policy
environment. It refers to the hotel’s efforts of the hotel
to reduce and prevent nuisance and 2. Consumption of electricity
pollution, to measure and reduce its 3. Level of waste
environmental impacts and how society 4. Proportion of recycled products
acknowledges these efforts. The used
involvement level of the hotel to local 5. Proportion of alternative sources
communities through charities, of energy used
participation in education and research
programs, etc.
4. Financial What the hotel achieves in relation to its 1. Market share
results key financial outcomes and the level that 2. Gross margins
its financial goals are achieved 3. Turnover
4. Global liquidity
5. Return on net assets
6. Loans
5. Operating What the hotel achieves in relation to key 1. Number of nonconformities
results indicators which are indicative of the 2. Average response time for the most
hotel’s operating effectiveness. These important services
results are benchmarked for different 3. Proportion of operating costs with
periods of time and competitive hotel respect to total costs
4. Average income from particular
services
5. Average number of rooms
occupied/total number of rooms
6. Suppliers/ What the hotel achieves in relation to key 1. Percentage of rejected products or
partners results partners/suppliers. This criterion services due to low quality or other
examines suppliers’ and partners’ problems
satisfaction from the cooperation level 2. Percentage of important delays
with the hotel, analysis indicators about of orders
Table III. their performance and the quality of their 3. Average income from tour
Business excellence products and services, and benchmarks operators
model for the hotel sector the results for different periods of time 4. Percentage of partnership
(results criteria) and competitive hotels termination with tour operators
 To overcome the problems that are possible to appear in the direct assignment of the A business
weights, since it is very likely that the decision makers will consider all of the excellence model
evaluation criteria of high importance and in order to make it easier for the decision
makers to express their preferences, an indirect method is proposed in order to assign
weights to the criteria of the proposed business excellence model. According to this
method, it is asked by the general managers of the hotels to rank the enablers and the
results criteria from the most to the least important one. In this way, C1, C2, . . . Cq 471
different classes of importance can be developed, where C1 represents the most
important criterion and Cq the least important one. Considering that the classes are
ordered in a 0-100 percent scale, there are Tq2 1 preference thresholds, which define the
percentage rate, which distinguishes each one of the different classes (Figure 2).
In order to estimate the stated importance of the criteria, which is a qualitative
variable, a linear program is formulated. The solution of the linear program gives the
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weights of the criteria. A thorough analysis of the linear program proposed is

presented in Appendix.

4. Survey conducted
An implementation of the aforementioned linear programming modeling has been
performed in order to estimate the weights of the criteria and sub-criteria of the
proposed business excellence model. In this survey, a specialized questionnaire has
been used asking the general managers to rank the criteria and sub-criteria form the
most important to the least important one. The linear program has been implemented
separately for the enablers and the results criteria. The calculated weights have been
normalized in such a way that they sum to 100 percent. Additionally, in order to extract
the importance of the sub-criteria, the linear program has been implemented separately
for each main criterion.
Figure 3 represents the final business excellence model for the Greek hotel sector,
summarizing the enablers and the results criteria as well as their importance.
According to Figure 3, leadership and human resources management are considered
as the most important dimensions concerning the enablers criteria. This is quite
expected, considering that the human resources of a hotel, whether it concerns upper
managers or just employees, is a factor with high contribution to the quality of the
provided services of a hotel and plays an important role in the development of a high or
a low perception of customers concerning it. This is also the case in most service
businesses and it is verified by the high importance of these factors in most of the
well-known business excellence models. On the contrary, processes are not considered
of high importance for the hotel managers, as it is expected that the provided services
of a hotel are based and implemented through well specified procedures.
Similarly, customer results, is considered to be the most important criterion among
not only the results criteria but also among all the criteria of the business excellence
model. This is also the case in almost all the other business excellence models and
indicates the particular importance of customers’ services for the hotels, too. On the

0 100%
Figure 2.
Cq Cq–1 Cl C2 C1 Classes of the hotels’
managers importance
Tq–1 Tq–2 Tl Tl–1 T2 T1 preferences
 BIJ
Improvements & innovations
16,4
Human
resources Customer Operating
Leadership 13%
management 11% results 13.5% results 9.5%

Processes 2.5%
472 Strategic
planning 8% Customer and
People Financial
market
results 10.5% results 8%
focus 6.5%
Resources 5.5%

Society
Suppliers/ Suppliers/partners
results 5.5%
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partners 3% results 3.5%

Figure 3.
Business excellence model
for the Greek hotel sector Enablers Results

other hand, suppliers/partners results do not seem to be of high importance for the
hotel managers, as the cooperation level between suppliers/partners and hotels is
limited only to the provision of simple services, such as the supply of high quality
products or the ensuring of specific amount of customers and is not extended to the
development of the strategic planning or the improvement of the partnership.
A comparison of the estimated weights of the criteria of the hotels’ business
excellence model and the other known models reveals that there is a remarkable
similarity especially for the most important criteria, such as leadership, human
resources management, and customer results.
A further analysis of the sub criteria weights of the proposed business excellence
model reveals that the hotel managers consider almost every sub-criterion as quite
important to achieve business excellence in the hotel sector. This fact supports the right
choice of the specific dimensions for the development of the proposed model and shows
that a hotel needs to satisfy all of these dimensions so as to achieve business excellence.
Nevertheless, some of the sub-criteria seem to be more important for the successful
operation of a hotel. Specifically, considering the enablers criteria, education and
training of personnel, management of finances, the right selection and performance
review of suppliers/partners, customer satisfaction determination and development,
design and management of processes seem to be more important comparing to the
other dimensions of the examined criteria. Accordingly, customer and people
satisfaction, the average percentage of rooms occupied, the consumption of electricity,
turnover and the average income from tour operators seem to be of more importance
considering the results criteria. All the above are dimensions that have direct impact in
the performance of hotels and can be easily monitored and be improved.
A more thorough view of the sub-criteria weights is presented in Table IV.

5. Pilot implementation
A pilot implementation of the proposed business excellence model has been performed
to a number of high-class Greek hotels. Time limitations (the project was co-funded by
the European Union) have limited the sample of the survey to 65 high-class hotels in
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Criteria Sub-criteria

1. Leadership (13) 1.1. Development of mission, vision, goals, values, and culture (28)
1.2. Personal involvement of leaders (27)
1.3. Public responsibility and citizenship (22)
1.4. Continuous improvement of the management system (23)
2. Human resources management (11) 2.1. Human resources planning, management, and improvement (16)
2.2. Education and training (25)
2.3. Involvement, participation, and empowerment of people (18)
2.4. Communication (21)
2.5. Employee well being and satisfaction (21)
3. Strategic planning (8) 3.1. Existence of a systematic procedure for the identification of the strategy (28)
3.2. Development, review, and improvement of policy and strategy (25)
3.3. Deployment of policy and strategy (26)
3.4. Communication of policy and strategy (20)
4. Resources (5.5) 4.1. Finances (29)
4.2. Buildings, equipment, and materials (21)
4.3. Technology (25)
4.4. Information and knowledge (25)
5. Suppliers and partners (tour operators) (3) 5.1. Suppliers/partners selection (35)
5.2. Suppliers/partners management (30)
5.3. Review – improvement of partnership (35)
6. Customer and market focus (6.5) 6.1. Customer and market knowledge (21)
6.2. Customer relationship management (25)
6.3. Product/service design (26)
6.4. Customer satisfaction determination (28)
7. Processes (2.5) 7.1. Development, design, and management of processes (35)
7.2. Process review (34)
7.3. Process improvement (31)
8. Customer results (13.5) 8.1. Customer satisfaction (28)
8.2. Percentage of repeated customers (23)
8.3. Percentage of customers that had knowledge about the hotel before visiting it (16)
8.4. Complaints (22)
8.5. Compensation for accidents or losses of personal items (11)
(continued)

Criteria and sub-criteria

excellence model
weights of the business
Table IV.
A business
excellence model

473
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BIJ
16,4

474

Table IV.
Criteria Sub-criteria

9. People results (10.5) 9.1. People satisfaction (27)

9.2. Absenteeism and sickness levels (15)
9.3. Staff turnover (13)
9.4. Training days and cost per employee (22)
9.5. Number of achievements and proposals from employees (23)
10. Society results (5.5) 10.1. Society perceptions about the social and environmental policy of the hotel (19)
10.2. Consumption of electricity (23)
10.3. Level of waste (18)
10.4. Proportion of recycled products used (18)
10.5. Proportion of alternative sources of energy used (22)
11. Financial results (8) 11.1. Market share (17)
11.2. Gross margins (18)
11.3. Turnover (22)
11.4. Global fluidity (16)
11.5. Return on net assets (21)
11.6. Loans (7)
12. Operating results (9.5) 12.1. Number of nonconformities (14)
12.2. Average response time for the most important services (17)
12.3. Proportion of operating costs with respect to total costs (22)
12.4. Average income from particular services (21)
12.5. Average number of rooms occupied/total number of rooms (26)
13. Suppliers/partners results (3.5) 13.1. Percentage of rejected products or services due to low quality or other problems (24)
13.2. Percentage of important delays of orders (24)
13.3. Average income from tour operators (28)
13.4. Percentage of partnership termination with tour operators (23)
Note: Values in parentheses are calculated in percentage
 the area of Crete, which represent more than 26 percent of the hotels of this category A business
in the specific area. The pilot implementation concerns 36 four-star hotels, 17 five-star excellence model
hotels and 12 more than five-star hotels and has taken place between February and
June 2007. The necessary data were collected via a specialized questionnaire with
predefined ordinal performance scales. These scales were calculated via regression
analysis techniques, according to the performance of the hotels on the global criteria
and their relationship with the partial performance on their correspondent sub-criteria 475
(Grigoroudis and Siskos, 2002). Weighted average is used to calculate the performance
of the hotels on the basic enablers and results criteria.
According to Figure 4, the global performance of the hotels is 60.4 percent. The
hotels present higher performance regarding the enablers criteria and lower
performance regarding the results criteria.
Analytically, regarding the enablers criteria, the hotels’ performance index is
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65.7 percent. According to Figure 5, the Greek hotels represent a good performance
concerning the processes criterion, an expected result considering that the hotels that
have taken part in the survey are high-class hotels with well specified procedures for the
development, management, review, and improvement of the quality of their provided
services. A quite low performance is observed for the suppliers and partners criterion,
basically due to the very low participation of suppliers/partners to the hotels’ strategic
decisions and to the nonexistence of a procedure for the selection of the
suppliers/partners, which is mainly based on the prices of the products/services.
Similarly, human resources management, which is a quite significant criterion, has a low
performance index. The reasons can be found on the minor participation of personnel to
strategic decision making, on the poor training, and on the nonsystematic way of
improving communication level between the different departments of the hotels.
Similarly, according to Figure 6, the performance of the results criteria is
55.1 percent. This index is quite low, basically due to lack of available data or of their

Business excellence index

100% 60.4%
81.0%
80% 71.5% 73.7% 76.5% 70.6%
67.3%
51.1% 53.0% 59.7% 56.7% 58.5%
60%

40,0%
40%
30.4%

20%

0%
Leadership

Human resources
management

Strategic planning

Resources

Suppliers and
partners
Customer and
market focus

Processes

Customer results

People results

Society results

Financial results

Operating results

Supplier/partner
results

Figure 4.
Average business
excellence indices
 BIJ Enablers criteria Performance index

16,4 65.7%
Weight

Human resources Strategic Suppliers & Customer &

Leadership Resources Processes
management planning partners market focus

476 71.5% 13% 51.1% 11% 73.7% 8% 76.5% 5.5% 40% 3% 70.6% 6.5% 81% 2.5%

Existence of a
Development of Human resources Development,
systematic Customer and
mission, vision, planning, Suppliers/partners design and
procedure for the Finances market
goals, values and management and selection management of
identification knowledge
culture improvement processes
of the strategy
79.2% 28% 74.9% 16% 72.3% 28% 75.4% 29% 40.0% 35% 70.8% 21% 87.7% 35%
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Development,
Personal review and Buildings, Customer
Education and Suppliers/partners
involvement of improvement of equipment and relationship Process review
training management
leaders policy and materials management
strategy
82.3% 27% 46.5% 25% 70.8% 25% 92.3% 21% 17.4% 30% 57.9% 25% 82.0% 34%

Involvement,
Public Deployment of Review-
participation and Product/service Process
responsibility policy and Technology improvement of
empowerment of design improvement
and citizenship strategy partnership
people
41.0% 22% 41.5% 18% 92.8% 26% 66.1% 25% 59.5% 35% 75.4% 26% 72.3% 31%

Continuous
Communication Customer
improvement of Information and
Communication of policy and satisfaction
the management knowledge
strategy determination
system
78.5% 23% 42.0% 21% 57.9% 20% 74.9% 25% 77.4% 28%

Employee
Figure 5. well being
Analytical results and satisfaction
for the enablers criteria 53.1% 21%

poor analysis. Most of the hotels do not collect or analyze systematically the necessary
information in order to monitor their progress. This is scored with a very low grade for
the particular survey considering that even though some hotels may achieve
satisfactory results they cannot take advantage of them to improve their current
position. This also explains the slight difference of the performance between the
enablers and the results criteria.
The hotels appear to have a very low performance index regarding the society
results criterion because of the very low proportion of recycled products and of the
very low proportion of alternative resources of energy used by them. Customer results
criterion has a low performance, too. This is mainly due to the minor increase of the
repeated customers and of customer satisfaction comparing to former periods.
Relatively satisfactory performance indices considering the results criteria appear only
for the compensations given for accidents or losses of personal items, for the delays of
orders from the suppliers and for the percentage of partnership termination with tour
operators, where the performance index overcomes 70 percent.
 Results criteria Performance index A business
55.1% excellence model
Weight

Suppliers/partners
Customer results People results Society results Financial results Operating results
results
53.0% 13.5% 59.7% 10.5% 30.4% 5.5% 56.7% 8% 58.5% 9.5% 67.3% 3.5% 477
Percentage of
Society perceptions
rejected products or
Customer about the social and Number of
People satisfaction Market share services due to low
satisfaction environmental policy non-conformities
quality or other
of the hotel
problems

61.5% 28% 59.6% 27% 51.5% 19% 55.4% 17% 66.2% 14% 65.0% 24%
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Average response Percentage of

Percentage of Absenteeism and Consumption of
Gross margins time for the most important delays of
repeated customers sickness levels electricity
important services orders

26.3% 23% 66.2% 15% 48.5% 23% 56.9% 18% 59.6% 17% 74.2% 24%

Percentage of
Proportion of
customers that had Average income
Staff turnover Level of waste Turnover operating costs with
knowledge about the from tour operators
respect to total costs
hotel before visitingit

47.4% 16% 64.2% 13% 46.2% 18% 61.2% 22% 48.8% 22% 59.2% 28%

Percentage of
Proportion of Average income
Training days and partnership
Complaints recycled products Global fluidity from particular
cost per employee termination with
used services
tour operators

61.9% 22% 49.6% 22% 10.8% 18% 53.8% 16% 56.5% 21% 75.0% 23%

Number of
Compensation for Proportion of Average number of
achievements and
accidents or losses of alternative sources Return on net assets rooms occupied/total
proposals from
personal items of energy used number ofrooms
employees

77.7% 11% 62.7% 23% 30.8% 22% 53.8% 21% 63.5% 26%

Loans
Figure 6.
Analytical results
51.9% 7% for the results criteria

Combining weights and performance indices a “performance/importance” diagram is

developed (Figure 7). This diagram is also mentioned as action, decision, and strategic
or perceptual maps (Customers Satisfaction Council, 1995; Dutka, 1994; Naumann and
Giel, 1995). This diagram is divided into quadrants according to performance
(high/low) and importance (high/low), which may be used to classify actions. This grid
can be used in order to identify priorities for improvement. The bottom right quadrant
is obviously the first priority, as these attributes are considered to be important but
hotels’ performance is rated moderately low. The second priority may be given to the
 BIJ

High
16,4

Processes Resources
Strategic planning
Performance Supplier/partner results Leadership
478 Customer & market focus
People results
Financial results Operating results Customer results
Human resources management
Suppliers and partners
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Society results
Figure 7.
Low

Performance/importance
diagram
Low Importance High

performance criteria/sub-criteria in the top right quadrant, especially if there is room

for improvement. The third priority issues are indicated in the bottom left quadrant;
although these issues are not terribly pertinent at the time of the analysis, they may be
more important in the future, and hotels’ performance is certainly not good. Finally,
last priority for improvement can be given to the criteria/sub-criteria in the top left
quadrant because this category is the least important and hotels’ performance is
relatively good. Apparently, priorities for improvement can vary among different
hotels, depending on the potential capabilities of improving the particular category.
According to Figure 7, customer results, human resources management, operating
results, people results, and financial results are considered as the most crucial
dimensions for the hotels. These dimensions are considered important for hotels but
they do not seem to have a high performance. Most of the hotels do not collect or
analyze the important data in order to review their performance. Furthermore, the
hotels must give specific attention to the society results. Maybe this criterion is not
considered as an important criterion for hotels but the low performance and the
possibility to become significant in the future, especially in the current time, when
there is a lot of sensitivity about environmental issues, may turn it to become a crucial
dimension. On the other hand, the competitive advantage of these hotels seems to be
their strong leadership. Most of the hotels’ leaders systematically develop the mission,
vision, goals, values, and culture of the hotels and improve the management system
mainly due to the fact that most of the high-class hotels belong to consortiums.

6. Concluding remarks and future research

A business excellence model for the Greek hotel sector is proposed in this paper. The
model focuses on specific dimensions that are of interest and of importance to hotels
and are determined by managers of high-class hotels from different areas in Greece.
The model integrates the advantages of other international business excellence models
making it a more thorough model for self-assessment.
A linear programming modeling for the assignment of the weights of the criteria of
the proposed business excellence model is also presented in this paper. The model
 integrates the different rankings about the importance of the enablers and the results A business
criteria as stated by the hotels’ general managers in order to assess their weights. An excellence model
implementation of this program is performed and the importance of the business
excellence dimensions for the Greek hotel managers is calculated.
The implementation of the suggested model into 65 high-class Greek hotels proves
the applicability of the model. The strengths and weaknesses of the hotels are
estimated and the appropriate guidelines for the development of their strategic plans 479
are provided. The proposed model can be used as a self-assessment tool for hotels. Its
implementation in different periods of time and the comparison of the hotels
performance would provide them with valuable information about their progress and
can be used as an internal benchmarking system.
Finally, the applied methodology for the development of the suggested model could
support the development of similar models in different business sectors and of National
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Business Excellence Indices.

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Appendix. The linear programming modeling for the estimation of the criteria
weights
The constraints of the linear program used for the estimation of the weights pi for every criterion
and every manager are:
.
If bij [ C1, which means that manager j considers criterion i of first priority then:

pi 2 T 1 þ S 2
ij . 0; bij [ C 1

.
If bij [ Cl, which means that manager j considers criterion i of such priority to the extent
that class l defines, then:

9
pi 2 T l þ S 2
ij $ 0 =
; bij [ C l ; l ¼ 2; . . . ; q 2 1
pi 2 T l21 2 S þ
ij , 0 ;

.
If bij [ Cq, which means that manager j considers criterion i of last priority then:

pi 2 T q21 2 S þ
ij , 0; bij [ C q

where S þ 2
ij and S ij are the overestimation and underestimation errors produced for each manager
m when ranking the n criteria. Therefore, the final form of the linear program can be written:

M X
X n
½min
F ¼ Sþ 2
ij þ S ij
j i¼1
 9
BIJ pi 2 T 1 þ S 2ij . 0; bij [ C 1 >
>
>
9 >
>
16,4 2
pi 2 T l þ S ij $ 0 = >
>
>
=
; bij [ C l ; l ¼ 2; . . . ; q 2 1
pi 2 T l21 2 S þij , 0 ; >
> ðA:1Þ
>
>
>
>
pi 2 T q21 2 Sþ , 0; bij [ C q >
>
ij ;
482
; i ¼ 1; 2; . . . ; n and j ¼ 1; 2; . . . ; M

X
n
pi ¼ 1
i¼1
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T q21 $ l
T q22 2 T q21 $ l
..
.
T1 2 T2 $ l
Sþ 2
ij ; S ij ; pi $ 0; ; i; j

where n is the number of the criteria, M is the number of the managers and l is a number given
by the user, which defines the minimum difference of the calculated values for two subsequent
classes. It is worth to mention that generally the value for l should not exceed l # 1/n, since l
cannot be greater than the weight of the criteria if they were of equal importance. A good value
for the enablers and the results criteria of the proposed model can be considered l ¼ 0.05.
The post-optimality analysis of the linear program in order to estimate the stability of the
results includes the formulation and the solution of n linear programs (equal to the number of
criteria). Each linear program maximizes the weight pi of a criterion and has the following form:

½max
F 0 ¼ pi for i ¼ 1; 2; . . . ; n
subject to ðA:2Þ
F # F* þ 1
all the constraints of linear program (A.1).
where F * is the optimal value for the objective function of linear program (A.1), and e is a
small percentage of F *. The average of the optimal solutions given by the linear programs (A.2)
may be considered as the final solution of the problem. In case of instability, a large variation of
the provided solutions appears, and this average solution is less representative.

About the authors

Yannis Politis is an Adjunct Professor at the Technical University of Crete, Department of
Production Engineering and Management. He received his diploma in Production and
Management Engineering and the MSc and PhD degrees in Decision Sciences and Operations
Research from the Technical University of Crete. He acts as reviewer for scientific journals and
books, and he is author of many research reports and papers in scientific journals and conference
proceedings referring to the analysis of consumer behaviour, customer satisfaction, and business
excellence. He works as a business consultant in quality management systems, environmental
systems, and systems for the security and hygiene in food industry. His research interests
 include operational research, multicriteria decision analysis, management and control of quality, A business
and business excellence models. Yannis Politis is the corresponding author and can be contacted
at: politis@ergasya.tuc.gr excellence model
Charalambos Litos is an Adjunct Professor at the Technical University of Crete, Department
of Production Engineering and Management. He received his diploma in Production and
Management Engineering and the MSc and PhD degrees in Human Resources Management from
the Technical University of Crete. He acts as reviewer for scientific journals and books, and he is
author of many research reports and papers in scientific journals and conference proceedings 483
referring to human resources management, quality management and business excellence. He
also works as a business consultant.
Evangelos Grigoroudis is an Associate Professor at the Technical University of Crete,
Department of Production Engineering and Management. He received his diploma in Production
and Management Engineering and the MSc and PhD degrees in Decision Sciences and
Operations Research from the Technical University of Crete. He acts as reviewer for scientific
Downloaded by University of Birmingham At 00:07 26 February 2016 (PT)

journals and books, and he is author of a book on the measurement of service quality, and a large
number of research reports and papers in scientific journals and conference proceedings
referring to the analysis of consumer behaviour and customer satisfaction. His research interests
include operational research, multicriteria decision analysis, management and control of quality,
and decision support systems.
Vassilis S. Moustakis is an Associate Professor and Director of Management Systems
Laboratory at the Technical University of Crete, Department of Production Engineering and
Management. He received his diploma in Mechanical Engineering from the University of Patras,
Greece and his Master of Engineering Administration and Doctor of Science, Engineering
Management from the George Washington University, Washington, District of Columbia, USA.
He acts as reviewer for scientific journals and books, and he is author of a book on economics and
management, and a large number of research reports and papers in scientific journals and
conference proceedings referring to management, logistics, health-care administration, decision
support systems, and cost engineering.

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