The Routledge Companion to Production and Operations Management

Martin K. Starr, Sushil K. Gupta, Martin K. Starr, Sushil K. Gupta

• Publisher: Routledge
• Year: 2017
• eBook ISBN: 9781317419235
• Topic: Business
• Subtopic: Business General
• Index: Business

This remarkable volume highlights the importance of Production and Operations Management (POM) as a field of study and research contributing to substantial business and social growth. The editors emphasize how POM works with a range of systems—agriculture, disaster management, e-commerce, healthcare, hospitality, military systems, not-for-profit, retail, sports, sustainability, telecommunications, and transport—and how it contributes to the growth of each.

Martin K. Starr and Sushil K. Gupta gather an international team of experts to provide researchers and students with a panoramic vision of the field. Divided into eight parts, the book presents the history of POM, and establishes the foundation upon which POM has been built while also revisiting and revitalizing topics that have long been essential. It examines the significance of processes and projects to the fundamental growth of the POM field. Critical emerging themes and new research are examined with open minds and this is followed by opportunities to interface with other business functions. Finally, the next era is discussed in ways that combine practical skill with philosophy in its analysis of POM, including traditional and nontraditional applications, before concluding with the editors' thoughts on the future of the discipline.

Students of POM will find this a comprehensive, definitive resource on the state of the discipline and its future directions.

Part VI
POM Domains of Application

22
Operations Management in Hospitality

Rohit Verma, Lu Kong, and Zhen Lin

1 Introduction

According to the World Travel and Tourism Council, the Travel, Tourism, and Hospitality industries collectively generate 9.8% of the world’s GDP while supporting 284 million jobs. Within the United States, the direct contribution of travel and tourism to GDP was US$488 billion (2.7% of total GDP) in 2015 and is forecasted to rise by 2.8% in 2016, and to rise by 3.7% per annum (pa), from 2016–2026, to US$722.3 billion (3.2% of total GDP) in 2026. Considering both direct and indirect impact, the total contribution of travel and tourism to GDP was US$1.5 trillion (8.2% of GDP) in 2015, a total that is forecast to rise by 3.0% in 2016, and to rise by 3.4% pa to US$2.2 trillion (9.3% of GDP) by 2026. During 2015, the total contribution of travel and tourism to employment, including indirect jobs, was 9.6% of total employment (14,248,000 jobs). This is expected to rise by 2.0% in 2016 to 14,527,000 jobs and rise by 2.4% pa to 18,493,000 jobs in 2026 (11.4% of total). The lodging sector of travel, tourism, and hospitality alone accounts for over 53,000 hotel properties, 4.9 million guest rooms, and US$176 billion in sales just within the United States. These statistics from the World Travel and Tourism Council demonstrate the size and value of the travel, tourism, and hospitality operations within the context of the global economy.

While the travel sector, especially within airline operations, has received attention within the operations management research, relatively few articles have been published in the mainstream operations management journals that focus on hospitality operations. We reviewed Management Science, Production and Operations Management, Journal of Operations Management, Manufacturing & Service Operations Management, and Operations Research for published articles that used keywords such as “hospitality,” “hotel,” or “restaurant.” We were able to find only twenty-four articles that met the above criteria (See Table 22.1 and Table 22.2 at the end of the chapter).

Given the size of the hospitality sector in terms of revenue and employment, more research needs to be conducted within the operations management discipline in order to explore unique aspects of this industry. Therefore, the purpose of this chapter is to present an overview of different topics and concepts from hospitality that provide opportunities for research to the operations management community.

The rest of this chapter is organized in several sub-sections that explore different aspects of hospitality operations.

2 The Essence of Hospitality

To study hospitality operations, first one must understand the meaning of hospitality. While many people may define hospitality as providing service to customers, in fact, there are subtle differences between the two concepts. Hospitality is a word derived from hospes in Latin, which means “host” or “guest.” Therefore, hospitality means taking care of customers’ feelings and emotions, going above and beyond just meeting their stated needs. In fact, although the words “hospitality” and “hospital” invoke very different emotions, they stem from the same root word in Latin described earlier. The two industries have evolved quite differently over the centuries, but they continue to share many common characteristics. For example, both industries need to take care of the unique needs of their guests by proving comfortable lodging, food-service, privacy/security, and many other similar amenities and supplementary services. Each industry can provide unique opportunities for companies operating in the other industry because of evolving customer preferences/business dynamics and changing regulations and policies. Many new industry segments are emerging at the interface of hospitality and healthcare, including senior housing and care, wellness and medical tourism, and concierge medicine.

The hospitality industry consists of a variety of service operations (Ottenbacher et al. 2009), including lodging, hotel, restaurant, tourism, convention and entertainment industries, etc. With the fast growth of the global economy and new communications technology, customers from all around the world are traveling not merely for business reasons but also for leisure and experience purposes. Therefore, managing their operations to create a memorable guest experience has become extremely important for hospitality firms during the recent years. Multiple dimensions, such as the service environment, customers’ expectations, actual service quality, and even guests’ personalities, influence the customer experience in hospitality. Consequently, managing guest experience within hospitality is a very complex task. Therefore, effective hospitality operations management must include improving guest awareness of positive emotions and distracting their attentions from negative aspects in order to minimize passive influences on overall experience (Pizam and Shani 2009).

3 Product and Service Innovation in Hospitality

Unlike in the manufacturing industry, innovation in the hospitality industry is more difficult to define, measure, and even facilitate. However, to keep up with the rapidly changing market and competition, it is necessary for hospitality firms and the hospitality industry to develop a new product, innovate services to adapt to new customer demands, and therefore remain competitive (Hassanien and Dale 2012). Current research on this topic within hospitality generally falls into two categories. The first set of papers studies the measurement of service innovation in the hospitality industry. These papers suggest that innovation can take place at multiple levels in hospitality including service concepts, primary processes, service environment, technology and service interaction, and in supporting processes (Hertog et al. 2011). Taking a step further, some new studies have identified the characteristics that contribute to the success of service development (Kitsios et al. 2011). The other group of studies puts emphasis on how to facilitate product and service innovation in the hospitality industry. For example, encouraging knowledge sharing and establishing a learning oriented strategy are demonstrated to be useful (Hua et al. 2009). From the individual perspective, both front-line employees and managers play important roles in new service development. Managers should always hold a positive attitude and grant extrinsic reward plus creativity training to motivate innovative ideas or behaviors.

4 Integrating Service Quality in Operational Processes

As demonstrated by past research studies, service quality is closely related to customer satisfaction and is the key to attract and retain guests. Therefore, it is essential for every service company to provide consistent, standard, and excellent quality that can meet guests’ expectations by launching effective quality assurance programs (e.g., “transaction-focused” and “relationship-focused”). If customer expectations cannot be met due to various reasons, errors will appear. Therefore, both programs are designed with the purpose of eliminating errors and recovering from service failures. Relationship-focused systems are more advanced since they not only provide solutions to fix mistakes, but they also find out why the errors happen in order to then prevent them from happening again.

In the process of quality assurance, both employees and customers play vital roles. Therefore, it is important to train our employees, especially those front-line workers who deal with customers face to face, to understand the complaining cues in guests’ gestures, languages, and behaviors. With efficient complaint management, we can always eliminate errors in time and restore customers’ satisfaction.

Current studies have paid significant attention to service quality from various perspectives. For example, since the SERVQUAL (service quality) measurement is proved to be inadequate in fully assessing quality, one recent research study found out the dimensions of customer perception and built a new quality model based on it for travel agencies (Caro and Garcia 2008). One other research paper came up with additional useful measurements for destination quality management (Narayan et al. 2008). Another study (Ha and Jang 2010) focuses on the relationship between service quality and satisfaction. Higher service quality can improve satisfaction and then loyalty, as shown by the research centered on traditional restaurants in Korea, and guest perception of the environment influences that relationship (Ha and Jang 2010). As with the inevitable service failure, successful and unsuccessful recovery have different impacts on customer repurchase behavior and satisfaction (Swanson and Hsu 2011). As demonstrated in the new research, higher commitment and empowering employees are more helpful in motivating them to provide excellent service with high quality (Clark et al. 2009).

5 The Role of Employees

From the topics discussed earlier, it should not be difficult to recognize the importance of service employees, especially front-line workers in the hospitality and tourism industries. Service employees generally serve several roles in daily operations. First, since they interact with customers face to face, their behavior and service quality greatly influence customers’ experiences. Studies have shown that the satisfaction and loyalty...

Table of contents

• Cover
• Title
• Copyright
• Dedication
• Contents
• About the Editors
• Notes on Contributors
• Foreivord l
• Preface
• PARTI The Remarkable History of POM
• PART II Core POM Functions
• PART III POM Process and Project Categories
• PART IV Emerging Themes and New Research Domains of POM
• PART V POM Interface with Other Functions
• PART VI POM Domains of Application
• PART VII Expert POM Practitioners' Perspectives
• PART VIII POM—The Next Era
• Index