Factors Affecting Sales Performance Of Hotels And Restaurants In Victoria, Essay.

Effect of Internal and External Factors on Demand for Hotels and Restaurants

Question:

Discuss about the Factors affecting Sales Performance of Hotels and Restaurants in Australia.

The primary significant features of business in the hotel and restaurant industry are that demand can never be fully managed by the firms. This is attributed to the fact that external factors determine the need for hotels and restaurant, namely preferences of customers, competitive pricing, state of the economy (Sainaghi, Phillips, and Corti, 2013; Wang, Chen & Chen, 2012). However, the business performance of the hotels is also affected by internal factors like degree of investment and innovation, the size of the business and worker’s costs (Sainaghi, Phillips and Corti, 2013). Therefore, to the companies in the hospitality industry to thrive, they must offer quality and high-class customer services. The senior management can establish sales performance cultures by being committed to excellence through their active participation in the progress of lasting associations with the customers (Goetsch and Davis, 2014). Such a culture will reduce the rates of staff turnover and increase their satisfaction. The Malcolm Baldridge National Award (MBNQA) went to the Ritz-Carlton hotel corporation of the USA because it delivered high-class services and the best hotel practices in the hospitality industry (Brown, 2013). Evans and Lindsay (2011) suggest that the hotel gained its superior quality because it focused on technological advancement and employee performance.

Most of the hotels and restaurants in Australia are well-known tourist centers, for instance, Royal Mail Hotel, Echoes Boutique Hotel and Restaurant Blue Mountains, Altitude Restaurant among others. These hotels and some more provide superior quality services and personalized services and are featured with swimming pools, modern fitness centers, conference halls, indoor and outdoor events. However, in Victoria the prominent hotels that exist there are not up to standard from the perspective of a developed country like Australia even though they might be first class hotels in developing countries. Some of the hotels that were prominent in Victoria decades ago have since gone down despite the advantage of strategic location, space, and resource. This project proposal focuses on providing evidence of the factors that impact the sales output of the hotels and restaurants.

This proposal's aim is to find out the factors that affect the performance of sales of hotels and restaurants in Australia. Furthermore, this research analyses the effects of such factors on customers’ response with the aim of developing an in-depth understanding of the objective

The Importance of High-Quality Customer Services in the Hospitality Industry

This study is to cover large hotels and restaurants with a minimum of thirty guest rooms and conference facilities within and without. The target participants shall include employees, top-level managers, and customers within the state of Victoria.

The service industry is different from the manufacturing industry, and thus the provision of services and products respectively varies widely. For instance, the manufacturing industry uses special offer and huge discounts to increase sales whereas the service industry focuses on the increased levels of customer satisfaction which keeps them loyal. Reece, (2012) asserts that most of the businesses in the service industry retain their customers by offering high-class services.

The perception of service quality by the customer depends on the service they have received and the extent of their satisfaction or expectation (Dabholkar, 2015). A performing organization makes use of customer information after gathering by use of questionnaires and interview with the aim of understanding their needs and then embarks on strategies how to meet them. Angelova and Zekiri, (2011) suggest that businesses should analyze the customers’ attitudes towards their service delivery and level of customer satisfaction by engaging them. Most of the research indicates that dissatisfied customers talk more about their worst encounter with an organization that their joyful experience (Klee and Westgard, 2014). Existing studies show a connective link between customer loyalty and satisfaction and a connection between organizational performance and loyalty of customer (Siddiqi, 2011).  

The research by Wang et al. (2012) on the hotels in Taiwan found out that the total quality management affected the hotels’ performance positively and thus established the link between innovation and profitability in the hospitality industry. Sandvik, Duhan, and Sandvik (2014) through their study found out that competitive advantage was majorly attained through innovativeness. The results showed a connected link where innovation positively influenced market demand which further affected profitability positively. Furthermore, Assaf, and Agbola, (2011) in their study on the performance of Australian hotels found out that increase in productivity is mostly influenced by the advancement in technology compared with the effect of labor and capital which is less felt.

Proper strategic plans and work systems by the management can offer the business a competitive advantage and thus maximize profits. The implementation of the programs should be done after it is assessed as realistic and viable by the experts and then the manager should be the first to embrace and initiate a campaign towards the employees to adopt and implement them, and the customers will only follow the example (Johnson et al., 2013). Successful compensation programs are essential towards sales performance. Chung, Steenburgh, and Sudhir (2013) researched the connection between compensation and performance of employees. The outcomes indicated that those employees that were frequently rewarded for excellence were more satisfied with their jobs and this was reflected in the quality of customer service which had a positive ripple effect on customer loyalty and sales performance.

Factors Influencing Customer Satisfaction and Loyalty in the Service Industry

The existing and future Customers are the only ones from whom organizations can create value from. The successful businesses according to are those that acquire new customers while retaining the old ones (Kotler and Armstrong, 2013). Stiff marketing competition in the industry makes the customers rational because of the availability of abundant choice to choose from and thus for a business to survive it must offer unique value its services. The management should support behavioral values by rewarding best performing employees and observe their strengths and weaknesses to align with their capabilities. The administration should seek to motivate the employees by meeting their expectations at the workplace and avoiding unnecessary emotional torture for this will be replicated in their performance.

Customer Services

Most of the big hotels major on the customer satisfaction and development of a strong association with them and thus continually widening their market share, profits and market sustainability. The levels of customer satisfaction, loyalty, and organizational sales are directly associated and significantly increase with the period of customers loyalty (Flint, Blocker, and Boutin, 2011). According to the study by Steven, Dong, and Dresner (2012), most businesses fail because of reduced levels of customer satisfaction.

Human and Capital Resources

Expert employee skills and sufficient capital funds can affect the performance of hotels as regards to sales by offering adequate services to the customers. Employees that are the well-equipped regarding skills and competence and a positive attitude can be relied upon to provide quality services alongside information technology which can also be a competitive advantage which results in improved performance of the business Steven, Dong, and Dresner (2012). Buller and McEvoy (2012) by showed that human resource in an organization is critical to its general performance. The research found that human resource functions such as training, motivation and work relationships contributed more to the performance of the business.

Organizational branding

The brand image which is inclusive of the name of a product, visible features and appearance are significant on how the customer makes selective choices from the existing ones in the market. Kaufmann, Panni, and Orphanidou  (2012) assert that customer behavior is affected by marketing factors such as availability of goods and services, promotion, image and the characteristics of the consumers. Therefore, the brand is key to the acceptance by customers. Brand/product preference or popularity is affected by the current perception of the quality of services about another provider within the same industry. A high brand image generates customer loyalty and sales in addition to market value (Solomon, 2014).

Impact of Innovation and Technology on Hotel Performance

Sales Performance

Business sales performance is directly associated with profitability and customer satisfaction. Research shows that organizations with long-time customers have high sales performance than their competitors who enjoy a more significant market share of top customer turnover. Evans and Lindsay (2011) conducted a research and found out that businesses can improve their sales performance to approximately 100% through the retention of 5 percent of their customers more than their competitors with a competitive advantage because the cost of retaining former customers is lower than that of acquiring new customers.

In agreement with the outcomes of the literature review, this study aims to analyze the factors that affect sales performance of hotels and restaurants and the corresponding influence of such factors on customers’ response in Victoria. Thus, the following research questions are proposed:

Primary Question

1. Does organizational branding have any effect on the performance of sales of hotels and restaurants in Victoria?

Secondary Hypotheses

2. Does customer services offered in hospitality industry affect the performance of sales of hotels and restaurants in Victoria?
3. What are the influences of the HRM functions on the sales performance of hotels and restaurants?

Qualitative research

The purpose of this qualitative study will be to find out the factors that affect the performance of sales of hotels and restaurants in Victoria. The study will use face-to-face interviews with the employees in the hotels, adapting with work situations. A summarized unstructured interview will be used to try and comprehend fundamental issues regarding the hotels. The perception of the employees regarding their work environment, in general, will be sought for (Saunders, 2011). The gathered data will be recorded down and analyzed later. This proposal expects to sample out fifteen employees out of the target population of all workers from the fifty selected hotels and restaurants.

Quantitative research

Questionnaires (Appendix 1) shall be used to collect data from all the employees of the fifty selected hotels and restaurants and are to be hand-delivered to the respective employees after granting of permission by the management. The target population is 100 employees from the fifty hotels, with a sample size of twenty employees comprising of five supervisors and fifteen junior workers. The questionnaire shall consist of both open and close-ended questions to enable the participants to give their opinions and to ensure relevancy of the responses respectively. Sales performance is to be taken as the dependent variable whereas customer services, human and capital resources, and organization branding as independent variables.

Validity and Reliability

To guarantee validity and reliability of the measuring instrument will be used to ensure the responses are not biased.  The consistency of each item will be analyzed to ensure the reliability of the responses from the participants. Furthermore, reliability across all independent items will be guaranteed by correlating them with each other. To ensure that the measured content is valid, the instruments will include a representation of specific details. The higher the number of representative items the higher the validity of the content (Csikszentmihalyi and Larson, 2014).

Role of Management in Strategic Planning and Employee Performance

Data Analysis Method

The collected data through interviews and questionnaires will be checked for reliability and verification did then organized, coded, tabulated and then analyzed to interpret the outcomes in alignment with the formulated research questions. Statistical Program for Social Sciences (SPSS) will be employed in the data analysis and presentation u in the form of charts, graphs for easy interpretation.

Research Limitations

The projected limitation to the success of this study will be the denial to access the necessary data and personnel in the hotels and restaurants of interest. The success of this study is substantially dependent on the permission of the hotel and restaurant management to interview the staff and the access to some vital information. Furthermore, this study is only restricted to the hotels in Victoria, and thus a generalization of its outcome should be applied cautiously in countries with different levels of economic growth and cultural background.

Time Schedule

The study is expected to last for approximately one year beginning in November 2017. The expenses associated with the research shall be met by the researcher from its inception to the conclusion. The table below shows the details of each task and period

Conclusion

The hospitality industry keeps changing because it is hugely dependent on the customers whose needs and preferences vary as well with time. The management has the responsibility for monitoring these variations and aligning their service delivery with these changes to achieve the organization's objectives and increase sales performance. Activities such as organizational branding, innovation, and productivity, employee loyalty, etc. are some practices that the management usually undertakes to respond to the changes in customer preferences.

References

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Assaf, A.G. and Agbola, F.W., 2011. Modelling the performance of Australian hotels: a DEA double bootstrap approach. Tourism Economics, 17(1), pp.73-89.

Brown, M.G., 2013. Baldrige Award Winning Quality--: How to Interpret the Baldrige Criteria for Performance Excellence. CRC Press.

 Buller, P.F. and McEvoy, G.M., 2012. Strategy, human resource management and performance: Sharpening line of sight. Human resource management review, 22(1), pp.43-56.

Chung, D.J., Steenburgh, T. and Sudhir, K., 2013. Do bonuses enhance sales productivity? A dynamic structural analysis of bonus-based compensation plans. Marketing Science, 33(2), pp.165-187.

Csikszentmihalyi, M. and Larson, R., 2014. Validity and reliability of the experience-sampling method. In Flow and the foundations of positive psychology (pp. 35-54). Springer Netherlands.

Dabholkar, P.A., 2015. How to improve perceived service quality by increasing customer participation. In Proceedings of the 1990 academy of marketing science (AMS) annual conference (pp. 483-487). Springer, Cham.

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