Perceptions of Guest Satisfaction by Market: A Guam Case Study

Introduction

Small island destinations like Guam, Saipan and Palau are increasingly seeing a more diversified group of travelers visiting their destinations. While Japan still makes up a significant percentage of visitors, these island destinations are beginning to show signs of an increasing number of visitors from markets like South Korea, Taiwan, and Hong Kong. As do most hotels and resorts around the world, properties in these island destinations conduct guest surveys to ensure that guests are satisfied with their experience during their stay. This has generally been done for the primary market, which in the case of these destinations, has been the Japanese overseas visitor. Properties in these destinations also have available guest satisfaction surveys for English-speaking guests made up mainly of local residents and business travelers from the region.

A number of studies have been previously conducted concerning guest satisfaction as it relates to various factors such as hotel branding (O’Neill et al., 2006), factors influencing guest experience (Higgins, 2004), business travelers (Gundersen, 1996) and Service Encounters Involving Failure and Recovery (Smith, 1999). These studies generally view the guest experience from the perspective of guests that are assumed to have the same or similar perceptions as they relate to guest experiences with service, quality, safety, and other factors.

Small island destinations in Micronesia with growing percentages in multiple markets need to be aware of how perceptions may differ. This is especially true in hotels and resorts that must maintain their competitiveness against other properties on the same island or in nearby destinations. In fact, due to the increasing numbers of guests from other markets, it is imperative that properties measure the perception of satisfaction of guests from these markets. Perceptions may differ between when measuring various aspects of the properties’ products and services.

This article will use a case study of an 800-room waterpark resort on Guam to examine who the property measures perceptions of guest satisfaction and breaks down the satisfaction ratings by source market.

Background Information

Guam, an unincorporated territory of the United States, is the largest island in the Mariana Archipelago. It is located in the northwest Pacific Ocean approximately 6,100 kilometers west of Hawaii, 2,400 kilometers south of Japan and 3,200 kilometers east of Hong Kong. The land area of Guam is approximately 549 square kilometers. The island is 48 kilometers long and ranges from 8 to 14 kilometers in width. Guam was formed by undersea volcanoes and is surrounded by coral reefs near the shore. Hagatna, the capital city, is located in the central section of the island, which also serves as the center of commercial and industrial activities for the territory. Tumon Bay, the major tourist resort area, is located in the central section of the island. The northern section of Guam is relatively flat and is the location of Anderson Air Force Base. The southern section is mountainous and is sparsely populated. Apra Harbor, the commercial port and main naval base, is located in the southern section. Much of the interior of Guam is covered with dense jungle and vegetation.

The climate is tropical, but is tempered by the northeast trade winds with temperatures ranging from 26 to 30 degrees Celsius throughout the year. Guam is frequently affected by typhoons and mild earthquakes. Average rainfall is between 2,509 and 3,136 millimeters per year. Guam has two seasons—rainy (June through October) and dry (November through May). The current population of the island is approximately 160,000, which is made up of a rich mixture of people from various areas of the world. The mix of peoples from the Pacific Islands, Asia, Spain, America, and the Philippines, has created a unique blend of cultures on Guam. The native Chamorro population has been reduced in recent years due to migration to the U.S. mainland and the great influx of other ethnic groups. The Chamorro inhabited Guam before its discovery by Europeans, starting with Ferdinand Magellan on March 6, 1521. Spain took possession of Guam, along with other Marianas Islands, in 1565 and used Guam as a stopover point for the Spanish trade route between Mexico and the Philippines. In 1688, missionaries arrived to convert the population to Christianity while famine and European diseases devastated the Chamorro population during the early period of Spanish rule. Guam was ceded to the United States by the Treaty of Paris after the Spanish-American War in 1898. The U.S. Navy administered the island until 1950 except for the period of Japanese occupation during World War II when Guam became the first American territory occupied by Japan. Guam was liberated from Japan after a campaign from July 21 to August 10, 1944. Guamanians[1] today are U.S. citizens but may not vote in national elections. In 1950, the Organic Act of Guam established a civilian administration under the Department of Interior.

The growth of tourism on Guam began with the liberalization of Japanese overseas travel in 1964, when Japan relaxed foreign travel restrictions at a time when there were also substantial falls in airfares. During the early liberalization period, Guam was receiving visitors at an extremely rapid growth rate. The majority of visitors were from Japan (approximately 60 percent), with a substantial increase noted in the late 1960s resulting from the introduction of flights from Japan by Pan American, the world’s largest airline at that time. The proportion of Japanese visitors was 74 percent by 1980. During this period, economic factors and favorable government policies, as well as the aggressive marketing efforts of travel agencies, contributed to the growth of Japanese overseas travel. A combination of these factors is still influential today in the highly volatile and competitive tourism industry, with many destinations working hard to get a larger share of the Japanese visitors’ spending power. In fact, by 1989, Japan had become the world’s leader in spending on international tourism. In the year 2000 following nearly a decade of poor economic performance, the more savings conscious Japanese overseas travelers were still the fourth largest group of spenders on international travel in the world, after the Americans, the Germans, and the British (Mak et al. 2004).

Well-known international and Japanese brands, especially in the lodging industry, have established a presence on Guam to capitalize on the tourism industry dominated by Japanese consumers. The major international resorts on Guam today include Guam Marriott and Resort and Spa, Hilton Guam Resort and Spa, Hyatt Regency Guam, Outrigger Guam Resort, and the Westin Resort Guam. Large Japanese chains with a presence on Guam are Guam Hotel Okura, Hotel Nikko Guam and Palace Hotel Guam. Japan’s Leo Palace Corporation has also made a substantial investment in the Leo Palace Resort (http://www.leopalaceresort.com/), a multi-faceted condominium, hotel, spa and world-class sports compound, which is located in central Guam approximately 20 minutes away by car from the tourist district of Tumon. The total number of hotel rooms as of the end of 2006 was just over 8,000 (Guam Hotel and Restaurant Association, http://www.ghra.org).

Guam offers a variety of leisure activities as well as historical and cultural attractions. Guam’s beaches are known for their clear water and white sand that are perfect for sunbathing, a practically required activity for visitors to tropical beach resort areas. There is also duty free shopping and a varied nightlife, including a nightclub, which hosts top quality Las Vegas-style shows for families. Guam has at least seven world-class golf courses with breathtaking views for golf fans. For ocean lovers, Guam has some of the best scuba diving and snorkeling in the world. There are also underwater parks (Underwater World, http://www.aquariumteam.com/) where visitors can pet sharks, and Fish Eye Marine Park, (http://www.fisheyeguam.com/), an underwater observatory that allows for viewing a variety of fish species that exist on Guam’s reefs. In addition, Guam offers submarine tours, sunset dinner cruises, jet skiing, wind surfing, kayaking, parasailing, sky diving, and deep-sea fishing for those who enjoy these ocean-related activities. Visitors to Guam often take an optional trip to the Commonwealth of the Northern Marianas (CNMI) to enjoy similar activities in a different environment.

This case study focuses on The Pacific Islands Club (PIC) on Guam. It is a part of PIC Resorts (http//:www.picresorts.com), which caters to a diverse clientele including individuals, couples, families and tour groups. PIC Resorts is the largest resort chain in Micronesia with a combined 1100 rooms, including 800 rooms on Guam and 300 rooms on the island of Saipan. PIC Guam attracts families, incentive and conference groups, both large and small, and offers services and facilities perfect for family fun and relaxation, business meetings and informal receptions. Guests typically enjoy the beach or waterpark environment for relaxation and activities. Activities include waterslide, archery, windsurfing, snorkeling, tennis, racquetball and a host of others.

Guam typically receives approximately 1.3 million visitors per year, with 80% arriving from Japan. The second largest market is South Korea, with approximately 10 to 12 percent of arrivals. The rest of the arrivals are from other markets such as Taiwan, Hong Kong, Philippines, and U.S. Although these numbers are not quite balanced for the island as a whole, PIC Guam has had a strong mix of Korean guests along with Japanese. At times these markets are equally strong in guest representation on property. This is mainly due to the management’s proactive measures from the early 1990’s to mix the target markets as a way to counter the high and low seasons of various source markets.

Case Study

PIC Guam has conducted a Guest Satisfaction Survey for over the past decade to measure not only overall guest satisfaction, but also to measure responses by markets. In order to do this, surveys are provided in various languages (Japanese, Korean, Mandarin, and English). Survey forms in the appropriate language are provided in rooms on the departure date for a guest from each room to complete and to drop off at the front desk. Participants in the survey are provided with an opportunity to win a vacation back to PIC (round-trip air fare and accommodations).

In December 2006, PIC Guam had a total of 18,928 paid rooms and completed the month with an occupancy rate of 80.4%. The total number of responses received was 1779, or 9.4% of the paid rooms. During the month of December 6935 rooms or 36.6% were sold to the Japanese market, while 9128 rooms or 48.2% were sold to the Korean market. The breakdown of responses by nationality is listed below.

Responses by Nationality:

Japanese = 10.6%

Korean = 11.3%

Chinese = 9.0%

Other = 1.2%

Further, by examining a small sampling of the latest results, we can see how perceptions concerning guest satisfaction differ between markets.

GUEST ROOMS
17. Everything in Working Order
Total	China	Korea	Japan	Other
75%	71%	80%	68%	81%
18. Room Comfort
Total	China	Korea	Japan	Other
76%	72%	78%	74%	80%
19. Room Cleanliness
Total	China	Korea	Japan	Other
75%	75%	78%	71%	80%
20. Housekeeping Staff Service
Total	China	Korea	Japan	Other
79%	79%	83%	74%	85%
21. Sufficient Information in the Room
Total	China	Korea	Japan	Other
76%	74%	77%	74%	78%

In the area of guest rooms, it is apparent that gaps in perceptions concerning cleanliness, service, and state of working order for items in the rooms exist between Korean and Japanese guests. In terms of information available in guest rooms, there appears to be a relatively consistent perception between all markets.

HOTEL SERVICES
6. Efficiency
Total	China	Korea	Japan	Other
82%	77%	82%	81%	90%	Guest Service/Bell staff
82%	78%	84%	78%	87%	Front Desk
81%	77%	82%	80%	87%	Concierge
80%	72%	84%	76%	83%	Housekeeping
80%	81%	82%	77%	89%	Telephone Operator
84%	84%	86%	80%	84%	Security Staff

In terms of efficiency in hotel services, we can see a relatively wide range of satisfaction levels in some of the areas. The most notable gap is seen in the way guests from various markets view the efficiency of Guest Services and Bell staff, ranging from 77% satisfaction level from the Chinese market, to as high as 90% satisfaction for those from other markets. Expectations for service on the telephone from the property’s telephone operator were highest from the Japanese guests as indicated by the lowest score here. This may indicate not only a potential language training issue for the property, but also an issue of telephone etiquette expectations from guests who are accustomed to telephone business practices in Japan.

For the overall property, examining perceptions of areas outside of the guest rooms, we can observe how various markets rate specific components of the resort.

PROPERTY IN GENERAL
22. Cleanliness of Property
Total	China	Korea	Japan	Other
77%	84%	79%	75%	86%
23. Safety of Property
Total	China	Korea	Japan	Other
83%	88%	84%	80%	88%
24. Security Visible and Alert
Total	China	Korea	Japan	Other
82%	91%	84%	78%	90%
25. Attractiveness of Landscaping
Total	China	Korea	Japan	Other
89%	84%	89%	87%	93%
26. Overall Staff Attitude
Total	China	Korea	Japan	Other
86%	83%	87%	85%	91%
27. Overall Impression
Total	China	Korea	Japan	Other
85%	83%	86%	83%	89%
28. Value for Money
Total	China	Korea	Japan	Other
81%	84%	81%	80%	86%

It is interesting to note that in terms of value for money, there is little variance in the perception of source markets. With globalization, growing competition, and the increasing frequency of travelers, we may see more narrowing of this component between markets in properties around the world as the perception of pricing and quality service become less distinguishable. Results with the Japan market indicate the importance of the perception of safety/security and cleanliness that remain to be such important factors for travelers from this market.

Conclusion and Implications

For any business that wants to maintain competitiveness, it is important to measure customer satisfaction. Hotels and resorts must also keep a finger on the pulse of their guest satisfaction levels. Hotels and resorts in Micronesia, which have highly segmented markets for guests, must not only examine the perceptions of their major market, but they must also examine differences in perception and how services can be fine-tuned to improve quality.

With the brief sampling of PIC Guam’s guest satisfaction survey results, we are able to see the variance in perception when it comes to satisfaction levels for components in the guest rooms and the overall property. This will allow the resort to fine-tune its products and services to improve satisfaction levels for all of its important markets.

Because abrupt changes in products, procedures and services may positively affect one market’s score while causing a decline in another’s score, it is extremely important that the proper balance is in place to weigh the pros and cons of changes, and that an adequate review takes place prior to implementing such changes. Management of hotels and resorts may consult with experts on source markets to gather important information on how to properly manage the balancing of markets as well as the offering of products and services.

References

Guam Hotel and Restaurant Association (2007) GHRA 2006 Hotel Statistics, GHRA Website. www.ghra.org viewed March 2, 2007.

Guam Visitors Bureau (2007) Monthly Visitor Arrivals, Tumon: Guam Visitors Bureau.

Gundersen, Marit G. (1996) “Hotel guest satisfaction among business travelers.” Cornell Hotel & Restaurant Administration Quarterly, Apr96, Vol. 37 Issue 2, p72.

Higgins, Stacey Mieyal (2004) “Guestroom at forefront of guest satisfaction.” Hotel & Motel Management 9/20/2004, Vol. 219 Issue 16, p4-22.

Mak, James, Lonny Carlile, and Sally Dai (2004) Impact of Population Aging on Japanese International Travel to 2025. Honolulu: East-West Center Working Papers, Economic Series, No. 73, October 2004.

O'Neill, John W., Mattila, Anna S. Qu Xiao (2006) “Hotel Guest Satisfaction and Brand Performance: The Effect of Franchising Strategy.” Journal of Quality Assurance in Hospitality & Tourism, 2006, Vol. 7 Issue 3, p25-39.

Pacific Islands Club Guam (2007) Guest Satisfaction Survey, December 2006, Human Resources Department: Tumon, Guam.

Smith, Amy K., Bolton, Ruth N. and Wagner, Janet (1999) “A Model of Customer Satisfaction with Service Encounters Involving Failure and Recovery,” Journal of Marketing Research, Vol. 36, No. 3 1999-08 pp. 356-372.

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[1] A term referring to those who are long-term residents of Guam, usually holding U.S. citizenship. These include people from one or a mixture of a variety of ethnic backgrounds, such as Filipino, Caucasian, Chinese, Korean, Japanese, Chamorro, etc.