The Evaluation of Customers Services Quality in Budget Hotels A Case Study of Premier Inn Hotel in London Abstract

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Customers Services Quality in Budget Hotels

TheEvaluation of Customers Services Quality in Budget Hotels: A CaseStudy of Premier Inn Hotel in London

Abstract

Thispaper shows that customer satisfaction is exceptionally aboutindividual inference that is deeply influenced by the client’sexpectations vis-à-vis the services. The most forceful verb in termsof customer satisfaction is ‘to improve’. Hence the need forhotel industry just like any other industry to realize the impact ofcustomer centered attitude with the general goal in provisions ofcustomer satisfaction is to be as close to their clientele aspossible. It begun with the notion that customer satisfaction in thehotel diligence and the determinants of their satisfaction willnormally pilot towards future intentions of customers. 5 Likert scalebalance was worn to estimate the responses(Almeida et al).The after effects of the study demonstrates that enhanced and greaterservice quality and service features will supplement the customer’ssatisfaction and the prospect intentions of pleased consumers will beincreased. In business, client contentment is an approach of makingmoney that can only be created by having a pleased and loyal customerbase. Premier inn hotel is no exception and they are fully aware ofthis fact hence devising ways to attain the globally accepted goal.The fundamental element of the Premier Inn brand is to present anamalgamation of quality and value for money in suitable locations.The above combination adds up to the right product, in the rightplace, at the right price. A business Account system is the innateexpansion of the brand’s main proposition due to its rewards.Business Account clientele have a mobile labor force with anextensive array of cost management, expediency and good organizationremuneration. For premier inn hotel chains to achieve consumerexpectations, then the world-class budget hotel brand ought to get anexcellent perception of its clients and what they want. The hotelsneed to have a reliable deliverance of products and services cuttingacross all units. Particularly they have to bring all branches up tostandard and develop emotional engagement with their customers.

Tableof Content

Abstract i

Table of Content ii

Chapter 1.0 Introduction 1

1.1 Purpose of the research 1

1.2 Objectives 1

1.3 Scope 2

1.4 Disclaimer 3

Chapter 2.0 Literature review 4

2.1 Background 4

Chapter 3.0 Research Methodology 7

3.1 Primary data collection methods 7

3.2 Secondary data 8

3.3 Proposed Research Strategy 8

Chapter 4.0 Results 9

4.1 Quality of service 9

4.2 Customer satisfaction 9

4.3 Customer services 10

4.4 Brand 10

Chapter 5.0 Discussion 11

5.1 Management systems at premier inn 11

5.2 Work relationships and employee retention 13

5.3 Customer awareness 15

5.4 Quality of services 17

5.5 Customer satisfaction 19

5.6 Branding 23

Chapter 6.0 Conclusion 25

Bibliography 26

Chapter1.0 Introduction1.1Purpose of the research

Themajor goal of this research was to understand the underlying aspectabout the quality of customer service at premier inn hotel in London(Altinay).It was triggered by the changing pattern that has led to in budget inhotels in London. The budget has escalated due to the fact that manybusinesspeople are utilizing hotels to cut down their costs. Premierinn hotel has been identified as one of the leading hotels thatbusiness people are get involved with. This research makes use ofthree premier inn hotel branches and it takes place within thehotel’s premises. Customer satisfaction is attained by offeringquality services. This research has purposely been prepared to shadethe light that supports this statement and the possible ways toachieve this customer loyalty.

1.2Objectives

Ashighlighted above the primary objective of this study is to establishthe role played by quality services especially in the hospitalityindustry. Then there is also need to establish the extent and effectsof this element to other sectors of the economy. This will beachieved by assessing how premier has grown over time especially attimes when they add value to their activities directed towardscustomers. Exploringconsumer’s perceptions of service quality at Premier Inn Hotels inLondon is also one of the objectives to be achieved by this research.The information to fulfill this objective will be achieved aftercross-examination of customers. They will be allowed to freely airout their views but they will automatically be considered aspersonal.Identifyingfactors affecting service quality at Premier Inn Limited joins theobjective category of this study. To achieve this objective theresearch team connects to the management protocol of the hotel.Employees as well as decision makers are evaluated with anonymity toavoid any victimization.Exploringcustomers’ expectation for service quality at Premier Inn Limitedis also top on the list. The objective will be assessed afterinteracting with customers and those that company thinks are itspotential market. Potential customers will help to provideinformation about what they think discourages them from visiting thehotel. Those present customers will have to avail the informationabout what they don’t like at premier inn hotels.The study also focuses on identificationof the gap between the perceptions and expectations of customersabout quality of services at Premier Inn Limited. This objective issatisfied after a cross examination of what the customer’s mindsread versus the hotel workforce’s anticipations.Studyingand making recommendations about the factors affecting customer`ssatisfaction at Premier Inn Limited.

1.3Scope

Thestudy will select three hotel branches of premier inn and it willconduct at the hotel’s premises. This enables the research team tocome in contact with the right and up to time customers of the hotel.It also avails an easier access to the hotel team without causing anyinconvenience. Since there will be no program alteration at the hotelit is also easier to get permission from the management. The routineprograms at the hotel in the real time of the research also availsupdated information about the activities. Hospitality related factorswill be the areas of concern for the study. Tourism, transport andgeneral effects on the economy will also be assessed at a slightlylower level. The scope is limited to the research methodologiesdiscussed in chapter three of this report. The research was conductedto establish the importance of hospitality as afield to other areasof economic development. The topic might imply a broader concept butthe real research was narrowed down to premier inn hotel in London.Quality of the services offered by hotels and customer satisfactionwere the major elements of concentration. The setting of thisresearch was directed by the code of conduct at the hotel. Theresearch team had to abide by the guiding rules and principles atethe hotel especially those that govern the employees’ ethics andstandards. Since the team was intruding there was no way they wouldbe treated as customers but instead customers had a perception thatthey were part of the company’s employees.

1.4Disclaimer

Theresearch study was conducted after the permission was sought andgranted by the hotel’s management team. The data was processed intoinformation that and reviewed thoroughly after total consideration ofall issues related to plagiarism and copyright. The report waswritten exhaustively to avail the most relevant and reliableinformation about the research topic. All participants andrespondents were approached after permission from the leadership andtheir individual voluntary consent. The identity and safety of therespondents was the major area of concern that the research team hadto observe. Therefore appropriate measures were installed to ensureconfidentiality and satisfaction of the respondents. The report isresearch based but it contains facts about the field thus making itviable for decision-making. However, this report does not support itduplication, renting, lending and redistribution for commercial gainswithout prior consultation from the research team.

Chapter2.0 Literature review2.1Background

Premierinn is among the major brands of Whitbread PLC and makes the largesthotel brand in the UK. It registers the occupancy rate of above 80%among more than 590 budget hotels recording over 43,000. The hotelenjoys the benefits of its strategic location whereby the premisesare normally installed along major roads, regional towns and cities.The hotel guarantees a promise to its customers is good sleep eachand every night in an extra-ordinary and consistent manner. SamuelWhitbread as a brewery company established Whitbread PLC in 1742.Over time it has grown and diversified into other fields includingthe hotel, hospitality and tourism industries. The hotel hasdeveloped a reputation as an award-winning hotel with widergeographical spread in the UK. Wider area coverage has been an addedadvantage for the hotel to facilitate more than 75% of the UKpopulation in a radius of 5 miles. The hotel’s bedroom has attachedbathrooms, Wi-Fi internet access and TV free wider view. The hotel isin association with bars and restaurants inside or just adjacent toit. Wide range of food dishes are offered at the hotel with aninternational perspective in mind. The services and products servedby premier inn are cheap and affordable. The pricing is reasonableand nondiscriminatory in the sense that any person is catered forregardless of their social status. The cheapest room starts from 29Euros per night. The brand has initiated the process of expanding andspreading it wings to tap the international market. The journey hasalready registered success by opening a branch in Dubai and two inIndia.

“Wewant to make our hospitality brands the best they can be by focusingon our customers and giving them just what they want” carry themission and vision of premier inn. Operational standards of premierinn are 100% comfortable environment, money back guarantee of qualityrooms and friendly services. They have packaged this under a singleslogan “Good Night Guarantee”. The company has also establishedterms and conditions for customer compliance. These are not meant toscare customers but to provide guidance for better services. Theyhave enabled the company develop healthy relationships with itscustomers. The hotel has big plans for the future and its safety onthe market. Among them are expansion plan that demands 55,000 roomsto retain its current post as the biggest hotel chain in the UK. Thecompany also wants to register the record of the biggest budget hotelchain in London with the ability to open more hotels overseas. Anindependent management board made up of highly professionalexecutives manages the hotel chain. Premier inn has a corporateresponsibility program “Good Together” to which it is totallycommitted. This has helped the hotel to continuously build its valuesand maintain the long-term history of community development programs.Corporate responsibility is an integral section of the hotel’sbusiness relations. It has given the company the ability to focus itspriority on six major areas. These are people, environment, health,sourcing, customers and community coupled with consistent devising acommitted strategy across the fields.

Premierinn contributes up to 70% of the profits accrued by Whitbreadaccording to the annual reports (Annual Report, 2009). The growth ofthis hotel is affected by the macro-environment mostly the tourismrelated aspects. There is no possibility to eliminate one of theseindustries as they solely and closely relate and depend on eachother. Any effects imposed and felt by the economy of the UK willautomatically affect the development of this hotel. Premier beingaware of the posed danger have devised a proper way of handling thischallenges to ensure it does not deviate from its long-term setgoals. Among the major approach perspectives utilized by premier innare the marketing and operating strategies. The marketing strategy isvital and determines the success or failure of any company. Premierinn has invested a lot and keeps on upgrading its marketing strategy.The company makes use of the commercial action plan that grants itthe privilege to be the most preferred hotel brand by travelers. Thehotel attracts more leisure customers due to its appropriatefacilities. The marketing plan was set upon four key levers. They arefocused advertising, increased sales activity, premier offers andwide reservation distribution (Annual Report, 2009). Development of awebsite has increased the hotel performance by 80%. The developmentof new hotel budget with 267 bedrooms at Stratford boosts the hotellevel. The operating strategy at premier holds and operates on thefollowing accounts. Specific short and medium term growth programsthat offers specific directions to employees. Reduced overhead costsas opposed to management streamlining and promotion of back officeprocesses. The company also delivers a number of procurementinitiatives and controls the costs tightly. The corporateresponsibility slogan also helps drive a sustainable performance inthe company. The program has helped the company escape so manynegative effects that might drug the brand name. These includereduction of CO2emission, waste management system and sustainable sourcing. Thecompany also intends to build a green hotel with 60 bedrooms thatmakes use of sustainable construction materials and processes thathelps in water savings.

Chapter3.0 Research Methodology

Thekind and nature of research dictates the type of researchmethodologies used. Quantitative data involves measurement ofvariables and verification of existing theories, hypothesis andanswering the questioning around these elements. Data in quantitativeresearch is normally utilized in generation of new hypothesis. Theapproach should provide satisfaction by obtaining the necessary dataabout the variables. Qualitative research methods help one to betterunderstand beliefs, meanings and experiences. It helps the researchteam describe ideas, values and other intangible aspects (Cochran,Jason). It is essential for the research team to understand thedifferences between these two types of methodologies. This helps themuse the approaches in the right way to attain proper results. Thisstudy involves used of both quantitative and qualitative researchmethods.

3.1Primary data collection methods

Directuse of both qualitative and quantitative research methodologies helpsthe research team obtain primary data. Primary data involves theinformation collected directly from the field. It reflects the exactcurrent situation of the study aspects. In this research studyinterviews, focus group discussions and open-ended questions wereused as qualitative methods to collect data. This methodology mostlyuses a small number of respondents because of the process of engagingdirectly with the research team. Approaches used to collect primarydata helped the researcher understand how other people recognizesimportant aspects. Primary data collection is explorative by natureand enabled the researcher personally identify the underlying truthon the ground. One can therefore identify the trends and anticipatethe expected way to go there after.

3.2Secondary data

Secondarydata is obtained by reviewing already existing works of research andwritten knowledge concepts. The research team has to obtainpermission from the responsible authority so that the information isutilized in the research report (Mintel). Care should be taken sothat credibility of the information is not subjected to doubt. Thoughseems to have come from proven facts, it is difficult to rely on it.Reliability is normally difficult because the information dosed notrepresent the current situations as they appear in the field. It isalso at times difficult to find the very specific information aboutthe concept of study. There is thus need to just establishrelationships and anticipations. This helps to generate a connectionbetween the current situation and what is thought to have been aroundat that time of research. It is however, important as it providesinsight about how life transformations take place.

3.3Proposed Research Strategy

Thisstudy will make use of both qualitative and quantities methodologies.Secondary data is essential so that the research team gains aguideline of what is expected. It avails the road map that guides theother parts of the research process. It is achieved through surveyquestionnaires, review of pre-existing data and pilot studies asquantitatitve approaches. Primary data is obtained and considered asthe most suitable information for decision-making processes. SERVQUAL(RATER) is the most effective instrument used in hospitalityindustries to measure data (Single, Peg Boyle). It is used as aquality management framework that was developed in mid 1980s forservice sector industries. The research chose this approach becauseit clearly highlights major components of high quality service. Itoriginally utilized ten elements of service quality but currentlythey were merged to five. It delivers aspects about reliability,tangibles, assurance responsiveness and empathy thus creating theacronym RATER. Due to this method the questionnaire is necessary tomeasure customer expectations of service quality. It also measuresthe customer’s perceptions of services received.

Chapter4.0 Results4.1Quality of service

Servicequality is the most essential aspect for the survival of any companyin the hotel industry. The variety of services and products providedby the hotels requires strategic approaches to ensure maximumquality. Quality should be consistent and maintained across allsections and departments. Most sensitive area are lodging, reception,room services, meals, just to mention a few. Quality of the servicesoffered is the most composite measure of various attributes. Theattributes are not only tangible but they incorporate intangibleones. Among the intangible attributes are safety and quietness whichare usually very hard to measure accurately. They are normallystudied through linguistic information. To measure and analyzeservice quality the SERVQUAL instrument is utilized. Parasuranam,Zeithaml and Berry of the hospitality industry developed the SERVQUALinstrument. This research is no exception but to make use of thissystem as well to be able to attain the necessary results.

Latestresults from Prelim

&nbsp

26/02/15

27/02/14

Turnover (£m)

2,608.1

2,294.3

Pre-tax Profit (£m)

463.8

347.0

EPSBasic underlying earnings per share (p)

213.67

179.02

Final Dividend (p)

56.95

47.00

4.2Customer satisfaction

Customersatisfaction is the judgment that customers make about the servicesof the company after using the services and attaining a certain levelof pleasure. Can be measured by researcher through either periodic orcontinuous surveys. It has been proved one of the most importantfactors that help in service delivery. As a result it contributes somuch towards the success of a hotel. It has a direct effect on theincrease of market share as result of viral mouth which isresponsible for repeat purchasing and referrals effects. It saves thecompany the expensive costs that are incurred when investing in aplan to attract new customers. This is because customer satisfactioninvolves the opinions and feelings of a client towards a specificproduct after they have used it. Customer satisfaction is measuredusing the discrepancy between customer experience gained after theuse of the services and the expected results.

4.3Customer services

Customers’service includes elements that constitute the supporting activitiesfor the business’ main product or service. They help the companydeliver the products and their services in the best way. Customerservices are increments that customers are accorded with wheneverthey get involved in business with the company (Overton, Rodney).They are aspects that the customers expect to be availed to make hisprocess of business engagement easier. They act as guidelines to thecustomer on what the company expects one to do while transacting withthem. Getting this information was easier especially when open-endedquestions and focus group discussion was used. They allow theparticipants air out their views freely without imposing any limits.Survey and pilot study helped the research team identify newinformation and need for more research in the field of budget hotelsector.

Figuresat last close

Closing Share Price (p)

4,977.00

Number of Shares in Issue (m)

181.74

Market Capitalization (£m)

9,045.40

4.4Brand

Abrand may is “a name, expression, indication, symbol, or blueprintor a combination of them utilized for identification purposes. Itdifferentiates given goods or services of a certain seller or groupof sellers, from those of its competitors”. A brand name is “thepart of the brand which can be verbalized” (e.g. premier Inn),while a brand symbol is “the part of the brand that can be visuallyacknowledged, like designs, signs or distinctive colors”. Intoday’s extremely aggressive environment, it is more than everimportant for hotels to establish a sturdy branding (or rebrand).This is because it acts as a viable differentiator, stimulating theawareness of customers thus influencing the purchases and cultivatinga sense of loyalty towards the branded product. Effective brandinghas greater positive effects on customer purchasing decision-makingprocess. It also directs the course of satisfaction and loyalty tothe company thus affecting the financial performance of the firm.Branding is the most dominant and effective trend in service relatedindustries among them the hotel industry. Hotel branding is not onlyabout the immediate company but the affiliates also play a big role.When the hotel delivers its products it is necessary to be careful sothat the company associates with the right brands. Brand helps inincreasing awareness on the market and attaining customer confidenceas well. Hotel branding helps increase reliability level, marketdemand and segmentation share.

Primary Country Listing

UK

Status

Full Listed

Index

FTSE 100, FTSE 350, S&ampP Europe 350, FTSE All Share

Sector

Travel &amp Leisure

Activities

Whitbread PLC operates hotels and restaurants. The Company provides services in relation to accommodation and food.

TIDM

WTB

Chapter5.0 Discussion5.1Management systems at premier inn

Managementsystem is the structure of procedures and processes that anorganization puts in place to enable them achieve their goal. Themanagement systems are concerned with quality, environment,occupational safety, information security and social accountability.Premier inn hotel makes use of a very complex management system withgeneral managers being on the topmost position in the rank. Thecompany also has showed interests in adopt cluster management system.The general management system is essential because of therequirements and setting of the budget market that premier innoperates. This involves centralization of pricing policy, sales andbookings and marketing sections. General Managers are executives withoverall responsibility for running revenue and cost aspects(Khosrow-Pour). At premier inn hotels the general manager overseesall functions related to marketing and sales. They also facilitatethe day-to-day operations of the hotel. At the hotel the generalmanager is charged with the duties of effective planning, staffing,coordination, organizing, delegation and decision-making. They areresponsible for ensuring the hotels attain the desired profits andappropriate results for the company. The general managers hold allmanagerial authority at premier inn and they do report to thecorporate office linked to the Whitbread’s family chain. They dothe hiring and management of executive team that is made up ofindependent department heads. The department heads oversees variousfunctions, budgeting and financial management at the departmentlevel. They also create and enforce business objectives, goals,sales, marketing, revenue, projects and contracts. They as wellhandle emergencies and guest related issues coupled with employee andfacility aspects. They are also responsible for public relations,labor relations business partnerships and legal linkages. Being abigger company, the general manger does not directly get involved inother duties apart from the above mentioned.

Clustermanagement system on the other hand allows the company to sign up forlarge mixed-use development properties. The small hotels with around30 to 40 bedrooms can get access over high street stores. Stratfordhotel location marked the starting point of this project accompaniedwith six more in pipeline. Cluster management system provides backedgraphical user interface and command line software which runs onnodes. The agent is therefore necessary to provide support to themanager for configuration purposes. The agent also manages servicesets and configures the whole cluster server through supercomputing.The cluster manager therefore dispatches work and duties for thecluster to perform. In such like cases a subset cluster manager inform of a remote desktop application is utilized to send work and getthe results. Cluster management system is effective for reliabilityand load balancing more than specific computational service clusters.

5.2Work relationships and employee retention

Employeesat premier inn are considered the most important componentresponsible for its success. There is therefore various programs thathelp motivate and encourage the employees. The hotel has provided asystem that avails an opportunity for the employees to develop asprofessionals. The working environment is also very friendly takingcare of the necessities that any employee would need fulfilled.Survey shows that 80% of the employees confirms that they are alwaysaware of what they are expected. The relationship that is enforced atpremier inn is that cultivating a family based structure. Employeesare trained to relate to each other as members of a single family.74% of the employees are positive and would not choose any otherleading company in the industry over premier. Employees are confidentand secured in the sense that they don’t worry about job security.They know the plans of the company to expand and open new branchesand thus remain assured of job opportunities. 77% are fullyguaranteed of job security in their minds while 70% have totalconfidence that they have a future in the company. The operationculture at premier inn is designed in a manner that there is no anydiscrimination based on the employee level. The company is welcomingto apprenticeship and graduate development programs without anydiscrimination (Baldry, Rob). Promotion and priority is usually givento the serving employees before recruitment of new ones is done. Thehotel moulds and trains its employees to senior managerial posts.This homegrown management system approach has helped the companyattain the positive relationship and understanding among its staff.

Employeesare in good terms with their managers who are always providingguidance. Employees agree that mangers check in with the teams dailyto know they are feeling. There are positive reports that managersare caring about employees considering them as their coworkers.Managers also encourage information sharing according to the 76% ofemployees who agrees to this. It is the culture of premier inn torecruit 50% of its staff from the locals living within the areas theyopen new branches. The company avails training and educationopportunities to those willing and are not well equipped withknowledge in the hotel industry. The company feeds families belongingto more than 40,000 households in the UK. 50% of the employeessupports the idea that premier inn has to reinvest in its area ofoperations. The company has established a staff survey that makes useof text and online platform for employees to make their voicevaluable. Employees are among the decision makers in the sense thatthey are usually asked to vote in many circumstances. This is usuallycommon whenever the company wants to establish a new branch.Employees vote in managers which is the best approach to giveemployees the right person that they desire. Availing the personneeded by people to lead them makes it easier to establishrelationships and thus reducing management costs. This has been agesture that premier inn is a hotel that listens to its employees andthus motivates so many who are employed there. There are annualconferences for some staff members from every site which bringsemployed together. The relationships are hence strengthened in thatemployees from different areas interact and share ideas. This helpsto ensure there is uniformity across the hotel’s branchesregardless of the locality. Uniformity encourages employees to workregardless of the branch they are operating from (Mintel). Thecelebrations also communicate how the company appreciates the workdone by its employees. This is achieved when the celebrations arelinked to the success that marks significant advancements. Thisaspect is responsible for the feel good factor. It helps employeeshave fun and a deeper understanding of each other eliminating thefeeling that spend too much time at work. The hotel has flexibleprogram that allows employees to work part-time. Employees also getprofit related pay taking advantage of company’s share optionscheme and staff discounts.

Overviewfrom annual report

&nbsp

26/02/15

27/02/14

Average Number of Employees (excluding directors)

38,816

36,447

Total Employee Cost (£m)

667.9

607.8

Gearing (%)

29.5

22

ROCE (%)

15.7

15.3

5.3Customer awareness

Premierinn is fully aware of its customers and commitment is to ensurecustomers are served well. Records indicate that the company holdsaround 21 million customers every month. The hotel has a clean andclear record keeping system that allows back draw of information. Theknowledge of customers has helped the company to offer equaltreatment to all its guests. There are no discriminatory factors atthe hotel. The company has installed mechanisms to ensure they serveall people regardless of their physical status. The hotelaccommodates both the disabled and all people without inconveniencingany single group. They also accept and understand the fact that thereis no single hotel design that can totally meet all peoples’preferences. They have thus established a vibrant receptionist officethat customers can utilize whenever they are not comfortable. Premierinn hotel team is well aware about the needs of its customers andthus has established various facilities and services to fulfillcustomer needs.

Premierinn has built a reputation of warranty that helps new customers makeeasier decisions while the existing ones develop a loyaltyrelationship. The company avails the information necessary for thecustomer to know about it. The information makes clients aware aboutaspects like price, promotional campaigns and facilities. Customersare well educated and whenever they visit the hotel they are aware ofwhat they have to get. This boosts the confidence of customers asthey make bold decisions. The information is essential for thecustomers to assess their ability and capability. As a result, thehotel will always receive visitors who have already made up theirminds and thus they are not going for window-shopping. The companyhas availed various channels of contacts that help the customerunderstand important elements. They are therefore fully aware of thehotel expectations and they can register their expectations as well.For premier inn communication is the key element.

Customersare aware of budget hotels and they need them because they offer gooddeals to guests. They avail services that are equivalent to biggerhotels with safe locality near or within the city centers. Due to thegrowing awareness about budget hotels they have shown the trend ofstrength and development. There is increase in number of rooms andhotel branches that support budget hotels in the hospitalityindustry. Premier inn hotel registered a record that reached thecustomers when it increased its rooms from 23,300 in 2001 to 40,000in 2009 (Presbury, Rayka). Marketing strategy used by premier innmakes it possible for customers to differentiate the brand well. Thestrategy does not incorporate a complex marketing plan. It involvesluring customers by improving facilities promotional campaigns andcompetitive prices. The budget hotel segment is a new brand withinthe hospitality industry. The growth of premier inn depends on brandproduct notion, value for money and service reliability. The sectionsin this segment are known by different names although the common onesare inn, lodge and motel. Customer is also well aware that premierinn offers limited services that are economy accommodation that arelow priced. The strategic location of premier inn hotels has helpedit to establish and increase customer awareness.

Thebudget hotel industry has been well known for attraction of varioustarget market. It has attracted most attention from business peopleand tourists. It is among the most price sensitive markets. Bothcustomers and premier inn management understands that hotel brandequity is “the value that consumers and hotel assets owners connectwith a hotel brand, and the impact of these relations on theiractions and the successive financial performance of the brand”.Customer-based hotel brand equity is interpreted as the financialperformance (i.e. average occupancy levels, average room rate) forthe hotel by means of understanding two major areas of focus:consumer perception which includes awareness, supposed quality,connected benefits and values to brand and consumer behavior likeloyalty and willingness to pay a differential price.

5.4Quality of services

Servicequality is a term used to describe customer’s perception about theextent to which the service meets or exceeds ones expectations.Premier in is set in a way that it combines a restaurant and a bar.This helps the customer get tasty meals and snacks anytime undersingle roof. The customer can also combine food and drinking atpersonal convenience. It thus eliminates the unnecessary movement andaccompanying costs and risks. The hotel employs qualified andexperienced chefs who know to make flavored meals. Food is providedin a variety of tastes and dishes to avail a wider area from whichones can make a selection. The facilities like the tables are relaxedand intimate with the correct setting that suits the value of food.For customer assurance about the quality of the meals, they areprepared where they can see each and every step involved. Traditionaland contemporary dishes are available in their fresh states. Theingredients used are of high quality availing great taste. The roomsare luxurious with king size Hypnos beds toasty duvet, firm and softpillows. The bathrooms have showers, TV is available and radiocoupled with Wi-Fi and desks for any workload. Tea and coffee makingfacilities are also available disposable at one’s own convenience.Upon request from the reception, hair driers can be availed to thecustomer. Blackout curtains help the customer have a peaceful nightsleep. Disability guests are also considered with customized roomsthat suit them being available.

Premierunderstands that balancing between quality and value is the bestpropelling aspect of a brand. Due to this premier has guaranteed agood night sleep with the chance for the customer to choose the typeof pillow one wants. They are committed and whenever the client isnot satisfied with the night sleep conditions the company is usuallywilling to refund. The mattresses have pocket springs which providesupport. The mattresses are covered with thick wool layered cosytoppers that regulates body temperature (O`Gorman, Kevin). The staffat the hotel is always on standby with a friendly and welcoming smileto soften the customer’s heart. They are well informed and provideanswers to all possible questions that the customer might have. Thehotel avails a compulsory breakfast for its clients who spend thenight within its premises. The customer is allowed to choose whateverpleases them from wider international prepared dishes. Children agedbetween two and sixteen are given free breakfast. There is free Wi-Fiat all time to allow the customer perform any online relatedactivities. The provision also allows customer download files andmovies from the internet. The Wi-Fi program has been customized tomake it easier to use and quick to access. It can be accessed at anyplace provided the client is within the hotel. Premier inn hasestablished a hub to make it easier for customer to book rooms onlineand survey the environment around.

Servicequality entails processes, outcomes and image that customers developbasing on the experience after utilizing a certain service orproduct. Quality of the services at premier inn was assessed andanalyzed using seven criteria. They were knowledge and skills ofemployees, attitudes of the staff, property distribution,reliability, service environment, services cape, service improvementand credibility. They can be broadly grouped into technical andfunctional. Technical dimensions include aspects of propertydistribution, reliability and price. Functional dimensionsincorporate knowledge and skills, staff appearance and serviceencounters. The quality of services can be analyzed basing on theSERVPERF model that establishes the link among customer satisfaction,service quality and purchase intentions (Mason, Peter). The modelconsiders service quality as service performance and interviewing ofcustomers about their views concerning evaluation of businessperformance. It is essential for primary data collection and utilizes22 items to evaluate experienced service quality. Premier has triedto remain modern by availing up to date equipment. The staff alsodelivers services as promised with appealing physical facilities andprompted customer services. The facilities also utilize new ways ofapproaching new customer experience.

5.5Customer satisfaction

Customersatisfaction elements can be categorized into technical andfunctional quality. It also entails various levels attributed toservice features, environment and performance. There are variousmethods applied to evaluate the satisfaction level of experiencedcustomers. In the study about premier the research team employedtechnical, functional and price. This evaluation helps the team tounderstand the factors that make customers feel satisfied wheneverthey get access to service offered by premier inn hotels (O`Gorman,Kevin). Observing the environment at premier inn and through customerresponses it is clear that quality based on cleanliness, security,reputation, location and room rate. Reputation is also an importantfactor used by customers to assess the attributes of the hotel workforce performance. The survey indicates that customers value premierinn hotels due to their strategic location and affordable prices. Thehotels are located to close proximity to the road and towns so thatcustomers can get access to other facilities. Premier inn has a cleanenvironment which is good for proper hygiene of the customers.Cleanliness avails a conducive environment and freshness in the airthat customers breathe. Customer satisfaction leads to repetitivecustomer purchase system. Customer satisfaction is also responsiblefor development of customer loyalty. Customer satisfaction isanalyzed basing on the following seven dimensions.

Locationof the hotel communicates the type of target market that theenterprise wants to trap. The branches located in city centersfocuses on businesspeople and general tourists because of theabundant office buildings and tourist attraction site. Premier innhas adopted the habit of identifying places that are easy to find.This saves customers time and accessibility has also made it costeffective for the customers (Mintel). During hotel location, premierinn hotels also take care of the parking facilities. Ample parking isnecessary to accommodate customers who travel long distances. Premierinn hotel has devised a system that helps and directs potentialcustomers to their location. The labeling is readily visible so thatcustomers can read the instructions even if they are in a hurry orfar enabling customers save time and other resources. It is effectivefor customers to save fuel thus adding value to customersatisfaction. The hotels have a well-organized transport system thathelps customers get to within the premises. Premier inn has utilizedthe aspects of main road locations, motorway services and hightraffic location. Customers uses the above elements assess howpremier inn hotels meet their basic and important demands.

Pricehelps premier inn provide the value of the services that the hotelsoffer according to customers’ minds. Price has enabled the customerimage and picture of the value of services they pay for. Premier innhotel is aware of this component and has utilized the opportunity bysetting appropriate prices (Bowie, David). The prices are not aimedat only covering original costs and obtain profit but the main aim isto have the knowledge of what customers wait for when paying thatprices. Premier inn hotel has taken the advantage to use pricing asthe pillar to compete against other hotels. Premier inn hotels haveestablished some fixed rules governing the pricing. Among them arefixed rate, charging per room rather than per person and frequentdiscount offering and corporate rates. Price motivates customers whenselecting hotels and it is considered as a vital aspect contributingto development of the hotels.

Thereare physical facilities that contribute to customer satisfaction.Premier inn avails guest rooms and beds for sleep and othertangibles. These physical facilities, appearance of staff, equipmentsand personnel courtesy influences the way customers perceivesatisfaction. Premier hotels have ensured availability of parking,clean comfortable rooms, laundry, and restaurant and TV room. Theyhelp customers establish the standard of the hotel and the elementscontributing to the named cost. Functional dimension and serviceencounter describes the service process indicating the process thatstates the production and consumption of services. The effects areonly perceived after the purchase and utilization of the offeredservice. Premier inn hotels has trained it employees in a way thatthey show total willingness when attending to customers. Promptservices is also an element that premier inn takes seriously.Employees are caring and offer personal attention to customers andtheir needs. The company has built a reputation of assurance in theservice provided to show how reliable it is to customers. Using theOverall Satisfaction (OSAT) scores it was possible to measure thehotel’s guest satisfaction performance as tracked on a monthlybasis using IHG’s guest satisfaction tracking system(InterContinental Hotels Group, 2009) (Presbury, Rayka). The OSAT iscalculated based on data found from surveys randomly distributed anddone by guests during their hotel stay. As part of the survey, guestsare asked to rate their satisfaction with the hotel’s services,cleanliness, employees and facilities.

Afterstaying in premier inn hotels, guests normally decide the rudimentsof significance and satisfaction to them that are cleanliness ofaccommodation, value for money, and the presence of self-cateringfacilities. This study used the ECSI model to envisage the intensityof customer satisfaction and purchaser loyalty in premier inn hotels.It based on four scopes namely image, functional, technical and priceof services when assessing customer satisfaction. The findingsrecommended that brand image is a major determinant of satisfaction.Perceived value on the other hand, designate a degree of loyalty forthe whole hospitality industry. When customers experience is well itimprints a good impression of hotels. This makes them help hotels inviral marketing at no cost and registration of repeated patronage.Premier inn hotels enjoy this privilege due to the quality servicesthey avail to the customers. Satisfaction enhances guests’ choicewhen it comes to use of a particular service brand on any givenevent. Customers who have experience with premier inn hotels haveformed a habit of sticking to it as the brand of choice. There aremany reasons which range from diverse culture, age and class amongothers that affect the way customers chose the hotel accommodation.Premier inn has taken care of these elements and thus provides awider range of facilities and services. Premier inn hotelacknowledged several advancements whereby 19,000 regular `loyalcustomers` per year were recorded (Elliot, Michael). There was adecrease of 13% in guests having quandary, the percentage ofclient-staff encounter increased from 30% to 50%. This translatesinto customers feel that premier inn’s employees are more helpful.Customer satisfaction rate increased to 44% from 26%. The hotel canbe viewed as the actual emblematic case in point of using customersatisfaction to add to the quantity of guests, both in retainingcurrent guests and attracting new ones.

5.6Branding

Brandingis the most leading trend in the services trade such as the hotelindustry. Paired-samples analyses were carried out on the premier innhotel’s pre- and post-rebranding guest satisfaction, tenure,standard daily rates, and returns per offered room, proceeds and networking profit (Griffith, Christopher). The domino effect revealedthat after the branding the premier’s occupancy and returns peroffered room amplified extensively. Proceeds and tenure, standarddaily rates replicated non-significant raise while net working profitregistered a non-significant decline. The non-significant outcomesmay be described by irregular performance in key hotel operationalvicinity and slow demand during. From the premier inn hotelmanagement’s perception, associating with suitable brands with theproper arrangement can permit them to leverage on the brand’sreputable name to add to the awareness of their assets and marketworthiness. This is particularly of use if the premier inn isbranding in response to modifications in the market demand and marketsegmentation. Effective hotel branding can also augment the level oftrustworthiness and risks related with the hotel as alleged by theconsumer. It also leads to a positive manipulation on theirconsumption activities because they will tend to pay for brands theytrust and are more aware of. As a result, premier inn hotels canenjoy stronger customer loyalty and charge higher rates for greaterfinancial returns without any fear of losing clients.

Themanagement at premier inn hotels is fully aware that hotel brandequity shows a significant relationship with a company’s financialperformance. Our study projects that a well-built hotel brand equityleads to improved financial performance due to its positivepersuasion of consumers to book with a the premier inn hotel brand.At premier inn it is well known that there is a strong connectionbetween brand equity and customer retention.This is because successful branding strategy increase customers’fulfillments thus strengthen customer faithfulness, which in turnadds to a company’s financial performance.Premierinn hotels recognizes the fact that it is very vital for hoteloperators and managers to comprehend how branding and rebranding canimpact on guest satisfaction and associated hotel financialperformance in order to justify the investment decision that had beenmade.As a result the management has categorized branding basing on fourbuild-ups of customer-based hotel brand equity. These are brandloyalty, brand awareness, perceived quality and brand image (Yomnak,Tortrakul). Brand loyalty may be refers to the affection a customerhas to a brand whereas brand awareness is the potency of a brand’sexistence in the customer’s mind. Perceived quality signifies theconstituents of product quality (e.g. performance, features,conformity to conditions, consistency, permanence, serviceability,fit and finish) and service quality (e.g. tangibles, trustworthiness,proficiency, awareness, and understanding). Brand association isdefined as anything allied in memory to a brand, includingfavorability, exclusivity of superficial attributes, andreimbursement from the brand. A customer’s choice to pay forservices like a hotel stay, often depends on the customer’s historyof consumption incidences (in the case of a current customer), orreference by others and awareness about the brand (in the case of newand potential customers) (Mintel). Statistical methods of dataanalysis like SPSS were used to make clear conclusion and test theresults. This helped the team to gain an insight of the relevance ofthe study and the extent of application of the gathered information.

Fromthe survey it is clear that customers at premier inn hotels obey themotivation theory. This has forced the company management to operateon the principle agent and incentive theory that pulls and retainsits customers. This theory is also behind the employed hard workingnature that is transformed into quality services and customersatisfaction. The management also understands well the importance ofbalancing the flexibility between deliberate and emergent stragies.This helps the company adjust its business plan and priorities.Proper resource allocation is another principle for the premier innmanagement team. Premier inn hotel chains are a good example fosmaller, weaker and more innovative company that breaks into themarket to disrupt and overtake competitors. They don’t wait foravailability all the information and data that is present in theworld. The company rather makes decisions basing on the littleavailable information. The company also never slumbers but insteadmakes every available opportunity to utilize personal resources. Thecompany also invests good capital in things that are potentialearners of positive returns.

Chapter6.0 Conclusion

Premierinn chain of hotels is a constantly growing brand in the industry.The teamwork custom present in all its branches is the pillar ofstrength that propels the success. Proper understanding of customerneeds is another aspect that premier inn hotel gets deeply involvedwith. The information found is then utilized immediately indecision-making. The brand is strong and there is no doubt that it isgoing to succeed on the international front. Great percentage of itscustomers is contented with the hotels’ service delivery system.Incorporation of technology in the system is an avenue to tap highmarket segment. Trends indicate that the brand has drawn so muchattention hence triggering a lot of interest from potentialcustomers. It is evident that hospitality and tourism based managersmust undertake sporadic customer satisfaction evaluation. This is dueto the fact that satisfaction cannot be enhanced without measuring itand premier inn is no exception. However, they should integrate acomparative performance management into their examination, becauseany information with no relative performance is not whole. Serviceencounters are the structured blocks of excellence in hospitalityindustry. Narrowing in on hospitality service quality will helppremier inn hotels overcome service confrontation of the millenniumand develop their market situation. The research hypothesis has beenconfirmed proving that customer’s anticipation and insight ofservice quality review provides momentous information that can beutilized by premier inn hotels as the leaders to build upservice-improvement programs.

6.1Recommendations

Thereport evaluated the potential market opportunities existing in thebudget hotel market. Premier inn hotels management has options ofentering the market either through direct investment or throughstrategic alliances. The risk assessment and the feasibility ofentering through direct investment and strategic alliance should beevaluated. The recommendations to Premier Inn is to develop astrategic alliance with a chain hotel already established in theinternational market which have enough experience about the Indianmarket conditions. This will reduce the capital expenditure forPremier Inn as they will not be required to put large-scale capitalin order to acquire and develop properties. Although a certain levelof control will be forfeited to the strategic partner, an option offranchising also can be explored but the management concepts and theorganizational model adopted by Premier Inn in expanding in theUnited Kingdom may not be consistent and relevant with a franchisingmodel. Hence the best opportunity for Premier Inn is to enter theglobal market through a strategic alliance with local players invarious respective countries. Through this they will be able toposition themselves and avail standardized offerings and developpartnerships with various leading business organizations to tap theincreasing domestic business travelers.

Optionsof market entry

Market entry options for Premier Inn

100% direct investment

Strategic partnership

Franchising

PremierInn has to utilize a low cost structure with less number of employeesto operate the hotel chain with a centralized marketing andoperations system. All the reservations should be conducted throughthe Internet and the number of employees in each individual hotelreduced in order to lower the cost. In the developing countries,market the cost of employees are significantly less than that of thedeveloped countries and the potential of marketing to the Internetand making a centralized reservation system through a manned customercentre and an automatic Internet reservation system has not beenproperly targeted by any hotel chain. Use of branded and standardizedofferings can reduce the uncertainty for the customers in terms ofwhat to expect and the customers’ needs and expectations can be metwith the adaptation of the rooms and services to the global marketconditions.

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