Sustainable Tourism: Socio-Cultural, Environmental and Economics Impact, pp. 351-360, 2011 M. Uran, D. Graan, A.

Rudani-Lugari: SERVICE QUALITY SYSTEM FOR SLOVENIAN SMALL ...

SERVICE QUALITY SYSTEM FOR SLOVENIAN SMALL INDEPENDENT HOTELS

UDC 640.41(497.4)

Maja Uran Daniela Graan Andreja Rudani-Lugari

Received 9 March 2011 Revised 6 June 2011 15 July 2011

Abstract Quality is today, in conditions of strong competition and increasing demands of guests became the foundation for survival in the tourist market and profitability. The quality of service in small independent hotels is important for successful business. If quality is what the guests want, demanding and expecting, then this is what a small hotel can offer faster and easier than big ones. Generally speaking, in the hotel industry, products are produced and consumed simultaneously, while in other industries production and consumption are separated in time and space. For this reason, a high quality standard is hard to achieve. Using a quality system, hotel managers try to eliminate errors and improve the guests perception of quality issues. In the international business arena, as well as in Slovenia, one can witness how established quality systems, such as ISO, are ineffective in tourism companies. This paper seeks to analyze common service system problems in small, independent hotels. Also, this paper presents why and how the hotel quality system for small hotels was developed. The final version of the system is drawn from the results of 30 workshops with Slovenian hotel managers. The results should provide valuable guidance for small hotels striving to improve service quality. Keywords Service quality model, Service quality system, Hotel industry, Service, Guality

INTRODUCTION The business environment in the hotel industry is highly competitive, each hotel directly or indirectly competing with another hotel. The highly competitive environment prompts hotel managers to meet their customers' expectations as much as possible to enable the survival and success of the business (Ivankovi 2005, 137). The dynamics in the international tourism market demand from tourism organization in order to be successful to deliver the highest quality, diverse, flexible and innovative products and the high level of individualization of delivered service (Tkali, 2009, 161). In the hotel industry, the emphasis on quality differs from that in manufacturing industries (as in Johns, 1999, 333; Kandampully, Mok and Sparks, 2001, 8; Kandampully, 2007, 30; Uran, 2003, 59). In the hotel industry, products are produced and consumed simultaneously, while in other industries production and consumption are separated in time and space. For this reason, a high quality standard is hard to achieve. Another issue is direct contact between employees and consumers that inevitably leads to errors that can easily contribute to the possible collapse of the
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Sustainable Tourism: Socio-Cultural, Environmental and Economics Impact, pp. 351-360, 2011 M. Uran, D. Graan, A. Rudani-Lugari: SERVICE QUALITY SYSTEM FOR SLOVENIAN SMALL ...

system. If it is accepted that these errors are inevitable, then the goal is to minimize them. Using a quality system, hotel managers try to eliminate errors and improve the guests perception of quality issues. The usual perception is that a good quality hotel is one with five stars, but nowadays it is defined differently. Quality is not defined by category, but by the capability to deliver products and services that have characteristics, and are designed in a way to please the guests and fulfill their needs (Uran, 2003, 60). In the international business arena, as well as in Slovenia, one can witness how established quality systems, such as ISO, are ineffective in tourism companies. Companies argue that these systems are not adapted to the specific needs of the tourist services and the size of these companies. They have also criticized the amount of documentation needed to acquire and obtain certificates. The biggest complaint is that these quality systems do not influence the final quality of the service for guests or, that the influence is very small and cannot justify the amount of money invested. In practice, the best results in providing quality service in the hotel industry are achieved by having internal quality service systems and standards. The construct of service quality has mostly been explored on the basis of the service receivers perspective of service encounters (Parasuraman et al., 1988, 12; Saleh and Ryan, 1992, 324; Babakus and Boller, 1992, 253; Bouman and van der Wiele, 1992, 4; Bienstock et al., 1997, 97). Not until the late 1990s and the early 2000s, did there emerge studies that focused explicitly on the service providers perspective in service encounters (Dedeke, 2003, 276; Chow-Chua and Komaran, 2002, 77; Athanassopoulos, 1997, 264). A model known as the gaps model or service quality model has been developed to identify problems in service delivery (Parasuraman et al., 1985, 41). It defines quality service through customer satisfaction, but it also identifies problems and mistakes through recognizing organizational gaps in the model and tries to avoid them. Hotel management can influence service delivery by narrowing organizational gaps and by improving service quality and customer satisfaction. The service quality model assumes that the difference between the service that the customer expects and the service he gets is due to organizational gaps (Parasuraman et al., 1985, 41; Zeithaml et al., 1990, 131; McCarthy and Keefe, 1999, 185; Uran, 2003, 101). These gaps can be split into (Uran, 2004, 21): positional gap specification gap service execution gap communication gap evaluation gap

The smaller the discrepancies are, the better the service is. By looking at the gaps and the factors that affect them, the problematic areas can be identified, and by dealing with them the service quality can be improved.

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Sustainable Tourism: Socio-Cultural, Environmental and Economics Impact, pp. 351-360, 2011 M. Uran, D. Graan, A. Rudani-Lugari: SERVICE QUALITY SYSTEM FOR SLOVENIAN SMALL ...

In 2003 Uran assessed service organizational gaps in the Slovenian hotel industry. The gap model was designed based upon the literature, then tested for contents validity. Data were collected by using the mail survey administered in Slovenia. Data was gathered on the sample of the 5000 questionnaires for hotel contact personnel and hotel managers. The gathered data was then analyzed with the chosen statistical methods as suggested by Zeithaml et al. (1988). For exploring the gap structures the exploratory factor analysis (EFA) was used with support of SPSS software. To confirm the gap structures the structural equation modeling (SEM) was employed with the support of EQS software. According to the result of the preliminary research of organizational gaps, the biggest problem for the Slovenian hotel industry (Uran, 2003, 207) is a lack of dedication of the hotel managers to define hotel service specifications or standards (mean 3, 90). On the other hand, this is the area where a lot can be improved to ensure higher service quality. Still, the general assessment (mean 5,00), shows that they understand the meaning of conducting marketing research, service specification, performance measurement and implementation of service quality model, but for various reasons it is rare practice in Slovenian hotel industry. Prior research also indicates that it is essential for successful business performance and the higher service quality, that Slovenian hotel managers find effective ways to reward, to motivate and include contact personnel in decision making. To make a general conclusion, the prior research shows the need to design same kind of the quality system. Selecting a suitable system is the most important, and also the most difficult decision that the management has to make (Dale, 2003, 120). The system should bring the best value to the guest, and therefore, for the company to obtain success through the guests satisfaction and loyalty. Big international hotel chains usually use their internal standards, which represent their basic know-how. How to select the right system? Knowledge about the strengths and weaknesses of different systems and knowledge about the hotel company is essential. Management should decide which service elements they would like to promote. On the other hand, it is not wise to adopt a system just because other companies have it. In practice, most choices made this way have proven to be wrong. Testa and Sipe (2006, 46) suggested a list of guidelines and recommendations that should be considered in developing hotel service quality systems. 1. Use information to help illustrate (define and communicate) the causes of servicerelated problems. A constant flow of information facilitates the process of revealing root causes. Make guest letters, corporate communication, and interdepartmental process problems transparent to employees. It is rare to find an employee who admits he knows too much about whats going on in the company. Conversely, hording or limiting information will help to keep solutions at the event level.

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Sustainable Tourism: Socio-Cultural, Environmental and Economics Impact, pp. 351-360, 2011 M. Uran, D. Graan, A. Rudani-Lugari: SERVICE QUALITY SYSTEM FOR SLOVENIAN SMALL ...

2. Take time to incorporate (train and educate) systems thinking exercises into training sessions and educational seminars at all levels. At the front line supervisor level, a hot spots and touch points training workshop might help to impact service quality. Train front line managers to use an employee tools grid and share how their tools have made their jobs easier. 3. Make continuous improvement (improve processes) a business fundamental. Use process charts to understand flow interdependencies and opportunities. Map the guest experience to look at the broader context to see if proactive measures can prevent problems. Have at least one cross-functional process improvement team working to improve a process with great impact to the bottom line. Evaluate technology options for improving key business functions. 4. Use data (evaluate and feedback) to drive decisions. Align measurement processes with business strategy, department plans, and individual performance reviews and development plans. Include predictive measures in the employee satisfaction and customer satisfaction areas as well as historical financial measures in your evaluation system. Encourage front line managers to implement feedback tools that allow them to provide constructive feedback on the job daily as opposed to periodic performance reviews. 5. Recognize (celebrate successes) systems oriented approaches that improve longterm profitability as a balance to rewarding short term financials. Sponsor internal best practice forums to ensure good ideas are shared and incorporated in other areas of the company. Use celebrations to reinforce company culture as well as a means to institutionalize new approaches and ideas. By understanding and implementing the tools and recommendations described here, service leaders should have a foundation for addressing chronic service-related problems. The real benefit of such tools is the flexibility to apply them in varying types of situations. METHODOLOGY AND RESULTS The research was conducted in order to design a framework for a hotel quality system (HQS) that would help managers develop their own systems and solve some of the problems indicated in preliminary research. The final version of the system is drawn upon the results of 30 workshops with Slovenian hotel managers and employees (Uran et al., 2006, 10). The workshops were carried out according to the interest of the Slovenian hotel companies. In the end, majority of the Slovenian hotel companies were involved in the system design. The paper presents some of the findings and provides valuable guidance for hotel management of hotels. The results show that hotel managers in hotels are uncertain which quality system to use, how to implement it, how to write standard operating procedures, how to measure customer satisfaction etc. The workshops were organized in the period from 2004 to 2006 according to the problems identified in preliminary research. 47 managers at different levels were interviewed in total. The topics were: Which system to use? How to start?
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Sustainable Tourism: Socio-Cultural, Environmental and Economics Impact, pp. 351-360, 2011 M. Uran, D. Graan, A. Rudani-Lugari: SERVICE QUALITY SYSTEM FOR SLOVENIAN SMALL ...

How to write standard operating procedures? How to implement them? How to measure the service quality? The results are as followed. 1. Which system to use? 85, 8 % of the workshop participants totally agreed that companies-own standards are more efficient then established quality systems such as ISO standards or EFQM model. But only 8, 6 % have already developed their own system. According to the previous research results, only 2 out of 46 major hotel companies in Slovenia have some ISO standards (Uran, 2004, 3). They all believe that the implemented system should be about delivering a better service to the customers and not about documenting what a company does. 89 % of them strongly believe that is more important how they serve the guest then what has been served. Only 21, 5 % of them believe that they are providing the service that guests want. In their opinion a good system should provide their company with a framework for how to write standard operating procedures, how to implement and monitor them. 2. How to start? Participants all agree that everything starts with the management commitment. It is interesting that more than half of them (57, 7 %) believe that quality is as important as business (financial) result. Sadly, only 28, 2 % think that the goal of their services is to exceed their customer expectations. As a result, there is a lot of space to raise the awareness of importance of service quality. They all agree that for successful start they need a quality team and policy. However few Slovenian hotel managers are willing to spend some extra money for a quality project (5, 5 %). 3. How to write standard operating procedures (SOP)? By Slovenian law job descriptions are required in every company. Basically, every employee has no more than page long set of instructions for what to do and how to deliver the services. For most of the companies that is sufficient. Only 14, 7 % of the participants believe that their written SOPs are excellent. 1, 8 % think that SOPs are the basis to evaluate job performance. They all agree that SOPs should be short, simple and systematic. 4. How to implement them? Participants all strongly believe that SOPs should be implemented through training, supervision and rewarding system. Unfortunately, according to prior research, the hotel managers stated that only 20, 7 % of Slovenian hotels have a good reward system and only 24, 1 % hotels have a good training system. 10,5 % of Slovenian hotels do not even spend not a single Euro on training and 52, 6 % spend less than 6250 Euros annually for education and training of their employees (Jerman et al., 2006, 12). 5. How to measure the service quality? 20, 2 % of participants measure guest satisfaction very often. The most common method used is a questionnaire placed in the hotel room. Only 7, 4 % of the managers interact and talk to guests on a regular basis. 9, 8 % use the information that is gathered with any form of marketing research. The employee satisfaction survey is rarely done. According to prior research, the level of dissatisfaction of Slovenian hotel contact personnel is very high.

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Sustainable Tourism: Socio-Cultural, Environmental and Economics Impact, pp. 351-360, 2011 M. Uran, D. Graan, A. Rudani-Lugari: SERVICE QUALITY SYSTEM FOR SLOVENIAN SMALL ...

Figure 1: HOTEL QUALITY SYSTEM HQS FRAMEWORK

MANAGEMENT COMMITMENT

QUALITY LEADERSHIP

SELECTION OF QUALITY SYSTEM QUALITY TEAM CURRENT SITUATION ANALYSIS, QUALITY POLICY AND GOALS DESIGN RESOURCE ALLOCATION PROMOTING QUALITY

STANDARD OPERATING PROCEDURES (SOP) DESIGN

GENERAL INFORMATION ABOUT HOTEL AND DEPARTMENTS SERVICES GENERAL RULES QUALITY RULES

QUALITY IMPLEMENTATION

SOP FOR ACCOMODATION AND F&B SOP FOR OTHER SERVICES

TRAINING SERVICE DELIVERY SUPERVISION REWARDING AND MOTIVATING

QUALITY EVALUATION

MEASURING GUEST AND EMPLOYEE SATISFACTION

METHODS METHODOLOGY DESIGN

RESULTS

USE OF INFORMATION

Source: Uran et al. (2006, 9)

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EXTERNAL EVALUATION

IMPLEMENTATION OF SOP

SITUATION ANALYSIS

SOP' CORRECTION

FEEDBACK

PRESENTING SOPs

CRM

Sustainable Tourism: Socio-Cultural, Environmental and Economics Impact, pp. 351-360, 2011 M. Uran, D. Graan, A. Rudani-Lugari: SERVICE QUALITY SYSTEM FOR SLOVENIAN SMALL ...

In line with the basic premises and definition of issues regarding service quality in hotels the hotel quality service (HQS) methodology (see Figure 1) was devised and tested for the specific needs of individual companies. In preparing the methodology, the best practices in the industry were considered as well as the results of all presented research. HQS takes into consideration principles and elements of TQM, ISO, MBQA, EFQM, Investors in People and others. HQS does not exclude the systems mentioned above. Its goal is to help the hotel companies to establish their own quality system. Certain solutions provided in HQS can also help companies to improve and upgrade systems they already have. HQS presents a clear and transparent system tool for establishing custom made service quality system in the accommodation sector, regardless of capacity or definition. It is also applicable to restaurants, bars and sport centers, wellness centers, etc. Figure 1 presents the entire system, with its elements and subelements. In the following text, the content of the individual phase will be presented (Uran et al., 2006, 9). HQS consists of three basic phases: 1. Quality leadership 2. Quality implementation 3. Quality evaluation 1. PHASE - QUALITY LEADERSHIP: This phase express the initial thoughts about quality and is the essential precondition to other phases. All authors of theoretical research in this field agree that there can be no success in the business without management commitment to quality concepts. Management can start the process of permanent improvement of quality by accepting and understanding these concepts, and with the desire to implement and communicate it to employees. The HQS provides guidelines to the hotel management on how to start creating a quality system. This phase is divided into six parts: 1. Commitment to the quality 2. Selection of a quality system 3. Selection of the quality team 4. Current situation analyses and designing quality policies and goals 5. Resource allocation 6. Promoting quality 2. PHASE - QUALITY IMPLEMENTATION: This phase is divided to two programs: Standard operating procedures (SOP) design Implementation of SOP

The HQS gives hotels guidelines on how to systematically develop standard procedures and services. Standard operating procedures are divided into five different sets: 1. General information about the hotel and its divisions 2. General code of conduct 3. Quality rules 4. SOP for basic services (restaurant, front desk, rooms) 5. SOP for other services (wellness, sport and business centers)
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Sustainable Tourism: Socio-Cultural, Environmental and Economics Impact, pp. 351-360, 2011 M. Uran, D. Graan, A. Rudani-Lugari: SERVICE QUALITY SYSTEM FOR SLOVENIAN SMALL ...

The HQS gives guidelines to hotel management on how to manage employees more efficiently while reaching for a common goal - good quality service. It has the following sub-programs: 1. Introducing SOP to employees 2. Training employees according to SOP 3. Delivering services according to SOP 4. Supervision 5. Rewarding and motivating 3. PHASE - QUALITY EVALUATION: Once the decisions to implement a quality system and process of implementation have been completed, it is time to assess the effects. These are seen in: Business results SOP implementation analysis Guest satisfaction Employee satisfaction

There is cause and effect between these elements. Satisfied employees are a precondition for satisfied guests. A satisfied guest leads to better business results and that gives the company better opportunities for development, for better rewards to employees and again to satisfied employees. The HQS evaluation phase helps hotel managers to define what to ask, which methods to use, how often to use them, and what to do with acquired information. The TQM concept demands separating users into external (guests) and internal (employees). Both groups are dealt with in this evaluation phase. It contains the following elements: Recommended questionnaire methodology for quantitative research (advantages and disadvantages for every method and hope to recruit guests participation in questionnaires) Research expectations and satisfaction with examples of quantitative questionnaire Use of information

CONCLUSION This paper presents why and how a hotel quality system for hotels in Slovenia was developed. Preliminary results shows that hotel managers in hotels are uncertain which quality system to use, how to implement it, how to write standard operating procedures, how to measure customer satisfaction etc. The research was conducted in order to design a hotel quality system that would help managers to solve some of the problems indicated in the preliminary research. The final version of the system was drawn upon the results of 30 workshops with Slovenian hotel managers. It is hoped that HQS will become a useful framework for designing individual quality systems in the tourism industry. In preparing HQS, the best practices in the industry and principles were taken into consideration. It also considered the experience of the project team members in designing SOP and all other activities that improve quality in tourism companies.
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The system is designed to be applicable for small, independent hospitality and tourism companies in Slovenia and we hope beyond.

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Maja Uran, PhD, Associate Professor University of Primorska, Turistica Faculty of Tourism Studies Obala 11a, 6230 Portoro, Slovenia e-mail: maja.uran@turistica.si Daniela Graan, PhD, Associate Professor University of Rijeka, Faculty of Tourism and Hospitality Management, Opatija Primorska 42, P.O.Box 97, 51410 Opatija, Croatia e-mail: danielag@fthm.hr Andreja Rudani-Lugari University of Rijeka, Faculty of Tourism and Hospitality Management, Opatija Primorska 42, P.O.Box 97, 51410 Opatija, Croatia e-mail: alugaric@fthm.hr

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