Posted: May 12th, 2022

Changes in the Chinese Hotel Industry

Changes in the Chinese Hotel Industry

Table of Contents 1.0 Introduction 1 1.1 Background 1 1.2 Aims and Objectives 2 1.3 Research Questions 2 1.4 Rationale 3 2.0 Literature Review 4 2.1 Background 4 2.2 Hotel Industry 4 2.3 Evolution in the Hotel Industry 5 2.4 Consumer Demands and Expectations 5 2.5 Chinese Hotel Industry 5 2.6 Changes in the Chinese Hotel Industry 6 2.7 Service Quality in Chinese Hotel Industry 6 2.8 Summary 7 3.0 Methodology 7 4.0 Timeline 9 5.0 Research Ethics 10 References 12

I

1.0 Introduction
1.1 Background
With the advent of technology and extensive integration of globalisation, the preferences and demands of the consumers are changing and becoming more specific in nature. There is also a rise in the number of individuals travelling places for business and also leisure. Through the studies conducted by Peng et al. (2014) it is brought forth that the international tourism is on an all-time high with the demand elasticities undergoing major changes. One of the most crucial part of the tourism industry is the hotel and hospitality sector that manages and provides for the travellers and the tourists. The effective and powerful arrangement in the hotel and hospitality industry plays a crucial role in the introduction of customer loyalty towards a brand. In the studies conducted by Kandampully, Zhang, and Jaakkola (2018) it is verified that the customer experience is of prime importance in the hospitality industry, as without customer’s satisfaction there can be no growth or popularity. Hence, it is important to understand what the customers want and identify the ways in which these ever-changing demands can be satisfied.

A special reference to the Chinese hotel industry reveals that the total contribution of travel and tourism to the GDP of the country was 11 percent for the year 2017 (Wood, 2018). The comparative analysis revealed that the GDP of China from the travel and tourism industry stood at a higher rate than that of the world. Thus, a steady and strong growth of the Chinese tourism industry indicates that there is a need for the strong hotel industry that is able enough to handle the domestic as well as international customers. Wood (2018) further highlights that the growing tourism industry has led to the exponential growth of the hotel industry in the nation and the occupancy rates are rising further. There have been growing investments in the merges and the acquisitions, which are in turn expected to augment the growth of the hotel industry of China.

1.2 Aims and Objectives
The overarching aim of this dissertation is to identify the changes that the hotel industry of China is undergoing with a special reference to the quality of service being provided to the consumers.

In order to achieve the same, the study is divided into different objectives as listed below:

· To critically review the literature concerning the evolution of the hotel industry and the importance of service quality

· To identify the changes Chinese hotel industry is undergoing with a special reference to the service quality

· To investigate the expectation of the customers in the changing environment of the industry

· To discuss the implications of customer expectations and parallelly changing policies of the hotel industry while making recommendations for attainting competitive edge in the future

1.3 Research Questions
In order to take the study further and explore the topic, the dissertation aims at answering the following questions:

· What are the causes and the evolutionary changes that the hotel industry is undergoing?

Through the exploration of this question, it would be possible to understand the basis of changes and evolution of the hotel industry. The question would also be helpful in explaining the evolution that the industry has undergone so far.

· How has the hotel industry of China changed over the years and what are the resultant impacts?

The answers obtained with reference to this question would add to the existing knowledge of the Chinese hotel industry. It would be useful to identify and discuss the impact of the changes that the hotel industry has experienced so far.

· What are the expectations of the consumers and how do they effect the hotel industry?

Using the above stated question it would be possible to evaluate the expectations of the consumers while understanding the ways in which these expectations have an impact on the hotel industry, with a special reference to China.

· Does the hotel industry of China integrating changes successfully and what can be done by the Chinese hotel industry to provide better service quality to its customers?

Finally, the analysis of the aspects associated with the outcomes of the changes that the hotel industry of China is undergoing would be inferred. The ways in which further improvements and betterment in the service quality for the customers can be integrated would also be highlighted.

1.4 Rationale
The understanding of the growth of the Chinese tourism industry leads to the conclusion that there is a rise in the occupancy rates, as tourists, both domestic and international, flock the nation. While the nation is able to understand the rising occupancy rates and take them into consideration while adding to the exiting industry platform, it is important to note that the consumer preferences are to be understood. Through the analysis of the type of services that the customers require and their places of origin it would be convenient to understand the quality of service that should be achieved. Therefore, it is believed that this research work will be helpful in gathering enough evidence about the evolution in the Chinese hotel industry that the same can be applied in the analysis of service quality required and provided. The investigation into the expectations of the customers under the competitive environment will reveal the impact of the same on the hotel industry players. Finally, the understanding of the goals set by the hotel industry can be clarified based on the need to enhance service quality standards.

2.0 Literature Review
2.1 Background
A gradual development and growth of the hotel industry has been brought to notice in the past and also in the present, which is destined to continue in the future. The changing economic conditions and the standard of living of individuals has led to the change in the demands of the consumers on their travel trips. Over the years, a shift from the fulfilment of the basic necessities to the demand for luxurious services and high-end quality has come to the notice. The literature review section aims at highlighting the characteristics of the hotel industry with the discussion of the evolution experienced by it. The demands and expectations of the consumers are also discussed followed by the special consideration of the Chinese hotel industry. The changes observed and integrated by China in its hotel industry in context to the changing tourist population and the preferences of the consumers will also be brought forth through the review of existing conclusions drawn by different scholars.

2.2 Hotel Industry
The work by Molina-Azorin et al. (2015) verifies that the hotel industry gains competitive advantage when the quality is managed thoroughly. In their study, Molina-Azorin et al. (2015) combined qualitative and quantitative methods of study wherein 13 managers from a hotel were interviewed and a quantitative study of 355 additional managers was undertaken. The results obtained concluded that an inter-relationship exists between the environmental management and the quality management, which ultimately leads to competitive edge. Further, as established in the work by Law (2019), the increasing number of hotels and also the rising dependence of the individuals on Internet has led to the evolution of hotel websites. These websites are able to successfully attract the users and the consumers by luring them through their gallery section.

2.3 Evolution in the Hotel Industry
The origin of the hotels dates back to the times when the oldest sheltering systems i.e. inns were made somewhere between 6th century BC to 12th century BC (Chaudhary, 2015). The time of industrialisation brought in the advanced hotels that were established with the aim of catering to the needs of the travellers, the number of which saw a rise with the introduction and development of road and air transport. From being available at only the railway stations and airports, the hotel demand increased on the roadsides. The eventual rise in the demand was due to the rising number of travellers and also the higher purchasing power parity of the individuals. As a result of these developments, the demands of the consumers took a shift from simple bed and breakfast lodging to the more luxurious hotels that have the ability to provide big and spacious rooms with extensive food layouts as well as recreational facilities. The growth of the hotel and hospitality industry is still continuing and the 21st century has seen the entry of individual investors in the field through the association with Airbnb.

2.4 Consumer Demands and Expectations
The prominent feature in the development and evolution of the hotel industry is the changing nature of the consumers. The studies carried forth by the authors Langvinienė and Daunoravičiūtė (2015) bring focus to the factors that influence the success of the business models in the hospitality industry. The changing demands of the consumers lead to the introduction of innovative strategies that can help in enhancing the overall service quality of the hotel industry.

2.5 Chinese Hotel Industry
The conclusions drawn in the studies conducted by Lee, Oh, and Hsu (2017) brought forth the understanding that the image of the brand changes with the country of its operations and ultimately affects the customer perception about it. Thus, the hotels in China are seen as good or bad by the consumers based on the image that they have been able to establish among the consumers.

2.6 Changes in the Chinese Hotel Industry
The results obtained by Dogru (2016) proposed that that development of the hotel industry in China has been possible through the different events and challenges. The author brings forth the role played by the mega-events like Beijing Olympic Games of 2008, World Expo 2010 Shanghai, and the Asian Games of 2010 held in Guangzhou in the development of the hotel industry in China (Dogru, 2016). It is therefore concluded that the hotel industry undergoes change and evolution when it accepts tourists from different regions of the world.

2.7 Service Quality in Chinese Hotel Industry
One of the biggest aspects of good service quality is the loyalty of the customers that can be achieved by any service provider. In their work, Kandampully, Zhang, and Bilgihan (2015) highlighted that the hotel and hospitality industry is undergoing a vigorous change and it is only through the loyalty among consumers that the connections can be built for a lifetime. The customer engagement and mass personalisation can turn out to be the promising factors for the industry players.

In the studies conducted by Tsang and Qu (2000), it was brought forth that the service quality of the Chinese hotels cannot be understood in an appropriate manner, as there is limited understanding about the differences in the outlook of the hotel staff and that of the consumers. The study carried forth by the authors focused on the differences in the perceptions of the hotel managers with respect to the expectations of the consumers and the actual expectations of the consumers (Tsang and Qu, 2000). It has been found that the services provided to the tourists in the hotels in China fall lower than their expectations.

Stefano, Filho, and Sohn (2015) have focused on the Assessment of the service quality in the industry through the inclusion of SERVQUAL. According to the authors, the quality of the product or the service has a direct impact on its performance and ultimately on customer satisfaction. The satisfaction of the customers is the prime factor that affects their purchase decision of the product and the service in question.

2.8 Summary
Through the literature reviewed it is easy to identify the basis of evolution of the hotel industry. It can be seen that with the changes in the living standards and the increase in the travel plans of the population, the lodging facilities underwent a change. It is understood that the key elements inclusive of globalisation, industrialisation, and Internet acceptance led to the change in the hotel industry. The demands and expectations of the consumers are changing rapidly because of which the hotel industry is also undergoing rapid change. It can also be summarised that the inclusion of the different perceptions and aligning them with the expectations plays a crucial role in the success of the hotel industry and also any other brand.

3.0 Methodology
The process of conducting the research and taking it forward is to be guided through the different stages. Therefore, in order to conduct the research in a defined manner the right process and method needs to be integrated. Research can be conducted using qualitative or quantitative data from the application of primary data collection or the secondary data collection. The application of secondary data collection is beneficial in understanding the existing knowledge on the subject whilst the primary data collection allows the researcher to gain hands-on experience and insights on the subject. Brannen (2003) confirmed through his research that the process of applying mixed methods for the research help in generating better results through the analysis of existing knowledge and targeting the gaps in the same. The integration of qualitative or quantitative data is based on the availability and accessibility of the research material.

In the qualitative research process, unstructured data is collected, which is later used to draw subjective conclusions. The same can be obtained with the help of structured interviews, focus groups, and observations. The studies carried forth by Silverman (2016) reveal that the process of qualitative research is based on the subjective approach with only a rough understanding about the related variables. On the other hand, for the quantitative research, structured data along with the statistical analysis is taken into consideration with the help of experimentation and surveys. In the work by Marshall and Rossman (2016) it is indicated that the application of quantitative studies present an objective approach with the variables clearly defined and understood much in advance. The undertaken dissertation incorporates and follows the qualitative data collection method using the structured interviews that can be conducted over telephone or via email exchange, and also a survey questionnaire for the primary research.

In order to maintain the research process and its validity, the understanding of the sample to be targeted for the study is essential. In the studies conducted by Morgan (2013) it is verified that the selection of right sample and identification of the right size of the sample is essential. It is therefore proposed that for this research work, a sample of the people who have travelled to China and any other at least one destination would be selected. As many as 100 tourists are to be targeted to attain a valid and acceptable result from the outcome of the study. Additionally, a minimum of two hotel managers from the Chinese hotel industry are to be interviewed for the understanding of the changes based on the consumer demands and expectations. The purpose of engaging the tourists as well as the hotel staff is to understand the differences in the perception of the two different entities.

4.0 Timeline
The timeline of the project is presented in the form of a Gantt Chart that allows the readers and the researcher to keep the different steps of the dissertation flow in sync. The preparation of Gantt Chart is also essential, as it allows the researcher to better understand and align the different parts of the work completion process.

Week 1 & 2

Week 3 & 4

Week 5 to 8

Week 8 & 9

Week 10 to 12

Week 13 & 14

Week 15 & 16

Topic Selection

Research Objectives & Questions

Gathering data through Literature Review

Interviews and Survey

Analysis of findings

Conclusion & Recommendations

Finalisation & Proof-reading

It can be seen in the Gantt Chart that the collection of data from the existing literature will be the lengthiest part of the work. The collection of primary data from the survey and also the conduct of interviews will also take only certain amount of time. Another important part of the research process that will be time consuming is the analysis and Assessment of the collected data and then its organisation for the attainment of a conclusion supported by the recommendations. Thus, analysis of the findings will take quite a lot of time in the overall process.

5.0 Research Ethics
The most crucial element of the research work is the ethical standards and practices that are to be followed in the process. The report published by Resnik (2015) highlighted that the moral or ethics help the researcher in identifying wrong from right. It is important to understand and adapt things based on their acceptability and validity. The research work requires absolute clarifications when human subjects become participants. It is essential to maintain their integrity and confidentiality throughout the research work. Therefore, in the undertaken research work it is aimed that the participants will be clearly updated about the study along with the provision of clarifications of the study that is being conducted. The maintenance of the confidentiality of the personal details of the participants is also to be taken into consideration. The research also consists of the ethical aspect of destroying the personal opinions of the participants once the study has been completed successfully. There would be no commercial utilisation of the information and feedback provided by the participants.

While ethical perspectives majorly comprise of the primary data collection and responsible use of the information obtained thereof, it is also important that the literature reviewed is given its due reference. The work of other authors that has been used as a reference for the dissertation is to be reference properly. Honesty should be maintained throughout the dissertation process. The original works should not be used without adequate referencing and plagiarism should be avoided at all costs. Thus, for this work, the authors of whose work is used as a reference will be cites within the text as well as a detailed bibliography would be produced. Moreover, keeping the respect for intellectual property rights is important. Thus, patents and copyrights along with all other forms of intellectual property will be honoured. The strive to avoid strong bias towards any factor or aspect will be maintained and carefulness will be integrated to avoid errors and negligence.

References
Brannen, J. (2003). Mixing methods. Aldershot, Hants, England: Ashgate.

Chaudhary, A. (2015). Evolution of hotel industry. [online] Infoanil.blogspot.com. Available at: http://infoanil.blogspot.com/2015/12/evolution-of-hotel-industry.html [Accessed 19 Feb. 2019].

Dogru, T. (2016). EBSCOhost | 116178092 | Development of the Hotel Industry in China: Mega-Events, Opportunities, and Challenges.. [online] Web.b.ebscohost.com. Available at: https://web.b.ebscohost.com/abstract?direct=true&profile=ehost&scope=site&authtype=crawler&jrnl=19415842&AN=116178092&h=ba08pH92oYGDEgROIVX3%2f21hMXrZw1f3Ay2RrKIwhCT0Oj%2fRXSbo33bNT5FslkZieIKdXT%2b8NBO2Sh5frrLpVQ%3d%3d&crl=c&resultNs=AdminWebAuth&resultLocal=ErrCrlNotAuth&crlhashurl=login.aspx%3fdirect%3dtrue%26profile%3dehost%26scope%3dsite%26authtype%3dcrawler%26jrnl%3d19415842%26AN%3d116178092 [Accessed 19 Feb. 2019].

Kandampully, J., Zhang, T. and Bilgihan, A. (2015). Customer loyalty: a review and future directions with a special focus on the hospitality industry. International Journal of Contemporary Hospitality Management, 27(3), pp.379-414.

Kandampully, J., Zhang, T. and Jaakkola, E. (2018). Customer experience management in hospitality. International Journal of Contemporary Hospitality Management, 30(1), pp.21-56.

Langvinienė, N. and Daunoravičiūtė, I. (2015). Factors Influencing the Success of Business Model in the Hospitality Service Industry. Procedia – Social and Behavioral Sciences, 213, pp.902-910.

Law, R. (2019). Assessment of hotel websites: Progress and future developments (invited paper for ‘luminaries’ special issue of International Journal of Hospitality Management). International Journal of Hospitality Management, 76, pp.2-9.

Lee, S., Oh, H. and Hsu, C. (2017). Country-of-operation and brand images: evidence from the Chinese hotel industry. International Journal of Contemporary Hospitality Management, 29(7), pp.1814-1833.

Marshall, C. and Rossman, G. (2016). Designing qualitative research. Los Angeles: Sage.

Metcalf, J. and Crawford, K. (2016). Where are human subjects in Big Data research? The emerging ethics divide. Big Data & Society, 3(1), p.205395171665021.

Molina-Azorín, J., Tarí, J., Pereira-Moliner, J., López-Gamero, M. and Pertusa-Ortega, E. (2015). The effects of quality and environmental management on competitive advantage: A mixed methods study in the hotel industry. Tourism Management, 50, pp.41-54.

Morgan, D. (2013). Integrating qualitative and quantitative methods. Thousand Oaks, California: SAGE Publications, Inc.

Peng, B., Song, H., Crouch, G. and Witt, S. (2014). A Meta-Analysis of International Tourism Demand Elasticities. Journal of Travel Research, 54(5), pp.611-633.

Resnik, D. (2015). What is Ethics in Research & Why is it Important?. [online] National Institute of Environmental Health Sciences. Available at: https://www.niehs.nih.gov/research/resources/bioethics/whatis/index.cfm [Accessed 19 Feb. 2019].

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Stefano, N., Filho, N., Barichello, R. and Sohn, A. (2015). A Fuzzy SERVQUAL Based Method for Evaluated of Service Quality in the Hotel Industry. Procedia CIRP, 30, pp.433-438.

Tsang, N. and Qu, H. (2000). Service quality in China’s hotel industry: a perspective from tourists and hotel managers. International Journal of Contemporary Hospitality Management, 12(5), pp.316-326.

Wood, L. (2018). The Tourism & Hotel Industry in China – Growth, Trends and Forecasts (2018-2023) – ResearchAndMarkets.com. [online] Businesswire.com. Available at: https://www.businesswire.com/news/home/20180927005827/en/Tourism-Hotel-Industry-China—Growth-Trends [Accessed 19 Feb. 2019].

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