Effects of Service Quality Policies in the Tourism Sector Performance: An Empirical Analysis of Spanish Hotels and Restaurants

Abstract

In the last few years, it has become essential, in order for companies to ensure their survival, to approach the customer and bet on quality. This is due to the importance of tourism in many economies and the increase in supply and demand. For this reason, there are numerous studies found in literature that evaluate the extent to which quality practices impact finances and competitiveness of tourism companies. Furthermore, the usual practice in many of these studies is to classify all types of tourism businesses in the same category, even though there seem to be significant a priori differences between them. The main objects of scrutiny in this study are restaurants and hospitality. The analysis of the aggregate results of two surveys carried out among executives in Spain that employed SEM methodology demonstrates that quality practices have influence, albeit indirectly, on a firm’s performance in a positive way. However, separate analysis of subsamples show disparities between hotels and restaurants. This paper illustrates that, although both subgroups operate in the same sector, they obtain different results from implementing quality policies. Therefore, the specific features and typology of the selected tourism company should be considered.

1. Introduction

The appearance of social networks and the Internet, heightened competition, and increased supply have all provided the client with new tools to facilitate their decision when it comes to purchasing. These factors have created new challenges and difficulties for companies in the tourism sector. They will have to face these challenges over the next few years, which will test the ability of companies to remain in the market and survive these changes. From the point of view of the company, the manager will be responsible for managing all the variables and information in order to take decisions that secure its long-term survival. This decision-making is precisely where quality management practices should play their role as facilitators [1]. The importance of quality practices and sustainability in the hospitality sector has increased its relevance during the past 10 years. For this reason, sustainability and quality have been included and its presence has been enlarged into corporate strategies of the companies [2,3]. Sustainability implications have no negative impact on a country’s economic tourism indicators and neither constrain companies’ profitability and competitiveness. Nevertheless, it can reduce resource costs and create a market differentiation [4]. There are many prior papers that focus on the service sector and establish quality as the key to survival [5,6,7,8]. However, it is also true that certain authors have demonstrated that not all quality practices are adequate for all firms [9] and that there is no single route to success [10]. This starting point suggests that the tourism sector should not be treated as a single entity and, to obtain more robust results and conclusions, it is necessary to analyze each of the separate subsectors that make up the industry. This paper will try to determine whether there are differences due to company typology regarding the effects derived from the implementation of quality in a firm. This study analyzes hospitality and restaurants, both of which are important subsectors in the industry.

The study contributes to the field of research in various ways. First, it describes the main quality practices adopted in the tourism sector and their effects on company performance. Second, it helps to recognize the dissimilarity in terms of quality management practices between hotels and restaurants. Third, it focuses on a sector where the impact of quality management practices (QMPs) on company performance has been studied, but the differences among company typologies have not. Fourth, the paper analyzes the tourism sector, which is viewed as a highly competitive sector. That characteristic is very helpful in analyzing whether investing in quality is a good management practice in order to stay alive in complex sectors.

The remaining sections of the paper are organized in the following way. Section 2 brings together the theoretical arguments on the use of QMPs and their relation to company performance. Section 3 outlines the methodology used in the empirical study. Section 4 provides the quantitative analysis. Section 5 shows the analysis of the results and the conclusions reached from the research carried out, which offers suggestions for scholars and professionals alike.

2. Literature Review

2.1. Adoption of Quality Management and Quality Performance Practices

The positive effects of quality on a firm have been widely studied, as can be easily confirmed by looking at the literature from the last 20 years [11,12,13,14,15]. The majority of authors agree that quality can activate various levers, both internal and external, that improve company competitiveness [16]. Regarding the internal effects of quality, the literature stresses improvement in workers and processes [17]. The main external effect was found to be increased customer satisfaction [18]. These three levers of improvement will be analyzed individually in this section.

Much has been written in the literature about the relationship between QMPs and workers, and the consensus is broad [19,20,21]. The majority of authors state that a motivated and prepared worker is the key to operating in sectors with a high degree of contact with the client, which is the case for hotels and restaurants [22,23,24]. In this context, certain authors have demonstrated that the implementation of QMPs can improve staff working conditions as much as it can improve their training and promotion prospects, which, in turn, lead to more motivated and more prepared workers [25,26,27,28].

The majority of previous empirical literature shows that QMPs benefit internal company processes [12,29,30], efficiency [8,31], the process of decision-making, and error reduction [32].

Lastly, it is worth noting that the quality facilitates a focus on the customer and continuous improvement [33,34] through long-term supervision in very dynamic surroundings with high degrees of competitiveness, such as the tourism sector. A firm’s focus on quality can become a market trend signal [35] and can have positive effects both on current clients, by increasing their loyalty, and on potential clients, by improving their acquisition [27,36]. Many other studies confirm that the implementation of QMPs helps address client needs and adapt to demand [11,26,37].

Following the above reasoning and considering that the improvements analyzed in this section are a direct consequence of the adopted quality practices, the paper hereinafter refers to them as Quality Performance (QP).

2.2. Quality Performance Versus Firm Performance

Some authors, such as Nair [38], do not reach definitive conclusions about the success of QMP implementation in companies. Nair concludes that, in certain cases, the cost reductions resulting from QMPs are cancelled out by the investment necessary to put them in place and the expenditure on follow-ups and quality control. However, the majority of authors take the opposite view and state that adopting quality policies as part of a global company strategy improves the competitiveness of firms ways.

Quality policies explaining and standardizing processes and tasks, which detect those items considered as valuable by the client, also focus on the formation of key processes, which improve worker performance and customer satisfaction with the company in comparison with its competitors [11,39], which also breeds loyalty [37]. As a consequence of this interlinked chain of factors, through a series of cause-effect relationships, the company can generate a competitive advantage that will improve its image [27,40,41] and increase sales by maximizing the yield from current clients and by acquiring new consumers [42]. Better positioning in the market can also allow a company to be more resilient when faced with potential crises and increase a company’s capacity to remain in the market [26,27,30]. Other researchers have found yet more routes for improving competitiveness in hospitality. First, the QMPs allow progress to more advanced information systems, which facilitate decision-making [43,44]. Second, quality practices can generate not only increased sales but also reduced costs whether through the elimination of activities that do not create value but do create costs or, via improved efficiency in key task performance, the same workload with less resources are dedicated to the process [23,26,27,35].

Following this line of argument, it seems clear that the majority of authors focus on quality as a path towards firm performance (FP), which justifies improved competitiveness through the integral improvement of the company via external factors and internal processes.

Concerning the hypotheses, it is worth noting that the main goal and contribution of this paper is to determine whether there are differences between the typologies of tourism companies with regard to the effects of QMPs on the firm. Below, the third and final hypothesis of the paper is proposed, given that some authors argue that each sector is different and that there is no single path to the implementation of standard effects derived from the QMPs [9,10].

To summarize, according to the previous research and the state of the art, the following hypothesis has been proposed.

Hypothesis 1 (H1).

The adoption of Quality Management Practices (QMPs) is likely to have a direct positive impact on Quality Performance (QP).

Hypothesis 2 (H2).

Quality Management Practices (QMPs) have a positive impact on Firm Performance (FP) mediated by Quality Performance (QP).

Hypothesis 3 (H3).

Hotels and restaurants obtain different results from the implementation of quality practices in their firms.

Figure 1 shows the model used in the study. The model presented by Figure 1 will be the same model used to contrast significant differences between hotels and restaurants (H3) with prior sample segmentation.

3. Measures and Methods

3.1. Sample and Data Collection

The data used to prepare this article were obtained from a survey conducted among managers of tourism companies (390 hotels managers and 193 restaurants managers). The survey was complemented with, direct or by phone, personal interviews with businesses’ managers. This study is the second and amplified wave of a previous study in 2015 and 2017 [24,45].

The principal reason for concentrating our study on the tourism sector is because this industry represents 10.2% of the total GDP of Spain and more than 11.8% of total national employment [46]. This data illustrates the significance of the tourism sector in Spain. International tourism has become one of the fastest-growing industries and is widely believed to contribute to economic growth [47]. Recently, quality labels for the Spanish tourism sector have been developed as part of a competitive strategy [48].

The questionnaire was divided into three main sections: quality management practices, quality performance, and firm performance. A fourth section was also included in order to know the companies’ characteristics. The relevant aspects of this fourth section is of employees, number of stars, and location of the business. The methodology used to carry through the questionnaire, that interviewers adopted, was directly or by phone depending of the manager accessibility. The questionnaire classified the hotels and restaurants by origin and type of business. The classification and typology of the companies are shown in

Table 1. Profile of the companies included in the sample.

Classification	Nº	%	Employees Mean
HOTELS
Hotels 4 * or more	141	36.15	54
Hotels less than 4 *	249	63.85	31
Total	390	100.00	39
RESTAURANTS
Independent	117	60.62	11
National, Foreign & Franchise	76	39.38	18
Total	193	100.00	14
Typology	Hotels		Employees Mean
Independent	199	51.03	28
National Group	139	35.64	46
Foreign Group	36	9.23	70
Franchise	16	4.10	52
Total	390	100.00	39

.

Some qualitative characteristics are as follows: hotels surveyed have an average of 39 employees and, on average, hotels have 3.36 stars. However, the foreign groups present a slightly higher quality (4 stars) than the independent ones (3 stars).

Regarding restaurants, on average, have 14 employees. Most of the restaurants are independent (60.62%), employing 11 employees on average. Franchised, National, and Foreign restaurants represent the 39.38% of the sample and employs 18 workers on average.

The location of the sample is basically Madrid, but there are also some Catalan companies located in Costa Brava (Girona) and Costa Daurada (Tarragona) and Barcelona downtown.

3.2. Measures

In this paper, three constructs have been analyzed, according to the literature review in order to examine the hypotheses presented.

Table 2. Constructs and variables.

Code	Definition	Mean	Standard Deviation
Quality Management Practices—QMPs. [11,29,39,49,50,51,52,53,54,55,56]
QMP1	The management is committed to the quality of the product and service.	6.22	1.19
QMP2	Current and future client needs are known.	5.77	1.23
QMP3	The company works with clients to improve the product/service.	5.86	1.39
QMP4	The company works with suppliers to improve the product.	5.75	1.31
QMP5	All staff is involved in the creation of the product /service.	5.73	1.48
QMP6	Improvements have been identified in the process of service provision.	5.80	1.29
QMP7	Goal achievement control is conducted, and variations are amended.	5.87	1.34
QMP8	There is a quality culture with a focus on continuous improvement.	5.88	1.34
Quality Performance—QP. [8,12,18,29,31,32,57,58,59]
QP1	The global service quality has improved.	5.60	1.38
QP2	Employees learn about the functioning of the facilities more rapidly.	5.45	1.54
QP3	Employees are more autonomous in their work.	5.29	1.63
QP4	Clients are more satisfied with the service since complaints have been reduced.	5.67	1.47
QP5	Clients come to our facilities more often than before.	5.32	1.70
QP6	The word of mouth regarding our service quality has attracted new clients.	5.67	1.48
Firm Performance—FP. [1,9,13,23,27,39,45,60,61,62,63]
FP1	Improved market image of the facilities.	5.68	1.47
FP2	Client satisfaction level is greater than among the competition.	5.60	1.36
FP3	Employee satisfaction level is greater than among the competition.	5.49	1.50
FP4	Improved capacity of staying in the market in times of crisis.	5.54	1.42
FP5	Sales have increased more than the competition.	4.91	1.74

summarizes the analyzed dimensions, their constituent variables, and each construct together with its representation in the literature that supports using each of these variables in the designed questionnaire. These three constructs were validated by survey participants using a 7-value Likert scale, with 1 being “completely disagree” and 7 being “completely agree”.

3.3. Methodology

The model has been studied using a Varimax rotation in order to classify the dimensions. Three dimensions have been found: QMP, QP, and FP. In order to identify the items that belonged to each dimension, a preliminary restriction of a minimum loading of 0.4 has been used. Then, in order to check the consistency of the model, a confirmatory factor analysis using the maximum likelihood has been taken into account, where only the items with a loading factor greater than 0.7 were accepted.

The next step once the dimensions were constructed and validated was to verify the internal consistency and the reliability of the model. Both the Cronbach’s alpha coefficient and the Average Variance Extracted (AVE) confirmed the goodness of fit of the dimensions. For all the dimensions, Cronbach’s alpha was greater than 0.7 [64] and the AVE exceeded 0.5 [65]. Furthermore, the discriminant validity results confirmed that all the correlations were less than the square root of the AVE.

Next, after the dimensions were established, the relationship between the dimensions was validated. In order to verify the cause-effect relationships, the robust model of the EQS software has been used. To conclude the goodness of fit, it has been used as the BB-NNFI (Bentler-Bonett non-normed fit index), CFI (comparative fit index), and RMSEA (root mean-square error of approximation). The results are shown in

Table 3. Factor analyses of the dimensions.

Dimension	Code	Confirmatory Factor Analysis	Internal Consistency and Reliability Statistics
Quality Management Practices	QMP1	0.79	Cronbach’s alpha: 0.91 Composite reliability: 0.93 AVE: 0.61
	QMP2	0.71
	QMP3	0.79
	QMP4	0.76
	QMP5	0.74
	QMP6	0.84
	QMP7	0.80
	QMP8	0.83
Quality Performance	QP1	0.72	Cronbach’s alpha: 0.85 Composite reliability: 0.89 AVE: 0.57
	QP2	0.77
	QP3	0.73
	QP4	0.80
	QP5	0.76
	QP6	0.75
Firm Performance	FP1	0.83	Cronbach’s alpha: 0.88 Composite reliability: 0.92 AVE: 0.69
	FP2	0.90
	FP3	0.87
	FP4	0.85
	FP5	0.70

,

Table 4. Discriminant validity.

	QMP	QP	FP
QMP	0.78
QP	0.63 **	0.76
FP	0.58 **	0.57 **	0.83

Square root of AVE in the diagonal. ** Correlation is significant at the 0.01 level (bilateral).

and

Table 5. Goodness of fit of the model.

Assessment Item	Values	Ideal Value
X2—(chi-squared) *	422.24
X2/df—(normed chi-squared)	2.81	<3
BB-NNFI—(Bentler-Bonett non-normed fit index)	0.84	>0.9
CFI—(comparative fit index)	0.89	>0.9
RMSEA—(root mean square error of approximation)	0.06	<0.08

* Satorra-Bentler scaled chi-squared.

.

4. Results

The results have been split in two sections. First, the results for the comprehensive sample are shown. Second, the divergences between sub-sectors have been analyzed.

4.1. Tourism Sector Analysis (Complete Sample)

First, the whole sample was analyzed. As shown in Table 3, after the items that did not meet the standards of the previous section were removed, each item presented in the model showed a loading factor beyond 0.7. As shown in Table 3 and Table 4, the comprehensive model presented a high consistency and internal reliability, as the values of Cronbach’s alpha, Composite reliability, and AVE were beyond those accepted by the literature.

Table 4 confirms the discriminant validity of the constructs. In all cases, it is shown that each construct is more closely related to its own dimensions than to the dimensions of other constructs.

Lastly, Table 5 shows the main indices that allow validation of the goodness of fit for the model. For the four selected indices, the model returns values within the ranges recommended by the literature [66,67,68], which confirms the reliability and robustness of the results showed by the model. In fact, according to Schermelleh-Engel [69], obtaining three statistics within their recommended values shows the goodness of fit of the model.

Lastly, the standardized solution of the causal model is presented in Figure 2. All of the hypotheses are supported at the 0.05 significance level.

As shown by the comprehensive sample in Figure 2, Quality Management Practices influence Firm Performance in a positive way by means of enhancing the Quality Performance of the company.

4.2. Differences Between Hotel and Restaurant Sub-Sectors

The next step has been to conduct a multi-group analysis in order to detect divergences between the sub-sectors.

As shown in this section, differences have been found in hotels and restaurants when they are analyzed individually.

Table 6. Invariance test for all relationships.

	QMP→QP	QP→FP
∆x2	4.905	1.007
p-value	0.026	0.315

illustrates the invariance test results for each relationship and Figure 3 shows the standardized values by the sub-sample.

As shown in Table 6, the data obtained shows disparity between hotels and restaurants in the relationship between QMP and QP, but the sub-samples did not present disparity when the relationship between QP and FP is analyzed. Figure 3 presents the standardized values for the complete model by sub-sector.

5. Results and Discussion

The results obtained confirm the hypotheses and offer a large number of conclusions and proposals for tourism service companies and, more specifically, for hotels and restaurants. Below, the results of the study are considered one hypothesis at a time.

Regarding the entire sample, statistical analysis validates H1 and confirms the direct positive effect of QMPs on tourism companies. It is possible to confirm that quality should be part of the global company strategy in the tourism sector [33,34]. Quality management in hotels and restaurants is indispensable since they are businesses with a high degree of client contact [22,23]. In this sense, QMPs activate three Key Performance Indicators (KPIs) for the hotel sector including two internal and one external. First, internally, they improve human resources [25,26,27] and, second, they make internal processes more efficient [8,12,29,31,32]. Third, externally, they increase customer satisfaction [11,26,37] and generate a competitive advantage in comparison with the competition.

It is worth noting that the three levers activated by QMPs coincide with three of the four perspectives used by Kaplan and Norton [70] to define the process of company value creation in the design of their famous Balanced Scorecard. In this context, and given the similarities, it is possible to state that the tourism sector’s focus on QMPs creates value for the company that implements them from the inside out, internally to externally, from internal improvement of the firm to improved competitiveness and finances compared to its surroundings. The results obtained in this first section are very much in line with the results obtained for another subsector of the tourism industry, travel agencies, by Alonso Almeida [8].

Concluding our analysis of the complete model, in contrast to the findings of authors such as Nair [38], statistical analysis confirms that H2 is accepted including the immediate and direct benefits of quality performance (QP) that positively impact firm performance. The effects of the quality on hotels and restaurants lead to greater client satisfaction with the company compared to the competition. Quality standardizes key internal processes and allows focus on tasks truly valued by the client, which increases their satisfaction [11,39]. This fact, together with the improved image generated by this improved satisfaction, creates a virtuous economic circle, which makes it possible to outsell the competition and, in times of crisis, reduces suffering due to lower demand. Ultimately, based on the above reasoning, it is possible to say that quality helps focus workers and processes on what is truly important, which generates synergies that improve efficiency, efficacy, and long term sustainability [26,27,30,71].

Despite the argument provided above, perhaps the best contribution to the literature of this paper is the acceptance of H3 and the affirmation that hotels and restaurants differ when it comes to the results obtained from implementing QMPs, which empirically confirms that the effect of quality practices is not standard but depends on the typology, sector, and various other individual factors for each firm.

It is worth noting that, when the sample is segmented, it is possible to observe differences in terms of the immediate effects of firm quality performance (QP), according to the company typology. The effect of implementing quality practices is positive both in hotels and restaurants. However, it is significantly higher for hotels than for restaurants. Ultimately, hotels obtain better immediate results (QP) from the implementation of QMPs than restaurants. This result allows us to accept H3.

The causes for these differences could be due to the operational differences between hotels and restaurants. Despite requiring further research, this study suggests two factors as possible sources of these differences.

First, as observed in Section 3.1, hotels operate, on average, with a higher number of employees than restaurants. This fact leads to a greater need for control of both processes and workers. An informal control system is clearly insufficient to guarantee quality service in hotels. The need for quality policies that standardize processes, train workers, make them more autonomous, and set the firm on a path toward a customer focus is much more clear in large firms than in small companies and more clear in hotels than in restaurants. Restaurants, however, do not see much of a positive effect from QMP implementation. As for small firms, informal management systems can be more efficient than in large companies. In these cases, it is easier for a manager to control by direct oversight, than where the number of variables to be controlled expands significantly. In this context, it is logical to think that hotels should obtain more QP from the implementation of QMPs than restaurants.

Second, to an increasing extent, tourists require more services at a lower price, which not only is accommodation required, but also entertainment and other services that provide added value to the visit [72,73,74]. Hotels have tried to adapt to these new demand requirements to remain competitive and not fall out of the market. In this context, hotels are becoming multi-service companies par excellence for the tourism sector. This transformation and the need to maintain competitiveness has led to increased organizational complexity and the need to develop and control a multitude of processes in addition to the traditional tasks. Logically, with greater complexity comes a greater need for a quality system that channels the firm towards efficiency and competitiveness.

It is possible to argue that it is logical that greater benefits are derived from the implementation of QMPs for firms with a higher number of employees and a higher number of processes to control. In this context, it seems logical that hotels obtain better results (QP) from the implementation of QMPs than restaurants.

To conclude this section, it is necessary to mention two additional key aspects derived from the analysis of the statistical results. First, while it is true that hotels obtain better quality performance (QP) from QMPs, this does not mean that implementing quality policies is not a priority for restaurants. As observed in the statistics calculated for restaurants, QMPs do positively impact QP, as in hotels, although with lower intensity. Second, no significant differences are observed for the effects of the QP on FP. QMPs, regardless of the company typology, indirectly and positively influence company competitiveness.

6. Conclusions

As a final summary of the study, it should be stated that investing in quality is profitable both for hotels and restaurants since it improves company competitiveness (FP). Therefore, any tourism manager who is worth his salary, both in hotels and restaurants, should include the implementation of quality policies as part of their firm portfolio. However, it is true that the proposed model shows that hotels obtained better results from implementation (QP) than restaurants, which led to the conclusion that more research is needed due to the differences in size and organizational complexity. This last conclusion paves the way for new future lines of research. For example, this paper is focused on the managers’ point of view. We could also study the differences in size, organization, and other business policies. Additionally, it is necessary to remark that this study only includes hotels and restaurants in one specific country and it would be useful to verify the model for other tourism subsectors and other geographical areas.