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LITERATURE REVIEW
Definition of Bed and Breakfast – Background
A bed and breakfast is generally known as a private home where a guest is provided a place to stay for the night. In some cases, the bathroom provided for the guest is shared with the family or another guest although the majority of guests now expect or demand a private bathroom that is usually en suite, or "in the room". Breakfast is usually included with the price of the room. Thus, bed and breakfast provided in a private home is sometimes referred to as a home stay. In addition to converted private residences, some establishments are considered bed and breakfast inns. The same concepts of "room and breakfast" apply. The major difference is that an inn has more rooms available than the usual one to four found in a private home. Inns often provide meals in addition to breakfast, as well as other services not always provided in a private home. These two terms are used in the industry to distinguish the difference between a stay in a private home and an inn.
Generally, a B&B is not the reason for a guest to visit an area, but in some cases B&Bs have done such a masterful marketing job that this has changed. People read articles in a variety of publications and sometimes are attracted by a bed and breakfast and plan to visit the area specifically to stay at that B&B. Travelers usually are attracted by recreational, cultural or historic sites, or by business they have in a particular area. Business travelers, especially women, sometimes seek out bed and breakfast accommodations as an alternative to the typical lodge, motel or hotel facility available in an area. B&Bs provide the traveler with a different lodging experience as well as what many consider a safer environment.
A Brief History of Bed and Breakfasts
The bed and breakfast concept has existed in one form or another since the beginning of man. Monasteries served as bed and breakfasts for travelers, and in some cases still do. Bed and breakfasts have been very popular with the traveling public in Europe for years. It was in England, Scotland and Ireland that the term "B&B" first came into use. Tourists will see a B&B sign in many windows there. The term "bed and breakfast" is not used in many other countries. Terms such as paradors, pensions, shukukos and pousados are used to describe what Americans and English-speaking Europeans think of as a bed and breakfast.
The United States also has a history of bed and breakfasts dating back to the time of early settlers. As the pioneers traveled the trails and roads across this county, they sought a safe refuge in homes, inns and taverns. In fact, some of those historic accommodations now serve as B&Bs. During the Great Depression, many people opened their homes to travelers to bring in some additional money for the family. The term "boarding house" was used at this time. After the Depression, this type of lodging declined and many people had the idea they were just for low-income travelers or drifters. In the early fifties, people may remember the term "tourist home" being used. This too was essentially a form of bed and breakfast. Once motels were built on the new highways, they were soon forgotten. In large part because of the number of Americans traveling to Europe in recent years and rediscovering B&Bs, there has been an exponential increase in interest in the U.S. Today, the B&B is not viewed as a low-cost lodging facility but as an attractive alternative to the typical standard chain hotel or motel room. Today, some bed and breakfasts offer amenities not unlike those found at the most upscale hotels in the world.
2. Customer Satisfaction
Several authors have suggested that bed and breakfast businesses are in a unique position to leverage relationship building into a sustainable competitive advantage (Ashley-Cotleur and King 1999; Ward 1997; Hart and Stevenson 1993). Quick customer response, an obsession with a quality product or service that bears the family name and a genuine desire to provide outstanding customer service are the bases for developing strong customer relationships (Hoover and Hoover 1999; Poza 1995). Moreover, anecdotal evidence suggests that family businesses that can create and maintain superior customer relationships enjoy competitive advantages associated with customer loyalty, perceptions of trustworthiness, and good-will (Biberman 2001; Stone 2000). There is a formal commitment to customer relationship management (CRM) is increasingly being seen throughout the business community as an essential tool in a company's competitive arsenal. CRM, which has evolved in recent years from several areas of marketing, including database marketing and relationship marketing (Sheth and Parvatiyar 1995), often requires significant changes in company processes, policies and strategy.
The tendency to expand the field of relationship marketing to encompass a broad range of marketing- and business-related activities has proven irresistible for practitioners as well. For example, the following have been called "customer relationship marketing": campaign management, cross-selling and up selling, customer retention, behavior prediction, customer profitability and value modeling, channel optimization, personalization, and even event-based marketing (Dyche 2002). Others mention loyalty programs (Reichheld, Markey, and Hopton 2000), enterprise-wide initiatives (Greenberg 2001), and partner and channel management (Greenberg 2001).
3. Customer Loyalty
Inn Vogue: Running a Bed and Breakfast Is a Tough Business, but One That Can Succeed with the Right Plan. By James A. Anderson
Despite a slowdown in tourism in the wake of the Sept. 11, 2001, terrorist attacks, bed and breakfasts have managed to hold their own. According to the latest industry figures compiled by the Professional Association of Innkeepers International, these businesses managed to pull in $3.1 billion in revenues in 2002, which was only slightly lower than in 2000. The number of inns in the U.S.. meanwhile, has grown to 19,500 from 19,000. The average daily rate for a room has climbed to $136.70 in 2002 from $128.87 in 2000. A few other enterprising African Americans are participating in this growing industry and roughly 20 black innkeepers belong to the African American Association of Innkeepers International (www.africanamericaninns.com). There's definitely money to be made in this area, but if you think inn keeping is an easy business to get into, think again.
The business can be time-consuming and expensive. Then there are the rigors of keeping house and pacifying guests. In fact, nearly a third of the entrepreneurs that launch these ventures will find the workload too much to handle and cease operations within five to seven years. But those who sweat it out enjoy the security of a sector that's potentially lucrative and resistant to economic downturns. That was the beginning, The structure was weather-beaten, and a fire a few years earlier had caused cosmetic damage. Moreover, the house's plumbing and electrical wiring were in need of upgrading. A new oil heating system had to be installed. A new roof was fitted and the yard landscaped. The 18 rooms had to be repainted and furnished. Each room needed a private bath installed; in addition, Greenwood added Jacuzzis to the guest rooms. The front porch needed to be lifted six inches. Greenwood brought in a group of architects and contractors and spent more than $75,000 in the first year alone.
Typical bed and breakfast expenses include:
* Renovations (electrical, plumbing, kitchen, landscaping, fixtures, security system, etc.)
* Interior decoration (painting, wallpapering, furniture, lighting, etc.)
* Linens and towels
* Dishes and utensils
* Smoke and carbon monoxide detectors, fire extinguishers, and other emergency equipment
* Promotion and advertising
* Permits and licenses
* Insurance (liability, medical, property, workers compensation, etc.)
* Telephone and answering service/machine
* Office equipment and supplies (front desk. computer, copier, fax machine, etc.)
* Reservation service(s)
A nationwide real estate boom has boosted prices across the country, and Pinkston says that owners looking to set up shop on the coasts will experience increased home prices immediately. "There are some pockets of the country where real estate hasn't gone up that much, but those places Lend not to be the best travel locations," he says. The money it takes to convert a home into a bed and breakfast can be considerable, too, especially for the quaint older homes innkeepers often choose. Greenwood says her biggest conversion bill for the Washington, D.C., property was for plumbing, particularly adding bathrooms and fitting boilers to heat water. In most states, bed and breakfasts must be licensed, They must also meet numerous codes, including health, fire, zoning, and building regulations. The cost of compliance is a major consideration in determining the economic feasibility of your business. Greenwood and Pogue had their share of challenges in this area.
INN THE ZONE
When getting ready to open the Brooklyn location. Greenwood was dismayed to hear that some local residents didn't like the idea of a business in their residential neighborhood. "I was shocked at first," recalls Greenwood. "My husband and I thought we were doing something to make the neighborhood better, and we really didn't expect some of our neighbors to want to fight that." But because there are no zoning regulations governing bed and breakfasts in the New York City area, there aren't any zoning laws on the books regarding this type of establishment. "Initially, they wanted to apply hotel regulations to me, which of course wouldn't make sense," recalls Greenwood. She and her husband then began a grassroots campaign, talking about their situation with the local media and community gatherings. It worked. Help came from a local architect who had heard of Greenwood's plight. "He was able to show there was a code that stated single family homes built before a prior date may house guests who pay for that consideration." This enabled the home to operate as a bed and breakfast and they were open for business--albeit after shutting down for seven months.
Ten Steps to a Successful B&B
1. Formulate a business plan. Include an introduction, description of the business, sales potential, personnel, consultants, commitments (escrow), and financial information. Make a month-by-month schedule of projected income and expenses. Review the outline often and make changes as necessary
2. Determine your market. Determine who comes to your location: tourists, travelers, or businesspeople. Form a profile (economic standing, family status, interests) of potential customers based on the local attractions they visit. Ask other inn or hotel executives in the area about their primary market
3. Project sales revenue. One way is to combine projected occupancy and room rates. Local chambers of commerce and tourist bureaus have information on occupancy rates for existing hotels, motels, and inns,
4. Research your location. Choose a location based on your potential market. Find out how many inns are in the area, how long they have been in business, and if any have gone out of business
5. Choose a building, Your inn will be someone's home away from home. To succeed in this competitive industry, most inns offer a private bathroom for each bedroom. The building must be in an area with a low crime rate and within the service area for emergency service It should also accommodate parking for guests and owners.
6. Learn the law. Visit your local chamber of commerce for information on the federal, state, and local regulations that will apply to your inn. Obtain a business license, which requires an annual fee. State regulations include sales tax permits and unemployment insurance taxes, if you have employees. Local requirements, which vary by community, are administered by the health department, building and zoning department, the department of public works, the fire department, and the planning commission
7. Get insurance. As an innkeeper, you will be liable for personal injury to guests and damage to your property, innkeepers should have commercial liability coverage for their building and contents of the public: areas. Keep records of contents, receipts, and appraisals, and report all losses
8. Renovate and furnish. Develop a schedule for subcontractors and ordering materials. Avoid costly fees by learning basic maintenance skills. A queen- or king-sized bed in each bedroom is standard
9. Calculate room rates. Find out what other inns and hotels in the area are charging. Set your price by analyzing what the room has to offer such as a private bath, or Jacuzzi. Breakfast is usually factored into the rate.
10. Promote your inn. Plan how to promote your inn. Create or order brochures, stationery, and business cards. "Be able to convince people why they should come to your location," Hardy adds. Use your Website as a valuable marketing asset and offer specials during certain seasons.
4. Retention
One of the features that attract guests to a B&B is the promise of a special breakfast. The host's goal is to serve attractive, delicious and whenever possible nutritious meals to guests. Breakfasts start at the very simple -- a continental breakfast, which usually includes hot tea or coffee, fruit juice and sweet rolls, muffins or biscuits. A full breakfast with juices, entree, breads and hot beverages is at the other end of the scale. No matter what type of meal you serve, everything should be of the highest quality.
Meal Planning
You may prefer foods that do not appeal to your guests, but you need to consider that people have a wide variety of food preferences as well as specific nutritional and dietary needs. Plan to serve foods that compliment one another and are appropriate to the season as well as those that are easiest for you to prepare and serve.
- Consider the number of people you will be serving;
- The type of place settings to be used; and
- The method you choose for serving.
Start with high quality foods.
The best meals typically include a variety of temperatures, textures, flavors, shapes, colors and sizes. Of course, despite all your planning, there's no guarantee everyone will enjoy the meals you serve.
Table Settings
The current trend in table fashions is that just about anything goes. Use of colors is a personal choice. There are no fixed rules about what to use and when to use it. Foods should always look attractive and appealing against the table cover and place settings used. Table settings can range from informal to very formal. The choice is yours and depends on the mood of your B&B and the feelings you want to convey to your guests.
Serve Healthy Foods
You should ask ahead of time if a guest has any specific dietary needs. This special touch will show your guests that you want to provide for their needs. Guidelines to consider for healthy meals:
- Use low-fat products.
- Include whole grains, fruits and vegetables in your meals. Bran or oats can be included in muffins, quick breads and served as cereal. These foods provide extra fiber.
- Limit the use of fats and products with cholesterol and other saturated fats. Choose vegetable oils and liquid margarines rather than butter and other animal fats.
- Limit the use of salt. Sodium can contribute to high blood pressure. Try substituting herbs, spices and other seasonings for salt in foods. Omit or reduce the amount of salt called for in recipes and avoid using processed or other foods that are high in sodium.
- Limit the amount of sugar. Sugar itself is not harmful, but it's a source of empty calories and provides very little nutritional value.
Food Safety
We're fortunate to have proper storage and cooking methods easily available today. However, it's amazing how many unsafe food practices people still use. Government inspections and strict standards in the food industry usually assure us of high quality, wholesome and safe foods. It's your responsibility to make sure that standard is maintained in your bed and breakfast. The danger zone for bacterial growth in food is between 40 degrees F and 140 degrees F. Most food poisoning bacteria grow in room temperatures around 60 to 70 degrees F. When bacteria grow, it divides and multiplies in number. Two very important rules to follow are:
- Keep hot food hot and cold food cold!
- When in doubt, throw it out!
Make sure all leftovers are stored promptly. Never thaw frozen foods on a countertop at room temperature.
For more food safety tips, contact your state or local health department.
Sanitization
"Sanitization" means effective bactericidal treatment by a process that provides enough accumulative heat or concentration of chemicals for enough time to reduce the bacterial count, including pathogens, to a safe level on utensils and equipment.
For example, bleach is an effective all-purpose sanitizer that even kills bacteria which may cause food poisoning. This sanitizer is authorized by use under USDA meat, poultry, rabbit and egg products inspection programs.
If using other types of sanitizers, such as tablets, then they must be registered with the U.S. Environmental Protection Agency and the product label must claim it will sanitize food contact surfaces without needing a final clear water rinse.
Check with your state and local health departments for rules and regulations which are specific to your area. You also may have to undergo some type of health inspection, perhaps on a regular basis.
State and Local Regulations
Your food service might be controlled by state and/or local laws or regulations. Be sure to understand all of the laws and regulations which govern you in this area.
5. Comparison between US and Taiwan's B&B.
Taiwan is situated about 160 kilometers off the southeastern coast of the China, and between Korea and Japan in the north and Hong Kong Island and the Bohol, Philippines to the south. The island has always been known as one of the most beautiful in the Pacific. The Portuguese called it Formosa, which means just that. With its mountains that rise up high above the green-forested foothills, its terraced flatlands and coastal plains and basins and foremost with its friendly generous people, it's really almost paradise. Not just the breathtaking scenery with waterfalls, lakes, hot springs or misty hillsides, make Taiwan well worth a visit. Pagodas and temples build on a culture that goes back beyond the beginning of western civilization. Next to nature and tradition there's also the modern Taiwan with skyscrapers that almost reach into heaven, with their feet firmly planted in a chaotic stream of traffic. Whatever you're looking for, you can probably find it in here. If you visit the capital city, Taipei, even if you're just passing through take a day or two to look around and to visit the Yangmingshan National Park. Other cities of interest are Taichungand the industrial city of Kaohsiung.
The most beautiful natural regions are Central Cross-Island Highway, the Hsitou's bamboo forests, Sun moon lake, Kenting National Park and the Yushan National Park and of course there's Yushan or Mount Jade, Alishan, and Toroko gorge. If you think you have seen the whole island you also have to discover the Penghu Islands, off the southwestern coast of Taiwan. Ancient temples, picturesque farms and windswept fishing villages, friendly people, fine beaches, coral reefs, and rugged coastlines are just a few keywords to get your attention. This is a great place for all kinds of water sports and don't forget to try the fresh seafood. Penghu is famous for its northeatern wind in the winter, wind is consistantly over 25 knots from October to April and blowing up to 50 knots occationally. It is a great destination for windsurfers.
Every guest comes to a B&B or inn with certain expectations about the quality of the services provided and the way they are delivered. An innkeeper who exceeds these expectations is perceived as offering high-quality services and, consequently, achieves a high level of guest satisfaction. As we all know, the more guests are satisfied the more often they will come back and/or generate positive word-of-mouth. Inversely, when expectations are not met, the result is guest dissatisfaction and a loss in repeat business and long-term profitability. Quality, therefore, is defined as the difference between the service customers actually receive and the service they expected. It is obvious then that, if customers are the arbiters of quality, it is up to the innkeeper to ascertain how high or how low his service ranks on the quality scale. The most effective way of gathering that crucial information is by surveying current and potential guests. However, a common difficulty with surveys is that respondents can more easily articulate expectations about the results to be achieved - for example, to be pampered - than about the manner in which the service should be provided, i.e. the different approaches used by the innkeeper to bring about a feeling of being pampered.
A survey method developed by Professor Noriaki Kano of Tokyo Rika University overcomes that problem by identifying three categories of customer expectations or requirements and by proposing a type of questionnaire that takes them into account.
1. Must-be requirements
If must-be requirements are not fulfilled, customers will be extremely dissatisfied or will simply not be interested in staying at your B&B at all. On the other hand, going the extra mile in fulfilling them does not increase their level of satisfaction above neutral. Failure to clean your guests' room will definitely result in an unhappy customer; however, going to the point of scrubbing the joints between the bathroom tiles with a toothbrush will not result in greater satisfaction. In other words, efforts to exceed this category of expectation will only result in "not dissatisfied" guests. This is because they regard must-be requirements as prerequisites and, therefore, take them for granted. Guests will expect B&Bs to have appropriate security measures in place to ensure their safety, to be able to provide adequate information on area attractions, to make available free parking spaces on their premises, etc. They will also expect the innkeeper or a reliable member of his staff to reside on the premises so that, if any problem arises, it will be quickly resolved.
2. One-dimensional requirements
The more one-dimensional requirements are fulfilled, the higher the level of customer satisfaction and vice versa. For example, the more elaborate and refined your breakfast dishes, the more your guests will be satisfied. Inversely, a very basic meal consisting of limited food items will result in less satisfaction and a perception of low quality. Other examples can include such things as the bed (size and firmness), bathroom amenities, the architectural style of the home, landscaping, leisure activities and/or dining on the premises, etc. One-dimensional requirements are usually explicitly demanded by customers.
3. Attractive requirements
Attractive requirements are the features that have the greatest influence on how satisfied customers will be with a given product or service; however, if they are not met, there is no feeling of dissatisfaction. A large flat-screen plasma TV in the guest room will quickly increase the customers' level of satisfaction. On the other hand, the lack of this feature will leave them basically neutral (certainly not dissatisfied). It's worth noting that attractive requirements are not explicitly expressed nor expected by guests.
Other examples of attractive requirements can include a big shower stall equipped with multiple showerheads, a fireplace in the guest's room, private balcony, breakfast served in the guest room, service above and beyond the call of duty by the innkeeper, unannounced surprises such as an upgrade or a discount offered to repeat guests, etc. It should be noted that customers may also be indifferent to certain aspects of the B&B service, for instance the presence in the room of wall-to-wall carpeting, tooth brush holder, etc. Whether these features are present or not has no effect on guests' perception of quality or their level of satisfaction.
According to Kano, these three types of requirements can be classified by means of a specifically constructed questionnaire and, when the responses are tabulated, they provide the innkeeper with useful feedback on which service components have the greatest influence on guests' perception of quality and, more importantly, they can help the innkeeper determine which improvements will have the greatest influence on their level of satisfaction.
The phenomenal growth in the bed and breakfast industry has led to the formation of the Bed and Breakfast market in South Taiwan countries. Bed & breakfast establishments have increased from approximately 300 in 1993 to an estimated 30 000 in 2004 in order to unite the industry nationwide. Individual establishments and associations were often unable to attain their full potential in matters such as national advertising, national networking, collective bargaining, representation at national level, staff training and other matters which could contribute to the running of a more efficient and financially sound venture.
There seeks:
To ensure our customers of quality, service and excellence by setting and monitoring the highest standards of professionalism and hospitality in the industry.
To strive towards total customer satisfaction.
To raise the visibility of our member establishments and present them as an unified body through professionalism and an effective marketing and public relations plan.
Loyalty means three things: Your customers stay with you, buy more from you, and refer new customers to you. It is about creating a customer whose value that increases over time. These are the things that come with real loyalty, which is at least a few steps above "customer satisfaction." Contrary to what many believe, creating loyalty requires entrepreneurs to focus on more than customer satisfaction. Jill Griffin, in her book Customer Loyalty - How to Earn It, How to Keep It, points to studies indicating how little correlation there really is between customer satisfaction and loyalty. In a 1991 study conducted by Forum Corp., 40 percent of the customers who claimed to be satisfied with their suppliers did not hesitate to switch to someone new. In 1993, the Harvard Business Review reported that 65 to 85 percent of customers who chose a new supplier said they were satisfied or very satisfied with their former supplier. Customer loyalty comes from three things: Customers feel they have a real relationship with the business, perceive real value from the relationship that could not easily be replaced, and believe that switching would cause hardship - economic or otherwise. There is no easy way to transform a business into a loyalty-based business, because it truly is a transformation for most. But a good way to start is with a loyalty program tied to a promotional campaign.
In the long run, dealerships should also be able to determine how many of those customers return to buy a second or third car. Really smart dealerships will even track customer referrals to find out if participants in this loyalty program generate significantly greater business. There would describe customer satisfaction (CS) as being the degree to which there is a match between a customer's expectations of a product and service combination, and the actual performance of that product and service combination. With the rate of change in all aspects of the coatings, paint, adhesives and sealants industries that we are experiencing today and, in combination with the competitive intensity and customer pressures to commoditize, it is most important that companies routinely and properly measure the level of their customers' satisfaction. Companies that are prospering in the new global economy recognize that measuring CS is the keystone to their success. Only by doing so can they retain the customers they have and understand how to better attract new customers. Those that will be successful recognize that CS is a critical strategic weapon that can bring increased market share and increased profits.
Here are eight steps which should provide a good measuring technique for the CSR process:
Ø Establish a process to tap into management, employees, outside consultants and industry sources for input on the dimensions critical to your CS
Ø Use this feedback to develop an ongoing program to identify critical CS dimensions
Ø Work with a professional staff and develop phone, e-mail and mail survey instruments
Ø It's imperative to understand the theoretical instruments of the CSS. Keep in mind that CS survey results that simply describe what was found provide no guidance for developing an action plan to improve satisfaction
Ø Regularly conduct surveys and re-evaluate their reliability and validity
Ø From the data, develop a CS metric that combines the current level of satisfaction and also analyzes the importance of the various dimensions of that satisfaction
Ø Employ the dimensional information and develop an action plan for improving each dimension and communicating these improvements to customers
Ø Tie the performance evaluation and compensation of each employee involved in the action plan to its accomplishment. This tactic insures that the customer's goals match the employees' goals. What gets measured gets rewarded and what gets rewarded gets done.
Customer satisfaction understanding and the ability to develop a viable action plan to constantly improve CS, is a direct result of how much time, effort and management priority is placed on the process from the outset as well as the continued application of these elements between formal CS surveys. Business leaders worldwide have taken up the cause of the customer, hoping to enhance profitability and boost competitive advantage. Today, customer satisfaction measurement is seen by many as the ultimate measure of business success. Instead, companies should measure the indicators of customer loyalty and the product and service attributes that constitute value to the customer, beyond minimum expectations. To deliver on its promise, a CSM system must measure the indicators of customer loyalty and determine customer priorities for action. Only then will it identify true value, the key to competitive advantage in today's business environment. A professionally managed CSM program helps a company understand and anticipate customer needs, and act accordingly. One primary benefit of such a program is an enhanced ability to identify potential areas of product and service differentiation. The best CSM programs go beyond identification to reveal how quality perception interacts with price and image to create value.
The real power of CSM lies in the final step: using the data to effect positive change in your organization. The wealth of information unearthed by a professional CSM program means nothing until it is translated into systems, changes and programs that will directly affect customer-perceived quality. It is essential that companies "get behind the numbers" to discover what impacts customer satisfaction, and to prioritize what to do as a result. The experiences of two diverse organizations offer vivid illustration: In achieving a high level of customer satisfaction, we started with our sales staff by initiating product knowledge and increased sales training sessions. All employees sell not a product--but the business itself, whether they are on the salesfloor, the stockroom or the delivery truck. Businesses with an integrated approach to promotional activities--including advertising, public relations, and marketing targeted at children in an area with stable family units from generation to generation are positioning themselves to reap benefits for many years. The children grow up and continue to do business with your company. The place where they bought the first ball glove or fishing rod may continue to attract them as adults. The store may not even be as good as its competitors', but the customers' pleasant memories make loyal customers. Start today ... the continued success of your business requires a perpetual analysis of customer satisfaction, additional team training, market area studies and integrated promotional activities. These are the building blocks for customer loyalty.
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