Chapter 4. Results and Analysis
4.6. An Exploratory Model for Strategy before Covid-19 based on PCA results
χ² = 518.486, df = 244, p-value = 0.000; RMSEA = 0.078; CFI=0.853; TLI=0.820; PCFI= 0.694.
p < .001 for all observed variables coefficients All variables can be consulted at Table 4.27 below
Figure 4.15. Measurement Model
R² 0.70 0.87 0.77 0.70
0.82 0.97 0.97 0.63 0.92 0.84 0.84
0.84 0.92 0.60 0.56
0.68 0.61 0.70 0.72
0.50 0.73 0.96 0.84 0.84
Q6.1 0.30
0.13 0.23 0.30
0.18 0.03 0.03 0.37 0.08 0.16 0.16
0.16 0.08 0.40 0.44
0.32 0.39 0.30 0.28
0.50 0.27 0.04 0.16 0.16 MARKET
Importance
Q6.2 0.88
Q6.3 0.84
0.56
Q6.4
PEOPLE Q13.1
0.57
Q13.2 0.90
1.Asian Cultural Training
0.98
0.67 0.99 Q13.3
2.Front-Office Competences
Q11.4 0.79
0.69 0.42
Q11.5 0.96
Q11.6 0.92
0.53
Q13.5 0.67
3.Continuous Improvement 0.66
Q13.6 0.92
0.70
Q13.7 0.96
0.86
Q10.2 0.79
PROCEDURES
Q10.4 0.77
PP1 General
0.75 0.48
Q10.5 0.82
0.66
Q10.6 0.78
0.84 0.73
Q10.7 0.85
0.73
Q10.8 PP2
Customer Q10.1
0.85 Q13.4
Q14.1 FINANCE
Profitability
Q14.2 0.98
0.92
Q14.3 0.92
0.93 0.84
0.92
0.71
An exploratory study of Portuguese luxury hotel management strategy
134 Table 4.27: Latent Dimensions and Observed Variables of the Measurement Model
Market Importance
Q6.1. Asian Market was important to Portugal
Q6.2. Asian Market was important to Luxury Hotels operating in Portugal Q6.3. Chinese Market was important to Luxury Hotels operating in Portugal Q6.4. Japanese Market was important to Luxury Hotels operating in Portugal People1: Asian Cultural Training
Q13.1. Staff should be trained in Asiatic Culture Q13.2 Staff should be trained in Chinese Culture Q13.3 Staff should be trained in Japanese Culture People2: Front-Office Competences
Q11.4 Staff have information to advise customers concerning restaurants, shops, and transport nearby Q11.5 Staff have proactive reaction to solve problematic situations
Q11.6 Staff have a happy and sincere smile People3: Continuous Improvement
Q13.5 Should have a continuous improvement policy Q13.6 Staff should be able to propose improvements Q13.7 Should have a continuous improvement department PP1: General Procedures
Q10.2 Breakfast should include vegetables and Asian food Q10.4 All luxury hotels rooms should have a kettle in the room
Q10.5 Courtesy gifts and amenities (water, slippers) are important to Chinese and Japanese customers Q10.6 Verify before check-in whether room equipment is working well
Q10.7 Emergency Direct Line
Q10.8 Clear instruction on how to work with room equipment at check-in PP2: Procedures / Customer
Q10.1 Standard procedures regardless of customers’ country of origin Q13.4 Training Standard in Front-Office Attendance regardless of customers ‘country of origin Finance: Profitability
Q14.1 Asian Market was profitable Q14.2 Chinese Market was profitable Q14.3 Japanese Market was profitable
4.6.2. Structural Equation Modelling (SEM)
The theoretical model comprises seven latent variables, namely Market (Importance), People1(Asian Training), People2 (Front Office Competences), People3 (Continuous Improvement), PP1 (General Procedures), PP2 (Procedures/Customer) and Finance (Profitability). Strategy is assumed as a dependent variable and all the others are assumed as independent variables. Figure 4.16. presents the theoretical model and the seven proposed hypotheses to be tested, which are represented by the cause-effect relationships.
χ² = 605.995, df = 284, p-value = 0.000; RMSEA = 0.078; CFI=0.840; TLI=0.803; PCFI=0.680
**p < .05, *p < .10
Figure 4.16: Model Estimation using Structural Equation Modelling (SEM) MARKET
Importance
PEOPLE
0.149 1.Asian
Cultural Training
0.147
2.Front-Office Competence
s 0.514*
3.Continuous
Improvement -0.974** STRATEGY
PROCEDURES
0.359 PP1
General -0.165
PP2
Customer 0.707**
FINANCE Profitability
An exploratory study of Portuguese luxury hotel management strategy
136 Strategy can be explained by the latent variables: Finance, People2 and People3, these results are shown in Fig. 4.16. Confirming the interviews and questionnaires results concerning strategy as Table 4.28.
Table 4.28: Impact of Strategic Dimensions (Independent Variables) on Hotels Strategy before COVID19 (Dependent Variable)
Components Interviews and Questionnaire
(Strategy Before Covid-19) Market
(Importance)
Asian, Chinese and Japanese Markets are considered important; however, Hotels Management are depending on Portuguese Tourism Office (TP) initiatives to approach the Asian Markets. The Japanese Market is not a priority to TP.
No long-term strategy in place. To Hotels Management, Markets closer to Portugal in distance and culturally are easier and quicker to conquest. There is no significant effect on the strategy before COVID19.
Asian Cultural Training
Asian cultural Training is considered important, however no Asian Cultural Training Plan was part of the hotels ‘strategy before covid-19. There is no significant effect on the strategy before COVIDcovid-19.
Front-Office Competences*
Front-office with a happy and sincere smile, prepared to advise customers about restaurants, shops and transports and solve problematic problems are generally appreciated, also appreciated by the Asian Customers. So, it was included in hotels strategy, even if not taking in consideration customer country of origin. There is a significant and moderate positive effect on the strategy before COVID19.
Continuous Improvement**
Hotels Management consider continuous improvement very important, but all actions are dedicated taking in consideration the western culture or similar. So, the improvements are creating a larger gap with the culture of Asian customers. This variable has a strong but negative proportional effect on the strategy to retain and attract Asian customers.
General Procedures
There are in place general standard procedures (many Japanese negative booking.com comments related to these procedures). Resulting on a non-significant effect in the dependent variable strategy.
Procedures Customer
There are in place standard procedures regardless customer country of origin. These procedures mainly take in consideration Western culture or similar. There is no significant effect on the strategy before COVID19.
Finance Profitability**
Hotels Management take in consideration Profitability to decide investing in a market or not. As much as a market is seen as profitable, as much will be the focus of investment. The Asian Market was seen as profitable. There is a significant strong positive effect on the strategy before COVID19.
Significant: **p < .05, *p < .10
137 In summary, the hotels management (before covid-19) do not have a long-term strategy to retain and attract Asian Customers (Japanese and Chinese). The component Finance-Profitability had impact in the strategy decision however, Asian Markets imply long-term investment return. The components People2 (Front-Office Competences) have positive impact in the Strategy and People3 (Continuous Improvement), as much Hotels management improve only taking in consideration the western culture or similar, bigger will be the gap to the Asian customers preferences and service expectations. To retain and conquest Japanese customers is very important to delight them through an outstanding service. Travel decisions are made collectively and taking in consideration friends and family experiences shared through “word to mouth”. So, understanding the Japanese customers and align the hotels attributes with their expectations would be a not expensive way of retaining and attracting Japanese tourists, well known for being respectful and big tourist spenders but, of course it is a long-term strategy aligned with the Japanese management and philosophy of life: Think big, start small.