Quality Management and Performance in the Hotel Industry: A Literature Review

Abstract

This paper presents a literature review of the quantitative empirical studies that have analyzed the relationship between quality management and performance in the hotel industry. It is based on a search of the databases ScienceDirect, ABI/Inform and Emerald, and it identifies the quality management and performance variables used, the analyses carried out and the main findings. The results show that, in general terms, quality management has positive effects on operational and financial performance, that quality certification leads to positive benefits for many hotels, that specific variables such as the number of stars or the size of hotel could be an influence on this relationship, and that other variables could also help us to understand better the relationship between quality management and performance, for example the motives for certification. Based on these results the paper offers implications for managers and future lines of research.

Appendix

Summary of quantitative studies on the effects of quality management in hotels

Study	Sample	Quality management variables	Quality performance variables	Financial performance variables	Analysis	Main findings
Camisón (1996)	38 Valencian hotels and 250 customers	Leadership, policy and strategy, people management, resources, processes	Customer satisfaction, people satisfaction, social impact	Financial results	Descriptive analysis	Quality management is basic for competitiveness, although there are differences between managers’ and customers’ perceptions
Breiter and Bloomquist (1998)	230 US hotels	Leadership, customer focus, empowerment, process improvement, fact-based decisions, training, recognition, flexibility, techniques and tools, strategy planning, teams, supplier management, ISO 9000 certification	Successful quality management programme, non-successful quality management programme		Descriptive analysis and significant differences between groups	Most hotels derive benefit from quality and find the obstacles mentioned in the literature on quality in industrial firms
Nield and Kozak (1999)	34 ISO-9001-certified tourist firms (including hotels)	ISO 9000 certification	Operational benefits, people benefits, marketing benefits (customer satisfaction, competitive advantage, image)		Descriptive analysis and interviews with three of the organizations analysed	The ISO 9001 has clear benefits for operational results, medium benefits for marketing results, and results regarding employees. Also, the managers interview pointed out that there seems to be no direct connection with financial results, because customers do not usually seek certification.
Kimes (2001)	1,135 Holiday Inn hotels	The study analysed the ratios in the hotels’ quality assurance reports	Number of defects in each hotel area	Income per available room (RevPAR)	Significant differences between hotels with defects and hotels without defects, and between deficient hotels and non-deficient hotels	There is a direct relationship between product quality and financial results. Defects in the exterior, in rooms and bathrooms are critical, whereas problems in other hotel areas do not have an important effect on RevPAR
Claver-Cortés et al. (2008)	301 Spanish hotels	Commitment to quality management (managerial commitment, customer satisfaction, cooperation with intermediaries and suppliers, training, motivation, employee involvement, continuous improvement, control)	Customer satisfaction, employee satisfaction	Market share, sales, gross profit per room, etc.	Cluster analysis and regression analysis	Those hotels that develop quality practices to a higher extent have better operational results, improved competitiveness and higher satisfaction among their interest groups (customers and employees). Quality management has an impact on competitiveness and interest group satisfaction
Tarí et al. (2009)	303 Spanish hotels with and without quality certification	Quality certificate	Customer satisfaction, employee satisfaction	Market share, sales, gross profit per room, etc.	Significant differences between groups	Certified hotels have better operational results, although no significant differences are shown regarding the satisfaction of interest groups and financial results
Nicolau and Sellers (2010)	24 quality certificates	Quality certificate		Firm’s market value (share price)	Event study and regression analysis	The price of shares reacts positively to the announcement of the certificate
Rubio-Andrada et al. (2011)	111 certified Spanish hotels	ISO 9001 or Q Certificate	Error reduction, improved operations, training, use of new technologies, working conditions, motivation, fewer complaints, customer satisfaction (amongst others)	Income, profits, financial ratio	Factor analysis	The quality certificate has a positive effect on operational and customer results, and also improves financial results
Arasli (2012)	23 hotels in Tehran	Leadership, satisfied customers, fact-based, people-based management, continuous improvement	Business excellence outcomes		ANOVA test	Most managers, chiefs, and employees gave their lowest scores to quality culture practices and business excellence performance
Alonso-Almeida et al. (2012)	162 Spanish hotels certified with the 9001 ISO standard or the Q certificate	Quality certification (ISO 9001 or Q certificate)	Results regarding customers, suppliers and other interest groups, employee results, operational results	Financial results	Structural equations	The reasons for certification have an influence on employee satisfaction, which in turn has an impact on the quality of the services offered. In turn, this has an influence on the results regarding customers, suppliers and other interest groups. Similarly, the quality of services and operations has positive impacts on financial results
Álvarez García et al. (2012a)	186 Spanish hotels with the Q certificate	Q Certificate	Customer results, employee results, society results	Key outcomes	Factor and cluster analysis	Certified hotels with greater concern for internal and external reasons for certification have a higher level of development of quality practices and better results in general
Álvarez García et al. (2012b)	34 companies with the Q for quality certificate	Q Certificate	Customer results, employee results, society results	Key performance results	Student t test	The companies studied, including hotels, that have implemented the “Q for quality” have improved their levels of performance
Pereira-Moliner et al. (2012)	259 hotels	Quality management (the management is committed to quality, the customers’ present and future needs are known by the firm, the firm cooperates with intermediaries in order to improve the product offered in the establishment, the firm cooperates with suppliers in order to improve the product offered in the establishment, the establishment staff receive training in quality-related issues, employee motivation is encouraged, all the staff are involved in the elaboration of the product offered, improvements are identified in the service delivery process, objective compliance is monitored and deviations are corrected, a culture focused on the continuous improvement of the product offered is at work)	Stakeholder satisfaction (customer satisfaction, employee satisfaction)	Financial performance (room occupancy rate, income per room, gross profit per room, wealth creation, capacity to generate profit in times of crisis) Market success (market share gain, success rate at new product launch, average sales growth in the last 5 years)	Structural equations	Quality management influences stakeholder satisfaction, market success and financial performance. In addition, environmental management mediates the relationship between quality management and performance
Wang et al. (2012)	588 hotels in China	Customer focus, internal and external cooperation, continuous improvement leadership, employee commitment, learning, process management	Customer results (loyalty, satisfaction, value, customer retention)	Financial results (market share, sales, sales cost, financial profitability)	Structural equations and discriminant analysis	Quality management has an influence on hotel results, and market turbulence, competitive intensity and technological turbulence moderate the relationship between quality and results