CC BY
31
UDC 338.48 EDN: AHVCMI
DOI: 10.24412/1995-042X-2022-1-188-198
Nazym B. SEITOVA
KAZGUU M. Narikbayev University (Nur-Sultan, Kazakhstan) Senior Lecturer, email: nazym.seitova@htmi.ch; ORCID: 0000-0002-2057-9641
ANALYSIS OF THE CURRENT INNOVATIONS IN YOTEL HOTELS IN SINGAPORE
Abstract. Use of modern technologies and smart spacing in hotel operations of the Yotel hotel chain has been proved as an effective way to enter the competitive hotel industry market worldwide. However, while the business-level strategy employs two different approaches including product differentiation and low-price based activities, it is argued that these same innovations cause the deterioration in the total service quality management of the Yotel hotel chain. The study evaluated the social and economic impacts of the job redesign that has taken place due to implementation of self-check in kiosks and AI robots at the front desk. Additionally, the study examined the level of the perceived service quality of the guests of Yotel and YotelAir hotels in Singapore using the dimensions of the SERVQUAL model against each of the service products and processes. It has been found that differentiation of innovative products across the two business units actually causes a gap between customer expectations and received service during hotel stay. Furthermore, such products as occupancy control for heat/AC and LED lights in the room are initiatives that do not correspond to the needs and expectations of all the current customers.
Keywords: innovations, service products, strategic planning, hotels, AI, service quality
Citation: Seitova, N. B. (2022). Analysis of the current innovations in Yotel hotels in Singapore. Servis v Rossii i za rubezhom [Services in Russia and Abroad], 16(1), 188-198. doi: 10.24412/1995-042X-2022-1-188-198.
Article History
Received 28 January 2022 Accepted 1 March 2022
Disclosure statement
No potential conflict of interest was reported by the author(s).
© 2022 the Author(s)
This work is licensed under the Creative Commons Attribution 4.0 International (CC BY-SA 4.0). To view a copy of this license, visit https://creativecommons.org/licenses/by-sa/4.0/
УДК 338.48 EDN: AHVCMI
DOI: 10.24412/1995-042X-2022-1-188-198
СЕИТОВА Назым Болатовна
Университет КАЗГЮУ им. М. С. Нарикбаева (Нур-Султан, Казахстан) Старший преподаватель, e-mail: nazym.seitova@htmi.ch
АНАЛИЗ ТЕКУЩИХ НОВОВВЕДЕНИЙ В СФЕРЕ ОБСЛУЖИВАНИЯ: ТЕМАТИЧЕСКОЕ ИССЛЕДОВАНИЕ СЕТИ ОТЕЛЕЙ YOTEL В СИНГАПУРЕ
Использование современных технологий и стратегии продуманной организации пространства в гостиничной сети Yotel зарекомендовало себя как эффективный способ выхода на конкурентный рынок гостиничной индустрии во всем мире. Однако несмотря на то, что стратегия бизнес-уровня использует два разных подхода, включая дифференциацию продуктов и деятельность отелей, основанную на низких ценах, утверждается, что эти же инновации вызывают ухудшение общего управления качеством обслуживания гостиничной сети Yotel. В исследовании оценивались социальные и экономические последствия реорганизации рабочих мест, которая произошла из-за внедрения киосков само-поселения и роботов с искусственным интеллектом на стойке регистрации. Кроме того, в исследовании изучался уровень восприятия качества обслуживания гостями отелей Yotel и YotelAir в Сингапуре с использованием параметров модели SERVQUAL для каждого из сервисных продуктов и процессов. Было обнаружено, что дифференциация инновационных продуктов между двумя бизнес-подразделениями фактически вызывает разрыв между ожиданиями клиентов и получаемым обслуживанием во время пребывания в отеле. Кроме того, такие продукты, как контроль присутствия для отопления/переменного тока и светодиодное освещение в помещении, являются инициативами, которые не соответствуют потребностям и ожиданиям всех нынешних клиентов.
Ключевые слова: инновации, сервисные продукты, стратегическое планирование, отели, ИИ, качество обслуживания.
Для цитирования: Сеитова Н.Б. Анализ текущих нововведений в сфере обслуживания: тематическое исследование сети отелей Yotel в Сингапуре // Сервис в России и за рубежом. 2022. Т.16. №1. С. 188-198. DOI: 10.24412/1995-042X-2022-1-188-198.
Дата поступления в редакцию: 28 января 2022 г. Дата утверждения в печать: 1 марта 2022 г.
СЕРВИС
В РОССИИ
И ЗА РУБЕЖОМ
Introduction
Yotel is a type of luxury hotel that operates on a smaller smartly spaced ground with some futuristic elements. The creation of YO! founder Simon Woodroffe OBE who has been inspired by air travel in the first-class cabin, offers Premium Cabins with adjustable SmartBeds, Techno Wall mood lightings, rejuvenating monsoon showers and much more at affordable prices (ibid.). Furthermore, aiming at busy guests, its first hotels opened at London Gatwick and Heathrow airports, with subsequent openings extending to city centres1. Thus, in order to differentiate operations between company's offerings, it has
rebranded its airport hotels under YotelAir brand, leaving those in city centre under Yotel brand2 and planning on launching its first residences under YotelPad in 2020 (Cordle, 2018).
Whereas, major shareholders of the company had included the Al-Bahar Group, United Investment Portugal, AQARAT (Kuwait Real Estate Company), the company entered into a $250 million strategic partnership with Starwood Capital Group in 2017, which allowed to further expand the brand worldwide3. These include openings of Yotel on Orchard Road Singapore in November 2017 and YotelAir at Jewel Changi Airport in April 2019.
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Locations with • are tatdng ort
Fig. 1 - Yotel Worldwide Location4
Vision / Mission and Aims
While YoteTs mission states that technology is viewed as a tool to create a "seamless experience", the organisation defines their target
market as Generation YO, those searching for extraordinary experience, fun and sought-after locations5. Additionally, in order to complete this mission and by use of seamless technology the brand
1 Hospitalitynet (2017). Yotel pushes the affordable luxury agenda, 13 Jul. URL: https://www.hospitali-tynet.org/news/4083729.html (Accessed on January 15, 2022).
2 Yotel (2020a). Our Brands. URL: https://www.yotel.com/en/about-yotel/brands (Accessed on January 15, 2022).
3 Hospitalitynet.org (2017). YOTEL announces $250 million strategic partnership with Starwood Capital Group, 26 Sept. URL: https://www.hospitalitynet.org/news/4084726.html (Accessed on January 10, 2022).
4 Yotel (2020c). Yotel expansion plan: 24+ hotels by 2021. URL: https://www.yotel.com/en/about-yotel/development (Accessed on January 15, 2022).
5 Yotel (2020b). Our DNA. URL: https://www.yotel.com/en/about-yotel/dna (Accessed on 15 January 2022).
promises their guests to aim at creating time, providing with smart design in the sought- after locations and delivering a sense of "komyuniti" through communal spaces (ibid).
Innovative Strategic Plan According to Johnson, Scholes and Whit-tington (2008), there are three levels of strategies exploited by organizations: business-level, corporate-level and international. I define first as the most significant and appropriate for this case as the discussion is based on business units located in Singapore. In regards to the business level strategies, the strategic business units (SBU's), in current case Yotel and YotelAir in Singapore, operate on the basis of two various strategies, with the former serving as a foundation and the latter assisting in achieving the competitive advantage.
Fig. 2 - The Strategy Clock: Competitive Strategy Options (Faulkner and Bowman, 1995 adapted by Johnson et al., 2008)
First of all, according to Bowman's Strategy Clock (Fig. 2), both hotels pursue a hybrid strategy. This allows the businesses to take advantage
of employing the product differentiation and low-price based activities (Faulkner and Bowman, 1995 cited by Baraskova, 2010). For example, self-check-in kiosks, guest-service robots at Yotel and granting short period stays at YotelAir along with low prices stimulate guests" higher acceptance of small room sizes6, which in consequence allows the possible reduction on total cost of hotel construction as well as labour and other operation-related costs. It is argued that the strategy is mainly used as an entrance strategy for businesses with established competition (Kaliappen, Chuah, Gorondutse and Moktar, 2018). Hence, with 420 hotels back in 2017, including hostels with more than 4 rooms across the country7, Singapore provided substantial competitive ground. Nevertheless, being the first hotel to provide with the combination of unique product offering, Yotel created a strategic lock-in, the second strategy sustaining its competitive advantage. In other words, Yotel/YotelAir became an industry standard for the use of modern technology and smart spacing simultaneously (e.g. Johnson et al., 2008).
Innovative products and services and classification Additionally, to support the lock-in strategy findings, in regards to Singapore's hotel industry, the country's tourism board (STB) has identified 3 different areas the innovation can take place in: process, service and manpower8. While, the latter two hold concerns about the relative quality of service and manpower growth, the former one considers ways of improving service through use of modern technologies (ibid.). Thus, despite being a tech-driven company, Yotel also emphasizes overall customer experience and constant innovation ("CANI"), taking it as the operations guiding principle9. For example, in March-April 2018,
6 Today (2016). Micro-hotel Yotel plans first Asian property in S'pore, 2 Sep. URL: https://www.todayonline.com/busi-ness/micro-hotel-yotel-plans-first-asian-property-spore (Accessed on January 15, 2022).
7 STB (2019). Hotels. URL: https://www.stb.gov.sg/content/stb/en/industries/hotels.html (Accessed on January 15, 2022).
8 STB (2015). Hotel Industry Expert Panel Outlines Recommendations to Achieve Productivity-Driven Sustainable Growth, 13 Oct. URL: https://www.stb.gov.sg/content/stb/en/media-centre/media-releases/hotel-industry-expert-panel-out-lines-recommendations.html (Accessed on January 10, 2022).
9 Yotel (2020d). WIT|Yotel Singapore's focus on Chinese travellers pays off. URL: https://www.yotel.com/en/about-yo-tel/press/coverage/wit-yotel-singapore-s-focus-on-chinese-travellers-pays-off (Accessed on January 15, 2022).
Yotel has announced its partnership with Silicon Valley's Plug and Play, one of the biggest innovation b2b platforms for start-ups, investors and corporations10. This declares that the company identifies itself through their activities rather than products themselves, and hence, undertakes a course
of process innovation, while most competitors are concerned with their own product offering. Nevertheless, in the table below, you may find classification of existing innovations at Yotels located in Singapore written by the author and based on information gathered from multiple sources.
Table 1 - Categorisation of YotePs innovative products and services by type of innovation
Products Service improvements Yotel branch Type of innovation
Smartbeds Enables smart spacing11 Yotel and YotelAir product
Occupancy heat / AC, LED light control Reducing green print9 process
Robots Delivery of water bottles and towels, singing songs (Jackson, 2019) Yotel
Self-check in Complete check-in process handled by the guest via use of kiosks11 Yotel and process, manpower
"Intelity" App Use of in-room facilities and room booking12 YotelAir
Interactive Website Online concierge
Contributions to local economic and social dimensions through innovations
Changi Airport has registered a record number of visitors - 65.6 million in the year of 2018, presenting an increase of 5.5% in comparison to the previous year13. Despite new long-haul routes and growing numbers of visitors, the contribution to the local tourism, in particular, the hotel industry is usually measured by the proportion of visitors' overnight stays (Leng, Chee and Chan, 2017). Thus, with one of the reservation process innovations of Singapore's YotelAir that includes availability and charges for hourly stays, 4-8 hours starting at S$100, with possible extension14, this business unit can be recognized as a pioneer in redefining the measure of benefits to the local economy.
Moreover, the focus of the Yotel's philosophy on providing "seamless experience" to their guests9, has potentially affected the utilization and evolution of innovative products, conforming to Pine and Gilmore's (1999) discussion on the "experience economy". This concept explains the shift from service to experience - based economy on which success of a business depends enormously (Sipe and Testa, 2018). This applies to Singapore hotel and tourism industry as well, as SGPC15 has reported job redesign to be taking place in front of house at the Nook restaurant in order to maximize potential of its employees in providing memorable dining experience to their guests via implementing Online Menu Mobile App and self-service stations for drinks and e-payment
10 Yotel (2020e). Yotel announces pioneering partnership with plug and play. URL: https://www.yotel.com/me-dia/2062/plug-and-play-partnership-final-542018.pdf (Accessed on January 15, 2022).
11 Yotel (2020f). About your stay. URL: https://www.yotel.com/en/hotels/yotel-singapore/your-stay (Accessed on January 15, 2022).
12 Intelity (2019). YOTEL Makes INTELITY a Brand Standard, 9 Apr. URL: https://intelity.com/news/2019/yotel-intelity-brand-standard/ (Accessed on January 12, 2022).
13 Changi Airport Group (2019). Changi Airport crosses 65 million passenger mark in 2018, 29 Jan. URL: http://www.changiairport.com/corporate/media-centre/newsroom.html#/pressreleases/changi-airport-crosses-65-million-passenger-mark-in-2018-2829095 (Accessed on January 15, 2022).
14 YotelAir (2020). Day Rates. URL: https://www.yotel.com/en/hotels/yotelair-singapore-changi-airport/day-rates (Accessed on January 15, 2022).
15 SGPC (2019). Productivity Improvement: Process and Job Redesign for Front of House: GHF Pte Ltd The Nook. URL: https://www.sgpc.sg/resources/research-publications/ (Accessed on January 12, 2022).
system (ibid.). Such practice does not only cut down the cost of staffing for the business but also improves the quality of jobs offered to the Singaporean job market.
Thus, according to the Asia Credit Research16, in the second quarter of 2018, HFCSP (Hong Fok Corp Ltd), one of the main investors of the Yotel on Orchard Road in Singapore, has reported a revenue increase by 110% in 2018 which translates as SGD 30.9 million, largely due to income contributions from Yotel during the reported year.
Critical analysis of innovative elements In order to appraise the success of implementation of the innovative elements of existing products, the author shall refer to a notion of service quality.
Service quality as a dimension has been defined to deliver a sustainable and competitive
advantage to the business (Angelova and Zikiri, 2011; Sorofman and McLellan, 2014). Additionally, despite aiding cost management, it has been found to improve customer satisfaction, which increases profit of the relative company (Yarimoglu, 2014).
Several scholars have attempted to measure service quality to define which factors contribute to successful performance of the business. Thus, one of them is SERVQUAL, developed by Parasuraman, Berry and Zeithaml in 1988, the model shown in Figure 1 allows to measure guest's perceptions of service quality before and after encounter of the service itself. Providing seven measurement gaps in the original model, it currently studies guest perceptions under five dimensions of the service experience: reliability, responsiveness, tangibles, assurance and empathy (Shahin, 2006).
Fig. 3 - SERVQUAL model (Parasuraman et al., 1988)
Reliability
This factor is defined as the capability of the business to deliver promised service accurately (Murasiranwa, 2012). In regards to the innovation product of Yotel, Singapore, specifically the delivery robots Yoshi and Yolanda, this factor shall be appraised on how well do these deliver the orders to the doorsteps of their customers. According to
TripAdvisor reviews, 21% of hotel guests who stayed at Yotel and encountered the interactive experience with the two robots, indicated the link of their accommodation choice to the presence of robots17. 680 out of 2995 reviews on TripAdvisor under 5 star - ratings have indicated guests acknowledging the presence of robots as entertainment not only for kids but adults as
16 OCBC Bank (2018). Earnings Review: Hong Fok Corp Ltd ("HFC"). URL: https://www.ocbc.com/assets/pdf/credit%20re-search/corporates%20reports/2018/ocbc%20asia%20credit%20-%20hfcsp%20earnings%20review%202q2018%20(17% 20aug).pdf (Accessed on January 10, 2022).
well18. Additionally, a study by Etemad-Sajadi (2018) has demonstrated positive links of robots use on guests" perceptions of reliability at the similar concept Henn na hotel in Nagasaki, Japan. The hotel utilized multi-lingual robots at the front desks as well as porters and assistance at the kitchen (ibid.). However, several customers have raised concerns on robots replacing humans, standing at the point of 4.03 for women and 3.24 for men respondents on the scale from 1-7 highest grade, (Etemad-Sajadi, 2018). This means that despite the fact that Yoshi and Yolanda are able to cut the staff-hiring costs at the Yotel, Singapore and replace 3.5 full-time employees the factor of human touch has to be considered.
Responsiveness
This factor has been generally defined as a willingness to assist guests promptly and efficiently (Parasuraman, Berry and Zeithaml, 1998 cited by Murasiranwa, 2012). In regards to Yotel and current innovations, it can be measured via the company's providing a wide array of channels for their guests to communicate with the hotel's staff.
According to Fergus Boyd (Group Director of Digital and IT), Yotel has already established a fully responsive website in 2015 that is able to customize bookings as well as is fully compatible with mobiles19. Thus, it represents an online fulltime concierge, to which guests may refer with any questions. However, as it can be seen through reviews on booking.com, some information on the Yotel's official website such as about the sizes of the rooms or ongoing renovations is misleading20. Thus, despite innovative technologies providing prompt access to information to their guests, it cannot be considered efficient enough while the information is incomplete.
Nevertheless, social media has also been used as one of the other channels to effectively communicate with YoteTs guests, especially such platforms as Twitter, Facebook and Instagram (Mari, 2016). This has allowed one of the guests to describe one of the grievances on the YoteTs Facebook page that has been later fixed during her stay (e.g. TripAdvisor18).
Empathy
Empathy is a factor that is defined by individualized attention, so that customers could feel unique and valued (Pakurar, Haddad, Nagy and Popp, 2019). This factor may include security, access and credibility as measurement dimensions (bid.).
Hospitality industry has been traditionally viewed on the basis of the relationship between a guest and the host, that is usually described by friendliness, creation of "hospitable" atmosphere and warming behavior (Burgess, 1982 cited by Brotherton and Wood, 2008; Blain and Lashley, 2014). However, with the emergence of innovative technologies this view has been opposed by Kandampully, Zhang and Jaakkola (2018) who claimed that guests 'perceptions of quality were mainly dependent on tangibles (in-room technologies) and entertainment.
Similarly, the guests of the Henn na hotel were more likely to accept new technologies by their "usefulness" and "enjoyment" provision (Etemad-Sajadi, 2018), which has been confirmed by another study at the Multi-Robot Café by PRINTEPS (Morita, Kashiwagi, Yorozu, Suzuki and Yamaguchi, 2018). Thus, guest experience is concluded to be a representation of "memorable experience", defined by offered products and services rather than personal engagement (Sipe and
17 Business Review Singapore (2019). YOTEL Singapore Orchard clinches Robotics Award for hospitality and leisure in SBR's Technology Excellence Awards, 31 May. URL: https://sbr.com.sg/co-written-partner/more-news/yotel-singapore-or-chard-clinches-robotics-award-hospitality-and-leisure (Accessed on January 15, 2022).
18 TripAdvisor (2020). Yotel Singapore: all reviews. URL: https://www.tripadvisor.com.sg/Hotel_Review-g294265-d12559807-Reviews-or35-YOTEL_Singapore-Singapore.html#REVIEWS (Accessed on January 15, 2022).
19 FatMedia (2015). Fat Media develop fully-responsive site for YOTEL, 30 Apr. URL: https://www.fat-media.co.uk/news/fat-media-develop-fully-responsive-site-for-yotel/ (Accessed on January 15, 2022).
20 Booking.com (2020). YOTEL Singapore Orchard Road Reviews. URL: https://www.booking.com/hotel/sg (Accessed on January 15, 2022).
Testa, 2018; Melissen, van der Rest, Josephi and Blomme, 2018).
Author of the current essay speculates that providing "memorable experience" via tangibles is also a type of care for the guest that has been preliminary arranged, which conforms with the definition of empathy factor provided earlier.
In relation to Yotels in Singapore, in-room and spacing designs in both hotels (at the airport and city center) aim at saving valuable time of their guests, by providing direct access to all information and facilities via a single App called "In-telity '' (Hertzfeld, 2019). Furthermore, in addition to the ease of access, one of the measurement dimensions of empathy factor has been presented by self-check in kiosks. Additionally, to provide care for their guests who prefer physical interaction during check in process, the traditional registration desks with full-time staff are still made available11. However, for the use of innovative elements of Yotel's offer, the author of current work has to stress the importance of targeted guest profile, highlighting tech-savviness and flexibility as targeted guest qualities. The view can be supported by the fact that majority of the customers at the Yotel Singapore have been reported to be in the age group of 25-45 years old (Kit, 2017), the Millennial age group, which is often praised for mentioned traits (e.g. ManpowerGroup21).
Tangibles
According to Pakurar et al. (2019), this dimension originally included all the physical facilities such as equipment, personnel, the tools and machines designed to provide service and even their outer appearance. In regards to the Yotels, the whole interior design theme with futuristic presence can be praised for details. Several guests have been positively affected by adjusting "Front desk" title into "Mission control" to fit the hotel's concept as well as the robots that are sent to deliver additional bottles of water and towels18. However, not all of the innovative tangibles have been welcomed. For example, occupancy, heat
and LED light control that operates only with presence of physical motion in the room has received negative comments on booking.com as well as TripAdvisor18,20. Despite the company's focus of using these to stimulate spreading positive public relations through green initiatives along the sustainable development (Maheshwari, 2016), several other scholars have identified other customers who received service as another valuable part of tangibles (Yarimoglu, 2014). In other words, the perpetual negativity across guest reviews in regards to the innovation may harm Yotel's quality of provided service under the SERVQUAL dimensions. Thus, it can be suggested to activate the motion detector feature on the basis of a guest's request.
Assurance
This dimension is defined by trust and confidence of the guests in the company operations (Kushwaha and Agrawal, 2014). However, it is important to note that there are 4 constituent parts to the assurance of services quality: competency (measured by one's ability to perform the service), respect for the guest, effective communication and the overall attitude expressed towards the guest (Strawderman and Koubek, 2008). Since, the discussed dimension is majorly dependent on its employees per original definition, in order to fit the discussed matter author shall try to appraise it against innovative products of Yotel hotels.
While Yotel's chief executive Hubert Viriot is assuring his target market in the existence of brand standards that are shared across global branches (Jackson, 2019), it can be seen that implementation of robots across the chain is an inconsistent practice. As these are only available at Yotel's locations in Singapore on Orchard Road, in Boston Harbor and New York (Johnson, 2018). Furthermore, in regards to the services provided by these innovative products, each has various functions such as Yoshi and Yolanda from Singapore are considered delivery robots only, Yobot of
21 Manpower Group (2016). Millennial careers: 2020 vision: Facts, figures, practical advice from workforce experts. URL: https://www.manpowergroup.com (Accessed on December 16, 2021).
New York is a butler, storing guest's luggage, and YO2D2 offers an array of services from summoning an elevator to navigating through the crowd to greet the guests (Kriston, 2018).
Thus, referring to Stawderman and Koubek (2008) components of assurance, due to loca-tional service inconsistency provided by lack of robots globally and inability of currently operating ones to communicate with guests effectively as compared to human employees, the risk of decrease in customer satisfaction with company's services is high as the experience expectations might not match the actuality. Yoshi, Yolanda, Yobot and YO2D2 are not able to maintain a full conversation and are not programmed for complex tasks yet (e.g. Kriston, 2018; Jackson, 2019; TripAdvisor18).
Conclusion and Recommendations
Innovations brought by constantly developing chains such as Yotel, creates significant competition to the local businesses. However, in order to appraise the success of the business the management has to focus not only on received revenue but also customers feedback, specifically, their perceptions of service quality. This paper has attempted to appraise each of the innovative products mentioned in Fig. 2 against the service
quality dimensions from Fig. 3.
Thus, it can be concluded that: such innovative products as occupancy control for heat/AC and LED lights in the room have not been received positively by several guests of the hotel. In these regards, the hotel has to clearly state the profile of the guests its focusing on with such green initiative as well as perhaps make it available on guests request rather than have it as a part of service standard.
Furthermore, service standards have to be reviewed on the issue of uniformity, which can also have a huge impact on the gap between perceived and actual service quality for the guest. In relation to the hotels' robots, each that is already in use has to provide the same range of functions to maintain guest expectations on the same level.
Additionally, while Yotel and YotelAir's website represent online concierge, it shall assure the guests of service quality via actual and updated information, which as has been seen through TripAdvisor and booking.com's feedback the hotels are lacking on.
At last, since the data and conclusions have been drawn based on empirical research review and the online booking channels' customer feedback.
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