Guest Satisfaction in American Independent Hotels

Introduction

The hotel industry is marked by a high level of competition, and customer satisfaction plays a major role in determining customer loyalty which is the ability to retain the customer by service or brand. Conducting guest experience or charting customer satisfaction levels is very significant to any hotel industry and at present, in America, independent hotels are committed to conducting surveys on a periodic basis using different modes of communication to identify the trend in customer satisfaction level. The recent growth trend in the hotel industry leading to stiffer competition and greater information available for the customer provides greater challenge, which requires retention of customers as the key to the successful hotel business. In American Hotel management J.D.Power and Associates are a reputed name which assists property manager and hoteliers to better understand the expectations and the criteria’s for improvement in the existing hotel business. The study conducted by J.D Power and Associates North American Hotel Guest Satisfaction Study provides a benchmark that allows the hotel to examine and measure their guest retention rates, service improvements initiatives, and hotel chain performance. Guests survey has been recognized as important in determining the overall satisfaction level measured in varying categories like room service, room comfort, hotel service, staff, and check-in/out process. The comprehensive nature of the study provides a range that can help determine and allocate resources in areas that may guarantee the maximum benefit of the hotel. The key challenges for the management are the implications which are surface as a result of issues related to recruitment of employees and retention of customer satisfaction.

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Objectives

The key objectives of the paper are to :

  • Ascertain the procedures for retention of customers in the hotel industry.
  • Identify the modus operands with respect to the retention of customers within the hotel management.
  • Identify the percentage of customer turnover in the chosen businesses.
  • Analyze the possibility of a turnover culture that exists in the hotel industry.
  • Analyze the causes and consequences of recruitment of employees.
  • Study the current and emerging trends of customers in present age internet culture.
  • How to combine the harmonious role of agencies and employer branding to enhance customer satisfaction?

Background

The hospitality industry is a dynamically growing industry that includes several sectors of businesses that deal with food, beverages, and accommodation services. (The Changing HR Function (CPID, 2005). This specifically includes restaurants, hotels, catering, and hospitality services. This industry has experienced phenomenal growth in the last five years and has impacted the employment opportunities of the new graduates. But there is also reporting of the current shortage of skilled staff for this industry. (The Changing HR Function (CPID, 2005). This impacts the level of customer satisfaction within the hotel industry and organization.

Statement of the Problem

The important task of enhancing guest experience is primarily the responsibility of the Hotel Managers, and a successful guest satisfaction program would incorporate actions that enhance the service, by improving certain touch points during the stay of the customer in the areas related to room, reservation process, front desk service, and various other value-added services. (Market Probe) These improvements if successfully diagnosed will have a high impact on the overall assessment of the independent brand of hotels.

Literature Review

The purpose of undertaking this literature review is to provide an examination of different factors like the perceptions, attitudes, practices, and strategies adopted by managers in the hospitality industry towards the retention of customers and high customer loyalty. The review will cover studies that will shed light on these aspects of customer satisfaction in relation to hotel management. The benefit of this approach is to allow a broad spectrum of identifying relevant practices that could assist in addressing these most pressing issues in the hospitality industry. The current trend would provide an insight in the light of the past reviews to overcome the issue of lack of retention and a high rate of turnover. The primary objective of the literature review is to study the comparative opinions and views of the authors who have specialized in the study of the hospitality industry and analyze it with current trends and case studies that are insightful. The comparative evaluation of the past trend with the current trend and the future projection will reveal the factors which really impact the hospitality industry with its growth and expansion in the near future.

The connection between Retention and Recruitment

The hospitality industry has to consider two very important processes, retention of the customers and efficient recruitment of the employees, which will determine customer satisfaction and loyalty for the hotel. Retention is one of the most important factors which lead to serious and long-term implications of the hospitality market and industry. This calls for proactive measures taken by the management and employers to provide sound and effective HR support and promising growth opportunities. Hutchinson and Purcell (2003) indicate that front-of-line managers play an important role in firming up the organization’s business strategy and goals as well as that of the individual. This suggests that with clear communication from managers to staff – clear targets and objectives – the staff is made to understand how important their role is to the overall company performance. When this is well-coordinated the employee is better focused and, hence, able to concentrate on the job. Hutchinson and Purcell (2003) refer to Raikes and Vernier (2004) in their study which found that the role of front office managers is to identify high-performing employees through multiple source feedback and provide them with adequate training. According to the study, managers will need to monitor, engage and influence staff by regularly communicating face-to-face with their team, giving genuine praise, and supporting their team by implementing improvement as a result of their feedback. Turning to Hospitality Review (2004), one finds that reward and recognition are believed to play an important role in the retention of staff. As it points out “All Marriott associates have individual balance scorecards to achieve targets against a series of key performance indicators. The main criteria for measurement are profit, guest satisfaction, labor turnover, and competitive performance”. The literature surrounding retention of staff, make it clear that rewards should be distinguished according to the performance, including for non-cash benefits. (Raikes and Vernier, 2004.)James (2004) points out that the reason why employees are loyal to their employers is not predominantly because of money but rather competence, principles, and the professionalism of the organization. Low pay is the number one reason employees leave and go elsewhere. (Spriggs, 2000). The research evidence shows that it is important that managers have an idea of what their competitors are offering in terms of emolument.

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The Changing HR Function (2005) argues that there are various initiatives to improve retention if appropriately implemented by organizations. These include:

  • employee communication/involvement; learning and development opportunities; induction process; pay increase; selection techniques; improved benefits; changes to improve work-life balance and line management human resource skills.

Research by CIPD (2005) found that in order to develop a retention strategy, it is important to find out what employees in hard to recruit groups are costing the organization as well as why they are leaving. The opinion of the researchers is that it is best for an exit interview to be conducted by a senior in the chain of command who has had no responsibility for the employee and who will not be involved in future reference writing. The research document listed several elements that have been known to play a positive role in improving retention some of which are as follows: prospective employees to be given a ‘realistic job preview’ at the recruitment stage; rewarding managers whose record in keeping staff is well above board, including the subject in the appraisal form and offering to retrain to managers whose record are poor in staff retention; creating an avenue for staff to air their views through different means i.e. regular appraisal, grievance procedure, and consultative bodies; accommodation of individual preferences in working hours and provision of job security.

The work of James (2007) argues that a retention strategy should pay special attention to areas such as the induction period and the development of a sense of belonging to the organization. Attention should also be placed on the inception, creation of a career development plan, work flexibility, the use of mentors, and avoidance of information overload.

Reward strategy should be seen as an important tool in the retention of staff in an organization. According to Foot and Hook, having invested so much in the training of employees who are capable of “carrying a strategy of innovation” it would not be the wish of the organization to lose such employees to competitors. He recommends that to motivate such staff there is the need for the development of a reward strategy to encourage staff to stay with the organization. This is reinforced by Raikes and Vernier (2004) who claim that both monetary and non-financial enticements are required to retain employees. Fields argue that “positive role models can attract, assist in retaining people within the sector, influence career decisions and enhance young peoples’ perception of the industry”. Individuals such as the likes of Jamie Oliver have today become an official metaphor who is well respected for his ideas on school meals. Fields support the fact that the re-introduction of cooking into the school curriculum would also encourage large numbers of pupils into the industry.

The opinion expressed in the CIPD Survey report (2007) is that the new type of employee is emerging in the market which is characterized by less loyalty resulting in a continuous search for a better job opportunity. CIPD’s (2005a) survey indicates that the hospitality industry is mostly affected by staff retention due to its workforce that is overwhelmingly made up of young people. It found that “This can among other things be influenced by age, with young workers more likely to switch jobs whereas older ones privilege security”.

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It is the view of Raikes and Vernier (2004) that it is important to segment the analysis driving people to stay with the organization and in doing so take into account specific reasons related to different groups, among which are high performers.

The indications are therefore that skills shortages which are related to retention problems occur when qualified staff leave and newly qualified staff such as Chefs become difficult to find hence creating a new skills gap. Given this evidence, it may be viable to consider the ‘pull factors’ in staff retention in order to ‘diminish the allure of preying competitors’.

Factors that affect Customer Satisfaction

Customer satisfaction is a very complex phenomenon affected by many variable factors and many measuring criteria. The present-day competition from various media is the key issue that needs to be addressed. The modern global age customers are attracted by competitive rates and have many choices which impact their future considerations. Their decision is based on product, price, brand, and service expectations. This consideration needs to be addressed when considering a strategy for building customer satisfaction and customer loyalty. This will be dependant to a great degree on the integrity of the brand, innovation, strength of the franchise, and brand promise. (Market Probe).

Hotel managers need to take a proactive role in identifying the strengths and weaknesses relative to their competition. They need to establish guest satisfaction goals that support customer satisfaction enhancement programs; enhance brand reputation; design innovative feedback questionnaires; drive for an increase in occupancy; improve brand loyalty; plan strategically motivating employees and serving customers; use effective advertising and rely on surveys and demographics of the current trend in the hospitality industry. (Hirneise). This will improve customer satisfaction over time.

Methodology

In order to undertake the research, both qualitative and qualitative and approaches were adopted to explore with local managers issues associated with recruitment of staff and retention of customers. Qualitative data is acquired through deeper research and understanding of each case study and literature that is reviewed. The data by the researcher/writer was collected specifically for this study. The interviews, a form of qualitative research, were presented as questionnaires. The questions focused particularly on the topic and research questions. They were also specifically geared for the hospitality industry and for the purpose of analysis. This particular study uses secondary data which contains information and findings from earlier research that have been published. Secondary data is usually gathered at the start of the study as the basic information provides a background and history for the particular topic.

Before beginning research work, the framework and path of acquiring knowledge/information must be chosen which is believed to be the best way to represent the information that is gained from research. There are two paradigms that seem to be extremely opposite of each other that are associated with research. These are the positivist/scientific approach and the phenomenological approach.

Research Method

Choosing Your Approach (2006) reports, “These are theoretical distinctions of the assumptions, purpose, design, process, data collection strategy and conclusions for the research.”

This research will be conducted following the case study research strategy as it will be focused on the “why” factor rather than the “what” or “how” factors, even though it will give answers to all factors. For this reason, a phenomenological or realism philosophy (Saunders et al, 2003) will be followed with an inductive approach. The collection of qualitative data will answer the study’s objectives. The hospitality industry covers a broad range of various services, businesses, locations, and cultures. Even if we are dealing with a chain of restaurants or hospitality providers, various cultures do require the examination of the different aspects in conducting business, factors relating to turnover rate, management style and challenges, employee’s work habits, etc. Hence, culturally diverse research was necessary due to the divergent perceptions of various geographical locations and cultures.

Physical and electronic searches were performed as these provided data from traditional methods and technological methods. Information from past studies and current studies is also obtainable in this manner. Literature was rated for bias as this would lower the validity of the research materials. Studies were also rated according to the relevancy of the topic of research. Quantitative data, information that can be counted, compared (such as on a scale), and can be expressed in numerical terms, is also used as results from student questionnaires that offered useful insight and feedback. The research method used for this study is the phenomenological approach. This approach opposes the acceptance of unobservable matters and grand systems erected in the speculative manner of thinking. This technique gains its conclusion from investigation. Investigation requires focusing on the specifics and gathering detailed, deep information and perceptions via inductive (beginning), qualitative methods such as conversations, interviews, and observations. The investigation is what drives the study; it determines the direction and procedure of the study. Qualitative data is acquired through deeper research and understanding of each case study and literature that is reviewed. Hence, the phenomenological approach laps over other necessary qualitative procedures, and qualitative methods were mainly used.

Conclusion

This in-depth analysis has led to confirmation that certain pathways and directed programs would lead to successful growth in the industry, in the area of customer satisfaction.. The issue of recruitment and retention can be managed by the dynamic involvement of the management and the growth opportunities for the employees. The potential for advancement and internal HR support would encourage recruitment, sustain retention and achieve high customer satisfaction. Training would be the key element for the integration of the diverse needs of the managers, employees, and the customer. There is the need to bring together all parties with an active interest in learning and for the sector to examine the creation of a training association which will have to be led by the manager, but would be supported and facilitated by the public sector. There is also the need to bring together all existing but currently independent initiatives that are being developed by a number of agencies and partnerships across the sector. If successfully established, the association would move from there and develop a harmonized approach for developing the sector, in the area of customer satisfaction. David Field, managing director of Nestlé Food Services believe that “hospitality” “should be at the forefront in the press and media” as it is a great way to inspire the next generation – and even to make today’s generation consider catering as a serious career (Hospitality needs to inspire the next generation). It is important for Hotel management to direct their resources to studies that would help understand and meet customer satisfaction and track management performance over time. This would be vital to maintaining high customer retention in the future performance of the business.

Work Cited

Choi, Tat Y. and Chu, Raymond (2001)Determinants of hotel guests’ satisfaction and repeat patronage in the Hong Kong hotel industry. International Journal of Hospitality Management. Volume 20, Issue 3, Pages 277-297

James, H. (2007). Promoting good practice in management and support of aid personnel. Web.

Hirneise,, Linda J.D Power and Associates. 2008, Web.

Hospitality Review (Jan. 2004) Orientation and turnover behaviour, pp 35.

Hospitality Review (2004). Reward and Recognition, pp 1 & Human Resources Management: Specialists Units 21-24, Supporting Foundation Degrees Course Book for HNC/HND. BPP Professional Education. Midland: W M Print.

Hutchinson, S. & Purcell, J. (2003) Bringing policies to life: the vital role of front line managers in people management. Executive briefing. London: Chartered Institute of Personnel and Development. 2008.

Raikes, L. and Vernier, J. (2004) Rewarding and retaining key talents: are you ready for the recovery?” 2008.

Spriggs, V. (2000). Texas Juvenile Probation Commission. A Study of Salaries and Turnover Rates of Juvenile Probation Department. 2008. Web.

The Changing HR Function (2005). Change Agenda. CIPD. 2008. Web.

Market Probe, Guest Satisfaction or Guest Satisfaction or Loyalty?? 2008. Web.

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