Hospitality service design

Operation ManagementHospitality Industry

Submitted to: Dr. Somonnoy GhoshSubmitted by: 16DM046 - Ashish Pandey

BIMTECH

HOSPITALITY SECTOR IN INDIA

SupplyIndia has an estimated 1,70,000 hotel rooms. Even with the expected addition of another 60,000 hotel rooms over the next 3-5 years, the industry is expected to fall short of meeting the long term demands of an economy growing at 7-9% p.a.DemandLargely depends on business travellers but tourist traffic is also on the rise. Also, there is seen an increasing demand for medical tourism. Demand normally spurts in the peak season between November and March.Barriers to EntryEconomic risks, high capital costs, competition in the industry, poor infrastructure facilities and scarcity of land.Bargaining Power of SuppliersLimited due to higher competition, especially in metros.Bargaining Power of CustomersHigher in metros due to increasing room supply.CompetitionIntense in metros, slowly picking up in tier-2 and tier-3 cities. Competition has picked up due to the entry of foreign hotel chains.

NEED FOR NEW SERVICE OFFERING

• Travellers demanding innovative alternatives because they are constantly bombarded with run-of-the-mill service offerings.

• Hospitality industry is still facing various challenges like Poor understanding of guest’s habits, dropped guest requests, traditional way of communication, outdated rooms etc.

• Hospitality market is flooded by many similar & easily substitutable service offerings. So, we can attempt to face this challenge by offering new and innovative features for customers.

• The hospitality industry is rapidly changing due to accelerations in information technology. So, we can make proactive changes which focus even more intensely on customer preferences, quality, and technological interfaces.

• Travelers instead of showing brand loyalty, are choosing to patronize hotels that offer the best value proposition under existing budgetary constraints. We can face that challenge by understands customers’ preferences.

Service Industry: Hospitality IndustryService: 4 Star HotelHotel Name: Belmont Hearne HotelPositioning of “Belmont Hearne Hotel”:“Future of Travel”Something happens when you stay at a Belmont Hearne Hotel. We're here to make your stay as comfortable and augmented as possible, right from the start. Maybe it's all the little things we do to show we care, from thoughtful touches and friendly service to our warm chocolate chip cookie welcome.Targeting: Our target customers would be middle class and upper middle class people.Type of Rooms in Hotel:Junior Suite, Suite, Premium, Superior

DESIGNING OF A NEW SERVICE

Innovation in “Belmont Hearne Hotel”:•We are going to provide Wearable Tech band for our guests to unlock their room (Key Less Entry). It will benefit us in 2 ways: work as a word of mouth for us and collect the data and other statistics of guests. It would be helpful for our guests’ also because they now need not to take care of their keys, can order anything easily, can access to other staffs like maintenance & housekeeping easily.•We will install 2 tablets outside the hotel and 3 at the reception so that guests’ would be able to check the availability of rooms without waiting in a line. They could also be able to pay through that and could be able to see the 360 degree virtual view of rooms without even entering.•We will start an online portal called Belmont Portal which would be an internal communication hub and knowledge base for everything that Belmont Hearne hotel comprises, represent practices and offers to all the employees. It will be a virtual space for sharing and dissemination of information.


Other Facilities at “Belmont Hearne Hotel”:•Reception opened 24 hours, multilingual staff •Valet parking•Concierge, page boy•Spacious reception hall with several seats and beverage service•Personalized greeting for each guest with fresh flowers or a present in the room•Minibar and food and beverage offer via room service during 24 hours•Personal care products in flacons•Wi-Fi facility, HD LCD TV•Safe in the room•Soundproof Windows•Ironing service (return within 1 hour), shoe polish service•Turndown service in the evening


A number of sites are available in India for a hotel positioned like us but we have has narrowed the choice to five locations: Mumbai, Goa, Jaipur, Delhi, and Bangalore.

LOCATION FACTOR RATING

Location Factor Rating Weight Hotel Location Scores (0 to 100)

Mumbai Goa Jaipur Delhi Bangalore

Annual tourist population 0.4 70 90 70 65 60

Cost 0.2 75 80 55 60 70

Road proximity to best tourist destinations 0.15 65 85 60 70 60Quality of tourist destinations 0.05 70 85 75 60 55

Infrastructure 0.05 80 70 65 85 65

Shopping and restaurants 0.05 65 70 75 90 70

Crowdedness 0.05 45 55 75 40 45

Other attractions 0.05 75 85 90 80 60

So, Site 2 (Goa) has the highest Location Factor Rating compared with the other locations. However, this evaluation would have to be used with other analysis.

LOCATION FACTOR RATING

Location Factor Rating Weighted Score for the Location of Hotel Mumbai Goa Jaipur Delhi Bangalore

Annual tourist population 28 36 28 26 24

Cost 15 16 11 12 14

Road proximity to best tourist destinations 9.75 12.75 9 10.5 9

Quality of tourist destinations 3.5 4.25 3.75 3 2.75

Infrastructure 4 3.5 3.25 4.25 3.25

Shopping and restaurants 3.25 3.5 3.75 4.5 3.5

Crowdedness 2.25 2.75 3.75 2 2.25

Other attractions 3.75 4.25 4.5 4 3

Total Score 69.5 83 67 66.25 61.75

SERVICE BLUEPRINT FOR

“Belmont Hearne Hotel”

FUNDING MECHANISMCost incurred in Innovation:•Wearable Tech band and gate unlocking sensor would cost us approx. 3000 for one band and one unlocking sensor. There would be a total cost of (66 rooms*3000)= Rs.1,98,000.•We will take Tablet Booking Devices on rent first from Teem Event Board. It would cost us Rs.4000/ month for one device including all the required software's. Total cost incurred on these would be 5 tablets*4000= Rs.20000/month.•The online portal that we are required for our employees would not cost us more Rs.6000-8000/ month.

FUNDING MECHANISMSo, total initial cost for us would be Rs.2,25,000 and then monthly cost would be around Rs.28000.According to our analyzation, these costs will not take much time to recover as: •These technologies would act as a worth of mouth for us (probably become a trend).•Save our employees effort so that they would be able to focus more on delivering values to our guests’.•After analysing the data we could be able to find some trends in guests’ behaviour and that would help us in finding opportunities or loopholes in our service delivery.

EMPLOYEE MANAGEMENT SYSTEM

We have categorised all our human resources into 4 departments:FRONT OFFICE•The staff of this department is very visible to the guests and directly interacts with the customers when they first arrive at the hotel.•The basic responsibilities of front office employees involve Creating guest database, Handling guest accounts, Coordinating guest service, handling in-house communication.•Candidates for this role with a hotel management degree and exceptional oral and written communication skills will be selected through strict rounds of aptitude tests and personal interviews.HOUSEKEEPING•Housekeeping is an operational department in the hotel, which is responsible for cleanliness, maintenance, aesthetic upkeep of rooms, public area, back area and surroundings. •The effort that a housekeeping department has a direct bearing on the guest’s experience in a hotel. •Housekeeping is a 24 x 7 x 365 operation.•We are selecting candidates who have diploma in housekeeping operations and are hardworking candidates.


FOOD AND BEVERAGE SERVICE•The food and beverage service department is an integral place in any hotel which is responsible for the systematic and the actual service of food and beverage to the customers.•The staffing pattern of this department is basically divided into two parts: the service staffs and the kitchen staffs.•Kitchen staff basically involves people who are into food preparation i.e. Chefs. For these roles professional chefs are recruited so that taste and quality of food is not compromised.•Service staff involves people who bring the food and beverages services to the customers. Apart from a professional degree, the candidate must possess excellent communication, listening and teamwork skills. Such candidates will be selected.BACK OFFICE & OTHERS•Employees who are involved with promoting the hotel come under this department. •Candidates who have a degree in Sales and Marketing and those who possess effective communication and creative skills will be selected through interviews and aptitude tests.


EMPLOYEE ENGAGEMENT PROGRAM•In hospitality, employees are the most important asset for any business and therefore, we will train our employees on regular basis so that they will learn that how to deal with the various customers and will be aware of all moment of truth.•We will also train them to learn interpersonal skills.•Yearly performance appraisal system will be incorporated but briefing will be given to employees on daily basis, so that they can upgrade themselves regularly. •We will start an online portal called Belmont Portal which would be an internal communication hub and knowledge base for everything that Belmont Hearne hotel comprises, represents practices and offers to all the employees.

CUSTOMER MANAGEMENT SYSTEM

• Understanding of customers as well as customer behaviour is the key success factor in marketplace for any business.

• We have positioned our Hotel as the customer driven hospitality provider and our target customers would be middle class and upper middle class people.

• We have chosen this segment because there are still many flaws in service delivery in hospitality and many hotels are not able to deliver the values.

• We will determine guests’ preferences through primary research, secondary research and feedback which can help us in anticipating guest's common needs.

• We also need a CRM software system as economies and information technology infrastructures are progressing at breakneck speed and a whole range of opportunities are opening up for the hotel industry in terms of how connections can be established.


We are segmenting the moment of truths in 2 parts:•The internet is the new big thing in today’s world so we have decided to make a clean and positive image over the internet (Social Media, Travel Guides, Review Sites, and our Website etc.) like on Facebook, TripAdvisor, Yatra.com, and MakeMyTrip.com etc. and they will act as the first moment of truth for our customers.•The second moment of truth is when the guest arrives in the hotel and during their entire stay. We will take care of only one thing and that is to deliver what we have communicated. This would give us an edge over all other hotels in our segment.


Forecasting of the success of the hospitality industry in Goa using historical data:•The total domestic tourist estimated was 18.99 L, foreign tourists 3.48 L, and total tourists 22.47L•The number of domestic tourists and foreign tourists checked in accommodation units were 18,68,294 and 3,48,370 respectively.•Number of bed nights spent by domestic tourists was 77,69,396 while foreign tourist’s bed nights spent was 15,48,370.•Total AC rooms highest is in three stars followed by four and above stars (3/4 Star to 5 star ratio is 3:1).•Tourist’s major item of expenditure was ~30.4% (Rs.450 crores) was on accommodation service.


Tourists Visits are maximum in the month of November and December.

The correlation between Domestic and Foreign Tourists is very high (closer to 1). We have found the correlation between them using CORREL function which returns the correlation coefficient between two data sets.Correlation = 0.935028So, our service would be attractive for both domestic and international tourists because of the quality of our service delivery and innovation in hospitality.

Month

Avg. Tourist Visits in Goa (2016)

January 358622February 292737March 334424April 310508May 297277June 203659July 97475August 260036September 282339October 327762November 391979December 442133


We have used FORECAST function of excel to anticipate the number of tourist in the coming years (2017 & 2018). FORECAST function calculates a future value along a linear trend by using historic values. So, it is forecasted that the tourist industry will increase in Goa such that there is a need of more hotels in Goa to meetup the demand.

Number of TouristsYear Domestic Foreign Total

2010 9,76,804 2,91,709 12,68,5132011 13,25,296 2,71,645 15,96,9412012 21,27,063 3,25,677 24,52,7402013 22,67,098 3,76,455 26,43,5532014 22,05,002 4,56,773 26,61,7752015 23,37,499 4,27,890 27,65,3892016 28,89,444 4,93,894 33,83,3382017 31,38,353 5,27,741 36,66,0942018 34,18,362 5,65,246 39,83,608

REFERENCES

• INNOVATION SERVICE DESIGN IN TOURISM AND HOSPITALITY OPERATIONS by Budsakayt Intarapasa and Thayuth Thongpan

• Customers’ Ethical Behaviour towards Hotels by Professor, Department of Marketing, TEI of Thessaloniki

• Operations Management by Albert Porter• Operations Management by Russell & Taylor• Service design in hotels by Meryem Akoğlan Kozak and Dilek Acar Gürel• Service Design and Operations Strategy Formulation in Multicultural Markets

by Madeline E. Pullman• Service Innovation and Customer Choices in the Hospitality Industry by Liana

Victorino• incredibleindia.org• www.tourism-of-india.com• Ministry of tourism India• http://crmsolutions.crmnext.com• http://www.managementstudyguide.com• https://www.equitymaster.com/research-it/sector-info/hotels/Hotels-Sector-

Analysis-Report.asp• Collection of Domestic Tourism Statistics for the State of Goa• A Study on Growth of Hotel Industry in Goa

THANKYOU