2ay Kandampully, PhD

Connie Mok, PhD»

Beverley Sparks, PhD
A ae encima Editors
 Jay Kandampully, PhD
Connie Mok, PhD
Beverley Sparks, PhD
Editors

Service Quality Management

in Hospitality, Tourism,
and Leisure

Pre-publication
REVIEWS,
COMMENTARIES,
EVALUATIONS . . .

“e ervice Quality Management in also care about service quality, as

Hospitality, Tourism, and Lei- shown by this line from Karl Titz’s
sure will be indispensable to anyone chapter: ‘Creating a service environ-
teaching this subject to students, ei- ment where customers are given the
ther at the undergraduate or post- gift of their experience without in-
graduate level. It is comprehensive, terference from the service providers
covering every aspect of service is the challenge fof service quality].’
quality. Many of the chapters pro- Truly inspirational.”
vide an overview of their topic area,
synthesizing a wide range of estab-
lished research and summarizing an Peter Jones, PhD, MBA
extensive literature. Charles Forte Chair
Each chapter is written by an of Hotel Management,
author who clearly knows his or Surrey University,
her subject. But not only this, they United Kingdom

Wri
Gyuderume
¢ )AURORE»
°
liaiailg
iui
rea
 More pre-publication
REVIEWS, COMMENTARIES, EVALUATIONS . . .

66 ervice Quality Management the journey. To gain a better under-

S in Hospitality, Tourism, and standing of managing service qual-
Leisure offers a thorough and com- ity, you should start reading it
prehensive coverage of service is- today.”
sues. The book outlines fundamen-
tal concepts, with sound theoretical John Bowen
foundations, through to recommen- Professor and Director
dations that can be implemented in of Graduate Studies,
the workplace. This book is invalu- William F. Harrah College
able to both the scholar and the of Hotel Administration
service industry practitioner.”

Marlene Pratt, GRAD DIP

Lecturer,
Griffith University,
Turramurra, Australia

“A! last. A serious text that is

academically sound, ground-
66 his book takes you along the ed in experience, practical, and use-
journey of service quality ful for both managers and educators.
management. Starting with an over- I am not surprised it took twenty
view of service quality, the book contributors from three continents to
moves to understanding your cus- put it together. The most important
tomers and what they value. The thing for me is that the editors have
process of delivering service through brought together papers that deal
employees, a critical area, is well with key issues for managers today.
covered in the book. It includes I hope every graduate management
chapters on measuring service and program makes sure this is available
monitoring service feedback. These to students.”
chapters are critical. Service delivery
systems are dynamic, without feed- John Walsh, PhD
back and adjustment they soon be- Associate Dean,
come obsolete. The book provides Faculty of Management,
information to get you started on the and Director, School of Hotel
journey of service quality and gives and Food Administration,
you the tools needed to continue on University of Guelph, Canada
More pre-publication
REVIEWS, COMMENTARIES, EVALUATIONS . . .

66 his book presents a compre- strengths of the book is the current

hensive review of the key nature of the concepts explored and
issues within the hospitality, tour- the quality of the research support-
ism, and leisure industries. The au- ing these concepts. The book ex-
thors are leading researchers in the tends frontiers in the research of
areas and they have provided cut- service quality, an issue of great im-
ting-edge research for hospitality, portance in the new millennium
tourism, and leisure academics, All where the service industries domi-
the chapters are underpinned by a nate. It is highly recommended for
sound theoretical framework and researchers in the fields of hospital-
substantiated by current examples ity, tourism, and leisure as a key
of best practices within internation- reference in service quality issues.
al service organizations; they ex- This book will become the bench-
plore, in a sophisticated way, cur- mark for research into service quali-
rent debates within academic and ty management in hospitality, tour-
industry forums. The book covers ism, and leisure.”
a number of topics, ranging from
an insightful discussion of the rela-
tionship between service quality, Margaret Deery, PhD
customer satisfaction, and value, to School of Management,
a rigorous examination of man- Faculty of Business and Law,
aging service failure through recov- Victoria University,
ery strategies. One of the central Australia

ie
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Service Quality Management
in Hospitality, Tourism,
and Leisure
 Digitized by the Internet Archive
In 2022 with funding from
Kahle/Austin Foundation

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Service Quality Management
in Hospitality, Tourism,
and Leisure

Jay Kandampully, PhD

Connie Mok, PhD
Beverley Sparks, PhD
Editors

THHP

The Haworth Hospitality Press®

An Imprint of The Haworth Press, Inc.
New York ¢ London ¢ Oxford
Published by

The Haworth Hospitality Press®, an imprint of The Haworth Press, Inc., 10 Alice Street, Bingham-
ton, NY 13904-1580

© 2001 by The Haworth Press, Inc. All rights reserved. No part of this work may be reproduced
or utilized in any form or by any means, electronic or mechanical, including photocopying,
microfilm, and recording, or by any information storage and retrieval system, without permission
in writing from the publisher. Printed in the United States of America.

Cover design by Marylouise E. Doyle.

Library of Congress Cataloging-in-Publication Data

Service quality management in hospitality, tourism, and leisure / Jay Kandampully, Connie Mok,
Beverley Sparks, editors.
jd Cin
Includes bibliographical references and index.
ISBN 0-7890-0726-6 (he : alk. paper) — ISBN 0-7890-1141-7 (pbk. : alk. paper)
1. Hospitality industry—Management. 2. Tourism—Management. 3. Leisure industry—
Management. I. Kandampully, Jay. Il. Mok, Connie. III. Sparks, Beverley.

TX911.3.M27 S46 2000

647.94'068'5—dc21
00-027256
 CONTENTS

About the Editors xi

Contributors xiii

Preface XVil

Chapter 1. Concepts of Tourism, Hospitality, and Leisure

Services 1
Yvette Reisinger
Introduction
What Are Tourism, Hospitality, and Leisure?
What Are Products, Goods, and Services?
What Are Tourism Products and Services? ke
OOrR

Chapter 2. Unique Characteristics of Tourism,

Hospitality, and Leisure Services 15
Yvette Reisinger

How Are Tourism, Hospitality, and Leisure Services

Different from Physical Goods? ihe
Conclusion 47

Chapter 3. Service Quality Concepts and Dimensions

Pertinent to Tourism, Hospitality,
and Leisure Services 51
Beth Schlagel Wuest
Perceptions of Service Quality au!
Dimensions of Service Quality 54
Objectives of Service 56
Continuum of Service ST;
Total Service Commitment 62
Summary 64
Chapter 4. The Impact of People, Process,
and Physical Evidence on Tourism, Hospitality,
and Leisure Service Quality 67
Karl Titz
Introduction 67
People 69
Processes 71
Physical Evidence Te
Conclusion 80

Chapter 5. Understanding the Role of the Service Encounter

in Tourism, Hospitality, and Leisure Services 85
Darren Lee-Ross
Introduction 85
Social Interactions 86
Service Encounters 87
Encounter Management 88
Selection 90
Training Of
Organizational Culture OF
Summary WE)

Chapter 6. Service Quality, Customer Satisfaction,

and Value: An Examination of Their Relationships 97
Geoffrey N. Soutar
Introduction a7
Service Quality 98
Satisfaction 104
The Service Quality—Satisfaction Relationship 104
The Value Construct 105
Conclusion 107

Chapter 7. Competitive Advantages of Service Quality

in Hospitality, Tourism, and Leisure Services 111
Chris Roberts
Introduction 111
Competitive Advantage 112
 Core Competencies 115
Service Quality As a Competitive Advantage 116
Matching Service Quality with Strategy 118
Sustainable Competitive Advantage 120

Chapter 8. Approaches to Enhance Service Quality

Orientation in the United Kingdom: The Role
of the Public Sector 123
Gillian Maxwell
Susan Ogden
Victoria Russell
Introduction 123
The U.K. Tourism Industry: The Quality Context 124
Driving Quality Forward in U.K. Public Services Dal!
Conclusion: Emergent Issues in Service Quality
in the United Kingdom 155

Chapter 9. Service Quality Monitoring

and Feedback Systems 143
Bonnie J. Knutson
Background 143
Conceptualizing Service Quality 144
Measuring Service Quality 146
Relating Service Quality to Customer Satisfaction,
Value, Intention to Return, and Loyalty 158
Rising Cost of Obtaining Customer Feedback 154
Toward the Future 156

Chapter 10. Measuring Service Quality

and Customer Satisfaction 159
Martin O’Neill
Introduction pe
Defining Quality in the Context of Service 160
Determinants of Service Quality 163
Service Quality and Customer Satisfaction 165
Service Quality and the Hospitality Industry 166
Measuring Service Quality in the Hospitality Context 168
Measurement Techniques 171
 Conclusion 185
Appendix: SERVQUAL Instrument 186

Chapter 11. Managing Service Failure

Through Recovery 193
Beverley Sparks
Introduction 193
Facet Analysis 193
Causes of Service Failure 195
Sources of Service Failure 198
Contextual Facets of Service Failure 200
Personal Factors of Service Failure 204
Processes 205
Response 208
Consequences ZA3
An Illustrative Model of the Service Breakdown
and Recovery Process 214
Future Research 216
Conclusion 241%

Chapter 12. Empowering Service Personnel to Deliver

Quality Service 223
William N. Chernish
Need for Motivation and Empowerment 229
Motivation 225
Empowerment eo
Bringing Together Motivation and Empowerment 2a
Conclusion 235

Chapter 13. Service Guarantee: An Organization’s

Blueprint for Assisting the Delivery
of Superior Service 239
Jay Kandampully
Introduction 239
Service Promise 240
Gaining Customer Trust 241
Blueprint for Superior Service 242
Elements of an Effective Service Guarantee 245
 Implications 247
Employee Participation and Empowerment 247
Pitfalls Associated with Service Guarantees 248
Service Guarantees in the Fast-Food Sector 250
Service Guarantees in the Hotel Sector 250
Service Guarantees in the Travel Sector 25
Conclusion 254

Chapter 14. Managing and Marketing Internal

and External Relationships 235
Linda J. Shea
Introduction 225
Relationship Marketing 256
Relationships with Suppliers and Intermediaries 260
Relationship Marketing and Service Quality 263
Additional Guidelines for Managing and Marketing
Key Relationships 264
Conclusion 267

Chapter 15. Cross-Cultural Issues in Service Quality 269

Connie Mok
Introduction 269
The Convergence and Divergence Debate 270
Standardization and Adaptation Pali
Previous Research in Service Quality
in the Cross-Cultural Context 213
Major Methodological Issues 276
Conclusion PS)

Chapter 16. Technology and Its Impact

on Service Quality 281
Simon Milne
Jovo Ateljevic
Introduction 281
Lodging and Information Technology: An Overview 282
Technology and Service Quality 286
Conclusion 291
Chapter 17. Delivering on Service:
What Are the Questions and Challenges
for Tomorrow’s “Virtual University”? 297
Richard Teare
Change Factors: How Can Information Needs
and External Change Be Assessed? 297,
Enablers: How Are Strategy, Structure, and Performance
Related? OES)
Impacts: How Can Learning Be Linked to Interpreting
and Responding to Customer Needs? 300
From Impacts to Outcomes: The Virtual
University—Tomorrow’s Learning Organization? 302
The Corporate Virtual University: A Global Design
for Localized, Accredited Learning 308

Index 319
 ABOUT THE EDITORS

Jay Kandampully, PhD, is Associate Professor

and Head of Services Management and Hospital-
ity, Faculty of Business, Economics and Law,
The University of Queensland, Ipswich, Australia.
Dr. Kandampully has nine years of managerial ex-
perience in hotels in Austria, India, and the United
States. He enjoys close alliances with leading ser-
vice organizations in the United States, United
Kingdom, Australia, New Zealand, Singapore,
| Malaysia, and India, where he is often invited to
ve | conduct management seminars to update managers
with nascent strategies. He is the author of the book Hotels As Integrated
Services scheduled for publication in 2000. He has published over fifty
articles and has presented numerous papers at international conferences on
issues relating to service quality, services marketing, and services manage-
ment. His research publication on the concept of “Service Loyalty” earned
him the prestigious “Literati Award” for the most outstanding paper of
1997, published in the journal Managing Service Quality. Dr. Kandampul-
ly’s recent publication in the journal Management Decision received the
1999 Citation of Excellence Award.” He was also recognized for “Excel-
lence in Teaching” in 1997 and 1998. Dr. Kandampully serves on the
editorial board of six refereed journals and is the editor of the journal
Managing Service Quality. He holds a PhD in service quality management,
and an MBA specializing in services marketing, both from the University of
Exeter, England. His undergraduate qualification was in Hotel Management
from Salzburg, Austria.
Connie Mok, PhD, is Associate Professor in the
Conrad N. Hilton College of Hotel and Restaurant
Management at the University of Houston in Tex-
as. Dr. Mok has extensive teaching, industrial, and
consulting experience in the hospitality and tour-
ism fields. She is the author or co-author of over
sixty-five published articles in academic journals,
conference proceedings, books, and trade journals.
Her research articles have been published in the
United States, United Kingdom, India, Hong Kong,
China, and Australia. She serves on the editorial
XI
Xi Service Quality Management in Hospitality, Tourism, and Leisure

boards of seven refereed academic journals. Dr. Mok received her PhD in
Marketing from Murdoch University, her Masters degree from Iowa State
University, and her undergraduate degree from the Conrad N. Hilton Col-
lege of Hotel and Restaurant Management at the University of Houston.
' Beverley Sparks, PhD, is Associate Professor in
Hotel Management at the School of Tourism and
Hotel Management, Griffith University, Gold Coast,
Australia. Dr. Sparks has been involved in teaching
and research at the tertiary level for over twelve
years and maintains a close alliance with the hotel
industry. Prior to entering tertiary teaching, Dr. Sparks
ran her own restaurant in country Victoria, Austra-
lia. She has also worked in major hotels throughout
Australia and New Zealand. Her research interests
include service quality, customer satisfaction, and
service recovery. She has several publications in top international hospitality
journals. She serves on the editorial boards of numerous prestigious aca-
demic journals. Dr. Sparks is very active in presenting seminars and confer-
ence papers, both nationally and internationally. Her refereed paper won the
Best Paper Award in Marketing at the 1996 CHRIE conference. Dr. Sparks
is the president of the Australian and New Zealand Chapter of CHRIE.
 CONTRIBUTORS

Jovo Ateljevic is a PhD candidate at the School of Business and Public

Management, Victoria University of Wellington, New Zealand. His thesis
is focused on the role of information technology and its impact on both
management practices and the competitiveness of small/micro tourism
firms. Entrepreneurship, the general problems of smaller tourism busi-
nesses, and the role of local and central governments in assisting and
supporting small tourism and hospitality businesses are his broader re-
search interests. Prior work experience in the tourism and hospitality in-
dustry, mainly in hotel management, has helped him to better synthesize
theory and practice. :
William N. Chernish, PhD, is Associate Professor at the Conrad Hilton
College of Hotel and Restaurant Management, University of Houston,
Texas. His research interests are in management, human resources, and
diversity.
Bonnie J. Knutson, PhD, is Professor in the School of Hospitality Busi-
ness, Michigan State University. She is widely recognized as an authority
on emerging lifestyle trends and creative marketing strategies. Her work has
been featured in publications such as The Wall Street Journal and USA
Today and on CNN. She has published numerous articles in prestigious
journals and is the editor of the Journal of Hospitality and Leisure Market-
ing. Dr. Knutson is a frequent speaker at seminars, workshops, and industry
meetings in both the United States and abroad. In 1991, Dr. Knutson was
named a National Scholar by the Advertising Education Foundation. In
1996, she was awarded the prestigious Golden Key Teaching Excellence
Award for outstanding instruction and dedication to students.
Darren Lee-Ross, PhD, is a Senior Lecturer in Management at the Busi-
ness School, James Cook University, Australia. He has managed a variety
of seasonal hotels in the U.K. over a number of years. His research inter-
ests are in human resource management, attitudes and work motivation,
and service quality. He has been published in a variety of academic jour-
nals and authored or edited a number of textbooks, the most recent of
which are Research Methods for Service Industry Managers and HRM in
Tourism and Hospitality. Dr. Lee-Ross earned his PhD from Anglia Poly-
technic University, United Kingdom.

XUL
xiv Service Quality Management in Hospitality, Tourism, and Leisure

Gillian Maxwell is a Senior Lecturer in Human Resource Management at

Glasgow Caledonian University in Scotland. Her main research interest is
in the operationalization of human resource management strategy and
initiatives, particularly in the context of the service sector. Eight years’
experience in line and personnel management in hotel and retail organiza-
tions informs her research activity. Her research focus is on areas such as:
quality management, learning organizations, managing diversity, investors
in people, employee commitment, and women in management. Ms. Max-
well has co-edited a book titled Hospitality, Tourism and Leisure Manage-
ment and is currently co-editing another book, /nternational Human Re-
source Management in Tourism, Travel and Hospitality Organizations.
She has published numerous research papers in academic journals and
conference proceedings.
Simon Milne, PhD, is Professor of Tourism and Associate Dean at the
School of Management, Auckland University of Technology, Auckland,
New Zealand. He also serves as Adjunct Professor, Department of Geog-
raphy, McGill University, Montreal, Canada. His primary research inter-
ests lie in the links between tourism and regional economic development.
In recent years he has been focusing on the ability of information technol-
ogy to assist businesses and communities in developing more profitable
and sustainable tourism products. Professor Milne is currently involved in
research projects in Canada, the Caribbean, and New Zealand. Professor
Milne received his PhD from Cambridge University, in the United King-
dom.
Susan Ogden, PhD, is a Lecturer in Management in the Department of
Hospitality, Tourism, and Leisure Management at Glasgow Caledonian
University, Scotland. Her current research interests center on service qual-
ity management and human resource management. Ofparticular interest is
the impact of current U.K. government policy on the management of
hospitality and leisure services provided within the public sector. Recent
research includes benchmarking within the public leisure sector, a compar-
ison of employee flexibility within public, private, and not-for-profit lei-
sure organizations, and client-contractor relationships and service innova-
tion in the contract-catering sector.
Martin O’Neill is currently a Lecturer and Head of the Department of
Hospitality Management at Edith Cowan University, Western Australia. He
has extensive experience within the hospitality industry. His research inter-
ests are in total quality management application in the hotel sector and
measurement of service quality and customer satisfaction. He has published
numerous articles in international journals and conference proceedings.
 Contributors xv

Yvette Reisinger, PhD, is a Senior Lecturer in Tourism and Tourism

Coordinator in the Faculty of Business and Economics at Monash Univer-
sity, Australia. Formerly, she worked in the tourism industry for major tour
operators in Europe, Asia, and Africa. Dr. Reisinger is the author of many
articles and conference papers in tourism. Her research activities and
publications have mainly focused on cross-cultural differences in tourist
behavior and personal values, cross-cultural communication and interac-
tion, and variations in perceptions of the tourism product by different
tourist markets. Her PhD dissertation focused on the Asian tourist market.
She serves on the editorial boards of Journal of Vacation Marketing and
An International Journal of Tourism. She has been a visiting protessor at
the University of Colorado at Boulder, Colorado.
Chris Roberts, PhD, is Associate Professor of Strategic Management in
the Department of Hotel, Restaurant, and Travel Administration at the
University of Massachusetts, Amherst, Massachusetts. He has many years
of industry experience in the hospitality and travel sectors, both as a
manager and as an owner/operator. He also has eleven years of corporate
marketing and sales experience with Bell Telephone Systems. His research
focus is centered on the strategy decision-making process. Dr. Roberts has
published numerous articles in prestigious academic journals. He received
his doctorate in Management Strategy from the University of Massachu-
setts.
Victoria Russell is a Business Development Consultant working in the
Moffat Centre for Travel and Tourism Business Development at Glasgow
Caledonian University, Scotland. She undertakes consultancy and contract
research on behalf of local economic development agencies, local authori-
ties, and private clients across Scotland. Clients include the Glasgow De-
velopment Agency, Grampian Enterprise, Forth Valley Enterprise, and
Stirling Council. The Moffat Centre manages and delivers the Tourism
Partnership Programme for Renfrewshire Enterprise, an initiative that
partners organizations such as the Scottish Tourist Board, Greater Glas-
gow, and Clyde Valley Tourist Board, and the three local authorities in this
region. This program concentrates on business development support for
tourism providers, including accommodation, visitor attractions, food and
beverage providers, and travel operators.
Linda J. Shea, PhD, is Associate Professor of Marketing and Graduate
Program Director in the Department of Hotel, Restaurant, and Travel
Administration at the University of Massachusetts, Amherst, Massachu-
setts. Dr. Shea has worked with a wide range of hospitality and tourism
businesses as a marketing research and training consultant. She has pub-
xvi Service Quality Management in Hospitality, Tourism, and Leisure

lished numerous research articles in the area of strategic marketing and

consumer behavior in a variety of books and prestigious hospitality jour-
nals. She received her doctorate in marketing from the University of
Colorado, Boulder, and has been teaching marketing-related courses for
nearly twenty-five years.
Geoffrey N. Soutar, PhD, is Professor of Marketing at the Graduate
School of Management, University of Western Australia. He has many
years of industry and university administrative experience. He is the editor
of the Journal of the Australian and New Zealand Academy of Manage-
ment. His areas of research and teaching are in marketing and consumer
behavior. His numerous research findings have been published in many
prestigious academic journals and he has been involved in many consult-
ing projects in marketing and tourism. Dr. Soutar received his doctorate
from Cornell University.
Richard Teare, PhD, DLitt, FHCIMA, is academic chairman of IMCA
and Principal and Granada Professor of the Association’s U.S.-based Uni-
versity of Action Learning. He has held professorial roles at three U.K.
universities and worked for national and international hotel companies.
Richard is a former chairman and nonexecutive director of the National
Society for Quality through Teamwork in the United Kingdom, editor of
the International Journal of Contemporary Hospitality Management, an
associate editor of the Journal of Workplace Learning, and worldwide
research director for the HCIMA’s Worldwide Hospitality and Tourism
Trends. He is a member of the editorial advisory boards of seven interna-
tional journals and has co-authored and edited nineteen books and more
than 100 articles and book chapters.
Karl Titz, PhD, is Assistant Professor at the Conrad N. Hilton College of
Hotel and Restaurant Management, University of Houston, Texas. His expe-
rience in the industry ranges from business analyst to club management.
Dr. Titz’s areas of specialization are food production management, food and
beverage management, casino, resort, and hotel management, and marketing.
His research has been published in the Journal of Hospitality and Tourism
Research, Dr. Titz earned his PhD from Kansas State University.
Beth Schlagel Wuest, PhD, is Assistant Professor in the Department of
Family and Consumer Sciences, Southwest Texas State University, Texas.
She gained her managerial experience at Ramada Inn Hotels in the United
States. Her research interests include consumer behavior, customer ser-
vices, and educational research. She has numerous publications in interna-
tional research journals and in conference proceedings. Dr. Wuest earned
her PhD trom the University of Minnesota.
 Preface

Evidence suggests that, despite the continuous emphasis on “service

quality” tor more than a decade, there is still a lack of holistic understand-
ing of what actually constitutes quality and how it can be nurtured and
managed. The holistic understanding and interdisciplinary approach to
service quality has become imperative for hospitality, tourism, and leisure
services managers in their efforts to design and deliver a superior quality
of service. The continued growth and maturation of hospitality, tourism,
and leisure (HTL) has seen its transformation into a global industry. More-
over HTL service is no longer considered a luxury confined to economi-
cally developed countries; it has become an integral component of life-
style, with producers and consumers spread throughout the world.
The hypercompetitive market of the new millennium will have a sur-
plus of everything—a list encompassing products, services, employees,
suppliers, retailers, etc—thereby increasing customer choice in the mar-
ketplace. Moreover, as we approached the millennium, it became increas-
ingly difficult for firms to assume that there exists an unlimited customer
base prepared to maintain patronage. The increased competition is re-
flected in the ways that customers now critically assess the quality of
service competing firms can provide. Thus the importance of managing
service quality has never been greater. In the scheme of business process,
it has become apparent that HTL organizations’ ultimate goal of maintain-
ing a loyal customer base, by offering superior quality of service, tran-
scends the obvious primary functions of management confined within
functional and organizational boundaries. Hence, this book has undertaken
an interdisciplinary approach to service quality management within hos-
pitality, tourism, and leisure.
Contributors to this book have drawn on their expertise from various
disciplines and countries and, here, collectively examine nascent under-
standing, approaches, and strategies pertinent to the management of ser-
vice quality in hospitality, tourism, and leisure organizations.

XVII
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 Chapter 1

Concepts of Tourism, Hospitality,

and Leisure Services
Yvette Reisinger

INTRODUCTION

In recent years, increasing attention has been paid to the management

and marketing of tourism, hospitality, and leisure, which have been widely
recognized as very important sectors of the service economy. However, a
different approach to the management and marketing of tourism, hospital-
ity, and leisure services than to that of physical goods is required. These
services differ from physical goods in a number of unique characteristics,
which have significant implications for management and marketing strate-
gies.
This chapter covers three main issues:

1. It defines the phenomena of tourism, hospitality, and leisure

and clarifies the relationships between these three areas.
2. It introduces the concepts of products, goods, and services
in a marketing context.
3. It explains the concept of tourism products and tourism service.

WHAT ARE TOURISM, HOSPITALITY, AND LEISURE ?

Tourism has a number of different definitions. It is very difficult to

pinpoint a definition that would give a meaningful and adequate explana-
tion of tourism, because the concept is fragmented, wide-ranging, and
multidimensional.
Historically, the concept of tourism
was first developed in the period
between the two world wars. Tourism was defined as a sum of relations
if
2 Service Quality Management in Hospitality, Tourism, and Leisure

and phenomena resulting from the travel and stay of non-residents, in so

far as [travel] does not lead to permanent residence and is not connected
with any permanent or temporary earning activity (Hunziker and Krapf in
Burkart and Medlik, 1981). Since 1942, the concept of tourism has been
broadened by including various forms of business and pleasure travel.
McIntosh, Goeldner, and Ritchie (1995) defined tourism as a short-term
movement of people to places other than their normal place of residence
and work, including the activities of persons traveling to and staying in
locations outside their places of residence and work for not more than
twelve months, for the purpose of: (1) leisure (recreation, vacation, health,
study, religion, and sport); and (2) business, family, mission, and meetings.
Several characteristics of tourism may be identified based on the ana-
lyzed definitions:

1. Two main elements. (a) movement, which refers to the journey (trav-
el) to and from a destination (the dynamic element of tourism); and
(b) the overnight stay outside the permanent residence in various
destinations (the static element of tourism)
2. Movement to and from the destination is temporary (temporary
change of residence), short-term, with intention to return
3. Destinations are visited for purposes other than taking up permanent
residence or employment
4. The activities tourists engage in during their journey, and the stay
outside the normal place of residence and work, are distinct from
those of the local residents and working populations of the places
visited

The review of various definitions also illustrates a number of conceptu-

al problems in defining tourism. There is no agreement on how far an
individual has to travel, how many nights the individual has to stay away
from home, or what activities must be engaged in, etc. There are also
cross-national differences in defining the concept of tourism.
Four groups of participants are involved and are influenced by tourism:
(1) tourists, (2) businesses providing goods and services that the tourist
market demands, (3) the government of the host community, and (4) the
host community. McIntosh, Goeldner, and Ritchie (1995) defined tourism
as the sum of the phenomena and relationships arising from the interaction
of these four groups in the process of attracting and hosting tourists and
other visitors. These groups cooperate to accomplish a set of goals at the
micro and macro levels within constantly changing legal, political, eeonom-
ic, social, and technological environments. Tourism is very dynamic.
 Concepts of Tourism, Hospitality, and Leisure Services 3

It is generally agreed that tourism is fragmented. It is made up of various

sectors or subindustries such as transportation, accommodation, attractions,
amenities, catering, entertainment, eating and drinking establishments,
shops, activity facilities (leisure and recreation), and many others. These
sectors provide products and services for individuals or groups of tourists
who travel away trom home. Consequently, tourism is an amalgam of the
products and services that its various subsectors make available for tourists.
The provision of these products and services depends on the linkages be-
tween various sectors and their mutual interactions.
Tourism is the most wide-ranging industry,in the sense that it demands
products from many sectors of the economy (Edgell, 1990) and employs
millions of people in different sectors. For example, airplanes and buses
must be manutactured to transport tourists; computers must be produced
to make hotel booking and airline reservations; steel, concrete, and glass
are needed to build hotels and restaurants; fabrics are needed to make
clothes; meat, wheat, and vegetables must be grown to feed visitors. No
other industry has so many linkages and interactions with so many sectors
of the economy (Edgell, 1990), and delivers so many different kinds of
products and services to its consumers.
Tourism is multidimensional. McIntosh, Goeldner, and Ritchie (1995)
noted that tourism embraces virtually all aspects of human life and society.
Tourism is a major economic activity of the travel, lodging, retail, enter-
tainment subsector, and many other subsectors that supply tourist needs. It
is a major sociocultural activity that provides different tourist markets with
cultural experiences. Tourism involves production, marketing, and con-
sumption of numerous products such as car rentals, hotel rooms, meals,
etc. It requires researching, planning, managing, and controlling tourist
enterprises. It is about the location of tourist areas, their physical planning,
and changes that tourism development brings to the landscape and com-
munity. The industry depends on various intermediaries and organizations
that perform tourism activities. Tourism also involves a historical analysis
of tourism activities and various institutions.
It is difficult to apply the concept of an industry to tourism in view of
the special nature and complexity of the potential contributors to the
tourism product. Tourism is about activities and services. It is about the
buying, selling, managing, and marketing of numerous activities and ser-
vices, which range from renting hotel rooms, selling souvenirs, and man-
aging an airline (Edgell, 1990), to marketing special events. However,
since these activities and services represent the supply in the market (tour-
ists constitute the demand) and are part of the economy, they might be
described as the tourism “industry.”
4 Service Quality Management in Hospitality, Tourism, and Leisure

There is a strong link between tourism and travel. Travel refers to the |
spatial displacement of people and the activities of people taking tripsto
places outside their residence for any purpose except daily commutingto
and from work (McIntosh, Goeldner, and Ritchie, 1995). Travel may be
undertaken for tourism purposes, or other purposes such as migration,
commuting, or exploring. It includes both business and convention tour-
ism as distinguished from “pure” pleasure tourism. Thus, travel has wider
meaning and application than tourism.
Hospitality is concerned with the provision of accommodation and
catering (food and beverage) services for guests. It also refers to the
reception and entertainment of travelers, the way they are treated by indus-
try employees (with empathy, kindness, and friendliness), and an overall
concern for the traveler’s well-being and satisfaction. Tourists are not the
only consumers of hospitality services; local residents also use them.
Leisure is considered to be part of free time available to the individual
after necessary work and duties are accomplished, to be spent at the discre-
tion of the individual (Miller and Robinson in Mieczkowski, 1990). It refers
to the time free from obligations, filled with specific activities, without
pressure of necessity. The problem is, however, in distinguishing between
work and leisure activities, and activities undertaken for the purpose of
subsistence (e.g., eating). The same activities can be regarded as leisure and
as obligations by different individuals. For instance, gardening can be re-
garded as a leisure activity by some people and as work by others. Eating,
shopping, social activities, and even sleeping may be considered as leisure
rather than necessity. The difficulties in categorizing leisure activities were
illustrated by Cosgrove and Jackson in Mieczkowski (1990). Consequently,
what is viewed as leisure or work depends upon personality, traditions,
and/or education of an individual or, as Shaw and Williams (1994) noted,
upon the individual’s attitude of mind, feelings, perceptions, or social posi-
tion,
Tourism activity is only possible during time available for leisure.
However, much of leisure time is spent at home or close to the place of
residence; therefore, it is beyond the scope of tourism. Tourism can also be
substituted for leisure (e.g., swimming while on vacation can be substi-
tuted for swimming in the local sport and recreation center). Moreover,
vacation experiences may affect the expectations of leisure experiences at
home. For example, experiences of playing golf can create the expectation
that golf courses should be provided in every local recreation and leisure
center. Experiencing high-quality facilities in local recreation centers may
create high expectations for vacation resorts.
 Concepts of Tourism, Hospitality, and Leisure Services E

Often, leisure is used synonymously with recreation. Recreation refers to

the experiences and activities (or inactivities) undertaken during leisure
time to recreate physically, psychologically, spiritually, and mentally after
work in order to prepare the individual for future work (Mieczkowski,
1990). Recreation activities may include play, games, sports, cultural func-
tions, informal education, sightseeing, entertainment, relaxation, and amuse-
ments, as well as travel and tourism. Clawson and Knetsch in Mieczkowski
(1990) argued that recreation is the attitude toward activities. An activity is
recreation when it involves no feeling of obligation. Recreation is only
possible during leisure time. However, not all leisure can be regarded as
recreation (e.g., studying, visiting parents). The same activities may be
regarded as recreation by one individual yet work by another. The assess-
ment of what activities are recreational depends on the individual’s attitudes
and feelings. For example, sport activities can be viewed as recreation, or as
a job in professional sports (Mieczkowski, 1990).
Tourism is a form of recreation. Recreational tourism is the most signift-
icant part of tourism. However, tourism includes elements such as busi-
ness tourism, which cannot be classified as recreation. Recreation also
involves elements such as urban recreation, which cannot be classified as
tourism. Further, tourism can occur within work time (business tourism)
whereas recreation occurs during leisure time. Some forms of tourism,
such as health tourism, pilgrimages, and visiting triends and relatives are
often not associated with recreation. Also, tourism is always associated
with temporary change of residence and overnight stay outside the perma-
nent residence. In contrast, most recreation occurs at home within the local
community. In addition, the purchase of recreation equipment often re-
quires financial expenditures that otherwise could have been allocated to
tourism and travel. Also, tourism has far more significant commercial
implications for the economy than recreation, which is often provided for,
free of charge, by the government or social organizations. Further, tourism
does not require learning special skills, as opposed to recreation, which
may require the acquisition of special skills (Mieczkowski, 1990) such as
sport skills.
In summary, the concepts of tourism, hospitality, and leisure are differ-
ent, although they are related. Tourism and hospitality are concerned with
the provision of goods and services; leisure is a concept of time; and
recreation is a concept of activity. Much tourism takes place during leisure
time. Recreation is often the main purpose for participation in tourism. All
these concepts are characterized by very complex relationships in the
creation and delivery of their services to tourists.
6 Service Quality Management in Hospitality, Tourism, and Leisure

WHAT ARE PRODUCTS, GOODS, AND SERVICES?

In ne iene literature, goods and services oe - both salsa as

4 le product in the form of atmosphere, advice on food

and peverige selection, and speed of meal preparation.
Kotler (1997) lists four distinct categories of products: (1) purely tangi-
ble goods, (2) tangible goods with accompanying intangible service, (3) a
major intangible service with accompanying tangible goods, and (4) a pure
intangible service. However, Levitt (1972) argued that there is no pure
service industry because there are no pure intangible services, only indus-
tries with greater or smaller service components. It is very difficult to
define a pure service and a pure good. A pure good implies that no element
of intangible service is offered with the good the customer receives. A
pure service implies that there is no element of physical goods in the
service offered. However, Shostack (1977) went further in the analysis of
the categories of products and described a product continuum, known as a
tangibility spectrum, which ranges from tangible dominant goods to intan-
gible dominant services. According to Shostack (1977), a key determinant
of whether an offering is a service is the degree of intangibility. Services
tend to be more intangible than manufactured products; manufactured
products tend to be more tangible than services. For example: salt, soft
drinks, detergents, or cars can be classified as very tangible products. On
the other hand, education and consulting can be classified as very intangi-
ble products. However, tangible products such as cars also require many
intangible service elements such as the transportation process itself. An
intangible service such as education includes many tangible elements such
as books. Consequently, all marketing products are mixtures of tangible
goods and intangible services.
Services are provided in every sector of the economy: in retailing, whole-
saling, transportation, telecommunication, finances, health, education, and
many other sectors, including tourism, hospitality, and leisure. For example,
renting a hotel room, depositing money in a bank, visiting a doctor, getting a
haircut, or traveling on an airplane—all involve buying a service.
However, the theoretical concept of service is very complex and diffi-
cult to define. It consists of a set of different elements. Thus, it can be
explained in several different ways. It has been agreed that service repre-
sents one of the main aspects of product delivery. Service has been defined
 Concepts of Tourism, Hospitality, and Leisure Services 7

as “any activity or benefit one party can offer to another that is essentially
intangible and does not result in the ownership of anything. Production
may or may not be tied to a physical product” (Kotler et al., 1998). The
literature also refers to services as deeds, processes, and performances
(Zeithaml and Bitner, 1996) and interactions or social events (Normann,
1991). The focus is on the service process or service encounter, which has
been defined as the interaction between the customer and the firm or the
dyadic interaction between customer and service provider (Czepiel, Solo-
mon, and Surprenant, 1985; Shostack, 1985; Solomon et al., 1985; Surpre-
nant and Solomon, 1987). Shostack (1985) defined this encounter as a
period of time during which a provider and a customer confront each
other, or a moment of truth. What happens between a customer and a
provider during this encounter determines the quality of the services and a
customer’s satisfaction with service.
The extent of personal interaction between a provider and a customer
and the length of this interaction vary among services. Mills (1986) divid-
ed services into three primary categories: maintenance-interactive, task-
interactive, and personal-interactive. The first type is of a simple nature
and is characterized by little uncertainty in transactions (e.g., fast-food
restaurant services). The second type is characterized by greater risk in
transactions and depends upon the service providers for information and
expertise (e.g., banking services, brokerage firms) and is, consequently, an
intense interaction between the service provider and the customer. The
third type is the most complex. It depends upon a very intense interaction
between the provider and the customer, the performance of the service
providers, and their competence and personality. This type of service is
very labor intensive and is characterized by the greatest risk in transactions
(e.g., hospitality and tourism services).
The performances and activities of the providers during the service
encounter Crs customers’ eaey ones OHNEservice. Vhe

Bice cea its for ‘customers. Some of

omfort of a hotel bed, and others are
psycho Beal or or benefits such as enjoyment and happiness.
Usually customers purchase a bundle of benefits that is a combination of
physical and psychological benetits. During the interaction with a provider
the customer evaluates whether the provider is able to fulfill the custom-
er’s expectations and deliver benefits that generate satisfaction. The pro-
vider’s skills, motivations, and attitudes toward a customer greatly influ-
8 Service Quality Management in Hospitality, Tourism, and Leisure

ence this evaluation. Bateson (1995) argued that services should be

defined in terms of the extent to which the customer receives the intangi-
ble benefits of service during the service encounter.
The general consensus is that services could also be defined as satisfac-
tion with interaction experiences. However, the services marketing literature
indicates that there is a difference between these two concepts. Satisfaction
is a psychological outcome deriving from an experience. Westbrook (1981)
described it as an emotional state that occurs in response to an evaluation of
the interactional experiences. Service and, in particular, service quality is
concerned with the attributes of the service itself (Crompton and MacKay,
1989) and how to satisfy customers so that they develop positive percep-
tions of the service (Ostrowski, O’Brien, and Gordon, 1993). Satisfaction
depends on the quality of service attributes (C rompton and MacKay, 1989).
Usuall a high quality of servicepee: results inPMs SCS

ae in the services marketing literature (e.g., Berry, 1980; Eiglier and

Langeard, 1975; Lovelock, 1991). These characteristics make it difficult to
evaluate services (Zeithaml, 1981). The criteria of service quality are still
not adequately determined. Defining quality service and providing tech-
niques for its measurement represent a major concern of service providers
and researchers.
The difficulty of defining a service and its quality is also increased by its
subjective nature. The perception of a service level varies according to an
individual’s sociodemographic and cultural grouping, needs and require-
ments, and previous service experiences. Parasuraman, Zeithaml, and Berry
(1988) reported that service quality is determined by a subjective customer
perception of service. Lewis and Booms (1983) highlighted the subjective
nature of service quality by noting that there is an element of *SMASHING
ness” eeu serviceAe The noted that evaluation of servi hi

In summary, e concept of corice is multidimensional and difficult to

define and evaluate. It becomes a particularly complex issue in high-con-
tact service industries such as tourism, hospitality, or leisure, which by
themselves are extremely difficult to define and explain.

WHAT ARE TOURISM PRODUCTS AND SERVICES?

 Concepts of Tourism, Hospitality, and Leisure Services 9

satisfy tourist needs while they are away from home. It includes the jour-
ney to and from a destination, transfer from and to an airport, accommoda-
tion, transportation while at the destination, and everything that a tourist
does, sees, and uses on the way to and from the destination, including
purchases of food and drinks, souvenirs, entertainment, amusement (French,
Craig-Smith, and Collier, 1995), and a very wide range of other services
such as financial, medical, insurance, etc.
A tourism product is often referred to as a tourism destination. How-
ever, a tourism destination is a geographical area or, as Burkart and Medlik
(1981) noted, a geographical unit visited by a tourist, which may be a village,
town, or city, a district or a region, an island, a country, or a continent. This
geographical unit offers a number of different tourism products for pur-
chase and consumption.
The major components of the tourism destination are:

. accessibility, which is a function of distance from tourist markets,

and external transport and communications, which enable a product
to be reached;
. amenities (e.g., catering, entertainment, internal transport, and com-
munications, which enable the tourist to move around during his or
her stay);
. accommodation;
. attractions, which may be site attractions (e.g., scenic, historical,
natural wonders) or event attractions (e.g., exhibitions, sporting
events, congresses); and
5. activities (e.g., outdoor and indoor recreation activities).

Tourist activities create demand for an extremely wide range of services in

the course of the journey and stay at destination, classified as direct and
indirect services. The direct services include transportation to and from the
chosen destination (air, sea, land); transportation within a destination and |
between destinations; accommodation at the destination (hotels, motels, re-
sorts, home and farm stays, RV parks, campgrounds, etc.); catering (food and
beverage); sightseeing; shopping; entertainment; recreation; information; and
many others. These services cater directly to tourist needs. The indirect
services are financial, medical, insurance, retailing, wholesaling (travel agent, z
tour operator), cleaning, printing, telecommunication, good water, sewerage, _ , oe t©
or electricity. These services support the provision of direct services. Without Ys
indirect services the provision of direct services would be impossible. As a
result, a tourism product is a service rather than a tangible sae
The tourism produc is not only a collection of tangible s (hotel
buildings) and inte se ieee 2ccommodat n servic f alsc sy-
 10 Service Quality Management in Hospitality, Tourism, and Leisure

chological experiences. It includes everything that tourists feel from the

time they leave home until their return. Therefore, tourist perceptions form
part of the tourism product and represent its psychological component.
These perceptions are, however, very subjective. Different individuals
seek different experiences from the same set of services and products.
Consequently, they experience and perceive the same product differently.
The demographic (e.g., age), socioeconomic (e.g., social class, income),
geographic (e.g., place of origin), cultural (e.g., cultural values), and psy-
chological (e.g., needs, motivations) makeup of travelers play an impor-
tant role in creating these perceptions. Also, since individuals have diverse
needs and try to obtain different benefits from the same product, the level
of tourist satisfaction with the same product also differs.
Moreover, the tourism product also has a human component. The per-
ptions of this human component are particularly important. During their
trips tourists come into direct and indirect contact with many people, such
as motel staff, flight attendants, cashiers in shops, waitstaff, tour guides,
. » and local residents. The tourist’s perceptions of this contact and the ser-
_ vices provided by industry personnel and the members of the host popula-
tion determine the overall perceptions of tourism product quality and
tourist satisfaction. The best quality of attractions, accommodation, trans-
mee tion, amenities, and activities will not attract tourists if tourists feel
* unwelcomed by the host So AMeLan or if the service AGEL is poor.

: industry relies very

heavily on the development of positive perceptions of people providing
services to tourists. For example, Pearce (1982) illustrated the role of many
people associated with the travel and hospitality industry such as restaura-
teurs, salespeople, hoteliers, and others in contributing to tourists’ overall
perceptions of service. Sutton (1967) reported that competency in providing
services is an important element influencing positive tourist perceptions of
service. Pearce (1982) indicated variables that create tourists’ negative per-
ceptions of service such as the service providers’ impoliteness or profes-
sional incompetence. Negative perceptions deter visitation and discourage
repeat purchasing. Therefore, the way tourists perceive ie service providers
influences the success of a A ae tourism
 Concepts of Tourism, Hospitality, and Leisure Services 11

re) end theservices they provide, e.g., transportation or accommoda-

e
and intangible items are offered by distinct sectors of the
tourism industry as individual subproducts, which create the total tourism
product. The individual subproducts may represent individual tourism
products or one product. Individual subproducts are supplied by individual
suppliers. They a beFA Ga tes Spat or together ole other sub-

nd ‘Gomes
E Figure 11).
A tourism product may be developed with conscious effort to appeal to
a specific market, e.g., theme parks or indoor entertainment. However, the

FIGURE 1.1. The Tourism Product—A Total Tourism Experience

SUPPORT SERVICES

Retailing Accommodation Cleaning

Sector Telecommunication
Entertainment
Sector Transportation
Sector
Manufacturing
Construction

Attractions
Sector

Tourist Information Wholesaling

Sector

Travel Trade
Sector
Financial
Catering
nsurance
Sector Outdoor and Indoor
Recreation and Leisure
Activities Sector
Printing Medical

SUPPORT SERVICES
 12 Service Quality Management in Hospitality, Tourism, and Leisure

tourism product may also be developed without any conscious effort in the
minds of potential tourists, through the creation of a particular image by
promotion (Burkart and Medlik, 1981). The emphasis in the latter is on the
psychological and experiential component of the tourism product rather
than the tangible component.
The concept of the tourism product as a composite of various subpro-
ducts signifies the uUpotiauce of the linkages: and ee sds carver Of
all sectors. Jnsatisfactory performance of one sub one (sector) can
@refle e nd on overall tourist

ty,which acpenisi on the rations among:all the sectors deliver-

ie na he tourism product
ors in order to
ish a major goal, which
is tourist satisfaction.
The concept of service has received substantial attention in the field of
tourism (Fick and Ritchie, 1991; Ostrowski, O’Brien, and Gordon, 1993),
hospitality (Lewis and Chambers, 1989; Saleh and Ryan, 1991) and recre-
ation (MacKay and Crompton, 1988).

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Cowell, D. (1991). Marketing Services. In M.J. Baker (Ed.), The Marketing Book.
Oxford: Butterworth Heinemann, pp. 456-466.
Crompton, J. and MacKay, K. (1989). User’s Perceptions of the Relative Impor-
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Czepiel, J., Solomon, M., and Surprenant, C. (1985). The Service Encounter:
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Edgell, D. Sr. (1990). International Tourism Policy. New York: Van Nostrand
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Eiglier, P. and Langeard, E. (1975). Une Approache Nouvelle pour le Marketing
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Fick, G. and Ritchie, J. (1991). Measuring Service Quality in the Travel and
Tourism Industry. Journal of Travel Research, 30(2): 2-9.
Foxall, G. (1985). Marketing in the Service Industries. London: Frank Cass.
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French, C., Craig-Smith, S., and Collier, A. (1995). Principles of Tourism. Mel-
bourne: Longman Australia Ltd.
Kotler, P. (1997). Marketing Management. Englewood Cliffs, NJ: Prentice Hall.
Kotler, P., Chandler, P., Gibbs, R., and McColl, R. (1998). Marketing in Australia,
Fourth Edition. New York: Prentice Hall.
Levitt, T. (1972). Production-Line Approach to Service. Harvard Business Re-
view, (Sept.-Oct.): 41-52.
Lewis, R. and Booms, B. (1983). The Marketing Aspects of Service Quality. In
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Lewis, R. and Chambers, R. (1989). Marketing Leadership in Hospitality:
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Lovelock, C. (1991). Services Marketing, Second Edition. Englewood Cliffs, NJ:
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MacKay, K. and Crompton, J. (1988). Conceptual Model of Consumer Evaluation
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McIntosh, R., Goeldner, C., and Ritchie, J. (1995). Tourism: Principles, Practices,
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Mieczkowski, Z. (1990). World Trends in Tourism and Recreation, Volume 3.
New York: Peter Lang Publishing.
Mills, P. (1986). Managing Service Industries: Organizational Practices in a
Post-Industrial Economy. New York: Ballinger.
Normann, R. (1991). Service Management Strategy and Leadership in Service
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Ostrowski, P., O’Brien, T., and Gordon, G. (1993). Service Quality and Customer
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Parasuraman, A., Zeithaml, V., and Berry, L. (1988). SERVQUAL: A Multiple-
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Pearce, P. (1982). The Social Psychology of Tourist Behavior. International Series
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Saleh, F. and Ryan, C. (1991). Analyzing Service Quality in the Hospitality
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14 Service Quality Management in Hospitality, Tourism, and Leisure

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 Chapter 2

Unique Characteristics of Tourism,

Hospitality, and Leisure Services
Yvette Reisinger

V nerly purines implications of the naturea fneee services for man-

agement and marketing strategies.

HOW ARE TOURISM, HOSPITALITY,

AND LEISURE SERVICES
DIFFERENT FROM PHYSICAL GOODS?

It has been accepted that services have unique characteristics that dis-
tinguish them from goods and provide a ground for developing different
marketing strategies for services and tor goods (Lovelock, 1991; Booms
and Bitner, 1981; Sasser, Olsen, and Wyckoff, 1978). It has also been
recognized that tourism, hospitality, and leisure services have a number of
characteristics that distinguish them from physical goods. These character-
istics and their implications for managing and marketing strategies are
identified in the following section

bac — activities support the serviceofferings = tourists. They deter-

mine the visible performance of providers. For example, the visible in-
1s)
16 Service Quality Management in Hospitality, Tourism, and Leisure

flight catering offerings have to be ordered and delivered to the plane.

Computer systems have to be developed to ensure efficient baggage han-
dling at the airport (Baron and Harris, 1995).
The tourism service offering can be viewed at several levels:

1. The core (basic) service (e.g., accommodation), which is the main

reason for the service purchase
2. The expected (actual) service, which consists of the basic service
and the tangible support service (e.g., accommodation services plus
a comfortable bed, transportation services plus a relaxing waiting
area, prompt in-flight service, good quality meals, clean lavatories,
and on-time arrival)
3. The augmented product, which consists of the basic service, tangible
support services, and added value in terms of reliability and respon-
siveness, service quality, price options, and supply of free travel
brochures
4. The potential product, which consists of future service offerings
such as all potential added features and benefits that might be of use
to travelers (i.e., everything that professionally can be done to the
product)

The core value of the physical good is produced in a manufacturing

facility such as a factory. In contrast, the core value of a service is pro-
duced in buyer-seller interactions.
Some suppliers use services as a core product. These services are im-
portant and necessary to provide customers with the intangible benefits
they are looking for. Other suppliers use services as an additional or
peripheral element associated with the good. These services are needed to
execute the core services or to improve the overall quality of the product
(Gronroos, 1978). For example, the core service purchased can be a flight
from New York to Chicago. The peripheral services can be meals, drinks,
in-flight entertainment, pillows, and blankets. They are extra elements of
the service that add to customer comfort and enjoyment. Unfortunately,
the distinction between core and peripheral services is not always clear. It
depends on what customers regard as a core or peripheral service, and
what services are more or less important to them. When buying airline
services, the actual transportation may be more important to the customer
than the cleanliness of the airport. When buying travel agency services, the
quality of the advice may be more important than the physical appearance
of the travel consultants. Moreover, many tourism organizations compete
on peripheral services by adding more of them to the core product to better
satisfy customer needs. Unfortunately, many of these organizations cannot
 Unique Characteristics of Tourism, Hospitality, and Leisure Services 17

live up to the promises and the image they create, and fail to fulfill custom-
er expectations. They lose their credibility and create customer dissatisfac-
tion.

“3 ans that 1 rourism

sm

(palpable PNY Foree a traveler cannot experi-

ence the tangible outcome of the holiday purchase iin advance. However,
since tourism services are activities and experiences of the service pertor-
y= be perceived
inthe mind
ae intangibility). For example, the traveler can perceive intuitively
whether his or her poliday expeucnces Hl be saleand orien: gles to

elements in the form of aiautodention, and tangible elements in the ane

of aircraft, food, seats, pillows, or blankets. Restaurants offer intangible
elements such as catering, and tangible elements such as meals. Similarly,
hotels offer intangible elements such as the atmosphere of a lobby, and
tangible elements such as design and architecture. The amount of tangible
and intangible elements involved determines the degree to which tourism
services are tangible. For example, airline services are more tangible than
tourism education services. On the other hand, airline services are more
intangible than car rental services.
= RT RY

, or evaluated before
ip to Hawaii,
7

o reduce some e ofit difficulties caused by the intangibility of tourism

services, marketers often try to increase their tangibility. For example,
potential travelers are shown pictures of the resort in promotional bro-
chures. The benefits of the services offered (¢.g., unforgettable memories)
are explained to travelers. Brand names for tourism services such as the
Qantas Frequent Flyer Program are developed. Also, celebrities are used
in tourism promotion to create customer confidence and trust in the ser-
18 Service Quality Management in Hospitality, Tourism, and Leisure

vice. For example, the Australian-born actor Paul Hogan was used to
promote Australia as a tourism destination for the American market.

of Production and Consumption

one place, | ) sale in

another, and s id consi FTES ourism services are
aeldhfirst and ‘hed producec aneously at the same
place and time. A passenger first purchases an airline ticket and then
consumes the in-flight service as it is produced (Bateson, 1995). As a
result of the inseparability of production and consumption, tourism ser-
vices require simultaneous presence of the customer and service provider
during their production and consumption. Also, the consumer must come
to the place where the tourism services are “manufactured” (Coltmann,
1989) before they can be consumed. For example, a tourist who wishes to
go on vacation must travel to the destination to consume the services
offered at the destination (Fridgen, 1996). Production and consumption of
these services begins upon the traveler’s arrival at the destination. In
addition, tourism services cannot be taken home because they cannot be
separated from the place of production. In contrast, production, distribu-
tion, and consumption of physical goods are separated in both time and
space (Bateson, 1995). Most manufactured physical goods are produced in
one place, packaged and transported through wholesalers to retailers for
sale in another location at a different time, sold somewhere else, and then
consumed in another place. Thus, manufactured products can be produced
at one time in one location and consumed at another time in a different
location. Once purchased by consumers, they can be taken home (e.g.,
shoes).
The inseparability of the production and consumption of tourism ser-
vices implies that the mass production of tourism services would be ex-
tremely difficult because it would require large numbers of tourists and
producers at one time and place. This, of course, would have enormous
environmental, social, cultural, and economic implications. Therefore, the
scale of tourism operations must be limited to a manageable level.
In some instances, however, the production and consumption of hos-
pitality services is not simultaneous, e.g., self-service options such as salad
bars or smorgasbords.
 Unique Characteristics of Tourism, Hospitality, and Leisure Services 19

tion of humanWilsall:
j Ra rvic eri itt tbecause it
m producer to pro ES igh oimanislOmicnaiewousiOnier, For
mple, services provided by the same travel agent vary on a daily,
weekly, and even monthly basis, depending on the travel consultants’
moods, feelings, attitudes, skills, and knowledge. Many travelers are
aware of this fact and, as a result, they shop around before they select a
provider. Similarly, customers differ in their needs and requirements.
Since they are present at the service production, bey influence the service
au ina way Shitty, to the ee ne

urther, provid re unable to maintain the same service performance

because performance also depends on tourist demand for services. In the
a aera nas is great demand i tourism. services, providers

: S, quality c slervices aes

may varySe etily.
Although tourism services are heterogeneous, they canstandardized.
be
For example, one can replace the human voice with a computerized voice
system at the front desk (Palmer and Cole, 1995).

nce fluctuates from daytoday,itisdifficult to

ervices. C onsistency of service performance
) rvice y depend on the consumers’ and providers’
demographic, socioeconomic, and psychological makeup and, in particular,
the providers’ skills and willingness to do a good job. Another factor is the
consumers’ ability and willingness to accurately communicate their needs
and to participate in the service process. Problems of lack of consistency
cannot be eliminated in tourism services, as they often can be with physical
goods, because there is a lack of uniform objective standards according to
which tourism service performance and quality can be assessed. Also, ser-
vice performance often depends on external environmental factors such as
climate, new technology, or political factors.
Consistency in services is critical for tourism business operations and
success. Tourists who know that they will receive good quality service
anytime they visit a¢ WOUSMICESS become repeat buyers. The heterogeneity of
t f consistency implies the need for quality
r management be aviOr. any airlines,
20 Service Quality Management in Hospitality, Tourism, and Leisure

be employed in a peopl
Various learning tec nniqu rstanding
of the service process and communication skills in receiving the required
service.

Perishability

For example, it is not possible to save the spare seat on a flight that is
i it totomorrow if tomorrow’s flight is overbooked.

ism services are eraslived. Airlines must try to fill all seats on allflights
and hotels must fill all rooms each night because an empty seat or hotel
room means that revenue is lost. To avoid loss, airlines and hotels charge
travelers penalties for canceled tickets and rooms. The value of their
services exists only at that point whe

return them to the airline after the departure day and claim a ering)
Similarly, hotel or restaurant services of poor quality cannot be redone and
resold. The restaurant manager cannot ask the guests to reenter the restau-
rant and start une whole experience from the be inning Bateson, ne

The purchase and consumption of tourism services does not result in

the transfer of ownership of these services. For example, the purchase and
consumption of hotel or airline services does not result in ownership of
airlines or hotel SALTS ieNEMA seat or aeral room cannot be taken
home either. When t rs purchase air! es th
 Unique Characteristics of Tourism, Hospitality, and Leisure Services 21

porary right a PE ice (service process), the access to

it, the conan) to use it (Palmer, 1994), and the transport process itself.
However, when purchasing airline services, a customer does not purchase |
the Aasto own the service or the title to that service. Thetravelercanonly
ywn the benefits of the transportation
tra service, not theservice itself, In
ions of a ‘flight, thietraveler can own the benefit of the flight experience,
in-flight entertainment, the memory of the ey oes SBull or the

the transter of
pause: For Say Bavitie
e transferae ownership to the buyer. New +e biegev OW US
aK de teint
Benefits Purchased

The purchase of tourism services results in the purchase of a bundle of

benefits through the experience that is created for the consumer (Bateson,
1995). In contrast, the purchase of a physical good results in the purchase
of the benefits that are part of the actual good. Also, the ways in which
consumers receive the benefits differ for tourism services and physical
goods. In the case of tourism services, consumers experience different
benefits during service consumption. These benefits are generated by a
variety of sources at once:

1. visible to the consumer (front office);

2. invisible to the consumer (administration and maintenance of the
physical facilities, e.g., the kitchen in a restaurant, housekeeping
department in a hotel);
3. the inanimate physical environment in which the service encounter
takes place;
4. interaction process and the contact personnel who actually provide
the service; and
5. interaction with other customers who affect the customer who pur-
chases the service (Bateson, 1995).

For example, a customer may find the dining-out experience pleasant if

other customers in the restaurant are quiet and polite. Similarly, passengers
on an airplane may develop very positive perceptions of the in-flight
service if they sit next to interesting travelers with whom they can chat
(Bateson, 1995). The benefits (if these experiences are positive) or dissat-
isfaction (if these experiences are negative) may last for a long time. In
22 Service Quality Management in Hospitality, Tourism, and Leisure

contrast, once physical goods have been consumed or are not being used,
their benefits for consumers immediately disappear.

More Difficult to Control Quality

It is more difficult to control the quality of tourism services than physi-

cal goods. The inability to store tourism services and their intangibility
makes it difficult to select them for testing and evaluation. For example,
when a tourist purchases a hotel room, he or she is not able to assess betore
purchase to what degree a room will satisfy his or her needs in terms of
comfort. Also, because tourism services are heterogeneous and dependent
on human performance, it is difficult to apply the standard specifications
of quality and eliminate any deviations from the norms. In contrast, in the
manufacturing sector, the quality of the product can be controlled before it
reaches the consumer. The ability to store physical goods means that
individual goods can be physically tested before they are released for
distribution. They can be selected in shops to assess variability in their
quality. For example, a customer who buys shoes can put them on and
assess the shoes’ fit and comfort.
The implication is that tourism services are usually purchased without
prior testing of their quality. There are, however, a few exceptions to this
rule, including home delivery of prepared food. Also, mistakes in the
service process cannot be caught and corrected before their production and
consumption. If something goes wrong with the service, it causes immedi-
ate damage and it is too late to implement quality control measures. Poor
service quality cannot be rejected before it gets to the customer for con-
sumption. Therefore, it is critically important for a service provider to
perform perfectly all the time. However, many mistakes in the tourism and
hospitality industry are accidental, unforeseen, and/or happen unexpect-
edly (e.g., the waiter drops a plate). These mistakes must be corrected by
using specific recovery strategies (Bateson, 1995). In contrast, mistakes in
manufactured products can be discovered and corrections made before
they are purchased.

Evaluation Process

The evaluation of tourism services occurs at three stages:

1. Preconsumption (consumer selects among alternatives)

2. Consumption (consumer compares experiences with expectations)
3. Postconsumption (consumer compares experiences with expectations
formed at the preconsumption and consumption stage)
 Unique Characteristics of Tourism, Hospitality, and Leisure Services 23

In the preconsumption stage, when consumers select among alterna-

tives, there are not many cues that the consumer can identify from adver-
tising to assess the service attributes prior to experiencing service. For
most tourism services, the evoked set is limited (brands and alternatives
that consumers consider before making a purchase decision). One of the
reasons for the limited set of tourism services is that numerous travel retail
establishments offer only a single “brand” for sale. Also, it is difficult to
obtain adequate prepurchase information about tourism services. In con-
trast, the evoked set in physical goods is unlimited because consumers can
see many competing brands of the same product as well as its alternatives.
However, many travel agencies handle business for competing airlines, car
rentals, and hotels.
Although the consumption of physical goods can be divided into three
activities: buy, use, and dispose (Bateson, 1995) (the consumer buys a bottle
of wine, drinks it at home, and disposes of the empty bottle), there are no
clear boundaries between these stages in the consumption of tourism and
hospitality services. The production/purchase/use of tourism services is a
single process because of the prolonged interactions between the customer
and the service provider. The whole process is evaluated rather than one
single activity.
In the postconsumption stage consumers compare the service perfor-
mance with expectations, which are developed on a basis of cognitive
scripts (knowledge and understanding) that specify the actions and events
that occur during service delivery. Since the consumers may not be famil-
lar with the service prior to experiencing it, it is often difficult for them to
develop cognitive scripts that show what should happen during the service
offering. It is also difficult for advertising to reinforce the scripts in the
consumers’ memory. In contrast, consumers of physical goods can
compare their experiences with expectations. They can form expectations
at the preconsumption and consumption stages on the basis of many tangi-
ble cues identified from advertising prior to the purchase.

Criteria for Evaluation

When tourism services are purchased, it is difficult for tourists to judge

the quality of these services as they often involve very few tangible ele-
ments. The only reliable evaluation criteria are the price and the physical
environment in which the service is offered (Zeithaml, 1991). However,
even the price cannot always be used as a measure of evaluation as it is set
by a producer and does not reflect the perceived value and benefits for
individual consumers. In contrast, when physical goods are purchased,
24 Service Quality Management in Hospitality, Tourism, and Leisure

customers can use many factors such as color, size, weight, etc. to assess
the product quality.
To facilitate the evaluation of service quality, Nelson (1974) and Darby
and Karni (1973) distinguished three categories of properties of consumer
goods, which determine consumer service quality and the degree of diffi-
culty of service evaluation. These are: search properties, which can be
evaluated prior to purchasing a product (size, color, feel); experience
properties, which can be assessed only after purchase or during consump-
tion (taste, wearability); and credence properties (competence, reputation,
security), which often are impossible to evaluate even after purchase and
consumption. Tangible goods are high in search attributes and thus can be
easily evaluated before purchase. Many tourism services are also high in
search properties (retailing) and are easy to evaluate. However, most tour-
ism services are high in experience attributes (taste, credibility, atmo-
sphere, friendliness, catering meals, vacation) and can only be evaluated
after a service has been received or during its consumption. Tourism ser-
vices are also high in credence attributes and cannot be assessed confident-
ly even after purchase and/or when the service is completed (recreational,
medical benefits of vacation, rental services). These tourism services are,
therefore, the hardest to evaluate or even impossible to evaluate after
purchase. Since most tourism services contain a high percentage of experi-
ence and credence properties, tourism service quality is more difficult to
evaluate than the quality of goods that contain a high percentage of search
properties.

Process As Service Quality Evaluation Criteria

The final assessment of tourism service quality does not rely solely on
the outcome of service, but also on the service process, that is, the quality
of the interpersonal interaction between a tourist and a provider. In con-
trast, the final assessment of physical goods depends on the outcome of the
offering: whether the purchased product satisfied the consumer’s needs in
terms of speed, weight, size, or color.

Dimensions of Quality Evaluation

There are many dimensions of service quality as opposed to goods

quality. According to Lehtinen and Lehtinen (1982), the three distinct
quality dimensions are: physical (includes the physical aspects of the
service); corporate (involves the service organization’s image or profile);
and interactive (derives from the interaction between contact personnel
 Unique Characteristics of Tourism, Hospitality, and Leisure Services 25

and the customer). This interaction is central to service, and the quality of
this interaction is vital to the assessment of the overall quality of service
(Crosby and Stephens, 1987; Parasuraman, Zeithaml, and Berry, 1985,
1988; Solomon et al., 1985; Urry, 1991). Martin (1987) distinguished
procedural (mechanistic in nature, system of selling and distributing a
product to a customer) and convivial dimension (interpersonal in nature,
emphasizes the service providers’ positive attitudes to customers, behav-
ior, and appropriate verbal and nonverbal skills). Gronroos (1984) distin-
guished technical (what the consumer actually receives from the service as
a result of the interaction with the service provider) and functional dimen-
sions (the manner in which the service provider delivers the service to a
customer). The interactive, convivial, and functional dimensions are inter-
personal in nature. They are important for the evaluation of the quality of
the interpersonal interaction between a tourist and a provider, and they are
important for the evaluation of tourism services rather than physical
goods.

No Warranties or Guarantees

It is rare for tourism services to carry any warranties or guarantees

because they are performances rather than tangible items, and because their
production depends not only on the providers’ but also on the customers’
involvement. The dissatisfied customer often cannot claim any refund for
wrong service Or compensation because he or she is part of the service
process and together with providers determines its tinal outcome. However,
there are exceptions; for example, an unhappy customer can be served
another meal, or be offered a cheaper holiday package during the rainy
season. On the other hand, physical goods usually carry warranties and
guarantees, which show that it is the fault of the producer if the product
fails.

Easy Imitation

The intangibility of tourism services makes them relatively easy for

competitors to copy (Coltman, 1989). It is impossible to keep competitors
away from the location of tourism services production. The competitors
can visit these places and consume them. Most tourism and hospitality
services cannot be patented either. These services are provided by people
and for people; thus, people can imitate them (Morrison, 1996). Also,
since the tourism and hospitality industry is very labor intensive and the
cost of entering the tourism services market is low, anyone can enter it and
26 Service Quality Management in Hospitality, Tourism, and Leisure

potentially offer the same type of service. In contrast, in the manufacturing

sector the physical products cannot be as easily copied by competitors,
because various copyrights and legislation prevent it.

People Based and Personality Intensive

Tourism, hospitality, and leisure services are provided by people (pro-

viders) for people (customers) who share these services with other people
(other customers). People are part of the total tourism product offered, as
much as any other attribute of the product (Bateson, 1995). People can
enhance the SEDO O aN tourism product ¢orSENS: it. For example

Beeotalite services are very Goat aie and characterized by a very

high level of personal contact between service providers and customers,
and between customers themselves, the quality of their social interactions
influences the service perceptions. In particular, peoples’ behavior, their
attitudes toward each other, willingness to anticipate and fulfill one anoth-
er’s needs, motivation, and personal characteristics are all of great impor-
tance to the production and consumption of tourism services, and the
development of perceptions of the overall tourism product. As a result,
tourism, hospitality, and leisure marketers must be very selective in terms
of whom they hire (employees-providers). Employees should have suit-
able interpersonal skills to avoid human conflicts. Consequently, staff
recruitment, selection, orientation, training, supervision, and motivation
play an extremely important role in the tourism, hospitality, and leisure
industry (Morrison, 1996). Tourism and hospitality managers and market-
ers should also be selective in terms of who their customers are. Matching
customers and service offerings and managing customers are equally im-
portant. In contrast, the production and consumption of physical goods are
less people oriented.
Low-contact tourism and hospitality services also exist, which rely on
selling tickets and keeping clear records rather than intensive contact
between a provider and a customer; and capital- intensive and equipment-
posee tourism services such as al ine services.
 Unique Characteristics of Tourism, Hospitality, and Leisure Services 27

Service Providers Are Products

Service providers are part of the service process and experience (Bate-
son, 1995). They are present at service production and consumption. They
check in tourists, prepare and serve food, organize activities, seek pay-
ments, etc. (Fridgen, 1996). The providers’ behavior, emotions, skills,
knowledge, and the way they pertorm service, regardless of whether they
are backed up Oy a ateamount of pene ae is Patt of the service

Martin (1987) fered the role of service providers in Clune Cus-

tomers’ psychological needs and meeting their expectations. He Dust \v
lighted the importance of the providers’ personal interest in the customer,
being friendly, appreciative of the customer, gracious, tactful, courteous,
and attentive. Callan (1990) stressed the importance of “a responsive,
caring and attentive staff,’ who “get things done promptly and provide
honest answers to problems,” who “treat others in a kindly fashion,”
99

making the recipient “feel thoughtful, efficient, correct, and magnani-

mous” (p. 48). Knutson wet indicated the By aan of prompt and
; li

facilities being ofte d. Many vanced Coen emotional, and —

logical factors influenceSpyies behavior and have a significant impact
on customer service experiences.
The providers are also a source of tourism product differentiation. This
is particularly true in airline services, where many airlines offer similar
bundles of benefits and fly the same aircraft type from the same airport Sikhs
and the only element of competitive advantage is at heseve leveicy ;
(Bateson, 1995). In contrast, the manufacturing-based services are No
standardized and less labor intensive.
The importance of service providers indicates the necessity of develop-
ing internal marketing: attracting, motivating, and training quality em-
ployees, developing jobs that satisfy the employees’ needs, and encourag-
ing staff to behave in a manner that attracts customers’ attention. For
example, British Airways trained its employees to understand that the aim
of their jobs is to deliver to the travelers satisfying flight experiences.
British Airways eee the philosophy that employees who are looked
g pita. totheir own customers(Payne,

One implication isi that the quality of providers is the key element in the
provision of services in tourism and hospitality. Consequently, the success
 Service Quality Management in Hospitality, Tourism, and Leisure

sm and hospitality businesses depends upon the right selection,

afing, motivation, management, and control of employees. However, the
ability to control and manage employees requires special skills and tech-
niques.

Consumers Are Products

Consumers are also an integral part of service provision in tourism and

hospitality. Although they are the pes of services, they are a ve

cess ' influence its outcom | er’s charac-

en soauneline and o vior may determine the final
outcome of the service provision and the level of satisfaction with service.
In contrast, manufacturers of physical goods keep customers away from
production for safety and propriety reasons (Morrison, 1996).
Consumers are also a source of tourism product differentiation. Tour-
ism services are customized and differentiated depending on the consum-
ers’ requirements. Providers must adequately identify these needs and
adequately segment the total tourist market.
Further, since the consumers are part of the tourism service production,
they need to be managed as carefully as providers. The customers’ percep-
tions of the tourism and hospitality service quality determine repeat pur-
chase or visitation and customer retention.
Moreover, many tourism services are customer-to-customer interac-
tions. Consequently, the other customers are also products (Bateson,
1995). For example, interactions with other travelers can influence the
assessment of service quality. A pleasant conversation with other travelers
may enhance the service experience.

Greater Customer Participation in the Service Process

Tourists as consumers are involved to a greater extent in the production

of tourism services than of physical goods. Their participation may be
very active (explorers) or passive (mass-organized packaged tour), com-
plete (leisure and recreation services in resorts) or partial (when service is
performed on a tourist’s possession such as a car). The producer of tourism
services has constant contact with a customer because tourists are present
in the service production. For example, tourists must travel to a chosen
holiday destination, check into a hotel, order food, participate in activities,
and pay for services (Fridgen, 1996). In contrast, the producer of the
 Unique Characteristics of Tourism, Hospitality, and Leisure Services 29

physical good has little or no contact with the customer. Thus, consumers
do not (normally) participate in the production of physical goods.
Because customers participate to a greater extent in production of tour-
ism services, they may be more responsible for their dissatisfaction with
the tourism experience than with physical goods. Customers need to com-
municate their needs and requirements adequately. In contrast, when pur-
chasing physical goods, the main form of consumer participation in the
service provision is the act of purchase (Zeithaml, 1991). Although the
consumers can be blamed for a wrong decision and buying a faulty prod-
uct, the producer is responsible for poor product performance.

Brand Loyalty

Many buyers of a tourism product may have little or no brand loyalty

(Coltman, 1989); they often choose different products (destinations) for
their vacations. However, many tourists are more brand loyal with tourism
services than with physical goods, for several reasons:

1. It might be more expensive to change brands of a tourism product/

service (e.g., airlines)
2. It might be more difficult to obtain effective information about the
availability of a substitute tourism product with the same attributes
3. It might be more difficult to assess a new product before purchase
4. It might be more difficult to find alternative tourism products with
similar attributes and which offer similar benefits
5. The risk of purchasing an intangible new tourism product is higher

As a result, consumers of tourism services may show greater brand

loyalty to specific tourism products/services in order to achieve guaran-
teed satisfaction. They develop trustful social relationships with a chosen
provider, rely on his or her advice and information, and become repeat
customers. This also allows the provider to gain better knowledge and
understanding of the customer’s preferences and tastes, and often a better
product match.

Supply Dependence

Tourism services are more supply dependent than demand dependent

(Seaton and Bennett, 1996). Their purchase and consumption depend upon
the places of their availability and production. For example, accommoda-
tion services are provided along major highways, in downtown areas, and
30 Service Quality Management in Hospitality, Tourism, and Leisure

near airports. Similarly, catering and dining services are provided in areas
of high population density, city centers, and shopping centers. Conse-
quently, the physical location of tourism services determines where their
purchase and consumption will take place. Also, the physical location of
tourism services determines the location of their distribution. Consumers
have to be brought to points of sale (intermediaries) and locations of
production (e.g., resorts). In contrast, manufactured products may be pro-
duced and consumed in different locations. For example, refrigerators can
be produced in one city and sold and consumed in another.
The supply of tourism product is fixed in the short term. For example, a
hotel has only a specific number of rooms and an aircraft has a specific
number of seats (Coltman, 1989; Holloway, 1986). In the long term, the
supply can be changed by building new hotels, planes, attractions, etc.
Usually only a few financially strong companies are able to afford to
develop new products in the short term. In contrast, the supply of physical
goods typically can be changed within a shorter time. For example, de-
pending on demand, more refrigerators and microwaves can be produced.

More Dependence on Complementary Sectors

The tourist’s experiences and satisfaction with services depend on

mutual cooperation of various sectors (e.g., transportation, accommoda-
tion, attractions) and organizations (e.g., travel agents, shopping centers,
car rentals, or food stores) which deliver tourism products and services
and generate tourist experiences. Without this cooperation and comple-
mentary performance these sectors and organizations will not achieve an
integrated total product and accomplish a major goal, which is tourist
satisfaction. The poor performance of one sector or organization always
reflects badly on the performance of others.

Dispersed Control and Responsibility

Since the tourism product is an amalgam of products offered by various

suppliers in different subsectors, and control of the service provision is
dispersed over the several suppliers (Seaton and Bennett, 1996), the fail-
ure of one subsector affects the reputation of the total product. In contrast,
the production of physical goods depends on one sector, and control over
production belongs to the producer.
 Unique Characteristics of Tourism, Hospitality, and Leisure Services 31

Demand

Customer Demand Dependence

Tourism services are offered where the customer is and where demand
for the services exists. Restaurants cook meals when customers order
them. Although restaurants can precook meals, they cannot serve them
ahead of time. The provider of tourism services has to ensure that service
offerings are widespread enough to cover the areas where there is demand
for them (Bateson, 1995). Consequently, tourism and hospitality services
are provided across a variety of locations. For example, McDonald’s has to
offer its services in a variety of locations such as in downtown areas, in
airports, or along major highways. In contrast, physical goods can be
manufactured even when customers do not ask for them. They can be
stored and distributed for sale at times of high demand.

Seasonality of Demand

The consumption of tourism services varies over time because the

tourism product is consumed and in demand more at certain times of the
year than others. Most tourism services are consumed and produced dur-
ing prime vacation months (annual summer or winter vacations, school
holidays, Easter and Christmas) than during off-peak seasons, and, for
example, during weekends rather than weekdays. As a result, the demand
for tourism services is seasonal. In contrast, the consumption of physical
goods is usually more stable through the entire year. The demand for
manufactured goods is less seasonal.

Demand Fluctuations

Demand for tourism services constantly fluctuates depending on exter-

nal forces beyond the control of suppliers, such as economic (fluctuations
in currency exchange rates), political (wars, terrorist attacks, instability),
and physical conditions (weather, hurricanes, droughts) (Coltman, 1989;
Seaton and Bennett, 1996). Tourism demand also depends on economic
and cultural distance. Economic distance refers to the distance the custom-
er has to travel in terms of time and cost. The longer the travel time, the
higher the resistance to travel to that destination and the lower the demand.
Cultural distance refers to the cultural differences between a tourist’s
country of origin and the destination visited. The greater the difference
between the culture of the destination and the culture of origin, the lower
32 Service Quality Management in Hospitality, Tourism, and Leisure

the demand for visiting that particular destination (McIntosh, Goeldner,

and Ritchie, 1995). Tourism demand also fluctuates depending on con-
sumers’ health considerations, facility standards, and service quality. The
perceptions of service quality are very subjective and depend on previous
tourist experiences and perceptions. Tourism demand is very competitive,
subject to fashion and changes in the level of individuals’ motivations.
The fluctuations in demand for tourism services can be temporal or
cyclical. In contrast, demand for physical goods is more stable and rela-
tively less dependent upon weather conditions, political instability, eco-
nomic and cultural distance, consumers’ health, and facility standards. A
more stable demand for physical goods also allows building inventories
and storing unsold items. In contrast, since the demand for tourism ser-
vices fluctuates, one cannot build inventories and save unsold services,
consequently experiencing loss. If demand is lost, the tourism industry
needs to develop strong recovery strategies to regain travelers.
One implication of demand fluctuation is that it is important to accu-
rately forecast tourism demand to match tourism supply. However, it is
extremely difficult to predict and accurately forecast demand for tourism
services. The in and out flows of intangible and perishable tourism ser-
vices cannot be measured. On the other hand, it is relatively easy to
forecast demand for physical goods. The in and out flow of physical goods
can be easily assessed using objective yardsticks of measurement.

Time Dependence of Quality

The quality of tourism services depends on timely provision. At peak

times and high vacation season (summer) hotels are usually fully booked
and then stand empty for the rest of the year. Similarly, some restaurants
can experience a rush of customers at Christmas and New Year and then
can be nearly empty for the rest of the year. When airlines work at full
capacity during annual holidays, delays are often caused by overcrowding.
When restaurants work at full capacity, the waiting time for meals is
prolonged. At a time of high demand, providers have to be quick in
responding to customers’ demands and spend less time serving each cus-
tomer. They are unable to be as attentive to the customer’s well-being and
satisfaction as during a time of low demand. The stress on service provid-
ers and resources creates many human errors and may result in very poor
customer experiences. Consequently, excessive demand is disadvanta-
geous for service providers and for customers. On the other hand, when
demand is too low, service quality also falls because of underutilized
infrastructure and personnel boredom and demotivation (Rust, Zahorik,
and Keiningham, 1996). Thus, the time at which the consumer chooses to
 Unique Characteristics of Tourism, Hospitality, and Leisure Services 33

use a tourism service is critical to its performance and quality, and there-
tore, the consumer’s experience and satisfaction.

Managing Demand

To stop service quality from declining it is advisable that tourism organi-

zations do not work at full capacity. However, in some organizations it is
desirable to work at full capacity, e.g., sporting events and music concerts.
Untortunately, most tourism/hospitality organizations experience operation-
al problems when demand exceeds supply or when more than 75 percent of
capacity is used (Rust, Zahorik, and Kleiningham, 1996). The inability to
store intangible and perishable tourism services creates the need to manage
demand in low and peak seasons. To manage demand for tourism services
one must manage the marketing mix, e.g., hotels must raise room rates
during the peak season and lower rates in off-peak seasons.

Moving Demand

There are many advantages for both suppliers and customers if they are
able to move demand, e.g., from the peak to the slack times. For example,
many airlines and hotels offer discounted airfares and lower room rates in
the off-peak seasons. In addition to better rates, service quality is enhanced
and customers receive better attention. Providers can spend more time
serving each customer. They are less stressed and make fewer errors.
Consequently, the image of the services is enhanced, demand for services
increases, and extra profit can be earned. In the case of physical goods,
there is no need to move demand from peak to off-peak times. The exis-
tence of inventory prepares producers for times of higher consumption.

Demand Elasticity

Demand for tourism services is highly elastic. Tourists are very respon-
sive to changes in price. An increase in price brings a proportional de-
crease in the demand for tourism services and the volume of tourist arriv-
als. However, an increase in price for very elite tourism services such as
luxury hotels or yacht cruises may also generate a higher demand from the
status and prestige-oriented market. This is the Veblen effect, which sets
up the demand curve based on exclusivity and prestige. The higher the
cost of an experience or product, the more desirable it becomes—up to a
point. Decreasing the price causes only a small increase in the amount
purchased. Increasing the price actually causes the demand to increase,
34 Service Quality Management in Hospitality, Tourism, and Leisure

instead of decreasing. On the other hand, a decrease in price brings a

proportional increase in tourism demand. The demand for business travel
is inelastic. Business travelers are less responsive to changes in price than
are holidaymakers. For physical goods, the demand for luxury goods such
as cars or houses is elastic. The demand for necessities such as food or
medicine is price inelastic.

Changes in Tourism Supply Bring Changes in Tourist Demand

Changes in the supply and production of tourism services lead to

changes in tourist behavior. For example, changes in the layout of a restau-
rant, its furniture, and atmosphere can affect the demand for services and
lead to tourists having new expectations of service quality and availability.
In contrast, changes in the supply of physical goods often do not create
any changes in consumer behavior.

Changes in the Benefits to Tourists

Lead to Changes in Tourism Supply

Changes in the benefits offered to tourists mean that a new product is

offered and a new market is tapped. For example, upgrading the take-out
shop to the upmarket silver service restaurant may result in the alienation
of its family consumers, repositioning the service operations in a new
segment (Bateson, 1995) and changing consumers’ expectations and ser-
vice evaluation criteria. If fewer benefits are offered, the consumer’s per-
ceptions of service quality change, and the consumer goes somewhere
else. If more benefits are offered, the perceptions of service quality are
enhanced and the consumer may become a repeat buyer. Consequently, if
the benefits change then the total product has to be changed into a new
one. Changes in benefits have far greater implications in tourism service
organizations than in manufacturing firms. Many changes made to ser-
vices are usually visible to the consumer.

Customers Have Different Demands for Tourism Services

Various individuals demand different types of tourism services depend-

ing on their lifestyle, motivation, and sociodemographic, economic, and
psychological makeup. For example, the psychocentric type of tourist,
who is concerned with small problem areas of his or her life, usually likes
to spend vacation in nearby destinations and participate in familiar activi-
ties. The allocentric type of tourist, who is outgoing, self-confident, and
 Unique Characteristics of Tourism, Hospitality, and Leisure Services 35

willing to experiment with life, prefers to travel to destinations such as

Africa or Asia to experience adventure and satisfy curiosity.

Market Segments Have Different Demands

for Tourism Services

Business travelers spend more than vacationers on a daily basis, as they

demand specific facilities and flexible arrangements, which are more ex-
pensive to maintain. They also need year-round travel and reliable and
convenient transportation. They are prepared to pay more for the availabil-
ity of timely airline services, work stations, computer data ports, and fax
and phone facilities in a hotel room. On the other hand, vacationers are
more interested in easy access to sports facilities and recreation activities.
Families are inclined to rent accommodations with fully equipped kitch-
ens, irons and ironing boards, weekly housekeeping, laundry facilities, and
easy access to playgrounds. First-class airline passengers demand addi-
tional value and add-ons in the form of a wider range and better quality of
food or more comfortable seats. Students and retirees, however, often
demand good-quality services at lower prices.

More Emotional and Nonrational Appeal

The tourism product has more emotional and nonrational appeal than
physical goods, depending partly upon the customer’s dreams and fanta-
sies (Seaton and Bennett, 1996). Customers frequently have emotional
reasons for buying tourism, hospitality, and leisure services (e.g., to feel
beautiful, to feel like a TV star) which are about making their dreams
come true. Emotions and feelings are generated by experiencing different
physical environments, the culture and heritage of the visited region, and
the atmosphere of friendliness, hospitality, empathy, and satety. Therefore,
the product is largely psychological rather than just physical in its attrac-
tiveness (Holloway, 1986). In contrast, consumers buy physical products
for rational reasons (specific functions) rather than emotional. However,
very often they are also influenced in their purchases by the status image
and sex appeal that are used by advertisers of products such as cars,
clothing, or alcohol in commercial campaigns.

Difficult Positioning and Marketing

The successful positioning of tourism services is more difficult than

that of physical goods because it is more difficult to promote abstract
36 Service Quality Management in Hospitality, Tourism, and Leisure

concepts such as experiences, benefits, or values than the tangible ele-

ments of physical goods such as size, color, or weight. These intangible
elements of service, including staff competence, reputation, expertise, and
skills form the basis for positioning of tourism services.

Greater Emphasis on Image and Perceptions

Image and perceptions are more important tools in marketing and posi-
tioning tourism services than physical products. This is because the former
lack tangible cues, which could be used to present them to consumers as
objects rather than performances and which could make them more easily
evaluated by consumers. Advertisers put a lot of effort into creating the
desired mental image. The entire process of service evaluation takes place
in the mind of the customer. It is the image or perception of the service,
rather than the actual service, which is being sold to the customer. The
images are used to create the consumer’s desired “dreamed reality.” Tour-
ism services are often presented in a more positive way to generate quick
sales. As a result, the image of tourism services often deviates from the
reality. The larger the gap between image and reality, the more likely it is
that the tourist will be dissatisfied. In addition, consumers often tend to
buy tourism, hospitality, and leisure services that match their self-image.
They fly first-class and stay at luxury hotels because this fits their mental
picture of successful people (Morrison, 1996). In contrast, sales of physi-
cal goods depend more often on the real product (and its performance)
than on its image.
In addition, environmental dimensions such as noise, music, tempera-
ture, or space utilization such as equipment, layout, and furnishings affect
tourists’ perceptions of the service experience. For example, the lack of
signs on the street or at an airport may significantly decrease travelers’
perceptions of the destination’s accessibility and safety. Similarly, lack of
space inside the overhead locker can affect passengers’ perceptions of the
comfort of their travel (Baron and Harris, 1995).

Higher Perceived Risk of Purchase

The risk of buying intangible tourism services is higher than the risk of
buying physical goods.
Various types of risk are associated with the purchase of tourism ser-
vices:

1. Financial (there may be financial cost if the service goes wrong)

2. Performance (providers will not perform and deliver benefits to
customers)
 Unique Characteristics of Tourism, Hospitality, and Leisure Services 37

8. Physical (the injury may be inflicted on the purchaser)

4. Social (a loss of personal social status might be associated with
a purchase) (Bateson, 1995)

Th e risk of purchasing tourism services is higher for several reasons:

l . Tourism services are difficult to standardize (there is no guarantee

whether the providers will perform according to customers’ expec-
tations and deliver service quality)
. Tourism services cannot be easily evaluated and assessed before
purchase (because there are no measurable and objective criteria
for their evaluation)
. Tourism services are experiences (they are sold without guarantees
and warranties, they cannot be returned, resold, and reclaimed
since they have been consumed, and the opportunity cost of a failed
holiday is irreversible)
. It is difficult to replicate exactly the same service experience
Nn
& . The tourism product is partly composed of dreams and fantasies
rather than assessable objects
. Consumers are not aware of what to expect (many suppliers are
involved in service provision and, therefore, the failure of one
supplier may change the perceptions of the total product)
. Tourism services involve highly complex human interactions (the
perceptions of service quality depend on the quality of these inter-
actions and human performance, in particular, the interpersonal
skills of the interactants and their backgrounds)
8. Because of their intangibility and a high level of experience quali-
ties tourism services must be selected on the basis of less pre-
purchase information than is the case for physical goods (custom-
ers must rely on the advice of travel agents and other intermediaries
who are motivated for quick sales and profit)
. There is uncertainty about the outcome of the services even though
the same service may be purchased
10. The dreams and image are sold at risk of selling image instead of
reality
i Many customers do not have the knowledge and experience to
evaluate whether they are satisfied, even after they have consumed
the service

In contrast, the risk of buying physical goods is smaller because physi-

cal goods are more standardized, more easily evaluated on the basis of
objective and measurable criteria, and can be experienced before pur-
38 Service Quality Management in Hospitality, Tourism, and Leisure

chase. Consumers know in advance what product performance to expect.

Goods can also be returned if their performance fails.
The perception of high risk in purchasing tourism services may be
reduced in the following ways:

1. Seeking out additional information about the product before pur-

chase
2. Developing customers’ high-brand and high-service loyalty to pre-
clude them from trying a new product
3. Focusing on personal recommendations and opinions of those whose
judgment consumers trust (e.g., relatives) and who have good
knowledge of the service (e.g., frequent buyers)
4. Developing the consumer’s perceptions of a greater control over the
service process and responsibility for service quality (informing po-
tential buyers about the importance of communicating their needs
and requirements adequately
5. Providing consumers with more and better information about ser-
vices (e.g., informing passengers about delayed flights or changes in
the service process
6. Communicating to customers about the role and responsibilities of
the providers in fulfilling the customers’ needs
7. Informing customers about their needs that cannot be fulfilled

Shorter Exposure to Services

Customers’ exposure to tourism, hospitality, and leisure services is

usually shorter than to physical goods. These services in many cases are
individual trips to restaurants, fast-food establishments, short flights, visits
to travel agents, or relatively short annual vacations. There is also less time
for providers to make a good or bad impression on customers (Morrison,
1996) and prove the quality of the product offered. In contrast, customers’
exposure to physical products such as cars and refrigerators is longer.
Many physical products can be stored for years; even food can be stored
for a long time in freezers.

Cost Determination

The cost structure of service production is also different. In the

manufacturing sector, fixed costs (e.g., building, manufacturing machin-
ery, tax on land, interest payments) and variable costs (e.g., gas, fuel,
electricity, labor) can be precisely estimated. The production output can
 Unique Characteristics of Tourism, Hospitality, and Leisure Services 39

also be estimated. The fixed costs do not change over time, as opposed to
variable costs. The fixed costs represent a relatively smaller percentage of
total costs. In the tourism and hospitality sector, fixed and variable costs of
intangible tourism services may not always be known exactly. The volume
sold of tourism services cannot be estimated. The fixed costs (cost of
promotion, cost of flight) represent a high percentage of total costs. These
costs do not change over time. In the long run all variable costs become
fixed costs. For example, in the long run all variable costs of one extra
meal for one extra passenger, which are borne by many extra single pas-
sengers, become fixed costs (Palmer and Cole, 1995). Unfortunately, it is
difficult to estimate how much these variable costs change over time. It is
also difficult to assess the basis on which to calculate fixed costs: on the
basis of the percentage of seats occupied, staff time used, or total turn-
over? Moreover, it is not easy to predict what these costs will be at differ-
ent times (e.g., gasoline and aviation fuel costs are volatile).

Price

It is more difficult to estimate price for tourism services than for physi-
cal goods since the cost of tourism services production and volume sold
cannot be precisely estimated as they can with physical goods. Tourism
services typically consist of much abstract input such as knowledge, skills,
and effort, which cannot be evaluated objectively. Thus, pricing takes into
account an intrinsic value (perceived benefits) for the customer, rather
than the cost of performing the service. In tourism, price is the only
concrete information available for evaluation of the service quality in the
absence of other tangible criteria such as weight or size. Price indicates
value and benefits to customers. It is also used as a positioning tool. Since
tourism products cannot be displayed (except in promotional brochures)
and their attributes demonstrated, their values can only be shown by dis-
playing their price. For example, very often restaurants place their menus
in their windows to show what they offer in terms of food and value
(Payne, 1993). In contrast, the value of physical goods is determined by
the total cost of their production.
Tourism services are also priced differently depending on the type of
customer, different locations (luxury hotels on French Riviera), buying
behavior of different market segments at different locations (consumers in
New York and consumers in Moscow), and different types of use at difter-
ent times (on a daily basis, weekly, annually), depending on the strength of
the demand, capacity, and existence of alternatives. A very common strat-
egy is to use price bundling, that is, to make the price of a total package
40 Service Quality Management in Hospitality, Tourism, and Leisure

lower than the price of individual components of the package (Palmer and
Gole, 1995):

More Variety and Types of Distribution Channels

The channels of distribution for most manufactured products consist of

three locations: a producer, a retail store, and a place of consumption. In
hospitality there is often one location where services are bought. For
example: customers come to a restaurant (producer), where food and
beverage are produced and sold (retail store), and consume their purchases
(place of consumption) (Morrison, 1996). However, since tourism and
leisure products are often located a long way from the customers, tourism
requires a more complex distribution system through the use of many
intermediaries such as travel agents, tour wholesalers, corporate travel
managers, convention planners, conference and meeting planners, and
many other specialty channels. They represent suppliers that not only
influence the potential tourists in terms of purchase but also make the
purchase of the tourism product easier, quicker, and more informative in
terms of such issues as hotel location, transportation availability, etc. In
contrast, intermediaries in the manufacturing sector seldom influence cus-
tomers’ purchase decisions and do not influence which products custom-
ers select in retail stores. There are several types of distribution channels in
tourism and hospitality, depending on the number of channel levels, which
aim to bring the product closer to the final buyer.

Direct Distribution

Channel 1, called the direct marketing channel, has no intermediary

level. It consists of a provider who is a retailer and sells directly to the
consumer. The consumer goes directly to the provider to buy a product
(e.g., a tourist goes to the hotel to book a room). The consumer may also
stay at home and purchase a product from the supplier (retailer) via a
reservation system (e.g., hotels, airlines). The location of the provider in
the direct distribution process is very important because it determines the
number of clients and competitors.
Service transactions, such as banking services, can also occur at loca-
tions separate from the provider’s premises (Payne, 1993). In this case, the
location is irrelevant. New technologies (e.g., reservation systems, elec-
tronic communication, telephone, and fax facilities) all play an important
role in tourism service offerings. The reservation systems inform potential
tourists about the availability of the product in terms of transportation,
 Unique Characteristics of Tourism, Hospitality, and Leisure Services — 41

accommodation, etc. Most airlines and hotels operate room and flight
reservation systems. In some cases, however, a customer’s presence at the
provider’s location is important. For example, a travel agent can sell travel
insurance or banking services (money exchange) if a customer wishes to
buy these services in person at the premises of a travel agent.
Due to the inseparability of production and consumption, direct sales of
tourism services are more convenient. Further, service operations must be
decentralized; services must be delivered at a convenient location depend-
ing on the availability of consumers.
A less common form of direct distribution occurs when a service pro-
vider goes to the customer’s location (e.g., home pizza delivery). In this
case, the provider’s location is less important, as long as it is close to the
customer.

Indirect Distribution

The consumer goes to the provider indirectly through an intermediary

(travel agent, tour wholesaler, or specialty channel). In this case, location,
number, and expertise of the intermediaries are also very important be-
cause they determine the number of customers and sales. There are three
types of indirect marketing channels, depending on the number of channel
levels used:

e The first type, Channel 2, uses one channel level, which is a single
middleman (travel agent) who buys travel services from a provider
and sells them to a client. The consumer goes directly either to the
retailer owned by the provider (e.g., car rental company, airlines, ho-
tels) or the individual travel agent who is paid a commission by the
provider for the performed services (hotel centers, airlines).
The second type, Channel 3, uses two channel levels or two middle-
men (travel agent and wholesaler). The consumer purchases a prod-
uct from an individual travel agent who purchases a product from a
wholesaler. In this case, a provider negotiates bulk sales with the
wholesaler.
The third type, Channel 4, uses three channel levels or three middle-
men (travel agent, wholesaler, and specialty channel). The consumer
goes to the specialty channel that purchases a product from a travel
agent who, in turn, negotiates sales with a wholesaler. The specialty
channel is involved in selling tour packages that are designed for tar-
get markets with particular needs (e.g., educational study, confer-
ence tours).
42 Service Quality Management in Hospitality, Tourism, and Leisure

From the traveler’s point of view, one of the most important advantages
of having two channel levels in the distribution process is that travel
services purchased by wholesalers in large quantities at discounted prices
allow the traveler to obtain cheaper travel packages.
From the producer’s point of view, having more intermediaries in the
channel means less control and more complexity of operations.

Promotion

It is more difficult to promote tourism services than physical goods.

The main objective of tourism promotion is to present service as a tangible
object rather than an intangible performance in order to make the services
better understood and their evaluation easier. This is usually done by
advertising the tangible features of the services, developing symbols that
better describe them, and consistently using the same symbols, logos, and
themes symbolizing a product (e.g., McDonald’s “M” logo).

Importance of Word-of-Mouth
and Personal Sources of Information

The most effective communication means for the tourism industry is

word of mouth. It has a more significant impact on tourist perceptions than
any other form of mass communication. Since experiencing and assessing
the tourism product is impossible before its purchase, potential tourists
seek and rely mostly on advice from friends and relatives. Consumers
believe that personal sources provide the most adequate and up-to-date
information (Bateson, 1995). As customers purchase more diverse and
complex products, consisting of more subproducts, personal sources of
information become increasingly important. Similarly, subjective rather
than objective criteria of product evaluation also become increasingly
important (Robertson, 1971). In addition, word-of-mouth techniques are
perceived as more credible and less biased (Lovelock, 1991) and can reach
more potential customers than any other promotional technique because it
has a multiple effect. Dissatisfied customers tell more than two times as
many people about their poor experiences than those who are satisfied
(Payne, 1993). In the manufacturing sector, personal sources of informa-
tion are less important because physical goods can be easily assessed using
tangible criteria rather than subjective advice.

Emphasis on Emotional Appeal

Because tourism and leisure services have more emotional and non-
rational appeal than physical goods, promotional campaigns aim to appeal
 Unique Characteristics of Tourism, Hospitality, and Leisure Services 43

to customers’ feelings by showing the distinct personality and features of

the tourism product. Therefore, for example, in promotional advertising
for an airline, there is little focus on aircraft types and more focus on the
comfort of the seats and welcoming attitudes of the cabin crew.

Emphasis on Off-Peak Promotion

In tourism, hospitality, and leisure, off-peak promotion is emphasized

when customers are at the initial stage of the decision-making process
about their vacations. Also, since the supply components of restaurants,
hotels, or airports are fixed, customer demand needs to be regulated. In
most cases, demand needs to be moved from the peak to the off-peak
season (Morrison, 1996). In addition, pressure on the infrastructure and
human resources (providers) in peak seasons also has to be regulated
(usually shifted to the off-peak season) to maintain quality of service. The
ability to produce more goods in times of high demand, and the ability to
store these goods in off-peak seasons, indicates that there is little need to
promote physical goods in a specific period of time.

Misleading Advertising

Marketers often adopt advertising practices that are misleading. For

example, promotional brochures often include untrue statements about a
destination. They exaggerate the standard of facilities or quality of attrac-
tions to encourage tourists to visit them. They use superlatives such as
“tropical and exotic” instead of “rainy,” “outstanding and superior”
instead of “standard,” etc. These statements are known as double talk.
They are used to generate customers’ interest, emotional appeal, and quick
sales. However, they also create very high customer expectations that
often cannot be fulfilled. Such statements can even lead to legal action.
Consequently, consumer protection has become an extremely important
issue. Misleading advertising practices, however, have a very short life.
Negative word-of-mouth publicity spreads very quickly and discourages
tourists from using the advertised service. The loss in consumer demand
causes a loss of revenue for the providers.

Greater Importance of Physical Evidence

When customers purchase tourism services they need more tangible

evidence of the service quality than in the manufacturing sector. This
physical evidence helps customers to make the right decision when choos-
44 Service Quality Management in Hospitality, Tourism, and Leisure

ing a tourism product. Physical evidence includes the environment where

the service is created and the service provider and customer interact. The
physical environment also includes tangible elements that are used to
communicate or support the role of the service.
There are two types of physical evidence: essential and peripheral. Es-
sential evidence (design and layout of the hotel and its furniture, carpets,
wall coverings, staff uniforms) is subject to key decisions by the providers.
Peripheral evidence has little value on its own. For example, the essential
physical evidence is represented by airline transportation, the peripheral by
an airline ticket. The airline ticket has no independent value. However, it
represents a right to experience the service. Similarly, the peripheral physi-
cal evidence represented by quality of food, cold course options, or free
bottle of champagne have little value on their own. However, they add value
to the essential services and help to better position service. The physical
evidence must be managed to ensure that it is matched by the quality of
personal service.

Greater Emphasis on Process

Emphasis on the service process is greater in tourism and hospitality than

in the manufacturing sector. The process involves procedures, tasks, sched-
ules, activities, and routines by which a service is delivered to the customer
(Payne, 1993) as well as how it is delivered. For example, the amount of
attention and effort that the staff put into servicing the customer can dis-
appoint or satisfy the customer. Providing a meal on time can make a custom-
er happy. Upgrading an economy class traveler to business class on a low-
capacity flight can create a positive customer experience and gain a favorable
reputation for the airline. The ability to provide a low-fat meal on request can
differentiate restaurant services and give a competitive advantage over restau-
rants with fixed menus (Payne, 1993). Consequently, process in tourism and
hospitality is a very significant source of competitive advantage. It also helps
to develop the right positioning strategy.

Greater Emphasis on Customer Service

Tourism and hospitality requires a greater emphasis on customer ser-

vice than the manufacturing sector. The provision of high-quality custom-
er service depends upon understanding why and what the customer buys
and determining what additional value can be added to the offer to better
satisfy the customer’s needs. Tourism includes a wider variety of activities
intended to ensure that customers receive the best possible service which
 Unique Characteristics of Tourism, Hospitality, and Leisure Services 45

matches their requirements in the most effective and efficient manner

(e.g., free advice, service quality audit, complaints handling). Tourism and
hospitality services are characterized by close personal contact between
the service provider and customer. This represents an advantage and an
opportunity to provide excellent customer service. However, it also allows
poorly trained employees to destroy the service experience. High-quality
customer service is a major source of competitive advantage and a major
differentiating element in tourism positioning (Payne, 1993).

Importance of Packaging and Programming

Packaging is used in tourism, hospitality, and leisure to sell services

when demand for them is lowest. Packaging refers to combining a range of
services and programs in one package for one price (Fridgen, 1996). The
combinations may include, e.g., fly-drive and fly-cruise packages, or ac-
commodation, meal, and event packages. Programming refers to special
activities, new events, and programs that add appeal to a package. Guided
nature tours or tourist information centers are examples of such program-
ming. Packaging and programming play a key role in selling travel and
hospitality services that are perishable and are lost forever if not sold when
they are offered. Packaging and programming are very popular with cus-
tomers because they make travel and travel planning easier, less time
consuming, more affordable, and offer greater assurance of consistent
quality. They are tailored to the individual consumer’s needs (Morrison,
1996). Also, packaging and programming help to match demand with
supply. In particular, they help to increase business in off-peak periods by
motivating customers to purchase services. For example, many hotels
offer lower room rates and weekend packages in off-peak seasons. Restau-
rants offer early-bird discounts for senior citizens (Morrison, 1996). The
packaging of travel and hospitality services is different from the packaging
of physical goods. Tourism and hospitality packages usually involve some
combination of services from principals, carriers, and intermediaries, and
they require cooperation of numerous industry groups.

Importance of Partnership and Cooperation

Because of the interdependent nature of tourism, hospitality, and lei-

sure, various sectors such as transportation, accommodation, or food and
beverage, and their organizations such as travel agents, motels, or bus
companies need to cooperate to deliver a total integrated product to a
customer in order to achieve customer satistaction. Partnership is also
46 Service Quality Management in Hospitality, Tourism, and Leisure

formed to share the costs of promotion (Fridgen, 1996). This cooperation

is very important and unique in tourism and hospitality.

Importance of the Relationship Between

Customers and Providers

Positive relationships between customers and providers are advanta-

geous for the tourism, hospitality, and leisure industry. The positive atti-
tudes of customers and providers toward each other can enhance the over-
all quality of the tourism product by developing a satisfying social
interaction during the service process. It is more important to enhance
these relationships in the tourism sector than in the manufacturing sector,
as these relationships have a direct impact on customer satisfaction and
retention.

Difficulty in Analyzing International Tourism Services

It is difficult to analyze international tourism services. Although ser-

vices can be exported and imported similarly to physical goods, the flow
of payments and commodities versus the flow of tourism services are
different.
In tourism export, the flow of tourism services and payments are in the
same direction. When Australia exports tourism services to Bali, the Balinese
tourists have to travel to Australia to experience these services in Australia.
The Australian tourism producers cannot take the product to tourists in Bali.
Tourists also pay for the services in Australia (see Figure 2.1).

FIGURE 2.1. Export of Tourism Services

flow of tourists
Australia Bali
flow of payments
a

In tourism import, services and payments move in the same direction.

When Australia imports tourism services from Bali, the Australian tourists
must travel to Bali to receive these services. Australian tourists also pay
for these services in Bali (see Figure 2.2).
 Unique Characteristics of Tourism, Hospitality, and Leisure Services 47

FIGURE 2.2. Import of Tourism Services

CO

flow of tourists
Australia Bali

flow of payments
SD

Because international tourism services are intangible and perishable,

one cannot easily measure a physical flow of these services passing
through countries, in contrast with tangible goods.

CONCLUSION

There is a growing recognition that tourism, hospitality, and leisure ser-

vices require different marketing and management approaches than physical
goods. These services share many common features that make them quite
different from manufactured goods. They have unique characteristics and
different evaluation criteria, distribution processes, pricing, promotional
focus, and cost structures. They include a high risk of purchase, are people
oriented, and are very much concerned with customer satisfaction. Tourism
and hospitality services differ from manufactured goods in many other
specitic features. To be successful and develop effective tourism strategies,
marketers and managers must understand these features.

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Sasser, W., Olsen, R., and Wyckoff, D. (1978). The Management of Service
Operations. Boston: Allyn and Bacon.
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 Chapter 3

Service Quality Concepts and Dimensions

Pertinent to Tourism, Hospitality,
and Leisure Services
Beth Schlagel Wuest

PERCEPTIONS OF SERVICE QUALITY

Guests’ perceptions of service quality vary widely. Likewise, guests’

perceived satisfaction with performed services also varies widely. Two
distinct variables influence their perceptions: customer expectations and
service standards. The gap between expectations and service standards/
performance is the primary indicator of overall service quality (Parasura-
man, Zeithaml, and Leonard, 1994b).

Customer Expectations

Guests are the judges of service quality (Berry and Parasuraman, 1991).
Their expectations of services greatly influence their resulting level of
satisfaction. It is far easier to please guests with lower expectations than
those with higher expectations. Consequently, an understanding of guests’
expectations is critical. Lewison (1997) categorizes service expectations in
three levels: essential, expected, and optional. Zeithaml, Berry, and Para-
suraman (1993) include three similar levels in their conceptual model of
customer service expectations: predicted, adequate, and desired.
Essential services are those which are the essence of the service busi-
ness. These services meet the fundamental requirements to continue op-
erations. For example, tourism, hospitality, and leisure service providers
must maintain reasonable business hours, admit or check-in guests, inform
guests of service details, and acknowledge complaints. Guests predict or
believe these services will be performed.
OM
52 Service Quality Management in Hospitality, Tourism, and Leisure

Expected services are those which guests assume the service provider
should offer in order to provide adequate service. Expected services go
beyond the essential services required for the company to stay in business.
However, because of guests’ expectations, such services need to be of-
fered in order to be competitive. Services such as convenient operating
hours, payment options, reservations, and reasonable information pertain-
ing to the services, facilities, and locale are expected by most guests. It is
also important to note that as guests are provided with additional services,
these services soon become commonplace. Over the years, expected ser-
vices increase. Guests become more demanding, requiring the service
provider to move beyond what is commonplace.
Other services are considered optional or desired. Guests consider these
services an added bonus that enhances the value of their visit. Optional
services express the uniqueness of the service provider and contribute to
its competitive edge. Today, the trend in optional services is toward indul-
gence, including ambiance, convenience, and unobtrusive service (“Indul-
gence Rules,” 1998). However, because guests generally do not expect
optional services, they ordinarily will not fault the service provider if such
services are not available. To effectively provide optional services, it be-
comes essential for the service provider to recognize the true desires of the
targeted guests.

Service Standards

Tourism, hospitality, and leisure service providers establish service

standards. Standards, however, are “changing benchmarks as customer’s
[sic] expectations increase and the organisation responds to such changes”
(Callan, 1994, p. 482). Appropriate service standards depend on the mis-
sion of the organization. Standards achieved, however, further depend on
two basic factors: the service policies of the organization and the actual
performance of the service procedures.
Service providers establish policies that are deemed comparable to their
image and appropriate to their target market. Such policies may be initi-
ated by management or a service team. They may be developed through a
formalized process or may simply evolve from experience and preferen-
ces. Policies may be elaborated in company documents or merely spread
by word of mouth throughout the organization. Regardless of the system,
service policies set the standards for the provision of guest services in the
company.
Service standards are only as good as the resultant performance. Al-
though service policies may establish guidelines and performance stan-
dards, personnel may not perform adequately. Some companies develop
 Service Quality Concepts and Dimensions D3

extensive service policies only to have staff fall short in performance.

After all, why would a recent survey (Dailey, 1997) find that respondents
were more satisfied with their experience of facing a drill in the dentist’s
office than ordering a meal at a fast-food restaurant? Consequently, ser-
vice managers who successfully set an example, relay procedures, and
motivate employees are more likely to capture the essence of a quality
service plan. Starbucks is a case in point. Their early goal of providing
excellent service has led to considerable success in a pricey coffee market
(Dailey, 1997).

Perceived Service Performance

Perceived service quality reflects the difference between guests’ expecta-

tions and the actual services performed (Parasuraman, Zeithaml, and Berry,
1994a). The extent to which expectations and service performance are
similar or different influence the extent to which guests are satisfied or
dissatisfied. Although varying approaches have been taken to study these
differences, the subjective disconfirmation conceptual model has been cited

positive or negative outcome. Interestingly, it has been noted that discon-

firmation may explain the perceived variance in service quality more than
mere per ormance (Parasuraman, Zeithaml, and Berry, 1994b). For exam-
ple, disconfirmation helps to explain the va in guests’ perceptions of —
rvice quality in situations when similar services were rendered.
Typically, guests consider services performed to be exceptional when
the expected services have been surpassed in quality and quantity. If
guests are pleasantly surprised by a host of unexpected optional services,
their level of satisfaction and rating of service performance will be consid-
erably higher. As an added bonus, a highly satisfied guest is one of the best
forms of advertisement. -
If guests’ expectations are sufficiently met with the services provided,
they will s the services as adequate. Unfortunately, what is adequate
today may not be adequate tomorrow. Further, mediocrity is not a standard :
by which companies will excel.
The worst-case scenario occurs when service performed does not measure
up to guests’ expectations. Poor service leaves a guest unimpressed, discour-
aged, and unsatisfied. Although, in some instances, the dissatisfied guest
represents an opportunity for the service provider to rectify the unpleasant
experience and correct service policies and performance, in too many —
instances the service provider is completely unaware of the guest’s displea-
 54 Service Quality Management in Hospitality, Tourism, and Leisure

sure. Although many guests let their dissatisfaction be known by telling the
front desk staff or the manager, according to a recent American Express.
Travel Index, 14 percent of leisure travelers do nothing and 4 percent never
return (“Handling Bad Hotel Service,” 1998).In another study conducted by
the Technical Assistance Research Corporation, dissatistied customers told.
nine or ten people about their unpleasant experience, while satistied custom-
ers told only four.tostive people (Vanderleest and_Borna, 1988). Just as a
highly satisfi ed customer can be a major asset, a dissatisfied guest can be a
liability.

CERN WN pase cls

maya DIMENSIONS OF SERVICE QUALITY
Service quality is the result of a,complex network of several dimen-
ssions. Through the years, researchers have been on a quest to identify the
most significant components of service quality. A variety of factors have
been identified as contributing to service quality.
Parasuraman, Zeithaml, and Berry (1988, 1994a) are among the most
recognized researchers in the area of service quality. Their development
= and refinement of the SERVQUAL battery has produced a generic mea-
) 4 sure of service quality through the examination of twenty-two service
YO IC items, which factor into five basic service dimensions (Parasuraman, Zei-
ANS thaml, andscat 1988, 1994a; Parasuraman, Berry, and Zeithaml, 1991).
ions consist
: of Telabvility,
reliability, tangibles, responsiveness,
p S.
agsurance, and empathy.
Reliability reflects the service provider’s “ability to perform service
dependably and accurately” (Parsuraman, Zeithaml, and Berry, 1988,
p. 23). Reliability includes “doing it right the first time,” which is one of
the most important service components for customers (Berry and Parasu-
raman, 1991). Reliability also extends to providing services as and when
allow promised and maintaining error-free records. Thus, the penchant to over-
i promise services and lead guests toward unrealistic expectations only
(ory "serves to undermine guests’ tolerance and trust.
Tangibles consist of the “appearance of physical facilities, equipment,
personnel, and communications materials” (Berry and Parasuraman, 1991,
p. 16). Although typically rated the least important of the five services,
tangibles are still considered a core service component. The importance of
tangibles can be illustrated by Holiday Inn’s recent endeavor to evaluate
and redefine their image after customers told them they were “looking a
little old” (Wagner, 1998).
Responsiveness represents the “willingness to help customers and pro-
vide prompt service” (Parasuraman, Zeithaml, and Berry, 1988, p. 23). It
 Service Quality Concepts and Dimensions oe)

has been said that “today luxury is time” (Watkins, 1998, p. 26). Conse-
quently, service providers’ ability to provide services in a timely manner is
a critical component of service quality for many guests.
Assurance reflects the “knowledge and courtesy of employees and their
ability to inspire trust and confidence” (Parasuraman, Zeithaml, and Berry,
1988, p. 23). Guests expect to feel safe in their transactions with em-
ployees. Situations in which employees enter guest rooms without knock-
ing, confront guests without appropriate identification, or misguide guests
with inaccurate information discredit the staff’s ability to reassure the
guest.
Empathy involves the “caring, individualized attention the firm pro-
vides its customers” (Parasuraman, Zeithaml, and Berry, 1988, p. 23). The
importance of empathy may be the root of the statement, “If one looks at
who is winning, it tends to be companies that see the guest as an individu-
al” (Watkins, 1998, p. 26). Due to guests’ desires that employees see
things from their point of view, Holiday Inn, Holiday Inn Select, and
Holiday Inn Sunspree properties are piloting an empathy training program
intended to help employees relate to their guests in a more empathic
manner (Wagner, 1998).
Numerous researchers have adapted the SERVQUAL battery to specif-
ic industries, products, and target markets. Saleh and Ryan (1991) were
among the first to analyze service quality in the hospitality industry using
SERVQUAL dimensions. More recently, Baker and Fesenmaier (1997)
effectively used the SERVQUAL model to study service quality expecta-
tion differences among three groups (visitors, employees, and managers)
involved in a tourism service encounter. Wuest, Emenheiser, and Tas
(1996) also used SERVQUAL as a basis for examining mature travelers’
perceptions of lodging service quality. Some researchers, however, have
questioned the effectiveness of SERVQUAL for the hospitality industry
(Fick and Ritchie, 1991; Johns, 1993). Webster and Hung (1994) adapted
and condensed SERVQUAL in an attempt to make it more manageable for
the hospitality industry. Similarly, Knutson and colleagues (1991) devel-
oped LODGSERY, a moditied version of SERVQUAL, which measures
the expectations of guests in the lodging industry and which substantiates
the earlier works on SERVQUAL. Stevens, Knutson, and Patton (1995)
also devised DINESERV, yet another take on SERVQUAL, intended to
measure guests’ expectations in the restaurant industry. Although scale
items measuring hospitality service quality may vary depending on the
specific end use, the same five service dimensions remain constant. Re-
gardless of the version or adaptation of SERVQUAL that is used, the five
56 Service Quality Management in Hospitality, Tourism, and Leisure

dimensions (reliability, tangibles, responsiveness, assurance, and empathy)

clearly appear to be the best and most consistent measure of service quality.

OBJECTIVES OF SERVICE

Why is customer service so important to tourism, hospitality, and lei-

sure service providers? Customer service has a direct impact on the cus-
tomer’s level of satisfaction, which, in turn, ultimately reflects on the
service provider’s bottom line. Although it is difficult to measure the true
impact of customer service, quality customer service has been cited as a
means for improving a variety of aspects of a business. The following
discussion focuses on several objectives of services.

Improve Guest Convenience

Many services contribute to the guest’s sense of convenience, comfort,

and well-being. Services such as accessible rest rooms, refreshment vend-
ing, shuttle service, and comfortable seating add to guest convenience,
enjoyment, and satisfaction and indirectly encourage guests to extend their
stay. The key to getting closer to one’s customers is making it easier for
them to do business with the service provider, better known as conve-
nience (Anton, 1996).

Enhance Service Provider’s Image

The number and quality of services offered establishes the image of the
service provider. For example, no-frills motels offer limited services in
order to reduce overall costs. Full-service hotels, on the other hand, pro-
vide almost every imaginable service to their guests. Although the price
paid by the guest may vary, the greater difference may be in the perceived
image of each of these properties.

Ensure Customer Security

Multiple services reinforce guests’ sense of security. Protective services

such as adequate lighting, security staff, emergency medical facilities,
guest room locks, sprinklers, and clearly marked exits instill confidence.
Conversely, in a study commissioned by Lodging Hospitality, question-
able neighborhoods and lack of deadbolt locks were cited as the primary
reasons for guests to avoid lodging at a hotel (Wagner and Watkins, 1994).
 Service Quality Concepts and Dimensions oH

Generate Traffic

Quality customer service has the potential to generate increased traffic

for the service provider. Satisfied guests will be more likely to extend their
stay, return to the destination, and recommend the property to other poten-
tial guests. Further, the delivery of quality service and customer satisfac-
tion has been clearly linked with profits, cost savings, and market share
(Sager, 1994). As a result, a satistied guest is a key element in improving
traffic and creating repeat business.

Establish a Competitive Edge

Tourism, hospitality, and leisure service providers, as members of the

service industry, are expected by the great majority of potential guests to
provide a set of baseline services. However, service providers who extend
their services beyond minimal expectations have a far better chance of
satisfying their guests. With creative ideas and a strong understanding of
the needs and desires of their guests, hospitality service providers are
developing innovative, extensive service strategies. The “critical differ-
ences in customer/guest service are what often separate hospitality indus-
try leaders from industry followers” (“The New Imperative,” 1998, p. 54).

Customer Demand

By providing specific services, businesses can generate demand among

certain target markets. Business travelers, family vacationers, and conven-
tioneers have been among the most frequently targeted groups. Each group
requires a series of customized services that can be promoted as a special
package in order to attract greater guest demand. According to a survey
conducted by Lodging Hospitality, toptlight businesspeople use and ex-
pect the amenities of home including such services as basic cable tele-
vision, newspaper delivery, coffee, room service, fitness facilities, and laun-
dry/dry cleaning (Wolff, 1998). The quality-conscious service manager
should provide these services if vying for travel dollars and attempting to
generate customer demand among business travelers.

CONTINUUM OF SERVICE

When looking for ways to improve service quality, hospitality industry

service providers often focus on the face-to-face encounter with guests. It
58 Service Quality Management in Hospitality, Tourism, and Leisure

seems only natural to assume that the guest will remember and be in-
fluenced by a positive, personable experience with staff. However, the
guest’s overall perception of service quality results from a variety of
experiences with the service provider over a period of time. Therefore, it is
important to encourage service providers to look not only at the on-site
personal experience of the guest, but also at events that precede and
follow. To provide effective services throughout the service continuum,
consultants such as KPMG’s Customer Centric Management have broad-
ened their scope to enable companies in the hospitality industry to provide
adequate services from the initial reservation through checkout and mar-
keting follow-up (“The New Imperative,” 1998). A service continuum
illustrates how a guest encounters the services provided over a period of
time. On the continuum, services are described as those the guest experi-
ences before entering the facilities of the service provider, those the guest
encounters while the service is actually being performed, and those that
occur after the guest has departed (see Figure 3.1).

Before

Information about hospitality, tourism, and leisure services is marketed

in a variety of ways—television and radio spots, newspaper and magazine
advertisements, pamphlets, direct mail flyers, Web pages, and billboards,

FIGURE 3.1. Continuum of Service: Before, During, and After the Customer
Encounter with the Hospitality Service Provider

|={=} (0)g-) During After

Check-In/ Customer Follow-up

Point of Entry

Payment Terms Complaint Resolution

Guest Assistance Frequent Guest

Incentives

Physical Facilities

Checkout/
Point of Departure
 Service Quality Concepts and Dimensions 59

to name a few. Such information gives potential guests their first percep-
tion of the services provided and contributes to the establishment of their
expectations. Consequently, if the services are marketed in a straightfor-
ward, honest format, they will be more apt to measure up to guests’
expectations. Information must also provide sufficient detail to answer
potential guests’ basic questions, and if possible, a means for acquiring
additional information. For example, the guest will need clear directions,
operating hours, and other essential details to be able to successfully
utilize the services.
Many tourism, hospitality, and leisure service providers encourage
guests to make advance reservations. For many guests, this is their first
encounter with the service provider. Whether reservations are made direct-
ly with staff on the property, or through a central reservation center, re-
servationists must convey a sincere desire to assist the guest and enable the
guest to access the facilities with ease.
Customers have become accustomed to convenient hours of operation.
Service providers must establish convenient hours of operation and main-
tain them in accordance with those posted. Offering consistent services
without unexpected interruptions will go a long way in establishing a loyal
customer base.
The old adage “first impressions are lasting impressions” seems equally
true among tourism and hospitality facilities. Upon entering the grounds of
the hotel, restaurant, or other tourist facility, customers gain their first im-
pression. Design, maintenance, and aesthetics of parking areas, grounds,
and facilities, appropriateness of signs, and adequate lighting and security
all add to the quality of the impressions generated.

During

When the guest arrives, the service provider has the opportunity to
interact face-to-face with the guest. Because guests experience services
and facilities in a variety of ways and because many guests feel that any
contact with employees is a service experience, all employees must be
considered as part of the service equation.
As guests arrive, they typically anticipate a most pleasant experience.
After all, isn’t that why they spend more than a little time in planning their
travel or recreation? Guests want their first encounter with the service
provider to be consistent with their expectations. Pleasant and efficient
service at the point of entry or check-in must be consistent with guest
expectations.
Monetary exchanges between service providers and guests require
careful consideration. Customers prefer options tor making payments,
60 Service Quality Management in Hospitality, Tourism, and Leisure

such as cash, checks, traveler’s checks, and a variety of credit cards.

Service providers, on the other hand, have to weigh the profitability,
efficiency, and security of providing an array of alternatives. Guests also
expect efficiency and security, as well as accuracy, in their transactions
with the service provider.
Of all services, guest assistance typifies what is thought of as “pure”
customer service. The elements of human interaction, personalized ser-
vice, and responsiveness to guest needs are the essence of guest assistance
and service. Without acceptable provision of these core services, service
providers will have difficulty earning the guest’s vote of confidence. Al-
though it is common to associate quality guest services with “high-end
luxury properties,” even budget properties are able to meet their guests’
needs through creative solutions. For example, some budget hotels that are
economically unable to provide room service have developed partnerships
with nearby restaurants. Hospitality Franchise Systems, with their 4,200 fran-
chised hotels under the Days Inn, Howard Johnson, Park Inn, Ramada,
Super 8, and Villager motel chains, has partnered with Pizza Hut to deliver
to over 900 of its hotels (Rubel, 1995). Such ideas prove to be win-win
solutions for everyone involved: guests, property managers, and outside
service providers.
Physical facilities reflect the policies of management and signify the
quality of guest service. Properties that have been maintained and appro-
priately updated give the guest a feeling of cleanliness, security, and safe-
ty. Overall, the condition of the property suggests a level of value (or lack
thereof) to the guest. Even simple tasks such as replacing light bulbs,
maintaining parking areas, and checking rest rooms for cleanliness con-
tribute to the guest’s perception of the property. Obviously, remodeling
and redecorating spaces, which is a costly undertaking, should be included
in long-range plans. Staybridge Suites by Holiday Inn has gone so far in
providing satisfactory facilities that they adopted an interactive television
system whereby extended-stay guests can select from alternate floor plans
and have their suite rearranged for them while they are out (Staybridge
Suites by Holiday Inn, 1998).
Target markets ordinarily require targeted services. Guest services fo-
cus on the special needs and desires of the anticipated guests. For example,
family-focused tourism destinations provide specialized services for all
members of the family. Business-centered properties, on the other hand,
narrow their offering of services to the needs of the business traveler. Walt
Disney World Resorts attempts to meet its varied target markets through
six resorts, each with a distinctive combination of space, facilities, themes,
and entertainment options (“Walt Disney World Resorts,” 1998).
 Service Quality Concepts and Dimensions 61

Guest checkout/point of departure signals the last chance for personal,

face-to-face contact with the guest. Not only does this experience contrib-
ute to the guest’s lasting impressions, but it is also the property’s last
chance to inspire the guest. Ideally, if any problems have surfaced, this is a
pertect time for resolution. At the point of departure guests are somewhat
sensitive and require special care. After all, their vacations are coming to
an end, they are going back to work, they may be tired, their schedules
may have been disrupted, or they may have spent more than they had
planned. Regardless of reasons, a host of situations preoccupy their thoughts,
making friendliness and efficiency an important part of departure procedures.

After

After leaving the premises of the service provider, the service experi-
ence is not yet complete. Many opportunities remain for the continued
provision of quality service.
Guest follow-up allows evaluation of the types and quality of services
provided. Tourism, hospitality, or leisure service providers have responsi-
bility for assessing as well as developing and delivering their service
programs. Surveys provided near the time of departure that can be com-
pleted and returned at a later date, follow-up telephone interviews, and
mailed questionnaires have been used by hospitality service providers to
evaluate their service plans. Assessments enable the service provider to
identify whether the appropriate services were provided, if other pertinent
services were overlooked, and if customers perceive services in the same
manner as the service provider. Most important, however, is the fact that
assessment results indicate appropriate modifications for service policies.
In some cases, guests depart the premises before their concerns or
complaints are fully resolved. In these instances, service providers still
have an opportunity to convert the guest’s experience into a positive one.
Studies show that customers who express concerns and have their prob-
lems effectively resolved are often more loyal than customers who never
faced undesirable experiences. However, studies also show that every
complaint that is voiced represents about 2,000 that are left unvoiced
(Plymire, 1991). An effective customer complaint resolution procedure
and a vehicle allowing easy guest access to staff when problems occur are
simply mandatory customer service components in today’s competitive
environment.
Frequent guest incentive programs are another means of promoting
customer service and repeat business. Through correspondence and other
marketing techniques associated with frequent guest incentive programs,
guests can be made aware of specific services and recent developments.
62 Service Quality Management in Hospitality, Tourism, and Leisure

The incentive program also provides an opportunity to maintain contact

with guests.

TOTAL SERVICE COMMITMENT

Quality service emanates from a total service commitment. Tourism,

hospitality, and leisure service providers must address service issues by
first developing appropriate policies and procedures, by attaining a firm
commitment from service employees, and by measuring the ongoing ef-
fectiveness of their service plan.

Development of Service Policies and Procedures

Service commitment begins with the establishment of service policies

and procedures. Policies must be developed that are in line with the de-
sired service image and target market. Managers generally have a strong
sense of the desired service image. Many also believe they have an equally
good understanding of what services their target market wants and at what
price. However, many managers miss the mark when it comes to profiling
their customers’ needs. Likewise, employees will likely have a different
perspective than their managers with respect to the feasibility and effec-
tiveness of service polices and procedures. Heymann (1992) encourages
the development of customer-driven policies and procedures with input
from customers as well as from employees who have regular contact with
guests. The opinions of guests and employees should be incorporated into
the policymaking process in order for the resulting policies and procedures
to be rooted in reality. In all cases, policies and procedures must be consis-
tent, effective, and efficient and must address all of the important dimen-
sions of service quality.

Commitment from Service Provider’s Employees

Quality service requires a commitment on several levels. Whether it is

the manager making policy decisions or an employee addressing guests’
concerns, service must be projected from a unified front. The only true
means of providing seamless service is through a team approach, with
management guiding and ensuring full implementation of the process.
Service providers must involve all of their staff in each department in
an effort to provide quality service. Everyone in the organization should
work together toward the common goal of delivering quality service. The
 Service Quality Concepts and Dimensions 63

staff must fully comprehend the significance of providing quality service;

they must truly understand and respect the essential roles that other depart-
ments play in the delivery of quality service (Heymann, 1992). Recogni-
tion of the integration of departmental functions enables employees to see
greater value in their own roles as component providers of quality service.
Empowerment is critical if the team approach is to function properly.
Numerous organizations tout the value of the team approach. Yet many of
these same organizations fail to empower their employees to be effective
service providers. A commitment to service means everyone in the orga-
nization must have the power to serve the needs and problems of guests
(Kirwin, 1992). Consequently, frontline employees must be given the
credibility and granted the authority to resolve guest problems without
constant approval from a manager or other higher authority.
Management plays a vital role in the delivery of quality service. Man-
agement guides the tourism, hospitality, and leisure organization toward
the achievement of quality service. The leadership, guidance, and actions
of managers set the stage for effective service delivery. One successful
hotel manager stressed the importance of management’s actions when he
indicated that a manager cannot teach values. Instead, he believes that
employees learn by observing the behavior and values of the manager
(“Robert Small,” 1987). Heymann (1992) recommends transformational
leadership, managers who “communicate high expectations and promote
intelligence, rationality, and careful problem solving” and who “treat em-
ployees as individuals and give personal attention” (p. 55). Essentially, the
promotion of quality service internally to employees goes a long way
toward etfectuating quality service to guests (Lewis, 1989),
Much of management’s role in serving guests lies in the development of
a service-oriented staff. Managers’ ability to hire, train, motivate, and
reward service-oriented employees greatly influences the organization’s
ability to provide quality service. It is often said that the key to quality
service is hiring the right employees. One restaurant executive said it was
far more important to him to hire a good, friendly person than merely a
competent one, because he could more easily train the person to do the job
(Dailey, 1997). Country Hospitality evaluates potential employees accord-
ing to what they call “PICI”—passion, intelligence, compassion, and in-
tensity (Kirwin, 1992). After hiring quality employees, regular staff train-
ing must emphasize the value of the service program, incorporate the
dimensions and continuum of quality customer service, and develop tech-
niques for effective achievement of service quality. Continual motivation,
performance assessment, and reward are essential ingredients in maintain-
ing positive, productive employees. Regular and consistent feedback on
64 Service Quality Management in Hospitality, Tourism, and Leisure

job-specific responsibilities followed by fair and meaningful reward and

recognition helps to motivate employees toward the provision of enhanced
service quality (Heymann, 1992).

Assessment of Effectiveness

A total service commitment requires regular and continual assessment.

Reasonable standards and effective measures of performance must be
developed to ensure quality service. Currently, many tourism, hospitality,
and leisure service providers have assessment systems in place. Some
service providers seem to feel that they are overburdened with assessment.
However, many of these systems need to be reexamined. For example,
measuring service quality solely through guest comment cards cannot be
termed a reasonable assessment of performance, since only 2 to 3 percent
of guests respond to the request (“Handling Bad Hotel Service,” 1998).
Systems of assessment must be devised with an intent to improve perfor-
mance (Heymann, 1992). Effective measurement must be broad based and
focused on the dimensions of service quality.

SUMMARY

A foundation of concepts and dimensions of service quality will guide

the tourism, hospitality, and leisure service provider in the development of
a quality service strategy. Understanding the factors influencing guests’
perceptions of service quality—such as expectations and service stan-
dards—illustrates the importance of ongoing assessment and revision of
service plans. Knowledge of the dimensions and continuum of service is
essential for the service provider to develop a comprehensive and truly
effective service strategy. Finally, recognizing the objectives of quality
service and the need for a total service commitment will encourage man-
agers to view quality service as their priority and enable them to take the
necessary steps to ensure its success.

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 Service Quality Concepts and Dimensions 65

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 Chapter 4

The Impact of People, Process,

and Physical Evidence on Tourism,
Hospitality, and Leisure Service Quality
Karl Titz

INTRODUCTION

The experience of great service vanishes in the blink of an eye. It is

timeless, unobtrusive, and invisible. Great service is being seated for din-
ner at Charlie Trotter’s in Chicago or Roger Verge’s Le Moulin de Mou-
gins in the south of France at 10:00 p.m. and looking at your watch at
1:30 a.m. not knowing where the time went. It is checking into your hotel
room without effort. Some may argue that people remember only the
extremes. However, while poor service is remembered, great service goes
unnoticed. Creating a service environment where customers are given the
gift of experience without interference from the service provider is the
challenge in restaurants, hotels, transportation systems, and national parks.
Understanding the components of a quality service experience is criti-
cal to long-term business health in the hospitality, tourism, and leisure
(HTL) organization. The lifeblood of HTL industries is the customer. En-
suring that the customer receives an appropriate level of service is critical
to success. Establishing service at a level beyond what the customer ex-
pects or is willing to pay for is as problematic as establishing a level of
service below what the customer expects. Customer perception of quality
in an HTL context depends on his or her expectations. Some firms aim to
delight the customer by exceeding expectations. However, is this a prudent
business strategy for all firms? Businesses have the ability to manage
customer expectations and, therefore, the experience of service.
The first challenge to anyone who sets out to discuss quality service is
to establish a common meaning of what service is. Albrecht and Zemke
67
68 Service Quality Management in Hospitality, Tourism, and Leisure

(1990) and others suggest that service is intangible. If service is intangible,

how can one understand what quality service is? One aim of this chapter is
to establish a foundation for defining service and quality for the HTL
industries. One definition might be that service is useful labor that does
not produce a tangible commodity. But is the act of being served somehow
tangible? How do customers know they have been served and, if they have
been served, how will they determine if the delivered service was of
acceptable quality? Quality could be interpreted as the degree of excel-
lence and superiority in kind. Both of these definitions together or sepa-
rately do not capture the experience of quality service in an HTL context.
The truth is, there is no single or simple definition of this complex phe-
nomenon. And if we ask our customers what quality service is, they may
ultimately tell us that quality service is not a “what” but a feeling. “I don’t
know what it looks like or what it takes to bring it together, but I know
what I feel like when I have experienced it.” It is difficult to evaluate a
feeling, but the service encounter has tangible artifacts that we can evalu-
ate.
“Service quality refers to customers’ appraisals of the service core, the
provider, or the entire service organization” (Duffy and Ketchand, 1998,
p. 241). Langevin (1988) suggested that meeting expectations and needs
of customers was the central issue in the perception of service quality.
Parasuraman, Zeithaml, and Berry (1988) postulated that the difference
between actual service provided and the customer’s expectation was a true
measure of customer service. SERVQUAL measures five dimensions of
service space (Parasuraman, Zeithaml, and Berry, 1988):

1. Tangibles: Physical facilities, equipment, and appearance of em-

ployees
2. Reliability: Ability to perform the required service dependably and
accurately
3. Responsiveness: Willingness to help customers and provide prompt
service
4, Assurance: Knowledge and courtesy of employees and their ability
to inspire trust and confidence
5. Empathy: Caring and individual attention provided by the staff

Perceived service quality measurement is based on gaps between the ex-

pected level of service in each of the domains and an evaluation of the
actual service received. Three central components work in concert to
produce a quality service experience in HTL: the people, the processes,
and the physical evidence of the experience.
 The Impact of People, Process, and Physical Evidence 69

Service is not provided out of thin air but rather through interactions
customers have with HTL organizations. Customers view their service
experience through the lenses HTL creates. People, processes, and physi-
cal evidence are choreographed to focus the customer’s experience of
quality service. Traditionally, frontline service employees are the lowest
paid but have the greatest impact on the HTL customer. Frontline em-
ployees are trained in the processes of providing guest service. The pro-
cesses that support customer service may be standards and procedures,
technology, communication flow, and organizational characteristics and
culture. Because of the intangibility of service, the artifacts or physical
evidence of service become critical to the service experience. This chapter
discusses people, process, and physical evidence, laying a foundation for
understanding quality service delivery in HTL.

PEOPLE

Analysis reveals three distinct groups of people who participate in the

customer’s experience of quality service (Bateson, 1985; Schneider, 1980,
1990):

1. Customers
2. Employees
3. Management

A distinction must be drawn between different types of customers.

Whether riding on an airline, checking into a hotel, or dining in a restau-
rant, homogeneity of the customer mix contributes to a positive customer
experience. A heterogeneous customer mix may create problems. For
instance, Disney has received significant attention in the press because of
a boycott by one customer group intolerant of another customer group.
Imagine a college fraternity being booked on the same floor of a hotel as a
family reunion, or the last-minute business traveler seated next to a cus-
tomer with a deeply discounted ticket. It is important to manage the cus-
tomer mix with this reality in mind.
Before developing a service strategy in HTL, management and em-
ployees must understand customers’ expectations. Failure to develop this
basic understanding will result in organizational waste and dissatisfied
customers (Lewis and Nightingale, 1991). Baker and Fesenmaier (1997)
used a modified SERVQUAL instrument to measure responses from the
three constituencies: employees, managers, and customers. The authors
70 Service Quality Management in Hospitality, Tourism, and Leisure

found that both employees and management significantly overestimated

customers’ service expectations at a Midwestern U.S. theme park. Inter-
estingly, managers attributed significantly higher service expectations to
customers than frontline employees did. This occurred in spite of the as-
sumption that management was aware of marketing research and the nature
of the relationship between product and customer. Balancing the level of
service is requisite to successfully serve the customers’ needs and main-
tain an economically viable presence in the marketplace.
J. W. Marriott had a simple philosophy about the treatment of em-
ployees. “Take care of your employees, and they will take care of your
customers” (Marriott and Brown, 1997, p. 34). Diaz and Park (1992)
found that employees who work in geographically isolated hotels and
resorts experienced high levels of job satisfaction despite a significant
dislike of isolation. The employees reported signiticant positive feedback
from management. Pizam and Neumann (1988) noted two significant
determinants in employee satisfaction: meaningful work, and feedback
from peers and supervisors. Setting standards and communicating them to
service employees is not enough to guarantee quality service in an envi-
ronment devoid of other positive motivators and stimuli.
The service encounter and the customer’s evaluation of the quality of
the service encounter are critical to service business success. A common
thread in creating a successful service climate is the employees who ulti-
mately provide customer service. Not all employees have the temperament
to work in a customer service capacity. It is important for the “health” of
both the individual and the organization to select qualified candidates.
However, management must cultivate a service environment, which is not
accomplished by words alone but by observable actions that promote good
service. Service must be part of the culture. Management’s task is to
identify viable and homogeneous markets, then create a service climate
responsive to those markets. That service climate is neither overwhelming
nor underwhelming, but a carefully orchestrated response to customer
expectation. However, people are not the only component of a quality
service experience. The processes that have been developed to aid em-
ployees in delivering a quality service experience are critical.
Quality service is a willful act. An intrinsic desire and willingness to
serve distinguishes great service employees (Heskett, 1986). The chal-
lenge to managers in the service arena is to identify employees who dem-
onstrate “flexibility, tolerance for ambiguity, the ability to monitor and
change behavior during the service encounter, and empathy with the cus-
tomer” (p. 123). Identifying quality service employees is difficult. However,
 The Impact of People, Process, and Physical Evidence 71

there is a growing body of research on selection and retention of em-

ployees in the HTL industries.

The Self-Monitoring Scale

The practice of preemployment screening was first introduced in the

1920s and 1930s (Anastasi, 1985) and has recently increased in the United
States (Kiechel, 1985). Service settings have seen the use of a personality
measure designed to evaluate an individual’s service orientation and pre-
dict the qualities of the employee in the service encounter (Hogan, Hogan,
and Busch, 1984). The self-monitoring scale, which measures the ability
of an individual to monitor and change his or her behavior (Snyder, 1974),
was used in a hospitality setting by Samenfink (1992). In addition to
assisting in the identification of employees with a customer service orien-
tation, Samenfink suggested that implementation of the self-monitoring
scale might decrease employee turnover, increase the number of guest
service employees likely to actively sell products, thereby increasing reve-
nue, and aid in identifying employees with the ability to adjust their
behavior to customer needs. Private companies often construct preemploy-
ment screening programs designed to identify qualified candidates. How-
ever, Management actions play a crucial role.

PROCESSES

Are a service delivery system and a quality service experience mutually

exclusive? How do we build a service delivery system with the flexibility
to adapt to individual needs? For example, try ordering a hamburger trom
McDonald’s without pickles. The process collapses. Are we not shackling
quality service with the nomenclature developed for a bygone industrial
age? We need to examine the processes associated with quality service.
Processes cover a spectrum of activities related to quality service delivery
and deal with the procedures and policies a company establishes to deliver
quality service. A discussion of operational-specific processes is beyond
the scope of this work. However, the reader should gain a familiarity with
the best practices that contribute to a quality service space. A service
environment must be planned for the specific service activity that will take
place. Significant processes related to quality service delivery discussed
here are benchmarking, continuous quality improvement strategies, ser-
vice evaluation, and application of technology.
¥2 Service Quality Management in Hospitality, Tourism, and Leisure

Pye (1994) classified six approaches to service improvement:

1. Task analysis: Tasks were viewed as a series of trainable steps

2. Models of behavior: Makes a comparison of good and bad through
video and pictures
3. Influencing the environment: Service training done with a whole
group; little headway can be made if the manager fails to set a good
example
4. Recruitment approach: Hiring people with a service orientation
5. Objective setting approach: Based on analysis of customer service
ratings and setting appropriate objectives to meet future goals
6. Structure approach: Empowerment and moving the locus of control
to the frontline employee

Pye suggests that these approaches are not universal in application.

Management must consider three factors before implementing or changing
a process:

1. Customer satisfaction level or expectations

2. Organizational culture
3. Nature of the transaction

Quality service improvement is not a prescriptive process but an analyt-

ical and dynamic process. Successful process implementation requires a
systemic approach. The six change strategies Pye identified have appropri-
ate applications. Applying them without consideration of the genesis of
the problem may lead to unsatisfactory or less than optimum results.
Increasingly, benchmarking has been used to examine internal practices as
well as the practices of competitors to determine if a best practice exists.

Benchmarking

Benchmarking measures performance in conjunction with improve-

ment initiatives to measure comparative operating performance and identi-
fy best practices. Benchmarking, which is used by management to im-
prove service quality and remain competitive, measures four domains:

1. Profitability
2. Service Quality
3. Marketing Effectiveness
4. Productivity
 The Impact of People, Process, and Physical Evidence 73

The National Association of Accountants (1998, p. 44) specified seven

steps to implement a process called Multidimensional Balanced Bench-
marking (MBB):
Le Define the service unit, which could be based on individual units,
such as the front desk of a hotel or the entire hotel. It could be the
central reservations center for a large travel agency or restaurants in
a particular region of the country.
N . Identify the data needed to measure and rank the service unit on the

four dimensions.
. Compare the required measures with existing data and determine if
additional measures must be made. Complete additional data collec-
tion as required.
. Identify comparative service units and rank performance of the units
in terms of strongest performer to weakest performer in each of the
four domains. Verify with operation managers that no anomaly ex-
isted during the data collection period.
. Compare the best practices with the weaker units to identify differ-
ences between operating practices. This comparison should be made
in all four domains.
. Implement best practices where applicable and consistent with com-
pany culture and philosophy.
. Begin the analysis again, applying it to other service units and oper-
ating methods.
The Benchmarking Exchange (1998) ranked the top five business pro-
cesses benchmarked in 1997:
I. Human Resources
2. Information Systems
3: Benchmarking
4, Purchasing/Accounting
5: Customer Service
The Benchmarking Exchange predicts that as companies become more
externally focused, customer service issues will gain momentum in the
years to come. Benchmarking will become critical as more companies
explore opportunities over the Internet and develop processes to better
serve customers through this medium.

Blueprinting

Another method of evaluating process is blueprinting (Shostack, 1992).

Blueprinting examines the flow of service. The question ultimately to be
74 Service Quality Management in Hospitality, Tourism, and Leisure

answered is, does this activity add value? If it does not add value, why do
we do it (LeBoeuf, 1993)? For example, during the 1970s and early 1980s
it was popular in many restaurants to serve a chilled salad fork. The forks
were ceremoniously presented to each customer to ensure they were aware
of the added “service.” But, in the kitchen, we continued to hold the salad
greens at room temperature and proceeded to put the greens on hot plates,
fresh from the dishwasher! The amenity war of the late 1980s was another
example of misplaced service. Hotels loaded guests up with toiletries but
kept them waiting in line to check out. Examples of service gone awry in
HTL are legion. Blueprinting is a way to systemically analyze the service
process to ensure that customers are receiving the appropriate level of
service.
Blueprinting requires two assumptions to be effective. First, the overall
service design determines the quality of the service encounter. Second, the
design and control of sensory input determines the nature of the service
encounter (Shostack, 1984). Applied in a restaurant or other HTL setting,
service blueprinting can be a useful tool in analyzing and providing an
appropriate level of service (Smith, 1994). The three areas addressed in
blueprinting are processes, means, and evidence (Shostack, 1992). Process
relates to the procedures involved in service provision. An example would
be scripting the reservation interaction in a hotel or airline reservation
center. Means may include the frontline employee and increasingly tech-
nological interfaces over the Internet and in the facility. Evidence would
include the ambiance, the physical facilities, the product, as in the case of
a meal or a seat on an airplane, or the ease and speed of navigating a Web
site. In spite of our best efforts to provide quality service, sometimes we
fail. The way in which service breakdowns are handled is critical to the
guest’s perception of quality service.

Handling Service Problems

There is an old saying, “It is not what you say but how you say it.”
Research in service breakdown and complaint resolution is receiving in-
creased attention in the literature and is the subject of Chapter 11 in this
book. Anyone who has managed or worked in operations knows the chal-
lenge of dealing with difficult situations and customers. HTL customers
hope that everything will flow smoothly, but sometimes it does not happen
that way. The way a service breakdown is dealt with will determine cus-
tomer experience. Sparks and Callan (1996) measured the perceived level
of effort in service recovery and the effect of effort on service evaluation.
Effort was measured using explanations, offers, and communication style.
Explanations were either internal, “This was our responsibility, and I
 The Impact ofPeople, Process, and Physical Evidence fp

assure you we will act to correct the situation,” or external, “We are sorry,
we have no control over the vending machines. You can call this number
to get your money back.” Customers measured the offer in terms of the
service breakdown. The offer needed to be appropriate to the situation to
mitigate the effects on service evaluation. Communication was evaluated
on the basis of empathy. The more empathic the communication style, the
greater the likelihood of a mitigating effect on service. Empathic commu-
nication was found to have mitigating effects even when the other two
responses, explanation and offer, were rated lower by the customer. Keep-
ing customers is more cost effective than finding new ones. Service indus-
tries need to recognize this reality and develop training programs to ad-
dress weaknesses in their response to service breakdowns.

Customer Comment Cards

Customer comment cards enjoy widespread use because they are eco-
nomical and easy to administer. However, is the information provided by
comment cards sufficient to facilitate analysis of the central issues of
quality service? Prior work by Cadotte and Turgeon (1988), Herzberg,
Mausner, and Snyderman (1959), Johnston (1995a), Johnston and Hei-
neke (1998), and Silvestro et al. (1990) suggested that service evaluation
consisted of four distinct factors:
. Satisfiers
. Dissatistiers
. Criticals
. Neutrals
BWNFR

Satisfiers do not detract from a service evaluation if they are not pres-
ent. But, when added to the service equation, satistiers significantly im-
prove the customer’s perception of service. For example, fresh cut flowers
and a heated towel rack would add significantly to a customer’s quality
service evaluation. In the absence of fresh flowers and heated towels, the
service quality would not suffer.
Dissatisfiers can be classified as adequate or inadequate. HTL organiza-
tions will have service quality problems if the room is dirty or the food is
cold. However, service providers will not be rewarded with higher evalua-
tions for a clean room or hot food.
Criticals are the elements significantly impacting service evaluation
positively and negatively. Timeliness would be a critical determinant of
customer service, as would responsiveness to customer needs.
Neutrals have the smallest impact on customer service evaluation. New
employee uniforms or an expensive change in china patterns may be
76 Service Quality Management in Hospitality, Tourism, and Leisure

examples of actions that have no impact on customer service evaluation.

There is a debate as to whether customers’ service antennae are as finely
tuned as we give them credit for (Johnston and Heineke, 1998). Rather,
there appears to be a zone of tolerance before a factor becomes significant-
ly negative or positive in service evaluation (Berry and Parasuraman,
1991; Johnston, 1995b; Kennedy and Thirkell, 1988; Miller, 1977; Oliver,
1980; Woodruff, Cadotte, and Jenkins, 1985; Zeithaml, Berry, and Parasu-
raman, 1993). However, customer feedback will continue to be sought.
It is management’s responsibility to ensure the information collection
process is relevant to the operation and identifies satisfiers and criticals.
Johnston and Heineke (1998) suggest that limited time and resources be
spent on neutrals because of the relative lack of importance to customers.
However, dissatisfying factors need to be brought up to an acceptable
standard. By treating them as satisfiers, management can ensure they are
executed at an appropriate level. Management must be economical and
efficient in dealing with dissatisfiers.
Criticals are the facets of service that will significantly add or detract
from a quality service experience. Criticals determine future purchase
intention and are the issues to which management must pay closest atten-
tion. Travelers place a high value on safety. But how many customer
comment cards in HTL inquire about safety? Timeliness and responsive-
ness to customer needs are also critical to customer satisfaction and quality
service. Today, management has a variety of data collection alternatives in
addition to the traditional customer comment card. A variety of technolog-
ical innovations have made the process of quality service assessment and
delivery easier.

Technology

Technology is finding increasing application in HTL. Today technology

allows customers to check into a hotel at an automated lobby kiosk and be
issued a smart card for room access and charges. This scenario may not be
appropriate for all settings but has dynamic application in HTL. Custom-
ers can click on Marriott Corporation’s Web page and obtain a listing of
available dates and rates for Marriott properties worldwide. A road map
from either the local airport or places hundreds of miles away can be
downloaded, airline tickets can be purchased, and seating for flights can be
selected. Seamless technology is critical to quality service. As a matter of
fact, travelers increasingly expect these technological enhancements, thus
making them a competitive necessity (Sussmann and Baker, 1996). But
successful technology implementation in hospitality has produced mixed
results. Productivity improvement, one of the hoped-for and touted results
 The Impact ofPeople, Process, and Physical Evidence Ti

of technology, is often not realized without a change in management

approach and the preparation of the personnel affected (Haywood, 1990).
Three types of technology have been discussed in the business literature
(Grosse, 1996):

1. Product technology
2. Process technology
3. Management technology

A systems approach to technology applications yields a somewhat dif-

ferent classification scheme:

1. Operating systems
2. Communication systems
3. Management systems

Specifically in hospitality, we have seen application of technology in

four areas, according to Kirk (1996):

. Building technology
. Environmental management technology
. Food production and service technology
Fe
WN. Information technology

This discussion will focus on information technology. Grosse (1996)

suggests that a firm’s technology implementation may not distinguish it
competitively. However, superior use of technology can create competi-
tive advantage. For example, Harrah’s Casinos recently patented a real-
time table game tracking system. At present, the system contains over
12,000,000 customer records on Harrah’s players worldwide (Harrah’s
Entertainment, 1998). Several questions must be answered prior to
technology implementation (Ford, Ford, and LeBruto, 1995):

1. Why should the firm undertake technology implementation?

2. Who are the intended users?
3. What is the purpose of the system?
4. When is the information needed?
5. Where is the information stored?

The opportunity for technological application in HTL is only limited by

imagination. Sumichrast and Olsen (1996) proposed a technological inter-
face for the concierge. Presently concierge interfaces are a database of
78 Service Quality Management in Hospitality, Tourism, and Leisure

information, limited to “advertisers” who pay to be included in the data-

base. The limitation of these systems is their inability to communicate with
the customer. Sumichrast and Olsen recommend the use of an expert
system designed to furnish recommendations, learn about the customer,
and render services. Attempts to use information technology in destination
management systems (DMS) have met with mixed results.
Although major hotel companies, airlines, and auto rental companies
are quickly implementing technology applications, DMS that attempt to
market a country or specific region have achieved fewer advances. Suss-
mann and Baker (1996) suggest that smaller HTL providers in defined
destinations have the most to gain from technology. The Internet provides
an economical vehicle for smaller locales and operators within those lo-
cales to gain widespread distribution of their product. Working together
with regional tourism agencies, these products can be bundled and deliver
a wide range of travel options for a broader segment of the market. A
number of frameworks have been suggested for implementation of DMS
(Cash, McFarlan, and McKenney, 1992; Griffiths and Willcocks, 1994;
Keen, 1991). Griffiths and Willcocks (1994) identified six categories of
risk associated with complex technology implementation:

1. History: Previous experience of success and failure

2. Context or organizational characteristics: This is complicated by
the numerous stakeholders involved in a DMS
3. External context: Pressures from governmental agencies or competi-
tive pressures
4. Content: The size and complexity of the project, the number and
variety of participating entities
5. Process: The way the implementation is structured, project manage-
ment
6. Risk outcomes: How closely the outcomes are tied to participant
goals and objectives

Given the risks associated with technology implementation in DMS,

Griffiths and Willcocks recommend four focal points for successful public/
private technology initiatives:

1. Governance: The ability of major participants to reach consensus on

objectives, resource allocation, and the decision-making process
2. Project management: There is a multidirectional flow of information
involving localized input and clear direction
3. Market need: An identifiable need for the DMS exists, which may be
predicated on economic survival of the participants
 The Impact of People, Process, and Physical Evidence 79

4. Learning: The development of a DMS is an incremental process and

less likely to fail if some of the participants have prior experience
with the technology

The challenge to management is the creation of competitive advantage

through the use of technological processes. The impact of technology is
further discussed in Chapter 16.

PHYSICAL EVIDENCE

Physical evidence of a service experience may entail a number of varia-

bles. As has been discussed previously, the service encounter includes
tangible and intangible attributes. Clearly, physical evidence of a service
experience is easier for the customer to evaluate and understand because it
is tangible. This poses problems for the HTL provider because physical
evidence can be both controllable and uncontrollable. For example, the
cleanliness of the service environment is under the operation’s direct con-
trol. However, crime patterns impacting an inner-city hotel or rainy weath-
er during a beach vacation are uncontrollable phenomena impacting the
overall service evaluation. HTL businesses, including casino operators,
McDonald’s, and Disney, have a long tradition of cleanliness. The glass is
tree of fingerprints, the brass is polished, and the floors and walkways are
free of debris. By maintaining this appearance of cleanliness and organiza-
tion, management creates a sense of security for the customer. Casino
management can mitigate the social stigma of gambling and create a sense
of confidence that an operation is run honestly by maintaining an immacu-
late physical space. It has long been understood that the service environ-
ment has a significant impact on purchase behavior.
Atmosphere, design, and decoration are covered in marketing, retailing,
management, and hospitality texts and periodicals. But physical changes
to the service environment and the subsequent impact on purchase behav-
ior remains little understood or investigated (Bitner, 1992). Unlike tradi-
tional industrial settings, service industries produce and distribute the
product in the same space. The question becomes, what impact does physi-
cal space have on customers and employees? In and Out Burger, a success-
ful Southern California hamburger chain, uses bright airy space with high
ceilings. The production areas have large windows to provide an abun-
dance of natural light. The space affords customers the opportunity to
observe the sparkling cleanliness and employees at work in a large open
space with natural light and an outside view. What impact does this sensi-
tive and sensible design have on business health?
80 Service Quality Management in Hospitality, Tourism, and Leisure

Bitner (1992) proposed a framework for examining the impact of

physical space on employees and customers. Organizational behavior lit-
erature examined the impact of physical space on employees. Marketing
literature examined its impact on customers. Employee motivational vari-
ables included pay, benefits, communication, promotions, and organiza-
tional relationships. Customer motivational variables included pricing,
advertising, added features, and promotion. However, no prior attempt had
been made to examine the simultaneous impact of design on customers
and employees. Bitner suggested that employees and customers respond to
physical stimuli on cognitive, emotional, and physiological levels. This
epistemology mirrors the hedonic consumption paradigm as proposed by
Hirschman and Holbrook (1982). Hirschman and Holbrook proposed that
experiential activities such as gamesmanship, theater, and sporting events
elicited hedonic responses. The constructs proposed were in the cognitive
domain, the emotional domain, the physiological domain (excitement and
arousal), and the absorption domain. The cognitive domain requires think-
ing, as in chess or mountain climbing. The emotional domain may be
triggered through watching movies or spectator sports. The physiological
domain may be triggered through eating or bicycle riding. Reading a great
book or participating in a hobby may absorb the participant in the activity
to the exclusion of outside stimulus.
Investigating these variables in a service context where tangible and
intangible attributes are both so critical is the next logical step. Titz, Miller,
and Andrus (1998) examined differences between casino gamblers using
these constructs. Slot machine players were found to be escapist and
tended to allow the experience to carry them away from the problems and
concerns of their everyday lives. Table game players were more adventur-
ous and more willing to create their own experience. Bitner’s typology and
the hedonic consumption paradigm may increase our understanding of the
impacts of physical space on business health. What experiences are elic-
ited in restaurants, hotels, and entertainment complexes? The intention
here is not to provide answers but instead to ask questions. As we under-
stand more about service phenomena, we continue to develop new scales
more precisely able to measure the outcomes.

CONCLUSION

This chapter reviewed current knowledge of the impact of people,

process, and physical evidence on tourism, hospitality, and leisure service
quality. Together these factors produce a synergistic relationship impact-
ing on service quality expectation and perception. HTL management is
 The Impact ofPeople, Process, and Physical Evidence &1

responsible for charting the industry’s future course. The successful

executive will be prepared to think and act in a rapidly changing environ-
ment. The challenges are significant and dynamic.

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 Chapter 5

Understanding the Role

of the Service Encounter
in Tourism, Hospitality,
and Leisure Services
Darren Lee-Ross

INTRODUCTION

The nature of service, strategies for improving it, and understanding

customers’ perceptions of it have enjoyed tremendous popularity among
researchers for the last two decades (for example, Leonard and Sasser,
1982; Johns, 1992; Lockwood, 1996; Johns and Lee-Ross, 1998). More-
over, the growing economic importance of service industries in many
countries has seen increases in centrally driven quality-based initiatives
including the European Foundation for Quality Management, the British
Quality Foundation, the International Organization for Standardization
ISO9000 Series, the Australian Quality Council, and the Quality Assur-
ance Institute of America. In addition, according to Tenner and DeToro
(1992), growth of international entrepreneurialism and an increased sup-
ply of more “sophisticated” customers has caused firms to seek competi-
tive advantage by relying more upon their employees to satisfy and even
exceed client expectations. Many hospitality, tourism, and leisure organi-
zations have taken up this challenge by focusing upon employee perfor-
mance at the customer interface, recognizing the crucial nature of the
service encounter (MacVicar and Brown, 1994; Dodwell and Simmons,
1994; Breen and Liddy, 1998; Bouldner, Baker, and Fesenmaier, 1997).
In addition, the term “service encounter” may have negative connota-
tions, for example:
Encounter: Meet in conflict. Collins English Dictionary and Thesau-
TUSe( 199250) 4101)

85
86 Service Quality Management in Hospitality, Tourism, and Leisure

According to this definition, customer/employee encounters have the po-

tential for conflict. In a service context this meaning cannot be taken
literally, but it provides a cautionary note for service managers because
customer perceptions of composite product quality often depend upon the
interaction between customers and frontline employees.
Management of the service encounter is notoriously problematic be-
cause direct provision relies solely on the employee. This is where manag-
ers have the least direct control over what their workers say and do (Jones
and Lockwood, 1989). The ubiquitous manager is also both impractical
and not particularly desirable in busy organizations. However, managers
may influence service encounters by focusing on broader issues such as
organizational culture, system design, selection, and training. In other
words, frontline employees can perform adequately at the customer inter-
face so long as there is a culture of support, an appropriate service delivery
system, and adequate training. Clearly, this is a complex mix of variables
and interactions which managers of hospitality, tourism, and leisure orga-
nizations must understand if they are to influence the process and outcome
of service encounters.
This chapter focuses on the role of the service encounter in service
organizations. The nature and main features of social interactions are first
explored, followed by an outline of service encounters and how to manage
them. The chapter continues by considering other issues of encounter
management including service delivery and system design, “scripting,”
and organizational culture. Personal interaction and relationships between
customers and frontline employees are key elements in service provision,
so selection and training strategies are also discussed.

SOCIAL INTERACTIONS

Service encounters are complex affairs, not least because the social
contact between actors carries a variety of expectations. For example,
employees who provide the service need to feel satisfied with their perfor-
mance almost as a justification for their career choice. They also need to
satisfy the immediate demands of the client. Similarly, customers desire
satisfaction in terms of their immediate purpose for the interaction, such as
hiring particular facilities in a leisure center, exchanging currency, or
ordering a drink at the hotel bar. They also desire to be treated in a polite
and “appropriate” manner. Horney (1996) simplifies these expectations
into procedural and convivial aspects of service delivery.
Understanding these two dimensions of service is obviously necessary
for managing the encounter; however, it is a mistake to believe that each
 Understanding the Role ofthe Service Encounter 87

situation is similar. The role played by customers in the interaction has a

significant bearing on the subsequent turn of events. A normal exchange
pattern contains a number of stimuli and responses communicated verbal-
ly and nonverbally. Actors provide cues for each other to react in specific
ways. Usually these cues are determined by the actual situation and stereo-
typing from experience of previous exchanges. Perceptions of social sta-
tus, economic and personal characteristics, appearance, and so on also
impact upon the relationship between participants. In addition, expecta-
tions and behavior are particular to specific occasions, which may cause
changes in the service encounter dynamic (Farber-Canziani, 1996). For
example, an individual using the clubhouse facilities of St. Andrew’s Golf
Club will have significantly ditferent service encounter expectations than
one using those of a nine-hole municipal course.
Despite the impact of these dynamics upon the service encounter, psy-
chological research (for a summary see Eysenck and Eysenck, 1985) has
shown that people possess a more or less stable set of characteristics that
predispose them to react in certain ways in a variety of encounters. These
include culture, introversion and extroversion, stability and neuroticism,
aggression and passivity, self-esteem, and desire for approval. Clearly
managers would be well advised to account for these innate predisposi-
tions prior to hiring and training their employees. For example, an intro-
verted employee would probably not be suited immediately to the job of
cocktail bartender. Similarly, a hotel employee displaying extrovert behav-
ior would possibly feel unfulfilled as a night porter or internal auditor.

SERVICE ENCOUNTERS

According to Czepiel, Solomon, and Surprenant (1985), a number of

key features distinguish service encounters from other social interactions:

¢ They have a narrow focus

e They are purposeful
¢ Roles are defined
¢ Providers are performing a job
¢ There is often no prior acquaintance
¢ Task-related information predominates
¢ There may be temporary status differences

These features modify the properties of social interactions to a greater or

lesser extent depending upon situational specifics, and all occur within the
88 Service Quality Management in Hospitality, Tourism, and Leisure

workplace. Usually, the narrow and purposeful focus of the encounter is

understood by participants and all will have expectations modified by the
tasks and functions of the job. For example, fine dining customers will
expect the experience to be somewhat formal and “silver-served” by com-
petent, unobtrusive, and polite waiting staff. In addition, perceptions of
status may be altered or suspended because of the possibility of temporary
status shift. Outside the workplace the service provider may have a higher
status than the customer but will nonetheless be expected to defer during
the encounter. Task-related information also characterizes the exchange
because it focuses on encounter-based goals of which actors are aware.
For example, the activities involved when booking a holiday with a travel
agent are restricted by the nature and content of the service.
Service encounters have a significant impact on participants. The inter-
action is an essential ingredient in the total quality perception of the
customer and the employee. Successful encounters are positively corre-
lated with employee motivation, performance, and job satisfaction. Hos-
pitality, tourism, and leisure organizations must manage the service en-
counter effectively for the benefit of customers and employees and for
long-term organizational success.

ENCOUNTER MANAGEMENT

There is no doubt that service organizations are characterized by high

levels of service encounters. It is also the case that employees act as
ambassadors for their organizations and play a crucial role influencing
overall customer perceptions of quality. Consequently, researchers and
some service organizations have sought to provide a context for managing
the encounter indirectly using service-related techniques of “blueprinting”
and other quality assurance systems (Comen, 1989). For example, once a
service delivery system has been blueprinted it may be appreciated as a
series of interconnected stages. Areas may then be identified in which the
service could be modified or customized. This technique allows managers
to see the amount and nature of the stages involved in the service and also
the range of options at each point in the process. The more complex the
system in terms of stages and extent, the more sophisticated the service
encounter is likely to be. This has a direct impact on the expectations of
the service provider and customer. For example, the Belfry Hotel in the
United Kingdom offers a package that includes extensive leisure facilities
and a championship golf course, whereas a TraveLodge offers a limited
range of accommodation and catering services. Belfry employees need
greater knowledge of facilities and how to interact with clients whose
 Understanding the Role of the Service Encounter 89

purpose of visit and social status may be different than those of Trave-
Lodge clients. Alternatively, consider the potential for differences in the
service encounter between a McDonald’s fast-food restaurant and a full
silver-service fine dining restaurant. In the former organization, the en-
counter is fleeting, noncustomized, and product oriented (interestingly,
without the server wishing you well as you leave the building!). However,
in a fine dining restaurant, the service is highly customized, with the server
having a more integral role in the complex service delivery process.
Some other general control measures include minimizing risk by limit-
ing employee contact with customers. For example, it is fairly common
practice for hotels to incorporate buffet style self-service food systems
(particularly for breakfast). In addition, hotels are increasingly using bev-
erage vending in corridors and public rooms and “minibars” in bedrooms.
In this way customers are forced to play a more active role, the interface is
eliminated, and thus risk reduced.
Another approach considers that if employees are trained or “scripted”
to respond in a preprogrammed way at the service interface, then service
quality will be enhanced. Simply, the roles of bartender, tour guide, and
receptionist, for example, can be conceptualized as the typical series of
tasks and behavior of someone in that position. Part of this role is interac-
tion with customers in a particular manner. Typically, a script includes
routines for greeting, probing, empathy, and positivity. Notwithstanding
problems of role conflict, role overload, role incompatibility, and multiple-
role conflict (see Jones and Lockwood, 1989, for an explanation) some
managers are fairly prescriptive about the script content and how it is
presented to the customer.
However, care must be taken when scripting if the subsequent encoun-
ter is to be successful. Managers need to be flexible when designing
scripts because each encounter is unique (although some commonality
usually exists). In addition, if the procedure is not carefully planned and
employees are not encouraged to share in the developmental process,
scripted responses will not truly be their own. Simple repetition of learned
“lines” at predetermined points of the service encounter may give a shal-
low, unoriginal, and uncaring impression to customers. In addition, em-
ployees may become bored and lose their self-esteem.
Farber-Canziani (1996, p. 143) summarizes the major limitations asso-
ciated with scripting as follows:

¢ Minimal employee involvement in service operation diagnostics

¢ Minimal development of employee observation and attention skills
* Overemphasis on rote memorization of limited categories of service
problems and standard solutions
90 Service Quality Management in Hospitality, Tourism, and Leisure

¢ Minimal employee ownership of management-designed service scripts

and standards
* Little empowerment of employees to manage the unavoidable con-
tingencies in the service encounter

An alternative approach for managers is to rely more on methods that

improve employee observation, diagnostic, and improvisation skills. In
other words, managers should consider empowering employees to deal
with each individual situation as it arises. However, a full training support
system should be in position for this approach to be useful. Otherwise
there is a danger that employee incompetence and inexperience will lead
to poorer levels of service and increased worker Stress.

SELECTION

Perhaps one of the most controllable issues in managing the service

encounter is selecting the right person for the right job. Managers can
attempt to influence employee behavior at the customer interface in a
variety of ways, such as job design, scripting, empowerment, and so on.
However, it is equally important (and makes the manager’s job easier) that
people with a predisposition toward providing organization-determined
quality service are selected in the first place. This idea is based on the
notion that there are differences in people’s skills and personality charac-
teristics which can be matched to specific jobs. Detailed explanation of
techniques and procedures involved in employee selection are beyond the
scope of this chapter, but further information is provided by Goldthorpe
and colleagues (1968), Shamir (1975), and Dickinson and Ineson (1993).
Developments in selection techniques for service encounter staff in-
clude situational interviews based on identified critical incidents occurring
during performance of the job. The incidents are then explained in terms
of behavior and provide benchmarks for a range of activities at the cus-
tomer interface. These descriptions are then turned into interview ques-
tions asking how applicants would deal with the situations. Answers are
transposed by interviewers into Likert-type responses on a behaviorally
anchored rating scale.
Other approaches for measuring the “fit” of candidates for service en-
counter jobs include those which focus on personality traits. Overall, these
procedures suggest that personality dimensions such as sociability and con-
scientiousness, for example, influence job performance and therefore reflect
innate competencies related to service encounters. According to Lewis and
Entwhistle (1990) the resulting service orientation index constructed from
 Understanding the Role ofthe Service Encounter 9]

such dimensions has successfully discriminated between suitable and un-

suitable candidates.
These techniques have been subjected to much criticism because of
their apparent inability to predict behavior at work. However, the key issue
is that they should not be used in isolation but as part of a composite
approach to employee selection. In this way, any bias or weakness specific
to a technique may be counteracted by strengths of another.

TRAINING

Augmenting results of the selection process is an obvious objective of

the training procedure. On the basis of organizational goals and priorities,
the best training procedures are usually effective if they consider funda-
mental issues of total commitment at all levels, involvement of everyone,
opinions of staff at all levels, and chief executives willing to participate in
the program.
According to Jones and Lockwood (1989), staff training has several
dimensions including the following:

¢ Traditional: Staff are shown the correct way of dealing with custom-
ers based on previously identified standards. Staff are then encour-
aged to adopt this approach through role play, video, and so on. This
is effective but may engender inflexibility which may be unsuitable
for all situations.
¢ Quality circles: Staff are encouraged to consider how they can im-
prove the service given to the customer. This approach (like others)
needs everyone’s support and the provision of resources by which
ideas generated can be tried and tested.
¢ Encouragement: Staff develop their customer service skills by using
incentives where they are judged against previously identified stan-
dards of performance.

Lewis and Entwhistle (1990) advocate a two-pronged approach for

effective staff training:

¢ Evangelical: This usually involves large numbers of employees

coming together for a sophisticated and polished performance de-
signed to generate a high degree of excitement, enthusiasm, and “to-
getherness.” The leader is someone who inspires and is viewed as
representing something to identify with and belong to. Unfortunately
the fervor is not usually maintained in the workplace.
92 Service Quality Management in Hospitality, Tourism, and Leisure

¢ Exploratory. Raises enthusiasm more subtly than evangelism and over

a longer period. Individualism and resistance to change is acknow-
ledged. This approach aims to “overcome” by creating a climate in
which people can grow and learn based on a premise that staff involve-
ment and participation in the decision process brings commitment.

This type of training is a key element in “customer care programs”

being developed by forward-looking hospitality, tourism, and leisure orga-
nizations. Often the starting point for these programs is a policy or vision
statement. Training needs analysis may then be undertaken by internal
trainers or external consultants. Staff work attitudes are usually investi-
gated in interviews. Information elicited includes feelings toward their
jobs and customers and how they feel about their employing organization
generally. Subsequent training programs are then designed, typically con-
taining information and guidance about the composite service product and
how to deal with the service encounter. It is also important for service
organizations to have some form of feedback mechanism so employee
performance can be monitored.

ORGANIZATIONAL CULTURE

Customer care and the provision of excellent service at the customer

interface needs more than a simple shift of organizational focus. The
transition requires a repositioning of the total organizational culture, and
managers would do well to remember the adage that one can rewrite a
constitution without changing people’s attitudes. For the purposes of this
chapter, culture refers to underlying attitudes and beliefs held by everyone
and how they impact on the service encounter.
Expressions of organizational culture range from complex and convoluted
definitions to simply “the way things get done here.” In smaller hospitality,
tourism, and leisure organizations, culture may be quite “fuzzy,” a function
of owners and managers who may be equally unclear about their attitudes
and beliefs. Larger organizations, however, should have clearer aims, objec-
tives, and procedures to achieve and thus satisfy their cultural aspirations. To
develop an appropriate service culture, managers need to understand the
concept itself and the key change triggers. The main elements cited by Jones
and Lockwood (1989, p. 123) include the following:

* Values: Sense of direction and identity guiding day-to-day behavior

¢ Heroes: Individuals who are successful because of their adherence
to organizational values
 Understanding the Role of the Service Encounter 93

* Rites and rituals: Communicate what is expected of employees

° Cultural network: Informal organization through which communica-
tion of the culture takes place

Understanding these elements should assist managers to establish the

“right” organizational culture. Lewis and Entwhistle (1990) suggest that
the correct climate creates responses in customers as well as employees.
That is, the organization establishes a climate that affects the way in which
employees behave during the service encounter and, therefore, the cus-
tomers’ perceptions of the organization and its service.

SUMMARY

The service encounter is a complex affair and difficult to manage;

therefore, it has been illustrated in a number of ways. Initially, it was
presented as a meeting between individuals, focusing upon their differ-
ences and how this transforms the actual exchange. The nature of the
service encounter was then shown to affect ensuing attitudes and behavior
between the employee and customer because of its specific purpose.
Dialogue, attitudes, and behavior during service encounters are effec-
tively beyond the control of management. However, if no attempt is made
to at least influence events, the outcome could be potentially disastrous.
There are a number of ways to manage service encounters, and those in
authority would be well advised to adopt strategies featuring all ap-
proaches. Encounters may be controlled directly and indirectly with ap-
proaches focusing on service delivery and system redesign, a knowledge
of organizational culture, and appropriate selection and training proce-
dures.
Service quality stands or falls by the outcome of the service encounter.
Excellence can only be achieved by commitment starting at the top of the
organization and being translated by managers providing leadership by
example. Clearly, this is only workable with appropriate support systems
that focus on service quality.

REFERENCES
Bouldner, A., Baker, D.A., and Fesenmaier, D.R. (1997). Effects of Service Cli-
mate on Managers’ and Employees’ Rating of Visitors’ Service Quality Ex-
pectations. Journal of Travel Research, 36 (1): 15-22.
Breen, P. and Liddy, J. (1998). The Ramada Revolution: The Birth of a Service
Culture in a Franchise Organization. National Productivity Review, 17 (3):
45-52.
O4 Service Quality Management in Hospitality, Tourism, and Leisure

Comen, T. (1989). Making Quality Assurance Work for You. Cornell Hotel and
Restaurant Administration Quarterly, November, 22-29.
Czepiel, J.A., Solomon, M.R., and Surprenant, C.F. (1985). The Service Encoun-
ter: Managing Employee/Customer Interactions in Service Businesses. Lex-
ington, MA: Lexington Books.
Dickinson, A. and Ineson, E. (1993). The Selection of Quality Operative Staff in
the Hotel Sector. International Journal of Contemporary Hospitality Manage-
ment, 5 (1): 16-21.
Dodwell, S. and Simmons, P. (1994). Trials and Tribulations in the Pursuit of
Quality Improvement. International Journal of Contemporary Hospitality
Management, 6 (2-3): 14-18.
Eysenck, H.J. and Eysenck, M.W. (1985). Personality and Individual Differences.
New York: Plenum Press.
Farber-Canziani, B. (1996). Integrating Quality Management and Customer Ser-
vice: The Service Diagnostics Training System. In M.D. Olsen, R. Teare, and
E. Gummesson, Service Quality in Hospitality Organizations (pp. 140-163).
London: Cassell.
Goldthorpe, J.H., Lockwood, D., Bechhofer, F., and Platt, J. (1968). The Affluent
Worker: Industrial Attitudes and Behaviour. Cambridge, UK: Cambridge Uni-
versity Press.
Horney, N. (1996). Quality and the Role of Human Resources. In M.D. Olsen,
R. Teare, and E. Gummesson, Service Quality in Hospitality Organizations
(pp. 69-115). London: Cassell.
Johns, N. (1992). Quality Management in the Hospitality Industry: Definition and
Specification. International Journal of Contemporary Hospitality Manage-
ment, 4 (3): 14-20.
Johns, N. and Lee-Ross, D. (1998). A Study of Service Quality in Small Hotels and
Guesthouses. Progress in Tourism and Hospitality Research, 3(4): 351-363.
Jones, P. and Lockwood, A. (1989). The Management of Hotel Operations: An
Innovative Approach to the Study of Hotel Management. London: Cassell.
Leonard, F.S. and Sasser, W.E. (1982). The Incline of Quality. Harvard Business
Review, 60,September/October: 163-171.
Lewis, B.R. and Entwhistle, T.W. (1990). Managing the Service Encounter: A Focus
on the Employee. The International Journal of Service Industry Management,
1 (3): 41-51.
Lockwood, A. (1996). A Systematic Approach to Quality. In A. Lockwood,
M. Baker, and A. Ghillyer (Eds.), Quality Management in Hospitality
(pp. 14-32). London: Cassell.
MacVicar, A. and Brown, G. (1994). Investors in People at the Moat House
International, Glasgow. International Journal of Contemporary Hospitality
Management, 6 (2-3): 53-60.
 Understanding the Role of the Service Encounter 95

Shamir, B. (1975). A Study of Working Environments and Attitudes to Work of

Employees in a Number of British Hotels. Doctoral thesis, London School of
Economics.
Tenner, A.R. and DeToro, I.J. (1992). Total Quality Management: Three Steps to
Continuous Improvement. Cambridge, MA: Addison-Wesley.
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 Chapter 6

Service Quality,
Customer Satisfaction, and Value:
An Examination of Their Relationships
Geoffrey N. Soutar

INTRODUCTION

A great deal of discussion has occurred in the fields of marketing and

strategy in recent years about consumer satisfaction and how it can be
created and maintained. Most organizations now recognize the central role
that their customers’ satisfaction plays in their long-term success; hospital-
ity, leisure, and tourism organizations are no exception. Marketers have
argued for the centrality of customer satisfaction for at least forty years,
giving the approach a variety of names, including the marketing concept,
having a customer orientation or, more recently, having a market orienta-
tion. However, all of these approaches argue that good marketing is much
more than merely being concerned about customers’ needs. All agree that
managers must understand the marketplace in which they operate, which
includes not only customers, but also competitors, governments, and regu-
latory agencies and the overall market environment (e.g., Narver and
Slater, 1990; Kohli and Jaworski, 1990). Further, all recognize that an
organization’s interest in satisfaction is not for its own sake but because of
a recognition that satisfied customers give an organization its best chance
of achieving its objectives, whatever they happen to be, as satisfied cus-
tomers are much more likely to come back, remain loyal, and provide
positive word of mouth. However, it is fair to say that customer satisfac-
tion has taken pride of place in many discussions about marketing (e.g.,
Kotler, 1988). Consequently, a great deal of research has been undertaken
to understand what creates and maintains customer satisfaction and to
determine how it should be measured, as it is clearly a key marketing
variable.
Oi
98 Service Quality Management in Hospitality, Tourism, and Leisure

Peters (1987) and many others have pointed out that today’s customers
are searching for quality, which in service industries, such as hospitality,
tourism, and leisure, equates with service quality. Not surprisingly, there-
fore, service quality has become a major issue for managers in these areas,
with many people arguing that service quality has a central role in the
success or failure of such organizations (e.g., Lee and Hing, 1995; Ford
and Bach, 1997; Hudson and Shephard, 1998) and that successful organi-
zations will have to compete on the basis of the quality of the customer
service they provide. If an organization succeeds in such a competitive
strategy, it has been argued, it will be well rewarded, as it is likely to obtain
the following:

¢ A competitive differentiation that favors the organization

¢ Favorable word-of-mouth advertising
¢ Greater productivity
¢ Better employee morale

However, perhaps most important, as Buzzell and Gale’s (1987) examina-

tion of the Profit Impact of Marketing Strategy (PIMS) database sug-
gested, private sector organizations at least may achieve:

¢ Better profits and rates of return

Managers must, therefore, understand how quality and satisfaction are

determined in their marketplace and how the two constructs are related, as
without such an understanding, the development of appropriate marketing
strategies and service quality programs will be impossible. Further, as
should be obvious, such understanding cannot come from internal infor-
mation alone. Quality and satisfaction must be investigated in the market-
place with customers, which means that organizations must undertake
appropriate marketing research and have well-developed and long-term
quality and satisfaction measurement and monitoring programs that pro-
vide management with the information they need. As a starting point for
suggesting a model of this relationship, the next section briefly discusses
some key aspects of service quality, while subsequent sections discuss
customer satisfaction and their relationship.

SERVICE QUALITY

The central link in most service strategies is quality, which has been a
major issue for many years, dating back at least to Deming’s work in Japan
 Service Quality, Customer Satisfaction, and Value 99

in the 1950s. Ideas about total quality management (TQM) and quality
assurance (QA) have been well developed over the last thirty years (e.g.,
Crosby, 1979, 1984) and are a central part of many organizations’ opera-
tions. However, most of the early work on quality concentrated on pro-
ducts. Thus, Gummesson (1989) found only three of the 145 papers pre-
sented at the 1988 American Society for Quality Control included “services”
in their titles, while none of the 102 papers at the 1987 European Organiza-
tion for Quality Control did so. Despite this, many service organizations
have also realized that quality is essential (e.g., Albrecht and Zemke,
1985; Peters, 1987; Carlzon, 1987; Gronroos, 1990; Albrecht, 1990; Berry
and Parasuraman, 1991). While service organizations have recognized a
need to improve quality, and many have introduced service quality pro-
grams, service quality is still a major problem that needs to be addressed,
for a number of reasons:

1. Many managers have a short-run view of the world, especially when

organizational systems are designed to reward short-, rather than
long-term achievements. Quality programs have financial and hu-
man resource costs, especially when first developed, which is a
major problem if such resources are in short supply, as is often the
case in leisure and hospitality organizations. However, as Gronroos
(1990, p. 51) has pointed out, “quality does not cost—a lack of
quality does,” at least in the long term.
2. Many organizations offer too many services. With limited budgets
this often means that nothing within the organization can be done
excellently. However, pruning activities can be an extremely diffi-
cult issue as it requires considerable change in the things people do
and may require substantial organizational restructuring, all of which
are costly, both financially and in human resources terms.
3. Existing operating systems may not be efficient or effective. As a
consequence, staff find it difficult to deal effectively with customers,
especially when problems arise. Otten, systems are also expensive to
repair or replace, making choices in this area difficult.
4, Reasonable status may not be given to the “frontline troops,” wheth-
er they are desk clerks, pool attendants, or housekeepers. Conse-
quently, these people have little job satisfaction or organizational
loyalty and are not inclined to exert themselves for their organization
when it might be required.
5. An “it’s not my job” syndrome exists in many organizations, which
means people try to avoid helping instead of providing support to
customers or to other staff who are dealing with customers. Remov-
ing this syndrome requires a major culture change, which can be
100 Service Quality Management in Hospitality, Tourism, and Leisure

difficult and which must come from an organization’s most senior

managers.
6. Staff think “customers are a nuisance,” making it difficult to develop
strong customer service programs, as they have other agendas.

Despite these problems, organizations must be concerned with the level

of service quality being provided. If service quality is to be assessed,
however, it must be operationally defined. People find it difficult to articu-
late what they mean by service quality, although they know when they
have not received it. As Buzzell and Gale (1987, p. 111) have noted,
“quality is whatever the customer says it is and the quality of a particular
good or service is whatever the customer perceives it to be.” There is even
more ambiguity about service quality as it

1. is multidimensional:
2. has underlying quality dimensions, some of which change over time;
3. is intangible, although it is often assessed through tangible clues
(e.g., a hotel’s appearance or a tour bus’s design or seats);
4. is the result of both service processes and service outcomes (i.¢., it
arises from how customers are treated and whether their problems
are solved); and
5. depends on the difference (or gap) between customers’ expectations
and perceptions.

Clearly, organizations must have a good understanding of their cus-

tomers if they are to understand their quality perceptions or have a chance of
successfully implementing service quality programs. They also need know-
ledge about how and when customers interact with their organization and
its various operations. Such interactions are critical as it is at these times
that service quality is assessed and the organization judged. Carlzon
(1987) is generally given credit for this insight, terming these interactions
“moments of truth” and arguing that the first phase in understanding
service quality is to define these moments of truth and determine how they
can go wrong.
Shostack (1984) provided an excellent approach to developing such an
understanding with her “blueprinting” concept, which examines interac-
tions from a customer’s viewpoint. Carlzon (1987) also stressed that mo-
ments of truth are more likely to go wrong if staff do not have the capacity
to deal with customers. Consequently, he argued for “empowering” cus-
tomer interaction staff and giving them the authority to solve problems,
rather than forcing them to respond bureaucratically, something that hos-
pitality managers need to understand more than most.
 Service Quality, Customer Satisfaction, and Value 101

Process and outcome are both vital to service quality, and these two
aspects are integral parts of Gronroos’s (1990) service quality model,
which emphasizes the “what” and “how” of services but also points out
that service quality results from gaps between expectations and percep-
tions of service received. This “gap” idea is also a critical part of the
“disconfirmation” approach to measuring both quality and satisfaction
(e.g., Oliver, 1981; Parasuraman, Zeithaml, and Berry, 1988). If perfor-
mance is less than customers expected, quality is perceived to be low and
dissatisfaction results. If performance meets or exceeds customers’ expec-
tations, quality is perceived to be high and satisfaction results. Gronroos
(1990) also noted the importance of image in the generation of quality
perceptions. If an organization (service provider) has a good image then
small service gaps are more likely to be accepted. However, if there is
already a poor image, even small gaps are likely to create negative quality
perceptions.
Of course, if gaps continue, previously good images are likely to be
overturned, with negative long-term consequences. Even great service
providers cannot live on their reputation forever. However, institutions
with relatively poor images will find it harder to overcome the past and
will need to be extremely vigilant about service quality. The gap model
provides a useful guide to understanding quality problems. Brown and
Swartz (1989, p. 97) found that the “gap analysis is a straightforward and
appropriate way to identify inconsistencies between provider and client
perceptions of service performance. Addressing these gaps seems to be a
logical basis for formulating strategies and tactics to ensure consistent
expectations and experiences, thus increasing the likelihood of satisfaction
and a positive quality evaluation.”
As has already been noted, service quality cannot be determined from
within an organization, for quality is about meeting consumers’ needs
(Wyckoff, 1984). If an organization does not know much about its custom-
er needs, it will find it extremely difficult to meet them. Consequently,
most service researchers recommend customer surveys as the starting
point in the development of quality programs.
There is no better general comment about service quality than that
suggested by Berry (1988), who stated:

1. Customers define quality.

2. Quality is a journey.
3. Quality is everyone’s job.
4, Quality, leadership, and communication are inseparable.
5. Quality and integrity are inseparable.
102. Service Quality Management in Hospitality, Tourism, and Leisure

6. Quality is a design issue.

7. Quality is keeping the service promise.

As these points emphasize and, as with all other areas of service man-
agement, the success of service quality programs will depend on an orga-
nization’s people and the capacity of the organization’s systems to support
them effectively. As Lee Iaccoca (1988, p. 249) noted, “the only job
security anybody has... comes from quality, productivity and satisfied
customers” but if you “start with good people, lay out the rules, communi-
cate with your employees, motivate them, and reward them if they perform
... you can’t miss.” Clearly, management, human resource management,
operations management, and marketing must all come together in the
service quality area, suggesting that we need to look as much within as
outside the organization if we are to really understand service quality.

Inside the Organization

What is sometimes forgotten in the necessary external evaluation of

service quality is that any strategies that are developed will have to be
implemented by an organization’s people and that managers need to un-
derstand as much about their staff, especially their customer contact staff,
as they do about their customers. Indeed, Gronroos (1990) argued that
excellent service quality cannot be provided without committed, dedi-
cated, and capable staff. Such arguments suggest that internal marketing
and employee satisfaction are as vital to organizational success as is effec-
tive external marketing and, further, that internal marketing comes before
external marketing.
This suggestion has led to a new model that puts the frontline workers
first and designs the service systems around frontline interactions with
customers, as can be seen in Shostack’s blueprinting procedures. This
approach also led to the development of the upside down organization
chart, which is often associated with Carlzon’s (1987) management view.
It also led to Albrecht’s (1990) suggestion of a quality service triangle,
which notes the relationship between organizational success and customer
contact staff and the need to ensure that operating systems support all staff
who deal with customers. The new approach to staff is well outlined by
Schlesinger and Heskett (1991), who suggested managers should:

1. Value investments in people at least as much as investments in ma-

chines (customers and staff are assets while machines are a liability)
2. Use technology to support the front line, not to monitor or replace
them
 Service Quality, Customer Satisfaction, and Value 103

3. Remember that recruitment is at least as important when hiring front

desk clerks or housekeepers as it is when hiring managers and senior
executives
4. Link compensation to performance at all levels, not just at the top

Such a model requires organizations to measure their internal as well as

external quality. Internal quality is related to an organization’s ability to
attract, develop, motivate, and retain quality employees, not for its own
sake but because the model recognizes that internal quality leads to exter-
nal quality, which leads to customer satisfaction, long-term loyalty, and
profitability. Effective internal quality programs must, therefore:

. Compete aggressively for service talent

. Ofter a real vision that brings purpose to those at the front line
. Provide training to equip staff to perform their service roles
. Understand that good and committed teams perform better
. Provide real freedom for staff to solve customers’ problems
. Acknowledge achievement publicly
. Base job design on research with employees (viewing them
NDNFWNE
as “customers”)

Nevertheless, at some point, an organization must understand how it is

viewed in the marketplace and so must measure its service quality. While a
number of suggestions have been made, the SERVQUAL model remains
the most commonly used approach. It is discussed briefly in the next
section.

The SERVQUAL Model

Parasuraman, Zeithaml, and Berry’s (1988) service quality model

(SERVQUAL) has been outlined in many papers in recent years. Despite
criticism from a number of detractors, SERVQUAL remains the most com-
monly used diagnostic model for evaluating service quality and the devel-
opment of service quality strategies. As mentioned previously, the
SERVQUAL model assumes quality is the result of gaps between people’s
expectations and their perceptions of service performance. The model does
not examine actual performance and so cannot be evaluated from within the
organization; it can only be evaluated from outside. Nel and Pitt (1993),
Saleh and Ryan (1991), and Samson and Parker (1994), among many
others, have used SERVQUAL in a variety of settings and found that,
although there are some problems with the instrument, it has good descrip-
tive power and can generate useful managerial insight and understanding.
104 Service Quality Management in Hospitality, Tourism, and Leisure

SATISFACTION

As has already been noted, satisfaction has been a concern for a number
of years (Cardozo, 1965) and is generally recognized as a postpurchase
construct that is related to how much a person likes or dislikes a product or
service after experiencing it (Woodside, Frey, and Daly, 1989). It can be
defined as an evaluation that an “experience was at least as good as it was
supposed to be” (Hunt, 1977, p. 459). Satisfaction is a response to a
perceived discrepancy between prior expectations and perceived perfor-
mance after consumption (Oliver, 1981; Tse and Wilton, 1988). Conse-
quently, managers need to understand how expectations are created and
how these expectations are influenced by people’s consumption experi-
ences. Satisfaction is often described as a confirmation of expectations
(Cadotte, Woodruff, and Jenkins, 1987) and, while there has been some
discussion as to whether satisfaction and dissatisfaction are opposite poles
on the same dimension (Churchill and Surprenant, 1982), most researchers
seem to have accepted that dissatisfaction and satisfaction reflect the same
continuum (e.g., Westbrook and Oliver, 1991). Customers are assumed to
have developed expectations prior to use, and perceived performance is
compared to these expectations on a “better than” or “worse than” model.
This comparison is “labelled negative disconfirmation if . . . worse than
expected, positive disconfirmation if better than expected, and simple
confirmation if as expected” (Oliver and DeSarbo, 1988). However, at
least in some circumstances, satisfaction also seems to be related directly
to perceived performance, which customers evaluate on a “good” to “bad”
dimension (Churchill and Surprenant, 1982; Tse and Wilton, 1988; Bolton
and Drew, 1991). Thus, performance impacts on satisfaction directly and
indirectly (through disconfirmation).

THE SERVICE QUALITY-SATISFACTION RELATIONSHIP

At the heart of the discussion is the assumption that, for service market-
ers, such as those in hospitality, tourism, and leisure, service quality im-
pacts on satisfaction directly and, so, is the crucial variable marketers need
to control strategically if they are to be successful in the long term. This
has led to suggestions that customer service is the key operational variable
and that, if service quality is improved, customer satisfaction and, hopeful-
ly, profitability will be improved, a result supported by research undertak-
en by Getty and Thompson (1994) and Woodside, Frey, and Daly (1989).
The simplest suggested relationship is shown in Figure 6.1.
 Service Quality, Customer Satisfaction, and Value 105

FIGURE 6.1. A Simple Relationship Between Service Quality and Satisfaction

Service Quality Satisfaction

It should be kept in mind that service quality is a global measure of a

number of quality dimensions (e.g., the tangibles, reliability, responsive-
ness, assurance, and empathy dimensions suggested in Parasuraman, Zei-
thaml, and Berry’s [1988] SERVQUAL model). It has also been suggested
that satisfied customers are also more likely to repurchase and/or recom-
mend the product or service to others, and the prior research cited sug-
gested that this may also be true. Consequently, there are antecedents to
and consequences of this simple relationship.
However, the relationship may not be as simple as Figure 6.1 depicts, as
recent research has suggested that service quality may be only one of a
number of factors that influence “value” and that it is value, rather than
service quality alone, that determines people’s willingness to buy and subse-
quent satisfaction. Given this suggestion, the present chapter concludes by
outlining some of the research undertaken into the value construct and
discusses its implications for hospitality, tourism, and leisure organizations.

THE VALUE CONSTRUCT

Zeithaml! (1988, p. 14) suggested that value is a “consumer’s overall

assessment of the utility of a product (or service) based on perceptions of
what is received and what is given,” which she termed a product or ser-
vice’s “get” and “give” dimensions. The most common such definition of
value is product quality and price tradeoff (e.g., Monroe, 1990; Cravens
et al., 1988), although some have suggested that a two-factor model may
not be a sufficient explanation (Schechter, 1984; Bolton and Drew, 1991)
and that other variables that might impact on value are service quality,
perceived risk, and image.
Sheth, Newman, and Gross (1991) have also suggested that value is a
complex construct with multiple dimensions (social, emotional, function-
al, epistemic, and conditional) that may impact differently in various situa-
tions. While functional value has generally been presumed to be the key
influence, Sheth, Newman, and Gross found that the other value dimen-
sions were influential in some situations. For example, while functional
106 Service Quality Management in Hospitality, Tourism, and Leisure

and social values dominated a decision to use filtered or unfiltered ciga-

rettes, emotional value was paramount in the overall decision to smoke.
Whatever dimensions are in the value construct, it is a mediating variable
between service quality and satisfaction, as shown in Figure 6.2.
The implications of this small change to the model are significant as, if
value plays a central mediating role, a reliance on service quality to gener-
ate satisfaction may be misplaced. If customers are more concerned about
what they get, then service quality may play a major role in generating
satisfaction and, more important, such customers are more likely to be
willing to pay a premium for higher quality. On the other hand, if custom-
ers are more concerned about what they give, then better quality is unlike-
ly to compensate for a higher price, organizations are unlikely to be able to
charge higher prices and, thus, will be unable to cover the additional costs
inherent in many customer service programs. It is clearly vital that organi-
zations understand the nature of the market and the value derived from
quality betore embarking on expensive customer service programs.
Research by Bolton and Drew (1991), Dodds, Monroe, and Grewal
(1991), Baker, Levy, and Grewal (1992), and Sweeney, Soutar, and John-
son (1997, 1999) suggests that such a model is plausible and that managers
need to understand the much more complex relationships than that implied
by the simple service quality-satisfaction nexus. Service quality still plays
an important role but it has indirect, as well as direct, effects on people’s
intentions and satisfaction. Managers need to understand both types of
effects if they are to develop effective customer service strategies.
Indeed, it seems that value is a complex construct with multiple dimen-
sions that are influenced by price, perceived risk, and “brand” (hotel, tour
company, or whatever) image, as well as service quality. Sweeney, Soutar,
and Johnson’s (1999) later research, undertaken in a retail environment,
suggests that service quality’s most important contribution may be indi-
rect, as good quality service reduces the risk people feel and, so, increases
value indirectly rather than directly. If this is true in the hospitality, tour-

FIGURE 6.2. Value As a Mediating Variable

Service Quality Satisfaction

 Service Quality, Customer Satisfaction, and Value 107

ism, and leisure area, then service quality is no less important. However,
its role may be different, suggesting managers may need to alter the way
they approach customer service programs that have traditionally focused
on the direct role service quality plays in increasing satisfaction. If the
indirect role through risk is more important, staff will need to be trained to
provide “risk reducing” service and ensure that they are seen as appropri-
ately qualified to do so.

CONCLUSION

The present chapter examined the two constructs that are at the heart of
the debate about the nexus between service quality and customer satisfac-
tion and outlined some of the issues relevant to understanding and measur-
ing both constructs. It also discussed a simple service quality—satisfaction
model and suggested that this model was not a sufficient explanation of the
way service quality impacted on consumer decision making. Some very
recent research into value was outlined which suggests that service quality
is only one of a number of factors that influence value and that managers
need to understand the interactions of all of these factors and the mediating
role that value plays before designing customer service programs.
Further, little research has been undertaken to understand the role that
different value dimensions (such as functional value, emotional value, so-
cial value, and epistemic or novelty value) play in different situations.
Given the nature of the hospitality, tourism, and leisure market, it may be
that social and emotional aspects play more important roles, and these roles
need to be examined carefully as they could have significant implications,
not only for customer service programs but also for the very nature of the
hospitality, tourism, and leisure experience. Managers in these areas clearly
need to look beyond the simple service quality—satisfaction relationship to
the more complex value relationships that make this area exciting but often
frustrating. An understanding of the service quality—value-—satisfaction path
would not reduce the excitement, but it would reduce managers’ frustration
and make it possible for them to better plan the experiences their customers
receive and the way their organizations interact with them.

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 Chapter 7

Competitive Advantages
of Service Quality in Hospitality,
Tourism, and Leisure Services
Chris Roberts

INTRODUCTION

Virtually every competitive organization seeks some sort of advantage

over its rivals; that is, it seeks some way to distinguish itself in the eyes of
its customers. The challenge for a business is to find an advantage that is
long lasting and not easily imitated. Of what use is an advantage if com-
petitors can quickly copy it? Any gain from such actions is short lived, and
may not be worth the cost.
What does it take for a firm to create a competitive advantage? It is not
as simple as lowering prices or adding a new feature to a product. Both of
these actions may be rapidly copied. In response, competitors can also
lower prices quickly. But price discounting usually comes at a cost if a
compensating gain in production or delivery is not found. Without such a
change, it is unlikely firms could sustain deep price cuts for very long.
Similarly, product improvements add costs to production. The value
added of the new feature in the eyes of the customer must be equal to or
more than any increase in price. It is frequently very easy for a competitor
to become aware of a product enhancement, analyze it, and then imitate it.
Some firms adopt a “follower” approach, waiting for leading firms to
introduce new ideas. When these actions prove successful, the followers
quickly move to duplicate them to share in any market gains.
Benefits from such competitive actions may be enjoyed for only
months, weeks, or less. For example, in the airline industry, gains from
price changes are limited to hours. Knowledge of lower ticket prices on
selected routes is quickly learned by rivals, and reservation computer
Lid
112 ~— Service Quality Management in Hospitality, Tourism, and Leisure

systems are rapidly reprogrammed to match. From this example it is easy

to see that bot time and uniqueness play vital roles in the creation of an
advantage
This chapter explores the concept of competitive advantage and how
firms may use service quality as a competitive tactic. The role of strategic
management and the competitive environment are explained as important
factors in the development of a competitive advantage. Next, core compe-
tencies, the foundation of any firm’s competitive strength, are explored.
The chapter ends with a discussion of how service quality can be used as a
key competitive advantage.

COMPETITIVE ADVANTAGE

The various processes that a firm develops to create and deliver its
product may become competitive advantages. Many firms ne eo in-
gredients fs part of a unique production operation. Coca-Cola has never
revealed its syrup formula, and continues to use it as a basis for creating an
advantage over rival soft drink producers. It no longer matters whether the
syrup for has special qualities{‘customers and competitors perceive
that it does\ and so it acts as asustainable advantage.jOther firms develop
a service delivery process to set themselves apart from competitors. For
example, the sorting, routing, and package processing routines that Feder-
al Express developed revolutionized the small parcel delivery industry.
Although eventually rivals were able to duplicate FedEx proCesses, it was
a matter of years before they could do it effectively. In that time, FedEx
accumulated a significant lead in market share and has since dominated
the small parcel delivery industry (Lovelock, 1996).
Skills may also develap into a competitive advantage. Hyatt Hotels has
developed what they call “the Hyatt touch.Jt is a level of service delivery
that consistently aims to surpass customer expectations. To achieve it, they
have carefully{identified customer needs}{nd the levels of service custom-
ers expect to fulfill those needs./Hyatt then takes the next step and deter-
mines dditional actions can deliver the expected service with higher
Zuality (Teaaigues include simple actions such as training bell staff to
notice names on luggage tags in order to personally address guests, or
more complex actions, such_as conducting ongoing training programs for
all employees through ts(Hiyat Universe teatexplore what customer
satisfaction and service are about. Hyatt uses “the Hyatt touch” as a key
element in its advertising and in its routine delivery mechanisms. Custom-
ers and employees are educated about it, and taught to believe in it and to
expect it. While rival hotel firms may seek to deliver a similar level of
 Competitive Advantages of Service Quality Lig

service, Hyatt has created a competitive advantage in the full service

market segment.
Sometimes a competitive advantage is an asset such as real estate. In
the hospitality industry, only one hotel or restaurant at a time can occupy a
highly desired location. The Plaza Hotel is the only hotel that can be
located at the corner of Fifth Avenue and Central Park South in New York
City. Its location alone gives the Plaza a prestigious advantage. Only one
hotel can be at the end of the bluff overlooking Niagara Falls. A restaurant
that is located at a freeway access point has a clear advantage over a
competitor who is located blocks away. However, there are few situations
in the hospitality industry in which real estate can be a true competitive
advantage. In most cases, customers are willing to be served short dis-
tances from where they ideally want to be. Although location may be a
factor in the purchasing decision price, product and service may be more
important.
Architectural design can be a competitive advantage (Roberts and Shea,
1996). The first large interior atrium hotel was constructed in Atlanta,
Georgia, in the late 1960s. For the times, its unique design was dramatic,
and initially the building owners had some difficulty finding a hotel chain
that would operate the new project. Hyatt Hotels finally agreed after sever-
al other companies turned away the project, and Hyatt has continued to use
unique architectural designs to distinguish itself. Competitors could not
easily modity existing buildings, so the distinctive designs used by Hyatt
endured for many years as a competitive advantage. Thirty years later the
concept of interior atriums is no longer unique, but Hyatt continues this
approach by seeking other dramatic architectural compositions. The tubu-
lar, oblong-shaped Hyatt Hotel near the Charles De Gaulle Airport in Paris
and the three-story, open air lobby of the Hyatt Regency Maui are but two
examples.

Strategic Management

A sustainable competitive advantage is the combination of firm pro-

cesses, skills, and/or assets that together create an edge in the eyes of the
customer (Prahalad and Hamel, 1990). These unique strengths are called
core competencies, and usage of them is considered strategic intent. That
is, firms select various sets of activities in planning efforts that they feel
will help them reach specific goals. This act of planning is very deliberate,
with choices made about specific tactics that are expected to achieve
desired results (Olsen, West, and Tse, 1998).
However, the concept of strategy is about more than just planning. It is
about allocating organizational resources and crafting actions that are in
114 Service Quality Management in Hospitality, Tourism, and Leisure

concert with the mission or primary purpose of the firm (Olsen, West, and
Tse, 1998; Schulze, 1992). The field of strategic management is the study
of an organization’s ability to align itself with forces driving change in its
competitive environment (Ansoff, 1988). It is a decision-making approach
to managing that integrates a firm’s mission, goals, and organizational
resources to create the most value over time (Porter, 1980).

Environment

The environment in which firms currently operate has changed dramati-

cally. It is no longer steady and predictable, as it was in prior decades.
Rather, it is turbulent, and the rate of change is highly unpredictable.
These changes occur in both the general environment (in which we all
live) as well as within the highly competitive hospitality industry environ-
ment.
In the general environment, a number of social, technological, political,
economic, and environmental forces continually alter our world. For
instance, the aging of the baby boomers is having a significant impact on
consumer buying patterns. Advances in electronic and computer technolo-
gy have revolutionized the computer and telecommunications industries.
These advances have had an impact on our homes, schools, and businesses
through the new products we use. All of these environmental forces have
an effect to one degree or another. As managers, then, we must be aware of
these environmental forces, assess their impact, and craft appropriate orga-
nizational responses (Wright, Pringle, and Kroll, 1992).
Forces are at work in the competitive environment, too. The competi-
tive environment is called the task environment, as it represents the subset
of the environment in which the firm operates. Customers, suppliers, ri-
vals, and the government all act in ways that influence the task environ-
ment. Customers change their preferences, often influenced by competi-
tors who offer new products or services. Legislatures increase taxes or
regulate business actions.
Consider companies that made typewriters. They are virtually out of
business today unless they learned to produce something radically differ-
ent, such as word processing software or personal computers. To keep
ahead of these forces of change, firms must seek out news of such
changes. They must carefully analyze these changes and take appropriate
actions in order to maintain a strategic alignment between their mission,
goals, strategies, and the environment.
Strategies are not built with a view only to the firm’s goals, resources,
and capabilities. The alignment of a firm’s strategy with the forces at work
in the environment is an absolute necessity to succeed. It is this “fit” that
 Competitive Advantages of Service Quality Wes)

managers seek when they build strategic plans. And since the environment
rarely remains perfectly stable and unchanging, strategies must be de-
signed to be flexible to allow the firm to adapt to change. Most of the time
such adapting requires only small adjustments to existing plans, some
minor variation or shift. This is referred to as incremental change. Other
times the environmental impact is so strong as to require frame-breaking
adjustments. This is referred to as radical change. Regardless of which
type of change action is needed, the firm must be cognizant of these
environmental forces. It must be prepared to adapt in order to maintain a
proper alignment between the firm’s goals, strategies, resources, capabili-
ties, and the environment.

CORE COMPETENCIES

Although all organizations may desire a core competency to create a

competitive advantage, not all firms possess the essential mix of resources.
Many firms may think they have one but really do not, while other firms
may be unaware of their core competencies. A core competency has four
critical elements (Prahalad and Hamel, 1990). First, as described previous-
ly, it must be a unique asset, process, or skill. Second, it must be useful
over a wide range of markets. The 3M Company’s expertise with adhe-
sives gives it the ability to create products that range from oftice supplies
such as Post-it notes and Scotch tape to industrial glue used in aircraft
construction. Third, there must be an increase in benefits in the eyes of the
consumer. For example, the Intel Corporation is widely known for the
microprocessors it makes for personal computers. Customers perceive a
greater value if a PC has an Intel chip rather than some other brand
because of their reputation for performance reliability and quality. Finally,
a core competency should be difficult to imitate. Competitors may acquire
some of the resources that make up a competency, but often they will lack
the human resources and production skills that are used to create the
product or service, and so are unable to exactly duplicate it.
These core competencies may be either internal or external to the firm.
For instance, Sony Electronics has a core competency in its ability to
miniaturize. They have nearly perfected the process of shrinking electron-
ic products. As consumers, what we see is an array of well-crafted, useful,
and smaller versions of popular products such as radios and televisions.
What we do not see is the carefully integrated array of research and
development techniques they employ to miniaturize products.
On the other hand, firms such as Disney have built external competen-
cies. As with the majority of service firms, the customer is very involved
116 Service Quality Management in Hospitality, Tourism, and Leisure

in the delivery of the Disney entertainment experience at their amusement

parks. They have developed a wealth of people management skills. From
quickly and smoothly orchestrating the parking of tens of thousands of
automobiles daily to the movement of people around the parks, Disney
demonstrates moment after moment its expertise in entertainment. Where
else are customers willing to wait in such long lines—many times more
than an hour—just to experience a product?
Disney has even made the waiting entertaining, a skill that is the envy
of many other companies. Disney has also mastered the concept of mer-
chandising, tying product sales to the many images in the Disney portfolio.
All of these competencies work together to create the perception of a
quality entertainment experience, and all of these activities are performed
externally, in full view of the customer. Disney has indeed developed a
competitive advantage from this strong set of core competencies.

SERVICE QUALITY
AS A COMPETITIVE ADVANTAGE

The Disney experience is a good example of how service may be used

to create a competitive advantage. However, service products are often
much more difficult to produce than physical olin Ree are deliv-
ered much differently than pdt \Gronros (1990) suggests that there
is anfimportant distinction between the process of service delivery and the
actual output of a serviceHe believes customers will compare their ex-
pectations against the combination of both the service process and the
actual service output. In the hospitality industry, the customer is involved
to some degree in virtually all that we do. What we strive for is the ability
to design service systems that are customer friendly, and that allow posi-
tive interaction between staff (service providers) and guests (service re-
ceivers).
Service quality can be used as a competitive advantage (Hamel and
Prahalad, 1989). Firms have learned to create superior service levels that
are not easily duplicated. The Ritz-Carlton Hotel Company is a good
example. A basis for their service quality approach is their motto: “We Are
Ladies and Gentlemen Serving Ladies and Gentlemen.” This statement
sets a tone for service delivery that is easily understood by all employees,
and is a clear benchmark of high expectations in service quality. However,
to build a competitive advantage using service quality is not easy. Services
are quite different from products. A customer does not see a product until
a firm believes it is ready for the marketplace. In contrast, services cannot
be held until ready for delivery.
 Competitive Advantages of Service Quality 117

Because this topic is of great interest to managers, much research has

been conducted to learn about these differences in great detail. Based upon
this research effort to date, we conclude that services are different from
products in four primary ways. First, service is a performance, not a
physical item. It cannot be stored and inventoried. It cannot be quality
checked before delivery. Its creation cannot be automated or computer
controlled. Second, the customer is always involved in the service process.
Services performed in the absence of the customer are not seen or valued.
Third, service delivery must be managed. Customers want services when
and where they perceive they need them. Therefore, service firms must
adapt to customer needs and deliver services under conditions that satisfy
the customer.
Finally, quality control of services is very difficult. Manufactured prod-
ucts can be checked in the production area before any customer is aware of
a defect (Juran, 1992). Automation can be used to standardize production
processes to ensure consistency. This is simply less possible with services.
Since the customer is involved in the service delivery process, there is no
opportunity to check for quality in advance. Customers are instantly aware
of a breakdown in service. Further, since humans deliver services to other
humans, automation can rarely be used. Therefore, staff training in service
delivery becomes a high priority for service firms. Management also needs
to maintain a high level of awareness of service failures (Bateson, 1995).
An unhappy customer does not easily forget a service failure. To keep a
customer, management knows it must swiftly act to correct a service
failure plus offer additional services to appease the unhappy customers.
Given these differences between services and products, how can we
control quality? In manufacturing concerns, conformance to an estab-
lished standard or set of specifications is emphasized (Juran, 1982). We
can do this in service firms, too. Standards for employee behavior in
service delivery can be identified and taught. For example, staff can be
trained to greet customers with standard phrases. A specification is devel-
oped and learned, and management can perform a quality control check by
listening to employees greet guests.
However, this alone is not enough to control quality. Service delivery is
performed in response to a customer need. It is important that the service
delivered match the customer need. While greeting phrases can be devel-
oped that appropriately vary with the time of day or the weather outside,
they can hardly be prepared to respond to the wide range of human emo-
tions. Further, because customer expectations and perceptions are constant-
ly shifting, customer concepts of quality shift as well. Therefore, quality
 118 Service Quality Management in Hospitality, Tourism, and Leisure

must be viewed as having two important dimensions: responsiveness and

consistency.
Responsiveness is the process of reacting easily or readily. Many firms
attempt to be responsive to market trends and changing customer de-
mands. Hyatt Hotels demonstrates a very high level of individual respon-
siveness with their “Hyatt touch” program, which prepares employees to
respond to specific guest needs as they occur. It is not a program of
prepared (or canned) responses. Rather, it permits the employee to identify
a unique guest need and to respond accordingly. Not all firms have em-
powered their staff in this manner. This approach permits Hyatt to main-
tain a high level of responsiveness—on an individual guest basis—in
order to deliver their goal of a high-quality lodging experience.
Consistency is the process of repeatedly producing a good or service in
the same manner. The concept is not centered on the level of quality,
which can be low or high. Rather, the item (or service) is delivered in
exactly the same fashion, with the same level of quality, each time it is
produced or performed. For example, McDonald’s is well known for its
consistency in the production of hamburgers. Each of us expects every
McDonald’s sandwich to be similar to the last one. We expect consistency
without regard to geography or time of day. McDonald’s meets this expec-
tation by maintaining rigorous standards in their production process.

MATCHING SERVICE QUALITY WITH STRATEGY

Service quality can be used as a competitive strategy. However, a com-

petitive strategy based upon service quality does not necessarily mean
adopting a premium level of service. The restaurant meal, the hotel room,
and the package tour are the primary products in the hospitality and leisure
industries. How they are delivered to customers is where service quality
can make the difference.

ler, ye | maintain desired cost efficiencies. For example, McDonald’s

offers products in the fast-food segment of the food service industry. Al-
though their product positioning and price are at the lower end of the
competitive spectrum, McDonald’s has built a very strong reputation for
(offering quality products)that people want, when they want them. Uniformi-
ty in production is a major goal. They use fine quality ingredients, but not
necessarily the absolutely highest premium meats, condiments, or breads.
 Competitive Advantages of Service Quality 119

then swiftly filling their orders is a key focus of staff training programs.
What they do not do is offer an obsequious level of service, which is both
time consuming for customers and costl n terms of increased labor
expenses for the firm tL
fa Vict rrurther givenMine farce num-
bers of people oneserve ver? “ia McDonald’s would see excessive
increases in labor costs. It would require more workers to provide higher
levels of individualized attention. Therefore, given McDonald’s strategic
intent of competing in the fast-food business, they have accurately
matched the quality of their product with the quality of their service
delivery. Both are consistent and responsive to customer desires.
The same attention is needed at higher levels of product positioning.
Firms that operate in full-service segments should be just as keenly aware
of the service expectations of customers.

or example, providing luggage trolleys at the reception desk

for guest use when the bell staff is busy would likely not be perceived as
an acceptable level of service. Customers select full-service operations
because of the higher level of service they perceive they will consistently
receive. Although self-service trolleys would be useful in moving luggage,
customer expectations would not be met. Hotel guests at full-service prop-
erties expect the bell staff to always be availa aggage handling.
A hotel in San
Francisco attempted a service strategy combining five-star Asian service
with five-star American lodging. Employees were to be personal valets,
catering to every guest’s need and whim. While many guests in this inter-
national business city were from Pacific Rim countries, a larger percentage
were from North America. Therefore, the majority of guests were

Even Asian guests did not expect such service in the

umm. Guests were Bien eating by ita Services Fives Peeeal

valets would provide.
The statf spent most of their time cleaning rooms rather than servicing.
Thus, they were not always available when needed to provide certain
120 — Service Quality Management in Hospitality, Tourism, and Leisure

services in a timely manner. Furthermore, the personal valets were hired

with the expectation that they would earn a large portion of their income
from tipping in exchange for the high level of personalized service. The
combination of guests not desiring the personalized service as expected
and personal valets spending much of their time cleaning resulted in very
low tips. Therefore, the strategy did not succeed. Guests were confused
and workers were unhappy. A good match was not achieved between
service quality and product.
These examples show that firms can use service quality to create a
competitive advantage, but the issues of responsiveness and consistency
play key roles. The service quality provided must be built upon core
competencies. Firms must offer what is desired and offer it in the same
way each time to meet customer perceptions of service quality.

Service Quality and Process Competencies

Service quality strategies can be built using many different process

competencies. Most apparent are those transactions that directly involve
the customer. As shown in the examples previously cited, the level of
service quality applied in the service delivery function can be intentionally
targeted and finely tuned. However, service quality in processes can be
applied widely across the organization. The issue is not limited to interac-
tions with customers. It can be embedded not only in operational issues,
but also in financial management, organizational design, and the corporate
culture. For example, how a firm manages its relationships with lenders,
suppliers, and investors can easily impact its ability to negotiate favorable
financial terms and conditions. Further, how employees of organizations
choose to interrelate with one another can be impacted by service quality.
Every enterprise can inculcate its own culture with the same focus on
consistent and responsive staff interaction that is often created for custom-
er interaction. In the hospitality business, where so many employees per-
form their tasks in front of the guest, the consistency and responsiveness in
how they treat one another is very visible to customers.

SUSTAINABLE COMPETITIVE ADVANTAGE

The turbulent general and competitive environment is a force driving

radical change in hospitality and leisure services. Globalization, the in-
creasing sophistication of consumers, and dramatic changes in information
technology are forcing hospitality and leisure firms to create distinctive
 Competitive Advantages of Service Quality 121

competitive advantages. Firms seek to successfully align their mission,

goals, and resources with their environments in order to maximize perfor-
mance. They draw upon inner strengths to build enduring strategies. In
these ever-changing times, merely imitating rivals does not create a lasting
competitive edge.
The pattern of adding amenitiesto continueto attract customers (ame-
nity creep) is reducing the distinction between firms. Similar to the airline
industry, where air travel is viewed as a commodity and there are only
minor differences in service perceptions, within product segments hos-
pitality and leisure products are becoming more homogenized. As prod-
ucts move toward each other in terms of features and quality (within
product segments) it becomes more difficult to effectively compete. To
create a sustainable competitive advantage, firms seek to develop core
competencies: unique combinations of processes, skills, and/or assets. As
competitors move closer together in terms of product quality, it is the
service quality developed by these core competencies that will be used
more often to create a competitive distinctiveness.
Service quality can be utilized in how a business produces and delivers
its products and services; in how it manages its employees; and in how it
builds a strong brand identity and reputation. It is a process that includes
both the responsiveness of the service and the consistency of the service
delivery. Firms that learn how to match service quality as an operational
approach with their competitive methods can create a formidable and
sustainable competitive advantage.

REFERENCES
Ansoff, H.I. (1988). The New Corporate Strategy. New York: John Wiley and
Sons.
Bateson, J.E.G. (1995). Managing Services Marketing. Fort Worth, TX: Dryden
Press.
Grénroos, C. (1990). Service Management and Marketing. Lexington, MA: Lex-
ington Books.
Hamel, C. and Prahalad, C.K. (1989). Strategic Intent. Harvard Business Review,
May-June: 63-76.
Juran, J.M. (1992). Juran on Quality by Design: The New Steps for Planning
Quality into Goods and Services. New York: The Free Press.
Lovelock, C.H. (1996). Services Marketing (Third Edition). Upper Saddle River,
NJ: Prentice Hall.
Olsen, M.D., West, J.J., and Tse, E.C. (1998). Strategic Management in the Hos-
pitality Industry (Second Edition). New York: John Wiley.
Porter, M.E. (1980). Competitive Strategy: Techniques for Analyzing Industries
and Competitors. New York: The Free Press.
122 Service Quality Management in Hospitality, Tourism, and Leisure

Prahalad, C.K. and Hamel, G. (1990). The Core Competence of the Corporation.
Harvard Business Review, May-June: 79-91.
Roberts, C. and Shea, L.J. (1996). Core Capabilities in the Hotel Industry. Hos-
pitality Research Journal, 19(4): 141-153.
Schulze, W.S. (1992). The Two Resource-Based Models of the Firm: Definitions
and Implications for Research. Best Papers Proceedings, Academy of Manage-
ment, 52, 37-41.
Wright, P., Pringle, C.D., and Kroll, M.J. (1992). Strategic Management. Boston:
Allyn and Bacon.
 Chapter 8

Approaches to Enhance
Service Quality Orientation
in the United Kingdom:
The Role of the Public Sector
Gillian Maxwell
Susan Ogden
Victoria Russell

INTRODUCTION

The origins of the U.K. “quality movement” arguably lie in the British
Standards Institution’s (BSI) definition of quality as the “totality of fea-
tures and characteristics of a product or service that bear on its ability to
satisfy a need” (British Standards Institution, 1983) and the publication of
the British national standard, BS 5750, in 1979. The international equiva-
lent, ISO9000, was launched in 1987 by the International Organization for
Standardization (ISO). ISO9000 was subsequently adopted as the Euro-
pean standard (EN9000) to promote industry competitiveness throughout
the world and to assist development of the European internal market.
Nationally and internationally, this approach has therefore provided the
key guiding principles for quality management (DETR, 1998). Quality by
the original BSI and ISO definitions is explicitly derived from a manufac-
turing approach which adopts a process control perspective to prevent
errors. However, this approach to quality orientation is limited in relation
to the complex task of managing tourism services (Maxwell, 1994), be-
cause tourism experiences are delivered by a range of suppliers from the
public, private, and voluntary sectors and are then purchased, experienced,
and evaluated by consumers over time and distance (Augustyn, 1998).
Since the early 1980s, though, a number of approaches to service quali-
ty management have evolved to stress the importance of satisfying the
i235
124 Service Quality Management in Hospitality, Tourism, and Leisure

needs of increasingly sophisticated customers by delivering intangibles

such as flexibility and friendliness (Becker, 1996). Again, there are limita-
tions in this emphasis in the context of tourism as intangible offerings are,
to some extent, predicated on tangible, finished standards such as cleanli-
ness—although the delivery of the tangible services is often intangible
(Murdick, Reuder, and Russell, 1990). Instead, wider approaches, effec-
tive in meeting customer expectations regarding both the softer (intangi-
ble) and hard (tangible) elements of quality, are required (Maxwell, 1994).
One result has been a continuing emphasis on training to enhance service
delivery skills. Acknowledgment of the importance of training to achieve
service quality is evident in the 1990 introduction of a national training
standard, Investors in People (liP). The widespread and successful imple-
mentation of this standard since 1990 and the impact of other quality
assurance schemes has increased the United Kingdom’s international com-
petitiveness in tourism provision.
U.K. public sector policy for promoting quality awareness and im-
provement is now gradually becoming more sophisticated, reflecting de-
velopment in the understanding of service quality across both hard and
soft constituents. This can be seen particularly in relation to the U.K.
tourism sector where the framework for promoting quality is multifaceted.
Here, a wide array of national and regional initiatives has been aimed at
both public and private sector organizations responsible for contributing to
the tourist experience; some of these are discussed in this chapter. As will
be seen, the range of initiatives is a direct reflection of the complexity and
variety of stakeholders involved in the U.K. tourism industry.

THE U.K. TOURISM INDUSTRY:

THE QUALITY CONTEXT

The domestic and international tourism markets of the United Kingdom

of Great Britain and Northern Ireland (U.K.), worth over £17 billion per
annum (Ernst and Young, 1998), are characterized by a high degree of
volatility and seasonality. U.K. tourism attracts a wide range of visitors
and is usually classified by type: urban and rural; industrial; conference
and business; retail; historical, arts, and cultural tourism; and sports, lei-
sure, and events tourism, for example. The effects of market volatility and
seasonality, set in an increasingly mature and competitive marketplace, are
diverse and sometimes differentiated in product and service offerings
(Maxwell and Connell, 1994).
U.K. tourism provision is characterized, above all, by its fragmentation
and diversity. This can be seen in geographical dispersion, organizational
 Approaches to Enhance Service Quality Orientation in the U.K. PA)

size and characteristics, and public sector involvement, each of which is

outlined in the following sections.

Geographical Dispersion

Tourism sites span the length and breadth of the mainland island of
Britain, with the geographical and cultural diversity of the United Kingdom
providing attractions for both domestic and international visitors. On the
north/south axis, popular tourist destinations are found at John O’Groats at
the northernmost tip of Scotland and Land’s End at the southernmost tip of
England. On the west/east axis, County Kerry in Northern Ireland, across
the Irish Sea from mainland United Kingdom, is a scenic tourist destination,
as are the Norfolk Broads, at the easternmost North Sea coastline in
England, which also are renowned as a nature reserve and boating area.
With communication and transport links ever improving, the range of is-
lands, most notably the Outer Hebrides, Orkney, and Shetland off Scotland,
beyond mainland Britain are increasingly accessible to tourists. That the
United Kingdom is an island destination is particularly significant for inter-
national tourism, in that overseas tourists have to be dedicated to making the
specific journey to the United Kingdom. The recent opening of the Channel
Tunnel train service linking the United Kingdom and France is, however,
increasingly making exit from and entry to continental Europe more acces-
sible.

Organizational Size and Employment Characteristics

Companies with interests in tourism range in size from international,

public limited company operators such as British Airways, British Air-
ports Authority, and Hilton hotels to a legion of small bed-and-breakfast
operators and independently owned visitor attractions. In between are
national organizations such as The National Trust, one of the most well-
known and largest voluntary organizations in the United Kingdom, which
maintains a wide range of historic properties, parks, and woodlands; the
public sector National Tourist Boards (NTBs) of Scotland, England,
Wales, and Northern Ireland; and regional, public sector organizations
such as Area Tourist Boards (ATBs).
Employment in the tourism sector is typically characterized by labor
intensity and intensification, and part-time and seasonal work undertaken in
particular by female and young employees. In the hotel sector especially,
employment practices can be conspicuously poor (Wood, 1992; Price,
1994), as manifest in, for example, low pay, long working hours, and casual
126 Service Quality Management in Hospitality, Tourism, and Leisure

employment contracts. Employment management is conspicuously mar-

ginalized (Goldsmith et al., 1997). In the face of such employment circum-
stances and conditions, employees may be generally disinclined to offer
quality service (Barron and Maxwell, 1998).

Public Sector Involvement

At a national level in the United Kingdom, several government depart-

ments have responsibility for tourism, with Secretaries of State for the
Departments of National Heritage, Sport, Environment, and Transport, for
example. Also, the Departments of the Chancellor of the Exchequer and
Trade and Industry encompass tourism-related issues within their portfo-
lio. Tourism interests even extend to the Ministry of Defense, which grants
access to walkers and ramblers as a major landowner. Central government
also provides subsidies to various organizations or QUANGOS (quasi-
autonomous nongovernmental organizations), e.g., the Arts Council, the
Sports Council, and the Countryside Commission, in order to assist in the
development of the tourism industry. An important current political devel-
opment in the United Kingdom is the formation of national assemblies in
Scotland, Wales, and Northern Ireland.
Public sector influence extends to a local government level. Local au-
thorities are an important provider of a wide range of tourist and leisure
facilities, such as museums and art galleries, libraries, parks, golf courses,
swimming pools, and leisure centers, which are either provided for free or
with heavily subsidized entry fees. Local government management of these
facilities is becoming more commercialized in response partly to private
sector competition and pressures on public funding, but also due to the need
to appeal to more sophisticated domestic and international visitors. For
example, local authority museums and galleries, which have historically
had free admission for all visitors, are increasingly relying on the full
exploitation of ancillary services, such as retailing and catering, to maxi-
mize revenue from visitors while simultaneously improving the total visitor
experience (McPherson, 1997). Within a public sector leisure or museum
facility, as a result of compulsory competitive tendering, visitor catering
may be provided by a private sector contractor. Also increasingly common
is the use of joint ventures, termed public-private partnerships, where the
local authority and a private developer unite to develop a new leisure
complex with management of all or part of the facility transferred to the
private sector. This approach has encouraged the shift from municipal
swimming baths to themed leisure centers, for example. Often, joint ven-
tures have the effect of merging local resident and tourist markets. The use
 Approaches to Enhance Service Quality Orientation in the U.K. {27

of Charitable Trust Status is similarly gaining importance due to the inher-

ent regulatory benefits in tax, employment, and operational conditions.
Thus the very nature of the U.K. tourism industry, in its individual and
interrelated characteristics, makes for a challenging context in which to
embrace theories of service quality. The following sections focus on the
role of the U.K. public sector in the drive for service quality.

DRIVING QUALITY FORWARD

IN U. K. PUBLIC SERVICES

Compulsory Competitive Tendering

Despite the evolution of customer-focused approaches to service quality,

the manufacturing approach to quality largely dominated quality enhance-
ment of public services in the United Kingdom up until the mid-1990s. This
can be demonstrated by examining the implementation at the local govern-
ment level of the compulsory competitive tendering (CCT) system, first in
1988 for “hard” (tangible) services such as catering, cleaning, and grounds
maintenance in museums and galleries, leisure centers, and parks, and then
in 1989 to “soft” (more intangible) services such as sport and leisure man-
agement. The belief of the (then) conservative government in introducing
CCT was that competition is the best guarantee of quality and value for
money. The overriding principle was that the public sector should only
continue to provide services if they could demonstrate value for money in
their management of them in comparison with the private sector. Value for
money was usually defined by three criteria:

¢ Economy (cost of services)

¢ Efficiency (comparing the amount/quality of outputs for any given
level of inputs)
e Effectiveness (a judgment on whether the right outcomes are being
achieved)

However, it is now widely accepted that given the strict mechanisms

imposed for the management of CCT, the main incentive for local govern-
ment managers has been to concentrate on using economy as the basis for
service provision (ILAM, 1997, p. 2).
Central to the implementation of CCT was the introduction of a client/
contractor division in the management of services whereby the client had the
responsibility for the developing the service specification, inviting tenders
128 Service Quality Management in Hospitality, Tourism, and Leisure

from both the in-house contractor and private sector contractors, awarding the
contract to the tender offering the most value for money, and subsequently
monitoring contract performance. The winning contractor had the responsi-
bility for delivering the service to the contract specification at the agreed
contract price. In awarding contracts, the quality of processes and systems
contained in the tender documentation could also be taken into account. Thus,
the incentive to gain an external quality award such as ISO9000 as a badge of
respectability increased under CCT. Indeed, many authorities sought ISO-
9000 accreditation from potential contractors (both internal and external) as
assurance that the contractor had quality systems in place. This became a
justification for awarding the contract internally even where the tender price
was slightly higher. Consequently, the implementation of CCT, at its simplest,
encouraged a quality control approach to service management, and, at best, a
quality assurance approach (see Table 8.1).
As quality management theory predicted, relying on such a products-
based approach to service quality caused problems when dealing with com-
plex services, which contain a large degree of intangible and experiential
elements. As Figure 8.1 illustrates, quality gaps can arise if the specification
is not designed to meet customer expectations and needs (Gap 1 and 2), or if
the service delivery does not meet the contract specification (Gap 3). CCT
was, therefore, criticized for achieving the goals of efficiency and economy
to the detriment of effectiveness; that is, delivering the service to the specifi-
cation at the prespecified price taking precedence over the specification
design and service innovation and development. Contract specifications
concentrated on numerically measurable outputs due to the difficulty of
specifying and monitoring intangibles such as the “enjoyability” of the
visitor experience or the needs of the local community. Furthermore, the
client/contractor division, where it has been rigidly applied, has hindered
the development of services. Of course, the extent to which CCT has had
any impact at all on the quality of service delivery has depended on the
perceived level of competitive threat within each locality. Thus it has been
alleged that “under CCT service quality has often been neglected and effi-
ciency gains have been uneven and uncertain, and it has proved inflexible in
practice” (DETR, 1998).
The approach to quality embedded in the CCT example, therefore,
constitutes a defining stage in the development of service quality orienta-
tion in the United Kingdom on two counts. First, it provides valuable and
extensive experience of the implementation of a national, product-based
quality system. Second and consequently, it provides an example of how
planning for quality has to be continuously reviewed; CCT itself is cur-
rently subject to a moratorium.
 Approaches to Enhance Service Quality Orientation in the U.K. 129

FIGURE 8.1. Quality Gap Model

Customer
Requirements

Management Perception
of Customer Requirements

Service Quality
Specification

Service Quality
Delivered

Service Quality
Customers Expect

Customer Perceptions
of Quality Delivered

Source: Adapted from Brogowicz, Delene, and Lyth, 1990.

The focus on service quality within the United Kingdom is now matur-
ing from the initial products-based initiatives, such as CCT, imported from
the manufacturing sector, to an approach based more on process orienta-
tion. This more recent and revised approach is reflected, for example, in
130 Service Quality Management in Hospitality, Tourism, and Leisure

the recent policy shift away from CCT to the introduction of the Best
Value (BV) policy by the labor government elected in 1997.

Best Value

Best Value is founded on a continuous improvement, process-based

approach to quality management. It has been interpreted as a “move away
from putting price considerations top of the list, for fear of falling foul of
Government sanctions, and instead focusing first on the question of effec-
tiveness” (ILAM, 1997). In essence it seeks to ensure that all quality gaps
are monitored and closed. A key principle is “the need to establish plans
and targets for improvements in the quality of services” (ILAM, 1997).
Thus the development of innovation in service delivery is encouraged.
This is underpinned by performance comparison between organizations
via benchmarking. Management of the quality chain—both internal and
external customers—is an important element of the policy: “greater in-
volvement of local people in setting the objectives for service provision”
(ILAM, 1997). Also important is a duty to be taken into account the
“social, economic and environmental well-being of the community”
(ADLO, 1997). Table 8.1 summarizes the key differences between CCT
and Best Value, with reference to the Quality Gap Model.

The Scottish Tourist Board

The developments in providing local and competitive public services

have been reflected in other quality schemes and initiatives, which can
extend to facilitating quality in the private sector. The Scottish Tourist
Board (STB), with its specific aim to increase quality in tourism provision
to enable international competitiveness, is one such example. Tourism in
Scotland now supports 177,000 jobs—8 percent of the workforce—and
accounts for 5 percent of GDP (BDO Hospitality Consulting, 1998). Not
only has the STB effectively and proactively addressed the issue of quality
service in Scottish tourism, but it has also led the way for its counterparts
in the rest of the United Kingdom and Europe.
One of the four National Tourist Boards in the United Kingdom, the STB
launched the first NT'B quality assurance scheme for accommodation provi-
sion in the mid-1980s and was followed by the English Tourist Board (ETB)
and Welsh Tourist Board (WTB). This scheme was introduced initially as a
classification of accommodation facilities symbolized by crowns, and an
optional assessment of quality grading which included a range of service
measures and facilities (see Table 8.2).
 Approaches to Enhance Service Quality Orientation in the U.K. HSI

TABLE 8.1. The Shift from CCT to Best Value—A Quality Perspective

Policy Economy and efficiency: Economy, efficiency, and

Imperatives - cost control effectiveness:
- revenue generation - customer focus

Gap 1 Distancing of external customer Full involvement of all parties in

(External and supplier via the setting service levels (internal
customer client/contractor split. and external customers and
| focus) suppliers).
Gap 2 (Service Set service specifications over | Continuous review and service
design) length of contract—client role. improvement—provider role.
Gap 3 Measurement of outputs against Measurement of outcomes
(Service service specifications and against performance of similar
delivery) contract price. Contract authorities via benchmarking.
penalties for failure.
Gap 4 and 5 Competition every 4/5 years. A duty to regularly:
(Service - publicize targets and service
review) standards
- monitor customer satisfaction
External auditing with public
reporting
Quality Control Total Quality Management
(product orientation) (process orientation)

$$$
Note: Another illustration of a quality assurance initiative in the public sector is
included in Best Practice Example 1: The QUEST for Quality in Sport and Lei-
sure.

TABLE 8.2. NTB’s Quality Assurance Scheme

Classification Scheme Listed

(determining the range and type One Crown
of facilities offered) ne Grane
Three Crowns
Four Crowns
Five Crowns

| Grading Scheme Approved

(determining the quality of facilities Commended
offered) Highly Commended
Deluxe
132. Service Quality Management in Hospitality, Tourism, and Leisure

Two motoring organizations, the Automobile Association (AA) and

Royal Automobile Association (RAC), had long provided examples of
quality grading for accommodation providers. However, it was the
introduction of the NTB schemes that provided for the first time both
large-scale coverage and increased consumer recognition of the accom-
modation facilities and services available. The STB provides an example
of facilitating and addressing quality by constantly developing its scheme
in response to consumer demand, including the following:

¢ Making the optional grading assessment mandatory (in 1991), re-

sulting in raising standards in hotel provision
¢ Introducing a new quality grade, “Deluxe,” to encourage quality pro-
vision at the highest end
¢ Introducing “specifications” that ensure accommodation providers
only achieve a grade through a minimum, as opposed to average,
grading percentage
¢ From 1996, basing ATB membership on quality assurance membership

The NTB scheme, though a significant milestone, proved a source of

customer dissatisfaction as it was perceived as difficult to understand.
Hotels with five-crown facilities, for example, did not necessarily provide
an equivalent quality of service. As a result, all four NTBs and the two
motoring organizations embarked on discussions in 1994 with a view to
providing a uniform scheme that would help promote an increase in the
number of overseas visitors. However, these organizations were unable to
agree on a harmonized scheme. Consequently, the STB introduced its own
“STAR” classification and grading scheme, based on awarding an ap-
propriate level of STARs to each accommodation provider, which began to
operate on August 1, 1997. (Best Practice Example 2, at the end of the
chapter, outlines the STAR scheme.)
Important for the STB is the high membership it enjoys in relation to
overall accommodation provision in Scotland (see Figure 8.2) and in
comparison to that of the ETB. Following the introduction of the STAR
scheme, a significant number of STB members have increased their grad-
ing assessment, and it has been argued that they have been encouraged to
invest in property improvements (Segal Quince Wickstead Ltd., 1998). In
1998, versions of the STAR scheme were introduced elsewhere in the
United Kingdom. The ETB, with the support of AA and RAC, planned
that its own STAR scheme—for hotels only—would be fully operational
by the year 2000.
 Approaches to Enhance Service Quality Orientation in the U.K. 135:

FIGURE 8.2. Accommodation Breakdown in Scotland

35.32%

Self-catering

Lodge
0.15%

30.68%
21.15%
12.7%

Source: Campbell, 1997.

Training in Scotland

The STB also has a firm commitment to providing support for training
initiatives across Scotland, which are delivered through the Local Enter-
prise Company (LEC) network. Tourism Training Scotland (TTS) is a
national initiative set up to promote effective training and staff develop-
ment across Scotland. Its mission is “to transform Scotland’s competitive
position in tourism, through promoting quality training and career devel-
opment for all who work in the industry, to ensure that a world-class
quality of service is enjoyed by all visitors to Scotland” (Scottish Tourist
Board, 1997b). Typical programs delivered or supported under this initia-
tive include the following:

1. Investors in People (IiP) national standard—a long-term process that

ties training to business objectives
2. Welcome Host—a one-day awareness seminar aimed at improving the
standard of service and hospitality offered to visitors to Scotland
3. Scotland’s Best—a one-day course for frontline staff and a two-day
course for managers and supervisors, aimed at developing a service
strategy
4, Natural Cook—a one-day awareness workshop aimed at raising the
protile of cooking using Scottish produce
5. Tourism Business Success—a tailor-made package to improve business
management skills
134. Service Quality Management in Hospitality, Tourism, and Leisure

6. Scottish Quality Retailing (SQR)}—aiming to improve retailers’ busi-

ness performance
7. Scottish Vocational Qualifications (SVQ)—aimed at improving busi-
ness performance through a set of professional standards
8. Conference Care—a one-day awareness workshop aimed at improving
standards for the conference and business traveler

The local enterprise network also delivers a number of customized

training courses depending on market demands in each LEC region. Typi-
cal courses include marketing and housekeeping.
The [iP standard has been particularly successful (Alberga, 1997). It is
based on four principles and twenty-three performance indicators. First
developed in 1990, the standard was modified in 1997. iP recognition has
been secured not only by large chain hotels, but also by a range of leisure
and tourism attractions such as visitor attractions, tea rooms, and coach
companies. (Examples of this are included in Best Practice Examples
3 and 4 at the end of the chapter.) Government policy is to continue to
actively support the IiP standard with targets set for increasing the number
of establishments with IiP recognition. Businesses initially commit to the
principles of IiP, then are formally assessed and, if appropriate, officially
recognized as Investors in People. With reassessment mandatory every
three years, the full IiP cycle from commitment to reassessment ensures
continuous review (see Figure 8.3).

FIGURE 8.3. liP Cycle

COMMIT
to investing in people
to achieve business
goals

EVALUATE PLAN
progress toward goals, how skill needs of
value achieved, and individuals and teams
future training needs are to be developed
to achieve business
goals

ACT
to develop and use necessary
skills in a well-defined and
continuing training program
 Approaches to Enhance Service Quality Orientation in the U.K. 135

CONCLUSION: EMERGENT ISSUES

IN SERVICE QUALITY
IN THE UNITED KINGDOM

U.K. public sector policy impacts on visitor experiences in both a direct

(Tourist Board accommodation classification schemes) and indirect (CCT,
Best Value) fashion. The variety of publicly supported national and regio-
nal quality initiatives (QUEST, liP, STARS) is indicative of the diffusion
of public sector bodies that influence the development and support of
tourism. Public policy can therefore be seen as an important catalyst for
the development of tourism in a diverse, but fragmented, way.
In overview, however, it can be seen that the initiatives impacting on
quality are generally shifting from a product to a process and, more recent-
ly, a user-based approach to quality assurance (Becker, 1996), which is
founded upon the premise that quality is a subjective perception which is
best evaluated from the perspective of the consumer. The user-based ap-
proach is particularly pertinent in the management of services, where the
total quality package is skewed away from the objective, physical attrib-
utes toward the intangible, experiential elements. As Baum, Amoah, and
Spivack (1997) acknowledge, delivering quality products and services in
tourism focuses increasingly on intangibles and the human factor in ser-
vice. The wide range of training initiatives supported by public funding is
evidence that the importance of enhancing the soft elements of services is
recognized. Furthermore, attempts are increasingly being made to measure
these intangibles in order to develop better control systems to monitor
service quality. This is particularly well illustrated with respect to the
QUEST accreditation system for sport and leisure facilities (see Best Prac-
tice Example 1) and in examples of successful IiP implementation (see
Best Practice Examples 3 and 4). The challenge of developing a holistic
approach to service quality management is ongoing, but within the U.K.
context, the recent design and redesign of initiatives aimed specifically at
the hospitality, tourism, and leisure sectors serve as examples of how this
challenge can be met. Monitoring the success of these schemes in terms of
enhancing the customer experience will be necessary to evaluate the pros-
pects for increasing service quality in the United Kingdom.
A danger of many of these schemes is that some service providers may
continue to see them in terms of gaining an emblem of respectability
primarily for promotional and marketing advantages, rather than tor genu-
inely improving customer satisfaction and the competitiveness of U.K.
tourism. Finally, it is asserted that the success of any quality initiative is to
varying degrees predicated on training.
136 Service Quality Management in Hospitality, Tourism, and Leisure

Best Practice Example 1:

The QUEST for Quality in Sport and Leisure

A further development in quality assurance has been the development of QUEST,

the only U.K. quality assurance scheme specifically designed for sport and leisure
facilities. Launched in 1996, the quality management initiative was developed by a
joint committee of various professional and public sector sport and leisure associa-
tions in the United Kingdom chaired by the Sports Council—“developed by the
industry, for the industry” (AQS, 1996b:2). It is targeted primarily at publicly owned
sport and leisure facilities, whether operated by the local authority, private sector
contractors, or voluntary sector organizations, with the aim of “setting clear industry
standards and providing a focus for raising standards and encouraging continuous
improvement” (AQS 1996a:1). However, it is hoped that QUEST has the potential to
develop appropriate standards for other sectors such as health and fitness centers
operated in the private sector.
The main principles of QUEST are quality improvement, shared knowledge, and
best practice. The scheme encourages managers to consider their operation from
the customer's point of view. Service improvement is achieved through a process of
ten steps starting with self-assessment against recognized industry standards
through to mystery customer visits and on-site assessment visits by trained asses-
sors and endorsement via a rating system with three categories: registered, highly
commended, and excellent. The assessment criteria cover twenty-four manage-
ment issues listed under four categories: facility operations, customer relations,
staffing, and service development and review.
1. Facility Operation
¢ Service Planning, Delivery, and Control
¢ Cleanliness
e Housekeeping
¢ Maintenance of Buildings, Plant, and Equipment
¢ Equipment
¢ Environmental Control
¢ Changing Rooms
¢ Health and Safety Management
¢ Inspection of Service Quality
. Customer Relations
¢ Customer Care
¢ Research
¢ Customer Feedback
¢ Advertising and Promotion
¢ Reception
¢ One-off Bookings
. Staffing
¢ Supervision and Staff Planning
e People Management
* Management Style
. Service Development and Review
¢ Programming and Sports Development
* Objectives
e Measurement and Review
e Usage
e Awards Achievement
* Service Development (AQS, 1996b:8)
 Approaches to Enhance Service Quality Orientation in the U.K. L37,

Best Practice Example 2:

Scottish Tourist Board “STARS” Classification and Grading Scheme

Within the “STARS” scheme introduced in August 1997, a number of classifications

exist to inform customers of the type of business they wish to book:

Hotel: a minimum of six letting bedrooms, of which at least 50 percent will have
en suite or private facilities (this will increase to 75 percent by the year 2001). A
hotel will normally be licensed (may be a restricted license) and serve breakfast
and dinner.
Guest House: a minimum of four letting bedrooms, of which at least 20 percent
(minimum of one) will have en suite or private facilities. Breakfast to be available
and evening meals may be provided.
Bed-and-Breakfast: accommodation offering bed and breakfast, normally, but
not always in a private house. B and B’s will usually have no more than six bed
spaces, and may or may not serve an evening meal (STB, 1997b).

The visit is classified into many areas. For a hotel, this can include up to nine
categories:

. Exterior: includes the appearance of the building, grounds and garden, environ-
ment, and parking
. Bedrooms: includes decoration, furnishings, furniture, flooring, beds, linen, bed-
ding, lighting, heating, accessories, and spaciousness/overall impression
. Bathrooms and WC; includes decoration, flooring, fixtures, furniture, linen, light-
ing, heating, accessories, and spaciousness
. Public areas: includes decoration, furnishings, fixtures, flooring, lighting, heat-
ing, atmosphere, and ambience
. Restaurants: includes decoration, furnishings, furniture, flooring, lighting, heat-
ing, menu presentation, table appointment, atmosphere, and ambience
. Food: includes dinner and breakfast (presentation and quality)
. Hospitality and service: includes reception (welcome, friendliness, attitude),
reception efficiency, reception porterage, housekeeping (bedrooms, guest bath-
rooms, public areas), bedrooms, room service, public area service, restaurant
(wine service, breakfast service), and checkout efficiency
. Other: appearance of staff, tourist information, and public toilets
. Leisure facilities: cleanliness, maintenance/decor (STB, 1997a)

A hotel will only be graded on existing facilities and service and will therefore not be
downgraded if, for example, it does not have a leisure center.

This assessment is based on the grading element of the previous scheme employed
with some notable changes; the total grading percentage is no longer based on an
average percentage, which introduces a minimum standard for each category, and
grading assessment sheets are automatically forwarded to establishments after
their visit (previously this was done only on request).
138 — Service Quality Management in Hospitality, Tourism, and Leisure

Best Practice Example 3:

Knockhill Racing Circuit—The Business Benefits
of Investors in People Recognition

Profile

Knockhill, established over twenty years ago near Dunfermline, is Scotland’s na-
tional motor sport center. Skilled instructors provide expert coaching and guidance
in many activities including: race and rally training, clay pigeon shooting, four by
four vehicles, go-carting, and thunder buggies. The company has grown in the last
five years from a family business to an organization which employs thirty-six full-
time and 100 part-time employees. Commitment to liP was made in 1993, cham-
pioned by the owner of the business, and recognition achieved in 1996. People are
recognized as the source of all business activities, as the circuit manager explains:
“It is a philosophy of this business that it’s people first—the staff and the customers.
Without them there is no business, so the training aspect is vital.”

Benefits of Investors in People

The personnel and circuit managers indicate that positive customer effects of Investors
in People achievement include:

* customer satisfaction;
* high levels of repeat business;
* positive image in the community and with customers;
* word-of-mouth recommendation; and
¢ staff responsiveness to customers.

Above all, customers emphasize that staff responsiveness ensures that they have a
unique and enjoyable experience and that good customer care will always bring
them back.

Thus the business strategy is focused on both customers and employees through
the Investors in People award, and there is a strong organizational commitment to
quality service.

Source: Maxwell et al., 1998.

 Approaches to Enhance Service Quality Orientation in the U.K. 139

Best Practice Example 4:

The Freedom of the Glens Family of Hotels—
Business Focus and Development Through Investors in People

Profile

The Freedom of the Glens Hotels is a privately owned group of hotels and a visitor
attraction that has been in the hands of the Young family for four generations. The
hotels are situated in the beautiful scenery of the Fort William area, on the west
coast of Scotland, and number three distinctive, small, and personal establish-
ments. The visitor attraction is Mysteryworld, a recently developed attraction which
explores the myths and legends of Scotland’s history. Each of the hotels has its own
particular identity and is no more than a two-hour drive from the Scottish central belt
which extends from Glasgow in the west to Edinburgh in the east.

The group is a major employer in the village area, with some ninety staff on the
payroll. The staff have a dedication to the provision of good service and a desire for
a team approach. Having secured Investors in People in 1994, the Youngs are
ardent advocates of the liP process, which has brought them clarity of business
focus and allowed them to increase the scope of their organization. Lawrence
Young, managing director, expresses the value of liP: “The culture and ethos of a
‘family business’ is central to our success, but as we grew in size, how was this to
be maintained? Investors in People became the brilliant solution.”

Business Approach

The commitment of the Freedom of the Glens Hotels to customer satisfaction

through staff development is highlighted, especially in 1997 when the annual busi-
ness planning session was devoted entirely to staff matters. Staff development was
the business’s key priority for 1998. The focus is on improving customer and staff
relationships as well as enhancing internal customer communications. Further ex-
amples of good practice include the managing director attending all staff induction
sessions to explain the business philosophy and the role of Investors in People in
the company. Thus investment in internal and external customers, to secure long-
term goals, is at the core of the business. Expansion is very much part of the
group’s aspirations, with plans to develop leisure facilities at two of the hotels. In
addition, given the right property, acquisition may be considered. The Freedom of
the Glens Hotels asserts that to secure a successful future, the key lies in the
interactions between its management, staff, and customers.

Source; Maxwell et al., 1998.

140 Service Quality Management in Hospitality, Tourism, and Leisure

REFERENCES

ADLO (1997). A Duty of Best Value, Association of Direct Labor Organizations.

London, UK: Sports Council.
Alberga, T. (1997). Time for a Check-up, People Management, 3(3), pp. 30-32.
AQS (1996a). QUEST—The Quest for Quality in Sport and Leisure, Sports Coun-
cil, Ref. No. 0618. London, UK: Sports Council.
AQS (1996b). QUEST—Manager’s Guidance Pack October 1996. Ref. No. 0619.
London, UK: Sports Council.
Augustyn, M. (1998). The Road to Quality Enhancement in Tourism, /nternation-
al Journal of Hospitality Management, 10(4):145-158.
Bailey, S. and Reid, G. (1994). Contracting Municipal Sports Management, Local
Government Policy Making, 21(2), pp. 55-65.
Barron, P. and Maxwell, G. (1998). Employee Job Perceptions: A Comparison of
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Baum, T., Amoah, V., and Spivack, S. (1997). Policy Dimensions of Human
Resource Management in the Tourism and Hospitality Industries, International
Journal of Contemporary Hospitality Management, 9(5/6): 221-229.
BDO Hospitality Consulting (1998). The UK Hotel Industry.
Becker, C. (1996). Implementing the Intangibles: A Total Quality Approach for
Hospitality Service Providers. In Olsen, M.D., Teare, R., and Gummeson, E.
(Eds.), Service Quality in Hospitality Organizations, (pp. 278-295). London:
Cassell.
British Standards Institution (1983). BS 5750 Part 8 “Quality Systems,” London:
HMSO.
Brogowicz, A.A., Delene, L.M., and Lyth, D.M. (1990). A Synthesised Service
Quality Model, International Journal of Service Industry Management, 1(1).
Campbell, P. (1997). Grading and Classification Statistics for 1997 Scheme Year,
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Department for Enterprise (1992). S5750/ISO9000/EN29000: 1987 A Positive
Contribution to Better Business, DETR.
DETR (1998). Modernising Local Government: Improving Local Service
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gions [also available at <http://www.local.doe.gov.uk/cct/improvbv/pretace.htm>}].
March 1998, Green Paper. London, UK: DETR.
Ernst and Young (1998). British Hospitality: Trends and Statistics, 1998, British
Hospitality Association Report. London, UK: British Hospitality Association.
Goldsmith, A., Nickson, D., Sloan, D., and Wood, R.C. (1997). Human Resource
Management for Hospitality Services, London: International Thomson Busi-
ness Press.
ILAM (1997). Best Value—An Alternative to CCT, Discussion Paper, Factsheet,
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of Leisure and Amenity Management.
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Maxwell, G.A. (1994). Human Resource Management and Quality in the UK

Hospitality Industry—Where Is the Strategy? Total Quality Management,
5(3):45-52.
Maxwell, G., Adam, M., Farquharson, L., MacRae, M., and MacVicar, A. (1998).
Customer Perceptions of Investors in People: Market Research in Scottish
Hotels and Visitor Attractions—Summary Findings, Glasgow: Glasgow Cale-
donian University.
Maxwell, G. and Connell, J. (1994). Retailing and the Foreign Tourist—The
Retailer Perspective, Marketing Intelligence, English Tourist Board 6:1-6.
McPherson, G. (1997). The Changing Role of Marketing in Local Authority Mu-
seums. In Foley, M., Lennon, J.J., and Maxwell, G. (Eds.), Hospitality, Tourism
and Leisure Management: Issues in Strategy and Culture (pp. 131-142), London:
Cassell.
Murdick, R.G., Reuder, B., and Russell, R.S. (1990). Service Operations Manage-
ment, Needham Heights, MA: Allyn and Bacon.
Price, L. (1994). Poor Personnel Practice in the Hotel and Catering Industry,
Human Resource Management Journal, 4(4):44-63.
Scottish Tourist Board (1997a). Annual Report.
Scottish Tourist Board (1997b). Tourism Training Scotland, intormation leaflet.
Segal Quince Wickstead Ltd. (1998). Impact of the Scottish Tourist Board's Ac-
commodation Quality Assurance Scheme, May. Edinburgh, Scotland: Scottish
Tourist Board.
Wood, R. (1992). Working in Hotels and Catering, London: Routledge.
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 Chapter 9

Service Quality Monitoring

and Feedback Systems
Bonnie J. Knutson

BACKGROUND

As the time approached for the coffee break, someone in the

group asked, “What factors are important in a good coffee break?”
The server, the food and beverage manager, and the hotel manag-
er all agreed that the coffee should be of the highest quality, well
brewed, and served in attractive china. It would be served from a
polished, elegant coffee urn on a clean, attractively arranged table.
None of the people in the workshop mentioned any of these
factors. They wanted to get through the line quickly. They also
wanted the coffee service area to be located close to the rest rooms
and telephones. They thought of a total break that would take care of
a variety of needs. None of them even mentioned the quality or
flavor of the coffee. (Albrecht and Zemke, 1985, p. 59)

An old axiom says, You can’t manage what you can’t measure. Grades
are used in school so teachers can monitor and manage the education of
children. Highways have speed limits to monitor and manage tratfic safe-
ty. Organizations have incorporated concepts such as Zero Defects and
Total Quality Management standards to monitor and manage production,
distribution, and service throughout the value chain.
Ever since Peters and Waterman (1982) admonished us to listen to our
customers, managers have looked for ways to accurately measure and
monitor the delivery of service quality in their organizations. Both the
popular and academic press have noted the link between high service
quality and business success. Measures of customer satisfaction and ser-
vice quality are widely used as a barometer of business performance.
143
144. Service Quality Management in Hospitality, Tourism, and Leisure

AT&T reported that changes in customer-perceived quality caused changes

in market share (Gale, 1994). Also consider this: Businesses having low
service quality average only a | percent return on sales and lose market
share at the rate of 2 percent per year. On the other hand, businesses with
high service quality average a 12 percent return on sales, gain market
share at the rate of 6 percent per year, and charge significantly higher
prices (LeBoeuf, 1987). If service quality is critical to the financial well-
being of an organization, then knowing what constitutes service quality is
essential to accurately measure and manage its delivery.

CONCEPTUALIZING SERVICE QUALITY

What is service quality? Unfortunately, there is no universal interpreta-

tion. It means different things to different people at different times and on
different occasions. To parents with small children, it may mean a swim-
ming pool and extra towels in a hotel. For a businessperson, it may mean a
prompt wake-up call and accurate billing. For a couple celebrating their
twenty-fifth wedding anniversary, service quality may take on the guise of
a romantic view from the room or unobtrusive room service. However
each person may define it, service quality is generally thought to be the
aggregate of his or her perceptions of the service experience.
While some studies view service quality as the sum of anywhere from
twenty-four to ninety-nine individual activities, others see it as having one
or more dimensions (Bennington and Cummane, 1998). Regardless of
how the construct is conceptualized, service quality is always a combina-
tion of two major factors—procedure and conviviality (Martin, 1986a).
The procedural factor deals with the technical systems involved in getting
products and services to customers. It includes such elements as the flow
of service, the timing of service, anticipation, supervision, and customer
feedback. The conviviality factor reflects an employee’s ability to relate to
customers as people. It includes attitude, body language, attentiveness,
suggestive selling, and problem solving.
Gronroos (1984) reasons that service quality is composed of three
dimensions. The first he calls technical quality. It represents what the
consumer actually receives as a result of interaction with the organization
and lends itself to an objective measurement by the customer. Examples
include a restaurant meal, a hotel room, or the roller coaster ride at an
amusement park. The second dimension, functional quality, represents the
actual performance of the service. Attitude, tact, skills, knowledge, and
friendliness are examples. They are seen subjectively by customers. To-
gether, technical quality and functional quality represent a bundle of goods
 Service Quality Monitoring and Feedback Systems 145

and services that create an image, which Gronroos sees as a third dimen-
sion of service quality. Although they use different labels—materials,
facilities, and personnel, or physical quality, corporate quality (image),
and interactive quality—other researchers support Gronroos’ notion of
three service quality dimensions (Lewis and Klein, 1986).
Perhaps the most widely cited measurement tool of service quality is
SERVQUAL (Parasuraman, Zeithaml, and Berry, 1985). SERVQUAL is a
generic instrument for measuring the gap between what consumers expect
(should be provided) and what customers perceive (thought organizations
did provide) vis-a-vis service quality. The researchers hypothesized that
service quality has five dimensions: reliability, assurance, responsiveness,
tangibles, and empathy. Their work used expectations to define service
quality and identify consumer expectation levels. In 1993, Boulding and
colleagues conducted a two-part study that supported earlier findings
about perceptions, clarified issues regarding expectations, and established
the relationship between perceptions and behavioral intentions. Genestre
and Herbig (1996) extended the SERVQUAL concept by adding product
attributes, then examining the combined results. They conclude that the
product dimensions are uppermost in the customer’s mind, and by exclud-
ing it, SERVQUAL only tells a part of the service quality story.
A Note About Expectations
Expectations are an integral part of how researchers conceptualize service quality. In
fact, they form the foundation against which perceptions are measured, and thus
service quality gaps are identified. It is important, therefore, to have a clear under-
standing of what expectations are and how they are formed.
But there is a price to pay for the experience of substantial progress and the
expectation of further progress. When expected progress is not achieved, we
feel disappointed or even frustration. What we have today, even if it is much
more than that which we had and which gave us full satisfaction yesterday, is
no longer enough tomorrow. (Katona, 1964, p. 120)
Expectations are personal intervening variables. In its most elementary form, the
theory of expectations may be graphically represented as follows:

Stimuli Response
(Environment) . A 2 (Behavior)

Expectation
(Attitude)

Personal intervening variables mediate between changes in the environment (stimuli)

and people’s responses to these changes (overt behavior or action). They influence
both the perceptions of the stimuli and the responses to them. Katona points out that
expectations are of particular importance when people have substantial discretion of
action and when a problem arises about how to respond to the stimuli.
(continued,
146 Service Quality Management in Hospitality, Tourism, and Leisure

(continued)

Expectations are considered to be a class of attitudes that point to the future and
reflect the degree of probability of an occurrence. Attitudes constitute important inter-
vening variables; they are generalized perspectives with affective connotations, indi-
cating what is good or bad. Attitudinal variables are learned; that is, acquired and
modified by past experiences with the environment. People’s time perspective ex-
tends both backward and forward. Expectations, then, constitute a forward-looking
class of attitudes of particular importance for purchase behaviors.
Expectations also tend to be stable as well as directionally consistent; that is, they
tend to remain favorable or unfavorable over time. Katona argues that people do not
generally change their expectations without valid reasons but concludes that the
formation of new expectations is not always based on a careful consideration of all
facets of a situation.

Boulding et al. (1993) distinguish between two types of expectations.

One type is a prediction of future events, an expectation of what will
happen; the second is normative, an expectation of what should happen.
The second type is characteristic of earlier service quality literature (Para-
suraman et al., 1988).
The Boulding group concluded that service quality should be measured
via a perceptions-statements instrument. Further, they believe that percep-
tions result from a combination of a priori expectations of both what will
and should happen with the reality of the actual service encounter. Given
the same service encounter, the lower the should expectation, the higher
the perception; the higher the will expectation, the higher the perception.
Finally, the researchers found that the higher the perception of service
quality, the greater the intention to return and the greater the intentions to
recommend the establishment to others.

MEASURING SERVICE QUALITY

A hospitality manager needs to understand computers, managerial ac-

counting, how to compute ROIs (Return on Investment), establish cost
control procedures, and manage staff. Each of these functions is an essen-
tial support to the purpose of the business—guests. While many people
may be influenced to try a hotel, restaurant, or attraction through the mass
media, loyal guests are made one at a time through top service quality.
This appears to be a mind-boggling task. Think about a hotel that checks
in a thousand guests a day, or a restaurant that serves two thousand people
daily, or the hundreds of thousands who walk through the gates at Disney
World every day. Hospitality managers in these operations, and thousands
more like them, must have knowledge, understanding, and managerial
 Service Quality Monitoring and Feedback Systems 147

skills to establish a standard operating performance (notice I did not say

procedure) tor hospitality or caring. The customer who first walks through
the door can be turned into a loyal guest only through high service quality.
Thus, in reality, it is impossible to separate marketing from operations;
they are two sides of the same coin. Every employee is both a salesperson
and a goodwill ambassador for the hospitality business. In fact, to your
guest, the employee is the business. Therefore, identifying opportunities to
increase sales and/or guest counts, through measuring customer feedback
about service quality, is a primary function of any hospitality enterprise.
Hospitality professionals know that customer feedback is the basis for
effective management decisions. If you talk with successful managers in
major hospitality chains—McDonald’s, Walt Disney, Hyatt International,
Hilton, or any other first-tier enterprise—you will get the same response:
Customer feedback works. They all believe in it, do it, and use it. It stands
to reason that if they develop new products, services, or concepts, the
market had better want them and be willing to pay what is needed to cover
costs.
Occasionally, an entrepreneur who manages a small hotel or restaurant
may say, “That stuff! Who needs it?” That response cannot be taken at face
value because, chances are, the entrepreneur 7s gathering customer feed-
back without knowing it, such as the following:

¢ Recording and monitoring customer counts, sales information, and

costs
¢ Being personally on the floor at meal times or at peak check-in times
observing guests’ behavior
¢ Using comment cards
¢ Talking with bussers and dishwashers to find out what is being left
on plates, or watching how a guest moves furniture in the hotel room
to make it more convenient
¢ Reading the complaint log
¢ Following up on the comments in the suggestion box
¢ Visiting competitors, attending seminars, and reading trade maga-
zines

Managers who do any of these things are using customer feedback to

make better management decisions. They understand guests’ wants and
needs by being close to those being served. It is simply not a formalized
process. But the growth of multiunit operations brought with it a need to
formalize the guest information system. First, because the final decision
makers (corporate management) become removed from the end user
(guest). Second, the impact of a management decision on hundreds or
148 Service Quality Management in Hospitality, Tourism, and Leisure

thousands of units is far greater than on one. Therefore, trial and error can
cause financial disaster.
For example, the owner/operator of a 200-seat restaurant finds it relative-
ly easy to obtain feedback from guests and employees. She can be in the
dining room almost every meal period, observing guests and probing for
perceptions, preferences, and habits. Her method of adapting to changing
guest needs can be trial and error. Before listing an item on a menu as a
regular offering, it can be carefully tested for taste (by sampling), appear-
ance (again, by sampling), portion size, and price (usually first as a special).
Single unit owner/operators continually obtain feedback from guests and
employees to aid in predicting what the customers will like and buy, and
what they will not. On the other hand, the president of a 500-unit restaurant
chain finds it impossible to have the same personalized and direct feedback
to guests. The bigger the distance between decision makers and customers,
the greater the need for accurate, thorough, and continual customer informa-
tion—thus, the need for a formalized customer feedback system. The bot-
tom line is this: Customer feedback about an operation’s service quality is
necessary whether it is a ten-room bed-and-breakfast or a 1,000-unit chain.
The question is how to best get it. Several methods are commonly used to
accomplish this task.

Service Audit

Martin (1986b) claims that the service audit is a form of “management

by walking around” (MBWA), which Peters and Waterman (1982) found
was one technique used by successful organizations. The service audit
goes beyond MBWA because it gives a structured process for walking
around. Through the service audit, management can examine service qual-
ity and get a feeling for how the operation is functioning. The auditing
process requires careful scrutiny of each service step and function. As a
result, it provides a sense of direction and identifies any areas that require
remedial attention.
Martin’s audit form is a series of forty service quality indicators that
have been identified as important to customers and to the success of an
organization. Half of the items are procedural, while the other half are
convivial. This audit form utilizes a four-point rating scale on which the
frequency and quality of each behavior item are recorded. The scale (Cus-
tomer-Service Assessment Scale, CSCA) is used to determine how ade-
quately the firm is meeting customers’ needs. The scale can be used to
assess service quality in an individual property, a group of properties, or
competitors. Regardless of how it is used, the CSCA’s usefulness lies in its
ability to expose service strengths and weaknesses. Its weakness, of
 Service Quality Monitoring and Feedback Systems 149

course, lies in the fact that the evaluation (perceptions) is not done by
customers.

Shoppers’ Studies

This type of feedback tool is akin to a service audit. In a shopper’s

study,* a field worker poses as a customer and, following a list of prede-
fined steps and criteria, makes mental notes (and later written notes) about
the service quality he or she receives from the organization. “This tech-
nique was first used over a half-century ago . . . [when] an investigator
posed as a customer and observed relationships with company employees
in areas such as quality of service and personality” (Blankenship and
Breen, 1993, p. 465). To be useful to hospitality managers, these studies
have to concentrate on what the guest thinks is important. A colleague
often tells the story about the district manager for a major fast food com-
pany. The manager went to visit his mother, who lived in a distant city. On
the way to her home from the airport, he decided to visit one of the
company-owned stores as a mystery shopper. After they finished eating,
he walked out of the store and headed around back. When his mother
asked what he was doing, he said that he wanted to check the garbage bins.
“Oh,” his mother replied, “I didn’t know I was supposed to be concerned
about the garbage.”
Shoppers’ studies are best done by an outside research company. Al-
though it may cost more, an outside firm is generally more skilled in
gathering this type of customer feedback, and they can evaluate the service
quality from an unbiased perspective. They would have no reason to slant
the findings either positively or negatively. In addition, it is unlikely that
any employee would know that the shopper is indeed evaluating the quali-
ty of service being given.

Critical Incident

A second alternative for assessing service quality is critical incident

analysis (Johns and Tyas, 1997). First used to identify critical require-
ments in job performance, the technique has been developed to study
satisfactory and unsatisfactory service quality in industries such as air-
lines, hotels, and restaurants (Bitner, Booms, and Tetreault, 1990; Lock-
wood, 1994). This technique involves collecting a large number of service
incidents by interviewing customers and/or staff. These incidents are then

*Shoppers’ studies are also called shopping surveys or mystery shoppers.

150 Service Quality Management in Hospitality, Tourism, and Leisure

inventoried, analyzed, and prioritized to identify those that are truly criti-
cal. These incidents are then traced back to their origins and action taken
on the most significant satisfiers and dissatisfiers. A case in point: Airlines
have discovered that one of the biggest irritants for passengers is not being
informed about changes in scheduled or normal flight operations—and
why a change occurred. They not only want to know that a flight will be
delayed; they want to know why, for how long, and what the airline will do
about connecting flights. In the air, knowing that the flight will experience
turbulence for ten minutes is far better than starting the bumpy ride with
no warning. To get the information to the passengers that they want (high
service quality) the airline must first conduct a critical incident analysis
(pert chart) to identify all the elements involved in delivering each step of
the process. Only then can the airline implement policies and procedures
to make sure that customers get the information they want, when they
want it.

Comment Cards

The hospitality industry is notorious for using comment cards to get

customer feedback about their service quality. Despite their widespread
use, there are two major problems with using comment cards (Stevens,
1988, pp. 41-42). First, most customers do not fill them out. Those that do
are far from being a representative sample of customers. They are usually
either very happy or very unhappy with the service quality; rarely are they
in the middle. While some may argue that comment cards can help man-
agement spot a small service failure before it becomes a big problem, you
could also argue that the negative (or positive) incident is simply a fluke—
a one-time occurrence. The second problem with comment cards is that,
even when they are filled out and turned in, it is often impossible to tell
what they mean. “Some people rate almost everything as ‘fair’; some think
mediocre is ‘good.’ If yours is a coffee shop restaurant and someone says
that the food was ‘fair,’ do they mean ‘fair’ relative to a chain fast-food
outlet, another family sit-down place, or to Le Francais?” (Stevens, 1988,
p. 42).

Complaint Logs and Special Request Logs

Hospitality managers should love to hear complaints and receive sugges-

tions or special requests. They are a valuable form of customer feedback.
Because employees are often the first to hear them, all personnel should
enter customer comments in a daily log. The line is too long. I couldnt find
 Service Quality Monitoring and Feedback Systems LoD

the place. Can I have applesauce instead of a salad? Beautiful room. Great
coffee. Personnel at one luxury hotel chain even carry a small notebook in
which they write any comments, requests, or suggestions they hear. In one
case, a bellman heard a guest comment on how he loved Snickers candy
bars and wished they were in the VIP fruit basket. That information was
entered into the gentleman’s guest profile and, from that time on, whenever
he checked into any of the hotel’s properties, there were some bite-size
Snickers bars in his room. These comments provide valuable customer
feedback. In each case, they give valuable information on how you can
“tweak” your operations to better provide what the customer wants.
The key, of course, in making these logs successful is twofold. First, the
manager can never “shoot the messenger,” especially if the employee is
relaying a complaint or a service failure. There is a management principle
that states: We get the behavior we reward (LeBoeuf, 1987). Employees
soon learn whether their managers want to hear this valuable customer
teedback. The second key is follow-up. Just as with comment cards, the
organization must use this feedback as an opportunity to add value to the
guest’s experience.

Focus Group

There are three primary uses of the focus group technique. One is to
identify a comprehensive list of service quality attributes that are impor-
tant to customers. Often, focus groups are used to narrow concepts and
issues so that the “right” questions are asked in a subsequent survey. They
can also be used as a follow-up to surveys and other data gathering tech-
niques to help clarify the findings. For example, feedback from a hotel
survey might indicate that security is a major concern for guests. To better
understand what customers mean by “security,” focus groups can be used
to probe the term. How does security relate to items such as key locks,
lighting in the parking lot, or front desk personnel not saying your room
number out loud? In one focus group with older travelers, security took on
the aspect of name tags being printed large enough for aging eyes to read
easily. Who would have thought that type size is part of hotel security?
Finally, focus groups are an excellent tool to pretest aspects such as
menu design, media messages, or proposed new names or logos. Several
years ago, there was a restaurant company named Mr. Steak. As American
consumers became more health conscious and started eating less beef, the
company was concerned that their name would begin to drive customers
away—even though they offered a good selection of chicken, fish, and
pasta on the menu. Following a comprehensive telephone survey, several
possible new names were identified. In focus groups, each name was
152. Service Quality Management in Hospitality, Tourism, and Leisure

“tested” relative to image, and how well it represented the menu design,
interior and exterior design of the buildings, and price structure of the
restaurant. From this research, Findley’s American Restaurant was se-
lected as the new name; it was successfully launched six months later.
Focus groups are popular with hospitality organizations because they
are relatively low cost and can be implemented rather quickly. Manage-
ment can view the discussion process so that they get a real feel for not
only what consumers say, but also how they say it—i.e., the intensity of
their feelings. Focus groups can also help generate new product ideas.
Wouldnt it be nice ifIcould get soup to go ata drive through? I sure wish
the phone in my hotel room were portable. Gee, if |had known you have a
store in that city, we would have stopped there for lunch.

Customer Value Workshop

Although akin to the traditional focus group, the customer value work-
shop (CVW) overcomes many of the problems inherent in the focus group
technique. Bennington and Cummane (1998) summarize the workshop
technique as follows: The CVW is more structured than a focus group and
generally involves more customers, about twelve to fifteen. The workshop
begins with customers completing a brief questionnaire that focuses on
identifying irritating elements in the service process as well as the level of
that irritation—disappointed, annoyed, angered. Participants then move on
to “imagineering,” which involves a visioning process designed to build a
picture of the ideal product and service—i.e., service quality—in the rele-
vant area. All the ideas generated by customers are organized into catego-
ries based on the natural relationship among the items. This process,
known as affinity diagramming, is more creative than logical (Brassard,
1989).
Affinity diagramming is both efficient and inclusive. Groups can orga-
nize more than 100 separate ideas or issues in less than an hour. Ideas are
not lost in the process because all are recorded and incorporated into the
diagramming. The customer group then names each attribute of the “ideal”
product and service. It is important that each attribute category is indepen-
dent from the other categories and that participants can easily differentiate
among them.
The final step in the CVW involves the use of computer technology.
Participating customers are asked to rate the firm’s current service quality
against each of the “ideal” attributes by pressing a number from 1 (poor) to
9 (excellent) on wireless, hand-held keypads that are linked to a computer.
Real-time processing allows both customers and management to see the
 Service Quality Monitoring and Feedback Systems 1535

results of the group and/or segments within the group. A follow-up discus-
sion helps clarify any points of confusion or differentiation.
This collaborative process addresses the service quality issues that cus-
tomers want to address and allows them to provide direction for improving
quality and customer loyalty. It likewise allows customers to help organi-
zations to design innovative products and services to meet their present
and future needs (Flores, 1993).

Survey

Even with its inherent methodological flaws, the survey is still the most
commonly used tool for measuring service quality. Consumer surveys
have become a widely used barometer of business performance over the
past decade (Hurley and Hooman, 1998). For instance, Parasuraman and
colleagues (1985) used surveys to develop SERVQUAL. Today, it is the
dominant service quality survey instrument, although it has been widely
criticized in recent years (Bennington and Cummane, 1998).
While a full discussion of the pros and cons of survey research is
beyond the scope of this chapter, it is helpful to list a few of its characteris-
tics as they relate to our ability to measure service quality. First, survey
data are often reported in the aggregate. Yet averaging consumers’ prefer-
ences and perceived performance do not necessarily represent the views of
anyone. Thus, their value is limited. Several researchers conclude that the
survey does not represent the customer viewpoint in a useful manner
because it cannot adequately probe the consumers’ mind-set. They con-
clude that it should be replaced by methods that better identify the per-
spectives of individual customers (Hiam, 1992, p. 113; Lytle, 1993). This
becomes increasingly important as people demand more customization of
products and services.

RELATING SERVICE QUALITY

TO CUSTOMER SATISFACTION, VALUE,
INTENTION TO RETURN, AND LOYALTY

The primary reason organizations measure service quality and customer

satisfaction is to better understand how they may enhance customer value
and loyalty, and thus the overall financial performance of the firm. Conse-
quently, it is necessary to establish links among these measures. Research
has established a relationship among customer perceptions of service qual-
ity, customer satisfaction, and customer defection and retention rates.
154. Service Quality Management in Hospitality, Tourism, and Leisure

There has been less success, however, in clearly defining and distinguish-
ing service quality from customer satisfaction, and determining the best
tools to measure each. In fact, the two terms are often used interchange-
ably because both are evaluation variables relating to consumers’ percep-
tions about a given product or service. The dominant view in the literature
is that satisfaction is the more global of the two constructs, and that
perceptions of service quality affect feelings of satisfaction, which will
then affect loyalty and future buying decisions (Hurley and Hooman,
1998).

RISING COST OF OBTAINING

CUSTOMER FEEDBACK

Many of us have placed a catalog order over the telephone. We have

also made hotel, restaurant, or airline reservations on the Internet. Most
have completed a survey or customer warranty card and returned it. And
how many of us are now using the new money cards and smart cards? One
swipe of their magnetic strip through the store’s scanner and the store is
paid in full. Companies are making it more convenient for us to spend
money. But they are also doing something else. They are making it much
easier to collect information (feedback) about us—about what we buy,
what we want, and what we do.
Consumer information is today’s business currency. Knowing more
about who comes to a hotel, resort, or other tourist destination, and why,
helps managers focus their marketing and operational strategies. They can
better target high-potential prospects, tailor their services to meet individ-
ual needs, improve customer satisfaction and loyalty, and even find oppor-
tunities to develop additional products or services. With new technologies
and databases, it is easier than ever for managers to capture information
from their guests and about their guests.
But a funny thing is happening on the way to the “information well.”
Consumers are in revolt. Until now, people have divulged information
about their lifestyles rather freely. They have completed surveys, partici-
pated in focus groups, typed in their e-mail address and preferences, and
applied for the money card. This will not be the case in the future.
Some consumers see this as a privacy issue. Others look at it from a
security standpoint. Still others rebel at the thought that Big Brother is
alive and well and living in a computer chip. In reality, the growing
reluctance of customers to disclose personal data is really an issue of
value. People are realizing that they get very little in exchange for the
information they give so freely through their commercial transactions and
 Service Quality Monitoring and Feedback Systems Hoe)

survey responses. There is a growing body of managers who believe that

consumers are going to take ownership of information about themselves
and demand something in exchange for it. In a recent article in the Harvard
Business Review, management experts John Hagel HI and Jeffrey Rayport
(1997) point out that businesses are seeing the rise of a privacy backlash
among consumers. They believe that this backlash has less to do with
privacy, however, than with value. People are coming to realize that they are
“selling” information about themselves to corporations too cheaply.
Of course, for some, privacy is an abstract concept that is an absolute
right. Most consumers, however, are willing to give their opinion or re-
lease personal facts if they can get something tangible in return—make a
“protit” from it. Think about the next time you take a vacation or go on a
business trip. Are you a member of a frequent flyer program? Passengers
will give airlines detailed data about their flying history in exchange for
items of value to them—e.g., upgrades, discounts on future flights, or the
ability to buy tickets, hotel rooms, and other products at a discount. The
same is true of hotel and car rental companies. Their application forms
often request credit card information, business and home addresses, phone
and tax numbers, e-mail, driver’s license, Social Security number, and
myriad other information.
The same trend is evident in the market research industry. Once, people
would complete a survey or participate in a focus group for little more than
a thank-you or some coftee. Those days are gone forever. Today, consum-
ers want something for their time and information. In the United States,
the going rates for focus group participants can range from $50 and up.
Restaurants offer certificates for complimentary appetizers, desserts, or
meals to encourage patrons to complete surveys. Even private clubs are
entering the fray. They will often “purchase” a new member referral from
a current member by offering a month’s dues free, a gym bag, or a logo
jacket if the prospective member joins. Telecommunications giant MCI
used a similar strategy with its Friends and Family program in which
customers were given discounts in return for listing the names of people
they called most often—e.g., prospective MCI customers.
A few years ago, there was a movie in which someone leans out of a
window and yells: “I’m madder than hell and I’m not going to take it
anymore!” When it comes to data about themselves, a similar scenario can
be applied to today’s consumers. So what does this mean to hospitality and
tourism industries? It means that people are increasingly taking ownership
of their personal information, forcing researchers to rethink their approach
to gathering consumer feedback. Historically, consumer data has been
something that hospitality businesses have obtained for free as a by-prod-
156 Service Quality Management in Hospitality, Tourism, and Leisure

uct of their transactions with their customers. According to Hagel and

Rayport (1997, p. 60), this means that academe and business “have every
incentive to overinvest in collecting information about . . . customers and
to underinvest in using it.” But the days of the “free lunch” are over. When
companies have to pay for information, the incentives change. As hos-
pitality companies pay more, they will become more selective about the
feedback data they collect, focusing on what is needed to increase value
and better satisfy consumers. They will also have to establish a stronger
partnership with customers so that they can continue to collect this vital
information. Finally, companies will have to establish a schedule of pay-
ments for the data they want to collect.
Futurist Faith Popcorn (Popcorn and Marigold, 1997) talks about the rise
of the vigilante consumer. Nowhere is this more evident than in the arena of
consumer feedback. While we still are not sure how this whole trend will
play out for the hospitality and tourism industry, the direction is clear. As
consumers take tighter control of their own personal data, access to it will
become more costly, much like the old supply and demand curves that we
all learned in Economics 101. Those hotels, resorts, restaurants, and other
travel destinations that develop innovative strategies to collect this data will
have a competitive head start in the new century.

TOWARD THE FUTURE

In the twenty-first century, organizations will find themselves in a more

competitive landscape greatly altered by new technologies, business prac-
tices, and consumer demands. Through its Hospitality 2000 study, consult-
ing firm Arthur Andersen (Cline, 1996) concluded that businesses need to
shift their primary focus from physical assets (property) to virtual assets
(customers). This view is one held by hospitality industry executives
around the world by a margin of five to one.
It is clear that service quality is a complex, confusing concept. If this
shift does indeed take place, it will require organizations to pay closer
attention to consumers’ expectations and perceptions about service quality,
then respond to them. McKenna (1997) says technology will enable organi-
zations to collapse this feedback loop in real time. Real time “. . . applies not
to any device but to the technologically transformed context of everything
we do. Real time is characterized by the shortest possible lapse between
idea and action; between initiation and result. . . . It is instant response”
(p. 6). He believes that the application of the powerful real-time concept—
using an information feedback loop from customers and market infrastruc-
ture to design and service, and back out again—has just begun. Successful
 Service Quality Monitoring and Feedback Systems L357

organizations in the future will use information and telecommunications

technology to respond to changing customer expectations within the short-
est possible span of time. They will understand that customers’ expectations
are being reset for hyperaccelerated, if not immediate, company response.
The competitive environment will no longer tolerate slow responses or
delayed decision making, McKenna declares.
The task of developing more eftective and efficient ways to measure and
monitor service quality will fall to all stakeholder groups involved inits
delivery: customers, staff, and management. Real time will make it easier; it
will also make it more imperative. Each group will have to see what the
other groups see relative to the delivery of service quality, and they will
have to see it simultaneously. It will be an exciting challenge—especiallyin
light of a growing global economy. Only then will the coffee break de-
scribed at the beginning of this chapter reflect true service quality.

REFERENCES

Albrecht, K. and Zemke, R. (1985). Service America. Dow Jones-Irwin, Home-

wood, IL.
Bennington, L. and Cummane, J. (1998). Measuring Service Quality: A Hybrid
Methodology. Total Quality Management. 9 (6) 395-406.
Bitner, M.J., Booms, B.H., and Tetreault, M.S. (1990). The Service Encounter,
Diagnosing Favorable and Unfavorable Incidents. Journal of Marketing. 54
1) 71-84.
Beeers A. and Breen, E. (1993). State of the Art Marketing Research. PTC
Business Books, Chicago.
Boulding, W., Kalra, A., Staelin, R., and Zeithaml, V.A. (1993). A Dynamic
Process of Service Quality: From Expectations to Behavioral Intention. Jour-
nal of Marketing Research. 3 (February) 7-17.
Brassard, M. (1989). The Memory Jogger Plus. Metheun, Goal/QPC, London.
Cline, R.S. (1996). Hospitality 2000: A View to the Millennium. Lodging Hos-
pitality, 52 (8) 20.
Flores, F. (1993). Innovation by Listening Carefully to Customers. Long Range
Planning. 26 (3) 95-102.
Gale, B.T. (1994). Managing Customer Value: Creating Quality and Service That
Customers Can See. Free Press, New York.
Genestre, A. and Herbig, P. (1996). Service Expectations and Perceptions Revis-
ited: Adding Product Quality to SERVQUAL. Journal of Marketing Theory
and Practice. 4 (4) 72-82.
Gronroos, C. (1984). A Service Quality Model and its Marketing Implications.
European Journal of Marketing. 18 (4) 36-44.
Hagel II, J. and Rayport, J.F. (1997). The Coming Battle for Customer Informa-
tion. Harvard Business Review. 75 (1) 53-61.
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Hiam, A. (1992). Closing the Quality Gap. Prentice Hall, Englewood, NJ.
Hurley, R.F. and Hooman, E. (1998). Alternative Indexes for Monitoring Custom-
er Perceptions of Service Quality: A Comparative Evaluation in a Retail Con-
text. Academy ofMarketing Science Journal. 26 (3) 209-221.
Johns, N. and Tyas, P. (1997). Customer Perceptions of Service Operations: Gestalt,
Incident or Mythology? The Service Industries Journal. 17 (3) 474-488.
Katona, G. (1964). The Mass Consumption Society. McGraw-Hill, New York.
LeBoeuf, M. (1987). How to Win Customers and Keep Them for Life. G.P. Put-
nam, New York.
Lewis, R.C. and Klein, D.M. (1986). The Measurement of Gaps in Service Quali-
ty. Paper presented to the American Marketing Association’s Services Market-
ing Conference. September 7-10, Boston, MA.
Lockwood, A. (1994). Using Service Incidents to Identify Quality Improvement
Points. International Journal of Contemporary Hospitality Management. 6 (1/2)
75-80.
Lytle, J.F. (1993). What Do Your Customers Really Want? Probus, Chicago.
Martin, W.B. (1986a). Defining What Quality Service Is for You. The Cornell
Hotel and Restaurant Administration Quarterly. 26 (February) 32-38.
Martin, W.B. (1986b). Measuring and Improving Your Service Quality. The Cor-
nell Hotel and Restaurant Administration Quarterly. 26 (May) 80-87.
McKenna, R. (1997). Real Time: Preparing for the Age of the Never Satisfied
Customer. Harvard Business School Press, Boston, MA.
Parasuraman, A., Zeithaml, V.A., and Berry, L.L. (1985). A Conceptual Model of
Service Quality and Its Implications for Future Research. Journal of Market-
ing. 49 (Fall) 41-50.
Peters, T.J. and Waterman, R. Jr. (1982). In Search of Excellence. Harper and
Row, New York.
Popcorn, F. and Marigold, L. (1997). Clicking. HarperCollins Publishers, Inc.,
New York.
Stevens, P. (1988). Winning!!! Hospitality Resource Inc., East Lansing, MI.
 Chapter 10

Measuring Service Quality

and Customer Satisfaction
Martin O’Neill

INTRODUCTION

The increased significance of the services sector to the global economy

has led to a heightened{concern by practitioners as well as consumers
regarding the quality of services being offered (Sung et al., 1997). Not
surprisingly, the concept of quality and its relationship with the service
industries has become a major preoccupation of many within this sector,
not least the hospitality industry. Hospitality operations now have to serve ;
an increasingly discerning public, who are now_more eager than ever to MOT
complain and transfer their allegiances to perceived providers of quality meen)
services. This, coupled with the increasingly hostile nature of the hospital- +~Q —>
ity environment, has forced many within the industry to invest in the complat /
delivery of higher levels of service quality as a means tofachieving com-
petitive differentiation] An integral part of any organization’s attempt to
deliver on this front is a commitment to a process of continuous quality
improvement. In turn, this requires the support of a systematic approach to
quality measurement.
Interest in the measurement of service quality is thus understandably
high, and measuring the quality of the service experience is now an inte-
gra! part of most managers’ responsibilities. The challenge, however, is to
identify and implement the most appropriate measurement tools for their
operation. In stressing the importance of service quality to the hospitality
sector, this chapter seeks to investigate the conceptualization and measure-
ment of service quality and the relationships between service quality,
customer Satisfaction, and customer retention. In so doing, it shall identify
and critically examine a number of the more popular techniques common-
ly employed within the hospitality industry.

159
160 Service Quality Management in Hospitality, Tourism, and Leisure

DEFINING QUALITY
IN THE CONTEXT OF SERVICE

Numerous attempts have been made to define service quality and the
closely related concept of customer satisfaction (Oliver, 1980; Tse and
Wilton, 1988). Unlike product quality, which in itself is particularly hard
to define, the search for a working definition of service quality is further
complicated by the highly transitory and intangible nature of most ser-
vices. At its most basic, quality has been defined as “conforming to re-
quirements” (Crosby, 1984). This implies that organizations must establish
requirements and specifications. Once established, the quality goal of the
various functions of an organization is to comply strictly with these speci-
fications. However, the questions remain, whose requirements and whose
specifications (Palmer, O’ Neill, and Beggs, 1998)? Thus a second series of
definitions state that quality is all about fitness for use, a definition based
primarily on satisfying customers’ needs (Juran, 1982). These two defini-
tions can be united in the concept of customer-perceived quality, where
quality can be defined only by customers and occurs where an organiza-
tion supplies goods or services to a specification that satisfies their needs.
There have been numerous attempts to encapsulate the essential nature
of the service quality construct in the form of theoretical models. One of
the earliest models is that described by Gronroos (1983), which relates the
level of experienced quality to both technical and functional dimensions of
service provision (see Figure 10.1):
¢ Technical quality refers to the result of the service and/or the ques-
tion, what has been provided?
¢ Functional quality, on the other hand, refers to the way the service
has been delivered and relates to the question, how has the service
been provided?
Technical quality refers to the relatively quantifiable aspects of the
service that consumers experience during their interactions with a service
firm. Because it can be easily measured by both consumer and supplier, it
becomes an important basis for judging service quality (Palmer, 1998).
According to Gronroos (1988, 1990), however, these more technical as-
pects of a service are easily copied, and competitive positioning may be
easily lost. Functional quality, in contrast, can be used to create a competi-
tive edge by focusing on the more personal aspects of the service encoun-
ter. Gronroos (1984) argues that technical quality is a necessary but not
sufficient condition for higher levels of service quality and that functional
quality is likely to be more important than technical quality if the latter is
at least of a sufficient standard. Saleh and Ryan (1991) concur with this
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162. Service Quality Management in Hospitality, Tourism, and Leisure

viewpoint and take it a step further, suggesting that the quality of function-
al service may even offset problems with the technical component experi-
enced by consumers. While a technical problem should not occur, the
reaction of the service provider to it, if it does, may contribute to positive
customer perceptions of the service provided.
Berry, Parasuraman, and Zeithaml (1988) support this concept by argu-
ing that Crosby’s (1984) definition of quality as “conforming to require-
ments” should be rephrased as “conformance to customer specifications.”
In addressing the evaluation process used by customers to assess service
quality, they conclude that service quality may be defined as the discrep-
ancy between customers’ expectations and perceptions (see Figure 10.2).
If expectations are met, service quality is perceived to be satisfactory; if
unmet, less than satisfactory; if exceeded, more than satisfactory.
Quality evaluations are both process and output based. They derive
from the service process as well as the service outcome. The manner in
which the service is delivered may thus be a crucial component of the
service from the customer’s point of view. To put it another way, it is not
just what is delivered but how it is delivered that determines the custom-
er’s overall perception of service quality.
In most instances, the customer receives a combination of both material
and personal service. The material service refers to the more tangible,
technical, and objectively measurable elements of the product or service
being supplied. Personal service, on the other hand, refers to what might
be better described as the more intangible, functional, subjective, and/or
relational elements of the service encounter. To provide good service,
therefore, a balance is needed between both personal and material needs.
More often than not it is the more relational factors that will create a
lasting impression in the customer’s mind. By concentrating on the devel-
opment and provision of these relational elements, organizations are now
better able to add value in the eyes of the customer. For it is in adding
value in the eyes of the customer that good service is achieved, quality is
perceived, and satisfaction achieved.
First and foremost, then, service quality is a customer issue. It is the
customer who will determine whether they have received it. To put it
another way, customer perception is everything. As harsh as it may sound,
it does not matter what the service provider thinks; if the customer is not
satisfied then the service has failed. Customers’ perceptions are their real-
ity (Cook, 1997). In turn, their perception of the service provided will be
determined by their expectations. If the service experienced lives up to
their expectations, customers will be satisfied. If the treatment they receive
is less than expected, this constitutes bad service. In short, customers want
 Measuring Service Quality and Customer Satisfaction 163

FIGURE 10.2. Service Quality: The Fit Between Customer Expectations

and Perceptions

Marketing Word-of-mouth Personal

communications recommendation experience

THE QUALITY GAP

PERCEPTIONS

External Tangible elements Human elements Personal

factors of the service of the service factors

Technical Functional
qualities: qualities:

Reliability Attitude of staff

Accuracy Appearance
| Promptness Atmosphere
Expertise Responsiveness
Empathy

Source: Morgan, 1996.

their expectations to be met completely and consistently. One critical

question remains, however: What do customers want and how do they
define quality?

DETERMINANTS OF SERVICE QUALITY

This is the difficulty from a provision and measurement point of view.
The factors affecting customer satisfaction and service quality are as many
and as varied as the number of potential customers themselves. Different
LOamMs, Ne2edS and
o
 164 Service Quality Management in Hospitality, Tourism, and Leisure

things are important to different people for different reasons and as such
are perceived in different ways. For example, the same factor can be
interpreted in many different ways, by many different people, and even, on
occasion, by the same person depending upon the time of day, mood,
attitude, and so on.
Evidence suggests that successful organizations are able to diagnose
their customer expectations fully and satisfy them completely, during each
and every service encounter (Zemke and Schaaf, 1990). Service leaders
have the uncanny ability of understanding implicit and even latent custom-
er requirements. These latent features may be described as features that
customers want but do not know are available and hence are unable to
articulate in discussions with service suppliers. Consequently, there is no
way of guaranteeing their delivery. When delivered, however, they present
the provider with the opportunity to not only satisfy, but also greatly
exceed customer expectations. Ramaswamy (1996) reinforces this view-
point by arguing that while nondelivery of such needs may not necessarily
dissatisfy the customer, a company that does manage to address them even
partially may experience a nonlinear increase in customer satisfaction.
Naturally, identification of service quality dimensions aids in the mea-
surement, understanding, and satisfaction of customer needs and wants.
This information comes from customers themselves and also from front-
line staff who daily come into contact with them. While extensive research
has been carried out in the area (Berry, 1983; Gronroos, 1984; Garvin,
1987; Fitsimmons and Maurer, 1991), the work of Parasuraman, Zeithaml,
and Berry (1988) stands out in terms of helping to clarify how customers
define service quality. Their initial qualitative study identified underlying
dimensions of service quality, each of which relates to the customers’
confidence in those providing the service. As a result of further extensive
research these criteria were collapsed into five more specific components:
tangibles, reliability, responsiveness, empathy, and assurance, which have
formed the basis of many measurement techniques. Although widely re-
ferred to as SERVQUAL, the five elements can more easily be remem-
bered through the acronym “RATER” (Tenner and DeTorro, 1992):
—

1. Reliability: Ability to perform the promised service dependably and

rae accurately
eet = 2. Assurance: Knowledge and courtesy of employees and their ability
= nae to inspire trust and confidence
Ce AiO 3 . Tangibles: Physical facilities, equipment, and appearance of personnel
nr nw
Ten 4. Empathy; Caring, individualized attention, and appearance of personnel
YVAN
5. Responsiveness: Willingness to help customers and provide prompt
service

Yor codtenvS N@d GS 4s hae -

 Measuring Service Quality and Customer Satisfaction 165

According to Zeithaml, Parasuraman, and Berry (1990), the various

Statistical analyses conducted in constructing SERVQUAL revealed con-
siderable correlation among items representing several of the original ten
dimensions for evaluating service quality. The authors believe that these
five dimensions are a concise representation of the “core criteria that
customers employ in evaluating service quality” (p. 20).

SERVICE QUALITY AND CUSTOMER SATISFACTION

Previous reference has been made to the concept of customer satisfaction

in the context of customer-perceived service quality. Indeed, a review of the
literature will reveal that both terms are quite often used interchangeably,
which has caused confusion. While both concepts are related and appear to
be merging, there are still gaps in the understanding of the two constructs,
their relationship to each other, and their antecedents and consequences
(Gwynne, Devlin, and Ennew, 1998). A distinction needs to be made be-
tween both. According to Cronin and Taylor (1992, p. 56), “this distinction
is important to both managers and researchers alike, because service provid-
ers need to know whether their objective should be to have consumers who
are satisfied with their performance or to deliver the maximum level of
perceived service quality.”
Oliver (1981, p. 27) takes the view that satisfaction is “the emotional
reaction following a disconfirmation experience.” Getty and Thompson
(1994, p. 9) define it as a “summary psychological state experienced by the
consumer when confirmed or disconfirmed expectations exist with respect
to a specific service transaction or experience.” In fact, the most commonly
used representation of customer satisfaction is the discontirmation approach
(Ramaswamy, 1996), in which satisfaction is related to the variation be-
tween a customer’s prepurchase expectations and their postpurchase per-
ceptions of the actual service performance. According to disconfirmation
theory, the extent of satisfaction or dissatisfaction that a customer has with a
particular service encounter is determined by the difference between the
customer’s expectations of performance and the actual perceived perfor-
mance of the service (Oliver, 1996). Any difference between them is referred
to as discontirmation.
If the service experienced is better than expected, then positive discon-
firmation or high levels of satisfaction will result. If, however, the service
performance falls short of what was expected, then negative disconfirma-
tion or dissatisfaction will result. Confirmation or zero disconfirmation
results when perceived performance just meets the customer’s expecta-
tions or when the service experience is much as expected in the customer’s
166 Service Quality Management in Hospitality, Tourism, and Leisure

eyes. Satisfaction may thus be viewed as being situation, encounter, or

transaction specific.
Perceived quality, on the other hand, may be viewed as a global attitudi-
nal judgment associated with the superiority of the service experience over
time (Getty and Thompson, 1994). As such, it is dynamic and less transac-
tion specific (Parasuraman, Zeithaml, and Berry, 1988). In other words, it
has attitudinal properties and acts as a global value judgment. According
to Lovelock, Patterson, and Walker (1998), the important distinction is
that “.. . satisfaction is experience-dependent—you must experience the
service to feel a degree of satisfaction/dissatisfaction. Perceived service
quality on the other hand is not experience-dependent . . . perceived
service quality is formed over multiple service encounters.”
Both constructs are distinct but related concepts, which can be used to
evaluate a specific service incident or overall attitudes toward a service
encounter. Service quality does differ from satisfaction, however, in that it
is a cognitive evaluation and objective attributes are used to assess quality.
While satisfaction can result from any aspect of an organization, whether
quality related or not, service quality perceptions are specifically related to
quality attributes or dimensions (Oliver, 1993).
Not surprisingly, there has been considerable debate concerning the
nature of the relationship between these constructs. Although the majority
of research suggests that service quality is a vital antecedent to customer
satisfaction (Parasuraman, Zeithaml, and Berry, 1985; Cronin and Taylor,
1992) there is now strong evidence to suggest that satisfaction may be a
vital antecedent of service quality (Oliver, 1981; Bitner, 1990). Regardless
of which view is taken, the relationship between satisfaction and service
quality is strong when examined from either direction. Satisfaction affects
assessments of service quality, and assessments of service quality affect
satisfaction (McAlexander, Kaldenberg, and Koenig, 1994). In turn, both
are vital in helping today’s customers frame their future purchase inten-
tions. The importance of both to today’s hospitality professional is thus
paramount.

SERVICE QUALITY AND THE HOSPITALITY INDUSTRY

In today’s hospitality environment} the true measure of company suc-

cess lies in an organization’s ability to Continually satisfy customers) In-
creasingly, customers are demanding value for money in terms of both the
price/quality ratio and the actual quality of the product or service being
offered. To ensure market success, hospitality organizations of all types
 Measuring Service Quality and Customer Satisfaction 167

are now being forced to stand back and take a long hard look at afway
they are currently doing business. TanHe ‘ou sles VYOUVG 1d aK
Given the increasingly competitive nature of the hospitality environ-
ment, industry professionals must now concern themselves with not only
increasing market share, but ASfanctiie and maintaining the existing
customer base) Consequently, a large proportion of organizational effort is
now being directed af “both getting and keeping customers?\( Christopher,
ayne, and Ballantyne, 1991). Evidence Suggests that an organization’s
Uf arity to deliver consistentlyjon the service quality front will without
doubt go “a long” way toward achieving thisfcentral business objective.)
Indeed, the importance of service quality and its relationship with custom-
er Satisfaction, brand loyalty, and market share has long been lauded by
those in the hospitality field (Knutson, 1988). Both are now viewed as
fundamental to the well-being of individual customers, which will have a
f signiticant effect on postpurchase perceptionqand, in turyffuture purchase
decisions.
In an attempt to achieve sustained competitive advantage, hospitality
organizations are now investing quite heavily in a host of service quality
improvement initiatives By and large the majority of these initiatives have
found form through the British Standards Institute, the European Quality
Award, the Malcolm Baldrige National Quality Award, the Edwards Dem-
ing Prize, or derivatives thereof. In addition, the hospitality industry has
also been investing quite heavily in raising quality standards through human
resource development. Such initiatives include the Investors in People
Award, the Welcome Host Initiative, and various vocational qualification
schemes. Oliver (1996) describes these initiatives as belonging to the total
quality management movement, advocating organizational strategies and
changes, which are thought to make a firm more customer friendly. In this
context, “customer satisfaction is thought to be a natural outgrowth of
optimal organisational design, and of instilling the appropriate organisation-
al culture, personnel training and customer responsiveness within employee
ranks. In short, it is believed that the attainment of satisfaction will be
enhanced if these practices are followed” (Oliver, 1996, p. 7).
In proposing a more behavioral focus, Oliver (1996) goes on to state
that such managerial practices alone cannot guarantee customer satisfac-
tion, for the principal reason that management cannot see “inside the head
of its constituents.” By adopting a more behavioral focus, in contrast,
“managers may be better able to see the workings of the consumer’s mind,
and in so doing may be better placed to consistently satisfy customer
demands” (p. 7). The central tenet of any such approach is the study of
consumer perceptions of service quality or that process by which individu-
168 — Service Quality Management in Hospitality, Tourism, and Leisure

als select, categorize, and interpret purchase and nonpurchase-related

stimuli, which, in turn, may lead to either first time, repeat, or transferred
patronage.
According to Van Der Wagen (1994, p. 4), individual “customers have
many different perceptions which are influenced by their education, up-
bringing, experience and many other factors.” As hospitality professionals
whose future very much depends upon these customers’ perceptions of
actual service delivery, we must strive to gain an understanding of how we
are performing in the customers’ eyes. As Bank (1992, p. 14) states, “the
idea is to stay ahead of the customer, to anticipate his or her needs ... so
that when he or she articulates the need you have already planned for it
and are ready (ahead of the competition) to meet it.”” Knowledge of cus-
tomer perceptions of the service offering would undoubtedly aid hospital-
ity professionals in this process.
Simply stated, today’s hospitality professional must consider the mea-
surement of service quality an integral part of any quality improvement
exercise.

MEASURING SERVICE QUALITY

IN THE HOSPITALITY CONTEXT

An integral part of any organization’s attempt to instill a “quality cul-

ture” is a commitment to a process of “continuous improvement” (Witt
and Muhlemann, 1995). To support this, a systematic approach to quality
measurement is needed. This is especially true of businesses whose pre-
dominant product is service as, unlike their counterparts in the manufac-
turing sector, they have fewer objective measures of quality by which to
judge their production (Hudson and Sheppard, 1998). Cronin and Taylor
(1992, p. 50) concur with this viewpoint, stating that managers need to
know “what aspects of a particular service best define its quality.” In turn,
this should enable the organization to take up a competitive position based
upon its ability to deliver that which is demanded as opposed to that which
the organization perceives to be in demand. The fact is, clear, sustained,
and continuous quality improvement is not possible without some indica-
tion of quality performance. To know the real effect of changes over time,
managers need measures to compare the quality performance of the ser-
vice (Edvardsson, Thomasson, and Ovretveit, 1994),
Ramaswamy (1996) identifies three different sets of measures with
which a company must be concerned:
 Measuring Service Quality and Customer Satisfaction 169

1. Service performance measures are primarily internally focused and

evaluate the current performance of the service and ensure that it is
continuing to reliably meet the design specifications.
2. Customer measures, on the other hand, are both internal and exter-
nally focused, aimed at assessing the impact of the service perfor-
mance on customers.
3. Financial measures are indicators of the financial health of the orga-
nization.

Naturally, the correlation between financial and customer measures will

determine the revenue-generating potential of the service, while the rela-
tionship between service performance measures and customer measures
will give some indication as to how the service is performing in the
customers’ eyes. In turn, this will have a direct bearing on a company’s
financial pertormance and overall market share.
It cannot be assumed, however, that a service that continues to meet
internal performance standards will continue to provide the desired level
of customer satisfaction. Customer-perceived measures must be indepen-
dently developed and correlated with performance. These measures will
direct future improvement efforts aimed at both improving operational
efficiency and satisfying and retaining customers.
Although traditionally it has been easy for operators to claim that the
unique characteristics of services precluded any attempt at measurement,
the present-day competitive environment has forced a serious rethinking
of this attitude. This is especially true of the hotel industry, where an
increasing oversupply of hotel accommodation worldwide has forced
managers to invest in the delivery of higher levels of service quality as a
competitive strategy aimed at differentiating their product and service
offering. As evidence continues to suggest that continual measurement is
one way of differentiating the successful long-term quality improvement
program, it has become imperative for managers to provide for its applica-
tion in the hospitality context (Lewis, 1987; Getty and Thompson, 1994),
This is not to deny the complexity of the task. Indeed, as Edvardsson,
Thomasson, and Ovretveit (1994) point out, managers face a number of
difficulties in measuring service quality:

¢ First, many measurement systems are flawed, as those designing and

using the system do not know enough about what is to be measured,
the purpose, and how the results are to be used.
¢ A second problem is that managers quite often do not measure quali-
ty throughout the service chain. While some may choose to concen-
trate solely on internal performance measures, others may concen-
170 Service Quality Management in Hospitality, Tourism, and Leisure

trate on external customer measures only. Of course, what is required

is a balance between both and an understanding that while quality
may be defined at the “moment of truth,” the process of providing
quality starts well before the actual interaction with the customer.
More often than not, externally perceived quality ratings will reflect
the level of internal performance.
A third problem is that measuring customer perceptions may of itself
increase expectations. In many cases, the very mention of quality im-
provement is enough to create a heightened sense of expectation on
the part of the customer.
A final pitfall is too much measurement. Organizations run the risk
of tiring both customers and staff with too much measurement. Given
the time and expense required to undertake such an exercise, it is
imperative that it is not overdone. ;

These authors emphasize two issues in particular in an attempt to avoid

these difficulties: identifying what should be measured and designing the
most appropriate measurement instrument for gathering and analyzing the
pertaining data.
In answering the first question, what to measure, Palmer (1998) sug-
gests that organizations should set about asking the following key ques-
tions:

¢ What do customers consider the important features of the service?

¢ What level of those features do they expect?
¢ How do customers perceive service delivery?

By answering each of these questions the organization will be better

able to establish clear goals and standards for quality improvement as well
as being better placed to offer customers the right level of service quality.
The question of how to measure service quality depends upon what is to
be measured. Recent years have witnessed the development of a plethora
of measurement tools and techniques aimed at assessing service quality
and customer satisfaction levels within the hotel sector. This is apparent in
both the academic and industrial press and to the uninitiated is a veritable
minefield of terminology. Such terms as SERVQUAL, SERVPEREF, DINE-
SERV, LODGSERV, LODGQUAL, and more recently GROVQUAL have
become common parlance among academics and practitioners. Added to
the full range of quantitative and qualitative methods available, it quickly
becomes clear that the most critical challenge for managers is to identify
 Measuring Service Quality and Customer Satisfaction 7i

and implement the most appropriate methods for measuring the quality of
the service experience (Ford and Bach, 1997).

-Cusiemer Sur Jels

MEASUREMENT TECHNIQUES
~

OABAVANMNS => fe Ges -

Today’s hotel manager faces many choices when it comes to measuring
customer perceptions of service quality. A full range of measurement
techniques is now available for the assessment of service quality, each
with its own particular strengths and weaknesses, depending upon what is
being measured and why it is being measured. The difficulty is that many
of these techniques are too costly, too complicated, or totally inappropriate Qua
for what is being measured.
By and large, hoteliers employ a mix of qualitative and quantitative Focus
methods, choosing to collect feedback through a combination of observa- IMP
tion and/or communication techniques. Qualitative methods include inter-
views, focus eroups,\customer role-play,!andzobservation research/and,
although highly subjective, nonetheless provide an interesting insight into
the mind-set of individual customers. Quantitative techniques, on the other
hand, collect information on the basis of a(predetermined standard, and as
such are more objective and measurable in nature. In the majority of cases
this information is collected b¥surveys,lwhich can be administered either
face-to-face (as in the case of exit surveys), indirectly (By telephone), or
simply lett for the customer to fill out later (as in the case of room surveys
and ¢ustomer comment cards) Ford and Bach (1997) provide a detailed
listing of the many techniques available to managers as well as addressing
the relative strengths and weaknesses of each. A summary of these tech-
niques and others along with their principal advantages and disadvantages
is provided in Table 10.1.
A number of the more popular techniques shall now be addressed in
relation to their suitability to the hotel industry and, where permission has
been granted, examples of each will be provided.

Unobtrusive Observation Measures -MAwract Wu Stett FOUCIN

‘Sater Shappes ‘” X

Unobtrusive observation measures have been widely applied within the

broad tourism sector and recently to assess visitor satisfaction levels with
festivals and events (Seaton, 1997). According to Ford and Bach (1997),
this is the simplest and least expensive technique to assess service quality
in hotel operations. In short, managers are required to take a step back
from operational duty in order to observe, map, and analyze the many

aSovie Qedlity SYPeAuct appook

172 Service Quality Management in Hospitality, Tourism, and Leisure

TABLE 10.1. Summary of Data Collection Techniques

Principal Advantage Principal Disadvantage

Management Observation | No inconvenience to cus- | Presence of observer may
tomer influence delivery
Employee Feedback Employee knowledge of Employee bias
delivery problems
Comment Cards Suggest company interest |Comments generally re-
in customer opinions flect extremes
Mail Surveys Ability to gather valid and | Time lag and effect of
representative samples memory retention
On-Site Personal Interview | Detailed guest feedback Sample representation
Telephone Interviews Representative and valid Customer inconvenience
sample of target customers
Critical Incident Technique | Identification of what is Low response rate
critical to customer
Disconfirmation Models Directs improvement Administration
Information rich Symptom identification
Mystery Shoppers Consistent and unbiased

interactions that take place daily between the organization and its custom-
ers. The principal advantage of this technique is that it can identify real-
time service problems and sources of customer inconvenience, which can
then be put right on the spot. Observers have a detailed knowledge of their
own operations and are therefore quite adept at noticing service problems
as well as the causes of these problems. Another great benefit of this
method is its minimal inconvenience to the customer, with the majority of
observation research being conducted without the customer’s knowledge.
Quite often it also gives management a greater appreciation of the pres-
sures on frontline employees.
This method has problems, however. In the first instance, management
observers require highly specialized training, which may prove both time
consuming and expensive. Observation also raises a number of ethical
concerns in relation to invasion of privacy. Consequently, many organiza-
tions inform both customers and employees that they are being observed
for the purposes of quality improvement. Also, employees may underper-
form because they feel intimidated by the constant pressure of manage-
ment observation. Thus there may be great benefit in extending the ob-
servation role to include frontline employees. Frontline staff may be much
more critical of their own roles within the organization, and peer evalua-
 Measuring Service Quality and Customer Satisfaction 7S

tion may be much better received by employees than “yet another ill-
informed” management appraisal. This brings us to another very lucrative
source of information—employee feedback.

Employee Feedback SLA OS venicles for antherinc

INFOWMNETNA) , (egpyaing, CuSjamer PercaprTGny.
It is very important to realize that much of service quality as perceived
by the customer is related to moments when the service supplier and the
customer meet face-to-face. More than any other factor it is the quality of
our people, in both the front and back of the house, which determine
success as defined at this moment of truth. It only makes sense, therefore,
that employee feedback of customer perceptions be sought and that em-
ployees be used as vehicles for gathering such information.
Most customers feel at ease with frontline service personnel and often
like to talk about the service they have received. It is much easier to report a
service failure verbally than in writing. This presents a fantastic opportunity
for hoteliers to gain firsthand and up-to-the-minute customer feedback. The
benefits are clear: problems that are identified can be put right immediately
or at least prior to the customer’s departure. This not only generates intor-
mation about the quality of the guest experience, but boosts employee
morale in terms of the satisfaction derived from an immediate service re-
covery. On the other hand, managers need to be aware of the problem of
employee bias. All too often what gets reported is only a fraction of what
should be reported. There is also a danger that employees will be somewhat
selective with the truth.
As a result, many hoteliers are now encouraging frontline statf to solicit
and record feedback during their many encounters with customers. This
may be done either formally or informally through various interview ap-
proaches, as in the case of checkout or bill settlement, or by random sam-
pling. This information may be gathered on a daily or weekly basis by
means of one-to-one reporting, departmental interviews, or employee report
cards (see Figure 10.3). Above all, it provides a source of instant feedback
on customer perceptions which, if they are to be of any use to management,
must be acted upon immediately.

One-to-One Customer Interviews

The customer interview is perhaps one of the least employed, yet most
effective techniques for achieving a deeper understanding of customer per-
ceptions of service quality. In the main, such interviews are caretully struc-
tured and follow a closely worded script with little room for deviation. The
174 Service Quality Management in Hospitality, Tourism, and Leisure

FIGURE 10.3. Employee Feedback Card Used by the ACCOR Hotel Group in
Western Australia to Gather Feedback from Both Employees and Customers

GUEST EXPERIENCE/
EMPLOYEE FEEDBACK RECORD
DATE:
DEPARTMENT:

CO Front Office C) Housekee ping CO) F&B

CJ Engineering C) Other

SECTION: :
(Eg. Room Servicing, Check In, Restaurant - breakfast)

eee as CL) Please tick the appropriate box

DETAILS: MAIN PROBLEM / SUCCESS CATEGORY
L) People (e.g., quality of service)
L) Process/Policy (e.g., Timing of service, hotel policy)
L) Equipment (e.g., Cracked plates, computer breakdown)
C) Other (e.g., Hotel surroundings - noisy rooms, stained carpet)

CL) GUEST EXPERIENCE or CL) EMPLOYEE FEEDBACK

Guest Name: . Employee Name:
Room Number: _. Department:
THANK VOU FOR COMPLETING THIS FORM
YOUR EFFORT WILL HELP TO IMPROVE THE SERVICE WE OFFER OUR GUESTS

Source: Reproduced with the permission of the ACCOR Hotel Group, Perth,
Western Australia.
 Measuring Service Quality and Customer Satisfaction LTD

great benefit, of course, relates to the richness of the information that may
be gathered and the fact that it is current. It also enables the company to set
about building a relationship with customers that should have a knock-on
effect in itself in terms of retention. The customer will feel valued and is left
with an impression that the company really cares for his or her personal
well-being.
The major problem with this technique is the time and expense required
to conduct such interviews, not to mention the specialized training and
customer intrusion issues. As a result, many companies tend to restrict the
use of this technique to particular times of the year and to particular types of
customer, namely their larger corporate accounts, special events, and indi-
vidual complainants. Many hotels deem it essential to follow up on good
and bad survey results and individual letters of complaint. For instance, the
Joondalup Resort Complex in Western Australia makes it a priority to
tollow up on each and every function held in the resort. The resort liases
with all function customers both pre- and postevent to ensure that their
needs have been fully met. If a problem becomes apparent, customers are
invited to a one-on-one meeting with the property manager to assess the
specific nature of their dissatisfaction. Whereas once customers would have
been lucky to receive a letter of apology, many managers now realize that
this more personal approach allows for a greater chance of recovery and
differentiation in the marketplace.

Focus Groups

It is not uncommon for hotels to issue invitations to their customers to

attend focus groups. Having their beginnings in group therapy as used by
psychiatrists, these groups are designed to get customers talking in depth
and at length about the organization’s ability to meet their needs. More
specifically, these sessions are designed to ascertain what the customer
deems important in terms of quality provision. The underlying premise is
that there is safety in numbers and one person’s response may become a
stimulus for another to contribute. This technique is rather useful in that it
involves customers not only in identifying problems but also in their
solution, which from a customer’s point of view is highly rewarding.
Once again, expense is a problem, especially for the small- to medium-
sized enterprise. Hoteliers are normally expected to meet the guest’s ex-
penses in traveling to participate in these sessions, not to mention the fee for
professional facilitators. It is not unusual, though, for guests to receive an
Open invitation to attend weekly team improvement meetings. In fact, such
invitations are frequently posted in many hotel lobbies. This may be viewed
as a more open form of the quality improvement circle, where guests are
176 Service Quality Management in Hospitality, Tourism, and Leisure

actively encouraged to contribute and offer suggestions based upon direct

experience. The author can testify that he has attended many such sessions
and has found them most rewarding indeed.

Critical Incident Technique

Critical incident is a technique designed to elicit details about services

that “particularly dissatisfy or delight customers” (Lovelock, Patterson,
and Walker, 1998, p. 137). This information may be collected during
one-to-one interviews or, as is more common in the hotel industry, by
means of in-house comment cards (see Figure 10.4). Comments from
cards and transcripts from interviews are collated to identify common
problems or sources of delight. Unlike other qualitative methods of glean-
ing feedback, customers are not forced to give answers to predetermined
potential problems. Rather, this technique seeks to encourage them to
record their most memorable incidents from the service experience. Ac-
cording to Hope and Muhlemann (1997) the technique is useful in a
number of respects:

* It facilitates the identification of specific attributes of service which

have a significant impact upon customers.
¢ This can be used to redesign the service delivery system around the
more important customer-perceived quality attributes.

Customer Surveys

Surveys are by far the most common and most abused data collection
technique employed by the hotel sector. These surveys can be employed
on a regular basis, as in the case of guest comment cards, or less regularly,
as in the case of the more detailed attribution techniques now being
employed. Of importance here is the validity, reliability, and practicability
of the particular survey instrument.

Customer Comment Cards

The more regular survey techniques normally take the form of simple
comment cards placed on dining room tables and in guest bedrooms. They
can range from the very simple (see Figure 10.5) to the much more compli-
cated (see Figure 10.6). Customers are normally invited to rate the quality
of individual attributes of the service experience on a predetermined scale,
as well as the overall quality of the service received. In the majority of cases
 Measuring Service Quality and Customer Satisfaction 177

FIGURE 10.4. An Example of a Critical Incident Card Used by Rydges Hotel,

Perth, Western Australia

fae are important to us. That’s why we’d like to hear what
you think about your stay with us. And if you have any suggestions
on how you think we could improve things, we’d like to hear them, too.
Just jot down your thoughts here, then drop it off at the reception desk.
Thank you.

Your name:
Room number:

Note: This card adopts a largely unstructured approach to assessing guests’

perceptions of service quality. Reproduced with the permission of Rydges
Hotel, Perth, Western Australia.

customers are also invited to offer individual comments on any aspect of the
service not covered by the survey.
The major advantage of this scheme is its simplicity in terms of data
collection. Once placed, comment cards require no further employee effort
or time in terms of administration. As such they are a very cheap means of
highlighting repeated service problems and, in particular, problems that
hoteliers would otherwise never become aware of. If positive feedback is
provided they also present management with an excellent opportunity to
acknowledge it to statf, which in turn acts as an excellent incentive to
improve performance. Such cards, depending upon where they are placed,
178 — Service Quality Management in Hospitality, Tourism, and Leisure

FIGURE 10.5. Typical Comment Card Taken from the Western Australian Res-
taurant Sector

YOUR COMMENTS COUNT

DAL Hope
ee eeLVL.

CAFE:

ouamrrorroon [| |
[emprover courresy [||
[poopmasts | | |
[seen orsemvice [| |__|
[mewrrvaruery |_| |
Teumanumness | ||
[iit
een ea ead |
PGi ei Sa]
[noo presenrarrow [|
Tamarence jcomroer |[|
ANY OTHER COMMENTS:

Note: This card uses a combination of structured and unstructured approaches

to assess guests’ perceptions.
 Measuring Service Quality and Customer Satisfaction 179

FIGURE 10.6. Excerpt from a More Detailed Comment Card Used by the Hyatt
Regency, Perth, Western Australia

RESTAURANTS
Which restaurant did you dine in during your stay?
(select one) e
EXPECTATIONS Not met Met Exceeded N/A
Friendliness of staff 3
Timeliness of meal 3
Quality of food
Menu variety
Selection of beverages
Value for money
Atmosphere/Ambience PP
MNNMNMNMNNN

Any comments you would like to make regarding our restaurants.

Would you come back to this restaurant?

CHECK OuT
EXPECTATIONS Not met Met Exceeded N/A

Checked out efficiently 1 2 3 4

Accuracy of account 1 2 3 4
Account easy to understand 1 2 3 s
1
Account timely 2) 3 4
Any comments you would like to make regarding your check out.

Note: This card uses a combination of both direct disconfirmation and unstruc-
tured approaches to assess guests’ perceptions of service quality. Reproduced
with the permission of the Hyatt Regency Hotel, Perth, Western Australia.
180 Service Quality Management in Hospitality, Tourism, and Leisure

also convey a warm, caring attitude to patrons, which is highly conducive

to establishing an ongoing relationship with them. Depending upon the
simplicity of design they may actually be a pleasure to fill in.
A major disadvantage, however, is their very low return rate. As they
rely totally on voluntary customer participation, they are more often than
not ignored as clutter. According to Simpson (1997, p. 83), “so many
companies have got onto the bandwagon of customer feedback that there
is now a customer backlash from being inundated with surveys, question-
naires, checklists and the like. They are not responding.” It is not uncom-
mon therefore to record a response rate as low as 20 percent, which of
course is next to meaningless.
In the majority of cases, respondents are either bored, have been de-
lighted, or are highly dissatisfied with the service encounter. Thus, those
that are collected may not reflect general customer feeling. In recognition
of this fact many hoteliers are now offering incentives to guests to encour-
age greater participation. Such incentives include free meals, weekend
breaks, and/or room discounts during the customer’s next stay.
Another serious problem with this technique is the time-lag factor. At
best the cards are analyzed weekly, which normally means that by the time
managers have gotten around to rectifying recorded problems the custom-
er has already moved on. Where appropriate, therefore, and regardless of
return rate, cards should be analyzed daily. A common practice in the
restaurant sector is for shift leaders to analyze results at the end of a shift.
Information regarding service problems is then passed on to the next shift
leader so that problems can be resolved within the day.

Attribution Techniques

According to Palmer (1998), quality is so complex a concept that it

cannot satisfactorily be measured by a series of ad hoc studies. This, and
the increasing importance of service quality as a means of gaining compet-
itive advantage, has led to the recent development and application of a
series of more detailed survey techniques aimed at measuring customer-
perceived service quality with the hospitality industry.
The majority of these more detailed quantitative studies have adopted
the confirmation-disconfirmation paradigm, which seeks to explore the
relationship between a customer’s prepurchase expectations and percep-
tions of service performance. As consumers evaluate service performance,
they typically cannot help but compare that performance to what they
expected. In turn these expectations provide a baseline for the assessment
of a customer’s level of satisfaction. These models contend that service
quality can be conceptualized as the difference between what a consumer
 Measuring Service Quality and Customer Satisfaction 181

expects to receive and their perceptions of actual delivery. They hold that
product and service performance exceeding some form of standard leads
to satisfaction, while performance falling below this standard results in
dissatisfaction (Wilkie, 1994; Wells and Prensky, 1996; Oliver, 1996).
According to Mowen (1995), this expectancy disconfirmation approach
helps explain consumer perceptions of service quality as well as consumer
satisfaction judgments.
Researchers have adopted both inferred and direct disconfirmation
techniques. The inferred approach seeks to estimate the size of any gap
between the customer’s expectations and the actual performance received.
Expectations and perceptions are measured separately, producing a rela-
tive measure of how well the service has performed compared to what the
consumer expected. Direct discontirmation, on the other hand, provides an
absolute measure of performance. It is a measure of how the service has
performed on the basis of the customer’s absolute level of satisfaction or
dissatisfaction.
Preeminent among these studies has been the work of Parasuraman,
Zeithaml, and Berry (1985) and the development of their SERVQUAL
instrument. Their research has concentrated on the belief that service
quality is measurable, but only in the eyes of the consumer. They take the
view that service is of high quality when customers’ expectations are
confirmed by subsequent service delivery.
They postulate that, as services are less tangible than goods, the dimen-
sions on which customers form expectations may also be different. Initial
qualitative research has led to the identification of five dimensions (tangi-
bles, reliability, responsiveness, assurance and empathy—reterred to pre-
viously as RATER) on which customers evaluate service quality. If expec-
tancies are discontirmed on any of these dimensions, satisfaction gaps
result, and the customer is likely to record a poor rating of the service.
Over the years these researchers have developed their initial qualitative
studies into the more comprehensive statistical tool known as SERV-
QUAL, which is now widely used to measure service quality throughout
the services sector.
SERVQUAL has been extensively researched to validate its psychomet-
ric properties and while it has attracted criticism for its conceptualization of
quality measurement issues, it has nonetheless been applied in a wide vari-
ety of sectors (Lewis, 1987; Lee and Hing, 1995; Ryan and Cliff, 1997;
Lam, Wong, and Yeung, 1997). It takes the form of a two-part twenty-two-
item questionnaire (see Appendix, p. 186), which seeks to estimate custom-
ers’ preconsumption expectations of service as well as postconsumption
perceptions of actual service received. Customers are asked to complete
182 Service Quality Management in Hospitality, Tourism, and Leisure

each section of the survey using a seven-point Likert scale that extends from
1 (strongly disagree) to 7 (strongly agree). Measures of service quality can
be derived by subtracting the expectation scores from perception scores,
which can also be weighted to take account of the relative importance of
each quality dimension. In turn, these importance scores allow managers to
focus attention where it is likely to have most impact or where it is most
needed. The scores across all the questionnaires are summed and averaged
to find a score for each question. The results of the questions within each
dimension are then averaged to obtain a score for each dimension, which
can then be used to highlight how well an organization is performing in
light of customer expectations.
The benefits derived from this approach are clear and may be summa-
rized as follows:

¢ SERVQUAL gives management a clear indication of how the company

is performing in the customer’s eyes both individually and en masse.
¢ It helps prioritize customer needs, wants, and expectations by identify-
ing what is most important in the customer’s eyes. As stated, this infor-
mation can be gleaned from the weighting of individual dimensions.
¢ It allows the organization to set an expected standard of performance
that can then be communicated to all staff and patrons.
* It can also identify the existence of any gaps between customers and
providers and thereby helps focus improvement efforts by directing
organizational energies at closing these gaps.

Each of these benefits can be clearly illustrated by the example shown

in Table 10.2, taken from a comparative study conducted by the author in
the Northern Ireland tourism sector. The information provided gives a
clear indication of how the company is performing across all dimensions.

TABLE 10.2. SERVQUAL Scores

Difference
Perceptions Expectations Score
Tangibles
Assurance
Reliability
Responsiveness
Empathy

Source; O'Neill, 1997.

 Measuring Service Quality and Customer Satisfaction 183

In addition to prioritizing what is important from the customer’s point of

view, it also identifies a clear gap in relation to the responsiveness of the
service provided. In turn this directed organizational improvement efforts
in relation to wait and delivery times.
Over the years, there have been many adaptations of the original
SERVQUAL tool to suit the specific operational characteristics of the
hospitality environment (Getty and Thompson, 1994; Knutson, Stevens,
and Patton, 1995; Walker, 1996; Dowell, Hing, and Leiper, 1998). As a
result, such terms as LODGQUAL, LODGSERV, DINESERV, and GROV-
QUAL have become common in the industry. Each of these instruments
has sought to develop and build upon the original and more generic
SERVQUAL tool. In the case of LODGQUAL, Getty and Thompson
(1994) identified three basic dimensions of service quality in the lodging
industry. The tangibles and reliability dimensions are as previously de-
fined. The authors identified a third dimension, however, contact, which
was a composite of SERVQUAL’s responsiveness, empathy, and assur-
ance. Their results suggest that these three dimensions are “indistinguish-
able and, in general, represent the patron’s contact experience with the
employees” (Getty and Thompson, 1994, p. 8). LODGSERV (Knutson et
al., 1990) is also built on the same five dimensions as SERVQUAL but
contains questions specifically tailored to the lodging industry. Further
work by the authors led to the development of DINESERV, which was
tailored to better capture the uniqueness of the dining experience.
From an academic viewpoint, the original SERVQUAL instrument has
been challenged on a number of fronts (Palmer, O’Neill, and Beggs,
1998). Questions have been raised about the dimensions of SERVQUAL
and whether they are consistent across industries, its psychometric proper-
ties, and how expectations are formed (Babakus and Boller, 1992; Brown,
Churchill, and Peter, 1993; Zeithaml, Berry, and Parasuraman, 1993).
While these criticisms have generated quite substantial debate among
academics, they are not addressed in any great detail in this chapter.
Industrialists, it seems, are more concerned with the more practical meth-
odological issues that present difficulty from an administration point of
view. For example, some researchers have suggested better wording for
some ofthe scale items (Bolton and Drew, 1991). Customers find it hard to
differentiate between many of the scale items, particularly when “negative
forms of questions are used” (Hope and Muhlemann, 1997, p. 288). For
example, consider the following: “the company strives to get it right the
first time” and “the company gets it right the first time.”
There has also been debate about whether it is practical to ask consum-
ers about their expectations of a service immediately before consumption
184 Service Quality Management in Hospitality, Tourism, and Leisure

and their perceptions of performance immediately after. Customers may

become tired or distressed as a result of being asked to complete both
surveys. Some analyses have therefore used combined single scales to
measure gaps (Carman, 1990; Babakus and Boller, 1992). It has been
suggested that expectations may not exist or be clear enough in respond-
ents’ minds to act as a benchmark against which perceptions are assessed
(Iacobucci, Grayson, and Omstrom, 1994). Consequently customers have
a tendency to circle “strongly agree” or “very important” for all aspects.
Furthermore, it is argued that expectations are only formed as a result of
previous service encounters, that is, perceptions feed directly into expecta-
tions (Kahneman and Miller, 1986).
For all of these reasons many researchers now believe that a more direct
approach to the measurement of service quality is now needed. It is felt that
performance-only-based measures of service quality may be an improved
means of measuring the service quality construct (Churchill and Surprenant,
1982; Bolton and Drew, 1991; Cronin and Taylor, 1992). This has led to the
development and application of a more direct form of disconfirmation tech-
nique such as SERVPERF. Like SERVQUAL, this approach requires the
customer to rate a provider’s service performance on a five-point Likert
scale ranging from (1) strongly disagree to (5) strongly agree. Unlike
SERVQUAL, however, it does not seek to estimate difference scores; rather,
it seeks to assess consumers’ postconsumption perceptions only. As such, it
is an absolute rating of customer attitudes toward service quality.
According to Hope and Muhlemann (1997) this approach overcomes
some of the problems raised regarding SERVQUAL, namely: raising ex-
pectations, administration of the two parts of the questionnaire, and the
statistical properties of difference scores. Taking a single measure of ser-
vice performance is seen to circumvent all of these issues. It is felt, how-
ever, that from an operational point of view, much useful information is
lost when performance-only measures are taken. This can be clearly dem-
onstrated through the example shown in Table 10.3.
Following the administration of SERVQUAL, it is clear that tangibility
is the dimension of the service encounter furthest from meeting customer
expectations. It can also be seen that the reliability dimension recorded the
highest expectation rating, which is in line with other studies that the
author has conducted and which no doubt confirms the relative importance
of reliable service to the majority of customers.
From an operational standpoint this information highlights the need for
quality improvement efforts in all areas, but most specifically in relation to
the more tangible aspects of the service encounter. If a performance-only
measure were taken, tangibles would still top the list of quality improve-
 Measuring Service Quality and Customer Satisfaction 185

TABLE 10.3. Inferred and Direct Disconfirmation Scores

Difference
Perceptions Expectations Score
Tangibles
Assurance
Reliability
Responsiveness
Empathy

Source: Gabbie and O'Neill, 1997.

ment, but the order of the other dimensions would change, placing reliabil-
ity as the second most important factor from the customer’s point of view.
As a consequence, the prioritization of any organizational improvement
effort may be wrong and even misdirected.
Having worked with both techniques, the author believes they are be-
yond the concern of the majority of hotel operators, who are more inter-
ested in the practicalities of the tool and its ability to provide timely and
relevant customer feedback and assist with quality improvement. It is not
surprising to note therefore that neither technique has been widely applied
within the hospitality industry. They have mostly been used as part of
some academic research exercise. It should also be borne in mind that
many industrialists do not have the required level of expertise to adminis-
ter and/or analyze the data from such quantitative techniques. As a result,
they are required to bring in an outside body who normally charges quite a
large consulting fee. Thus, cost is also a factor.

CONCLUSION

Galileo once wrote “count what is countable, measure what is measur-

able, and what is not measurable make measurable” (Edvardsson, Tho-
masson, and Ovretveit, 1994, p. 178). No business today can afford to
ignore the customer. There is simply too much choice within the wider
competitive environment. If customers are not already, then they must
become the focal point of all organizational effort. More than at any other
time in recent business history their satisfaction is critical to future corpo-
rate survival. In turn, this will be determined by an organization’s ability to
deliver consistently on the service quality front.
186 Service Quality Management in Hospitality, Tourism, and Leisure

Gone are the days when organizations could differentiate on the basis of
their product offerings alone. Gone are the days when organizations deter-
mined their own levels of service and quality. Gone also are the days when
the provision of customer service was seen as something that only the
“service industries” did. What is clear is that whether production or ser-
vice oriented, organizations from all economic sectors are now turning to
service quality as the only remaining means of differentiating their busi-
ness offering, turning one-time customers into longer-term clients. This
requires an approach to quality improvement that concentrates on the
continual measurement of service quality as perceived by the customer. In
short, what gets measured gets done, completed, and continually improved
upon.

APPENDIX: SERVQUAL INSTRUMENT

Please complete Part A by indicating your expectations of hotels in general. Then complete Part B
indicating your perceptions of this hotel in particular. Please answer on a scale from 1 (strongly disagree
with the statement) to 7 (strongly agree).

[PART A]
Directions: please complete the following questionnaire pertaining to service quality. If you feel the
features mentioned in each statement are essential in your judgment of the hotel, please circle 7.
However if you feel the features mentioned are of little importance, please circle number 1.

Strongly Strongly
Disagree Agree
An excellent hotel will have modern-looking equipment, e.g., Wire OriA4a oe One
dining facility, bar facility, crockery, cutlery, etc.
The physical facilities, e.g., buildings, signs, dining room decor,
lighting, carpet, etc., at an excellent hotel will be visually
appealing.

Staff at an excellent hotel will appear neat, e.g., uniform,

grooming, etc.

Materials associated with the service, e.g., pamphlets,

statements, table wine, serviettes will be visually appealing in an
excellent hotel.

When an excellent hotel promises to do something by a certain

time, it will do so,

When patrons have a problem, an excellent hotel will show

genuine interest in solving it, e.g., an error in a bill.

An excellent hotel will perform service right the first time.

An excellent hotel will provide its services at the time it promises

to do so.

An excellent hotel will insist on error-free service.

Staff at an excellent hotel will tell patrons exactly when services

will be performed.
 Measuring Service Quality and Customer Satisfaction 187

Staff at an excellent hotel will give prompt service to patrons.

(12) Staff at an excellent hotel will always be willing to help patrons. Mem Orael Onn Os

Staff at an excellent hotel will never be too busy to, respond.

The behavior of staff at an excellent hotel will instill confidence in

patrons.

Patrons of an excellent hotel will feel safe in their transactions.

Staff at an excellent hotel will be consistently courteous with

patrons.

Staff at an excellent hotel will have the knowledge to answer

patrons’ requests.

(18) Staff at an excellent hotel will give patrons individualized ete.

On AO Oneih
attention.

An excellent hotel will have opening hours convenient to all of its

patrons.

An excellent hotel will have staff who give its patrons personal
attention.

An excellent hotel will have the patrons’ best interests at heart. ieee
insta Oa OlanTG

The staff of an excellent hotel will understand the specific needs ieee
bat poten bears
of their patrons.

Strongly Strongly
[PART B] Disagree Agree
(1) |The hotel has modern-looking equipment. Terese
herd Soke heal

(2) The physical facilities at the hotel are visually appealing. eee
Oma OseOlt

(3) Staff at the hotel appear neat. Wor Pan Shnt end Sve Maal

(4) Materials associated with the service are visually appealing. ere Om Amo
msOual

(5) When the hotel promised to do something by a certain time, Heer

Ova Oneihh
it did it,
(6) When patrons have problems, the hotel shows a genuine interest Worn
ioc ocd Shoal
in solving them.
The hotel performs the service right the first time. MO aN Ot atom
Orns

(8) The hotel provides its services at the time it promises to do so. eee
cd ie Ole,

(9) The hotel insists on error-free service. Voor banettt

Vaccl ancl
(10) Staff at the hotel were able to tell patrons exactly when services WoO
neon Ont Onnt,
would be performed.

) Staff at the hotel give prompt service to the patrons.

) Staff at the hotel are always willing to help patrons. Hes

) Staff at the hotel are never too busy to respond to patrons. ‘lees

) The behavior of staff instills confidence in patrons. ‘Nas

) Patrons of the hotel feel safe in their transactions. less

) Staff at the hotel are consistently courteous with patrons. 0© SB

© ®©
my
DW
YH
Bw o
®w RRA
se
oa
aa22
aaa
B®
®2 ON
NNN
NN
188 Service Quality Management in Hospitality, Tourism, and Leisure

Staff at the hotel have the knowledge to answer patrons.

The hotel gives patrons individualized attention.

The hotel has opening hours convenient to all of its patrons.

The hotel has staff who give its patrons personalized attention.

The hotel has the patrons’ best interests at heart.

The staff at the hotel understand the specific needs of their

patrons.

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man.
Walker, R.H. (1996). Towards Identifying How Visitors to Tasmania Define and
Assess Service Quality in the Hospitality Industry. Australian Journal ofHos-
pitality Management, 3 (2): 27-39.
Wells, W. and Prensky, D. (1996). Consumer Behavior. New York: John Wiley.
Wilkie, W. (1994). Consumer Behavior, Third Edition. New York: John Wiley.
Witt, C. and Muhlemann, A. (1995). Service Quality in Airlines. Tourism Eco-
nomics, | (1): 33-49.
Zeithaml, V.A., Berry L., and Parasuraman, A. (1993). The Nature and Determi-
nants of Customer Expectations of Service. Journal of the Academy ofMarket-
ing Science, 21 (1): 1-12.
Zeithaml, V.A., Parasuraman, A., and Berry, L. (1990). Delivering Quality Ser-
vice: Balancing Customer Perceptions and Expectations. New York: The Free
Press.
Zemke, R. and Schaaf, D. (1990). The Service Edge. New York: Penguin.
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 Chapter 11

Managing Service Failure

Through Recovery
Beverley Sparks

INTRODUCTION

The tourism and hospitality industry offers a range of services, includ-

ing accommodation, food and beverage, transport, tours, and attractions.
Like all service industries, the services provided within the tourism and
hospitality sector have several things in common, which distinguish them
from the a SME b Ha Une and other eal sectors.

serve aei hospita ity services in advance and even harder to “try
before yo eaten provision of services is often immediate and Sponta-
bi p sion recjuires a matchhing of expectations
It to achi eve under conditions of time
.For all of these reasons, achieving zero
quite difficult and, inevitably, service failures sometimes occur.
This chapter focuses upon the topic of service failure and recovery, an
area that has only received limited attention in the hospitality and tourism
literature..To get a detailed understanding of this complex topic, a facet
ese is presented and discussed. A model illustrating the process of
srvice failure, recovery, and outcomes is depicted, and implications for
services management, marketing, and research are discussed.

FACET ANALYSIS

Service provision, failure, and recovery are multifaceted processes. In

an effort to gain a deeper understanding of the various components of
these processes, a facet analysis has been conducted and is presented in
Table 11.1. This involves an attempt to identify and systematize the differ-
J 03:
194 Service Quality Management in Hospitality, Tourism, and Leisure

TABLE 11.1. Facets and Types of Elements

First-level facet Second-level facet Third-level facet Examples

FAILURE Omission Tour is canceled
Commission Quantity Too few seats at table
Quality/manner Dirty room
Timing Flight delay
Location Lost luggage
Agency Chef's night off
Cost Wrong price
CONTEXT Cultural Norms regarding forms of
address
Organizational Policies Policy about handling ser-
vice breakdowns
Structure and size Small family business versus
large bureaucracy
Management philosophy The customer is always right
Human Resource Manage- Training programs
ment
Physical Architecture, temperature, Poor soundproofing
furnishing, music, tidiness
Psychosocial Number, groupings, relation- Large, noisy party
ships of people present
Financial High price/low price Hidden costs
Temporal Daily, weekly, seasonal Time of day, season, day of
week, peak/off peak
PERSONAL Psychological Mood
Values
Demographics Education
Age
Gender
Race
Occupation
PROCESS Overt Verbal
Nonverbal
Covert Attribution theory
Distributive, interactive, and
procedural judgments
RESPONSE Strategy Recovery Replacement, compensa-
tion, apology
Nonrecovery Denial, avoidance
CONSEQUENCES Immediate Customer satisfaction
Customer complaints
Long term Word of mouth
Loyalty
SS
 Managing Service Failure Through Recovery 195

ent aspects of a target phenomenon. It includes a breakdown of the service

failure process, the context in which the failure occurs, personal factors
influencing failure and recovery, process factors, responses to failure, and
consequences of failure and recovery. Each of these broad facets is broken
down into more specific second-level subfacets and, where appropriate,
third-level facets and examples are given.

CAUSES OF SERVICE FAILURE

The topic of service failure has received limited attention in the litera-
ture, and no clear definition of precisely what “failure” means is evident.
This contrasts with the broader services marketing and hospitality litera-
ture, where considerable focus has been given to issues of service quality
or customer Satisfaction (see Bojanic and Rosen, 1994; Brown, Fisk, and
Bittner, 1994; Knudson et al., 1990). As discussed in other chapters, the
general consensus that emerges from this literature is that customer satis-
faction and service quality should be defined in terms of customers’ per-
ceptions. Hence, for the purposes of this chapter, service failure or break-
down will be defined as that which does not meet the customer’s
expectations. It is the customer’s perception of service failure that is criti-
cal, not whether the service provider was responsible, nor whether the
perceptions are fair and reasonable.
As shown in Table 11.1| failure can occur due to elements of the orga-
nization, other customers,or the actual customer, or because of some
combination of or interaction between these agents.\In addition, failures
may be categorized as occurring due to error of either omission or com-
mission. Failure as a result of omission means that some part of the service
offering is not given. For instance, a particular service is not available. In
contrast, failure as a result of commission occurs when the service is
delivered but foes not méet the expected standards) Although not shown
in Table 11.1, service failures usually involve either (Core or peripheral
activities (lacobucci, Grayson, and Ostrom, 1994). The core service break-
downs may include occurrences such as a hotel room not being ready, or a
steak being cooked well done when requested rare. Peripheral activities
that may contribute to a perceived breakdown of service include a lack of
interpersonal skills (e.g., friendliness) on the part of the service provider.
Finally(failures may vary across a range of other dimensions including
severity, duration, frequency, and avoidability) The following discussion is
organized around the causes of service failure, and other dimensions of
failure are mentioned in passing only.
Cian
IE Ree ger
196 Service Quality Management in Hospitality, Tourism, and Leisure

Wo
ei italality
Service failures sometimes ws due to 1 eit For instance,
certain dishes are advertised on a restaurant’s menu but are no longer
available. Alternatively, failure may occur if critical details of the service
are not provided to the customer at the time of sale. For example, a custom-
er books a hotel room and on arrival finds the property is in the midst of
renovation and was not informed. A os oft flight or a room service meal
that does not arrive are other examples offService failures
due to o mission\l

Commission

The largest proportion of failures arise when a service is delivered but

does not meet the customer’s expectations. Six types of service failure errors
of commission can be distinguished, as described in the sections that follow.

Quantity

Service failures frequently involve incorrect quantities. For instance,

the wrong number of seats are reserved for a restaurant booking or the
wrong number of coffees are served. In most instances, failures of exces-
sive quantity are inconvenient, but are less serious than failures that in-
volve insufficient quantity.

Quality of the Product

In tourism and hospitality settings, most service failures relate to the

quality of service received. As indicated previously, failures of service
quality may relate to either core or peripheral aspects of service. First{core
aspects include all that is central to the service, such as the meal served at
a restaurant} the safe transport between two airports provided by an airline,J
or the provision of accommodation at a hotel./Customers are likely to
perceive service to have broken down if the steak is tough or their flight is
unsafe. In the case of a hotel, cleanliness, bed comfort, and functioning of
appliances within the room are often key indicators of the core product
quality. Research on service quality has found that reliability of the core
service is an especially important determinant of customer evaluations
(see Parasuraman, Berry, and Zeithaml, 1991).
Peripheral aspects include all that is tangential to the core service, partic-
ularly the interpersonal relations between the service provider and customer.
The service encounter between customer and provider can be conceptual-
 Managing Service Failure Through Recovery 197

ized as a largely ritualized event based on shared norms appropriate to the

situation (e.g., politeness, smiling). Within the service encounter, it can be
expected that the service provider and the customer will engage in a range
of behaviors determined partly by the situation. Central to the encounter is
the use of interactional and communication strategies, which can enhance or
detract from the effectiveness of the service delivery. If these peripheral
activities are not carried out effectively the customer may perceive a break-
down in the service offering. Examples of factors that could contribute to a
breakdown include a moody or unhelpful receptionist or waiter, ignoring
the customer during the waiting process, or deflecting responsibility and
sending the customer to another department (Kelley, Hoffman, and Davis,
1993). Similarly, Keaveney (1995) found that{many service failures were
attributed to some aspect of the service employees’ behavior or attitudes
such as being uncaring, impolite, or unresponsive.\[n each case it is the
quality of the service that has suffered.

Timing
A common cause of service failure relates to timing issues. Most timing
problems can be categorized as either too slow (delays or wait times) or
too fast (inappropriate timing). For instance, in a study of restaurant pa-
trons, 38 percent of respondents indicated failures as attributable to time
delays (Sparks, 1998). Timing failures also include waiting in line to
check in or out of a hotel. As mentioned, not only do delays contribute to
failures, but poor timing in general is also an important problem. For
instance, a timing failure occurs in a restaurant when waiters bring out the
main course before the customers have finished their appetizer.
Location

Service may fail due to what may be termed location issues. For
instance, a common failure in aircraft services is missing luggage. Bejou,
Edvardsson, and Rakowski (1996) report lost luggage as a major failure
cited by customers in a study of airline passengers. Similarly, luggage or
room service being delivered to the wrong room in a hotel is likely to be
construed as a failure. Other complaints voiced by customers include taxi
drivers who take a longer route than necessary to get to a hotel or get lost
trying to find the assigned hotel. In each case, the service has been pro-
vided, but not in the expected location.

Agency

Sometimes a service may fail if the normal or expected provider is not

there to deliver it. For instance, a regular customer at a restaurant who
198 Service Quality Management in Hospitality, Tourism, and Leisure

always has the same server may experience a failure simply because that
person is not present. Another example could be a couple selecting a
particular restaurant because of the great things they have heard about the
chef, only to find it is that particular chef’s night off. Similarly, customers
who always use a particular agent to manage their travel plans may experi-
ence a failure if that person is not available.

Cost

Another common problem involves pricing or cost. A failure may occur

if an account has been incorrectly added up. Similarly, misquoted charges
for a service, such as a hotel room, are quite possible. Extra charges of
which the customer was unaware may also give rise to a service failure of
this type. In a study conducted by Keaveney (1995) billing problems were
cited as a major category of service failures.

SOURCES OF SERVICE FAILURE

This section examines three potential courses of failure: the organiza-

tion, the customer, and other customers. In reality, many service failures
occur because of a combination of actions attributable to more than one of
these sources.

Organizational Factors

Sometimes organizational factors may contribute to a service failure.

Organizations frequently contribute to service breakdowns by creating
false expectations in their customers’ minds and/or their unwillingness to
invest in the resources necessary to deliver the expected service. Indeed,
Kelley, Hoffman, and Davis (1993), in a study of the retail industry, found
failure occurred for a variety of reasons that can be classified as organiza-
tionally driven. For instance, policies were perceived by customers as
inequitable, or service was slow or unavailable due to understaffing or
poor training. In a study conducted on the restaurant industry, unclear
policies, such as restaurants not accepting a particular credit card, led to
perceptions of failure (Hoffman, Kelley and Rotalsky, 1995).
Other management decisions, for example, the number of staff per shift,
may affect service delivery and recovery. Similarly, a lack of training or a
failure to take responsibility for the recovery process may add to the
severity of a service failure. For example, consider the following story,
which deals with an airline company’s policy on baggage damage claims:
 Managing Service Failure Through Recovery 199

A traveler took a plane from one city to the next, collected his lug-
gage, including a guitar, and drove four hours to his home. On un-
packing, he discovered damage to his guitar, which had been marked
“fragile.” On calling the airline he was told to send a letter and a quote
for repairs or replacement to a city address in another state. He took
this advice and sent the documentation. After four weeks and no
response, he phoned the airline company and was told to call another
number, and then yet another number. Finally he spoke to a claims
officer who informed him he should have reported the damage within
seventy-two hours and that he needed documentation proving he flew
on that flight. Furthermore, although he was not likely to be able to
make a claim, he was informed that if he wanted to “pursue the
matter,” he needed to bring the guitar to the airport where he landed (a
four-hour drive) to arrange an inspection of the damaged item.

In this case, conflicting information and continual barriers, including be-

ing passed from one company representative to another, served to increase
the customer’s dissatisfaction with the company.

Customer Actions

The customer can also contribute to service failure by, for instance,
making an erroneous booking or by misunderstanding a special offer. In
addition, as service becomes more automated (e.g., self-checkout), there is
a greater probability of customers themselves contributing to a service
failure situation. For instance, with electronic airline ticketing, customers
need to ensure they have photo identification with them to check in and get
their boarding passes. If the customer fails to have such identification, it
can cause a serious failure in the service system.

Other Customers

Although not well documented, evidence exists to suggest other custom-

ers can contribute to service failures. For instance, noisy customers “party-
ing on” until the early hours of the morning in the next hotel room may well
mean that the service promise of a pleasant night’s sleep is not met. Similar-
ly, airlines report problems with customers who consume too much alcohol
and then prove a nuisance, detracting from other customers’ experience of
their flight. In addition, mixing nonsmoking customers with smoking cus-
tomers may result in failed service. As Zeithaml and Bitner (1996) have
pointed out, other customers may cause delays, display disruptive behavior,
200 — Service Quality Management in Hospitality, Tourism, and Leisure

or cause unpleasant crowding. As an example, the following story illustrates

how other customers may exacerbate a service failure situation.

A traveler reported an incident following a long-haul flight (seven-

teen hours). The traveler was required to transfer to another plane on
arrival and proceeded to the check-in point for seat allocation. On
arrival, most counters had long queues, so the traveler lined up with
the other customers. A check-in counter in the next line opened and a
customer from the rear of the queue pushed forward to take the front
position. Several customers complained and voiced their annoyance.

In this instance, a fellow customer violated norms of polite behavior and

caused other customers to experience even further delays.

CONTEXTUAL FACETS OF SERVICE FAILURE

Under this heading, consideration is given to several facets of the situation

or context in which the service failure occurs. These contextual factors may
be relevant to the failure in a variety of ways: they may contribute to the
failure, moderate the impact of the failure, affect the response to the failure,
and so on. Hence, the context in which service takes place will influence not
only the service delivery but also the recovery process. Relevant contextual
subfacets include cultural factors, organizational factors, physical conditions,
psychosocial factors, financial factors, and temporal conditions.

Cultural Factors

All service provision occurs within a cultural setting. Cultural factors

may impact on perceptions of failure and on acceptable recovery tactics.
For example, cultural background may influence expectations regarding
service and may determine the type of complaint made. Also, tourists may
be reluctant to complain about substandard service as they may feel less
self-assured or competent in a foreign country. The effectiveness of a
recovery tactic may also be reduced when dealing with customers trom
foreign countries, especially if language barriers are present. Indeed, one
Australian general manager of a hotel reported:

Japanese customers rarely complain when they stay at our hotel.

However, if something isn’t up to standard you certainly hear about
it from the travel agent once the customer has returned home. .
 Managing Service Failure Through Recovery 201

And there is an expectation that the problem is properly fixed. As an

example, one tour agent who received a complaint that one of our
spa baths wasn’t operating expected that we immediately go through
the entire (400-room) hotel and check each spa. This is done in the
interest of future customers. (personal communication, Greg Cox,
General Manager, Parkroyal Surfers Paradise)

Hence, cultural factors may contribute to service failure and influence the
service recovery process.

Organizational Factors

Most tourism and hospitality services are delivered within a broader

organizational context. Experiences associated with obtaining a room at a
hotel, air travel, eating at a restaurant, or visiting a theme park are all
influenced by organizational structures, procedures, and policies. Manage-
ment decisions on levels of autonomy and discretion given to frontline
staff will clearly moderate the effectiveness of service recovery processes.
Other elements of the organization that may affect the recovery process
include the overall “climate” of the organization. Indeed, evidence sug-
gests that positive service climate is associated with higher levels of cus-
tomer satisfaction (Schneider, White, and Paul, 1998) and it is possible
that climate is also correlated with service failure and recovery. A climate
that encourages service staff to take control of the situation and implement
a service recovery plan may well lead to higher levels of satisfaction.
Schlesinger and Heskett (1991) argue that many organizations, includ-
ing restaurants, airlines, and hotels, employ principles of traditional mass
production in running their businesses. As a result, they argue thatthe
service system itself leads to a range of failures and inhibits effective
recovery. These authors found that many service systems left no room for
employee discretion, which resulted in disaffected staff and increased
employee turnover. More important, such factors led directly to an in-
crease in failures and a lack of concern with recovery. Thus, an organiza-
tion’s service system and human resource policies, including selection,
training, and levels of pay, have important implications for the processes
of service delivery and recovery (see also Boshoft, 1997).
Brymer (1991) and others have argued that service providers need to be
more empowered by organizations. Empowerment is often defined in
terms of how much discretion and autonomy frontline personnel are given
(Kanter, 1977; Kelley, 1993).
Several different levels or forms of empowerment may be distinguished
(Kelley, 1993; Bowen and Lawler, 1992; Brymer, 1991). The influence of
202 Service Quality Management in Hospitality, Tourism, and Leisure

each of these levels of empowerment upon customers’ evaluations may be

mediated by perceptions of the consideration being shown, and feelings of
control over the outcome of the interaction. With full, or what Brymer
(1991) refers to aX flexible” Seo merien nee is considerable latitude in
decision making, with very broad guidelines and limits. One possible alter-
native to fullempowerment is to provide frontline staff with training in the
implementation of a set of guidelines that specify the action to be taken and
compensation to be offered in the event of service breakdown. Brymer
(1991) refers to this as “limited” empowerment, in that it allows the statf
member to make some decisions but under tighter control. As Bowen and
Lawler (1992) note, many customers value “no surprises” in service deliv-
ery, and they like to know what to expect when they visit a service business.
Hart, Heskett, and Sasser (1990) argue that the best way to recover from
service failure is for frontline workers to identify and solve problems, even
if this means breaking rules. Hence, it is suggested that effective service
recovery requires latitude in decision making and, ultimately, support from
management to take whatever action is necessary to fix the problem. Evi-
dence to support this contention comes from the work of Sparks and Brad-
ley (1997), who found that fully empowered employees were clearly pre-
ferred over the other alternatives, but only when the service provider used
an accommodating (personalized) communication style.

Physical Conditions

The physical environment can be influential in a variety of ways. It

may, for example, facilitate or constrain effective service delivery and
recovery. It may make customers feel anxious or at ease. Bitner (1992)
discusses how the physical environment encourages approach or avoid-
ance behavior. She argues that the environment can facilitate approach
behaviors that encourage customers to remain and interact with service
personnel. Hence, the environment may influence the willingness of cus-
tomers who have experienced service failure to complain or report fail-
ures. In another study, Bitner (1990) found that the tidiness of a travel
agent’s office influenced the manner in which failures were perceived.
More specifically, she found that people who were exposed to a tidy or
organized travel agent environment were less likely to expect the failure to
occur again than those who were exposed to an untidy or disorganized
environment. Thus, cues in the physical environment can influence cus-
tomers’ attributions and perceptions in a service failure situation. Similar-
ly, signs at an airport might assist or hinder customers in finding the
correct check-in counter and potentially contribute to failure situations.
Failure may also result from climatic factors, for instance a restaurant that
 Managing Service Failure Through Recovery 203

is overly air-conditioned may create an unpleasant environment and de-

tract from customer experiences.

Psychosocial Factors

Psychosocial factors, by which is meant the number and kind of people

present and the interactions that occur between them, may also intluence
the perceptions of failure and the process of recovery. For instance, the
recognition and perceived seriousness of a failure may well be influenced
by factors such as the number of people dining or touring in a party. In
addition, it may be that a person is more likely to complain in the company
of others than alone. The actions taken by a service provider in response to
a service failure may well differ depending upon whether the failure is
being dealt with in relative privacy or on public display. In addition,
relationship variables such as whether the individual is a regular or new
customer may influence the propensity to complain about a failure and
also what is done about the failure.
e
7
Financial Factors

The financial dimension of the service, ata ears much is paid,

how it is paid, and when it is paid may also be a moderating factor upon
perceptions of Paty has been found that customers’ expectations are
influenced by price, 4nd the higher the price, the greater the expectations
(Parasuraman, Berry, and Zeithaml, 1991), Similarly, customers’ percep-
tions of a failure may be influenced by the relative cost of a service. For
example, a customer’s “zone of tolerance” (see next section) may be much
narrower when staying in a hotel that costs $500 per night versus $80 per
night. Whether the service exchange involves a ninety-day world tour or
an afternoon’s bus tour of a city, customers expect value for money, and
their experience of the service is typically evaluated within the context of
“how much ts being paid to whom.”

Temporal Conditions

Time issues can also influence likely failures as well as opportunities to

recover a failure. For instance, the time of day may increase the potential
for a service failure. In a hotel that caters to business clientele, the hours
between 7 and 8 a.m. may be an especially busy checkout time, leading to
longer wait times, queuing, and service provider stress. Time also plays a
role in a seasonal sense, with peak seasons resulting in greater crowding,
204 Service Quality Management in Hospitality, Tourism, and Leisure

which leads to congestion and increased wait times. The opportunity for
error at a theme park is likely to increase during school holidays. Crowds
result in people having to wait longer for rides. Similarly, recovery pro-
cesses are likely to be hindered by crowds and busy periods.

PERSONAL FACTORS
OF SERVICE FAILURE

A range of factors relating to the individuals involved, both the customer

and service provider, are likely to influence whether the service delivery is
perceived as a failure and whether action taken constitutes a satisfactory
recovery process. These personal factors include the parties’ demographic
background, personality, attitudes and values, abilities, and current physical
and emotional state. A brief discussion of some of these factors follows.

Zone of Tolerance

As mentioned earlier, service failure occurs when the delivery does not
meet a customer’s expectations. A range of reasons for service failure
have been suggested; however, not all customers will perceive the same
actions as failures. Parasuraman, Berry, and Zeithaml (1991) propose that
customers have what is termed a “zone of tolerance,” that is, beliefs
regarding what constitutes both adequate and desired levels of service
expectations. The “space” between the adequate and desired service ex-
pectations is the zone of tolerance. This space can expand or contract,
resulting in differing evaluations of service delivery. The zone width may
vary between customers and from one situation to another.

Psychological Factors

Past experience can influence how recovery tactics are perceived. For
instance, Kelley and Davis (1994) have reported that regular customers
(those who are more committed to the firm) hold higher expectations
about the service recovery effort of the firm. Similarly, as a customer’s
experience increases it may also serve to narrow the zone of tolerance. For
instance, a regular customer may have higher expectations and a narrower
tolerance level.
Other psychological factors such as the customer’s or service provid-
er’s mood may contribute to the service failure or the recovery process.
Mood has been shown to influence consumer actions and evaluations, and
Gardner (1985) reports that customers in a good mood are easier to please
 Managing Service Failure Through Recovery 205

and report more positive evaluations. A personality factor that may aftect
how people perceive the failure and recovery process is called locus of
control (Rotter, 1966). Sparks and Bradley (1998) developed a service
locus of control (SLOC), which identified control over events as having
three sources: internal, belonging to a powerful other (providers of ser-
vice), or luck. Customers who rank high on the powerful others scale may
not complain as they believe events are out of their control and other
forces determine the outcome.
In addition, the importance of the event to a person may influence
whether something is seen as a service failure. Customers may pay far
more attention to the service delivery when organizing a restaurant meal
tor a group of friends out to celebrate a birthday than when stopping off
for a casual meal on the way home from work. The level of importance
may, therefore, lead to quite different perceptions of service delivery. The
zone of tolerance is likely to be narrower in the case of an important event.

Demographics

A range of demographic variables such as age, education, and sex may

impact upon the recovery process. For example, older customers may
expect a more formal service delivery style than do younger customers. To
date, some studies have investigated these demographic variables in con-
junction with complaining behaviors. However, little support for the pre-
dictive power of these variables is evident (Bearden and Oliver, 1985;
Bolfing, 1989; Singh, 1990).

PROCESSES

Before outlining the ways in which providers respond to service fail-

ures, it is necessary to consider some of the overt (observable, behavioral)
and covert (unobservable, hidden) processes that take place during, and
immediately atter, the service encounter.

Overt

The service encounter, its antecedents, and its consequences are charac-
terized by a range of overt actions by both the provider and customer.
These overt actions can include both verbal and nonverbal actions that are
communicated between the parties. As Bitner, Booms, and Tetreault
(1990) note, in many instances failures are a result of not effectively
delivering the core service. However, much of customers’ dissatisfaction
is caused by the manner in which the provider responds to the failure.
206 — Service Quality Management in Hospitality, Tourism, and Leisure

Hence, when errors do occur, the key to the recovery process lies in the
action taken by the service provider, such as demonstrating effort to fix the
problem (see Sparks and Bradley, 1997), showing sincerity about the
problem, or being receptive to the customer’s needs. Johnston’s (1995)
research has also shown that three of the most important actions in the
recovery process are clear indicators of attentiveness, care about the prob-
lem, and responsiveness. These actions can be evidenced in the verbal and
nonverbal messages given by service personnel. For example, a service
provider can use the customer’s name, engage in small talk, seek the
customer’s input, and even change the service delivery to accommodate
the customer’s unique needs.

Covert

At all points in the service encounter/failure/recovery chain, the partici-

pants are engaged in a variety of covert cognitive and affective processes,
as they appraise and evaluate events that occur. In the brief discussion that
follows, emphasis is given to a small subset of such processes, namely,
those that relate to forming judgments about fairness. These judgments
ultimately affect levels of customer satisfaction. The most extensively
used approaches to understanding how these evaluations take place are
attribution and justice theories.

Attribution Theory

When the delivery of a service does not match customers’ prior expecta-
tions or normative standards, customers may engage in attributional pro-
cesses to make sense of what has occurred (Bitner, 1990; Harvey and
Weary, 1984). According to attribution theory (Hewstone, 1989; Weiner,
1982), causes may be of two types—internal and external. Internal causes
include factors inherent to the service provider, such as the amount of effort
put into the delivery of the service, the strategies used to deal with service
situations, and the skill level demonstrated. External causes include factors
outside the service encounter, including the activities of other people such
as suppliers, or bad luck. Research into the fundamental attribution error
(Heider, 1958) indicates that in general, customers will attribute causes for
service breakdowns to features that are internal to the service provider (for
example, the provider’s inexperience or the organization’s poor training
programs) rather than to luck or organizational policy. Past research indi-
cates that the value of customer attributions depends upon the range of
information available regarding the cause of the problem, including the
frequency of the problem, perception of whether the problem is preventable
 Managing Service Failure Through Recovery 207

or due to bad luck, and the extent to which the service provider tried to
solve the problem (see Bitner, 1990; Folkes, 1984).

Justice Theory

Another tramework used to evaluate the service recovery process is that

ofjustice. What is perceived to be fair and reasonable in the circumstances
will influence the level of customer satisfaction. Service and organization-
al research studies (see for instance, Bies and Moag, 1986; Clemmer,
1993; Goodwin and Ross, 1990; Sparks and Callan, 1996; Tyler, 1994)
have confirmed that customer satisfaction is not merely based upon the
ultimate outcome of the service recovery but also upon the procedures
used to reach an outcome, as well as the interactions along the way.
Clemmer and Schneider (1996) make the point that in services marketing,
what is important is the need to focus on processes and relationships rather
than outcomes, due to the intangible nature of services and the key role
played by service personnel. An important point to emerge from these
studies is that while it is likely that some form of compensation is impor-
tant to levels of customer satisfaction, the desire to establish and maintain
a positive relationship with the firm is also likely to influence feelings of
satisfaction. Hence, the effectiveness of service recovery techniques used
by tourism and hospitality tirms may rely upon customers’ evaluations of
both the intervention process and the outcomes of this exchange.
Procedural. Procedural justice primarily addresses means used to achieve
an outcome (see Lind and Tyler, 1988). It is argued that procedural justice
will affect satisfaction and fairness judgments independently of outcomes.
Issues of procedural justice can include actions such as process control and
decision control. Process control refers to whether a customer has an oppor-
tunity for input into how the situation is dealt with and is often referred to as
“voice.” Decision control refers to the extent to which a customer has
control over the actual outcome. Procedural justice can also be influenced
by factors such as waiting time, flexibility, and efficiency of the recovery
process. Thus, the actions that have been discussed as possible service
recovery responses may be evaluated differently depending upon how they
are perceived by customers in terms of procedural fairness.
Interactional. How the firm manages its response to a customer who
experiences a service failure is likely to be a key determinant of the custom-
er’s satisfaction levels and perceptions of the company (Bitner, Booms, and
Tetreault, 1990). As many services are largely intangible, it is the perceived
quality of the interaction between customer and service provider that in-
fluences judgments about satisfaction with a service. A key determinant of
service quality and customer satisfaction evaluations is service provider
208 — Service Quality Management in Hospitality, Tourism, and Leisure

empathy, that is, concern demonstrated by the service provider (Zeithaml

and Bitner, 1996; Johnston, 1995). Hocutt, Chakraborty, and Mowen (1997)
found that following a service failure incident, customers were most satis-
fied when service personnel displayed high levels of empathy and responsi-
veness. Similarly, in a scenario study of hotels, Sparks and McColl-Kenne-
dy (1998) found the amount of concern a service provider displayed was
especially important to perceptions of satisfactory service recovery.
Distributive. Distributive justice is generally understood to focus on the
actual objective outcome of the service recovery. This could include finan-
cial compensation such as a refund or discount for the defective service.
Research primarily undertaken in the organizational behavior field and
based on equity theory (Adams, 1965) reveals that an outcome will be
evaluated in terms of its perceived equity. It is argued that a person will
evaluate the outcome based upon a ratio of inputs to outputs. It is possible
that an outcome may even be perceived as too good, or too different from
what others receive and, as a result, be perceived as inequitable (Adams,
1965; Leventhal, Weiss, and Long, 1969). Similarly, other research has
suggested that the form and value of the compensation should match the
explanation given for service failure (Sparks and Callan, 1996). Thus, it
appears that the amount of compensation and under what conditions such
compensation should be provided remains in doubt.

RESPONSE

Recognition of Service Failure

For service recovery to take place, it is first necessary that the service
provider recognize that a problem has occurred. Service failures frequent-
ly go undetected. For example, a customer’s soup may be cold, but unless
this is brought to the attention of the server, it is not known. Similarly, a
service provider may ask a customer how things are but does not get a
truthful answer. This type of behavior is quite common in restaurant set-
tings when a waiter asks the customer how the meal is and gets a standard
“it’s fine” response, irrespective of the quality. Hence, the recognition of
service failure often depends upon a customer voicing dissatisfaction.
Indeed, it is argued by many (for example, Andreason, 1984, 1985; Ritch-
ins, 1983) that up to two-thirds of customers may not voice their dissatis-
faction with a failure. In addition, service providers may not recognize a
situation as a failure if they believe corrective action has already been
taken. As an example, consider a situation in which a person has booked a
flight from one destination to another. Upon arrival to check in for the
 Managing Service Failure Through Recovery 209

flight, airline personnel inform the customer that the flight is canceled and
she has been reallocated to a flight one hour later. In this situation the
provider offers no apology but simply an alternative flight, and there is no
apparent recognition of the inconvenience caused.

Nonrecovery Actions

Denial and Avoidance

One response option open to a service provider is to deny or largely

ignore the service failure. This may not be as uncommon as one might
think. Bitner, Booms, and Tetreault (1990), in a study of critical incidents,
found unsatisfactory service encounters were largely related to service
providers’ inability or unwillingness to respond to service failure situa-
tions. A provider may respond to a disappointed customer with an argu-
ment that challenges the existence or legitimacy of the customer’s concern
and may not actually invoke any further recovery tactics. An example of
this was reported by two tourists, the first an American tourist in London,
and the second an Australian business traveler:

The tourist was staying at a moderate-range small hotel, and at

breakfast requested decafteinated coffee. The waiter replied, “We’re
not a five-star hotel, you know” and offered regular coffee.

Similarly, when a business executive was traveling by plane from

Australia to Thailand she found her earphones were not operating.
On calling the flight attendant, the man looked, shrugged his shoul-
ders, and then acted as if nothing was wrong.

At other times service providers may simply avoid the disgruntled

customer, choosing to remain “back of house.” More commonly, perhaps,
service providers may simply avoid responding to the complaint, choosing
to change the topic to an aspect of the service that has been satisfactory.

Service Recovery Actions

Service recovery is the process of dealing with a service failure situa-

tion with the aim of restoring the customer’s satisfaction. Recovery tech-
niques usually involve attempts to rectify the service breakdown but may
also entail providing customers with explanations about the service fail-
ure, apologizing, making offers of compensation, and being courteous in
the process (see for example, Bitner, 1990; Blodgett, Hill, and Tax, 1997;
210 ~~ Service Quality Management in Hospitality, Tourism, and Leisure

Goodwin and Ross, 1990; Hoffman, Kelley, and Rotalsky, 1995; Sparks
and Callan, 1996). As many of these responses are enacted by frontline
service providers, customers tend to base their evaluations largely on the
behavior of these staff (Bowen and Schneider, 1988; Surprenant and Solo-
mon, 1987). The choice of recovery actions taken is likely to depend upon
a range of factors already considered, including the context, process, and
people involved, together with the seriousness of the failure. For instance,
it is unlikely that customers would expect a full refund of their restaurant
account just because an addition error had occurred.

Fix the Problem

Wherever possible, it is desirable to rectify the original problem en-

countered by the customer. Sometimes this is not feasible, such as when a
flight is delayed, a tour bus breaks down, or a restaurant meal arrives late.
However, as an example, the following anecdote illustrates how fixing the
problem can lead to highly satisfied customers:
A couple who had requested a double room checked into a hotel and
were allocated a room, only to find two single beds. The couple
decided to go down to reception and discuss the matter with the front
desk staff. The staff member checked the rooms available and of-
fered to relocate the guests to another room with a double bed. The
desk attendant gave a key to the couple and suggested they go and
see whether they liked the room. On entry, the couple found the
room was a Suite.
The action of fixing the problem, giving some control to the customers and
providing a better room, resulted in very satisfied customers.
Apology

An apology for a failure is another way to recover the customer’s

confidence in the firm. Apology can range from a simple statement of
regret to more extended “confessions of responsibility for negative events
which include remorse” (Tedeschi and Norman, 1985, p. 299). For most
customers, an apology is the minimum requirement for recovering a ser-
vice failure. The manner in which an apology is delivered is relevant, and
some expression of sincerity usually helps the recovery process. Hence,
coupling an apology with statements of concern or empathy is important.
Explanations

When a failure has occurred, one option is to offer an explanation.

Firms offer explanations in an effort to increase customer understanding of
 Managing Service Failure Through Recovery 211

the problem or to diffuse customer anger. Explanations can be predomi-

nantly internal (“it was our fault”) or external (“the problem was beyond
our control”), and presumably, these explanations are included in the
evidence considered by customers in making attributions. An example of
an external explanation includes a pilot of an aircraft announcing to pas-
sengers “we’re in a holding pattern awaiting clearance to land. This is due
to heavy congestion at the air terminal. We will be landing just as soon as
clearance is provided. We expect to be around fifteen minutes late due to
this situation.” Research has shown that when employees offer an external
explanation for service failure, the firm is judged to have less control over
the breakdown (Bitner, 1990).
The effectiveness of explanations as a means of service recovery is still
unclear and to some degree underresearched. Tax, Brown, and Chandra-
shekaran (1998) report that the provision of information had both positive
and negative outcomes for customer perceptions. It seems the manner in
which the information is perceived makes a considerable difference. For
instance, when information was perceived as an excuse to mitigate an
organization’s accountability, it was seen as negative. In contrast, informa-
tion that increased understanding about the problem and led to a quick
resolution was perceived favorably. Similarly, Sparks and Callan (1995)
found that accepting the responsibility (that is, giving an internal explana-
tion) and being prepared to back this up with some form of compensation
(of a value kind) was evaluated very favorably in a service failure situa-
tion. However, when the breakdown is clearly outside the firm’s control, a
symbolic offer (such as a couple of drink vouchers) was judged more
favorably than a value ofter.

Customer Input

One recovery tactic is to involve the customer in the service recovery

such that the customer feels some control over the process. Bies and
Shapiro (1988) and Lind, Kanter, and Earley (1990) report that process
control, or voice, influences perceptions of the fairness of the recovery.
Voice procedures involve customers having an opportunity to express their
views or provide input to the decision, whereas customers who do not
have this opportunity are said to be involved in “mute” procedures (Bies
and Shapiro, 1988). The opportunity for individuals to express their feel-
ings about an apparent injustice (to have voice) is also important in in-
fluencing levels of satisfaction, especially when it is accompanied by
some tangible compensation (Goodwin and Ross, 1990). Previous re-
search (Lind, Kanfer, and Earley, 1990) has demonstrated that the benefi-
cial effects of voice emerge for two reasons. The first is instrumental; that
212 ~~Service Quality Management in Hospitality, Tourism, and Leisure

is, people assume that the opportunity to express a view will help them
control their outcomes. The second benefit is called “group value”; that is,
people value voice because it suggests their views are worth hearing and
hence, that they are members of an important status group (see Lind,
Kanfer, and Earley, 1990). In contrast, failure to consider customers’ in-
puts (voice) may result in feelings of limited control over what happens, a
lack of a sense of fairness, and low overall satisfaction.
Tourism and hospitality firms can do several things to encourage cus-
tomer input. First, service providers can be trained to encourage customers
to provide feedback about their experiences on the spot. Second, it is
possible to encourage customer input through less personal methods such
as complaint or suggestion boxes, toll-free customer service numbers, or
survey feedback forms. The key is to invite input from customers so as to
recognize the source of their inconvenience, and to prevent its occurrence
in the future. Furthermore, Blodgett, Wakefield, and Barnes (1995) found
customers are more likely to report a problem if it is clear the firm is
willing to fix the problem. They argue that explicit factors such as a
service guarantee or service warranty help to cultivate such an environ-
ment. These authors (1995) underscore the importance of addressing the
problems voiced by clients. Failure to do so is expected to result in further
dissatisfaction from the customer’s perspective.

Compensation

Another service recovery action is to provide the customer with finan-

cial compensation such as a refund or discount. What appears to customers
to be appropriate compensation is still underresearched. Goodwin and
Ross (1990) found that customers preferred to receive a tangible outcome,
even a token refund, when there was a breakdown in service delivery.
Other researchers (for example, Bitner, 1990) report that the presence of
an offer of compensation leads the customer to attribute greater control to
the firm and to believe the cause is less stable (i.e., a temporary lapse in
service). Research reported by Sparks and Callan (1996) found that an
offer was perceived more or less favorably depending upon other factors
such as the explanation provided for the breakdown. Blodgett, Wakefield,
and Barnes (1995) found that compensation only made a positive differ-
ence in satisfaction when accompanied by high levels of courtesy and
respect. This implies that if the recovery process involves a rude service
provider, then no amount of financial compensation will make up for the
service failure. In contrast, Johnston (1995) did not find any evidence to
support the need for “atonement” in a service recovery process.
 Managing Service Failure Through Recovery 213

CONSEQUENCES

Once a service recovery tactic has been used and evaluated, the customer
is likely to have formed feelings of satisfaction or dissatisfaction. The
definition of satisfaction is covered elsewhere. However, it is important to
note that previous studies have clearly demonstrated a link between the
actions taken by service firms in response to a service failure and resulting
satisfaction levels. It should be noted that, in addition to satisfaction, there is
a number of other potential consequences, both immediate and long term, of
the service recovery process.

Immediate Outcomes

Direct Complaint Behavior

When a failure occurs, one option open to the customer is to complain

directly. Such complaints are often made to the frontline staff who are easily
accessible, but may be made to a supervisor, or in written form, through
customer feedback surveys. As already discussed, the manner in which com-
plaints are handled is often a key factor in how the recovery is perceived.

Satisfaction

A key concern of the service recovery process is customer Satisfaction.

Within the service context, customer satisfaction is concerned with judg-
ments about an event or encounter. Evidence from a range of studies (e.g.,
Bitner, 1990; Bolton and Drew, 1991; Cronin and Taylor, 1992) suggests
customer satisfaction is inextricably linked not only to judgments of ser-
vice quality, but also to repurchase intentions and customer loyalty. Bit-
ner’s (1990) research demonstrated a direct path between customer satis-
faction and the evaluations of service quality.

Long-Term Outcomes

Some outcomes of the failure and recovery process are more long-term
in nature. The information communicated by a satisfied or dissatistied
customer may be ongoing and may have wide ramifications. Similarly, the
long-term loyalty of customers is likely to be affected by failure and
recovery processes, especially where there is opportunity to change ser-
vice providers (that is, engage in switching behavior). For instance, it is
relatively easy to change from one restaurant to another.
214 Service Quality Management in Hospitality, Tourism, and Leisure

Word-of-Mouth Actions

One outcome of the recovery process may be that positive or negative

word of mouth (WOM) is communicated. Generally, WOM communica-
tions are comments made by personal sources such as business colleagues,
friends, or relatives. While positive WOM is clearly desired, negative
WOM is most damaging. Unfortunately, negative WOM is reasonably
common, especially among aggrieved customers. As an example, Blod-
gett, Hill, and Tax (1997) reported that customers who feel they have been
treated with courtesy and respect are more likely to repatronize the firm
and spread positive WOM. In contrast, those who received rude service
indicated they engaged in an increased level of negative WOM. Sparks
and Bradley’s (1997) research study on service breakdown in a hospitality
setting found that customers who express higher levels of satisfaction with
the service recovery process are less likely to engage in negative WOM.

Loyalty to Firm

Service failures, if not properly handled, can have devastating effects on

the firm. Indeed, Keaveney (1995) found people most frequently switched
firms due to service failures. Similarly, Dube and Maute (1996) reported on
the importance of dealing effectively with customers’ complaints to prevent
brand switching in services. Other research (Gilly, 1987; Sparks and Bradley,
1997) has found that customers who are more satisfied with the service
recovery response are more likely to consider using the service firm again.
Others (Zeithaml, Parasuraman, and Berry, 1996) have demonstrated that
among customers who experience service problems, those who receive satis-
factory resolution are more likely to remain loyal to the firm than are those
who experience unsatisfactory resolution. Hence, ettective service recovery
significantly improves behavioral reuse intentions.

AN ILLUSTRATIVE MODEL
OF THE SERVICE BREAKDOWN
AND RECOVERY PROCESS

The discussion thus far provides an organized list of the discrete facets
of the service failure/recovery process, but is of little help in “fitting the
pieces together.” To further understand these phenomena, it is necessary to
develop a model that specifies the dynamic, temporal relationships be-
tween the various facets. Figure 11.1 provides such a model. Organization-
 Managing Service Failure Through Recovery 215

FIGURE 11.1. Diagrammatic Overview of the Service Failure and Recovery

Process

Service Customer No response to service failure

provider perceptions
actions of service |wo|

Service
Service pro- provider
Organiza- Service Service vider recog- acceptance
tional experience | | failure nition of ser- of need to
factors vice failure respond to
service
failure
Customer Customer
actions expectations
of service
YES

Responses to service failure

Nonrecovery Recovery

Denial

Apology Explanation

Customer evaluation of fairness of recovery tactics

Customer
satisfaction

Word-of- Loyalty
mouth actions to firm
216 ~~ Service Quality Management in Hospitality, Tourism, and Leisure

al factors, service provider actions, and customer actions are the three
factors that are most likely to influence the service experience. A service
failure will be directly influenced by the service experience and largely
result from a discrepancy between expectations and perceptions (see Zei-
thaml, Parasuraman, and Berry, 1996). The next step in the model involves
the possibility of some form of recognition of the failure by service staff.
After recognition, an acceptance of the need to respond is necessary before
a response can be formulated. A provider can respond to a failure in
several ways, from denial of a problem to financial compensation. Cus-
tomers will, of course, engage in some form of evaluative process about
the failure and the response to it. Finally, outcomes will include levels of
customer satisfaction and subsequent behaviors such as word of mouth
and loyalty or reuse of the service.

FUTURE RESEARCH

The model shown in Figure 11.1 helps raise a number of important

issues. As mentioned earlier in this chapter, limited research has been
conducted on the topic of service recovery. The tourism and hospitality
sector is a field that requires a better understanding of service failures and
the recovery process. Some topics that need further investigation include:

¢ The role of other customers as contributors to experiences of service

failure
¢ The reasons why customers do not complain
¢ The stress and emotional dimensions of service recovery, especially
for the frontline service personnel
¢ The factors that influence service providers’ decisions to invoke re-
covery versus nonrecovery tactics
* The effectiveness of alternative service recovery strategies
¢ The manner in which the various contextual, personal, and process
factors interact to influence the success or otherwise of service re-
covery attempts

CONCLUSION

Service failure is likely to occur because of the unique nature of the

hospitality and tourism product. This chapter presented a facet analysis to
make explicit the factors likely to impact upon service failure and recov-
 Managing Service Failure Through Recovery ele

ery. Several types of service failures have been distinguished, and the
contextual, personal, and process dimensions of service failure and recov-
ery have been elucidated. While a range of options is available for recov-
ering from service failure, ultimately what matters are the subjective eval-
uations customers make of these recovery tactics. The effectiveness of
many tactics is likely to depend upon other facets of the service delivery/
failure/recovery system. A framework for understanding the service fail-
ure and recovery process as well as associated outcomes has been propo-
sed. This model may be useful to service managers and marketers in
helping to pinpoint the sources of service failures and the range of possible
recovery strategies. Further research is required to develop a deeper under-
standing of the many tacets of the service recovery process.

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 Chapter 12

Empowering Service Personnel

to Deliver Quality Service
William N. Chernish

NEED FOR MOTIVATION AND EMPOWERMENT

Motivation, leadership, empowerment, workers, and service quality are

all inextricably intertwined in any organization that seeks to satisfy guests,
customers, and others whom it serves. When the organization operates
within the hospitality, tourism, and leisure sector, much or all of its output
will necessarily be an intangible service rather than a hard product. The
service will likely be perishable, delivered directly to the consumer, and
not subject to the types of quality assurance measures that may be used
when manufacturing, distributing, and selling a product.
In light of these characteristics, the service delivery and the quality of
the service and level of customer satisfaction will be highly dependent
upon the employee who interfaces with the customer. It is that employee
who represents the organization and its reputation many times in the
course of doing business. Carlzon referred to this interface and interaction
as “moments of truth” (Carlzon, 1989). For the service to be delivered in
the appropriate manner and with the expected level of quality, employees
must be prepared and must have sufficient reason to perform according to,
or above, standards.

Basic Philosophy of Empowerment

Several authors have examined and developed tools and techniques for
creating organizations and assisting people to become self-empowered
and act upon it. Many of the theories and techniques have their basis in
contemporary organizational psychology and motivation theory. Factors
jos}
224 Service Quality Management in Hospitality, Tourism, and Leisure

distinguishing traditional motivation from the evolving notions of empow-

erment focus on changes in organizational structures and processes, and
on preparing employees and managers to accept new ways of doing busi-
ness and new ways of modeling behavior.
The introduction and application of the principles of empowerment are
designed to increase employee motivation and control by reducing the
number and types of bureaucratic constraints. The concept results in great-
er employee independence to act, prevent, or resolve problems, and deliv-
er appropriate service and guest satisfaction. This freedom and self-control
is thought to result in greater worker satisfaction and higher organizational
morale.

Industry Characteristics

The hospitality, tourism, and leisure industry segments are character-

ized by factors that distinguish them from production-oriented and hard-
product businesses. The manufacture of traditional goods, whether on an
assembly line or otherwise, permits the inspection, testing, and verifica-
tion of quality before shipment, sale, and consignment to the ultimate
customer. In the manufacturing sector, various techniques have been de-
veloped to apply statistical, total quality, continuous quality improvement,
and other tools to the assurance of quality before shipment. Where the
product does not meet appropriate standards, or is unlikely to meet stan-
dards, shipment may be postponed for further testing and adjustments
(Bowen and Lawler, 1992; Petrick and Furr, 1995).
Rather than manufacturing tangible products, the hospitality, tourism,
and leisure industry focuses upon the sale and delivery of rooms, meals,
and transportation services for immediate consumption. This delivery in-
volves the active participation of employees in interacting with the guests.
There is limited or no opportunity for inspection and testing of service
delivery, and the employee is the representative of the organization. When
coupled with the fact that many hospitality, tourism, and leisure employees
are paid relatively low wages, the managerial challenge for service integri-
ty is significant (Albrecht and Zemke, 1985; Lashley, 1997; Moon and
Swaffin-Smith, 1998).
Managers facing such challenges may have limited ability to change
products or services offered, to utilize different facilities or processes, or
to change the location of their business operations. The variable most
under managers’ influence is the employees of the organization. Managers
must find better ways for employees to do their jobs, and must find ways
to encourage those employees to perform at or above expectations and
 Empowering Service Personnel to Deliver Quality Service 229)

service standards. Motivation and empowerment are two approaches to

this challenge.
In an industry where service quality is important, it becomes essential
that those delivering that service be able to do so in an effective, efficient,
and customer-satisfying manner. This implies that employees must be
motivated to do a job, and further be given the tools and the latitude to act
on that motivation—to be empowered to provide the appropriate level of
creation, inspection, and delivery of service quality.
In a business or industry where employees create as well as deliver a
service, employers must place great faith and trust in the frontline customer
service employee. It is that employee who provides the interface between
customer and the organization, and who has a great deal of control over the
quality of the delivery and the customer experience. The hospitality indus-
try—trestaurant and other food service, lodging, travel and transportation,
entertainment, and related sectors—all share those characteristics and share
the need for employees who act to provide the appropriate level of service
and guest experiences. These characteristics make the concept of empower-
ment appropriate and useful for the travel, tourism, and hospitality industry.

MOTIVATION

Definitions of Motivation

Employee motivation has been a subject of managerial study for more

than half a century, beginning with Roethlisberger and Dixon’s (1939)
work at Western Electric. One can also find early work in motivation
theory in the “hedonic calculus” of Jeremy Bentham in 1789 (Steers,
Porter, and Bigler, 1996).
“Motivation” is generally related to the Latin movere, which means “to
move,” and as used in contemporary management also means to entice
employees to move in a direction and manner that meet the organization’s
goals (Jones, 1955; Atkinson, 1964; Vroom, 1964; Campbell and Prit-
chard, 1976). Further study of the definitions laid out by those researchers
identify three common characteristics, which are concerned with (1) what
energizes human behavior, (2) what directs or channels such behavior, and
(3) how this behavior is maintained or sustained (Steers, Porter, and Big-
ler, 1996). The implication is that the behavior is directed toward some-
thing, and that the something is consistent with the goals of the organiza-
tion.
Later work in motivation provides more definitive theories of ways in
which managers can better understand the needs and movement of work-
226 Service Quality Management in Hospitality, Tourism, and Leisure

ers. The works of Maslow (1968), Herzberg (Herzberg, Mausner, and

Snyderman, 1959), and McClelland (1961) are considered essential con-
tributions to the “content theory” of motivation, while the work of Vroom
(1964) and Porter and Lawler (1968) are classified as “process theories.”

Content Theories of Motivation

Maslow and Herzberg are probably the most widely recognized names
associated with content motivation. Maslow developed a “hierarchy of
needs,” which describes how people’s needs guide behavior. Maslow con-
tends that an individual has needs which are arranged hierarchically, and
that the fundamental needs must be met before upper-level needs may
begin to drive behavior. Maslow’s theory contends that only unsatisfied
needs can influence behavior; those that are satisfied do not motivate
(Maslow, 1968; Steers, Porter, and Bigler, 1996) (see Table 12.1).

TABLE 12.1. Motivation—Maslow’s Hierarchy of Needs

Need and Definition Organizational Assurance

Self-actualization: realization Major components are competence
of one’s potential and achievement, implying the neces-
sity for adequate training and tools to
control the environment of the work-
place, and to achieve organizational
goals.
Self-esteem: desire for self-respect That organizations take appropriate
and respect of others measures to balance needs for profits
and people
Social: associations and friendships, By developing opportunities for social
interaction with others interactions, informal activities, and
employee gatherings
Safety: job security, safe working Development of safety programs and
conditions, freedom from physical or methods of participatory decision
mental harm making, especially when organiza-
tional change is required
Basic: physiological; water, air, food | Providing a work setting which is con-
ducive to meeting human needs, in-
cluding food, rest, refreshment

Sources: Maslow, 1943; Frunzi and Savini, 1997.

 Empowering Service Personnel to Deliver Quality Service gal

Herzberg developed the motivator-hygiene theory based upon research

involving accountants and engineers. On the basis of his study, he identi-
fied factors that were called “motivators,” including variables such as
achievement, recognition, and work itself as well as responsibility, ad-
vancement, and growth (Steers, Porter, and Bigler, 1996). A separate set of
factors was also identified, which Herzberg referred to as “hygiene” fac-
tors (see Table 12.2). This set of factors focused on extrinsic non-job-
related factors such as company policies, supervisory style, pay, and co-
worker relations. Herzberg held that elimination of the dissatisfying
hygiene factors would only bring workers to a neutral position, and that
motivation would occur only when the hygiene factors were all present,
and then the “motivators” could be brought into play (Herzberg, Mausner,
and Snyderman, 1959; Steers, Porter, and Bigler, 1996).
Managers in the hospitality industry may apply the theories of Maslow
and Herzberg in many ways, some of which may seem obvious} Thework
of both researchers suggests that employees will be unwilling to make
additional contributions to their job or the organization unless some basic
conditions are met. Thus, inadequate pay, unsate working conditions,
work schedules that conflict with child care needs, or an onerous supervi-
sor will serve to inhibit employee motivation to meet service standards and
therefore reduce the overall level of customer satisfaction (Raleigh, 1998).
Managers and executives can also adjust organizational conditions to pro-
mote employee satistaction by providing a favorable environment where
employees can move toward self-actualization (Johnson, 1997).

TABLE 12.2. Herzberg’s Motivator-Hygiene Theory Factors

Motivation Factors Hygiene Factors

Opportunity for growth and advance- | Working conditions
ment

Company policies and administration

Sources: Herzberg, Mausner, and Snyderman, 1959; Herzberg, 1968.

228 — Service Quality Management in Hospitality, Tourism, and Leisure

Process Theories of Motivation

Vroom developed the “expectancy theory” for work situations. His

model is based on the assumption that individuals make conscious and
rational choices about work behavior. Application of the Vroom model
may be based on the notion of outcomes and valences. The outcomes are
consequences anticipated by a worker following certain behavior, while
valences refer to the extent to which those outcomes appear to be attrac-
tive. The expectancy theory would explain employee behavior as being
that which would bring about the greatest expectation of individual value
based on accomplishment, acceptance by peers, fatigue, and similar fac-
tors (Vroom, 1964). Porter and Lawler have refined the Vroom model and
hold that efforts by an individual may not necessarily result in good job
performance because of an individual’s inability to accomplish necessary
tasks, or that there may not be a good understanding of the tasks necessary
to complete the job in a satisfactory manner (Steers, Porter, and Bigler,
1996).

Other Theories of Motivation

The work of Maslow, Herzberg, Porter, and Lawler has provided a

useful framework within the structure of process and content. Managers,
however, have not easily adapted to the findings of these behaviorists. In a
more traditional setting, managers have taken a less reasoned approach.
One has proven effective under some circumstances that were prevalent in
the past. One of the earliest theories to find its way into the management
literature was that of Frederic Winslow Taylor, based on his work at the
Midvale Steel Company in Pennsylvania at the start of the twentieth centu-
ry. Taylor is generally recognized for his part in developing the scientific
management school. In his work, Taylor recognized that responsibility for
providing an adequate work environment, tools, and training belonged to
managers, not workers (Urwick, 1956). Taylor understood that it was
necessary to provide basic factors, such as Maslow’s basic needs and
Herzberg’s hygiene factors, before additional efforts to motivate workers
would be effective.
McGregor, Ouchi, and others have set forth useful management motiva-
tion models. McGregor is best known for his recognition that some manag-
ers may categorize workers as either Theory X or Theory Y people. In that
categorization, Theory X workers dislike work and will avoid it when
possible, have little ambition, tend to shun responsibility, want security, and
therefore require managers to use coercion, control, and threats of punish-
ment to attain organizational objectives (Hodgetts, 1996). McGregor’s
 Empowering Service Personnel to Deliver Quality Service 229

Theory Y holds that people find work as natural as resting or playing, will
exercise self-direction and self-control, will associate commitment to objec-
tives with rewards for achievement, will seek responsibility, and will use
imagination and creativity to solve problems. Theory Y also holds that most
of the potential of the workforce is only partially utilized (McGregor, 1960;
Hodgetts, 1996).
Ouchi, who studied Japanese organizations, has also added an inter-
national dimension to the theories of motivation. He has provided tools for
adapting the Japanese model to other cultural environments with his
Theory Z. Ouchi sets out certain dimensions that characterize Japanese
management. In some sense, the characteristics of that model are applica-
ble in a broader, global setting: lifetime employment, consensual decision
making, collective responsibility, slow evaluation and promotion, informal
control, nonspecialized career paths, and holistic concerns for people have
been historically present in the Japanese organization (Ouchi, 1991). Al-
though some of these characteristics are changing, managers can view the
elements that contribute to success and apply them to the motivation of
hospitality, tourism, and leisure employees (Albrecht, 1988; Siu, Tsang,
and Wong, 1997).

EMPOWERMENT

Definitions of Empowerment

Empowerment takes the theories of employee motivation and places

them in a larger setting, one that also considers organizational processes,
communication, and organizational boundaries. Empowerment involves
making clear to workers that they have both the authority and resources for
getting work done correctly and then holding them responsible for that
work (Hodgetts, 1994, 1996). Blanchard stresses that people in an orga-
nization already have the power to do the job through their knowledge and
motivation, and that empowerment is merely the process of “letting the
power out” (Blanchard, Carlos, and Randolph, 1996; Lashley, 1996).
One prominent example of the application of empowerment in the hotel
industry comes from the Ritz-Carlton group. The chain takes special care
to fully train each employee in its philosophy, divided into “Credo,”
“Three Steps of Service,” and “The Ritz-Carlton Basics.” Each employee
has a wallet-size card to remind him or her of those elements. Employees
are taught that “We Are Ladies and Gentlemen Serving Ladies and Gentle-
men.” This stresses a sense of equality and the level of behavior expected.
230 ~~ Service Quality Management in Hospitality, Tourism, and Leisure

The Credo states:

The Ritz-Carlton Hotel is a place where the genuine care and com-
fort of our guests is our highest mission.

We pledge to provide the finest personal service and facilities for our
guests who will always enjoy a warm, relaxed yet refined ambience.

The Ritz-Carlton experience enlivens the senses, instills well-being,

and fulfills even the unexpressed wishes and needs of our guests.

The steps of service provide further general guidance to all employees,

and make clear that each is responsible for the guest experience. More-
over, each employee has the ability to remedy problems and may commit
hotel assets toward ensuring the Credo and philosophy are carried out.
Hodgetts provides a different viewpoint in stating that “The basic ideas
of empowerment include: (1) giving employees greater authority to make
decisions, (2) maintaining an open and decentralized communication sys-
tem, (3) drawing people from many different departments in solving com-
plex organizational problems, and (4) rewarding and recognizing those
who assume responsibility and perform well” (Hodgetts, 1993). Empow-
erment gives autonomy over the way in which work is done and reempha-
sizes the need for accountability (Carr, 1994).

Different Concepts and Applications of Empowerment

Blanchard has laid out a straightforward model for organizational em-

powerment in which he contends that “empowerment isn’t magic. It con-
sists of a few simple steps and a lot of persistence” (Blanchard, Carlos, and
Randolph, 1996, p. 115). Application of the Blanchard model lies in three
keys: sharing information with everyone, creating autonomy through
boundaries, and replacement of the old hierarchy with self-directed work
teams.
Blanchard’s “first key is to share information with everyone” (Blan-
chard, Carlos, and Randolph, 1996, p. 27). Managers have traditionally
shared only the information with employees that the managers believed
the employees needed to know. This approach rations information, and
permits the manager to act as a broker of a resource. Lower-level em-
ployees are not provided all available information, and are frequently
provided insufficient information to be effective at minimal levels. Blan-
chard’s approach permits employees to decide what information is neces-
sary tor effective operation and makes that information available to them.
An extension of the total sharing of information is contained in the concept
 Empowering Service Personnel to Deliver Quality Service 23d

of “open-book management,” in which employees at all levels are given

access to information, and are also provided training and education to best
use the information for their, and for the organization’s, benefit (Stack,
1992; Case, 1996).
Blanchard’s “second key is to create autonomy through boundaries”
(Blanchard, Carlos, and Randolph, 1996, p. 39). He refers to boundaries as
those things that mark the limits and define the areas in which employees
are tree to operate without direct managerial supervision. These bound-
aries may be defined by goals, policies, and general guidelines. The areas
that are specifically cited include:

. Business purpose
. Organizational values
. Image of the future
eR. Organizational goals, including what, when, where, and how indi-
BWN

viduals and the organization do things

. Roles of people
AN. The organizational structure and its supporting systems (Blanchard,
Carlos, and Randolph, 1996).

Blanchard’s “third key is to replace the hierarchy with self-directed

work teams” (Blanchard, Carlos, and Randolph, 1996, p. 57). The essence
of this concept is that workers at the lowest possible level can torm teams
which can produce more and better service than can the same individuals
working alone (see Table 12.3). Self-directed teams consist of groups of
employees who have responsibility for an entire product, service, or pro-
cess (Blanchard, Carlos, and Randolph, 1996). Such teams are not neces-
sarily without a manager, though the role of the manager may rotate and
that manager may be selected by the team itself. To achieve and ensure
that self-directed work teams can occur, Blanchard suggests that em-
ployees must be sufficiently trained and educated to work independently,
and that managers must teach team members that the teams can become
less dependent on hierarchical management and direction.

BRINGING TOGETHER MOTIVATION

AND EMPOWERMENT

Motivation implies providing the incentive for individuals to move

toward organizational goals (Perry, 1997). Empowerment implies the need
to move people toward meeting goals, and providing additional tools and
the environment and circumstances necessary for that motivation to work
232 ~~ Service Quality Management in Hospitality, Tourism, and Leisure

TABLE 12.3. Adaptation of Blanchard’s Three Keys to Empowerment

[rer Sharing information with | Creating autonomy Replace hierarchy with

everyone through boundaries self-directed work teams
Lets people understand Builds upon information | Empowered teams can
the current situation in sharing do more than empow-
clear terms ered individuals
Begins to build trust Clarifies the vision (big People don’t start out
throughout the organiza- | picture) with input from knowing how to work
tion everyone in self-directed teams
Breaks down traditional Helps translate vision Dissatisfaction is a natu-
hierarchical thinking into roles and goals (little ral step in the process
pictures)
Helps people be more re- |Defines values and rules | Everyone has to be
sponsible that underlie desired ac- | trained in team skills
tions; when values are
clear, decision making
is easier
Encourages people to Develops structures and | Commitment and support
act like owners of the procedures that empow- | have to come from the
organization er people top
Empowerment
from
Elements
Motivational
Reminds us that empow- | Teams with information
erment is a journey and skills can replace
the old hierarchy

Source: Blanchard, Carlos, and Randolph, 1996.

freely, effectively, and successfully. Motivation is therefore an essential,

but not exclusive, element of empowerment. Empowerment in hospitality,
tourism, and leisure settings requires bringing together all those elements:
motivation, information, and the structural considerations necessary for
effective team interactions (VanDerWall, 1998),
A hospitality employer may wish to introduce the Blanchard approach
to empowerment, and might implement the three keys through a program
involving employee training and structural adjustments over time. Servers
and other front-of-house employees might be taught appropriate service
standards, behavioral expectations, and how to better understand the busi-
ness and profit aspects of the organization. Back-of-house employees
might participate in similar educational efforts where the customers are
internal: the servers and others who have the direct guest interface. Struc-
tural changes will also be necessary to permit employees to act differently.
 Empowering Service Personnel to Deliver Quality Service 233

The owner will have to provide additional information, delegate authority

to make decisions to the lowest practical level, and provide some incentive
to encourage employees to work in self-directed teams and to behave in
different ways (McDonald, 1997; Wilson, 1998).
Empowerment as a concept was first introduced into the manufacturing
sector, yet is readily adaptable to many segments of the hospitality, tour-
ism, and leisure industries. Managers in some segments will find a more
hospitable environment than in others. Some characteristics that contribute
to or tend to impede application of empowerment in hospitality are shown
in Table 12.4.

TABLE 12.4. Factors Enabling or Inhibiting Empowerment in Hospitality, Tour-

ism, and Leisure Organizations

Empowerment Enabling Factors

Service orientation Service delivery occurs at the “moment of truth,” meaning
that the frontline employee is responsible for service and
service quality to the customer.
Distributed workplaces Many aspects of the hospitality, tourism, leisure industry are
distributed at various locations, making it necessary for em-
ployees to operate with a high degree of independence.
Lack of close oversight The distribution of employees, and the fact that employees
interact directly with guests and customers, frequently
makes close supervision difficult or impractical.
Traditions of the industry | Industry traditions of providing “service to the guest” en-
courages frontline employees to take necessary initiatives
to deliver appropriate levels and quality of service.
Empowerment Inhibiting Factors
Low wage, high turnover | Many industry jobs require minimal formal education and
experience, and are relatively poorly compensated. Entry-
level employees may not find sufficient motivation to be-
come empowered, or have sufficient experience to do so.
Lack of training Persons filling jobs in the hospitality, tourism, and leisure in-
dustry frequently receive little or minimal technical training,
and seldom receive the training necessary to understand
their larger roles in an organization, thereby making empow-
erment difficult to achieve.
Pressure for profits As is the case with many organizations, firms in the industry
frequently operate with very thin margins and find significant
pressures to increase short-term profitability at the expense
of investment in training, education, or organizational
change necessary for empowerment.
234 Service Quality Management in Hospitality, Tourism, and Leisure

Travel, tourism, and hospitality owners, executives, and managers who

seek improved organizational performance, profitability, and guest or cus-
tomer satisfaction may seek to empower their employees to meet those
objectives. Within the industry, each manager will have to examine criti-
cally the organizational situation and the degree to which the organization
is willing to cede authority to lower-level managers, supervisors, or first-
line employees. Many of the characteristics of the industry actually favor
empowerment, while others serve to inhibit it. Each can be overcome over
time, with the appropriate commitment.
Bowen suggests that employees are not suddenly empowered because
managers tell them they are or because companies publicize a culture of
empowerment (Bowen and Lawler, 1995). Lawler, Mohrman, and Ledford
(1992) further suggest that empowerment exists when companies imple-
ment practices that distribute power information, knowledge, and rewards
throughout the organization.
Not all employees and not all managers favor the implementation of
empowerment programs. Employees may feel that they are being expected
to do more without additional reward. Managers and owners may feel that
their authority is being removed and that they will be stripped of decision-
making ability by staff (Potochny, 1998). The challenge to managers is to
implement programs wisely in order to create a powerful tool to increase
revenue and improve customer service.
For an organization to implement a program of employee empower-
ment, some factors must be present and visible. These may be identified as
“tools for implementation of empowerment.”

Tools for Implementation of Empowerment

1. Executive leadership: As is the case with most organizational initia-

tives, the introduction of empowerment activities requires a commit-
ment from the top of the organization. If an organization chooses to
conduct business in the same manner as in the past, there is little
reason to believe that the results will be different. This change re-
quires a demonstrated commitment and a willingness to change in
order to introduce new methods (Stutts, 1986; Sparrowe, 1995).
2. Policies in place for empowerment to work: The boundaries and
autonomy described by Blanchard must be established to provide the
flexibility and independence for employees to act freely to their full
capacity.
3. Training to bring individual competencies to necessary levels: For
employees to be empowered, they must have the tools necessary to
do their jobs. These tools, skills, and knowledge, must include ap-
 Empowering Service Personnel to Deliver Quality Service Soe)

propriate technical skills, interpersonal and managerial skills, and

team skills necessary for success in an interdependent environment.
4. Information sharing: Blanchard and others have emphasized the need
for free dissemination of information and for the skills necessary to
use that information. This implies the development of systems and
procedures to develop and share information and knowledge directly
related to the workplace and to the economic environment in which
the organization operates (Stack, 1992; Blanchard, Carlos, and Ran-
dolph, 1996; Case, 1996).
5. Organization and structural change to permit successful operations:
The fundamental systems of an organization must be reviewed and
revised to permit employees to become empowered and to operate in
an empowered manner. This may require development and imple-
mentation of policies, rules, reporting relationships, and lines of
organization to permit uninhibited operation of self-directed work
teams and empowered employees (Sanson, 1995; Belasco, 1996;
Hayes, 1998).
Other Benefits of Empowerment
Effective empowerment is expected to permit frontline employees to de-
liver higher quality customer service and to be able to respond more quickly
to guest service challenges. Empowerment programs may also have a posi-
tive effect on other aspects of organizational operations: better relationships
among employees and between employees and management, lower turnover,
and higher employee morale (Potochny, 1998; Rowe, 1998). Bowen and
Lawler (1995) also cite the potential for greater and sustainable competitive
advantage in the marketplace with an empowered employee force.

CONCLUSION
Empowerment of workers in the hospitality, tourism, and leisure indus-
tries can provide firms with a competitive advantage and a way of motivat-
ing employees and increasing levels of customer service and potential
profit. The path to empowerment is one which requires significant com-
mitment and investment, but one which literature and experience tells us
will be repaid.

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 Chapter 13

Service Guarantee:
An Organization’s Blueprint
for Assisting the Delivery
of Superior Service
Jay Kandampully

INTRODUCTION

Tourism and the various components of tourism services have become

an integral part of everyone’s social pattern of consumption. In both devel-
oped and developing countries, social life has incorporated some aspects
of hospitality, tourism, and leisure service consumption. This can take
many forms, such as vacation, holiday, travel, recreation and eating out,
etc. Consequently, tourism as a social phenomenon has gained recognition
and acceptance in almost all social systems around the world. Williams
and Shaw (1992) indicate that more than 637 million tourists were ex-
pected to cross international boundaries by the year 2000, and according to
the World Tourism Organization (1999), tourism is currently the world’s
largest industry, earning over US$444.7 billion in 1998. Thus we can
expect continued growth in tourism.
Growth in hospitality, tourism, and leisure services globally has posed
an ongoing challenge to its managers. Relentless advances in technology
have rendered ever-shorter life cycles to products and services (Achrol,
1991), ultimately diminishing their customer appeal. Products and ser-
vices deemed satistactory by the customer today will undoubtedly prove
unsatisfactory to the same customer tomorrow. Hence, it is imperative that
products and services demonstrate continuous enhancement of value
through innovation and improvement. Today quality no longer constitutes
a competitive weapon but is, in fact, the basic core offering expected by
239
240 ~~ Service Quality Management in Hospitality, Tourism, and Leisure

customers of every organization. The global economy has succeeded in

elevating the role of quality to center stage in every business function.
Thus, an organization’s ability to continuously enhance the value of the
service offering now constitutes the decisive factor in the pursuit of suc-
cess.
Managers today have realized that traditional approaches to manage-
ment are inadequate if they are to keep abreast of an increasingly competi-
tive market. To maintain market leadership, managers need to adopt new
approaches that will not only enable improvements to be made, but that
will also support simultaneous improvement and innovation of the orga-
nization’s systems, procedures, and people on a continuous basis.
From a customer’s perspective, it is the service element (customer-
employee interaction) that effectively increases the value of a hospitality,
tourism, and leisure organization’s product/service offering. Moreover, in
almost all of these organizations, products and services cannot be sold in
isolation, but are commonly offered in combination. Not only does one
support the other, but it is this combination that significantly increases the
value to the customer. Consequently, customers’ perception of the services
offered are vital to all hospitality, tourism, and recreational organizations.
This warrants continuous improvement and innovation of systems, proce-
dures, and people to ensure that customers receive superior value for their
patronage.

SERVICE PROMISE

Empirical findings from Berry, Parasuraman, and Zeithaml (1994)

demonstrate that service reliability is at the heart of excellent service and is
considered the core attribute of good service by most customers. Breaking
the service promise is the single most important way in which service
companies fail their customers (Berry, Zeithaml, and Parasuraman, 1990).
In most service businesses, customers are required to pay before the ser-
vice is delivered. In other words, service is first sold, then produced and
consumed simultaneously. For example, the customer buys a flight ticket
first, with the full expectation of receiving all that is promised. Consisten-
cy of service refers to the absence of variation in the output from one
occasion to another as well as in comparison with what is promised in the
first instance (Chase and Bowen, 1991). So, to the service customer, con-
sistency and reliability are synonymous. Consistency implies that the cus-
tomer receives the same treatment, and the same level of service—time
and time again. The authors point out that in the majority of service
interactions, customers are unable to pretest the service reliability prior to
 Service Guarantee 241

purchase, with the result that the customer is unsure of the reliability of the
particular service being offered.
According to Zeithaml (1981), services offer only a limited number of
cues to customers wishing to make a purchasing decision. Therefore,
consumers perceive a greater risk when buying services than when buying
products (Zeithaml, 1981; Eiglier and Langeard, 1977). For organizations
in the tourism and hospitality industry, developing strategies that reduce
the risk consumers associate with using their services is important. One
such strategy is to offer a service guarantee. This guarantee has a dual role:
informing customers what to expect, and ensuring that the services deliv-
ered are commensurate with that standard (Maher, 1991). A service guar-
antee offers an organization the opportunity to take immediate corrective
action, which is crucial in converting dissatisfied customers into satisfied
ones (Bredin, 1995). The service guarantee serves as an organization’s
commitment to ensuring its guests are happy (Evans, Clark, and Knutson,
1996).
The main theme in the literature regarding service guarantees is that
they can help firms learn from their mistakes, which directly reduces the
risk of customers being exposed to a repeat of the same service failure.
This is achieved through the conduit of customer information. Service
guarantees trigger the flow of information back to the company as imme-
diate feedback (Ettorree, 1994), enabling the organization to learn quickly
about customers’ changing expectations (Bredin, 1995). As customers
become less inhibited about complaining (Firnstahl, 1989), information
tlows more freely. Moreover, by using service guarantees, firms are able to
learn from complaints (Bredin, 1995), they are forced to respond to cus-
tomer feedback (Rose, 1990), and they are able to measure quality failures
as they happen (Gooley, 1993) as well as critically analyze the data in a
meaningful way (Martin, 1995). Thus, service guarantees enhance a com-
pany’s opportunity to continuously improve systemwide and have the
capacity to transform dissatisfied customers into loyal ones.

GAINING CUSTOMER TRUST

Indeed, this customer focus, the strategic management decision to add

value to the firm’s offering, underlies the success of almost all leading
hospitality, tourism, and recreational organizations. The long-term sustain-
ability of this market leadership is every organization’s aim. Gaining and
sustaining the customer-supplier relationship as a long-term commitment
has thus become a prerequisite for leading organizations. Moreover, gain-
242 ~~Service Quality Management in Hospitality, Tourism, and Leisure

ing and sustaining customers’ trust in the organization extends beyond the
marketing function.
The outcome of a service encounter is seldom subject to a guarantee,
rendering a customer’s perceived risk intangible, which is an inherent
feature of interaction with a service organization. The encounter cannot be
reworked or returned and, more important, the customer’s payment is
given with the tacit understanding and expectation of receiving a good
result. In every service transaction, customers (unable to see or pretest the
outcome) are thus at risk. Service managers need to recognize, acknowl-
edge, and reduce this customer risk and by so doing, create a unique
opportunity to differentiate themselves from their competitors. To mini-
mize this risk, many leading hospitality, tourism, and leisure organizations
have recognized and implemented the strategy of offering a service guar-
antee.

BLUEPRINT FOR SUPERIOR SERVICE

A service guarantee essentially constitutes an organization’s service stan-

dard, a “blueprint” for service, defining the organization’s service promise
to its internal and external customers simultaneously. This means that the
service guarantee maintains both marketing and operational functions. As a
marketing function, the service guarantee informs customers of the specific
service standards they can expect to receive. Operationally, the service
guarantee represents the blueprint of the organization’s service standard, its
promise (external standard) to be maintained. Thus, service guarantees si-
multaneously affect and enhance an organization’s marketing effectiveness
and operational competency, both internally and externally (see Figure
1351).
Moreover, I argue that a clear and customer-focused service guarantee
will force an organization to do several things better than it has ever had to
do them before. A service guarantee enhances an organization’s ability to:

* Reinforce the service promise

* Indicate the level (standard) of expected service,
to both customers and employees
* Receive immediate customer feedback
* Respond to customer feedback
* Identify failure points in the service system
* Reward customers/employees
¢ Continuously assess and revise standards
 Service Guarantee 243

¢ Undertake training and education to complement changes

¢ Adopt empowerment programs
¢ Encourage employee involvement and ownership
¢ Enhance internal service quality
¢ Develop structures and systems to support service
¢ Anticipate changes in the marketplace

The focus of the service guarantee is to bring the customer loop right to
every employee in the company—thus, the employees can literally hear
the customer speaking to them through these guarantees. Additionally, the
service guarantee presents the organization with an opportunity to take
immediate corrective action, this being crucial in converting dissatisfied
customers into satisfied ones. Leading on from this point, it can be argued
that one of the significant benefits of the service guarantee is the myriad
information received from customers as immediate feedback, which, in
turn, rapidly informs the organization of its customers’ changing expecta-
tions. Not only does the service guarantee enable an organization to learn
from customers’ complaints, but it effectively compels the organization to
respond to customer feedback.
Thus, the service guarantee assists an organization to create a customer-
driven standard of service (see Figure 13.2). Understanding customers’

FIGURE 13.1. Service Guarantee: The Impact on Marketing and Operational

Functions

Expected
Quality

Internal and external

marketing

Enhance Enhance
operational Service market
competency Guarantee awareness

Internal and external

operating standards

Experienced
Quality
244 Service Quality Management in Hospitality, Tourism, and Leisure

FIGURE 13.2. A Mechanism to Develop and Implement Guarantees for Creat-

ing Superior Service

Identify services which do not

meet customer requirements

Establish standards in
accordance with customer
requirements

Provide employees with skills,

technology, information, training,
empowerment, and rewards to
meet the standards

Design and train employees

Positive F
on service F
failure-recovery Negative
Feedback and service guarantee-honoring Feedback
procedures

Develop and implement

service guarantees

Employee rewards
service delivery

Customer experience
of service

wants increases the organization’s likelihood of establishing a unity of

expectations between customer and employee. Service guarantee pro-
grams substantially affect organizational benefits, an argument substan-
tiated by many leading service organizations, whose success has been
linked to their service guarantee programs.
 Service Guarantee 245

Kandampully and Butler (1998) proposed the employment of service

guarantees and reward systems, which will not only enhance the customer
feedback mechanism, but may be effectively utilized to initiate a process
of recovery, correction, and innovation. Service management literature
suggests that service guarantees force the organization to create an “error
discovery” system (Hart, 1988), particularly where customers have en-
countered a negative service experience.
According to Hart, Schlesinger, and Maher (1992), a guarantee forces
an organization to acknowledge and understand the reasons underlying
failure. It can therefore be argued that guarantees assist organizations to
identify negative service experiences, initiate recovery and corrective ac-
tion (staff training, procedural changes), and subsequently make innova-
tions in service delivery. The focus here is not merely to solicit complaints,
but to ensure that the problem is corrected in the first instance, and that
action is taken to prevent its reoccurrence. Guarantees also enable firms to
maintain records of negative incidents, from which training issues can be
identified. Additionally, guarantees encourage customers to communicate
positive comments and specific personal requirements. Moreover, it is
possible that customers’ specific requests may be adopted as value-adding
service concepts.
Although it is important to learn of customers’ negative experiences, it
is equally important that an organization learns of customers’ positive
experiences tor the purpose of informing and rewarding the internal cus-
tomers (Kandampully and Butler, 1998). This will directly affect em-
ployee morale, which has the potential to immeasurably increase the prob-
ability of augmented service and quality (Stevens, 1996). The success of
hospitality, tourism, and leisure organizations depends, to a large extent,
on the commitment of their frontline staff, so these organizations must
place a premium on attracting and rewarding employees with exceptional
social skills (Zemke, 1988). For all service organizations, developing and
maintaining long-term relationships with customers and employees is ot
particular importance (Kandampully and Duddy, 1999), and linking ser-
vice guarantees with reward systems assists an organization to recognize
and compliment its patrons and employees.

ELEMENTS OF AN EFFECTIVE
SERVICE GUARANTEE

There is littke debate in current literature as to what constitutes an

effective service guarantee. According to Hart (1988), an effective guaran-
tee contains certain elements without which it lacks power and credence
246 ~—Service Quality Management in Hospitality, Tourism, and Leisure

and results in greater damage to the organization’s image. Hence, guaran-

tees should have the following qualities:

1. Easy to understand and communicate: It should be written in simple,

concise language that pinpoints the promise. The service guarantee
must be understood by both employees and the customer. Written
guarantees must use plain language to avoid confusion and misinter-
pretation. Employees need to know what the guarantee contains
without referring to a manual; therefore a simple, precise statement
is best.
2. Unconditional: It should promise customer satisfaction uncondition-
ally. The more conditions placed upon the customer, the less credible
the guarantee becomes. Conditions only place barriers in the custom-
er’s way when they wish to communicate their displeasure.
ioe). Meaningful: The guarantee should promise features that are impor-

tant to the customer, not the organization. This ensures that the
organization researches what is meaningful to the customer before
developing the guarantee. Areas that are important to the customer
include having the telephone answered quickly, receiving service
that is nonthreatening, dealing with employees who are knowledge-
able and efficient, etc.
4. Easy to invoke: Customers who are already dissatisfied should not
have to jump through hoops to invoke a guarantee. Any impediment
to making a complaint will only exacerbate their anger and frustra-
tion. “No hassles” (but not “no questions asked”) allows quick reso-
lution of the problem but does not preclude the opportunity to en-
quire about the failure points, thereby allowing the firm to correct
the system.
5. Easy and quick to collect: Customers should not have to work hard
to collect a payout from a guarantee. Any form of compensation
should be immediate, without a lengthy, formal procedure. Empow-
erment of staff with responsibility, authority, knowledge, training,
and trust will allow all employees to authorize compensation.

Promising significant payout in the service guarantee has three effec-

tive results: (1) it communicates to the customer that the firm is serious
about its commitment, (2) it encourages the customer to complain, and
(3) it motivates the company to make immediate changes in the system to
prevent further payouts.
 Service Guarantee 247

IMPLICATIONS

Offering a service guarantee implies that an organization is committed

to quality service and desires to continually make improvements to its
service. However, the implementation of a guarantee has other implica-
tions.
A service guarantee becomes a proactive method of providing the orga-
nization with information on whether the service being offered is pleasing
the customer. Analysis of this information will determine any changes in
customer expectations and will enable changes to the service to meet cus-
tomer demand.
Dissatisfied customers can do great harm to an organization. The 3/39
rule states that one satisfied customer will tell three other people, but a
dissatisfied one will tell thirty-nine others. This also is true for dissatistied
customers who complained and became victims of a poorly designed and
written service guarantee,
Hospitality, tourism, and leisure organizations should always under-
promise and overdeliver a service. Overpromising and underdelivering will
ensure that a customer will be dissatisfied.
Empowerment of employees with knowledge, training, and trust will
prove essential to effectively manage the service guarantee. Employee
empowerment provides the customer with an instant solution to problems,
and the employees themselves will develop an attitude of “whatever it
takes to please the customer.”
Employees will also be forthcoming with their problems with the sys-
tem rather than hiding them. Once they realize that the system is not
intended to punish employees, they will accept ownership of their work
and take every measure to improve it.

EMPLOYEE PARTICIPATION AND EMPOWERMENT

Service management literature has repeatedly emphasized the impor-

tance of the human element in the delivery of superior service (Solomon
et al., 1985) and the dual role of service personnel in the maintenance of
operational and marketing tasks in the organization (Bitner, Booms, and
Tetreault, 1990). Many services are designed to assist, service, or fulfill
customers’ personal needs, and it is in such situations that the customer
commonly seeks to establish and maintain a relationship with the service
provider (Parasuraman, Berry, and Zeithaml, 1991). Further, research
shows that, although reliability is the most important dimension in meet-
248 — Service Quality Management in Hospitality, Tourism, and Leisure

ing customer expectations, the human elements often serve to bridge any
gaps that may occur as service failures.
Associated with service guarantees is the issue of employee participa-
tion and empowerment. Lawler (1992) believes that organizations in
which employee involvement/empowerment is the norm will prove supe-
rior, as empowerment has a direct effect on four organizational perfor-
mance variables: cost, productivity, quality, and speed in responding to
customer requests. One of the underlying assumptions of those advocating
empowerment is that employees’ values will be in line with those of the
organization. Organizations must be prepared to allow employees the free-
dom to act and to make decisions based on their own judgment. For
example, if a hotel receptionist is empowered, then that receptionist must
be able to decide how best to deal with the needs of the customer and
should be accountable and responsible for dealing with customer com-
plaints. However, unless employees are authorized, informed, trained, and
empowered to respond immediately to customers’ requests, guarantees
will not prove successful. Employees need to be given responsibility,
authority, and information so that their decisions will be in line with the
organization’s goal. Additionally, managers will have to trust their em-
ployees to act on behalf of the organization and should reward the em-
ployees regularly for their initiatives and efforts. Evans, Clark, and Knut-
son (1996) state that employee training and empowerment are the two
keys to successful implementation of a service guarantee program.

PITFALLS ASSOCIATED WITH SERVICE GUARANTEES

Service guarantees that are poorly designed or incorrectly implemented

can cause problems for both customers and the organization. These pitfalls
are discussed in the following sections.

Customers Who Cheat

The expectation that customers will abuse the promise has prevented
managers from implementing a service guarantee, but only a very small
percentage of customers are dishonest. Establishing a good information
management system to record past claims can prevent this problem.

The Organization Fails to Learn from Dissatisfied Customers

and Fails to Correct Errors

If the organization fails to learn and to make changes, not only will the
dissatisfied customers tell others of their poor experience, but payouts will
 Service Guarantee 249

continue to occur for the same failures. Having a service recovery system
means accepting that service errors will occur; however, the organization
preplans tor such situations and establishes systems to detect errors as and
when they happen so that immediate corrective action can be taken. By
learning from the failure the organization can prevent future failures, not
only by the person who was involved with the service delivery but every
employee in the organization.

The Groundwork Has Not Been Done

An organization must have the following:

1. Consistency in meeting the standards stated in the service guarantee,

or it will lose considerable sums of money.
2. Fully empowered employees. The firm’s employees must have the
authority to implement the policy and solve customer’s problems on
the spot. The guarantee will soon lose its effectiveness if a long,
complex procedure must be followed. Therefore, training and sup-
port from the managers are necessary. Hampton Inn (Promus Corpo-
ration, USA) employees are “empowered to do whatever it takes to
satisfy the customer” (Sowder, 1996, p. 57). If managers do not
support employees’ decisions, then the employees too will be dissat-
istied. Unhappy employees do not create satisfied customers.
3. A reward system that motivates employees (to take additional re-
sponsibility) and customers (to inform the organization of both posi-
tive and negative service outcomes) alike.
4. Asystem designed to equip employees with information and training
so that they are able to respond to customer needs.

Competitors Are First in Offering Service Guarantees

Obviously the first organization in the industry to implement a guaran-

tee gets publicity from the guarantee launch and theretore gains the com-
petitive edge.

Service Guarantee That Excludes Too Many Customers

Exclusions and conditions in the fine print have been utilized to dis-
courage complaints and payouts in the past. If customers are discouraged
from complaining, then the organization will not learn from its mistakes
and will not make the appropriate changes.
250 Service Quality Management in Hospitality, Tourism, and Leisure

Service Guarantee That Tarnishes the Company’s Image

Guaranteeing parts of the service that are basic features, such as clean
and hygienic rooms, should not be necessary. In fact, to do so would make
customers suspect that these are areas in which the company regularly
fails. In Japan a written guarantee may provoke suspicion, as the culture
assumes implied guarantees from every firm.

SERVICE GUARANTEES
IN THE FAST-FOOD SECTOR

McDonald’s

McDonald’s offers an explicit unconditional service guarantee on the

quality of the food as well as the speed of their service. It is the aim of
McDonald’s to deliver an order within sixty seconds. A customer who has
to wait more than three minutes will receive a complementary item (e.g.,
drink or fries), and for a wait of more than five minutes the customer will
be given vouchers for his or her next visit. Customers who are dissatisfied
with their current meal will have the problem fixed immediately and will
receive their next meal free.

Kentucky Fried Chicken

Kentucky Fried Chicken appears to have an implicit guarantee, in that

they have internal standards with which they wish to comply. They aim to
deliver an order within sixty seconds, and nobody should wait more than
five minutes. Payouts are management’s responsibility and can range from
complementary items to vouchers to the value of the meal. In June 1998,
they had a special promotion called the “service challenge,” which was to
deliver all food orders within sixty seconds or provide free fries.
According to Maher (1992), guarantees should not be judgment calls;
“prompt delivery” or “courteous service” are open to interpretation. State-
ments such as “lunch in five minutes” or “you will have a room,” on the
other hand, set a standard to be lived up to.

SERVICE GUARANTEES IN THE HOTEL SECTOR

Hampton Inn

The Hampton Inn of Memphis, Tennessee, offers a 100 percent satis-

faction guarantee for guests who are not satisfied with the quality of their
 Service Guarantee 2511

stay at the hotel. Employees at all levels from general manager to house-
keeper are empowered to do whatever it takes to satisfy guests. According
to Sowder (1996), the unconditional guarantee offered by Hampton Inn is
not merely a program; instead, it represents how the hotel makes decisions
and runs its business.

SERVICE GUARANTEES IN THE TRAVEL SECTOR

Citytravel

Citytravel (a subsidiary of Citycorp) guarantees the lowest price in the

market. A customer who is aware of a lower price offered by a competitor
can inform Citytravel through a toll-free number. Following confirmation
of this through their computer fare index, Citytravel will offer the lower
fare to the customer or refund the money (Hart, 1988). Citytravel believes
that by doing this, they gain the opportunity to demonstrate their superior
service to their customers.

CONCLUSION

A service guarantee serves as a standard, expressed explicitly to both

customers and employees, for what is being promised by the firm and
what standard the customers may expect of them. Service guarantees
allow customers to communicate directly with employees. Additionally,
the service guarantee presents the firm with an opportunity to take imme-
diate corrective action, which is crucial to converting dissatisfied custom-
ers into satisfied ones. Consequently, it can be argued that one of the
significant benefits of the service guarantee is the immediate feedback of
customer information, which informs the firm of customers’ changing
expectations. Not only does the service guarantee enable a firm to learn
from customers’ complaints, it effectively compels the organization to
respond to customer feedback immediately. In realizing the cost involved
with each failure, the company has an additional opportunity to learn from
the mistake and so eliminate the possibility of further similar mistakes.
In essence, the service guarantee assists an organization to create a
customer-driven standard of service. Services management literature sug-
gests that well-managed service guarantee programs substantially affect
organizational benetits, which is confirmed by many leading service orga-
nizations, whose success has been linked to their service guarantee pro-
grams.
252 ~~Service Quality Management in Hospitality, Tourism, and Leisure

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=
>.
 Chapter 14

Managing and Marketing

Internal and External Relationships
Linda J. Shea

INTRODUCTION

The dynamic nature of the hospitality, tourism, and leisure industry has
fueled the quest for improved service quality among all internal and exter-
nal stakeholders. Travel agents, tour guide operators, chambers of com-
merce, tourism boards, hotel and restaurant suppliers, advertising agen-
cies, and other constituents strive for competitive advantages to meet
customer needs and achieve their profit or nonprofit goals. These and
other organizations in the industry understand the importance of partner-
ships with others in the channel of distribution system. They know their
employees should provide quality service, and they want to meet custom-
ers’ expectations. But who is responsible for the management and market-
ing of these interdependent relationships? Too often, this relationship
building is left to chance. Deliberate strategies are needed for encouraging
the synergistic effect among individual employees, customers, and inter-
mediaries in the delivery of service quality.
This chapter presents strategies for building and maintaining relation-
ships with various internal and external markets, including employees,
stockholders, customers, suppliers, retailers, and other intermediaries. The
chapter begins with the definition and discussion of relationship market-
ing—its importance and components. This is followed by a look at several
common relationships and strategies for building and maintaining long-
term associations. It is then demonstrated how the management and mar-
keting of these relationships directly and/or indirectly narrow the gaps of
service quality. Finally, basic guidelines for managing and marketing to
internal and external markets are presented.

255
256 ~~ Service Quality Management in Hospitality, Tourism, and Leisure

RELATIONSHIP MARKETING

Relationship marketing is a process of strengthening ties between the

organization and its customers, intermediaries, suppliers, and employees.
Building relationships involves economic, social, and structural compo-
nents (Zeithaml and Bitner, 1996). Economically, relationships are built by
delivering consistent service quality, meeting and exceeding expectations,
and facilitating mutually beneficial financial transactions—all resulting in
profit gains for both parties. While economic transactions essentially oc-
cur between organizations, social transactions occur between individual
people. Socially, relationships are built and maintained by taking a person-
al interest in individuals involved in these transactions. The social dimen-
sion provides an additional reason to continue doing business. Structural-
ly, long-term relationships are strengthened through customization of the
service transaction. This component contributes to a dependency on the
part of the recipient. These components can be applied to all relationships
important to the hospitality, tourism, and leisure organization.

Relationship with Employees

Because of the inseparability of the service from the provider, service

quality begins with quality employees. In their boundary-spanning roles,
hospitality service employees are the connection between the organization
and the customers. Customer evaluation of the service and the organiza-
tion are based on interactions with service employees, not physical assets
(Carlzon, 1987). Jan Carlzon, former CEO of Scandinavian Airline Sys-
tems, emphasized the importance of this employee-customer contact. He
calculated that over one year, 10 million customers had an average of five
employee contacts lasting about fifteen seconds each. That means that
perception of the company is created during these 50 million “moments of
truth,” and determines the success or failure of the company.
A staff of untrained, underpaid, unmotivated employees is unlikely to
generate satisfied customers. Building, maintaining, and retaining the
workforce requires a deliberate and competent management and market-
ing effort. In addition to using appropriate recruiting and job training
methods, and offering a meaningful benefit package to employees, several
strategies can build lasting relationships with employees. These strategies
are based on the concept of internal marketing, or marketing the job to
employees as customers. Furthermore, the strategies are interdependent.
 Managing and Marketing Internal and External Relationships 257

Select Employees with the Right Service Attitude

Employees at all levels should understand the concept of customer

service. Kotler, Bowen, and Makens (1999) suggest turning the organiza-
tional chart upside down to more accurately represent this orientation. A
traditional organizational chart depicts each level as focusing on pleasing
the boss at the next higher level. On the contrary, each level should be
oriented toward pleasing the one at the true top of the chart, namely, the
customer.

Involve Employees at All Levels

in the Strategic Planning Process

Employees are more likely to accept and share goals of the company if
they participate in their establishment. Ritz-Carlton President and CEO
Horst Schulze expressed his concern for employee relationships, saying,
“We make sure our employees know the values, goals, and strategies of
our company, because that’s the only way they become a part of the
company, rather than just fulfilling a function ... it’s immoral for a
company not to teach their employees these goals and strategies” (Gillette,
1998, p. 56). Most people are more motivated to work toward achieving
their own goals than those of someone else.

Keep Employees Informed

The alignment of goals with employees necessitates specific means of

communication. Promotion as a marketing mix element applies to internal
marketing and is equally important in this context. This communication
could be in the form of an employee newsletter, formal and informal
meetings, distribution of promotional material, or even one-on-one con-
sultation. An employee who feels “left out of the loop” cannot be expected
to work toward common goals.

Reduce Employee Conflict and Stress

Several marketing actions can serve to reduce (or increase, if not man-
aged) employee conflict and stress (Shamir, 1980). For instance, effective
communication of employee roles and scripts in both internal and external
promotions can reduce conflict associated with assuming service roles.
Carefully targeting specific segments reduces conflicts between customers
and the stress often endured by the service employee. Even selection of
uniforms can enhance the attitude of employees wearing them. Clearly
258 — Service Quality Management in Hospitality, Tourism, and Leisure

informing customers about organizational policies can also reduce conflict

and stress.

Provide Training for Service Recovery

Despite a well-intentioned and well-executed service delivery system,

breakdowns in the service encounter will inevitably occur. Generally, a
customer’s level of satisfaction is more dependent on the way in which a
particular incident is handled by the service provider, rather than on the
fact that an unfavorable incident has occurred (Bitner, Booms, and Te-
treault, 1990). Unfortunately, most individuals are not naturally equipped
to resolve these situations, but need training for service recovery. Many
service failures can be anticipated and employees need to be aware of
them and ready to resolve them.

Empower Employees

Expeditious and effective service recovery relies on employee empow-

erment. This autonomous freedom, power, and latitude to resolve custom-
er service issues is critical not only to managers, but to frontline em-
ployees. Customers do not appreciate waiting and repeatedly explaining a
problem to higher level managers.
Employees can either be given (or trained to react with) a list of pos-
sible responses, or encouraged to use their discretion in responding to
customers. Empowered employees are more customer focused, are more
satisfied with their jobs, and can devise more creative permanent design
solutions (Bateson, 1995).

Develop a Reward System for Recognizing Employees

In addition to standard compensation methods, employees and employ-

ers benefit from a specific reward system for quality of service. This
enfranchisement goes a step beyond empowerment, because employees
are actually rewarded for satisfying customers.
Each of these strategies is important, but only works in conjunction
with the other strategies. Interdependently, they contribute to the delivery
of service quality.

Relationship with Customers

The importance of retaining customers cannot be overstated. Today’s

dynamic marketplace featuring conditions of high employment rates, low
 Managing and Marketing Internal and External Relationships 259

population growth, increased competition, better informed consumers, and

increased costs of doing business mandates a focus on customer retention
(Bateson, 1995). The cost of recruiting new customers resembles the cost
of recruiting new employees. In other words, these costs far outweigh the
costs of retaining current ones. The contribution to bottom-line profits
results from a reduction in both fixed and variable costs.
Berry and Parasuraman (1991) identified three levels of relationship
marketing strategies. The first level emphasizes retaining customers
through price incentives. The purpose is to encourage current customers to
use the service more frequently. The nature of the customer benefit is
purely financial. Examples of this type of strategy abound in the hospital-
ity and tourism industries. They can be short term or long term in nature.
For instance, special promotions or coupon offerings for one-time savings
opportunities serve as a type of reward to current customers and as an
incentive to try other services offered by the same organization. A health
club may offer savings on tennis instruction packages, massages, or per-
sonal nutrition profiles to current users of the facility. Often restaurants
offer coupons to be used on subsequent visits. Longer-term efforts offer a
continuing price incentive to customers. For instance, nearly all airlines
offer frequent flyer programs, rewarding repeat customers with free travel
opportunities. Hotels, too, design frequent stay programs to encourage
retention among their customers.
Although these types of programs generated greater than expected re-
sponse during the 1980s and early 1990s, their effectiveness has waned
substantially. The problem with this level of relationship building is that
once the incentives are either removed or copied by competitors, there is
no differential advantage to hold customer loyalty. Ultimately, the result is
lower profits for all competitors. There is always room for another low-
cost competitor to steal market share. “Amenities creep” was created by
the addition of amenities as a competitive tool, and subsequently matched
by most other competitors, which led the way for the proliferation of new
entrants in the hotel industry sector of the economy. Hotel chains such as
Red Roof Inn and Days Inn achieved lower costs and hence lower custom-
er prices by offering only the most important amenities for a consumer
segment. For this reason, there has been a shift away from such programs
as a primary customer retention strategy.
This trend is evidenced in a recent study of repeat hotel patronage by
Bowen and Shoemaker (1998). Their survey of frequent business travelers
revealed some important suggestions for customer retention. They found
that room upgrades, efficient and flexible check-in and checkout proce-
dures, and using database information from previous visits to customize
260 Service Quality Management in Hospitality, Tourism, and Leisure

the service are all preferred to “points and prizes” strategies. Loyal guests
also want to feel as though employees genuinely care about their pro-
blems. These kinds of issues relate to second- and third-level relationship-
building strategies.
The second level of relationship marketing strategies involves a social
element. This is easier to achieve in a smaller setting such as a local
restaurant, private club, or bed and breakfast operation. Regular customers
can be identified and recognized by name. This familiarity and personal-
ization may also be achieved in larger settings with the use of technology.
Hotel employees can track customer preferences by looking at information
recorded and maintained in a database.
The third level involves structural strategies to build relationships.
Merely managing a database to determine who your customers are and
whether they prefer a king or double-double room is one step. Moving to
the next step means creating one-on-one relationships through the use of
customized programs. For example, Preferred Hotels and Resorts World-
wide uses a guest information network called Guestnet to enrich the ser-
vice experience for its customers (Parets, 1998). Customers checking into
one of their properties might find a monogrammed robe and newspaper of
choice waiting in the room. The alarm may even be set to the customer’s
preferred time of awakening. One hotel located near colleges tracks per-
sonal information on students and their parents. This way, they can send
promotional material in connection with the parents’ next trip to town.
They also record students’ birthdays and offer to throw a pizza party at
their residence on behalf of the parents. Other such programs use informa-
tion about preferred recreation activities and link it to sales of customized
vacation packages at other company resorts. This level of strategy is a
powerful tool for building loyalty.
In summary, the higher the level, the more customized the service.
Patrons move from being customers to being clients. Also, higher level
strategies require greater degrees of competitive differential. Ultimately,
these strategies lead to increased customer satisfaction and lower defection
rates.

RELATIONSHIPS WITH SUPPLIERS

AND INTERMEDIARIES

A channel of distribution in hospitality, tourism, and leisure, as in any

other industry, contains all parties involved in the process of delivery of a
product or service, beginning with the producer and ending with the final
consumer. In the distribution of tangible goods, the typical goal is to move
 Managing and Marketing Internal and External Relationships 261

the product through the channels to the consumer. Contrarily, services are
often produced, sold, and consumed in the same location. Therefore, dis-
tribution focuses on getting the consumer to the service. Most hospitality
organizations cannot rely solely on sales staff and reservation systems to
distribute their services. Instead, they are realizing the need for intermedi-
aries, partnerships, and alliances and are seeking new, creative ways of
developing these relationships.
The primary distribution systems in lodging and food service are
chains, franchisers, and management companies. Franchising, the most
prevalent distribution format, has realized substantial growth during the
last decade in lodging, fast food, health clubs, and travel industries. Fran-
chisees pay tees or royalties to franchisers. The benefits accrued from this
type of relationship include the use of brand names and their reputations
and access to unique products and services, management formats, physical
designs, and process methods. These relationships are contractual in na-
ture and should be negotiated according to the mutual interest of both
parties.
Important intermediaries in hospitality, tourism, and leisure services are
travel agents, tour operators, tour wholesalers, incentive planners, and
central reservation systems. They are commonly linked in various com-
binations. The most prevalent intermediary in the industry is the travel
agent. Using sophisticated electronic booking systems, agents can provide
customers with up-to-date information on tourist destinations, hotel prop-
erties, and air and ground transportation. They can buy packages from tour
wholesalers and they can book clients with tour operators.
Additional partnerships are formed with suppliers of food products, fur-
niture, equipment, linens, uniforms, and myriad other distributors. Relation-
ships must also be built with other support agencies, such as advertising
agencies, chambers of commerce, and convention bureaus. Also character-
istic in hospitality industries are partnership arrangements with competi-
tors. For instance, when hotels are fully booked, they may send overflow
to nearby properties. Complementary firms design packages comprising
transportation, restaurant, and event components.

Management of Channels

Channel management carries with it some inherent conflict. What is

beneficial to one channel member may be detrimental to another. Care
must be taken to balance and control these conflicts. For example, while
travel bookings on the Internet are currently insignificant, this may in-
crease in the future and threaten the role of agents.
262. Service Quality Management in Hospitality, Tourism, and Leisure

Guidelines listed at the end of the chapter relative to all types of internal
and external relationships are particularly applicable to these types of
partnerships and alliances. Additional recommendations for enhancing
relationships with channel members are as follows.

Focus on Long-Term Benefits Over Costs

When analyzing relationships with these groups, it is important to look

at the broader, long-term picture. Although agents and others work on a
fee basis, it is tempting for firms to consider cutting costs by eliminating
ties or dependencies without considering the benefits lost. Travel agents
book only 25 percent of all hotel rooms, but are responsible for the sale of
90 percent of all airline tickets and 95 percent of cruises (Schulz, 1994).
Intermediaries can distribute hospitality and tourism services more effi-
ciently. They have greater access to customers and are experienced in
serving their needs.

Promote Benefits Aggressively

Intermediaries are bombarded with information from innumerable

competitors. Providing an experience creates a stronger impact than pro-
viding more reading material. Hotels, airlines, and tourist destinations link
to provide “fam” trips (at almost no cost to agents) to familiarize agents
with their services. Inviting a concierge for a meal forms a better impres-
sion than sending a menu. These options are more likely to establish a
social component in the relationship and thereby strengthen it.

Base Recommendations on Service Quality

Some businesses consider entering into formal or informal agreements

based on the potential for reciprocity. The ability of a local restaurant to
send a number of customers to a nearby hotel property in exchange for
reciprocal recommendations may seem attractive initially; however, if the
quality of the restaurant is poor or inconsistent, the hotel property would
reap greater benefits by ignoring the opportunity. The property would, in
effect, be exchanging current customers for new customers along with the
additional costs. Instead, partnerships should be based on compatibility of
market segments’ consistency of quality.

Recognize Your Own Strengths and Weaknesses

Hospitality firms need to be mindful of what they do well and stick with
their competencies. Vertical integration of the distribution system offers
 Managing and Marketing Internal and External Relationships 263

potential for cost savings. Consider, for instance, establishing in-house

catering, travel agents, or advertising departments in place of indepen-
dents. Each of these activities requires a specific set of skills and experi-
ences that may fall outside the range of a firm’s competencies. Without
expertise in a different type of business activity, more costs and more
headaches result.

Look for Innovative Distribution Connections

The past decade witnessed dramatic changes in the way hospitality

firms distribute products. One such innovative strategy is retail partner-
ships. Taco Bell, Subway, Pizza Hut, and other franchisers are linking with
large retailers such as Wal-Mart, Kmart, and convenience store chains
such as Cumberland Farms to move closer to the customer. These are
examples of horizontal marketing systems, whereby organizations at the
same level (e.g., retailing) combine to reach new markets. Airlines, hotels,
and auto rental companies offer discounts to teacher associations, auto
rescue clubs, and other groups which promote them as a benefit to their
members. This gives these hospitality firms access to members of those
organizations. Distributing through Web sites on the Internet is yet another
recent innovative advance (Connolly, Olsen, and Moore, 1998). Best West-
ern claims to reach nearly three-fourths of customers who do not use travel
agents with this method (Vis, 1995). These examples illustrate the diverse
options available for developing mutually beneficial relationships.

RELATIONSHIP MARKETING
AND SERVICE QUALITY

The management and marketing of internal and external markets direct-

ly and indirectly serves to narrow the gaps in service quality (Parasura-
man, Zeithaml, and Berry, 1985). Gap | represents the difference between
customer expectations of service and company perceptions of customer
expectations. Effective internal marketing includes gathering customer
information from employees whose boundary-spanning roles allow them
to tap into customer expectations. It establishes clear lines of communica-
tion up the chain of command. Suppliers also initiate consumer surveys
and can share valuable information concerning expectations. Effective
relationship marketing to external customers means knowing what they
expect. All of these activities directly impact the extent of the gap and,
executed properly, serve to narrow it.
264 ~—Service Quality Management in Hospitality, Tourism, and Leisure

Gap 2 is created when company perception of customer expectations is

translated into service designs and standards. Clearly, building solid cus-
tomer relationships at the structural level narrows this gap. As described
previously, it means the service is custom designed to the needs of a client.
When systems are devised in this manner, no guessing is involved; hence,
there is less error in the translation than in a hit-or-miss approach.
The service performance gap (Gap 3) involves the transfer of service
design to service delivery. The gap is potentially created by several em-
ployee-related problems and issues. Effective internal marketing, training,
and empowerment all encourage effective delivery of service and reduce
the performance gap. Furthermore, strong relationships with customers at
the social and structural levels diffuse the reliance on price for leveling
fluctuating demand. Finally, close management of the advertising function
can ensure that customers are informed of their roles in the delivery trans-
action.
Gap 4 is the difference between service delivery and communication
about service to customers. The causes for this gap include ineffective
communication among internal and external markets and overpromising.
Advertising should be used to communicate roles of customers as well as
employees, not only to themselves, but to educate each of them about the
roles of the other. Key to this communication is avoidance of the natural
tendency to make unreasonable promises. When these rules are followed
as part of relationship management and marketing, this gap is significantly
reduced.
Gap 5 is defined as the difference between perceived and expected
service. Since this gap is a function of the first four gaps, it is indirectly
affected by the implementation of strategies to reduce the preceding gaps.
Customized service strategies directly narrow this gap, as they represent
the opportunity to exceed customer expectations.

ADDITIONAL GUIDELINES FOR MANAGING

AND MARKETING KEY RELATIONSHIPS

The following guidelines use basic marketing principles to build, main-

tain, and strengthen relationships of all types discussed previously.

Communicate a Marketing Orientation

The interdependency of channel relationships mandates common goals.

The achievement of service quality relies heavily on a consumer orienta-
 Managing and Marketing Internal and External Relationships 265

tion. In the spirit of the marketing concept, all parties involved in the
delivery of service must embrace this philosophy. It is important for man-
agers, frontline employees, suppliers, agents and brokers, stockholders,
and of course customers to receive this message. Communication to em-
ployees could be achieved through recruitment material, orientation train-
ing, or newsletters. Customers can be reached through advertisements,
stockholders could be made aware through the annual report, and interme-
diaries can be informed through promotional material and interactions
with sales associates or other personnel.

Communicate the Organization’s “Product Position”

Establishing and communicating a clear and unambiguous position

promotes the integration of internal and external markets. It sends a dis-
tinct message to all channel members regarding the way in which an
organization wants to be perceived and differentiated from other competi-
tive organizations. It affords channel participants the opportunity to create
unique packages and programs for solidifying that position. This strategy
is particularly important in today’s market, with the trend toward family
branding of hotels. Marriott, Holiday Inn, and Howard Johnson all have
established several hotel brands under their names. They need to further
educate consumers, suppliers, and intermediaries about the relative posi-
tions of their properties, so the appropriate consumers can be directed to
them.

Target Customers

It is nearly impossible to build lasting relationships through service

quality when trying to please all customers at once. Without knowing who
the customer is or should be, attempts at devising a marketing plan are
futile. When you factor in all other intermediaries and channel members,
each with their own marketing plans, it is easy to see the resulting contu-
sion and chaos. Instead, segments of consumers with common needs must
be identified. Suppliers and intermediaries in the hospitality and tourism
industry can design more accurate and precise specifications if they know
who they are serving and if they are all endeavoring to serve the same
segment of customers.

Solicit Feedback

Monitoring systems are a must to determine employee, customer, and

other distribution channel members’ expectations. Four Seasons Hotel CEO
266 Service Quality Management in Hospitality, Tourism, and Leisure

Isadore Sharp points out the importance of having an organizational cul-

ture to support the delivery of consistent, reliable service—particularly for
the high-end deluxe properties. He claims the element of luxury comes
from the “people part of the experience” (Gillette, 1998, p. 59). This, he
says, requires frequent (once-a-month) monitoring of employees. Berry,
Parasuraman, and Zeithaml (1994) also suggest asking employees for
feedback, since the employee sees more of the service delivery than cus-
tomers, and they see it from a different angle. They further suggest em-
ployees assume the role of “manager for a day” to provide input for
changes.
Customer feedback should be encouraged as well. These systems can
include formal broader-based periodic surveying, or continuing feedback
systems such as tabletop surveys in a restaurant. This can be supplemented
by less formal short-term, on-the-spot methods. Provisions for complain-
ing should be established to make it convenient and easy for customers.
For instance, in addition to the tabletop survey form, restaurant managers
could make rounds among tables soliciting service evaluations. Finally,
suppliers and intermediaries need formal and informal mechanisms for
feedback. Logs should be kept and all groups’ complaints analyzed per-
iodically. Only when all angles are viewed can top managers get a clear
perception of issues and problems. These feedback systems promote syn-
ergism among the channel members.

Always Take Corrective Action

Although it seems intuitively legitimate to focus on only the greatest

producing employees, or high-volume, profit-generating suppliers, inter-
mediaries, or customers, this can be a destructive mentality. A mistreated
customer or an agent who perceives unfair treatment and defects can
represent boundless potential loss of business, which cannot be measured
and therefore is unknown to the perpetrating organization. Relationship
marketing moves beyond problem resolution. It requires analysis of how
and why the problem occurred in the first place. It necessitates the devel-
opment of a program for improvement to avoid recurrence.

Conduct Business in a Socially Responsible Manner

Being a good citizen is part of the broadening of the marketing concept.

Examples include using environmentally safe packaging, training em-
ployees to serve alcohol responsibly, and voluntarily banning smoking in
restaurants. Sponsorships, fund-raisers, and donations are additional ways
 Managing and Marketing Internal and External Relationships 267

to practice good citizenship. Organizations can partner with employees,

customers, and intermediaries in providing these kinds of societal con-
tributions.

CONCLUSION

Delivery of quality service in hospitality, tourism, and leisure organiza-

tions requires coordination and cooperation from employees, suppliers,
intermediaries, and all other stakeholders of an organizaiton. This chapter
presented deliberate strategies for the management and marketing of these
internal and external relationships. Three major categories of relationships
were reviewed: employees, suppliers and intermediaries, and customers.
How these relationships narrow the gaps in service quality was then illus-
trated. Finally, several guidelines applicable to the development and main-
tenance of these relationships were suggested. Implementaiton of these
strategic activities creates synergism in these markets and contributed to
the overall quality of service.

REFERENCES

Bateson, J.E.G. (1995). Managing Services Marketing, Third Edition (pp. 456-459).
Fort Worth, TX: Dryden Press.
Berry, L.L. and Parasuraman, A. (1991). Marketing Services: Competing Through
Quality (pp. 136-140). New York: Free Press.
Berry, L.L., Parasuraman, A., and Zeithaml, V.A. (1994). Improving Service Quali-
ty in America: Lessons Learned. Academy of Management Executive. 8 (2):
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Bitner, M.J., Booms, B.H., and Tetreault, M.S. (1990). The Service Encounter: Diag-
nosing Favorable and Unfavorable Incidents. Journal of Marketing. 54 (January):
71-84.
Bowen, J.T. and Shoemaker, S. (1998). Loyalty: A Strategic Commitment. Cor-
nell Hotel and Restaurant Administration Quarterly. 39 (1):12-25.
Bruns, R. (1998). Hotel Companies Are Using Technology and Clever Marketing
to Identify and Reward Their Most Valuable Guests. Lodging. June: 55-60.
Carlzon, J. (1987). Putting the Customer First: The Key to Service Strategy.
McKinsey Quarterly. Summer. Reprinted in Lovelock, C.H. (1991). Services
Marketing (Second Edition) (pp. 424-432). Englewood Cliffs, NJ: Prentice
Hall.
Connolly, D.J., Olsen, M.D., and Moore, R.C. (1998). The Internet As a Distribution
Channel. The Cornell Hotel and Restaurant Administration Quarterly. 39 (4):
42-54.
268 Service Quality Management in Hospitality, Tourism, and Leisure

Gillette, B. (1998). Luxury Segment Players. Lodging. October: 55-59.

Kotler, P., Bowen, J., and Makens, J. (1999). Marketing for Hospitality and
Tourism (Second Edition). Upper Saddle River, NJ: Prentice Hall.
Parasuraman, A., Zeithaml, V.A., and Berry, L.L. (1985). A Conceptual Model of
Service Quality and Its Implications for Future Research. Journal of Mar-
keting. 49 (Fall): 41-50.
Parets, R.T. (1998). Details, Details, Details. Lodging. June: 56.
Schulz, C. (1994). Hotels and Travel Agents: The New Partnership. Cornell Hotel
and Restaurant Administration Quarterly. 35 (2): 45-50.
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New York: McGraw-Hill Companies, Inc.
 Chapter 15

Cross-Cultural Issues
in Service Quality
Connie Mok

INTRODUCTION no lo

It was estimated that by the year 2000, multinational ees y

(MNCs) would control approximately half of the world’s assets (Dulek, awe
Fielden, and Hill, 1991). Many companies that were identified as Ameri-
can, such as Kentucky Fried Chicken (KFC), Wendy’s, McDonald’s, Holi-
day Inn, and others, may(Saturate the U.S. market) but they are no longer
domestic companies. KFC has been expanding in (overseas markets)such
as Japan since 1970. In the 1990s the KFC store at the heart of the
Forbidden City in Beijing attracted more Chinese tourists than the city
itself. The McDonald’s Corporation 1997 Annual Report reported that, in
1996, 50 percent of McDonald’s Corporation’s income came from opera-
tions outside the United States. In the hotel industry/globalization has also
continued to grow) Holiday Inn, for example, entered the European market
in 1969 and the Asian market in 1973. Slattery (1996) reported progres-
sive international development of hotel chains from 1990 to 1995, most
notably, Bass, Accor, Forte, New World, and Four Seasons. International.
expansion has many benefits; additional growth or expansion and added—
revenues or profits, which lead to improved return on investment, were —
reported as the greatest benefits (Go and Christensen, 1989). O ene-
He Rene larger market penetration and thus more market share. In —
addition, greater name recognition and an international identity are also
advantageous to the company. These benefits are undoubtedly most favor-
able; however, international expansion has exposed U.S. hospitality com-
panies to groupsof multicultural consumers. The rapid global develop-
ment of the hospitality industry has made it important for MNCs to be able
to function profitably in foreign markets. Global managers are expected to
269
Me NCA ee ere

270 Service Quality Management in Hospitality, Tourism, and Leisure

successfully interact with people from various cultures and, more impor-
tant, to be able to understand more than the domestic market, both in
managing their operations and in marketing their products and services.
Internationally, as competition and customer sensitivity intensifies, lodg-
ing providers are becoming increasingly concerned with the quality of their
service offerings. Hotels with poor service have difficulty succeeding in the
area of marketing, no matter how aggressive their advertising and sales
Pon mmermmence {he there is general agreement that customer satisfac-
tion has a rect relationship to profitability, thequestion remains as to how ~
companies can best mergeBaa e goals of profit maximization and customer
satisfaction so as to reap the benefits of an increasingly global market. On
one hand, there is the trend toward standardization of servicestocompete
on the international market with value-added products or services (Pizam,
Jansen-Verbeke, and Steel, 1997). On the other hand, the hospitality indus-
try has recognized the importance of differentiating product/service offer-
ings to suit local tastes and preferences. Which way should we go?

THE CONVERGENCE AND DIVERGENCE DEBATE

Convergence

One of the ongoing debates fueled by globalization involves hypothe-

ses of convergence and divergence. In 1983, T. Levitt published an article
on global convergence of markets in Harvard Business Review, criticizing
the practices of MNCs thattmanufacture products customized for each
country at a high cost Levitt, 1983). He refutes the effectiveness of these
practices b iming that only global companies will achieve long-term
success by offering globally standardized products that are advanced,
functional, reliable, and low priced} He claims that two vectors shape the
world—technology and globalization. Technology is a powerful force
driving the world toward an increasing similarity, which will result in
global markets for standardized consumer products on a large scale. Glob-
al corporations can enjoy enormous economies of scale in production,
distribution, marketing, and management as well as reduced world prices.
Therefore companies must learn to operate as if the world were one large
market—ignoring superficial regional and national differences.
Six years later, Kenichi Ohmae (1989) lamented that, as a consequence
of the flow of information through satellite-broadcast television and the
dominance of the English language, everyone receives the same informa-
tion almost simultaneously and hence become global citizens. In Ohmae’s
 Cross-Cultural Issues in Service Quality 271

view, it is not diversification or competition that exerts pressure toward

globalization but the needs and preferences of customers who have become
globalized. Proponents of the convergence process support the notion that
global markets are converging and becoming more homogeneous and,
therefore, customers of different cultural backgrounds will have common
preterences. Convergence theorists contend that globalization will support
homogeneity and thus consumers with different cultural backgrounds will
accept a homogeneous product.
A more recent publication, The McDonaldization of Society (Ritzer,
1993) proposed McDonaldization as both a literal critique of food produc-
tion and service arrangements and a metaphor for standardizing forces in
the wider society. “This mass production is a process by which the prin-
ciples of the fast-food restaurants are coming to dominate more and more
sectors of American society as well as the rest of the world” (p. 1). Fast-
food restaurants and other McDonaldized systems are mass-production
systems, which are built upon the belief that in the world of mass produc-
tion, consumers accept homogeneous products. Their acceptance facili-
tates market growth and the reduction of prices through economies of
scale, which in turn leads to a greater price gap between mass-produced
goods and customized goods. Low price encourages the clustering of
demand around homogeneous products (Taylor and Lyon, 1995).

Divergence
5
eeeee Oe

On the other hand, proponents of the divergence hypothesis such as

Douglas and Wind (1987) agree that the growing integration of interna-
tional markets implies that adoption of a global perspective has become
increasingly imperative. However, they argue that to conclude that this
mandates the adoption of a strategy of universal standardization appears
naive and oversimplistic because it ignores the inherent complexity of
operations in international markets. They explain that substantial evidence
exists to suggest an increasing diversity of behavior within countries, and
the emergence of idiosyncratic country-specific segments. Other propo-
nents of the divergence hypothesis point to the barriers of standardization,
and suggest that greater returns are to be obtained from adapting products
and marketing strategies to the specific characteristics of individual mar-
kets (Fisher, 1984). Douglas and Wind (1987) give examples of how
companies adapt lines to idiosyncratic country preferences and develop
local brands or product variants targeted to local market segments. The
Findus frozen food division of Nestlé markets fish cakes and fish fingers
in the United Kingdom, but beef bourguignonne and coq au vin in France,
and vitello con funghi and braviola in Italy. Similarly, in Asia, Coca-Cola
 aes agit op ad ner IL ee
272. ~~Service Quality Managementin Hospitality, Tourism, and Leisure

markets products such as Georgia, cold coffee in a can, and Aquarius, a

tonic drink, as well as Classic Coke and Hi-C.
Taylor and Lyon (1995) think that the mass producer has reached the
limits of the old paradigm. With rising costs, price competition, shifting
demographics, and changing eating habits, mass production for homoge-
neous markets is no longer enough for companies to survive. They pro-
posed a new paradigm: mass customization. Variety and customization
through flexibility and quick responsiveness are the focus of mass custo-
mization. The goal is to develop, produce, market, and deliver affordable
goods and services with enough variety and customization that nearly
everyone finds exactly what he or she wants. They believe mass custo-
mization becomes a self-reinforcing cycle: “meeting customer demands
leads to higher profits, which in turn facilitates the organization’s ability to
increase its customization capability, which in turn stimulates further mar-
ket fragmentation” (p. 65).
Proponents of both sides agreed that some adaptation is necessary for
MNCs to operate successfully in global markets. While the end products
are different, they share some common characteristics that may well be
derived from technology and globalization. The real issues being debated
are at what level is standardization appropriate and at what level is adapta-
tion appropriate, and for which products.

STANDARDIZATION AND ADAPTATION

In 1988, Don I. Smith postulated that nenu and service are solely
determined by customers rather than industry, This was then a bold state-
ment but one that logically derived from the inherent service orientation of
hospitality operators. An examination of the asm eevee ot the fast- food
industry will illustrate this point. The domestic U.S. fast-food marketis
saturated. Chain restaurants are gaining market share through tien
evolution, marketing and promotion programs, nontraditional venues, and
expansion in internat onal markets. Two major driving forces of the suc-
cess of the fast-food industry’s global expansion are customer acceptance
and frequency of use. A total of twenty fast-food chains operate interna-
tionally{ McDonald’ss has operations in 106 countries which made it the
biggest international fast-food chain as of 1998.
Standardization is still a characteristic of McDonald’s operations. How-
ever, its menu has been adapted to local tastes and preferences, For exam-
ple, in France the menu is written in three to five different languages,
usually French, German, Italian, Belgian, and Japanese. Some menu items
offered in France are not available in the United States, including bagels,
 Cross-Cultural Issues in Service Quality JAS

seasoned red potato wedges with dipping sauce, cakes and pastries,
scones, and croissants. The drinks offered are also different. Dr. Pepper
and root beer are not offered while Orangina, an orange-flavored carbon-
ated drink, beer, and wine are available for purchase. For the breakfast
menu, McDonald’s in France also offers a fruit salad and scones.
McMarins, which are the fish version of chicken McNuggets, are not
available in the United States. Salad and dessert choices are also varied.
The chef salad is served with salmon and shrimp while eclairs, brownies,
muffins, and beignets are on the dessert menu. Mass customization has
incorporated local preferences and tastes into the process as this example
demonstrates.

PREVIOUS RESEARCH IN SERVICE QUALITY

IN THE CROSS-CULTURAL CONTEXT

Studies and Their Findings

Consumer preferences cannot.be fully understood without considering

their cultural context. The effects of culture on consumer behavior are
both powerful and far-reaching, and this importance is sometimes difficult
to grasp or appreciate (Solomon, 1999). For example, most people would
think couples on their honeymoon would like as much privacy as possible.
In Japan, however, many newlyweds spend their honeymoon by joining
package tour groups| A consumer’s culture determines the priorities and |
meanings J or she attaches to different services and products) It also
mandateS the success or failure of specific products and services. A prod-
uct or service that provides the desired benefits to consumers in a particu-
lar culture at any point in time has a better chance of gaining acceptance in
that market. For example, KFC first entered the Asian market in 1973 and»
failed because of lack of understanding of the market and proper control.
In 1985, KFC did its homework and reentered the Asian market after
careful market research and product modification. ry
To further understand the influence of culiure on tourists’ behavior, it is
important to examinethe research findings. on hospitality and tourism_“ Ly
service. quality eexpectations and perceptions in the cross-cultural context.
Most of the service quality research reported in the hospitality and tourism ge
literature has been conducted in North America. Very little has been re-
ported on service quality expectations or perception of consumers from 7 )
other countries. With increasing globalization of the hospitality and tour-
ism industry, it is important that differences in multicultural market needs, ve Ge
C ~
274 ~~ Service Quality Management in Hospitality, Tourism, and Leisure

and the servicing of these needs, be understood (Patton, Stevens, and

Knutson, 1994).
Luk and colleagues (1993) investigated international tourists’ expecta-
tions of the quality of organized tour service and the influences of cultural
values on quality expectations. They surveyed 311 tourists who were in
Hong Kong as participants in organized tours. The sample included 201
tourists from Europe and America and 110 from the Asia-Pacific region.
The Rokeach Value Survey (RVS) (Rokeach, 1973) was used to measure
cultural values. The SERVQUAL instrument (Parasuraman, Berry, and
Zeithaml, 1988) was used to measure the tourists’ expectations of service
on five service quality dimensions: assurance, reliability, empathy, tangi-
bility, and responsiveness. Because of the generic nature of SERVQUAL,
this study modified the SERVQUAL scale to include the distinctive com-
ponents of organized tour service. Comparison of service quality expecta-
tions of organized tour service between tourists from the two regions
found that the tourists from the Asia-Pacific region had much higher
expectations on all of the five dimensions. Reliability was shown to be the
most important factor to Asia-Pacific tourists, followed by assurance,
while Europe-America tourists rated reliability and assurance as of equal
importance. Empathy and responsiveness were considered less important
by both groups. The study findings also showed that cultural values signif-
icantly affected service quality expectations of tourists. Differences in
quality expectations of organized tour service were shown to be specifical-
ly influenced by tourists’ value for sociability. Sociability refers to the
values of being polite, helpful, obedient, forgiving, loving, honest, and
clean. It was suggested that because of these differences in expectations,
tourism marketers need to reexamine the basic assumptions that have
traditionally dominated the design and the service of organized tours.
Mok and Armstrong (1998) examined hotel service quality expectations
of international tourists using cross-cultural samples. Data were collected
from hotel guests from different cultures in three Hong Kong hotels, which
belonged to the same hotel segment—midprice. The expectation scale of
the SERVQUAL instrument (Parasuraman, Berry, and Zeithaml, 1988) was
adopted to measure service quality expectations. The wording of the scale
was modified for the hotel setting. Three hundred and twenty-five hotel
guests completed usable questionnaires. The sample was segmented by
country of origin, which included Australia, Japan, Taiwan, the United
Kingdom, and the United States. The findings of the study indicate that
tourists from these five countries have different expectations in two of the
five service quality dimensions, namely, tangibles and empathy. The Japa-
nese guests have the lowest scores on all of the five dimensions. The
 Cross-Cultural Issues in Service Quality ale

researchers suggested that these findings could be attributed to the travel-

related behavior of Japanese tourists. Japanese tourists could be described
as “always traveling in groups,” 99 66 “not adventurous,” “big spenders,” and
“love to shop.” Their tour itineraries are usually packed with sightseeing
and shopping activities prearranged by tour operators, which allow very
little free time for individual activities. Japanese tourists spend relatively little
time in hotels where they stay (except, of course, for rest); and rarely will
you find them using the health club or other facilities in the hotels. Their
preferred activities and travel behavior could partly explain their relatively
lower expectations for hotel service quality.
It was also reported that both Japanese and Taiwanese tourists have
significantly lower expectations for the empathy dimension than their
Western counterparts. The empathy dimension refers to providing caring,
individual attention to customers. In general, Asian tourists prefer to travel
in groups by joining package tours. Accommodation is included in these
package tours and usually members check in and out as a group rather than
individually. Meals, sightseeing, and entertainment are also included in the
package. All these activities are prearranged by tour guides. This type of
arrangement might leave much less room for tourists to seek individual
attention from hotel employees. Language barriers might be another rea-
son for lower expectations for individual attention, since most hotel per-
sonnel in Hong Kong speak English and Cantonese. Japanese is not com-
monly spoken, and Taiwanese speak the Mandarin dialect.
Another study conducted by DeFranco and Mok (1998) measured tour-
ists’ expectations for hotel service quality in the cross-cultural context. A
total of 594 North American tourists (200 from the United States and 394
from Mexico) participated in their survey. The LODGSERV instrument
(Knutson et al., 1991) was used to measure hotel service expectations.
Results from their study show that while tourist expectations for hotel
service quality were high in general, Mexican tourists had signiticantly
higher expectations on all service quality dimensions than the U.S. tour-
ists. In search of an explanation for such differences, the researchers
considered the hospitable characteristics of Mexicans. They might put
more emphasis on whether hotel employees are caring, empathetic, and
responsive. Besides, traveling and staying in a hotel may be a bigger event
for Mexicans than tor people from the United States who are known to be
frequent travelers; the Mexicans, therefore, may have higher expectations.
Lim and Ha (1997) investigated how foreign tourists evaluate service
quality of the restaurants in the Etaewon special tourist district of Seoul.
They hypothesized that there were significant differences among different
nationalities in terms of their perceptions of restaurant service factors.
276 ~—Service Quality Management in Hospitality, Tourism, and Leisure

Data were collected using Cadotte and Turgeon’s (1988) twenty-six food
service attributes. Questionnaires were administered to 180 Japanese,
American, and Asian tourists. The results of their study showed significant
perception differences among tourists from different nationalities in the
following food service attributes: attitude of employees, employees’ com-
munication ability in a foreign language, availability of food on menu,
convenience of location, and quality of advertising. In general, American
tourists evaluated service quality more positively than Asian tourists did
for most items. The researchers attributed these findings to the fact that
most restaurants in Etaewon district are more Western culture oriented.
They suggested that restaurant owners and employees should widen their
service focus to better meet the needs of the Japanese and other Asian
tourists who constitute nearly 70 percent of foreign tourists in the district.

MAJOR METHODOLOGICAL ISSUES

A full discussion of the methodological issues in cross-cultural studies

is beyond the scope of this chapter. Only two major issues, sample compa-
rability and transferability of research instrument, are discussed.
One of the major difficulties in doing cross-cultural research is drawing
samples that are comparable. Totally matched samples are hard to obtain in
reality. Demographic variables such as income and education are often not
comparable due to different standards of living and systems. Some re-
searchers emphasize the need to match demographic variables in cross-
cultural studies so that the only variable that is different is culture (Hofstede,
1980). However, the usefulness of demographics in segmentation and pre-
dicting consumer behavior is often questioned (Pizam and Calantone, 1987;
Snepenger and Milner, 1990; Oh and Jeong, 1996; McCleary, Choi, and
Weaver, 1998) because a significant relationship between demographic
variables in segmentation and consumer behavior has not been consistently
demonstrated in studies. Hofstede (1980) differentiated between the ap-
proaches used for comparison of total cultures and those used for subcul-
tures. For comparing total cultures, a very broad sample may be appropriate
so that differences due to subcultures are eliminated. If the purpose is to
compare subcultures, narrow similar samples should be drawn from differ-
ent countries. For example, compare Japanese leisure travelers with Austra-
lian leisure travelers. For those readers who wish to understand more about
the issue of cross-cultural comparability, please refer to Berry’s (1969)
work.
The other major concern is the transferability of research instruments.
The goals of methodology in cross-cultural research are not different from
 Cross-Cultural Issues in Service Quality 217

those of other research: reliability, validity, representativeness, generaliz-

ability, and so forth. A major problem is that researchers use instruments
(without modification) in one culture that were designed, pretested, re-
vised, and validated in another culture. The problem arises when the
researcher tries to reach conclusions about a culture by scoring according
to the norms derived in another culture. Brislin (1976) emphasized the
importance of the emic-etic distinction as it applies to cross-cultural
psychology. The distinction relates to two goals of cross-cultural research:

1. The first goal is to document valid principles that describe behavior

in any one culture under study, taking into account what the people
themselves value as meaningful and important. This is an emic anal-
ysis, which refers to meanings that hold only in one culture.
2. The second goal is to make generalizations across cultures that take
into account all human behavior. This is an etic analysis.

For example, in a study aiming to internationalize a survey instrument,

LODGSERY, that has been validated with American consumers (Patton,
Stevens, and Knutson, 1994), an emic item was found in the translation
process that is unique to American-English culture, the phrase “no red
tape.” The American-English version of LODGSERV was translated into
Japanese, Chinese, Australian and British English. After several rounds of
translation and back translation, the phase was reworded to read “should
eliminate unnecessary bureaucracy.”

CONCLUSION

The need for greater cross-cultural understanding of consumer behavior

has been proclaimed by both managers and researchers as essential for
improving international marketing efforts (Wilkie, 1990; McCort and Mal-
hotra, 1993). Nevertheless, limited cross-cultural research within service
marketing on the effect of culture on consumers exists (Mok and Arm-
strong, 1998). Research findings reported previously indicate that tourists
from different cultural backgrounds have different expectations and per-
ceptions of service quality. To exceed customers’ expectations, we need to
understand these differences. For instance, Japanese travelers’ overwhelming
preference for traveling in groups by joining package tours might require
special arrangements by hotels. Instead of catering to individual needs and
requests, special arrangements for groups might be very much appre-
ciated. Assigning rooms to tour group members on the same floor or
278 — Service Quality Management in Hospitality, Tourism, and Leisure

preparing one or two special breakfast items just for the tour group are
examples of how hotels can exceed customers’ expectations.
In general, the lower the customer expectations, the higher the possibil-
ity that service quality will be better perceived and vice versa. Therefore,
understanding the service preferences and differences in expectations of
tourists from different cultural backgrounds can help a business provide
the type of services they appreciate so that efforts and resources are not
wasted. The strategy of “all things for all people” is outdated. To exempli-
fy how one international chain caters to the needs of their guests from
Japan, Four Seasons Hotels offer green tea service when Japanese guests
arrive; serve authentic Japanese breakfast; provide Japanese slippers, bath-
robes, and towels; and train their employees on Japanese protocol. Ex-
ported tourism services cater to a highly heterogeneous international mar-
ket, with marketing activities that not only cross geographical boundaries
but also transcend cultural differences. Meaningful market segmentation is
a prerequisite for the formulation of an effective marketing strategy. Tour-
ists’ service quality expectations and preferences are important factors,
which should be taken into consideration in the segmentation of the inter-
national market.
Despite the complexity and difficulties involved, it is hoped that more
researchers will embark on cross-cultural research in the area of service
quality management to enhance the understanding of international cus-
tomers.

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 Chapter 16

Technology and Its Impact

on Service Quality
Simon Milne

Gt 20m
Jovo Ateljevic

INTRODUCTION
gD
There can be no doubt that en ae (IT) is changing the
business of tourism) Studies of the significant intrafirm impacts of new
technologies (Haywood, 1990; Peacock, 1995; Mutch, 1998) have been
paralleled by broader analyses of IT’s ability to alter distribution networks
and industry structures (Bennett and Radburn, 1991; Reinders and Baker,
1998). Some commentators have even suggested tha{IT changes the very
rules of tourism> with industry leaders adopting a new managerial and
strategic “best practice® (Poon, 1993, pp. 12-13). (et =r a1 OS USE
though many benefits are attributed to IT, it is not always clear wheth-
er the “hype” matches reality. In this chapter we explore the degree to which
IT is influencing one area of particular importance to tourism, hospitality,
‘and leisure managers—service quality (SQ) (Coyne, 1993; Church and
Lincoln, 1998). In an increasingly competitive environment it is SQ that
provides a differentiation strategy for firms and a means to enhance custom-
er relations and long-term profitability (Gamble and Jones, 1991; Johns,
1996, p. 254; Lewis and Gabrielsen, 1998, p. 64). Indeed, a 1995 survey of
US. lodging managers’ perceptions of the utility of technology use on their
properties shows that the main perceived advantage is an improvement in
guest satisfaction (Van Hoof et al., 1995). Over 80 percent of the 550 survey
respondents felt that technology enhanced customer satisfaction. The figure
is lower in companies with fewer than 100 rooms (70.2 percent) and higher
in properties of more than 300 rooms.
Although it is clear that new technologies can influence SQ in profound
ways, we still know relatively little about their specific impacts on mea-
281
282. Service Quality Management in Hospitality, Tourism, and Leisure

sures of service quality, and even less about their impact on a key link in
the service quality equation—the worker. This chapter examines some of
the research that has been conducted on the relationships between SQ and
the introduction of new technologies in the lodging industry. We focus on
some of the key issues that face managers as they attempt to maximize the
benefits of IT for service enhancement.
The chapter begins with an outline of some of the key information
technologies being adopted by accommodation establishments. We then
review the literature dealing with the impacts of technology use on SQ in
the lodging industry. We draw on a range of empirical research that has
been conducted around the world. Our review reveals that SQ and IT use
are not always positively correlated. In particular, we argue that it is
dangerous to ignore the human resource dimensions of IT introduction.
We also stress that not all firms are equally able to turn IT to their advan-
tage. Although our focus is on the lodging industry, the themes raised have
a broad applicability for managers in all areas of tourism, leisure, and
hospitality.

LODGING AND INFORMATION TECHNOLOGY:

AN OVERVIEW

The lodging industry is constantly adopting new information technolo-

gies, and the pace of adoption is quickening. Facing demanding clients,
and under pressure from increasingly intense global competition, compa-
nies are turning to technology as a means to improve SQ, increase produc-.
tivity, and lower labor costs (Olsen, Crawford-Welch, and Tse, 1991;
Go and Pine, 1995).
Rather than conduct an exhaustive review of existing and emerging IT
applications, we choose to focus on the dominant forms of technology.
Our review is conducted at three scales: the room level, hotelwide, and
beyond the hotel (including the growth of global communication net-
works).

The Room

Hotel guests have become ever more demanding of in-room technolo-

gy. This is particularly true for the business traveler whose laptop comput-
er and hotel room often serve as a virtual office. Guests are used to
multichannel and increasingly interactive TV in their own homes and
therefore demand more from guest room televisions (Wolff, 1998b).
 Technology and Its Impact on Service Quality 283

Technology-driven entertainment options for both business- and lei-

sure-oriented guests will become increasingly linked to. Internet,access.
Net access and intelligent rooms will become a part of guest service at
-service establishments in the not-too-distant future! For example, in
March 1998, one of the first video (and information) on demand systems
for the residential and hospitality markets was introduced at the Residence
on Georgia condominium and hotel complex in Vancouver, British Colum-
bia. The system lets the 500 residents and guests simultaneously access the
Internet, video on demand, cable television, music channels, and security
cameras (Raman and Cleary, 1998). :
Personal data cards will also become more common. These will incor-
porate guests’ Internet bookmarks and other customized information. Ac-
tive badges will give guests automatic access to their rooms and ensure
that room lighting, heating, and other functions instantly meet the guest’s
needs (Grimes, 1998). These cards may also be used to generate informa-
tion that may enable market segmentation to be conducted. Current in-
room checkout and ordering systems will continue to improve in sophis-
tication and user friendliness, to the point where front desk checkout
becomes the exception rather than the norm.

The Hotel

The most common technologies used for hotel management purposes

are telephones, faxes, and desktop or portable computers. User-friendly
‘software enables managers and owners to master basic tasks without spe-
cific knowledge of accounting or computer techniques (see Milne and
PohImann, 1998; Mutch, 1998).
In larger hotels, peripherals are usually connected to a central unit. The
more advanced property management systems (PMS) provide seamless,
connections between different elements of a hotel’s operations and create
links to external communication networks (Chervenak, 1993; Wolff,
1998 a). A typical PMS will cover several core elements of a hotel’s opera-
tions:

¢ Front-office functions: Reservation, registration, checkout; individu-

al, delegate, walk-in, and “house” account folios are all monitored
and updated automatically
* Guest history; Tracks guest history status, records special requests,
VIP services, and handles room preferences with an automatic link
to reservations and sales modules
284 ~— Service Quality Management in Hospitality, Tourism, and Leisure

¢ Software integration: Upon checkout and after the night audit, guest
information automatically updates the guest history, company histo-
ry, city ledger, travel agent, and other modules
¢ Housekeeping: Tracks and maintains the physical status of rooms;
energy management systems have also been built in current PMS
° Yield management: Provides immediate feedback on average daily
rate and is integrated into the front-office system
° Back-office accounting: Front-office revenue update, back-office
revenue journals; accounts payable is integrated with the general
ledger

Local area networks (LAN) and intranets can enable greater levels of
information flow within the firm. Databases on worker performance can
be designed to provide management with greater knowledge about worker
performance and how to allocate labor most effectively. Group decision
support systems (GDSS) may also play a role in reducing the need for
management meetings and in speeding up the decision-making process.
With GDSS software and a LAN, real-time discussions and debates can be
held from individual offices and computer screens. Idea generation and
brainstorming are argued by some to be particularly well suited to this
approach (see Davin, 1997).

The Hotel and Beyond—Networking

Of the various tourism-related IT developments that have captured the

imagination of researchers during the past two decades, computer reserva-
tion systems (CRS) have undoubtedly held center stage (Milne and Gill,
1998). These powerful travel distribution technologies are seen by many
commentators to offer significant opportunities for companies to improve
customer service and increase the efficiency and flexibility of product
delivery (Go and Williams, 1993; Wolff, 1998a).
The costs inherent in the development of a hotel CRS are high, espe-
cially for independent operators. For this reason many enterprises do not
develop their own systems, preferring instead to align themselves with a
hotel consortium or hotel group representative. In 1996 the Utell consor-
tium, the world’s largest, brought together over 6,500 subscribing hotels
from 160 countries, and processed over 2.8 million reservations a year
through its forty-four international offices (Milne and Pohlmann, 1998).
It is important to link hotel PMS/CRS with airline global distribution
systems (GDS) such as Sabre (Wolff, 1998a). Without such a link proper-
ties become largely invisible to the bulk of potential customers. For the
vast majority of properties this connection is made possible via “switches”
 Technology and Its Impact on Service Quality 285

such as THISCO—a unified interface linking about twenty major hotel

chain CRSs in the United States to airline GDSs (McGuffie, 1994).
The Internet is playing a growing role in the tourism industry as a sales
and marketing force, and lodging is no exception to the trend. The Ameri-
can Hotel and Motel Association estimates that by 2001, e-commerce in
the lodging arena will be worth $2.9 billion within the United States alone
(Gatty and Blalock, 1998). Another technology just beginning to be imple-
mented by larger enterprises is the data warehouse. Although similar in
some respects to a corporate intranet system, a data warehouse utilizes
complex software programs to read and interpret the data in other systems,
while intranet information is largely built and maintained manually.
Data warehouse information is therefore “online, real-time,” providing
management with the most precise analytical and decision-support tools.
The type of information a data warehouse provides is frequently market-
ing-related, with a focus on guest information. Other data applications
might include accounting, employee records, vendor information, or any
other information category of interest or useful to multiple departments or
locations (Berry and Parasuraman, 1997; The Economist, 1999).

Technology Diffusion

It is important to note that small tourism firms are generally less likely
to implement IT than their larger counterparts (Van Hoof et al., 1995;
Mutch, 1998; Buhalis, 1999). The consensus that emerges from the re-
search is that small-accommodation managers often feel that computeriza-
tion is relatively unimportant to their competitiveness and that they would
rather focus attention on human contact dimensions (Milne and Pohlmann,
1998; Ateljevic et al., 1999). The managers of some smaller operations
also complain that it is difficult to find affordable customized software to
meet small-hotel needs. On other occasions, managers are simply “techno-
phobes” (Milne and Gill, 1998).
It is interesting to note that larger, full-service hotels have a much
bigger presence on the Internet than their small, limited-service counter-
parts. Studies in the United States show that managers in larger properties
(greater than 300 rooms) attach significantly more importance to the Inter-
net as a tool to make reservations and analyze the competition than their
smaller counterparts. Similarly, they rated its importance as a means to
communicate with colleagues, vendors, and corporate offices significantly
higher (Van Hoof and Verbeeten, 1998).
286 Service Quality Management in Hospitality, Tourism, and Leisure

TECHNOLOGY AND SERVICE QUALITY

The outcome of service encounters is determined by the interactions

between providers and customers, and is influenced by employee and
customer characteristics, organizational culture, systems and procedures,
enterprise structure, and technology (Solomon et al., 1985; Grove and
Fisk, 1991). Lehtinen and Lehtinen (1991) view SQ as a function of
interactive processes. This in turn requires organizations to manage and
control their service encounters via technical control systems and proce-
dures, human resource management, and the development of service-
oriented culture. We now focus on the impacts of IT on two key areas that
shape SQ in the lodging industry—sales and marketing, and labor perfor-
mance/management.

Marketing and Sales

The use of the Internet for marketing and sales purposes represents an
effective and flexible way to bypass traditional distribution channels, In-
deed, a recent survey of Internet use by hotels showed that two of the most
important benefits identified were the exposure it can generate for the
property, and the benefits it creates for marketing and advertising (Van
Hoof and Verbeeten, 1998). Managers also value its communication capa-
bilities and are relatively enthusiastic about the Internet as a means to
check out the competition and to make reservations.
Of course, the most interactive Web site in the world will not create
guest satisfaction unless information provision is prompt and the site is
well maintained. It is certainly not uncommon to find Web sites and e-mail
connections being established and then forgotten. In this case, the outcome
will be visitor frustration (especially given the supposed promise of imme-
diate response) and a negative impact on SQ. Clearly, the true potential of
the Internet as a marketing tool has yet to be unleashed (Ghosh, 1998).
Small hotels around the world face very real problems in gaining access
to the global travel distribution system. Large-scale computer reservation
systems are usually prohibitively expensive and have some difficulty ca-
tering to nonstandardized types of tourist product. At the same time, small-
scale traditional marketing approaches such as brochures have only limit-
ed effectiveness. As a result of these difficulties increasing numbers of
small hotels are turning to the Internet as a marketing tool. The Internet
has several key elements that make it an appealing alternative to tradition-
al marketing approaches:
 Technology and Its Impact on Service Quality 287

¢ Web sites are flexible; the images and text they present can be
changed easily and presented cost effectively.
Web sites have the potential to reflect community/business desires
and information more effectively than many traditional marketing
approaches.
The number of Internet users is growing rapidly and the demograph-
ic profile of users (wealthy, well educated) is of interest to communi-
ties and businesses that wish to attract visitors at the higher end of
the tourist spectrum.

However, a number of factors may also reduce the effectiveness of the

Internet as a marketing and business development tool:

¢ Web sites are often poorly designed and slow to download.

¢ Many small hotel sites tend to be “virtual brochures” rather than ac-
tual booking tools. If the Internet is to be used to its full potential
then it is essential that it facilitate bookings via e-mail or other ap-
proaches.
¢ Many small hotels fail to present the unique aspects of their enter-
prise and the place within which it is situated. The key issue here is
to stand out from the crowd.

As hardware and software costs fall, more companies are gathering and
manipulating visitor data (Bruns, 1998; The Economist, 1999). Innovative
establishments are gathering as much information as possible firsthand
from customers through frequent stay programs, smart cards, and sophisti-
cated surveying methods. A key competitive advantage lies in effectively
tracking customer needs and purchases, talking to the customer, and then
tailoring services for the visitor (Albrecht and Bradford, 1990). In simple
terms this involves setting up an ongoing learning relationship with core
customers (see Berry and Parasuraman, 1997).
The development of customer databases need not be the preserve of
larger hotel chains. It is now not uncommon to find boutique hotels that
use a database to keep tabs on the needs and desires of important clients.
The trick is to identify valuable customers and to concentrate on them.
This information can be used to customize traditional marketing tools such
as brochures.
In one example of this approach, a small boutique bed-and-breakfast
based in New Zealand’s capital city, Wellington, has successtully devel-
oped a detailed database that covers key return clients. The company
focuses almost entirely on woman business travelers and has a database
which provides information on the types of newspapers and refreshments
288 Service Quality Management in Hospitality, Tourism, and Leisure

that guests like and the sort of breakfasts they normally order. It also
provides information on the special family needs of the travelers (for
example, the special needs of children who may be accompanying their
mothers. The company now has the ability to customize mailings to key
clients, letting them know of special offers or simply wishing them a
happy birthday.

Labor

The more that technology becomes a standard part of delivering

services, the more important personal interactions are in satisfying
customers and in differentiating competitors. (Schlesinger and Hes-
kett, 199 p274)

In his detailed survey of labor use in hotels, Wood (1992, pp. 133-137)
points to two common misconceptions about the impact of technology on
labor. The first is that technology can play only a limited role in improving
labor productivity and reducing costs. The second is that where technolo-
gy is introduced, it is inevitably associated with processes of de-skilling.
The labor management issues associated with IT introduction are com-
plex, and it is important that management be aware of both the possible
negative and positive impacts on staff. Technology cannot substitute for
decisive strategies or for efficient employees; rather, it can complement
them. Although technology can aid in furthering efficiency and quality, the
true creators of SQ are happy, satisfied, and loyal employees (Peacock,
1995; Strebel, 1996; Lewis and Gabrielsen, 1998).
The lodging industry labor force has two broad categories: frontline
workers are involved in direct contact with the consumer (waiters, front
office staff), while background workers tend to perform behind-the-scenes
tasks (making beds, preparing food, accounting, etc.) (Drucker, 1991;
Yavas, Yasin, and Wafa, 1995). Service quality and performance in back-
ground jobs are largely measured in terms of quantity (how many bed-
rooms can be tidied during a shift) while quality is largely a matter of
meeting externally imposed criteria. On the other hand, the performance
of a frontline worker embodies both quantity and quality: with behavior
toward customers often viewed as being just as important as the physical
labor undertaken in performing the task (Drucker, 1991).
The links between empowerment, job satisfaction, and SQ have been
analyzed by several researchers (Wood, 1992; Lewis and Gabrielsen,
1998). Motivated and satisfied employees will have positive impacts on
external customer satistaction, and also lead to increased employee reten-
tion rates. Lower levels of employee turnover will lead to a more experi-
 Technology and Its Impact on Service Quality 289

enced workforce and higher levels of consumer satisfaction. On the other

hand, disgruntled or disempowered employees will clearly have a negative
impact on overall SQ.
Technology can, for example, allow frontline workers to reduce time
spent on certain functions, enabling them to focus more on the people-
oriented activities that are so critical to service enterprise success (Quinn
and Paquette, 1990, p. 70; Schlesinger and Heskett, 1991). Front office
work has also become more comfortable and varied—stripped of many
repetitive and often irksome tasks such as entering data in books and
issuing bills manually. The introduction of sophisticated yield manage-
ment systems gives greater responsibility for price bargaining to reserva-
tion/front office staff. In effect, they become sales managers rather than
simply order takers (ILO, 1997, p. 54; Rodger and Vicar, 1996). On the
other hand, night audits are now done effortlessly by PMS-based technolo-
gy—as a result, many of the functions of the traditional night auditor have
been made redundant and jobs have been lost or de-skilled.
Although the improvement of SQ is clearly a key reason for the
introduction of IT, the decision is also often driven by a desire to improve
productivity and reduce costs. In contrast to the U.S. case, a recent survey
of Swiss-German hotels shows that the driving force behind technology
implementation is “rationalization opportunities” (see ILO, 1997, p. 40).
Even within the United States it is arguable that a sizable percentage of the
reduction in the number of workers per 100 available rooms has been due
to the introduction of IT. In their U.S. study of technology and SQ, Reid
and Sandler (1992) note that the most popular forms of technology usually
tend to produce the greatest labor-cost savings. In Europe, where comput-
erization is less advanced than in the United States, there has been a less
marked reduction in workers per room (Van Hoot, Verbeeten, and Com-
Denk, 1996; 1LO, 1997, p57):
Research into the impacts of technology on labor requirements is limit-
ed, but recent work conducted in Montreal and elsewhere reveals that job
loss due to technological innovation is more likely to occur in larger
properties. Indeed, 75 percent of nearly seventy Montreal large hotel man-
agers interviewed in 1992 and 1995 felt that technology had been respon-
sible for some job losses in recent times. On the other hand, 90 percent of
small operators felt that technology had had no discernable impact on
labor needs (Milne and Pohlmann, 1998; Milne and Gill, 1998).
IT is also playing a role in changing the way in which SQ is monitored.
Some companies focus on management by objective approaches—with an
emphasis on setting targets to be met during the year. In other cases hotels
may take the approach of viewing the monitoring of SQ as everyone’s job.
290 Service Quality Management in Hospitality, Tourism, and Leisure

In larger hotels a transparent computer database can register customer

preferences and complaints and quantify staff activities so that labor use
can be more effectively matched to demand. This in turn leads to tighter
scheduling of work, with employees having fewer busy periods inter-
spersed with lulls.
New forms of evaluation also lead to new reward structures. For exam-
ple, the French group Novotel recently introduced a competency-based
reward system for all levels of staff. The key competencies of employees
are evaluated continuously. As employees improve, they receive a centrally
set percentage increase in pay. This approach replaces annual performance
evaluations—improving objectivity and transparency. As IT aids in the
breakdown of traditional barriers between different aspects of accom-
modation operations, availability to work in teams, attitude, and personal
behavior become more important. Several large chains, including Accor,
are highlighting the added social values of staff as part of a major endeav-
or to improve service levels and worker retention.
A key question here is to what extent workers will feel that technologi-
cal changes have affected their jobs and workplace environment—either
positively or negatively (Peacock, 1995; Ledgerwood, Crotts, and Everett,
1998). Some commentators argue that the introduction of IT is often
linked with a feeling of weakening the employee’s position (ILO, 1997,
p. 56). To minimize the negative impacts of IT introduction, workers and,
where applicable, unions should be consulted before new technologies are
introduced (Strebel, 1996, p. 87). Negotiations and discussions should
cover the following items (ILO, 1997, p. 73):

¢ Workers’ participation in the identification and introduction of new

technologies
¢ Training on new equipment and related safety/health issues
¢ Job security, work organization, and working time
* Modalities for the participation of unions concerning new manage-
ment methods
* Details (where applicable) on expected productivity and profitability
increases

Internal marketing of enterprise SQ (and IT) philosophy to employees

is vital (Scheuing, 1996), while training is a key feature in the successful
implementation of new technologies (Larkin and Larkin, 1996; Lashley,
1998). IT offers a range of opportunities to improve the training and
communications environment within a hotel. New interfaces, simulation
of real-life situations, and access to networked training software all offer
management the chance to maximize effective interaction with employees.
 Technology and Its Impact on Service Quality 291

Unfortunately, we have some distance to go before emerging IT, such as

the Internet, can really lead to improved training procedures and commu-
nication within the firm. A recent study of perceptions of the value of
Internet use in the U.S. lodging industry reveals, for example, that manag-
ers have a very low opinion of the Internet as a training tool and do not
view its internal communications capabilities much more highly (Van
Hoof and Verbeeten, 1998). Managers in larger, full-service hotels rated
the importance of the Internet as a potential training tool more highly than
their counterparts in smaller, limited-service properties.
It must also be remembered that the introduction of IT influences man-
agement as well as staff. A manager in an IT-rich work environment needs
knowledge of computer systems to select the required equipment and use
it effectively; ability to make rapid judgments based on the information
provided by systems, and a high degree of interpersonal skills.
The use of technology may save some time by reducing more mundane
tasks and opening up opportunities for managers to have more involve-
ment with guests and staff. However, not all IT introductions will bring
positive outcomes for management. Davin (1997) has shown that the
benefits of GDSS may, for example, not be as apparent as some commen-
tators point out. Her research reveals that GDSS does not offer benefits in
decision time or participation quantity, with face-to-face meetings being
more efficient. Donaghy and McMahon-Beattie (1998) show that the
introduction of yield management (with related IT) can lead to a marked
change in the time and importance that managers attach to their job com-
ponents and roles. Although yield management was found to facilitate and
enhance teamwork, its use did tend to overshadow employee recruitment
and development within the establishments studied.

CONCLUSION

The lodging industry will be called upon to spend increasing sums of

money on IT. This investment will be crucial to improve efficiency and
reduce costs, and, perhaps most important, to facilitate the provision and
monitoring of SQ.
IT has great potential to improve the quality of service provided by
lodging establishments. The integration of computing and telecommunica-
tions will create global information networks based most probably on the
Internet. As the Internet evolves into a single, powerful “information
highway” supported by diverse technology applications, there will be
many opportunities for more flexible and efficient sales processes, data
warehousing, customized service provision, and labor monitoring. At the
292 ~~ Service Quality Management in Hospitality, Tourism, and Leisure

same time, the hospitality industry will benefit from the continued devel-
opment of intranet/PMS software and technologies.
Hotels vary widely in their ability and willingness to adopt IT (Van
Hoof et al., 1995; Van Hoof, Verbeeten, and Combrink, 1996; Milne and
Pohlmann, 1998). Some organizations are on the cutting edge, while
others embrace advances long after they have been adopted by competi-
tors (Cline, 1997). Technology influences SQ in small independent hotels
as well as large chain operations, in both the developed and the developing
world. The real differences lie in the cost and degree of sophistication of
the equipment installed—and the infrastructural base to support it.
This chapter has shown that the task of improving service in organiza-
tions is complex. It involves knowing what to do on multiple fronts. The
implementation of technology may very well assist in improving SQ, but
research shows quite clearly that technology and information alone do not
confer competitive advantage (Cline, 1997). If managers want to convert
IT investments into real service quality improvements they must under-
stand its links to, and impacts on, workers, managers, and suppliers.
A central issue is the fact that not all of the impacts of IT on service
quality can be expectedto be positive.In particular, managers need to
work closely with workers to maximize the benefits of IT introduction
(Strebel, 1996, p. 87). If managers are willing to grapple with the com-
plexities of IT adoption, and are prepared to manage its myriad impacts
effectively, then there appears to be little doubt that technology will facili-
tate ongoing improvements in service quality in the lodging industry and
throughout the tourism, hospitality, and leisure arena.

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 Chapter 17

Delivering on Service:
What Are the Questions and Challenges
for Tomorrow’s “Virtual University”?
Richard Teare

CHANGE FACTORS:
HOW CAN INFORMATION NEEDS
AND EXTERNAL CHANGE BE ASSESSED?

Teare and Bowen (1997) examine the managerial activity of learning

about events and trends in the organization’s environment by profiling the
top thirty hospitality industry issues as reflected by U.K.-based and North
American hospitality management journals.
Figure 17.1 portrays a thematic picture of the clusters of research-based
articles that reflect patterns in management, service improvement, and
business performance issues. These themes sit at the center of organiza-
tional purpose and form a logical starting position for framing a learning
agenda.
In seminar discussions with a group of twenty-five experienced U.K.
hotel general managers during 1997, the Worldwide Hospitality and Tour-
ism Trends (WHATT online) research team sought to draw together the
participants’ own top ten priority ranking. Industry priorities reflected a
very real sense of concern about both customer and employee retention
and development as well as the means of enabling these goals to be
achieved. A summary of the key issues and priorities is included here.

People

The problem of retaining high-caliber employees in the United King-

dom is related to the industry’s inability to attract the right people (manag-
By
298 — Service Quality Management in Hospitality, Tourism, and Leisure

FIGURE 17.1. Patterns in Management, Service Improvement, and Business

Performance

Some key issues:

* Sustainable Strategic
development 1 information 1 = Constant change] + Performance
; ' systems f ' improvement
" Business ' ' SWerkebaced '
‘ i)

Hera ses c>, Radical | _ learning 1 Return on

HHpLOvernet 1 business 1 ' Investment
* Personal and | structures! = Sharper
organizational ‘and (customer) focus Competitive
development approaches positioning

* Service im-
provement and
competitiveness

Change factors => Enablers => (Impacts > Outcomes

ers claimed that entrants have unrealistic expectations about hours of work
and wages). The highest level of turnover occurs if expectations are not
met during the first few weeks of employment.
High turnover is also attributed to inadequate training and lack of on-
going development for employees—a need exists for initial management
training and continuous, self-directed learning for all. The “Investors in
People” scheme is seen as a positive step (especially for managing frontline
employees), but other areas were viewed as equally important—e.g., leader-
ship training, “adaptive (adaptable) manager” techniques, information man-
agement skills, and responding effectively to challenging financial targets
(among many others). Maximizing effectiveness, both individually and in
team performance, is seen as the prime means of delivering better re-
sults—tinancial, customers, employees, and systems.

Business

Participants were eager to see industrywide improvements in strategic

systems, especially relating to information and yield performance. In turn,
it was thought that this would help industry to focus more attention on
organizational indicators that are harder to monitor and measure but are
potentially important measures of success (e.g., effectiveness of commu-
nications, morale, “best practice breakthroughs” or “best in class” innova-
tions).
 Delivering on Service 299

Branding and brand awareness coupled with operational consistency

and perceptions of quality were seen as key issues then and in the future,
especially in relation to the U.K. trend toward the “outsourcing” of hotel
restaurants (using external providers).

The Top Priorities

Overall, the discussion groups felt that the most pressing priorities for
the U.K. hotel sector were: (a) customer retention and being customer
focused, (b) motivating employees with a vision of the long term, and
(c) personal development so that employees are equipped with the skills
necessary to make things happen. Other key benefits will include im-
proved retention rates among the pool of “good” managers and operatives,
which is linked to development initiatives to lead, motivate, inspire, recog-
nize, and reward the workforce.

ENABLERS:
HOW ARE STRATEGY, STRUCTURE,
AND PERFORMANCE RELATED?

In reviewing the interrelationships between the external environment,

strategy, structure, and performance, it is possible to discover a number of
challenges tor business learning (Teare, Costa, and Eccles, 1998). In sum-
mary form, they are described as follows.

Strategy and External Analysis

¢ How might the organization assign environmental scanning tasks to

detect and interpret the likely impact of external events?
¢ Who should be involved in “inside out” environmental scanning (re-
viewing the competitive environment)? Who will identity intorma-
tion needs and sources and assign scanning tasks? How will infor-
mation be stored, processed, and disseminated so that it provides
timely, well-focused, and meaningful inputs to organizational learn-
ing and updating?

Strategy and Structure

¢ How should the organization seek to develop and sustain forms of

competitive advantage now and in the future?
300. Service Quality Management in Hospitality, Tourism, and Leisure

¢ Should unit managers adopt an enhanced role in the ongoing task of

maintaining alignment between the strategic variables of structure,
strategy, and environment? What additional contributions could they
make to organizational efforts to improve processes, embed a cus-
tomer-focused culture, and maintain “open” internal communication
networks?
How might workplace learning programs be used to optimize: flexi-
bility (e.g., employee participation in idea generation and decision
making); adaptability (e.g., responding quickly to changing market
conditions); empowerment (e.g., giving employees the scope to be
creative and to experiment); innovation (e.g., allowing employees to
reinvent processes and procedures); and team support (encouraging,
sharing, and providing mutual support)?

Strategy and Performance

¢ To what extent should financial, functional, asset, and investment

performance influence the organization’s strategic direction?

Although these challenges have the appearance of strategy-level com-

plexity, they provide meaningful categories for organizational learning
that can be subdivided and “cascaded” (disseminated) as project assign-
ments to an operational level.

IMPACTS: HOW CAN LEARNING BE LINKED

TO INTERPRETING AND RESPONDING
TO CUSTOMER NEEDS?

If managers have discerned the main business issues, then how should
they interpret and respond to their customers? How can they close the loop
on managerial learning by relating industry issues and imperatives to
customers and customer-led processes for delivering and assuring custom-
er service? These challenges give rise to a number of questions for work-
place learning initiatives related to customers (Teare, 1998).

Understanding Customers

¢ Which services might be standardized and which should be custom-

ized (or personalized)? What are the design and delivery implica-
tions of these approaches for hospitality services?
 Delivering on Service 301

¢ In what circumstances are customers likely to attribute more credi-

bility to internal information than external information sources (and
vice versa)?
How does prior experience and familiarity with the product affect
the customer’s preference structure (preferences) and the formation
of expectations, assessment criteria, and reference point experiences
as key performance indicators?
To what extent does role specialization in family purchase situations
influence choice? What are the implications for the marketing of
hospitality services?
¢ When are customers likely to use a decision rule (predetermined
choice criteria)? How does this approach help to confirm the ap-
propriateness of the decision?
How does a customer’s personal rating system operate and vary be-
tween different customer groups and across different hospitality set-
tings?
In what circumstances might customers be willing to compensate for
a feeling of dissatistaction with hospitality services? How might a
feeling of dissatisfaction affect the approach to a repurchase situa-
tion?
What practical steps might the organization take to minimize the po-
tential impact of dissonance?
How might the experiences of customers and employees be used to
monitor and improve customer satisfaction levels?

Designing and Delivering Services

e How should the organization integrate or at least coordinate its cus-

tomer service, quality assurance, and marketing effort throughout
the value chain?
¢ How might the organization refocus its internal service culture so
that it is customer led? What practical steps does this involve and
how should they be reinforced?
¢ To what extent could the organization benefit from service branding?
¢ How might the organization interrelate its efforts to maintain cus-
tomer loyalty and product consistency?
¢ How might the organization localize its operations to adapt and re-
spond to culturally and geographically different customer needs and
expectations?
302 Service Quality Management in Hospitality, Tourism, and Leisure

Assuring Total Quality Services

¢ How might customer-perceived quality measures be used to identify

and rectify quality gaps in the organization?
¢ What practical steps does the organization need to take in order to
design and implement its own program for service quality bench-
marking? To what extent might this activity drive organizational
learning, both internally and in partnership with other service pro-
viders?
¢ How might the organization ensure that its quality and performance
improvement efforts are customer focused?

The answers to what seem to be technical questions can in the main be

addressed by attaining and sustaining a service leadership position. What-
ever else this might mean, the overriding task is to learn from mistakes and
to find ways of embedding a habit of active learning. To underline this, it is
helpful to note one of the main findings of an Anglo-U.S. benchmark
comparison of service practice and performance report on the competitive-
ness of U.K. service. The report observes that training alone is insuffi-
cient—a concerted effort is needed to retain employees and develop their
potential to its fullest extent (London Business School, 1996).
If those who deliver service are themselves capturing the best ways of
improving it (given that those in the front line are truly the eyes and ears of
service leadership) then work-based learning might well be the key that
unlocks the full potential for learning from customers.

FROM IMPACTS TO OUTCOMES:

THE VIRTUAL UNIVERSITY—
TOMORROW’S LEARNING ORGANIZATION ?

Although a great deal was written during the 1990s about the learning
organization, there is no magic formula for embedding better ways of
working and, in turn, learning from work. At its simplest level, individuals
have a capacity to learn and to share their experiences with others. If team
or shared learning can be nurtured with imagination and courageous lead-
ership, it can, it seems, be cross-pollinated. But what are the conse-
quences? If the organization is too rigid or hierarchical, then the good
ideas will live with the enthusiasts and perish with the diehards who refuse
to renew their learning regularly. How can managers embed a culture of
learning and, most significantly, how can they make it “catch fire” so that
 Delivering on Service 303

it becomes infectious and quickens the pace and increases the competence
of the people who make an organization what it is?

Step 1: How Can Organizations Support

Managerial Learning in the Workplace?

A thematic review of four areas (managerial learning and work; coach-

ing, mentoring, and team development; competencies, managerial learning
and the curriculum; and work-based action learning) (Teare, 1997a) re-
veals a number of key questions for embedding managerial learning:

¢ How are the participants’ roles defined (scope, tasks, responsibili-

ties, relationships); how do they currently enact their roles (gather
information, take decisions and action, contribute to key activities
such as planning, organizing, staffing, leading, and controlling); and
what improvements would participants like to achieve for them-
selves, their work group and the wider organization?
What are the external variables affecting managerial work (e.g., re-
lated to sources of discontinuity, uncertainty, ambiguity, complexity)
and how might the program enable parallel, ongoing learning to
occur so that managerial skills and knowledge keep pace?
How can the program encourage participants to enhance their capacity
to learn from work by using a variety of ways of analyzing experiences
(e.g., intuitive, incidental, retrospective, prospective approaches) so that
learning becomes self-sustaining?
What forms of learner support should be used (e.g., coaching, men-
toring, team development) so as to help people to learn, widen, and
strengthen organizational participation, and embed a culture of learn-
ing?
Who will coach and mentor and what are the resource and develop-
ment implications?
What are the core and specialist levels of competency, and how will
these be built into the program and measured for attainment? How
will these considerations affect the forms of learning and the meth-
ods of delivery?
How will the efforts of participants be recognized—formally (e.g.,
accredited learning and the completion of an academic award), intor-
mally (e.g., support, encouragement, study time), and professionally
(e.g., enhanced career prospects)?
How will program outcomes add value for participants and the orga-
nization as a whole? How can the program encourage others to take
304 Service Quality Management in Hospitality, Tourism, and Leisure

responsibility for recognizing and responding to their own develop-

ment needs?
¢ How can the benefits of workplace learning be readily identified and
sold to participants, their superiors, and subordinates? How can the
reactions of skeptics and opponents be anticipated and effectively
dealt with?
* How might return on investment (time, resources, individual and or-
ganizational effort) be measured and monitored?

Step 2: What Is Needed to Enable Organizational Learning?

ia thematic review of the literature relating to organizational vision,

leadership and motivation, and organizational change and performance
(Teare, 1997b) reveals that for both formal, programmed learning and
informal self-reflection, it is helpful to consider the following:

How can the organization equip itself to detect and respond appro-
priately to market trends? What processes and procedures are needed
to isolate any given pattern of external events, devise suitable re-
sponses, and ensure that the implications for realigning resources
and competencies are addressed? How should the organization as-
similate the new knowledge that it acquires from this continuous
cycle of adjustment and realignment?
Should the organization make a deliberate attempt to connect its
analysis of the internal and external change factors to cultural
change? If so, how might the concept of an evolutionary organiza-
tion (EVO) be launched? What are the organization’s ideals or vision
for an EVO? How can organizational members be encouraged to
think and act responsively and without unnecessary constraint so
that natural curiosity drives workplace learning?
What kind of organizational structure is appropriate now and in the
future? To what extent could and should the organization move to-
ward facilitated self-organized learning networks so that budgets, re-
sources, targets, and goals for learning are released to groups of em-
ployees, each managing enterprise activities? How will the differing
roles of knowledge workers and generalists be reconciled if this ap-
proach is adopted?
How should the organization adjust its information flows to take advan-
tage of real-time communications (virtual office, global networking via
Internet and intranet) for transacting its business? How could commu-
nications technologies be used to create a searchable knowledge net-
work within the organization to support the learning effort?
 Delivering on Service 305

¢ What action is needed to ensure that learning from experience is cap-

tured and that opportunities for organizational learning from self-
reflection (individual and shared learning) and from studying other
organizations are acted upon?
How might learning partnerships with external catalysts be used to
organize joint discovery and research projects, workshop and bench-
marking activities, in-company tailored partnership programs, and
organizational network activity assessments?
What performance measures does the organization currently use
most often, and why?
Should “soft” employee-related performance measures (e.g., com-
mitment, employee satisfaction, self-development, morale) be given
more emphasis? How might the full range of organizational perfor-
mance measures be related to improvements arising trom the organi-
zational learning effort?

Step 3: How Can Managers Combine

Managerial and Organizational Learning?

To “ground” some of the key learning organization concepts, several

themes were explored concurrently during an Internet conference with
managers from airport owner and operator BAA plc (Teare and Dealtry,
1998). The aim was to identify ways of creating a supportive learning
environment and to relate this to an agenda for organizational learning and
renewal. A summary of the main recommendations is given in Table 17.1.
Having created the information and communications infrastructure,
what should the syllabus be if we are to support learning organization
environments? Peters (1996) proposes a syllabus-driven approach for the
aspiring learning organization, interlinking six areas that can be addressed
by designing interventions for individuals, groups, and organizational sys-
tems:

¢ Learning about the participant’s own job in the organization and how
to do it better
¢ Learning how to create alignment between culture and strategy in the
organization so that initiatives fit the context from inception to im-
plementation
¢ Learning about the future by exploring the value of techniques for
scenario planning and anticipating the likely implications tor person-
al and organizational competency development
¢ Learning about the operating environment and the supply chain—
essentially, systems thinking
306 ~~ Service Quality Management in Hospitality, Tourism, and Leisure

¢ Learning how to challenge existing schools of thinking and avoid

myopia so that personal and organizational mind-sets are open to
change and to new ideas
¢ Developing an organizational memory for the purpose of capturing,
storing, and retrieving knowledge and expertise

TABLE 17.1. The Learning Organization: Some Recommendations

Themes Recommendations

Modeling e Use internal communications to explain and encourage personal

the learning learning and to promote its application to ongoing business im-
process in provement. “Sell the benefits” as often and in as many different ways as
organizations possible, throughout the organization.

e Aimtorecruit and retain people with different cognitive styles and skills
to avoid “organizational cloning.”

e Aim to use taught and discovery methods, and where appropriate,

a combination of both.

e Encourage creative thinking and its application to opportunities for

learning.

Organizational * Seek to enact change through individuals rather than overlaying an

readiness agenda for organizational change on the workforce as a whole. Use
workplace learning founded on core values of trust, honesty, and
integrity to encourage personal development.

¢ Establish one or more independent action research sets to examine

future scenarios and implications. Draw the set membership from
people with different learning styles, skills, and from a variety of
organizational functions.

Teamwork ¢ Communicate the benefits of teamwork as widely as possible and link

and learning individual inputs to team outputs via the appraisal process. Use a
learning journal to enable team members to reflect on the
effectiveness of their own inputs. Establish targets for team
participation (ongoing and different teams) and encourage shared
learning.

Networked e Seek to embed a culture of learning by devoting time and resources to

learning developing a wider and deeper understanding of the concept of
empowerment. Link this to on-the-job training and development,
explain and communicate the benefits at all levels of the organization,
and emphasize the benefits to individuals as well as the organization.
 Delivering on Service 307

The syllabus is for the organization as a whole and its members, who
should participate according to their personal learning agenda and the organi-
zational imperative. However, the sequence of its implementation is of some
significance. Peters (1996) suggests that the learner’s own job should be the
starting point, as improvements here will yield organizational benefits from
the outset. After this, longer-term debates should be established about future
competencies and how to network learning throughout the organization’s
supply chain. The framework also provides a basis for monitoring the kind of
organizational adjustments needed to maintain creativity and productivity and
for routinizing improvements by creating and drawing upon a knowledge
base that constitutes the organization’s bank of knowledge capital.
The issues raised in steps | through 3 can be described as the ingredi-
ents of a learning organization, and they are depicted in Figure 17.2. But
how can managers make this happen and integrate learning and work?

FIGURE 17.2. Systemized Organizational Learning

organizational
objectives

diagnose learning needs and

opportunities

learning organization
support:

individual learning
coaching, mentoring,
self-managed learning

personal development
learning resources

team learning
action learning, facilitator
development, learning sets

Progress review—
return on investment:
personal, professional, organizational

Source: Adapted from Buckler (1996), p. 37.

308 — Service Quality Management in Hospitality, Tourism, and Leisure

Step 4: How Will Workplace Learning Evolve

in the Information Age?
Work-based, career-long learning is increasingly seen as the route to
personal effectiveness, and the new communications technologies are rev-
olutionizing the delivery of learning experiences. Access to global do-
mains of knowledge is now a reality, and the Internet brings the genera-
tors, brokers, and users of knowledge closer together than ever before. The
Internet provides the means of interacting with communities of interest
wherever they exist and of accessing, searching, and using learning re-
sources linked to the Current Awareness database and other databases of
articles and archive material. This capability offers the means of enabling
a new form of online business learning and providing real-time links
between the knowledge stakeholders—authors, editors, publishers, read-
ers, learners, tutors, industry sponsors, and educationalists.
The virtual university represents the most advanced form, so far, of this
emergent network of learning. Its design and implementation should nec-
essarily reflect the challenges of working smarter and team-based learn-
ing. The final section profiles the pioneering design work undertaken
during 1998-1999 by several large corporations, working with Internation-
al Management Centres Multinational.

THE CORPORATE VIRTUAL UNIVERSITY:

A GLOBAL DESIGN FOR LOCALIZED,
ACCREDITED LEARNING

The sample client organization has an unrivaled reputation as a service

leader and for the breadth and depth of its training and development
activity around the world. Yet, in seeking transformational change in train-
ing and learning, the client concluded that it would need to embrace the
Internet and the processes of action learning, a combination that has been
pioneered by International Management Centres (IMC), the world’s first
global business school dedicated to work-based action learning. The ob-
stacles to building an integrated framework for just-in-time learning seem
complicated enough without overlaying best-fit resource configurations
for both micro and macro variables, some of which are cited later as
challenges for the Corporate Virtual University (CVU) design team. But
these are the operational realities that present a daunting challenge. Our
aim was to design a robust, low-cost learning network for “high flyers”
(people who are performing above expectations for their job role) at every
organizational level, regardless of their prior academic background, that is
capable of supporting a large organization working in every world region.
 Delivering on Service 309

International Challenges for the Client CVU

Micro level Macro level Best configurations?

Owner involvement Six-continent scope Communications
Legal variance Multiple languages Multiple brands
Cross-cultural differences Business in 52 currencies | Systems integration
Franchise integration Political impacts to balance Technical expertise
Casino operations High-risk environments Policy adaptation

The client set itself the task of constructing a framework for accelerated,
active learning so that it could build the competence levels of its managers
as quickly and cost effectively as possible.

Human Resource Challenges

¢ Generate and retain competence

¢ Leverage technology (fully utilize the potential
of its technological investment)
¢ Develop future leadership performance capabilities
¢ Create rapid development routes for managers
¢ Accelerate paths for competency

Put simply, the goals are to work smarter and add value to the business
by helping employees (called associates) to learn at work.

Human Resource Goals

e Maintain a high-performance work environment

¢ Demonstrate added-value services
¢ See that continuous learning is the key to being a world-class orga-
nization
¢ Continually raise the “performance bar” (performance potential of
the worktorce) and accelerate development
¢ Build expertise in the knowledge of the business

To do this, it is necessary to speculate on the challenges that future service

leadership organizations will need to embrace. The priorities are as follows:

¢ Learning at work, with minimal “time out” (time away from the work-
place), using Internet resourcing to deliver “learnerware” (learning
resources) to the work environment and engaging high-potential em-
310 Service Quality Management in Hospitality, Tourism, and Leisure

ployees on the projects that frame the organization’s own learning

agenda.
True partnerships between industry and education, with localized uni-
versity support around the world—based on the client organization’s
learning agenda rather than a more traditional “static” learning agenda.
¢ A seamless (close) connection between accredited training and learn-
ing for career-long, just-in-time career development in the workplace.
This should recognize the importance of learning outcomes (and the
evidence of achievement) as the means of aligning training and other
forms of accredited workplace learning via a process of “credit map-
ping” training and learning outcomes.
Parity of status for nontraditional forms of learning achievement, using
practitioner-oriented mechanisms for accrediting prior experiential
learning so that no associate is discouraged or impeded from learning at
work and gaining formal recognition for the outcomes of their study.
¢ Accelerated learning that is no longer bounded by traditional aca-
demic structures, yet is recognized as equivalent to conventional de-
gree award frameworks—at all levels.

The Process of Action Learning

If this process was to work, it would need to be a well-resourced, highly

supportive learning process with opportunities for associates to customize
their own learning and to share their learning with the “learning sets” both
face-to-face and via the Internet (see Figure 17.3).

FIGURE 17.3. The Process of Action Learning

Tutors

Learning Set
Organization:

Mentors =. Learner Courseware /

Work teams (Associate) Virtual library
Line managers
: 16-20 Associates
Project clients ;
Own learning
Shared learning
 Delivering on Service Sf]

In promoting this radical agenda for learning at work to busy, success-

ful associates, it is essential to set out the benefits and opportunities for
personal development and for the company as a whole. In practical terms,
this means stating how and by whom the learning process is directed.

How Is the Learning Process Organized?

It uses computers and the Internet to deliver a total learning infra-

structure at low cost, nationally and internationally.
A single Internet access point in any given work location provides
complete access to all learning resources. A hands-on induction to
Internet-resourced learning is provided so that those with no prior
experience of computers or the Internet are not disadvantaged. This
Internet resourcing is easy to access, navigate, and print at the point
of use—with no time wasted and minimum fuss. The resources are
constantly updated and used internationally to ensure that they are
relevant to industry needs.
Associates can access their “learnerware” at work so that they can
relate it to the world of work—with minimal travel costs or time out
for formal classroom study.
CVU courses integrate with all existing in-company training courses
—they do not replace them.

By Whom Is the Learning Process Directed?

The learning process is aligned with the change agenda and is built
to the organization’s specification.
The learning process is professionally accredited and university vali-
dated: a consortium of universities around the world support the pro-
cess—but do not control it. CVU’s business objectives and the needs
of learner-associates come first and drive the curriculum.
The learning process is designed for busy managers—its purpose is
to help them to function more effectively in their current jobs and to
prepare them for the next job and/or promotion—not to create aca-
demically oriented managers for the sake of it.
The learning process delivers return on investment as associates
work on the company’s key issues and in this sense, the value added
is trackable and quantifiable.
Evidence shows that action learning actually increases commitment
(and employee retention). Associates can see the relevance and value
of what they are doing by working on the projects that really matter
to them and to the company.
312 ~~ Service Quality Management in Hospitality, Tourism, and Leisure

How Can Managers Make It Happen?

The international scale and scope of the client CVU required the maxi-
mum possible engagement of the senior training team in the phased de-
sign, internalization, implementation, and evaluation of the “first wave” of
action learning sets. To embed the Internet-based quality assurance proto-
cols and procedures used for managing all aspects of the courses offered at
certificate, diploma, bachelor, and master’s degree levels, a prototyping
process was established. In essence, this meant that all trainer team mem-
bers who were engaged in the architecture/design process undertook pro-
jects aligned with the CVU’s training and learning strategy. The total
project sought to explore, test, review, and refine all aspects of the CVU
model prior to its launch. The model was designed to include:

¢ Internet resourcing (such as forum design, courseware design, Internet

communications and learning, use of online publishing resources,
learning sets, and learning dynamics for workplace learning—nation-
ally and/or globally).
Accreditation of prior experiential learning (APEL). This would en-
able the senior training team to mentor and undertake or supervise
the learning portfolio assessments of its associates. The purpose is to
recognize workplace learning achievement as a basis for entering
CVU courses as a “proxy” for possessing conventional qualifica-
tions.
Aspects of credit mapping. This enables the senior training team to
“credit rate” the organization’s existing training resources by map-
ping the learning outcomes against IMC’s accredited and validated
courses. Where outcomes are equivalent, academic credit can be giv-
en and the length and content of CVU courses can be customized to
reflect this. In effect, this provides an integrated approach to training
and accredited learning, by creating a career-long framework for
“just-in-time” personal and professional development. It also means
that the CVU team learns how to build in learning outcomes to
achieve the maximum possible quantity of academic credit, when
designing future training materials and courses.
A fully customized and prototyped course for frontline, operational
staff—using the full extent of IMC’s courseware with individual or-
ganization contextualization.
The transfer of expertise in tutoring; inducting tutors (who are mem-
bers of both the CVU and IMC’s global faculty); running Internet fo-
rums as meeting places for virtual learning; managing all aspects of
dynamic quality assurance (ISO9000 certified); and equipping the
 Delivering on Service ell by,

team to run their own evaluative research programs for training and
learning.
¢ The transfer of expertise in capturing the learning outcomes of pro-
jects and formalizing this as internal systems, procedures, and rou-
tines so as to build on and fully utilize the intellectual capital of the
organization as a whole.
In essence, these components are reflected in four strands of concurrent
activity over a two- to three-year period of design, prototyping, imple-
mentation, evaluation, and incremental improvement (see Figure 17.4).
Beyond the initial design phase, the CVU trainer team is organized to
make rapid progress in three main areas of course-related activity, de-
scribed in the following sections.

Pilot Course Delivery Teams

A CVU trainer team responsible for organizing the support functions

for the pilot courses (each with sixteen course members or associates per
learning set) exists in every CVU world location. Additionally, each asso-
ciate has his or her own mentor and a “client” for the main dissertation
project and/or other assignments as appropriate. The main challenge here
is to “cascade” the early successes of the initial U.K. prototype course and
to build the CVU’s mentor network so that every single learner has a
helper close at hand.

FIGURE 17.4. Designing the Corporate Virtual University

Prototyping and internalizing

(course-based)

Strategic
Corporate partners and
Corporate Virtual
Interface for regional
University
cross- university
with IMC
divisional alliances
learning

Accreditation of prior
experiential learning and
training credit mapping
314 ~~ Service Quality Management in Hospitality, Tourism, and Leisure

The key hands-on experiences for these teams are as follows:

¢ The course start-up process (when individual and team learning

mechanisms are established)
¢ Taking action to ensure the “organizational fit” of the course, linked
to the associates’ own work
* Project assignment specification and marking (all based on real
workplace challenges)
¢ Maintaining momentum in course set and subset working (face-to-
face and Internet subset interactions) as well as organizing and facili-
tating both academic and company-specific inputs
* Operating the program management functions—including registry
and quality assurance

Partnership

The main role of the partnership trainer team is to internalize the IMC
partnership framework so that the CVU could run its own accredited and
validated courses. This framework should necessarily be built around the
client’s ways of working, and so the team must interpret the CVU design
framework from their own experiences and knowledge of “how things are
done.” The team reports on all aspects of organizing and customizing
CVU Internet-resourced workplace learning. The infrastructure includes
the following:

¢ All courseware, and ISO9000-accredited quality assurance with full

hands-on guides relating to all aspects of course design and delivery
* All aspects of accreditation (Distance Education Training Council,
U.S., and the British Accreditation Council, U.K.) and university part-
ner support around the world for joint awards with IMC and the CVU
¢ All aspects of “virtual tutoring” and Internet-resourced learning in-
cluding the “virtual library” (access to some 1,500 journals online)
and other resources designed to provide learner support at work
¢ Mechanisms used to capture knowledge and track return on invest-
ment in workplace learning—these are key deliverables for CVU
implementation and for associate retention and development

Credit Mapping

The credit mapping team is learning how to map the outcomes of

internal training courses against IMC’s practitioner/academic awards so
 Delivering on Service B15

that a seamless pathway between training and learning can be created. The
hands-on work includes:

° Prototype mapping of existing company training courses (if the aca-

demic value is known, then associates can progress directly from in-
ternal training courses to certificate or bachelor’s-level awards and
obtain a “fast track” qualification at work).
¢ APEL portfolio building. The credit mapping team is also learning
how to coach and counsel potential associates with nonstandard or
no qualifications. The aim is to help applicants complete the APEL
workbook so that it can be successfully verified and entitle them to
CVU awards at the appropriate level.

Have We Addressed the Challenges

for Industry-Led Learning?

The development of the corporate university concept was a feature of

the 1990s—there are many examples in the United States and elsewhere,
and this phenomenon quite probably reflects a sense of frustration with the
perceived narrowness of conventional management education in a busi-
ness world that is obliged to work at a much faster pace (Teare, Davies,
and Sandelands, 1998). The Corporate Virtual University represents a
significant step forward in that it quite deliberately leverages the best that
the world of education has to offer to apply it to learning at work. In effect,
it is both a corporate university and a real university, with some ten
university alliance partners supporting the CVU’s agenda in their respec-
tive world regions and languages. The role played by IMC is key—it
provides all the resourcing, quality assurance, and accreditation mecha-
nisms and experience to enable learning to flourish in a sophisticated
business context and on an international and multicultural basis. IMC also
acts as a broker with the CVU of university relationships for joint awards
and seeks to ensure that academic inputs are both meaningful and relevant.
This is a challenging and difficult task, but the goal is worthwhile as it
aligns university support with the company’s global enterprise. In this
way, the global network, orchestrated by the CVU and IMC, adds value to
a global firm’s enterprise rather than seeking to control the learning pro-
cess and the curriculum as in the past. At last it is possible to say that we
have applied a commercial mind-set to business learning that achieves
global scope in resourcing terms and local attention to the issues and
challenges that matter to individual learners, their business units and, in
virtual university terms, to the company’s business as a whole.
316 Service Quality Management in Hospitality, Tourism, and Leisure

In summary, the CVU concept reflects a radical industry-based re-

sponse to the issues and challenges of retaining service leadership. It has
blazed the trail by:

¢ Promoting the workplace as a valid site of learning and giving prom-

inence to continuous, lifelong learning with a truly open system of
access and entry.
Designing an organizationwide framework of action learning with
industry-themed resourcing and accredited awards, supported by an
Internet-rich learning environment with a single access point for all
associates anywhere in the world.
Aligning an array of university alliance partners with IMC and the
CVU so that they deliver a meaningful support service with a curric-
ulum that is rigorous, vibrant, and dynamic, within a framework de-
signed to the client’s specifications.
Enabling the CVU’s own trainer teams to run the courses with exter-
nal tutors and examiners to “triangulate” a multidimensional view of
quality assurance, characterized by fitness for purpose and evi-
denced by the attainment of learning outcomes that are derived from
implementable solutions to real work projects with tangible benefits
for the learner, his or her work teams, and for the client organization.

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Teare, R. (1997a). “Supporting managerial learning in the workplace.” Inter-
national Journal of Contemporary Hospitality Management, 9(7): 304-314.
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Teare, R. (1998). “Interpreting and responding to customer needs.” The Journal of
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 Delivering on Service Sly,

Teare, R., Davies, D., and Sandelands, E. (1998). The Virtual University: An
Action Paradigm and Process for Workplace Learning. London and New
orks Cassellipas lis:
Teare, R. and Dealtry, R. (1998). “Building and sustaining a learning organiza-
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WHATT. Worldwide Hospitality and Tourism Trends Forum <http://www.mcb.
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 Index

Page numbers followed by the letter “e” indicate examples; those followed by the
letter “f” indicate figures; and those followed by the letter “t” indicate tables.

Accommodation. See also Hotels Asia, 269, 271

in Scotland, 133f Kentucky Fried Chicken (KFC)
worldwide oversupply of, 169 and, 273
Advertising, 53, 264. See also Assets and competitive advantage,
Information 113
and gap between image and reality AT&T (American Telephone and
Telegraph), 144
in customer perception, 36
Australian Quality Council, 85
misleading, 43
Automobile Association (AA), U.K.,
Affinity diagramming, 152 ISZ
Airlines, 17
critical incidents and, 150
BAA (British Airports Authority),
global distribution systems (GDS),
305
284-285 Bach, S.A., 171
ownership of services and, 20-21 Baker, D.A., 55, 69
perishability of services, 20 Bank, J., 168
personality of service providers Behavior, 27
and, 27 of the consumer, 167
price and, 111 culture and, 273
sources of benefits to the Japanese, 277
customer, 21 of employees
training and, 19 customer interface and, 90
Albrecht, K., 102 expectancy theory and, 228
service failure and, 197
Amenities
standards and, 34
business travelers and, 57
of tourists, 34
competitive advantage and, 121
Belfry Hotel (U.K.), 88
relationship marketing and, 259 Benchmarking, 72-73
American Hotel and Motel Benchmarking Exchange, 73
Association, 285 Berry, L.L.
Andrus, D.M., 80 definition of quality and, 162
Arthur Andersen (consulting firm), quality service and, 101
156 relationship marketing and, 259

319
320 ~~Service Quality Management in Hospitality, Tourism, and Leisure

Berry, L.L. (continued) Citytravel service guarantee, 251

service reliability and, 240 Coca-Cola
SERVQUAL and, 54, 103, 181 in Asia, 271
zone of tolerance and, 204 syrup formula and, 112
Best Practice (U.K.), 135, 136e, Collins English Dictionary and
IsVemlsSsenis9e Thesaurus, 85
Best Value (U.K.), 130, 131t Comment cards, 64, 150
Best Western, 263 advantages of, 172t, 177, 180
THES, Id), Zl disadvantages of, 172t, 180
Bitner, M.J. factors of service evaluation and,
delivery of core service and, 205 75-76
physical stimuli and, 80 incentives to encourage customer
service environment and, 202 participation, 180
Blanchard, K.J., 229, 230-232 Communication. See also
Blueprinting, 73-74 Advertising; Information;
Booms, B.H., 205 Information technology
Boulding, W., 145-146 channel relationships and, 264-265
Bowen, D.E., 202 employees and, 257, 265
Bowen, J.T., 259 service breakdown and, 74-75
Bradley, G.L., 202 Community, 2
Brand loyalty, 167 Competitive advantage, 167
reasons for, 29
amenities and, 121
British Airports Authority (BAA),
assets and, 113
305
core competencies and, 113,
British Quality Foundation, 85
115-116
British Standards Institute (BSI),
design and, 113
1235167
location and, 113
Brown, S.W.
skill and, 112
customer perceptions, 211
Competitive environment, 114,
gap analysis, 101
Brymer, R.A., 201, 202
120-121
Complaint resolution, 74-75. See
Business travelers, 259
lodging amenities and, 57 also Service recovery
versus vacationers, 35 Compulsory competitive tendering
Butler, L., 245 (CCT) U.K. 126-127
Buzzell, R.D., 98, 100 Computers, 16. See also Information
technology; Technology
computer reservation systems
(CRS), 284-285, 286
Callan, V.J., 74, 211 Consumer. See also Customer;
Carlzon, J., 100, 256 Guests
Casinos, 79 brand loyalty, reasons for, 29
CCT (compulsory competitive direct marketing and, 40
tendering), U.K., 127-130 increasing sophistication of, 120
Chandrashekaran, M., 211 indirect marketing and, 41
Channel management, 261-263 information, 154-156
 Index Su

Consumer (continued) Corporate Virtual University

and inseparability of consumption (continued)
and production, 18, 28 priorities of, 309-310
perception of risk in buying trainer team, 312, 313
products versus services, 241 tutors, 310f, 312
privacy, 154-155 universities and, 314, 315, 316
as a product, 28 Corporations. See Multinational
product differentiation and, 28 corporations (MNCs)
protection, 43 Country Hospitality, 63
purchase of tourism services and, 23 Critical incident analysis, 149-150
risk in the purchase of tourism Crosby, P.B, 160, 162
services, 37-38 Cumberland Farms, 263
security, 154 Customer. See also Consumer;
service production and, 28-29 Dissatisfied customer; Guests
sources of benefits to in tourism amenities and, 121
services, 21
care of, 92. See also Customer
tourism services image and, 36 service
Consumption
and cheating on guarantees, 248
in the evaluation of tourism
databases and, 287
services, 22, 23
empathic communication with, 74
the hedonic paradigm, 80
exposure to physical products
inseparability from production in
versus services, 38
tourism services, 18
as the focal point of organizational
ownership of tourism services and,
effort, 185
20
gaining trust of, 241-242
service provider personality and, 27
heterogeneous versus
Core competencies, 113, 121
homogeneous mixture of, 69
critical elements of, 115
Disney and, 115-116 information technology and, 77-78
Corporate Virtual University (CVU). interaction with frontline
See also Organizational employees, 86
learning and loyalty of, 61
action learning and, 310f, 311 participation in service production,
credit mapping team, 314-315 28-29
design of, 313f physical stimuli and, 80
goals of, 309-310 quality service and, 98, 99-100
human resource challenges, 309 relationship with, 258-260
IMC and, 308, 312, 314, 315, 316 security of, 56
infrastructure of, 314 cleanliness and, 79
international challenges, 309 service performance and, 117
the Internet and, 311, 312, 314 service production and, 19
mentors, 310f service provider behavior and, 27
model of, 312-313 SERVQUAL and, 183-184
partnership trainer team, 314 as a source of service failure,
pilot teams, 313-314 199-200
322 ~~Service Quality Management in Hospitality, Tourism, and Leisure

Customer (continued) Customer feedback, 174f. See also

sources of benefits in tourism Quality service assessment
services, 21 and comment cards, 150
status and the service encounter, 88 and complaints and special
targeting, 265 requests, 150-151
understanding, 300-301 consumer privacy and, 154-155
Customer complaint, 61, 213. See and distance between customers
also Service breakdown/ and decision makers, 148
failure; Service recovery forms of, 147
in quality service measurement, frontline staff and, 173
150-151 guarantees and, 241, 251
Customer dissatisfaction. See management and, 76
Dissatisfied customer rising cost of, 154-156
Customer expectation, 145f-146f, synergism between channel
164, 264. See also Customer members and, 266
perception; Quality gaps the vigilante consumer and, 156
definition of quality and, 162 Customer interface, 86. See also
disconfirmation and, 180-181 Customer experience;
employees and, 69-70
Experience; Interaction
and Gronroos, 116
employee behavior and, 90
service gap model, 101
organizational culture and, 92-93
hotels and, 119
and service culture, elements of,
Japanese tourists and, 274-275
92-93
levels of, 51-52
Customer loyalty, 61
management and, 69-70
as a consequence of service
Mexican tourists and, 275
recovery, 214
price and, 203
quality control and shifting of, 117 relationship marketing and, 259
the quality gap and, 163f Customer perception, 145n, 153,
versus quality service, 278 165. See also Customer
real time and, 156-157 expectation; Quality gaps
SERVQUAL and international American tourists and, 276
tourists, 274 Asian tourists and, 276
Taiwanese tourists and, 275 combination of products and
technology and, 156-157 services and, 240
in the United Kingdom, CCT and, customer expectations and, 170
129f definition of quality and, 162
zone of tolerance, 204 disconfirmation and, 180-181
Customer experience, 69. See also employee-customer contact and,
Customer interface; 256
Experience; Interaction; environment and, 36
Service encounter experience and, 166
and disconfirmation in expectation and focus of management on
versus perception, 104 consumer behavior, 167
in theoretical model of quality and Gronroos service gap model,
service, 161f 101
 Index 323

Customer perception (continued) Customer surveys, 61. See also

influences on, 168 SERVQUAL
Japanese tourists and, 276 characteristics of, 153
market share and, 144 cross-cultural instrumentation,
personality and, 205 276-277
price and, 203 Customer value workshops, 152-153
Customer-Service Assessment Scale,
quality control and shifting of, 117
148
the quality gap and, 163f
CVU. See Corporate Virtual
quality service and, 67-68 University
service failure and, 211 Czepiel, J.A., 87
SERVQUAL and, 103, 145
technology and, 156
in the United Kingdom, CCT and,
Or
Customer relations, 136e Darby, M., 24
Customer retention, 259 Davis, M.A., 204
Customer satisfaction, 153, 213 Deming, Dr. W. Edwards, 98
antecedent to service quality, 166 Design, architectural, 113. See also
customer input and, 211 Environment
disconfirmation and, 104, 180 Destination management systems
empathy of service providers and, (DMS), 78-79
DeToro, I.J., 85
206-207
DINESERV, 55, 170, 183
employees and, 223, 227, 288
Direct marketing, 40
fairness judgments and, 206 Disconfirmation, 104, 172, 179f. See
and Gronroos service gap model, also Quality gaps;
101 SERVQUAL
guarantees and, 246 confirmation-disconfirmation
and guest expectations versus paradigm, 180
service performance, 53 direct, 181
internal service performance and, inferred, 181
169 SERVPERV and, 184
marketing and, 97 theory, 165
as a postpurchase construct, 104 Disney. See Walt Disney Company
Dissatisfied customer, 25
quality service and, 8, 98, 104,
following up on interviews with,
105f, 143, 160, 165-166
1S
relationship marketing and, 256
and Gronroos service gap model,
service climate and, 201 101
technology and, 281 guarantees and, 246, 247, 248-249
versus quality service, 154 recognition of, 208
Customer service, 44-45 and the 3/39 rule, 247
guest assistance and, 60 Distribution, manufacturing versus
objectives of, 56-57 tourism services, 18
324 Service Quality Management in Hospitality, Tourism, and Leisure

Distribution channels Employees (continued)

direct, 40-41 behavior of
indirect, 41-42 expectancy theory, 228
innovative, 263 service failure and, 197
relationships with, 261 standards and, 117
Distributive justice, 208 conviviality and procedure, 144
Dube, L., 214 customer expectations and, 69-70
customer Satisfaction and, 256
frontline
customer expectations and, 70
customer interaction and, 69
BarleyaPhC2 211
empowerment of, 63, 72, 235
Edvardsson, B., 169
management and, 172
Edwards Deming Prize, 167 technology and, 289
Emotion, 35 the service encounter and, 86
customer satisfaction and, 165 guarantees and, 243, 245, 246
disconfirmation and, 165 guest assurance and, 55
physical stimuli and, 80 hiring of, 63
promotion and, 42 information technology and,
Employee empowerment, 288 288-291
benefits of, 235 interviewing, focus on personality,
Blanchard’s three keys, 232, 232t 90-91
enabling versus inhibiting factors, involvement in strategic planning
233t processes, 257
guarantees and, 248, 249 managers and, 151, 224, 227, 234
implementation of, 234-235 monitoring of, 266
philosophy of, 223-224 morale, 245
Ritz-Carlton, 229-230 and feedback, 173
service recovery and, 258 and guarantees, 245
training and, 232, 234-235 and quality service, 98
Employee motivation, 223-224 personality of, 26
content theories of, 226-227 physical stimuli and, 80
definition of, 225 preemployment screening of, 71
empowerment and, 231-232 providing with information,
Herzberg’s motivator-hygiene 230-23152035, 297
theory factors, 227t quality service, 19, 144
Maslow’s hierarchy of needs, 226t measurement and, 172t, 173,
process theories of, 228 174f
theories of, 228-229 reduction of conflict and stress,
Employees. See also Service 257-258
providers; Staff retention, 288
as ambassadors, 88, 147 self-directing teams, 231
attitude and, 257 the self-monitoring scale, 71
autonomy of, 231, 234 the service encounter, minimizing
background versus frontline, 288 risk of, 89
 328

Employees (continued) Fairness judgments

SERVQUAL and, 68 attribution theory, 206-207
training of justice theory, 207-208
evangelical, 91 Farber-Canziani, B., 89
exploratory, 92 Fast-food industry, 118-119. See also
turnover and, 71 McDonald’s Corporation;
in the United Kingdom (hotels), Restaurants
297-299 driving forces of success, 272
Employment (U.K.), 125-126 guarantees and, 250
Encounter. See Experience international operations of, 272
EN9000, 123 as mass production systems, 271
English Tourist Board (ETB), 130 Federal Express (FedEx), 112
Entertainment, 283 Fesenmaier, D.R., 55, 69
Entwhistle, T.W., 91 Financial, the, 169
Environment, 67 service failure and, 203
cleanliness and, 79 Findley’s American Restaurant, 152
customer perception and, 36 Focus groups, 151-152
evaluation of tourism services and, disadvantages of, 172t, 175
Zo Food service, the, 261, 276. See also
management and, 70 Fast-food industry;
radical change and, 115 Restaurants
Ford, R.C., 171
service failure and, 202-203
Four Seasons Hotels, 278
in service improvement, 72
France
technology and, 114
Findus and, 271
Epistemology, 80
McDonald’s and, 272-273
Europe, 269
Franchising, 261
European Foundation of Quality
Management, 85
European Organization for Quality
Control, 99 Gale, P.T., 98, 100
European Quality Award, 167 Gambling, 79
Experience. See also Customer Gardner, M.P., 204
experience; Customer Genestre, A., 145
interface; Interaction; Service Getty, J.M., 183
encounter Global market, 269-270, 272
customer perception and, 164 Globalization, 120
environment and, 67 convergence hypothesis and,
hedonic response and, 80 270-271
physical stimuli and, 80 divergence hypothesis and,
psychological component of the 271-272
tourism product, 10 homogeneous products and, 271
as reason for risk in the purchase mass customization and, 272, 273
of services, 37 technology and, 270
as a source of benefits to the tourist behavior and, 273
customer, 21 Goeldner, C., 3
326 ~—Service Quality Management in Hospitality, Tourism, and Leisure

Goods. See also Physical goods Guarantees (continued)

tangible products as, 6 and the 3/39 rule, 247
versus services, 15 in the travel sector, 251
Government, 134 Guests. See also Consumer; Customer
in definition of tourism, 2 assessment of perceptions, 178f,
tourism in the United Kingdom 179f
and, 126-127 assistance to, 60
Gronroos, C. assurance to, 55
customer expectations and, 116 convenience to, 56
and quality service, 102 dissatisfied, 53-54
dimensions of, 25, 144-145 employees and, 62
service gaps and, 101 and expectations of, 51, 53, 59
technical quality and, 160 personalized service and, 119-120
Gross, B.L., 105 property management systems
GROVQUAL, 170 and, 283
Guarantees, 25, 212 reservations and, 59
benefits of, 242-243, 245, 251 Gummesson, E., 99
as blueprints for superior service,
242-245
competitors and, 249
Hagel HI, John, 155, 156
customer feedback and, 241, 251
Hampton Inn service guarantee,
customer satisfaction and, 246
250-251
development and implementation
Harrah’s Casinos, 77
of, 244
Hart, C.W.L
the dissatisfied customer and, 246,
guarantees and, 245
247, 248-429 service recovery and, 202
elements of, 245-246 Harvard Business Review, 155, 270
employees and, 246 Herbig, P., 145
empowerment of, 247, 248, 249 Llerzbereu hile. Oe ont
morale of, 245 Heskett, J.L.
exclusion of too many customers principles of traditional mass
and, 249 production and, 201
in the fast-food sector, 250 service recovery and, 202
focus of, 243 staff and, 102
groundwork for, 249 Hiring, 63, 72, 103
in the hotel sector, 250-251 Hirschman, E.C., 80
in Japan, 250 Hoffman, K.D., 198
marketing and operational Holbrook, M.B., 80
functions impact, 243f Holiday Inn, 54, 55, 60, 265
organizational performance expansion overseas, 269
variables and, 248 Hospitality
pitfalls of, 248-251 definition, 4
reduction of customer risk and, 241 perishability of, 20
the service encounter and, 242 tourist perception and, 10
service failure and, 241, 245 Hospitality Franchise Systems, 60
 Index 327

Hospitality industry, services, 185. Hotels (continued)

See also Competitive Mexican tourists and, 275
advantage; Employees; perishability of services, 20
Quality service; Service personal data cards, 283
breakdown; Service providers Scottish Tourist Board and, 137e
characteristics of, 224 SERVQUAL in Hong Kong and,
competitive advantage and, 167 274
confirmation-disconfirmation technology and, 282-285
paradigm, 180 and monitoring, 289-290
cross-cultural, 273 and quality service, 292
distribution channels and, 261 and “rationalization
employees and, 224-225 opportunities,” 289
personality, 26 training and, 19
face-to-face encounter and, 57 in the United Kingdom, 297-299
first impressions and, 59 worldwide oversupply of, 169
global, 239-240, 269-270 yield management, 284, 289
guarantees and, 242 Howard Johnson, 265
guest satisfaction and, 57 Human resources, 309-310. See also
information technology and, 292 Employees; Hiring
intermediaries and, 261 Eun peel)
market success and, 166 Hyatt Hotels
organizational factors in service COMES advantage and,
naa
packaging and programming, 45
ee
<
and, 118
ee
partnerships with competitors, 261 yes Regency ie Ei
patenting and, 25 Hyatt University, 112
quality measurement and, 159
quality service, 116, 120, 255
consistent delivery and, 167 Iaccoca, Lee, 102
quality testing, 22 Image, 36, 56, 163f
service provider personality and, 27 guarantees and, 250
service standards and, 52-53 IMC (International Management
technology and, 77 Centres), 308, 312, 314, 315,
Hotels, 185. See also Lodging 316
accounting, 284 In and Out Burger, 79
customer expectations and, 119 Indirect marketing, 41-42
employee feedback and, 173 Information, 58-59. See also
focus groups and, 175 Customer feedback
following up on customer surveys, for customers, 211
LS for employees, 230-231, 235, 257
the global market and, 270 Guestnet, 260
guarantees and, 250-251 Information technology (IT), 120.
housekeeping, 284 See also Internet
the Internet and, 283, 286, 291 accounting and, 284
LODGSERY and, 275 auditing and, 289
328 Service Quality Management in Hospitality, Tourism, and Leisure

Information technology (continued) Interaction (continued)

computer reservation systems in quality service evaluation, 24-25
(CRS), 284-285 service breakdown and
the customer and, 77-78 empowerment of frontline
data warehouses, 286 staff, 202
databases, 284, 287, 290 as a source of benefits to the
employees and, 288-291 customer, 21
global distribution systems (GDS), status and, 88
284-285 technology and, 286
Internal marketing, 256, 263, 264
group decision support systems
employee personality and, 27
(GDSS), 284, 291
information technology and, 290
guests and, 283
International Management Centres
housekeeping and, 284
(IMC), 308, 312, 314, 315,
intranets, 284, 286
316
labor management and, 288
International Organization for
local area networks (LAN), 284 Standardization (ISO), 85, 123
lodging and, 282 International tourism, 239
managers and, 292 the United Kingdom and, 124-125
property management systems Internet, 285
(PMS), 283-284 CVU and, 311, 312, 314
quality service and, 282 in hotels, 283, 291
software and, 284, 285 managers and, 291
THISCO, 285 marketing via Web sites, 286-287
tourism and, 281 Investors in People (IiP), 124, 133,
training and, 290-291 (ISSemt396
Utell, 284 cycle, 134f
yield management and, 284, 289, employees and, 298
291 principles of, 134
Intel Corporation, 115 Investors in People Award, 167
Interaction, 86, 120. See also ISO9000, 85, 123
Customer experience; CCT and, 128
Customer interface; CVU and, 312, 314
Experience; Service Italy, 271
encounter
customer evaluation of service
and, 256 Japan, 98, 229
as the element of service, 240 guarantees and, 250
empathy of service providers and, Jones, P., 91
207-208
frontline employees and, 69
guarantees and, 242 Kandampully, J., 245
guest assistance and, 60 Kanfer, R., 211
as moment of truth, 100 Karni, E, 24
the psychological and, 87 Keaveney, S.M., 214
Kelley, S.W. Leisure industry (continued)
customer expectations and, 204 packaging and programming, 45
service failure and, 198 promotion and, 42
Kentucky Fried Chicken (KFC) quality service and, 255
in Asia, 273 service policies and, 52-53
expansion overseas, 269 Levitt, 1.270
service guarantee, 250 Lewis, B.R., 91
Kmart, 263 Lewison, D.M., 51
Knutson, B., 55 Lind) E-A.;211
KPMG (Klynveld Peat Marwick Local Enterprise Company (LEC),
Goerdeler), 58 Scotland, 133
Location
competitive advantage and, 113
price and, 39
Labor. See Employees Lockwood, A., 91
Language, 275 Lodging, 261. See also Hospitality
Lawler, E.E. industry; Hotels
employee job performance and, 228 e-commerce and, 285
service delivery and, 202 information technology and, 282,
Leadership 288, 292
CVU and, 316 the Internet and, 291
executive, 234 Lodging Hospitality, 56, 57
transformational, 63 LODGQUAL, 170, 183
Learning. See also Corporate Virtual LODGSERY, 55, 170
University; Organizational Mexican tourists, 275
learning; Training translation and, 277
customer understanding, 300-301 Lovelock, C.H., 166
quality service, 302 Lyon, P., 272
service delivery, 301
service design, 301
Lehtinen, J. and P., 24 Maher, D., 245, 250
Beisures 2,455 Malcolm Baldrige National Quality
Leisure industry. See also Award, 167
Competitive advantage; Management
Employees; Quality service; benchmarking and, 72
Service providers business performance and service
characteristics of, 224 improvement, 298f
employees and, 224-225 customer expectations and, 69-70
personality, 26 customer feedback and, 76, 147
and facilities in the United and employees, 151
Kingdom, 135, 136e frontline, 172
global, 239-240 focus on consumer behavior and,
guarantees and, 242 167
guest satisfaction and, 57 MBWA, 148
information technology and, 292 motivation theory and, 228-229
intermediaries and, 261 quality service and, 63, 117
330 — Service Quality Management in Hospitality, Tourism, and Leisure

Management (continued) Marketing channels, levels of, 41-42.

the service encounter and, 86, 93 See also Distribution channels
service recovery and, 201 Marriott, 265
SERVQUAL and, 182 Marriott, J.W., 70
as a source of service failure, 198 Martin, W.B.
strategic, 113-114 and convivial versus procedural
technology and, 79 dimensions of interaction, 25
traditional, 240 and MWBA, 148
unobtrusive observation and, 172t Maslow, A.H., 226
Managers, 228, 240 Mass customization, 272, 273
customer expectations and, 70 Maute, M., 214
customer feedback and, 147, MBWA (management by walking
150-151 around), 148
customer satisfaction and, 98 McDonaldization of Society, The
employees and, 151, 224, 227, 234 (Ritzer), 271
and empowerment of staff, 100 McDonald’s Corporation
focus on consumer behavior and, cleanliness and, 79
167 consistency and, 118
information technology and, 285, expansion overseas, 269
292
in France, 272-273
and the Internet, 291
international operations, 272
and quality service, 98, 99, 107
product design and, 118
measurement of, 168, 169
service delivery and, 119
requisite understanding of
service guarantee, 250
hospitality operations, 146
McGregor, D., 22
staff and, 102-103
transformational leadership, 63 MCI (Microwave Communications
Incorporated), 155
unobtrusive observation and, 171
Market research, 155 McIntosh, R., 3
Market segmentation, 283 McKenna, R., 156-157
international, 278 Methodology in cross-cultural
Market share research, 276-277
gain by chain restaurants, 272 Midvale Steel Company, 228
quality service and, 144, 167 Miller, J.L., 80
Marketing, 35, 61, 163f, 263. See Monitoring, 265-266
also Internal marketing; information technology and,
Relationship marketing 289-290
channel relationships and, 264-265 Mr. Steak, 151
customer satisfaction and, 97 Multidimensional Balanced
direct, 40 Benchmarking, 73
focus of, 207 Multinational corporations (MNCs),
guarantees and, 243f 270
international market segmentation adaptation and, 272
and, 278 control of the world’s assets, 269
targeting, 60, 265 Mystery shoppers, 172t. See also
via web sites, 286-287 Shoppers’ studies
 O34

National Association of Accountants, Personnel. See Employees; Service

AB providers; Staff
National Tourist Boards. See NTBs Beterss 305
National Trust, The (U.K.), 125 Physical goods
Nelson, P., 24 consumer expectation and, 23
Nestlé, 271 standardization and, 37
Neumann, Y., 70 versus tourism services, 16, 17, 23
Newman, B.I., 105 in quality testing, 22
Novotel, 290 in supply dependence, 30
NTBs (National Tourist Pizam, A., 70
Boards—U.K.), 125, 130, 132 Pizza Hut, 60, 263
quality assurance scheme, 131t Plaza Hotel, The, 113
Policy, 52-53
making, 62
Ohmae, Kenichi, 270 quality service and, 117
Oliver, R.L., 165 Popcorn, Faith, 156
on customer satisfaction, 167 Porter, L.W., 228
Organizational culture, 92-93 Preferred Hotels, 260
Organizational learning, 302. See Price
also Corporate Virtual company success and, 166
University; Learning; demand elasticity and, 33-34
Training evaluation of tourism services and,
combining managerial and 28
organizational learning, location and, 39
305-307 relationship marketing and, 259
key considerations for, 304-305 service failure and, 198, 203
managerial learning in the technology and, 289
workplace, 303-304 value and, 106
recommendations for, 306t Procedural justice, 207
and syllabus of, 305-307 Product differentiation
system of, 307f the consumer and, 28
Ouchi, W.G., 228, 229 service provider personality and,
Ovretveit, J., 169 27, 28
Production
automation and, 117
Packaging, programming and, 45 inseparability from consumption
Parasuraman, A. in tourism services, 18
definition of quality and, 162 McDonald’s and, 118
relationship marketing and, 259 product improvement and, 111
service reliability and, 240 Productivity
SERVQUAL and, 54, 103, 153, 181 quality service and, 98
zone of tolerance and, 204 technology and, 76
Patterson, P.G., 166 Products. See also Tourism product
Pearce, P., 10 the consumer as, 28
Performance standards, 52 as destination, 9
332 ~~ Service Quality Management in Hospitality, Tourism, and Leisure

Products (continued) Quality service (continued)

as goods and services, 6 as a competitive strategy, 98
improvement of, 111 confirmation-disconfirmation
intangible versus tangible, 6 paradigm, 180
service providers as, 27 consumer surveys and, 153
services as, 16 continuum of, 57-62
tourism and, 3 core competencies and, 121
versus services, 241 core service and, 196
Profit, 98 customer complaints and, 61
Profit Impact of Marketing Strategy and customer expectations, levels
(PIMS), 98 Of, 51-52
Property management systems customer perception and, 67-68
(PMS) customer satisfaction and, 98, 104,
auditing and, 289 105f, 143, 160, 165-166
core elements of hotel operations customer surveys and, 61
and, 283-284 defining, 68
Psychological experiences, as a demand management and, 33
component of the tourism dimensions of, 24-25, 54-55
product, 9-10 and distance between customers
Psychological level and decision makers, 148
customer satisfaction and, 165 empathy of service providers and,
physical stimuli and, 80 207-208
Psychological makeup, of tourist, employee behavior and, 70, 117
34-35 employee empowerment and, 63
Psychological needs, service employee interrelations and, 120
provider behavior and, 27 employee performance and, 19
Psychological research, and the evaluation of, 23-25
service encounter, 87 internal quality programs and,
le, Ga 1 103
price and, 39
factors of, 144
Quality Assurance Institute of functional, 144, 160, 161f, 163f
America, 85 and Grénroos service gap model,
Quality control, 117 101
Quality gaps, 101, 145n, 163f. See guest expectations versus
also Disconfirmation performance, 53
Best Value and, 130 improvement of, 71-72
relationship marketing and, 263-264 information technology and, 282,
SERVQUAL and, 103, 182 291-292
Quality management, 123 internal quality programs and, 103
in the United Kingdom (Best international tourists and, 274
Value), 130 Japanese tourists and, 274-275
Quality service, 153, 262, 302 management and, 63, 117
ambiguity of, 100 managers and, 107
CCT and, 128 market share and, 144
competitive advantage and, 112-113 Mexican tourists and, 275
 Index 55)

Quality service (continued) Quality service assessment (continued)

physical evidence and, 43-44 foreign tourists and, 275
problems of, 99-100 the global economy and, 159
procedure and, 144 instruments of, 170
property maintenance and, 60 and interviews, customer, 171,
the quality gap, 163f 4/213, 0/6
quality testing and, 22 and LODGQUAL, 183
real time and, 156-157 and mail surveys, 172t
sales and, 144 managers and, 168
the service encounter and, 93 and perceptions-statements
SERVQUAL and, 145 instruments, 146
technical, 144, 160, 161f, 162, 163f qualitative versus quantitative
technology and, 76, 156-157, 286 techniques, 171
theoretical model, 161f Scottish Tourist Board and, 132
total service commitment, 62-64 and service audits, 148-149
traffic and, 57 and SERVQUAL, 103, 164-165,
training and, 124 181, 181-184
in the United Kingdom, CCT and, sets of, 168-169
127-130 and shoppers’ studies, 149
value and, 105, 106f staff and, 102
and surveys, customer, 153, 176
versus customer expectations, 278
versus customer Satisfaction, 154 and telephone interviews, 172t
and unobtrusive observation, 171,
Quality service assessment, 162, 163
72tr 173
and benchmarking, 72-73
QUEST (U.K.)135; £36¢
and blueprinting, 73-74
and comment cards, 75-76, 150,
172t, 176-177, 178f, 179f, 180
and complaint and special request Ramaswamy, R., 168
logs, 150-151 RATER, 164, 181. See also
confirmation-disconfirmation SERVQUAL
paradigm, 180 Rayport, Jeffrey, 155
and critical incidents, 149-50, 176, Recreation, 5
Tht Recruitment. See Hiring
by customer, 196, 256 Relationship marketing
customer intrusion and, 175 channel management, 261-263
and customer value workshops, competitors and, 259
152-153 corrective action and, 266
data collection techniques, 172t customer feedback and, 266
difficulties of, 169-170 customer targeting and, 265
and disconfirmation models, 172t definition of, 256
and employee feedback, 172t, 173, good citizenship and, 266-267
174f : monitoring and, 265-266
and feedback, customer147-148 quality gaps and, 263-264
and focus groups, 151-152, 172t, synergism and, 266
175-176 Research, cross-cultural, 276-277
334 — Service Quality Management in Hospitality, Tourism, and Leisure

Reservation systems, 40-41, 286 Service breakdown/failure, 74-75.

CRS, 284-285 See also Service recovery
Utell, 284 and agency, 197-198
Reservations, 59 and commission, 194t, 195, 196
Residence on Georgia, 283 contextual facets of, 200-204
Resorts Worldwide, 260 core versus peripheral, 195, 196
Restaurants, 17, 45. See also and cost, 198
Fast-food industry cultural factors of, 200-201
and customer perception by customer awareness of, 117
different nationalities, customer as source of, 199-200
275-276 demographic factors of, 205
versus the fast-food market, 272 denial and avoidance of, 209
Retailers diagrammatic overview, 215f
in direct marketing, 40 environmental factors of, 202-203
in indirect marketing, 41 facet analysis of, 194t
Reward systems, 249, 258, 290 financial factors of, 203
Ritchie, J., 3 guarantees and, 241, 245
Ritz-Carlton Hotel Company human resource policies and, 201
competitive advantage and, 116 internal versus external causes,
employee empowerment and, 206
229-230 and location, 197
Ritzer, G., 271 management as source of, 198
Rokeach Value Survey (RVS), 274 and omission, 194t, 195, 196
Rotalsky, H.M., 198 organizational factors of, 201-202
Royal Automobile Association personality and, 205
(USI e132 principles of traditional mass
Ryan, C., 27, 160 production and, 201
psychological factors of, 204-205
psychosocial factors of, 203
and quality, 196-197
and quantity, 196
saleh, P27; 160 recognition of, 208-209
Sasser, W.E., 202 responses to, 208-212
Satisfied customer. See Customer temporal factors of, 203-204
satisfaction and timing,.197
Schlesinger, L.A. Service climate. See Environment
guarantees and, 245 Service commitment
principles of traditional mass assessment of, 64
production and, 201 employees and, 62-64
staff and, 102 policymaking, 62
Scottish Tourist Board (STB), Service continuum, 57, 58f
130-131 after face-to-face encounter, 61-62
STAR classification, 132, 137e before face-to-face encounter, 58-59
training and, 133 during face-to-face encounter, 59-61
Service audits, 148-149 Service culture, 92
 Index 3{5)9)

Service delivery, 112, 143, 164, 301. Service performance. See also
See also Service performance Service delivery
advertising and, 264 the customer and, 117
the customer and, 117-118 disconfirmation and, 104, 165
employees and, 223 employees and, 19
improvement of, 71 and Grénroos service gap model,
quality service measurement and, 101
ILWPX guest expectations and, 53
the service encounter and, 197 internal, 169
service environment and, 202 measuring, 64, 72-73
in the United Kingdom, CCT and, SERVQUAL and, 103
128 SERVQUAL versus SERVPERV
Service delivery systems, 88 and, 184
Service design, 264, 301 Service policies, 51-52
Service development, 136e employees and, 62
Service encounter. See also Service process, the, 44
Customer experience; Service production, 28-29
Customer interface; and costs of, 38-39
Experience; Interaction Service providers. See also
cleanliness and, 79 Employees; Staff
covert process of, 206-208 cleanliness and, 79
and employees continuum of service and, 57-62
behavior of, 90 customer experience and, 67-68
scripts and, 89-90 and excessive demand, 32
temperament of, 70 frontline
fairness judgments and, 206-208 empowerment of, 201
features of, 87 service recovery, 210
guarantees and, 242 and guest expectations, 57
management of, 86 levels of, 51-52
negative connotations of the term image of, 56
“encounter,” 85-86 monetary transactions with guests,
overt processes of, 205-206 59-60
service delivery and, 197 quality service and staff, 62-63
as a source of benefits to the performance, assessment of, 64
customer, 21 personality of, 27
status and, 88 as products, 27
technology and, 286 programs, assessment of, 61
Service evaluation. See Quality reservations and, 59
service assessment the service encounter, status and, 88
Service gaps. See Quality gaps and service failure, 203, 204
Service management (U.K.), 123, service policies and, 52-53
135 and service recovery, 206, 210
Best Value, 130 SERVQUAL and, 54-56
CCT and, 128, 129f in the United Kingdom, 135
336 ~~ Service Quality Management in Hospitality, Tourism, and Leisure

Service quality. See Quality service SERVQUAL (continued)

Service recovery, 74-75, 207 development of, 153
actions, 206, 210-212 dimensions of, 54-55, 68, 164, 183
consequences of, 213-214 European tourists and, 274
demographics and, 205 form of, 181-182, 186-188
diagrammatic overview, 215f management and, 182t
employee empowerment and, 258 product attributes and, 145
empowerment of frontline staff quality gaps and, 103, 182
and, 202 scoring, 182t
facet analysis of, 194t versus SERVPERF, 184
foreign customers and, 200 Shapiro, D.L., 211
guarantees and, 245 Sharp, Isadore, 266
interaction and, 203 Sheth, J.N., 105
management and, 201 Shoemaker, S., 259
personality as locus of control, 205 Shoppers’ studies, 149. See also
service climate and, 201, 202 Mystery shoppers
training and, 258 Shostack, G.L., 100
Service standards, 51-52 Skill, 112
Service strategy, 69-70 Slattery, P., 269
Services. See also Quality service Smith, Don I., 272
characteristics of, 8 Society and tourism, 3
core versus peripheral, 16 Solomon, M.R., 87
and customer expectations, levels Sony Electronics, 115
of, 51-52 Sparks, B.A.
definition of, 6-7 employee empowerment and, 202
direct versus indirect, 9 service recovery and, 74, 211
intangible products as, 6 Staff, 120, 136. See also Employees;
intangible versus tangible, 17, 162 Service providers
material versus personal, 162 appearance of, 27
personalized, 119-120 complaint resolution and, 61
reliability of, 240 customer Satisfaction and, 256
tangibles, 54 and empowerment of, 100
too little versus too much, 119 frontline
versus physical goods, 15, 16, 17 customer interaction and, 102
versus products, 241 CVU and, 312
SERVPERF, 170 empowerment of, 201-202
versus SERVQUAL, 184 feedback and, 173
SERVQUAL, 69, 103, 170. See also interviewing, 90-91
Disconfirmation; Quality managers and, 102-103
gaps as personal valets, 119-120
academic questions concerning, quality service and, 62-63, 99-100
183-184 training of, 117
American tourists and, 274 evangelical, 91
Asian tourists and, 274 exploratory, 92
benefits of, 182 in Scotland, 133
 IST.

Standardization, 37 Technology (continued)

globalization and, 270, 272 quality service and, 76, 286, 291
of production, 117 risks of complex implementation
Standards, 52-53 of, 78
employee behavior and, 117 the service encounter and, 286
STB (Scottish Tourist Board) systems of, 77
STAR classification, 132, 137e types of, 77
training and, 133 value of service and, 239
Strategic intent, 113 Tenner, A.R., 85
McDonald’s and, 119 Tetreault, M.S., 205
Strategy Thomasson, B., 169
competitive, 98, 113-114, 118 Thompson, K.N., 183
external analysis, 299 3M Company, 115
performance, 300 Titz, K., 80
personalized service and, 119-120 Total quality management, 143
quality service, 98, 120 Tourism
relationship marketing, 259-260 concept of, 1-2
structure, 299-300 as an economic activity, 3
Subway, 263 elements of, 2
Suppliers, relationships with, 260-261 the host population and, 10
Surprenant, C.F., 87 multidimensionality of, 3
Surveys. See Customer surveys as recreation, 5
Sutton, W., 10
sectors of, 3
Swartz, T.A., 101
tourist activities and, 2, 9
Tourism industry. See also Employees;
Quality service; Service
Taco Bell, 263 breakdown; Service providers
Tangible goods, 24. See also and brand loyalty, 29
Physical goods business travelers versus
Task analysis, 72 vacationers, 35
Task environment, 114 characteristics of, 224
Tey, See, Zale! competitors and, 25
Taylor, Frederic Winslow, 228 consistency in, 19
Vaylorys:, 272 cross-cultural, 273
Technology. See also Information customer feedback and, 212
technology; Internet customer perception and, 36
customer expectation and, 156-157 demand
customer satisfaction and, 281 elasticity, 33-34
environment and, 114 fluctuations, 31-32
focal points for successful management, 33
implementation of, 78-79 and tourist behavior, 34
frontline staff and, 102 the emotional and, 42
globalization and, 270 employees and, 224-225
hotels and, 282-285 personality, 26
interaction and, 286 evaluation of, 22-24
338 Service Quality Management in Hospitality, Tourism, and Leisure

Tourism industry (continued) Tourism product (continued)

export of, 46f demand fluctuations, 31-32
first impressions and, 59 as destination, 9
global, 239-240 the emotional and, 35
guarantees and, 242 human component of, 10
guest satisfaction and, 57 intangible versus tangible items of,
heterogeneity of, 18-19, 22 10-11
image and, 36 interaction and, 46
import of, 47f psychological component of, 9-10
information technology and, 281, subsector cooperation and, 12
22 support services of, L1f
and inseparability of consumption tourism services as, 15
and production, 41 word of mouth and, 42
and intangibility of, 25, 35, 37 Tourism Training Scotland, 133
intermediaries and, 261 Tourist(s)
international, 46-47 activities
the Internet and, 285 as a characteristic of tourism, 2
levels of, 16 as a component of tourism
organizational factors in service destination, 9
failure, 201 brand loyalty, reasons for, 29
packaging and programming, 45 complaint and, 200
perishability of services, 20 and direct services versus indirect
positioning of services, 35 services, 9
price and, 39-40 employee personality and, 26
product differentiation and, 27 evaluation of tourism services and,
promotion and, 42 23
quality service and, 255 human component of tourism and,
quality testing and, 22 10
risk in the purchase of, 37, 38 international, 274
Scottish Tourist Board, 130-133 Japanese, 274-275
sector cooperation, 30 Mexican, 275
service policies and, 52-53 psychological component of
the service process in, 44 tourism and, 10
service provider personality and, 27 service production and, 28-29
sources of benefits to the Taiwanese, 275
customer, 21 types of, 34-35
supply dependence of, 29-30 Training. See also Corporate Virtual
types of risk associated with the University; Learning;
purchase of, 36-37 Organizational learning
in the United Kingdom, 123-125 customer feedback and, 212
public sector involvement, customer interviews and, 175
126-127 dimensions of, 91
Tourism product employee turnover and, 298
brand loyalty, 29 evangelical, 91
the consumer as, 28 exploratory, 92
 339

Training (continued) Valets, 119-120

guarantees and, 249 Value
implementation of technology and, company success and, 166
290-291 definition, 105
quality service and, 19, 124 the global economy and, 240
scripting, limitations of, 89-90 as a mediating variable, 106f
service breakdown and, 202 price and, 106, 111
service recovery and, 258 technology and, 239
standards and, 117 Value for money (U.K.), 127-128
Transportation services, 21 Van Der Wagen, L., 168
Travel, 2 Veblen effect, the, 33
business versus vacation, 36 Vroom, VERSUSH., 228
definition, 4
Travel agent, the, 261
TraveLodge, 88-89
Walker, R.H., 166
Wal-Mart, 263
Walt Disney Company, 69
Unions, 290 cleanliness and, 79
United Kingdom of Great Britain and core competencies and, 115-116
Northern Ireland, 123. See Walt Disney World Resorts, 60
also Corporate Virtual Warranties, 25, 212. See also
University; Organizational Guarantees
learning Webster, C., 55
Best Practice, 135, 136e, 137e, Welcome Host Initiative, 167
138e, 139e Welsh Tourist Board (WTB), 130
Best Value, 130, 131t Wendy’s, 269
Celi Word of mouth, 42, 163f
quality gaps and, 129f as a consequence of service
shift to Best Value, 131t recovery, 214
value for money and, 127-128 Worldwide Hospitality and Tourism
Findus and, 271 Trends (WHATT), 297
hotels and, 297-299
tourism
employment, 125-126
markets, 124 Yield management, 284, 289, 291
public sector involvement in,
126-127, 135
sites, 125
Zeithaml, VERSUSA.
definition of quality and, 162
service reliability and, 240
Vacationers versus business SERVQUAL and, 54, 103, 181
travelers, 35 value and, 105
Vacations, 43 zone of tolerance and, 204
“~<
 HAWORTH HOSPITALITY PRESS
Hospitality, Travel, and Tourism
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TOURISM IN THE ANTARCTIC: OPPORTUNITIES, CONSTRAINTS,

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versity of Nevada, Las Vegas

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THE INTERNATIONAL HOSPITALITY BUSINESS: MANAGEMENT

AND OPERATIONS by Larry Yu. (1999). “The abundant real-world examples
and cases provided in the text enable readers to understand the most up-to-date
developments in international hospitality business.” Zheng Gu, PhD, Associate
Professor, College of Hotel Administration, University of Nevada, Las Vegas

CONSUMER BEHAVIOR IN TRAVEL AND TOURISM by Abraham

Pizam and Yoel Mansfeld. (1999). “A must for anyone who wants to take advan-
tage of new global opportunities in this growing industry.” Bonnie J. Knutson,
PhD, School of Hospitality Business, Michigan State University
LEGALIZED CASINO GAMING IN THE UNITED STATES: THE ECO-
NOMIC AND SOCIAL IMPACT edited by Cathy H. C. Hsu. (1999). “Brings
a fresh new look at one of the areas in tourism that has not yet received careful
and serious consideration in the past.” Muzaffer Uysal, PhD, Professor ofTour-
ism Research, Virginia Polytechnic Institute and State University, Blacksburg

HOSPITALITY MANAGEMENT EDUCATION edited by Clayton W. Bar-

rows and Robert H. Bosselman. (1999). “Takes the mystery out of how hospital-
ity management education programs function and serves as an excellent resource
for individuals interested in pursuing the field.” Joe Perdue, CCM, CHE, Direc-
tor, Executive Masters Program, College ofHotel Administration, University of
Nevada, Las Vegas

MARKETING YOUR CITY, U.S.A.: A GUIDE TO DEVELOPING A

STRATEGIC TOURISM MARKETING PLAN by Ronald A. Nykiel and
Elizabeth Jascolt. (1998). “An excellent guide for anyone involved in the plan-
ning and marketing of cities and regions. ... A terrific job of synthesizing an
otherwise complex procedure.” James C. Maken, PhD, Associate Professor,
Babcock Graduate School of Management, Wake Forest University, Winston-
Salem, North Carolina
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 et

iz
Hospitality/Foodservice/Tourism

Customers today expect a very high overall level of service in

hospitality, tourism, and leisure. The success of competitors in these
fields will thus be driven by strategies focusing on quality of service to
add value, as opposed to product or price differentiation. Service
Quality Management in Hospitality, Tourism, and Leisure highlights
concepts and strategies that will improve the delivery of services, and
provides clear and simple explanations of theoretical concepts and their
practical applications!
“A MUST READ. ... A TREASURE. . . . Pulls together the work of
scholars across the globe, giving you access to new ideas, interna-
tional research, and industry examples from around the world. To
gain a better understanding of managing service quality, START
READING THIS BOOK TODAY.”
—John Bowen, PhD, Professor and Director of Graduate Studies, William F. Harrah
College of Hotel Administration, Las Vegas, Nevada

“AT LAST! A SERIOUS TEXT THAT IS ACADEMICALLY SOUND,

GROUNDED IN EXPERIENCE, PRACTICAL, AND USEFUL FOR BOTH
MANAGERS AND EDUCATORS! I hope every graduate management
program makes sure this is available to students. This is relevant
scholarship at its best. . . The authors clearly combine both practical
management experience and solid academic credentials.”
—John Walsh, PhD, Associate Dean, Faculty of Management, and Director,
School of Hotel and Food Administration, University of Guelph, Canada

“INDISPENSABLE to anyone teaching this subject, either at the under-

graduate or postgraduate level. ... COMPREHENSIVE, covering every
aspect of service quality. TRULY INSPIRATIONAL.”
—Professor Peter Jones, PhD, MBA, BA (Hons), FHCIMA,
Charles Forte Chair of Hotel Management,
rrey University, United Kingdom ISBN 0-?890-1141-?
90000

THE HAWORTH HOSPITALITY PRESS ||

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