The popularity and occupancy rates of family operated hotels in Shanghai China are still low despite being located in good tourist destinations. This study identifies the reasons for this observation. It involves a study of 145 owners, managers and customers of family operated hotels in Shanghai. The study found out the following in family operated hotels in Shanghai: low service quality, poor product facilities, inappropriate management approaches, poor marketing strategies, and low levels of technology. In order to achieve high occupancy and popularity rates in these hotels, the owners and managers should ensure that they have good service quality, good product facility, appropriate management approach, good marketing strategies, and adopt good technologies. If these are implemented, the family operated hotels will be able to achieve customer satisfaction and retention, high profitability, and high rates of popularity.
I would like to acknowledge certain people who have contributed to the success of this dissertation. First, my acknowledgements go to my instructor who has given me guidance since the beginning regarding the steps to follow in completing the study successfully. I also acknowledge my classmates who have discussed a lot of issues related to the dissertation. The discussions have enabled me to gain knowledge on how to write a good dissertation. My special thanks also go to my parents for providing me with material and moral support towards the accomplishment of the objectives of this research. Lastly, I would not want to forget the special contribution of my mentor towards my education.
Table of Contents
List of Figures
Figure 1: China’s Inbound Tourists at its Lowest in 2013……………………………………….16
Figure 2: Four-Service Characteristic…………………………………………………………….24
Figure 3: SERVGUAL Model……………………………………………………………………26
Figure 4: Level of Education for managers and owners of family owned businesses……………….38
Figure 5: Graph showing annual income for family operated hotels in Shanghai……………….39
Figure 6: pie chart showing responses on level of service quality………………………………40
Figure 7: pie chart showing responses on level of product facilities…………………………….42
Figure 8: pie chart showing responses on appropriateness of management approaches…………44
Figure 9: Pie chart showing responses on management strategies………………………………45
Figure 10: Pie chart showing levels of technology in family operated hotels……………………47
List of Tables
Table 1: Inbound tourists in China in 2012…………………………………………………………………7
Table 2: Hotel Statistics in China…………………………………………………………………………..9
Table 3: Characteristics of family operated hotels…………………………………………………………10
Table 4: Research Outline………………………………………………………………………..13
Table 5: Top 20 Outbound Destinations by Travel Agencies in 2013…………………………..17
Table 6: Demographic profiles of respondents…………………………………………………..37
Table 7: Responses on service quality in family operated hotels………………………………..40
Table 8: summary of responses on quality of internal product facilities…………………………41
Table 9: summary of responses on appropriateness of management approach………………….43
Table 10: summary of responses on marketing strategies of family operated hotels……………45
Table 11: summary of responses on levels of technology in family operated hotels……………46
The tourism industry in Shanghai is wide. The development of tourism meets people’s needs, improves quality of life, and promotes development of other industries. Tourism has become an important element of economic growth. Shanghai is the city of China. It is the center of Chinese economy, science, technology, finance, trade, exhibition and shipping. Shanghai is also one of the major tourist cities in China. Shanghai is the second largest tourist destination in China after Beijing. Culture is the main tourist attraction in Shanghai. The city attracts a lot of tourists who are interested in Traditional Chinese Culture including the Wu and Yue Dynasty cultures. According to statistics in 2012, Shanghai tourism industry income was about 365.055 billion Yuan, increasing 13% from the previous year, in 2013, and Shanghai tourism industry income was 390 billion Yuan, an increase of 6.83% from the previous year. The table below indicates the number of inbound tourists in China in 2012.
Table 1: Inbound tourists in China in 2012
|June||Rate of rise||Jan-June accumulative total||Jan-June rate of rise|
|People from Macao||1680||15.46%||9137||22.40%|
|People from Tai Wan||56256||29.62%||306517||14.86%|
Shanghai tourism industry recorded an income of 365.055 billion Yuan. This reflects an increase of 13% from the previous year. In 2013, Shanghai tourism industry income was 390 billion Yuan, an increase of 6.83% from the previous year. According to the statistics, Shanghai received 3,116,435 tourists from January 2014 to June 2014.
Shanghai operates several hotels which mainly serve inbound and outbound tourists. There are about 500 hotels in Shanghai. In April 2014, the average hotel occupancy rate was 65.9% (Shangtex Hotel Shanghai, 2014). Average prices per hotel were 512 Yuan. The income for a single hotel room was 355 Yuan. There was 58.19% guest room income, 28.19% catering income. There was also an average food cost rate of 42.11%, average labour cost rate of 39.21%, average energy consumption cost of 8.58% and average beverage cost rate of 33.46%. The average monthly salary of frontline employees was 3516 Yuan.
The occupancy rate of Five-star hotels in shanghai was 68.57% in April. Average prices for five-star hotels were 837 Yuan while employee turnover rate is 3.63% and average monthly salary for frontline employees in Five-star hotels was 3,801 Yuan. The occupancy rate for four-star hotels was 75.55% and their average prices were 489 Yuan. Four-star employee turnover rate was 3.34% and employees’ average monthly salary was 3,916 Yuan. Three-star hotels recorded occupancy rates of 48.94%, average prices of 240 Yuan, employee turnover rate of 3.62%, and frontline employees’ average monthly salary of 2,799 Yuan. These statistics are summarized below.
Table 2: Hotel Statistics in China
|Occupancy Rate||Average Prices||Employee turnover rate||Frontline Employees’ average monthly salary|
|5-Star Hotels||68.57%||837 Yuan||3.63%||3,801 Yuan|
|4-Star Hotels||75.55%||489 Yuan||3.34%||3,916 Yuan|
|3-Star Hotels||48.94||240 Yuan||3.62%||2,799 Yuan|
Family operated hotel refers to the use of residential room, combined with the local humanities, natural landscape, ecology, environment, agricultural resources, forestry and fishery production. They are operated within the household, providing customers with comfortable accommodation and effective catering services. The family operated hotel is different from traditional hotel. It may not have advanced luxurious facilities, but it allows customers to experience the local amorous feelings. The feeling of stay in a family operated hotel is different from the feeling of stay in a traditional hotel. Family operated hotels are different in every country because of the different environment, culture and life. For example, family operated hotels in Europe provide accommodation in the farm to let customers experience farm life. In United States, accommodation is provided in basic home stay and Hostel; this is a deliberately arranged accommodation.
With the development of Shanghai tourism in the recent years, tourism resources across the city are developing quickly and the number of family operated hotels is increasing rapidly. From 2006 to 2012, the total number of family operated hotels in Shanghai increased from 8,642 to 13,952, and rooms increased from 1.068 million to 2.12 million.
There are four different kinds of family operated hotels; they are based on different characteristics located in different geographical locations.
Table 3: Characteristics of family operated hotels
|Landscape type||Sightseeing area, park district|
|Cultural experience type||Historic Area|
|Rural experience type||Remote areas|
|Characteristic of industry type||Leisure farm|
With the increasing number of international and domestic visitors in shanghai, family operated hotels have the opportunity to increase their income. However, they face a lot of competition from larger hotels operating internationally. These large hotels offer superior customer services and higher quality of services. In order to compete effectively in the market, family operated hotels need to provide unique services and manage their marketing strategies effectively. The popularity and occupancy rates of family operated hotels are still low despite being located in good and attractive places. Generally, family owned businesses perform poorly because they do not respond to the needs of their guests.
The research motivation for this study is to understand the needs of global guests and the management approaches needed to market and run family operated hotels in Shanghai. It explores the reason why family operated hotels perform poorly compared to 5-star, 3-star and 4-star management-operated hotels despite being located in good environments. Furthermore, this research study is motivated by the need to identify the challenges and problems faced by family operated hotels in their management and operations. It is necessary to understand the current management and operational approaches of the family-operated hotels in order to determine how to improve their marketing strategies and increase their popularity.
The main objective of this study is to find out the reasons why the popularity and occupancy rates of family operated hotels in Shanghai China are still low despite being located in good place, and to determine how family-operated hotels may respond to the needs of global guests in order to improve their marketing. Marketing is one of the most important mechanisms of enhancing the popularity of family-operated hotels. This study attempts to find out how this marketing can be achieved by family-operated hotels in Shanghai.
Nowadays, family operated hotels are facing a lot of problems and challenges, and at the same time, the number of competitors has increased. This increases the pressure of owners of family operated hotels. The aim of this study is to identify ways of improving the popularity of family operated hotels in Shanghai. This can be achieved by first understanding the challenges and problems facing those family operated hotels in Shanghai. This study determines the importance of management approach, hotel facilities, human resource development and service quality in family operated hotels. The research seeks to determine whether these aspects of hotel operation and management have been utilised appropriately by family operated hotels in Shanghai. Therefore, the following research questions will be considered to meet the research objectives of the study.
- Is it important to improve service quality in family operated hotels in order to meet the needs of guests?
- Do family operated hotels in shanghai use appropriate internal product facilities that meet the needs of guests?
- Is the management approach appropriate in family operated hotels in Shanghai?
- Do family operated hotels in Shanghai use appropriate marketing strategies to gain competitive advantage and improve their popularity?
- Is it important to use more technology in family operated hotels in Shanghai?
One of the main limitations of this study is potential lack of cooperation from family operated hotel owners and managers. This research targets respondents from family operated hotels that may not be willing to provide information about their businesses because they may fear that the information can be used by competitors. Some respondents may also be busy with their family hotel operations; hence having limited time to respond. Others may be reluctant to respond due to their privacy values. This limitation will be solved by sending questionnaires to the respondents in advance before the study begins so that the respondents can get enough time to respond. The respondents will also be given the freedom to omit their business profile and details in order to feel comfortable to provide the information needed for the study.
The second limitation is inadequate time. While the respondents need to take enough time to respond to the questions due to their busy time schedules, the study faces the limitation of time because the research needs to be completed and submitted within a short period of time. The limitation of time can be addressed by designing a time schedule and following it appropriately. Each activity should be allocated some time, with priority activities being allocated more time.
Lastly, the research will be affected by inadequate financial resources. Various activities including sending mails, browsing the internet for information, and visiting libraries will require a lot of money. This problem will be overcome by collecting funds in advance from parents, friends and relatives.
Table 4: Research Outline
|Chapter 1: Introduction||Background of the study including introduction to the hotel industry, tourism industry and family owned hotels in Shanghai|
|Chapter 2: Literature Review||Motivation of Tourism in China, Shanghai Hotel Classification, Competitive strategies for family operated hotels, marketing in family operated hotels, and measurement of hotel service quality.|
|Chapter 3: Methodology||Research Framework and hypotheses, research methodology and research design.|
|Chapter 4: Research Findings||Demographic analysis, Analysis of service quality, analysis of product facility, analysis of management approaches, analysis of marketing strategies, and analysis of technology level|
|Chapter 5: Conclusion||Conclusions, recommendations, and suggestions for future research|
Demographic characteristics usually include age, gender, marital status, number of family, family income, occupation, education, religion, race, nationality, etc. The analysis of demographics provides information about consumers, which will determine the needs of the market. Such information includes social class structure changes, family life cycle, family composition and age groups. Crompton (1979) notes that it is possible to describe the who, when, where, and how of tourism, together with the social and economic characteristics of tourists. For instance, the travel motivation between men and women is quite different.
Gender differences have also been observed in the behavior of tourists during their holiday experiences. Andreu, Kozac, Avci, & Cifter (2005) found that male tourists preferred more recreation and activity in the destination and female tourists had a stronger relaxation and shopping activities. Furthermore, the rise of income will affect outbound travel in two ways; one is travel for leisure and another one is rise in business activities to stimulate business to invest in foreign markets. According to many researches, elder people and people with low-income do not travel frequently, while middle-aged people and people with high income always travel much farther (Jonsson and Devonish, 2008).
According to Jonsson and Devonish (2008), marketing efforts of hotels should focus on active holidays because they are the highest motivators for tourism. Marketing efforts should be linked with geography because tourists from different locations have different travel motivations and preferences. However, the marketing strategies should be consistent with the diversity of needs and preferences of different tourists from different geographical backgrounds (Jonsson and Devonish, 2008). In China, the main destinations that provide the most tourists are: Hong Kong, Thailand, South Korea, Macau, Singapore, Malaysia, Japan, Vietnam, France, USA, etc. Family owned hotels should focus on their marketing strategies on people from these destinations in order to meet their needs and improve their popularity and income.
Culture is also another motivation for tourism in China. TravelChinaGuide.com suggests that culture is the backbone of tourism in china. The culture and heritage of China with a long history of 5,000 years attracts a lot of tourists who wish to experience and see the Chinese culture. The Beijing Olympics of 2008 is one of the main examples of ways that China displays its rich culture. The Shanghai Expo 2010 also helped in showcasing Chinese culture in Shanghai.
China’s inbound tourists were the least in 2013 since the global financial crisis of 2009/2009, but it still managed to record an income of $51.7 billion from inbound tourism. The travel environment of major cities in China including Shanghai improved significantly in the recent years. For example, various flight networks and trains have been developed in the recent years. They include Shanghai-Hangzhou and Beijing-Shanghai high speed train connections and flight networks. These transport networks have improved the conveniences of travel among various inbound tourists.
Figure 1: China’s Inbound Tourists at its Lowest In 2013
According to China National Tourism Administration, in the first half of 2013, the number of foreign visitors in China was merely 4.94 million. Compared to the number of visitors in the first half of 2012, 2011 and 2010; it has dropped significantly in 2013.
In 2013, China’s outbound tourism market grew rapidly. Its status as world’s largest outbound tourism market and outbound tourism spender has been further consolidated. In the year, 98.19 million Chinese traveled abroad. That’s an increase of 18% compared to the year 2012, with the outbound expenditure reaching $128.7 billion USD, an increase of 26.8% on last year.
Table 5: Top 20 Outbound Destinations by Travel Agencies in 2013
|Destinations||Number of Chinese Mainland Tourists|
There is a wide range of accommodation in Shanghai to choose from, ranging from affordable backpackers’ hostels to luxury hotels and service residences. Although there is no international rating system for hotels, the classification is based on a number of factors that cover two aspects: service and facilities.
- Boutique hotel – Boutique hotel is located in the large commercial circle. It has configuration of a high standard hardware facility and quality hotel services provided by professional staff (Brown, 2003). Boutique hotels are hotel service corporations that are also operated and managed by professional people; they provide convenient and comfortable living to high-level customers. For example: Pudi Boutique Hotel.
- Budget hotel – budget hotels provide small hotel rooms with cheap price, and the service mode is “b&b”. This means rooms and breakfast. For example: motel168.
- 3 star hotels – they have good building structure (at least 30 rooms for rent), a commendable standard furnishing, and basic facilities. For example: Jinjiang hotel.
- 4 star hotels – based on 3 star hotels, provide Internet service, high quality guest elevator, staffs can provide at least 2 foreign language service. For example: Shanghai Park Hotel.
- 5 star hotels – These are hotels which provide exceptional quality with the highest standard of furnishings, flawless service, meticulous guest care and exemplary provision and presentation of all aspects of the business. For example: Shanghai Grand Hyatt Hotel.
In addition to different types of hotels mentioned above, there are also family operated hotels in Shanghai. After China’s entry into the WTO, it opened its market to various multinational corporations. The world famous hotel management groups continue to expand the number of the hotels in Shanghai. As competition increased, the domestic hotel brands were restructured (Miller, 2011). This has led to high competition for family operated hotels; hence they are now facing more enormous challenges in the highly competitive market.
How to attract more travelers to stay in family operated hotels is an important concept just like in other organizations that want to attract more customers amidst increased competition in the international market. How to win in the competitive hotel industry is the major challenge for family operated hotels. Aram and Cowen (1990) suggest that family operated hotels are not small businesses compared to other businesses. Instead, they have different management structures, strategic objectives and priorities.
Some researchers several ways that family operated hotels can overcome the challenge of competition in the hotel industry. One of the strategies is strategic development and planning (Collins et al., 2003). Cooperation and partnership management are also necessary to improve the competitiveness of family operated hotels. Family operated hotel also needs to conceptualize and develop new product services in order to gain competitive advantage in the globalized hotel industry.
Collins et al (2003) suggest that family business training is important for family operated hotels. Training programs are necessary to address various needs of family businesses in terms of management and operations. Scholars suggest that the impact of learning and education in family operated hotels is enhanced when the family system is separated geographically from business system. Professionalism is essential in every business. For a family operated hotel, this can be achieved through comprehensive training.
Because the tourism industry has become more and more prosperous, understanding consumer behavior in hotel marketing is becoming important. Family operated hotel marketing is needed to improve the family operated hotel in the midst of skyrocketing competition in the hotel industry. Marketing helps to improve market competitiveness of family operated hotel, and attracts more tourists from all over the world (Getz et al, 2004). Therefore, family operated hotels should know and use marketing strategies to increase the number of customers and improve their popularity.
Consumer behavior is defined as activities people undertake when obtaining, consuming, and disposing of products and services. Simply stated, consumer behavior has traditionally been thought of as the study of “why people buy” – with the premise that it becomes easier to develop strategies to influence consumers once a marketer knows the reasons people buy specific products or brands (Blackwell et al, 2006).
Consumer behavior is a complex process; it involves many different factors which can be classified into internal factors and external factors (Middleton & Clarke, 2001). Internal factors affect guests while external factors affect the social environment (Olsen et al, 1995). The internal factors include motivation, personality, attitude and perception. External factors include culture, class, group, and enterprise.
- Internal factors affective consumer behaviour
- Motivation – motivation affects guests. It involves the factors that push guests to check in the hotel. Family operated hotel should motivate guests through accommodation, catering and other aspects. This enhances guest satisfaction. The family operated hotels also need to provide different kinds of quality services to guests. For example, the fax service, information service, internet access inside the hotel, etc.
- Personality – Personality refers to certain tendency and relatively stable psychological characteristics of a person. Different customers have different personalities. For example, hotel guests generally have tiresome journey and busy work which makes them to suffer more pressure and workload than others. So the hotels need to provide a “home” feeling to their guests.
- Attitude – A stable psychological predisposition of an individual to anything in social reality (Blackwell et al, 2006). For example, guests develop positive attitudes towards hotels which pay more attention to their needs. They always choose hotels with high quality products and services.
- Perception – Blackwell et al (2006) suggest that perception is the process through which an individual selects, analyses, and interprets information in order to take an action that makes sense. Hotel guests use information about various hotels and form perception on each. They use their past experience, personal characteristics and beliefs to choose their desired hotel (Middleton & Clarke, 2001). Some of the factors that guests consider in choosing a hotel include: location, facilities, quality of hotel services, hotel visibility, the hotel price, and the diversity of hotel entertainment facilities.
- External factors
- Culture – Culture can change people’s ideas because culture teaches people values and preferences that are common to their own culture. These values and preferences affect their behaviour and choices (Miller, 2011). Culture affects the guest hotel consumption habits. The consumer behavior of each country is different because each country has a unique national culture. Even each region has different consumption behavior behaviour because different regions also have different cultures. Shanghai culture leads guests to have different values and preferences that lead them to make different choices concerning hotels.
- Group – Goods or services can be consumed by a group. The values that guide the group will influence the choice of goods or services to be consumed. Two or more guests may work together in order to achieve a common goal through interdependence and interaction. As a result, they will choose hotel services and products that meet the needs of the group and not the needs of an individual.
Service marketing is a sub field of marketing which includes the marketing of both goods and services. Goods marketing include the marketing of fast moving consumer goods (FMCG) and durables. Service marketing typically refers to the marketing of both business to consumer (B2C) and business to business (B2B) services.
A service, according to Vargo and Lusch (2004), is ‘the application of specialized competences (knowledge and skills) through deeds, processes, and performances for the benefit of another entity or the entity itself. Services are offered by one party to another. Rendering a service to recipients, objects, or other assets depends on a time-sensitive performance to bring about the desired result. In exchange for money, time, and effort, service customers expect value from access to goods, labor, professional skills, facilities, networks, and systems.
Organizations that engage in service marketing must consider four special service characteristics: intangibility, inseparability, consistency and perishability. Service intangibility means that service cannot be seen, tasted, felt, heard or smelled before they are purchased. In a hotel, hotel product (service) was should be provided according to the customer’s immediate need (Miller, 2011). For example, when the hotel guests are in the room the waiter should not knock on the door; but when the guests go out and then come back, they will find that the room has been cleaned.
Service inseparability means that service cannot be separated from the service provider, regardless of whether the provider is a human or machine (Jones & Haven-Tang, 2005). If the staff provides the service, then staff will be part of the service. During the service customers are in the field, so the interaction between the provider and the customer has become a major feature of service marketing. The provider and the customer will affect the result of the service.
Service consistency means that the quality of service depends on who provides them as well as when, where and how they are provided (Jones & Haven-Tang, 2005). For example, one hotel is known for providing good service. A front-desk officer is smiling during service and the efficiency is very high; but if several feet away from him there is another officer providing a terrible service with a bad mood, even the same person will provide a different service quality with a different mood.
Service perishability means that services last for a short duration before they are spoilt, and therefore cannot be stored for a future use (Jones & Haven-Tang, 2005). Services and products are produced and consumed within the same period of time. Hotel product or service perishability requires service provision by the hotel to be timely because if the product or service lasts for long, the customer may no longer need it (Stein, 1971). For example, if there is no guest stay in the hotel room, this is a kind of loss. Similarly, if the room equipment has a problem and it is not fixed on time, the final result is that the guest will no longer come to the hotel, and the hotel will lose this guest.
Figure 2: Four-Service Characteristic
According to McCarthy (1964), the four Ps are expanded to the seven Ps. These are: Product, Price, Place, Promotion, People, Process and Physical Evidence. Family hotels need to use these 7Ps in their marketing strategies in order to provide the right services, for the right people, at the right place, for the right purpose, through the right channels. McCarthy (1964) defines each of the 7Ps as follows:
- Product: The bundle of benefits consumers acquire is the basis of their decision-making (Pizam, 2005).
- Price: The cost of a product goes beyond the price tag in the most case.
- Place: Convenient locations for making purchases are essential; in fact it would not be too much to say that the easier marketers make it for consumers to find the products.
- Promotion: It’s not something that is done to consumers, it’s something they consume.
- People: That is not about the money, it’s about the people who run businesses and deal with the public need to understand how other people react in purchasing situations.
- Process: The way services are delivered affects the circumstances in which people buy as well as their propensity to buy (Stein, 1971).
- Physical Evidence: Physical aspects of the service experience often will relate to the pleasure one feels from receiving the service rather than the practical pleasure (Stein, 1971).
Service quality is a comparison of consumer expectations with performance of the service provider. A major contribution to service quality conceptualization and measurement was made by Parasuraman et al. (1988), who proposed that service quality is a five dimensional concept and results from comparing customers’ expectations and perceptions of service performance. Based on these arguments, they developed a model for measuring service quality called SERVQUAL. The SERVQUAL model uses 22 statements to measure both expectations and perceptions. The statements cover five service quality dimensions, namely reliability, responsiveness, tangibles, assurance and empathy. Over the years, this model has become the most widely adapted and tested conceptualization of service quality (Ladhari 2008; 2009).
Figure 3: SERVGUAL Model
From the figure above, it is clear that the SERVQUAL model is composed of five gaps. Gap 1 represents the gap between the perception of management and the expectations of consumers. In this case, the management of the company or business does not perceive what the consumers want correctly. This gap is caused by inadequate marketing research, inability to interpret customer’s expectations, etc.
Gap two is the gap between management perception and specification of service quality. In this case, the management is able to perceive what the customers want but it fails to set correct performance standards (Xiangyu & Jarinto, 2012). This gap may be caused by poor planning procedures, lack of commitment from the management, unsystematic development of new services, and ambiguous services.
The third gap measures the difference between service quality specification and service delivery. This is caused by poorly trained personnel, poor HR policies, improper marketing, and poor training and development.
Gap 4 is the gap between service delivery and external communication. This gap arises when the service providers fail to fulfill the expectations that customers develop from the company’s communication at the time of service delivery. The gap results from overpromising in promotion, lack of achievement of performance specifications, and inability to act according to the needs of the customer.
Lastly, gap 5 refers to the gap between the expected service and the service experienced by the customer.
Hotel and hospitality industries have evolved as technology changes to meet various changes in guest demand and increased competition in the industry. Family-operated hotels need to adopt appropriate technologies in order to manage operations and compete with other hotels in the industry effectively. Technology enables hotels to provide innovative products and services, and enhances effective customer service and product quality. Technology enables family-operated hotels to make operations faster; hence this reduces waiting time by guests and improves the efficiency of service operations.
One of the operations in family-operated hotels that need improved technology is the front-desk. Front-desk staff needs technology to enhance effective customer support. Front desk agents welcome customers, schedule meeting halls, keep keys for various rooms, and take guest payments. They also ensure that guests are comfortable in the hotels. In order to achieve these, front desk staff needs to keep records effectively. Nowadays, paper-based record keeping has evolved to computerized technologies. Smith (2014) suggests that this technological improvement helps hotels to deliver seamless guest experience and maximize their profits.
One of the most important issues in hotel management and operations is to meet the needs of clients. As noted earlier, guests in family-operated hotels are mainly tourists and travelers. These guests usually carry various devices including wireless internet connectivity. In this case, family-operated hotels need to provide wireless internet in order to enable such customers to access the internet easily. Customers will prefer to spend their visits in hotels where they can access the internet to communicate with their family members and friends at home. The internet connection in hotel rooms should therefore be reliable in order to retain customers and enhance their satisfaction so that they can be retained. Smith (2014) suggests that some hotels nowadays provide smartphones and iPads to guests in their rooms so that they can use in their stay. Furthermore, guests also use the company’s web applications to check room services and transportation or shipping options.
Hotels also use technologies to conduct check-in activities. For example, they may use technology to check the availability of rooms, prepare reservations, keep inventory records, capture guest data, and enhance pricing (Kasavana and Cahill, 2003). Technology is also used to integrate client’s billing with in-room entertainment costs, phone accounting, and point of sale purchases (Smith, 2014). Furthermore, technology enables front desk agents to obtain real-time information needed for efficiency and minimization of wait-time.
Technology is also important in enhancing effective marketing in family-operated hotels. For example, hotels use the internet to reach new and existing customers and provide them with information about their products and services (Teare, 1994). Social media is one of the greatest internet platforms for business across the world. With billions of social media users, family-operated hotels can benefit from marketing their products through the social media. Advertisements are also made through internet technologies to increase customers in the company.
Family operated businesses are small, but they still need to have a clear management structure that can enable it to form implement effective business strategies. The purpose of management is to implement strategy by forming a vision, mission and organisational objectives of the business (Uran, 2010). Family-operated businesses can perform better and gain popularity by setting objectives and coming up with strategies to achieve such objectives. This is the work of management. The management can achieve this through coordination of different small departments in the family-operated hotels.
A family operated hotel should have a general manager who is also referred to as Hotelier, and is responsible for the profitability of the company. Under the general manager there are other senior managers in each department such as Front office manager, housekeeping manager, sales and marketing manager, billing/finance manager, maintenance manager, and food and beverage manager (Rutherford, 2002). These department heads report directly to the general manager. Under the department heads there are other junior level managers including supervisors who supervise subordinate staff including cleaners and customer service staff. Accounting, Human Resources and Payroll functions may be handled by the general manager. Other functions such as security can be outsourced from other companies from outside the organisation.
Effective management can also be enhanced through training and development which vary depending on the managerial position and duties of the manager (Uran, 2010). In family-operated hotels, experience is the most important qualification. However, a family should hire a general manager from outside the company who has relevant educational background, e.g. a degree in hospitality management or any business-related degree. If there is a family member with that kind of qualification and some experience, he/she may manage the business as general manager. While it is important for a family-operated business to have members from the family as managers so that they can take the family interests into consideration, appropriate management from experienced managers may be needed from other people if the family members do not have such qualifications.
This study is based on the secondary literature and the study survey results. The study adopts the cause-effect approach in which several causes of failure and low popularity of family-owned business are identified. The study identifies the relationships among product quality, service quality, facilities, management approach, marketing strategy, and external factors including technology. The relationships among these factors will be studied. This study will also study the effects of these factors in terms of overall performance of the organisation; profitability, customer retention and satisfaction, competitiveness and popularity.
The independent variables include: product quality, service quality, facilities, management approach, marketing strategy, and external factors. Dependent factors include: profitability, customer retention and satisfaction, competitiveness and popularity.
According to Baker (2006), hypothesis refers to a testable prediction about the relationship between independent and dependent variables in a study. There two types of hypotheses: Null hypothesis (H0) and alternative hypothesis (H1). A null hypothesis is a general assertion developed when testing the relationship between dependent and independent variables. An alternative hypothesis is the negation of a null hypothesis. In this study, a number of hypotheses will be formulated and tested to determine the relationship between dependent variables and independent variables.
Hypothesis 1: High service quality is associated with high customer satisfaction and retention
H0: improving service quality in family operated hotels leads to increased customer satisfaction and retention.
H1: improving service quality in family operated hotels does not lead to increased customer satisfaction and retention.
Hypothesis 2: Good internal product facility is associated with high customer satisfaction and retention
H0: improving product facility in family operated hotels leads to increased customer satisfaction and retention.
H1: improving internal product facility in family operated hotels does not lead to increased customer satisfaction and retention.
Hypothesis 3: modern strategic management approach should be used in family operated hotels in order to increase competitiveness and profitability.
H0: It is significantly true that the use of modern strategic management approaches in family operated hotels leads to increased competitiveness and profitability of such hotels.
H1: It is not significantly true that the use of modern strategic management approaches in family operated hotels leads to increased competitiveness and profitability of such hotels.
Hypothesis 4: Superior marketing strategies enhance higher popularity and increased competitive advantage among family operated hotels.
H0: It is true that the use of superior marketing strategies in family operated hotels leads to higher competitive advantage and popularity.
H0: It is not true that the use of superior marketing strategies in family operated hotels leads to higher competitive advantage and popularity.
Hypothesis 5: Technology can be used by family operated hotels to improve customer satisfaction and retention.
H0: the use of technology in family operated hotels leads to higher levels of customer satisfaction and retention.
H1: the use of technology in family operated hotels does not lead to higher levels of customer satisfaction and retention.
Research methodology refers to the scientific and systematic ways of collecting information on a given research topic (Bradley, 2010). It involves collecting, organizing analysing and data in order to make deductions and conclusions regarding a specific topic or to provide solution to a specific problem. There are two types of research methodology: qualitative and quantitative research methods. Qualitative research includes the analysis of data in form of words and ideas while quantitative research involves the analysis of data in mathematical form (Bradley, 2010).
This study utilizes qualitative research method which utilizes responses of sample respondents to obtain the information or data needed for analysis. In this case, responses are coded and analysed using statistical approaches such as mean, median and standard deviation. However, this study will mainly be descriptive analysis whereby the results of the survey will be described and analysed in relation to existing theories and models of hotel industry.
Sampling involves the selection of a small section of a population in order to conduct a research study. A sample should reflect the general pattern of the larger population. The sample size depends on the size of the target population while the sampling technique depends on the components and characteristics of the larger population. A sample size is calculated using the formula: n = Z2p(1-p)/e2 whereby n represents the required sample size; z represents the confidence level, which is usually at 95%; p represents probability of occurrence; and e represents margin of error, usually at 5%.
188.8.131.52. Target Population
The target population for this research was owners and managers of family-operated hotels in Shanghai. The total population of family operated hotels in Shanghai is approximately 13,952. The sample size will be determined from this population.
184.108.40.206. Sample size
The sample size for this study was calculated as follows: n = 1.962*0.6(1-0.6)/0.082 = 144.06. Therefore, a total of 145 family operated hotels will be interviewed. This includes 75 guests and 70 managers of the selected family operated hotels. This suggests that the minimum sample size is the preferred of 145 to achieve 95% confidence level at a standard error of 0.08.
220.127.116.11. Sampling Technique
McNeill (1990) suggests that there are three types of sampling techniques: random sampling, systematic sampling, and stratified sampling. Random sampling avoids bias and subjectivity; each member of the total population has an equal chance of being selected. Systematic sampling involves choosing members of a population in a systematic or regular manner. In this case, the population should be regularly distributed in space, e.g. every 3 miles. Stratified sampling is used when the parent population is composed of subsets of predetermined sizes (McNeill, 1990). The subsets reflect different proportions of the total population and the sampling should therefore be stratified in order to produce proportional results that represent the whole population.
The sampling technique for this study was systematic sampling. The sample of guests and managers of family operated hotels interviewed was selected systematically in special context so that the sample may not be concentrated in one area. Each member was selected after every 100 meters from East to West and 200 meters from North to South of Shanghai. This systematic sampling technique resulted in selection of family operated hotels that evenly distributed across Shanghai.
The instrument used in this research is a questionnaire. A questionnaire is a document with sets of interview questions to be answered by the respondents selected for a given research (McNeill, 1990). There are two types of research: open ended questionnaires and closed questionnaires. Open ended questionnaires allow respondents to answer questions in their own way without any restrictions or choice answers (McNeill, 1990). The problem with these types of questions is that it is difficult to code the responses. Closed questionnaires restrict respondents on the choice of answers to provide. This method facilitates easy coding and tabulation of responses.
This study uses closed questionnaires to get answers from respondents. The questionnaire will be provided in five parts; part A to part E. Part A consists of five questions concerning the profile of the respondents. This part was intended to test the influence of demographic factors on the performance of family operated hotels in Shanghai. Part B consists of questions that examine the management style of the organisation. This part is intended to address hypothesis 3 which suggests that modern strategic form of management results in higher performance. Part C consists of questions regarding the capital structure and financial management of the family operated hotels. This part further tests hypothesis 3. The questions in part D address the marketing strategy and product and service quality of the company. This part tests hypotheses one, two and three. Lastly, part E contains questions that examine the external factors which influence the family operated hotels, and it tests hypothesis five.
This research uses primary source of data to get first-hand data from family operated hotels in Shanghai. The primary data was obtained through survey using closed questionnaires. The researcher obtained the responses of both guests and owners of family-operated hotels by visiting the selected family operated hotels. The respondents were required to submit the filled documents immediately when they finished – within the 2 weeks when the researcher was within Shanghai distributing the survey questionnaires. All the targeted respondents responded by sending back the filled questionnaires.
Qualitative analysis will be used to derive findings and conclusions of the research. The data collected from the respondents will be organized, coded and analysed using graphs, tables and charts. Mean, median and other statistical tools will also be used to analyse the coded data. Hypothesis testing will also be used to determine whether the null hypotheses or the alternative hypotheses are correct.
The questionnaires were distributed to 145 owners and managers, and guests of family operated hotels in Shanghai. The demographic characteristics of these respondents were measured by gender, age, education, income, and marital status. The results of the demographic responses are analysed in the table below.
Table 6: Demographic profiles of respondents
|Demographic Profile||Frequency||Percentage||Median group|
|Educational Level||Primary School||17||11.72%|
|Annual Income||Below $10,000||21||14.48%|
From the table above, it is clear that most of the owners and managers of family operated hotels in Shanghai are male (59.31) compared to 40.69% women. Furthermore, most of them are aged between 31 and 60 years of age. This shows that most of the family operated hotels Shanghai are operated by middle aged men. This reflects a maturity age and the head gender – men are the head and key decision makers in families of China. In terms of marital status, most of the owners and managers of family operated hotels in Shanghai are married. This indicates that they are committed to family matters, they have family labour, and they are likely to use income from the business in family expenses. These are both disadvantages and advantages for married people to manage family operated hotels. Most of the respondents were also college graduates (51.72%). However, there is a significant amount of owners who did not join college. In fact, 11.72% only completed primary school and only 20.69% completed degree and postgraduate. This is shown more clearly in the graph below:
Figure 4: Level of Education for managers and owners of family owned businesses in Shanghai
This shows that most of the respondents do not have sufficient educational background to manage hotels.
In terms of income, most family operated hotels earn an income of $100,000-500,000. This shows an average income which is very low compared to other large hotels managed by executives. The income levels are represented below.
Figure 5: Graph showing annual income for family operated hotels in Shanghai
The analysis of service quality in family operated hotels in Shanghai can be carried out by reviewing question 1 of the study.
Question 1: Is it important to improve service quality in family operated hotels in order to meet the needs of guests?
Theoretically, it is assumed that service quality in hotels is paramount to meeting the needs of guests in family operated hotels (King and Cichy, 2006). This needs to be proved by analysing the views of guests visiting family operated hotels in Shanghai. The responses of the selected guests are rated in terms of high, medium, low and not sure. These are given the scores of 4, 3, 2, and 1 respectively.
Table 7: Responses on service quality in family operated hotels
The median score is 2, which represents low service quality. This indicates that most of the interviewed guests consider service quality of family operated hotels in Shanghai to be low. Therefore, it is important to improve service quality in family operated hotels in Shanghai in order to meet guest needs.
Figure 6: pie chart showing responses on level of service quality
The pie chart above shows that those who consider service quality in family operated hotels in Shanghai to be low are very many, as indicated by the large green portion which occupies almost the entire pie chart.
Since service quality is essential in hospitality industry, it is therefore true to say that family-operated hotels need to improve their service quality in order to meet the needs of guests and achieve higher customer satisfaction and greater profitability. According to the SERVQUAL model, gap 5 measures the difference between the expected service and the service experienced by the customer (Parasuraman et al, 1988). In this case, family-operated hotels need to reduce this gap in order to achieve higher customer satisfaction and increase its popularity.
It is assumed from the literature that internal product facilities such as clean rooms, lighting, beds, space, and other facilities are important in satisfying customers and retaining them (Ingram & Ransley, 2004). In this analysis part research question 2 is reviewed and linked with hypotheses 2. They will then be tested and analysed against their respective responses from the questionnaire; which are mainly found in part D of the questionnaire.
The question is: Do family operated hotels in shanghai use appropriate internal product facilities that meet the needs of guests?
The responses of the respondents regarding internal product facilities were categorized into high quality, medium quality, low quality, and not sure. The results were as shown below:
Table 8: summary of responses on quality of internal product facilities
|Score (X)||Level||Frequency (F)||CF||Percentage|
|Median score = 3||Medium|
From the table above, the median score is 3, which means that customers consider the quality of product facilities in family operated hotels to be medium. Most of the respondents said that the quality of product facilities in family operated hotels in Shanghai is low. These results are then summarized as shown in the pie chart below:
Figure 7: pie chart showing responses on level of product facilities
The responses for low and medium represent the largest portions of the pie chart. This clearly indicates that the perception of customers about product facilities of family operated hotels in Shanghai is low. Therefore, family operated hotels in shanghai do not use appropriate internal product facilities that meet the needs of guests. They need to improve on that. Guests require product facilities that enhance their comfort and increase their utility (Smith, 2014). This can be improved by the use of technology in the hotel rooms and front desk.
The hypothesis related to management approach is that modern strategic management approach should be used in family operated hotels in order to increase competitiveness and profitability. From the responses of owners and managers of family operated hotels in Shanghai, we attempt to answer question 3: Is the management approach appropriate in family operated hotels in Shanghai? To answer this question, responses of owners and managers of family operated hotels were grouped into: most appropriate, appropriate, inappropriate, most inappropriate. These were given the scores 4, 3, 2 and 1 respectively. Most appropriate approaches are those that use modern strategic management, appropriate knowledge on management, enough experience and educational background, and effective management structure. Inappropriate management is one which does not have any of the above features and entails involvement of traditional approaches of management which do not respond to change.
Table 9: summary of responses on appropriateness of management approach
From the table above, it is clear that the median score is 2, which shows that the management approaches of family operated hotels in Shanghai are inappropriate. The highest number of respondents (52.41%) suggested that management approaches of family operated hotels in Shanghai are inappropriate. These respondents gave negative answers to most of the questions in Part B of the questionnaire. For instance, 74% of the respondents said that they use informal management structure while 54% suggested that they do not have relevant management skills and knowledge developed from education. Most of the family members operating the businesses also lacked appropriate knowledge and experience of managing a hotel. The pie chart below provides an appropriate visual representation of this finding.
Figure 8: pie chart showing responses on appropriateness of management approaches
It is clear that more than half of the pie chart represents those who considered that the management approach of the family operated hotels in Shanghai to be inappropriate. This indicates that the management approach in family operated hotels in Shanghai is not appropriate. This proves the hypothesis that modern strategic management approach should be used in family operated hotels in order to increase competitiveness and profitability.
It has been noted in the literature review that an appropriate management in family-operated hotels should have a general manager and some department heads who oversee the formulation of organisational objectives and implementing of appropriate strategy to achieve the organizational objectives. Family members should be used as managers and members of staff if they have appropriate experience and educational qualifications, otherwise other people may be hired to manage the hotel.
The hypothesis related to this item suggests that superior marketing strategies enhance higher popularity and increased competitive advantage among family operated hotels. The appropriate question that the research attempts to answer in order to prove the above hypothesis is question 4: do family operated hotels in Shanghai use appropriate marketing strategies to gain competitive advantage and improve their popularity? This research question can be answered using the answers given by respondents regarding the marketing strategies of family operated hotels in Shanghai. The marketing strategies of family operated hotels in Shanghai are rated as very good, good, poor, and very poor.
Table 10: summary of responses on marketing strategies of family operated hotels
From the table above, it is clear that the mean score is 2, which indicates that the respondents consider the marketing strategies of family operated hotels in China to be poor. Majority of the respondents (36.55%) view the marketing of such hotels as poor. The smallest percentage of the respondents (15.17%) suggests that the family owned hotels in Shanghai use very good marketing strategies. The pie chart below represents this finding more clearly.
Figure 9: Pie chart showing responses on management strategies
The pie chart indicates that the red and the green portions of the circle, which represent “Good” and “poor” respectively are almost the same size and occupy the largest part of the circle. However, it is clear that the marketing strategies of family operated hotels in Shanghai are poor as indicated by the results from the survey. This answers research question 4 – family operated hotels in Shanghai do not use appropriate marketing strategies to gain competitive advantage and improve their popularity. Therefore, this proves the hypothesis that superior marketing strategies enhance higher popularity and increased competitive advantage among family operated hotels.
Hypothesis 5 suggests that technology can be used by family operated hotels to improve customer satisfaction and retention. This can be proved by analysing the responses of interviewees on the influence of external factors on the performance of family operated hotels in Shanghai. This analysis also seeks to answer question 5: Is it important to use more technology in family operated hotels in Shanghai? Most of the respondents suggest that most family operated hotels either use outdated technologies or use no technology at all. The level of technology used in family operated hotels in shanghai is measured as very high, high, low or very low for analysis purpose in this study.
Table 11: summary of responses on levels of technology in family operated hotels
The median score is 2 (very low). His indicates that the level of technology used by family operated hotels in Shanghai is very low. A very high percentage of the respondents (44.14%) support this argument. A clear representation of this finding can be represented by a pie chart.
Figure 10: Pie chart showing levels of technology in family operated hotels
The green part of the circle which represents the percentage of respondents who consider technology in family operated hotels in Shanghai to be low is the largest part of the entire circle. This gives a clear indication that the level of technology used in family operated hotels is low; hence technology has not been used appropriately in family operated hotels in Shanghai to improve customer satisfaction and retention.
Since the current performance of family operated hotels in Shanghai is low as indicated by the annual income of the selected sample, it is important to use more technology in family operated hotels in Shanghai in order to improve customer satisfaction and retention; which in turn improves sales revenue and profitability. Smith (2014) suggests that appropriate technology enhances the minimization of wait-time and improvement of profitability. This is possible because technology ensures that the family-operated hotel meets customer needs.
The aim of this research was to find out the reasons why the popularity and occupancy rates of family operated hotels in Shanghai China are still low despite being located in good place, and to determine how family-operated hotels may respond to the needs of global guests in order to improve their marketing. In order to achieve this, the study sought to answer the following questions: Is it important to improve service quality in family operated hotels in order to meet the needs of guests? Do family operated hotels in shanghai use appropriate internal product facilities that meet the needs of guests? Is the management approach appropriate in family operated hotels in Shanghai? Do family operated hotels in Shanghai use appropriate marketing strategies to gain competitive advantage and improve their popularity? Is it important to use more technology in family operated hotels in Shanghai? The study carried out a survey of 145 managers and owners of family operated businesses and their customers in Shanghai. Forty questions were asked and their answers were recorded and analysed.
From the analysis of this study, there were various findings regarding to the research questions. First, it was found out that service quality in family operated hotels in Shanghai is low. This is one of the reasons why the popularity and occupancy rates of family operated hotels in Shanghai are still low compared to other big hotels. This supports the theory that service quality is paramount to meeting the needs of guests in family operated hotels; because when the needs of guests are met, many of them will come to the business and refer it to others; hence making it more popular.
Secondly, the research found out that family operated hotels in shanghai do not use appropriate internal product facilities that meet the needs of guests. The perception of customers about product facilities of family operated hotels in Shanghai is low. Therefore, it is true to say that internal product facilities in family operated hotels such as clean rooms, lighting, beds, space, and other facilities are important in satisfying customers and retaining them.
Thirdly, the management approaches of family operated hotels in China are inappropriate. Therefore, this supports the hypothesis that modern strategic management approach should be used in family operated hotels in order to increase competitiveness and profitability.
Fourthly, it was established that family operated hotels in Shanghai do not use appropriate marketing strategies to gain competitive advantage and improve their popularity. Therefore, low occupancy rates and popularity of family operated hotels in Shanghai is also caused by lack of appropriate marketing strategies. This supports the hypothesis that superior marketing strategies enhance higher popularity and increased competitive advantage among family operated hotels in Shanghai, China.
Lastly, it is clear from the survey that the level of technology used in family operated hotels is low. This shows that technology has not been used appropriately in family operated hotels in Shanghai to improve customer satisfaction and retention. Therefore, it is important to use more technology in family operated hotels in Shanghai in order to improve customer satisfaction and retention; which in turn improves sales revenue and profitability.
Generally, Family operated hotels in shanghai need to improve their service quality, product quality, management approach, marketing strategies and level of technologies in order to increase their popularity and occupancy rates.
From the survey results, this study suggests several recommendations that family operated hotels in Shanghai should implement in order to improve their popularity and occupancy rates. First, family operated hotels need to form marketing departments and develop appropriate marketing strategies focused on active holidays because they the highest motivators of tourism in Shanghai (Songshan et al, 2010). The hotels should develop attractive advertisement messages and display them using bill boards, media, and shows and exhibitions attended by tourists. They also need to offer competitive prices and good quality products and services as a way of attracting customers. Another marketing strategy is social media marketing. Family operated hotels should use social media such as Facebook, Twitter, Instagram, YouTube and Skype to advertise their businesses; targeting groups and accounts of tourists.
The family operated businesses also need to develop training programs on management in order to allow their managers to run modern strategic management and operations. These programs should provide training on how to develop appropriate strategic objectives and how to implement them. Managers and owners of family operated hotels in Shanghai should also be trained on how to manage people and how to respond to consumer demand through service delivery.
Family operated hotels should also improve their product facilities such as clean rooms, lighting, beds, and space. The staff should maintain, repair and clean the facilities of the hotel regularly so that they remain in good condition all the time. The gardens should also be landscaped and cleaned regularly to give guests a good feeling of nature and comfort ability. Rooms should also be decorated to the standards of the guests and fitted with air conditioners to make the guests comfortable all the time.
Future research could include other aspects of increasing customer satisfaction and retention that have not been included in this study; such as considering different cultures of guests, their nationality and other aspects. Other researches may also study other external factors because the current study only considered competition and technology. There are other external factors that may affect the popularity and occupancy rates of family operated hotels in Shanghai. Such factors include government policies, purchasing power of consumers, socio-cultural attitudes and beliefs, and political stability.
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Summary of Responses: Part A
|R1||Yes||Spouse||More than 3||Formal||Yes||No||Yes||No|
|R5||No||Nanny||More than 3||Informal||No||No||No||Yes|
|R9||Yes||Spouse||More than 3||Informal||No||Yes||Yes||Yes|
|R17||Yes||Nanny||More than 3||Informal||Yes||Yes||No||Yes|
|R20||No||Child||More than 3||Informal||Yes||Yes||No||Yes|
|R32||No||Spouse||More than 3||Formal||No||No||No||No|
|R37||No||Spouse||More than 3||Informal||No||No||No||No|
|R41`||Yes||Child||More than 3||Informal||Yes||No||Yes||Yes|
|R49||Yes||Child||More than 3||Informal||Yes||No||Yes||No|
|R60||Yes||Child||More than 3||Formal||No||Yes||Yes||Yes|
|R67||No||Sibling||More than 3||Informal||Yes||Yes||No||Yes|
|R70||Yes||Spouse||More than 3||Informal||Yes||Yes||No||Yes|
|R82||No||Child||More than 3||Formal||Yes||Yes||No||No|
|R88||No||Child||More than 3||Formal||Yes||Yes||No||Yes|
|R91||No||Nanny||More than 3||Informal||Yes||Yes||Yes||No|
|R95||Yes||Spouse||More than 3||Informal||No||No||Yes||Yes|
|R101||No||Spouse||More than 3||Formal||No||Yes||No||No|
|R109||Yes||Child||More than 3||Formal||Yes||Yes||No||No|
|R112||No||Spouse||More than 3||Informal||Yes||Yes||Yes||No|
|R124||No||Spouse||More than 3||Formal||Yes||Yes||Yes||No|
|R129||Yes||Sibling||More than 3||Informal||Yes||Yes||No||Yes|
|R133||No||Spouse||More than 3||Informal||No||Yes||No||Yes|
|R141||No||Spouse||More than 3||Informal||No||Yes||No||Yes|
|R1||Family contributions||Below $100,000||Below $10,000||No||No||Yes||No|
|R3||Family contributions||$500,001-$1,000,000||Above $1,000,000||Yes||No||No||No|
|R4||Other||Above $1,000,000||Below $10,000||No||No||No||Yes|
|R7||Loan||Above $1,000,000||Below $10,000||Yes||Yes||Yes||Yes|
|R11||Personal Savings||$100,001-$500,000||Below $10,000||No||No||No||No|
|R14||Family contributions||Above $1,000,000||Below $10,000||No||No||No||No|
|R17||Personal Savings||Below $100,000||$1001-$2000||No||Yes||Yes||Yes|
|R20||Family contributions||Above $1,000,000||Above $1,000,000||Yes||Yes||Yes||Yes|
|R21||Family contributions||$100,001-$500,000||Below $10,000||No||Yes||No||Yes|
|R23||Personal Savings||Below $100,000||$1001-$2000||No||No||Yes||No|
|R26||Family contributions||Above $1,000,000||Below $10,000||No||No||Yes||No|
|R27||Personal Savings||$100,001-$500,000||Below $10,000||No||No||Yes||No|
|R29||Personal Savings||Below $100,000||Below $10,000||No||Yes||No||Yes|
|R32||Family contributions||Above $1,000,000||$1001-$2000||Yes||Yes||No||No|
|R34||Personal Savings||$500,001-$1,000,000||Below $10,000||No||Yes||Yes||Yes|
|R38||Personal Savings||Below $100,000||Below $10,000||Yes||Yes||Yes||No|
|R41`||Family contributions||Above $1,000,000||Below $10,000||No||No||Yes||No|
|R42||Personal Savings||$100,001-$500,000||Below $10,000||Yes||Yes||No||Yes|
|R44||Personal Savings||Below $100,000||Above $1,000,000||No||No||Yes||Yes|
|R47||Family contributions||$100,001-$500,000||Below $10,000||Yes||Yes||Yes||Yes|
|R48||Personal Savings||$500,001-$1,000,000||Below $10,000||No||No||No||No|
|R52||Loan||Above $1,000,000||Below $10,000||No||No||Yes||Yes|
|R53||Family contributions||$100,001-$500,000||Below $10,000||Yes||Yes||No||No|
|R55||Other||Above $1,000,000||Below $10,000||No||No||No||No|
|R62||Personal Savings||Above $1,000,000||Below $10,000||No||No||No||Yes|
|R65||Family contributions||Below $100,000||$500,000-$1,000,000||No||Yes||No||Yes|
|R67||Personal Savings||$500,001-$1,000,000||Below $10,000||No||No||Yes||Yes|
|R68||Family contributions||Above $1,000,000||Below $10,000||Yes||No||No||Yes|
|R71||Personal Savings||Below $100,000||$500,000-$1,000,000||No||No||No||No|
|R74||Family contributions||Above $1,000,000||Below $10,000||Yes||Yes||No||Yes|
|R75||Personal Savings||Above $1,000,000||$1001-$2000||Yes||Yes||No||No|
|R78||Loan||Above $1,000,000||Above $1,000,000||Yes||No||No||No|
|R82||Personal Savings||$100,001-$500,000||Above $1,000,000||Yes||Yes||Yes||Yes|
|R86||Family contributions||Above $1,000,000||$1001-$2000||No||Yes||Yes||Yes|
|R89||Personal Savings||Below $100,000||Below $10,000||No||No||Yes||Yes|
|R92||Personal Savings||Above $1,000,000||Below $10,000||No||Yes||Yes||No|
|R94||Personal Savings||$500,001-$1,000,000||Above $1,000,000||No||No||No||No|
|R97||Family contributions||$500,001-$1,000,000||Below $10,000||Yes||Yes||Yes||Yes|
|R98||Personal Savings||Above $1,000,000||$1001-$2000||No||No||No||Yes|
|R99||Other||Above $1,000,000||Below $10,000||Yes||No||Yes||No|
|R103||Family contributions||$100,001-$500,000||Below $10,000||Yes||Yes||No||Yes|
|R104||Personal Savings||$500,001-$1,000,000||Below $10,000||Yes||Yes||Yes||Yes|
|R106||Personal Savings||$100,001-$500,000||Below $10,000||No||No||No||Yes|
|R109||Family contributions||$100,001-$500,000||Above $1,000,000||No||No||Yes||Yes|
|R110||Family contributions||$500,001-$1,000,000||Below $10,000||Yes||Yes||No||Yes|
|R112||Personal Savings||$100,001-$500,000||Below $10,000||No||No||Yes||Yes|
|R117||Other||Above $1,000,000||Below $10,000||No||No||Yes||Yes|
|R118||Personal Savings||$100,001-$500,000||Below $10,000||Yes||No||No||No|
|R120||Loan||Below $100,000||Below $10,000||No||Yes||Yes||No|
|R122||Family contributions||Above $1,000,000||Above $1,000,000||Yes||No||Yes||Yes|
|R125||Personal Savings||Below $100,000||$100,000-$500,000||Yes||No||No||No|
|R127||Personal Savings||$500,001-$1,000,000||Below $10,000||Yes||Yes||Yes||Yes|
|R128||Loan||Above $1,000,000||Below $10,000||No||No||No||No|
|R130||Family contributions||Above $1,000,000||$500,000-$1,000,000||No||Yes||No||No|
|R132||Family contributions||$500,001-$1,000,000||Below $10,000||Yes||Yes||No||No|
|R133||Personal Savings||Above $1,000,000||Below $10,000||No||Yes||No||Yes|
|R135||Personal Savings||$500,001-$1,000,000||Below $10,000||Yes||Yes||No||No|
|R139||Family contributions||Above $1,000,000||Above $1,000,000||Yes||No||Yes||No|
|R142||Personal Savings||Below $100,000||$100,000-$500,000||Yes||No||No||No|
|R144||Personal Savings||Above $1,000,000||Below $10,000||Yes||Yes||No||Yes|
This Questionnaire is conducted on family owned hotels in Shanghai, China. The respondents are family-owned hotel managers and customers aged between 23 and 75 years. The questions are asked in order to examine why popularity and occupancy rates of family-owned hotels are low, and how the marketing of family operated hotels can be improved in Shanghai. The respondent is required to tick where appropriate. Eighty copies of his questionnaire are sent by mail to identified sample of family owned businesses and should be filled and returned by mail within the next two months.
Part A: This section requires the profile of the respondent.
A1. What is your gender?
A2. What is your age?
23-30 31-40 41-50 51-60 61-70 above 70
A3. What is your marital status?
Single Married Divorced Separated Others (specify)
A4. What educational level have you attained?
Primary School High school College Bachelor’s Degree
A5. What are the annual returns of your business?
Below $10,00 0 $$10,000-$100,000
$100,000-$500,000 $500,000-$1,000,000 Above $1,000,000
This section deals with the management style of the hotel.
B1. In your family operated business, do you use modern strategic mode of management family management?
B2. Who helps you in the family to manage the business?
Spouse Child Sibling Nanny Others (specify)
B3. How many members of the family are involved in the business?
One Two Three More than three
B4. What is the management structure of the hotel?
B5. Do you think this management structure is effective?
B6. Do you have any hotel management skills or knowledge developed through education?
B7. Have you worked as a manager in another hotel before starting your family owned hotel?
B8. Is there any member of your family management team with knowledge and experience of hotel management?
Part C: this section deals with the capital structure and financial management of the hotel
C1. What was the source of your capital?
Family contributions Personal Savings Loan Other sources (Specify)
C2. What was your initial capital?
Below $100,000 $100,001-$500,000 $500,001-$1,000,000
Above $1,000,000 (specify)
C3. What are the annual returns of your business?
Below $10,00 0 $1001-$2000 $10,000-$100,000
$100,000-$500,000 $500,000-$1,000,000 Above $1,000,000 (specify)
C4. What are the costs of your business?
Below $10,000 $1001-$2000 $10,000-$100,000
$100,000-$500,000 $500,000-$1,000,000 Above $1,000,000 (specify)
C5. Do you have an accounting department?
C6. Do you keep accounting records with income statements and balance sheet every year?
C7. Do you engage Employees in financial management?
C8. Do you have workable financial plan and budgets?
Part D: this section deals with the marketing strategy, product and service quality of the organisation
D1. Who are your target customers?
Tourists Locals Low income earners Middle Income Earners High Income Earners Others (specify)
D2. What products and/or do you offer in family operated hotels?
Snacks Drinks Traditional cuisine Travels and tours
Accommodation Casino Cinema Others (specify)
D3. What is the quality of products in family operated businesses in Shanghai?
High Medium Low Not sure
D4. Are your products unique from those offered in other hotels?
D5. Does your staff have the knowledge and skills to deliver quality services?
D6. What is your distribution channel?
Agents Direct selling sales representatives Others (specify)
D7. What are your promotional tools?
Publicity Advertising Billboards and bulletins Shows and exhibitions None Others (specify)
D8. What is the capacity of your hotel per meal?
Less than 10 11-20 21-30 31-40 41-50 More than 50
D9. How often do you experience long queues?
Very often Often Rarely Very Rarely
D10. What are the levels of prices in your hotel compared to competitors?
Very High High Low Very Low
D11. How many days do you operate per week?
7 5 other (specify)
D12. What are the operating hours per day?
8:00 Am – 5:00 Pm 8:00 Am – 4:00 Pm 8:00 Am – 6:00 Pm
8:00 Am – 11:00 Pm 6:00 Am – 6:00 Pm Other (specify)
D13. What dining environment do you provide for your customers?
Clean Dirty Comfortable Uncomfortable Other (specify)
D14. Do you conduct performance appraisal for employees?
D15. Do you conduct customer survey to determine their level of satisfaction?
Part E: This section asks about external factors affecting the hotel
E1. Do you use technology in your family operated hotel?
E2. If yes, how does technology affect your hotel business?
Increasing sales Improving product and service quality Improving customer satisfaction and retention increasing competitive advantage
E3. Does competition affect your business?
E4. If yes, how does competition affect your business?
Decreasing sales Reducing customers Decreasing Profits