A study of success factors for small to medium sized hotel management companies in China

Pao Yue-kong Library Electronic Theses Database

A study of success factors for small to medium sized hotel management companies in China

 

Author: Wang, Shaoren Arthur
Title: A study of success factors for small to medium sized hotel management companies in China
Degree: DHTM
Year: 2015
Subject: Hotel management -- China.
Hotels -- China.
Hospitality industry -- China.
Hong Kong Polytechnic University -- Dissertations
Department: School of Hotel and Tourism Management
Pages: 1 online resource (x, 151 pages) : illustrations
x, 151 pages : illustrations
Language: English
InnoPac Record: http://library.polyu.edu.hk/record=b2832926
URI: http://theses.lib.polyu.edu.hk/handle/200/8401
Abstract: By the year 2020, China will be the world's number-one tourist destination, with annual arrivals of 130 million forecasted. China's long history and diverse tourism resources attract both international and domestic leisure tourists to visit different parts of China, increasing the demand for different types of hotel products and services. Equally important is business travel. China's dynamic economic growth over the past decades has attracted business and investment interests from around the world. In such a booming market, China's stock of hotels will need to expand and upgrade significantly in order to serve its potentially massive market in line with the expected growth of international arrivals plus increasing domestic tourist demand. Intensified competition from international developers and operators pose great challenges to domestic hotel operations in China. Indicators reveal that the performance of many of China's domestically owned hotels lags far behind internationally managed operations located.That may be due to any number of reasons, such as, management inefficiency and inferior service quality. These factors provide international corporate giants as well as small-to-medium-sized hotel management/consulting companies unprecedented opportunity to capture a substantial share of the hotel management market. In the hotel industry, many small-to-medium-sized hotel consulting firms aspire to become hotel management companies for the sake of revenue performance and company growth. But when it comes to signing the management contract, hotel owners often put emphasis on the issue of credibility of the potential hotel management company's brand, furthermore, assets must match the value of the equity. As a result, these consulting firms stay small with very limited full-time staff, and most ultimately vanish from the scene. The most relevant existing literature in academia is located primarily on the basis of such general topics as hotel development in China and China's hotel performance, but no comprehensive discussions and strategic studies on the success factors of hotel management companies in China have been located. Also, search for academic papers investigating the opinions of hotel management executives from different regions of the world who have operations in China has been fruitless. Therefore,this study aims to clarify and search for success factors for the sustainability of small-to-medium-sized hotel management companies in China. The rationale for this paper is built upon the literature review on critical success factors, challenges ,and barriers of SMEs; China's hotel industry; network and strategic alliance; franchising for success; composition of a company's competiveness and competency; elements of corporate strategy on a company's positioning and directions; core capabilities of business sustainability; entrepreneurship; and challenges to cultural differences. As a result, of wide-reaching research, a total of 178 critical success factors were pulled from the literature.
This study then implemented the Delphi method. A three-stage Delphi research model was conducted to elicit opinions on the 178 success factors from panel members representing SMEs and non-SMEs. Panel members were all at the executive level of management, with background experience at hotel chain headquarters or small-to-medium-sized hotel management companies,each having experience in the China area for more than two years. The focus group consisted of 22 participants, namely, group general manager, vice president, chairman, and executive of the board.These 22 panel members were from hotel management companies based in six different countries: the USA, Switzerland, Singapore, Hong Kong, Taiwan, and China. As a result, 30 of the original 178 success factors obtained 100% agreement (either "success factor" or "probable success factor"). The 30 critical success factors selected were rated by panel members in order to evaluate their perceived importance by the experts. Among the 178 success factors contained in the questionnaires, 47 factors received only one "non critical success factor" selection from the panel members. Insights into the selection of some factors were given, which clarified the choices. This study applied the case study method to verify and elaborate its findings. In order to generalize the conclusions of this study, the opinions of case-study company's executives were collected. The procedure of this case study was designed to follow this study's methodology to indicate the Company executive's opinion on whether each factor is or is not a key success factor. The case study executives were also asked to provide ratings on the importance of those identified critical success factors, as well as the performance for each of the previously identified success factors in order to apply IPA for cross-examination of importance and performance. From the perspective of research design and implementation, this study indicated the findings can have managerial implications for small-to-medium-sized hotel management companies in China. The results of this study also have both theoretical and practical implications for several segments of the hospitality-related industry. Application of this study's results is straightforward: Executives of hospitality companies can examine all the key success factors as they process their own priority list for the purpose of strategic planning for their company's immediate and long-term development. These companies can also conduct self-evaluation among key executives and/or execution managers/directors to see how well they have performed their professional tasks. When gaps between "importance versus performance" for any success factor is found, companies are urged to go back to their importance priority list and adjust their actions accordingly. Said "importance versus performance" rating can be applied as a company's annual or quarterly evaluation system.

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