Sustainable competitive advantage and business are critical to long-term viability in the hospitality industry in India, according to a study published in the International Journal of Business Excellence. The study focused on the National Capital Region but could equally apply more widely. Such insight is important to those working in the sector, given its highly competitive nature and ever-changing consumer preferences.
Deepali Anand and Alka Munjal of Amity University in Noida, India looked at the sector regarding hotels given star ratings in the region. They investigated how hoteliers boost their competitive advantage through cost leadership and differentiation. Cost leadership involves minimizing production and distribution costs while still offering a high-quality service to hotel guests. This is typically done through measures such as economies of scale and improved technology that can improve efficiency. On the other hand, differentiation focuses on giving customers a unique “offering” or “value proposition” that improves brand loyalty and the chances of a customer using the hotel repeatedly or sticking with a given of hotels if visiting other areas.
The hospitality industry, by its very nature, is obviously service-oriented. Aspiring to excellence at whatever star-rating a given hotel has, is critical to its long-term success. This involves excellent customer relations, organizational growth, employee satisfaction, and the quality of what the hotel offers its guests. However, demands of the modern traveller are constantly changing, albeit the basic need remains the same – a room with a bed and bathroom facilities. In India, there are also government initiatives that are there to support the hospitality sector. Hotels can benefit from these, but must, in their part, adapt to change and so innovate when it comes to how they operate.
The team considered whether hotels could benefit from prioritizing cost leadership, differentiation, or a combination of both. And, yes, these strategies do affect how hotels are run. Understanding the effect of different strategies can then decide whether a given hotel will have greater or less success in a competitive market environment.
Anand, D. and Munjal, A. (2024) ‘Effect of sustainable competitive advantage on business excellence in the hotel industry’, Int. J. Business Excellence, Vol. 32, No. 4, pp.545–560.
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