CHAPTER 3

ST Strategies for quality Service in

Tourism and Hospitality
 INTRODUCTION
To bridge the gap between the expectations and perceptions of a guest in a
hospitality and tourism setting, it is a must to plan his/her experience carefully.
A productive guest encounter is expected to yield optimum experience.
2 With these, critical planning is very much important to properly design and ensure
that the best experience is the only experience a guest will receive.

In planning the guest experience, strategies are employed to be able to deliver

processes for each issue that is needed to be resolved by the management. Strategies
are plans that are designed to achieve a specific aim of the company. It usually
involves setting goals, planning actions to achieve such goals, and maximizing
resources to achieve the goals. With strategies, resources become optimized,
productivity is maximized, and processes are simplified. Now, with guests at the
center, the experience would be better than initially planned.
 REALITY BITES
Hotel DAVC, designed by popular local architects, boasts of its
stylish design and enjoys the harbor view of Manila Bay. It
showcases a rooftop heated pool, pampering spa services, and a
gym. The hotel is a three-minute walk from a train station. The
shopping district is also 10 minutes away via train. Shuttle service
between the other hotels runs every 30 minutes. It also offers one
hundred percent (100%) electric transportation as part of its green
marketing strategies that can be booked prior to arrival.
The chic guest rooms feature free Wi-Fi and stun in bright-colored
palettes. Targeting foreign guests, the room also features free
international calls, a FREE fully stocked minibar, and a smartphone
with unlimited data for traveling in the city. Inside the room, the
guest will see the hotel management's concern for the
environment as direct drinking water is dispensed through room
tap to avoid the use of plastics. The hotel also features a fitness
center, a spa, and an infinity pool. For business travelers, a well-
equipped business center and concierge service are made
available. The LMGC Restaurant serves light food among a green
veranda, featuring indoor plants, while dishes are served by
international chefs.
 HOSPITALITY, TOURISM, AND STRATEGIES
Strategic planning has been utilized extensively for developing tangible products rather than used in
service-related industries like hospitality and tourism. With the marketing nature of tourism products
and services, it is evident for establishments to draw their market toward services, strategy plays a
critical role. By utilizing strategies, a company is able to identify its competitors while satisfying the
needs and wants of its guests.

Strategic planning is the process of identifying a company's internal and external characteristics which
will contribute to the attainment of its goal pointing to a specific direction while formulating different
policies on how best to achieve it. A restaurant, for example, to become one of the best in a certain
area or region, should think of different strategies to be able to meet the requirements needed in a
certain area as dictated by the market and the present situation it belongs.

With strategic planning in mind, three elements make up its components. Firstly, the identification of
long-term goals and objectives concerning the conceptualization of coherent and achievable strategic
objectives. Secondly, the adoption of different courses of action should also be in place to assure that
actions taken to arrive at objectives are already set. Lastly, the allotment of resources is also set in
place. This means that there will be costs associated with the actions to be able to achieve the
objectives.
 Porter's Generic Strategies

In order to be successful and to make a profit in the

industry's competitive market, every organization
needs a clear strategy. But how do establishments
decide the best strategy for their businesses, may it
be a spa, a restaurant, or a resort? The decision they
make will affect every aspect of their company so it
is important to get it right.

Porter's generic strategies can help a decision maker

Michael Porter
to make the best choice for his/her company.

Michael Porter identifies three strategies in

achieving competitive edge in his book. Competitive
Edge. These are cost leadership strategy,
differentiation strategy, and focus strategy.
 Cost leadership strategy
focuses on increasing profits by reducing
operational costs and charging lower prices. To
implement this strategy successfully, a company
will need to invest in new technology and to
have efficient logistics. A company must also
make sure that its spending on items such as
labor, materials, and facilities is kept low. It is
essential that a company beats its competitors
on cost so it will need to continually monitor and
reduce its costs. An example would be an
economy level hotel that charges low rates but
has only basic amenities for a regular guest. Its
room will typically have a standard bed, color
television, air-conditioning unit, and private
bathroom. Wi-Fi connection is optional.
Differentiation strategy
focuses on making a company's service being attractive and
unique in comparison to those of its competitors. For example,
a company might specialize in a particular feature or unique
service, be renowned for its excellent customer service, or
have a highly valued brand image. It will need to be creative
and innovative and be able to provide high quality services for
this strategy to work. Sales and marketing also play a vital role
in this strategy's success and a company will need to make
sure to stay ahead in new trends in the industry. One best
example would be a hotel utilizing green technology in its
operations. This hotel can boast of adhering to the call on
sustainability and environmental stewardship by integrating this
concept in its day-to-day operations, such as the use of
reclaimed wood, metal roofing and steel grills of another
reclaimed building, passive cooling through building orientation
and insulation on metal roofing, as well as harvesting rain and
groundwater for toilet flushing, plant irrigation, and general
house cleaning.
 The Focus Strategy
Concentrates on developing services for niche market. Using this
strategy requires a deep understanding of the customer’s needs
of a company. its aim will be to meet these needs by providing
that something special and extra that the customers cannot get
anywhere else. A company will also need to decide whether to
adopt cost leadership or differentiation. This is because the focus
strategy is not normally enough to win substantial market share
on its own.

First type of focus is on cost leadership or cost leadership on a

narrow or focus market. An example would be the study hubs in
the university belts. They have the very focus market place. They
specifically target students guests. That are looking for cheaper
alternatives to hotel lounges wherein they could spend their time
studying. They do not provide for everyone but only for students,
that is why their price is relevantly low.
 The Focus Strategy
The second type of focus is on differentiation in a narrow or
focused market. An example would be a coffee shop which
adopted the drive through business model. It focuses on guest
who do not really necessarily want to sit down and have a cup of
coffee. The guests like the brand and offering but do not have the
time to sit down and enjoy a cup of coffee. They have it on the
move.

Choosing the right strategy for an organization is crucial in

gaining in a competitive edge over its rivals. By using porters
generic strategies model, an organization would be able to
identify the strategy that it needs to lead the organization to
success.
INTERNAL AND EXTERNAL ASSESSMENTS
Internal analysis is where an organization takes stock of resources and assets that it
possess. This include the strength that enable an organization to function well. Experts
refers to this as the “secret sauce” of an organization. Moreover, internal analysis also
flaunts the weaknesses of an organization. These weaknesses are identified not to dwell
onto, but to be address and resolved so that they do not harm an organization.

An airline company, through internal analysis, may found out that it needs to have a
stronger passenger relationship management with its client. By delving deeper, it found
out that deep problem was because it is not in the culture of the employees to establish a
relationship with their passenger. Utilizing a strategy to develop a relationship marketing
in their operations, it enabled the entire company to combat this problem and convert the
weakness into a strength.
An external analysis, meanwhile, does not
rely on the "secret sauce." How a company
positions itself in the market with respect to
its rivals in its particular space is of primary
concern. Attention should be focused on
what a company is good at relative to its
rivals in that industry. Doing external analysis
not only determines a company's position in
the external environment, but also
showcases its opportunities and threats.
Identifying a company's opportunities and
threats, through different tools such as the
Political, Economic, Social, Technological,
Environmental and Legal (PESTEL) analysis,
exhibits what it needs to be wary about
which somehow are uncontrollable to a
certain level.
One best example is what happened
in Boracay when it was closed for six
months because of the
environmental rehabilitation projects
of the Philippine government. Many
hotels and their respective
employees and guests were affected
by this situation. It is said that about
400 lodgings and food services were
ordered to be closed for violating
laws, three casinos were shut down,
and other tourism establishments
built within the 30-meter shoreline
were demolished. The government
predicted about P18-20 billion loss of
potential gross receipts due to the
six-month closure.
 Strategizing for the Future
Ford (2011) stated that the things hospitality and tourism organizations must plan to
cope with changes in the future include demographics, technology, social
expectations, economic changes, competition in the industry, stakeholders, and
other factors.
Demographics
Changes in the workforce and the market of the hospitality and
tourism sector will continue to affect the operations of the industry,
and this is relevant not only to the service providers, but also to its
market. Park and Yoon (2009) made an article on the segmenting
the motivation of Korean tourists. In their article, they noted that
motivation in tourism is largely determined by a number of factors,
including demographics. Results show that with changing
demographics, themes as to their socio-economic characteristics
and behavior in tourism also change. The findings of the research
show that most Korean tourists value family togetherness, are
passive, and some are want-it-all tourists. In the Philippines, as
reported by the Department of Tourism in 2017, millennials proved
to be the most well-travelled. The 15-24 age group travelled
across the country the most, followed by the 24—34 age group
and the 45-55 age group. These only show that demographics has
changed already whereby before these activities are prolific with
the baby boomers but now millennials take the scene.
 Economic and Natural Forces
Economic and Natural Forces Economic forces also change the nature of the industry and how it is
managed by the key stakeholders of this fast growing sector. In 2018, the Philippine Statistics Authority
reported that the Tourism Direct Gross Value Added (TDGVA) of the Philippines jumped to a great amount
of 12.7%. This translates to P2.2 trillion,

by 14.3% as compared to 2017's record of 1.9 trillion. A lot of people are actually benefiting from tourism,
and in the Philippines, this service-oriented sector is zource of employment and income of a lot of Filipinos.
The Boracay tourism sector and its resideMaca Tourism sector and its residents were deeply affected when it was a
closed in April 2018. The six-month closure of the Island was based on the need for "rehabilitation" with the
environmental problems which were already surfacing and becoming too much for Boracay to bear.
In January 2020, Tagaytay, one of the famous
places in the Philippines, also suffered a
tourism disaster as one of its prized natural
destinations, the Taal Volcano, erupted.
Tourists flock in Tagaytay because of its cool
temperature and the magnificent Taal Volcano.
In just the first three months of 2019, Tagaytay
had 6.9 million visitors-a sudden rise as there
were only 7.5 million visitors in the entire 2018.
Unfortunately, as the Taal Volcano erupted,
most of the areas in Tagaytay and the nearby
municipalities in Batangas were deeply affected
and had to find means on how to cope with this
economic and natural downturn.
 Competitors
Competitors also shape the tourism and hospitality industry. The presence of
this major key player brings about major changes in the industry. Moore (1996)
utilized biological analysis in explaining shifts in today's business. He
mentioned in his article that businesses are a big part of the ecosystem and
businesses need to co-evolve in order to thrive and survive. This is because of
the fact that the economy consists of unpredictable key players which
constantly shift. Thus, movements between competitors shift from time to time
and create different relationships which also affect other relationships that will
be made in the future.

Bengtsson (1999) explained and identified these relationships existing in

competition. She mentioned that in analyzing the relationships between
competitors, four types can be distinguished,
Coexistence exists on social exchanges between competitors. As economic
exchange and bonds are not present, each competitor knows about each
other but does not interact with them. Usually, power is identified dependent
on the competitor's position and strength. Somehow, dependence is
present and smaller companies are at the mercy of larger players. There is
also a distance between the competitors, although psychologically. Trust is
also regarded high, although informal, as one player is also dependent on
another competitor but does not interfere with him/her.
Another relationship is cooperation, which also exists in this scenario. As this
concept is present, there are frequent exchanges between the players which
comprise of business, information, and social exchange. All competitors are
cooperating but it does not mean that they are not competing. Formal agreements
exist if the competitors have formed strategic alliances. Independent hotels
usually do this, such as in the case of referral groups or marketing consortiums.
Although informal agreements also exist, they are built on social norms and trust.
These norms adjust the distribution of power and dependence among themselves,
which means that conflicts rarely arise.

As expected, competition is another relationship that is based on an action reaction

pattern, which means that if a player launches a product or service, the other
competitors will definitely launch a similar, if not the same, product with some
developments. Because of this, interaction is usually simple and direct. Dependence
and power are also equally distributed but are also based on their position in the
ecosystem. Lastly, a new relationship has existed. It is called co-opetition. Simply, it
means cooperation between competing players. This relationship includes economic
and other forms of exchanges. Usually, power is in the cooperative side of the
relationship which is based on how it functions in the ecosystem. The competitive
side, meanwhile, highlights that power is dependent on the player's position and
strength.
Dependence usually arises in two ways. When there is
cooperation dependence usually takes the form of formal
agreements or trust. However, when there is competition,
dependence is again related to the player's strength and
position in the network. With goal setting, competitors
cooperate as it is stipulated in their formal agreement that
this will be done jointly. This is why key players in the
industry need to have an assortment of different
relationships which depends on how they are set in the
present environment. Because of this, the content of a
relationship can vary from time to time. Also. relationships
can grow stronger, eliminating weaker relationships.
Usually, this has no clear pattern or cycle and is highly
dependent on the players.
Other Stakeholders and Relevant Groups
Aside from the factors previously mentioned several other groups also affect
how the future of the tourism and hospitality industry will be shaped.

1. Resource Suppliers
A company cannot continue its operation without raw
materials, equipment, and other supplies. This is actually
not limited to the manufacturing sector, but is also an
important requirement in service operations, as we
established already the concept of service product. The
availability of the resource supplier can also affect the
smooth operations of the company. This is also why there
is seasonality in some service operations, as well as the
offering of some products, especially food items.
Somehow, a disruption in the operation of the resource
supplier will ultimately affect the company. Thus,
companies in the tourism and hospitality industry usually
identify a selection of existing backup suppliers, which
somehow subjects, companies to increased costs due to
price gouging. Aside from the common reasons, this
situation usually arises because of a natural hazard.
2. Capital Suppliers
Another player that we need to consider is the
suppliers of capital. Now that the capital market is
international and electronic transfers are now available,
suppliers can now move in a faster pace, which makes
a company vulnerable. A company may need to spend
more time to forecast the availability of this valued
resource. Because capital availability is crucial, a
company's decision-making should be exact so as not
to dampen the entire operations. The stock market now
has a great impact on how certain industries, including
tourism and hospitality, go around.
3. Labor Supply
As the pool of skilled employees is also of utmost
importance, as they also shape the market, Chapter 4
discusses issues on staffing and employee concerns.
Without a stable labor supply, the tourism and
hospitality operations will be greatly affected as they
drive the operation itself. There will be no one to man
the operations and will fill the empty slots of the retired
employees.
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