01 Explain two reasons why building customer relationships is important for a 5-star hotel. [8]

[Sir Afzal Shad]

01 Explain two reasons why building customer relationships is important for a 5-star hotel. [8]

Possible Answer:
Repeated Customers >> Strong Interaction, Humble Dealing >> Customer positive Reviews, word of mouth advertisement, more customers will be attracted (relate case study) >> Sustained Quality, Brand Image, Increased Room Occupancy (managerial economies of scale)

Further Expansion Opportunities >> Market Development (new areas) / Product Development (additional services) >> Carry forward the brand image >> Reinvest from the parent hotel(s), less dependency on loan /investments, Trainings can also be offered from the parent hotels (purchasing economies of scale)

Please read the answer of the previous student & if the answer seems well developed don't use the same KN in your answer, try to give new one.

[Shuraim Arif]

(KN) Good relations with customers leads to a more loyal consumer base.
(APP) For example, if a 5-star hotel has good relations with its customers that it maintains by providing them with luxurious suites and hotel rooms, and offers complimentary breakfast, the customers would want to stay with them every time they want to book a stay.
(AN) This would mean that even though sales may not increase rapidly, they would be prevented from decreasing as customers would choose this hotel over others in the market. More importantly, customers are happy with the business's service, meaning they would spread the word among relatives or friends.
(AN+) This would potentially lead to an increased number of sales as the positive word of mouth spreads and the business starts to gain popularity amongst customers, gaining a huge competitive edge over the market.
(KN) Another reason businesses may want to build good relationships with customers is that complaints reduce.
(APP) For example, if the customers of a 5-star hotel trust the hotel and feel free communicating, there is a far higher chance that the customers report any problems to the staff, (who would take it very seriously and try to get the problem resolved right away,) rather than posting negative reviews about the hotel on the internet.
(AN) Since there would be little to no negative reviews about the hotel on the internet, there would be little to no damage to the hotel's reputation, making it far easier for new customers to choose the hotel over others that have bad reviews. This would lead to an increase in sales, which would increase the net profit.
(AN+) An increase in net profit would mean that cashflow problems would mean cashflow problems are almost unlikely to occur, meaning all costs and expenses would be paid on time, leading to the same, good, consistent quality of the hotel that its customers like.

Examiner Comments:
AN1: 2/3 Elements
AN+1: Going vague, no addition other than increase in sales, infuse the nature of business and give depth.

APP2, AN2: Negative reviews in APP and AN again, why?
AN2: Increase in sale again? Pure repeating!
AN+2: Going too generic. What is the relation of consistent quality with the profit?

[linta]

building customer relationships encourages loyalty towards the business by the customers
a 5star hotel could enhance its services where the staff for eg offers private tours or restaurant reservations based on guests preferences.by making the guests feel valued the hotel increases the likelihood of repeat bookings.this leads to a lower marketing cost and a steady revenue for the business as the loyal guests return regularly and also reduce the need to carry out expensive marketing campaigns ultimately giving the hotel an edge over its comeptitors .
Moreover;strong relationships lead to positive word ofmouth promotion The hotel encourages guests to share experiences leading to positive reviews on platforms or personal reccomendations to friends and family.this enhances the hotels reputation in the luxury market.the trust from good relationship allows the hotel to charge higher prices as luxury customers value exclusivity and quality .this also attracts high income customers that are willing to pay more for such exceptional services Hence it enhances the profit margins for the business and also strengthens its market position.

Examiner Comments: [8/8]

[masabtahir]

kn] for repeated sales in the business for good customer relationship
ap] for e.g. building a good communication, interaction and humble dealing style improves customer relationship i hotel business
an] this will satisfy customer standards and there self esteem would e fulfilled so they will repeatly come to their hotel for repeat sales and brand image of the firm will increase as good attending by employes
an+] this will increase customer base as good brand image was created before with good customer relation

kn] this will make the customer charge high to price to the hotel services as they are giving good services and help
ap] for e.g. pc hotel charge high price people are okay to give money because they know there providing quality service in return of it
an] this will increase sales as people will pay high price easily and make the profit of the hotel increase which can make them able to enhance their service quality with high profit earning this will enhance further their stars and can acheive to 6 stars rating
an+] this can help to expand hotels services and open new outlets of hotels

[Fatima ibtehaj]

[KN]For customer loyalty.
[APP]Providing good customer service can make a person inclined to come to the same hotel again leading towards a positive word of mouth advertisement.
[AN]This positive word of mouth advertisement will lead towards reduction of dependence on expensive marketing to attract new customers hence reducing overall costs and reduction in economies of scale.
[AN+]In the long run, this will lead towards a rise in sales revenue.
[KN]In order to manage complaints
[APP]Good customer relationships make guests more comfortable giving feedback or raising complaints directly to the hotel.
[AN]This allows problems to be resolved quickly before they damage the hotel’s reputation. By responding effectively to complaints, a 5-star hotel can maintain high service standards and improve operations.
[AN+]

[sarah_naeem]

[KN]: Building customer relationship is important so that customer loyalty can be gained.
[AP]:For example, if a 5-star hotel enhances it's services by offering a tour to the customers or by making them feel valued and by offering them discounts, room delivery services or complimentary breakfast with their stay, such services would encourage the customers to return to such a welcoming hotel.
[AN]: Thus, this would lead to customers spreading positive word of mouth of the hotel which leads to increase in revenue which further leads to less marketing cost.
[AN+]: Furthermore, this would also lead the hotel to become well known and to brand image being improved.

[KN]: Another reason building customer relationship is important so that the hotel can receive honest feedbacks and can further improve their services.
[APP]: For example, the hotel can hand out feedback forms to their repeated customers as good customer relationship leads to customers feeling comfortable in sharing what the think should be improved leading to a better environment being provided to the other customers.
[AN]: Thus, this leads to quick problem solving, makes customers feel valued as their opinions are being considered which also grabs the attention of new customers making them willing to pay higher prices as well.
[AN+]: Furthermore, this also leads to improved profit margin and long term success of business.