Harvard Case - Sustainable Tourism: Heritance Kandalama Resort of Sri Lanka
"Sustainable Tourism: Heritance Kandalama Resort of Sri Lanka" Harvard business case study is written by Beng Geok Wee, Ivy Buche. It deals with the challenges in the field of Service Management. The case study is 11 page(s) long and it was first published on : Oct 23, 2008
At Fern Fort University, we recommend Heritance Kandalama Resort implement a multi-pronged strategy focused on enhancing service quality, leveraging service innovation, and strengthening brand positioning to further solidify its competitive advantage in the sustainable tourism market. This strategy will involve a combination of service design, employee empowerment, and customer experience management initiatives, all underpinned by the resort's commitment to diversity and inclusion.
2. Background
Heritance Kandalama Resort, a luxury hotel in Sri Lanka, is renowned for its eco-friendly design and commitment to sustainable practices. The resort faces challenges in maintaining its competitive edge amidst growing competition and evolving customer expectations. The case study highlights the need for the resort to address issues like service quality inconsistencies, employee motivation, and a lack of clear brand differentiation.
The main protagonists of the case study are the resort's management team, led by the General Manager, who are tasked with developing strategies to improve the resort's performance and maintain its position as a leader in sustainable tourism.
3. Analysis of the Case Study
To analyze the case, we will utilize the SERVQUAL model to assess service quality gaps, the Service Profit Chain to understand the link between employee satisfaction and customer loyalty, and the Service-Dominant Logic framework to highlight the importance of co-creation in delivering value to guests.
SERVQUAL Model: The SERVQUAL model identifies five dimensions of service quality: tangibles, reliability, responsiveness, assurance, and empathy. The case study reveals potential gaps in reliability, responsiveness, and empathy, particularly in areas like guest service and staff attentiveness.
Service Profit Chain: This model emphasizes the connection between employee satisfaction, customer loyalty, and profitability. The case study indicates a need to improve employee morale and motivation, which directly impacts service quality and ultimately customer satisfaction.
Service-Dominant Logic: This framework emphasizes the importance of co-creation in service delivery. The resort can leverage this by actively engaging guests in their experience, offering personalized services, and fostering a sense of community through interactive activities and cultural experiences.
4. Recommendations
1. Enhance Service Quality through Service Design and Employee Empowerment:
- Service Design: Conduct a comprehensive service blueprint to identify key moments of truth and areas for improvement in the guest journey. This will involve mapping out the entire guest experience, from arrival to departure, and identifying touchpoints where service quality can be enhanced.
- Service System Design: Implement a new service delivery system that emphasizes service standardization while allowing for customization based on individual guest preferences. This can be achieved through training programs that focus on service scripting and emotional labor in service, ensuring consistent service delivery across all touchpoints.
- Employee Empowerment: Implement a service employee empowerment program that encourages staff to take ownership of guest satisfaction. This can involve providing employees with the authority and resources to address guest concerns and proactively offer solutions.
- Employee Incentives: Develop a robust employee performance management system that includes clear performance metrics and incentivizes employees for delivering exceptional service. This can include financial rewards, recognition programs, and opportunities for professional development.
2. Leverage Service Innovation to Enhance Customer Experience:
- Service Innovation: Introduce innovative services that cater to the evolving needs of the sustainable tourism market. This can include personalized wellness programs, immersive cultural experiences, and technology-enabled services like virtual tours and online booking platforms.
- Customer Journey Mapping: Conduct customer journey mapping exercises to identify areas for improvement and opportunities for service innovation. This will help the resort understand the guest experience from their perspective and identify pain points that can be addressed through innovative solutions.
- Technology-Enabled Services: Implement self-service technologies like online check-in, mobile ordering, and digital concierge services to enhance guest convenience and efficiency.
3. Strengthen Brand Positioning through Service Marketing and Customer Relationship Management:
- Service Marketing Mix: Develop a comprehensive service marketing mix that leverages the resort's unique selling proposition (USP) of sustainable practices and luxury experiences. This can include targeted marketing campaigns, social media engagement, and partnerships with travel agencies and tour operators.
- Customer Relationship Management (CRM): Implement a robust CRM system to collect and analyze customer data, enabling the resort to personalize communication, tailor services, and build long-term customer relationships.
- Customer Loyalty Programs: Introduce a customer loyalty program that rewards repeat guests and incentivizes them to return. This can include exclusive offers, early check-in privileges, and personalized experiences.
- Service Brand Management: Develop a strong service brand management strategy that reinforces the resort's commitment to sustainability and luxury. This can involve creating a distinct brand identity, developing a strong brand voice, and ensuring consistent brand messaging across all touchpoints.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core competencies and consistency with mission: The recommendations align with the resort's commitment to sustainable tourism and its mission to provide exceptional guest experiences.
- External customers and internal clients: The recommendations address the needs and expectations of both external customers (guests) and internal clients (employees).
- Competitors: The recommendations aim to differentiate the resort from its competitors by focusing on service quality, innovation, and brand positioning.
- Attractiveness ' quantitative measures if applicable: The recommendations are expected to lead to increased customer satisfaction, loyalty, and ultimately profitability.
6. Conclusion
By implementing these recommendations, Heritance Kandalama Resort can enhance its service quality, leverage service innovation, and strengthen its brand positioning, solidifying its competitive advantage in the sustainable tourism market. This will enable the resort to attract and retain discerning guests, build strong customer relationships, and achieve sustainable growth.
7. Discussion
Other alternatives not selected include:
- Service outsourcing: While outsourcing certain services could be cost-effective, it may compromise the resort's brand identity and service quality.
- Service guarantees: While service guarantees can enhance customer confidence, they may also lead to increased operational costs and potentially create unrealistic expectations.
Key assumptions of these recommendations include:
- Guest demand for sustainable tourism will continue to grow.
- The resort has the resources and commitment to implement the recommendations.
- Employees are willing to embrace new service standards and technologies.
8. Next Steps
The implementation of these recommendations should follow a phased approach:
- Phase 1 (3 months): Conduct a comprehensive service audit, develop a service blueprint, and implement employee training programs.
- Phase 2 (6 months): Introduce new service innovations, launch a customer loyalty program, and implement a CRM system.
- Phase 3 (12 months): Evaluate the effectiveness of the implemented strategies, make necessary adjustments, and continue to monitor and improve service quality and customer satisfaction.
By following these next steps, Heritance Kandalama Resort can successfully implement its strategy for sustainable growth and maintain its position as a leader in the sustainable tourism market.
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Case Description
In 1992, when Aitken Spence Hotel Holdings PLC (ASHH) of Sri Lanka announced its intentions to build a tourist resort in a region with several ancient archeological sites and rich in natural biodiversity, the local communities as well as environmentalists were apprehensive about the negative impacts of the development on the region. In response, the resort developers embarked on sustained and ongoing environmental, social and community development programmes to preserve the physical environment, benefiting the surrounding communities and involving local residents in the operations of the resort. The resort, Heritance Kandalama, went on to receive many international awards for environment management and social and community development. It was the first Asian hotel to receive Green Globe 21 certification in 1999. The resort also raised the profile of its parent company, ASHH, as one of the pioneers of sustainable tourism in Asia. This case examines (a) the environment management and social and community development strategies/programmes at Heritance Kandalama, (b) the emergence of an organisational culture anchored on sustainable development, and (c) HR practices that supported the implementation of sustainable tourism practices.
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