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HOTEL ESTABLISHMENT IN

BORONGAN CITY

An Undergraduate Study

Submitted to the Faculty of

College of Business Management and Accountancy

Chapter I INTRODUCTION Hotels play a pivotal role in boosting the tourism industry of a certain place. It offers accommodation or a temporary place of the visitors to live in during their sojourn in the city or in a particular destination. For this reason, enormous cities which offer diverse services like Las Vegas, USA; Singapore City; Paris, France and even cities and places here in the Philippines have established hotels of different classes to cater the growing demand of visitors or tourists for accommodation. Explicitly, as tourism rate increases in a particular destination, the number of hotel establishment increases as well. Gomez (2008) said in his article of the Philippine Traveller’s Magazine, dated August, 2008, that hotels at present are like mushrooms sprouting from nowhere due to several developments of the tourism industry. For the past decade, hotels have become one of the measurements of a developing place. Benitez (2010), in his book, “101 Reasons to Visit the Philippines”, cited that tourism industry of the Philippines is indeed growing and places around the country feel the need to establish hotels that will house its tourist. The establishment of hotels in a place testify its development in several sectors like education, investment, health, tourism and the likes. As a particular place develops, especially on its tourism industry, there comes the need to establish hotels where visitors can relax and sleep from a tiresome trip to interesting destination of the town or city. Henarez (2011) in his book, “The Road to Developing Country, insinuated that hotels contribute the growth of several sectors in a town or city as it becomes one of the attraction to tourist in visiting a certain place or city.

Daria (2012) in his article published at “Flip Trip” magazine dated, September 2012, said that best service a hotel can offer does not just alter on its state-of-the-art facilities, but it also includes the customer services being provided by its management and staff. It is important that staff should always make the customers feel that they are being pampered because in exchange of those excellent services is their continued patronage that will contribute to the sales and income of the establishment. Security is an important feature that should always accompany along with the engagement in hotel industry. Not so long ago, in Metro Manila, a famous resort casino hotel was in the headline of all means of media after a shootout exercised by a man alleged to undergo severe depression. Williams (2010) denounced in her book “The Necessities of Being Hotelier”, that hotels are places where visitors go for a temporary and secured shelter, hotels should guarantee optimum security to its clients unless hotel owners or its management desire to earn continued patronage from the customers. Time flew and the global stage had been seen unearthing unimaginable patterns in the landscape of hotel industry. Rios (2011) in her study regarding the current trend of hospitality industry asserted that hotels owners nowadays are innovating and engaging ways on how their respective establishment will survive the stiff competition of hotel industry especially in major cities or densely visited locations like Boracay and Palawan. She added that it is important for hotel owners to upgrade always its services and become aware of the changes and innovations happening in the industry in order for the company to cater the needs of its customers and achieve sustainable growth. Establishing hotel in a particular place is indeed a win-win situation. As the hotel owners earn, the community where it is located also benefits, hence, it becomes a tool in promoting what the entire community or city could actually offer.

Therefore, it is of utmost important that hotels are created not just to earn but also for the purpose of aiding the community or place promote its beauty. In this study, the quality of the services offered by the hotels of Borongan City will be identified in order to generate accurate information that can serve as basis for more development of the services of hotels in the city, especially that the industry has just started to emerge in the city. Significance of the study The study “Establishment of Hotels in Borongan City” will help the following entities; A. To the hotel owners It can serve as an assessment tool of the quality of services offered in their respective hotels for them to have an idea on how they can improve more their services, which in the long run would create sustainable growth in their own company or hotel. It can provide them definite ideas on how management practices in the establishment will be improved more for them to cater the kind of services that the customers need. B. To the future hoteliers The information that the study will generate can be a learning tool to the future hoteliers for them to extract an idea on how they can run their future hotel business. With that knowledge, they can be provided confidence once they start operating their own business. C. To the city government The data from the study will serve as basis in evaluating the compliance of hotel businesses to the mandate of the local and national government and they will become aware of the proper actions to take, so that they can assure that hotels are giving a positive image to the entire city and are really helping boost its tourism industry. Moreover, it can aid them modify their policies and programs for the hotel establishments in the city

2. What is the average number of hotels in Borongan City in relation to: 2.1 type of hotel; 2.2 length of its operation; 2.3 location; 2.4 services offered; 2.5 number of patrons or customers quarterly 2.6 number of rooms?
3. Is there a difference of the characteristics of hotel establishments in Borongan City in relation to; 3.1 accessibility ; 3.2 amenities and facilities ; 3.3 security management ; 3.4 promotional and advertisement management ; 3.5 quality control management ; and 3.6 staff educational qualification?
4. What is the average number of hotels in Borongan City in relation to: 4.1 accessibility ; 4.2 amenities and facilities ; 4.3 security management ; 4.4 promotional and advertisement management ; 4.5 quality control management ; and 4.6 staff educational qualification?
5. What is the average number of hotel guests that visited the hotel in a quarter in relation to: 5.1 age; 5.2 gender; and 5.3 type of visitor?

Objectives of the study: The study, “Hotel Establishments in Borongan City” is guided by the following objectives:

1. Determine the profile of each hotel establishment in Borongan City in relation to the following variables; 1.1 type of hotel; 1.2 length of its operation; 1.3 location; 1.4 average number of patrons or guests quarterly; 1.5 total number of rooms
2. Determine the position of the hotel establishments in Borongan City in relation to the following variables: 2.1 accessibility ; 2.2 amenities and facilities ; 2.3 security management ; 2.4 promotional and advertisement management ; 2.5 quality control management ; 2.6 staff educational qualification.
3. Determine the average profile of the hotel guest that patronizes the hotel in a quarter in relation to: 3.1 age ; 3.2 gender ; 3.3 type of visitor (foreigner or local).

Promotional and Advertisement Management – (noun) the activity being conducted by a designated department of the hotel in promoting and advertising the services offered by the establishment. Security Management – (noun) It pertains to the equipment, programs and activities facilitated by a designated team in the hotel that promotes security and safety of the guest. Quality Control Management – (noun) the activities exercised by a designated department in assuring that services, products and all the offerings of the hotel are of good quality and shall satisfy the demand of the customers or guests.

Chapter II REVIEW OF RELATED LITERATURE The study, “Hotel Establishments in Borongan City” is guided by the following finished studies with utmost relevance and help in gathering data necessary for the realization of the study’s objectives. Both printed and online sources were maximized by the study in order to come up with the desired result. CUSTOMER SATISFACTION Customer satisfaction is the utmost goal of every business especially in the hotel industry. The management extends great effort in implementing policies and activities in order to meet the demands of the customers. (Giese and Cote, 2000) defined typically that customer satisfaction as post consumption evaluative judgement concerning a specific product or service. (Gundersen, et.al, 1996) has the same definition that customer satisfaction is an evaluative process that contrasts pre-purchase expectations with perception of performance during and after the consumption experience. This integral component of any business is patterned on the expectancy disconfirmation theory. (Barsky,1992; Oh and Parks,1997 and Wiley, 2000) came up with a common explanation of this theory that satisfaction level is the result of the difference between expected and perceived performance. On the other hand (Oliver, 1980) elaborated that satisfaction occurs when product or service is better than expected.

In 1988, Parasumaran developed the SERVQUAL scale, which became the most popular instrument for measuring service quality. It identifies five key dimensions of service quality – reliability, tangibles, responsiveness, assurance and empathy. It is comprised of 22 items for assessing customer’s perceptions and expectations regarding the quality of service. According to this instrument, service quality occurs when perceived service meets or exceeds customer satisfaction. Service quality and customer satisfaction are two different entities, though they are closely related with each other. (Carman, 1990; Bolton and Drew, 1991) believe that satisfaction represents an antecedent of service quality. In this sense, satisfactory experience may affect customer’s attitude and his or her assessment of perceived quality service. Thus, satisfaction with a specific transaction may result with positive global assessment of service quality. MANAGEMENT PRACTICES In hotel industry, it essential that management practices is excellently performed. It gives proper direction in the entire operation of the business. (Smith and Album, 2010) define management as restless, changing and dynamic business activity. Staff designated for the managerial positions should always be receptive of the changes happening in the hotel industry. This study asserted that the social condition and problems influence the dynamics or mechanism of the industry. These changes have forced today’s marketing executives to be more market-driven in their strategic decion-making, requiring a formalized means of acquiring a timely and accurate information about the customers, products and marketplace and the overall environment. Leaders of the hotel establishment should be innovative enough in finding new techniques and strategies in encourage customer’s patronage of its services. Santos (2010) cited that sales and marketing departments of the hotel industry are aggressively seeking methods on how to entice various segments of the society to stay in their hotels. Marketing has stirred greater demands through marketing plans.

Education plays an important role in harnessing the leadership qualities of the managers or leaders of the hotel industry. Almost all hotels, require its staff, especially those in executive or managerial positions to be a graduate of collegiate programs relevant to hospitality industry. (Summer,2005) explained that business schools and popular discussions of the corporate world tend to place huge stress on the importance of good management in top performing companies. SERVICES OF THE HOTEL INDUSTRY Explicitly, at present, hotel establishments have develop its services, in order for them to cater the ever-changing demand of the customers. Many had gone into adding a casino in its services, while others had added a restaurant or bar as part of its services. As mentioned by Santos (2010) Department of Tourism in the Philippines defines hotel as a “building, edifice or premises or a completely independent part thereof, which is used for regular reception, accommodation or lodging of travellers and tourist and the provision of services incidental thereto for a fee.” Santos (2010) mentioned also that in the Philippines, there are four categories of hotels; De Luxe, First Class, Standard and Economy. Meanwhile, Department of Tourism insinuated that hotels can be categorized by the following factors; location, physical structure, bedroom facilities and furnishings, front office and reception service, recreational amenities, entertainment, engineering and maintenance, public areas and overall service. RELEVANCE OF THE HOTEL INDUSTRY BUSINESS Basically, a certain business is established to address the explicit demand of its target markets. In hotel industry, relevance plays a very important role. The services offered should importantly address the demand of its customers. It should always seek to determine and respond the needs of its patrons or guests. (McDaniel, Lamb and Hair, 2007) believe that all business people, regardless of specialization or area of responsibility, needs to be familiar with all the fundamentals of the

D. Research Instrument Hence, the study was a quantitative type of the study, a common survey questionnaire tool was employed to all the hotel respondents. The questionnaire was divided into two parts. First, was about the profile of the hotel and the second spoke out about the characteristics or position of the customers in relation to predetermined subcategories such as: accessibility; amenities and facilities; security management practices; promotional and advertisement management; quality assurance management and the educational qualifications of the staff. These subcategories are validated as integral features that a hotel must have. There were only two options used in answering the question; available and unavailable. Hence, the purpose of the study is focused on determining the presence of the pre-identified features in the hotel. E. Validity of the Research Instrument To guarantee that the rightful instrument will be maximized in order to obtain effectively the objectives of the study, a rigorous research and expert consultation were conducted by the student researchers. Initially, they conducted online research on standard of hotel services and from that they were be able to categorize the components of services and practices that must be adhered and provided by the hotel. From there, they were be able to formulate the necessary questions. After making the final draft of the questionnaire, the student-researchers consulted a person in authority to identify the rightful services and practices of hotels. Before the respondents were made to answer the questionnaire, they were also consulted on the feasibility of those mentioned features and services to be followed and acquired by the local hotels. I. Measurements of Variables

In the first part of the questionnaire, profile of all the hotel respondents was based on highest frequency count. In the second part that has subcategories, highest frequency count was also employed in order to describe the accessibility, amenities and facilities, the promotional and advertisement management, security management, quality control management and educational qualification of its staff. In this part, in order to interpret the data, a certain formula was employed. Initially, the number of criteria in each category was identified and multiply it by the eight (total number of hotel respondents, to get the perfect frequency in a particular category. Secondly, the total number of each status (available and unavailable) is obtained and from the perfect frequency, the percentage in each status is determined. Formula 1: Perfect Frequency PF=Perfect Frequency ; CR=number of criteria; TR=total number of respondents CR X TR = PF Formula 2: Percentage of Status PS=Percentage of Status; TS=Total Number of Status; PF=Perfect Frequency TS / PF x 100 = PS To determine the passing of the hotel in a certain category, the percentage of each status must be above 50%. Below this required percentage, the hotel respondent in a certain status will be deemed unpassed. J. Data Gathering Procedure The eight hotel respondents were distributed with a validated common survey questionnaire in order to obtain the data that address the objectives of the study. However, only one from hotel establishment was made to answer, hence, one survey questionnaire was distributed in each establishment. Hotel owners, manager or any staff with authority to speak out in behalf of the hotel was selected as direct respondent of the study.

Table 1.3 Number of Guests in a Quarter Number of Guests Quarterly Frequency Below 1000 5 1000-2500 3 2501-5000 0 Above 5000 0 The table shows that the highest frequency count of number of guests received quarterly is below 1000 with a total frequency of 5. Table 1.4 Price Range of Rooms Length of Operation Frequency Php 500-Php 1000 2 Php 1001- Php 1500 5 Php 1501-Php 2000 1 Php 2001-Php 2500 0 Php 2501-Php 3000 0 Price Range above Php 3000 0 The common price range of rooms is being shown by the table above. With a highest frequency count of five, the common price range falls under Php 1001-Php 1500. In the second part, available and unavailable were used in describing the presence of the predetermined features. Available has a value of 2, while unavailable has a value of 1. The table below illustrates the general findings of the hotel establishments in the city when it comes to the following criteria. Table 2.1. The Accessibility of Hotel Establishment Points of Access Frequency Accessible Inaccessible Shopping Center 8 0 Grocery Store 8 0 Convenient Store 8 0 Highway 8 0 PUV Terminal 8 0 Recreational Areas like beaches, 5 3

parks and the likes Church 6 2 Hospital 8 0 School 8 0 Government Offices 7 1 Entertainment Center like auditorium, sports complex and the likes

Convention Center for seminars, trainings and the likes

Restaurants 8 0 Bar 7 1 Total 104 8 Table 1 shows that the hotels in Borongan City are accessible to important points of access. All are accessible to shopping center , grocery store, convenient store, highway, PUV terminal, hospital, school, convention center and restaurants. Perfect frequency is 112 and the total frequency is 104. The accessibility status is 92.86% on the other hand the inaccessibility status is 7.14%. Table 2.2. The Facilities and Amenities in the Establishment Facilities/Amenities Frequency Available Unavailable Receiving Lounge 8 0 Front Desk 8 0 Parking Area 8 0 Elevator/Escalator 4 4 Comfort Room 8 0 Fitness Center 0 8 Restaurant/ Pantry 8 0 Bar 0 8 Recreational/ Entertainment Room 1 7 Function Room 7 1 WiFi or Internet Access 8 0 Rooms (Single) 8 0 Rooms (Twin) 7 1 Executive Suite 4 4 Family Suite 8 0 Total 87 33