Managerial Attitudes Towards Performance Measurement in Hotels

276 Int. J. Qualitative Research in Services, Vol. 1, No. 4, 2014
Copyright © 2014 Inderscience Enterprises Ltd.
An exploratory study of managerial attitude towards
performance measurement in hotels of Uttarakhand
State of India
Devkant Kala*
Department of Management,
Himgiri Zee University,
Chakrata Road, Dehradun – 248197, Uttarakhand, India
Email: devkala@gmail.com
*Corresponding author
S.C. Bagri
Himgiri Zee University,
Chakrata Road, Dehradun-248197, Uttarakhand, India
Email: prof.bagri@gmail.com
Abstract: Assessing service quality and performance of the hospitality industry
has become more important than ever. Globalisation, competitive pressures,
changing environment and well-informed customers make the traditional
practices no longer appropriate for measuring performance and gain
competitive advantage. Balanced scorecard (BSC) has gained wide acceptance
within the service sector as a means of improving overall performance. An
exploratory research using the BSC as theoretical framework was taken to
evaluate the performance measurement practices adopted by hoteliers of
Uttarakhand State of India and examine the attitude of hotel managers towards
BSC perspectives. The study found that managers were not normally aware
about the BSC in a formal manner in spite of using measures from all
perspectives of BSC involuntarily. Results revealed that the managers use a
hybrid approach combining both the financial and non-financial measures to
evaluate performance. Attitudes of hospitality managers towards BSC
perspectives do not vary across the hotels of different categories and locations.
Keywords: performance measurement; hotel; balanced scorecard; BSC;
Uttarakhand.
Reference to this paper should be made as follows: Kala, D. and Bagri, S.C.
(2014) ‘An exploratory study of managerial attitude towards performance
measurement in hotels of Uttarakhand State of India’, Int. J. Qualitative
Research in Services, Vol. 1, No. 4, pp.276–291.
Biographical notes: Devkant Kala is an Assistant Professor of Department of
Management, Himgiri Zee University, Dehradun. Presently he is pursuing his
PhD in Marketing from Uttarakhand Technical University, Dehradun. His
research interests focus on performance measurement, marketing and general
management.
S.C. Bagri is Professor of Mountain Tourism and presently the Vice Chancellor
of Himgiri Zee University, Dehradun. He carries 34 years of rich experience in
the field of mountain tourism, tourism planning and development, and

An exploratory study of managerial attitude towards performance measurement 277
ecotourism. He served as Consultant for United Nations World Tourism
Organization, Madrid, All India Council for Technical Education, Planning
Commission, Govt. of India, University Grants Commission, Indian Council of
Social Science Research and GTZ, Govt. of Germany on Tourism and
Hospitality.
1 Introduction
India is known worldwide for its unprecedented natural and man-made attractions since
time immemorial. Its language, culture, cast and creed, value, tradition, folklore, dances
and music attract tourists from far and wide. Its 28 states are filled with various
attractions which quench the thirst of all kinds of tourists (Bagri et al., 2010).
Uttarakhand State, known as Devbhoomi (the land known for its association of Hindus
Gods and Goddesses) is located in the northern part of the country sharing international
boundary with Nepal and Tibet (China) in the north, Himachal State in the west and
north-west, Uttar Pradesh State in the south and Nepal in the east. Approximately 250 km
north of National capital Delhi, the state of Uttarakhand is easily reachable by road, rail
and air transportation from Delhi, the national capital of India.
Nature, adventure, wildlife, culture, heritage, pilgrimages, yoga and meditation, a
cocktail of opportunities for unlimited experiences, are the strengths of this mountainous
state. The state has the four important shrines (four sacred places of worship) of Hindu
religion and has diverse geographical features ranging from mountains, peaks and forests
with breathtaking spectacular views of snow-capped Himalayas and its valleys, glaciers,
rivers along with the famous world heritage sites the Valley of Flowers, Nanda Devi
Biosphere Reserve and the first national park of India named Jim Corbett National Park,
which have made Uttarakhand State as an astonishing land in the northern part of India.
The basins of the great rivers like the Ganga and Yamuna and others never fail to attract
nature-based tourists to enjoy the warmth hospitableness of the local community (Bagri et
al., 2010; Joshi, 2001; Negi, 1991). For centuries saints and pilgrims in their search for
the divine have walked these mystical vales around which myriad legends and tales from
the rich mythology and history of India are woven. This rich culture, tradition, and
lifestyle have enticed many pilgrims, mountaineers, trekkers and nature lovers to enjoy
the breathtaking beauty of the region. The tranquillity of the Himalayas attracts many
tourists from USA, Europe, Australia and Asia continents year round.
Significant advantages and opportunities in terms of developing tourism and tourism
related activities on an integrated manner are largely available in almost all the areas of
Uttarakhand State. With the creation of a separate state of Uttarakhand in 2000, tourism
is viewed as one of the key sectors of economic growth and development in the state,
both from the point of view income and employment generation as well as a source of
revenue for the state. According to the statistics of Ministry of Tourism, Government of
India, the percentage share of Uttarakhand in domestic and foreign tourist visits during
2012 was 2.6% and 0.7% respectively (Indian Tourism Statistics, Ministry of Tourism,
2012). With its many extraordinary attractions and the efforts of the Uttarakhand Tourism
Board the growth of tourism to Uttarakhand is gaining momentum but there has been a
slow pace of hospitality in the state.

278 D. Kala and S.C. Bagri
Uttarakhand is a preferred destination for the nature lovers, but hotel industry has not
sufficiently progressed in comparison of tourist attractions (Bagri et al., 2010; Mehta,
1999; Pande, 1997). The industry in the region has experienced dynamic development in
2011–2012 and it is forecasted that this growth will continue as after 2014 despite natural
calamities in June 2013. In 2013, no flow of tourist traffic was recorded in the higher
region of the state. The present study is based upon two districts Nainital and Dehradun
attracting 80% of recreationists arriving at certain tourist destinations located in the lap of
the mighty Himalayas. In view of this tourism has placed a higher demand for the quality
hotels in the given two districts as more affluent travellers arrive in these locations.
On evaluating the overall scenario of hotel properties in India, it seems that the present
study area is saturated with a range of hotels from star properties and resorts to budget
hotels.
2 Need of the study
The present study is undertaken to examine the existing performance measurement
practices implemented by existing hotel organisations to satisfy the requirements of
customers and business owners. Traditionally, most organisations look at their corporate
performance by reviewing the financial aspect. However, financial measures alone are
not a balanced view of critical success factors of any organisation, mainly because
financial measurement tends to measure the past (Atkinson and Brander-Brown, 2001;
Harris and Mongiello, 2001; Evans, 2005). The industry has failed to grow with the
changing scenario and still relies heavily on the use of traditional measures while
assessing the successes of business profitability of hotel units.
Balanced scorecard (BSC) devised by Kaplan and Norton has gained wide acceptance
within the service sector as a means of providing a focus on human resources, intellectual
capital, and challenges associated with regard to maintaining consistent product and
quality standards, while not ignoring financial performance. Huckestein and Duboff
(1999) and Denton and White (2000) reported on the experiences of White Lodging
Services in implementing the BSC and recorded that BSC implementation improved
performance of White Lodging Services in generating revenue and profitability,
aligning objectives of individual departments, facilitating the dissemination of strategy
information throughout the organisation, understanding concern stakeholders
expectations, encouraging managers to focus on both long-term and short-term measures
of success, making performance appraisals more objectively, and receiving valuable
feedback regarding resources and processes. Harris and Mongiello (2001), Doran et al.
(2002) and Evans (2005) examined the range of performance measurement concepts
available to business managers and identified the key indicators that hotel managers find
useful in managing their businesses, acknowledging the value of the BSC. Phillips and
Louvieris (2005), Banker et al. (2005), Haktanir and Harris (2005) and Ramdeen et al.
(2007) concluded that non-financial measures are related to future financial performance
and that both financial and non-financial performance improves the overall performance
of organisations. Other studies including of Evans (2005) in UK; Kim and Lee (2009) in
Korea; Huang et al. (2007) in China; Min et al. (2008) in Korea; Ivankovič et al. (2010)
in Slovenia; Chen et al. (2011) in China found the successful application of BSC as a
performance measurement system in hospitality organisations.

3 Literature review
Several studies have been carried in terms of tourist destination analysis in the
Uttarakhand state of India and some of the significant works include Singh and Kaur
(1985), Negi (1991, 1995, 1997), Bagri (1993, 2003), Pant (1994), Pande (1997), Mehta
(1999), Bagri and Gupta (2001), Joshi (2001), Bainjwal (2002), Bharadwaj (2002), Bagri
and Mishra (2004, 2005), and Thapliya (2006). These studies deeply studied the rich
potential resources of tourist places and mainly focused on pilgrimages, natural
attractions and ethnic and cultural treasures of the state providing a broad overview of
mountain tourism attractions on the basis of available information. However, these
studies lack any findings on available hotel properties including performance
measurement practices of hotel units of Uttarakhand. No published research is available
regarding the different variables adopted by hospitality managers in this region regarding
performance measurement. Bagri et al. (2011) has attempted to touch the human resource
development aspect of hotel industry in Uttarakhand state to some extent. As of now
improving business performance has been one of the central tenets of management and
remains fundamental to organisational success (Neely, 1999). Hotel organisations are
bounded to actively manage and maintain their performance and competitive advantage
(Pyo et al., 2002). The increasing importance and value of people (employees and
customers) in the hotel industry make the traditional practices no longer appropriate for
measuring performance and gain competitive advantage.
Researchers including Brander-Brown and McDonnell (1995), Atkinson and
Brander-Brown (2001), Harris and Mongiello (2001), Haktanir and Harris (2005), and
Wadongo et al. (2010) have pointed to the reluctance of hotels to use balanced measures
and rely solely on financial measures. Traditional measures of performance were
excessively profit-based (Brander-Brown and McDonnell, 1995), short-term oriented
(Denton and White, 2000), unbalanced (Harris and Mongiello, 2001), unsatisfactory for
competitive advantages (Evans, 2005; Phillips, 1999), past-based (Atkinson and
Brander-Brown, 2001), little market oriented (Phillips and Louvieris, 2005) and
non-holistic (Phillips, 1999). Therefore, over reliance on them is no longer relevant for
today’s managers. Due to limitations of financial measures and the impact of global and
increasing competition in the hotel industry, hotel owners should rethink their current
performance measurement based on financial to a more balanced measurement which has
both financial and non-financial dimensions (Atkinson and Brander-Brown, 2001; Harris
and Mongiello, 2001; Evans, 2005).
4 Objectives of the study
1 To review the ongoing performance measurement practices applied by hoteliers of
Uttarakhand State.
2 To explore the nature and scale to which the BSC method shall be utilised by
hoteliers.
3 To examine the attitude of hoteliers towards financial and non-financial performance
measures of BSC.

5 Research methodology
Uttarakhand State is composed of 13 districts. Three locations Dehradun, Mussoorie
(Dehradun District) and Nainital (Nainital District) were selected for the present study
because of having maximum hotel properties including the hotels units of internationally
recognised branded hotel chains. As per the survey of Uttarakhand Tourism Development
Master Plan of 2007–2022, the places of pride in terms of tourist visits to Uttarakhand are
Rishikesh, Haridwar, Gangotri, Kedarnath and Badrinath, owing to their religious
importance. However, Nainital, Mussoorie and Dehradun enjoyed maximum tourist visits
for leisure, recreational and health purposes. In view of this, it was decided to concentrate
the study work on the best performing hospitality establishments of these three tourist
towns. These best performing hotels were selected on the basis of their hotel category,
goodwill in the industry, customer responses cited in hotel rating websites and
competitors’ evaluation.
Figure 1 Study area: map of Uttarakhand indicating the surveyed location (see online version
for colours)
Figure 2 Map of Dehradun (see online version for colours)

Figure 3 Map of Mussoorie (see online version for colours)
Figure 4 Map of Nainital (see online version for colours)
The sample work was undertaken from May 2012 to October 2012 as summer season is
the peak period of tourist visits because in India schools, colleges and universities remain
closed in May, June for summer vacations and September and October is a season of
festivals and people prefer to go for outings during that period. The exploratory case
study method was chosen as the vehicle to carry out the primary data collection. In this
approach the researchers tried to elicit more in-depth information regarding performance
measurement issues. In order to obtain detailed information concerning the performance
measurement practices, semi-structured interviews, based on the philosophy of the BSC,
were carried out. Open and closed ended questions were used to explore performance
measurement activities within each case organisation. To provide corroborated evidence

for understanding the performance measures utilised, observation of operations was also
undertaken as this was important for understanding the decision-making mechanism and
systems of the business, and for scrutinising the data.
Each prospective hotelier running a hotel in a professional way was initially
approached and invited to participate in the study. A total of 12 participants agreed to be
interviewed, representing four best performing hotels in each region. The majority of the
hotels identified for sampling were 3 to 4-star and with only one 5-star hotel in
Mussoorie. Each interview lasted approximately 45 minutes, and data were collected
during the interviews through recording devices recording detailed notes as the interview
was in progress. These notes were then interpreted and used as the basis for analysis. As
an introduction, interviewees were asked to express the importance of performance
measurement system in their hotels and if they were familiar with the BSC. Once
interviewees had a clear understanding of BSC as performance measurement system, they
were asked to rate the relative importance that their hotels attached to each perspective of
BSC. The process of data analysis followed Wolcott’s (1994) methodology in which he
identified three major phases; description (relying heavily on verbatim quotes from
respondents), analysis (identifying important factors and themes) and interpretation
(making sense of meanings in context).
6 Analysis
6.1 Profile of hoteliers
A profile of the participants interviewed is provided in Table 1. The first column of
Table 1 lists the alphabetical reference for each interviewee. Second column provides
each hotel’s star rating (star ranking was given keeping in view similar nature of
facilities). Subsequent columns provide location of each hotel, designation of
interviewees and a brief indication of their main concern in terms of performance
measurement activities.
6.2 Application of performance measurement
Information regarding the performance is a regular part of most reports provided to
owners. One of the functions of owner is to check that the hotel is meeting its targets and
is performing satisfactorily. It is the only way that one can tell the owner and about the
progress of hotel. The investigation of the interviewees revealed that all the interviewees
emphasised the need of comprehensive and balanced performance measurement system.
Among the designated hotelier’s categories, interviewee A commented that performance
measurement system is powerful tool for controlling and improving organisations. If one
does not know how well or badly a hotel unit is performing and what a hotelier is
supposed to perform in a given financial year one cannot identify the scope for
improvement. Interviewee D supported the concept of measuring performance. If the
performance is not measured, how would one can know what is being done every day? It
seems a sort of self-practice. If we are not doing well, it can tell us what problems we
have and what areas need improvements. Interviewee C advocated that every
organisation, including hotel, has to measure their performance for a number of important
purposes. PMS can make a positive contribution to our work.

Table 1 Profile of interviewees
ID Hotel rating Location
Interviewee’s
designation
Main focus of performance measurement
system
A 5 star Mussoorie AGM Both financial and non-financial indicators
are important
B 4 star Mussoorie GM Relevance of non-financial measures for
measurement and improvement.
C 4 star Dehradun AGM Importance of evaluation of actions already
taken and quality measurement through guest
feedback.
D 4 star Nainital AGM Usage of indicators related to quality,
customer, revenue, employees, and degree of
competitiveness.
E 4 star Nainital AGM Non-financial measures influence financial
measures.
F 3 star Mussoorie GM Financial measures are relevant but must be
integrated with non-financial measures.
G 3 star Mussoorie GM Emphasis on the need of balanced
performance indicators for effective
decision-making.
H 3 star Dehradun GM Importance of intuition and past experience in
performance measurement.
I 3 star Dehradun Manager
(operation)
Usage of market oriented indicators for
measuring performance.
J 3 star Dehradun Manager
(operation)
Financial measures highly regarded in terms
of level of usage and importance.
K 3 star Nainital AGM More focus on financial indicators and
performance measurement activities of high
performing firms.
L 3 star Nainital GM Multiple dimensions of performance; more
focus on customers’ satisfaction, employees’
competence.
Note: *GM: General Manager; **AGM: Assistant General Manager.
6.3 Knowledge of BSC
In terms of having the knowledge of BSC, surprisingly only two of the interviewees
heard of this term previously, however remaining interviewees exhibited unfamiliarity
with the BSC as a balanced performance measurement system. The data collected
indicate a fairly low familiarity of BSC amongst the interviewees. The result is consistent
with the findings of McPhail et al. (2008) study which was conducted in context of hotels
of Australia. When the concept of BSC and its perspectives as discussed with these hotel
managers, it was revealed that all the respondents were using all the dimensions for hotel
performance measurement, which are inherent to the original BSC. This indicates that
hotel managers are not aware about the concept of BSC in a formal manner, but apply
measures from all four perspectives of BSC inadvertently. BSC allows managers to look
at the business from four divergent important perspectives viz., finance, customer,
internal business process, and learning and growth (Kaplan and Norton, 1992, 2001;

Ittner and Larcker, 2001; Banker et al., 2005). These perspectives are associated with the
four functions of accounting and finance, marketing, value chain, and human resources
respectively. Researchers utilised BSC as a reference for this study; therefore, research
findings have been interpreted on the basis of four perspectives of BSC. In this line,
interviewees were also asked to describe the nature and scale of application of four
perspectives of BSC within their properties and the results are as follows:
6.3.1 Financial perspective
Most hoteliers rely exclusively on financial measurements to identify the managerial and
economic performance as it plays an important role in evaluating the prior financial
conditions and performance of the organisation concern. Interviewee K suggested that
business is all about the achievement of given targets in order to remain in the good
books of the owners of the business. Interviewee J emphasised on short term financial
performance measures to achieve the given targets in terms of meeting corporate goals.
Incidentally, hotel owners were primarily concerned with the financial performance of
the hotels.
On being questioned to interviewee H, it was noticed that the success of the business
was not just the financial performance measures but non-financial performance measures
were also taken into consideration by the organisation concern. Non-financial measures
include customer satisfaction, addition of new services, efficient processes, appearance of
staff and their competency, but owners would make short term decisions in perspective of
achieving given targets of room occupancy, F&B sales and total room sales but these
financial measures alone cannot provide the comprehensive view of organisational
performance. As most of the indicators focus on financial performance, interviewee G
added that the current performance measurement system adequately reflects financial
performance but it does not comprehensively measure all crucial areas. In this context
interviewee A expressed that solely the financial measures are no longer satisfactory for
an organisation and suggested to incorporate non-financial measures as additives in order
to have balanced view.
6.3.2 Customer perspective
All the interviewees felt that customer care and satisfaction should be the matter of great
concern in all hotel properties as supported by interviewee F that customer care is the key
element of operations within the hotel as it encourages repeat business and referrals.
Guests’ comment cards method is also used to evaluate guest satisfaction level. ‘Talk to
Guest’ is perceived to be the most critical measure for timely solutions to customer
problems and improving the current level of satisfaction. On being interacted with
interview D, it is revealed that the customer requirements and their opinion about hotel
performance, comment cards are shared to staff members in regular meetings. The
interviewee E emphasised on quality aspects and ensured that customers should get
exactly the right services in order to attract repeat visitors. Guest comment cards and
‘after-the-stay’ mail can provide an indication of problem areas related to attaining better
repeat customer figures. Furthermore, the interviewee B advocated that the happy and
satisfied customers would always come back because of obtaining its loyalty.

6.3.3 Internal business perspective
The way the services were offered and delivered to the guests was perceived to be the key
performance indicators by all of the interviewees. As interviewee I suggested that striving
for the best and never stopping is the mantra to survive in this hospitality business. The
day a person stops making himself better is the day it stops being in the business. Another
interviewee C focused on the quality of products that give it competitive advantage and is
a critical success factor. The interviewee J commented that in this service business,
nothing can be innovated regularly. Hoteliers often do change menu, interiors and
banquet, but nothing can be changed on mass scale. While knowing the views of
interviewee G it is revealed that the reputation for service delivery and product quality is
a competitive advantage, while the interviewee A noted that the superior quality that the
hotel delivers in terms of infrastructure and products is what makes the difference to it in
a highly competitive market. The hotel is decorated to a very high standard of comfort
which ensures customers are relaxed and feel at home while in the hotel.
6.3.4 Learning and growth perspective
In general, all of the participants indicated that hotel employees are a key performance
factor in their operations. It is the employees who provide the services in an organisation
and contribute to the overall guest experiences therefore all interviewees perceive their
employees to be critical to their operations. As stated by interviewee D that the
employees are the key component of the operation delivering customer care and services
to the standard expected. The interviewee B noted that people skills are more important
than job skills. It is easier to teach someone how to do a job than to teach the skills of
dealing with different kinds of customers one can or will be encountering in the course of
employment. While interviewing interviewee H it is noticed that a reliable measure of
measuring the performance is the way the people are received on arrival and treated on
departure from the hotel. The staff dresses, their business/service approach and their level
of professionalism are also the matter of great concern.
While interacting with interviewee F it was revealed that training is an investment in
the employee to ensure quality of services. It was supported by interviewee E who shared
that training is mainly conducted internally providing them an insight of the business by
showing around the rooms in detail and all the while briefing them on all the work they
would be required to do. The interviewee L indicated that improvement in employee
skills would lead to the betterment of the internal processes and further it would lead to
enhanced customer satisfaction and increased financial performance which would
invariably help the hotel to achieve its goals and mission.
7 Discussion and implications
It is widely acknowledged that tourist destinations are becoming more competitive and
the performance gap between successful and unsuccessful companies is diminishing. This
means that hotels must catch up to effective performance measurement trends in order to
remain in existence and be competitive. Furthermore it has been advocated that if
performance measurement is not undertaken in a comprehensive and balanced way and
simply left up to trial and error, improvement in efficiency and effectiveness will only

occur at insignificant rate of what it could be. It is observed that in the past hotels of
Uttarakhand were focusing on financial measures only. Consequently, instead of having
its unsurpassed natural and manmade attractions, scenic routes and unexplored vales,
hospitality industry of the state did not achieve a significant position in Indian tourism
and hospitality industry. These short term monetary oriented desires of hoteliers of
Uttarakhand state also led to either winding up or left unattended of certain hotels in the
region. Hotel industry of Uttarakhand faces many challenges with regards to improving
the profitability of operations and exploiting the new opportunities that have arisen due to
the growth in the economy and changing nature of tourism in India. There are doubts that
the current performance measurement practices do not address the critical issues that the
modern hospitality manager needs to understand. The only way to underpin these types of
development is to establish effective performance measurement practices to evaluate
different aspects of hotel operations and their outcomes. It is necessary for hospitality
organisations to invest in their staff to create higher productivity, foster creativity and
ultimately improve market share.
In the present study, which is limited to only 12 best performing star hotels of three
major tourist towns of Uttarakhand, it was noticed that besides paying attention to
financial measures of performance, the selected hotel properties are also paying attention
to non-financial measures of performance such as state of art infrastructure, quality of
hotel staff and regular training to enhance their professional skills, innovative processes,
error free services and guest satisfaction and retention. Consequently these hotels are
enjoying adequate room occupancy, high guest and staff satisfaction and retention,
cheering goodwill and increasing market share in their respective towns. But
unfortunately this is not case of other hotels in the state. Most of the hotels meet the basic
requirements of tourists and ignore the importance of non-financial measures. In order to
attract elite class of tourists and increase the tourist inflow in the state, hotels must
consider various other dimensions so as to increase the level of tourist satisfaction.
According to Uttarakhand Tourism Development Master Plan of 2007–2022 (2008),
there is a wide gap between the expectations of tourists and performance of hotels of
Uttarakhand and significant steps have to be taken by hoteliers in order to improve the
performance. Hotels have to understand the importance of quality accommodation,
superior service, efficient processes and professionally trained hotel staff in order to
entice tourists to tourist places of the state regularly. Natural beauty and attractions can
only attract tourists to a certain level but performance of hotel service will encourage the
frequency of tourist visit. Hoteliers must understand that natural calamities can adversely
affect the peaceful and safe positioning of the state and can also reduce the flow of tourist
arrival. To compensate all such issues and to attract considerable number tourists to
Uttarakhand, hotel entrepreneurs have to make the provision of quality and services.
BSC not only helps hotel managers to evaluate and monitor the performance and
progress of their hotels, but through the efficient utilisation of organisational resources,
sharpening the professional skills of hotel staffs, enhancing guest satisfaction, offering
innovative processes and delivering superior quality can strengthen the tourism potential
of the state. The positive consequences of BSC such as satisfied and loyal customers,
competent staff, improved hotel operations, innovative processes and efficient resource
utilisation will enhance the productivity and goodwill of hotels and also contribute to the
development of the state in many ways; by generating revenue for the government and
local communities; by creating new jobs and income earning opportunities; by inducing
new businesses and trading opportunities; by opening markets for local products; by the

promotion of new skills; by the improvement in physical and social infrastructure and
community facilities and by enhancement in the environmental and cultural awareness as
well as the appreciation of community’s natural, historical and cultural heritage.
The ability of the BSC to produce results has unquestionably been proven;
considering that since its conception in the early 1990s it has grown in popularity to the
extent, that it is estimated that half of Fortune 1000 companies make use of it. With
regard to its application in Uttarakhand, it is still relatively unknown; however there is
evidence to suggest that this is changing rapidly. The researchers strongly believe that the
BSC if applied in the hospitality industry of Uttarakhand may yield outstanding results.
Further, it is advocated that hotels of Uttarakhand should keep a constant watch on
emerging trends and should take every care to make tourists comfortable and should
meticulously avoid giving them cause for any complaint. Value for money is everybody’s
expectation and there should be no compromise on standards of facilities and services
provided to customers.
This study helps to understand how the hotel managers of the present three major
tourist towns of Uttarakhand state measure the performance of their hotels. They use a
hybrid approach on measuring performance due to their concerns on ensuring meeting the
financial results as well non-financial returns. The findings reveal that managers place
equal attentions on both the financial measures (profits, turnover, revenue growth and
occupancy) and non-financial measures (customer satisfactions, innovation and employee
competence and satisfaction). These measures are in correspondence with the approach
where managers are basing the performance on the extent that predetermined objectives
could be achieved. The objectives are internally generated which are set by the
owners-managers themselves for satisfying their own desires and expectations. It is
observed that the owners-managers use a mix approach combining both the short term
and long term measures to evaluate performance against the predetermined goals. The
short-term measures help reflect the current position of an organisation while the
long-term measures identify its strength and ability to grow, gain market acceptance and
reflect an overall success of a business.
The study yielded valuable information about the decision-making system and the
operation of the hotels. The main effort of the management and the employees is to
satisfy the customer during their stay and respond to their requirements on a real-time
basis. Talking to guests and receiving their reactions and responses are seen as key guest
satisfaction indicators, whereas guest comment card responses are considered as useful in
gaining an awareness of general problems and repeated complaints. Guest satisfaction
information is also applied in evaluating departmental and employee performance.
Although, there are evidences that the hotel monitors operational performance in
considerable detail, the financial measures are used to a large extent for measuring the
performance of the hotel. The statement of the interviewee H “...in the short-term the
profitability and occupancy are the best indicators...” clearly highlights the emphasis.
Since the influence of feedback relationships can create positive reinforcement among
them, the respondents have expressed their intentions on paying more attention to the
interdependences (feedback relationships) among performance measures. The statement
of Interviewee F, “Financial performance and customer performance are interdependent
on each other. Without a good financial performance it is unrealistic for an organization
to survive, simultaneously if the customers are not satisfied, the hoteliers can’t survive
either….” explicitly express the importance of mutual relationship.

The study further noticed that the attitude of hospitality managers towards four
perspectives of BSC does not vary across the hotels of different category in three study
areas. All the hospitality managers placed equal attention to all the measures of four
perspectives of BSC. The extent of utilisation of financial measures is high in 3-star
hotels, the importance of internal process measures and learning and growth measures is
high in case of 5 and 4-star hotels whereas usage of customer measures is evenly
distributed across the hotels of all categories and locations. Researchers observed that the
orientation of 3-star hotels seems quite short term while the long term approach is used
by hotels of 4 and 5-star category. The study also observed that despite claims concerning
the BSCs potential to serve a quest for competitive advantage, it is not being widely
adopted in hotels. While it appears that the attention directed to the BSC may have
impacted positively on hotels’ use of a variety of measures, there appears to be limited
specific reference to the BSC term. Evans (2005) notes that the use of locally adapted
terminology, when adopting broadly based performance measurement systems, has had
little impact upon the actual performance measures adopted. It appears the BSC may need
further ‘‘selling’’ to the hotel industry if claims with respect to its ability to represent a
source of competitive advantage are to gain broader acceptance (McPhail et al., 2008).
Such acceptance could be stimulated by research studies concerned with exploring the
relative merits to hotels that have applied the BSC.
8 Conclusions
The study discusses many issues of relevance to the growing literature in the field of
performance measurement while providing hotel organisations with a practical tool to
help them establish an effective performance measurement system. The research reported
in this paper provides an understanding that hotel managers of three major tourist
locations should incorporate both financial and non-financial performance measures in
their performance measurement systems. They are using balanced range of measures,
which are linked to the hotel’s objectives, strategic intent and changing requirements.
Arguably, identifying and choosing the right performance measures is a very difficult
task because of the fluid nature of the business and the continuing changing environment
that the hotel sector operates in. This study recommends that managers within best
practice hotel units desiring to develop effective performance measurement systems
should view the performance measurement holistically. Financial, customer, internal
business process and learning and growth should not be measured in isolation but must be
viewed as part of a whole. The findings of this research could provide useful pointers to
other low budget hotels considering a revision to their performance measurement system.
Using financial and non-financial measures does not necessarily imply that the hotels
are BSC users. Hotels of Uttarakhand state need to put more emphasis on the BSC
approach by extending more focus on the main assumptions that build on the idea of
linking performance measures to business strategy and associated cause-and-effect
relationships. Hotel managers also identified many benefits for using the balanced
performance measurement approach including the effectiveness in communicating
strategy, providing a better understanding of cause-effect relationships, showing a
comprehensive picture relating to company performance, improving the company’s
financial performance and facilitating organisational learning.

These results are common throughout the present study area of Uttarakhand state and
can be extended to reflect the attitude of hospitality managers. The results of this study
suggest that appropriate consideration must be given to balanced and comprehensive
performance measurement system in order to improve the overall performance of the
hotel establishments. The authors suggest that hotel establishments in the region should
take into account the results of the study and develop adequate strategies that address the
necessity of performance measurement system. By having this provision of assessing the
performance of existing hotels there are all possibilities of having bulk business from the
existing customers making the hoteliers more prosperous. This may further extend the
possibility of generating jobs to the people of surrounding villages in unorganised sector.
Finally, an extension of this research to other sectors outside the hotel industry could
yield useful insight with respect to the relative standing of the hotel sector with respect to
performance measurement practices.
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