Research in hospitality industry

Role of research in hospitality industry

A snapshot of various kinds of research projects

April 2012

Introduction

This document is a proposal detailing how research can make a difference in the high end hotels industry

Presented herewith is an understanding of the industry in India and key research types that can add value for the hotel/hospitality brand

4/5/2012 2

An appreciation of the Indian Hotel industry

Contents Salient features Key trends

Indian Hotel industry – Salient features

Growing economy that is predicted to smooth-sail upwards in 2012 Burgeoning demand contrasted against insufficient growth in supply Leading

to Rising rates and overall boom in the high-end sector

More than 95% of business accounted by domestic travelers amongst which business travel accommodation is touching unprecedented levels …

Business likely to fructify significantly in metros given the strong demand from IT professionals for accommodation in metros

A large number of International budget hotel chains are poised to enter Indian soil

Back home, around 3 times as many hotel projects in the luxury segment have been approved by the Indian Government & will fructify around 2012

2012-2012 can be a phase where there can be a tussle of sorts between full-service players in luxury segment as well as evolving Indian & International budget chains

4/5/2012 4

Trends in Indian Hotel industry

The industry is witnessing a sleuth of Value offerings – Cross breeds that claim the best of 5-star at prices of 3-4 star

Increasing disposable income, higher global exposures through media & frequent international travel have introduced different customer breeds into the fray who come with expectations of a completely different order

There is a high experimentation in the high-end hotel industry with the launch of theme-led properties, as an effort to differentiate

Recession coupled by introduction of lucrative Enterprise benefits has led to a breed of demanding enterprise customers

1. Rising quality of service delivery in hospitality – A general trend, thus there are no apparent long-term ‘differentiators’ in the sector, only sustainable brand value

2. Changing definitions of ‘Luxury’ & ‘Value’ – these 2 attributes are starting to carry multifarious layers & shades across customer segments

4/5/2012 5

Research for Hotel industry

Contents Research for Hotel brands Research for Restaurants

Research for Hotel industry

Given that the 5-star Hotel industry in India is high on involvement and moderate on clutter, owning a sustainable brand heritage and delivering compelling positive touch points to customers at all times becomes an imperative

There are 2 levels at which consumer touch-points mostly materialize in hotel industry:

4/5/2012 7

Hotel Property experience

Restaurant experience

Touch-points rub-off on overall Hotel brand

Touch-points rub-off on the Restaurant Brand + Hotel brand associated if

any

Research solutions accordingly need to

address the overall Hotel brand

Research solutions accordingly need to

address the Restaurant

Research for Hotel brands

There are 3 broad areas where research can make a difference for any Hotel brand:

4/5/2012 8

Brand health & Equity research

Satisfaction research

Brand mix research

1. How are we performing as a brand & how are our individual properties performing?

2. What is the strength of our heritage across different customer segments & what values sustain & drive our overall brand heritage?

1. How well-entrenched are we with our guests & whether there is need for action to further current loyalty levels?

2. How satisfied are our employees with us & why does attrition happen?

How well are our marketing AND other inputs supporting us in sustaining our brand health & equity & other tactical goalposts?

Research for Restaurants

There are 3 broad areas where research can make a difference for a Restaurant:

4/5/2012 9

Consumer related research

Menu related research

Mix of Touch-points (MoT) research

1. Profiling research

2. Consumption attitudes & behavior mapping (CAB)

3. Consumer diagnostics

4. Trend analysis wrt F&B genres

1. Developmental research

2. Menu assessment research

3. Pricing research

4. Fatigue tracking

This involves assessment of overall satisfaction, delight &

diagnostics for all consumer touch-points

at the restaurant in the competitive

context

Brand health & equity research

Contents Scope of research Brand Health – Dimension

s Brand Equity – Dimension

s Research design

Research for Hotel brands

Brand health & Equity assessment – Scope

Premise of a brand health & equity research is that a brand needs to be assessed in line with any internal/external interventions in order to evolve as a preferred service brand

Key dimensions that are gauged within this for both own brand & competition are:

How is the brand faring on these indices pre / post any marketing intervention?

What indices need to particularly addressed to bolster brand performance?4/5/2012 11

Brand health Brand equity

1. Brand Salience2. Brand Perceptions

1. Product (Property) rating

2. Service rating3. Extent of Brand

bonding1. Disposition to

brand2. Entrenchment3. Imagery

1. Brand imagery1. Brand associations2. Brand Values

2. Decoding Brand Perceptions

1. Strengths & Weaknesses

2. Differentiators3. Quality of Brand

bonding1. Personal relevance

(Empathy) & Esteem

2. Differentiation

Brand health assessment – Dimensions

This assessment constitutes rating of overall brand and competition on select indices that together constitute ‘overall brand health’

It will primarily yield perceptual rating in terms of Salience and Brand perceptions of the brand & properties as against Competition

Key assessments that are made to determine overall brand health detailed as follows –

Salience Brand perceptions

Product rating Service rating

Top of Mind recall Spontaneous

recall Aided recall Spontaneous Ad

recall Aided Ad recall

Rating of brand, properties & its sub-units as against expectations on Reach / Availability Perceived Quality Experience Price

Service availability Service reliability Perceived service quality Staff rating on image,

communication skills, responsiveness, expertise, courtesy & empathy

4/5/2012 12

Brand health assessment – Dimensions (Contd.)

Brand bonding will be assessed through following measures detailed below –

Assessment of Salience, Perception rating and Brand bonding parameters will yield overall status of our brand in the marketplace vis-à-vis competition …

It will also highlight areas where we score above competition & whether there are any areas where we are on par or below that need bolstering

4/5/2012 13

Disposition Loyalty Imagery

Overall disposition towards the brand vs competition wrt: % Adorers % Adopters % Accepters % Available % Rejecters

Extent of loyalty amongst own vs competition guests wrt – % Will only always visit % Will visit X brand

hotel or others % Will visit only

competition

Strength of association of brand with desired imagery parameters over & above competition such as – Authentic Iconic Discerning Heritage Perfectionist Etc

Brand equity – Dimensions

Brand equity research yields the subjective value of the overall brand as well as equity of individual properties

It involves exploration of following dimensions & strength of association of values that emerge from the following articulations – Associations Decoding of Strengths, Weaknesses & Differentiators Brand Values & Quality of Customer Bonding

Identification of Brand values & quality of bonding involves use of Brand Essence Wheel

Brand Essence Wheel breaks down the overall equity of the brand into

1. What the product/ brand does for me

2. How I will describe the product/ brand

3. How the brand makes me look

4. How the brand makes me feel The above 4 questions cover both rational and emotional aspects with respect to

the brand and hence give a holistic picture of esteem & empathy with brand & can be further used to developing the core of marketing communications & brand initiatives4/5/2012 14

Brand equity – The Output

Rational

Emotional

What the propertydoes for me

How I woulddescribe the

property

How the brandmakes me look

How the brandmakes me feel

BRAND PERSONALITY

FACTS & SYMBOLS

CORE

Framework of Outputs on the Brand Essence Wheel for brand & Competition

4/5/2012 15

Brand health & equity assessment – Research Design

Centers recommended

Pan India – Concentrating on all 4 Metros and representation of key Non metros

Target audience

TG must be representative of the actual universe

Hence need to represent following segments for both brand & Competition across Luxury, Premium, Mid-market and Value categories –

1. Individual segment1. Business travelers

2. Leisure travelers

3. Business cum Leisure travelers

2. Corporate segment1. Enterprise decision makers

2. Employee frequenters across grades

4/5/2012 16

Brand health & equity assessment – Research Design (Contd.)

Methodology

Brand Health AssessmentTypically, Brand health assessment necessitates Quantitative methodology, but also needs to be supported by Qualitative methodology for decoding various measures

Technique – Given the nature of TG, typically one-on-one approach works bestHence One-on-one Structured interviews supported by One-on-one In depth interviews are recommended

Brand EquityGiven that one is aiming to capture softer nuances in terms of brand associations, imagery & overall core, Qualitative methodology is necessitated

Technique – Focus groups are best equipped for the task. But for logistical reasons, one-on-one In depth interviews may also be considered

4/5/2012 17

Satisfaction Research

Contents Scope of research Guest Satisfaction research Employee Satisfaction rese

arch

Satisfaction research – Scope

Objective of Satisfaction research is to ascertain current satisfaction levels of key stakeholders vis-à-vis competition

Typically, a satisfaction research for 5 star hotel brand covers 2 stakeholders –

These dimensions are detailed further …

4/5/2012 19

Guest satisfaction

Employee satisfaction

Overall Satisfaction with Brand

Overall Entrenchment with Brand

Overall customer experience at our properties

Overall loyalty, positive WOM & repeat business for our properties

Overall Satisfaction with company

Overall Satisfaction with individual work dimensions

Decoding of satisfaction levels Reasons for loyalty / attrition

Overall entrenchment

Guest Satisfaction research – Measures

Typically, a satisfaction research amongst guests for a high-end hotel brand involves assessment & decoding of following dimensions at an overall level –

Overall satisfaction rating Overall rating on levels of Entrenchment

Overall Satisfaction with specific properties

Satisfaction with Brand Individual Properties

ever visited Facilities across

properties Staff across properties Perceived service levels

across properties

Entrenchment with Brand

Individual Properties ever visited

Entrenchment with brand for different occasions Business Leisure Business cum

leisure

Image Location Landscape & expanse Ambience & décor Room options Facilities – Restaurant,

Food, Business center, Banquet facilities, Spa, Gym, Shopping, Security, Travel facilities etc

4/5/2012 20

Guest Satisfaction research – Measures (Contd.)

The research also involves assessment & decoding of following dimensions in detail for properties in which ever stayed –

4/5/2012 21

Satisfaction with Overall Service

Satisfaction with In-room service

Satisfaction with Staff

Services offered – availability

Perceived quality Overall Service

Experience Pricing Any other parameters

In-room ambience In-room facilities &

amenities Room service Overall In-room

Experience Pricing Any other parameters

Staff availability Staff accessibility Image Communication skills Responsiveness Expertise Courtesy Empathy levels Any other parameters

Guest Satisfaction research – Outputs

Key outputs of Satisfaction research is the rating of our brand amongst own guests and competition brands amongst competition guests on the following

1. Overall Satisfaction index and distribution

2. Satisfaction drivers and rating on Satisfaction drivers

3. Entrenchment levels and rating on Entrenchment drivers

Overall composite customer satisfaction index, which can be tracked over time

These are further broken down into various tangibles & measurable domains detailed and reported at following levels –

1. Overall pan India

2. By Customer segment

3. By Property

This will also yield the key reasons driving current scores vis-à-vis competition and key improvement areas that can improve scores in the short-run as well as long run

4/5/2012 22

Guest satisfaction research – Design

Methodology

Typically, this necessitates Quantitative methodology, but also needs to be supported by Qualitative methodology for decoding current satisfaction levels

Given the nature of TG, typically one-on-one approach works best. Hence One-on-one Structured interviews supported by One-on-one In depth interviews are recommended

Centers recommended

Pan India – Concentrating on all 4 Metros and representation of key Non metros

Target audience

TG must represent all properties for both brand & Competition across Luxury, Premium, Mid-market and Value categories, covering following profile of guests –

1. Individual segment - Business travelers, Leisure travelers, Business cum Leisure

2. Corporate segment - Enterprise decision makers, Employee frequenters across grades4/5/2012 23

Employee Satisfaction research – Scope

Given that the high-end hotel industry is manpower driven, it is crucial to determine employee satisfaction amongst both current & ex-employees

This will involve assessment of satisfaction and reporting wrt following dimensions – Overall employability rating as an employer in the market place Overall satisfaction with working for the company Satisfaction with respect to –

– Role definition & clarity

– Work environment

– Day to day working experience

– Interaction with peers / superiors

– Remuneration

– Growth opportunities

– Any other parameters

Decoding of satisfaction in terms of –– High points & Low points

– Reasons for Loyalty / Attrition

4/5/2012 24

Employee Satisfaction research – Design

Methodology

Typically, this necessitates Quantitative methodology amongst Current employees and Qualitative methodology to explore attrition amongst ex-employees

Given the sensitivity of information captured, one-on-one approach works best

Hence One-on-one Structured interviews amongst current employees supported by In depth Interviews & One-on-one In depth interviews among Ex-employees recommended

Centers recommended

Pan India – Concentrating on all key Properties

Target audience

1. Current employees – Front-end & Back-end across different functionalities

2. Ex-employees

4/5/2012 25

Brand Mix Research

Brand Mix research

Brand Mix research involves study of impact and efficacy of brand mix elements (external inputs) in following areas –

These researches can address ad-hoc requirements in tune with marketing interventions for the brand

4/5/2012 27

Elements testing Delivery related research Secondary research

Concept testing for a new property

Communication development

Advertising pre-testing

Advertising effectiveness testing

Sourcing related research

Product (Menu etc) development

Pricing research Benchmarking studies

Market overviews Market intelligence Trend analysis

Consumer related research

Contents Profiling research CAB research Consumer diagnostics Trend analysis

Research for Restaurants

Profiling research

Objective of Profiling research is to ascertain the profile of customers who contribute to footfalls and / or business for the restaurant

Key dimensions on which consumers get profiled are outlined below:

The research requires quantitative methodology through one-on-one structured interviews with guests from the database maintained by the restaurant

Outputs from profiling can be used for appropriate targeting of the restaurant & its overall milieu

4/5/2012 29

Demographics Lifestyle Dining out

Age & Gender Education Occupation SEC Income (MHI / MPI) Type of residence

Durables ownership Shopping habits Leisure activities Media habits – Print,

TV, Radio, Internet, Mobile internet etc

Club membership if any

Frequency of dining out With whom & size of

party Restaurants ever visited Most frequented

restaurant Restaurants lapsed out

of Menu last ordered Monthly Spends on dine

out

Consumer Attitudes & Behavior mapping

Objective of CAB research is to gain understanding of consumer attitudes & behavior with respect to dining out / fine dining

This research is typically done with a developmental view prior to new launch, theme change / re-design or for an upcoming restaurant

Dimensions that are explored herewith are:

The research necessitates a combination of Quantitative & Qualitative methodology

TG targeted is frequenters of 5-star / fine dining restaurants across age groups

Output is typically used to strategize design / launch of the restaurant4/5/2012 30

Attitudes wrt dining out Habits wrt dining out Preferences

Purpose of dining out Motivations & barriers if

any Expectations from a fine

dining / 5 star restaurant Descriptors of overall

experience Overall pay-offs sought

Rational Emotional

Frequency of dining out Time spent per visit With whom & size of party Menu last ordered Monthly Spends on dine out Restaurants - Ever visited, Most

frequented, Lapsed & reasons Choice process & drivers of

choice Satisfaction, Loyalty &

Disposition

Importance, differentiation & preferences wrt – Brand name & Image Ambience & décor Menu – F&B Service Staff Any other touch

points

Consumer diagnostics

Objective of Consumer diagnostic research is to gauge reasons for either or all of the following –1. Consumer delight Understand delight factors / elicit testimonials2. Consumer satisfaction Freeze on aspects that should be sustained3. Consumer dissatisfaction evidenced by poor feedback / low satisfaction /

lapsage Aid in taking relevant corrective measures

Such research is typically Qualitative in nature and conducted through In depth Interviews

TG targeted is ‘own’ guests from the most recent (last 3 months) database maintained at the restaurant

Output is used to either enhance delight factors and / or take relevant corrective measures to avert dissatisfaction

4/5/2012 31

Trend analysis for F&B

Trend analysis in F&B is typically undertaken for a restaurant with the objective of maintaining a sustainable edge in terms of delivery in the fine dining market

There are 2 stages to any trend analysis –1. Stage 1: Ideation / Articulation from ‘discerning’ consumers + Chefs, of all F&B

genres, menu & dishes aware of, ever consumed, never consumed & desire to consume, never consumed & do not desire to consume

2. Stage 2: Classification of F&B genres, key dishes of own & competition restaurants into 4 piles –

Stage 1 of the research requires Qualitative interaction with Chefs in the fine-dining industry and ‘discerning’ consumers, typically acknowledged food connoisseurs / experts

Stage 2 of the research requires Quantitative structured interviews with frequenters of fine dining / 5-star restaurants

Output from the research is strategic in nature and must be used with a long-term developmental view4/5/2012 32

Evergreen genres Emerging genres Steady genres Declining genres

Must always be present in any 5 star / fine dining restaurant & will

always be consumed

Not consumed by all, but high desire for trial / high on

imagery – Growing genre

Consumed by many & winning steady

patronage – well-accepted but not endorsed by all

Declining steadily on consumption as well

as imagery – Low demand overall

Menu related research

Contents Menu research Pricing research Fatigue tracking

Research for Restaurants

Menu Developmental / assessment research

There are 2 types of Menu research –1. Iterative Development

1. This is done at an experimental stage2. Basic menu developed by chef is force-tasted by consumers by trial

offer & rated3. Based on ratings, the Chef iterates the menu over a fixed time period

until scores are above par on satisfaction & delight levels2. Menu assessment research

1. This is typically done for a menu already in place2. Consumer ratings are taken post force-taste through a trial offer to

validate preference and prioritize preference across dishes tasted3. The research may also be accompanied by feedback to menu card /

card options

Objective of Menu Developmental research is to obtain cues for finalizing menu for a new / upcoming restaurant or for a restaurant that is changing its menu

Objective of Menu assessment research is to validate consumer satisfaction & delight specifically with the menu at the restaurant – note dips as & when they occur for corrective action

The research is conducted by means of placing a feedback form at the restaurant which every guest is requested to fill in post meal – findings are analyzed by agency

Output is used to fine-tune & prioritization of menu options OR to ascertain if any of the menu options require corrective measures

4/5/2012 34

Pricing research

Objective of pricing research is to aid iteration in arriving upon optimal pricing for menu in order to make it competitive & to drive preference by means of value proposition

Pricing feedback for a 5-star restaurant poses following challenges –– Standard feedback scales & options such as ‘slightly expensive’ or

‘too expensive’ are translated into consumer’s projected image ‘difficult to afford’ / ‘cannot afford’ … hence standard approach cannot yield results in this category

– For certain menu options, a statistically significant base may not be possible

In this scenario, all Pricing questions done for menu for a 5-star restaurant are typically MASKED and feedback is taken at TWO levels for each dish –– FEEDBACK FROM MENU CARD MINUS TASTING – Respondent asked to rate

each menu option along with recipe and price, on following scales• Interest in Recipe – ‘1’ being ‘Not at all interesting’ to ‘5’ being ‘Very interesting’• Willingness to try – ‘1’ being ‘Definitely will not try’ to ‘5’ being ‘Will definitely try’

– FEEDBACK POST TASTING – For dishes tasted, post billing, respondent is asked to rate each menu option along with price on following scales• Satisfaction with each dish• Willingness to try again – ‘1’ being ‘Definitely will not try’ to ‘5’ being ‘Will definitely

try’4/5/2012 35

Pricing research (Contd.)

Analysis is done by checking the extent of negative correlation between ‘Interest in recipe’ and ‘Satisfaction post trial’ against ‘Willingness to try’

Research will indicate whether price is having a negative rub-off on overall willingness to try or not

The research is conducted by means of placing a feedback form at the restaurant which every guest is requested to fill in pre-meal and post-meal

Findings are analyzed by agency

Output is used to understand whether current pricing is leading to lower trials of certain menu options or not

4/5/2012 36

Fatigue tracking

Objective of fatigue tracking is to gauge whether consumers are starting to develop fatigue towards existing menu and whether a re-design needs to be considered

This is typically an additional analysis conducted post regular Menu assessments

Key aspects looked into for identifying fatigue with a particular menu option are –1. Low trial over 3 consecutive assessments

+2. Consistently low ratings over 3 consecutive assessments

+3. Low willingness to trial or re-trial

Fatigue track flags consecutive dips as and when they occur, thus enabling immediate corrective measures / timely redesign of menu

This analysis is done only amongst REGULAR consumers at the restaurant (who frequent the restaurant at least once in 2 months)

4/5/2012 37

Mix of Touchpoints (MoT) research

Research for Restaurants

Mix of Touch-points (MoT) research

Objective of MoT research is to have an overall assessment of delivery at the restaurant in the competitive context

In this research, own and competition restaurants get rated on following dimensions– Theme, Ambience, Décor, Lay-out– Furniture, Cutlery & Crockery etc– Staff – Image, Attire, Communication, Expertise, Empathy, Turnaround time etc– Overall Menu – Menu card, Range of dishes etc– F&B – Presentation, Uniqueness of Taste, Quantity, Innovation in menu etc– Pricing– Any other factors

TG targeted is frequenters of 5-star / fine dining restaurants across age groups + Guests from the database maintained by the restaurant one-on-one

Research requires quantitative methodology through structured interviews

Output compares scores of own restaurant with own guests versus competition restaurants amongst competition guests – thus serves as an assessment to arrive upon overall standing

4/5/2012 39

www.azresearch.incopyright AZ Research Partners

AZ Research Partners Private Ltd.

Contact us

Research & Beyond…

Managing DirectorSujay MisraMob: [email protected]

DirectorShubhra MisraMob: [email protected]

For latest updates, follow us on: www.azresearch.in