Hospitality Operations Management


Shangri-La Hotel is a global five star hotel. The hotel has set up many branches across the world in regions such as the United Kingdom, Middle East, Pacific Asia Europe and Latin America. The hotel works under the motto; we treat strangers as one of our own.

Nature of hospitality products and services offered at Shangri-La Hotel

The hotel provides a range of products and services. Such include facilities such as business centers, clinic, conference facilities, parking facilities hospitality lounges, facilities for the physically challenged and safe deposit boxes. Its services include photo processing, courier services, complimentary shoeshine services, laundry and valet services. Moreover, the hotel offers services about children. These are marked by babysitting or day care services. It is significant to note that the hotel also deals with travel and transport. Here the services offered include air transport transfer, car hiring or renting, taxi services and tour desk services. The shops that this hotel deals with include shopping rachides, gift shops, foreign exchange counters and florist. Regarding food and beverages, Shangri-La Hotel offers twenty-four hours room services. It has four restaurants and three bars, a lobby lounge and pastry shop. Regarding business centre, the hotel operates between 7.00 in the morning to 10.00 at night. The business centre provides various business amenities for the deserving executive travelers. Such amenities include facilities, service and equipment. The facilities include conference halls, meeting rooms and offices, video conferencing among other (Johnston & Clark, 2008). It is significant to note that video conferencing requires a two-week advance book. Other facilities include the nail salon, SPA, Marin and nonsmoking rooms. Services include binding, facsimile, laser printing, scanning and photocopying. Moreover, they offer notarial services and word processing, which constitute of translation and interpretations. The equipment includes mobile phones, computers that have broadband internet access, LCD, multimedia, overhead and slide projectors.


Identify various influencing factors that may have an impact on the demand pattern

The white paper "Working for Patients" published by Department of Health (1989) proposed quasi-market reforms to reconfigured the health sector and thus erected organizational boundaries between providers and purchasers of services. This has helped NHS to unify its system and now it has increased the accountability of providers and has greater control over the allocation of resources. However, many times health care organizations such as NHS have to deal with unpredictable situation such as infection that can put their budgets at risk. In such situations, hospitals have to absorb cost associated with such diseases. It is so because such costs are not covered by the contracts. Further, the additional diagnostic and therapeutic costs associated with the outbreak are to be borne by the health care organizations. (Crawshaw, Allen and Roberts, 2000).

Need of Financial Management in Health Care Organizations

Several factors influence the demand for service and products offered by Shangri-La hotel. These are explained below. Time of the week or day A closer analysis of the firm reveals that conferencing facilities, no smoking zones, transport and travel and accommodation services are on high demand towards the end of the week especially on Fridays on the weekends. By Sunday evening, the demand for these services normally declines. On the other hand, during the weekdays, the demand for baby is sitting and day care services are high (Jones, 2003). The same applies to the demand for front offices services such as orienting, scanning and photocopying. Many parents seek for day care services during weekdays, as they are to attend to jobs. However, during the weekends the demand for such services declines. The above is based on the many parents are free from work on weekends thus have the time to take care of their babies and spend time with them. Additionally very few jobs need front office services doing the weekends (Van der Wagen, Goonetilleke, 2009). The demand for nail salon services, SPA and no smoking is high doing the evenings as compared to the mornings. Many people like smoking in the evening after work as they interact with their friends. Moreover, nail making and massage are usually in many cases done in the evening after long day’s work. Pricing and economic factors According to the law demand, the higher the price of a product the low its demand and the lower the price of product or services, the higher its demand (Jaakkola & Alexander, 2014). The above rule is not different with the products and services offered in the Shangri-La hotel. Customers flock for the service and product offered here at times when prices are reduced or when there are discounts for promotion purposes. Additionally, during economic hardships such as inflation, the number of customers and service seekers in the hotel reduces drastically. Seasonality Seasonality is categorized and explained according to the seasons of the year. These include the holiday and festive season and the normal seasons. During holidays and festive seasons, the demand for travel and transport, food and accommodation and photo processing increases. However, babysitting and day care services decline in demand (Jaakkola & Alexander, 2014). Statistics indicates that doing the festive season's people like travelling outside their homes to break the monotony of home environment and interact with the new friend. The above idea normally called mass tourism explains why the demand for such hospitality services increases. On the other hand, the demand, for transport and travel services, food and accommodation reduce during the normal seasons. The above is based on the idea that during such times, many people are held up in offices thus have very minimal time for travel (Mauri & Minazzi, 2013). During the normal season, the demand for business centre facilities and equipment is higher as people attend job training, conferences, and seminars among much more. In a way, during the festive seasons, the demand for services and products that are related to leisure and recreational services increase while the demand for official business events such as conferences, printing and scanning decrease and vice versa.

Different groups of customers and their different levels of expectations about the products or services offered

There are different groups of people who are users of Shangri-La Hotel services and products. These include international business people, executives, college student and organizational groups. These individuals differ from each other regarding the meals experience, price, food, and drinks among others (Mauri & Minazzi, 2013). For instance, executives seeking for babysitting or dare care services are more concerned about the hygiene of the day care environment. The organizational group normally are concerned with the size of the conference and meeting rooms, and they expect spacious and well-ventilated conferee room and meeting room with the necessary equipment installed.

On the other hand, international business travelers expect quality rooms and are concerned with the cost of travel and accommodation (Ernst, Hoyer & Rübsaamen, 2010). Most of these prefer expensive rooms, which are spacious, and bed and breakfast included. College students tend to be economical. They prefer cheap room and are more than willing to share accommodation. Their presence of drinks depends on the price with many preferring cheap drinks.

Identify those factors and analyses how each of the factors influence the operation manager’s decision on average spending power for operating the business successfully

As stated above, most of the health care organizations do not have profit maximization as their sole goal, yet profits are desired by these organizations to achieve their other objectives. For both types of health care organizations, for-profit and not-for-profit, making a profit is essential for expansion (McLean, 2002). To have a wider access to health care, they need to expand and for this, they need to realize profits from their operations. In addition to this, they need to earn profits for some of their patients who are not capable of bearing medical treatment cost and need medical services at subsidized rates. Further, health care organizations need to be up-to-date with the latest technological advancements to deliver quality services (Courtney et. al. 2004). Moreover, health care organizations need to remain prepare for any emergency situations. Thus for such unforeseen situations also, they require generating profits. Finally, profits are also needed by for-profit and not-for-profit health care organizations for renovation and replacement of equipment and building, so that they can cover some of those higher costs (Cleverly, 1989).

There are several factors the influence investment in hospitality and business operations. Such include finances, staffing and decision-making as discussed below. Finances The finance position of a firm influences the decision for investment; if the firm is financially stable, it is easier for the operation manager to make steps towards investment (Ernst, Hoyer & Rübsaamen, 2010). On the other hand, if the firm is financially untenable the operation manager will find it difficult to invest due to lack of investment capital. Staffing Staffing is a very significant function of any business management. It involves hiring, firing and promotion of the workforce. If the firm has an adequate number of workers, investment becomes easier as compared to the firm that has deficits regarding staffing. Decisions making

Decision-making is key to the planning function of business management. Decision-making is at the heart of any operational manager. However, it is significant to note that the length of time taken to come up with a decision impact on the operational manager ability to invest (Ernst, Hoyer & Rübsaamen, 2010). The more the time taken in making decision, the more the delay in investment. On the other hand, the faster the process of decision making, the more the chances of investment. Briefly, the Shangri-La hotel offers the broad range of products and services, which include facilities, food and beverages, children related facilities and services, transport and travel, shops and business centers. These are offered to different categories of individual, which include executive, international businesspersons, college youths and organizational groups. The demand for these services differs deepening on the seasons, the time of the day or week, pricing and other economic factors.

Stages of product development

There are several stages involved in new product development to meet consumer needs and expectations. They include idea evaluation, market research, development, and product testing, analysis and product commercialization. Idea evaluation

Any new product begins with an idea. The above may be simple by basing the product on something that already exists (Heizer & Render, 2004). The idea is normally based on what new need ought to be brought to the market. Market research After getting some ideas and selecting the most suitable in, market research then begins. The above involves identifying a market segment, the potential customers among others. Conducting a market research enables the management to find out if there is demand for the product idea (Rushton, Croucher & Baker, 2014). Additionally, it enables them to map out the specific features that need to be developed to meet the needs and expectations of the potential consumers.

Development entails the actual development of the product. Here the prototypes can be designed in various ways and production stages to come up with a final product that the potential clients will want to buy. Product testing Normally before launching the product and spending a lot of money in promotion and production, the product ought to be tested with a smaller group of actual buyers (Rushton, Croucher & Baker, 2014). Testing of the product helps in ensuring that the product is visible, profitable and that no alterations need to be done before the product is launched. Analysis The feedback obtained from testing enables the producer to make essential changes to the product and establish how it will be launched to the market (Rushton, Croucher & Baker, 2014). With data from really consumers, producers are in a position to make decisions that are very crucial to the success of the product. Such include the price of the product and the marketing strategies to be used. Introduction/ commercialization Once the product has successfully passed through the above stages of product development, it is finally introduced into the market, product promotion and marketing is done through advertisements, promotions, sales persons, personal selling among others (Rushton, Croucher & Baker, 2014). Once the above was done a good product, lifecycle management ensures that the producer puts all efforts and investments in the product

Analyze features that contribute towards the customers’ perception of products and services.

Several factors can be investigated to understand customer perceptions about the product and services in hospitality. Such include brand images, brand loyalty, nutrition and dietary needs, access to facilities by the disabled and access to the restaurant. Brand image

The brand image implies that customers think about a specific barbed. Normally it is developed over time and affected by consumer experiences (Cummings & Worley, 2014). An appositive brand image is normally built when the consumers can recall the brand and its uniqueness. The above would be regarding the offered value proposition and relationship to the firm’s way of business and its key values. Nutrition and dietary requirements

There is a medical establishment that the way in which trendy food and beverages service are presented can be detrimental to someone’s health (Cummings & Worley, 2014). There have been several initiatives even at governmental levels to promote healthy eating. With this, many people working in hospitals needs to make suggestions for balanced diets for the clients. There is also an aspect for Meals and Menus for different situations. The above will cater for the diverse specific diet that is nutritionally balanced. Space utilization Having a right combination of the sizes of tables reduces waiting time for customers and increase the sitting capacity (Cummings & Worley, 2014). Equally, using large capacity dedicated tables creates special areas, help enhance the overall ambience and reduce customer discomfort caused by overcrowding.

These include the provisions of good family size rooms with large bathrooms enabling wheelchair access. Customers will want to find out if the restaurant offers excellent food and is large enough for wheelchair access if there is enough designated parking lot for the disabled driver among others.

Assess the opportunities and constraints affecting product and service development at your Organisation.

There are several opportunities and constraints affecting product and service development in the sangria-La hotel. Opportunities refer to the factors that that offers possibilities for business expansion to make more profits and sales (Gursoy, Chen, Chi, 2014). On the other hand, constraints refer to those factors that hinder business growth, reduces sales and profits. Opportunities Opportunities in Shangri-La hotel include technology use such as printing in demand, market expansions and improvement of the supply markets. These will increase the market share, sales and eventually profits.

Shangri-La hotel faces the following constraints competition from other hospitality firms, economic hardships that reduce the demand for the services and product offered, changes in consumer behaviour, increase in the cost of supply and negative population changes.

Evaluate different merchandising opportunities for hospitality products and services.

Due to globalization, there is a developing trend by investors to invest their money in international markets thus increasing travelling all over the world. The trend is beneficial to the hospitality industry. Most of these travelers expect high-quality services depending on their purchasing power (Gursoy, Chen, Chi, 2014). The above offers good opportunities for the hospitality firms to market their product and services with value addition. In the hospitality industry, the merchandise opportunities include persuasion of customers to patronize the hotel. Creating desire for the product or service in the wind of potential customers, creating product awareness among customers, increasing revenues and market share.

Evaluate different methods of pricing taking into account additional pricing considerations.

There exist Different methods of pricing in the hospitality industry. Such include the cost plus method, competition-based pricing, market-oriented pricing, and value-based pricing and target pricing (Weron, 2014). In Competition-oriented pricing, the price is determined based on the price of the same product or service offered by a rival firm. In cost plus method, the firm estimate the production cost to the predetermined percentage it may add to determine the selling price of a product or service. On the other hand, market-oriented pricing consists of setting up prices depending on the feedback from the market research on specific targeted markets (Weron, 2014). In target, pricing the selling price is determined to establish a particular return on investment regarding predetermined specific volumes of production. Finally, in value-based pricing, the price is set depending on the perceived value of the product or service.

Factors, which affect revenue generation and profitability in hospitality operations

Several factors affect revenue generation and profitability in the hospitality industry. Such include sales mix, consumer turnover, average spending power, labour intensity among others. Sale mix Sales mix is a way of mixing relative sets of products and setting up relatively low prices than the total of the individual products as a promotion to increase the total Organisation sales (Pan, 2015). In actual sense, it is less than the amount it would have been if it were sold individually thus affecting revenue generation at the end. Customer turnover If the customers are not attracted to the product or satisfied by the service, they may not return to the Organisation thus negatively affecting sales and revenue generation at the same time (Pan, 2015). Average spending power The above typically depends on the will of consumers; if they are free to send extra or not. If the average spending of a guest goes down, the sales will reduce and so it is the revenue generated.

To produce goods and offer services, a large number of employees are needed (Lopes, 2016). However, it should be noted that the more human effort against product or service the more the production cost thus limited profitability. Shelf life Shelf life is the length period the product can stay without going bad, if the product or service is not suitable for use, it will be discarded affecting profitability badly.

Elasticity of demand If the availability against demand id not properly met, the profitability is likely to decline due to decline in sales.

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Apply different performance measures and appraisal techniques to individual aspects of hospitality operations, the product and the whole operation.

Performance appraisal is methodology through which an employee or firm’s performance receives the evaluation. In the hospitality industry, the quality of the product service cost of the product and time matter are normally considered. Methods that can be used include Performance standards and matching the employee performance with their jobs (Lopes, 2016). Others that can be sued include approaches in the survey, which include graphic rating scales, narratives essays, and management by objective and behaviorally anchored rating. If the appraisal fails to realize the objectives, it should employ training awareness about employees.

Determine the effectiveness of different quantitative and qualitative appraisal techniques and their application to hospitality operations

Aspects such as employees’ attitudes, quality of a product and services can be considered under qualitative appraisal methods. The above can be assessed using various questionnaires, interviews and focus group discussions (Lopes, 2016). The primary limitation of the approach is that findings cannot be generalized to a wider population. Quantitative aspects such as the volume of output increase in revenue and market shared can be used using primary or secondary data. Its findings can be generalized to a wider population. To improve the effectiveness of appraisal techniques, the mix of the appraisal techniques ought to be employed.

Apply approaches to business analysis, evaluation and planning appropriate to hospitality operations, making proposals for action

When applying various approaches with diverse aspects to the hotel industry, it is worth to consider approaches such as facilities and services to offer accommodation, marketing, catering and demand generating services. For instance in Shangri-La hotel have for a long time treated their customer by offering lodging facilities (Pace, Pluye, Bartlett, Macaulay, Salsberg, Jagosh, & Seller, 2012). However, later the facilities were improved by adding services such as Safari. Each tourism firm ought to expect three types of customers, which include holiday users, business users and other users. Accordingly, products and service ought to be designed to fulfil the needs of these types of customers. Focusing on catering market is very crucial. Three major groups can generate profit. These include in-house visitors, non-residents and organized groups (Pace, Pluye, Bartlett, Macaulay, Salsberg, Jagosh, & Seller, 2012). There are three major types of services in the hospitality industry about demand. These include institutional, recreational and transit. These groups may enhance the generation of good impression about the firms concerning building market demand. In the planning process, three types are identified. These include goal dependent, single use and standing plans. Goal-dependent planning constitutes of objectives, the budget bad performance standard. Single use planning includes a temporary goal to be attained. Standing planning includes all ongoing applications. Analysis and execution of new approaches ought to be based on the combination of all these planning methodologies.


In conclusion, sustainable tourism can be described as an attempt to create the job for masses while creating the very little impact on culture and environment. The primary goal is to treat people, the tourists and firms with a positive experience. Tourism is regarded as one of the fast growing industries in the world. Accordingly, this growth will create stress on biodiversity and indigenous cultures, which may result into mass tourism. However, sustainable tourism cannot cut down the impacts of tourism in many ways such as contributing to cross-cultural intelligence and supporting local communities to buy local goods.

Dig deeper into Hospitality Management with our selection of articles.


Cummings, T. G., & Worley, C. G. (2014). Organization development and change. Cengage learning. Ernst, H., Hoyer, W. D., & Rübsaamen, C. (2010). Sales, marketing, and research-and- development cooperation across new product development stages: implications for success. Journal of Marketing, 74(5), 80-92.

Gursoy, D., S. Chen, J., & G. Chi, C. (2014). Theoretical examination of destination loyalty formation. International Journal of Contemporary Hospitality Management, 26(5), 809- 827. Heizer, J. & B. Render (2004) Operations Management: International Edition, 7th edition, London: Pearson Prentice Hall.

Jaakkola, E., & Alexander, M. (2014). The role of customer engagement behavior in value co- creation: a service system perspective. Journal of Service Research, 17(3), 247-261. Johnston, R. & Clark, J. (2008) Service Operations Management. 3rd edition. Harlow: Financial Times-Prentice Hall

Jones, P. et al. (2003) Hospitality Operations – a systems approach Thomson (647.068JON)

Lopes, M. (2016). The hospitality industry (Doctoral dissertation). Mauri, A. G., & Minazzi, R. (2013). Web reviews influence on expectations and purchasing intentions of hotel potential customers. International Journal of Hospitality Management, 34, 99-107.

Pace, R., Pluye, P., Bartlett, G., Macaulay, A. C., Salsberg, J., Jagosh, J., & Seller, R. (2012). Testing the reliability and efficiency of the pilot Mixed Methods Appraisal Tool (MMAT) for systematic mixed studies review. International journal of nursing studies, 49(1), 47- 53. Pan, F. C. (2015). Practical application of importance-performance analysis in determining critical job satisfaction factors of a tourist hotel. Tourism Management, 46, 84-91.

Rushton, A., Croucher, P., & Baker, P. (2014). The handbook of logistics and distribution management: Understanding the supply chain. Kogan Page Publishers. Van der Wagen, L., Goonetilleke, E., (2009 2nd Ed) Hospitality Management: Strategy and Operation. Pearson Education Australia

Weron, R. (2014). Electricity price forecasting: A review of the state-of-the-art with a look into the future. International journal of forecasting, 30(4), 1030-1081.

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