CHAPTER 3

Strategies for Quality Service in Tourism and Hospitality

Introduction
To bridge the gap between the expectations and perceptions of a guest in a
hospitality and tourism setting, it is a must to plan his/her experience carefully. A
productive guest encounter is expected to yield optimum experience. With these
critical planning is very much important to properly design and ensure that the best
experience is the only experience a guest will receive.
In planning the guest experience, strategies are employed to be able to deliver
processes for each issue that is needed to be resolved by the management. Strategies
are plans that are designed to achieve a specific aim of the company. It usually
involves on to achieve such goals, planning actions to achieve such goals, and
maximizing resources to achieve the goals. With strategies, resources become
optimized, productivity is maximized, and processes are simplified Now, with guests
at the center, the experience would be better than initially planned.
Learning Objectives
At the end of this chapter, the students should be able to:
 understand the concept of strategy:
 realize the importance of designing the guest experience; and
 identify key factors that must be examined to ensure best service.

Reality Bites
Hotel DAVC, designed by popular local architects, boasts of its stylish design
and enjoys the harbor view of Manila Bay. It showcases a rooftop heated pool,
pampering spa services, and a gym. The hotel is a three-minute walk from a train
station. The shopping district is also 10 minutes away via train. Shuttle service
between the other hotels runs every 30 minutes. It also offers one hundred percent
(100%) electric transportation as part of its green marketing strategies that can be
booked prior to arrival. The chic guest rooms feature free Wi-Fi and stun in bright-
colored palettes.. Targeting foreign guests, the room also features free international
calls, a FREE fully stocked minibar, and a smartphone with unlimited data for
traveling in the city. Inside the room, the guest will see the hotel management's
concern for the environment as direct drinking water is dispensed through room tap to
avoid the use of plastics. The hotel also features a fitness center, a spa, and an infinity
pool. For business travelers, a well-equipped business center and concierge service
are made available. The LMGC Restaurant serves light food among a green veranda,
featuring indoor plants, while dishes are served by international chefs. Are the
strategies for guest comfort a highlight in this hotel? Explain how.
Content
Hospitality, Tourism, and Strategies
Strategic planning has been utilized extensively for developing tangible
products rather than used in service-related industries like hospitality and tourism.
With the marketing nature of tourism products and services, it is evident for
establishment to draw their market toward services, strategy plays a critical role. By
utilizing strategies, a company is able to identify its competitors while satisfying these
and wants of its guests.
Strategic planning is the process of identifying a company's internal and
external characteristics which will contribute to the attainment of its goal pointing to
specific direction while formulating different policies on how best to achieve it. A
restaurant, for example, to become one of the best in a certain area or region, should
think of different strategies to be able to meet the requirements needed in a certain
area as dictated by the market and the present situation it belongs.
With strategic planning in mind, three elements make up its components.
Firstly, the identification of long-term goals and objectives concerning the
conceptualization of coherent and achievable strategic objectives concerning the
conceptualization of coherent and achievable strategic objectives. Secondly, the
adoption of different courses of action should also be in place to assure that actions
taken to arrive objectives are already set. Lastly, the allotment of resources is also set
in place. This means that there will be costs associated with the actions to be able to
achieve the objectives.
Porter's Generic Strategies
In order to be successful and to make a profit in the industry's competitive
market, every organization needs a clear strategy. But how do establishments decide
the best strategy for their businesses, may it be a spa, a restaurant, or a resort? The
decision they make will affect every aspect of their company so it is important to get
it right.
Porter's generic strategies can help a decision maker to make the best choice
for his/her company.
Michael Porter identifies three strategies in achieving competitive edge in his
book, Competitive Edge. These are cost leadership strategy. differentiation strategy,
and focus strategy.
Cost leadership strategy focuses on increasing profits by reducing operational
costs and charging lower prices. To implement this strategy successfully, a company
will need to invest in new technology and to have efficient logistics. A company must
also make sure that its spending on items such as labor, materials, and facilities is kept
low. It is essential that a company beats its competitors on cost so it will need to
continually monitor and reduce its costs: An example would be an economy level
hotel that charges low rates but has only basic amenities for a regular guest. Its room
will typically have a standard bed, color television, air-conditioning unit, and private
bathroom. Wi-Fi connection is optional.
 The differentiation strategy focuses on making a company's service being
attractive and unique in comparison to those of its competitors. For example, a
company might specialize in a particular feature or unique service, be renowned for
its excellent customer service, or have a highly valued brand image. It will need to be
creative and innovative and be able to provide high quality services for this strategy to
work. Sales and marketing also play a vital role in this strategy's success and a
company will need to make sure to stay ahead in new trends in the industry. One best
example would be a hotel utilizing green technology in its operations. This hotel can
boast of adhering to the call on sustainability and environmental stewardship by
integrating this concept in its day-to-day operations, such as the use of reclaimed
wood, metal roofing and steel grills of another reclaimed building, passive cooling
through building orientation and insulation on metal roofing, as well as harvesting
rain and groundwater for toilet flushing, plant irrigation, and general house cleaning.
The focus strategy concentrates on developing services for niche market.
Using this strategy requires a deep understanding of the customer's needs of a
company. Its aim will be to meet these needs by providing that something special and
extra that the customers cannot get anywhere else. A company will also need to
decide whether to adopt cost leadership or differentiation. This is because the focus
strategy is not normally enough to win substantial market share on its own.
The first type of focus is on cost leadership or cost leadership in a narrow or
focused market. An example would be the study hubs in the university belts. They
have a very focused market place. They specifically target student guests that are
looking for cheaper alternatives to hotel lounges wherein they could spend their time
studying. They do not provide for everyone but only for students, that is why their
price is relevantly low.
The second type of focus is on differentiation in a narrow or focused market.
An example would be a coffee shop which adapted the drive-through business model.
It focuses on guests who do not really necessarily want to sit down and have a cup of
coffee. The guests like the brand and offering but do not have the time to sit down and
enjoy a cup of coffee. They have it on the move.
Choosing the right strategy for an organization is crucial in gaining a
competitive edge over its rivals. By using Porter's generic strategies model, an
organization will be able to identify the strategy that it needs to lead the organization
to success.
Internal and External Assessments
Internal analysis is where an organization takes stock of the resources and
assets that it possesses. These include the strengths that enable an organization to
function well. Experts refer to this as the "secret sauce" of an organization. Moreover,
internal analysis also flaunts the weaknesses of an organization. These weaknesses are
identified not to dwell onto, but to be addressed and resolved so that they do not harm
an organization.
An airline company, through internal analysis, may find out that it needs to
have a stronger passenger relationship management with its clients. By delving
deeper, it found out that the problem was because it is not in the culture of the
employees to establish a relationship with their passengers. Utilizing a strategy to
develop relationship marketing in their operations, it enabled the entire company to
combat this problem and convert the weakness into a strength.
An external analysis, meanwhile, does not rely on the "secret sauce." How a
company positions itself in the market with respect to its rivals in its particular space
is of primary concern. Attention should be focused on what a company is good at
relative to its rivals in that industry. Doing external analysis not only determines a
company's position in the external environment, but also showcases its opportunities
and threats through different tools such as the Political, Economic, Social,
Technological, Environmental and Legal (PESTEL) analysis, exhibits what it needs to
be wary about which somehow are uncontrollable to a certain level.
One best example is what happened in Boracay when it was closed for six
months because of the environmental rehabilitation projects of the Philippine
government. Many hotels and their respective employees and guests were affected by
this situation. It is said that about 400 lodgings and food services were ordered to be
closed for violating laws, three casinos were shut down, and other tourism
establishments built within the 30-meter shoreline were demolished. The government
predicted about P18-20 billion loss of potential gross receipts due to the six-month
closure.
Strategizing for the Future
Ford (2011) stated that the things hospitality and tourism organizations must
plan to cope with changes in the future, include demographics, technology, social
expectations, economic changes, competition in the industry, stakeholders, and other
factors.
Demographics
Changes in the workforce and the market of the hospitality and tourism sector
will continue to affect the operations of the industry, and this is relevant not only to
the service providers, but also to its market. Park and Yoon (2009) made an article on
the segmenting the motivation of Korean tourists. In their article, they noted that
motivation in tourism is largely determined by a number of factors, including
demographics. Results show that with changing demographics, themes as to their
socio-economic characteristics and behavior in tourism also change. The findings of
the research show that most Korean tourists value family togetherness, some are
passive, and some are want-it-all tourists. In the Philippines, as reported by the
Department of Tourism in 2017, millennials proved to be the most well-travelled. The
15-24 age group travelled across the country the most, followed by the 24-34 age
group and the 45-55 age group. These only show that demographics has changed
already whereby before these activities are prolific with the baby boomers but now
millennials take the scene.
Economic and Natural Forces
 Economic forces also change the nature of the industry and how it is managed
by the key stakeholders of this fast growing sector: In 2018, the Philippine Statistics
Authority reported that the Tourism Direct Gross Value Added (TDGVA) of the
Philippines jumped to a great amount of 12.7%. This translates to P2.2 trillion, higher
by 14.3% as compared to 2017's record of P1.9 trillion. A lot of people are actually
benefiting from tourism, and in the Philippines, this service-oriented sector is a source
of employment and income of a lot of Filipinos.
The Boracay tourism sector and its residents were deeply affected when in
temporarily closed in April 2018. The six-month closure of the island was based the
need for "rehabilitation" with the environmental problems which were already
surfacing and becoming too much for Boracay to bear.
In January 2020, Tagaytay, one of the famous places in the Philippines, also
suffered a tourism disaster as one of its prized natural destinations, the Taal Volcano,
erupted. Tourists flock in Tagaytay because of its cool temperature and the
magnificent Taal Volcano. In just the first three months of 2019. Tagaytay had 6.9
million visitors-- a sudden rise as there were only 7.5 million visitors in the entire
2018. Unfortunately, as the Taal Volcano erupted, most of the areas in Tagaytay and
the nearby municipalities in Batangas were deeply affected and had to find means on
how to cope with this economic and natural downturn.
Competitors
Competitors also shape the tourism and hospitality industry. The presence of
this major key player brings about major changes in the industry Moore (1996)
utilized biological analysis in explaining shifts in today's business. He mentioned in
his article that businesses are a big part of the ecosystem and businesses need to co-
evolve in order to thrive and survive. This is because of the fact that the economy
consists of unpredictable key players which constantly shift. Thus, movements
between competitors shift from time to time and create different relationships which
also affect other relationships that will be made in the future.
Bengtsson (1999) explained and identified these relationships existing in
competition. She mentioned that in analyzing the relationships between competitors.
four types can be distinguished.
Coexistence exists on social exchanges between competitors. As economic
exchange and bonds are not present, each competitor knows about each other but does
not interact with them. Usually, power is identified dependent on the competitor's
position and strength. Somehow, dependence is present and smaller companies are at
the mercy of larger players. There is also a distance between the competitors,
although psychologically. Trust is also regarded high, although informal, as one
player is also dependent on another competitor but does not with him/her.
Another relationship is cooperation, which also exists in this scenario. As this
concept is present, there are frequent exchanges between the players which comprise
of business, information, and social exchange. All competitors are cooperating but it
does not mean that they are not competing. Formal agreements exist if the competitors
have formed strategic alliances. Independent hotels usually do this, such as in the case
of referral groups or marketing consortiums. Although informal agreements also exist,
they are built on social norms and trust. These norms adjust the distribution of power
and dependence among themselves, which means that conflicts rarely arise.
As expected, competition is another relationship that is based on an action-
reaction pattern, which means that if a player launches a product or service, the other
competitors will definitely launch a similar, if not the same, product with some
developments. Because of this, interaction is usually simple and direct. Dependence
and power are also equally distributed but are also based on their position in the
ecosystem.
Lastly, a new relationship has existed. It is called co-opetition. Simply, it
means cooperation between competing players. This relationship includes economic
and other forms of exchanges. Usually, power is in the cooperative side of
relationship which is based on how it functions in the ecosystem. The competitive
side, meanwhile, highlights that power is dependent on the player's position strength.
Dependence usually arises in two ways. When there is cooperation, dependence
usually takes the form of formal agreements or trust. However, when there is
competition, dependence is again related to the player's strength and position in the
network. With goal setting, competitors cooperate as it is stipulated in the formal
agreement that this will be done jointly.
This is why key players in the industry need to have an assortment of different
relationships which depends on how they are set in the present environment. Because
of this, the content of a relationship can vary from time to time. Also, relationships
can grow stronger, eliminating weaker relationships. Usually, this has no clear pattern
or cycle and is highly dependent on the players.
Other Stakeholders and Relevant Groups
Aside from the factors previously mentioned, several other groups also affect
how the future of the tourism and hospitality industry will be shaped.
1. Resource Suppliers
A company cannot continue its operation without raw materials, equipment,
and other supplies. This is actually not limited to the manufacturing sector, but is also
an important requirement in service operations, as we established already the concept
of service product. The availability of the resource supplier can also affect the smooth
operations of the company. This is also why there is seasonality in some service
operations, as well as the offering of some products, especially food items. Somehow,
a disruption in the operation of the resource supplier will ultimately affect the
company. Thus, companies in the tourism and hospitality industry usually identify a
selection of existing backup suppliers, which somehow subjects companies to
increased costs due to price gouging Aside from the common reasons, this situation
usually arises because of a natural hazard
2. Capital Suppliers
Another player that we need to consider is the suppliers of capital. Now that
the capital market is international and electronic transfers are now available, suppliers
can now move in a faster pace, which makes a company vulnerable. A company may
need to spend more time to forecast the availability of this valued resource. Because
capital availability is crucial, a company's decision-making should be exact so as not
to dampen the entire operations. The stock market now has a great impact on how
certain industries, including tourism and hospitality, go around.
3. Labor Supply
As the pool of skilled employees is also of utmost importance, as they also
shape the market, Chapter 4 discusses issues on staffing and employee concerns.
Without a stable labor supply, the tourism and hospitality operations will be greatly
affected as they drive the operation itself. There will be no one to man the operations
and will fill the empty slots of the retired employees.