Operations management in the hospitality and tourism sector refers to the activities performed in various areas of the hotel sector. Hospitality refers to the various positions that deal with visitors and this mainly consists of restaurants, catering, casinos, resorts hotels, and many more. The concept of hospitality covers the relationship between a guest and a hotel (Raj and Griffin, 2015). This sector creates wealth for shareholders by offering quality services to the customers. The Berkeley hotel located in London is taken in this report for study. The nature of various products and services of hospitality and the influences which affect the demand pattern of hospitality services is all given in this report. Further, elements that have an impact on the spending power of customers with different stages involved in development of products and services are also mentioned in this. In addition to this, various methods of pricing within the hospitality industry and factors that affect the profitability of various sectors operating in this sector are all given in this report.
1.1 Nature of Hospitality Product and Service Areas
Product is define as an item which is offered for sale and service is produce by hotel to their consumers. It can be in tangible or virtual form. There are different nature of product and service in The Berkeley Hotel, situated in London are as follows:-
Perishable Elements- It can be describe as a service which cannot be gathered or stored for sale in upcoming future. For instance: food and beverage products are not durable but these are perishable.
Tangible or Intangible Elements- Tangible goods and services includes exterior and interior design and equipments of Berkeley Hotel. These all are visible to the customers. It may be divided into different kinds like quality, style, design, brand name etc. For example: furniture is tangible, which be seen or touched.
Room Division: It is an action or activity which is responsible for clients service, revenue and division forecasting. This department play primary roles in providing service to guests during a hotel stay. It includes reservations and housekeeping etc.
Food and Beverage: This service is provided by service manager of The Berkeley Hotel to their guest (García-Lillo, Úbeda-García and Marco-Lajara, 2016). There are different kinds of food and beverage service which include: plate service, Buffet service, Plater service etc. Role of service department is to deal with visitors complaints and fulfil special clients' request.
1.2 Different Influences which Affecting Demand Within Hospitality Operations
There are different prospect which affect the patterns of demand in hospitality operations. These are as follows:-
Seasonality- Main visitors of The Berkeley Hotel London are hikers, climbers, ramblers etc. All these customers are mainly visit in different seasons. Seasonality is distinguishing of a time series in which there is a daily and predictable changes (Xu and Gursoy, 2015). It play an important role in identifying behaviour of customers. Seasons are categorised into three environment: Down, Green and High. These are related with various expectations and demand. In high season, demand of the hotel services are automatically high.
Time of week- One of the essential groups of customers are famed as families and couple. They primarily choose weekend and other type of holiday like summer and winter vacations to travel. Through this, demand of hotel rooms become high.
Healthy Living- It is an important part which directly affect the patterns of demand. Different types of people are living in an environment like high income level group, low income level and some others (Perez and del Bosque, 2014). Most of consumers are health conscious and they select the hotel where they get standard ground of sanitation and healthy food.
Culture- Culture is a characteristic of a specific group of citizens which are similar with language, belief, cooking, social habits arts etc. It also affect demand because people mostly prefer that hotel where they get similarities with their culture.
1.3 Compare customer profiles and their differing expectations and requirements
There are various characteristics which help The Berkeley Hotel London in differentiate customer profiles in their expectations and requirement. These are as under:-
Pricing consideration: It is an essential element that highly impact on customers needs and expectation.
Most of the customers in Berkeley hotel are couple and families. These type of guests are concerned for their top-grade services rather than consideration of price. This leads to the relatively highest prices for whole services. It impacts on customers needs and expectation level (Xie, Zhang and Zhang, 2014) .
Meal experience: It is define as a customer profile about their experience of meal in hotel.
This factor also influence on customers requirement and expectation. The standard of meal of business clients is more higher, along with this, there have various type of gusts such as sportsmen and their group members. In this, they require light food meals.
High income level customer- It refers to the spending power of customers which impacts on their needs and expectations (Köseoglu, Sehitoglu and Craft, 2015).
High income level customer have more spending power in comparison to others, because they always try to pay amount for any service. For instance: high income level group want luxury services and it is responsibility of hotel manager to provide them better services as per their needs.
1.4 Factors Affecting Average Spending Power (ASP) in hospitality businesses
ASP is refers to the decision of pricing process between hotel and customers. It is an ability of individual to spend money after paying taxes. There are various factors that affect ASP in the Berkeley hotel. These are as under:-
Size of Income- There are different income level of customers which are connected to the average spending power (Chan and Hsu, 2016). If there is is high income of consumer then ASP is increasing of that consumer and vice versa.
Status- One another feature which is based on the ASP of visitors is status. When customers are belongs to a royal family then they want high cost facilities and their Average spending power is also high as per their status.
Social and cultural effects- Social and cultural factors also affect the average spending power of a customer. In case festival and occasion, consumers spend more amount on goods and services so, it automatically enhance ASP.
Economic situation- This factor affect the average spending power of consumers in Berkeley Hotel because economic condition of a country is depend on the income of customers (Hertzman Moreo and Wiener, 2015). If there is a high generation of income then it make positive impact on hospitality industry and vice versa.
2.1 key stages in product and service development:
As the operational managers of Berkeley Hotel London, their major involvement in development of new service and product in market. For example: This hotel wants to develop guide facility for consumers satisfaction (Raj and Griffin, 2015). Then operational management need to follow some steps for developing the innovative product and service which are mentioned below:
Idea generation: Idea generation is a first step, in this operation managers are create new idea of service and product process. In this, they analysis the new treats and opportunities.
Idea screening: In this step, managers are choose best ideas and conduct market research. This market research helps in identifying the consumers demand and preference for innovative product.
Concept development and tasting: In this stage, managers generate their concept and determine wants of the consumers about new services and product.
Business analysis: In this, managers are find their competitors who manufacturing the same kind of services and products for the consumers. In order, Berkeley Hotel London produce their services and products at reasonable price for compete their competitors.
Product development: Under this, Berkeley Hotel London develop and generate their new product and services for achieving effective desire result.
Test marketing: Under this, hotel managers collect feedbacks from the consumers and determine their needs for fulfilling their demands of products and services.
Commercialisation and launch: Under this, company put marketing mix because products and services are ready to launch in market. Marketing mix tool helps the company to introduce their product and service in market place.
2.2 Features which contribute towards the customers’ perception of products and services.
Berkeley Hotel London need to attract their consumers by providing them good quality of products and services and maintain good brand image and goodwill in market.
Brand image: Under this, strong and good brand image of hotel services and products can create better and positive perception of the consumers.
Style of the service: It is an important factor that affects the consumer's preference. If hotel services are provided individually and separately to the females, males, families and couples the it can make good and effective perception in customer's mind.
Nutrition and dietary requirement: For attract and influence maximum consumers, hotels needs to provide effective menu of evidently, nutritious and delicious dietary.
Space utilisation: Letting the clients to follow decent space is also effective and important feature for the organisation because it helps to influence and make positive perception of consumers' towards company.
Availability of resources: If special services provided to some person like disabled person etc. is create higher popularity of the hotel. And if hotel can provided sufficient resources to support entire consumers then customers will again and again visit the hotel.
2.3 Opportunities and constraints affecting product and/or service development within a hospitality environment.
Opportunities helps the company to boost up their business procedure and maximize sales volume. Several number of restraint limits the operation of hotel that reduce the profitability. For increasing the profitability, Berkeley Hotel London needs to analysis the opportunities and treats for developing products and services.
Opportunities: Berkeley Hotel London is a 5 star hotel in UK that should be create planing for providing different varieties of rooms and space to the customers i.e. individual, couples and families. This type of planing can helps the company to making effective position at large scale.
Constraints: Major issue of Berkeley Hotel London was its limited accommodation services and less facilities. While its competitors provided many extra facilities to attract large numbers of consumers (Brown, Arendt and Bosselman, 2014). It is not easy to attain competitive benefits for this company needs to make planning for maximising facilities in order to maximise profits and attract consumers.
2.4 Different merchandising opportunities for hospitality products and services.
Merchandising: Merchandising define to the variety of products accessible for sale in the market and display that products in effective manner which increase the interest of consumers to make a purchase. For increasing the profit and effectiveness of the company, merchandising should be adopted by the company. In this include grouping related products collectively, provide samples, spotlighting promotional items, well-stocked shelves etc.
Different merchandising opportunities: In this globalization process, large number of peoples are travelling more for the intention of business. And it will effects of leads the maximisation the popularity in hospitality sector (Ryan, 2015). Thus, Berkeley Hotel London can get different or several merchandising chances or opportunities over the other competitors. Here are some opportunities that can be get by this company.
- Some times, visitors or customers want more and less service quality according to their purchasing power. Then there is a chance and opportunity for the company to develop their maximum value and increase efficiency by providing services with premium and reasonable charges to the customers.
- If the economic condition of the visitors and visitor's nation is increased, then there is a opportunity for the company to providing better merchandising benefits to the visitor and they can easily maximise their profits.
3.1 Various methods of pricing taking account other into consideration of pricing
So many type of pricing strategy and methods are there which can be by The Berkeley hotel to set the prices of its products and the services which it offer to its customers for satisfy their needs and wants. Various methods of pricing with additional pricing considerations can be understood by the following given points:
- Cost oriented pricing: This pricing strategy cover determination of all variable and fixed costs related with a service or good. After determination of all cost require to offer a service to final customers, managers add a percentage of profit to each unit. Cost + Fix percentage of profit = Selling price this is the formula which is use under this pricing method (Brown, Arendt and Bosselman, 2014). This is one of the simple pricing strategy which can be use by The Berkeley hotel to fix the prices of its products and services.
- Market oriented pricing: This is another method of pricing in which company set the prices of its products same as the prices of competitor's products (Market Oriented Pricing Strategy, 2018). The Berkeley hotel can use this in order to stay competitive in market.
Main pricing consideration that require to be consider by the businesses operate under hospitality sectors include service charge, minimum charge and cover charge. Get the best University Assignment Writing Services in the UK from expert writers.
3.2 Factors that have an impact on profitability and revenue generation in hospitality operations
Various factors are there which affect the revenues generation and profitability of hospitality operations. These factors can be understood by the points given below:
Shelf life: This refers to the time during which stored food remain useful, valid or suitable to eat. Shelf life of products can be manage by managing the stock of perishable products and with this wastage of these goods can be minimised (Ryan, 2015). In order to maintain the number of its profits The Berkeley hotel can apply the FIFO method which is first in first out. Further, food items can be store in refrigerator with use of plastic wraps. In case when product is not useful it will left as waste and this affect the profitability of companies.
Labour intensity: In hospitality industry, human efforts are require on large amount to produce and offer goods to the customers or tourists (Singal, 2014). When there is a requirement of large human efforts to develop products the businesses require to pay more to the employees which lower the profits margins of companies.
Elasticity of demand: This cover the availability of a product and services against its demand. In case when demand of customers does not met properly then it results in decrease the sales and profitability of enterprise (Denizci Guillet and Mohammed, 2015).
4.1 Range of Performance Measures and Appraisal Techniques to Individual Aspects of Hospitality Operations
It refers to a process of collecting, analysing and reporting of information regarding to the performance of an individual or a group.
Performance appraisal techniques
There are following techniques to measure performance appraisal in Berkeley Hotel. These are discussed as below:-
Quality Management- It is process of evaluation which is which is required to evaluate whole quality of an organization (Raj and Griffin, 2015). It helps to analyse the quality of goods and services in Berkeley Hotel. It mainly divided into four parts: quality planning, assurance, control and service.
Speed of Delivery- Another technique of measure of performance appraisal is speed of delivery. It evaluate the time of serving and analyse that how fast customers get their deliver. Hence, it is the most significant technique to measure the outcome within specific time in Berkeley Hotel.
Developing Quantitative and Qualitative data- This technique is used to measure whole performance of functional administration in Hospitality industry (Brown, Arendt and Bosselman, 2014). Researcher collect qualitative data from various sources like customer satisfaction and reliability etc. and quantitative date which are related with price of a product, number of luxury customers etc.
External comparison- Company can also measure their performance by comparing with external factors like competitors. If competitors earn more profit then Berkeley hotel should also improve their service quality and beat competition.
4.3 Approaches to business analysis, evaluation and planning appropriate to hospitality operations.
Business analysis: Business analysis is a process of identify the needs and problems of the business. It is a set of methods and tasks which are regulate for the solve the business problems.
Business evaluation: Business evaluation is an activity in which estimate the economics values. In this identify the market price and willingness of pay which is effect the sale of business.
Business planning: Business planning is a process in which include all the information of future needs. In this include background information of the company or its goals. A business plan can help the company to secure efforts, prioritise and finance to evaluate the opportunities.
When following different techniques of hospitality sector, it is difficult to consider operations of this company such as provided services of accommodation and demand of creating sources. In some countries, provide only lodging services to the consumers (Singal, 2014) . But later, they increase efficiency in their service by adding more value like safari etc. here are different types of categories that create maximum profits for the hotel i.e. organized group, non-residents and in-house guests.
4.2 Usefulness and Limitations of Various Quantitative and Qualitative Appraisal Techniques
Qualitative Appraisal- It is also known as traditional method of performance appraisal technique. It is based various qualities of an individual such as knowledge, judgment, attitude, loyalty, capacity, leadership etc.
Quantitative Appraisal- This is also known as modern method of performance appraisal technique. It is based on judgment of employees performance which are developed.
Mainly, these methods of appraisal are based on a sample data and it is not consider actual measure of performance. These methods are useful to gathering information from different sources and measure performance of an organization (Raj and Griffin, 2015) . It give an estimate idea with future prospectus and evaluate performance of employees. Researcher use quantitative technique for performance measurement because is more appropriate and based on development of employees performance. Drawback of qualitative technique is that this is not free from personal judgment and researcher cannot get proper evaluation and training of an individual.
From the above given information, it can be concluded that management of various operations perform under different hospitality sector is very essential as growth of this industry is related to it. Businesses that run under this industry require to identify and examine all the factors that affect the demand pattern in this as this help in develop effective plans and policies that ensure achievement of business objectives in specific time period. Management of key features of products and services should also done by company in appropriate manner as this affect the perception of customers towards that product or brand. Those elements that have a impact on profitability of company should be examine by various businesses that come under hospitality sector to maintain the level of their profit.