Managing Quality Service in Hospitality

Managing Quality

Service in Hospitality

How Organizations Achieve

Excellence in the Guest Experience

ROBERT C. FORD, Ph.D.

UNIVERSITY OF CENTRAL FLORIDA

MICHAEL C. STURMAN, Ph.D.

CORNELL UNIVERSITY

CHERRILL P. HEATON, Ph.D.

UNIVERSITY OF NORTH FLORIDA

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Managing Quality Service in Hospitality:

How Organizations Achieve Excellence

in the Guest Experience

Robert C. Ford, Ph.D.

Michael C. Sturman, Ph.D.

Cherrill P. Heaton, Ph.D.

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ISBN-13: 978-1-4390-6032-2

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1 2 3 4 5 6 7 15 14 13 12 11

This book is dedicated to Bruce Laval—the father of guestology

CONTENTS

Dedication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii

Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .........x

Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xi

Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xix

About the Authors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xx

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......xxii

SECTION 1 THE HOSPITALITY SERVICE STRATEGY ........... 1

Chapter 1: The Basics of Wow! The Guest Knows Best

Hospitality Principle: Provide the service quality and value that

guests expect. .......................................................... 3

Guestology: What Is It?....................................................... 5

The Guest Experience......................................................... 9

Guest Expectations .......................................................... 17

Quality, Value, and Cost Defined ............................................. 20

Lessons Learned 23

Review Questions 23

Activities 24

Ethics in Business 25

Case Study 25

Additional Readings 27

Chapter 2: Meeting Guest Expectations through Planning

Hospitality Principle: Focus strategy on the key drivers of guest

satisfaction ............................................................ 31

Three Generic Strategies ..................................................... 32

The Hospitality Planning Cycle ............................................... 38

Assessing the Environment.................................................... 41

What the Future May Hold .................................................. 43

Assessing the Organization Itself: The Internal Audit ............................. 56

Developing the Service Strategy ............................................... 62

Action Plans ............................................................... 64

The Uncertain Future ....................................................... 68

Involving Employees in Planning .............................................. 68

Lessons Learned 70

Review Questions 70

Activities 71

Ethics in Business 71

Case Studies 72

Appendix: Quantitative and Qualitative Tools to Plan for the Future 74

Additional Readings 78

Chapter 3: Setting the Scene for the Guest Experience

Hospitality Principle: Provide the service setting that guests expect ........ 83

Creating the “Show” ........................................................ 84

Why Is the Environment Important? ........................................... 93

A Model: How the Service Environment Affects the Guest ......................... 97

Lessons Learned 108

Review Questions 109

Activities 109

Ethics in Business 109

Case Studies 110

Additional Readings 111

Chapter 4: Developing the Hospitality Culture: Everyone Serves!

Hospitality Principle: Define and sustain a total service culture ............ 117

The Importance of Leaders .................................................. 118

The Importance of Culture .................................................. 121

Beliefs, Values, and Norms .................................................. 126

Culture and the Environment ................................................ 128

Communicating the Culture ................................................. 131

Changing the Culture....................................................... 141

What We Know About Culture .............................................. 142

Lessons Learned 143

Review Questions 143

Activities 143

Ethics in Business 144

Case Study 144

Additional Readings 145

SECTION 2 THE HOSPITALITY SERVICE STAFF ............. 149

Chapter 5: Staffing for Service

Hospitality Principle: Find and hire people who love to serve ............. 151

The Many Employees of the Hospitality Industry ............................... 152

Loving to Serve ........................................................... 155

The First Step: Study the Job ................................................ 157

The Second Step: Recruit a Pool of Qualified Candidates ........................ 163

The Third Step: Select the Best Candidate ..................................... 178

The Fourth Step: Hire the Best Applicant...................................... 185

The Fifth Step: Make the New Hire Feel Welcome .............................. 187

The Sixth Step: Turnover—Selecting People Out of an Organization .............. 187

Employing the Best to Serve Your Guests ...................................... 189

Lessons Learned 189

Review Questions 190

Activity 191

Ethics in Business 191

Case Studies 192

Additional Readings 193

vi Contents

Chapter 6: Training and Developing Employees to Serve

Hospitality Principle: Train your employees, then train them some more . . 197

Employee Training ......................................................... 199

Developing a Training Program .............................................. 203

Training Methods.......................................................... 206

Challenges and Pitfalls of Training ........................................... 216

Employee Development ..................................................... 219

Lessons Learned 223

Review Questions 223

Activities 224

Ethics in Business 224

Case Studies 225

Additional Readings 226

Chapter 7: Serving with a Smile: Motivating Exceptional Service

Hospitality Principle: Motivate and empower your employees ............. 229

Motivating Employees ...................................................... 230

The Needs People Have..................................................... 232

The Rewards People Want .................................................. 235

Rewarding Employees for Performance ........................................ 243

Linking Performance and Rewards ........................................... 244

Clarifying Employees’ Roles ................................................. 245

Setting Goals ............................................................. 247

Providing the Right Direction ................................................ 249

Motivation, Employee Satisfaction, and Guest Satisfaction ....................... 256

Lessons Learned 258

Review Questions 258

Activities 259

Ethics in Business 259

Case Studies 260

Additional Readings 262

Chapter 8: Involving the Guest: The Co-Creation of Value

Hospitality Principle: Empower guests to co-create their experiences ...... 265

Guests Co-Create Value .................................................... 266

The Guest Can Help! ...................................................... 268

Strategies for Involving the Guest............................................. 269

Determining When Guest Participation Makes Sense ............................ 280

One Last Point: Firing The Guest ............................................ 284

Lessons Learned 287

Review Questions 287

Activity 288

Ethics in Business 288

Case Study 289

Additional Readings 290

Contents vii

SECTION 3 THE HOSPITALITY SERVICE DELIVERY SYSTEM . . 295

Chapter 9: Communicating for Service

Hospitality Principle: Glue the guest experience elements together

with information. ..................................................... 297

The Challenge of Managing Information ...................................... 298

Information and the Service Product .......................................... 301

Information and the Service Setting ........................................... 304

Information and the Delivery System.......................................... 307

Decision Support Systems ................................................... 313

The Hospitality Organization as an Information System ......................... 320

Lessons Learned 324

Review Questions 324

Activities 325

Ethics in Business 325

Case Studies 326

Additional Readings 327

Chapter 10: Planning the Service Delivery System

Hospitality Principle: Provide seamless service delivery ................... 331

Planning and Designing the Service Delivery System ............................ 332

Developing The Service Delivery System ....................................... 335

Planning Techniques ....................................................... 341

Targeting Specific Problem Areas in Service Delivery Systems ..................... 355

Lessons Learned 362

Review Questions 362

Activities 363

Ethics in Business 363

Case Studies 364

Additional Readings 365

Chapter 11: Waiting for Service

Hospitality Principle: Manage the guest’s wait ............................ 369

When the Wait Begins...................................................... 370

Capacity and Psychology: Keys to Managing Lines ............................. 371

Queuing Theory: Managing the Reality of the Wait ............................. 375

Managing the Perception of the Wait ......................................... 385

Service Value and the Wait ................................................. 390

Lessons Learned 391

Review Questions 392

Activities 393

Ethics in Business 393

Case Studies 394

Appendix: The Mathematics of Waiting Lines 396

Additional Readings 398

viii Contents

Chapter 12: Measuring and Managing Service Delivery

Hospitality Principle: Pursue perfection relentlessly ....................... 401

Techniques and Methods for Assessing Service Quality ........................... 403

Measuring Service Quality After the Experience................................. 415

Finding and Using the Technique that Fits..................................... 427

Lessons Learned 429

Review Questions 429

Activities 430

Ethics in Business 430

Case Studies 431

Additional Readings 432

Chapter 13: Fixing Service Failures

Hospitality Principle: Don’t fail the guest twice ........................... 437

No Perfect Service Systems .................................................. 438

Service Failures: Types, Where, and Why ..................................... 440

The Importance of Fixing Service Failures ..................................... 443

Dealing with Service Failures ................................................ 449

Recovering from Service Failure .............................................. 452

Lessons Learned 462

Review Questions 462

Activities 463

Ethics in Business 463

Case Studies 464

Additional Readings 469

Chapter 14: Service Excellence: Leading the Way to Wow!

Hospitality Principle: Lead others to excel ................................ 475

What Does the Guest Want? ................................................ 476

Strategy .................................................................. 476

Staffing .................................................................. 481

Systems .................................................................. 486

Hospitality and the Future .................................................. 487

Leaders and the Future ..................................................... 489

It Begins—and Ends—with the Guest ......................................... 494

Lessons Learned 494

Review Questions 495

Activities 496

Ethics in Business 496

Case Studies 497

Additional Readings 499

Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 501

Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 509

Contents ix

FOREWORD

Whenever I am in the Orlando area, I try to meet with Bob Ford. He is one of the best

scholars of hospitality management. I find that spending an afternoon with Bob fills me

with both energy and curiosity. He has an uncanny ability to identify areas of opportunity

and to discuss common practices in the hospitality industry and how we can investigate

ways to improve them. I value his insights and his ability to recognize the real issues that

we need to resolve with service delivery systems, so much so that I have had him come to

Houston to spend a day with our faculty.

Through this book, everyone can spend a day with Professor Robert Ford. Bob loves

to spend time with hospitality executives, discussing what keeps them up at night. This

discussion provides him with not only a real understanding of the industry but also anecdotes he uses to illustrate his text. The examples of best practices presented in this

book make it an interesting read. This book is structured as a textbook, but any manager

of a hospitality organization will find the time spent reading this book a good investment.

The research suggests that there truly are important differences between managing a

service organization and managing a tangible goods producing organization. Yet, there

are very few books on the management of services. This book is the only one I know of

on the management of hospitality services. When I taught services management, my

choice for a text was Bob’s Managing the Guest Experience in Hospitality. I come from a

marketing background. Bob often reminds me that marketers make promises and operators have to deliver those promises. This book explains how to deliver the promise.

This book has been completely updated from Managing the Guest Experience in Hospitality

with new examples and the latest thought on service management. Although Disney

provides great examples of how to deliver great service, the book has been expanded to

include examples from a diverse set of hospitality organizations, including international

organizations. This inclusion will make it interesting and relevant to students going into

any area of the hospitality industry and to students from across the globe. Michael

Sturman, the Kenneth and Marjorie Blanchard Professor of Human Resources at Cornell

University, joins Bob Ford in this edition. One of Michael’s additions is his knowledge of

compensation and staffing in the hospitality industry. Michael’s research articles have been

featured in the top management journals. He is known for his ability to communicate the

implications of this research to practitioners and is former editor of and a frequent contributor to the Cornell Hospitality Quarterly.

I am delighted that Bob and Mike have created Managing Quality Service in Hospitality:

How Organizations Achieve Excellence in the Guest Experience, based on Managing the Guest

Experience. I am delighted not only for myself, but also for my guests, the students of

hospitality management. I strongly recommend Managing Quality Service in Hospitality as

a must read for hospitality managers and a text for hospitality management programs.

John Bowen

Dean and Barron Hilton Distinguished Chair

Conrad N. Hilton College

University of Houston

PREFACE

Welcome to Managing Quality Service in Hospitality. While this book may look familiar to

those who have read Managing the Guest Experience in Hospitality, it is so different that

we felt it was necessary to change the name. The book continues to be based on the

principles of guestology, and that means we practice in writing this book what we teach

in class. So, we kept some of the positive features of the earlier book while changing

those that our readers said needed to be changed.

The book is based on much of what the first author learned when he came to

Orlando to head the hospitality program at the University of Central Florida. There, he

learned about many different aspects of the hospitality industry from The Walt Disney

Company, and specifically about the principles of guestology from its “father,” Bruce

Laval. Disney was then and still is today a benchmark hospitality organization. People

come from all over the world to learn how to use Disney’s guestological techniques and

apply those principles to their own guest-focused organizations. If there seems to be an

abundance of examples in this book from Walt Disney World, there is a reason. This is a

visible and familiar service exemplar that most students can relate to easily and which

many have visited. Disney also provides an exceptionally wide representation of the

hospitality industry. It has successful examples of restaurants from quick-serve to fine

dining; lodging from campgrounds to upscale hotels; a transportation system that

includes trains, boats, buses, and monorails; catering services, convention and meeting

planning services, entertainment and night clubs, retail stores, golf courses, and cruise

ships. These organizations include almost every specific job category in the hospitality

field. The range of jobs for study on the Disney property—in terms of staffing, training,

motivating, and job performance—is very wide. Disney hires and trains thousands of

people annually to fill 1,100 different positions.

But there are many other exemplars: companies that use best practices to successfully

deliver great service. Aside from Disney, there are many more examples from hotels,

restaurants, amusement parks, airlines, and even others that may, at first glance, not

appear to be in the service industry. In today’s business environment, almost all companies need to know how to provide exceptional service, or their customers will go to

their competitors that can. We hope that you will be able to learn from these examples,

from firms both familiar and new to you, and see the application of the principles and

ideas in the book to whatever hospitality organizations are near you.

We also hope that you will find this book as clearly written and rich in content and

real-world examples as its predecessor book. We worked hard to improve the things

our student readers and faculty teachers liked while changing what needed to be changed. A lot has happened in the past decade, and this book contains new content to

reflect those changes. We hope you like our work and invite you to tell us how well

we did or where we could have done better. As practicing guestologists, we sought

the input of many former guests and those who were seeking more coverage of managerial topics than is currently available in hospitality texts. We did what we tell you to

do as practicing guestologists—ask, ask, ask your guests what they want, need, and

expect from an experience. After all, it doesn’t matter what we think is a great book if

our guests don’t see it that way.

We have made two big changes while writing this book. The first involves the changes

that have occurred with people. Guests of the late twentieth century are different from

today’s guests. The current generation of employees now entering the labor force is also

different with different expectations, capabilities, and behaviors than the last. The second

big change is in the forces impacting the organization. Competitors and the nature of

competition have changed. Suppliers are different, technology is very different, and hospitality organizations have discovered that the global nature that all business operates in

today impacts them too. We are all hooked together somehow and the result of these

global connections is a change in how we manage the guest experience in hospitality.

We have made other changes as well to make the book more relevant in an era

where social responsibility, ethics, and environmental concerns are increasingly part of

the hospitality manager’s world. In each chapter, we have added an ethical dilemma to

discuss. Our references have been selected to give the student and instructor further

information on each chapter’s topics for expanding lectures, opening knowledge doors

for papers, more in-depth study of related topics, and offering starting places for further

research. We have also included classic references to allow the student to trace the evolution of ideas back to their roots.

Finally, we want to point out that customer service by itself will not save a bad strategy, ineffective staffing, or poorly designed and operated business systems. On the other

hand, the research shows that once a business is efficiently run, customer service can give

it a sustainable competitive advantage. A big friendly smile won’t make up for a ruined

meal but a wow service encounter with a well-trained and motivated server can make a

routine experience into an unmatchable wow that guests will remember and come back to

have again. The exciting thing to us is how great an opportunity this is for gaining a competitive advantage over others in whatever hospitality business you are in. A quick look

at the most recent American Customer Satisfaction Index (online) will show that most

businesses are at the “C” level in providing customer satisfaction. Where else in the

world can you be only a little above average to be seen as “outstanding”? We hope that

the lessons learned and the concepts presented here will help you become accomplished

guestologists and receive an “outstanding” from your guests.

Purpose of the Book

This book is an attempt to organize, integrate, and present information about managing

hospitality organizations, some of which comes from academic studies and some from

the school of experience. It has been written to meet the needs of college classes devoted

to or including exploration of this exciting, undeveloped area. It should also be of help

to executives and managers who want to implement a guest-focused service strategy in

any hospitality or service organization that wants to compete successfully in today’s

customer-driven market.

This book fills a void. Up until now, instructors and students in hospitality management classes have had to use a text that combined services marketing with some services

management, with specific applications to restaurants, lodging, and other hospitality

areas made by the instructor or by means of handouts and articles on serving guests in hospitality settings. Managing Quality Service in Hospitality fills that void. It combines the findings of the most significant research on services and hospitality services in particular with

the best practices of leading hospitality organizations such as The Walt Disney Company,

Marriott, The Ritz-Carlton, Darden Restaurants, Southwest Airlines, and many others.

xii Preface

In addition to reviews by numerous college and university instructors of hospitality,

the material has been reviewed by practicing executives from many successful hospitality organizations, such as The Walt Disney Company, Starwood Hotels, Gaylord Hotels,

Hyatt Hotels, Sodexo, Darden Restaurants, and Sheraton Hotels. These academic and

practitioner reviews have assured that the text content is supported by sound theoretical

underpinnings and real-world findings.

The Hospitality Principles

Managing Quality Service in Hospitality represents theory that has passed the test of relevance. A proven principle of hospitality management keys each chapter of this book.

Leading hospitality organizations have found these principles to be important, workable, and useful. They represent the key points to keep in mind when putting the

book’s material into practice. They can guide hospitality organizations and their managers as they seek to reach the levels of excellence achieved by the benchmark

organizations.

Systematic Sequence

To communicate the content of Managing Quality Service in Hospitality as clearly as possible, we have used a simple structure for the book so that its organization could be one

of this book’s major features. One section is devoted to each of hospitality management’s three major concerns: strategy, staffing, and systems. Each of the fourteen chapters

is keyed to a principle of successful hospitality management.

Section 1, The Hospitality Service Strategy, begins by Chapter 1 explaining some of the

book’s major concepts: some differences between products and services; what is meant

by guestology; meeting customer expectations; the three parts of the guest experience;

and the definitions of quality, value, and cost in a guest service context. This section

then moves to Chapter 2’s thorough coverage of the planning processes used to assess

and meet guest expectations. Also explained are essential planning topics such as quantitative and qualitative forecasting tools; the importance of demographic trends; and the

organization’s service strategy origins in its vision, purpose, and mission, which themselves are based on the organization’s careful assessment of guest expectations. Chapter 3

describes why the service setting or environment is crucial to service success. We have

employed numerous examples to illustrate the principles and best practices of creating an

appropriate setting. Section 1 concludes with Chapter 4’s discussion of the importance to

the hospitality organization of a total service culture and how to achieve it.

Section 2, The Hospitality Service Staff, covers how to recruit and hire “persons who

love to serve” in Chapter 5, how to train them in Chapter 6, and then how to motivate

and empower them to provide outstanding guest service in Chapter 7. A topic that

many students and practitioners find particularly important is covered in Chapter 8,

how the hospitality organization can, when the conditions are right, encourage and

help guests co-produce, or participates in providing, their own experiences!

Section 3, The Hospitality Service Delivery System, shows how to glue the different

parts of the guest experience together by communicating information to the right person

at the right time, described in Chapter 9. Chapter 10 then describes the critically important tasks involved in planning and creating the service delivery system. This includes

projecting to meet demand, monitoring the system, and engaging in continuous

improvement. Because no organization’s server/system combinations can match

demand perfectly, Chapter 11 describes techniques for managing the inevitable waits

for service. Chapter 12 presents some ways of measuring results in terms of service

Preface xiii

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