Exploring How Professional Knowledge and Experience Become Critical Success Factor in Hotel Operation ()
1. Introduction
A hotel provides multiple services. It has been estimated that a modern and top-level hotel is operated by dozens of professionals using a combination of techniques from more than 40 management areas [1] . In an international tourist hotel, almost everything that customers’ need is available. That is why it is also called “a city within a city”. In a hotel, numerous services are provided and each service involves different knowledge and skills. Thus, professional knowledge and experience in management have become indispensable for efficient operation of a hotel. In addition, hotel managers often explicitly state that they are devoted to differentiating the hotel from competitors by offering superior service. Differentiated and better service requires that the employees master hotel-specific skills and knowledge. Therefore, Gjelsvik [2] pointed out that hotel employees with professional knowledge and experience can create new competencies and sustainable competitive advantage. This study will discuss how professional knowledge and experience become critical success factor in hotel operation.
2. Literature
The resource-based perspective on strategy regards the firm as a bundle of resources and suggests that their attributes significantly affect the firm’s competitive advantage [3] . Most conspicuous among these resources are those that are valuable, scarce, imperfectly tradable, and hard to imitate. Professional knowledge is a critical firm-specific resource that does not easily lend itself to transfer and imitation by other firms [4] . According to Trivett [5] , professional competency can be characterized as the minimum combination of achievement-based behavioral objectives, mastery learning, and life experiences that result in student learning necessary to succeed in one’s profession. Competency is evidenced by individual achievement of required skills and knowledge [6] . Grant [7] also argued that knowledge is a firm’s most critical competitive asset, and Spender [8] contends that knowledge and the firm’s ability to generate it are at the core of the theory of the firm. Therefore, knowledge creation and transfer of knowledge within the firm contribute to higher firm performance [9] . The importance of general management knowledge and skills was indented in the study conducted by Ashley et al. [10] and Breiter and Clements [11] . They stated that people skills, leadership, service orientation, oral communication, listening skills, teamwork, employee relations, problem identification and problem-solving, adapting to change, creative thinking ability, employee training and development, written communication, quality management, individual and system-wide computer skills, and financial skills are important competencies that should be cultivated by the hospitality management curricula for the 21st century.
Hotel business is not protected by a patent. One of its competitive advantage lies in its intangible asset―management knowledge. Hotel with a knowledge that either gained from experience or management theory, will have at least an initial advantage. Hotel employees with professional knowledge and experience can create new competencies and sustainable competitive advantage [2] . Hotel managers often explicitly state that they are devoted to differentiate their hotel from competitors by offering superior service. Differentiated and better service requires that the employees master hotel-specific skills and knowledge. Therefore, having rich knowledge and experience in hotel management has become an important element for hotel operations.
3. Methodology
This research employed qualitative in-depth interviewing, that enables the researcher to obtain access to groups of people to provide a broad view of situations, people or settings which cannot be observed directly by the researcher in a short time [8] . Such interviewing also presumes that the perceptions that people have in their minds, and the beliefs and attitudes they have, will impact on the action they take or are prepared to consider, or even understand. More pragmatically, it is an approach that helps to ensure respondents understand the questions by allowing the opportunity to rephrase them [9] .
There are a number of advantages to using the qualitative in-depth interview as the method for data collection:
1) It has the potential to overcome the poor response rates of a questionnaire survey [12] [13] .
2) It is well suited to the exploration of attitudes, values, beliefs and motives [12] [13] .
3) It provides the opportunity to evaluate the validity of the respondent’s answers by observing non-verbal indicators, which is particularly useful when discussing sensitive issues [14] .
4) It can facilitate comparability by ensuring that all questions are answered by each respondent [15] .
5) It ensures that the respondent is unable to receive assistance from others while formulating a response [15] .
6) It can allow research issue to be explored in greater depth [16] .
The emphasis in this research is on identifying reasons hotel owners’ emphasis and dedication leading to hotel with good efficiency via semi-structured personal interview with senior hotel executives. This research has tended to be exploratory and descriptive because the researcher wanted to understand the critical factors in the hotel operation in Taiwan as seen through the eyes of managers in the industry, rather than only through the lens of macro analysis of industry statistics and profiles. This research asked a series of questions which were open-ended and which the respondents could answer in any way they wished. While their descriptions may be incomplete when put in the macro context, they are important because the perception and ideas that are in the minds of managers in the industry are what drive their actions and their responses to the challenges surrounding them. Their understanding and perceptions are critical in developing a more complete picture about hotel operational performance compared with the recommendations and advice contained in academic and industry research and commentary.
The procedure for data collection began with a telephone contact between the researcher and each of the hotel general managers and asked permission to interview with other managers. At this time they were informed of the aim of the study and the objectives of the research and about the nature of the questions that will be asked during the semi-structured interview, and seek participation and to arrange the interview time if they were willing to participate. A total of 27 hotel owners and managers across 25 hotels participated in the interview (Table 1). Interview data was analyzed by way of constant comparative method. Constant comparative method is a methodological technique derived from ground theory, whereby the information that has been gathered is coded into emerging themes. The data are then repeated revised until it is apparent that no new themes are emerging. The themes are then categorized to form conclusions.
4. Finding
In this research, when asked what factors lead to good performance, we found that many managers in hotels with good performance attributed the business success to hotel employees with professional knowledge and experience. Hotel managers often explicitly state that they are devoted to differentiate their hotel from competitors by offering superior service. Differentiated and better service requires that the employees master hotel-specific skills and knowledge. Therefore, having rich knowledge and experience in hotel management has become an important element for hotel operations. The president of Hotel G7 mentioned:
I must admit that international chains or foreign consultant companies really have a certain edge in their management and marketing. In addition to a brand that facilitates international marketing, marketing position, architectural and spatial planning, and establishment of standard operation procedures are all their merits. For investors, these are precious experiences indispensable in the preparation of a new hotel. Without the aid of these predecessors, it is easy to take a wrong step.
The owner of Hotel G10 also agreed that:
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Table 1. Participating hotel manager.
International chains would attach importance to each detail in their management. Each task is comprehensively deliberated. All the possible problems that may arise and solutions to these problems are considered in advance. In other words, they mean to be well-prepared before any incident occurs or is expected by customers. This notion is absent in local hotels. On the other hand, with respect to many services, while many local hotels have been self-satisfied, international chain hotels will demand themselves to do a better job. They set a higher standard to follow. This is what we have to learn from them.
A manager of Hotel G2 also pointed out that:
The employee turnover rate in hotels is high, and almost all the tasks are taken care of by multiple shifts. These will make hotel services inconsistent and variable. Only professional management and sound system can ensure that shift is not a variable in service quality.
The manager of Hotel G4 also said:
To operate a hotel in an efficient manner, a professional management system and training are essential. In this industry, service is provided by human, but human is the most uncertain and uncontrollable factor. Think about the difference between the results of two employees, one is dedicated and one is not. We cannot ensure every employee can be dedicated to his/her job or maintain his/her condition, but we can use a management system or training to ensure that a consistent level of service can be offered at all times, even if an employee is not at his/her best condition.
The interviews with managers pointed to the fact that professional knowledge that comes with joining a hotel chain and experience in hotel management can help hotels build standard operation procedures (SOPs) and equip employees with professional knowledge and correct service attitudes, which are of critical importance for a new hotel in the beginning. The manager of Hotel A1 mentioned:
In the beginning, we commissioned an international hotel chain to manage our hotel. During that period, this international hotel chain helped us establish SOPs and build up our employees’ professional knowledge and attitudes. Today’s achievements are attributed to such solid foundations.
The managers interviewed indicated that the hotel management system should be built with professional knowledge and experience in hotel management. It deals with the organizational structure, functions of each department, and cross-departmental coordination. As indicated by the manager of Hotel A3:
Building a sound hotel management system is contributive to our operation. A problematic hotel does not necessarily have problematic employees. In most cases, it has something wrong with its management system, such as the absence of a clear definition of responsibilities or insufficient communications.
Additionally, hotels with rich professional knowledge and experience are able to address a critical incident or complaint immediately. As stated by the manager of Hotel A2:
International hotel chain’s professional management knowledge may not be observable in routine works. In the case of an accident or customer compliant, the efficiency of its crisis-solving ability will be conspicuous.
The research findings revealed that the professional knowledge and experience in hotel management is also reflected on service quality control. Through an exclusive control system, consistency of service quality can be ensured. As mentioned by the manager of Hotel A4:
Our hotel group has not only set an SOP for every operation but also built a “Measure Quality System (MQS)” to examine the quality of each operation. This is the key to our pursuit from A to A-plus.
The manager also added:
The content of MQS is detailed and complicated. The book has a length of 4000 pages. This has been exclusively compiled to meet the potential needs of top-class international business travelers for a hotel. Take bathroom items as an example. Most hotels simply provide useful items, and some may provide items of specific name brands. But according to our long-term observations and customer feedbacks, we have set up a set of specifications for towels, soap, and shampoo. All the details from size, weight to material are specified.
The managers interviewed also pointed out that the professional knowledge of hotel management is not fixed but needs to be adjusted according to the trends of the time, customer demands, and the changes in the competitive environment. The manager of Hotel A6 mentioned:
The competitive environment is changing all the time, and customers have more and more demands. Invariable service contents and methods may be ultimately excluded from the market. Only through constant modification or update of services can we retain the patronage of our customers.
In the interviews, it was relayed that time and speed are two elements most concerned by business travellers. Therefore, hotels with professional knowledge and experience are dedicated to simplifying operation procedures to provide fast response to customer needs. As indicated by the manager of Hotel A7:
Many customers may complain and wonder why their problems cannot be immediately addressed. Through our investigation, we have found most of their problems are not difficult to solve, but the procedures used to solve their problems are too complicated. As a result, we are constantly improving our operation procedures to make them simpler and more efficient.
The manager of Hotel A8 also pointed out:
Our headquarters have made a research on the MICE market and found that when selecting a proper meeting place, corporate organizations are most concerned about response speed. 85% of them will deliver their business to the first responder. For this reason, we have reviewed our operation procedures and accelerated our response speed. An audit system has also been set up to check if our salespersons have responded to our customers in the shortest time.
The interview data indicated that hotels with good performance, and average performance are also equipped with professional knowledge and rich experience in hotel management. The only difference is that some of them put too much emphasis on providing quality service to customers and ignore the concept of cost.
Hotel A1 has placed its service focus on providing thoughtful services for customers, making them feel fully respected. The CEO of Hotel G1 who directed this service style is thus given the honor of “godfather of the hotel sector in Taiwan”. The manager of Hotel G1 stated:
Every customer knows that we do not set up counters in our reception lobby for the purpose of breaking down the barrier between our customers and our staffs. Each receptionist responsible for escorting customers from the airport to our hotel is able to call our customers by their names. In each guest room, envelopes and name cards printed with the name of the guest will be prepared in advance. All these are our principles of receiving guests.
The manager added:
Based on the characteristics of hotel services, we have developed a reverse-pyramid management model. In this model, customers are placed in the first layer. Recognition of customers is vital to our hotel. Customers are our boss. Under customers are front-line clerks. They are the core personnel providing services to customers on behalf of the hotel. Under the front-line clerks are the logistic departments and supervisors who are responsible for simplifying the operations of front-line clerks and make their services more efficient. The general manager and CEO are at the bottom. They provide support to supervisors of each department. Through this notion, we intend to let all supervisors understand they are the backup troops for front-line clerks. We believe only with full support and authorization of supervisors, can the basic-level employees combat in the front line.
The success of Hotel G1 has also allowed it to transfer its service model through franchisement. So far, there are a total of 7 hotels participating in this franchise system. However, having practically run the given operations, some franchise hotels has begun to question about the management styles of Hotel G1. The owner of Hotel A5, one of the franchise hotels, mentioned:
I must admit that Hotel A1’s service styles are brilliant. But these service styles require approximately 1/4 more human labour than common styles adopted by other competitors. For our hotel, this is a huge cost.
The manager of Hotel G1 confessed:
Profitability is never our primary concern. What we care about is whether we can provide high-quality service to our customers. On such condition, hiring more human labour and spending more money are inevitable.
Another controversy between franchise hotels and Hotel G1 lies in the reverse-pyramid management model. An ex-manager of Hotel G1 franchise hotel expressed
We know the importance of such management model for hotel operation. But in Taiwan, it is virtually impossible to ask a boss to take every advice from employees.
Research finding indicated that due to the incongruence of management ideas between Hotel G1 and franchise hotels, many franchise hotels no longer follow the methods or service models provided by Hotel G1.
Another local hotel, Hotel P1, is also renowned for its outstanding management and its own chain system. The manager of Hotel P1 mentioned:
The success of Hotel P1 has allowed us to accumulate knowledge of hotel management and establish our own chain system. Unlike other hotels, we have our own architects and affiliated construction firms. After a new hotel is constructed, talents cultivated through our leadership training program will step in to manage the hotel. Therefore, from development to operation, we do everything by ourselves and never rely on others (M20).
However, an ex-manager of Hotel P1 pointed out that:
This hotel chain likes to do everything on its own. A talented person who has not started from the entry level in this chain system can hardly be promoted. Therefore, a closed system is formed. This closed system, along with its conservative styles, has given us an impression that this hotel chain is an outdated enterprise.
Another ex-manager of Hotel A3 said:
This chain’s management system is characterized by stringent supervision and layer-based control. In each department, in addition to the head of department, an additional inspector is deployed to mainly avoid human mistakes. This organizational design might be workable 10 years ago but also caused that most employees would rather follow the guideline than to create something new. In this era, such approach is inefficient.
Hotel P2 is also a hotel with average operational performance. Its family-controlled management style has resulted in a lack of professionalism and the absence of a sound system. A manager of Hotel P2 said:
The board is composed of only family members. Many managers and employees are also family members. They are colleagues and relatives at the same time. Because some of them are not harmonious, serious problems have occurred in hotel management.
He further added:
There is no a sound management system in operation. Management highly depends on people, not system. All the decisions are in the hand of family members and many have been made at their whims. Professional managers are not respected here, so the turnover of mangers is high.
The lack of professional knowledge and experience was however noticeable in poor performing hotels and the managers interviewed expressed that this was a factor.
The owner of Hotel A9 in Kaohsiung used to run a banquet catering restaurant. After he had made some money, he wanted to expand his business. He then bought the financially-crippled hotel and renamed it Hotel A9. Contrary to his expectation, the operational performance of original hotel did not improve and even deteriorated after he took over. The main cause was the owner’s lack of knowledge about hotel management. A manager of Hotel A9 said:
After our owner bought this hotel, he introduced a large number of people who used to work for his restaurant into the hotel. For instance, he appointed his restaurant executive chef to be the general manager of the hotel. I do not mean to say that the chef was not capable of managing the hotel, but managing a small local restaurant is essentially different from managing an international hotel with more than 300 guestrooms. Small-scale restaurants usually do not have a clear-cut organizational structure and a systematic employee training system. Let alone regular updates of facilities. After these people were inaugurated, they really showed their ignorance of these concepts.
He further pointed out:
Even the owner bought this hotel, he managed the hotel in the same way he managed his restaurant and did not put much emphasis on room operation. The owner invested most resources in food and beverage, specially in banquet services, because he thought such investment would bring quick returns as long as the business was good. Running guestrooms was a long-term investment that could not bring returns in a short time. Therefore, he was unwilling to take the risk.
Hotel P2 is another hotel with poor operational performance. It also suffered from deterioration of operational performance due to the manager’s lack of experience. A manager of Hotel P2 pointed out that:
Our general manager is good on finance. Those who study finance will usually resort to cost reduction when in face of poor operational performance. He laid off 20% employees and cut capital budgets. At last, the hotel’s service quality was seriously affected.
The same manager added:
Moreover, he repeated a mistake that many general managers would make. Managers would be immediately replaced if their departments could not turn in satisfactory performance. Therefore, change of positions of managers was constant. The manager of the Western food restaurant and the manager of the Chinese food restaurant were switched, and the bar manager and the manager of Teppanyaki were switched. Such switch of position was not intended for cross training or exploitation of the managers’ expertise. A manager would be sent to another department before he became familiar with the current department (M32).
The manager of Hotel P3 attributes his owner’s lack of experience in hotel management to poor performance. He said:
Our old boss passed the hotel ownership to his first son, who is not talented in hotel management at all. He could have commissioned the management to professional managers, but he wanted to be involved in every business, despite his ignorance. At last, many decisions he made indeed appealed to many customers but brought negative returns.
Another hotel with poor operational performance, Hotel P5, has a dominative first lady, who always manages the hotel according to her personal preference, disregarding the opinions of professional managers. An ex-manager of Hotel P5 mentioned:
Our boss’ wife rules everything. She is Japanese. She keeps a close eye on everything and does not fully trust professional managers. She is easily affected by her personal preference. She hears our advices but seldom accepts them.
The managers interviewed revealed that lacking sound management system is also a factor leading to hotel with poor performance, but is usually overlooked by hotels with poor performance. The manager of Hotel P5 said:
Many managers have always focused on marketing strategies and overlooked their internal management system. The impact of these factors is latent and not easily detected, but it is very influential.
5. Discussion and Conclusions
Research findings indicated that the best way for a hotel’s management to present professionalism and experience is to always think ahead of customers and set a high standard for itself. It was revealed that international hotel chains were usually well-prepared before any incident occurred or was expected by customers. With respect to many services, while many local hotels have been self-satisfied, international hotel chains always demand themselves to do a better job. They set a higher standard to follow. In this increasingly competitive environment, making customers satisfied is already not enough, because satisfied customers may not necessarily be loyal. Therefore, services should evolve to make customers not only satisfied but also moved. Using the professionalism and experience globally accumulated over the years, international hotel chains always try to provide adequate services before demand and set a high standard for themselves. This is the reason why these hotels can have good performance and the notion local hotels need to learn.
Moreover, hotel services have an inherent tendency to be inconsistent or variable [15] . The results of the research illustrated that part of the reason for inconsistency in hotel sector is because many of its services are provided by humans rather than machines. Humans are not as consistent as machines, and the human element is the most uncertain and uncontrollable factor. In addition, employee turnover rate is high, and almost all the tasks are taken care of by multiple shifts. This leads to service quality being hard to control with impacts on operational performance. However, this shortcoming can be improved through professional management and experience to assist hotels in building up a sound management system. Professional knowledge and experience in hotel management can help hotels build standard operation procedures (SOPs) and equip employees with professional knowledge and correct service attitudes to ensure that shift is not a variable in service quality, and a consistent level of service can be offered at all times, even if an employee is not at their best condition. Hotel service cannot only focus on quality, stability and consistency should be emphasized as well. In a hotel, most services are provided by humans, but humans are the most unstable factor of all. Humans are easily susceptible to personal emotions and the external environment and provide services of inconsistent quality. Through the use of professional knowledge and management experience, the impact of the human factors can be reduced to ensure that all employees provide services at a constant quality level in any condition, so that the stability and consistency of hotel services can be maintained.
Managers interviewed also pointed out that to make a hotel operate efficiently, it is very important to build a sound management system, because a hotel is usually comprised of many departments and to complete the job, all departments need to cooperate. A problematic hotel does not necessarily have problematic employees. In most cases, it has something wrong with its management system, such as the absence of a clear definition of responsibilities or insufficient communications. Professional hotel management knowledge and experience can build a system suitable for that particular hotel according to real situation and increase its operational performance. On the other hand, in the judgment of the service quality of a hotel, the focus cannot be placed on its regular services but on its way of handling customer complaint should any contingency occur. If it is capable of quickly and properly handling customer complaints and contingent events that cannot be forecasted, its ability to handle routine work will be definitely of no doubt. To have this ability, training of professional knowledge and accumulation of experiences are indispensable. Therefore, professional knowledge and experience in management can help a hotel efficiently solve contingencies and maintain customer satisfaction.
Although professional knowledge and experience have a strong influence on hotel’s operational performance, it was also discovered that conflicts between professional knowledge in management and ideas of the owner may constantly occur. In Taiwan, as mentioned in the previous section, most hotels are not run by hotel owners with professional knowledge. Some entrepreneurs established hotels simply because they have land and sufficient capital, and these hotel owners are very involved in management and are characterized by stringent supervision and control. This leads to the tendency of hotel owners to rely on their past experience as the platform for management and a great reluctance to accept advice from professional managers. As a result, most employees would rather follow owner’s opinion than create new ideas. In this era of emphasizing professionalism and efficiency, such an approach will have a negative impact on hotel operations. Moreover, the management team in some hotels is composed of owner’s family members, close relatives or friends. It was observed that one aspect of nepotism is that these people have high loyalty and can be trusted by the owners. However, these people have no professional background and there is not a sound management system in this kind of hotel. Management highly depends on people, not systems. All the decisions are in the hands of family members and many have been made at their whims. Professional knowledge is not respected in such hotel. As a result, the operational performance is seriously influenced and becomes poor. It can be inferred that hotel owners do not have to be an expert in hotel management, but they need to hand over the management to professional managers. Although these hotel owners have their own ideas and methods of running a hotel, they still need to respect and accept advice of professional managers. Managing a hotel is professional and complicated. It cannot be done simply with the owner’s personal ideas or reliance on trustworthy family members. Respect for professional knowledge and management experience is still an indispensable element in hotel management.
Hotels are businesses that must make profit to survive. To hotel owners, great service without profit is nothing [17] . There was agreement by those interviewed that good services make more satisfied customers, which should lead to repeat business and a better reputation. However, every additional dollar spent on service immediately reduces pretax profit by a dollar. According to the interview results, some management teams have outstanding professional knowledge in hotel management, but they put too much emphasis on providing quality service to customers and ignore the concept of cost. It is difficult for most Taiwanese hotel owners to accept this service model. Nebel [17] indicated learning how to stay within budget and provide quality service, at any management level in a hotel, is the essence of effective management. In consequence, when management team manages a hotel, they should propose a business plan to the owner with consideration of both the cost and owner’s interest. This business plan needs to cover details of business operations, profits to be obtained, and time of return on investment. With a better understanding of the goal and merits of the plan, the owner may be more willing to trust experienced professionals and authorize them to run the hotel. In sum, professional management and experience can be effective and contributive to hotel performance only on the ground of trust.
It was apparent throughout the research results that professional knowledge in hotel management can help hotels establish a sound management system, SOPs compliant with customer needs, effective crisis-solving mechanisms, and a quality control system to maintain service quality. Specially, professional knowledge in hotel management puts emphasis on each detail and all the possible problems that may arise and solutions to these problems are considered in advance. Moreover, it sets a higher standard to follow and requires the service provided to be of high standard. All of these are the factors contributing to good operational performance in hotels. On the other hand, hotel management knowledge has been more highly developed in Western countries, and Taiwanese hotel managers could do well to have much more communication and exchange opportunities with international hotel chains, and learn specific operation and management practices from them. They may have chances to open up their international views and gain knowledge from prestigious hotel groups with successful experiences. The hotel sector in Taiwan is competing in the global market. Hoteliers should be aware of the trends of global service development and take constructive action to cope with future changes and challenges.