Hospitality Review Volume 22 Article 10 Issue 2 Hospitality Review Volume 22/Issue 2

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Keywords Michael Kasavana, Food and Beverage, Food service, Organizations, Hospitality Administration and Management, Finances, Smoke-free. Restaurants, bars, Sales, No Effect, Smoke-free. Restaurants, Bars, Hoteols, Smoking Bans, Hotel, lodging, International, Human Capital

This full issue is available in Hospitality Review: https://digitalcommons.fiu.edu/hospitalityreview/vol22/iss2/10 VOL. 22, No. 2 Fan 2004

A 101of . and Tourism Management Publication

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Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. This edition of the Review marks an end and a beginning. After more than 12 years at the helm, Professor William O'Brien has returned to the classroom and research full time. While we are sony to see Bill step aside, his place has been taken by a very capable colleague - Professor Marcel Escoffier. Many of our col- leagues in the academy know Marty. He is an active member of the academy, and a thoughtful individual who will bring great insight into future editions of the Review. We look forward to his leadership as we continue to strive to ensure that our efforts are per- tinent to the changing needs of hospitality and tourism research.

At the July annual meeting of the CHRIE Education Research Academy, we were engaged in a discussion concerning the publication of original research and research concepts as opposed to empirical studies. As a result of these discussions, we agreed to provide a forum for high quality conceptual papers. It is anticipated that shortly we will announce a guest team of editors who will manage the process and pro- vide us with the refereed articles for publication in a special edition.

As you can see from the Table of Contents, we have an excellent col- ledion of articles which has something of interest regardless of your aca- demic bent.

Joseph J. West, Ph.D. Publisher

i FIU Hospitality ReuiewlFall20G

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. A Beginning and a Continuation As we assume the duties and responsibilities as editor of the FIU Hospitality Review, we wish to take this opportunity ta affirm our School of Hospitality and Tourism Management's commitment to excellence. This journal represents a continuation of the ideas and ideals of Dr. Norman Ringstrom, a founding member of our faculty and the FIU Hospitality Review's first editor. His goal, and the goal of both his suc- cessor, Professor William O'Brien, and ourselves is to provide the hospi- tality community with a forum wherein academics, those in industry, and governmental policy makers may participate in defining and improving the world-wide tourism and hospitality industries. We wish to continue this noble goal. To that end we solicit and pub- lish articles that cover the gamut from empirical research and proposals of new theories concerning hospitality to articles concerning our indus- try's leaders: How they became successful and where they believe the industry is headed. This mix of academic and applied knowledge is what distinguishes those journals published by the nation's top hospi- tality programs from the trade press. It has been our experience that those in academe often believe that applied articles lack importance. As a practicing hotel manager, we can assure the academics that relevance is in the eyes of the beholder. Publishing articles that appeal to acade- mics and practitioners assures us of an open forum wherein both groups may learn from each other. As we assume the editorship, we ask that those who may be inclined to read only one or another type of article pause for a moment and consider what they are missing. Our industry continues practices that were first introduced a century or more ago. While not everything that is old is necessarily in need of revision (Caesar Ritz introduced the idea of a bathroom for every guest room, an idea that still hears merit), certainly articles questioning many of these traditions have relevance. Similarly, we believe that the application of current research trends reported in the general business literature, when applied to our indus- try, merits publication. Finally, we wish to encourage the use of the FN Hospitality Review as a fonun for students and others just entering our field to submit articles that may look at some aspect of hospitality from fresh points of view. Often we managers and educators are tm close to industry issues and fail to see the forest for the trees. k., we begin our tenure as editor, we wish to further the ideals of Dr. Ringstrom and make this journal an important bridge between acad- eme and industry. We encourage you, our readers, to contribute articles of importance for review, and we ask that you encourage your colleagues to do the same. In the next few weeks we will be sending out copies of this journal along with letters encouraging article submission. Should you receive such a mailing, consider yourself flattered. But once you come back down to earth, we ask that you forward your duplicate copy to a colleague whom you feel may become a future contributor to our journal. Marcel Eseoffier

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. FIU HOSPITALITY REVIEW Vol. 22, No. 2 Fall 2004 Publisher: Joseph West, Dean FIU School of Hospibhty and Tourism Management Editor: William G. O'Brien, Assodate Professor hiateEditor: Lillian Ladge Kopenhaver, Professor Contributing Editors: Elio Bellucei. Professor Nestor Portocarrem. Professor Marcel Escoflier, Asswiate Professor Editorial Board: Rocm M. Angelo, Associate Dean Joseph West, Pmfessor and Dean Lendal H. Kotschevar, Distinguished Professor Mark Bonn, Professor, Florida State University Ronald F. Ciehy, Director and Professor, Michigan State University Fred J. DeMicm, Chair and Professor, The University Of Delaware Chekitan S. Dev, Associate Professor, Comell University Nicholas J. Hadgis, Dean, School of Hospitality Management, Widener University Kimberley Harris, Associate Professor, Florida State University Michael L. Kasavana, Professor, Sehwl of Business, Michigan State University Dank Laudadio, Pmfessor, Florida State Univenity Rob Chrm Hung Law, Associate Professor, Hong Kong Polytechnic UNV. Anthony G. Marshall, President & CEO, Educational Institute of the AH &MA David V. Pavesic, Professor, Georgia State University Jonathan R Pmbber, Assistant Professor, East Camha University Joan S. Remingtan, Associate Dean, Florida International University Claire D. Schmelzer, Associate Professor, University of Kentucky John M. Tarras, Associate Professor, Schml of Business, Michigan State University Hubert B. Van Hoof, Assistant Dean and Associate Professor, Schwl of Hotel and Restaurant Management, Northern Arizona University Anhw N. Vladimir, Contributing Editar, QUEST Magazine Editorial Assistant: Dawn Minisall Typesettingmesign: FIU Publications FIUH~spirolityReview is published by the Sehaol of Hospitality and Tourism Management, Florida International University, North Mi-. Florida. International Standard Serial Number: ISSN 0739-7011.

Editorial Policy: FIU Hospitnlity ReuYu, does not accept responsibility for any of the views expressed in its pages. Rather, the editorial board accepts the responsibility for providing an oppar- tunity for a bmad range of views ta be expressed. Articles do not represent a consensus of opinion; same ideas presented are in open disagreement with others, and no reader should be able to agree with all of them. Unsolicited manuscripts lartides, essays, reprints, excerpts, hkreviews, ete.), amomparued by a self-addressed,stamped envelope, may be submitted ta: FIU Hospitality Review, Florida International University, NE 151st St. and Biseayne Boulevard, North Miami, FL 33181 telephone 305-919-4500. See guidelines far authors. Annual subscription rates far the bi-annual publication are $25 in the US.. and $35 elsewhere, payable ta FZUHaspitali& ReuSw, Florida International University, North Miami, FL 33181.

Nvt printed at State expense. Florida International University

iv FIU Hospitality ReviewlFall2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. 1 Guidelines for Authors

FIU Hospitality Review encourages submission of manuscripts on topics relevant to the hospitality industry. The following guidelines will assist authors in preparing articles for publication. E-mail submissions preferred. MS Word attachment. [email protected]

U.S. Mail submissions also accepted. Send to: FIU Hospitality Review School of Hospitality and Tourism Management, Florida International U~versity,3000 NE 1.51 St., North Miami FL 33181. Printed manuscripts should be double-spaced in 12 point font. In addition, authors must include a diskette (31/2inch), labeled with the author's name and the article's file name. Enclose two hard copies. Please use MS Word.

The article should provide a cover sheet with an article title and the name, title, school, address, telephone number and e-mail address of business affiliation of authods). have a preface or abstract, usually two to three seniences, which summarizes the article. This is printed on the first page of the article prior to the body of the text.

be written in the third person. The policy of the FIU Hospitality Review is not to print fist or second person articles.

include no more than five tables, charts or exhibits, with a preferred vertical format which must not exceed 35 lines in depth and 40 characters in width so each can fit on a single page.

follow standard footnotelendnote format, which the FIU Hospitality Reuiew runs as "References." Use consecutive num- bers in the text and follow the style set forth in the MLA Stylesheet or Kate L. Turabian, A Manual for Writers of !&rm Papers, Theses and Dissertations, 6th ed., (Chicago: University of Chicago Press, 1996). The FIU Hospitality Review will not accept articles with internal footnote citations or textnotes. Do not include bibliographic references. range from 10 to 25 pages (2,500 to 7,000 words), with references and tables included. include major subheads within text; each should consist of a sub- jectlverb construction and be short.

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. Table of Contents Page Ingredients for success in career development by Judi Brownell, Professor of Organizational Communication School of Hotel Administration Cornell University ...... 1

Electronic perception technology applications in food service by Michael L. Kasavana NAMA Professor in Hospitality Business and Bonnie J. Knutson, Professor and Hee S. Lee Foodservice Management The School of Hospitality Business Michigan State University ...... 18

Measuring brand equity of restaurant chains by Woo Gon Kim, Assistant Professor and Peter DiMicelli, Jr., Doctoral Candidate Oklahoma State University School of Hotel and Restaurant Administration and Jin Kang, Assistant Manager Marketing Department CJ Foodville Corp...... 28

Effect of smoke-free ordinances on restaurant and bar sales by Howard Peny Glauert, Professor Graduate Center for Nutritional Sciences and Department of Nutrition and Food Science University of Kentucky ...... 42

The five essentials of private club leadership by Ronald F. Cichy, Director and Professor and Bonnie Knutson, Professor The School of Hospitality Business and Jaemin Cha, Doctoral Candidate The Department of Communications Michigan State University ......

vi FIU Hospitality Review /Fall 2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. Hospitality innovations: Identifying successful practices by Michael Ottenbacher School of Management The University of Surrey and Brendan Gray, Associate Pmfessor Director, Marketing Performance Centre ...... -59 University of Otago

Smoking restrictions, bans rise in hospitality industry by Reidar Mykletun, Former Dean The Norwegian School of Hotel Management Stavanger University Stavanger,Nomay...... 71

Directing the continuous quality improvement effort by Martin O'NeiU, Associate Professor and Susan Hubbard, Associate Professor and Program Director Hotel and Restaurant Management Department of Nutrition and Food Science Auburn University...... 87

The international hotel industry in the new millennium by Robert A. Brymer, Professor Dedman School of Hospitality College of Business Florida State University and A. J. Singh, Assistant Professor School of Hospitality Business Michigan State University ...... ,104

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. Ingredients for success in career development

by Judi Brownell

Hospitality managers can expect to same - there are never-ending confront hve challenges In the decades ahead. A study of luxury hotel general challenges and a constantly managers identifies the skills and changing landscape."'We are. . . in personal characteristics respondents the entertainment business," yet perceived as most important to their another general manager noted. career development, as well as the future requirements for unit level Other respondents described managers and the major challenges hospitality management in the they anticipate. The author then maps following manner: "We have to be those skills and personal characteristics identified by respondents against future dedicated and passionate;" industrv challenoes to siaoest addi- "Managing the multi-dimensions oonal managerjayneeds ~&mmenda- of guest, staff, and ownership tlons are presented for development strategiesthat will ensure hospitality needs makes us unique," and organizafions identify, develop, and "Personal and professional rela- retain individuals with the "right stuff." tionships, more than in other industries, indicate one's success in our field." hat characterizes hospi- A variety of studies echo these tality management? practitioners' views and suggest When unit managers that effectiveness in hospitality from North American luxury organizations, indeed, requires hotels were asked that question, emphasis on a specific set of skills they had no problem coming up and personal characteristics.' with answers. Long hours, high workforce diver- "The diversity of people and sity, and increasingly sophisti- activities under one roof," one cated guests contribute to the daily general manager commented. challenges managers confront. Another described the situation by Large portions of each day are saying, "no two days are ever the spent addressing unanticipated

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. events, from weather-related plishing goals while facilitating crises to malfunctioning equip- effective relationship^,^ this ment and purchasing errors. highly people-centered business requires a set of interpersonal Industry's future shaped skills suited to the multiple Tomorrow's managers will demands of a workplace driven help to shape the industry's by its human ~apital.~ future. Consequently, identifying Strong interpersonal skills the specific competencies required are demonstrated in a variety of for moving from middle into ways."erhaps managers chat senior level positions provides over lunch in the employee cafe- direction for selecting and devel- teria or pitch in to barbeque oping the next generation of unit chicken at the company picnic. By level managers. Such informa- tapping into the organization's tion is useful to educators and informal networks and by demon- practitioners alike since succes- strating a sincere concern for sion planning and leadership employees' interests and ideas, development are keys to the these managers are better able to future growth and vigor of the understand employee concerns hospitality industry. and to address conflicts and misunderstandings before they Leaders confront challenges become serious problems. The What challenges will leaders same skills that facilitate an confront in the decades ahead? A inclusive, team-oriented approach literature review suggests that within the property forge strong the men and women responsible external relationships as well. for guiding tomorrow's hospi- Second, organizations can only tality organizations need to have thrive if their leaders facilitate strong interpersonal skills, be trust and good will. In daily perceived as trustworthy, and conversations as well as in public demonstrate a concern for devel- arenas, senior managers must oping their employees. As the instill confidence and demonstrate workforce becomes more diverse character through the choices they and the industry more multina- make and the messages they send. tional, recognition of cultural Effective leaders can be depended differences and a global orienta- upon to "do the right thing"; their tion is also required. As change is words and actions are aligned.6 inevitable, managers who Managers must build bonds of succeed will be those who adapt trust throughout the organization. to new technologies and keep Such bonds establish a foundation pace with the demands of an for working together effectively in uncertain future.' more turbulent times. First, while all managers A third challenge is to develop have the dual tasks of accom- the hospitality workforce. This

2 FIU Hospitality Review /Fall 2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. may involve providing feedback things as advances in technology to a front desk attendant inter- and changes in the economy. ested in moving into a manage- Working effectively in this milieu ment position or mentoring a requires leaders to adapt to new member of the marketing depart- circumstances and anticipate ment. The customer-contact future demands. employee is part of the service experience; therefore, the quality Wise decisions needed of his or her performance reflects Identifying and developing directly on the organization. hospitality leaders who are Cultivating the knowledge, skills, prepared to meet these challenges and judgment of all employees is not an easy task. While the through such activities as perfor- specific competencies required to mance appraisals, coaching, and progress from middle to senior mentoring is a critical manage- level management always have ment task.: been elusive, it has never been Next, leaders who demon- more important to make wise deci- strate interpersonal sensitivity sions in the selection and develop- are particularly effective in ment process. It seems essential, diverse organizations, as they are therefore, to identify the skills and able to "sense and understand the personal characteristics that viewpoints of everyone around the contribute to career development table."8Managing effectively in an and that distinguish individuals increasingly diverse workforce is with the potential to become therefore a fourth industry chal- successful general managers. lenge. As organizations become Identifying these two sets of increasingly multinational, requirements will enable hospi- successful managers will be char- tality organizations to design acterized not only by their cultural development strategies that will awareness internally but also by ensure success in the increasingly their global per~pective.~Serving competitive and complex business guests from around the world environment just described. Such requires a broad understanding of direction will also guide educators the impact of culture on values, interested in preparing students to attitudes, and beliefs. manage the challenges of a diverse Finally, those who look and people-centered industry. outward to examine the interna- tional landscape readily will GMs surveyed notice that the environment is A survey of general managers characterized by substantial and was conducted to determine the continuous change.'"Businesses skills and personal characteristics are becoming ever more complex, these executives perceived to be and hospitality organizations are most essential to their success increasingly affected by such and career development. While

- Brownell 3

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. this approach has inherent limi- tant. Part 2 of the survey posed a tations, going directly to those number of open-ended questions, who hold senior leadership posi- including an inquiry regarding tions to identify success factors the traits respondents believed provides a grounded and relevant would be most important to their perspective that the researchers future effectiveness as a general believed would contribute to manager. Respondents were also information currently available asked about the issues they felt on the subject. posed the most significant future The first step was to gather challenges, both to them person- items identified in previous ally as well as to the hospitality studies as essential to effective industry. The final section of the management practice. The author survey requested demographic searched hospitality databases information. and reviewed articles addressing managerial competencies and Eight companies selected profiles of effective managers Eight hotel companies were published between 1995 and 2003. invited to represent the luxury This search generated a list of 43 and upscale hotel segments in the recurring skills and personal United States as defined by J.D. traits. These items were then Power and Associates' 2002 reviewed by a group of five general Domestic Hotel Guest Satisfac- and regional hotel managers who tion Study." All three luxury were asked to delete any items chains were included, and five of they believed were irrelevant or 12 upscale brands were selected redundant, and to suggest missing by faculty and graduate students items. The result was a list of 36 in hospitality management. items deemed to include the skills Seven of the eight companies and personal traits most identified agreed to participate in frequently associated with this study. In each case, a corpo- managerial effectiveness. rate representative provided a The list of items was then list of general managers' divided into two convenience addresses, and surveys were sent categories, skills (question #1) to all 187 general managers and personal characteristics directly; 111 useable surveys (question #2), and presented to were returned in self-addressed respondents on five-point Likert envelopes for a response rate of scales. General managers were 59.3 percent. asked to rate each item according Demographic information to the extent they believed it revealed that just over 90 contributed to their career percent of the general managers success and advancement from 1, were male. All respondents had representing unimportant, to 5, worked for more than 10 years in representing extremely impor- the hospitality industry and the

FIU Hospitality Review /Fall 2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. vast majority, nearly 75 percent, Presentational speaking (mean had worked in the industry for 3.71), intercultural communica- more than 20 years. While just tion (3.79), and negotiating (3.96) under 30 percent of respondents were also perceived to he less had been in their position fewer important than other items in than five years, 43 percent had the group. been general managers for more When the top five personal than 10 years. Seventy-five characteristics (all means over percent of those surveyed indi- 4.40) are examined in question cated that English was their #2, respondents agreed that hard native language. work (mean 4.651, trustworthi- ness (mean 4.591, and integrity Skills are ranked (mean 4.55) were keys to their The first question asked career development. In fact, respondents to rate, on a five- virtually 95 percent of respon- point Likert scale, the degree to dents assigned the highest which each of 16 skills possible rating to hard work. contributed to their career devel- Close behind was perseverance opment. The limited number of (mean 4.471, which over half of respondents made descriptive general managers found statistics the most reasonable "extremely important." approach to data analysis. Five On the other hand, nearly skills had means of 4.3 and half of all general managers- above. Leading teams came out over 90 percent of whom were at the top of the ranking (mean male-agreed that gender (mean 4.73), with nearly 75 percent of 1.84)was "unimportantn to their respondents rating it as career development. Also among "extremely important." Effective the five lowest-ranked character- listening ranked next (mean istics were lucky breaks (mean 4.62), followed by coaching 2.67), educational background employees (4.41). Next were (mean 3.091, and a global providing feedback (mean 4.33) perspective (mean 3.36). and managing conflict (4.31). Mentoring, with a mean score of At the other end of the scale, 3.55, was perceived as less using technology (mean 3.21) important to managerial success was viewed as the least impor- than 15 of the other items. tant of all items, with only six Ranked means and standard respondents judging it to have deviations for items in both ques- been "extremely important" to tions are presented in Table 1. their career development. Preparing reports (mean 3.44) Future success analyzed and writing memos and letters General managers were then (mean 3.49) were also viewed as presented with an open-ended less essential than other skills. question that asked them to list

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. Table 1 Hotel general managers' ranked means by question [N = 111) MEAN SO ------

Question #1: Skills --

- --Leading teams------4.73 - .52

--Effective listening -4.62 -- .52 - Coaching employees 4.40 67 --- -- Providing feedback -- 4.33 -- .62

Managing conflict -- 4.30 --.73 Managing crises 4.18 .87 ------~ Time management 4.08 .76 Appraising employees 4.00 .72

Managing diversity -- 3.98 .86 Conducting meetings 3.96 .71 -- -- - Negotiating -- -- 3.83--- .86

-- Intercultural communication 3.79 .96 3.71 1.17 - Presentational-- speaking Writing memos & letters 3.48 1.01

- Preparing reports 3.44 84 Using technology 3.20 84 Question #2: Personal compelencies -- -- - Hard work 4.64 .53 Trustworthiness ----4 58 -- .68 - Integrity 4.55 65 -- -- Positive attitude 4.52 64 Perseverance 4.47 ~- .69

Flexibility -- 4.36 .79

Problem-solving ability -4.36 62 -- Confidence 4.35 .61 ------~ -- Decision making ability 4.34 .59 p~ - .80 -~Knowledge of the - field 4.02 Strategic planning 4.00 .77 - - Persuasive ability 3.91 .79 -----

- Personal sacrifice 3.90 .89-

Creativity 3.82 .-.95

--Personality fit ~- 3.68 .93 Mentoring 3.55 .93

Global perspective -3.36--- .98 Educational background 3.09- .99 Lucky breaks 2.67 .90 ------Gender 1.86 1.04

6 FIU Hospitality Review /Fall 2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. up to three skills or personal char- gory is based on the total number acteristics that they felt would be of respondents (N=lll) who required for future success in mentioned a particular item, not their current position five to ten on the total number of responses years out. In a content analysis, generated by the group. There coders used single words as their were seven categories of unit of analysis and categories responses that were each emerged from the data provided. mentioned by more than 10 An inter-rater reliability coeffi- percent of the general managers. cient of .94 indicated n high level Findings are presented in Table 2. of agreement among raters. Interpersonal communication Percent of response in each cate- skills, associated with managing

Table 2 Future leadership competencies: highest rates of response

(N = 111) Skills and personal characteristics Number of *Percent of responses respondents Communication (47) 42.3 interpersonal skills n = 39 listening n-8 ---- Leadership (38) 34.2 manage change n=4 alticuiate vision n = 6 leadership n = 21 build teams ----n=7 Trust (29) fair n = 2 trustworthy n = 6 integrity n=21 Problem solving (19) 17.1 decision-making n = 11

-----problem solving n = 8 ---- Flexibility --- (3- 14.4 Revenue management (15) 13.5 financial skills n=9 revenue management n = 6 Strategic planningfihinking (14) 12.6 strategic planning n = 10

----big picture view n=4 --- percent of response is based on number of respondents, not total number of responses.

Brownell

---

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. employees and building relation- employees were their greatest ships, was mentioned by more dilemmas. than 40 percent of all respon- Two other issues were each dents. The other two top cate- mentioned by 11.7 percent of all gories, leadership skills and respondents, keeping up with trustworthiness, were mentioned technology and the challenge of by nearly 30 percent of all general providing high quality service managers. The category of leader- while ensuring a profitable oper- ship encompassed responses such ation. Another issue generated as "creating and sharing a vision," by several respondents was the and "leading employees through need to balance and maintain organizational change." relationships with various stake- Other categories that general holders - the corporate office, managers agreed would be impor- owner, employees, and guests tant in the future included (8.5 percent). problem-solving and decision- When general managers were making skills (17.1 percent), flex- asked about industry (as opposed ibility (14.4 percent), and to individual managerial) chal- financial management (13.5 lenges, they once again focused percent). Strategic thinking, on the human resources issues of involving the ability to take a big- recruitment and staffing, picture view, was also mentioned employee development, and with relative frequency (12.6 retention (37.8 percent). At the percent) as a future success factor. industry level, the economy and world events were also on Challenges are shared respondents' minds, with 21.2 A second open-ended ques- percent mentioning some aspect tion asked general managers to of the external environment as continue contemplating the their greatest concern. Slightly future by sharing their opinions less than 15 percent of the regarding the most pressing general managers felt that the challenges facing both unit changes brought about by tech- managers as well as the hospi- nology, especially the Internet's tality industry itself. Virtually impact on distribution systems, half of all respondents believed were posing critical challenges. that human resources issues Once again, the difficult task of would pose the most serious balancing quality with business future concern. Within this needs was an issue 12.9 percent larger category, 35 percent of all of respondents believed would general managers indicated that continue to pose a challenge in finding qualified staff was their the years ahead. biggest problem. Others (16.8 Finally, general managers percent) revealed that retention were invited to offer any topics on and training and developing which additional information

FIU Hospitality Review /Fall 2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. would be useful to them. Repeat- advance include the top-ranked edly, respondents mentioncd items of leading teams, effective their frustration that the hospi- listening, coaching employees, tality industry often is not consid- providing feedback, and managing ered to be a top career choice for conflict. These skills can be char- well-qualified young people in the acterized as those required for job market. "What must we do to developing employees and inter- be perceived as a career opportu- personal effectiveness. When item nity?" one respondent asked. means for skills and personal Another expressed a similar view, competencies combined are exam- stating, "Why does the hospitality ined, four of the six items with industry have such difficulty mean ratings above 4.50 are attracting and retaining talent?" personal characteristics rather Another questioned, "How can we than skills-hard work, trustwor- increase the salary levels and thiness, integrity, and a positive still keep our eye on profit attitude (Table 3). margins, which will continue to If the five future industry show restrained growth?" challenges presented earlier are accepted, then one potentially Implications for tomorrow fruitful approach to interpreting What are the implications of findings is to suggest the specific findings from this study for skills and personal characteristics management development and required to address each chal- education? Survey results suggest lenge and to compare this set of specific skills and characteristics traits with the items ranked as that general managers believe most valuable by survey respon- contribute to effectivcness and dents. In other words, do the subsequent career development. skills and personal characteristics The most critical skill areas for identified by general managers as middle managers who aspire to critical for their success and

1Table 3

5 = exiremely importanl 4 =very important

Item Mean SO- Leading teams 4.73 521

-- Hard work 4.65 --533 Listenino- 4.62 ,523 Trustworthiness 4.59 680

Integrity -- 4.55 ,657 Positive attitude --- 4.52 ,644

Brownell 9

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. career development appear to be acteristics related to employee those that will be needed for development also were perceived meeting each of the five future by respondents as important to industry challenges? While spec- their own advancement. In addi- ulative, such an activity should tion, nearly 12 percent of respon- reveal important gaps. dents mentioned developing employees as a future manage- Personal skills valued ment challenge. The survey Individuals best suited to mean for appraising, coaching, succeed in hospitality manage- and providing feedback combined ment are those who have a was 4.25. When the rating for concern for their employees and mentoring is included with this the interpersonal skills required skill set, however, the overall for effective execution. In mean drops to 4.07. reviewing item means, it seems clear that respondents were Managing diversity, change valued for their interpersonal The two final managerial chal- skills such as leading teams, lenges identified in the literature listening, and managing conflict review were managing diversity (overall mean 4.54).Apositive atti- and adapting to change (one tude was also viewed as essential aspect of change, the impact of to facilitate strong interpersonal technology, was also mentioned by relationships on the job (4.52). more than 11 percent of respon- In addition, respondents noted dents as a future challenge). The the importance of trustworthiness mean for the two skill items specif- and integrity-and, to a slightly ically related to intercultural less extent, confidence-as communication, combined with assisting in their career develop- the personal characteristic of a ment (mean 4.49). Not only does global perspective, was only 3.71. this cluster of personal character- Items associated with adapting to istics align with the need for trust change, which presumes a set of reported in the earlier literature personal characteristics as well as review, it should also be noted that technological savvy, received a over a quarter of all general mean ofjust 3.94. managers generated this response Such relatively unimpressive when asked an open-ended ques- means indicate that the skills and tion about the factors required for personal characteristics required success in the future. Strong inter- to meet two of the industry's personal skills combined with future challenges may well be perceived trustworthiness creates overlooked. Given the certainties a profile of those likely to recog- of change and globalization, those nize and empower the organiza- responsible for management tion's human capital. development may want to address The skills and personal char- this potentially serious gap. Table

10 FIU Hospitality Review /Fall 2004

pp--~

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. 4 illustrates these disparities by colleagues when he notes that the suggesting which of the skills and true test of leadership is "trial by personal characteristics included fire." While managers need basic on the survey align most closely concepts to guide their thinking, with each of the five industry they must then be able to apply challenges, and providing the what they know appropriately in mean ratings. the field. As another consultant While the importance of notes, "Ninety five percent of management development is managers say the right thing. Five undisputed,'' the effectiveness of percent can actually do it."15 current efforts has been ques- tioned on several fronts. Neither Academic settings rated organizations themselves nor the Hospitality management academic institutions that provide educators are in agreement that hospitality management education strong experiential course compo- have escaped criticism leveled nents strengthen individuals' against largely conceptual designs, ability to apply key concepts and as study after study Ends that transfer skills from the classroom "vlsion . . is easx execution is hard."'" to the workplace. Laboratories, RiEinl&speaks for many of his team activities, experiential exer-

Table 4 \

Perceived as contributing to career development (means on five-point scales) Challenge Skills Personal Characteristics ------leading teams & leading teams (4.73) positive attitude (4.52) interpersonal skills conflict management (4.31) mean = 4.54 -- -- effective listening (4.62)- instilling trust integrity (4.55) trustworthiness (4.59)

mean = 4.49 confidence (4.35) -- developing employees appraising (4.01) coaching (4.41) mean = 4.07 providing feedback (4.33) --- managing in a global intercultural communication(3.79) global perspective (3.36) environment managing diversity (3.98)

mean = 3.71 -- adapting to change technological expertise (3.21) llexibility (4.37) creativ~ty(3.82) mean = 3.94 problem solving ability (4.36) ------Source: Literature review Source: Survev results

Brownell

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. cises, community service projects, are also prepared to apply their and internships all contribute to expertise to create inclusive, team- the relevance of the instruction and based cultures and handle daily facilitate the deeper learning dilemmas with a positive, "can do" required to develop critical approach. This finding suggests management competencies. that admissions practices should Educators might take note of address key personal characteris- the fact that respondents ranked tics as well as more traditional the value of an educational back- criteria, and that these factors play ground third from the bottom in a much more central role in terms of items perceived to ensuring graduates' success than contribute to their career success commonly acknowledged. (mean 3.09). The message seems clear; academic programs are not Women fall behind realizing their potential to provide While admissions statistics the type of experience that is indicate that women are well-repre- perceived as directly promoting sented in hospitality management career advancement. Efforts to academic programs, the demo- enhance instructional relevance are graphic information from this study needed to increase general shows that a proportionately small managers' perceptions of the value number are assuming unit level of an educational background. leadership positions in the luxury Designing academic programs hotel segment. This finding to produce tomorrow's hospitality suggests that special attention leaders requires more than just should be given to better defining effective instructional strategies.& career paths for women in middle reported earlier, four of the six management positions. In addition, items associated with career devel- the obstacles to women's career opment - and also receiving the development need to be identified highest overall mean ratings - were clearly and addressed. personal characteristics. Admission Once applicants are admitted, processes must address the ques- educators also must share respon- tion of desired personal traits and sibility for helping future industry provide methods to assess appli- leaders to build character and cants' flexibility, creativity, attitude, behave ethically by focusing not and work ethic as well as their more only on what students learn, but traditional credentials. also on whom they become as If practitioners are to trust the members of a global community. value of a hospitality degree, they Students who come to understand will need to be assured that gradu- that they are defined by the choices ates have more than a solid busi- they make, day in and day out, will ness foundation and a functional be better prepared to align vision, knowledge of the industry. They values, and behavior as they step will want to know that graduates into management positions.

12 FIU Hospitality ReuielulFall2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. Classroom training methods career success. Additional alone are insufficient to prepare research is required to determine leaders to handle the dynamics of why mentoring appears to be a unanticipated events in a neglected practice. constantly changing workplace. In addition to renewed focus Tichy16is among those who argue on mentoring, other skills and for more action learning on the job, personal characteristics that explaining that formal training deserve additional attention are can influence no more than 20 those related to managing diver- percent of a leader's professional sity and change. Effective development.17BennisLs concludes methods must be developed to that the concepts are essential, but help new managers communicate afterward even the most senior across cultures and prepare for managers "have to invent it for managing in a multicultural envi- themselves in the field." Supervi- ronment. Developing structured sors must take responsibility for programs to identify and assess continuous employee learning and core competencies enables recognize "teachable m~ments."'~employees to grow throughout the Opportunities to demonstrate or course of their careers. As organi- reinforce appropriate responses zational structures flatten and might present themselves in a service employees take more variety of situations, such as when responsibility for problem solving, an employee conflict arises or developmental activities and when special accommodation is accompanying reward systems made for a guest. must be in place at all levels. The concern raised by respon- Mentoring is neglected dents regarding the industry's The skills of providing feed- inability to attract young talent back, appraising employees, and into management positions is coaching will become increas- troubling. A more vigorous focus ingly important as managers at on career development, and the all levels share responsibility for clarification of career paths, may developing members of their begin to address the recruitment teams." Managers' ability to issues that were mentioned. Part- serve as role models by demon- nering with academic institutions strating effective practices is also to design and deliver tailored a proven method of helping programs for continuing education employees recognize and acquire ensures that managers remain new skills. While mentoring has challenged and equipped with been found to be an effective cutting-edge industry practices. development activity," respon- Selection processes also must dents in this study rated it near be aligned with management the bottom of the list (mean 3.55) development goals and designed of behaviors contributing to their to assess such competencies as

Brownell 13

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. work ethics, integrity, and a posi- ship skills will be essential for tive predisposition. These traits effectiveness as they articulate are nearly impossible to modify their vision and inspire all once an employee is on the job, employees to play a role in that yet researchers interested in future. identifying characteristics related to managerial effective- Achivement ranks high ness repeatedly have identified When general managers were them as critical success factors. asked what aspect of their job was Assessment centers, for instance, most personally rewarding, nearly are one of the most effective 40 percent of study participants methods for observing individ- indicated that they enjoyed uals' personal characteristics in helping their employees to grow settings similar to those they and watching them succeed. When confront in the workplace. In respondents reflected further on addition, assessment centers are what it was about the job that one of the most powerful tools for captured their passions and imag- judging an individual's ability to inations. several mentioned the respond appropriately to circum- ~, virtually limitless opportunities stances and dilemmas that might hospitality leadership provides for arise in the future.22 "making a difference where it The ideas presented here are matters." The general manager summarized in Figure 1, which profile that emerged from this parallels industry and academic management development study was characterized by the processes. Elements of the model values of trust and integrity. illustrate the ways in which Respondents noted the satisfac- academic and industry profes- tion of "achieving things that seem sionals first select, and then contin- impossible," and "creating magic" uously assess and develop, with employees by facilitating management talent through a commitment and teamwork. variety of methods and interven- Clearly, these general managers tions. The need for continuous scan- have experienced the excitement ning to identify future leadership of looking into the future and real- requirements is also emphasized. izing that it is in their hands. Tomorrow's leaders will face Guided by a clear vision of the an ever-changing workplace ingredients for managerial effec- with a dynamic set of roles and tiveness and equipped with a responsibilitie~.~~The men and variety of career development women already in senior strategies, general managers look management positions, those forward to the role they can play general managers who partici- in shaping the next generation of pated in this study, agree that hospitality leaders. strong interpersonal and leader-

14 FIU Hospitality ReuiewlFall2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. Figure 1 Methods for developing future hospitality leaders

SELECTION DEVELOPMENT

INDUSTRY Process

Personal Skills Required Continue to Identify Characleristics for Career Future Leadership Required for Career Development Needs Development

L Process ACADEMIC bj internships I I

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. References mational Leadership (Thousand Oaks, Calif.: Sage Publications, 1994); T. Dvir ' B. Chuug-Herrera, C. Enz, and M. and B. Shamir, "Follower Developmental Lankau, "Grooming Future Hospitality Characteristics as Predicting Transforma- Leaders: A Competencies Model," Cornell tional Leadership: A Longitudinal Field Restaurant & Hotel Administration Quar- Study," The Leadership Quarterly 14, no. 3 terly 44, no. 3 (2003): 17-26; D. Emen- (2003): 327-344; K. B. Lowe and K. G. heiser, J. Clay and R. Palakurthi, "Profiles Lroeck, "Effectiveness Correlates of Trans- of Sueeessful Restaurant Managers for formational and Transactional Leader- Recruitment and Selection ship: A Meta-analytic Review," Leadership in the US," International Journal Quarterly 7 (1996): 385-426; J. Seltzer and of Contemporary Hospitality Management B. Bass, "Transformational Leadership: 10, no. 2 (1998): 54-62; N. Johns, "Quality Beyond Initiation and Structure," Journal Management in the Hospitality Industry: of Management 16 (1990): 693-704; J. C. Part 2. Applications, Systems and Teeh- Williams, "Self-control," Business Review niques," International Journal of Contem- 15, no. 2 (1997): 9,32. porary Hospitality Management 4, no. 4 D. Goleman, "Leadership that Gets (1992): 3; R. Martin, "Study Probes skills, Results," Harvard Business Review 78, no. traits of management elite," Nation's 2 (2000): 78-90; W. D. Macaleer and J. B. Restaurant Ness 31, no. 13 (19971: 1, 83; Shannon, "Emotional Intelligence: How J. Perdue, J. D. Ninemeier, and R. H. Does it Affect Leadership?" Employment Woods, "Comparison of Present and Relations Today 29, no. 3 (2002): 9-19; B. Future Comneteneies Required for Club Palmer. M. Walls. Z. Bureess. and C. Managers." Intrrnat~or~ul.lournol of Slough, -Emuti,mal Intelligence and Effie. Conl6~111poror\Hoaprralir> dlonaye,nir~~l. rive Leadershio." lrodershir, & Oraorrrzu. 14, no. 3 (2002): 142-146. - lion ~evelo~mc%tJournal 22, no. l(2001): ' M. Goldsmith and C. Walt, "Future 5-10. Leaders," Executive Excellence 16, 110.12 T. Simons, "Behavioral Integrity: (1999): 11; J. A. Conger, "The Brave New The Perceived Alignment Between World of Leadershio Trainins.". . Orpaniza-.. Manaeers'- Words and Deeds as a Research tionol Djnam~cs21, 110 3 l993R. 46-60; Ft,cus.' Orgo,~rzotran Sci~nc6, 13, no. 1 H. D. Irtldnd and Y.A. H~tt."A~.hic,\.~nc 2uU2 : 18-35 and Maintaining Strategic competitive- ' G. G. Dess and J. C. Picken, ness in the 21st Century: The Role of "Changing Roles: Leadership in the Zlst Strategic Leadership," The Academy of Century," Organizational Dynamics 28, no. Management Executive 13, no.l(l999): 43- 3 (2000): 19-34. 57; R. Hughes, *Reflections on the State of D. Goleman, "What Makes a Leadership and Leadership Development," Leader?" Harvard Business Review 76, no. Human Resource Planning 25, no. 2 (2002): 6 (1998t 99. 4-6: W. H. Weiss, "Leadership," Supervision OA. Nahavandi, The Art and Science 60, no. l(1999): 6-9. ofLeadership (Upper Saddle River, N.J.: 'L. J. Cary and J. D Timmons, Prentice-Hall, Ine., 2000). "Leader's Guide," Developing Leadership, M. A. Hitt, "The New Frontier: E. J. Boone, ed., (Raleigh: North Carolina Transformation of Management for the State University Press, 19881, 1-86; M. New Millennium," Organizational Kusy and R. MeBain, 'The Human Side of Dynamics (2000): 7-17: E. Kur and R. Leadership Promotes the Bottom Line of Bnnning, "Assuring Corporate Leadership Organizations," Manager Update 9, no.1 for the Future," The Journal ofMannge- (1997): 19-31; 0. A. Sogunro, "Impact of ment Development 21, no. 9 (2002): 761- Training on Leadership Development: 779; J. B. Tracey and T. R. Hinkin, Lessons from a Leadership Training "Transformational Leaders in the Hospi- Program," Evaluation Review 21, no. 6 tality Industry," Cornell Hotel & Restau- (1997): 713-737. rant Administration Quarterly 35, no. 2 ' J. K. Barge, Leadership: Communica- (1994): 18-27. tion Skills for Organizations and Groups " J. D. Power and Associates. (New York: St. Martin's Press, 1994); B. M. Domestic Hotel Guest Satisfaction Study Bass and B. J. Avolio, Improving Organi- (Agoura Hills, Calif.: J. D. Power and Asso- zational Effectiveness Through Pansfor- ciates, 20021.

16 FIU Hospitality Review /Fall 2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. " M. C. Mnmford, S. J. Zaccarw, F. D. 'W. Bennis, "New Leadership," Exec- Harding, T. 0.Jacobs, and E. A. Fleishman, utiueExcellence 16, no. 11 (19991: 7. "Leadership Skills for a Changing World: 19 L. F. Kesner, 'Leadership Develop- Solving Complex Social Problems," Leader- ment: Perk or Priority?" Haruard Business ship Quarterly 11, no. l(2000): 11-35; M. Review (May 2003): 36. Schatz, "Why we Don't Teach Leadership in B. Tracey and A. Nathan, "The Our MBA Programmes," The Journal of strategic and operational roles of human Management Development 16, no. 9 (1997): resources: An emerging model," Cornell 677; A. Start, "Take Me to Your Leader," Restaurant & Hotel Administration Quar- The Management Accounting Magazine 68, terly 43, no. 4 (2002): 17-27. no. 10 i19951: 4. %'J.J. Sosik and D. L. Lee, "Mentoring IS W. Bennis, 'New Leadership," Exec- in Organizations: A Social Judgment utive Excellence 16, no. 11 (1999): 8. Perspective for Developing Tomorrow's " G. Rifkin, "Leadership: Can it be Leaders," Journal of Leadership & Organi- Learned?" Forbes (April 8,19961: 107. zational Studies 8, no. 4 (2002): 17-32. '5 R. Birchfield, 'Wanted: Effective '2 F. Berger and J. Brownell, "Leader- Leaders," Management 45, no. 2 (1998): 26. ship: The Loews Assessment Center, L. F. Kesner. "Leadership Develop- Desiened to Nurture Potential Manaeers. ment: Perk or Priority?" Haruard Business ~ee&with Success," Lodging 22, lo, 2 Review (May 2003): 29-38. (19961: 54-58. " C. 0. Longenecker and L. S. Fink, 23 J. A. Conger, "Personal Growth 'Improving Management Performance in Training: Snake Oil or Pathway to Leader- Rapidly Changing Organizations," The ship?" Organizational Dynamics 22, no. 1 Journal of Management Deuelopment 20, (1993): 19; P. F. Dmcker, "Management's no.1 (2001): 7-18; M. C. Mnmford, S. J. New Paradigms," Forbes (1998): 152-177; Zaccareo, F. D. Harding, T. 0. Jacobs, and R. Mullin, "Kinder, gentler executives E. A. Fleishman, 'Leadership Skills for a versus hard-ball MBAs," Chemical Week Changing World: Solving Complex Social 158, no. 41 (1996): 44. Problems," Leadership Quarterly 11. no. 1 (2000): 11-35; J. Younger and J. Roddy, Leadership Development and Succession Judi BmwneN IS a professor of organlza- Planning: A Career-Stages Approach tonal commun!catlon in rhe School of Horel (Prova, Utah: B. T. Novations, 2000). Administration at Cornell Universify

- Brownell 17

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Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. Electronic perception technology applications in food service

by Michael L. Kasavana, Bonnie J. Knutson, and Hee S. Lee

Electronic Perceotion Technoloav (EPT) digital measuring equipment, and enables automatid equipment to 9ain art$- related devices. Now, the field has cialsight commonly referred to as "machine- vision"by employing specialty software and expanded to incorporate EPT

embedded~ ~~ sensors to create a 'Visual"inout projection phenomena. field that can be used as a front-end Unlike face recognition, an EPT cation for transactional behavior. The sensor recognizes movement and authors review this new technology and present feasible future applications to the gestures by interpreting the reflec- food service industry in enhancing guest tion of light projected against a flat services while providing a competitive object or surface. Basically, an EPT advantage. projector beams an image onto a flat surface (e.g., projection of a fuU- size typewriter keyboard onto a lectronic Perception Tech- table top) and is capable of recog- nology (EPT) is an innova- nizing user interaction with the Etive technology that enables projected item (e.g., "typing" using automated equipment to gain arti- the artificial keyboard to create ficial sight commonly labeled distinguishable data entry). "machine-vision." It provides elec- Current EFT applications have trical components and specialty been limited to projection devices devices with the ability to recognize designed to extend the capabilities and respond to nearby objects in of cellular phones, personal digital real time. EPT employs application assistants (PDA), interactive game software and embedded sensors to boards, and a variety of industrial, create "visual" input and to enable medical, and security equipment.' transactional behavior (actionlreac- tion). Until recently, the field of Canesta patents process machine-vision was limited to such Canesta, Inc. patented a devices as auto-focus cameras, process that uniquely allows

18 FIU Hospitality ReuiewlFall2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. machines to recognize three- Figure 1 dimensional objects. EPT permits Canesta keyboard an array of products to perceive pattern projector and react to objects in a restricted plane in real time through the medium of "sight." The process relies on low-cost, high-perfor- mance, embedded sensors and specialty oftw ware.^ Unlike an Eigenface algorithm that maps the LA characteristics of a person's face Courtesy ofCanesta, Inc (canesta.mmi into a multidimensional space (thereby creating a face print), EFT Figure 2 is also capable of recognizing actions and gest~res.~ Canesta keyboard IR Although technological devel- light source opments have continually produced a variety of sophisticated devices, until recently there has been little progress in providing devices with a vision or sight capability.' This lack of sight is often perceived as a major stumbling block to innova- Li tive progress and product advance- Courtesy of Canesta, hc.icanesta.mml ment. The goal of EFT is to enable devices or applications of any Figure 3. complexity to be able to perceive Canesta keyboard objects and features in real time so sensor module that the identification of actions and reactions are practical and productive.

Components required An EPT configured device consists of three required compo- nent parts: projector, infrared Courtesy of Cane.sta, Inc. (caneata.con&) light source, and sensing system (http://www.canesta.com). The projected (see Figures 1,2 and 3). projector is used to propel an image EPT applies an infrared light (e.g., virtual keyboard) onto a flat source to the illuminated object. surface. The image pmjector uses a Infrared is an invisible band of radi- holographic format to defract a ation at the lower end of the electro- single beam of laser light directly magnetic spectrum that starts at into the imagelpattern being the middle of the microwave spec-

Kasauana, Knutson and Lee 19

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Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. tmm and approximates the begin- Sensors read light ning of visible light. Infrared trans- The light illuminating each indi- mission requires an unobstructed vidual pixel in an image sensor line of sight between transmitter comes from a different feature in the and receiver. Infrared is used for imagelpattern being viewed. An EPT wireless transmissions between sensor, housing an embedded computer devices as well as most complementary metal oxide semi- remote control units for television conductor (CMOS) chip, is capable of sets and stereo equipment. In addi- reading reflected images of light tion, an infrared band can also be emanating from objects. Since light used in a variety of security detec- moves at a constant speed and takes tion equipment. a measurable time to travel between In a virtual keyboard projection, points, it is possible for the CMOS for example, the user's typing chip to calculate the distance activity occurs in the thin layer of between those points. Knowing the space that separates the hovering amount of time light takes to reach object and the moving fingers of the each pixel makes it possible to calm- user from the surface of the late, with certainty, the exact keyb~ard.~The infrared light source distance to the object. In other words, projects straight lines and the user's it is possible to develop a three- fingers become visible to the sensor dimensional "relief' map of the as they intersect one or more of the surfaces contained or created within projected lines. This intersection the projected scene. In three dimen- forms the basis of visible recognition. sional space objeds previously indis-

Figure 4 Flow diagram of the key stroke interpretation algorithm

IMAGE I

Pi i Localization I

7- sensor coordinates Event Triangulation Classification

Key, down, up, held down keyboard coordinates Event Key Generation Identification I Key ID ' i Keystroke Event

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. tinguishable from the background, In a recently issued U.S. patent, for example, metaphorically "jmp" Canesta was able to apply a new out toward the viewer class of lowcost sensor chips to clock (http:www.canesta.com).Returning the travel time of light. The chips to the virtual keyboard example, the function in a manner similar to user's fingers can be identified and radar in that the distance to remote separated from the background objects is calculated by measuring objects in the image. This series of the time it takes an electronic burst actions can lead to formulation of a of radio waves to make the round key stroke algorithm (see Figure 4). trip from transmitting antenna to Localization determines the reflective object. Similarly, the EPT position and time of each keystroke. Canesta sensor chip relies on a burst Event classification determines the of unobtrusive light as a transmis- type of action (i.e., taping, landing, sion media for round-trip monitoring moving, and takeoff).'l'riangulation (http~Iwww.canesta.com). transforms image points into keyboard positions as a table, then The EFT chip, which is not maps to the identity of the key asso- susceptible to ambient light, ciated with that position. Key iden- measures the duration of the pulse tity and event type determine the to reflect back to each pixel via a high appropriate keyboard event. For a speed, on-chip, timer. Alternatively, broad class of applications, multi- the EFT chip can be calibrated to dimensional mapping can be simply count the number of extremely helpful in reducing the returning photons - an indirect mathematical and physical complex- measure of distance that can also be ities that have prohibited successful useful. From a technical persmve, computer vision development and onboard miniature components are application in earlier developments. used to perform these computations.

Figure 5 Size of EPT components

-- Kasauana,Knutson and Lee 21

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. Data entry resolved applied) format. An EPT embedded EFT may soon be used to solve format involves the pre-installation several of the data entry challenges of EET components to a stand-alone posed by tiny mobile and wireless appliance or device. There is no devices (http://www.ananova.com). need for additional parts; the As electronic devices continue to embedded components render the become more miniaturized, data unit EPT-enabled (see Figure 7). entry becomes problematic. To Alternatively, a separate EFT compensate for the small size of a peripheral can be attached to the data capture device, EPT can be body of an appliance or device as an used to provide a rich set of user add-on to form an EPT-applied unit input formats capable of recog- (see Figure 8). nizing penfstylus movements, In an automobile, for example, human gestures, and body move- EFT can be applied to locate and ments (see Figure 5). Applying clarify blind spots as well as warn miniature components to tradi- the driver to steer clear of dangerous tional stand-alone devices, for objects in the approaching roadway example, enables the projection of a (http~/www.onstar.com).Since EFT virtual keyboard from a standard is capable of recognizing movements PDA device to simplify data input and gestures, the driver can use (see Figure 6). hand gestures to control the car's There are two EFT user input radio, heater, cellular phone, or air formats available: embedded (EFT- conditioner thereby minimizing enabled) format and add-on (EPT- distractions while allowing the

Figure 6 EPT-enabled PDA illustration

Courtesy of Canesta,Inc. (canesta.eoml

22 FIU Hospitality ReuiewlFall2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. Figure 7 EPTenabled mobile phone illustration

Courtesy of Canesta, Inc. fcanesta.omj

Figure 8 EPT-enabled add-on peripherals

Courtesy of Canesta, Inc. 1canesta.comi

driver to focus on extcmal safety entry to a restricted area, authorized ~oncerns.~EST can be used to create personnel may be identified through a driver automohile assistance instant ID recognition. EFT sensors, system (see Figure 9). trained to read facial appearance For security systems, replacing and expressions, can be used to closed circuit television monitors match images with a media-friendly with EPT technology can signifi- database, and to activate and verify cantly increase a huildiig's level of authorization within a restricted security. For example, to facilitate entry location (see Figure 10).

Kasauana,Knutson. and Lee 23

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. Figure 9 EPTsnabled automobile assistance system

Figure 10 EPT-enabled security recognition system

By recognizing a wide array of table or bar counter to encourage movements, EFT devices are customer self-order entry (see capable of detecting a variety of Figure 11).It will be easy to place a activities. This feature can be drink or food order, given the rela- applied to health monitoring, tive simplicity and limited offerings inventory monitoring, hotel guest projected by the system. Once an room monitoring, and so on order has been entered, the order (http~/www..canesta.com). can be transmitted from the EPT Just as an EFT projector can capture device to the restaurant's beam a virtual keyboard onto a flat POS system for production and surface, an EPT-enabled device can service. A confirmation message project a drink and snack menu can be beamed back to the customer onto the counter of a dining room acknowledging receipt of order.

FZU Hospitality Review /Fall 2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. Figure 11 EFT-enabled bar counter projection

Similarly, consider the possi- the image can also be projected in bility of a road warrior driving down proximity of the driver's view, the the road with a hungry passenger driver can safely keep one eye on the who may be able to place an order road while placing hidher own directly to a nearby restaurant order (see Figure 12). The informa- through an installed EFT device. By tion can then be converted to an using an EFT-enabled handheld PC, electronic signal and delivered PDA, or cell phone inside the car, through CDMA or WCDMA (Wide- the eatery can be contacted for order band Code Division Multiple placement, table reservation, or Access) to the restaurant for related action. Using the handheld processing. Probably the virtual device to connect to the Internet, for menu projected onto a flat surface example, he can apply an EPT- wiU be an abbreviated version of the enabled device to generate a menu restaurant's physical menu. It is a image and project that image on the simplified version designed to ease inside of the car's windshield. By food service ordering, similar to touching or pressing the menu item what might be contained in a kiosk icons projected, the Em sensor can order entry system.' read and process customer actions Similarly, passengers may be and transmit that information to able to place a food service order the restaurant POS system. Since while in transit aboard an airplane.

Kasauana, Knutson and Lee 25

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. Figure 12 Emnabled Automobile Windshield Menu Projection

The inflight menu can be projected without having to rely on a phys- onto the passenger tray table and ical, printed menu. By projecting the order entry completed by a virtual menu, item selection can touching menu item descriptors. be rapidly relayed, processed, and The order can then be automati- served with greater efficiency. cally communicated to a designated Self-entry orders can be available production station for inflight wherever an EPT-enabled device dining. By adding an EPT projector and projection surface are found. to the light panel above select seats, Devices need not be larger than a the airline company may gain a hand-held terminal, PDA, or competitive advantage while cellular phone with a high-resolu- enhancing operational efficiency. tion display. In the not too distant This process can improve service future, in addition to in-house speed as passengers choose inflight clientele, approaching drivers may meals from a projected menu rather be able to place an order from the than through flight attendant road via EPT windshield projec- interaction (see Figure 13). tion. While the feasibility of a cellular phone call being placed EPT is innovative from an automobile appeared to be EPT is an innovative techno- impractical only a few years ago, logical advancement capable of mobile EPT services are likely to providing vision to projected arrive sooner than expected. virtual objects. In food service, for Hospitality firms would be wise to example, EPT projection might consider the myriad of possibilities enable guests to self-order of EPT applications in extending

26 FIU Hospitality Review /Fall 2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. Figure 13 EPTenabled ~~ightcabin Illustration

guest services, improving produc- 24.10116.firm http. uw.ananora.com news. tivity, and providing a competitive mrry ~nr_648?53.hrn.I; face rt:cogn~f~on, rc trlcvc,d Dc~~.rnb~.r3, ?Ul)3, frurn advantage. nrtp: u.ww.whweb con1 cncvilu~adefinct erm '~cm=f;l~c*rrroptt~,.n: OnStnr. References ritrvvcd Dcccrnbr. d. 2U03. from http~/iwwwonstar.codus~e~~lishijs~index.j~ ' "Electronic perception technology," bar counter image retrieved December 3, retrieved November 24, 2003, from 2003, from http:/lwww.michaelangelos~stau- http://www.canesta.codtechnoloyy.htm; rant.comiCocktai1%20Bar.htm: car image www.poseidon-tech.com. retrieved December 3. 2003. from P Michelson and A. Johnson, "Back- http trndgc. p(loglt. corn ~rnxgcs?q=dnr~ngC gmund Information: Electronic Perceptinn ~~=~~&I~=BIP=I'TF-II&~~~-UTF Technology; retrieved November 24,2003,fnnn 8&ne~window=l;flight image retrieved httpJlmmdej.com/RmocsiCABGGhtml December 3, 2003, from http:i'/m,flypied- %w.teehweb.com mont comlaaoXTML%ZODa~757.hhn. ' www.canesta.com ' C. Tomasi, A. Rafii, and 1. Tomnoglu, - - "Full-size projection keyboard br handheld Michael L. Kasavana is a NAMA professoc devices,' Communications of the ACM, 46, Bonnie J. Knutson is a professor, adHee no770-75...... S. Lee received an M.S. in food service ' S Klilppur, R. Kyle. R. y,:hlln. dnd A. managemenr botrl rta Schm of Hosprtalrry L,rrno.i. -Nlaht Vision - ,hanmne----~- rh.. . ., . 6uslness at Mrch~qanSrate Un~vers&! drive," ketzeved December 3, 2003, from http~/ww.raytheoninfrared,com/admidfile/ SPIE4360-211finalauto.pdf ' N. Richardson "Kiosk: the new hot thing? Hospltabty Technology; electronic perception technology. retrieved November 21, 2003, from http://www.poseidon- tech.comiusltechnolagyhtml; electronic perception technology, retrieved November

Kasauana,Knutson and LPP 27

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. Measuring brand equity of restaurant chains

by Woo Gon Kim, Peter DiMicelli, Jr., and Jin Kang

Linle research has been done to measure terms of the personal meaning brand equity of hospitality companies. It is about a brand stored in consumer imoortant for food service oraanizations to measure accurately their b;and equity in memory....'' An example of this order to manage and leverage it properly. statement and of how brand is being This study attempts to measure the brand used in the hospitality industry is equity of casual dining restaurant chains in evident with the Hilton Grand Vaca- monetary terms using conjoint analysis. tions Company, which uses brand recognition through the continued development of the company's line e term "brand namen(brand) of Hilton Grand Vacations Club originated from putting the ownership program. Thus through ?"name of the producer on the the continued development of the product to find out who had the vacation ownership program, responsibility when the product had consumers are becoming more a problem.' Ironically, the term aware of the brand name known as "Uncle Sam" got its origin from a Hilton Grand Vacations Club. This brand name. It seems that during consumer awareness (brand recog- the War of 1812, pork was shipped nition) of brand equity is being to American soldiers in barrels stored in their memory, passed on to stamped with the letters "U.S." and others, and also used by them in the name of the packer, Sam Wilson. investing in the ownership program The soldiers referred to the U.S. which allows the brand equity to pork barrels as "Uncle Sam's meatn continue to grow for the company. and this brand name later became Thls type of brand equity recogni- the nickname for a major symbol tion makes it easier for banking, representing the United States. investment, and other financial According to Keller, "Consumer industries to place an equity value brand knowledge can be defined in on the brand name.

FIU Hospitality Review /Fall 2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. Keller describes several con- Brand names have increas- sumer stimuli fadors that are "key ingly been considered as primary dimensions of brand knowledge": capital for many businesses. awareness, attributes, benefits, Financial professionals developed images, thoughts, feelings, atti- the notion that a brand has an tudes and experiences." These equity value, which exceeds its dimensions of brand knowledge can conventional asset value. This further be described or defined in notion is based in part on the fact terms of brand recognition as a that the cost of introducing a new name, term, sign, symbol, design, or brand to its market has been a combination of these factors approximated at $100 million, which is intended to identify the with a 50 percent probability of goods and services of one seller or failure.' Brand power as a long- group of sellers, and also to differ- standing part of the base for entiate them from those of competi- equity, instead of management tors.' Though brand covers various strategies for short-term perfor- meanings of identification, it is mance, has been re-evaluated by used in this study as a representa- many American companies.' tive of the value and equity it gives The concept and measurement to corporate recognition and identi- of brand equity has interested fication. In short, brand equity has academicians and practitioners for a value that attaches to brand more than a decade, primarily due name and recognition. to the importance in today's Brand equity is the sum of the marketplace for building, main- total amount of assets, including taining, and using brands to obtain those formed by the brand identi- a definite competitive advantage. fiers such as good will, deducted Many companies have established by the total amount of liabilities. a strong brand image as a way of It can increase or decrease the making customers believe that all value of a product or service of their corporate products are of offered by a company. The correct good quality and beneficial to measurement of brand equity consumer needs. This brand image should be calculated in order to also has an effect on the overall manage a restaurant firm's brand corporate image, which helps to and to build strong brand eq~ity.~form the value of the company. The purpose of this study is This overall effect is valued as good twofold: first, to measure the will, which is then given a dollar brand equity of casual dining value for purposes of corporate chain restaurants in monetary acquisitions and buy-outs. terms through conjoint analysis, It is no secret that the food and, second, to determine the rela- service industry has a high tionship between brand aware- mortality rate, especially within the ness and brand equity value of first few years of a new operation. chain restaurants. This is one reason why it is hard to

Kim, DiMicelli, JI:and Kang

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Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. attract investors for new food Interbrand's 2001 worldwide service operations. However, even research and corporate estimates successful food service operations produced the following ranking of find it difficult to acquire new some major American food service investment funds for the purpose of operators: McDonald's was ranked expansion and growth. One reason ninth, followed by Pizza Hut, for this is the problem associated Kentucky Fried Chicken, and with assessing "added value or Burger King, with rankings of 47, intangible assets." It is difficult to 51, and 80, respectively. It is not assess or evaluate "added valuen surprising to find that food service without knowing the actual value firms ranked high in their value of that a brand name adds to a product brand equity in comparison to or busines~.~As a major player in many other service firms. the corporate world and one with continued growth potential, food Research is summarized service firms should be well aware Much research has been of the importance of brand equity. If conducted concerning the service companies can provide branding phenomenon in the economic worth for their brands hospitality industry. However, that could partly explain the value research concerning the consumer- of intangible assets, they will be based equity of restaurant brands able to attract more outside has not been fully explored. Muller investors by showing a more accu- and Woods made several proposals rate valuation of the firm's equity and suggestions regarding the importance of brand management McDonald's ranked highest rather than product management A number of different in the food service industry.1° They methods have been suggested for first proposed that the common measuring brand equity, such as skills and competencies necessary the consumer-based perspective, for managing the brand name of a the financial perspective, and the multi-unit restaurant should combined perspective. Inter- include a clear understanding of brand Group, a British consulting the concept of the restaurant, the group, annually estimates and dependability of the brand name, ranks the value of major global the development of a better brand brands by using a multiplier of image, as well as price and value brand profits based on the reconciliation. These researchers brand's performance along seven believed that a restaurant brand dimensions. In 1999, the group, contains specific elements, using a subjective multiplier of and promises explicit benefits to brand profits, ranked McDonald's the customer. corporation as eighth interna- Restaurant brand management tionally, with a value of $262 goes beyond traditional means of billion as a value for brand equity. product differentiation such as

FIU Hospitality Review /Fall 2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. service excellence, signature menu in the restaurant industry: simple, items, attractive facilities, and monolithic, and endorsed." Such convenient locations. Brand industry leaders as Tricon (Pizza management in food service also Hut, Taco Bell, and KFC) and depends on positioning strategies Darden (Olive Garden, Red based on a clear understanding of Lobster, and Bahama Breeze) have demographic and socio-economic followed the simple brand strategy characteristics of customers as well over the years. Following this as their patronage behavior. The strategy, each independent brand authors also pointed out that brand stands alone, thereby establishing equity is built based on the flawless its own identity value and brand execution of service, symbolic equity. A monolithic strategy image, quality products, and satis- adheres to the principle that the faction of customer expectations. A strength of the corporate brand will restaurant brand offering these add value to an entire company's attributes can achieve an increased product offerings. A good example market share, enhanced customer of this is evidenced in the Walt loyalty, and a positive brand image. Disney Corporation which has a A number of alternative line of theme parks as well as methods have been suggested for animation films. measuring brand equity. During The endorsed brand strategy the 20th Century, the most implements a recognized and well- commonly accepted approaches to accepted name, which comprises measuring brand equity were identifiable guarantees of quality either financial or consumer- and consistency on a cluster of related methods. However, the products or services in a similar evaluation of these methods general product category. Several presents some problems in hotel chains have embraced brand measuring brand equity. The extensions as a means for their result from the financial approach market power. One such chain is does not suggest a correct direc- Marriott Corporation, which main- tion for a company to follow, since tains a collection of lodging brands it relies solely on the current operating in different industry financial condition that fluctuates segments: Courtyard by Marriott, with the daily movement of the Fairfield Inns by Marriott, Resi- stock market. The consumer- dence Inns by Marriott, and related method is more of a Marriott Resorts. Each brand has marketing approach, and though distinct attributes, but they are it may be more reflective of value unified by the corporate name based on consumer behavior, it is Marriott. Jiang, Dev, and RaoJZ not objective. pointed out that brand extensions In his article "Assessing the helped to minimize the rate Value of Brands," Murphy identi- of switching from a brand fied three generic brand strategies family. However, brand switching

Kim, DiMicelli, Jr. and Kang 31

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. increased after the number of (3x4~2~3~3)product profiles, so extensions exceeded three. the respondents have the opportu- nity to make a decision based on a Research ranks values possible 216 rankings in the study. This research design is based on The Orthoplan and its Frac- the ranking of specific food service tional Factorial Design component related attributes that create a within the SPSS analysis program perceived value for the brand. In were used to run the data analysis. conducting research using conjoint What makes these components and analysis, respondents assign a program so nice to use is that each value to predetermined features, respondent does not have to eval- referred to as levels, of a product or uate all possible profiles. service. In this study, there are five After all data were collected, 16 attributes and each attribute is carefully chosen restaurant broken down into two to four levels, concepts (profiles) were selected which are used to determine total through this process, and three brand utility. profiles were added to the prefer- In the study, each respondent ence research totaling 19 profiles in was given a card containing the all to determine the validity of the following attributes: brand name, preference model. The preference of menu, service, location, and price in each profile can be calculated by randomized levels. These attributes these ranking results. are similar to those proposed by the Measuring preference is diffi- National Restaurant Association cult because it is an abstract and with regard to price, service, and psychological matter. The easiest location. However, it should be way to measure preference is to let noted that in the Korean market, respondents rank them according menu is synonymous with food item to criteria of preference. However, selections, and brand name is more it is not easy to rank 19 profiles important to the focus of this study using this study. Therefore, the than ambiance. Balanced Incomplete Block (BIB) Three of the four names of the test was used to measure the pref- sample restaurants were randomly erence of each respondent in this assigned to each card. The fourth study. The BIB test is used widely attribute is listed in a randomized in the field of management, rotation on each card so a balance marketing, research, and product of selection opportunity exists, development. Using the BIB test eliminating a carryover effect of a requires as many cards as profiles respondent's opinion. The levels of to design the questionnaire. analysis for the attributes are as It is likely that respondents follows: three levels for price, four may pay more attention to the first for brand name, two for location, attribute when the profiles are three for service, and three for presented on each card. To prevent menu. There are a total of 216 a type of carryover effect of a

FIU Hospitality Review /Fall 2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. respondent's opinion, a type of such as education, information counterbalancingwas used through offering, tour guide, and many other the rotation of the attributes with tangible and intangible products. every fourth set of cards in the BIB tests. For example, attributes from Casual restaurants selected card 4 to card 7 are presented in This study attempted to order of price+menu-*service+ measure the brand equity of location; attributes from card 8 to certain restaurant chains using card 11 are put in order of conjoint analysis. To evaluate location+price-+menu+service, brand equity of a corporate name and from card 12 to 15 the within the food service industry attributes are in the order of required the sampling of people service+location-t price-rmenu. who frequented casual dining The attribute names are also restaurants. Customers ranging in rotated with every fourth set of age from their twenties through cards. This will prevent profile bias thirties were identified as the and increase respondent objectivity. primary guests of casual dining restaurants such as T.G.I. Friday's, Conjoint analysis is useful Bennigan's, Outback Steakhouse, Conjoint analysis is widely and Snoopy Place, and were there- recognized as a useful marketing fore targeted for this study. research tool which can provide T.G.I. Friday's is a leading full- invaluable information for product senrice casual theme restaurant design, market segmentation, founded in 1965. It is currently pricing decisions, and brand equity operated hy a worldwide restau- researchL3.Conjoint analysis is a rant consortium, which empha- technique for measuring trade-offs sizes great food, quality beverages, by analyzing survey responses and outstanding service rendered regarding the consumer's prefer- in a festive dining environment. ence." In a real purchase situation, The interior design is distinctively restaurant customers examine and decorated with authentic antiques1 evaluate options that simultane- memorabilia that showcase the ously vary across several attributes specific location and local decor. in making their final purchase The restaurant's menu has selection. Conjoint analysis makes evolved to reflect the needs of it possible to calculate the brand guests and is catering to single utility based on the responses on adults, families, and seniors. The each questionnaire by clarifying the menu variety is upscale and selec- consumer's preference. Conjoint tively reflects a host of delicious analysis was adopted to quantify and healthy entrees. the brand equity of chain restau- Outback Steakhouse is the rants in monetary terms. It has not number three operator of casual- only been applied to tangible prod- dining restaurants in 21 countries. ucts, but also to intangible products The chain prides itself on steak,

Kim,DiMicelli, Jr: and Kang 33

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. chicken, and seafood entrees served chicken Caesar salad, chicken in an Australian-themed atmo- quesadillas, seafood gumbo, and sphere. The Outback Company also pumpkin soup with lots of vegeta- owns and operates other restaurant bles. The Linus set menu for chil- chains with Italian, prime rib and dren has crispy fried mozzarella seafood themes. cheese and dim sum made into in Bemigan's was founded by D. various shapes. Bennigan, a native of Ireland, who The respondents in this study upon corning toAmerica searched for were selected while walking or places to relax with family and shopping in a downtown shopping friends, enjoy great food, raise a mall in the city of Seoul, Korea, glass, and wish them a hearty cheer, where all ofthe sample restaurants just like the taverns of his homeland. are located. The survey adminis- Backed by Metromedia Restaurant trators were instructed to ask a Group's 30-plus years of franchising screening question to determine experience, Be~igan'snow offers whether a person frequented potential franchisees experience, casual dining restaurants more expertise, and brand equity, making than five times during the past them one of the fastest and most one-year period. A total of 500 popular restaurant franchises today. people who met the minimum The menu is as diverse as the coun- dining frequency requirement were tries in which Bennigan's is located, selected to complete the survey, offering unique sandwiches, seafood and 285 completed the on-site dishes, burgers, and their famous survey, resulting in a response rate baby back ribs. of 57 percent. Snoopy Place is a theme concept offering food, shopping, and Brand awareness plays role entertainment, which opened in High brand awareness plays a late December 1998 in Singapore, vital role when a consumer selects a and eventually expanded to other restaurant chain over another. Such locations throughout Southeast strong awareness is a leading factor Asia. Each complex offers great in building hlgh brand equity. In this food and service, and has well over study brand awareness is divided 2,000 kinds of Snoopy toys in the into three major categories: first, gift shop, Snoopy cartoon strips, a 'Top of mind," which represents the playroom for children, and a huge restaurant name that is foremost on airplane piloted by Snoopy. All the the mind of respondents; second, grilled foods at Snoopy Place use "Brand recall," which is representa- black oak in the oven. These dishes tive of the casual dining establish- include pizza steak, kebobs, and ment that the respondent first other meat dishes. There are, in brought to memory when asked to fact, over a hundred items on the participate in the survey; and third, menu at Snoopy Place, including "Brand recognition," which repre- pasta, chicken fajita salad, grilled sents the most perceived casual

FIU Hospitality ReuiewlFall2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. dining restaurant when considering product is selected and analyzed. going out to dinner. Such is not the case in the service The results reflected in Table 1 area where objectively choosing a show that T.G.I. Friday's holds the real service product and a hypothet- highest level of brand awareness ical one for observation can be d%- with regard to being uppermost in cult. Also, the four restaurant consumer's minds at 49.2 percent. chains that are the subjects of this Bennigan's, which can be described study all provide a similar level of as the strongest rival, had a 21.2 service and menu, which could be a percent "top of the mind" aware- problem. Therefore, this research ness rating. This study also attempted all of the hypothetical included an up-and-coming rival combinations about all attribute and competitor in the casual dining levels of both menu and service for market in Korea, the Outback each brand. The total utility of each Steakhouse chain. Though Outback attribute was added together and showed a low rate in the brand then divided for an average, which recall (16.7 percent) as well as in was then used in the research. the brand name recognition (55.4 In the first stage, the percent), it is considered to have a researchers computed the relative high growth rate potential. Snoopy importance rating of the five Place, the most recently emerging attributes and the utility level of restaurant chain in Korea, showed attributes by using SPSS conjoint a very poor brand awareness level analysis program. As seen in Table overall. See Table 1. 2, the score of Pearson's R and that of Kendall's Tau are used in Brand equity is measured conjoint analysis as a means to The first step is to measure the verify the validity of the observed brand equity of the selected four preference and that of the specu- restaurant chains in monetary lated preference observed among terms. It is easy to measure brand the holdouts in the combinations. equity when the product is tangible, Table 2 shows that location turned in which case a hypothetical out to be the most important

Table 1 Results of brand awareness in four restaurant chains

T.G.I. Outback Snoopy Friday's Bennigan's Steakhouse Place Top of mind 65 28 1 (49.2%) (21.2%) (0.8%) - Brand recall 41 65 18 1 (38.0%) (60.2%) (16 7%) (0.9%) ------Brand recognltion 120 123 72 16

Kim, DiMicelli, Jr and Kang 35

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Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. Table 2 Relative importance of the five attributes

Atlribute Importance (%) Ranking -- Location 28.63% 1 ~ -p.p-pp-p-p Price 26.06% 2 -- Brand name 19.33% 3 -- - -- Menu 13 94% 4 --- Setvice 12 05% 5 Pearson5 R = 983,p < 0001 Kendalk t?u = 889, p< OW4

attribute (28.63 percent) among The second stage is needed to the five attributes, followed by estimate the total utility (desir- price 26.06 percent, brand 19.33 ability) of the four hypothetical percent, menu 13.94 percent, and restaurants, which were estimated service at 12.05 percent. to reflect the most realistic repre- By systematically observing sentation of attribute levels for each how respondents react to the restaurant chain. This stage shows resulting restaurant profiles, one a simplified way to calculate the can statistically deduce the scores total utility of a hypothetical (part-worths, a.k.a., brand utility) restaurant that was assigned with for the separate attribute levels. an attribute level. The estimated Table 3 shows that Bennigan's total utility of these four restaurant topped the list in the attribute alternatives is equal to the sum of levels of brand name with a part- its part-worths, and its breakdown worths score of 1.10. This table also is offered in Table 3. The total showed friendly service to have the utility of the four restaurants is highest part-worths score among presented in Table 4. In examining the three service attribute levels a hypothetical unit of T.G.I. with 0.68. Of the remaining Friday's equipped with an average attribute levels, fine taste had a check of $12, easy access, friendly part-worths score of 0.40, while the service, and fine taste, such an price level of $12 had a score of 1.48, establishment should render a total and easy access with 1.62 showed utility of 4.78. Areview of the hypo- the highest part-worths score for thetical restaurant under the brand the menu, price, and location name of Bennigan's should show a attributes, respectively. The part- slightly lower total utility at 4.55. worths scores are useful for deter- This reduction in total utility could mining which levels are preferred. be a reflection of the fact that all Once these scores are known, an other criteria being equal, i.e., loca- individual can simply sum them to tion, service and menu, Bennigan's predict how each respondent would had a higher price by only one react to the 19 profiles. dollar for a total price of $13.

FIU Hospitality Review /Fall 2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. Table 3 Attribute part-worths

--Attribute Level ----Part-worth~ Location Easy access 1.62 Uneasy access 0.00 Price $12 1.48 $13 0.74 $1 6 --0.00 Brand name T.G.I. Friday's 0.89 Bennigan's 1.10 OutbackSteakhouse 0.28 Snoopy Place ---0.00 Menu Fine taste 0.40 Large quantity -0.39 --- Various-- menu 0.00 Service Friendly service 0.68 Prompt service 0.05 --- Accurate -----service 0.00

Others fare worse The fact that Snoopy Place is a The two remaining hypothet- relatively new restaurant in this ical restaurants fared far worse in area probably placed it on an even measuring customer desirability, plane with Outback Steakhouse i.e., total utility. Outback Steak- and did not affect the total utility house had the lowest total utility at outcome as much as the fact that its 1.37. This can probably he price structure was $3 lower than attributed to the establishment's Outback's at $13 overall. Snoopy much higher price of $16 and to Place's total utility score also having its location attribute rated suffered because its location as "uneasy access." It should be attribute also had an "uneasy noted, however, that the Outback access" rating. The main reason Steakhouse chain is relatively new why both Outback Steakhouse and in the demographic area compared Snoopy Place had such lower total to the other three restaurants. utility scores in comparison to Though Outback had the lowest T.G.I. Friday's and Bennigan's was total utility, it was not that much most likely the result of the higher lower than that of the Snoopy Place price attribute and the poor level restaurant chain, which is more of rating of "uneasy access" for the a local or at best a regional restau- location attribute. rant chain. Still, Snoopy Place had Overall, respondents indicated a total utility of only 1.83. that the most optimal combination

--A Kim,DiMicelli, Jr ar~dKang 37

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. Table 4 Total utility of the hypothetical restaurants

Brand name Location Price Menu Service Total utilitv - -- T.G.I. Friday's Easy access $12 Fine taste Friendly service 4.78 ------Bennigan's Easy access $13 Fine taste Friendly service 4.55 Outback Steakhouse Uneasy access $16 Fine taste Friendly service 1.37 - ~ Snoopy Place Uneasy access $13 Fine taste Friendly service 1.83 ------~

is with the restaurant that has the while Bennigan's accounted for attribute level reflecting the lowest 24.11 percent, Outback Steakhouse price of $12, the location with easy 20.38 percent, and Snoopy Place 0 access, friendly service, and a menu percent of total utility, respectively. that produces food of fine taste. See Once the brand equity percentage Table 4 is calculated, then it is necessary to multiply the annual sales of the Value is determined restaurant chain by its corre- The last stage in the use of sponding percentage, which is the conjoint analysis to determine second step in the process. By brand equity value is a two-step takingT.G.1. Friday's 18.54percent process. First, it is necessary to use control of total brand utility and the total utility calculated in Table multiplying it by the total sales of 4 and divide that figure into the $32.8 million, it is possible to deter- brand utility (part-worths) in Table mine that the brand equity value of 3, for each of the corresponding T.G.I. Friday's name is equivalent brand names. This division step to $6.08 million. By following this will determine the brand equity same process, the brand equity percentage as shown in Table 5. value of Bennigan's name was Table 5 shows that the brand calculated to be $5.84 million, utility percentage of 18.54 percent while $3.32 million was given to represents T.G.I. Friday's brand the Outback Steakhouse name. equity control of its total utility, Unfortunately, due to the zero

Table 5 Results of brand equity in four restaurant chains

Total Brand Total sale Brand equity Brand name utility utility Percentape (millions, 2001) value (millions) -- TGI. Friday's 4.78 0.89 18.54% $32.8 $6.08 -- - -- .- Bennigan's - 4.55 1.10 24.11% $24.2 $5.84 Outback Steakhouse 1.37 0.28 20.38% $1 6.3 $3.32 - Snoopy Place 1 83 0.00 0% $3.5 $0 -

38 FIU Hospitality Review /Fall 2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. brand utility (part-worths) contri- and recall, as well as brand aware- bution of the Snoopy Place restau- ness, to impress consumers in order rant brand name to total to raise the brand equity value. restaurant utility as stated in As reflected in these tables, Table 3, it was not possible to conjoint analysis allows for market impart a brand equity value to the segmentation. It helps explain Snoopy Place restaurant brand what consumers consider most name. However, from each of the important and leads to the adoption other three restaurant chains, the of a more efficient marketing researchers were able to retrieve a strategy through consumer dollar amount attributable to the segmentation. Though not reflected brand name by taking a total in any of the tables, the study did utility percentage of the sum of show that on average, males total sales, which resulted in an consider price the most important extracted brand equity value. attribute, whereas females thought that location was the most promi- Brand equity value compared nent attribute. Additionally, where Over the many years of its exis- to eat and the convenience of the tence T.G.I. Friday's has exposed location did seem to be a priority for itself to the press and created an the buying consumer, as reflected in image whereby many consumers Tables 2,3, and 4. give it a high awareness level. Friday's showed a higher level of Several factors are relevant awareness and the highest brand This study attempted to equity value of $6.08 million, based measure the brand equity of the on the overall higher annual sales of restaurant chains using conjoint $8.6 million and higher total utility, analysis. Several attributes as compared to that of Bennigan's at combined together will determine $5.84 million, (see Table 5). the degree of customer satisfac- However, Bennigan's brand equity tion at the conclusion of their value was not much different from dining experience. Since the that of Friday's. The reason for this attributes representing customer is that Friday's brand shows a lower satisfaction interact with each part-worths score at 29, which is other, determining that one approximately four-fifths of the attribute is more important than brand utility rating of Bennigan's at another does not give the 1.10. This leads to the obvious researcher an understanding of conclusion that high brand aware- the purchase habits or reasoning ness, i.e., top of the mind, does not for repeat patronage. What might automatically mean high brand be considered an important utility or high brand equity value. attribute might depend on the Brand equity does not rely on presence or absence of other awareness alone. It needs a combi- attributes that, by themselves, nation of affirmative recognition are less important.

Kim, DiMicelli, Jr. and Kang 39

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. Conjoint analysis makes it percentage (18.54 percent) was possible to measure relative values lower than that of Bennigan's (24.11 of things considered jointly which percent). Had Bennigan's brand might be unmeasurable taken one utility (recognition and value) been at a time. In the study, respondents a little higher than 1.10, it would were each given a profile of a have scored a higher brand utility restaurant, where each profile percentage, which could have consisted of a set of attributes that resulted in a higher total brand differed by degree as it pertained to equity value overall than Friday's the establishment's food and which would have still had a higher service criteria. The exact level of awareness. This leads to the attributes were drawn from a obvious conclusion that high aware- specific design and were included in ness does not automatically mean the set of profiles that each respon- high brand equity. During its early dent received for evaluation as to years, Friday's exposed itself to the the worth of the profile to them press and along with added personally. In other words, the publicity has given itself a high researchers are using conjoint anal- awareness level. On the other hand, ysis in order to identify the value of Bennigan's took a more friendly the brand based on the individual approach that has led to the higher respondent's attitudes toward the brand equity. attributes that were presented as One of the advantages of brand name, service, menu, price conjoint analysis is its analytical and location. The researchers were power. As tested in the above, a also looking to predict the respon- conjoint analysis allows market dents'loyalty and explain the vari- segmentation. This study showed ation in that loyalty based on each that brand equity does not rely on person's perceived attitude. These awareness alone. It needs a combi- findings will be able to help nation of affirmative recognition managers as well as marketing and brand awareness to impress decision makers manage their consumers in order to raise brand brand's equity to maximize the equity. In the context of the applica- value of their asset. tion of conjoint analysis in predicting a buyer's choice among Friday's ranks highest the multi-attributes used as a The findings indicate that T.G.I. measuring tool, a manger can now Friday's leads Bennigan's in total use such information in terms of brand equity. The reason for this determining what is best for outcome is that Friday's showed the customer satisfaction and highest utility score (4.78) and continued growth. higher annual sales dollars in comparison to Bennigan's. Although Research has limitations Friday's showed a higher level of A conjoint analysis makes it awareness, their brand utility possible to calculate the brand

40 FIU Hospitality Review /Fall 2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. utility from responses to the ques- "ker. tionnaire. Nevertheless, the limited R. R. Cadotte and N. Turgcon, "Key factors in guest satisfaction," Cornell Hotel number of attributes and compa- and Restaurant Administmtion Quartprly 28, rable brand do confine the research. no. 4 (1988): 44-51. When measuring brand equity, ' A. Ourusoff, "Who said Brands are Dead?,"Brandweek 34, no. 32 (August 1993): consideration must be given to 20-33. factors such as price cuts that can P. Nedungadi. "Recall and Consumer raise the numbers but hurt the Consideration Sets: Influencing Choice without Altering Brand Evaluation," Jouml brand's image. Such elements of Comurner Research 17; no. 3 11990):263- should be given close attention in 276. future studies. A month of adminis- C. J. Cobb-Wdgren,C. A. Ruble, and N. Donthu, "Brand Equity. Brand Preference. tration of convenient surveys was and Purchase Intent," Journal ofilduertising conducted to collect the data. 24, no. 3 (1995): 25-40. Since Seoul is the largest city '" C. C. Muller and R. H. Woods, "An of South Korea, as well as its expected restaurant typology," Cornell Hotel and Restaurant Administration Quarterly, capital, the small sample size may 35, no. 3 (1994): 27-37. not be a true representation of " J. Murphy, "Assessing the value of customer preference in restau- brands," Long Range Planning 23, no. 3 (1990): 23-29. rant chains throughout the whole " W. Jiang, C. Dev. and V. R. Rao, city. Therefore, it may be an unre- "Brand Extension and Customer Loyalty: liahle attempt to apply non-repre- Evidence from the Lalging Industry," Cornell sentative results on the overall Hotel and Restaurant Administmtion Quar- terly 43, no. 4 (2002): 5-16. total sales to estimate dollar J. Hair, R. Anderson, R. Tatham, and value of brand equity. W Black, Multivariate Dntn Annlysis (2nd ed.) (New York: Macmillan Publishing Company, 1992). References " G. E. Paul, M. K Abba, and W. Yoram, "Thirty Years of Conjoint Analysis: Reflec- I D. A. Aaker, "Dimensions dMeasuring tions and Prosoects." Interfaces 31. no. 3 Brand Personality," Journal of Marketing Research 34, no. 3 (1997): 347-356. * K. L. Keller, *Brand Synthesis: The Multidimensionalitv of Brand Knowledee." Woo Gon Kim~san ar~stanlproessorand Journal of Consnmir Research 29, (M&ch Peter DiMiceI11, Jr. IS aocroral cand~date 2003): 595-600. a !n rhe School of Hotel and Restaurant bid. Admlnrsrrat~onar Oh'ahoma State Un~ver- ' K. L. Keller and D. A. Aaker, The s~lyJm Kang IS an asslstantmanager ~nthe Managing the Corporate Brand: Effects rnarkebng depdrtrnenl at CJ toodvrlle uf Corporate Marketzng Activity on Consumers Evaluations of Brand Erten- Corporatbn in Seoul. Korea. sions (Cambridge; Mass.: 1997).

Kim,DiMicelli, JI:and Kang 41

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Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. Effect of smoke-free ordinances on restaurant and bar sales

by Howard P. Glauert

Peer-reviewed stud~esthat have examined The first peer-reviewed study the effect of the enactment of smoke-free examining the effect of non- ordinances on restaurant and bar sales have uniformly found that the enactment of smoking ordinances on restaurant these ordinances does not decrease restau- sales was published by Glantz and rant or bar sales, with most studies Smith in 1994'. Fifteen cities in observing no effect on restaurant revenues. Colorado and California that had enacted smoke-free restaurant ordinances were chosen and paired moke-free restaurant ordi- with 15 similar cities without ordi- nances have been enacted or nances. Examples of these pairs Sproposed in many cities in the were Aspen and Vail, Colorado, United States. The main opposi- Sacramento and Fresno, California, tion to these ordinances has been and Palo Alto and Mountain View, from restaurant and bar owners, California; the smoke-free city is who have claimed that such an listed first. Quarterly data on ordinance would hurt their busi- taxable restaurant sales and total ness. This review examines studies retail sales were obtained from the that have quantified whether the Colorado State Department of enactment of smoke-free ordi- Revenue and the California State nances influences sales in restau- Board of Equalization. Total restau- rants and bars. Only studies that rant sales were analyzed as a frac- have been published in refereed tion of total retail sales to account journals are reviewed in order to for population growth, inflation, ensure that the methods and inter- and changes in the economy. pretations have been peer- reviewed, and only studies that Sales not affected had actual data as to restaurant Overall, there was no effect on and bar sales are described. restaurant sales (as a percent of

FIUHospitality Reuieu, /Fall 2004

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Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. retail sales). After performing in Flagstaff, Arizona. Data on statistical analyses, restaurant restaurant sales, total retail sales, sales were found to be increased in and hotel and motel sales were two cities, decreased in one city, and collected from the Arizona Depart- not changed in the rest. In ment of Revenue for Flagstaff and comparing the smoke-free cities two comparison cities, Yuma and with the control cities, sales were Prescott. Four endpoints were increased in one city, decreased in quantified: first, restaurant sales in one city, and not affected in the rest. Flagstaff before and after the start This study was updated in 1997 of the ordinance; second, the ratio of when three more years of data were Flagstaff restaurant sales to thosc added; in addition data for five in comparison cities both before and cities and two counties that banned after enactment of the ordinance; smoking in bars (as well as seven third, the ratio of restaurant sales control communities) were addedz. to total retail sales in Flagstaff both As beforc, smoke-free ordinances before and aRer the start of the ordi- were not found to affect restaurant nance; and, fourth, the effect of the sales. In addition, bar sales (as a ordinance on motel and hotel sales percent of total retail sales) were both before and &r the start of the also not affected. When the city ordinance. For all endpoints, the pairs were examined individually, smoke-free restaurant ordinance only one city, Davis, California, did was found to have no effect. have a drop in sales. Northeast studies cited Southwest cities examined A study from the state of Huang et aL3examined restau- Massachusetts was performed by rant sales in West Lake Hills, Bartosch and Pope5. Thirty-two Texas, a suburb of Austin, before cities and towns that had adopted and after a smoke-free restaurant smoke-free ordinances between ordinance was enacted in June 1992 and 1995 were studied and 1993. Data were collected for the compared to 203 cities and towns 17-month period before the ordi- that had no such ordinance. nance went into effect and for the Taxable meals receipts data were 19-month period after it went into collected from the Massachusetts effect. Seasonal variations were Department of Revenue from taken into account, as were January 1992 through December economic trends. The analysis 1995. The study did not find any found that restaurant sales did not difference between communities decrease after the ordinance went with smoke-free ordinances and into effect, and may actually have those with no ordinance. This study increased (a positive regression was updated in 2002, so that data coefficient was noted). between 1992 and 1998 could be Sciacca and Ratliff' examined analyzed; again, no effect on the the effect ofa smoke-free ordinance restaurant business was observed6.

Glauert

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. New York City enacted a ratio of restaurant and cafe smoke-free restaurant law in 1995. turnover to total retail turnover The effect of this law on the city's and also compared restaurant and restaurants and hotels was studied cafe turnover in SA to that in other by Hyland et aL7. Data on taxable Australian provinces not having sales from restaurants and hotels smoke-free laws. The study found was obtained from 1990 through that the enactment of the smoke- 1997, and compared to similar data free law did not influence the from other counties in New York restaurant business in SA. State that did not have smoke-free ordinances. Five endpoints were California shows no change quantified: first, total sales from In 1998, California began eating and drinking establish- requiring all bars in the state to ments; second, total sales from become smoke-free; restaurants hotels; third, ratio of these sales to had previously been required to total retail sales in New York City; become smoke-free in 1995. fourth, ratio of sales from eating GlantzLoexamined the effect of and drinking establishments to these two laws on bar revenues in those outside of New York City; and California. Data were obtained fifth, ratio of sales from hotels to from the California State Board of those outside New York City. For all Equalization. For the study, bars of these endpoints, the smoke-free were defined as establishments ordinance either had no effect or with full liquor licenses, and thus resulted in an increase in sales, included restaurants that had full compared to the rest of the state. bars. The study had two endpoints: Hyland and Cummingss also exam- bar revenues as a fraction of total ined restaurant employment before retail sales; and the fraction of all and after the start of the smoke-free "eating and drinking establish- law. Statistics were obtained from ment" revenues that were going to the New York State Department of businesses with full liquor licenses Labor. They found that there was (to determine if there was a shift an 18 percent increase in restau- toward or away from bars). No rant jobs in New York City between change was observed in bar 1993 and 1997, whereas there was revenues following enactment of only a 5 percent increase in restau- the restaurant law in 1995, but rant jobs in the rest of the state. there was a small increase in bar The Australian territory South revenues following enforcement of Australia (SA) enacted a law the 1998 law. The fraction of all prohibiting smoking in restaurants eating and drinking establishment in 1999. Wakefield et examined revenues going to bars was the effect of this law on restaurant increased after both the 1995 and turnover (defined as retail sales + 1998 laws. wholesale sales) from April 1991 to Finally, an ordinance that April 2001. They examined the banned smokmg in all public places,

44 FIU Hospitality Review /Fall 2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. including both restaurants and bars, American Journal ofPublic Health 87, no. 10 (1997): 1687-93. was enforced in El Paso, Texas, 'P. Huang, S. Tobias, S. Kohont, M. starting on January 2,2002. Huang Harris, D. Satterwhite, D.M. Simpson, L. et al." examined the effect on restau- Winn, J. Foehner, and L. Pedro, "Assessment rant sales, bar sales, and mixed of the impact of a 100%smoke-he ordinance on restaurant sales-West Lake Hills, Texas. beverage sales. Sales tax reports for 1992-1994,"Morbidity and Mortality Weekly restaurants and for bars and mixed Report 44, no. 19 (1995):370-372. beverage tax receipts were examined J.P. Sciacca and M.I. Ratliff, "Pmhibiting smoking in restaurants: effects for 12 years before and one year after on restaurant sales," American Journal of the ordinance was implemented. Health Promotion 12, no. 3 (1998): 176-184. Results were additionally examined W.J. Rartosch and G.C. Pope, "The after expressing them as a percent of economic effect of smoke-free restaurant poli- cies on restaurant business in total retail sales, or &r adjusting for Massachusetts," Journal of Public Health inflation. No changes were observed Management Practice 5, no. l(19991: 53-62. in restaurant revenues, barrevenues, W.J. Bartosch and G.C. Pope, "Economic effect of restaurant smoking or mixed beverage revenues, either restrictions on restaurant business in before or after adjustment for total Massachusetts, 1992 to 1998," Tobacco retail sales or inflation. Control 11, Supplement 2 (2002):ii, 38-42. ' A. Hyland, K.M. Cummings, and E. Nauenberg, 'Analysis of taxable sales Sales not affected receipts: was New York City's Smoke-Free Air Overall, it is clear from the Act bad for restaurant business?," Journal of Public Health Management Practice 5, no. 1 above studies that enacting smoke- (19991: 14-21. free restaurant laws does not influ- A. Hvland and K.M. Cummines. ence sales in restaurants, at least in ^Reat;~~lranrernploymnlt hfow and after the Nrw,l'ork ('~tsSnsnke-Frec Air Art." h,urnul the cities and towns studied. Of ofPublrc ~eajthManagement practice 5, no. course, one cannot state with 100 l(1999l: 22-27. percent certainty that this would * M. Wakefield, M. Siahpush, M. Scollo, also be true for every city or town A Lal, A. Hyland, K. McCaul, and C. Miller, The effect of a smoke-free law on restaurant that enacts a smoke-free ordinance. business in South Australia, Australia and It is likely, however, that nearly all New Zealand Journal of Public Health 26, no. would have a similar experience as 4 (2Ml2):375-82. lo S.A. Glantz, "Effect of smoke free bar the cities studied if a smoke-free law on bar revenues in California," Tobacco ordinance were enacted: no effect Control 9, no. l(2000): 111-12. on the restaurant business. 'I P. Huang, A.K. De, and M.E. McCusker, "Impact of a smoking ban on restaurant and bar revenues-El Paso, References axas, 2002,"Morbidity and Mortality Weekly Report 53, no. 7, (2004): 150-152. I S.kG1antz and L.R. Smith, "The effect of ordinances requiring smoke-free restau- rants on restaurant sales," American Journal Howard F! Glauert is a professor in the ofPublic Health 84 no. 7 (1994):1081-5. Graduate Center for Nutritional Sciences SAGlantz and L.R. Smith, 'The effect and the Department of Nutrition and Food of ordinances requiring smoke-free restau- Science atthe University of Kentudfy rants and bars on revenues: a follow-up,''

Glauert 45

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. The five essentials of private club leadership

by Ronald Cichy, Jaernin Cha, and Bonnie J. Knutson

The authors examine underlying dimen- styles including charismatic, trans- sions of private club leadership using prin- cipal components analysis. The data were actional, and transformational lead- wllected between 1996 and 2W3 from 702 ership, and have focused on which club managers or club chief operating off- type of leadership style is effective in cers who are members of the Club predicting performance outcome^.^ Managers Association of America (CMAA). Five factors - innovation, vision, inner Authentic transformational flalues, stewardsh~p,and commun~cabon- leadership is a revised theory of were idenblied as essenfialsof private club transformational leadership, which leadership. emphasizes the leader's ethical and moral ~rientation.~George charac- terizes authentic leaders as those generally held view is that who genuinely desire to serve and currently there is a lack of empower others rather than seeking A, eadership in the world.' power, money, or prestige for them- Leadership is what ordinary people selves4 Along with authentic use to bring forth the best from leaders, servant leadership: which themselves and others. Leadership puts other people's needs, aspira- has been an important topic among tions, and interests above the leadership scholars and practi- leader's own, is an increasingly tioners over the last several decades. popular concept in the field. Three Research has been examining types of leadership behaviors - rela- underlying attributes, characteris- tion-oriented, task-oriented, and tics, and behaviors of successful change-oriented - have been another leaders. In doing so, leadership has approach to defining leadership." been defined in various ways and from different research directions. In Hospitality leadership defined particular, academic researchers Prior to 1990, research relating have delineated various leadership to leadership in the hospitality

46 FIU Hospitality Review /Fall 2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. industry was scarce. Since that and vision) of women hospitality time, however, numerous studies' leaders. have been conducted in several The primary purpose of this segments of the hospitality study was to identify and examine industry. These studies describe the underlying dimensions of qualities, keys and secrets of hospi- private club leadership, using proce- tality leaders in the lodging dures similar to those of the industry, non-commercial food Knutson et al study.ll In the private service industry, commercial food club environment, club chief oper- service industry, and club industry. ating officers and club managers Several studies have focused on must provide leadership for the club applying the theory of transforma- membership, board, and staff. tional leadership in the hospitality The survey instrument was ind~stry.~These show that constructed based on three original managersltop executives who sources: 24 leadership qualities exhibit transformational leader- taken from the Bennis and Nanus ship behaviors are viewed as the classical leadership study, seven most effective. Testa examined a keys to business leadership adapted disparity between the way from Labich, and 16 semts of busi- employees view their leaders and ness leadership from Roberts." the leaders' own view of themselves Using a six-pint scale, respondents in the hospitality industry, and were asked to indicate their level of found that managers (leaders) gave agreement from 1, strongly themselves higher effectiveness disagreed, to 6, strongly agreed for scores than did their employees? leadership qualities and secrets and the level of importance from 1, very Leadership is defined unimportant, to 6, very important Arecent hospitality leadership for leadership keys. Cichy and study by Knutson, Schmidgall, Schmidgall note that "three sources and CichyIo contributes to the (leadership qualities, keys, and hospitality leadership field in two secrets) make a good survey basis ways. First, this study employed because the Bennis and Nanus factor analysis to identify the work is a classic leadership study, underlying dimensions of leader- Labich's is a popular approach to ship while other previous studies business leadership, and Roberts on hospitality leadership only offers an unusual treatment of busi- relied on descriptive statistics. ness leademhip."13 Second, this study focuses on Participants in this study (total women leaders when most studies n = 702) were chief operating offi- have been based on male leaders. cers or club managers who were The authors identified seven lead- members of the Club Managers ership dimensions (perseverance, Association of America (CMAA). trust, inner values, responsibili- While attending the Business ties, stewardship, communication, Management Institute 111 (BMI 111)

Ciehy, Cha and Knutson 47

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Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. at Michigan State University clubs (10.2 percent), and yacht between 1996 and 2003, respon- clubs (3.7 percent). Of the total, dents were asked to complete a average annual total gross survey before they were exposed to revenues were US$4.8 million, a leadership session, so that their with an average of 121 employees. answers were not influenced by the The majority of respondents were contents of the presentations. Data male (84 percent). The average were collected during three number of years as a club manager seminar sessions each of the seven or COO in the club industry was years: April, September, and 6.8 years. The age range of the November. To ensure that these majority of respondents was data from the seven years can be between 36 and 45 (45.1 percent), aggregated for further statistical followed by 35 years or younger analyses, the post-hoc Duncan test (33.6 percent), then by 46 to 55 was used to check for any anoma- (19.4 percent) years. The largest lies among years on scale items. percentage of the respondents had This test also looked for any trend an earned baccalaureate degree over these seven years. (48.4 percent), followed by 34.9 Findings show that scale items percent who had some college or are not different from each other associate degree, and by 12.8 over that period, and there is no percent who had done postgrad- particular pattern except for club uate work. annual total gross revenue, which increased over the years. The Factor analysis employed authors suggest this trend is the Because the primary objective of result of inflation. It should also be the present study was to identify noted that items in leadership underlying dimensions of private scales are rooted in human values, club leadership, factor analysis was and the theory of human value or employed as the primary statistical personal value theory" indicates technique. Factor analysis is that human values are stable over intended to reduce a large number time. Thus it is reasonable to aggre- of variables to a smaller number of gate all data from 1996 to 2003 to factors by grouping together vari- analyze the dimensions of overall ables that are correlated.'5FoUowing private club leadership. Table 1 the study procedures of Knutson et shows the characteristics of clubs al, factor analyis was run on each set and respondents. of the following: 24 qualities of effec- The majority of the total clubs tive leadership, seven keys to lead- were member-owned (84.5 ership, 16 secrets of leadership, and percent), compared to corporate- the combined set (47 items in total) owned (9.0 percent). Overall, a of all three survey sets.16 majority of the total respondents To examine whether the data were from golf / country clubs (82.0 were appropriate for factor anal- percent) followed by city / athletic ysis, the Kaiser-Meyer-Olkin

48 FIU Hospitality Review /Fall 2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. Table 1 Characteristics of clubs and respondents*

----Type of ownership --Member ----- owned Corporate owned------9.0% Other 6.4% - ---- ~ ------Type of club

CiWI Athletic Club ------Golf 1 Country Club 82.0% Yacht Club 3.7% Other 4.0% Annual total gross revenue (Average) 4.8 rnlll~on

- Number of em~lovees. . ------121.2 Education level ------High school or less -- -- - 4.0% Some college or associate (two-year) degree 34.9% Baccalaureate (four-vear) dearee 48.4% -- , Post graduate work 12.8% -- -- Number of years as a club manager or COO (Average) 6.8 years ------~p Number of years-- in thexb industry (Average) 11.9 years --Age -- 35 years or younger 33.6% ------36 - 45 years 45.1% 46 - 55 years 19.4"/0

---55 - 65 vears 1.9% 66 years or older 01%

Gender --- Male 83.9%

Female ------16.1% Percenhges may notadd to 100%due to rounding.

(KMO) measure of sampling tics for each scale were higher adequacy and Bartlett's test were than the recommended .5, ranging used. For data to be appropriate from .76 to .92 and Bartlett's tests for factor analysis, the KMO value were all statistically significant at should be higher than .50 and the p < .Ol level. These results certify chi-square value of Barlett's test that the sample can be subjected must be significant at the .05 level to factor analysis to uncover the (Kim and Mueller, 1978). As underlying patterns of variables. shown in Table 2, the KMO statis- See Table 2.

Cichy, Cha and Knutson 49

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. Results of the Kaiser-Meyer-Olkin (KMO) and Bartlett'stests

Bartlett KMO Chi-square Significance

------(df) ---(~<.001) Leadership qualities 2341.780 0.816 276 p < ,001

(Bennis & Nanus,-- 1985) ------Keys to leadership 601.943 0.760 21 p < ,001

(Labich. 1988) ------Secrets of leadership 2928.980 0.911 91 p<.001 (Roberts, 1985) ------Comblned measures 7003.924 0.919 741 p < ,001 of leadershio

Principal components analysis Four scales evaluated and Varimax rotation method were To determine the basis for iden- used to generate the factors. The tifylng the underlying dimensions criterion used for the number of of private club leadership, the factors to be extracted was an eigen authors evaluated four types of value greater than 1. Factor load- leadership scales, using three ings above .71(50 percent variance) criteria: interpretability of factors, are considered excellent, .63 (40 percentage of variance explained, percent) very good, .55 (30 percent) and range of alpha scores. Table 3 good, .45 (20 percent) fair, and .32 shows the summary of factor (10 percent of the variance) poor." dimensions for the four leadership Because this study is the first scales examined: Bennis and specifically designed to discover the Nanus, Labich, Roberts, and one dimensions of private club leader- formed by combining these three ship, all variables that loaded at .40 scales. See Table 3. level or above were retained. Cross- The scale of leadership quali- loading items were specifically ties adapted from Bennis and examined to see in which factor NanusLnproducedfactors that are they best fit. An alpha was calcu- more readily interpretable than lated for each factor with and the other three. Factor solutions without that variable. If a factor's that do not make sense in the field alpha score could be improved by of study are meaningless; even removing any variable(s1, that item obtained factors show adequate was eliminated, and a new alpha percentage of variance explained score was computed. This process and range of alpha scores.1s It is continued until no further improve- important for researchers to ment in alpha scores could be made ensure clear interpretability of on each individual factor obtained factors as prerequisite

FZU Hospitality Review /Fall 2004

~..

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. Table 3 p

Number Number Range of Percent of of initial of final Number alpha variance ---- items -- items of facton scores explained Leadership qualities (Bennis & Nanus, 1985) 24 17 5 .53 to .64 52.3 ------Keys to leadership (Labich, 1988) 7 7 2 .31 10.67 49.2 ------Secrets of leadership

--(Roberts, 1985) 16 14 2 .70 to .84 46.2 Combined measures of leader~hl~ 47 39 8 .46 to 87 49.0

condition. In this sense, although compared to the other three (49 the range of alpha scores for lead- percent, 46 percent and 49 percent ership secrets adapted from for leadership keys, secrets, and RobertsZowas highest among all combined set). When the scale of scales, this scale was not chosen as leadership qualities was compared the best scale by which to identify to the combined set, this finding is dimensions of private club leader- noticeable because the numbers of ship because it suffers from items for the combined set (revised unclear interpretability and also to 39 items) is more than double the because it shows the lowest number of leadership qualities (17 percentage of variance explained. revised items). This result indicates A scale of keys to leadership that the 17 items of leadership adapted from Labich2' was not qualities is a parsimonious selected as the best scale by which measure of private club leadership, to identify dimensions of private compared to the 39 items of the club leadership because this scale combined set. shows the lowest range of alpha Therefore, the authors selected scores among all, besides the the scale of leadership qualities problem of interpretability. It also adapted from Bennis and NanusZ3 should be noted that keys to lead- as the basis for identifying the ership originally included seven underlying dimensions. This items, based on annotated notes finding differs from that of Knutson from business leaders. et al.", which found that the The choice of the scale of lead- combined set produced the highest ership qualities from Bennis and range of alpha scores and explained Nanusz"was reinforced because this the largest percentage of variance scale shows the highest percentage when they used the sample of of variance explained (52 percent), women financial executives. While

Cichy, Cl~aand Knutson

- - --

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. Table 4 Factors of leadership quality for leaders

Factors Items 1 2345 Emphasize quality over quantity. place a relativ~~phzonleamin~k+tH Encourage and reward risk taking. Surround themseives with people who are 0.58 t not like them. -- Don't change their minds often. Maintain precise desired outcomes. Provide a compelling message or vision. Have a strong personal value or belief system.

-----Have strono familv values. 0.76 Have a good sense of humor. Know their strengths and nurture them. -- Believe there is no such thing as failure, only "next steps"; mistakes are, in fact. opportunities. -- Provide appropriate information,resources and support to allow employees to become empowered. Are excellent public speakers, + Are inquisitive; they askthe best 0.71 Extra Method: Principal Component Analysis Rotation Method: Varimax with Kaiser Normalization Variance explained: 52% Alpha 70.6~0.64~6i~3~~

the study by Knutson et ~31.~~uncov- cial and Technology Professionals, ered eight dimensions of women while the authors studied both male hospitality leaders based on the and female club managers or club combined set, this present study chief operating officers (females = 16 supports five dimensions of private percent). The level of importance club leadership based on a scale of placed on any one attribute is likely leadership qualities taken from to be different based on such Bennis and NanusZ6.These differ- elements as industry segments, ences can be attributed to differ- gender, time of data collection, and ences in sample characteristics of economic situation. each study. Knutson et al.'s As demonstrated in Table 4, on researchz7 only studies female the basis of the scale of leadership members of the Hospitality Finan- qualities adapted from Bennis and

52 FIU Hospitality Reuiew /Fall 2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. NanusZ8, five factors, which effectiveness at their individual accounted for 52 percent of the total private clubs. Effective leaders variance of the revised 17 variables, should have creative thinking and were identified. See Table 4. flexible planning.31

Innovation is important Vision is essential The first factor is termed The second factor, "vision," is "innovation." Innovative leaders one of the four foundations of lead- exhibit similar characteristics or ership discovered and reinforced in behaviors of what change-oriented various research conducted by leadership presents.29 Change- Cichy and his colleagues. Bill oriented leadership implies Marriott defined the essence of leaders' qualities that continu- carrying through with a vision: ously make progress for advance- "Leadership is having a vision first, ment. This factor includes the items and then communicating that that leaders focus on quality over vision."j2 Club leaders provide a quantity and place a relatively compellmg vision to st& members. significant emphasis on learning. The vision must be present in all These are prerequisites for leaders the decisions of the leaders. This to make progress to the future. factor also includes the item, "main- An important characteristic of tain precise desired outcomes," an innovative leaders is that they important aspect of a compelling experiment with new things. They vision because many managers do are unafraid of trying or adopting not succeed well or even sficiently new methods and practices of busi- in connecting vision to the striving ness, and they do not penalize st& for and reaching of actual tangible members for taking risks, but outcomes. Tangible outcomes are rather encourage and reward risk those that people can see and touch taking. Effective leaders should be before they even exist. They seem ready and willing to change direc- real despite the fact that they exist tion when necessary. They do so by only in the minds and hearts of not surrounding themselves with those who dream of achieving the people closely similar to or exactly outcomes. like themselves. One of the irnpor- For example, if the club organi- tant aspects of transformational zation's vision is to deliver the leaders is that these leaders stimu- highest service quality experience late their subordinates by to club members, staff members presenting them with challenging should be directed to an under- new ideas and different ways to standing of the ways in which such tackle old Club leaders a vision may be made real and must embrace local, regional, actually accomplished. Beyond national, and global changes in the this, club leaders should provide club industry, and always find ways staff members with the tools to to improve business practices and measure club members' satisfac-

Cichy, Cha and Knutson 53

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. tion. Effective club leaders make ciples. People wish to follow sure that staff members clearly someone who knows where he or understand expectations and how she is going. The Hindus have a they can reach their goals to saying: 'lf you don't know where you produce desired outcomes for their are going, any road will take you club organizations. there." To know their strengths, Most importantly, effective leaders regularly ponder a number club leaders should not impose the of questions about their leadership company's vision on staffmembers, vision and values: What are my but rather should allow staff personal values? What is my vision? members to have a shared vision What is my vision for me as a with the values of the organization. person? What is my vision for my Effective leaders know that it is the family? What is my vision for the power of the shared vision that relationships I am nurturing and creates the desired outcome. They strengthening? What is my vision understand that the shared vision for the organization in which I am a comes from individual personal leader? What is my vision for my life visions combined and strengthened in this decade? Where am I going? through synergy. Club leaders also have strong Quality improvements are a family values and a good sense of part of each person's responsibility humor. By recognizing strengths daily in an organization that has a and building on them and identi- vision of providing its customers fying weaknesses and working to (club members and staff members) overcome them, self-confidence with the level of quality that meets emerges. Club leaders must instill their requirements and exceeds this confidence in their familes and their expectations. All of these indi- organizations and other people to viduals end up communicating the strive to be the best that they can message of quality and "being" the become in service of others, family vision for improving quality. members, and club members.

Inner values are emphasized Leaders inspire The third factor is labeled The fourth factor is called "stew- "i~ervalues." Leadership is first, ardship." Effective club leaders foremost, and always an inner regularly provide relevant infoma- quest. Before leaders lead others, tion, resources, and support to help they must first understand them- staffmembers become empowered. selves and lead themselves. Values Being a leader means being able to tend to ad as guiding principles for encourage and inspire followers - in individuals and organizations. Self- this example, followers are staff knowledge is a combination of members. A recent Bennis and knowing and being true to self and Thomas leadership bookmpoints out being loyal to personal values and that "when you are the leader, you unwilling to compromise their prin- have to remember that you work for

FIUHospitality Review /Fall 2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. them, not the other way around." and encourage others to make staff Empowerment occurs when members to feel that they information is shared, resources contribute importantly to the orga- are made available to help all ni~ation.~ contribute to the shared vision, and all are supported in thcir efforts. Communication is key Leaders believe that the way to get The fifth factor, "communica- what they want is first to help tion," is one of four foundations of others get what they want. One of leadership previously identified by the results of empowerment is an Cichy and his colleagues. Commu- increase in the competence of staff nication is the key to leading a members. Club leaders support team on a successful path toward their staff members and the staff a shared vision. Without commu- members in turn support the values nication, a leader cannot build and vision of the club organization. trust or a shared vision or perse- This factor also includes an item, vere in the journey. The more "Believe there is no such thing as leaders learn about effective lead- failure, only next steps; mistakes ership, the better they will be able are in fact opportunities." Leaders to communicate with others. support others and they do not Knutson et a1.k study also identi- punish others for makingmistakcs. fied communicalion as one of the Mistakes are opportunities for all to dimensions of women hospitality learn and grow. leaders. Knutson et al. observed The transformational compo- that "communication is a two-way nent "individual consideration" also street. Most importantly, commu- emphasizes that leaders should pay nication is active listening and special attention to the achievement asking the best question^."^^ Thus, and development needs of their both the listening and the subordinates (staff members).34 speaking dimensions of communi- Effective club leaders should help cation should be emphasized in staff members improve perfor- private club leadership. mance by coaching (short-term Club leaders must listen to the strategy) and / or mentoring (long- needs and ideas and support the term strategy). Leaders foster an associates of the organization. They organizational culture that invites know that the associates often see people to believe that they, and not and fcel what is not seen or felt by the leader, are the key to achieving the leader because associates are the shared vision. Club leaders more frequently in close contact should have the capability to let with the club's members. Leaders their people do their jobs and help must listen to the members that the them fulfill their responsibilities. organization serves, as well as to Clubs are highly service-oriented the people in the organization who organizations and, in that sense, serve the members. Club leaders club leaders' roles are to motivate should listen to understand the

Cichy, Cha and Knutson 65

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. views of others so they can learn Limitations of the current from others. study should be noted. First, future researchers need to consider modi- More research is necessary fying the scales to capture other What constitutes elements of relevant dimensions of private club leadership is an ongoing debate. leadership to increase the percent The main purpose of this study of variance explained and improve was to determine underlying factor reliability scores. Findings dimensions of private club leaders. show that the identified five dirnen- The authors believe it to be the sions of private club leadership - first to identify such dimensions in innovation, vision, inner values, this industry. To that end, this stewardship, and communication - study evaluated four types of lead- accounted for only 52 percent of the ership scales followed by Knutson total variance of the revised scale of et al.'s procedure38,and found that leadership qualities. This result the revised scale of leadership indicates that it may be necessary qualities (17 items) taken from to include other dimensions to Bennis and Nanus" best described define private club leadership. For dimensions of private club leaders. example, Kouzes and Posner Principal components analysis emphasize that credibility is the with Varimax rotation method foundation of leadership, and that indicated that private club credibility comprises integrity, leaders have five underlying honesty, forward looking, and conf- dimensions such as innovation, dence.lSFuture study requires that vision, inner values, stewardship, a scale of leadership qualities can and communication. The authors be expanded with added items also believe that current private (such as items for credibility) to club leaders are most likely to present a broader view of leader- possess leadership qualities and ship dimensions in the club characteristics associated with industry In doing so, the evaluation these five essentials. of reliability should be reexamined. Current and future dub industry Second, the five dimensions leaders should pay attention to these obtained from the study are based identified five dimensions. Elements on self-perception of club leaders, such as communication skills, artic- not including staff members' ulating vision, and creating shared perceptions. Past research has vision can be enhanced and devel- shown that in hospitality organiza- oped through formal education, tions there may be disparity training, and organizational manage between how staff members view ment programs. Through mentoring their leaders and how leaders programs, leaders can develop perceive themselves. For example, trusting relationships with their staff Testamassessed perceptions of lead- members (employees),and can rein- ership quality and effectiveness force the importance of stewardship. from both supervisors and subordi-

FIU Hospitality Reuieu1lFall2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. nates. and found that su~ervi- (1999): 181.217. B. George, Authentic Leadership: sodmanagers tended to give them- Rediscovering ,he Secrets a Creating Lasting selves higher eff'ectivenessscores valcle(sari ~~~ei~~~:J~~~~~.B~~~,2003). than did their employees. Thus, the ". K. Greenleaf and L. C. Spears, The authors recommend that future Power of Servant-Leudershb :Essays (Sari Francisco: Berrett-Koehler Pubbhers, 1998); research to R. F, Russell and G. A. Stone. "A review of measure leadership characteristics servant leadership attributes;'developing a and behaviors. practical model," Leadership & Organiza- tionul De~elopnlent23, nos. 3-4 (2002): 146 Third, this study was limited to 157, the ex~lorativeof dimensions of G. Yukl. A. Gordon. and T. Taber. "A club leaders, without hierarchical taxonomy of leadership behavior: integrating a half century of linking these dimensions with behavior research," Journal of Leadership outcome variables. It will be impor- and Organizat~onalStudies 9, no. I (20021: tant to discern the relationship 15-30. between these identified dimen- 7 See, for example, R. F. Cichy and M. P. Sciarini, 'Do you fit this profile of a hospi- sions and desired outcome vari- tality leader?,"lodging 15, no.10 (1990): 40- ables (e.g., job commitment and job 42; R. F. Cichy, M. P. Sciarini, C. Cook, and performance). Future research can M. E. Patton, "Leadership in the lodging and non-commercial food service indus- determine which dimension plays tries,' FlU Hospitality Reuiew 9, no. 1 the most important role in 119911: 1-ID; R. F. Cichy, M. P. Sciarini, and predicting positive outcome, M. E. Patton, "Food-Service Leadership: Could Attila Run a Restaurant?," Cornell assessed from both leaders' and Hotel and Restaurant Administration Quar- followers' (staffmembers') perspec- terly 33, no. l(1992): 46-55; R. F. Cichy, T. tives. Furthermore, future resemh Aoki, M. E. Patton, and K. Y. Hwang, on how organizational variables "Shido-sei: Leadership in Japan's commer- cial hod-service industm.".. Cornell Hotel such as organizational culture and and Restaurant .4dministmfion Qirortprly climate influence one's level of lead- 34, no.l(l993): 88-95; R. F. Cichy and R. S. ership styles may contribute to Schmidgall, "Leadership qualities of finan- cial executives in the U.S. lodging industry," understanding in this field. Cornell Hotel and Restaurant Admi~rLstro- tion Quarterly 37, no. 2 (1996): 56-62; R. F. References Cichy and R. S. Schmidgall, "Financial exec- utives in U.S. clubs.' Cornell Hotel and ' S. Adams, Don't Step in the Leadership Restaurant ~dminisirationQeorterly 38, (Kansas Cily: Andres McMeel Publishing. no. 5 (1997): 67-72. 1999). See, for example, J. B. Trncey andT. R. ' See, for example, B. M.Bass, Hand- HiKin, "Transformational leaders in the hook of, Leadershiu: A Sur~sevof T~ONand hosoitalitv industm." Cornell Hotel and RI 4,ur.h NCW~&k. Free l'rcls, 1990 IS A Rz.

Cichy, Cha and Knutson

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. hospitality leaders," FZU Hospitality Review " B. M. Bass, Leadership and Perfar- 20, no. l(20021: 1-13, mance Beyond Expectations (New York: Free 'I Ibid. Press, 1985). 'l W. Bennis and B. Nanus, Leaders B. J.Avolio, B. M. Bass, and D. J. Jung, (New York: Harper and Row, 1985); W. MLQMultifactor Leadership Questionnaire Roberts, Leadership Secrets ofAtrila the Hun (Redwood Citv: hhdGarden. 1995). (New York: Warner Books, 1987); K. Lahich, K R. dreger and J. S. Peterson, "Lead- "The seven keys to business leadership," ership profiles for the new millennium," Fortune 118, no. 9 (1988): 19-26. Cortlpll Hotel and Restaumnt Administration l3 Cichy and Schmidgall, 68. Quarterly 41, no. 112000): 16-29. " M. Rokeach, The Nature of Human " W. G. Bennis, and R. J. Thomas, Geeks Values (New York: Free Press, 1973); M. & Geezers: HOU,Era, Values, and Defining Rokeach, Understanding Human Values: Moments Shape Leader (Boston: Haward Individual and Societal (New York: Free Business School Press, 2002). Press, 1979). *Bass (1985). 'q.G. Tabachnick and L. S. Fidell, '".Hogan, G. J. Curphy, and J. Hogan, Using Multivariate Statistics. 3rd ed. (New "What we know about leadership effective- York: Harper and Row, 1996). ness and personality," American Psychologist 'd Knutson, Schmidgall, and Cichy. 49, no. 6 (1994):493-504. " Tabachnick and Fidell. Knutson. Schmideall.", and Cichv... 11. Bennis and Nanus. 3' Ibid. '* TabachNck and Fidell. 1X Bennis and Nanus. Zo Roberts. " J. M. Kouzes and B. Z. Posner, The " Lahich. Leadership Challenge, 3rd ed. (San Fran- BennjS and Nanus. cisco: Jossey-Bass, 2002). ZS bid. 'O Testa. Knutson, Schmidgall, and Cichy. "Ibid. " Bennis and Nanus. Ronald Cichv is a director and ~rofessorh 17 Knntson, Schmidgall, and Cichy. the school o;~osp~al~y~usmn&s, Jmin 'WenNs and Nanus. Cha is a doctoral cand~datem the DeDart- ?' G. Yukl, A. Gordon and T. Taber; K. B. rnent of Communication with a specializa- Lowe, K. G. Kroeck, and N. Sivasubrama- tion in Hospitality Business; and Bonnie niam, "Effectiveness correlates of transfor- Knutson is a professor at the School of mational and transactional leadership: a Hospitality Business at Michigan State meta-analytic review of the MLQ literature," University Leadership Quarterly 7, (1996): 385-425.

58 FIU Hospitality Review /Fall 2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. Hospitality innovations: identifying successful practices

by Michael Ottenbacher and Brendan Gray

The authofs reoorton a survevof 185hospi- only critical for survival but it also tality managers to im/estigate-whidprocess creates a competitive advantage activities are related to the success of new hisPitalityinnovations. The results suggest for the organization'. Further- that successful new hospitality projects more, a way to ensure long-term result from a more holistic, systematic, and stability and profitability for professional approach to the innovation service firms is to constantly process. develop new services'. Although many hospitality firms recognize the importance of innovation, it is t the start ofthe 21st Centmy, not always clear how to create and hospitality organizations face design new hospitality services. Aan unstable and turbulent business environment because of Failure rate is high rapid changes in customer needs, Despite the importance of fierce competition, globalization, successfully developing innova- and technical innovations. These tions, the failure rate for new challenging business conditions service developments is alarming have led many hospitality firms to high. The success rate for new adopt more sophisticated marketing service projects is on average 58 techniques. In this context, the percent3, with four out of 10 new development of hospitality imova- services failing in the marketplace. tions could be seen as a fundamental Tlns results in wasted time, money, marketing activity that many hospi- and human resources4. Being tality fmsundertake in order to creative is not sufficient for success gain a competitive advantage. in new service development". Of The ability to develop and greater importance are effectively launch successful new hospitality designed structures and profession- services in the marketplace is not ally implemented processess.

--- -- Ottenbacher and Gray 59

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. Innovations are "the outcome of these approaches tend to follow the the innovation process, which can format of the Booz, Allen, and be defined as the combined activi- Hamilton model" which consists of ties leading to new, marketable the following seven steps: products and services andlor new formulation of new product/ production and delivery systems'." service development strategy In the broadest sense, the term "innovation" comes from the Latin idea generation innooare,meaning to make some- screening and evaluation thing newB. New hospitality service business analysis developments range from true concept development innovations, which are totally new-to-the-world services with an concept testing entirely new market, to fairly minor commercialization modifications of existing company services. Past researchYsuggests These steps can be divided into that most hospitality-related new three major innovation stages: pre- services are often modifications of development, development, and existing services. In this context, launch preparation. the terms innovation and new service development (NSD) will be Early stage defines strategy used interchangeably. The NSD process starts with the clear formulation of objectives Innovation requires blueprint and an NSD strategy, which leads According to Cooper and and directs the entire service devel- Edgett,lo the new service develop- opment activity. A product imova- ment process could be defined as a tion chart can be used as a strategy formal blueprint, road map, or statement, but a only few service thought process for driving a new hshave written NSD strategiesL5. service project from idea stage The sources of new service ideas can through to market launch and come from internal or external beyond. These process models, if sources, either formally or infor- applied in a disciplined way, help mally16. External sources of new firms improve effectiveness and ideas include customers, competi- efficiency of innovations so that tors, channel members, and trade scarce resources are not wasted1'. associations and shows. However, The use of new service process hospitality firms should not rely models will not necessarily guar- exclusively on external sources. antee success, but the use of a Front-line staff can be viewed as a model does increase the chance for logical source of ideas because of suc~ess'~. Service innovation their understanding of the service process models13 are based on new operation and customer needs. product development models and Since not all new hospitality

60 FIU Hospitality Revieur /Fall 2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. ideas can and should be developed, service delivery process. ShostackZ2 the objective of screening is to elim- suggests combining all three steps inate most suggestions and concen- by the use of a service blueprint, trate resources on those ideas that which is a flow chart that shows the have the best potential for success. main functions of the service, Because of thc intangibility of possible fail points and processes to services, whether an innovation correct these, and the relationship enhances or supports the organiza- between the front and back office. tion's image is a significant Blueprints aim to match service screening criterion because the new specifications to customer expecta- service has to uphold the corporate tions and to accurately portray the reputation. Further screening service system. A service blueprint criteria often include potential visually displays the process of competitive advantage, market service delivery, the point of size, development cost, price, ROI, customer contact, and the evidence market share, and other predeter- of service as the customer experi- mined "must have" or "would liito ences it. Customer actions, contact haven niteria17. employee actions, 'backstagen The business analysis stage employee actions, and support includes a detailed investigation processes are highlightedu. that defines the service and its requirements to become a Final stage involves testing successful project. The first part The final stage of the innova- consists of a customer analysis, tion process is the most expensive competitive analysis, and market and resource-intensivez4. Before research of potential consumer the launch, the commercial feasi- needs and want^'^. The second part bility of the new service concept is includes a financial analysis, like tested and validated. Market details on costs, revenue, and testing is often undertaken in an internal rate of return, to justify an effort to expose potential customers investment in new resour~es'~. to the new hospitality innovation and test its marketing strategy Stage develops service under near realistic purchase The development stage is the conditions in order to find out if, translation of an idea into an actual and to what extent, customers will service for the market2".It involves actually purchase. This provides three stepsz': first, service concept the organization valuable feedback development, that is, the descrip- about the new service and its tion of customer needs and wants; marketing program. The reluc- second, service system develop- tance of some service organizations ment, that is, resources required for to implement market testing may the service, including employees, be explained by the difficulty of service environment and adminis- patenting a service, with innova- trative structure; and, third, service tors fearing that competitors might process development, that is, the hear about thc new service being

Ottenbacher and Gray 61

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. tested and copy itzs. financial senices sector, while one The final stage of the NSD of the largest industries worldwide, process includes the implementa- the hospitality industry, has been tion of the market launch plan, the largely ignored. This study operations and delivery plan, and a addresses that gap by investigating post-launch evaluation of the new the successful innovation processes service projectz. With the help of an of hospitality services. effective evaluation system, which analyzes sales, market reactions, Success is defined and problems, managers can The literature review revealed benchmark the performance and five factors linked to successful new undertake necessary changes. service development processes. These factors are NSD pre-launch Process links to success activities, employee involvement, In the last two decades, several NSD process management, launch empirical studies have investigated preparation, and effective marketing the success and failure of new communication. A total of 31 items service developments". These to measure these factors were studies have tended to concentrate developed, based on a review of the on the development process. appropriate literature (see Tables 1 The use of a formal, complete, to 5).Aquestiomaire was then sent and proficient process is strongly to 480 German hotels listed in the linked to new service successza. 2000 Hotel Guide from the German Good communication among all Hotel and Restaurant Association. departments during the develop- The criterion for inclusion in the ment process, the support of top study was that the organization management, and the guidance of had developed new hospitality an experienced NSD manager are services over the past three years. also important". A lack of under- Like other success studies in NSD,33 standing of customers and competi- hotels were contacted by telephone tors has been linked to unsuccessful to identify potential respondents. outcomes30. Involving employees The questionnaire was prepared in throughout the NSD process is English and then translated into therefore doubly important because German, using the parallel-trans- of their knowledge of customer latioddouble translation method34. demands as well as their ability to The appropriateness of the ques- improve service quality. tionnaire was confirmed through Successful innovators are effective the evaluation of academics knowl- communicators who can raise edgeable about NSD and pretests customer awareness and convince with hospitality managers in customers of the benefits of the new Germany. Completed question- service32. naires were received from 185 However, the majority of these hospitality managers, representing studies have concentrated on the a response rate of 38.5 percent.

62 FIU Hospitality Review /Fall 2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. The sample of 185 new hotel suggests developers should conduct service projects was split into two market, competitor, and financial groups: successful and less studies, screen potential ideas, and successful new hotel service devel- assess senice elements and proee- opments, based on the mean aggre- dures. Furthermore, these process gate scores of the measures that activities should be formalized and examined NSD performance. The well structured to reduce the risk of literature suggests a cut-off point of 3.5 on a scale of 1to 5 when defining The results of the t-tests successful and less successful confirm that successful new hospi- project^;^' the natural break in the tality service developers incorpo- data supported a 3.5 cut-off. To rate research into customers'needs provide an overall measure of NSD and competitors' strategies. success, the average score on all 12 Furthermore, they undertake performance variables was market studies and a financial computed. This study measured analysis, and analyze service NSD performance along the elements and procedures before following dimensions: total sales, developing the innovations. In addi- market share, profitability, tion, successful new service devel- improved loyalty, improved image, opers professionally plan and enhanced profitability and sales of execute the whole NSD process. other hotel services, new markets, There appear to be no differences new customers, cost efficiencies, between successful and less customer satisfaction, positive successful service innovators with employee feedback, and competen- rcgnrd to screening the project at cies of employees. This procedure several stages of the process to resulted in 120 (64.9 percent) NSD decide if the project should be projects being classified as continued. It should be noted that successful and 65 (35.1 percent) the level of screening overall was NSD projects being classified as quite low. These findings are in line less successful. with previous studies in other T-tests were conducted to service sectors3@. Overall, the assess si@cant differences in the results of the t-tests suggest that mean responses on the 31 question- NSD pre-launch activities are naire items of successful and less important for the success of new successful NSD3E.A significance hotel service developments. See level of .05 was used for all tests. Table 1. A lack of input by employees, Planning is critical who have the skills and the experi- The first factor of the NSD ence in devcloping new services, is process relates to the process- one of the strongest handicaps to related activities in the earlier innovati~n~~.Employees can help to stages of the new service develop- identlfy customer requirements and ment process. The literature needs for new services, and their

Ottenbacher and Gray

- - -~~

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. Table 1 Comparison of successful and less successful projects on prelaunch activity items

Successful Less successful projects projects Dillerence Pre-launch activities Mean SD Mean SD T-value Sig --- - Well planned and executed development process - -- Customer needs and competitors strategies were researched Market study was ~- ~ndeltaker Financial analysis was done before the development of the new service Screening at different stages inthe 2.80 1.53 2.37 1.47 1.83 NS process to check if the project should be continued service ciicept included a detailed 3.26 1.24 2.80 1.30 2.30 .023 analysis of all service elements and procedures Measuredon a five-point scale: I= notat all; 5 =very well

involvement increases the chance of tion to the launch activities (see successful implementation because Table 2). On the other hand, there employees will probably treat are no differences between customers better'O. Furthermore, successful and less successful employee involvement in the service developers in regard to process also helps to focus more involving employees in idea strongly on the customer instead of generation or rewarding employees process efficiencies4'. However, for their involvement in NSD employees are oRen hesitant to get initiatives. It should be noted that involved in NSD activities because the extent to which employees this might enlarge their workloada. receive rewards for being involved One way to increase employee buy- in NSD was quite low for both in is to adequately reward staff for successful and less successful their NSD inv~lvement~. projects. The above observations The results of this study indi- suggest that there is moderate cate that successful new hospi- support that employee involve- tality service developers involve ment will positively impact the employees in the planning and performance of new hotel service design of the new service, in addi- developments.

64 FIU Hospitality ReuiewlFall2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. Table 2 Comparison of successful and less successful projects on employee Involvement in process items

Successful Less successful projects projects Diflersnce Employes involvement Mean SO Mean SD 1-value Sig -p Involve employees in idea generation 3.12 1.48 2.77 1.33 1.57 NS ------Involve employees in planning and 3.75 1.22 3.15 1.19 3.16 ,002 design of the service ------Involve employees---- in launch activities 3.82 1.23 3.30 1.23 2.71 ,007 Give rewards to employees involved in --the development'-- -- 2.25 1.31 1.90 1.22 1.73 NS Measuredon a five-point s,mle: I= notatall: 5; to a great Merit 'measuredon a five-pointswle: I=no rewards foremployees; 5 = h~ghrewards for employees

Previous studies suggest that likely to be guided by a motivated, successful new senice development enthusiastic, and experienced depends on getting the necessary leader and by a clear, wellcommu- commitment from management nicated strategy and vision. and employees in different depart- Furthermore, successful projects ments by creating a supportive and are more likely to occur in an inno- innovative environmentM. This vative environment that enhances includes having a product cham- employee involvement and where pion to promote and guide the management provides strong and whole development and a formal visible support. Although successful team that effectively develops the innovator8 are more likely to utilize new ~ervice'~.Successful NSD a formal development team, it projects exhibit a high level of coor- should be noted that the extent to dination and communication". which all hospitality services use Furthermore, successful projects this is not particularly high. The appear to be guided by a clear, well- results suggest, therefore, that communicated strategy and vision, successful new hotel developments and by management who strongly benefit from effective process and visibly support the pmject4'. management. The results of this study Launch preparation includes suggest that successful hospitality activitics at the final stage of the firms are significantly more likely development process such as to have good communication and internal marketing of the project, coordination between management training of employees, final testing, and employees and between and developing procedures to eval- different departments (see Table 3). uate the performance of the NSD. Successful innovations are more Althuugh the literature stresses the

- Ottenbacher and Gray

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. Table 3 Comparison of successful and less successful projects on process management items

Successful Less successful projects projects Difference ------Process management Mean ---SD Mean SO T-value Sig Good communicationand coordination 4.16 0.91 3.65 101 3.46 ,001 between management and employees

pp------ppp Good communication and coordination 4.18 0.82 3.55 1.02 4.22 ,001 between departments ------~ ------Motivated, enthusiastic and experienced 4.15 1 .OB 3.73 1.27 216 ,033 person guided the whole development

------process ----- Management created an innovative 3.63 1.34 3.15 1.07 2.75 ,006 environment to enhance employee involvement .------Management placed strong and visible 4.49 0.88 4.07 0.90 3.04 003 support beh~ndthe service ------p---ppp Service was developed by a formal 2.93 1.56 2.28 1.34 2.74 ,007 development team

--~----~~~-p~p Process was guided by a clear, well- 4.14 0.81 3.47 1.10 4.21 ,001

communicated------strategy and vis~on Measured on a five-point Scale: I= not at at5 =very well

significance of testing innovations successful new service developers before launch, service firms tend are more likely have procedures to not to do thisa. evaluate the performance of the project. On the other hand, there Marketing is successful appear to be no differences between The results of this study successful and less successful inno- suggest that successful new hospi- vators in tcrms of developing a tality service developers have formal launch plan and testing the significantly higher levels of service before the launch. It should employee commitment, motivation, be noted that the extent to which a support, and training, and formal launch plan is developed employees are more likely to under- and the new scnicc is finally tested stand the details of the service (see was not particularly high for both Table 4). Effective internal successful and less successful marketing to employees supports projects. Based on these results, it these higher levels of commitment can be concluded that launch and motivation. Furthermore, preparation is moderately impor-

FIU Hospitality Review /Fall 2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. Table 4 Comparison of successful and less successful projects

Successful Less successful projects projects Dinerence Pre-launch activities Mean SD Mean T-value Sig SD -- Employees understand and support 4.18 0.72 3.83 0.92 2.82 ,005 the new service when launched (1) ------Commitment of employees when 4 27 0.69 3.77 0.83 4.36 ,001 bunching new service (2) -- - - Motivation of employees when 4.28 0.74 3.80 0.82 4.00 ,001

launching new service (3) -- Extensive training of employees 3.74 1.14 3.07 1.16 3.77 001 involved in the new service Internal market'ig of new 4.18 0.98 3.75 0.89 2.84 ,005 service to employees Anal Testing 3.10 1.39 2.75 1.31 1.65 NS ~ ------Development of aformal 3.28 1.29 2.92 1.25 1.81 NS launch program Procedures that evaluate performance of the service

Measuredon a five-oointscale: I=notatali: 5 = verv, well:... /I1 measuredona fiive-oointscale: I=notatak 5= to a great extent: (2) measuredon a tive~poatsca~e:I= iowcommitment- 5= high commitment: (3) measured on a five-point scale: I= low motivation; 5= high motivation

tant for successful new hospitality largely intangible, the potential service developments. benefits have to be clearly explained, as customers cannot Marketing is necessary try or test the service before they It is not sufficient to create a purchase it''. new service and announce it The research results suggest exists. Even the best products and that successful new hospitality services don't sell themselves, service developers have a more which means NSD should be distinctive position in the market supported by a strong marketing thanks to well-targeted adver- communication strategy to create tising and promotion (see Table awareness and interest among 5).Furthermore, their campaigns potential customers. Advertising are more effective than competi- and promotion must be well tors' and are significantly better targeted so the new service has a at informing journalists, guides, distinctive position in the targeted and magazines about the project. market'9. Because services are Successful communicators are

Ottenbacher and Dray

- - --

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. Table 5 Comparison of successful and less successful projects on effective marketing communication items

Successful Less successful Effective projects projects Difference marketing communication Mean SD Mean SD T-value Sip

--p---pp------Advertisinglpromotion was well targeted 3.46 1.25 2.82 1.21 3.30 .001

~ Advert./promo. Campaign was more effective than for services from competitors 3.01 1.27 2.38 1.25 3.14 ,002 ---- ~p~pp----pp-- New service had a distinct position 3.54 1.23 255 1.20 5.19 ,001 -p---p~ ------inform hos~ital'itviournaiists/ --- . ----,. ------guideslmagazine 3.29 1.52 2.67 1.28 2.90 ,004

p- -- Customer awareness of the service was raised 3.64 1.10 3.15 1.20 2.75 ,007 ------Benefits of the service were well explained to the customers 3.94 1.12 3.43 1.14 3.40 ,001 Measured on a five-point scale: I= not at all; 5 = very well

also more likely to raise customer strated by the t-tests, hotels with awareness and explain the bene- a more market-led and formalized fits of the service. process tend to be more successful at developing and launching new Success can be improved hospitality services. Thus, the The primary goal of this study results emphasize the need for a has been to gain a better under- planned, systematic, and well- standing of how successful new executed hospitality development hospitality innovations are devel- process. This NSD process should oped. This has been accomplished include the following: by investigating the development realistic analyses of the envi- activities of German hotels. The ronment and potential project results provide a number of impli- before developing the new hospi- cations for hospitality scholars tality service and for hospitality managers incorporation of employees involved in innovation projects. from different departments and Hospitality firms are not levels in the innovation process immune to the high failure rates a supportive and innovative of NSD; however, this study has corporate environment identified ingredients in the staff training and internal development process that can marketing so that employees are help improve success. As demon- highly committed and motivated to

68 FIU Hospitality ReuiewlFall2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. support the new service offer when such as pre-launch activities, it is launched process management, launch effective communication of preparation, and effective commu- new service benefits to target nication are critical activities for customers, because even the best both financial and hospitality inno- hospitality services don't sell vators. Additional research is themselves. needed to assess whether the results are unique to the German This investigation has shown hospitality industry or apply in that success and failure in new other national country contexts. hospitality service developments is not the result of managing one or References two activities of the devclopment ' R.G. Cooper and S.J. Edgett, Product process. Rather, successful new Development for the Service Sector hospitality projects appear to result (Cambridge: Persew Rooks, 1999). from a more holistic, systematic, 'P Papastathopoulou, G. Avlonitis, and K Indounas, "The Initial Stages of New and professional approach to the Senice Devela~ment:A Case Studv from the innovation process. Another major Greek ank king Sector," Journal ofinancia1 implication for hospitality Semices Marketing 6,110.2 (2001): 147-161. A. Griffin, "PDMA Research on New managers is that research from Product Development Practices: Updating other service sectors might offer Trends and Benchmarking Best Practices," valuablc insights that could help to Journal of Product Irrnovation Management 14,110.6 (1997): 429-458. increase the success rate of hospi- ' Cwper and Edgett. tality innovations. ' U. de 9rentani:Wew Industrial Service &though this study has shown Development: Scenarios for Success and Failure." Journal of Business Research 32 the importance of process-related (1995): 93-103. activities in the development of E.E Scheuine and E.M. Johnson 'A successful new hospitality services, F'roposed Model for %eew Service Develop- ment," The Journal of Services Marketine it does have limitations. The study " 3. n0.2 (1989):25-34. has been conducted in only one ' R.A. Burgelmann andM.A. Maidique, national context, Germany. In addi- Strategic Management of Technology and tion, the research included only Innovation (Chicago: Irwin, 19961: 2. ' J. Tidd, J. ~essantand K Pavitt, managers' perspectives. Future Managing1nnovatlon:lntegrating Techno- research should investigate if the logical, Market and Organizational Change findings from this study are appli- (New York: John Wdey and Sana, 1995j. cable to other countries and should M. Ottenbacher and V Shaw, 'The Role of Employee Management in NSD: Prelimi- explore the views of employees or nary Results from a Study of the Hospitality customers. Sector," 2002 F'roduct Development and The major implication for Management Association (PDMA) Research Conferonce, Orlando, USA: 109-133. service innovation theory is that "Cooper and Edgett. the findings from the financial -' T.D. Kuczmarski, Managing New scnices sector appear lo have some Products - Curripeting Through Excellence (Englewood Cliffs: Prentice Hall, 19881. relevance to the hospitality sector. " Cooper and Edge%. In particular, process activitics " M. R. Bowers, "The New Product

- - Ottenbacher and Gray

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. Development Process: A Suggested Model for Developing New Business Services," Euro- Banks," Journal ofRetail Banking 8, nos. lJ2 pean Journal of Marketing 25, no. 2 (19911: (19861: 9-24; Scheuing and Johnson. 33-59. Bwz, Allen & Hamilton, New Produd 34 G. J. Avlonitis, F'G. Papastathopoulou, Management for the 1980s, (New York: Booz, and S.P. Gounaris, "An Empirically-Based Allen, and Hamilton, Lnc., 1982). Typology of Product Innovativeness for New 'j S. A. W Drew, "Accelerating Innova- Financial Services: Success and Failure tion in Financial Services," Long Range Plan- Scenarios," Journal of Product Inmuation ning 28,no.4 (19951: 11-21. Managemerrt 18 (2001): 324-342. '6 Scheuing and Johnson. 35 P. Doyle, J. Saunders and L. Wright, " C. M. Crawford and C. A. Di "Competition in Global Markets: A Case Benedetto, New Products Management, 6th Study of American and German Competition rd. (Boston:~~-~ Mdraw Hill. 2000). in the British Market." Journal oflnterna- C,IOPPTmd F.dg,.tt. 1~1t~~d. trorrol Hu*tnc,,~sStudr, 23, no 3 r 1992 . 119- D U' Cuwell. *Yew dcr, ~rrIkvelon- 4-12 \ Shaw -The Yirketin~.StrateM~,s and ment," Journal of Marketing 3,110.3 (198il: ~r&isatiokl characteristies of ~ricshand 296-312. German Companies -A Study of the Machine B. Edvardsson and J. Olsson, "Key Tool Market," European Journal of Concepts for New Service Development." The Marketing 28, no.7 (1994):30-43. Service Industries Journal 16. 110.2 11996): 3r J. F Hair, R. E. Anderson, R. L. 140-164. Tatham, and W.C. Black, Multiuariute Dota 22 G. L. Shostack, "Designing Services Analysis, 5th ed. (Upper Saddle River, N.J.: That Deliver," Horuard Business Reuiew Prentice Hall, 1998); S. Sharma, Applied (January-February 1984): 133-139. Multiuariate Technique (New York: John 23 V A. Zeithad and M.J. Bitner, Seruice W~leyand Sons, 1996). Marketing: Integrating Customer Focus S. Edgett, "The Traits of Successful Across theFinn (Boston: McGraw-Hill, 20001. New Service Development," Journal of " U. de Brentani, "Innovative Versus Services Marketing 8,110.3 (1994):40-49. Incremental New Business Services: S%id. Different Keys for Achieving Success," 39 Drew. Journal of Product Innouation. Management B. Schneider and D. E. Bowen, 18 (2001): 169-187. Winning the Service Game (Boston: Hamard 25 M. R. Bowers, "Developing New Business School Press, 1995). Services: Improving the Process Makes It 4' bid. Better," Journal ofseruices Marketing 3, no.1 Scheuing and Johnson. (1989): 15-20. " Edvardsson and Olsson. 26 Cooper and Edgett. de Brentani (19911. " U. de Brentani and R.G. Cooper, '"tuahene-Gima. "Developing Successful New Financial Edgett. Services for Businesses," Industrial " Ibid. Marketing Managenlent 21 (1992): 231-241; Cooper, Easingwood, Edgett, Klein- R.G. Cwper, C.J Easingwwd, S. Edgett, E.J. schmidt, and Storey. Kleinschmidt, and C. Storey, "What Distin- " Ibid. guishes the Top Performing New Pmducts in "A. Johne and C. Storey, "New Service Finaneial Services," Journal ofPmduct h~no- Development: A Review of Literature and uation Manngement 11 (19941: 281-299. Annotated Bibliography,"European Journal " Scheuing and Johnson. ofMarketing 32 (19981: 184-251. 19 K. Atuahene-Gima, 'Differential Potency of Factors Affecting Innovation Performance in Manufacturing and Services Michael Ottenbacher is a professor in Firms in Australia," Journal ofMuct Inno- the School of Management at the Univer- uationManagenlent 13 (1996): 35-52. sity of Surrey and Brendan Gray is an 30 Cooper, Easingwood, Edgett, Klein- assoc~ateprofessor and director of the schmidt, and Storey. Marketing Performance Centre at the Drew. University of Otago. 32 Cooper, Easingwood, Edgett, Klein- shmidt, and Storey. " U. de Brentani, 'Success Factors in

- FIU Hospitality Review /Fall 2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. Smoking restrictions, bans rise in hospitality industry

by Reidar J. Mykletun

With the rise of smoking restrictions and with tabletop lighters, and there bans in the hospitality industrx the author were few smoke-free zones.' discusses solutions that are implemented to protect the wokforce andguests from invoi- Ashtrays were found in untary smoking. Historical and societal private homes, offices, and, of contexts are drawn, and enforcement of course, restaurants, where smoking bans as well as their economic ~mpact-,s explored 811 dri lriternaNonal owners and employees wanted to eerspecr~vepnmar~ly slnce US researchers provide the best hospitality and have oro~elledthe research on smokina service to their customers. and hLah issues. The author illustrates th; Smoking was an integrated part there has been no wav to amid enforce- ments of strict smoking>estrictbns, and the of the meal experience in restau- struggle to do so could just delay the rants, and even morc part of the process and waste resources. total ambience of bars and pubs. The first research article demonstrating smoke-related igarette and cigar smoking health risks appeared as early as has traditionally been seen 1906, and from 1930 to 1949 a few Cas glamorous. Kelly noted scientific papers were presented celebrities smoked, and hawked almost every year.' A major cigarettes, adding to their glam increase in published studies on image. As early as 1929, PR man smoking and health issues is Edward Bernays puffed up sales by noticed from 1950 onward. At the hiring women to pose as suffragists forefront of this process were U.S. smoking cigarettes while parading researchers; the world outside the down New York's chic Fifth Avenue; U.S. learned From them. decades later, Viginia Slims would In 1953 great publicity was target feminists with the same given to an experiment reported message: Modern independent from the Sloan-Kettering Institute women smoke.. .. Brides were gifted which succeeded in inducing cancer

Mykletun

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. in rats by painting their backs with today's Norway, the levying of tars from cigarette smoke. The special tobacco taxes has increased number of popular articles on the the price for 20 Camel cigarettes to issue increased rapidly. Among the more than US$10. In hindsight, it most influential was Miller and is fair to claim that the restaurant Monahan's lead article in Reader's industry should have foreseen this Digest in July 1954. A sharp drop upcoming change and been pro- in cigarette consumption was seen, actively meeting this new situation. but in 1955 consumption was again Lack of adaptive capacities in the on the rise. industry will appear as an even a The first congressional hear- more serious problem when consid- ings on smoking and health in the ering the research on passive (invol- U.S. occurred in 1957, and in 1962, untary) smoking. the important Advisory Committee on Smolung and Health was estab- Passive smoking is hazard lished and presented its report in Ambient smoking, also called January 1964, stating that: involuntary smoking, passive Cigarette smoking is a health smoking, second-hand smoking, or hazard of sufficient importance in side smoking, refers to the tobacco the United States to warrant imme- smoke that contaminates the atmo- diate action. Cigarette smoking is sphere in the area where smoking casually related to lung cancer in takes place (also called environ- men; the magnitude of the effects of mental tobacco smoke). The docu- cigarette smoking far outweighs mentation of ambient smoking other factors. The data for women, health hazards led to a second although less extensive, points in important turn both in consumer the same direction! behavior and in legislative policies. The report created shock Research on this problem lagged waves, and tobacco consumption behind that of active smoking. In decreased. By the mid-'GOY, 42 1972, the U.S. General Surgeon percent of the adult U.S. population passed a second report summa- smoked, dropping to 23 percent in rizing research based on evidence 2001.' An extensive list of efforts from 1957 onward which concluded has been undertaken to reduce the that atmospheres contaminated ill effects of smoking on health. with tobacco smoke might be suffi- Advertising was abandoned by a cient to harm the health of the large segment of the media persons exposed to it. The length throughout most of the Western and density of exposure determines world. Additionally, tobacco was the health hazards." labeled with notes of warning about Statements like this had a health hazards. Some states and great impact on smoking policies, nations introduced special taxation but still the restaurant business did on tobacco to reduce the request for not react. United Airlines was the the products. For example, in first airline to introduce separate

72 FIU Hospitality Review /Fall 2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. cabin areas for smokers and compared to blue collar workers. nonsmokers in April 1971. Later Restaurants and hotels were among that year the U.S. Interstate the industries to be least likely to Commerce Commission limited have smoking bans. The rapid smoking to the last five rows on growth in smolung bans, however, interstate buses. Canadian federal was between 1988 and 1993.8 authorities were the first to impose a national ban on smoking on all Documentation grows Canadian airlines due to health The smoking restriction trend risks for the cabin crew. gained more fuel as researchers In 1973, Arizona was the first continued to build massive docu- state to introduce smoking prohi- mentation of the effects of passive bition laws, thus protecting the smoking. In 1995, 26 out of 33 non-smokers in public areas such published epidemiological studies as elevators, theaters, libraries, linked second-hand smoking to lung museums, art galleries, and cancer, and so did six different meta- buses. In 1975, 48 U.S. states analy~es.~In 2002, The World passed legislation on cigarette Health Organization (WHO) insli- smoking- and tobacco produ~ts.~tute IARC concluded that environ- Soon smoking bans in parts of the mental tobacco smoke causes cancer Western world were to be and coronaryheart disease. '" enforced in public places and The health hazards of passive later in workplaces. Generally smoking are higher than commonly speaking, however, Europe believed. Mainstream smoke is that lagged behind the U.S. which is inhaled by the smoker. A In 1989, the European Commu- leisurely smoked cigarette takes nity passed EC Resolution seven to 10 minutes. The smoker is 89IC189101 recommending that all inhaling the smoke from his membership states prohibit cigarette for only approximately 20 smoking in indoor public areas. seconds (about 1percent of the time Membership states have gradually it takes to smoke one cigarette), and followed these recommendations, burning about 50 percent of the but with a variety of firmness and tobacco. The remaining 50 percent restrictions. England and Germany of the tobacco burns and produces still constitute exceptions, having smoke for the atmosphere around no national restrictions on the smoker for 99 percent of the smoking. Australia enforces time the cigarette is lit. This side smoking restrictions at territory stream is what contaminates the levels. For instance, in Victoria atmosphere and exposes the acci- state, workplace smoking bans dental bystander to passive faced 17 percent of the workforce in smoking. Added to this is the smoke 1988, increasing to 66 percent in that the smoker is breathing out, 1995, with white collar workers and the gasses diffused through the enjoying a higher rate of protection paper of the cigarette. Moreover,

Mykletun

- -

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. during 99 percent of the time that turned into important work environ- the smoker is not inhaling his ment issues. Even though it may be smoke, the tobacco burns with a argued that the restaurant business lower temperature and less oxygen. is unique, health issues should be It means that the increase of nico- given priority. Moreover, guests were tine and cancer-inducing tar also victims of passive smoking, but components in the smoke around is the risk of not being overly attractive three times higher, while the to non-smokers was not paramount concentration of the cancer- in the arguments posed by the hospi- inducing benzene is increased from tality business. five to 10 times. Also, the Research has focused the nitrosodimetylamine is increased effects of tobacco smoking on the from 20 to 100 times. Filter-tipped working environment and its cigarettes make no difference impact on restaurant staff. Brauer regarding the side stream smoke. and Mannetje reviewed three studies comparing restaurants Employees feel impact and other areas regarding environ- Research has documented that mental tobacco smoke. In general, non-smoking employees in restau- restaurant areas showed higher rants may have an impact from side concentration of environmental stream smoke equal to smoking 2.5 tobacco smoke than public and cigarettes when it comes to nicotine office buildings where smoking levels, and 15 to 25 cigarettes when was allowed; likewise, bars talking about nitrosodimetylamine. showed higher concentrations For non-smokers, immediate effects than restaurants. In their own may be observed in several parts of study they assessed the effects of the body, including blood capacity three different conditions (non- to transport oxygen and changes in smoking, restricted areas, and the inner cells of the veins. In fact, unrestricted) on indoor restaurant non-smokers exposed to passive atmospheres in Vancouver. As smoking share all the negative expected, they found that environ- health effects of the active smokers, mental tobacco smoke concentra- including lung cancer (estimated tions were higher in the risk increase of 14 to 30 percent), unrestricted restaurants, as were respiratory organ diseases, and the number of cigarettes smoked, heart attack." compared to non-smoking areas in Estimates like these have been restricted restaurants. The differ- heavily criticized for the uncertain- ences between the latter and the ties that are present in the models smoke-free restaurants were small used," but the results are supported due to a certain amount of particu- by epidemiological studies.'qe lants probably spread from the hazards of passive smoking led to kitchen area into the non-smoking debates and concerns about the area. They concluded that "data health of the workforce and were indicate the potential for high

74 FZUHospitality Review /Fall 2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. particular exposures in restau- among all occupations in Norway, rants and suggest that additional and they also rank top in risks of measures, combined with smoking- cancer in general, and lung cancer restrictions, are required to reduce in particular. The same has been exposure." "According to Robinson observed in the U.S. In the year and Speer, the exposure to atmo- 2000, the Supreme Court in spheric tobacco smoke is four times Norway supported a claim against higher than average at restau- a restaurant company from a rants and 10 times higher in bars female bartender who for 15 years and lounges as compared to office had been exposed to passive ~orkplaces.'~ smoking while working in a bar and developed lung cancer. The effects Workplace danger high of passive smoke on her develop- Three different studies on ment of cancer were estimated to be atmospheric smoke levels were 40 percent, while her own consump- undertaken in Norwegian restau- tion of 10 to 15 cigarettes per day rants from 1997 - 99. They showed was estimated to contribute by a great variability in levels of atmo- maximum of 60 percent. This was spheric nicotine. The highest levels the first case of its kind at the were observed in unrestricted Supreme Court, and as such it smoking areas, while lower levels constitutes a standard for future were observed in the non-smoking trials. The situation definitely areas. However, in the latter, some called for firm action, and the areas were as intoxicated as the debates on smoking bans were unrestricted areas. In their propo- intensified. sition for a new law on smoking in With such evidence, it would be restaurants the Ministry of Health unethical to continue exposing the and Social AfTairs claimed that restaurant workforce to such a restaurant staff is exposed to very hazardous working environment. high concentrations of nicotine in In Norway, it would also be illegal the atmosphere in the workplace, since the Working Environment Act with consequent risks for devel- states that the workforce should not oping cancer. They estimate that be exposed to threats to life and each year a minimum of 22 out of well being as they relate to working 1,000 staff, on average, would die conditions. from this intoxication. They further Indeed, the hospitality business claim that the estimate might well was lagging seriously behind other be a conservative one, and for some industries in imposing restrictions especially intoxicating bars, the on smoking, and also in other work- risk may reach 22 out of 100, as it place health and safety issues. The has also been estimated in research image of the serious workplace studies from the U.K. and Ireland.'= could be at stake. It was also The restaurant workforce has the obvious that stronger measures shortest life span expectancies had to be taken by central authori-

Mykletun 75

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. ties, since the worldwide hospitality among these are 25 percent business refused to change its allowing smoking in separate smoking policy. The industry rooms with sufficient ventilation argued that strong restrictions systems. The remaining 75 percent would reduce sales due to fewer are total bans. Miami, Florida, was visits and shorter stays, resulting the latest newcomer, introducing a in a reduced number of pre-di~er total ban on restaurant smoking in drinks, less wine with meals, fewer 2004. Some areas, such as Mesa, desserts and coffees, and fewer Arizona, allow hardship exceptions after-dinner drinks. for bars demonstrating a significant loss of sales due to the ban. States pass laws Similar to the U.S., Canadian In the United States, authori- states are entitled to impose regu- ties at the state and municipal lations on the restaurant business. levels may impose smoking restric- Since 2002, British Columbia has tions on restaurants. For instance, claimed that restaurants allowing California was the first state to smoking can do so in separate enforce a restaurant smoking ban rooms, and that the workforce may in 1995. In 1998 it was extended to work inside these rooms a include all facilities serving guests maximum of 20 percent of their food or drinks. The protection of the working hours. Ottawa enforced a health of the workforce was the general smoking ban for all public main argument used. Violators of places, including bars and restau- the law were fined. The effective- rants in 2001. ness of the law is claimed to be Australia also has the same about 90 percent. Delaware decentralized system for regulating enforced similar bans in 2002. smoking in restaurants. The However, before California, restrictions vary from state to state, Flagstaff, Arizona, was the first and depend upon the type of service city to go smoke-free in restaurants provided by the restaurant. in 1993. No average negative effects Although fines are applied to were observed for the business' enforce these regulations, the effec- total revenue in that area; 56 tiveness is not as expected. In New percent of the operations were Zealand, the Smoke Free Environ- stable with regard to sales.I7 ment Act in 1990 established at In 1995, New York City least 50 percent of the restaurant enforced smoking bans for restau- tables and casino areas as smoke rants with a seating capacity of 35 free; however, a total ban has now or more, but accepted smoking in been proposed. separate bars, outdoors, and in lounges where food was not served. Europe is different A high number of municipalities For Europe, the picture looks and cities have enforced smoking entirely different. Sweden is bans in restaurants and bars; proposing a partial ban in 2005, but

76 FIU Hospitality Review /Fall 2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. allows special rooms for smokers. Health and Safety Commission has Finland has had regulations since recommended an all-out smoking 2001 requiring 50 percent of the ban in workplaces and other public restaurant area to be smoke free. In places, including restaurants Iceland people have been legally where dining occurs. The Govern- entitled access to smoke free envi- ment Chief Medical Officer has ronments since 2001, which include called for such a ban. The director smoke free zones in restaurants of public health in the West and other areas operated for Midlands, Rod Griffiths, has entertainment. argued that Birmingham, the The pressure to prohibit second biggest city in the U.K, smoking in public areas has should follow the example set by reached the United Kingdom as New York City. However, the pub well. In the U.K., politicians, hospi- and hospitality business is lobbying tality and restaurant associations, against the ban and has so far been and health organizations have been effective in its efforts." debating the issue, and in 1995 the Courtesy of Choice Program was Some have total bans launched hoping to avoid the Only two of the smallest Euro- tension that enforcement of legisla- pean countries have instituted total tion had provoked in the U.S. The smoking bans for the restaurant idea was to provide effective venti- business. Ireland was the first to lation for smokers and non-smokers abandon smoking on March 29, in the same area, while avoiding 2004, as a part of smoking ban law smoke going into smoke-free zones. imposed on all workplaces and However 53 percent of the restau- public places, including restau- rateurs conceived the solution as rants, bars, and pubs. The ultimate impractical, while 29 percent goal was to make Ireland smoke claimed they would have to free. Especially for the restaurant redesign their installati~ns.'~ business, the enactment was moti- Cuthbert and Nickson,lg vated by the reduction of health applying a qualitative approach, hazards for the workforce; 80 observed that some U.K. restau- percent of this population, as well rants went smoke free and took as 60 percent of smokers and the advantage of their strategy by Restaurant Workforce Union, competing with mainstream supported this total ban. The restaurants still allowing smoking. Licensed Vintners Association These smoke free restaurants (owners' association) tried to delay would not appreciate a smoking the enactment, but has lately urged ban, destroying their newly its members to abide by the law. acquired competitive advantage. Different solutions have been More than 60 percent of U.K. citi- proposed to get around the smoking zens are expected to support a ban, for instance patios with covers restaurant smoking ban. The and heaters, and a "Happy

Mykletun. 77

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. Smoking Bus" parked outside the In 1988, however, the Ministry pub where guests may enter with got Parliament's support on their drinks and have their proposing "...in the near future, cigarettes. Herbal cigarettes are the hotel and restaurant industries selling well as they are not will constitute only smoke free banned.2l areas." Three years later the regu- Norway followed Ireland with lations were gradually sharpened enforcing a total smoking ban as of by requiring sufficient ventilation, June 1,2004.There have been big 50 percent of the tables in smoke- debates with the hospitality associa- free zones, smoke-free areas to tions and the tobacco industry access the smoke-free zones, and defending the current practices. also smoke-free zones at the bar Unlike Ireland, however, Norway counter and counters where food has debated the issue for 30 years, was ~erved.2~ allowing a slow adaptation to the In June 2004, a total smoking new situation, and also placing ban in Norwegian restaurants went Norway as a forerunner in the into effect, 14 years since it was first smoking ban development process in announced by the government. Europe. The first law on protection Referring to the Work Environment against tobacco damages was passed Act, the main reason was to reduce as early as 1973, aimed at making health hazards for the workforce, Norway a smoke-free society. The but also to shelter guests from motivation behind the approach was passive smoking. The law was to reduce health risks for smokers by expected to reduce smoking in eventually getting rid of all tobacco general, especially by abolishing an smoking in the country arena where the youngsters were Results from research on health exposed to a social setting that hazards due to passive smoking dragged them into smoking. made the Ministry of Health and Both patrons and restaurateurs Social -airs issue new regulations were surprised and aggravated in 1988 instituting a general when the ban actually was smoking ban for all public trans- proposed. The Hotel and Restau- portation areas, workplaces, rant Workers Association meeting rooms, institutions, and supported the ban, arguing that places accessible to the public, this was the only acceptable where more than two people gath- strategy to protect the workforce ered. The focus had now shifted to from the hazards of passive health hazards for non-smokers.An smoking. A similar stand was taken exception was made for restaurants by 107 organizations who voiced and bars, allowing them five years their opinions during public hear- to organize their indoor space with ings. Central among these were the at least one-third of the tables, and Public Health Services and other the common public areas as smoke- organizations working with health free zones. issues; 11 opposed the ban,

78 FIU Hospitality Review /Fall 2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. including the Norwegian Hospi- largest consumer group, spending tality Association. They advocated most on dining overall. The second smoke-free zones combined with single group, 27 percent of the ventilation systems and "air sample, consisted of non-smokers curtains" to protect both the staff who could tolerate smoking and and non-smoking guests, while also would not actively avoid restau- being able to senrice both of these rants where smoking was allowed; groups. Separate smolung lounges this group reported a minor with self-service drinks were not increase in their patronage. seen as an alternative by the asso- On the opposite side were three ciation. Moreover, they argued for a groups of smokers. Their customer governmental inspection system to behavior changed after the license the operations for smoking, smoking was imposed; they and that operations not meeting reduced their frequency of dining the requirements should he smoke out, and changed from "dining" to free. Tobacco companies also "eating" in the sense that they opposed the proposed ban, as did spent a shorter time at the restau- five muni~ipalities. rant. Those who would adapt and obscrve the rules (10 percent) Guests react differently reported dining out slightly less As illustrated by Corsun and frequently after the ban. Those coworkers in the New York City who would avoid restaurants study? a smoking ban is likely to where smoking was prohibited (6 change the patterns of restaurant percent), and who were the biggest patmnage, but it still remains open spenders per meal, showed a sharp whether the total economic effects drop in dining out; the violators (11 will be negative, zero, or even posi- percent) who would not observe the tive, and also which conditions will rules and who were the biggest benefit the individual restaurant, spenders per week also reduced bar or pub. As smokers constitute a their number of restaurant visits, minority of the population (about 23 but increased their patronage in percent in the U.S. and higher in stand-alone bars. European countries),it is likely that Of the non-smokers, 77 restaurants could please a majority percent were in favor of the law, of the population with a ban. compared to 13 percent of Corsun and coworkers profded smokers; 21 percent of non- restaurant patrons into five cate- smokers believed that the ban gories: The largest single group, 47 would harm the restaurant percent of the sample studied, were industry, compared to 68 percent non-smokers who could not tolerate of smokers. Smoking bans in smoking and would avoid restau- taverns and bars received only rants where smoking was allowed. limited support from all groups of After the ban they dined out more patrons. Thus, smokers and often than before. This was the non-smokers differ radically

Mykletun

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. in their attitude toward the opposing smoking bans in change, although 60 percent of Massachusetts for more than 20 smokers believed that second- years has been documented?' hand smoking was hazardous to In a study of attitudes toward one's health. Also of interest is the smoking bans in fast-food restau- fact that the New York City restau- rants, only 22 percent opposed the rant smoking ban led to the publi- ban, while 54 percent strongly cation of two guides on dining out favored a ban. Again an effect was with smoking in the ~ity.2~ observed from the regions researched: 72 percent of San Other regions are similar Francisco residents were positive, The findings from the Corsun while only 41 percent in the study are well in concert with find- tobacco region of Greensboro, ings from a study on a random North Carolina, favored it. Near sample of Massachusetts's citi- one fourth of fast food restaurant zensZ5 reported by Biener and visitors would be likely to visit a Siegel; 30 percent of their respon- restaurant more frequently if a dents predicted increased use of smoking ban was in place, as restaurants and 20 percent compared to 16 percent who would increased patronage of bars if a most likely avoid the place.2R smoking ban was imposed. In A study of a random sample in contrast, 8 percent announced a Norway found that 55 percent of reduction in visits to restaurants, respondents reacted positively and 11 percent would reduce their toward smoke-free bars and pubs, bar stays. Moreover, 40 percent and 70 percent would sustain their reported having avoided bars or patronage of restaurants if smoke restaurants because of second- free; 11 percent would increase hand smoke, as contrasted to 8.5 their restaurant patronage. percent having avoided bars or However, 50 percent of respon- restaurants because of their non- dents under the age of 30 were smoking policy. They concluded quite negative toward having that they had found a potential smoking bans in bars; 54 percent of market for restaurants and bars smokers and 77 percent of non- wanting to attract non-smoking smokers thought of separate clientele. smoking rooms without waiters as In general, smoking bans have a good alternative to smoking gradually gained support from bans.2g Even smokers dislike U.S. citizens over the years.2"esi- staying in rooms filled with tobacco dents in the tobacco belt are less smoke."More often smokers also likely to favor smoking bans, as prefer to breathe smoke-free air are whites, the less educated, and when not actually engaged in those with lower incomes. Coopera- smoking; additionally, there is tion between the tobacco industry reason to believe that passive and the restaurant business in smoking constitutes an additional

80 FIU Hospitality Review /Fall 2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. health risk for active smokers" as policing strategy leads to leniency well. From a consumer behavior regarding the enforcement of the perspective it is obvious that law. Restaurateurs might be restrictions and bans on smoking caught in a high-risk situation of will change patronage of bars, losing customers when strictly pubs, and restaurants. The enforcing the ban. Smokers average turnover for the business violating the law reported that may be stable or even increase, the complaints came from other but it is likely that some opera- customers in 25 percent of cases, tions will lose clientele, while while non-smoking guests others will be winners. claimed that the complaints came tkom other guests in 40 percent of Who enforces ban? the cases. Smokers probably do The New York City restaurant not like to be ridiculed by non- smoking ban was expected to be smoking fellow diners when self-enforced. Restaurateurs would lighting up cigarettes in a smoke- be fined from $100 to $1,000 on free restaurant, and this may repeated offenses for not policing explain the discrepancy in figures smoking guests. Guests could be displayed above. fined up to $100 for smoking in A pub in Ireland organized a smoke-banned restaurant areas. In mock funeral wake the evening spite of these fines, in some before the ban was enforced. After instances restaurant operators may loud discussions, the Irish have be likely to disregard the law. In the accepted the ban. However, the New York City study by Corsund owners' Licensed Vintners Associa- and co-workers, the restaurant tion has warned that it will provc managers personally policed the impossible for pub owners to smoking guests in 27 percent of the prevent smoking in pubs. They violations reported, and non- have advised their members not to management workers disciplined get into any aggressive situations the smokers in 46 percent of the with possible smoking guests. instances. Other guests interfered Two evaluations were carried and disciplined smokers that out in Norway during 1998 and lighted up in nun-smoking zones or 1999, the time period the govern- smoke-free restaurants, and such ment was preparing for enacting corrections were reported in 27 the total smoking ban. It was percent of all instances. found that the restrictions were Having violated the law not effective.'?Restaurants serving without being asked to stop was meals were the most loyal ones, reported by 63 percent of the offering the best indoor air quality, smokers, and half the non- while pubs, bars, and restaurants smokers reported to have seen frequently violated the law. At smokers lighting up without least 30 percent of the municipali- being policed. Obviously the self- ties did not practice any govern-

Mykletun

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Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. mental inspection of the restau- from peer-reviewed journals to rant compliances with the smoking reassure the quality of the restrictions, allowing the least research. The author concludes loyal operators a competitive that these studies demonstrate no advantage. Every second govern- influence on sales in restaurants, at mental inspector claimed that least not in the cities studied when there was no way the restrictions enforcing restaurant smoking could be enforced. bans. However, this is an area of The operators themselves were research that will be still debated. dissatisfied with the restrictions For example, Evans criticized the since their guests did not pay atten- Corsun study and argued that it tion to the smoke-free areas but was likely that the smoking ban smoked everywhere in their restau- had made the NYC restaurants rants. They did not want to police experience a reduction in revenue their guests too hard, since they up to 15 percent as a consequence found this to be inconsistent with of the smoking ban. In a reply to the role of hospitality and sewice Evans, Enz and coworkers3' providers. The practical aspects of suggested a weekly increase in enforcing restrictions and bans on turnover for the same restaurants restaurant smoking has not found from $8 to $11 per person. The its form, which is likely to cause latter estimates were supported by different standards between opera- findings from another study of the tions, and in some instances be a NYC restaurant industry, showing tool to gain competitive advantages. an 18 percent increase in number The recent Norwegian proposal of restaurant jobs between 1993 about training a special "smoke- and 1997, as compared to 5 percent police force" may be a safer solution for the rest of NY State.35 The than leaving the disciplining to the controversy clearly demonstrates business itself; however, expenses how estimations like this can be will be high for a solution like this. influenced by a multitude of issues. Dunham and Marlow3= Economics not effected researched how bars, taverns, and A main concern for the restau- restaurants might be differentially rant business as a whole is how affected by smoking laws. They crib results turn out in economical icized previous research on method- terms. Dr. Howard P. Glauert, ological reasons for not being able to professor in the Graduate Center show which type of operators would for Nutritional Sciences at the lose business and which ones would University of Kentucky, authored gain or even show no change from the "Effect of smoke-free ordi- the new conditions. Their research nances on restaurant and bar demonstrated that bars and taverns saleP3included in this issue. Dr. would experience adverse effects Glauert reviewed one Australian more than twice as often as restau- and nine U.S. studies sampled only rants. The adverse effects were

82 FIU Hospitality Review /Fall 2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. likely to be experienced by restau- arguments for restrictions. The rateurs who offered fewer seats for U.S. has led the way both in docu- non-smoking guests, while neutral menting health hazards and imple- and even positive effects would be menting restrictions and bans on experienced by those who offered a smoking, resulting in the lowest relatively large number of tables to frequencies of active smokers. non-smokers. Oceania, Australia, and New Thus,the research on economic Zealand also lead the way. In impacts is still not quite conclusive. Europe, only Ireland and Norway The area is also very difficult to have been in the lead, followed by document, as smoking restrictions Sweden, Finland, and Iceland. vary from place to place, and laws Smoking restrictions and total vary between operations and bans have gradually meant that districts. Compensatory measures restaurant businesses, by means of such as the newly-announced good lobbying, have been able to Miami restaurant outdoor smoking delay restrictions taking effect for patioP may be convenient in some a while. However, they are now areas and difficult or very expen- lagging behind when mcasured on sive in others, depending most of all working environment quality on climatic conditions. The latter socio-cultural trends regarding also applies to outdoor tables for smoking. The voices arguing for smokers observed in New York City. working environment aspects have Climates as found in the northern reached a level that makes the United States, in Canada, and in enforcement of restrictions impos- the Scandinavian countries make sible to avoid. Restrictions take on these solutions impracticable. many faces, from total bans for the entire business to bans for restau- Hazards have history rant areas while bars and pubs go Solid documentation of health free. However, any operation hazards due to passive smoking allowing smoking will still face has built up over the last 30 years, health risk problems. Some opera- and for 40 years it has been obvious tions have purchased expensive that cigarette smoking is ventilation systems to prevent non- dangerous to several aspects of smokers from the atmospheric one's health. Gradually smoking intoxication crcated by smokers, restrictions have been enforced in but it is hard to find efficient various forms, mainly because of systems. the health risks for involuntary smokers breathing the tobacco Struggle delays ban smoke from the active cigarette The restaurant business and smokers. A general reduction in hospitality organizations have smoking frequency and preventing been trapped on the dark side of younger patrons from starting the debate on smokingrestrictions, smoking have also been seen as and the tobacco industry has coop-

Mykletun

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. erated in preventing smoking so far been the establishment of restrictions being put in place. In smoke-free zones, ventilation and hindsight it is obvious that the air curtains, with only a few opera- struggle has delayed the restric- tions becoming smoke free. The tions and bans for some time, but it latter is the only alternative that could in no way stop it. The most can be accepted from a workforce interesting question is why restau- health protection point of view. rants worldwide have taken this From the guests' perspectives, conservative stand. The restaurant health protection can best be business adapts rather well to new handled in a smoke-free environ- trends in food and drinks, as well ment, since research on effects of as ta fashion and design. How ventilation systems have so far not could they possibly overlook the provided consistency in granting anti-smoking trend? Is all their non-smoking guests clean air to energy invested in survival in a breathe. Moreover, investments in highly competitive market, or are ventilation systems and separation they absorbed into the culinary of smokers from non-smokers by arts? Are the magic connections either space or walls are expensive, between smoking, alcohol, and and in some instances impractical. meals so well established in the Outdoor arrangements for smokers workplace culture that it is not may be organized where space and really a matter of discussion? Do climate allow for it, which would be their attitudes toward this change a way of omitting bans and also reflect a mixture of traditions and reducing health risks of passive habits, basic ideas of hospitality smoking. It is also likely that and service, and the fear of lost restaurateurs will be sued by staff revenue? Is resistance reflecting developing health problems related the professional pride of the host, to passive smoking. where patrons' smoking tradition- The restaurant industries in ally was left to the proprietor's several continents and countries discretion? It is also evident that find themselves caught in a the policing of restrictions and painful dilemma. Increasingly bans has been complicated, and they see smoking bans enforced this may be another important upon them. Research has shown reason why restaurants seldom that there will be room for a went smoke-free before they were restaurant business after a forced to do so. These are questions smoking ban is imposed, but bars, that further research should try pubs, and taverns will probably to answer. face harder times with a smoking Restaurateurs and other hospi- ban. There are serious arguments tality operators update their prod- for operators in the hospitality ucts continuously, responding to industry to take a positive changing market demands. On the approach to these changes in their smoking issue, the adaptation has organizational environments and

FIU Hospitality Review /Fall 2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. proactively use the change for a we breathe,"American Demographics 17, no. new smoke-free market approach. 6, (June 1995): 2430. '" IARC Monoma~hson the evaluation New concepts must be developed of the carcinogenic hsI& ta humans. "Ibbaceo emphasizing the positive sides of Smoking and Involuntary Smoking." Conclu- the smoke-free life where taste sions, http:lwww-cie.iarc.fr.htdocdmono- organs work better, there is no graphdvo1831-02iovoluntary.html " Ministry of Health and Social Mairs, need for guests airing wardrobes Ot..prp. no 23 (2002.20031 (Oslo, Norway: ahrdining out, and restaurateurs Norwegian Minist~of Health and Social will see savings on cleaning, Affairs, 2002). ' R. Nard, "Uctterrettelighett um painting, a11d other maintenance. r0ykhg i den sentrale hellseforvaltning," Apart of this dilemma is the obscr- ndsskrifl for Norsk legeforening 123 ( 2009): vation that making the restaurant 2763-2764. '.' T. Sanner and E. Dyhing, "Risiko for operations themselves responsible lungekreft og hjertesykdom ved passiv for policing smokers will be r#yking," Tidsskrifl for Norsk legeforening unpleasant and incompatible with 124 (2004):387-4138, M. Brauer and A. Mametje, "Restau- their images of the host role. rant Smoking Restrictions and Environ- Leniency may give some opera- mental Tobacca Smoke Exposure,"American tions competitive advantages iC Jourr~ol of Public Health 88, no. 12 (December 1998): 1834-1836. they used to serve a far higher '"bison and Speer. number of smokers than non- '' Ministry ofHealth and SdAfFairs. smokers. In turn, it is likely that " J. P. Sciacca, "A mandatory smoking this will contribute to under- han in restaurants: concerns vs experiences," Journal of Communit.~Health 21, no. 2 mining the law. (1996): 134-149. Is L. Fox, Smoking," Caterer and Hotel- References keeper (March 7, 19%): 63-66. '°L. Cutbert and D. Nickson, "Smoking K. Kelly, "Smoking Out," U.S. Neuo & in the restaurant industry: Time for a ban?" World Report (January 26,2004: 14. International Journal of Contempomv ' K. H. Miles and K S. Camemn, Cofin Hospitality Management 11, no. 1 (1999): 31- Nails and Corporate Strategies (Euglclcwood "".1C Cliffs, N.J.: Prentice Hall, Inc., 1982). '""Bi& ngham bids tobe &st in UK to M. H. Miller and J. J. Monahan, The ban public smoking," Occupational Health 55, Facts Behind the Cigarette Controversy," no. 9 (September 2003): 7. Reoderk Digest (July 19541: 1-6. " "Smoking Ban Begins Today; Pubs Public Health Service, Smoking and Find Ways to Please,' The Miami Herald Health. A Report ofthe Adoisory Committee (Source: New York Times Service) (March to the Surgeon General of Pr~hlicHealth 29,20041: 12 A Seruice (Washington D.C.: U.S. Department Ministry of Health and Social Affairs. ofHealth, Education and Welfare. 1962). 23 C. A. Em,Trapped on the dark side of Kelly. smoking bans," Come11 Hotel andRestaurant Public Health Service, The Health Adn~inistrationQuarterly 43, no. 2 (April Consequences of Smoking. A Report of the 2002): 3-4, and D. L. Corsun, C. A. Young and Surgeon General 1972 (Washington D.C.: C.A Enz, 'Should NYC's restaurants lighten U.S. Department of Health, Education and up? Cornell Hotel and Restaurnnt Adminis. Welfare. Health Senices and Mental Health tration Quarterly 37. no. 2 (April 1996):37-47 Administration, 1972). and C. A. Enz, D. L. Corsun, and C. A. Young, ' Miles and Cameron. "The politics of smoking: findings or ' R. Borland, M. Momd and R. Mullins, agendas?' Cornell Hotel and Restaurant "Prevalence of workplace smoking bans in Administration Quarter1.y 37, no. 6 Vidaria,"Austmlia andiVeujZealand Jourml IDecemberl996):8-12, ofPublicHealth 21. no. 7 (1987): 694.698. "A Yeck, The Smoker's Guidc to Dining V.P Robinson and T. L. Speer, "The air Out In New York City (New York: Salmeri

-- Mykletun

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. Publishing, 1995); and C. Davenport, The j". Hvland and K. M. Cummines. Znsid~rbGuide to Smoking and Dining in "Rpdtuuranr rrnplovmrnt ix.forr nnd after thr Manhattan (New York: Kato Enterprises, Sew Yurk C~tvSrnokeFrrr Act." Jorrrnol d 1995). Public ~ealtiManagement and Practice 5, 15 L. Biener and M. Siegel, 'Behavior no. 1 11999): 22-27. intentions ofthe public after bans on smoldng 3b J. Dunham and M. L. Marlow, in restaurants and bars,"American Journal "Smoking laws and their differential effects ofPublicHealth 87, no. 12 (December 1997). on restaurants, bars and taverns." Contem- 16 J. P. Robinson and T L. Speer. porary EconomicPolicy 18, no. 3 (July 2000): W. A. Ritch and M. E. Beeav. "Stranee 326-333. " G. East, "Banned smokers head out- doors," South Florida Sun-Sentinel (March ciatlon ;and the tolmcco indus:ry".4nierrcan 15,2004), and G. East, "Outdoor restaurant Jurrmnlr.jl'r~hla Hrolfh 91 no. 1 2UUl : 59h- smoking irks non-smokers," South Florida 603. Sun-Sentinel (March 22.2004). " Robinson and Speer. note: This research was undertaken " L. B. Johanuessen, 'Ja ti1 r0ykfrie during the author's stay as visiting research serveringssteder," Tidsskrift for Norsk lege- scholar at the School of Hospitality and forening 122 (2002): 2672. Tourism Management at Florida Interna- 30 i"Ibbakkshruk i Norge," (Oslo, Norway: tional University, Miami. The author grate- Directorate of Health and Social Affairs, fully acknowledges this institution for 2002). generously offering the very best research " Ministry of Health and Social Affairs. conditions during the work. The author's 32 "myking ved servering: Evaluering I main affiliation is with the Norwegian School sammendrag. Rapport for Statens of Hotel Management, Stavanger University tohakksskaderld om holdninger ag atferd in Norway. and they are gratefully acknowl- blant tilsynsmyndigheter, eierel drivere og edged for providing the travel grant needed publikum, (Oslo, Norway: RH Knoff AS, to do this research. 1999). 33 H.P. Glauert, "Effect of smoke-free ordinances on restaurant and bar sales," FIU Reidar Mvkletun is the former dean of Hospitality HP~'imr22, no. 2 (Fall 2004). Ihe ~orwe~~anScnool of Horel Manage- " Enz, Corsun, and Young; M. Evans, men1 a1 Sravanger Universry College m "Review of Cornell survey on smoking ban Stavanger, ~ofiay. in New York City," Cornell Hotel and Restaurant Administration Quarterly 37, no. 5 (October1996): 8.

86 FIU Hospitality Reuiew /Fall 2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. Directing the continuous quality improvement effort

by Martin A. O'Neill and Susan Hubbard

The continuous qualrly ;mprovement (CQll operator andor destination and its emat the Lodge and Conference Center ability to satisfy at Grand National, Opelika, Alabama, involve a range of strategies, policies, and ~~.3t0me~~.Of central practices enactedby the current manage- here is the quality of service ment team to liff the service game and provided to visitors, which more enhance the overall quality and value for money appeal of the guest experience. The Oftenthan not be a deter- authors rewrt the findinas of a recentlv factor when it comes to repeat visi- wndu~study on this issue. tation and recommendation inten- tion? Today's hospitality consumer has become a rather sophisticated s the international tourism and somewhat more discerning industry at last begins to individual in terms of both quality A show signs of recovery1the and value for money expectation. To issues of service quality and visitor complicate matters further, satisfaction are again beginning to evidence now suggests that even assert themselves as key board- when exemplary service has been room issues for today's tourism delivered, today's consumer andlor hospitality professional. remains a very fickle and some- While much has changed on thc what disloyal individual.' tourism landscape over recent With its wide range of benefits, years, there continues to be one including income generation, constant; service quality remains a foreign exchange earnings, the complex construct to conceptualize, creation of both full- and part-time operationalize, and measure. jobs, and the generation of This is particularly true of the secondary economic activity, tourism sector, where long-term support for and investment in the success is dependent upon the state tourism sector is now hospitality record of a particular regarded as an essential regional

---- O'Neill and Hubhard 87

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. economic development strategy by It is not surprising, therefore, both government and the private that government and industry sector.' Not surprisingly, operators should take the quality issue seri- have been forced to take note and ously. Indeed, at a recent state- invest in the continuous develop- sponsored tourism conference, ment of their respective product participants identified the service and service offerings. This has led quality issue as being critical to to serious rethinking on the part of the future survival and growth of many in terms of strategy develop- the state tourism industry6 ment, production, and delivery Against this background, the CQI systems, as well as the manage- efforts of one prominent state ment of people, and has resulted in tourism provider and its ongoing a range of quality efforts andlor efforts to become a property initiatives aimed at continually synonymous with quality and improving the quality of the overall excellence are reported. guest experience. Affiliated as it is with the Robert Trent Jones Golf Trail (the Alabama tourism rises state's premier tourism attraction) This is particularly true of the the Lodge and Conference Center Alabama tourism sector, where in at Grand National, Auburn, the face of a general economic Alabama, is representative of the downturn in most other sectors, the very best in southern hospitality potential economic significance of provision. In a concerted attempt to tourism throughout the state has, sustain its competitive positioning, it seems, at last been realized. Most the property recently appointed a recent statistics supplied by the new general manager, Jay Prater, Alabama Bureau of Tourism and who was charged with the respon- Travel5 estimate that some 18.3 sibility of improving both the million people visited Lhe state in quality of the overall guest experi- 2002, representing approximately ence and bottom line performance 2 percent of Gross State Product through a continuous quality (overall production), with combined improvement effort. An ongoing spending (international and transformation process has been domestic) at just over $6.5 billion, initiated by the new management an increase of some 7 percent over team and a survey of consumer 2001. Employing some 140,000 perceptions of service quality at the people (7.4 percent of non-agricul- property conducted to showcase the tural employment in Alabama) success of efforts to date. throughout the broad travel and tourism sector, this represents a Quality is critical second consecutive record year for There is no doubt that quality Alabama tourism and one that has been, is, and shall remain an continues to buck the nationally issue of critical strategic impor- sluggish downward trend. tance for today's hospitality profes-

88 FZU Hospitality Reuiew /Fall 2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. sional. This point is well reinforced customers who would claim that by Kandampully' when he states: service quality is anything from "Of all the challenges facing hospi- poor to non-existent. It is not tality establishments today - surprising, then, that the quality including intense competition, issue continues to garner consumer globalization, and technological and academic interest with count- innovation - the single most less research publications and pervasive and pressing challenge course texts continuing to be is the ever-increasing demand of devoted to this very issue.'' customers for service quality." This So what is meant by quality is not surprising really, given that, and the related concept of service by definition, the hospitality quality, and why does its delivery industry is founded on the prin- remain such an elusive concept for ciple of being hospitable. many?& an operational construct, Comprised of four basic service quality refers to an organization's offerings including accommodation, ability to produce and deliver that food and beverage, entertainment, which is demanded in a manner and information provision, the which consistently meets consumer quality of service provided is vital expectations. In the words of Berry, to the day-to-day operation and Zeithaml, and Parasuraman12 longer term survival of any estab- "...quality is the degree of excel- lishment. It follows that in a busi- lence intended, and the control of ness such as hospitality, where variability in achieving that excel- quality of service is a major part of lence, in meeting the customer's the total product, providing service requirements." quality should occupy a position of prime importance! Service quality needed Paradoxically, at a time when The issue then is not solely one the world's economy has shifted of design on the part of the hospi- toward a greater service orientation tality provider, but also of ensuring and the economics of quality provi- conformance and, more importantly, sion are well accepted and under- fitness for purpose or the extent to stood, it is ironic that service which the product or service consis- quality continues to be experienced tently meets the customer's needs. more as the exception than the rule As with product quality, service it should be? Indeed, it is with great quality also relates to satisfying justification that a question customer requirements.13 Unlike continues to be asked: Where has product quality, however, organiza- the service gone from the hospi- tions must contend with the fact tality industry? Evidence continues that services are a combination of to suggest that the receipt of service both tangible and intangible quality is as elusive as everL0.In attributes. This, of course, helps truth, it appears there is no explain some of the complication shortage of opinion concerning with its delivery, namely that it is a

-- O'Neill and Hubbard 89

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. highly individual and heteroge- As a result of further extensive neous concept which can really only research, these criteria were be defined in the eyes of the collapsed into five more specific consumer as end user who, coinci- components: tangibles, reliability, dently, serves as an inherent piece responsiveness, empathy, and in the delivery jigsaw. assurance, which have formed the What is clear is that today's basis of many measurement tech- customers want their expectations niques. Although widely referred to met completely and consistently as SERVQUAL, the five elements and that they are very unforgiving can more easily be remembered when organizations fail to do so. It through the acronym "rater'6," is with little surprise then that which refers to the following: researchers have settled on the Reliability: ability to perform concept of customer perceived the promised service depend- service quality" as the one best ably and accurately. descriptor for this construct, with Assurance: knowledge and hospitality providers attempting to courtesy of employees and their position and differentiate them- ability to inspire trust and selves according to the emphasis confidence. they place upon the various tangible andlor intangible attributes of the Tangibles: physical facilities, construct. equipment, and appearance of Naturally, identification of personnel. service quality attributes aids in Empathy: caring, individu- the design and delivery process alised attention, and appear- and assists in the satisfaction of ance of personnel. customer requirements. This information comes from customers Responsiveness: willingness themselves and also from front- to help customers and provide line staff who daily come into prompt service contact with the customer during According to Zeithaml, Para- the many critical incidents of suraman, and Berry the various transaction experienced. While statistical analyses conducted in extensive research has been constructing SERVQUAL revealed carried out in the areals,the work considerable correlation among of Parasuraman, Zeithaml, and items representing several of the Berry stands out in terms of original 10 dimensions for evalu- helping to clarify how customers ating service quality. The authors define service quality. Their initial believe that these five dimensions qualitative study identified 10 are a concise representation of the underlying dimensions of service "core criteria that customers quality, each of which related to employ in evaluating service the customers' confidence in those quality."17 While many other defini- providing the service. tions and models have been

FIU Hospitality Review /Fall 2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. proposed, academics and practi- ranks.'" Put simply, TQM strives for tioners almost universally agree the mutual co-operation of everyone that senice quality must be defined in an organization and associated by the customer and not the service business processes to produce prod- pr~vider,'~otherwise inappropriate ucts and services which consistently strategies will result and time and meet the needs and expectations of money will be wasted." customers. At the heart of any such Providers are investing approach is the realization that In an attempt to continually quality is about customers and the satisfy their customers, hospitality way that they are treated or as providers have been investing quite Palmerz' puts it, "the total qdtyof heavily in a host ofwhat might best the service as perceived by the be descnbed as quality improve- customer." TQM places the ment initiatives. By and large the customer at the heart of all organi- majority of these initiatives have zational efforts to improve quality found form through the British and seeks to harness organization- Standards Institute, the European widecommitment to satisfying their Quality Award, the Malcolm every need. This approach goes one Baldrige National Quality Award, step further though and argues for the Edwards Deming Prize, or a definition of quality that extends derivatives thereof. In addition, the beyond mere customer satisfaction hospitality ir~dustryhas also been to include both employee and investing quite heavily in raising employer satisfaction. TQM quality standards through the depends on and creates a culture in development of its human resource an organization that involves every- base. Such initiatives include the body in quality improvement, or as Investors in People Award, the Edvardsson, Thomasson, and Welcome Host Initiative, and Ovretveit so eloquently put it, various vocationally oriented quali- "TQM is a framework for linking fication schemes. internal changes to customer Oliver describes these initiatives needs."" Ingrained within it is a as belonging to the Total Quality commitment to service excellence, Management (TQM) movement, which can only be achieved through advocating organizational strategies the development of a self-reiu- and changes, which are thought to forcing improvement cycle which make a 6rm more customer fkiendly. requires the efforts of everyone In this context, "customer satisfac- involved in the service supply chain. tion is thought to be a natural outgrowth of optimal organizational TQM is broad design, and of instilling the appro- Many researchers have priate organizational culture, provided insights into the charac- personnel training and customer teristics of the business environ- responsiveness within employee ment, which are necessary to

O'Neill and Hubbard 91

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. Figure 1 Customer-focusedTQM strategy

--

LeZGfacts7 LeZGfacts7 --I I FOCUS on processes 1I L-1 -1

CUSTOMERS 7- Let everybody be I Improvecontinuously cornrn~tted

sustain quality eff0rts.2~Such work Focus: customer based forms the foundations on which the principles of TQM are built, and Approach: management led although there is little consensus as Philosophy : prevention rather to the application of the theory, than cure there is some agreement on the concept itself. In general terms, Standard: right first time TQM means that quality aware- Measure: cost of quality ness and practices extend to all aspects of an organization's activi- Scope: total commitment and ties and are not restricted to identi- involvement fying and rejecting unacceptable *Time: continuous improvement products or services, as was once the situation. TQM has become a Such principles are not way of business life, providing a complex; they are eminently teach- culture and framework for the able and consequently capable of achievement of corporate goals, being learned.24While developed ensuring that employees of all within the Japanese rnanufac- levels are involved to some extent turing sect0r,2~they can be applied in the decision-making and equally effectively in any culture, problem-solving processes. as evidenced by numerous recorded To this end, TQM may be success stories, for example, viewed as a process by which a Hewlett Packard, Apple, STC, company concentrates its total Dupont, British Airways, Walt resources on the task of satisfying Disney, and Ritz-Carlton Hotels. Of customer requirements in terms of critical importance is the issue of value for money, reliability, and timing and a commitment to a fitness for purpose at a minimum process of continuous quality cost. At the heart of the TQM impr0vement,2~wherein change is approach is the following set of sought for the long term and must easily understood and applied become an ingrained part of the guiding principles (see Figure 1): organizational psyche and culture.

92 FIU Hospitality ReviewlFaLl2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. Too often, though, organizations ness meets pleasure. The Lodge set out on a quality path only to and Conference Center offers a stall when major problems have technologically advanced confer- perceivably been eradi~ated.~~ence environment paired with What needs to be understood is award-winning championship golf, that this is merely the beginning of miles of hiking, relaxing by the a journey, which requires that indoor/outdoor pool, or exercising at attention be focused not only on the health club."3a eradicating immediate problems, The property was selected for but the source of these problems the project because of its expressed and the processes which support commitment to continuous quality them over the longer term. improvement. The general manager speaks of a "high degree of focus on Grand National is focus customer satisfaction" and is The Lodge and Conference committed to assessing both Center at Grand National is located customer and employee satisfaction on the outskirts of Opelika, levels throughout the property. Alabama, and is a part of the Prater is very much a hands-on award-winning Robert Trent Jones manager who believes firmly in the Golf Trail. Nestled in 2000 acres of continuous quality improvement pine and hardwood forest, the ethic and, as such, in leading from Lodge embraces nature at its the front in relation to all quality finest." The 18 golf courses at eight improvement efforts. The most sites along the Robert Trent Jones obvious example of this CQI philos- golf trail are all located in Alabama ophy is of course, the relocation of and funded by the Retirement Prater's work desk from the execu- Systems of Alabama.Z9In addition tive offices suite to the entrance to the 54 holes of championship golf lobby of the property, where he is in at one's door, the Lodge has 129 full view of his guests and is guest rooms and 15 suites and permitted a freer form of "non- includes such amenities as scripted interaction. His office indoor/outdoor pools, health club, without walls allows him to be avail- sports bar, restaurants, and a able to guests and live the customer- hiking trail. centered attitude each day. In Marketing efforts describe the addition, Prater sees to it that each Lodge as a place of "glorious lakes of his key managerial personnel and streams enveloped with "walk the floor" each day with a view hundreds of magnificent species of to touching base with clientele. This grand old trees. Six hundred acres policy was enacted by Prater imme- will ofer abundant hiking along the diately after he took on the role of shores of the Saugahatchee Lake. GM and is one that he feels guests The Lodge and Conference Center are very comfortable with. at Grand National will indulge its Personnel at all levels and in all posi- guests with the finest mix of busi- tions are actively encouraged to

O'Neill and Hubbard 93

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. interact with guests in an attempt to customer's perspective so that the seek out opportunities to delight and system can be better re-engineered add value to the guest experience, so to meet the customer's specifica- much so that an almost tangible tions. In support of this task the service culture can be felt upon property has also initiated a CQI entering the property. This approach committee which meets once is practiced throughout the service monthly to consider system develop- cycle from the initial reservation ments and solve problems based inquiry through to actual departure upon both employee and customer and beyond through the property's feedback. This committee is many relationship marketing initia- comprised ostensibly of frontline tives. Put simply, personnel, both service employees whose responsi- front and back of house, are encour- bility it is to interact with guests and aged to seek out any opportunity to attest to the user friendliness of the delight the guest. various service delivery systems. Additionally, the property has initi- Attitude is important ated what it terms a "Bright Ideas Success on this front is very Box" where employees are encour- much dependent upon having the aged beyond the normal channels to right people display the right combi- offer suggestions on how quality can nation of skill and attitude on a day- continuously be improved. These to-day basis, and this can only be ideas are considered at the various achieved by a strong internal rela- improvement meetings and satisfac- tionship focus. This is very much the tory ideas tested within the property. approach at Grand National where Successful initiatives are accepted the property believes firmly in as mainstream practice and the "recruiting for talent and ongoing employee who offered the suggestion training to retain." Teamwork is is rewarded with a cash incentive. encouraged at every level with the concept of a "level service playing Customer is focus field" accepted by all staff in the Needless to say, customer interest of total and complete guest service training is an integral and satisfaction. All employees, regard- vital part of all employee training less of position, are encouraged to efforts at the Lodge, from initial attend both weekly departmental induction through the lifetime of and monthly quality improvement any employee's tenure at the prop- meetings. These meetings are called erty. In addition, in-house reward to share ideas and cultivate insights programs have been developed to into the existing system dynamic recognize outstanding "service and, more importantly, to seek out heroes." Employees are consis- innovative and more effective ways tently encouraged to engage in staff of doing business. development opportunities, as the The approach is very much property believes that its own about looking at the system hmthe development will be assured as a

94 FIU Hospitality Review /Fall 2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. natural outgrowth of such activity. The research focused on guests' This, of course, also serves to moti- perceptions of the quality of service vate employees who are regularly provided by the Lodge and Confer- promoted from within based upon ence Center; and the study was ability, and equally works to ensure undertaken collaboratively with the a loyal and productive workforce, a property with a view to providing fact that has been well recognized practical benefits, while at the same in the feedback garnered to date time allowing theoretically useful through the property's in-house insights to be developed. The study comment cards. made use of the Importance-Perfor- mance Analysis (IPA) technique Customer is focus which has gained popularity over The property Mybelieves that recent years for its simplicity, ease in order to sustain its quality of application, and diagnostic improvement dri~e,it must be value.31 it is best described as an founded upon timely and relevant absolute measure of performance, customer-focused information. Put which also seeks to identify the simply, they believe there can be no underlying importance ascribed by improvement without information. consumers to the various quality As with most hospitality properties, criteria under assessment?' Impor- the Lodge administers comment tance is viewed as a reflection by cards andlor surveys to guests in the consumers of the relative value of hoteL Questionnaires are made avd- the various quality attributes, and able to customers in the various it is this additional information revenue outlets, as well as at check- which makes the technique more out and in guest bedrooms, and a suited to the task of directing small incentive is offered to staff to improvement based upon what is encourage a higher return. Returns deemed most important by are analyzed on a weekly basis and consumers. the results shared during the various The scales developed took the quality improvement meetings, form of a 23-item self-completion which become quite competitive in questionnaire, which visitors were terms of how each department asked to complete either during performed. Where problems become their stay or upon their departure apparent and contact details have from the property. For each item been lefi, the property follows up with respondents were asked to rate each complainant. All problems are their perceptions of the attributes seized upon as opportunities and listed on a five-point Likert scale viewed as a free source of informa- ranging from 1 for "strongly tion. Naturally this extends to day-tu disagree" to 5 for "strongly agree." day practice, where all employees are In addition, respondents were also empowered to do "whatever it takes" asked to rate the level of impor- to resolve guest problems and add tance attributed to each quality value to the overall guest experience. dimension on a similar scale

O'NeiLl and Hubbard

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. ranging from 1for "low importance" December 2003. Participants were through 5 for 'Xgh importance." approached at random and asked Scale items were based largely about their willingness to partici- on the 22 items of the original pate in the research. Willing partici- SERVQUAL technique and its pants were asked to either complete corresponding RATER components, the questionnaire in the presence of but were modified to take into the administrator or to complete it account the particular service at a later date and place it in a drop setting.33This was achieved via a box located at the hotel reception series of interviews with the GM desk. who was quizzed on the relevance The sample was comprised of of each of the scale items to the 143 respondents from a total of 451 property. This resulted in the administered questionnaires, repre- combining of two of the original reli- senting a 31.7 percent response ability related attributes and exclu- rate. No incentives were used to sion of one of the responsiveness garner a healthier response rate. Of related attributes from the original these, 83 (58 percent) were male. SERVQUAL attributes, as well as Approximately 59 percent were out- an amended form of wording for a of-state visitors and 56 percent had number of other attributes and the stayed at the property on at least inclusion of three additional one previous occasion. Some 36 attributes related to the properties percent were business travelers, food and beverage (items 5 and 10) while the remainder were vacation, and room facility (item 6) service VFR, or football oriented; 79 percent offering. This was an especially said they would return to the prop- important issue for Prater as there erty based upon their experience to was some indication from in-house date and 89 percent stated they comment cards that customers would be happy to recommend the were not entirely pleased with this property based upon their experi- element of the property's product ence to date. A similar number (88 offering. Afull list of the 22 refined percent) stated that they believed scale items is shown in Table 1. An the property offered an adequate additional variable (surveyitem 23) value for the price paid. Some 70 sewed as an overall measure of percent of respondents were in the service quality and was included for 45 years or older age bracket. the purpose of validity testing. The results of the study are Additional demographic and presented in two sections. Section loyalty data were also sought. one includes reliability and validity data as they relate to the psychome- Survey is random tric performance of the research Questionnaire administration instrument adapted from within the main public lobby of the SERVQUAL and section two property took place over seven week- presents a performance-based anal- ends during November and ysis of the key results from the

96 FIU Hospitality Review /Fall 2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. Table 1 Analysis of individual service quality attributes

Mean (m) Standard Variable perception deviation 1. The property has good facilities-offere& 4.25 1.37 ~ ~~p. - 2. The decor of the property was visually appealing 4.26 1.42 3. Property staff appeared neat 4.23 1.45 -- - 4. Brochures & signposting were visually appealing 3.85 1.52

- ~ - 5. Food & beverage options were broad 3.37 1.61 - .- ~ 6. Room facilities/services were excellent 4.06 1.52

~ - - 7. Staff showed a genuine interest in solving problems 4.07 1.48 - - -- 8. Service deliver~was error free and riaht first time 3.37 1.82 -. - - 9. Ooeratina times for services were clear & convenient to me 3.60 1.77 -~- ~ 10. ~ood&bevera~eservices were excellent 3.33 1.62 11. Property staff were very knowledgeable about hotel services 3.96 1.54 12. We did not have to wait excessively for service 3.79 1.56 .~ 13. property staff were always willing to help guests 4.19 I.44 ~ .- -- 14. Property staff were never too busyto respond to guests 4.04 1.55 15. Behavior of property staff gave confidence in theproperty 4.04 1.49 .. - 16. 1 felt safe &secure whilst staying at the property 4.20 1.48 17. Property staff were consistentlyeo"~with guests 4.30 1.45

18. Property staff had theknowledge- to answer guests' questions~- 3.98 1.60 19. Overall, the property made me feel like a special individual 3.96 1.52 20. The ~ro~eltvhas its auests' best interests at heart 4.02 1.53 -. ~-.~- 21. Property staff understood the specific needs of guests 3.79 1.62 -~ .- 22. Property staff gave individual attention to guests 3.83 1.65 - ~ - -- Average Perception Scores 3.93 1.31 -

study. While data were collected performance in light of existing CQI using the IPA technique, this practice. It also proved useful to section of the analysis will concen- attest to the reliability and validity trate on the performance (percep- of the research instrument tion) only data as they relate to both (adapted SERVQUAL) as a user the individual quality attributes friendly methodology for measuring and the aggregated RATER dimen- service quality within the partic- sions as defined in the original ular hospitality setting. To this end SERVQUAL scale. an exploratov fador analysis using the principal component extraction Reliability, validity tested technique was performed on guest The overriding goal of the study perception scores. The analysis was to attest to the property's made use of the OBLIMIN oblique

O'Neill and Hubbard 97

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. factor rotation procedure in SPSS- responses across the 22-item scale X and is in keeping with the orig- to assess guest perceptions of inal SERVQUAL study.% service quality. This information is The results revealed that the presented in Table 1 where mean five-component RATER structure and standard deviation scores are proposed for the original shown for each of the service SERVQUAL scale was not quality attributes assessed as well confirmed, and that service quality, as the average mean score for all 22 at least in the context of this prop- attributes (m=3.93). erty, was in fact uni-dimensional in The results show that the prop- nature, with all 22 items loading erty is performing well above heavily on a single factor. The average in all respects, with mean instrument performed well in terms values in excess of m=4.00 being of both reliability and validity, recorded for 11 out of the 22 however. Overall reliabilities were attributes assessed, with the alpha = 0.99 and 0.98 respectively remaining 11 attributes falling for both the importance and perfor- between m=3.33 and m=3.98. mance scales. Construct validity While this is an excellent overall was also addressed in terms of both performance, there is still signifi- convergence and the research cant room for improvement, most instrument's ability to discriminate notably with respect to those between the underlying dimension- attributes concerned with food and ality of the service quality construct. beverage provision, which clearly While the precedmg fador anal- confirms management concerns ysis makes it clear that the instru- about this key area. Guests were ment did not perform well in terms consistently unhappy with both the of discriminant validity, it range (options) and level of food and performed much better in terms of beverage service provision offered. convergence. Convergence was These are clearly important deter- investigated by calculating the minants in the guest's choice set for mean difference scores for each of any property. the 22 scale items and correlating (Pearson's product moment correla- Individual items rated tion) these with the mean score kom While the five-factor structure an overall single item measure of proposed by the original quality which was also included in SERVQUAL instrument was not the instnunent (item 23). Acorrela- held up during the factor analysis tion of 0.214 was found which, while of the data, it nonetheless proved low, was nonetheless significant at useful to analyze the data around the 1percent level. the aggregated RATER factor struc- ture. This, it was felt, would allow Perception examined for a more practical analysis of the The next stage of the analysis results and one that would assist in was to examine the sample better directing the property's CQI

98 FZU Hospitality Review /Fall 2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. effort. Consequently, individual through to m=4.10 for assurance. scale items were grouped around In terms of ranked performance their corresponding SERVQUAL the property did best with respect factors, with mean and standard to the assurance related aspect of deviation scores being calculated service provision (m=4.lo), closely for each. Additionally, these factors followed by responsiveness were then tested for reliability (m=4.01), tangibles (m=3.98) and using Cronbach's alpha, as per the the empathy (m=3.90), with the procedures followed in Hudson and reliability dimension ranking last Shephard's3' earlier application of (m=3.59). Given their corre- the technique within an Alpine ski sponding reliabilities, these results resort. Special attention was given should prove beneficial in terms of to the two additional attributes (5 helping the property prioritize its and 101, with item 5 grouped under CQI efforts. For example, attention the tangible dimension and item 10 should clearly be focused on those under the reliability dimension. attributes comprising the relia- The results of this analysis are bility dimension (items 7-10), provided in Table 2. which relate to the issues of error The results reveal that each of free delivery, timeliness, and the aggregated dimensions satisfies interest in problem solving. CQI the minimum recommended alpha efforts should then be concentrated level of 0.70 for reliability, with coef- upon those items pertaining to ficient alphas ranging from a quite empathy, and so on. high alpha =.87 for reliability This should not in any way be through to alpha =.95 for both the viewed as a general.endorsement of assurance and empathy dimen- the technique's reliability in terms sions of the service quality of directing the quality improve- construct. In terms of mean perfor- ment effort. Rather it serves to mance, the results again reveal a highlight the value and relative well above average situation for the simplicity of the technique, as property, with mean (m) scores expressed in an aggregated form ranging from m=3.59 for reliability through the original SERVQUAL

Table 2 Analysis of individual sewice quality attributes

Mean (m) Standard Coefficienl

-----SERVPUAL Dimension ---Perception --deviation -- alpha - Reliability ------3.59 1.43 -- .87 Assurance 4.10 1.38 .95 ------Tangibles 3.98 1.30 .93 ------Empathy -- --3.90 ---1.48 .95 Resoonsiveness 4.01 1.44 94

O'Neill and Hubbard 99

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Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. factor structure, for prioritizing and your experiences to date?" and directing the improvement effort. "How likely would you be to recom- In the absence of another more mend the Lodge and Conference rigorous methodology being Center to others based upon your adapted, it should serve the prop- experiences to date?" For each item erty quite well for this purpose. respondents were asked to rate Combined with the data pertaining their perceptions of the attributes to the corresponding importance listed on a five-~ointLikert scale measure which was also taken, it ranging from 1fir '%ighly unlikely" can be seen how such a technique to 5 for "highly likely." Additionally, would be beneficial in helping direct a similar correlation analysis was the attention and limited resources also performed in relation to the of any operator to the real priorities issue of pricdvalue. of the customer. Value is assessed Behavior analyzed Respondents were also asked Further testimony to the to rate the pricdvalue relationship success of the property's efforts to offered by the property. This date can be found by analyzing the measure was posited as: "Based relationship between the essen- upon your experiences to date, do tially attitudinal performance you still believe that the Lodge and measure (mean perception value) Conference Center provides and the various behavioral adequate amenities and services outcome/intention measures for the price charged?" The corre- recorded. Two measures of behav- sponding scale ranged from 1 for ioral outcome were: "How likely "strongly disagree" to 5 for would you be to revisit the Lodge "strongly agree." The results of and Conference Center based upon this analysis are shown in Table 3,

Table 3 Behavioral intention correlation index

Mean Perception Score -- ~ Intention to return Pearson Correlation ,164' Sig. (2-tailed) ,050 N 143

~~ ~ -- Intention to recommend Pearson Correlation ,154 Sig. (2-tailed) ,067 N 143 - ~~~ -~~~ PriceNalue Pearson Correlation ,262 ** Sig. (2-tailed) 002 N 143 - ' Correlation is significanrat the 0.05 level (2-tailed) " Correlation is significant at the O.Ollevel(2-failed)

100 FIU Hospitality ReuiewlFall2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. both for the overall mean percep- ment of an internal as well as tion rating as well as for each of the external relationship marketing RATER dimensions. focus. Put simply, employee satis- Interestingly, the results indi- faction must precede customer cate a significant positive correla- satisfaction if quality improvement tion between the "intcntion to gains and competitive positioning is return" behavioral indicator and to be sustained for the longer term. the overall mean perception score Of critical importance is the (Pearson Coefficient = 0.164; Sig. = need for timely, relevant, and <0.050), yet not for the "intention continuous information flow from to recommend variable (Pearson all customer groups, both internal Coefficient = 0.154; Sig. = 0.067). and external. As stated previously, This is a curious finding and, given there can be no sustained improve- the overall reliabilities, is one that ment without information. These is hard to explain. The results also data are essential to the improve- show that the property performed ment effort in a number of key well in terms of the "pnce/value" respects: issue and the overall mean percep- First, by way of offering a tion score (Pearson Coeficient = measure of existing perfor- 0.262; Sig. =<0.010). This is clearly mance indicative of the fact that the Second, in terms of the identdi- majority of guests feel that they are cation for fail points and/or receiving gnod value for money in problem areas terms of the product and service received. Third, by a system of prioritiza- While debate continues as to tion in helping operators direct the one best way to define and eval- scme resources to areas where uate the service quality construct, performance improvement will both academics and practitioners have the most benefit to overall concur that the debate is largely customer satisfaction redundant unless both serve to aid The study demonstrates the in the CQI effort. This calls for as relative ease with which the chosen detailed an understanding as methodology can assist operators in possible of customer requirements this process. Indeed, it is this prac- and the design of product and ticality that makes such techniques service delivery systems equipped so appealing to CQI specialists. to meet these requirements. This They gather information about requires a concentrated improve- factors relevant to the customer's ment ethic which must pervade the perceptual processing and satisfac- entire organizational supply chain, tion level and communicate the wedding everyone within and results in a format that can then be beyond to the ideal of right first used to target specific and relevant time and/or prevention rather than improvements in the service cure. Central here is the develop- delivery system. This will permit

OTVeill and Hubbard

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. more concentrated and timely (httpJiiwww.worldtourism.orginewsmom/Rele asesi20Wjanvieridata.htm) corrective actions, which can then H. Lee, Y. Lee and D. Yoo, "The determi- be taken to improve actual percep- nants of perceived senice quality and its rela- tual problem areas. tionship with satisfadion." Journal of Services In terms of the specific operator Marketing 14, no. 3 (20001: 217-231. A. F. Curasi and K. N. Kennedy, "From under examination, the results prisonen to apostles: a typology of repeat show that their CQI efforts to date buvers and loyal customers in service busi- have been largely successful. This, nesses," ~ou-1 of Seruices Marketing 16, no. 4 (2002): 322-341. of course, is another benefit of such D. Rigney, "Role ofAlabama Department techniques in that they allow oper- of Ag-iculture and Industries in the Agn- ators to test the success of any Tourism Trail." in J. Thomas Chestnutt. ed. Action -pub& ~sswinformation for Alahma related CQI initiatives over time. Citizens (Auburn, Alabama: Alabama Cooper- The results do highlight a number ative Extension Systen~.2W4). of areas of concern for this operator, K. Deravi, "Economic Impact -Alabama not least with respect to the relia- Travel Industry 2002," Center for Business and Economic Development, Auburn Univer- bility issue where there is both clear sity, 2003. room and need for improvement. S. Hubbard, "Issues affecting Alabama That said, the Lodge has the tourism pmfessionals." Governor's Conference on Tourism and Travel, Huntsville, Alabama distinct advantage of being at the (September 21,2003), Unpublished paper. beginning of its quality journey, J. Kandampully, Services Management - and given the importance and the newparadigm in hospitality (New South Wales, Australia: Pearson Education pride attached to the issue by all Australia, 20021, xi. concerned, there is little doubt that R. H. Woods and J. Z. King, Quality Lead- they will correct this situation in ership and Management in the Hospitality the not too distant future. While Industry (East Lansing, Mich.: American Motel and Hotel Association, 1996). only one property within Alabama, ' M. Coeyman, '"Listen Up," Restaurant it is felt that this example, at the Business (May 20,1996): 58-66. higher end of the state's hospitality lo T. Levitt, 'Production-line approach to service," Haruard Business Review game, will serve as an example and (September-October 1972): 41-52; Coeyman; prime motivator to other tourism A. Boys, "South West Fails on Service!" The and hospitality professionals to lift West Australian Newspaper (June 17,1998): and sustain their service effort. In 23; Technical Assistance Research Programme, "Does the rhetoric of customer turn, this should serve to enhance service match the reality?"Managing Seruice the state's overall reputation and Quality 6, no. 3 (1996): 6-9; H. Frederick, ' appeal, and in so doing, ensure (in Whatever Happened to Service?."Restaurant Busirless (May 15,1998): 95-105;ACSI, %t the words of the popular state Quarter Results -Hotels and Restaurants," sponsored vanity plate) that the American Customer Satisfaction Index: "stars will continue to fall on Michlgan Business School, 2004. " D. M. Davidoff. CONTACT: Customer Alabama" tourism! +n ur. m rhe husprlnlln and 1uurw.m i?ulur/q ~NewlilrkI'wnnre Hall. 19941A Lrknood, References M. Baker and A. Ghillyer, ~ualityManage- ment in Hospitality - Best Practice in Action ' R. Klancnik, "Global troubles took toll on ilondon: Cassell, 1996); M. Olsen, R. Teare, tourism in 2003, growth to resume in 2004," and E. Gummeswn, Seroice Quality in Hospi- Madrid (January 27,2004), Tourism Barom- tality Organizations (New York: Cassell, 1996); eter: World Tourism Organization. J. Kandampully, C. Mok, and B. Sparks,

FIU Hospitality Review /Fall 2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. Service Quality Management in Hospitality, htveit,Quality ofsemice: making it really TourismandLeisrrre (London: Haworth Hospi- work (London: McGraw Hill, 1994). tality Press, 2001); Kandampully, xi; W. B. " T. J. Peters and J. R. Waterman, In search Martin,PmuidingQuality Semice- whatevery ofercellence (New York: Harper & Row, 1982); hospitality serviceprnuiderneeds to know (New R. J. Schonberger, World Class Manufacturing Jersey: Pmntice Hall, 2003). (London: Collier MacMilan, 1986). l2 L. L. Bern, V A. Zeithaml, and A. Para- " W. E. Deming, Managemerrt ofstatistical juram.In. -Q"IIII~~Loilnt& m .irr\icrs lor: /,,~hni~rr<,sfilrqu&nn;ipn.durtri.~r> ~Sev Uusrnzar lk~nruna2h, nL. '3 \la."-June 1985 . Ymk Sew York I:nivcriitv, Graduate School 44-52. ofBusiness, 1981). 'q.C. Lewis and B. H. Booms, "The '& C. W~ttand A. Muhlemann, "Service marketing aspects of service quality" in L. L. quality in airlines," Tourism Emnomics 1, no. Beny, G. L. Shostack, and G. D. Upah. eds, l(1995): 33-49. Emergingperspectiue's on services marketing " R. H. Wdand J. Z. Kmg, Quality Id- (Chicago, Ill.: American Marketing Associa- ership and Management in the Hospitality tion, 19831: 99-107; A. Parasuraman, 'A. Industry (East Lansing, Mich.: American Zeithaml. and L L. Bern. "Aconce~tualmodel Motel and Hatel Association, 1996). of ien.irc quality end iw impl~r.irionitor wu.w.l~.dgcw.c~m.2W lururc research." Jbar~

,-~~--1Yh.i ~~ ll \ ~Fnll 41-5U..~ Irw.;~~ and ~~ .M~rrht,ll. ~~vwl~de~wcom.201U "Defining and measuring the of 30 S. ~lber& and^. Mihalik, The use of customer service,"Marketing Intelligence and importance-performanceanalysis as an evalu- Planning 8, no. 6 (1990): 11-17: R. Silvestro ative technique in adult education," Eualaa- and R. Johnston, The determinants of service tion Reoiew 13, no.111989): 33-44. quality - hygiene and enhancing factors," C. Ennew, C. Reed, and M. Binks, "Impor- Working paper, University of Wanvick Bnsi- tance-performance analysis and the measure- ness School. 1990. ment of service oualitv." Eurnoean Journal of " V. A. ~Lithaml,A. Parasuraman, and L. Marketing 27, nb. 2 (i993): 6-70; M. Joseph Beny, Delivering quality service: Balancing and B. Joseph, "Service quality in education: a Customer Pemptions and Expectat~on( New student perspective," Quality Assurance in York: The Free Press, 19901. Edueatwn 5, no. l(1997): 26-37; R. K S. Chu 'Werrv. Zeithaml. and Parasuraman: C. and T Choi. "An imoortance-nerformance (;mnrua,.Sk,n iw murrag~,nzcnl ondmo,kcrrm7 y:nnl)iis oi ho~eldtrrion tjctnrs in thr Ham,: Lexingmn. Masi.: Lrh!t~@~nRIN.~. 1984,; n Kong huu.1 indusrn: a mmpansun ofbu..inrsi A. tian'in, 'C,rmpcling on tht. rqhr dlmm- and Ic~~~rrlt~dvtl~rs."7:~~(~~n~ %kannjit.!%,nl sun; of qu:rliry," Ikrn on1 Ra,r,tpcs Hri WII. 2: 520001. 363-37;; d Usnilla and J.James, Suvernhrr~Dc~cmlbcr1987: lUl-109. .I. -lrnoonanrr-ocrli~rnt~ncranulvs~r."~luunial Fitsimmons and G. Manrer. "A walk thrdugh of Garketing il (January 1977f77-79. audit to imomve restaurant Derformance." "A Parasuraman, V. A Zeithaml, and L. L. (bmrll H~,rrlund /l?rtauro~r/rldm,nrslrnr,o,r Beny. "SERVQUAL: Amultiple item scale for &m'te,rl%,Fellmar\. 191 measuring consumer perceptions of service ' A. R. lbnncr and 1 .J. 1)rTor~., Toralounli/v . . quality," Journul offitailing 64 (1988): 1237. management: three steps to continuous " Parasuraman, Zeithaml, and Beny. improvement (Cambridge, Mass.: Addison- S. Hudson and G. W H. She~hard. Wesley, 19921. T. 0. Miller "A customer's definition of quality," The Journal of Business Strategy mance ~nalisisto an Ap&e Ski Resort," (January-Febmary 1992):47. Journal of navel and Tourism Marketing 7, "Nightingale, 37-62. no. 3 (1998): 61-77. C. Gronroos, "Service quality: the six ' d C SumlJ!!: P\)r.honu.rri Thmn (New criteria of good perceived service quality," York, 37.?nc(;rau.-Iiill Bmk Cnmpan~1978 Review ofBusiness 9, no. 3 (1988): 10-13. R. L. Oliver, Satisfaction: a behaoioural - - -- perspective on the consumer (London: Martin O'Neill is an associate professor McGraw-Hill, 1997). and Suwn Hubbard is an associate :' A. Palmer, Principles of SeruicesMar- orofessor and orooram director in the kvriny, 2nd d.I hnd

O'Neill and Hubbard 103

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Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. The international hotel industry in the new millennium

by Robert A. Brymer and A. J. Singh

The top priorities of 170 hotel preliminary inquiry was under- managers from 25 countries were taken to help alleviate uncertain- identified as human capital, under- standing customers, use of capital, ties about the future and, more alignment of stakeholder interests, importantly, develop a research use of information technology, and agenda on future issues valuing brands in a Cornell Univer- confronting the international sity study.' The authors discuss how managers in a hotel's functional hotel industry. departments are ultimately respon- The method of investigation sible for addressing each of these chosen for this study was qualita- concerns ond issues. tive research. The structure of this research was in keeping with the goals of qualitative research, s the hotel industry progres- which are "designed to uncover ses into the 21st Century, motivations, reasons, impres- A hotel managers need to sions, perceptions and ideas that anticipate and prepare for relevant individuals have about a changes in the issues that will subject of interest."' Typically, affect the functional departments good qualitative research, which of their hotels in the future. may include focused group discus- Whereas the original study by the sions or individual interviews, is Center for Hospitality Research at the foundation on which quantita- Cornell University helped to iden- tive research is developed that tify the current issues troubling ultimately draws inferences about hotel managers around the world, the population at large. an investigation into future issues This study conducted one to expected to affect hotel operations two-hour in-depth, individual in the first decade of the new interviews with 24 hotel general millennium was conducted. The managers (GMs) operating hotels

104 FIU Hospitality Review /Fall 2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. in 13 countries: United States, and check-out processes and in Japan, China, Singapore, New room amenities, with business Zealand, Australia, Egypt, Israel hotels reflecting an "office away (Middle East and North Africa), from an office" atmosphere. This Switzerland, Sweden, Nether- will be driven by guest demand for lands, France, and Scotland all the support services and (Western Europe). The hotels were resources such as Internet access, carefully selected and represent a updated tools, equipment, and broad spectrum, which includes telecommunication to enable them small, medium, and large hotels to conduct their business produc- that were both independently tively. Combined with increased owned and operated and part of a technology, hotels will modernize chain operation. their rooms, create innovative The typical respondent was a interior design features, and pay GM operating a 400-room hotel even more attention to quality with an average occupancy of 74 factors. Implementing some of percent, an average room rate of these changes may be an issue due $170, and an average of 427 to price resistance in some employees, and having hotel segments if the economy worsens. management experience of 24 In general, it is a safe assumption years. These international that guests in the future will be managers gave their views on more discriminating in their changes they anticipate in the tastes and preferences. following functional departments of hotels in their respective coun- Asian GMs respond trieslregions, by the year 2010: Japanese GMs mirrored the room division U.S. view of technological changes food and beverage in the guest rooms and operational systems to improve guest service sales and marketing as well. In addition to an emphasis human resources on business services, the Japanese felt more upgraded facilities to accounting and finance help travelers relax, such as physical plant management Jacuzzi style tubs, were going to be and engineering morc important. One hotel GM predicted the creation of "work stations" in Japanese hotel rooms. Improvement is cited While the implementation of With technology being the technology in hotels was impor- primary enabler, hotel GMs in the tant for GMs interviewed in U.S. indicated that services, facili- China, they felt that they were ties, and processes in hotels would lagging as compared to the rest of improve. These changes will be the world. With an increasing visible in more efficient check-in number of multinational (China

Brymer and Singh 105

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. was recently admitted into the management, and guest rooms WTO) companies doing business equipped with the latest tech- in China, it was predicted that nology to accommodate corporate there would be a shortage of busi- travelers. In addition, the ness class hotels. As these changes ambiance of the room will focus on occur and newer business hotels art pieces and updated entertain- are developed, hotel technology ment equipment such as wall will become more advanced, with mounted flat screen TVs. a strong focus on customer service management databases, as Hi-tech rooms requested observed by one general manager. Moving on to the land of the Hotel general managers in Pharaohs, Egyptian GMs predicted Singapore concurred with their a surge in future hotels and resorts, Asian counterparts regarding the with sophisticated design and important role of technology in d6cor. They felt that hi-tech, luxu- future hotel operations. However, rious rooms, Internet access, better the interviewed GMs emphasized in-room entertainment options the importance of rest and relax- (such as wider choice of TV chan- ation to make the guest experi- nels), and improved rooming ence more memorable. This processes will be the central focus included introducing spas, of hotels in the future. However, increasing the bathroom size, they indicated that all these modernizing fixtures, and changes would be implemented enhancing the sleep experience. without losing the "hi-touch" Continuously meeting higher aspect of personal hospitality. guest expectations will remain a The need for "hi-tech - hi- challenge in the future. touchn continued to another General managers inter- country in the Middle East: Israel. viewed in New Zealand felt that The GMs felt that the use of the room styles in the future will computers (and associated elec- change and will be similar to tronic communication mediums) extended stay concepts with the would continue to create a sense of inclusion of kitchens, dining isolation. Therefore, guests will tables, and a parlor area in addi- need to speak to someone. Despite tion to bedrooms. One of the GMs the increase in technology in the stated the critical role of house- rooming process, hotels will never keeping in improving guest satis- replace humans to greet and faction. The four Australian GMs welcome guests. One GM interviewed were unanimous in predicted smaller and more inti- their views about increased pres- mate hotels, with increased in- ence of technology in all facets of room entertainment technology as hotel operations, which include the key to competitive advantage. check-idcheck-out, the use of Swiss GM predictions were Internet reservations, revenue more traditional and stressed the

FIU Hospitality Review /Fall 2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. need to maintain the basics of ness and quality of products. Hotels bathrooms, quality mattresses, will have to look at new sources of and large rooms. However, they revenue in their food and beverage observed a trend toward younger, operations. This may include more affluent guests demanding reviewing room service operations quality service. The view of a GM and increasing the focus on interviewed in France was that catering and special events. Special guests would be willing to pay for events will become more elaborate better in-room technology and and specialized, according to one of amenities. In Sweden, Internet the GMs interviewed. access and focus on the bed, bath- Most Japanese hotels have a room, television, and web-based higher percentage of their revenue reservation systems were viewed from food and beverage versus as Lhe trend. As technology rooms. This is because societies becomes more pervasive, they felt driven by tradition tend to spend that employee training nccds to be more on the ritualised relationship continuously updated. building occasions. As such, A GM in the Netherlands banquet, catering, and weddings predicted an increase in will remain a staple revenue outsourcing for housekeeping source for larger hotels. However, services, a trend already started. as in the case of U.S. hotels, Once again, unique room features, Japanese hotel managers are Internet acccss, and quality were looking for new sources of revenue stressed as important value to enhance food and beverage creating features. Scottish GMs operations. Regional cuisines and stressed that technological tools free-standing restaurants in such as video conferencing may hotels are some of the new become popular hotel features in approaches being considered. In the future. Furthermore, the China, the threat to food and distinction in amenities offered in beverage within hotels is expected upscale vs. mid-priced hotels is to come from the new declining, which will place more entrepreneurial climate resulting pressure on upscale hotels to offer in more eating options outside more value-creating amenities. the hotel. The focus for hotel food and Dining is important beverage departments in Singa- U.S.-based GMs stated that in- pore will be on operational restruc- house dining will become even turing and efficiencies. As such, more important to dclwc hotels. hotel organizations are looking to Hotels will have to create new combine skill sets of the chef and things that "wow" the guests. These food and beverage director into a may include celebrity chefs, combined position. As Singapore is outsourced branded restaurants a restaurant paradise, hotel food within hotels, and focus on fresh- and beverage operations will

Brymer and Singh

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Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. continue to think of new ways to Some of the emerging trends promote in-house dining to their for hotels in Israel include cooking guests and local customers. This staff being involved in the service will be done by an emphasis on of food and thus having more quality, diversification in food and guest contact. Recruiting qualified beverage outlets, and creation of food and beverage staff will new signature outlets to attract remain a challenge in Israel. local customers. One Swiss GM observed that younger guests are more food Competition is factor conscious and want to learn about As in the case of China, New the source and quality of the food. Zealand GMs see more pressure Organic food is receiving higher on a hotel to compete with premiums from this segment. external restaurants. Banquets Restaurant outsourcing will and celebrity chef outsourcing are continue as a trend and guest expec- new trends, which are expected to tations of consistency and standard- continue. Australian hotels are ization of service will increase. also combating the negative image The implementation of a 35- of hotel food. One GM felt that hour work week in France is there would be fewer food and posing an organizational chal- beverage outlets in hotels and lenge for restaurant operations. more independent proprietors As a result, restaurant manage- managingfleasing restaurants in ment will have to plan better and hotels since there is not much hire additional staff. The Swedish profit in food and beverage. hotel GM interviewed felt that However, hotel food and beverage, outsourcing would continue in in order to adapt, will have to offer food and beverage operations in and adjust menus, bars, room his country and hotel manage- service, and dining room. In addi- ment will focus on the rooms tion, they will need to offer new department as the major gener- regional cuisines, such as Asian ator of cash flow. General style cuisine, which is becoming managers in Scotland expressed popular in Sydney. It is becoming similar sentiments: increase in increasingly important for food outsourcing and focus on rooms. and beverage outlets to become independent profit centers. Marketing, sales increase Egyptian GMs preferred to Hotel GMs in the U.S. keep the traditional method with predicted that there would be food courts offering a variety of more emphasis on third party restaurants. Some of the trends partnership marketing with the include more guest options by airlines, credit card companies, including outside delivery choices, major retailers, and even other thematic restaurants, and promo- hotels. The room-booking window tions of Egyptian wine. in the future will be shorter: six

FIU Hospitality Reuiew/Fall2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. months or less in advance. The competition among hotels will marketing function will be more become fiercer with an investment aggressive in an environment with climate conducive to growth and flat demand, and each hotel will development. While the current need to focus on product differen- political climate is business tiation more than before. One GM friendly, it is difficult to predict how predicted an increase in interna- the political environment will be for tional guests to the U.S., which the ncxt 10 years. The GMs inter- certainly looks like a plausible viewed in Singapore are viewing scenario in view of the declining the Internet distribution channels value of the dollar. Another GM in a positive light as well. They predicted that advances in view them as a tool to increase database marketing will help market size and market share. hotels retain and identify new However, one GM predicted that a market segments. hotel's reputation would remain its One of the GMs interviewed best sales and promotion tool predicted a further segmentation through word of mouth advertising. of the Japanese hotel industry with In New Zealand and Australia, the development of resorts and it appears that Internet booking business hotels. Meetings and engines are replacing travel agents events were seen as the growth at a fast pace; therefore, the shift market in the near future. to the Internet as a distribution However, the increase in Internet- channel may grow at a faster rate. based third party booking sites has This will result in making websites created a culture of price sensitive more interesting, efficient, and guests. This will pose more of a easy to use. While this may be true challenge for luxury hotels that for transient business, wholesale previously competed on the basis of travel agencies and tour companies product differentiation. The remain strong. An interesting increasing transparency of pricing observation was that the increase will result in further discounting of in merger and consolidation activi- luxury hotels in Japan. ties within companies will shift the demand dynamics in favor of the Internet is factor customer since there will be fewer One Chinese GM interviewed (larger)companies to whom hotels said the Internet is a boom for hote- will have to market. As a result, liers which will enable them to hotels will have to widen and diver- potentially increase their market sify their demand bases, so that size, while the increase in interna- they are not overly dependent upon tional visitor arrivals is expected to one or two companies for the bulk continue. As domestic and multina- of their business. The target tional companies grow in size, market group of the future is growth in domestic business travel amuent and younger than its is a logical extension. However, predecessor groups.

Brymer and Singh 109

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. The competitive landscape in expense of independents. As a Cairo is expected to see a radical result, they will see the new increase due to the burgeoning concept of "cross-selling" hotels supply of hotel rooms. All of this within the network of hotels. will place a downward pressure on room rates. Some companies may Finance requires role not survive in this competitive A hotel GM in the U.S. environment, resulting in a more predicted that they would have to consolidated hotel industry. As in work with hotel owners more the case ofAustralia, GMs in Israel closely, understanding their finan- feel that the Internet is slowly cial picture and priorities. There replacing the traditionally strong will be more clustering of role of the travel agency; 80 percent accounting functions within an of current bookings are through area, (e.g., all the hotels in one travel agents. Since hotels cannot company in the New York City area directly negotiate through the will have their accounting activi- Internet, service quality, branding, ties processed in one common and reputation will gain more office). As owners are becoming prominence. As with any new increasingly demanding, with phenomenon, an understanding of higher rates of return expecta- the full capabilities (limitations tions, the management team will and opportunities)of Internet book- have more pressure to achieve ings is important in the future. GOP results. As such, they will be In the words of a GM in expected to take a more active role Switzerland, the use of the in reviewing the financial side of Internet has resulted a new term, the operation. Pressure on labor "mixed marketing," which is a costs will result from an increase in combination of traditional and new the cost of new employee benefits booking mediums. The marketing such as child care and elder care. function needs to remain tuned to Challenges in Japan include changes in this area so they are room discounting which will make able to adapt strategies. Some of it harder to meet investor rates of the sales and marketing senti- return requirements. The trend in ments expressed by GMs in the Japanese hotel industry is Sweden and the Netherlands were pointing toward consolidation, "user-friendly websites," "define with the emergence of five or six your goals and concepts, build good major hotel companies. reputations," "aggressive with Structural changes in the sales," "increased centralization Chinese hotel industry include the with large hotels," "increase in privatization of unprofitable, repeat guests," "active selling," and state-owned hotels. It is expected "search for new markets." A GM in that this change will benefit the Scotland indicated the increasing industry as the new owners trend in branded hotels at the upgrade and improve these prop-

FIU Hospitality Review /Fall 2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. erties. In general, as China moves Overall, computer systems will be closer to western-style business an effective tool to improve overall systems, there will be more effi- financial decision making. Depart- cient and standardized financial ments will save costs by electroni- reporting systems. Cash flow cally interfacing with suppliers to versus property appreciation will order their own supplies. be the primary driver of total Swiss hotel GMs predict fewer returns for hotels in Singapore. employees in the accounting depart- This, in turn, will place more ment. Once again, as investor needs emphasis on operations prof- become more stringent, manage- itability. Future profits will ment performance is mitical. As one depend upon the extent to which GM predicted, the focus has shifted technology makcs operations from long term to shorter term more efficient (therefore reducing goals and returns, with information costs) and the price of labor. Hotels analysis becoming a more impor- will have to introduce innovative tant decision making tool. A hotel programs to monitor and reduce GM in Sweden recommended the costs, such as those that reduce use of cash flow models to forecast defects and minimize waste. investment returns, therefore, In New Zealand, governmental focus on predictive versus reactive legislative actions will determine financial management. In the some financial reporting require- Netherlands, a GM anticipates an ments. Management information increase in online accounting. In system upgrades will continue to Scotland, the move has been in improve financial reporting. A GM favor of decentralized accounting, a stated that Australian hotels have trend expected to continue in the had poor returns on investment future. This is especially true in the with high development costs and case of chain operations. Manage- relatively high operating costs ment information systems are (mainly labor), so shareholder expected to continuously improve value has decreased. Each depart- financial reporting. ment needs to justify its costs and be evaluated based on its profit or Recruitment issues dominate cost reduction potential. In this Going forward into the new environment, financial reporting millennium, U.S. GMs predicted needs to be accurate and timely, that recruiting and retention which the GMs predict will be issues would dominate human more centralized and driven by resource management issues for electronics. some time. Selecting the right With the increasing use of people will continue to be a computerized back office systems, priority. As the pool of qualified hotels in Egypt and Israel will individuals deeliness, human have more streamlined systems resource departments will have to and cut out overlapping functions. improve the enlire selection

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Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. process, which includes screening GMs in New Zealand, they felt tests to match the candidates with that new technology would the right jobs and avoid needless increase productivity, thus, reduce turnover due to poor job matching. labor dependency. However, as This sentiment reverberated some of the new employment in Asia as well, where Japanese contracts are more stringent, GMs said that there will be staff employers may have less leverage shortages of willing, hard working, in influencing employee job perfor- and skilled employees.As noted by mance. As the nature of interna- one GM, in the future, more tional guests becomes more emphasis will be placed on a multicultural, this will be manager's academic background reflected in the hotel's hiring poli- because of the increased demands cies and training programs. on managers. As the entry-level skill set of Skilled positions have shortage employees will be lower in the The shortage of employees future, training will become more was a theme which Australian important. Chinese GMs felt that GMs voiced as well. This was as businesses in China grow, the particularly acute in specialized need for qualified labor will be and high skill positions such as acute. A premium will be placed on chefs. Some of the reasons might employees with an exposure to be that hotels are not attractive as Western education. Furthermore, a career choice, that larger as new businesses (not necessarily companies offer better compensa- hotels) develop in China, hotels tion packages, and that there are will face turnover because of an overall low salaries in the increase in job opportunities for industry. However, they added both management and line different perspectives on how that employees. This may push Chinese would affect the way hotels are hotel management to reevaluate operated. First, part-time posi- organizational structure, compen- tions would increase in proportion sation policies, and other strategic to full-time jobs. This would result human resource management in hotels reorganizing with a issues. Singapore, which has had a smaller and smarter workforce. more developed hotel industry Certain specialized positions such than China and Japan, faces the as chefs are starting to develop same turnover problems. As such, their own companies and lease the GMs interviewed stated that their services to hotels. Views on employee motivation, employee employee relations included interaction, and training will having a zero tolerance policy become even more important with regard to organizational human resource issues. commitment, involving employees Even though recruiting and in decision-making (empower- staff retention were issues for ment), and providing inspiration,

FIU Hospitality Review /Fall 2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. motivation on career paths, and suggested increasing the intensity ongoing training. of training by implementing A GM in Egypt stressed the minimum standards, use of perfor- critical importance of the human mance bonuses and working with resources department today by colleges and universities as solu- saying, "We now know how to deal tions to staffmg issues. with humans; therefore human resources are. becoming more Technology plays role important." Hotels in Israel are Technology presents both chal- combating recruitment issues by lenges and opportunities for the using new immigrants from Russia engineering departments of US: as a potential source of employees, based hotels. While hotels have especially in low skill positions. traditionally been considered tech- This may alleviate their short- nology laggards, the GMs inter- term hiring problems; however, viewed indicated that hotels would long-term solutions are needed. become more and more technology- Not surprisingly, it is becoming oriented in the future. The tech- clear that the shortage of nology will be more sophisticated, cmployees is a global problem. help~ngus to understand where to General managers in Switzerland, save and how to select the best France, Sweden, and the Nether- options to improve efficiency. In lands all face similar predica- order to remain competitive, hotels ments, which may he summed up will havc to update their technology as: "It is difficult to find good more frequently. This will include quality personnel." Swiss hotels new technology and a different are addressing the issue by paying "look" in the hotel. As energy more to attract employees, management systems become more searching the international labor cost effective, property design will markets, and becoming better be used more to control energy costs employers. A French GM said that and other common engineering hotel schools should do a better job expenses. These may be features of attracting students to the field. built into the initial hotel structure. The Swedes felt that hotel human While traditionally engineering resourcc departments should view departments focus on mechanical employees as assets and guide and structural issues, as the hotel their growth in the organization. becomes more networked, hotel Furthermore, human resource engineering staff will need to be policies should reflect the presence morc knowledgeable about of diversity in the workforce, such networked systems. as older and younger workers occu- Japanese, Chinese, and GMs pying the same space. A GM in the in Singapore also predicted more Netherlands suggested the use of technologically-oriented hotels, the Internet to advertise positions, and the accompanying need for and, finally, the Scottish GMs improving the staff's technical

Brymrr and Singh

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. knowledge. They felt hotels and trends affecting the engineering guests would benefit from energy operations in Switzerland, France, efficient systems and higher Sweden, Netherlands, and Scot- quality in-room technology. land include in-room Internet A New Zealand GM predicted connectivity, personnel training in the use of automation and new technologies, and technology advances in technology will maintenance outsourcing and replace and become a substitute constant upgrades. In Scotland for human interaction. To the one of the GMs stressed that hotels extent that guests will value will use less expensive energy impersonal efficiency over sources and implement new envi- personal, albeit imperfect, interac- ronmental consenration programs tions with human contact, this within engineering systems. prediction may come true. A GM in Australia predicted Similarities exist that hotel designs would be The feedback from hotel GMs smarter and more customized to around the world demonstrates the lifestyle being targeted. Non- that there are some unique revenue generating public spaces perspectives on the future, but may become smaller in future there are even more similarities on hotels. Building efficient struc- how they view hotel operations in tures, which are quicker to build the first decade of the new millen- and more inexpensive to main- nium. Even with the broad range of tain, will be important in all new cultural, political, social, environ- structures. Preventive mainte- mental, and economic platforms nance programs will continue to these GMs face in their countries, be the best on-going building and it is apparent that many issues asset maintenance program. unite the global hotel industry and However, new technologies will its future development. Despite require hotel engineers to contin- what may seem to be several uously update and maintain their obvious differences, there are more specializations and trade skills. similarities in what the GMs General managers in Egypt express than there are differences. are seeing engineering equipment The hotel industry is truly changing for air conditioning and emerging as a global industry, one electricity. The improved tech- that shares opportunities and chal- nology is expected to improve lenges more than ever. energy efficiency. Future themes articulated In Israel, GMs stressed the consistently by many GMs from role of information technology in different countries and regions of connecting engineering systems. the world include the following However, no dramatic changes commonalities: are expected. Rooms division manage- Some of the technological ment: Hotels will continue to

FIU Hospitality Review /Fall 2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. increase technological applica- the most pervasive marketing and tions to better serve guests, (e.g., sales changes for the future iden- check-in and check-out processes). tified by the GMs in this study was General managers recognize that technology, especially the high guests are becoming more volume of Internet marketing. demanding and discriminating in Traditional marketing and sales guest room amenities offered. practices are still essential, but Hotels will incorporate state-of- the growing emphasis on "mixed the-art technology, telecommuni- marketingn also includes third- cations, equipment, Internet party websites and less contact access, etc., to create mini-work with travel agents. stations. There will also be The GMs also pointed to the increased emphasis on guest room increasing competition from hotel design/spaciousness, dkcor, bath- development, which places a room sizes and fixtures, comfort- downward pressure on room rates, able bedding, and entertainment necessitating more aggressive accessories that invoke a relaxed marketing and sales in the future. homelike atmosphere. In short, This will create more user-friendly guest rooms will continue to websites, more alliances with evolve in ways to enhance work airlines, credit card companies, and relaxation space. retailers, consolidation of hotels Food and beverage into larger companies, and even management: The GMs indicated "cross-selling" of competitive that competition from restaurants hotels. Hotels will host more inter- outside the hotels would increas- national travelers and will rely on ingly pose a threat to hotel restau- service quality, branding, and their rants. They expressed a need to be reputation for future success. more creative in food and Finance and accounting: beverage, and many believe that Hotel GMs will continue to inter- outsourcing hotel restaurants will face more with hotel owners and become more widely accepted. The be held accountable for the finan- GMs stated that free-standing cial success of their hotels. signature restaurants, celebrity Higher rates of return, prof- chefs, and creating a "wow" factor itability, and cash flow will face with high quality food, unique challenges from rate discounting. menu choices, and senice delivery The financial reporting systems would be essential for the survival will be more accurate, stream- of hotel restaurants. They also lined, technology based, employ stated that new revenue sources fewer personnel, and utilize from special eventslcatering and models that rely more on predic- room service would play a larger tive versus reactive financial role in the success of food and management. Labor cost beverage management. increases are a major concern for Marketing and sales: One of the future, and GMs will have to

Brymer and Singh

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. find other ways to reduce costs, will be impacted by technology and defects, and waste while creativity. The GMs in this decade improving efficiency. must be willing to stay abreast of Human resources: The fast-paced changing technology, most pressing issue facing hotels while blending it with innovative this decade is a shortage of approaches to traditional opera- willing, hard working, skilled workers. The GMs identified tional systems. The role of GMs recruiting, selecting, and tomorrow is more complex world- retaining excellent employees a wide and how they operate hotels high priority. The reduced labor is greatly influenced by the pool will lead some hotels to country and region in which they outsource certain departments, are located. However, feedback hire immigrants to fill low from this study suggests that these skilled positions when necessary, GMs face many similar challenges and utilize more technology. General managers are also and opportunities. General working hard to reduce turnover managers can learn from each by placing the right people in the other regardless of where they right job, motivating, empow- might be located. Educating and ering, training, improving training GMs in current systems, compensation packages, and while building their creative improving the overall working approaches to leadership, will be environment for employees. vitally important to the success of Plant management, engi- their hotels in the future. neering: The emphasis in this area hinges on more sophisti- cated technology and networked References systems to improve operational ' C. A. Enz, "What Keeps You Up at efficiency, while reducing costs. Night?" Cornell Restaurant and Hotel Quar- Hotels will continue to build terly 42, no. 2 (April 2001): 38-45. more efficient physical plants to lK.I. Peterson, '"QualitativeResearch stay competitive, facilities that Methods for the Travel and Tourism are smarter and less expensive Industry," in 'Ibauel, Tourisn~,and Hospi- tality Research: A Handbook for Managers to maintain. The GMs and their and Researchers, J. R. Brent Ritchie and C. managers must stay updated, as R. Goeldner, eds. (New York: John Wiley & future hotels will continue to Sons, 1994):487-492. improve energy management systems, weigh environmental Robert A. Brymer is a professor of hotel concerns, and incorporate the management in the Dedman School of newest technological advances. Hospitality/College of Business at Florida The common thread in the GM State University and A. J. Singh is an assis- feedback is that virtually every tant professor in the School of Hospitality area of hotel operations tomorrow Business at Michigan State University

116 FIU Hospitality ReuiewlFall2004

Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission. Contents © 2004 by FIU Hospitality Review. The reproduction of any artwork, editorial or other material is expresslv prohibited without written permission from the publisher, excepting thatone-time educational reproduction is allowed without express permission.