Case 2 - Sage Hill (1)

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Fanshawe College *

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MGMT 67

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Apr 3, 2024

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Sage Hill Inn Above Onion Creek is a popular lodging destination for those visiting the Texas Hill Country to relax and experience nearby attractions and activities. Located in Kyle, Texas, the 88-acre property is 25 miles south of Austin, Texas, and a few hours drive from San Antonio and Dallas. The property, formerly known as the Inn Above Onion Creek, was purchased in 2012 by Eric Goldreyer, founder of Bedandbreakfast.com, and John Banczak, former president of the company. The new owners focused on enhancing the popular Inn Above Onion Creek by adding new services, updating the facilities, and expanding the use of environmentally conscious practices. John Banczak was quoted in The Houston Chronicle as saying, “When we purchased the inn, we loved the location and topography of the land and surrounding area, and the architecture and layout of the main inn and buildings” . . . “So we set out to rede- sign with a modern yet rustic aesthetic, while trying to stay true to the Hill Country area.” A conversation between Amy Dolan, the innkeeper, and a consultant indicated three needs: (1) the need to understand guests’ expectations, (2) the need to deter- mine and monitor guests’ perceptions, and (3) the need to identify potential service failure points. She said, “We do our best to maintain excellent service in order to build repeat business and obtain positive word of mouth. If guests’ expectations are not met, then they are likely to be dissatisfied and occupancy rates will decline. That means lower revenues.” To continue attracting previous guests of the Inn Above Onion Creek and build loyalty among ones staying at the inn for the first time, “We must listen closely to understand what they expect when deciding to stay here and, afterward, how they feel about their experience. With this feedback, we can provide an experience that meets expectations and effectively resolve service problems that are creat- ing guest dissatisfaction.” In addition to knowing more about guest expectations and perceptions, she said it would be good to identify potential service failure points. These could then be monitored more closely, thus ensuring guest satisfaction. BACKGROUND When operating as the Inn Above Onion Creek, the lodging was designed to resemble a Texas homestead of the 1800s with a main house of rustic redwood and a second building similar to one an owner would build when expanding the family’s living area. The twelve guest rooms, named after famous Texans, conveyed the homestead image with a mix of modern amenities and antique furnishings. A gourmet breakfast and din- ner were included with each overnight stay. Among the design changes for Sage Hill Inn Above Onion Creek were updated guest rooms with new flat-screen TVs and more contemporary furnishings. There are three suites, eight guest rooms, three cottages, and a three-bedroom ranch house. The cottages and ranch house include amenities such as gourmet kitchens, oversized porches, and a private hot tub. The grounds were improved with a larger pool deck, a 14-person spa, and a large out- door fire ring. Many other changes and service addi- tions were completed, such as opening the Garden Spa in a separate building with four massage rooms, a lounge, and covered porch overlooking a flower gar- den. The website for the inn has numerous photographs of accommodations and descriptions of services and activities available to guests (www.sagehill.com). A gourmet prix fixe breakfast and three-course din- ner are included with each overnight stay and lunch is available, by reservation, for an extra fee. Individuals not staying at the inn may also enjoy dining at the inn by making reservations in advance. Chef Ryan Castille cre- ates the menus with fresh produce from the garden and draws on local suppliers for seasonal ingredients. The dining room is always open with complimentary tea, coffee, soft drinks, and a selection of homemade cookies. Across from the dining area is a large library with enough seating and tables for meetings and a wide selection of books, games, and DVDs. W, Feaon ] $he el Jooy = Baloiaiinss sy SAGE HILL oW BAER W W0 zf’f MK AR AT Y Welcome to Sege Hill Inn & Spa. vl g e Aot A7 SR 0 90 ATES D T MK "Written by Michael W. Pass, Sam Houston State University and published in Journal of the International Academy for Case Studies 21, no. 5 (July 2015), pp. 197-203. Revised by Roger Schroeder, September 2019. This case was written for class discussion and is not intended to illustrate either effective or ineffective management practices. Reprinted with permission.

: %lm Part Seven Case Studies GUESTS’ EXPECTATIONS AND PERCEPTIONS Knowing what guests expect is important because their satisfaction with the quality of a service is formed by comparing perceptions of a stay to previously formed expectations. Amy Dolan talked with the consultant about how guests’ expectations form as they find out about a hotel property from a variety of sources, includ- ing friends and family, guidebooks, websites, and pre- vious experiences at the inn, or similar properties. She stressed that, “the website plays a big part in shaping perceptions of what they may experience when staying at the inn.” The consultant said that it would be good to examine the website (www.sagehill.com) for explicit promises (e.g., breakfast and dinner menus) and implicit promises (e.g., pictures of the inn) that influence the development of expectations. He suggested that the Five Dimensions of Service Quality could be used as a guiding framework to figure out expectations and that a SERVQUAL? questionnaire could be used to measure the five dimensions (i.e., responsiveness, assurance, tangibles, empathy, and dependability). However, he indicated some concern about all of the five SERVQUAL dimensions and survey questions being useful specifi- cally for the hotel industry. After a guest checks out, an e-mail message is sent thanking them for choosing to stay at the inn and ask- ing for feedback via Google Reviews, bedandbreakfast .com or tripadvisor.com. These websites are monitored by regularly reviewing comments and responding to guests when they express a concern about their stay. EXHIBIT 1 Guest’s first day. — o Sign at Street g 2 Directional Signs All Amenities 'z 3 Road ~ 1/2 mile long Office Sign (see website) Room Amenities Dining Room Amenities f é Fields and Woods Buildings. Buildings and Paths Trails, Books, Food, Menu Displayed on Parking Spaces Pool Garden Hill Country Views DVDs Chalkboard Visits Area Attractions (6:30 pm) Goes to dining Walks trails area, Eats Dinner, Meets Reads book other guests -2 Enters property Eats cookies Z .E (3:90 pm) Drives Gets DVDs 5 > to inn. Parks car Watches TV Alir. Dixer, goen o < Uses Internet Room or Cottage. May Goes 1o office Goes to Pool go to Fire Ring, watch Farries Lunggage Goes to Spa TV, use the internet. * L Staff greets guests and Innkeeper greets, Checks guest in directs their attention to Makes spa appointments the meal description on § Special requests taken Innkeeper gives orientation Innkeeper and staff blackboard. Staff asks 2 Orientation to dining room, library to room or cottage (e.g., answer questions for any needs related to > and other amenities how to work fireplace, and fulfill special preparation. Dinner is Breakfast and Dinner times explained instructions for satellite TV) requests. served. Line of Visibility Prior to Arrival Contacts spa and local Dinner is prepared. - % Reservations confirmed. firms to fulfill special 2 z Guest profile reviewed requests. 2 for special needs. 1 ! ! { £é 23 l Reservation & check-in software system . I Computer, Telephones . All Supplies for @ & Preparation, Kitchen Equipment, 2 SERVQUAL is described in Chapter 8, Managing Quality. Kitchenware

Sage Hill Inn Above Onion Creek: Focusing on Service Process and Quality lm Dolan said, “Customer comments are helpful but some guests do not post a message on one of the websites. We don't know how they felt about their stay with us.” The consultant explained this as a reasonable concern because, on average, across all services, only 50% of consumers complain about a problem they have with a service. Several comments from previous guests were examined to obtain an understanding of how they per- ceive their stay at the inn. For example, the quotations below show guests’ perceptions of the caring individual- ized attention experienced while at the inn. “The innkeeper welcomed us by name, gave us our key, and showed us around the dining room, kitchen, and library. She was so welcoming, we felt right at home from the beginning.” “We arrived a bit late, as we were both coming from work on a Friday. The innkeeper actually went above EXHIBIT 2 Guest's second day. and beyond to accommodate us by plating our din- ner so we could eat in the calm of our cottage.” FAIL SAFE THE GUEST’S EXPERIENCE Service encounters occurring during a stay result in guests’ perceptions of property features and inter- actions with the staff that may lead to satisfaction or dissatisfaction. In addition to identifying guest expec- tations before a stay and perceptions afterward, Amy Dolan expressed that they “would want to identify any potential service quality problems so they can be han- dled effectively.” The consultant agreed that determin- ing potential failure points, in advance, would help to fail safe the guest’s experience. He said that closely examining the inn, as if you are a guest visiting for the first time, helps to identify areas requiring more atten- tion. To this end, a service blueprint (Exhibits 1 and 2) was developed that represents the service process experienced by a guest during the first and second day - ] ‘é .§ Room Amenities All Amenities (see website) Room Amenities Dining lfoom Amenities = S Dining Room Amenities Buildings and Paths Trails, Books, Food, Menu Displayed on == Menu Displayed on Chalkboard Hill Country Views DVDs Chalkboard Stays Another Night Visits Area Attractions, Walks trails Goes to room Reads book, Eats cookies, Gets DVDs Wakes up, Showers/Dresses or cottage. Watches TV, Uses Internet. Goes to w & (8:00 - 9:30 am) Goes to dining area Either stays Pool, Goes to Spa g2 Meets other guests, Eats Breakfast for another 5 2 Reads Newspaper day or checks - 5 out and leaves. Checks Out May have lunch or visit spa after checking out Staff greets guests and ‘ directs their attention to the meal description on Innkeeper or staff completes checkout. = =2 blackboard. Staff asks If needed, confirms arrangements for spa visit or lunch. 'é for any needs related to Asks about satisfaction with stay. > preparation. Breakfast is served. Line of Visibility o l Makes aﬂ_&gemen & Thank you note sent by e-n;il with 3= i : request for feedback throu 2 ‘é ek ki for lunch, if requested. bedandbreakfast.com, tripadvisor.com, > Google Reviews v All Supplies for Preparation, Kitchen Equipment, Kitchenware Support Processes Software System Used to Checkout

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? Part Seven Case Studies of a stay. An initial review identified one potential fail- ure point; guests have to carry their own luggage to the rooms. The consultant confirmed with Dolan that he would help her with the situation by recommending ways to learn more about guests’ expectations and percep- tions. She could then decide which ones would be implemented as a research program at the inn. Before developing recommendations, he wanted to look at the website of Sage Hill to get an idea of guests’ expectations. The consultant also needed to complete secondary research to find out if a research tool based on SERVQUAL exists for the hotel industry. Finally, he wanted to examine the service blueprint to identify where there is even a remote possibility that guests’ perceptions may not meet their expectations. Identify- ing these potential failure points would help to fail-safe the guests’ stay at the inn. Discussion Questions 1. Define the service-product bundle that is being provided for guests, including the tangible services, the intangible services and the facilitating goods. Do you see any missing elements or areas of possible improvement? . Using the service blueprint, make a list of all the potential key service failure points and the associ- ated customer expectations. For example a service failure point with expectations is: check-in should be fast and hassle free. You should find 10 to 15 service failure points. . For each service failure point in question 2 is it self-service or service provided by the hotel, and is it high-contact or low-contact service? Does this indi- cate any possibilities for improvement? . There are five dimensions to SERVQUAL: respon- siveness, assurance, tangibles, empathy, and dependabililty. What dimensions of service quality do you think are important for the hotel? Feel free to de- fine your own dimensions or use SERVQUAL. Then for each of these dimensions construct 2 questions that could be used in a questionnaire when mea- suring customer satisfaction at some of the service failure points from question 2. . How should the hotel handle service recovery and service guarantees? Suggest some options they could implement.

Case 2 - Sage Hill (1)

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