Quality Service Management in Tourism and Hospitality PDF

Quality Service Management in Tourism and Hospitality Handout 1 Introduction to Total Quality Management (TQM) in the Tourism and Hospitality Industry The Tourism and Hospitality Industry Tourism is a significant economic activity of the travel, lodging, retail, and en...

Quality Service Management in Tourism and Hospitality Handout 1 Introduction to Total Quality Management (TQM) in the Tourism and Hospitality Industry The Tourism and Hospitality Industry Tourism is a significant economic activity of the travel, lodging, retail, and entertainment subsectors supplying the needs of tourists. It is a significant socio-cultural activity providing cultural experiences to tourist markets. Two main elements: movements – travel to and from a destination. Overnight stay outside the permanent residence in various destinations. Movement to and from the destination is temporary, which means there is an intention to return. Destination is visited for purposes other than employment or taking up permanent residence. The activities tourists engage in during their journey and their stay outside their usual residence and work are distinct from those of the working populations and residents of the places visited. The hospitality industry is large and fast-growing. It refers to a variety of services and businesses focusing on customer satisfaction. The relationship between the tourism and hospitality industries is SYMBIOTIC, wherein one cannot function without the other. Characteristics of a Tourism and Hospitality Product Intangibility – Tourism products cannot be seen, tasted, felt, or heard before purchasing and consuming. Services and experiences are what a traveler mainly purchases; the only tangible items are the ticket or receipts of payments. Inseparability – Tourism products are primarily services and cannot be separated from the person or company that provides them. Perishability – It is a characteristic of products and services that do not allow the product or service to be stored for sale at a future date.  Variability – In the tourism industry, services are rendered by human to human. These services have a high level of variability when producers and consumers interact. Absence of Ownership – Purchasing an overnight stay at a hotel is not the same as buying material things. Manufactured by Many Producers – A tourism product involves other sectors in its production, and a single enterprise cannot provide. Seasonality – It refers to predictable change over a year in a business or economy based on the calendar or commercial seasons. Introduction to Quality Management Quality management oversees different organizational activities and tasks to ensure that products and services are consistent. Key Components of Quality Management 4 components of quality management: Quality Planning – refers to identifying the quality standards pertinent to the project and deciding how to meet them. Quality improvement – is the decisive change in the process to improve the reliability or confidence of the outcome. Quality control – pertains to the continuing effort to uphold a process’s reliability and integrity in achieving an outcome. Quality assurance – is the planned or systematic actions essential to offer sufficient to meet a particular product or service’s specified requirements. Quality management aims to guarantee that all the organization’s stakeholders collaborate to improve the company’s process, culture, products, and services to achieve the long-term success that stems from customer satisfaction. The following is the process of quality management: 1. The organization sets quality targets to be met and agreed upon with the customer. The basis for setting quality targets depends on the target market research a company conducts to achieve the satisfaction and loyalty of customers. The target market refers to the people who will most likely avail of a business’s products and services. 2. The organization then defines how the targets will be measured. 3. The final step involves reporting the level of quality achieved. Total Quality Management TQM (Total Quality Management) is the continual process of detecting and reducing or eliminating errors in manufacturing, streamlining supply chain management, improving the customers experience, and ensuring that employees are up to speed with proper training. Customer-focused – The internal and external customer is the driver in a total quality setting. External Customers define the quality of the product or service delivered, while Internal Customers define the quality of the people, processes, and environments associated with the products or services. Total Employee Involvement and Empowerment – All employees participate in working toward the business goals. The following are the benefits of involving employees: First, it increases the likelihood of developing a good decision or plan. Second, it promotes ownership of decisions. Process-centered – A process is a series of steps that take inputs from suppliers and transform them into outputs delivered to customers. Peak performance – means that all personnel and processes operate at their best performance. It is essential for organizations that operate in a global environment where competition is intense, constant, and unforgiving. Strategically based – means formulating a strategic plan incorporating the elements of vision, mission, broad objectives, and activities that must be completed to accomplish the broad objectives while integrating quality as a core component. Scientific approach – refers to structuring work, decision-making, and problem- solving by utilizing hard data to establish benchmarks, monitoring performance, and making improvements. Obsession with quality – The organization must become passionate about meeting or exceeding the quality of outputs through continuous improvement. Long-term commitment – involves the implementation of a new corporate culture in the entire organization to achieve future success and long-term growth. Education and training – are fundamental to total quality as these improve people continually. Through education and training, people who know how to work hard also learn to work smartly. Freedom through control – pertains to the concept that humans should control the processes and work methods and must not rely entirely on technology to reduce variations in output.  Unity of purpose – means that internal politics have no place in a total quality organization where collaboration should be the norm. All employees must work toward a common goal. TQM in the Tourism Industry The tourism industry is a sharing process that authorizes employees at different levels to work in groups/departments to start guest service prospects and determine the most suitable approach to meet or exceed them. Quality problems in tourism establishments directly impact on their operation via customer complaints. Handout 2 What is Guestology? Guestology is the scientific study of people’s needs, expectations, and behaviors in the service industry and uses that information to manage a service organization efficiently. The Guest Cycle The guest cycle is the stage of interaction between the hotel and guests. It is divided into 4 main stages which show a systematic approach to operations and the activities that transpire in each stage. 1. Pre-Arrival – is when the guest interacts with a tourism and hospitality establishment before arrival, like inquiring about services and making a room reservation at a hotel or booking a travel package with a travel agency. 2. Arrival – Includes hotel registration and room assignment process or travel agents meeting their guests before a tour. 3. Occupancy – is when a guest stays in a hotel, or the tourist is already in a vehicle on the way to the different attractions and experiences included in a tour package. It is when their requests and special needs must be met. 4. Departure – is when a guest checks out and leaves a hotel or when the tourist part ways with the tour guide at the end of a tour.  Drop Service Handling luggage Inquiry Guest Payment Clearance Reservations Check-out Procedure Pickup Service Departure Pre-arrival Occupancy Arrival Currency Exchange Handling Luggage Telephone Calls Registration Managing Guest Allocating Room Account Issuing key, welcome kit Managing Guest The Guest Experience The guest experience is the totality of the guest’s experiences with the service provider on a given occasion. Service Product – The customer, client, or guest comes to the organization. It can be tangible products such as the hotel room. Service Setting – The place where service takes place. Service Delivery System – The direct support backbone of every establishment to meet their needs and wants. Service Encounter Service encounter – The person-to-person series of interactions between a tourism employee who delivers the service and the guests.  Heart of a Service – Is the encounter between the server and the customer, where emotions meet economics in real time and where most customers judge the quality of service. Moment of Truth Moments of truth – Represent the points in a guest experience where a critical event occurs, resulting in the customer forming an opinion about the service provider. 2 Major Categories of Moments of Truth: Positive Moments - Moments of Glory – These happen when guest expectations during an interaction are exceeded. Negative Moments – Moments of Pain – These are the miserable moments of guest wherein the organization’s products or services disappoint them. The discrete moments of truth from the guest’s perspective: Zero moment of truth – is the event where a person looks for information online and forms the first impression of a brand. Actual moment of truth – refers to the time between when a customer makes a purchase and when they get the product. The first moment of truth – is when the guest sees the product or gets to use the service for the first time and decides about it. Second moment of truth – refers to the following collection of moments that incorporates the customers’ senses: what they see, feel, touch, hear, smell, about the organization’s products and brand throughout the experience. Ultimate/Last moment of truth – is when the guest is ready to share their opinion about the brand, usually by publishing content, like a public review on the website or a social media post. Guest Expectations Guests arrive with a set of expectations as to what a chosen hotel, restaurant, or travel agency can and should do, how they should do it, how the people who will provide the service should behave, how the physical setting should appear, and what capabilities they should have to perform their roles or responsibilities in coproducing the experience. First-time guests build their expectations based on familiarity with brand names, advertisements, previous experiences with other tourism organizations, their imaginations, and the stories and experiences of people they know who have already been guests.  Types of Customers: An organization needs to identify and understand the types of customers it will encounter throughout its business operations. External customers do not have any direct relationship with the company but buy and consume the produced products and services (MBA Skool Team, 2021). They are commonly referred to as customers in general. The following are the types of external customers: Loyal customers are the essential type to please and should be one of the priorities a specific company should keep in mind. This type of customer represents at least 20% of the customer base but is the driving force of most sales' revenue. Impulse customers are the best type for suggestive selling. These customers are willing to accept recommendations on products and services. Discount customers wait for promos and markdowns offered by an organization. These types of customers contribute to a company's cash flow because products and services that are seldom purchased at full prices are used by them. Need-based customers are driven by a specific need. They only buy for a specific reason and occasion and immediately leave after getting what they need. Wandering customers generate the most significant traffic as they have no specific need or desire but yield the smallest percentage of sales revenue. Internal customers are individuals from an organization who receive specific services from staff members within the same organization. They are the employees who perform a specific task that directly affects the job performance of another staff member. Quality, Value, and Cost In the tourism and hospitality industry, the terms quality, value, and cost have specialized meanings to fit the guest-focused orientation of the industry. Quality is the difference between the quality that the guest expects and the quality that the guest gets. If the two (2) are the same, then the quality is average or considered as expected since one got what was expected and is satisfied (Cornell & Manzano, 2022). Value is defined as how much a product or service is worth to a guest. It measures all the costs and benefits associated with a product or service. It includes the price, quality, what the product or service can do for that specific guest and the monetary, time, energy, and emotional costs they consider when evaluating the value of a purchase (Zen Desk Blog, 2023). Cost refers to the tangible and intangible financial and nonfinancial costs that the guest has incurred during the experience of the products and services. It makes up the total burden on the guest who chooses a service from a tourism organization. Handout 3 Strategies for Quality Service in Tourism and Hospitality Strategic planning is identifying an organization's internal and external characteristics that will contribute to attaining its goal, pointing to a specific direction, and formulating different policies to achieve it. Below are the elements of strategic planning: Identifying long-term goals and objectives concerning conceptualizing coherent and achievable strategic objectives. Adopting different courses of action to ensure that actions taken to arrive at objectives are already set. Setting in place the allotment of resources. It means that costs will be associated with the actions to achieve the objectives. These elements allow an organization to have a route and an outline of goals to be successful in the long term. Generic Competitive Edge Strategies An organization needs a clear strategy to become successful and profitable in the industry's competitive market. Cost Leadership Strategy focuses on increasing profits by reducing operational costs and charging lower prices. Organizations employing the low-price strategy must recognize that if they reduce prices to guests by reducing their own costs, the resulting deterioration in the guest experience may decrease the experience's value to guests and drive them to competitors. Differentiation strategy focuses on making a company's service attractive and unique compared to its competitors. Creating a strong brand image is a major way to differentiate a service from competitors. Brand image represents a promise to guests of what kind of quality and value of experiences are associated with it. A strong brand promise reduces customer uncertainty, creates brand preference, and increases customer loyalty. Focus strategy concentrates on developing services for niche markets and requires a deep understanding of the customer's needs. It focuses on a specific  part of the total market by offering a special appeal, such as quality, value, location, or exceptional service, to attract customers in the market segment. It aims to meet the needs by providing something special and extra that the customers cannot get anywhere else. The Hospitality Planning Cycle The hospitality planning cycle determines how a service organization finds a way to give guests what they want and when they want it, even if they do not know yet exactly what they want. The strategic planning process is a way to reach the outcomes. It involves an external assessment of environmental opportunities and threats leading to the generation of strategic premises about the future environment, and an internal assessment of the organizational strengths and weaknesses leading to the redefinition of the business's core competencies. The figure above shows how hospitality planning prepares an organization for the future. Environmental Assessment. It refers to how the organization is positioned in the market compared to its competitors. It also showcases an organization's opportunities and threats so that they will be wary about which aspects will be uncontrollable to a certain level. Strategic premises are the assumptions/conclusions drawn by the organization about the future of the industry and market from assessing the environment. These are the educated guesses of the managers after assessing all the long-  term aspects of the external environment and trying to use them to discover what forces will impact the organization in the future and what customers will want in that environment. Internal Assessment. It involves searching for strengths and weaknesses that define the organization's core competencies and considers its strong and weak points regarding its ability to compete in the future. The organization's core competencies are the bundle of skills and technologies that gives the organization a critical difference in providing customer benefits and their perceived value. Vision and Mission Vision and mission statements are vital parts of the hospitality planning process. These will define why a company exists, how it plans to achieve its goals, and what it will ultimately achieve. The vision articulates what the organization hopes to look and be like. It does not present the principles, goals, and objectives; instead, it presents the hopes and dreams which create a picture toward which the organization aspires and will provide inspiration for their journey. The mission statement specifies the organization's purpose, why it was founded, and for which it continues to exist. Given the strategic premises and the organization's core competencies, this defines the path to the vision. It serves as a guide to define the how, what, who, and where of the organization's overall service strategy that will drive the design of the service product, service environment, and service delivery system. Developing the Service Strategy. After assessing the external and internal factors per the corporate vision and mission, the organization is ready to define the service strategy since this guides decision-making, from capital budgeting to handling a customer complaint. To reach the target market, the organization must define its market's key drivers (value drivers of guest satisfaction), craft its service product to meet the market's needs, create the appropriate service environment, and design the service systems to reach the target market. Service expert Len Berry suggested that an excellent service strategy has four (4) characteristics:  Quality. It means that an organization should commit to quality. Those truly committed to excellence start by committing to the organization to provide customers with a guest experience of high quality. Value. It commits the organization to provide customers with more benefits from the guest experience than their costs. Organizations must budget funds to measure their services' perceived value to customers. Customers must believe they are getting significant value for their money, no matter what the associated service costs. The service strategy should commit an organization to hire people who believe in service, provide employee training programs that emphasize the commitment to service quality, allocation of resources to serve the customers, and carefully reinforce the entire workforce's commitment to service by giving performance and reward systems, and ascertain that all action plans are aligned to support and achieve the service mission. It ensures that everyone in the organization advocates and implements service quality by constantly reflecting the total commitment to service excellence. The service strategy should foster a sense of genuine achievement that stretches and pushes all employees to grow and develop so that everyone in the organization can do things they thought impossible. Defining these service strategies provides an organization with the following basis for ensuring that the customer's key drivers are addressed: What will be the organization's service product? The service product should meet the expectation of the market. What is the service environment's role in providing or delivering the service? The service environment should be designed to fit the product and exceed the guest's expectations of how the tourism organization should feel and look. How will the service delivery system make the service product available to the guest? The service delivery system should be designed to ensure that the service product is congruent/similar to how the guest expects to experience it. Action Plans. The action plans can be developed after identifying the service strategies since the organization now has a clear idea of who they want to serve, what they want to serve, where is the market for that service, where they want to go, and how they intend to get there. An action plan outlines the organization's tasks to meet the goal (Indeed, 2022). These plans will outline how the organization will operate, the tasks needed for the next period (fiscal year), and how valuable feedback will be elicited. Management, staffing, capacity utilization, finance, and marketing are the five (5) key areas in which action plans should be established. Strategizing for the Future The organization needs to know its competitive advantages over competitors to start developing the business strategy for the future. The first strategy is conducting a SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis which helps the business identify areas where they perform well and determine where they stand in the market by analyzing its external and internal factors. Another strategy is using PESTLE (Political, Economic, Socio-Cultural, Technical, Legal, and Environmental) analysis, which is a tool to gain a macro picture of the industry environment of an organization and allows them to form risk factors for the SWOT analysis. Aside from using the above strategies, an organization must know the other factors that tourism organizations must plan to cope with the changes in the future: Demographics refers to the age and generation groups, sex, and nationality of the tourism and hospitality organization's potential guests, investors, and employees. Technology. Dramatic technological changes will continue to influence tourism organizations and industry significantly. The need to blend innovative high-tech solutions into high-touch service situations will be recognized as a competitive strategy and, if successful, will be rewarded in the marketplace. Social expectations are the implicit rules that govern an individual's reaction and belief that is acceptable by society. Organizations should monitor and adapt to society's changing expectations, social trends, and institutional changes. Economic forces. An organization must consider the effects of governmental economic policies on its suppliers of capital, the ability of its customers to buy the service, its own cost structure, and the direct and indirect competitor's ability to compete. Competitors. An organization will have three (3) types of competitors: existing competitors (these have established positions in the market), potential competitors (those who are likely to enter the market), and indirect competitors (these offer customers a substitute or alternative service or product). Stakeholders and other relevant groups that will also shape the future of the tourism and hospitality industry are the following: o Resource suppliers are the providers of raw materials and equipment. The resource supplier's availability will affect the company's smooth operations. A tourism and hospitality company  needs to identify a selection of existing backup suppliers to avoid operation disruptions due to lack of or unavailability of ingredients. o Capital suppliers are the institutions with capital to invest or lend, such as banks and investors. Since capital availability is crucial, the company's decision-making should be exact, immediately determined, and properly planned to avoid limiting and negatively affecting operations. o Labor supply refers to a company's pool of skilled employees. A tourism and hospitality operation must have a stable labor supply to drive operations. o Natural forces include real estate or financial market crashes, terrorist attacks, wars, volcanic eruptions, and earthquakes. Preparing for these events means dealing with the immediate consequences (the day of the disaster) and the long-term consequences and implications. Plans are designed to be flexible guides along the organization's path, but these are not the final word for everything. Effective tourism and hospitality organizations must stay vigilant in responding to the uncertainties that can affect the operations and the services they provide to be ready to face them.