Implementation Of A Customer-Oriented Approach In The Management System Of Hotel Industry

Abstract

In current conditions, the foundation of sustainable development of hospital facilities is the search for strategies and opportunities that will lead not to short-term results, but to the achievement of a high economic effect and increased competitiveness for a long period. The customer-oriented approach, improving the quality of services and meeting customer needs, is the most important competitive advantage in the face of fierce competition in the hospitality market, and it also provides an increase in the profitability of the organization. A customer-oriented approach should be considered as one of the most important factors in the management system of competitiveness, where a customer-oriented approach is aimed at meeting customer needs and competitiveness in the market as a whole. The contribution assesses the level of customer-orientation of hotel facilities as a necessary element of the effective implementation of a customer-oriented approach in the management system of hotel facilities. The content of the term “customer-orientation” has been clarified, taking into account its place in the management system of competitiveness of hotel facilities. A multi-factor model for assessing customer-orientation of hotel facilities is proposed. The set of indicators for assessing the level of customer-oriented hotel facilities has been determined. A methodological complex for assessing the level of customer-orientation of hotel facilities, including tools for assessing the proposed indicators, has been formed. The results of such an assessment are the basis for the strategy development to improve competitiveness of hotel facilities in the hotel services market.

Keywords: Customer focuscompetitive advantagehotel businessservices

Introduction

Currently, a customer-oriented approach to company’s management has become one of the most relevant for researchers dealing with the strategic business development. In business practice, many modern companies have already turned to customer-oriented strategies. American organizations have especially succeeded in this direction. The strategy efficiency is the rating of the most successful companies in the world “Fortune Global 500”, where the leading positions are occupied by companies which have a position of a client director: Walmart (retail, USA), Apple (manufacturer of personal and tablet computers, audio players, phones, software; USA), Exxon Mobile (oil company, Russia) and others. However, despite its high practical significance, a customer-oriented approach does not have a sustainable scientific definition. Each company understands a customer-oriented strategy in its own way and reduces it to either a high level of management, or to a particular quality of service, innovation, and service for customers.

Analysis of a customer-oriented approach allows identifying two main approaches to the definition of this concept and its key factors:

• A customer-oriented approach is a special tool for building business processes with customers, focusing on staff performance and quality of service (Saxe & Weitz, 1982; Hennig-Thurau, 2004; Lambin, 2007) According to researchers, the work of staff mainly depends on customer satisfaction and organizational efficiency. Professional competences of the staff: knowledge, skills, abilities, motivations, values, attitudes, personal qualities, behavior - characterize the quality of the workforce and are a basic component of a customer-oriented approach (Stavrinoudis & Psimoulis, 2017);

• A customer-oriented approach is a business philosophy, which includes all business processes of an organization whose goal is to obtain the final result desired by the client (Kohli & Jaworski, 1990; Narver & Slater, 1990). Most of the current research in this area is devoted to assessing the company’s strategy efficiency from a position of customer satisfaction, where customers are the basis for the functioning of any organization and are the main elements of the environment and determine the behavior of this company in the market (Nordhorn, Scuttari, & Pechlaner, 2018).

According to a customer-oriented approach (Shoul, 2013), the quality of the service is one of the main parameters of the customer-oriented organization. The consumer's assessment of the quality of services is formed in the process of comparing expectations of the quality of then service until the moment of its acquisition with a direct perception of the quality of the service at the time and after its acquisition. Consequently, the consumer's assessment of the quality of the service is according to two main criteria: what the consumer receives from this service, that is, its material component (technical aspect of quality) and how the consumer receives this service (functional aspect of quality). The quality of the service is a certain combination of distinctive features that give the service the ability to meet established standards or customer expectations, requests and individual customer needs. Research findings on the impact of the quality of service on customer satisfaction (Phi, Thanh, & Viet, 2018) show its dependence on four dimensions of service quality: reliability, responsiveness, usefulness of the website and the material component of the service.

Drucker (2003), formulating the tasks of the management science of the 21st century, argued that there is only one legitimate rationale for the goal of a business: the creation of a satisfied client. Companies that do not know how to find their customers, cannot identify their needs and build long-term and trusting relationships with them will eventually be squeezed out by those who have managed to meet market expectations.

The main components of a customer-oriented approach (Lambin, 2007) can be characterized as follows:

• Focus on customer loyalty (growth in market share and attracting new customers are becoming increasingly costly, so it is more profitable to use the potential of an already existing customer base);

• Individual communication with clients (with the development of information technologies, it becomes possible to maintain interactive communication between the organization and its clients in order to take into account the individual needs and preferences of each of them);

• The basis of cooperation is relationships, not a service (over time, the services provided become monotonous, therefore maintaining and developing cooperation between the company and its customers is the key to continued success).

Thus, increasing market competition forces organizations to place a special emphasis on building long-term and sustainable relationships with their clients (Chen, 2016). Building partnerships with the client and interest in his needs is a highly promising area of modern management. All this characterizes a “customer-oriented approach”, although at present there is no single definition. As a rule, experts and researchers understand the organization’s orientation to the needs and interests of the client. This determines the ability of a business to concentrate additional profits through a deep understanding and satisfaction of these needs (Kim, Boo, & Qu, 2018).

Problem Statement

Recently, in Russia there has been a clear tendency towards increased competition between hospital facilities, which are exposed to the ever-increasing influence of competitive factors. The hotel market is developing at a high rate, as evidenced by the annual increase in the number of new hotels by an average of 10-15%, hotel income is about 25% per year, as well as the positive dynamics of the tourist flow.

To date, 22 international hotel operators are represented in Russia, which operate 179 hotels (38,705 rooms) in 38 cities. It is planned to open 105 hotels (20,637 rooms), and the total amount will be 284 (59,342 rooms) by 2020 (see Fig. 01 and Fig. 02). The largest market share (80%) is distributed among five companies: Accor Hotels, Hilton Worldwide, Marriott International, Carlson Rezidor Hotel Group, InterContinental Hotels Group.

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In most countries of the world (except for the USA), national hotel brands constitute a significantly smaller share than hotels under international management. A similar trend is observed in the Russian market. Currently, there are 179 hotels operating under international brands, which is almost 1.5 times more than national hotels represented by 101 facilities. As of October 2016, 169 hotels under international management and 72 under Russian management were in Russia. Thus, in the current year the difference was reduced by 19 facilities in favor of Russian chains. Russian operators actively continue to develop their business, opening new hotels both in the regional market and abroad.

The main incentives for the expansion of international hotel chains in Russia are high prices for accommodation in most cities, which indicates a low hotel competition, as well as a low level of comfort and services that are typical for Soviet-built hotels that dominate the market.

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Hotels managed by international hotel operators have several advantages with respect to non-chain independent hotels:

• Recognizable hotel brand is perceived as a guarantee of quality;

• Various advantages and discounts for regular guests encourage tourists to choose the hotel chain in which they are members of the loyalty program;

• Uniform standards of service and unification of management systems, and training in chain hotels provide a higher level of service than in independent hotels;

• During the crisis, chain hotels are more stable for a number of reasons, including stable demand from regular loyal guests, the ability to manage the load due to the presence in several global reservation systems and the availability of highly qualified specialists;

• Concentration on a certain segment of the tourist market allows significantly simplifying the promotion, improving management efficiency and increasing customer satisfaction with hotel facilities.

Analysis of the experience in the development of the hospitality industry shows that the Russian market of chain accommodation facilities is still in the formative stage. Russian hotels are still characterized by the absence of uniform recognizable standards, since the portfolios of assets of their management companies contain extremely heterogeneous facilities. This complicates the recognition of Russian brands and reduces their competitiveness compared with foreign chains.

A wide range of development strategies of hotel facilities is determined not only by the features of the hotel product and the specifics of the hotel industry, but also by the very nature of competition in the hotel business (Kobyak, Ilina, Latkin, & Evstigneev, 2018). The concept of competitiveness and a customer-oriented approach are comparable in their significance. The first must meet the requirements of the market in which the company is located, and the second - to meet customer expectations. In this regard, it is necessary to talk about the strategic customer-oriented management, since the company, guided by the interests of the client, builds long-term prospects, often abandoning short-term benefits (Makusheva, Konovalova, Yudina, & Silaeva, 2017). In our opinion, for the sphere of hotel services, a customer-oriented approach should be considered as one of the most important factors of competitiveness in the long term, where a customer-oriented approach is aimed at meeting customer needs, and competitiveness is aimed at the market as a whole (see Figure 03 ).

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Thus, the customer-oriented approach in the service sector represents the ability of the company to provide high-quality competitive services aimed at a long-term perspective and the ability to meet and exceed customer expectations, increasing their loyalty.

At the same time, in the process of implementing a customer-oriented approach in the management system of hotel facilities, a whole range of problems arise, starting with the lack of an unambiguous interpretation of customer-orientation, its forms, the specifics of the relationship with the quality of services and insufficient substantiation and depth of methodological tools for its assessment (indicators, methods and assessment technique). Thus, it is necessary to develop a methodological complex for assessing customer-orientation of hotel facilities, the use of which will allow assessing the current level of customer-orientation and identify the main directions of its improvement.

Research Questions

Taking into account the facts mentioned the authors of the study considered the following research questions:

• What factors determine customer-orientation of hotel facilities?

• What indicators can be used to assess the current level of customer-orientation of hotel facilities?

• What tools and assessment methods are most suitable for determining the indicators of customer-orientation of hotel facilities in accordance with this set of indicators?

• What tools and assessment methods are most suitable for determining the indicators?

Purpose of the Study

The purposes of this study are the following:

• Identify the main factors determining customer-orientation of hotel facilities as an essential condition for ensuring and improving their competitiveness;

• Develop a system of indicators for assessing the level of development of customer-orientation indicators of hotel facilities;

• Develop a set of tools for assessing the level of customer-orientation of hotel facilities in accordance with the proposed system of indicators.

Research Methods

5.3. Selection of methods and development of assessment tools

In the course of the study, the authors identified three main methods for assessing the client-oriented media: a survey, expert assessment, analysis and collection of statistical data.

Surveys can be conducted in different ways:

• Assessment of informal surveys;

• Focus groups (formal surveys);

• Inviting external consultants to interview employees.

The next method is expert assessment, which includes the method of organizing work with experts and processing expert opinions expressed in quantitative or qualitative form in order to prepare information for decision-making. The essence of this method is that the basis of the decision, forecast, conclusion is the opinion of a specialist or a team of specialists based on their knowledge and practical professional experience.

The above proposed system for assessing the level of customer-orientation of hotel facilities includes many different indicators of the qualitative and quantitative assessment of the development of hotel facilities. Accordingly, for such a set of indicators it is not possible to develop a uniform methodology and tools for assessment. Therefore, it is necessary to develop a methodological complex for assessing customer-orientation of hotel facilities, including tools, criteria and rating scales for each of the presented indicators.

At the moment there is a well-proven method for assessing the level of services in the hotel “Secret Guest”. However, from the point of view of the subject of this study, this methodology does not take into account a more detailed analysis of a number of customer-oriented factors, namely, religious and national awareness, specifics of the customer segment, internal and external customer-oriented approach, location and infrastructure for a certain type of hotel, hotel website and loyalty program. The most significant tool that can be used in the framework of the set of indicators proposed is the scale of factors of contact points and indicators of emotional and social intelligence (see Figure 04 ).

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The practice of hospitality has also developed ways to assess guest satisfaction with the quality of services provided, which can be used as part of customer-orientation assessment of hotel facilities. A traditional approach to assess customer satisfaction is the Net Promoter Score (NPS), a net promoter index or method for calculating customer loyalty (Bǎlan, 2012). At the heart of NET is the belief that loyalty is a person’s willingness to contact the company again and, more importantly, to recommend a product or company to his friends. To do this, ask customers the question: “On a scale from 1 to 10, with what probability do you recommend the product (service) of our company to your friends or colleagues?” Depending on rates, they are divided into the following categories:

• Promoters - rated 9 and 10. These are customers who are highly loyal to the company and are very likely to recommend it to their friends.

• Passive clients - rated 7 and 8. They are considered “passive” clients who are not ready to recommend the company, but not so much dissatisfied with it.

• Detractors - rated from 0 to 6. They are dissatisfied customers who would rather not recommend the company to their friends / acquaintances, and, moreover, can even “discourage” using its services.

 Based on the segmentation data, NET can be calculated using a simple formula (see formula 1):

NPS = (% Promoters) - (% Critics) (1)

The resulting value will be in the range of -100 to 100.

At present, there is no single scale for assessing the level of customer-orientation of hotel facilities, which greatly complicates expert assessment. The typology of service elements makes it possible to build an extremely simple and illustrative model for assessing the quality of services in hotel facilities and can be formed on the qualitative and quantitative criteria of competencies. The rating scale can be given as uniform for all elements, as well as different. For some - a three-point, for other more significant elements - a five-point or ten-point. In our opinion, it would be advisable to offer an assessment on a five-point scale (see Table 03 , Table 04 ), where the minimum value is “0” (absence of this indicator), and the maximum value is “4” (full presence and satisfaction with it).

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This scale will allow:

• Assess customer-orientation indicators characterizing the quality of hotel services through the eyes of the client (customer satisfaction / dissatisfaction);

• Determine the criteria for expert assessment of the level of competencies of hotel facilities for each of customer-orientation indicators (available / not available, or full interest / lack of interest).

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It should be noted that using the criteria of expert assessment of the level of competences of the organization, it is impossible to fully assess all indicators on the proposed customer-orientation factors. Indicators of the percentage of subsequent visits and rating on booking sites, complaints handling requires statistical data processing. In the first case, it is necessary to analyze the data of the hotel on subsequent visits, and then - analysis of reviews. The percentage of subsequent visits to hotels is difficult to analyze without automated control systems, some of which do not include tracking of subsequent visits by customers. The rating on Internet resources is monitored using booking sites (for example, Booking.com, TripAdvisor), and complaints handling involves analyzing reviews from the official website of the hotel and from booking sites. Sales dynamics is measured by load values, ADR, RevPar by the method of comparative analysis of indicators for the hotel services market using statistical data processing. These indicators, according to Hua, Wei, DeFranco, & Wang (2018), are used as an indicator of guest loyalty and, therefore, are applicable to assess customer-orientation of hotel facilities.

The index of satisfaction with the quality of services provided by the client is calculated as the ratio of the sum of satisfaction values for factors, calculated as the sum of points received by the number of respondents to the total maximum possible points for all factors. The assessment tool is a survey using the above five-point scale by the following parameters that affect the guest satisfaction level:

• Reservation service;

• Reception and accommodation services at the hotel at check-in / check-out;

• Room rating;

• Room cleaning rating;

• Catering;

• Range and quality of services.

Findings

Improving the assessment methodology for several indicators in the process of testing it dictates the need to make changes to the initially formed set of indicators. Taking into account the refinement, the system of indicators for assessing customer-orientation of hotel facilities is presented in Table 07 .

The model assessing customer-orientation of hospital facilities developed in this study is a comprehensive assessment of customer-orientation of hospital facilities. The result of the assessment is the sum of points scored according to the results of expert assessment of the set of 37 indicators. Thus, the indicator obtained during the application of the proposed methodological complex is a quantitative assessment characterizing a certain level of customer-orientation of hotel facilities. The results of a comprehensive assessment should be interpreted as follows (see Table 08 ):

Conclusion

The solution of practical problems when assessing and implementing a customer-oriented approach as a factor in competitiveness of hotel facilities directly depends on the methodology taken as a basis, which should contain basic principles of customer-oriented research, taking into account its essence and content, features and results of its interaction with customers.

The weak elaboration of the methodological basis for assessing customer-orientation, which is currently traced in scientific and applied publications, complicates the solution of these problems. In order to eliminate the noted problem, the authors formulated the definition of a customer-oriented approach as a factor in competitiveness of hotel facilities, namely, the ability of hotel facilities to provide high-quality competitive services aimed at long-term prospects and the ability to meet and exceed customer expectations, increasing their loyalty.

To form a methodology for assessing customer-orientation of hotel facilities, the authors suggested a set of factors characterizing the level of customer-orientation of hotel facilities: internal client, external client, quality of service, location, infrastructure, range of services, prices, loyalty program, religious and national awareness, facilities for disabled people and specifics of the customer-oriented segment. When analyzing indicators of customer-oriented factors proposed, it was proved the expediency of using various methods and tools that form the methodological complex for assessing the level of customer-orientation of hotel facilities. In addition, a more convenient scale was developed, namely, a five-point scale, to assess the level of formation of organization's competences on the proposed set of client-orientation factors.

The main directions for the practical implementation of this model are:

• Apply monitoring of the current level of customer-orientation of hotel facilities in order to develop effective management decisions in the field of managing competitiveness of hotel facilities;

Use the proposed methodological complex for assessing customer-orientation of hotel facilities that provide consulting and appraisal services in the field of hospitality.

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