Faculty & Research
Introduction to Overall Best Practices
An Introduction and Overview
In this study overall best practice champions are those individual managers, individual hotels, or brands of hotels that, beyond performance in specific areas, succeed in making hotels better places for guests to stay, for employees to work, and for investors and owners to profit. This definition is consistent with the recent work of others studying service firms (Rucci, Krin, and Quinn 1998; Heskett 1995). Many of our overall best practice champions were excellent in several functional best practices such that they deserved the designation as an overall champion. Overall champions were identified for each product segment and five key competency categories.
Overall champions were selected in all of the product segments of the industry because it was reasoned that practices that have benefits for one product segment such as budget hotels may not be appropriate for hotels in a different segment like luxury hotels. The champion in the budget segment refused to participate in the study, so unfortunately an overall best practice champion does not represent that product segment. Overall champions were also selected in key competency areas. These competency areas are central to the overall operation of hotels and deserve attention because they are critical factors for success in competitive terms.
Key Competency Areas
Key competency areas are the areas within an industry that are considered key to producing results. Identifying champions in key competency areas allows for a focus on factors of critical importance to hospitality organizations. In our study five key competency areas were repeatedly identified in the two phase I pilot tests by industry nominators, and hence they were placed in the phase I nomination survey as critical areas for identifying best practice champions. The key competency categories include customer service, physical property, employee retention and loyalty, quality standards, and profitability.
Product Segments
The definition of product category was adapted from the Bear Stearns Financial Services Company's United States lodging industry categorization scheme, coupled with the addition of casino hotels and resorts, a product type not included in the Bear Stearns scheme (Adler and Lafleur 1997). We chose this industry categorization scheme with the council of our industry experts because it allows us to compare and recognize the success of firms and individuals operating in similar competitive and operational contexts with similar resources. In the box below are the definitions of each product category as defined for our phase I nominating survey.
Table 1: Product Segments (Based on Bear Stearns Industry Classification Scheme)
Deluxe Hotels
(elegant, distinctive, highest quality décor; upscale restaurants; full range of first class amenities and customized services)
Upscale Hotels
(well integrated décor; quality furnishings; premium guest room amenities and facilities; high staff-to-guest ratio)
Mid-scale Hotels, with or without F&B
(nicely appointed rooms; range of facilities may be limited; good quality amenities; some special services available)
Economy Hotels
(clean and comfortable; functional, limited range of amenities; some services offered)
Budget Hotels
(clean, well-maintained; offers a minimum of service and amenities; price-sensitive guests)
Extended-Stay Hotels, Upper Tier
(large suite units with separate living and sleeping areas; complete kitchen; personalized service; plush, comfortable rooms)
Extended-Stay Hotels, Lower Tier
(functional suite unit with small living room and small bedroom; kitchen area)
Casinos
(hotel whose focus is on gaming)
Phase III Data Integration
The 29 overall best practice champions cases presented in this section are the final product of the phase II interviews and the phase III market-based customer interviews. The overall best practice case studies reflect the business approaches the champions utilized to make their hotels compelling for the guests, the employees, and the investors. These cases contain decisions and actions regarding real estate investment, property design and management, the organizational development of managers and employees, and the processes to organize, manage, and improve upon their operations.
In each overall best practice case study for which significant customer information was collected, the data from the phase III market interviews are integrated into the summary. The Guest Perspective presents the various hotel attributes driving customer decisions to stay at the champion hotel or brand (under the sub-heading Value Drivers In The Purchase Decision), as well as those aspects they liked at their last stay at the champion hotel or brand (under the sub-heading Value Drivers In The Hotel Experience). A third sub-section is the Benefits to the Customer that describes the end-users' perspectives regarding the customer benefits (e.g., a worry-free stay, feeling at home, etc.) that dominate the hotel's or brand's image in the respondents' minds. Lastly, in this section we explore those managerial and operational practices that were most visible to the customer and that they cited as the reasons why the champion was able to deliver value. These practices are presented in the sub-section designated Outlook of Management Practices. The second main section of phase III findings is entitled Intermediary Perspective. This section highlights the intermediaries' (travel agents and meeting planners) motives to do business with the champion and what they believe are the most valuable attributes of the champion's products and services.