1.2 Industry background

1.2 Industry background

“Hotel” is a profitable institution which provides lodging, meals and other services for their guests. (businessdictionary.com,2011) An establishment to call a hotel, it should at least have three en-suite rooms out of six letting bedrooms. The commonly used rating sometimes depend on the government but these ratings can be vary from country to country, depending on their facilities, and how develop are those countries. In other words a “5 star” hotel in UK standards will be different to a “five star” hotel in Taiwan or  Ghana.(“hotel business”,2011,8) The significance of UK hospitality industry where hotel is a part of it has become very interesting. It is the 5^th largest industry, which contributes a huge support to the economy, employing about 2.4 million people. (Oxford Economics, 2010).some address hospitality as one of the main pillars of UK economy because of its huge impact on generating revenue in UK. Contribution from hospitality industry to economy is over 34 billion pounds per year while tourism contributes around 16 billion pounds per year. (British Hospitality association,  annual report 2010-2011). The hotel industry acts as the bridge between hospitality and tourism.

A study done by Melvin gold consulting Ltd ( 2008) found out there are 716,505 rooms are for accommodating purposes in various type of hotels in UK. 38.1% of UK hotels are branded but other 61.9% hotels are indecently operated. This supports the above mentioned fact that the hotel industry plays a major role in the UK creating employment opportunities, and generating income.

The hotel industry is a service industry; therefore its main priority is the quality of service they provide for the customers as the “service” is their final product. When compare the hotel industry to other organizations, it can be seen that, it is up to the consumers to make decision to buy that intangible finished product presented to them. (Start your business magazine, 2011,15) . Freytag,( 1999) identifies customers tendency   to remember a negative service experience , as twice as a positive one.

Indubitably, service quality contributes to the success of any hotel business. The hotel management must have a sufficient knowledge about the customers, their needs, expectations and demands. The quality of the service provided by the management must be satisfactory to its customers. The hotel industry must be aware of these aspects and must make the necessary changes to satisfy their customers, as a result consumers will come searching for service. (Kandampully, 2002) .If not ,the options which are open for hotels to reach its audience are limited to advertising which might not be very successful in a competitive environment.

Colgate and Norris (2001) recommend that a commitment to a constant quality enhancement procedure can be attain only by following the amount and severity of service failures in hospitality industry. It implicit that a customer’s expectation and perception of service quality was directly associated with the service failures a customer experienced ( Mattila, & Wirtz, 2000) . Mattila & Wirtz  research also point out the fact that organizations quality of reaction and problem resolution was critical to the customers continuous satisfaction, loyalty and intentions to return or recommend.