Guest satisfaction of business clients of the Bellevue Park Hotel through CRM

2015

Guest satisfaction of business guests of the

Bellevue Park Hotel through CRM

Bachelor dissertation in Tourism and Vitality Management

HZ University of Applied Sciences

Author: Aivis Palacis, 60626

Final Thesis

The graduation assignment is written by Aivis Palacis, student number 60626,

with the guidance of Professor Judith Van Poppel. This report is completed whilst

working in Bellevue Park Hotel Riga (as of May, 2015), Riga, Latvia. The

dissertation is a part of the Graduation course, CU11839

Author:

Aivis Palacis

Student number:

60626

Course:

Graduation

Assignment:

Final report (thesis)

Study:

Vitality & Tourism Management

Academic institute:

HZ University of Applied Sciences

University supervisor:

Mrs. Judith Van Poppel

Placement supervisors:

Ms. Evita Uze

Starting date:

10-01-2014

Preface

Dear reader,

This is my Bachelor Thesis regarding to guest satisfaction of business guests of the Bellevue Park Hotel through use of CRM. Research was carried out in Latvia, Riga whereby it was commissioned in Netherlands, Vlissingen of HZ University of Applied Science, program Tourism and Vitality management studies.

I would like to thank my supervisor Judith Van Poppel, for guiding me through this experience and providing me with all the necessary help and guidance requested. Additionally, I would like to thank my company supervisor, front office manager Evita Uze for supporting this research throughout the time of this project. Moreover, I would like to thank general manager of Bellevue Park Hotel Riga, Ieva Ozola for hiring me and having trust in my actions at all times.

I am certain that this research will provide quality results to Bellevue Park Hotel Riga and will reach out to their expectations of how to improve their performance and ratings.

Sincerely,

Aivis Palacis Vlissingen, May 2015

Abstract

This research project has been conducted by Aivis Palacis, a student of Vitality and Tourism Management at the University of Applied Sciences Zeeland in Vlissingen. This graduation assignment has been fulfilled in the Bellevue Part Hotel Riga in Riga, Latvia. The overall purpose of this thesis was to come up with a CRM concept which increases guest satisfaction and retention. The aspects are considered to be the ultimate goal within the hospitality industry; however, many companies fail to address this issue properly. Therefore, this bachelor research paper explores guest behavior, as well as the behavior of staff members and its effect on guest satisfaction, expectations and complaint management by using CRM concepts. Additionally, this report provided

insight into the relation between guest preferences and their religious heritage. In fact,

it became apparent that religions do have correlation with different hotel offers. This was based on a comparison between Christians and Atheists.

The research type of this paper is exploratory because not so much is known before about the topic what includes mixed research design. Qualitative data was gathered from face to face interviews and coded, as well as structured covert observations whereby, quantitative data was collected with use of online surveys and later on analyzed through use of Google drive and Microsoft Excel. Additionally, desk research took place as well to back up some of the data.

Furthermore, the 5 dimension module which described five leading factors influencing guest satisfaction, expectation and retention revealed that guests are expecting to have a memorable experience without any issues. Additionally, it was discovered that front office does not have important knowledge and skills based on reviewed dimensions which strongly connects to satisfaction.

Moreover the study showed that angry guests are difficult to handle, but interestingly the survey also uncovered is that one does not tend to express their negative emotions right away, instead research revealed that use of social networks and word of mouth is the preferred way of expressing negative experiences. Additionally, business guests favored the idea when receiving small gifts, room upgrades, free drinks, dinners or a simple cup of coffee for free can reduce dissatisfaction but this can be applied only in case of small problems. Therefore, the overall picture of the research gives a good comparison and insight into these matters.

Ultimately, it became clear to implement smaller CRM platforms suitable for mobile phones and tablets. Eventually the outcome of this research was that it is beneficial for BPHR to follow a CRM concept specifically the one developed by the researcher. Nevertheless, this app needs to still be developed and programmed (timely and costly) and therefore, considering the current situation it would make best sense for BPHR to make use of “Conichi”, a mobile CRM app which has been established in Germany in 2014. An implementation would certainly increase the overall business performance by increasing satisfaction among guests and thus leading to retention.

Table of Contents

1. Introduction ... 1 Background ... 1 Problem definition ... 1 Research objectives ... 2 Research question ... 2 Reading guide ... 2 2. Company description ... 3

2.1. Bellevue Park Hotel Riga ... 3

2.2. Hotel services ... 3

2.3. Mission and vision ... 4

2.4. Target group ... 5

2.5. Corporate value ... 5

2.6. Organizational chart... 5

3. Theoretical framework ... 6

3.1. Review of relevant literature ... 6

3.2. Conclusion of literature review ... 10

4. Research design and methodology ... 11

4.1. Research method ... 11

4.2. Information on literature review ... 11

4.3. Population and Sample ... 12

4.4. Data collection method ... 12

4.5. Data analysis method... 13

4.6. Ethics ... 14

4.7. Limitations ... 14

5. Results ... 15

5.1. CRM situation and strategies ... 15

5.2. Expectations of business guests ... 17

5.3. Management of guest complaints ... 17

5.4. Guest retention & positive Guest recommendations ... 20

6. Discussion ... 22

7. Conclusion ... 25

8. Recommendation ... 27

Bibliography ... 28

Appendices ... 31

Appendix 1 – Research onion ... 31

Appendix 3– Sample and population ... 33

Appendix 4: Data collection methods ... 34

Appendix 5: Interview Questions ... 36

Appendix 6: Expert Interview II, concerning CRM mobile application ... 37

Appendix 7: Expert interview II, ‘’Conichi’’ ... 38

Appendix 8: Published Survey in BPHR Facebook page ... 40

Appendix 9: Survey I, Questions ... 41

Appendix 10: Desk Research, Research instrument ... 46

Appendix 11: Observation ... 49

Appendix: 12: Transcripts, qualitative interviews ... 56

Appendix 13: Survey I, Responses ... 78

Appendix 14: Benefits of CRM according to Sales Matrix 2003 ... 89

Appendix 15: CRM concept ... 90

Appendix 16: Survey I, tables ... 91

Appendix 17: Tips for retaining loyal guests. ... 93

Appendix 18: Implementation plan ... 94

Abbreviations ... 98

Figures & Tables

Figures

Figure 1: Location of hotel, Google maps, 2014 ... 3

Figure 2: Conference room capacity, Live Riga, 2014 ... 4

Figure 3: Organizational chart of Bellevue Park Hotel Riga, 2014 ... 5

Figure 4 : Complaints ... 18

Figure 5: Irritation towards complaint management ... 19

Figure 6: Complained methods ... 19

Tables

Table 1: CRM importance and possible implementation for BPHTR – guests ... 15

Table 2: CRM importance and possible implementation for BPHR – Staff ... 16

Table 3: Expectations of business guests – Guests ... 17

Table 4: Management of guest complaints – Guests ... 18

Table 5: Complaint management I ... 18

Table 6: Complaint management II ... 18

Table 7: Guest retention & positive guest recommendations – Guests ... 20

Table 8: Personalization ... 20

Table 9: Warm Welcoming ... 20

Table 10: Special Relationship ... 21

1. Introduction

Background

Bellevue Park Hotel Riga is located in the capital city of Latvia, Riga. This hotel is within walking distance from the old Riga town and is located next to the park area what makes it competitive with other hotels in Riga. Besides the unique positioning, the hotel has one of the biggest and most equipped conference complexes in Latvia. Moreover, the Hotel’s capacity reaches out up to 231 rooms and 480 beds including Spa, fitness and beauty centers, and many other facilities.

The globalization and change of technology inevitably requires a more highly skilled labor force worldwide. Technology makes it possible to produce customized service on a large scale at relatively low and competitive prices. Additionally, according to professor (Dwyer, 2014), technological spill overs are particularly important for developing countries providing opportunities for them to narrow the productivity gap with the developed economies. Thus, the Internet and related social media has been a vital development across all industries as guests use it to gather information on destination, products and services.

Furthermore, one of the biggest trends for Hotel industries are CRM based app’s that are cheap, fast and easy to use. These smartphone CRM systems are considered to be a future of hospitality industry whereby everyone can access and share the information they want towards hotel services based on social networking principle where everyone wins (Maximizer, 2014). Additionally, ‘’Maximizer’’ predicts that within the next five years CRM market will grow by 46% whereby hotels that collaborates with these systems now will have an advantage in the future. Thus, according to World Tourism Organization (UNWTO), it is expected for the BRIC countries to have a gradual growth in market share of business tourism until 2030. (Europen Commission , 2014)

This been said, within recent years Bellevue Park Hotel Riga has received a staggering amount of negative online guest reviews, but no direct complaints regarding the hotel and/or service have been experienced. Based on these reviews the management of the hotel is curious about the causes and thus deeper research must be conducted. Precisely, guest satisfaction and the expectation of business guests during their stay require further analysis. They believe that this can be accomplished by developing a proper guest relationship management (CRM) strategy. Since it is a business hotel that mainly works with business guests it is clear that this research will focus on this particular target group.

Problem definition

Nowadays, hotels find it challenging to seamlessly gather and store valuable guest information data by making use of CRM software possibilities. First of all, there are a number of CRM tools in the market available, but guests (hotels and other companies) find it difficult to assess and choose a well-fitting CRM system which also suits the guest’ accurate needs. Precisely, the CRM software must fit to the overall business and marketing strategy of the hotel.

Secondly, special attention must be addressed to factors such as ease of operation, user friendliness, technological compatibility and the costs when assessing a possible implementation of CRM (Vogt, 2011).

Essentially, the main problem of the hotel lies in the uncertainty of measures which can be undertaken in order to successfully reach out to their guests and therefore, fulfill their expectations in the most effective manner. As a matter of fact, a precise way or

strategy to diminish and deal with complaints is not present at the current state. This not only leads to dissatisfaction among various guests, but what is more disastrous is the fact that dissatisfied guests will share their experience with potential guests via social networks and other experience sharing sites. In the end, this results to a loss of potential guests. Therefore, an effective CRM strategy needs to be developed in order to eliminate these problems and create loyalty, retention and satisfaction instead

(Chang,

2010).

Research objectives

The objective of this research is to find out how Bellevue Park Hotel Riga can best reach out to one of their main target group with an aim of ensuring a pleasant and memorable visit. In addition, relevant aspects is to find out whether guests are satisfied, whether their expectations are met and how guest complaints are managed by the hotel. After successfully analyzing the mentioned factors, the researcher will propose a well-defined CRM strategy as well as technology which also suits to the existing situation of Bellevue Park Hotel Riga.

Research question

“In what way can the concept of CRM be specifically used to increase guest satisfaction among business guests of Bellevue Park Hotel Riga?”

Sub-Questions:

In what ways can Bellevue Park Hotel Riga apply CRM strategies?

What are the business guests’ expectations beforehand of visiting the hotel? In what ways can guest complaints be better managed, consequently reducing negative online reviews?

What triggers business guests to return to the hotel as well as to recommend it to others?

It also could be interesting and relevant to take a look into elements that influences staff satisfaction eventually, finding out if there is relation between guest pleasure and staff satisfaction. Moreover, question of ‘’Are guests from different cultures likely to be delighted by different hotel offers’’ can be researched additionally as well, therefore, providing client with an extra results that could help BPHR to improve their performance.

Reading guide

This research is structured in the following way. The next chapter ‘’Company Profile’’ describes the profile of the company and gives more in depth background information of BPHR. Chapter 3 ‘’Theoretical Framework’’ supports the data collected of the research theme. In Chapter 4 ‘’Methodology’’ describes of how this research has been carried out whereby Chapter 5 ‘’Results’’ show the findings the research has revealed. Chapter 6 the results are discussed with data from theoretical framework. Lastly, the conclusion in chapter 7 has been drawn based on research findings and followed with recommendation for BPHR in Chapter 8.

2. Company description

2.1. Bellevue Park Hotel Riga

The information has been mainly gathered from the official website of Bellevue Park Hotel Riga. Information has been found under the rubrics ‘’About Bellevue’’ and ‘’Spa & Fitness’’ with the main website.

Bellevue Park Hotel Riga is a four star hotel which is located in Slokas Street 1, LV-1048, Riga, Latvia. This hotel was established in 1978 and ever since had successful operations. 22 years later, in the year 2000, the hotel was renovated and gained a new international look. Nowadays this hotel has 231 rooms from what 40 are business class rooms and 3 different style lux’s rooms with a total of 480 beds. These rooms are located within 11 floors including 2 bars, 2 restaurants, and 9 conference halls. The total surface area reaches up to 1100m² and has a capacity of 1100 guests in total. Moreover, one of the advantages of this hotel is its location. This hotel is located within short distance from Old Riga town and is located right next to a park area where one can enjoy the nature and a little bit of peace and quiet in the middle of Riga. For simplification purposes, Bellevue Park Hotel Riga and BPHR are used interchangeably.

Contacts:

Website: www.hotelbellevue.lv Tel: +371 67069000

Fax: +371 67069001 Mail: info@bellevue.lv

Figure 1: Location of hotel, Google maps, 2014

2.2. Hotel services

Spa & Fitness

BPHR offers Spa and Fitness facilities - Massage Studio Sanum Spa. Here one can choose from various treatments, including a classic massage, aromatherapy and anti-stress treatment. A sauna, steam bath and fitness room are available for hotel guests 24/7.

Beauty salon – SHINE

This beauty salon offers hairdressing, manicure, pedicure and cosmetologist services. The employees are highly skilled professionals in various treatments which the guests can enjoy.

Restaurants

The hotel has two restaurants in which the first one is located on the ground floor and is open only during breakfast time from 6:30 am until 10:30 am. The second one offers a panoramic view and is located on the 11th _{floor. It provides various culinary delights} from 3:00 pm until 11:00 pm.

Besides ordinary restaurants, BPHR offers a special night menu for their guests as well as a summer terrace with a nice view on the Victory Park. This is available during high season only.

Lobby Bar and Balsam Lounge

The lobby bar works from 9:00 am until 12:00 pm offering snacks and beverages, while Balsam lounge is open 24/7 for their guests.

Conference, meeting rooms

BPHR owns the biggest and most equipped conference rooms in Latvia with a total room size of 1100m² and is divided into 9 different style rooms. The room capacity can be seen in Figure 2.

Room name Arrangement style

Banquett Classroom Boardroom U-shape Reception Theatre

Vilnius 8 10 10 10 10 16 Tallinn 24 20 21 18 30 30 Frankfurt 34 20 22 20 30 35 Riga 48 45 32 30 40 60 Berlin 50 70 45 40 70 110 Event Plaza 100 130 45 40 150 200 Maritim I 200 210 75 70 200 330 Maritim II 200 200 65 60 200 300 Maritim I+II 450 410 220 100 450 630

Figure 2: Conference room capacity, Live Riga, 20141 Equipment:

 Audio & video players/ recorders/ flags/ flipcharts & whiteboards/ wireless presentation controller/ microphones/ projectors/ personal computers and laptops/ office equipment/ rostrum and podiums/ screens and plasma monitors/ simultaneous interpretation/ TV & video set/ video camera with operator/ wireless internet connection

2.3. Mission and vision

The following mission and vision has been retrieved from the general manager, Ms. Ieva Ozola.

Mission

Our mission is to become the biggest and most equipped conference center in Baltic States. Vision

We want to satisfy people’s expectations on the accommodation, the service and conference center level by offering them an honest product. This is both on recreational and business level. Provide a perfect combination between accommodation and business meetings under one roof.

The mission clearly states that the hotel is focusing on the provision of the largest, most equipped conference center for business guests in the Baltic countries. Therefore, the researcher focused primarily on gathering relevant information about business guests so as to be in line with the overall mission. In terms of the vision, the hotel aims to find the perfect balance between good accommodation offers and professional business conference centers. In order to accompany this vision, the researcher elaborates

business guest expectations beforehand, but also conducts interviews relating to the general service and accommodation. In the end, the results will show which CRM system might suit best according to the mission, vision and general situation of the hotel.

2.4. Target group

There are two main target groups for BPHR.

 Business guests

 People in groups

BPHR mostly focuses on business guests from Europe, especially the Baltic States. Russian business guests also build up a high fraction of existing guests. The primary reason as to why these guest stay at the hotel is simply due to business matters. One can say that they are attracted by the large and well-equipped conference rooms, meeting facilities and the opportunity to speak in good Russian language within this area what makes it easy to communicate between guests and the staff.

The second target group can be characterized as “people in groups” such as sport teams, group of tourists, weddings and other big group events. They mostly arrive during low seasons and commonly are local or European citizens. According to BPHR the hotel is considering to put an emphasis on more individuals (business people) than people in groups in the near future. This is because guests in groups already receive decent discounts and affordable prices. Therefore an emphasis has to be made to attract more business guests who have more money to spend and the hotel can provide these guests with the right equipment, facilities and services for this target group.

2.5. Corporate value

BPHR is mainly a business hotel that puts an emphasis on business guests and groups as mentioned previously. The fact that Riga - the capital city of Latvia - is rapidly expanding, new opportunities and demand for new businesses are being created. The location certainly plays a determining role (center of the Baltic States) since it connects the East to the West. Therefore, entrepreneurs from the East such as Russians are increasingly interested to invest in the European businesses through the use of Latvian markets. This raises the demand for business accommodations with high standards and morals. Thus, it is crucial for BPHR to reach out to this target group to guarantee the highest level of satisfaction and to ensure attractiveness, retention and capability to successfully compete in the shared market with other hotels. In this way it would increase revenues and generate cash flow from business tourism. By supporting tourism in Riga, a positive effect for the Latvian economy is growth and job creation.

3. Theoretical framework

The research question “In what way can the concept of CRM be specifically used to increase guest satisfaction among business guests of BPHR puts an emphasis on the following elements:

 Significance of CRM & implementation peculiarities  Guest satisfaction, expectation and 5 dimensions  Management of complaints

Therefore it is demanded to find a link between existing studies and the research questions.

3.1. Review of relevant literature

Significance of CRM & Implementation peculiarities

Customer Relationship Management is a system that analyzes how management works with their guests, solve their problems, and encourage buying the product or services. CRM includes all elements of guest transaction and brings together all guest related elements of a company by using intelligent methods (Chang, 2010). One of the most important tools of CRM are 4P’s; Price, Promotion, Place and Product (Tohidi, 2012). However, this research will not be focused on the 4P’s, since this theory involves marketing perspective as well and might lead away from the main objective.

Moreover CRM itself includes business processes, technology and regulations needed to collaborate with the guests through different points of the business cycle (Woojung Chang, 2010). To increase the success of any CRM strategy it is crucial to gather more and more data about the guest and therefore, getting a better understanding and knowledge of potential or existing guests. The fact that businesses are increasingly driven by guest-centric strategies, the need for an effective CRM strategy is crucial (Mishra, 2009).

According to (Tohidi, 2012) the objective is to increase the satisfaction of guests by using CRM methods which include wide set of tools, technologies and overall relationship that should ultimately lead to increased sales and loyalty of the guest from the companies perspective. Therefore it appears that CRM is an ongoing strategy than simply a view point of technical aspects (Mishra, 2009). This way CRM can ensure long term relationships with guests. Having this said it is important to focus organizational activities on guest needs and desires. From an implementation perspective, CRM should not be mistaken for a simple software solution, but more importantly as an entire corporate strategy which revolves around the development of a sustaining relationship between business and guests (Parvatijar, 2001).

Furthermore, (Rababah, 2011) explains that organizations are competing with each other like never before to ensure a good position within the market. Most of these organizations understand the importance of their guests and become more guest-centric. Companies are investing a lot of time and resources to effective guest relationship management, therefore, having a better view and control of guests, however a lot of times failing to fulfill these CRM strategies in reality (Prasongsukarn, n.d.). In fact, many organizations over the past years are dealing with these kinds of difficulties to implement CRM and its strategies into the organization. Many organizations find it costly and hard to benefit from CRM. Despite of the positive success stories worldwide, researches show a high failure rate for companies implementing CRM strategies (Finnegan, 2010). The same study revealed that most of the time CRM

implementation is too focused on social networking instead of knowing guest problems in-depth and integrating culture, process and people issues within the organizational CRM context. Therefore misleading information or partial knowledge about the guest might lead to false issues and/or wrong approach to the problems.

Other studies show that organizations that pay more attention to the guests perform better overall. For example, these kinds of organizations can better identify valuable guests, resolve existing problems and therefore be able to attract more loyal, profitable guests (Steel, 2013). In this sense it’s been described that CRM technology can be a leading factor to have a successful management of guest relations. This involves support from marketing and sales department, along with back office that can help investigate and analyze data related to guests and their behavior (Josiassen, 2014).

Additionally, (Moseley, 2003) explain ten ways of how properly implemented CRM strategies can increase hotel revenues. Since many books and articles have been written mostly about CRM implementation this study focuses on increase of revenues through use of CRM.

Guest satisfaction, expectation and 5 dimensions

Guest satisfaction has been believed to be the ultimate key success factor for the service industry. In fact guest satisfaction is essential for long-term business success, and one of the most frequently researched topics in marketing (Ekinci, 2011). However, some research challenges hold the assumptions that guest satisfaction leads to loyalty (Skogland, 2004). Although, existing research suggests that merely satisfied guests are not necessarily loyal nor committed (Voss, 2008).

Research was conducted to provide insight into results that the expectations and satisfaction of hotels hospitality are influenced by personal factors such as gender, purpose of stay, nationality, and private domain of hospitality (Azmi, 2012). Although, the same research showed that the hotel’s star rating is the only accommodation factor that might have a strong association with hospitality. According to (Smith, 1994), hospitality and service are distinctive characteristics of tourism and accommodation products, however he also states that sometimes it is difficult to determine these in practice.

Furthermore,(Azmi, 2012). distinguishes criteria levels of guest satisfaction in 5 dimensional factors as follows: “Personalization”, “Warm Welcoming”, “Special Relationship”, “Straight from the Heart”, and “Comfort”.

First factor ‘’Personalization’’ in this study refers to the feeling of the guests by welcoming them as important guests, by knowing their name and other personal information that could make guest feel important. It states that guests rates the hospitality of the hotels by how they have been treated. Apart from treating guests with full respect, it is crucial to do it regardless of their physical or cultural differences. In addition eye contact with the guests during conversation is found to be one of the most important elements of “personalization” in specific and hospitality in general (Azmi, 2012)..

The factor ‘’Warm Welcoming’’ is the second most important dimension of explaining hospitality. According to (Smith, 1994) hospitality is an expression of welcome by local residents to tourists arriving in their community. Research shows that guests find it pleasant when they receive extra attention on arriving at the hotel. For example they receive warm greeting at arrival by receiving token of free drink, gift or welcome letter as greeting at the reception while checking in. In addition it states that taking care of

guest luggage as well as good eye contact makes guests feel more welcome. This way staff creates a pleasant surprise and excitement which enhances their satisfaction (Azmi, 2012).

“Special relationship” was the third most influential dimension which positively contributes to the satisfaction of the guest. This factor refers to the individual care of the one to one guest that involves special treatment and understanding beyond the normal service delivery. Guests at this level are treated as friends or companions of the hotels. Guests would expect a warm “good bye” from the staff when they are leaving the hotel. The emphasis on relationship marketing through personalized programs is of critical importance to make the guests feel special and to make them believe that the hotel has singled them out for extraordinary attention (Azmi, 2012).

The fourth dimension “Hospitableness” is explained as ‘’Straight from the heart’’ or in other words emotional intelligence what arrives from the host of the hotel or restaurant. (Lashley, 2008) says that hosts of hospitality and tourism services should have necessary level of emotional intelligence to understand, predict and fulfill needs of their guests. Research shows that this kind of intelligence is very important to organizational success of satisfying guests, where staff have quality to create a positive impact on external guest experience. Furthermore, front liners should incorporate emotional intelligence into the hospitality. In fact smiling is considered as an icon for hospitality at cultural as well as commercial domain, but for the latter the smile is more as an indicator of expressing emotions that it was not for profitability reasons but for pleasant stay of the guest (Azmi, 2012).

Finally the fifth and the last dimension of hotel hospitality and guest satisfaction is “Comfort”. This dimension is more focused on guest environmental satisfaction, their room and expected facilities within the hotel. All aspects of the room have to be in good condition and be clean; attention to hygiene is highly recognized. Apart from tangible comfort in the context of hospitality it’s also important that guest receives emotional state where they can feel comfort throughout their stays in the hotel. Essentially, guests should develop a feeling of being as comfortable as at home. If one were to have high expectations in these aspects, it will not help generate guest satisfaction towards the hotel. It is the quality of emotions created by the qualities of staff performance, hospitality and fellow diners that generate long-term guest satisfaction as well as loyalty (Lashley, 2008).

Study by (Ahmad, 2008) on Malaysian hotel services also found that staff performance was more important than the tangible aspects of the hotel. Although “comfort” is considered as least important, the need to feel comfort is vital in creating a memorable experience at hotels.

Complaint management

Even when hotel guests have received highest quality service, the complete overall satisfaction is rare. Expectations of today’s guests are high, demanding and they are less likely to be loyal than before. It is almost impossible to avoid failures due to the high expected demand within the hospitality industry (Taegoo, 2009). In fact, if one fails to resolve a complaint or uses an ineffective approach to deal with it, it can highly increase frustration among guests which accordingly may lead to negative word-of-mouth. This can strongly lead to catastrophic consequences for the business (Kilinc, 2006)

A study of (Taegoo, 2009) suggests resolving complaint situations by offering guests different possible compensations for example room discounts or cheaper upgrades will lead to a win-win situation for both the guest and the hotel in most of the situations.

Furthermore, hotels should install strong policies, proper training systems and procedures therefore empowering employees so they would be perfectly trained and be capable to deal with angry guests as well as to provide them with the best solution in no time. Moreover, these employees need to be reliable and trustworthy; someone who acts in the best interests of the hotel and someone who is pro-active or in other words who doesn’t need supervisor approval to successfully resolve complaints. (Heejung, 2012)In general, people with higher moral awareness are most likely to express their feelings of negative experience by using word-of-mouth than showing direct anger at the spot to service failures while guests with lower moral awareness will do the opposite.

Firstly, it is of utmost importance to resolve negative word-of-mouth publicity and other complaint reviews by using suitable approaches as online apologies. An appropriate apology or explanation can minimize the negative effects. Moral engagement should be a priority (Hongwei, 2014).

Secondly, literature revealed that front line managers should proactively encourage guests to contact them directly therefore, guests anger can be managed with mental engagement what will strongly reduce negative word-of-mouth or even peer-to-peer online reviews.

Thirdly, two strategies have been explained. First anger should be reduced by understanding and taking immediate action to ensure effective communication with one another. Second, one should express understanding of dissatisfaction as well as to discoursing guests of negative check-out or afterward review. This could lead to a strong feeling of self-control of the guest what most likely will reduce or eliminate the anger (Wei Wei, 2013). Furthermore, front liners should ask guests immediately during check-out abcheck-out their service experience. If guests show dissatisfaction the receptionist can settle, apologize, or justify as necessary. If everything went well then the hotel can indicate its strong quality and move on from there (Hongwei, 2014).

Moreover, a study from (Zhou, 2014) recognized that strong attention has to be made with regards to unique conditions within hospitality, however it has been delighted that value of the digital age and importance of cultural aspects is crucial for guest satisfaction.

3.2. Conclusion of literature review

CRM is a guest-centric system that allows businesses to communicate with their guests as well as to monitor profitable and loyal guests eventually improving their satisfaction and overall performance of the business. This can be done only if CRM has been implemented properly by having all the necessary elements such as technology and positive relationship. Additionally, companies are failing to implement as well as to find it not beneficial of having a CRM due to having too much attention on social networking instead of knowing their guests in depth. Companies that focus more on their guests perform better overall.

Furthermore, guest satisfaction is the ultimate goal for hotels as well as it is essential for long term relationships and loyalty. Satisfied guest does not mean loyal. The loyalty and expectations of the guest is influenced by gender, purpose of stay, and religious beliefs. Moreover, five most important elements that guests are expecting as well as influences ones satisfaction is knowing the name of the guest and treat him like an important one as well as having an eye contact is one of the most important elements of personalized service. Second factor involves extra attention; warm greeting by offering free drink or a gift within check-in. Special relationship is created where warm good-bye is expected. The fourth dimension involves emotional intelligence engagement where a smile indicates that guest is welcome for the right reasons instead of profitability. Finally, Comfort is considered to be the least important factor; however this factor is crucial to create satisfaction.

Moreover, proper management of complaints is more importance than reaching out to guest expectation. Staff needs to be trained, independent and capable of handling complaining guests. Sign of empathy and deep apology reduces frustration therefore, providing an opportunity to resolve problems before guest leaves. Front office needs to encourage guests to provide feedback therefor, creating the opportunity to resolve problems beforehand. People with higher moral awareness are expressing their dissatisfaction by use of word-of-mouth or social network whereby people with lower moral awareness will do the opposite.

4. Research design and methodology

This chapter covers an overview of the methodology used in this research. This chapter is structured around the research design, data collection and analysis method. Ethical considerations, as well as limitations to provide trustworthiness are also reviewed. Furthermore, identified population and samples are explained.

The figure in appendix 1 shows the research onion which has been initially designed by Saunders in 2007. It illustrates the steps of the research approach which has been adopted; therefore it provides one with a clear view about the layers which lead to the data collection and analyses for this specific research.

4.1. Research method

The research methods applied for this research can be regarded as a mixed method research due to the fact that qualitative, as well as quantitative elements have been used. Overall, it can be said that the research design is exploratory with descriptive elements in nature since, little is known beforehand regarding the use of CRM in this specific hotel as well as frequencies were analyzed as numeric results (Baarda, 2014). In order to collect relevant data concerning existing literature from the theoretical frame, desk research has been primarily used. In contrast, the method for data collection regarding guest behavior, the researcher conducted observations, interviews and online surveys. According to Brink & Wood (1998, p.5) words and all sensory data are considered qualitative unless they are transformed into some numerical system. Since, previously discussed theory explains that guests with higher moral awareness tend to express their dissatisfaction afterwards, rather than complain immediately (Heejung, 2012). Therefore, having a need for the quantitative research approach to be used as well, in order to find out how many business guests of BPHR who took part in the survey have complained to the reception, how many business guests expect recognition and what is the most preferred complaining method as well as if and how many business guests would share their experience with the front office.

4.2. Information on literature review

The main focus of this research is to understand guest behavior and preferences through the use of CRM within the hospitality field that would possibly increase guest satisfaction and retention. The theoretical framework of the paper is based on data from relevant books, journals and websites. There is extensive literature available concerning guest satisfaction however, additional theory towards complaints, and expectations has been reviewed as well. This resulted in a better and more in depth insight into important constructs that led to the main answer, conclusion, and recommendation afterwards. Each literature concept plays an important role into answering the specific research question. Connection between research questions and concepts can be found in appendix 2 – operationalization.

Moreover, the research focuses on the concept of CRM, specifically on the 5 dimension module (chapter 3.1) which describes five leading factors on guest satisfaction, expectation and retention (Azmi, 2012). Moreover, study of how to recognize and deal with angry guests and their complaints to eliminate negative reviews and word of mouth is also analyzed (Hongwei, 2014) Later on; this can be interpreted into reasons of why BPHR has negative reviews. Therefore, the overall picture of the research will give a good comparison and insight into these matters including many other studies mentioned in (chapter 3); Operationalization with concepts can be found under appendix 2.

The qualitative literature review has been conducted before the data collection reasoning that it put the study into context and allowed the researcher to get better acquainted with the topic. A drawback for this method is the possibility of getting influenced by the findings or opinions of the existing literature.

4.3. Population and Sample

The population for this research can be characterized as stakeholders of BPHR which need to be addressed. Within this population, mainly two samples have been identified namely business guests and hotel staff. The sampling technique for the first sample is regarded as stratified random sampling, because the survey has been dispersed randomly to all of the guests whereby only data from business guests were used for this research. The second and third sample has been handed out purposefully to four receptionists and five business guests of BPHR in order to find out how they interact with each other and whether the front office makes use of some kind of CRM system. The respective sample size can be seen in Appendix 3.

Survey sample size was chosen based on one month BPHR guest visits from February 2015. Amount of guests visiting BPHR in his month was 5478 guests; therefore formula 2 _{was used of statistics that calculates minimum size of the sample size for}

90% certainty. Therefore it was expected to have the sample size of 94 business guests thus, having a margin error of 10% applicable to both surveys. This way making sure, that research is reliable and valid. Unfortunately, expected response rate was not reached and reached only amount of 41 business guest responses.

4.4. Data collection method

Since mixed research method is used, the data was gathered mainly from structured, in depth face to face interviews and structured covert observation as well as online survey has been used. Data collection methods explained in depth per sub-question can be find under, appendix 4: Data Collection methods.

For the qualitative part, five business guests and four front desk employees were interviewed, see appendix 5: interview questions, within time frame from 16.03.2015.-29.03.2015. The amount of participants was enough since, the collected data started to repeat itself. Moreover, data was collected by use of a smartphone app iTalk which gave researcher the possibility to record interviews in High Quality (HQ).

Additionally, two qualitative expert orientation interviews took place as well. First one took place on (25.02.2015) with BPHR manager of marketing whereby, it was necessary to discuss views and insights about CRM from company’s perspective see appendix 4: expert interview I. This person was chosen, since she was mostly involved into new developments within the hotel. The Second interview took place at the very end of the internship. Whereby the preferred ‘’Conichi’’ CRM app was discussed with the Manager of Sales of Conichi as representative of the company. Interview was held through use of Skype. Therefore, giving more in depth knowledge about benefits, features and ways to implement it specifically for BPHR this interview took place 26.04.2015. See appendix 5: expert interview II.

Quantitative data was collected through the use of online survey with fixed and structured, closed questions with possibilities to expand based on research instruments. This survey was concerned to guest satisfaction, retention, complaints and expectation with an amount of 30 questions in total whereby it was expected to be open for one month; however, it was open for two months since not enough people participated at first 01.03.2015- 01.05.2015. Occurred problems as well as limitations are explained in chapter 4.7.

Additionally, the use of Facebook, (See Appendix 8: Facebook) and direct approach was made to encourage more people to take part in this survey within that time frame, see appendix 6: survey I questions.

Moreover, structured observation was made for this specific research. Methods used in this observation are participant observation and covert observation (Baarda, 2014).This means that participants were not aware of being observed by researcher within front office. This observation was done within a period of three days where front office employees were absorbed and analyzed. This specific approach has been chosen because this observation was previously structured as well as it was anonymous (mystery shopping). Since this was a structured observation the researcher did focus on front office employees and their behavior and quality of service in relation to the 5 dimension model of guest satisfaction by (Azmi, 2012).

Lastly, the desk research was used in this report as a secondary data collection by giving additional insight into research constructs such as, possible CRM systems, possible CRM apps, advantages and benefits of CRM and expert reviews, . Based on internet findings, Sales matrix, Sales Force, hotel news now and ‘’Conichi’’ was reviewed mainly therefore, giving better insight into additional information based on the research questions, see appendix 9: Desk Research.

4.5. Data analysis method

The collected data has been analyzed in various ways depending on the sample.

Random Sample 1: Business guests

This sample was analyzed by use of Google drive and Microsoft Excel. After all the necessary data was collected it was measured by use of Excel as well as diagrams and charts were made based on responses received. Afterwards, data was used only from participants who said that their purpose of traveling is business, since only this target group interests the researcher based on the research objectives therefore, leaving leisure guests out of the research. Participants were asked to state if the purpose of travelling is business or leisure related therefore, creating a possibility to determine only reliable data focused on business guests.

Purposive Sample 2: Hotel staff

Observation for this additional side sample was analyzed based on frequencies of how many times preferred actions occurred and whether it was positive, negative or neutral see appendix 10: Observation. After all the data was gathered and written down, it was necessary to calculate the total amount of interactions happened within the expected time frame. The complete data was analyzed and represented based on specific actions that took place at the time. Therefore it is clear if the preferred actions did take place or not.

Additionally, staff interviews of this side sample were analyzed and coded as well: explained in sample 3, below.

Purposive Sample 3: Business guests

This sample was analyzed based on recorded data whereby transcript was made afterwards by writing down all the information recorded and later, classified based on responses as well as coded/labeled and categorized according to (Baarda, 2014) what eventually delivered a selective coding as a results of qualitative data. Complete process and explanation of transcript and coding can be found in Appendix 11

4.6. Ethics

Regards to the research itself, ethics raises the point of importance of appropriate behavior throughout the study. Since more parties are involved it’s important to ensure an ethical approach throughout the entire research phases. Gathered information is strictly confidential and accessible only to the involved parties.

Moreover, questions from surveys, questionnaires and interviews will be “ethical” in nature and will not irrelevant questions what could be misleading or offensive to the participant. The questions will be prepared in advance to eliminate misleading questions or information. Since the study will take a lot of time and social support it has been considered that honesty, reliability and overall ethical factors are important. Furthermore, the APA referencing style is adopted in order to site literature sources appropriately. Lastly, the researcher does not engage in plagiarism.

4.7. Limitations

It should be underscored that several limitations are of note. First of all, quantitative survey did not represent an expected amount of data See appendix 12: Survey I responses. This can be explained due to the too many survey questions set up by the researcher. Also, BPHR did not want to allow and to let the researcher sent out surveys through the mail, due to the fact that guest might understand this survey wrong way as a spam. Therefore, the researcher had to gather responses by asking guests individually, if they would be willing to fill in the survey online. Unfortunately, the response rate still was not enough to reach reliability. Therefore, more in depth researcher should be done. Moreover, additional research was made. For the research question as follows:

Are guests from different cultures likely to be delighted by different hotel offers? This sub-question was not included into the actual thesis since, it appeared to the researcher that this information is irrelevant to the actual study in the end of the research therefore; separated exploration based on this research question was made and placed in the very end of the Appendices of the Thesis. Taking into account that this specific research question does not completely interface with the actual research, it is clear that t is still interesting for the client (BPHR) to see if there is connection between preferences and guests from different cultures. This can help BPHR to improve their performance towards guest satisfaction.

5. Results

5.1. CRM situation and strategies

Expert interview

Through the expert interviews, as well as discussions with the front office employees, it became apparent that the staff does not have competencies in terms of CRM expertise. BPHR staff behaves naturally that is in line with the general concept of CRM, but technological know-how, table 2 show lack of knowledge. Furthermore, according to the front office manager Mrs. Uze, it is apparent that BPHR does not have sufficient financial resources in place to invest in a CRM concept.

Business guest interview

Results show, see table 1 that it is important for guests to have a simple, fast and pleasant access to the staff of the hotel.

‘’Would be nice for a hotel to know the preferences however it is not that important as far as you are nice. Questions, requests if they can answer (hotel) with friendliness is great. We are always willing to answer some personal demographic questions, and it is nice to have a small chitchat when you come in.’’ -Business Guest- For guests to come back to the same hotel, satisfaction, memorable experience and positive atmosphere is important. Also, recognition, friendship and extra attention are expected. Friendship between guest and a staff member is essential. Additionally, benefits that include discounts and personalized service are important. Additional information is shared if benefits are involved.

‘’I prefer low profile and some basic share of information, would share some additional information if we would receive long term benefit from it, for example like Hilton hotel has this Hilton membership cards’’ -Business Guest-

Selective Coding

Benefits

Relationship

Guest retention

Access

 Discounts  Personalized service  Room Upgrade  Recognition  Friendship  Extra attention  Satisfaction  Memory  Positive atmosphere  Simple  Fast  Pleasant

Table 1: CRM importance and possible implementation for BPHTR – guests

Front office Interviews

Based on selective coding, front office staff members have heard about CRM concept, some guests said and I quote: ‘’not sure exactly what it is, CRM’’. Results also revealed that CRM means dealing with complaints and to find out guest preferences, See table 2.

‘’Best way to find out guest preferences is to ask and start talking while you check in the guest.’’ –Receptionist-

guests.’’-Receptionist-Selective Coding

Approach

Understanding of CRM



Asking questions



Researching



Listening



Absorbing



Have heard of it



Not sure



Dealing with complaints



Guest preferences



A tool

Table 2: CRM importance and possible implementation for BPHR – Staff

Desk Research

Hotel News Now

‘’A proper CRM strategy brings new levels of revenue growth and leads to guest satisfaction and retention. In the following chapter’’

Sales Matrix 2003

Implementing at least few of the following 10 ways into the business process, companies increase revenues by at least 5% (Moseley, 2003). The return on investment (ROI) of a well-planned CRM strategy is 3 – 4 months. It has been analyzed which of these ways would be suitable for BPHR and how it might increase revenues.

Since BPHR does not use a CRM system although it is planned to have one it is important to first have a better insight into the benefits and advantages of Customer Relationship Management as follows:

‘’It will support company’s sales persons by giving more reliable data about customers. This will give an ability to easily manage, monitor and notify therefore, critical activities will not fair.’’

‘’Sales and Marketing are working on daily basis by communicating, meeting, and networking with guests and looking after their information and personal data CRM will provide more in depth information about their guests, therefore saving a lot of time and effort for other departments.’’

‘’Without any CRM system in place it is difficult to keep track about their guests. CRM allows easily keeping all necessary information therefore having a clear view of profitable and loyal guests’’

‘’Share account, history and opportunity information, this will give your business new ways how to attract new guests, and create new sales opportunities by use of good CRM system’’ The complete theory can be found under, Appendix 14: Benefits of CRM.

Salesforce.com

Additionally, the most popular CRM systems ‘’Sales Force’’ provides an all in one CRM solution package. It is a customized all inclusive CRM system for businesses and have a price of 315.00 EUR per user, per month. This includes workflow and approval automation, report history tracking, enterprise territory management, profiles and page layouts, customize app development, integration via web service API, sales force identity, sales data and sales cloud engage.

This specific CRM system is applicable to BPHR. It provides all the necessary features to increase guest satisfaction as well as guest support and additional features, mobile app and own guest database.

CRM mobile app

Based on already discussed results and studies the researcher has developed a concept for a mobile CRM application that is simple to use, and brings all the necessary benefits to the business and guests without spending huge amounts of money. The concept can be found in Appendix 15: CRM Concept.

5.2. Expectations of business guests

Business guest Interviews

Table 3 shows, guests are expecting beforehand to have a good quality, fast and easy access to the service additionally it is expected to have a breakfast and free internet. ’Food and good breakfast that is included makes the stay memorable’’ -Business Guest-

When it comes to hospitality, polite and friendly staff is important. Recognition, smiling and open staff as well as positive atmosphere are expected. Location is preferred to be close to the center. Interesting surroundings and accessible public transportation close to the hotel are expected as well. Clean rooms and comfortable beds are also estimated that involves tea, coffee, kettle and radio accessible in the rooms.

’’We were expecting tea and coffee in the room’’ -Business Guest-

Selective Coding

Equipment

Facilities

Location

Service

Hospitality

 Tea  Coffee  Kettle  Radio  Clean room  Comfortable beds  Close to the center  Interesting surroundings  Accessible public transportation  Fast  Easy to access  Good quality  Breakfast  Free internet  Polite staff  Friendly staff  Open  Smile  Recognition  Positive atmosphere

Table 3: Expectations of business guests – Guests

5.3. Management of guest complaints

Business Guest Interviews

Based on qualitative interviews in case of complaint it is important to interact with professional staff that is easy accessible, can provide fast approach with precise timing and direct actions towards solving the issues.

‘’It important when it comes to complaints, to know what channels to use, who to call and how’’

-Business Guest-

Capability of managing angry guests is preferred as well. Additionally, Human factor is important. Empathy, tolerance, openness, friendliness and trust as well as patients are important to the guest, See table 4.

‘’ Even if something went bad guest will remember how you solved it and that issues were resolved and free gift received’’ -Business Guest-

24% 76% Complaints Yes No N=41 Selective Coding

Human Understanding

Staff



Empathy



Friendliness



Openness



Tolerance



Patience



Trust



Accessibility



Fast approach



Professionalism



Precise timing



Direct action



Anger management

Table 4: Management of guest complaints – Guests

Observations

Observation results show that guests were encouraged to share their experience of their stay eight times (Partly), six times (Yes) and 12 times (No). See table 5

Construct Result

Are guests encouraged to share their experience (possibly complaints) in the hotel by reception (Yes/No/ partly):

8/Partly 6/Yes 12/No

Table 5: Complaint management I

When interacting with complaining guest observation revealed that out of four complaints, (three times) there was no empathy involved and (one time) empathy was involved, from reception side, See table 6.

Table 6: Complaint management II

Survey

Construct Result

When dealing with complaint, is there empathy involved from front office perspective (Yes/No):

3/No 1/Yes

0 5 10 15 20 25 30

Yes No Depends of the

person

I don't complain

Irritation towards complaint management

N=41

0% 10% 20% 30%

to friends and relatives to friends and relatives, By use of social networks Immediately to the stuff, by writing a negative review By use of social networks Immediately to the stuff, to friends and relatives I never complain Immediately to the staff by writing a negative review, to friends and relatives

N=41

Results show in figure 4, that 75.6% of business guests have not complained to the staff regarding some issues whereby 24.4% said that they have complained.

The figure 5 shows that 32.5% do feel irritated if problems are not resolved immediately, where 67.5% said that it depends of the problem. None of the respondents answered (No) or that they do not like to complain.

Research has revealed that out of all 41 participants, 45 different complaint methods of BPHR business guests have been recorded. Results show that 28% of business guests of BPHR prefer to complain by writing a negative review online as well as to inform friends and relatives. 22% of respondents stated that they complain immediately to the staff of BPHR whereby, 18% revealed that they never complain. Moreover, 9% of business guests stated that they prefer to complain immediately to the staff as we as to friends and relatives. Also 9% of business guests stated, by use of social media whereby 6% chooses to complain immediately to the staff and by writing a negative review. Lastly, 4% revealed that they complain to friend’s relatives as well as by use of social networks, whereby 4% complains to friends and relatives see figure 6.

Figure 5: Irritation towards complaint management

Additional information regarding the survey results as a form of tables with numeric data can be found under appendix 17: Survey I ,tables

5.4. Guest retention & positive Guest recommendations

Business guest Interviews

Research findings show two core categories that creates retention and positive recommendation, experience and value.

’Experience itself in general makes the whole picture and willing to come back’’

Experience have to be stunning, positive and memorable whereby the value of the hotel offers, has to be with low costs, high quality and preferably all inclusive package, See table 7.

‘’Best factor for retention is overall value, price versus quality’’

Selective Coding

Experience

Value



Positive



Stunning



memorable



Low costs



High quality



All inclusive package

Table 7: Guest retention & positive guest recommendations – Guests

Observations

Results show based on observation that positive eye contact made towards guest was made 31 times while it was not seen six times. See table 8

Construct Result

Eye Contact (Yes/No): 6 /No

31/Yes

Table 8: Personalization

Research shows that guest were greeted 22 times positive, six times neutral and one time negative. Additionally, extra attention was made 18 times and 14 times was not. See table 9

Construct Result

Greeting (positive/neutral/negative): 24/Positive 6/Neutral 1/Negative

Extra attention (Yes/No): 18/Yes 14/No

Table 9: Warm Welcoming

Table 10 below shows that friendly approach between guest and receptionist was made 20 times, seven times it was neutral and two times special relationship was not made.

Construct Result

Friendliness between Reception and guest (Yes/No/Neutral):

20/Yes 7/Neutral 2/No

Table 10: Special Relationship

Within period of observation, positive and pleasant smile between the guest and

reception was made 27 times while eight times it was not. Observation was made

only on front office employees towards guests entering the hotel. See table 11

Construct Result

Welcoming by positive smile (Yes/ No): 8/No 27/Yes

Table 11: Hospitableness

Desk Research

According to Caroline Cooper, hotelnewsnow.com, ten tips for retaining loyal guests are explained. She states that retaining loyal guests is five to ten times more profitable than trying to attract new ones. She also states that 68% of guests will fail to return in case of feeling unappreciated. Therefore, it is important to retain loyal guest and put emphasis on them. Most relevant tips mentioned below.

Last impression is very important.

Always try to keep in touch with your loyal guests

Always appreciate and support loyal guests’ more than new ones

Do not always stick with the rules, be flexible and let guests for example have a breakfast later then they should

Remember your guests, make sure staff knows them

Your staff needs to know how to deal with complaints properly, are able to recognize important guests and manage difficult situations on their own.