Editorial Board

A Refereed Monthly International Journal of Management

Development of a Model on Technology-Enabled Service Encounters in Hotels

Dr. Ritu Narang

Associate Professor

Department of Business Administration

University of Lucknow

ritu_vnarang@yahoo.co.in

Ankita Jaiswal

Research scholar

Department of Business Administration

University of Lucknow

jaiswal.ankita47@gmail.com

Abstract

In this study, a new model on technology-enabled services encounters in hotels has been developed in two phases. In the first phase, an existing model developed by Aguayo et al. (1997) was used as the foundation framework to develop a new model reflecting various service encounters. Interviews of experts from hotel industry were conducted in the second phase which led to further development and validation of the proposed model. The new model on technology-mediated service encounters comprises six major service encounters information & query, booking, check-in, stay, conference room & business centre, and check –out. This proposed model makes a valuable contribution towards existing literature and guides the hotel industry in decision-making and devising of suitable strategies.

Keywords: Hotel Industry, Hotel Technology, Modified Model, Service Encounters, Technology-Enabled.

Introduction

Changing consumption pattern of customers driven by technological advancements has given rise to various customer-oriented innovative products and services. Following this, the hotel industry has also adopted various technology-based services to improve operational efficiency, reduce costs and enhance service quality (Camison, 2000; Siguaw and Enz, 1999; Van Hoof et al. 1996). Likewise, Watkins (1995) argued that IT starts and ends with customers in hotel industry.Borsenik (1993) argued thatinvestment in IT could only be fruitful if it engages the customers in memorable experience and also empowers the hotel staff to work more efficiently in better assisting their guests. Therefore, hoteliers are shifting from transactional outlook to technology-based experiential paradigm.

Technology has revolutionized the basic structure of every industry, and is more likely to reshape the hotel industry at a remarkable rate (Davis and Davidson, 1991; Frew 2000a). Moreover, digitalization of services could be used for managing rising technological needs of customers.With such perspective, the hospitality service providersneed to be more cautious in pushing technological services to guests touch –points (Wang et al., 2013). At these touch-points /encounters, useful information can be collected about any customer preferences, choices and behaviors (Minghetti, 2003).Touch-points are therefore considered, significant for every hospitality services. This has inspired companies to consider technology as a constant mediator to increase their service exchanges, where both customers and firms can benefit at such service encounters (Bitner, Brown, and Meuter, 2000; Salomanet al. 1985).

According to Bitner and Wang (2017), while significant academic discussion has revolved around the role of technology and current innovations in this sector less has been considered from a futures perspective. They have further argued that technology-based service encounters still need to be explored and theories could be developed or modified in this context(Bitner and Wang 2017).With such perspective, this study proposes a new model for acknowledging the influence of technology at various service encounters to enhance customer-experience.

Literature Review

Service Encounters

Service encounters or the “moments of truth’’ are the most foundational pillar of service marketing. Shostack (1985) considered service encounters to be that period of time during which the customer interacts with the services including technology, physical elements, and other customers. The service encounter construct is not only important for the marketing literature but is increasingly becoming important for the businesses focusing upon service quality (Bitner, Brown, and Meuter, 2000).Considerable studies have been done to explore the exchanges that take place between the customers, contact employees and even between employees (Baron and Haris1995).For instance, Surprenant and Solomon (1987) focused on the dyadic interactions between the service provider and customers to be the most important ones. Likewise, good service encounters could reinforce a long –term relationship between customers and organizations (Smith, 2003; Smith and Wheeler, 2002). There are other studies that have focused on multiple service encounters or multiple events. For instance, Verhoef et al., (2004) have tested a model on how events contribute to an overall evaluation of sequence of events. They found that although encounters are important but peak performances are required for customer satisfaction.Evidently, service encounters are important from the viewpoint of both customersas well as the firm. It may include a single discrete encounter or many chains of events.

Influence of Technology

Previously, service –encounters were ‘low-tech, high-touch’ as they were predominantly characterized by human- interactions. Likewise, Parasuraman (1996) modified the traditional services marketing triangle, by adding technology dimension to existing domains i.e., company, employees, and customers. Technology infusion matrix developed by Bitner, et al., (2000) also acknowledged the relevance of technology in service encounter. Service providers have also realized the relevance of service encounters, whereby customers either interact with the technology or front-line employees. For example- In zappoos.com, an online shoe retailer owned by Amazon, the main focus is on providing easy access, backed by full information of shoe choices, easy return and ordering at every technology service encounters. Technology facilitated interactions are therefore, the new characteristics which are increasingly becoming important in every sector. Even the hospitality industry, has understood the importance of technology in delivering services. According to DiPietro and Wang (2010) the hotel industry relied on certain traditional print–based mediums to distribute its information such as brochures, regional guides, and reservation through the mail, fax or phone. Now, the hoteliers are using technology-enabled systems like global distribution systems (GDS) and central reservation system (CRS) for booking the rooms for the customers. In this context, some researchers have used “marketspace” transaction in place of “market place” interactions. Evidently, these service encounters are more dominated by technology rather than a person.

In hospitality industry, guests interact with the organization at various places and in various ways (Cline, 1999). Danaher and Matsson (1994a) have divided the service encounter of a meeting or conference event into: arrival, coffee-break, lunch, and the conference room. Danaher and Matsson (1994b) have identified five encounters in the restaurant setting i.e., check-in, room, restaurant, breakfast and check-out to assess customer satisfaction at each encounters. The study revealed quality improvement efforts should be primarily directed to room and breakfast encounters for improving overall satisfaction. Zeithaml and Bitner (2006) have classified service encounters as: remote encounters, phone encounters, and face encounters. Bitran and Lojo (1993) have identified six stages of service encounters in the professional service organization namely, access, check-in, diagnosis, service delivery, disengagement and follow-up. Aguayo et al. (1997) recognized main hotel-guest points of interaction namely;check-in, stay and check –out from where a lot of useful information can be recorded for developing hotel information system. Technology infusion, therefore at service encounters could elevate customer experience.

Need for Developing a New Model

            Figure 1 shows the model developed by Aguayo et al. (1997) which addresses the workflow management of a hotel by identifying different business processes, tasks and methods employed in the hotel industry. To model the process, communication –based methodologies were used to create the hotel information system. Client accommodation was identified as the highest workflow loop, when the client arrives at reception desk.  This loop was further broken down into guest-hotel touch points for generating three secondary workflows: check-in, stay, and check –out, encompassing the server-client relationship (Fig 1). Workflow loops at each touch-point were illustrated with the case of tourist couple requesting the services of a hotel. They concluded that workflow technology can benefit the hotel industry in the modeling processes and provide greater efficiency.

Fig 1: Unfolded workflow technology

Source: Aguayo et al. (1997)

However, with the advent of innovative technologies, other encounters which are missing in this model need inclusion. For example, a major consideration for business travelers when deciding to book a hotel is the technological facilities provided by the hotel at the conference room, which could form an important encounter. Although this encounter has been addressed in the previous studies, a comprehensive model of all the encounters is still lacking with the growing importance of technology-based services used at these encounters.

 This study differs from that of Aguayo et al. (1997) in that, firstly, it includes comprehensively all the encounters that were identified from a review of the existing literature as well as from the viewpoints of the interviews conducted on the experts from the hotel industry to enhance guest experience; and secondly, it proposes a new theoretical model that combined the opinions of the experts as well as other scholars. At the end of the study, the refined model was proposed to guide future research as well as help the hotel industry in designing suitable strategies.

Research Methodology

The current study was conducted using a qualitative approach as it aimed to build a theoretical model of guest-hotel encounters through technology-enabled services and to investigate the current as well as the future innovative technologies that can be used at various encounters in the hotel industry to provide seamless and hassle-free experience to the guests. It involved two distinct phases as follows: phase (1) aimed at developing an appropriate theoretical model to reflect various hotel-guest encounters while, Phase (2)sought expert advice on the content of the proposed model and technological innovations that are currently being used or could be used in the hotel industry to enhance service encounters. The details of each phase have been discussed in the next section. The first phase of the model refinement examined the previous service encounter models and developed a model that contains the most appropriate encounters from previously validated studies in the context of hotel industry, keeping the model of Aguayo et al. (1997) as the foundational base.

In Phase 2, semi-structured twelve in–depth interviews were conducted on experts from the hotel industry to gain further insights on the modified model. Participants included ten senior hotel managers from leading hotels, including six frontline managers, two duty managers, two Food &Beverage (F&B)Managers, while the remaining two were influential hospitality consultants (see Table 1). After conducting 12 interviews, theoretical saturation was reached as the researchers felt no new insights could emerge on the topic of study(Francis et al., 2010).

Table1. Some Suggestive Interview Questions

Two-step Development/Refinement of Proposed Model:

Phase 1: Model Development

 Based on Aguayo et al. (1997) a modified model was developed. The new model contains three more service encounters, which were not there in the model proposed by Aguayo et al. (1997). At every encounter, an information loop starting from initial request, negotiation followed by service development is generated till the customer is fully satisfied (Aguayo et al.,1997). Service encounters such as ‘information& query’, ‘Booking’ ‘Conference room’ were incorporated in the model (figure 2). Minghetti (2003) and Cline (1999) identified information query and booking as important points of interaction, where lot of information about any customer can be collected and stored in the hotel information system. These “touch points” could also be used to elevate customer satisfaction by incorporating technology-mediated services such as PDA, Bluetooth, electronic invoicing etc. Further, it was argued that the type of information channel also affects the amount of information that can be traced at any step (Minghetti, 2003). For instance, at booking phase, booking with fax or mail could produce minimum information whereas booking through the call centre or online reservation could reveal important information of any guest.  

Danaher and Matsson (1994a) contended that the experience at ‘conference room’ encounter has the most impact on the business traveler satisfaction, followed by ‘arrival’ and ‘breakfast’ encounter. They also stated that alone core business services cannot bring customer satisfaction. Hoteliers need to focus on peripheral service delivery as they can bring overall customer satisfaction as well as repurchase intention. Furthermore, business travelers are an invaluable market segment in the hotel industry. Their spending capacity is approximately twice than that of leisure travelers (Hampton, 1989). To attract such travelers, many hoteliers are adopting new technology-enabled services. In summary, based on extensive literature review, a modified model was suggested and regrouped under following six different encounters:

1. Information& query (modified encounter)
2. Booking (modified encounter)
3. Check-in (unchanged)
4. Stay (unchanged)
5. Conference room (modified)
6. check-out (unchanged)

Figure 2: Modeling the technology-enabled service encounters in hotels

Phase 2: Validation

Model developed by Aguayo et al. (1997) does not acknowledge all the service encounters neither does it consider the recent technologies which are being used at these encounters. Keeping this in mind, experts from hotel industry were asked several questions (Table1) to improve the modified model developed in Phase1. To conduct in-depth interviews, calls were made to each participant to fix up the interviews as per their convenience. Interviews were conducted with the participants either on telephone or in-person at the hotel premises. Each interview was recorded with the permission of the study participants. Anonymity was guaranteed to the participants so that they could talk freely about the topic. The participants were assured that the information will be kept confidential and used only for academic purpose. The interviews ranged from 25 minutes to 45 minutes. Eight interviews were conducted in the hotel’s premise while the rest were conducted on telephone. Each participant was interviewed separately at the convenient timings as suggested by them. All the interviews were audio-recorded with the participant’s consent so that the researchers do not miss out on any vital information. The data collected from the interviews was transcribed, and sorted for analysis.

Table 2 shows the profile of the respondents that took part in phase 2 of the study. All the participants had more than 5 years of experience in the hospitality industry. A total number of 10 hotels (four5-Star, three 4-Star and three 3-Star hotels) were contacted /visited to collect the data through observation and in-depth interviews. Out of these 10 hotels, majority of the hotels were chain-based hotels, including 4 hotels having international hotel chains, and 4 hotels had hotel chains in India while other 2 were independent hotels. To investigate recent state-of-art technologies at various encounters in the hotel industry, scope of the study was limited to hotels-ranging from three-Stars to five-Star categories. This study was conducted within the popular tourist route i.e., Golden triangle of north India including regions across Delhi, Agra and Jaipur, which has its own historical and cultural significance.

Table 2: Profile of Respondents

The analysis of the responses obtained from the experts confirmed the various encounters in the modified model developed at Phase1. However, two-third of experts argued, that not only ‘conference room’ but ‘business centre’ is also important for business travelers as this encounter is mostly required for before-hand preparation by the members who attend/organize the meeting. Thus, ‘conference room’ encounter was further modified by adding ‘business centre’ encounter as suggested by the experts from the hotel industry. For such travelers technology plays a vital role in making their experiences more memorable. As one executive stated, “we are providing different customized packages to suit their needs”. To attract such business travelers, many hoteliers are adopting new technology-enabled services. For instance, a manager at a four-Star hotel stated, “we have incorporated Herman miller ergonomic comfortable chairs in the conference room for providing much more relaxed atmosphere and seamless experience while conducting meetings or conferences”.

A Refined Model of Hotel-Guest Encounters through Technology-Enabled Services

Having confirmed the encounters at phase 2, which the experts believed are suitable in the modified model developed at phase 1, the model has been further refined to depict various technology–enabled service encounters to describe the existing hotel technologies at these encounters for enhancing guest experience. (Figure 3).  The model at phase 1 has been modified by adding ‘Conference room &Business centre’ encounter identified through interviews of the experts from hotel industry. The various service encounters recognized in the newly developed model are discussed below. Current and future role of technology in each of these encounters is also described. 

Information & query: This is the first phase where guest checks for vital information such as price, discounts, timings for check-in and check-out, location etc. for booking a suitable hotel either by contacting in-person at the hotel reception or hotel website (Minghetti, 2003; Cline, 1999). To satisfy guests’ queries innovative technologies such as Online Travel Agents (OTAs),travel apps, hotel websites, Artificial Intelligence (AI), Virtual Reality (VR) etc. are of paramount importance for providing required information. For instance, While, OTAs, websites, and travel apps provide detailed information about the hotel, 360⁰ Virtual Reality (VR) allows customers to experience their rooms or nearby attractions on the hotel website before they book or arrive at the hotel.

Majority of the experts stated, in future Big data analytics could be used to predict various offers which will suit different categories of travelers or even could be used for developing marketing strategies for revenue management (RM) or anticipating customer demands. Some also reiterated that Artificial Intelligence (AI) Chatbot technology is still in its relative infancy that could be further used to create memorable experience by solving guests’ queries in the real time 24*7.

Booking:  After searching for various options available in the market, guest books the hotel at this phase (Minghetti, 2003; Cline, 1999). Various guest facing systems such as Online Travel Agents (OTAs), travel apps, hotel websites, thin-client terminals, and specific apps for hotels such as Hilton Honors, Marriott International, Accor Hotels, Hyatt Hotels, etc. which enables a variety of services like searching or booking a room, automatic check-in, door-key and even for requesting extra food, drinks, extra pillows etc. These technologies enable customers to find and book the best hotel according to their suitability criteria.

As suggested by one of the experts, Augmented Reality (AR) is used in online games to engage gamers into a memorable experience. Hoteliers may use this technology in making their hotel’s location an important part of an established AR game. They can even create hotel’s app, for exploring the hotel areas in a more interesting and enjoyable manner. Thus, it could be used to make the encounters more engaging and valuable for guests.

Figure 3: A refined model of technology-enabled service encounters in hotels.

Check-in: This is the first phase where guests physically interact with the hotel, its staff, environment, and other guests (Bitran and Lojo, 1993; Danaher and Matsson, 1994b). Undoubtedly, technology has revolutionized the hotel experience of people as compared to earlier times. Now, people prefer to go straight away to their rooms rather than wait in the long queues for an attendant to welcome them after arrival. For instance, an executive at four-Star hotel stated, “self-service check-in kiosks are used to generate digital keys to unlock their preferred rooms, and avail other services such as access to elevators, side doors, fitness centers through the Hilton Honors app.”

One of the study participants also stated that block-chain technology could be used to make secure payments and identification of guests at the check-in & check-out encounter in a quick and easy manner without compromising customer data.

Stay: During this encounter, guests enjoy their stay by using various hotel technologies that add fun, comfort and convenience to their visit. For instance, High-speed internet connection, Smart TV, Smart lighting, light sensors, I Pad, Amazon or, Alexa based in-room automation, keyless entry, smart mirrors, sound proof windows, concierge, etc are some of the innovative tools which provide technology-driven experience to delight the customers. Respondents further argued that guests now want less engagement with the employees and thus, hotels are relieving them with front-desk interaction altogether. For instance, an expert stated, “Hyatt’s Twitter Concierge Service, uses social media via twitter for providing assistance from any location, not just from the front desk”.Another front-line manager at three-Star hotel statedthat, “in-room I-pad automation is used to control the lighting, television, temperature, or any electronic gadgets inside”.

Another participant commented that “in today’s time a customer is looking for an experience rather than a stay”. Incorporating only Smart rooms full of technological services would not be enough but hoteliers could think of bringing the concept of ‘Smart Hotels’. These hotels could have automated check-out facilities, Internet of things (IoT), customized environmental settings etc. This will not only improve satisfaction of technophile customers but also elevate their experience by giving more personalized services during their stay encounter. With an ever-increasing volume of international travelers, hoteliers could equip their hotel staffs with language translation apps; so that they don’t lose any moment of contact with their guests during the check-in, stay, and check-out encounter. Likewise, in future Drones and air taxis could take guest experience to the next level.

Conference room & Business centre Phase: With hotels becoming the preferred choice for conducting a meeting or organizing any event, hoteliers are viewing this as a golden opportunity. They are also ready to offer tailor-made options for conferences and meetings. Equipment such as data projectors, digital visual presenters, smart boards, video conferencing system, computers with internet access, acupuncture enabled chairs etc are made available at this encounter to provide them hassle –free experience while conducting their meeting/conference. Also, “Wi-Fi is a necessity for both leisure and business travelers”, as stated by another executive.

The technologies to be adopted at this encounter could include the use of Augmented Reality(AR), Blockchain technology, Robots etc. that could enhance the productivity of every meeting/conference at this encounter.

Check –out:One of the participants commented, “Sooner or later, this would be the new phase where technology would play its major role”. However, some also argued that it has already taken its giant leap. As the check-in phase is already dominated with various technological tools, in the same way, check-out phase will also see new technologies to attract technophile customers. For instance, an executive stated, “Hilton honors app is used to make payments, check-out, participate in loyalty programs and to get the notifications about various coupons and offers”. With the advent of social media, service providers are also accruing benefits from these platforms. They can provide an opportunity for the firms in building their image if, managed effectively. But, they may prove to be deleterious to the reputation of the firms, if negative feedback or comments are not properly addressed.

Blockchain technology, driverless cars, and translation apps for facilitating smooth conversation with the international travelers could be some probable solutions for future, as stated by another expert.

Discussion and Implication

This study aimed at developing a theoretical model for acknowledging the influence of technology at various service encounters by keeping the model of Aguayo et al. (1997) as the foundation framework. With such objectives, two-step development and refinement of conceptual model was performed: at first phase, various encounters identified from the existing literature and through findings based on experts’ interviews were included in the model developed by Aguayo et al. (1997); at second phase, a new refined model was proposed after validating the technology-enabled service encounters from the experts. The respondents suggested various current as well as future technologies that could be used to improve various service encounters in the hotel industry. The six phases discussed in the refined model are unique “moments of truth” where the highest object lies in creating memorable experience at each service encounters. With the cumulative effect of all these technology-enabled encounters, guests’ overall experience could be enhanced.

Compared to the model of Aguayo et al. (1997), which only discussed about workflow technology at check-in, stay, and check-out encounter for creating hotel information system, this study comprehensively includes all the technology-enabled service encounters from the viewpoint of experts from the hotel industry to elevate customer experience. The proposed model in this study also differs from previous work-flow model, which employed the hotel, or employee viewpoint on ‘service encounter’. This study however, had explored the views and experiences on ‘technology-enabled service encounters’ from an employee perspective. This has resulted in customer-oriented approach for better understanding the relevance of technology in elevating guest experiences.

Moreover, the respondents agreed that the current technologies used in hotels are in the nascent stage but the future of the hotel industry will be more technologically oriented. Some participants also argued that Indian hotel industry needs to pick up with global hotel trends. In general, all the participants argued in favour of technology adoption with a rising influx of online consumers. Therefore, future technologies suggested by the hotel experts could be strategically implemented to engage the guests at every touch point of their journey.

This study extends the overall understanding of service encounters and provides a strong academic base for future studies. It seeks to develop a service encounter model by acknowledging the influence of technology at every service encounter in order to enhance customer experience in the hotel industry and therefore, makes rich theoretical contribution to the literature of ‘technology-enabled service encounters’.

Conclusion

The current study is an attempt to focus more on technology-mediated service encounters, instead of just valuing service encounters. As advancing towards digital era, technology provides unprecedented amount of data on their guests. More specifically, customers could be reached out before they actually arrive at the hotel. With the advent of technology –mediated services ‘Information &query’ and ‘booking’ phases could be used to get more insights about any guest and even reciprocating them with personalized digital experience. Likewise, ‘conference room &business-centre’ encounter could be useful for luring business travelers by providing technology-mediated services at this encounter. However, these technology-enabled encounters are significant for elevating customer experiences but hoteliers need to ensure the right balance between technological innovations and human touch. Implementation of technological solutions should be carefully thought out by formulating effective and efficient strategies.

            In future, a study on the importance of each service encounter in context of technology-enabled services could be conducted using the model developed in this study. Moreover, as the hotel industry starts adding more technology-mediated services, more encounters may be incorporated in this model to enhance customer experience. The refined model therefore, is so robust that it can incorporate more service encounter as future technology progresses. Future research could include the perceptions of the guests towards technologies employed in various encounters. Despite its strengths, the present research has the following limitation. The current study was conducted in a limited region. Although respondents in this study had sufficient experience and had worked in diverse regions of India. Other geographical areas could also be taken into account in future research.

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