The Development Process Of International Hotel Companies In India

Author : Vinod Kumar Yadav
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)

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Download or read book Performance Measurement System in Hotel Industry written by Vinod Kumar Yadav and published by . This book was released on 2010 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Performance of any organization is one of the mechanisms to gain people's commitment towards achieving the stated objectives of the organization. Increased competition, rapid change, reduced resources and mounting employee expectations, have all combined in such as way that organization are being expected to achieve more out of less. The changing Indian economic and demographic structure has led to changes in life style at a faster pace than economic growth. The demographic imbalance complicates the task of creating and providing different services as per demanded by the different customers. Thus, measurement of these services becomes complex especially in hotel industry. Experimental approach to the service delivery processes in Indian hotel industry also hinders in effective implementation of performance measurement system. Traditionally, companies in hotel services place heavy emphasis on the use of financial measures although they are historical by nature. The role of non-financial indicators, such as customer satisfaction, quality assurance, productivity, employee development etc. becomes important as they determine the competitiveness of a business as well as its ability to sustain profitability in the future. Incorporation of non-financial indicators in performance measurement process is crucial particularly in the face of intense competition, shorter product (service) life cycle and rapid advances in technology, which characterize the contemporary business. Also, the changes in performance measurement practices should incorporate the changes in business environment and environmental variables in Indian hotel industry. This study is an effort to address the questions, which includes: (a) the different performance measurement systems adopted by Indian companies in hotel industry; (b) the approaches used to measure the performance of the organization in hotel services; (c) the different factors distorting the PMS of the organization and (d) the effectiveness of PMS and need for the change in the existing PMS. This study also aims to establish an equation between performance measurement practices and environmental variables in Indian hotel services. The primary data as well as secondary data has been used to decipher the trends in performance measurement practices in hotel services in India. The secondary data is used to select the service companies in hotel industry for this study. The last three-year's financial position of the companies has been taken as the base to select the hotels for this study. The total 65 executives were approached in-person and through mail to get first hand information in all over india. Thirty-nine responses were received against the distributed questionnaires. The 37 responses were of use. The findings of the study indicate the inspiring facts to study the performance measurement system in India. Mounting pressure of customer demand and competitiveness has changed the Indian hotel industry very much, not only in adoption of change but also to upgrade their quality of service. The emphasis is on providing the personalized service to improve the market share by gaining the customer's belief. The strategic objectives get more priority than the financial objectives. The performance measurement approach followed by hotels and restaurants services is also indicating the same trend. The gap between the global and Indian companies in terms of performance measurement practices is reducing. As the multinational companies in hotels and restaurant sector are coming to India, this gap would further reduce and practices in sector would become of international standard. The sector is mainly aiming for the customer satisfaction, improving market share and providing quality and personalized services as strategic objective. Hotel services uses mainly the activity based costing approach, which is having high impact on the performance of the organization. The human behaviour is the main distortion factor in the performance measurement system. The cost based strategy is mostly adopted by the companies in hotels to achieve the stated objectives. Most important performance indicator for this sector is customer satisfaction. Customer behaviour, competition level, change in business objectives and approach have all combined in such a way to make the change in business system in the hotel industry India The empirical study deciphers the trend used to identify the potential of hotel services in context of economic and social changes underway in India. Although, hotel industry is lagging behind in the level of understanding of performance measurement system, but the sector realizes the importance of effective PMS for the organization. The different Indian hotels are found to use different approaches to measure the performance. The performance measurement systems adopted by Indian hotels are also found to be different than that followed by multinational chain of hotels. The role of social, economic and cultural factors is being realized by most of the hotels in India. Therefore, the development of performance measurement practices considering the role of environmental factors is need of hotel service business. This may also be one of the reasons why the multinational hotels can not be a very big threat to Indian hoteliers. The multinational hotel chain can make a difference with advanced equipments and hi-tech; whereas Indian companies in hotels sector may still be able to enjoy competitive advantage on home turf.