Measuring Hotel and Resort Performances During and Post-COVID-19: A Balanced Scorecard Approach

Abstract

The post-COVID-19 era of hotel/resort management requires a new attitude to assessing and benchmarking business performance. To survive and compete in the “new normal” environment, hotel/resort businesses need to build on their strategic agility and sensitivity, humanistic and sustainable leadership and resource fluidity. In this view, performance measurement is aligned with the evolving strategic goals, which collectively support people and places—customers, employees, communities and the environment. This case study explores the systems and practices implemented in hotels and resorts to measure business performances during the COVID-19 pandemic in Australia. We highlight how hotel/resort managers can apply agile leadership and more humanistic approaches in promoting a new way of thinking to innovate around the balanced scorecard (BSC) framework. In this vein, the case also provides an opportunity to think strategically about the implications of static versus dynamic performance measurement systems.

Teaching Note

Case Summary

The COVID-19 pandemic continues to present the Australian hotel and resort industry with unprecedented challenges. The post-COVID-19 era of hotel/resort management requires a new attitude to assessing and benchmarking business performance. To survive, compete and thrive in the “new normal” environment, hotel/resort organisations need to build on their strategic agility and sensitivity, humanistic and sustainable leadership and resource fluidity. The salient role of performance measurement is highlighted in this case study through secondary data analysis to uncover new business opportunities to optimise the organisational performance of the presented resort case. Underpinned by the BSC framework and benchmarking theories and practices, we encourage students and industry practitioners to apply innovative thinking, agile leadership and more humanistic approaches to the challenges and activities presented in the case study.

Teaching and Learning Objectives

The case study provides students with the following opportunity to:

• 1. Assess hotel/resort business performances through the use of the traditional BSC framework.

• 2. Conduct benchmarking analysis to identify continuous improvement opportunities for the hotel/resort operations.

• 3. Propose suitable measures to assess hotel/resort performances against key performance indicators (KPIs) and potential benchmarking indicators in the context of the “new normal” business environment.

• 4. Critically discuss the implications of static versus dynamic measurement systems on organisational performances.

Target Audience

This case study is suitable for both under- and post-graduate students in hospitality and tourism programs to better understand the significance of measuring and benchmarking organisational performances. It is critical for students to develop the ability to embrace change, innovate and adapt to the increasingly complex and uncertain environment. The case presents real management learning challenges to foster students’ critical thinking, creative, decision-making and collaborative skills.

To effectively contribute to the case study analysis, students should have a fundamental knowledge of hotel/resort operations, particularly, the hotels and human resources divisions, strategic planning and financial decision-making.

Teaching Approach and Strategy

It is recommended that at least two class sessions are dedicated to this case study. The first session can debrief the magnitude and impact of COVID-19 on the tourism and hospitality industry and, specifically, within the Australian context. This can be followed by an introduction of the BSC framework, benchmarking approaches. After a general discussion of the case organisation and business challenges, students can be assigned into two groups. Each group evaluates a different set of BSC perspectives from the case study. Lecturers/instructors should foster socially constructed teaching and learning experience through which students create their own knowledge—by discussing, comparing and reflecting on their findings and implications to the different business scenarios.

Having asked the students to read the case study and suggested readings in advance, the second class can focus on each group presenting their final recommendations and action plans for overcoming the encountered challenges. Afterwards, students should also be encouraged to propose future research directions for modifying, expanding and innovating BSC within the hospitality context. In closing, the lecturer/instructor should remind students that the desirable solution is the one that balances both short- and long-term performance goals and optimises the organisational performance; thus, moving away from the purely profit-driven strategic approach. The proposed teaching plan and group activity worksheet are included in Tables 6.4 and 6.5 respectively.

Table 6.4 Proposed teaching plan

Table 6.5 Group activity worksheet

Indicative Answers

Example answers to each case study question are provided below:

BSC Perspectives

• 1. Answers should consider the suitability of existing and potential new data sources to help identify a suitable and reliable flow of data to inform effective managerial decision-making. It is the type of data and the reliable access that will provide an advantage that other hotels/resorts may not be able to achieve or imitate (e.g. business acumen can be an integral benchmark for informing effective managerial decision-making during uncertain business times. Students can discuss the advantages and disadvantages of this benchmarking technique).

• 2. The altered consumer and travel behaviours due to the safety and security concerns in everyone’s life (in home and host countries) has increased demands for more meaningful consumer experiences (e.g. experiences aligning with consumers’ search for personal growth, escape, education, regain experiences and other), presenting both new challenges and opportunities for the (re)design of hotel/resort experiences. Hotel/resort businesses will need to adapt their operational and marketing strategies and practices to meet the changed needs. In this process, agile leadership enables the development of a competitive advantage. Also, with the increased awareness of human and environmental vulnerabilities during and after the pandemic, hotel/resort segments may call for more humanistic and sustainable experiences. Some post-pandemic service expectations will be similar to pre-pandemic expectations, whereas others will differ. Students could thematically analyse the different reasons to identify 3–4 underlying reasons.

• 3. Building on Q2, hotel/resort leaders could adapt to the environmental changes with agility to adjust the existing policies and procedures (P&Ps) and/or develop new ones. Hotel/resort leaders should be mindful and yet critical to promote new ways of working. Students can further apply the change management theories to think through the various forces and suitable change management strategies to achieve effective and efficient outcomes. Established P&Ps will need to change in response to operational, legal and technological requirements. Students can discuss how a P&P can be adapted to better suit an emerging guest need.

• 4. Training session(s) focusing on innovation for hotel/resort managers and leaders could foster the right mindset and practices to support innovation on an everyday basis and as everyone’s responsibilities. Students could be encouraged to discuss ways to balance both the financial and non-financial benefits of innovations to facilitate attitude change towards innovations.

• 5. Hotels/resorts can opt for more sustainable work practices/routines to improve their environmental impact. Students could evaluate the tangible and intangible resources required to perform different P&Ps, discussed in Q2.

• 6. Annually, the resort can conduct an evaluation of its environmental initiatives and report on the effectiveness of its big data strategy, specifically updating their stakeholders on its big data use (e.g. data sourcing, metrics, the instant visualisation of real data, etc.) and how it leads to continuous improvements/more sustainable workplace practices.

• 7. Students could explore innovative ways in using technology to foster support between employees working on-site and from home. Hotels/resorts can provide training sessions and promote work behaviours to engage their employees in ongoing well-being practices (e.g. mindfulness and meditation; self-awareness, reflection, social awareness, etc.).

Benchmarking

• 8. Apply hotel/resort leadership to model the right mindset. Students could also consider other options, such as benchmarking and performance management training.

• 9. It is suggested that students develop a broad list of examples with specific measures. Afterwards, they could apply convergent thinking to retain 3–4 quantifiable examples for each BSC perspective.

Recommendations and Action Plan

• 10. Technology advancement has facilitated contemporary hotel/resort organisations in collecting and accessing a wide quantity of big data, such as online reviews and business reports. Students should consider the quality, reliability and validity of secondary data during analysis for enhancing business decisions and enriching benchmarking and performance measurement practices. Additionally, students could focus on how ethical usage of big data can be fostered, such as consent, equity and privacy, to translate big data usage into socioeconomic value.

• 11. Each BSC perspective assumes a unique role in contributing to organisational performance. Students could identify the current measurement gaps, devise solutions to address the gaps and outline the interlink between all perspectives to achieve an alignment. To attain the short- and long-term organisational goals, students should balance the focus of all perspectives (e.g. not leaning to one or two only).

• 12. Both BSC systems—static and dynamic—will present possible values but also paradoxes at either end. Students could be encouraged to discuss various scenarios in which the KPI solutions incorporate all values. Consequently, students could generate creative findings by identifying the opposites, the bridge between them, and juxtaposing them to develop optimal strategies to improve (short- and long-term) organisational performance.

Further Research Directions

• 13. BSC lacks a perspective dedicated to measuring staff performances and developmental effectiveness. Students could identify 3–4 benchmarking tools suitable for understanding staff work motivations, satisfaction and turnover intention.

• 14. Employees may have diverse intentions when exhibiting performances. Students could employ different motivational theories to extend our understanding of performance measurements.

Further Readings

• 1. Garrido-Moreno, A., García-Morales, V. J., & Martín-Rojas, R. (2021). Going beyond the curve: Strategic measures to recover hotel activity in times of COVID-19. International Journal of Hospitality Management, 96, 102928. Doi:https://doi.org/10.1016/j.ijhm.2021.102928

• 2. Guix, M., & Font, X. (2020). The materiality balanced scorecard: A framework for stakeholder-led integration of sustainable hospitality management and reporting. International Journal of Hospitality Management, 91, 102634. Doi:https://doi.org/10.1016/j.ijhm.2020.102634

• 3. Kaplan, R. S., & Norton, D. P. (1996). Linking the balanced scorecard to strategy. California Management Review, 39(1), 53–79. doi:https://doi.org/10.2307/41165876

• 4. Sigala, M., Beer, A., Hodgson, L., & O’Connor, A. (2019). Big data for measuring the impact of tourism economic development programmes: A process and quality criteria framework for using big data. In M. Sigala, R. Rahimi, & M. Thelwall (Eds.), Big data and innovation in tourism, travel, and hospitality (pp. 57–73). Springer.