Does managerial efficiency relate to customer satisfaction? The case of Parisian boutique hotels

Abstract

Purpose The purpose of this study is to examine the relationship between the managerial efficiency and the customer satisfaction of Parisian boutique hotels by using the multi-criteria decision analysis (MCDA) methods. Design/methodology/approach In the first stage, hotels’ managerial efficiency is assessed by data envelopment analysis to establish which hotel has the most efficient performance. In the second stage, the customer satisfaction of these hotels is estimated by the ELECTRE (ELimination et Choix Traduisant la RÉalité) method to assess the hotel’s ability to satisfy their customers. Findings Empirical results show that there is an inverse relation between customer satisfaction and ability to maximise the Revenue per Available Room (RevPAR). In other words, trying to improve efficiency implies a reduction in guests’ satisfaction (and vice versa). Research limitations/implications Therefore, through this research the authors can realise that hotel managers should give more attention to customer service because it has a more direct and important impact on customer satisfaction. It also positively impacts on resource management. However, there are some limitations to this study. First, this study only focuses on 12 hotels. Because the data set is very confidential, it is very difficult to have a bigger sample. Then, the evaluation is based on 2014 figures only. It could be interesting to know their performance for previous years to understand their evolution. Finally, it is necessary to know the percentage of direct reservations for each hotel. For instance, if a hotel is relying too much on online travel agents (i.e. Booking.com, Expedia, etc.), it needs to pay a significant amount of commission to these companies. As a result, it could have a good RevPAR but might pay a huge commission (for example, 20 per cent for most of sites) at the end. In terms of perspectives, it is necessary to conduct a more extensive research to test the hypothesis in a different context. Additionally, the data were taken for a single period of time. It will be very interesting to create a panel of hotels and collect data over a period of time (Barros, 2005; Barros and Santos, 2006; Barros and Deike, 2008). This would enable to better understand the relationship between managerial efficiency and customer satisfaction in a long-term prospective. Originality/value This paper presents the relationship between the managerial efficiency and customer satisfaction in Parisian boutique hotels context. Study suggests that in service industry, increase of firm’s efficiency could negatively impact the guest satisfaction. Therefore, through studying the authors can realise that why hotel managers should focus on customer satisfaction, which attributes play the vital role in customer satisfaction and how to optimize their resources. One of the originalities of this paper is that the authors use the customers’ feedback from the UGC websites (Trip Advisor and Booking.com) as the performance evaluation indicators for customer satisfaction. The data are very confidential and hard to get.

Efficiency Assessment of Inbound Tourist Service Using Data Envelopment Analysis

“…Due to poor technical efficiency and scale efficiency, the results show that overall efficiency for hotel value is only 42%. The CCR of DEA and the BCC models analyzed the operating efficiency of 25 hotels in 2000 and found that four of them were efficient [33]. In short, DEA is a tool for efficiency evaluation.…”

“…Furthermore, the DEA is a multi-factor productivity model for the purpose of evaluating the relative efficiencies of a homogenous set of decision making units (DMUs) [19] and handles multiple inputs and outputs of the performance evaluation method [20], in line with an ideal quantitative assessment of the performance model [21]. In recent years, DEA has been widely used in tourism research [22][23][24][25][26][27][28][29][30][31][32][33].…”

Efficiency evaluation of hotel operations in Mainland China based on the superefficiency SBM model

“…Because satisfaction is related to loyalty, it can reduce transaction costs and price elasticity in the future bookings. Zaman et al (2016) discovered that satisfaction was inversely proportional to the efficiency of hotels.…”

What is the core essence of small city boutique hotels?

“…Small city boutique hotels (SCBHs) have incorporated unique characteristics of the local culture (Lee, 2011; Zaman et al , 2016), contributing to create competitive advantage for the destination. There is growing evidence that guests are tired of the standard “cookie-cutter” hotel room (Phillips, 2004).…”

“…There is growing evidence that guests are tired of the standard “cookie-cutter” hotel room (Phillips, 2004). Hotels should integrate functional and aesthetic elements such as style, layout and architecture (Heide et al , 2007; Cheng et al , 2016) and understand that tourist expectations of a destination must be satisfied and even exceeded by the hotel design (Phillips, 2004; Loureiro and Kastenholz, 2011; Zaman et al , 2016). As Lee (2011, p. 709) claims, “just as hotels are interested in increasing their market share, so are destinations.” Differentiation through design based on the hotel’s location history and architecture will strengthen the branding of the destination (Lee, 2011).…”