Service Quality – Hospital

1. Introduction to Hospitality Industry
The hospitality industry is part of a larger enterprise knownas the travel and tourismindustry. It is one of
theoldestindustriesintheworld. Inearly days, traders, explorers, missionariesandpilgrimsneededa break
in their journeysrequiring food, shelter andrest. People opened their homesand kitchensto these weary
travelers, and an industry was born. Although accommodation today is varied and their services have
changed and expanded over the ages, one thing about the hospitality industry has remained the same,
guests are always welcome! From a friendly greeting at the door, room service, breakfast, to a host of
facilities' the hospitality industry offers travelers a home away from home. Hospitality is defined as “the
friendly receptionandtreatmentofstrangers". Formostpeople, hospitality meansentertainingguestswith
courtesy and warmth. Hospitality is alsoan industry made upof businessesthatprovidelodging, food and
other services to travelers. The main components of this industry are hotels, motels, inns, resorts and
Restaurants. In a broad sense, the hospitality industry might refer to any group engaged in tourism,
entertainment, transportationorlodgingincludingcruise lines, airlines, railways, car rental companiesand
tour operators. However the two main segments are the lodging industry also called the hotel industry,
andthe foodand beverageindustry, alsocalled the restaurantindustry. Thelodgingindustry ismade upof
businesses providing temporary housing, and such a business is called a lodging establishment and the
people who stay in it are called guests or clients.
India hotel occupancy
This statistic shows the occupancy rate of hotels in India from 2000 to 2014. In 2013/14, the occupancy
rate of all hotels in India was 58.9 percent, up from the 57.8 percent seen in the previous year.
Classification of Hotels
Hotels are classified into five main types:
• Economy / limited -service hotels
• Mid-market hotels
• All-suite hotels
• First class or executive hotels
• Luxury or deluxe hotels
For the purpose of our research, Economy and Executive hotels are selected.
Normally hotels have four rate categories: (1) Rack rates, (2) Group and tour rates, (3) Special and
promotional rates and (4) package rates.
(1) Rackratesare normalroom rates.It is based on the category of the room,type of bedding and occupancy.
Unless specified, guests are quoted the rack rates and are charged for the same.
(2) Group and Tour rates are a discounted room rate for an organisation, which has blocked a large number
of rooms. Most hotels have group rates that are lower than the rack rates. This rate is generally extended to
a trade association or fraternalorganisation that hasscheduled a meeting, seminar or conference atthe hotel.

2. Discounts are also offered to a tour operator, in return for a commitment to purchase a minimum number
of rooms over a given period of time.
(3) Special and promotional ratesare offeredto corporate travellers, traveling salesrepresentatives,military
personnel, airlines staff or other regular clients. Sometimes special rates are also offered along with an
advertising campaign or to promote the hotel during lean periods.
(4) Package rates are offeredtothe public along with other servicessuch asbanquet or a ball, or recreational
facilities or a special event. Such a package normally includes accommodation, tickets to the concerned
event and transportation from hotel to the venue and back. Other popular packages offered by hotels are
honeymoon, weekend, Christmas, New Year or any other sports activity. The package rate is normally
lower than the combined component or rack rate.

3. Dynamics of Competition in the Hotel Industry
The metros, Delhi and Mumbai accounted for 49 percent of the premium room capacity, and the four
metros, for 59 percent. Taking all roomsinto account, Delhi and Mumbaiaccounted for 25 percent of the
room capacity while 12 major cities accounted for around60 percent capacity. The Five Star and the Five
Star Deluxe categories accounted for 30 percent of the total available room capacity in the country. In
recent years thepercentage of three andfour starcategories seemed tobe on theincrease. Exhibit 4 gives
the distribution of rooms in different categories in India between the years 1990-1993 and 1996-98.
Generally the facilities in all the five star or deluxe category of hotels were comparable. However, each
hotel tried to provide some uniqueness with respect to each of its facilities. They tried to provide this
uniquenessthroughdécor, personalizedservice, menus,roomserviceandcustomizationofofferings. Since
essentially the facilities, the general quality of service, the general quality of food, and sometimeseven the
taste of food were very similar among all the five star hotels, differentiating a hotel from its competitors
was not easy. Each hotel tried to provide a certain atmosphere and a standard of service that could be
called unique to it. This involved systematic training of its staff of different categories, but since turnover
of staff from onehotel toanotherwas common, theservice stylesetc., also tendedtobe moresimilar than
dissimilar. In this situation, thefollowing were thoughtto be importantfactors for success in this industry.
Occupancy Rates: Since a very large portion of the expenses of a hotel was fixed, being
(i) financial costs for the property
(ii) maintenance costs
(iii) establishment costs and
(iv) day to day running costs,
It was very importantto get a good occupancy rate. Occupancy rates tended to be higher in hotels with a
good location, with a good brand image and a higher proportion of business and airline occupants. To
enhanceoccupancy throughabuildupofclient loyalty, hotels startedloyalty programmeswhosemembers
obtained preferred hotel rooms, lower rates and other benefits.
Location: Location was considered important but the degree of its importance depended on the target
audience. Hotels located close to airports, forinstance, tended tohaveairline crew, transit passengersand
tourists as their dominant clientele; those situated in business districts tended to have business clientele
due to their proximity to probable places of business interactions; while those situated in quiet locations
attracted conventions and conferences. The cost of property generally being the lowest in the first
category, these hotels could also offer larger discounts to their clients.
Brand image: The image of a hotel in terms of service orientation, statuscommanded, expense category,
overall ambience, customertypesandprogressivenessaffected the nature of customers andthe demands
made by them on the hotel. Hotels tended to build this brand image through advertisementsin TV, news
papers, magazines(especially in flightmagazinesandtravelguides) anddirect mailing toprospectiveclients
and corporate managers dealing with hotel bookings. The hotels also tried to build relationships with
administrativestaffof corporationsthroughpersonalvisitsandpresentations. Theideawastocreate a pull
from the occupants to prefer the hotel rather than another.

4. Alliances: Forming alliances, with related activity or service providers, was another instrument to drive
business. Alliances with other companies provided mutual benefits. The most common alliance was with
airlines, with thehotelgivinga discount, orafreeextra nightstay (especially overa weekend)onproduction
of aboardingpass, andtheairlinegivingbonuspointstoitsfrequentfliersforstayingattheirpartnerhotels.
Other alliances were with other hotels and trading establishments for discounts on production of their
"club" cards.
Real Estate: Real estate costs constituted a very significant cost in the overall cost structure of any hotel.
Thismadethe hotelindustry highly capitalintensive. Themazeof landregulationsmade expansionthrough
green field projects very time consuming, and their eventual outcome, highly uncertain. The tariffs of
hotels, especially five star hotels in India were among the highest in the world, even higher than in many
western cities for comparable hotels. The most importantreason for this was the very high cost of urban
real estate, leadingto a costof constructionofRs.5 million andmore per room. Thecosts, of course, varied
a great deal dependingon location. Thus choosinga location andcontrolover cost of constructionandthe
time taken for construction were very critical factors determining the profitability of a hotel.
Executive Summary
RadissonHotel belongsto Carlson Groupwhich ownsnumerousother brandslike Regent and Country Inn
and Suits. The company hasnumerouspropertiesof RadissonamongthemRadisson Blu Hotel Delhi is the
oldest of the Delhi. The property is of highrepute which has served numerousguestswho have also been
the guest of our country. It is still considered the best hotel near the Airport. When the hotel was
constructed there was no other hotel near the Airport. Now, numerous other hotel chains have come up
near the Airport.
The project discusses the competition set of hotels of Radisson Blu Hotel Delhi. Now, the hotel is facing
some stiff competition from other hotels that are functional near it. Although, the list is quite long if we
count the numberof hotels functional near the Airport. But, the hotel has set up a competitionset for its
own. We havealso discussedtheparameterson which thecompetitionset is made. Itis understoodby the
facts and data provided by relevant sources in the project that the industry is growing at a considerable
rate. At last, I have discussed the areas on which the hotel needs to work on to maintain its sam market
share.
Key Trends
This section is dividedinto two parts:Country Trends and City Trends. In the first subsection, an overview
is providedofthe broadtrendsalongwithSurvey findingsrelated tokey operatingstatisticsthathave been
observedinthe country in thepastyear. Thisis followed by theCity Trends, which reflect HVS’sperception
of each city, aswell as our expectationswith regard toits future performance. An interesting trendto note
is the correlation between the supply and demand growth, with the supply 1 growing at 17.8%
compounded annual growth rate (CAGR) and demand at 17.3% from 2008-09 to 2012-13. The fact that

5. occupancy levels remained generally stable during this period despite strong increases in supply, is
indicative of thehealthy growthin demand. However, the occupancy performanceis only partof the story;
there appears to be a trend where hotels are dropping average rates to attract customers in the face of
increasedsupply. Asaresult, HVSis ofthe opinionthatanewcustomermindsetisemergingthatis sensitive
to the price instead of the traditional one, which was more loyal to a hotel/brand. As operators battle
increasing departmental costs andowners struggle with debt service payments, hotel companiesneed to
reconsider their rate strategies.
Country Trends
• Hotel Industry Performance – Growth in Demandand Supply:In 2012-13, the country experienced a 2
slowdownin growthacrosssectors, asreflected in GDP growthof 5% . Despite thisslowdown, theyear saw
hotels maintain occupancy levels at a steady 60.4% (60.9% in 2011-12). HVS estimated that major cities
across the country witnessed a growth of 11% in hotel roomsupply in 1 2012-13, whiledemandexhibited
a strong increase of 9.2% during the same period. The nationwide results of this year's Survey, however,
reveal that the average rates declined by 3.6% when compared to those in 2011-12 (Exhibit 1).
EXHIBIT 1: Occupancy and Average Rate – 2008-09 to 2012-13
Increasing Utility Costs: Energy costscontinuetorise and posea challenge to the hotel industry. The
Survey, thisyear, hasrevealed a rise of 13% inPAR energy costs(`1,82,067)overthatin the previousyear
(`1,61,479). Additionally, theSurvey resultsshow thatonly 26% of the hotels surveyedhavean energy
managementsystemin place across India(Table 1-10). Therise in Energy costscoupled with the limited
conservationmeasuresemployedhighlightthe dire need for sustainablepractices tobe usedin the
industry.
2 HVS is currently trackinga proposedsupply of84,650 brandedrooms, ofwhich 60% isactively under
developmentandis expected to enter the Indianhotel marketover the next five years. Given the
anticipated increase in hotel room supply, togetherwith a high inflationary environment, HVS
reemphasises the need for operationalefficiency andsustainablepractices in orderto curtail further

6. decline of profitability. Going forward, companieslike HVS Sustainability canassist hotelsin improving
their financial performance along with the environmentalandsocial one.
• Continuing HighManpower to Room ratios: Employee-to-roomratiosin Indiacontinueto be on the
higher side when comparedwith global benchmarks, almosttwice as much. The all Indiaaverage of
employee-to-roomratiostandsat1.6. Thiscan be attributedto the large chunk of four star andthree-
star hotel respondents, whichhavean average employee-to-roomratioof 1.7. Typically, hotelsin India
provideservices and facilities beyondtheir positioning;hence, they require moremanpower.
Introduction
In thissection, we present key operatingstatisticsand other datafor the Survey participantsaccordingto
the
numberof rooms. The participating hotelshave been classified intothree categories: 'Less than50
rooms', '50
to 150 rooms', and'Morethan 150 rooms'. We havealso drawn a comparisonbetween ChainAffiliated
and
Independenthotels.
Trends
• Room Profile and Facilities: ChainAffiliated hotelstend to offer more expansivefacilities (116 rooms
and4.5 Food& Beverage outletson anaverage) as comparedto independentones(49 roomsand3.1
Food& Beverage outlets on an average). Suites constitutea higher percentage (11%) of the total room
inventory of hotelswith less than50 roomsas comparedto the other categories. This is because heritage
properties, with their small roomcountand relatively large suite inventory forma large portionof this
category. We notethat there is a distinctdifference in the facilities of chain affiliated and independent
hotels.
• Total Employees per Hotel: Itisinterestingto note thatthere is notmuchdifference in the
employee-to-roomratiobetweendifferently sized hotels, which suggestssome amountof inefficiency
especially in the smaller sized ones. However, in Indiaeven hotels with small inventoriesprovide
variousfacilities such as F&B outlets, laundry, androomservice amongstothers, which leads to these
ratios.
• Profitability: TheNetIncomepercentage of chain affiliated hotelsis observedtobe higher than thatof
independenthotels. This is primarily because the chain hotelsare better at managingdepartmental
coststhroughstrongstandardoperatingproceduresand trained staff. FHRAI resultshave also shown
the benefits of economiesof scale that larger hotels achieve, andcontrol bothdepartmentaland

7. operatingexpenses effectively.
• Marketing Media: TheSurvey revealsa greater percentage usage of loyalty card programmes, hotel
websites, blogs, merchandisingandtelemarketing by the chain affiliated hotels as they are able to
leverage ontheir brandnameand reach.
• Technology: Larger-sizedhotelsfocusonyield managementsystems, managementinformation
systemsandother technology suchas electronic key cards and LAN networks. Hotelswith smaller
inventoriescontinue touse more traditional accountingsystemswith the adoptionofother
technologiesbeing limited. Typically, the chain affiliated hotels tendto have larger inventories, and
standardisedproceduresandstronginformationmanagementsystems, hence, recording a greater
usage of technologieswhen comparedwith independenthotels.

8. Strategies for Increasing Hotel Room Sales
It also includes ideas for fine‐tuning or overhauling your room sales strategy.
1. Price room rates according to selling point. Inspect rooms for uniqueness, room size,
features, location, and guest request. Categorize these elements as a basis for room rate
differential from which to sell. For example, a down and out, end room, with Jacuzzi tub,
overlooking a wooded stream, which is the most‐often requested room would sell for more
than an upstairs room located farthest away from the stairs. Creating a variety of room rates
allows for creative up selling by your staff. Moreover, a variety of room rates allows for a
basis of negotiation when booking a reservation.
2. Spruce up. Examine your property from a guest's point of view for curb appeal. Are
potholes filled? Has the parking lot recently been slurried and or seal coated? Are the
parking lot stripes fresh? Are all light bulbs shining? Is the grass freshly mowed? Are the
flowerbeds alive with annual color?
3. Draw guestsin withprice. Not allproperties want to compete on price. However, ifyou need
to sell rooms, price is an effective motivator. Consider a changeable letter board or an
electronic sign which can display a message. Advertise your lowest possible price. Use price
as an opportunity to upsell on the basis of features. As occupancy increases, consider raising
rates. This is especially true if, for example, your property’s walk‐in traffic increases after 6
p.m. (with an average 20 requests) and you have just 15 rooms left to sell at 4:30 p.m.
4. Empower your clerks to negotiate price. Travelers expect to be able to negotiate‐‐
especially when they see that the parking lots are empty at 10 p.m. at all competing
properties. The idea in this case is that any rate above variable cost (the cost for
housekeeping, amenities, and laundry) contributes to profit. You set the parameters; your
clerks negotiate within those parameters. Bonus guest services agents on room sales.
5. Allow options for the breakfast question. Many limitedservice properties have a tough time
deciding whether to add eggs and meat products to their complimentary breakfast.
Consider continuing with your continental breakfast being complimentary, but adding a

9. modest charge for the option of eggs and meat products.
6. Sell to the local community. Advertise your property to the local community in the Shopper
as an extra bedroom. Give locals aspecialrate to encourage them to use your property when
out‐of‐town guests come to visit. Consider blast emailing last‐minute bargain rates when
your sales fall short of forecast.
7. Examine the number of tasks that your guest service agents provide. There is always a
balance which must be maintained between labor cost and guest service. At some point,
however, you lose room sales when clerks are trying to perform too many functions.
Consider, for example, the incoming phone reservation which is missed because the clerk
on duty is taking another reservation, cashiering, night auditing, providing room service,
replacing an air conditioner, performing wake‐up calls, taking a message, walking security
rounds, room clerking, running the phone console, issuing a key, running the elevator,
parking a car, or giving directions to the local diner.
8. Choose a market niche. In which market are you competing? Successful operators know their
market niche and stay within their bounds. There has always been a margin for properties to
cross over into competing territories ever since Holiday Inn merged concepts from full‐service
hotels and limited‐service properties. However, a $59.00 rate likely does not warrant custom
toiletries and triple‐sheeted beds. The limited service category
emphasizes basic room accommodations and minimal public areas. Compete on the basis of
providing the best value instead of the most amenities. Your bottom line will thank you and
your guests will too. Motel 6 and the early days of the original Volkswagen Beetle
revolutionized their industries by utilizing these principles.
9. Re‐examine your operating affiliation. Are you an independent or a flagged property? If
you are independent, you may be able to benefit from the advertising, name recognition,
centralized reservations system, and operating support of an established brand. On the
other hand, your location, operating conditions, and market may suggest that you re‐think
the expense involved in maintaining a flag relationship. The bottom line—does a flag
affiliation offer you a net gain?
10. Establish a program of total quality management. All employees should have an
opportunity to be involved in a program to incrementally improve operations at your
property. The function of a total quality management program is that operational challenges
are addressed at the lowest possible level within the organization, which can yield
operational savings, increased employee satisfaction, as well as increased guest satisfaction.
W. Edwards Deming, a well‐known US‐based consultant, was instrumental in helping
automobile manufacturers in Japan develop their once cheap cars into world‐class quality
cars. The idea was that every employee within the organization was charged with making
one small positive change to his or her workplace. The change could favor the organization,
the employee, the manufacturing process, or the customer. Let’s do the math

10. (stay with me to see how this works out): 10,000 employees working 250 days each year,
for 20 years (since he started the program) = 50 million improvements! His motto: A little +
done often = a lot. The same can work at your property—no matter how small.
11. Mine demographic data from registration cards. Watch for patterns and useful information
among variables such as zip codes, e‐mail, company, number in party, arrival days and times,
and special requests. For example, zip code patterns suggest areas that you can identify for
advertising. E‐mail addresses allow you to communicate with your guest history easily,
quickly, and almost without charge. A recurrence of a particular company would allow you to
investigate the possibility of creating special rates and/or bill‐to accounts. Number in party
and special requests can assist you in providing an adequate number of no‐ smoking rooms,
rates for late checkouts, rollaways, daytime rates, etc.
12. Become a female‐friendly property. One of the fastest growing sectors of the lodging
industry is single female travelers. Tap into this market by making subtle adjustments to your
operating standards. For example, clip and maintain all hedges no higher than hood height.
This helps provide additional security by reducing hiding places and shadows. Ensure that
parking lot and walkway lighting maintains lighting conditions to a minimum of dusk
illumination. Change remote corridor entries to operable only with room keys (and remove
door props). Position security cameras throughout public areas.Review the amenity package.
Review lighting quality and amount in the bathroom/dressing area.
13. Book returns at check‐in and check‐out. Train guest service agents to ask about return
reservations at check‐in. For example, it is normal for clerks to maintain a friendly
conversation with guests during the check‐in process.
14. Offer "special" business packages. Operators are always searching for ways to raise their average
daily rates (ADRs). Traditional thinking suggests that frequent business travelers expect
discounted rates. Maybe not. Consider this alternative strategy by example: Business traveler
Smith stays at the Shady Rest Motel. The rack rate at the Shady Rest is $90; The ADR is $75; and
Smith pays $80 for a room. Smith pays with a Corporate American Express card. Over time, the
operator, Patel, has come to know Smith and has discovered that Smith's company will pay up to
$100 per day for a room. Patel bundles a value‐added business package for Smith with the
following daily features: Best room available at check‐ in, two complimentary drink coupons for
the manager reception, complimentary full breakfast, Wall Street Journal, USA Today, and free
DVD movies. Smith pays $95 per day.
15. Consider minimum stays and drastic rate deviation during special events. For example, the
Cliff Motel rack rate is $75; The ADR is $59. During homecoming weekend at the nearby
university, demand is such that the property charges $100 per day with a two‐night
minimum. This rate and minimum stay holds until 15 days before the event. Inside of two
weeks, the property first drops the minimum stay and then the rate in order to help ensure

11. a sellout. Three days before the event, the rate increases to $150, but no minimum stays on
remaining rooms. The community accepts the policy due to market conditions. Consider your
opportunities for implementing similar strategies.
The hotelgets95% ofitscustomersasforeigntourists. Theoccupancy rateinthishostelis110%. Therooms
are occupied for the365 daysinthisyear. Demandis morethanSupply in this hotel. The customersarenot
provided with any food in this hotel. The hotel does not practice differential pricing for its customers. It
charges single price for all of its customers irrespective of different nationality. Tourists generally would
like tostay in this hotel for the wonderful service providedby the hotel. Generally the hotel gets repeated
customers and the customer loyalty is very good over here.
Marketing Strategies adopted by the hotel to attract more tourists:
• Reservation is done directly without the help of middleman like travel agents.
• Hotel providespromptservice tothe enquiriesof the customer’smails. Usually thequeriesare answered
within an hour.
• The services providedby the housekeepersare also very good. They are excellent in communicationand
they meet the customer demand promptly.
• Generally in thishotel, 80% of the customersare repeated which means there is customer loyalty to the
maximum extent.
• Usually the hotels provide one room to one customerin a day. But Bentleysuses its perishable capacity
3 times a day for the purpose of maximizing the revenue.

12. Conclusion
From the research paper and findings, it can be concluded that the future of revenue management will
evolve the following aspects:
One-to-one Revenue Management
• Sophisticated hotels will evolve to one-to-one revenue management; each individual will be a market
segment in themselves
• In the future, technology will support calculating the total customer value and the potential total
customer spend, based on history and future potential from demographics, to determine what rate and
what availability to offer to a potential guest
Total Customer Value Integration
• The future of revenue management will include a focus on the Revenue Per Available Guest (RevPAG)
and total customer value
• The next generation of revenue management systems will create an offer based on the value of, or
potential value of, each individual customer
Function Room Yield
• Forecasting and yielding of function space will be a focus in the future for hotels
• Many large hotel companiesandrevenue managementsystemsareworkingto developeffective models
in this area.
Cost of Business Analysis
• Different revenue streams and channels do not yield the same profit, even when the rate is exactly
the same