INTRODUCTION TO TOURISM

(HMGT 119)

Unit 4
The Hospitality Industry

Instructor: Alicia Muirhead

Source: Walker, R. J. 2007. Introduction to Hospitality

Management. New Jersey: Prentice Hall
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Dittmer, P. (2002). Dimensions of the Hospitality Industry. New York: John
Wiley & Sons
 CHARACTERISTICS OF THE HOSPITALITY
INDUSTRY
1. Intangibility
- In that, service cannot be seen, tasted, felt,
heard or smelled before they are purchased.
- E.g. prior to boarding an airplane,
passengers have nothing but an airline
ticket & the promise of safe delivery to their
destination.
- However, to reduce uncertainty cause by
service intangibility, buyers look for tangible
evidence that will provide information &
confidence about the service.
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 CHARACTERISTICS OF THE HOSPITALITY
INDUSTRY

- E.g. the exterior of a restaurant is the

first thing that an arriving guest sees.
The condition of the grounds & the
overall cleanliness of the restaurant
provide clues as to how well the
restaurant is run.
- Tangible provide signals as to the quality
of the intangible service.

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 CHARACTERISTICS OF THE HOSPITALITY
INDUSTRY
2. Inseparability
- In most hospitality services, both the service
provider & the customer must be present for the
transaction to occur.
- Customer-contact employees are part of the product.
- Service inseparability means that customers are
part of the product.
- E.g. a couple may have chosen a restaurant because
it is quiet & romantic, but if a group of loud &
boisterous conventioneers is seated in the same
room, the couple will be disappointed.
- Managers must manage their customers so that
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they do not create dissatisfaction for others.
 CHARACTERISTICS OF THE HOSPITALITY
INDUSTRY
- The characteristic of inseparability requires
hospitality managers to manage both their
employees & their customers.
3. Perishability
- Services cannot be stored.
- E.g. a 100 room hotel that sells only 60 rooms on a
particular night cannot inventory the 40 unused
rooms & then sell 140 rooms the next night.
Revenues lost from not selling those 40 rooms is
forever.
- Because of service perishability, airlines & some
hotels charge guest holding guaranteed
reservations even when they fail to check into the
hotel. 5
 CHARACTERISTICS OF THE HOSPITALITY
INDUSTRY

- Restaurants are also starting to charge a fee

to customers who do not show up for a
reservation. They realize that if someone
does not show up for a reservation, the
opportunity to sell that seat may be lost.

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 CHARACTERISTICS OF THE HOSPITALITY
INDUSTRY
4. Variability
Lack of consistency
 Services are variable (uneven). Their quality depends
on who provides them & when and where they are
provided.
 Services are produced and consumed simultaneously.

 A guest can receive excellent service one day &

mediocre (average) service from the same person the
next day.
 E.g. a restaurant customer ordering a medium steak
may expect it to be cooked all the way through,
whereas the person working on the broiler may
define medium as having a warm, pink center.
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 CHARACTERISTICS OF THE HOSPITALITY
INDUSTRY
 Restaurants have solved this cause of variability by
developing common definitions of steak doneness &
communicating them to the employees &
customers.
 Managing consistency

 Standardized procedure: industrialize service and

cutting interaction
 Customized: taking care of individual

 Educate customers

 Train contact and non-contact employees

 Manage suppliers’ quality

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 CORPORATE PHILOSOPHY
 Current corporate philosophy has changed from one
of managers’ planning, organizing, implementing, &
measuring to that of managers’ counseling
associates, giving them resources & helping them to
think for themselves.
 There is a more participative management style,
which results in associate empowerment, increase
productivity, & guest and employee satisfaction.
 Corporate philosophy has strong links to quality
leadership & the total quality management (TQM)
process.
 It embraces the values of the organization,
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including ethics, morals, fairness & equlaity.
 CORPORATE CULTURE
 This is the overall style or feel of a company.
 A company’s culture governs how people
relate to one another & their jobs.
 In essence, it is how things are done around
a company.
 Each major corporation has a culture, some
more pronounces than others.

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 MISSION STATEMENT
 Itis short statement of the central purpose,
strategies, & values of a company.
 A corporation’s mission statement should
answer the question “ what business are we
in?”
 A good mission statement will go beyond the
obvious & include the corporate purpose,
values, & strategies.

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 GOALS

 A goal is a broad statement of what a company or

department wishes to accomplish.
 It is a quantification of the mission in measurable
terms. In a hotel, for instance, one of the goals
might be to increase occupancy from 80 to 85%.
 Goals can be written for each department.

 Most corporations involve their employees in goal

setting.
 This not only ties in with total quality
management, but also encourages employees to
“buy into” the process & increase the likelihood
that goals may even be exceeded. 12
 STRATEGIES

 Are actions (game plan) that are needed to

accomplish the goal.
 Using the hotel occupancy example, the
strategy will state how the goal will be met.
 The strategy identifies the specific actions
necessary to produce the desired result.

 Once the corporate philosophy, culture,

mission, goals, objectives & strategies are
finalized, the management functions will
have guidance and direction to help steer 13

the organization to success.

 FOCUS ON SERVICE
What is the primary purpose of hospitality?
 First & foremost, is to enhance the lives of
those people (guests, customers, passengers,
etc.) to whom we are dedicated to serve.
 The way we do that is through service.
 Service is how we go about treating our
guests, how we make (or fail to make) their
lives better by how we treat them.
 Quality customer service demands that
service providers need to understand what it
is that people want. Kindness comes through
understanding. 14
 FOCUS ON SERVICE

 Service providers need to let their

guest/customers feel welcome.
 Quality customer service requires that we
make all guests feel comfortable, that we
provide the assurance, and follow
through, that the guests will be taken care
of.
 Customers need to feel that they are
important at all times.
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IMPORTANCE OF SERVICE IN HOSPITALITY
MANAGEMENT
 People in the service industries typically
deal directly with their customers, meeting
them face-to-face on an ongoing basis.
 E.g hotel employees provide services directly
to customers. They are in daily contact with
guests & often receive immediate feedback
about the hotel’s quality of service.
 Many customers express their feelings about
service by compliments or complaining to
the staff.
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 IMPORTANCE OF SERVICE IN HOSPITALITY
MANAGEMENT
 For many customers, the level of service is
defined by a specific event or by contact with
a particular member of staff.
 Customers expect a particular level & quality
of service.
 If service meets/exceeds those expectations,
the customer is likely to be satisfied. If not,
he/she is likely to be unhappy.
 An opportunity to transform a first-time
customer into a loyal customer may be lost
because of poor service. The quality of service
is critical to the success & survival of a 17

hospitality business.
 IMPORTANCE OF SERVICE IN HOSPITALITY
MANAGEMENT

 Hospitality managers have traditionally tried

to ensure a high quality of service by training
their staff, the goal being uniformity.
 Most believe that, by training each staff
member to use specific service techniques &
procedures, they were establishing standards
of excellent service.
 Service should be of high quality

 Some managers find it advantageous to tailor

service to the specific needs & perceptions of
individual customers. 18
 SUCCESS IN SERVICE
 It is critical to offer guests exceptional service, but
what is exceptional service.
 Service is defined as the act or means of serving. To
serve is to provide goods & services for and be of
assistance to.
 With guest encounter/moment of truth each day, it
is critical to incorporate service excellence through
each hospitality organization.
 A guest is anyone who receives or benefits from the
output of someone’s work.
 The external guest is the customer that most people
think of in the traditional sense.
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 SUCCESS IN SERVICE
 The satisfaction of external customers ultimately
measured a company’s success, since they are the
people who are willing to pay for its services.
 The internal guests are the people inside any
company who receive/benefit from the output of
work done by others in the company.
 As hospitality professionals, we need to recognize
situations and act to relieve them/avoid them.
 At the end of the day, service equation is to create
guest loyalty. We not only need to keep guests
happy during their stay, but also to keep them
returning.
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 SUCCESS IN SERVICE
 For success in service we need to:
1. Focus on the guest.
2. Understand the role of the guest-contact
employee.
3. Weave a service culture into education and
training systems.
4. Thrive on change

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 MOMENTS OF TRUTH
 Jan Carlzon, former president of Scandinavian
Airlines, wrote a book in which he employs the
term “moments of truth”.
 It describes contacts between customers &
businesses that give customers impressions of the
businesses & from which customers make
judgment about the businesses.
 A customer makes judgment about a business
each time he/she contact with any element of that
business.
 E.g. in a hotel, a guest may first make contact
with the hotel business when her taxicab stops in
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front of the entrance.
 MOMENTS OF TRUTH
 The initial impression made by the outward
physical appearance of the building may be the
first moment of truth.
 If the guest expects the taxi door to be opened
by a doorkeeper, his presence/absence may be
the next moment of truth.
 In restaurants, moments of truth are equally
applicable.
 Customers experience moments of truth when
they arrive at the establishment. If appearance
of the building is pleasing/if there is sufficient
parking, positive moments of truth are 23

recorded.
 MOMENTS OF TRUTH
 Upon entering the restaurant, customers
note its atmosphere----the lighting & décor
as well as the noise level.
 The sum of the customers’ moments of truth
become the perception & impression of a
hospitality business & its service quality.
 If the majority of customers judge the
moments of truth to be positive, the business
will have a positive reputation.
 If not, the business’s reputation will be
negative, & decreasing levels of sales will be 24

likely.
 CYCLES OF SERVICE
 Karl Albrecht states that a customer views
an organization in terms of the chain of
events from the beginning of his experience
with an organization to the end of the
experience. He refers to this chain as a
“cycle of service”.
 A “cycle of service” is a natural, unconscious
pattern that exists in the customer’s mind,
& it may have nothing in common with one’s
technical approach to setting up the
business.
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 CYCLES OF SERVICE
 Albrecht point out that service businesses are
often set up & run in a fashion designed to achieve
specific goals established by owners/managers, &
that working to achieve these goals may impede
one’s ability to provide positive moments of truth&
satisfy customers’ needs.
 E.g. a hotel may be run to achieve maximum
profit.
 Managers may therefore establish policies that
would minimize staff & maximize efficiency. This
may mean that customers desiring to check into
the hotel have to wait in line because an
insufficient number of clerks is on duty. 26
 CYCLES OF SERVICE
 This approach may mean establishing
policies in the kitchen & bar that do not
allow servers to take orders for items other
than those listed on the menu.
 It may lead to minimizing supervisory staff
to a point where customer problems cannot
be appropriately handled.
 Guests, however, are not aware of these
policies & are concerned with their own
comfort & enjoyment of the hotel facility.
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 CYCLES OF SERVICE
 They experience moments of truth from the
beginning of their stay to their departure &,
taken together, these represent a cycle of
service that leaves an overall impression of
satisfaction/ dissatisfaction with the hotel.

 Inhospitality, where product is service,

policies must be customer oriented & service-
oriented.

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 CYCLES OF SERVICE
 Ifboth managers & staff members do their
best to generate positive moments of truth for
customers, the resulting cycles of service are
more likely to produce satisfaction.

 Policies & procedures must be sufficiently

flexible for staff members to have the ability
to provide individualized service for guests.

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 WAYS TO IMPROVE SERVICE
 Effective
leaders are those who make things
happen because they developed the
knowledge, skills, & attitude required to get
the most out of the people in their operation.

 Leadership involves change

 Guestsare constantly changing; so is

technology, product availability, &
competition.
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 WAYS TO IMPROVE SERVICE
 To cope with this constant change, the
National Restaurant Association (NRA)
suggest that (1) all change is likely to
meet with some resistance & (2) when
implementing change, do the following:

1. State the purpose of the change

2. Involve all employees in the process
3. Monitor, update and follow up.
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 SERVICE & TOTAL QUALITY MANAGEMENT
 Fiercelycompetitive marketplace is exerting
enormous pressure on service industries to
deliver superior service.

 The Malcolm Baldrige National Quality

Award is the highest level of national award
for quality that a U.S. company can receive.
The award promotes an understanding of
quality excellence, greater awareness of
quality as a critical competitive element &
the sharing of quality information and
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strategies.
 SERVICE & TOTAL QUALITY MANAGEMENT
 In the area of service, TQM is a participatory
process that empowers all levels of employees
to work in groups to establish guest service
expectations & determine the best way to
meet/exceed these expectations.
 TQM is a continuous process that works best
when managers are also good leaders.
 A successful company will employ leader-
managers who create a stimulating work
environment in which guests & employees
become an integral part of the mission by 33

participating in goal & objective setting.

 SERVICE & TOTAL QUALITY MANAGEMENT
 Installing TQM is exciting, because once
everyone becomes involved, there is no
stopping the creative ways employees will
find to solve guest-related problems &
improve service.
 Other benefits include cost reductions &
increased guest & employee satisfaction,
leading ultimately to increase profits.
 Top executives & line managers are
responsible for the success of TQM process.
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 SERVICE & TOTAL QUALITY MANAGEMENT
 Achieving TQM is a top-down, bottom-up
process that must have the active
commitment & participation of all employees
from the top executives down to the bottom of
the corporate ladder.
 Leaders empower employees who welcome
change.
 Empowerment is a feeling of partnership in
which employees feel responsible for their
jobs & have a stake in the organization’s
success. 35
SERVICE & TOTAL QUALITY MANAGEMENT
 With TQM----offering customized rather
than standardized service---in other words,
tailoring service to the needs of guests &
customers.

 Toaccomplish this, management must

delegate the authority to satisfy guests’
needs to the employees who come into direct
contact with guests: servers, housekeepers,
desk attendants, & and so.
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SERVICE & TOTAL QUALITY MANAGEMENT
 Managers give employees in these & similar
jobs wide latitude to do what is necessary to
meet guests’ needs & solve their problems
without to do what is necessary to meet
guests’ needs & solve their problems without
obtaining specific permission from
management. The term used to describe this
is employee empowerment.
 Employees are said to be empowered when
they have the power to make decisions about
how best to meet the particular needs of a 37
guest in a particular instance.
SERVICE & TOTAL QUALITY MANAGEMENT
 One effect is to provide employees with the
ability to transform guests’ moments of truth
from negative to positive.
 Empowerment does not mean that employees
have unlimited power to make any changes
they choose in any phase of operations
reasonable limits apply.
 Employees are usually limited to making
decisions about their own jobs. Additionally,
there are commonsense boundaries.
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 SERVICE & TOTAL QUALITY MANAGEMENT
 Empowered employees tend to do the following:
1. Speak out about their problems & concerns
2. Take responsibility for their actions
3. Consider themselves a network or professional
4. Have the authority to make their own decision
when serving guest.
To empower employees, managers must:
1. take risks
2. Delegate
3. Foster a learning environment
4. Share information & encourage self-expression
5. Involve employees in defining their own vision
6. Be thorough & patient with employees. 39
 DISCUSSION

List five attributes, traits &

characteristics of a leader of your
choice.

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 TRENDS
 We can identify a number of trends that are having
& will continue to have an impact on the hospitality
industry.
 Some of the major trends that hospitality
professionals indicate as having an influence on the
industry are:
1. Globalization: one has the opportunity to
work/vacation in other countries, & more people
than ever travel freely around the world.
2. Safety & Security: since 9/11, people become more
conscious of their personal safety & have
experiences increased scrutiny at airports & federal
and other buildings; tourists kidnap from their
resorts, thugs mug them & other assault them. 41
 TRENDS
3. Diversity: the hospitality industry is more divers of
all other industries; not only do we have a diverse
employee population, but we have a diverse group of
guests. Diversity is increasing as more people with
more diverse cultures join the industry.
4. Service: this is at the top of the guest’s
expectations, yet few companies offer exceptional
service. Hence, training is important in delivering
the service that guests have come to expect.
5. Technology: is a driving force of change that
presents opportunities for greater efficiencies &
integration for improved guest service. The industry
faces challenges in training employees to use the
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new technology & to standardization of software.
 TRENDS

6. Legal Issues: lawsuits are not only more

frequent, but they cost more is you lose &
more to defend. Government regulations &
the complexities of employee relations create
increased challenges for hospitality
operators.
7. Changing Demographics: population is
gradually increasing & baby boomers are
retiring. Many retirees have time & money
to travel and utilize hospitality services.
8. Price-Value: are important to today’s more
discerning guests.
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 TRENDS

9. Sanitation: is critical to the success of any

restaurant & food service operation.
Guests expect to eat healthy foods that
have been prepared in a sanitary
environment.

10. Security: of all types of hospitality and

tourism operations is critical & disaster
plans should be made for each kind of
threat. Personal safety of guests must be
the first priority. 44