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Low-budget hotels, (O'Brien, 2015), University of Birmingham, 2015,…
Low-budget hotels
Order qualifiers
Safety
Hygiene
Front-desk reception service
Loyalty cards
Easiness to perform booking
Minimum facilities
4 V's
Volume
high
Most low budget- hotels need a lot of rooms to compensate for the cheap prices.
Variability
low
The budget hotels are rather basic and they are not customized to the guests
variation
medium
The variation is medium, since the main target group of low- budget hotels are business guests and their travels are not based on any season. Of course, it varies during holidays, therefore it is medium and not high. (Accor, 2020)
Variety
low
In comparison to luxury hotels, low budget hotels have fewer amenities and offer less quality services. (Lyall,2018)
4 p's
Price
Cheap in comparison to other hotels in the area
Place
Mostly, outside the city center or near a highway
Product
Minimum of amenities and services (Landman, 2020)
Promotion
Offering price deals, use social media, email marketing, websites (Mathur, 2014)
Organisational Design
Hierachy
Usually more flat than luxury hotels.
Centralistation
Centralizing purchasing operations leads to cost savings.
Formalisation
Low formalization.
Complexity
Low complexity
Not many subunits, which makes complexity low within a low budget hotel.
Characteristics low budget hotels
(Peng et al.,2014)
Limited service
Low cost
Simple interior design
Low cost and operation costs
Order winners
Qualities of a product or service that directly contribute to customer acquisition
Quality
Location
Core product
Hygiene
Customer services
Flexibility
Speed
High-end technology usage
self/online check-in
Processes
I
IPO
Self Service technologies such as tablet, Laptops allowing customers to check in/out, book tables etc.. (Charalampos , 2020)
CPO
A Budget hotel has Limited service, a Small number of staff available , therefore the Interaction between the customers and staff is very low. (Sorin,2020)
MPO
Low Budget hotels are offering facilities like television, a desk, free Wifi , but they do not offer services such as breakfast included in the price, rooms enough for 2 people, bath products,bathrobes and many other extras . AvenaGo, 2018)
Core processes
Mass production/ Mass service
Typical OQ= Quality performance
Typical OW= Price
low cost competition
Significantly lower prices
Low-cost carriers
Characteristics of Mass production process type
Little process flexibility
Product layout
Fixed or some variation in the supply chain
Low levels of inventory
Fast throughput times
Capacity management is leading or level capacity
Total quality management (TQM)
Very few in-process design changes
Employees mainly follow set routines
Predicatble, lower skilled employees
High fixed costs & Low variable costs
Market Structures
Perfect competition
When you only look at the low budget hotels in a city, the market can be seen as perfect competition. The hotels are homogeneous since they all offer the same product and price.
Imperfect competition
If you look at the city itself, the market can be viewed as imperfect competition. There are lots of different categories of hotels in a city therefore it is heterogeneous.
Organisational Form
Functional
Often seen in hotel chains where there are centralised positions for the enire chain
Divisional
Often seen in the smaller hotel/hostels where there is no department overseeing everything
(O'Brien, 2015)
University of Birmingham, 2015
Operations management p.9 (P. Jones, P Robinson, 2020)
Operations management ch. 2,3 (P. Jones, P Robinson, 2020)