Service Spotlights
Implementing Service Innovations in European Hotels (p. 97)
This paper examines the impact of postadoption innovation implementation strategies on five distinct performance outcomes. Using a sample of 85 hotels in Europe, the study explores which implementation strategies are most strongly linked to specific innovation outcomes and competitive performance. The results reveal that employee enabling implementation strategies have a positive direct effect on employee performance and indirect effects on customer sentiment outcomes and the operational performance of the innovation. Administratively driven implementation strategies had a positive direct effect on customer comparative performance, and an indirect effect on a firm’s comparative operational performance, as hypothesized. Finally, owners were more likely to be idea generators and principal early supporters of successful innovations, highlighting the power of top-down approaches to championing change within the European context.
Understanding Consumers’ Inferences from Price and Nonprice Information in the Online Lodging Purchase Decision (p. 108)
The Internet has revolutionized how hotel customers book hotel rooms. The wealth of nonprice information available in the online environment, both firm generated and user generated, can be used by customers, along with price, to determine the value of competing hotel offerings. From a revenue manager’s perspective, an understanding of if, and how, customers integrate this information to inform prepurchase evaluations is key to developing appropriate pricing and competitive positioning strategies. The authors use a combination of eye tracking and retrospective think-aloud interviews to examine how consumers weigh nonprice information with price during two distinct phases of the online choice process: browsing and deliberation. They find that firm-generated content is very influential during browsing, particularly the image selected to represent the property in search results. Firm- and user-generated content play a role in hotel choice during deliberation, with the interplay among several types of information being an important indication of value for customers. The insight for management is the following: price alone will not drive market share. Revenue managers need to effectively leverage online firm-generated content to communicate value to the customer that is commensurate with prices charged. They also need to closely monitor user-generated content to evaluate the likely success of price positioning strategies.
Understanding Online Hotel Reviews Through Automated Text Analysis (p. 124)
Customer reviews submitted at Internet travel portals are an important yet underexplored new resource for obtaining feedback on customer experience for the hospitality industry. These data are often voluminous and unstructured, presenting analytical challenges for traditional tools that were designed for well-structured, quantitative data. In this article, the authors adapt methods from natural language processing and machine learning to illustrate how the hotel industry can leverage this new data source by performing automated evaluation of the quality of writing, sentiment estimation, and topic extraction. By analyzing 5,830 reviews from 57 hotels in Moscow, Russia, they find that (i) negative reviews tend to focus on a small number of topics, whereas positive reviews tend to touch on a greater number of topics; (ii) negative sentiment inherent in a review has a larger downward impact than corresponding positive sentiment; and (iii) negative reviews contain a larger variation in sentiment on average than positive reviews. These insights can be instrumental in helping hotels achieve their strategic, financial, and operational objectives.
United Nations World Tourism Organization Study on Online Guest Reviews and Hotel Classification Systems: An Integrated Approach (p. 139)
The proliferation of online travel-related content is changing how customers book and research travel. Before making an online hotel reservation, customers visit on average almost 14 different travel-related sites, with about 3 visits per site, and carry out 9 travel-related searches on search engines. Official hotel classifications are often used by customers as a filter mechanism in the hotel research and booking process, with guest reviews being used to make a final selection among a smaller group of hotels. As online reviews continue to grow in popularity, questions arise as to whether traditional hotel classifications systems are becoming less relevant. Traditionally, classification systems have been about amenities, whereas guest reviews are about meeting expectations; thus, guest reviews may be able to provide a quality check on the amenities that are required as part of the classification system. The authors outline an integrated approach for the inclusion of online reviews into hotel classification whereby guest reviews add a quality dimension to hotel classifications, thereby refining the classification.
Is Investing in Social Media Really Worth It? How Brand Actions and User Actions Influence Brand Value (p. 152)
Although previous studies have documented a positive link between traditional media and brand performance, how social media is related to brand value has not yet been comprehensively explored. In this article, the authors propose a conceptual model to address this research gap, collecting a unique data set that captures information on user and brand actions on three social media platforms (Facebook, Twitter, and YouTube), word-of-mouth, and brand value for 87 brands in 17 industries. The authors empirically test their model with partial least squares path modeling (PLS-PM). First, they test the direct effects and find that user actions on YouTube and brand actions on Facebook have a positive influence on brand value. Second, they enrich their model by including word-of-mouth as a mediator, finding that the effect of social media goes above and beyond pure word-of-mouth spread. The authors test for alternative models, by first accounting for sample heterogeneity and second by including brand strength as a control variable, finding that the main model results’ are indeed robust. The study demonstrates that making use of social media positively relates to brand value, as well as validates a set of objective metrics to measure social media actions, thus advancing knowledge on social media marketing for both academics and practitioners.
Connecting Search Marketing to Hotel Revenue Management: Conjoint Analysis as a Methodology to Evaluate the Optimal Online Travel Agency Commission Fee (p. 169)
A growing amount of travel is booked through third-party Internet booking sites where the booking commission the hotels are charged is subject to negotiation. The fee varies, depending, among other things, on the search position a travel offering is advertised. In this paper we demonstrate how to quantify the value of the placement on the third-party search results page, and thus how to assess the appropriate placement associated fee taking the benefit of this position into account. A sample of 5,968 stated booking choices by 1,492 respondents on a fictitious online hotel booking website was analyzed using choice-based conjoint analysis. The empirical results support past observations and claims that the position of a hotel on the search page of a booking site has significant impact on the likelihood of being booked. The study finds, however, that this placement-based probability depends on the specific attributes of a hotel. The major contribution of this article is the methodology demonstrating how to determine the monetary value of various search results positions (listing on an online travel agent (OTA) site) for different hotel properties.
Free Drink or Free Mug? Managing Service Experience with Experiential vs. Material Complimentary Gifts (p. 184)
Should a resort hotel offer guests an experiential gift (such as free guided tour, a massage, or cocktail reception) during their stay or offer a free material gift (such as a mug with the hotel logo, a bathrobe, or a wine glass) upon departure? In this article, the authors suggest that companies should consider these free gifts as a meaningful service design choice and provide appropriate gift offerings to maximize customer satisfaction. Across three experiments, the authors find that customers are generally happier with experiential offerings and prefer them over material counterparts under ordinary circumstances. However, this experiential advantage disappears for customers on meaningful and special occasions because of a strong desire to obtain a memory cue that will help them recall the experience. Thus, companies should consider designing a material offering that has the quality to serve as a salient memory marker (e.g., has a prominent local identity such as a Chinese silk robe as opposed to a more generic fleece bathrobe). The insight for management is as follows: managers must take into account consumer context or customer type (e.g., special occasions, repeat customers) to design service bundles with complimentary gifts to create innovative and effective service experiences.
An Examination of Customers’ Attitudes About Tabletop Technology in Full-Service Restaurants (p. 203)
This article examines the influence of customer-facing technology in full-service restaurants. As a new addition to the service experience, tabletop devices offer the customer more control over the dining experience, and also increase customer participation in the service process, which has the potential to upset the traditional exchange between service providers and customers in restaurants. To examine how customers react to the use of tabletop devices, this study examines 1,343 point-of-sales transactions from 20 units of a full-service casual dining restaurant chain and matches customer in-restaurant transactions to their reactions to tabletop devices used during their meals. Results show that over 70% of the customers who used tabletop devices reported positive affect toward the device, with approximately 79% of customers reporting that the device improved their experience, citing convenience, ease of use, and credit card security as some benefits of using the technology. Approximately 80% of the customers who used the device reported that they would return to the restaurant because of the positive affect. The results also indicate that likeability of the device and tip percentage were positively and significantly connected to customer reports of the devices having a positive effect on experience and on desire to return. In addition, when customers reported increased return intentions, likeability of the device was higher regardless of reports of the device improving restaurant experience, showing that the introduction of tabletop devices had a positive effect for most—but not all—customers.
Can Service Coproduction Factors Enhance Learning-by-Doing Simultaneously? Evidence from the U.S. Hotel Industry (p. 218)
Many service organizations face profitability pressure and use learning-by-doing (i.e., eliminating errors and incorporating innovations based on experience) along certain factors of production to enhance profitability. Some coproduction factors (e.g., operations costs, such as the water bill at a hospitality site) are negatively associated with profitability, whereas others (e.g., adding variety by offering a healthy dining menu) are positively associated with profitability. Unilaterally adjusting individual factors is difficult. For instance, increasing variety also increases operations cost. This study explores the trade-offs involving simultaneous learning-by-doing along four coproduction factors. It draws upon evidence from 822 U.S. hospitality sites from 2001 to 2011, and finds that although lower cost of operation is associated with profitability, there are increasingly fewer opportunities to improve profitability through learning as costs rise. High levels of customer-centered cost, service level, and service variety are associated with profitability gains, but reduce incremental performance gains from learning. Based on computed elasticities, organizations may combine factors such that the net effect of coproduction and learning-by-doing enhances profitability. Insight for management is as follows: service organizations ought to measure the profitability trade-offs associated with coproduction factors and account for these trade-offs when implementing innovative practices based on learning-by-doing.
Testing Service Innovation: A Methodological Review of Video Experiments (p. 234)
Experimenting with and testing new or improved service designs is often a challenging task for managers. In this article, the authors promote the use of video experiments as a dynamic method for testing service innovation. They conducted a systematic review of over 40 articles from five prominent journals that span the disciplines of organizational behavior, operations management, marketing, and service management to summarize how researchers have used video experiments to develop managerial theory. They found that video experiments provide service researchers and practitioners the opportunity to effectively communicate important experiential aspects of service systems such as emotions and psychological effects. Moreover, customer responses to service design choices can be assessed based on the results of a video experiment. Consequently, the authors position video experiments as a particularly well-suited method for examining innovations that are related to the application of behavioral science insights or what we term as behavioral-based service innovations. To advance the future use of video experiments in service innovation research, the authors present a suggested guide for developing a video experiment and discuss important methodological considerations. They also review future research opportunities for studying behavioral-based service innovations through the use of video experiments.
