Critical success factors in UKbudget hotel operations

Bob BrothertonSchool of Food, Consumer, Tourism and Hospitality Management,

Manchester Metropolitan University, Hollings Faculty, Manchester, UK

Keywords Budgetary control, Hotels, United Kingdom, Critical success factors

Abstract This study explores the nature of critical success factors (CSFs) in UK budget hoteloperations through a questionnaire survey designed to ascertain the relevance and importance of arange of factors referred to as critical in the extant academic and trade literature. From a usablesample of 239 questionnaires the results show that budget hotel unit managers from the leadingbrands largely agree with the criticality of the factors stated in the literature, this being verified viathe independent t-test and reliability analysis results that show most of the CSFs to be highlystatistically significant (p , 0.001) and the set of CSF items to be consistent (a ¼ 0.9360). Thedata analysis, via principal components analysis, also facilitates the creation of a parsimoniousmodel that identifies two dimensions and five CSFs as being the “most critical”.

IntroductionThe budget hotel sector has been one of the greatest success stories in the UKhospitality industry over the last 10-15 years, and continues to be so; “The budget hotelsector is still the fastest growing hotel sector in the UK” (Deloitte & Touche, 2000, p. 3).The growth in supply and market volume/value has been considerable, with theleading operators engaged in a frantic scramble for market dominance. The firstannual UK budget hotels survey conducted by Deloitte & Touche (1997) indicated thatin 1992 there were 193 budget hotels, with 7,326 rooms and this was forecasted toincrease to 745 units with 40,375 rooms by 2000. Their 2000 report showed thatalthough this unit growth forecast was slightly optimistic – 682 units in 2000 – therooms forecast was quite accurate as it recorded 40,050 rooms by this year (Deloitte &Touche, 2000). Although there is some evidence that the growth rates of the pastdecade are likely to slow in the new millennium, Mintel (1999, p. 9) was still forecastingthat the number of budget hotels would increase; “to around 1,020 by 2003, generatingaccommodation revenues in excess of £870 million”. However, this may have beensomewhat optimistic as the Deloitte & Touche (2002, p. 4, 8) UK Budget Hotel Surveyindicated that, “at the end of 2001, there were 847 branded budget hotels in the UKrepresenting some 51,900 rooms. . .. (and that) the number of branded budget hotelsand rooms is predicted to increase to 1,365 hotels and 86,080 in 2005”.

Given the vibrancy and growth in this sector of the UK hotel industry, on whichrelatively limited research has been conducted, this study was designed to identifythose factors regarded as “critical” in the relevant literature for the success of budgethotel operations and to test the extent to which budget hotel managers would agreewith the views of academic and industrial commentators expressed in this literature.It was also designed to further explore the view contained in the literature that criticalsuccess factors (CSFs) may be contextually contingent or generic in nature and toinvestigate the possibility of developing an emergent model of budget hotel CSFs.

The Emerald Research Register for this journal is available at The current issue and full text archive of this journal is available at

www.emeraldinsight.com/researchregister www.emeraldinsight.com/0144-3577.htm

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International Journal of Operations &Production ManagementVol. 24 No. 9, 2004pp. 944-969q Emerald Group Publishing Limited0144-3577DOI 10.1108/01443570410552135

Critical success factorsThe CSF approach to management has existed for some considerable time, withDaniel’s (1961) work regarded as perhaps one of its earliest proponents. Historically, ithas been applied extensively to the information systems (IS) field (Brotherton andLeslie, 1991; Davis, 1979; Edwards et al., 1991; Ghymn and King, 1976; Hickey, 1993;Robson, 1994; Rockart, 1979; Tozer, 1988; Ward et al., 1990). More recently, it has beenapplied beyond the IS field and used as a more “generic” approach to management,particularly within strategic and operational planning/management (Black, 1990;Devlin, 1989; Grunert and Ellegaard, 1993; Hardaker and Ward, 1987; Leidecker andBruno, 1984; Sousa de Vasconcellos e Sa, 1988). It has also been associated with corecompetency (Hooley and Saunders, 1993; Lowes et al., 1994), value chain (Johnson andScholes, 1993) and business process (Ward, 1992; Watson, 1993) perspectives. Othershave applied it to the creation of a learning organisation (Rosemblum and Keller, 1994);used it as the basis for a world class manufacturing business to attain a EuropeanQuality Award for total quality management (Quality Today, 1995); distilled the“common traits” underlying the most successful retailers in the USA (Berry et al.,1997); and suggested that the successful internationalisation of a retail format is basedon three CSFs (Dupuis and Prime, 1996).

However, despite this range of application it does have a generic essence, whichBrotherton and Shaw (1996, p. 114) suggest as: “Focused Specialisation, i.e. theconcentration of resources and effort upon those factors capable of providing thegreatest competitive leverage”. Nevertheless, the question remains, what are CSFs?Basically, CSFs are the factors that must be achieved if the company’s overall goals areto be attained. They may be derived from the features of a particular company’sinternal environment, i.e. its products, processes, people, and possibly structures, andare a reflection of a company’s specific core capabilities and competencies critical forcompetitive advantage (Berry et al., 1997; Duchessi et al., 1989; Van der Meer andCalori, 1989). However, the CSFs facing any given company will also be determined bythe nature of the external environment it faces. One feature of these external CSFs isthat they: “are less controllable than the internal ones, though they may still be subjectto varying degrees of measurement and control” (Brotherton and Shaw, 1996, p. 115).

CSFs may also be viewed in terms of their generality. Some situation or context arespecific while others are generic to a given combination of industrial/market/broaderenvironmental conditions (Geller, 1985a). Rockart (1979) also categorised CSFs intoshort-term (monitoring) and long-term (building) activities. Grunert and Ellegaard(1993) have distinguished between conjunctive or compensatory and perceived oractual CSFs and Ketelhohn (1998) discusses the differences between industry orstrategic and operational CSFs, a distinction that mirrors the context specific-genericdichotomy referred to above. Finally, Griffin (1995) provides a range of differentcategorisations related specifically to CSFs within an IS context.

Notwithstanding the attention given to the CSF approach in the generic IS andbusiness management literature an extensive search of numerous electronic databasesrevealed relatively few other explicit and distinct hospitality-related CSF studies.Notable exceptions include Geller’s (1985a, b, c) work on the US hotel industry thatfocused on the application of the CSF approach to hotel IS design. Goldman and Eyster(1992) and Lee (1987) produced studies concerned with the CSFs underlying restaurantsuccess and hotel food and beverage leases, respectively. Griffin (1995) undertook

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a study designed to identify and categorise the CSFs associated with yieldmanagement systems (YMS) in hotels. Again this was a study very much rooted in theIS tradition. However, a number of departures from this tradition appeared in the latterhalf of the 1990s. These include Croston’s (1995) investigation into the CSFs underlyingsuperior hotel profitability; Peacock’s (1995) investigation into the factors which areregarded as critical for a hospitality manager to be successful; Singerling et al.’s (1997)study into success factors in private clubs; Kaufman et al.’s (1996) study of theattributes associated with successful bed and breakfast operators; Chang et al.’s (1997)work on CSFs and benchmarking in in-flight catering services; Hinkin and Traceys’(1998) exploration of the physical and service factors that are regarded as critical foreffective meetings; Collie and Sparks’ (1999) study designed to identify practitionerperceptions of the key success factors and inhibitors in Australian restaurant andcatering business operations; and Ingram et al.’s (2000) study on the CSFs associatedwith action learning courses related to the hospitality industry.

With the exceptions of Brotherton and Shaw (1996), Croston (1995), and Ingram et al.(2000) and Peacock (1995) all the other hospitality-based CSF studies referred to abovewere conducted either in the USA or the Asia-Pacific region. Thus, as far as hospitality,CSFs and the UK are concerned the only research programme to explore CSFs in anysustained manner is that being conducted by Brotherton and other colleagues. In thisprogramme, Brotherton and Shaws’ (1996) work constituted the starting point inrelation to CSFs in “UK Hotels Plc”. Work to identify the CSFs and “CriticalSkills/Competences” in UK “Licensed House Operations and Management” (Brothertonand Watson, 2000, 2001), “UK Corporate Hotels” (Brotherton, 2004), and the testing ofBrotherton and Shaws’ (1996) UK Hotels Plc. findings on a cross-national basisbetween the UK and Holland (Brotherton et al., 2001, 2002), has also been ongoing inthis programme.

Budget hotel operationsThough the terms “budget” or “limited service” hotels or “economy lodging” are usedquite widely in both common and specific hospitality parlance what exactly constitutesa budget hotel is not easy to define, leading Fiorentino (1995, p. 457) to conclude that:“from an overview of the literature, budget hotels emerge as a complex and difficult todefine hospitality phenomena”. Indeed, some years earlier Roper and Carmouche (1989,p. 25) had commented that: “There is, in fact, substantial segmentation within this onesector of the hotel industry; it does not represent a homogeneous product group”, andwent on to suggest that this variation could be summarised by categorising budgethotels into “New-System, Traditional and Upper-Tier”. Despite such differences Seniorand Morphew (1990, p. 6) claimed that “it is possible to identify five broad similaritiesamongst them, (namely a) low tariff structure. . . minimum range of facilities. . . limitedrange of services. . . strategically-located. . . (and of) new/modular construction”.Finally, in spite of Fiorentino’s earlier reservations he also advanced a definitionalstatement at the end of his work suggesting that: “The budget hotel. . . is a brand newpurpose-designed product concept in the hospitality industry which relies heavily onthree factors; branded product concept, value for money and service consistency”(1995, p. 461).

However, regardless of the difficulties in establishing a universally accepteddefinition of the budget hotel what can be said with reasonable certainty is that as the

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branded budget hotel sector has developed considerably in the UK over the last 10-15years. The nature of this product and its generic operational characteristics may besummarised as:

. Strongly branded product;

. Extensive geographic coverage of the hotel network;

. Easily accessible;

. Centralised reservation system;

. Standardised unit construction and guest bedroom layout/facilities;

. Fixed, or only promotionally variable, room rates;

. Relatively limited service; and

. High value-for-money offer.

In terms of identifying potential CSFs, though there are other factors, such as siteselection, speed of hotel portfolio growth, competitive pricing etc., that may be deemedas critical for success at a strategic brand level this research was designed toconcentrate on those factors critical to hotel level operational success rather than thatof the corporate entity or the brand as a whole. That said there are some difficulties inany attempt to create a clear dichotomy in this respect. As a consequence, althoughmany of the potential 36 operational CSFs identified in the study can clearly beclassified as operational in nature/focus, there are some CSFs that could be regarded asboth operational and strategic in importance. For example, those relating to thecorporate/brand infrastructure such as the size of the hotel network, its geographiccoverage and standardised hotel design could be categorised as strategic CSFs. On theother hand, factors such as warmth and/or speed of guest welcome, hygiene andcleanliness, responsiveness to customer demands and staff recruitment and selectionare more locally determined.

The 36 potential CSFs were identified from a range of academic and industryfocused literatures. In particular, the annual UK budget hotel surveys produced byDeloitte & Touche (1997, 1998, 1999, 2000, 2001) and Mintel’s (1999) Budget hotelsreport were extremely useful sources for this exercise. Other industry focused literaturesources either confirmed the relevance of the Deloitte & Touche and Mintel material orcontributed additional ideas that included the work of Gauldie (2000), Gilbert andLockwood (1990), Hall (1998), Hall and Rawlinson (1998), Lilley (1996, 1998), McCaskey(2000), Miller (1998), Szitasi (1989) and Windle (1995-1996). On the academic side thework of Callan and Lefebve (1997), Fiorentino (1995), Roper and Carmouche (1989) andSenior and Morphew (1990) was also found to be helpful in generating the list ofpotential CSFs.

The final list of 36 items was essentially determined by both frequency of referenceto these items in the literature and relative importance ascribed to them by thecommentators concerned. In this sense the set of items represents a type of weightedsummary of the items commentators appear to regard as those being the mostimportant or critical for budget hotel operations to be successful and, hence, constitutepotential CSFs open to verification from the empirical data. Though it would have beenpossible to produce a list containing fewer items, by concentrating on those with thegreatest frequency of reference and/or relative importance given to them by thesesources, it was felt that this would not have adequately covered the range of possible

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CSFs or given the respondents a full opportunity to provide their views on theimportance of these.

MethodologyIn terms of research design it was clear that the most appropriate and feasible optionwould be a survey. Given that one of the key purposes of this research was to ascertainthe CSFs for budget hotel operations in the UK per se a valid survey was clearly thebest choice available. This would allow the results derived from the sample to begeneralised to the population as a whole and was the most feasible option for collectingthe data required, especially in view of the very limited funding available to conductthe study. In addition, the inclusion of appropriate categorical questions in thequestionnaire facilitated relevant sub-sample analysis to determine whether the CSFscould be regarded as generic or contextually contingent in nature.

The results of the preceding budget hotel operations literature review were used asthe basis for the design of the questionnaire, particularly the CSF items. Though itwould have been possible to group or categorise the 36 factors and produce a morestructured conceptual framework to guide and inform the empirical research designand data collection/analysis it was felt that leaving the 36 items as one unstructured setwould be preferable for two main reasons. First, this would avoid any potential bias inthe data collection instrument that could have occurred if the items had been groupedunder particular headings. Second, this approach facilitated the ex post determinationof a model based on the empirical results via exploratory factor analysis.

The questionnaire package was mailed to the general manager of each budget hotelin the sample. In addition to the questionnaire the mailing contained a reply-paidenvelope, a covering letter explaining the nature and purpose of the research anda definition of CSF to ensure, as far as was reasonably practicable, that all therespondents had the same understanding of the concept/term prior to responding to thequestions.

The population for the sample selection was defined as the leading budget hotelbrands in this sector of the UK hotel industry (Table I). The sampling frame wasderived from the literature, i.e. the annual Deloitte & Touche UK budget hotel surveysreferred to earlier and the recent Mintel (1999) report on budget hotels. The names andaddresses of the constituent hotels were obtained from the companies’ budget hoteldirectories and/or their Web sites. A sample of 549 was selected from this information.This procedure generated an initial return of 209 completed and useablequestionnaires. To address the validity issues associated with non-response

SizeBrand No per cent Location No per cent Rooms No per cent

Travelodge 68 28.5 Motorway 44 18.4 1-20 2 0.8Travelinn 108 45.2 A road 110 46.0 21-30 10 4.2Holiday Inn Express 15 6.3 Airport 5 2.1 31-40 104 43.5Campanile 12 5.0 City centre 32 13.4 41-50 40 16.7Comfort Inn 6 2.5 Town suburb 36 15.1 51-60 10 4.2Premier Lodge 30 12.6 Rural 12 5.0 Over 60 73 30.5

Total 239 100.0 239 100.0 239 100.0

Table I.Sample characteristics bybrand, location and size

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appropriate follow-up action was taken. A reminder letter, with another copy of thequestionnaire, was posted to all the non-responding hotels approximately one weekafter the date given for the return of the original questionnaire. This resulted in afurther 30 questionnaires being completed and returned. Thus, the final useable samplecomprised 239 questionnaires, comprising a very satisfactory final response rate of44 per cent for this type of mailed survey.

In terms of the analysis of the questionnaire data basic descriptive statistics wereinitially produced to determine whether it was suitable for further analysis. Followingthe identification of an encouraging situation from this analysis the scalar data werethen subjected to a one-sample t-test (on a two-tailed basis and at the 99 per centconfidence level) procedure via the SPSS software. This test was selected because theway it operates within SPSS allows the actual distribution of responses to eachquestion to be compared with those that would be expected if the null hypothesis wereto be supported by the survey data. In short, the procedure requires a “test value” to beentered against which it compares the actual means of the variables from the data.If this test value is set at the mid-point of the scale used for the questions, i.e. in thiscase at three, it effectively generates a normal distribution as a comparator for theactual distribution within the data. Therefore, this allows the null hypothesis of theresponses which will not indicate any statistically significant level of importance(positive direction), or unimportance (negative direction) for the CSF items, to be testedon a two-tailed basis.

Once the statistical significance of the individual CSF items had been establishedvia the t-test procedure those CSF items obtaining a suitably positive significancevalue were subjected to split-half reliability analysis, in the form of Cronbach’s acoefficient, to ascertain their internal coherence. Following these procedures the t-testswere then repeated for each of the sub-samples based on the categorical variablesmentioned earlier. This was undertaken to explore whether the t-test results obtainedfrom these analyses, for any or all of the variables, would show any difference to thoseobtained from the same analysis conducted on the full sample. In short, to test whetherthe CSFs could be regarded as generic or contextually contingent. Finally, the datawere subjected to exploratory factor analysis, via the use of the principal componentsanalysis (PCA) technique, to establish whether this data reduction procedure wouldindicate the existence of an underlying model.

The survey resultsThe survey results are presented here in line with the format of the questionnaire,i.e. the sample size and its characteristics, followed by the current, future and relativeimportance of the CSF items. Finally, the results of the reliability and exploratoryfactor analyses conducted on the data are indicated.

Sample size and characteristicsThe size of the realised sample ðn ¼ 239Þ was very encouraging in terms of providing arepresentative data set from the budget hotel sector. As Table I shows the sample was,not unsurprisingly, dominated by the two leading brands, Travelinn and Travelodge.Though this did skew the sample in favour of these brands it nevertheless reflects thepopulation distribution of budget hotel brands in the UK. The sample was alsodominated by budget hotels in Motorway and A (Trunk Road) Road locations, with

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these accounting for almost two-thirds of the respondent hotels. However, this againreflects the nature of the population distribution for budget hotel locations.Interestingly, the more recent growth locations of suburban and city centre sitesalso feature quite strongly, accounting for nearly a further 30 per cent of the sample.

The size distribution shows the 31-40 bedroom range to be the largest singlecategory, followed by the over 60 bedroom group. Cumulatively these two sizecategories account for 74 per cent of the total. If the 41-50 category were to be added tothese this would account for some 90 per cent of the total. Once again, this is stronglyrepresentative of the budget hotel population distribution by size. Table II indicatesfurther characteristics of the sample. This suggests that the sample is veryrepresentative of the breadth of budget hotel operations, as it comprises a considerablerange of responses in relation to average room occupancy, number of full- or part-timestaff and the business mix. Given all of these characteristics it is reasonable to claimthat the sample as a whole is highly representative of branded budget hotel operationsin the UK.

CSFs (Current importance)The percentage frequency distributions of the responses to each of the 36 CSF itemscontained in the questionnaire are shown in Table III. To test the hypothesis specifiedearlier this data was subjected to a one-sample, two-tailed t-test analysis (at the99 per cent confidence level). The results of this showed the vast majority of the CSFs(current importance) to be significant at the p , 0:001 level in a positive direction. Thetwo exceptions to this were “Corporate Contracts” and “Limited Service Level” whichwere found not to be significant. The means and standard deviations for this data setare shown in Table IV. These results clearly indicate, with the exception of the two CSFitems referred to above, that the null hypothesis should be rejected.

To explore the data further the same t-test analysis was repeated for sub-samplesbased on the categorical variables of budget hotel size, location and brand toinvestigate whether each of these had any influence on the significance levels found inthe full sample analysis. In general, the t-test results by size did not exhibit anymeaningful variations to those found in the full-sample analysis, with only a few itemsbeing indicated as significant at the slightly lower level of p , 0:01: However, the lownumbers of respondents in the 1-20 ðn ¼ 2Þ; 21-30 ðn ¼ 10Þ and 51-60 ðn ¼ 10Þcategories meant that the analysis could not be performed on these groups.

The same analysis conducted locationwise indicated that the statistical significanceof the responses from budget hotels in “City Centre” ðn ¼ 32Þ; “Town Suburb”ðn ¼ 36Þand “A Road” ðn ¼ 110Þ locations were exactly the same as those recorded for the fullsample. The results for budget hotels in “Motorway” locations ðn ¼ 44Þ showed thatthese hotels viewed two of the CSFs (low guest bedroom prices and added-value

Average per cent No. of staff Business guestsNon-business

guestsRoom price room occupancy Full time Part time (per cent) (per cent)

Mean £42.48 83.45 10.54 13.91 65.57 34.23Median £39.00 85.00 8.00 10.00 70.00 30.00Range £36.50-£94.62 42.00-99.62 0.00-47.00 0.00-50.00 10.00-99.62 10.00-90.00

Table II.Sample characteristics bypricing and occupancy,staffing and business mix

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facilities in guest rooms) to have slightly lower ðp , 0:01Þ levels of significance. In thecase of hotels in “Airport” and “Rural” locations this analysis was not conducted due tothe very low sub-sample sizes of n ¼ 5 and 12, respectively.

There was generally little variation in the significance of the CSFs by brand. Most ofthe brands deemed the CSFs to be significant, though sometimes at the lower levels ofp , 0:01 or 0.05. The results obtained for the Travelodge ðn ¼ 68Þ and Travelinnðn ¼ 108Þ brands were identical to the full sample. Unfortunately, the size of most ofthe other brand sub-samples was too small to conduct this analysis. The only exceptionbeing Premier Lodge ðn ¼ 30Þ who indicated two of the CSFs as significant at the

Current importance(per cent)

Future importance(per cent)

CSFs 1 2 3 4 5 Less Same More

Central sales/reservation system 3.1 18.7 40.1 38.1 1.9 60.2 37.9Convenient locations 8.6 39.7 51.8 1.0 61.1 38.0Standardised hotel design 0.8 6.3 27.8 41.2 23.9 1.9 81.3 16.8Size of hotel network 0.8 5.7 26.5 38.1 30.0 2.9 49.5 47.6Geographic coverage of hotel network 2.4 21.2 41.6 34.9 1.9 40.3 57.8Consistent accommodation standards 23.5 76.5 53.3 46.7Consistent service standards 3.1 18.8 78.1 52.6 47.4Good value restaurants 2.4 24.4 41.3 31.9 2.4 55.0 42.6Value for money accommodation 5.5 21.2 73.3 36.2 63.8Recognition of returning guests 0.8 9.4 35.5 54.3 1.0 49.8 49.3Warmth of guest welcome 3.1 22.7 74.1 57.6 42.4Operational flexibility/responsiveness 2.3 18.3 51.4 28.0 1.0 60.7 38.3Corporate contracts 9.3 23.0 31.9 18.3 17.5 13.9 48.6 37.5Smoking and non-smoking rooms 3.1 21.0 34.6 41.2 62.4 37.6Design/look of guest bedrooms 2.3 24.2 45.3 28.1 66.2 33.8Size of guest bedroom 3.9 37.0 37.7 21.4 70.5 29.5Guest bedroom comfort level 12.5 42.0 45.4 56.2 43.8Responsiveness to customer demands 0.8 6.2 43.6 49.4 45.2 54.8Customer loyalty/repeat business 5.8 31.9 62.3 1.0 49.0 50.0Disciplined operational controls 1.6 18.6 45.1 34.8 62.1 37.9Speed of guest service 12.1 40.9 47.1 57.6 42.4Efficiency of guest service 5.5 38.8 55.7 51.9 48.1Choice of room type for guests 1.6 6.2 33.1 38.1 21.0 1.9 66.3 31.7Guest security 0.8 10.5 30.5 58.2 48.3 51.7Low guest bedroom prices 2.3 5.4 27.6 40.1 24.5 3.8 56.7 39.5Limited service level 5.9 22.2 41.8 19.7 10.5 12.1 59.6 28.3Hygiene and cleanliness 0.8 12.1 87.2 55.3 46.7Quality audits 4.7 14.6 33.2 47.4 1.0 59.1 38.9Staff empowerment 6.1 25.5 39.7 28.7 1.0 62.1 36.9Strong brand differentiation 5.9 18.8 36.5 38.8 2.4 49.0 48.5Customer surveys/feedback 1.6 2.4 22.2 33.7 40.0 2.9 42.4 54.8Staff training 1.2 24.2 74.7 40.2 59.8Added-value facilities in guest rooms 4.3 8.9 33.9 33.1 19.8 3.9 51.0 45.1Staff recruitment and selection 1.6 11.7 45.1 41.6 55.8 44.2Standard pricing policy 0.8 2.3 21.8 35.0 40.1 2.9 57.6 39.5Quality standards 5.4 16.3 78.2 1.0 40.5 58.6

Notes: 1 ¼ Not at All; 2 ¼ Not Very; 3 ¼ Fairly; 4 ¼ Very; 5 ¼ Extremely

Table III.Current and future CSF

importance frequencytable (percentages)

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p , 0:01 level and three as not significant – central sales/reservation system,standardised hotel design and low guest bedroom prices.

CSFs (Future importance)The data in Table IV indicates whether the respondents believed that the level ofimportance they had ascribed earlier to the CSF items would be the same, higher orlower in the future. This overwhelmingly shows that the importance currently ascribedto all the CSFs will be at least as high in the future. Furthermore, the respondents alsoindicated that overall eight items will have a greater importance in the future. Theseitems were:

CSFs Mean SD

Central sales/reservation system 4.13 0.82Convenient locations 4.43 0.65Standardised hotel design 3.81 0.90Size of hotel network 3.92 0.90Geographic coverage of hotel Network 4.09 0.81Consistent accommodation standards 4.76 0.43Consistent service standards 4.75 0.50Good value restaurants 4.03 0.81Value for money Accommodation 4.68 0.57Recognition of returning guests 4.43 0.69Warmth of guest welcome 4.71 0.52Operational Flexibility/responsiveness 4.05 0.75Corporate contracts 3.12 1.2Smoking and non-smoking rooms 4.14 0.85Design/look of guest bedrooms 3.99 0.79Size of guest bedroom 3.77 0.83Guest bedroom comfort level 4.33 0.69Responsiveness to customer demands 4.42 0.64Customer loyalty/repeat business 4.56 0.60Disciplined operational controls 4.13 0.76Speed of guest service 4.35 0.69Efficiency of guest service 4.50 0.60Choice of room type for guests 3.71 0.92Guest security 4.46 0.71Low guest bedroom prices 3.79 0.95Limited service level 3.07 1.0Hygiene and cleanliness 4.86 0.37Quality audits 4.23 0.87Staff empowerment 3.91 0.88Strong brand differentiation 4.08 0.90Customer surveys/feedback 4.08 0.92Staff training 4.74 0.47Added-value facilities in guest rooms 3.55 1.0Staff recruitment and selection 4.27 0.72Standard pricing policy 4.11 0.88Quality standards 4.73 0.56

Note: All the CSFs are significant, in a positive direction, at the p , 0.001 level – except 13 (CorporateContracts) and 26 (Limited Service level) which are not significant

Table IV.Current CSF t-test results(full sample)

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. geographic coverage of the hotel network;

. value for money accommodation;

. responsiveness to customer demands;

. customer loyalty/repeat business;

. guest security;

. customer surveys/feedback;

. staff training; and

. quality standards.

It was also possible to compare the relative emphasis given by the respondents as awhole to the current and future importance of the CSFs by comparing the mean scoresfor each. This indicated that four of the CSFs – customer loyalty, staff training, qualitystandards and efficiency of guest service – were regarded as approximately,i.e. within+/2 one rank position, equally important both now and in the future. Incontrast to this three other CSFs – hygiene and cleanliness, consistent accommodationstandards and consistent service standards – moved from a current importanceposition of twelfth equal to first, second and third positions, respectively, in the future.

In addition to this “global” view the “future importance” data were also explored inrelation to two groups of budget hotel brands identified within the data. These twogroups may best be described as the “Market Leaders” and “Market Laggards”.The former constitute the two leading brands, Travelinn and Travelodge (n ¼ 174;73.7 per cent), and the latter the remainder of the brands (n ¼ 66; 26.4 per cent).A comparison of the relative future-oriented importance ascribed by these two groupsto the full CSF item list was also possible using the same means-comparison criteria asabove. This analysis showed some commonalities, but also some divergence, betweenthe two groups. The CSF – staff training – was included in the top five current andfuture importance lists for both groups and – Value for Money Accommodation – inthe top ten. Conversely, the market leader group placed – customer loyalty/repeatbusiness, efficiency of guest service and guest security – in its top ten current/futureimportance list. In contrast to this, the Market Laggard’s group current/future top tenincluded – hygiene and cleanliness, quality standards, recognition of returning guests,consistent accommodation standards, consistent service standards and value formoney accommodation.

Finally, an examination of the CSFs included in the future top five, but not in thecurrent top five, again indicated some convergence and divergence. The CSFs –geographical coverage and responsiveness to customer demands – appeared in bothLeader and Laggard groups’ top five. However, the Leader group contained customersurveys/feedback and strong brand differentiation in its top five, while guest securityappeared in the Laggard’s top five. The significance of all these results will becommented on later in the discussion section.

CSFs (relative importance)The survey questionnaire also asked the respondents to rank the importance of the 36CSFs by indicating which they would regard as the “Top Five”, using the ranking top,second, third, fourth and bottom. Table V shows these results. For each of thesecategories the five CSFs with the highest frequency were identified.

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Table V.The most critical CSFs

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Given the data in Table V it was possible to take this relative importance, or“criticality”, issue further by producing an overall importance ranking for these CSFs.This was calculated by taking the frequencies for each CSF in Table V and multiplyingit by a weighting factor, the latter being determined by the relative “position” of eachfrequency to reflect the fact that not all the frequencies associated with a given CSF areequally important. For example, hygiene and cleanliness had a frequency of 17 in both“Top” and “Bottom” categories. Clearly the 17 in the “top” category should carryrelatively more weight than that in the “Bottom” in any overall ranking. Therefore, thefrequencies for each CSF should be weighted by their relative position to generate avalid overall ranking. This was achieved by allocating weighting factors as follows:top (5), second (4), third (3), fourth (2) and bottom (1). Taking convenient locations asan example, this process generated an overall score for this CSF of 199 as it had afrequency of 31 in the top, 15 in the fourth and 14 in the bottom categories. This gaveð31 £ 5Þ þ ð15 £ 2Þ þ ð14 £ 1Þ ¼ 199: The application of this procedure to all the CSFsin Table V produced the weighted scores and overall ranking shown below. Theseresults show the relative importance of the first three CSFs to be proportionately muchhigher to the respondents than the remaining eight:

(1) value for money accommodation (576);

(2) consistent accommodation standards (336);

(3) hygiene and cleanliness (335);

(4) convenient locations (199);

(5) quality standards (180);

(6) warmth of guest welcome (139);

(7) staff training (97);

(8) central sales/reservation system (95);

(9) consistent service standards (78);

(10) guest security (14); and

(11) efficiency of guest service (12).

Reliability analysisThe Cronbach’s a co-efficient for the set of 34 current CSF items, i.e. excluding the two(limited service and corporate contracts) already identified as not statisticallysignificant, was 0.9360. Given an a value of 0.7 and upwards is generally regarded assatisfactory (Pallant, 2001); the 34 item set clearly has a high level of reliability andinternal consistency. The SPSS output showed that this co-efficient could only beraised slightly, i.e. to 0.9362 or 0.9364, if CSF2 (convenient locations) or CSF 1 (centralsales/reservation system), respectively, were omitted from the calculation. However,this seemed to be a rather pointless option, as the level of reliability would onlyincrease marginally by eliminating two CSFs that had previously been found to behighly statistically significant by the t-test analysis.

Factor analysisThe 34 items from the current CSFs scale found to be statistically significant inthe t-test results were then subjected to the PCA data reduction technique in SPSS.

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Before the PCA was conducted the quality of the data for this analysis was assessed.Inspection of the correlation matrix indicated many of the coefficients to be of 0.3 andabove, and predominantly significant at the p , 0:001 level. The Kaiser-Meyer-Olkin(KMO) test value for sampling adequacy was 0.884, this exceeding the recommendedvalue of 0.6 and is at a level referred to by Ryan (1995) as “meritorious”. The Bartlett’sTest of Sphericity (BTS) had a value of 4090.99 and was significant at the p , 0:001level. On the BTS, Ryan (1995, pp. 255-256) suggests that “the researcher is looking fora large test statistic for sphericity and a small associated significance level to reject thehypothesis that the correlation matrix is an identity”. Clearly, the BTS results in thiscase met Ryan’s conditions. In view of these results the data are deemed suitable forPCA.

The PCA analysis indicated the existence of seven components with eigenvaluesgreater than 1. These cumulatively explained 62.3 per cent of the variance. Though itwould have been possible to reduce the number of components examined from seven tofour, as the first four accounted for approximately 50 per cent of the variance, it wasdecided that all the seven should be retained at this stage because the remaining threecomponents contained items deemed to be important and relevant to the developmentof the emergent conceptual framework. The retained components were then subjectedto varimax rotation that converged in 14 iterations to produce the rotated factor matrixresults shown in Table VI. This contains only 25 of the 34 items as one of theconsequences of the decision to retain seven components for this analysis was thatsome items loaded at low levels, i.e. below 0.5, on some of the components.Consequently these were removed from the final list to leave a set of 25 items that hada loading of 0.5 or above.

However, while the empirical data supports the claim that all 25 of these factors arecritical this would be inconsistent with the general CSF concept and operationalmanagement reality. To reduce the number of items to a more sensible andparsimonious level it was necessary to combine the results from the PCA analysis andthe items regarded as “most critical” by the respondents. The former revealed an initialmodel of budget hotel CSFs (Figure 1).

This was helpful as it introduced a degree of structure to the set of items, but it stillembraced 25 items across seven dimensions or categories. To reduce this volume andrange of CSFs still further it was decided that only those items, included in the initialPCA derived model, that were also indicated as being one of the 11 “most critical” bythe survey’s respondents, should be retained (indicated as * in Figure 1). Thisimmediately reduced the number of CSF items in the model to ten and its dimensionsfrom seven to six as the warmth of guest welcome item, indicated as the sixth mostcritical, was not present in the dimensions revealed by the PCA analysis and none ofthe 11 most critical factors were included in the core product dimension shown inFigure 1.

On the other hand, a model containing ten CSFs across six dimensions was still notas parsimonious as it could have been. To reduce the model further the two dimensionsof strategic control and location were combined to produce one of “Accessibility” andthose of pricing, consistency, hygiene and quality and customer service were combinedto create one of “Performance”. This is shown in Figure 2.

The model shown in Figure 2 is derived by taking the average weightedranking 199 þ 95=2 ¼ 145 of the two CSFs (central sales/reservation system

IJOPM24,9

956

Com

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Table VI.Factor analysis (rotated

factor matrix scores)

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and convenient locations) and that 576 þ 336 þ 335=3 ¼ 415 of the three highestranked CSFs (value for money accommodation, consistent accommodation standardsand hygiene and cleanliness) from the other dimensions. This left a final model withfive CSFs across two dimensions. This being more consistent with Brotherton andShaws’ (1996) contention that the CSF approach is concerned with “focusedspecialisation”, and one that emphasises both strategic importance of product/brandaccessibility and operational importance of superior performance delivery as being thegeneric critical factors underlying the success of a budget hotel brand and itsconstituent units.

It was noted earlier in the analysis that the budget hotel brands could be separatedinto two distinct groups (Leaders and Laggards) on the basis of their relative marketposition. Therefore, the PCA analysis was repeated for the current importance CSFdata across each of these two groups. The results of this indicated that in the Leadergroup the KMO value was 0.785 and the BTS was significant at the p , 0:001 level.

Figure 1.An initial model of budgethotel operations’ CSFs

Figure 2.A final model of budgethotel operations’ CSFs

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Excluding items loaded at less than 0.5 produced a varimax rotated component matrixwith eight components containing 28 items. For the Laggard group the KMO value was0.568 and the BTS was significant at p , 0:001 level. Again, excluding items loadedat less than 0.5, this produced a rotated component matrix with ten componentscontaining 31 items. This means that the data were deemed suitable for PCA, but onlyjust, as KMO values below 0.5 are not acceptable.

The interpretation of the rotated factor matrices for the two groups was not alwaysstraightforward as some components were comprised of slightly inconsistent factorsand, hence, the nature/internal consistency of some of the components was not alwaysclear. Nevertheless, using the same PCA item and “most critical rankings” discussedabove it was possible to reduce the number of components retained to five in theLeader group and seven in the Laggard group. The common themes these componentsindicated across the two groups were quality and standards, consistency and value,accessibility (which again largely reflected the accessibility and performancedimensions in Figure 2), and, what may be termed, “Looking After The Customer”.However, the distribution of the loaded items across the components also showed thatthe Leader group tended to have a tighter focus on a more limited range of componentsthan the Laggard group.

DiscussionThe results from this study generally tend to support the degree of importanceascribed to the CSF items in the literature. Of the original 36 CSF items the t-testanalysis found 34 to be statistically significant, in a positive direction, indicatingstrong empirical verification of the alternate hypothesis. In this sense it is clear thatthere is congruence between the literature and reality. These results were also quiteconsistent across the sample used for the study, within which any variations identifiedby the main sub-sample characteristics were minimal and generally at lowersignificance levels. Though it was not possible to conduct all the sub-sample analysesdesired, due to small sub-sample sizes in some instances, it is clear that variables suchas the size and location of budget hotels have no statistically significant impact uponthe factors regarded as critical for success.

This is also generally mirrored in the case of variations by brand, with theexception of Premier Lodge where three CSFs were found not to be significant; thesebeing, central/sales reservation system, standardised hotel design and low guestbedroom prices. However, at the time of the survey this brand was undergoing rapidgrowth, Scottish and Newcastle had previously acquired the “Premier Inns andLodges” brand from Greenalls and they were in the process of assimilating andrebranding it. Given this it may have been that the variation found in Premier Lodgewas more a function of these factors than anything else. Therefore, it may bereasonable to assert that it was most likely this variation occurred as a consequence ofa temporary dislocation to “normal business” and that if the survey were to berepeated today a more consistent response in line with the other brand leaders mayhave been evident.

Nevertheless, this does raise the interesting observation, not recognised in theextant literature, that CSFs may be susceptible to unusual or transitional periods orevents. There is a general assumption in the literature that CSFs can be classifiedwithin fairly static and discrete categories such as short-vs long-term, monitoring vs

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building, and generic vs context specific. Though one might argue that the variationsevident in the case of Premier Lodge could be explained with reference to the“context-specific” category this is not generally used in the literature to refer totemporary, transitional or unusual contextual conditions. Though this categorisationclearly does refer to differences between specific organisations or even time periods ittends to assume a degree of stability or normalcy within the differing contexts. ThePremier Lodge case suggests that there may be a need for the impact of temporary,unusual and/or dysfunctional effects to be taken into account when categorising CSFs.In short, during abnormal conditions the “normal” criteria for categorising CSFs mayrequire suspension and/or modification.

However, despite this, it is reasonable to contend that the vast majority of theCSFs in this study may be regarded as generic rather than contextually contingentin nature. In turn this suggests that the operational environments, processes andperformance measures used within the branded budget hotel offer, particularlyacross the brand leaders, are more homogeneous than heterogeneous. A view thatchallenges somewhat the differentiation argument advanced by Roper andCarmouche (1989). On the other hand, to be fair to these authors, theircategorisation was produced long before the market had evolved to its presentstate where it is dominated by a handful of major players providing a relativelysimilar product.

This does of course raise issues of competitive advantage. If the factors underlyingoperational, and indeed brand, success are generic across the sector there are reallyonly two potential sources, beyond basic differences in the core offer, of competitiveadvantage at unit and/or corporate levels. The first may be termed “additionality”,i.e. the provision of additional facilities and/or services to differentiate one offer fromanother. The second is simply “performance”, or more specifically superior deliveryperformance in terms of meeting customer needs and priorities. There is evidence ofboth. Some of the major brands are introducing telephones in guest bedrooms(Travelinn are piloting this), others have provided satellite television (Premier Lodge),and many are including “meeting rooms/conference facilities in new builds” (Deloitte &Touche, 2002, p. 15). This is generally referred to as concept drift or amenity/facilitycreep and is designed to secure competitive advantage by adding differential value tothe tangible aspect of the product offer. However, the problem with this approach isthat it is easily copied by competitors and, according to Deloitte & Touche’s (2002)analysis, one eventually subject to diminishing returns.

All the major brands are emphasising the quality and value-for-money aspects oftheir offers to try and differentiate themselves on performance and Travelinn hasintroduced a “100 per cent Satisfaction Guarantee” (McCaskey, 2001). Though it is tooearly to tell whether this will prove to be a significant source of advantage, and hence aCSF for Travelinn, indications from the pilot phase and early days of the full launchsuggest that this may be the case (Guild, 2001). Furthermore, the Travelinn managingdirector (Carl Leaver) contends that it has been a huge success not only in relation tocustomer complaint surfacing and early resolution via empowered front line staff butthat it is also operating under the budgeted cost of 0.5 per cent of room revenue at0.39 per cent and has had positive effects on both customer and employee satisfactionand loyalty that have, in turn, enhanced revenue and reduced staff turnover costs(Leaver, 2002).

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Moving on to consider the issues raised by the relative current/future importance ofthe CSFs. The eight CSF items indicated in general as likely to be more important in thefuture really reflect the nature and development of the budget hotel sector in the UK.As the explosive growth phase of the 1990s slows, and the associated scramble formarket leadership begins to give way to a greater emphasis on retention of marketshare, it is not surprising that the majority of these eight items are concerned with thebrands’ abilities to focus on customer service as a key source of competitive advantage.Only one is concerned with establishing greater scale, reflecting the fact that whilegrowth still continues there is a need for both current market leaders to ensure they arenot threatened by the current Laggards and for the latter to take every opportunity tocatch up with the Leaders while there is still a possibility for this to happen. This isreally a classic picture of market/industry evolution that illustrates the relationshipbetween a change in competitive conditions and the sources of competitive advantageappropriate to these different conditions.

However, the current/future importance data did embody some more subtle nuancesrelating to the two strategic groups of Leaders and Laggards. In one sense this may beseen as a product of the “context-specific” category as the two sets ofcompanies/brands are clearly different to each other in respect of their relativemarket positions and associated strategies. On the other, as noted earlier, the“context-specific” category is normally interpreted in the literature as one pertaining tothe structural and resource conditions specific to a particular organisation within agiven industrial environment, with the “generic” category referring to CSFs regardedas common to all the inhabitants of such an environment. The fact that thecurrent/future importance results show some degree of commonality across the twogroups of brands does indeed verify the contention that “generic” CSFs exist as adiscrete category. However, the fact that there is some divergence between these doesnot, of and in itself, simply verify the “context specific” alternative in the manner this isusually interpreted.

Though it does support, to a certain extent, the monitoring vs buildingcategorisation this is again normally associated in the literature with relative timeand task orientations. Monitoring CSFs are usually associated with short-term,operational concerns and Building CSFs with longer-term, strategic issues within thestructural and resource conditions faced by a particular organisation. The divergencesbetween the relative current/future importance levels given to the CSFs by the twogroups in this study indicates something more than a simple time/task baseddichotomy in relation to an organisation’s internal conditions. They suggest thatemphasis on the maintenance, and/or improvement of competitive advantage is relatedto an organisation’s relative position in the sector or market.

In this sense the CSFs in question are neither generic across the sector/market norare they context-specific in relation to a particular organisation’s structure and/orresources. In short, this suggests there is another dimension; in that some CSFs aredependent upon the organisation’s relative position. Different organisations atdifferent stages of the market/product life cycle will clearly have different views onwhat constitutes short- and long-term success and the imperatives they need to focuson to achieve this.

This is illustrated by the relative emphasis given to the future importance ofdiffering CSFs by the Leader and Laggard groups. Though the data shows both groups

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indicating that some CSFs are primarily concerned with maintaining thestandard/quality of their provision from the present to the future, it also showsothers that are more concerned with improving their relative competitive position. Forexample, CSFs such as staff training and value for money accommodation, included inboth Leader and Laggard groups’ respective top ten CSFs, i.e. those regarded as themost important both now and in the future, are essentially concerned with maintainingthe standard/quality of provision within the core offer and are common to both groups.However, other CSFs in this category differ, reflecting the relative position of theLeader and Laggard brands and the different priorities emanating from this. In thecase of the Laggard group there is a greater emphasis on the continued development orimprovement of a significant number of “core offer” CSFs such as consistentaccommodation and service standards. Whereas the Leader group places greateremphasis upon capitalising on the lead they have through strengthening their relativeposition via the opportunities this offers for greater efficiencies, i.e. the efficiency ofguest service CSF, and/or developing their business further through concentrating onCSFs such as customer loyalty/repeat business.

In addition, an examination of the most future-oriented category of CSFs, i.e. thosein the future top five but not in the current top five, reveals another nuance. Herecertain CSFs are common to both Leader and Laggard groups, e.g. geographiccoverage of the network and responsiveness to customer demands. In the case of theLeader group these are essentially concerned with maintaining the relative position ofthese brands. Conversely, for the Laggard group, these same CSFs reflect the fact thatthese brands are still developing their offer in an attempt to close the gap betweenthemselves and the Leader group brands. Thus, the same CSF may be either oneconcerned with position maintenance or development/improvement depending uponwhether it is located within a Leader or Laggard brand environment.

In view of this it may be the case that the rather static dichotomies in the extantliterature currently used as a basis to classify a given CSF into one category or anothermay require some rethinking and revision. It would appear that these classifications,and the criteria they use to identify the discrete category a given CSF should beallocated to, do not embrace the additional dimension of “relativity” the abovediscussion identifies. Thus the rather static, bi-polar dichotomies of strategic vsoperational, maintenance vs building and generic vs context-specific may benefit fromfurther reflection and research to consider the extent to which an organisation’srelative position in the market influences the nature and purpose of a given CSF. Thisdoes add something of a confounding nature to the existing literature in the sense thata given CSF may not be either generic or context-specific, in the way these are normallydefined and understood in the literature. Indeed a given CSF could be both onefulfilling a maintenance and a developmental purpose at the same time in differentorganisations with differing relative market positions.

Similarly, as indicated earlier, although the PCA results for the Leader and Laggardgroups suggested some themes common to both groups, they also contained somesubtle differences in emphasis and focus. At a general level this was illustrated by thePCA/most critical CSFs analytical combination leaving all 11 of the most critical itemsin the Laggard group’s seven retained components, but only nine in the Leader group’sfive components. This suggesting that a mature, market leader brand is likely to focuson a more limited range of CSFs because of its more dominant and defensive position,

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whereas the brand attempting to grow and take market share has to focus on a wider,and perhaps more diverse, range of specific CSFs as a means to develop and strengthenits relative market position. This view is also reinforced in the detail of the combinedPCA/most critical CSFs results.

More specifically, in the case of the Laggard group, five unitary components,i.e. those comprised of only one loaded factor, were identifiable, e.g. value for moneyaccommodation, central sales/reservation system, convenient locations, staff trainingand quality standards, all indicating an emphasis on developing the brandinfrastructure and core product to a level capable of competing effectively with theLeader brands. The same results for the Leader brand group only identified three suchunitary components in the form of convenient locations, warmth of guest welcome andefficiency of guest service. Thus, accessibility would appear to remain as a genericCSF, regardless of relative market position. That said, for the Laggard group, this alsoinvolves a focus on the development of an effective central sales/reservation system,but it does not for the Leader group who already have this aspect of the brandinfrastructure well established. The other differences between the two groups suggestthat an offensive vs defensive CSF categorisation may be appropriate.

While, on the one hand, this may be seen as synonymous with the monitoring vsbuilding dichotomy it is not. These are not categories based on either short- or longterm, strategic/operational or generic/specific dichotomies in the normal way suchcategorisations are used in the literature. As argued earlier a given CSF could beclassified into more than one of these categories, depending on its primary purpose forthe organisation/s in question. In the same way a given CSF could be categorised asoffensive or defensive, but this dichotomy reflects a more dynamic view, that ofrelative position, rather than the more static time/task criteria underlying the existingdichotomies.

ConclusionsThis has been a very successful piece of research. The empirical data analysisconfirmed, through a systematic empirical investigation, many of the views expressedin the literature regarding the possible criticality of a range of factors advanced byvarious academic and industrial authors. In this sense it has made a contribution to theliterature on budget hotel operations by providing original, objective, valid and reliableempirical evidence to verify certain assertions made in this literature. It has alsohighlighted the fact that many of these factors may be regarded as “generic” CSFs,certainly in the context of branded budget hotel operations.

In addition to this the data analysis revealed an emergent model from which it waspossible, by synthesising the results from two different aspects of this analysis, toproduce a final model illustrating the relative criticality of two categories of CSFs.This, in turn, illustrating where both corporate and operational attention should befocused to extract the maximum competitive leverage from the brand and itsoperational units. This synthesis also highlighted the importance of the corporate –unit operations CSF nexus, wherein the inseparability of the brand’s infrastructure andthe operational performance of its constituent units comprise the mutually supportivecomponents of accessibility and service delivery. In this sense it has also contributedadditional empirical support for the strategic vs operational CSF dichotomy expressedin the wider CSF extant literature.

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On the other hand, some caution must be observed in this matter as the respondentsto the questionnaire survey were all drawn from the supply-side perspective. There is adanger here of Gap 1 of Parasuraman et al.’s (1985) SERVQUAL Gap Model. In short,the potential mismatch between management expectations of customer needs andpriorities and those actually held by customers. It would be interesting to repeat thisresearch using budget hotel customers as the target respondents. This would thenfacilitate a comparative analysis of the various factors’ criticality from the supply anddemand-side perspectives.

It is indeed possible that the managers’ perceptions of the factors they regardas critical for success would accord with those of their customers, however, it isequally possible that they may not. Though not directly concerned with the CSFfocus of this study there is some evidence to support this view with the results ofCallan and Lefebves’ (1997) study that found both elements of convergence anddivergence between the views of budget hotel managers and customers on theimportance of providing a number of facilities and services. One reason forthe divergence found in Callan and Lefebves’ study may be summarised as thediffering views that managers and customers are likely to hold over whatconstitutes success and the factors regarded as critical for it to be achieved. Thisstrengthens the feeling that further research to replicate this study from thecustomers’ perspective would be an interesting extension on the grounds of bothpotential academic and practical value.

However, that said, the work has also highlighted some possible inadequacies in thebody of extant literature referred to above, and more specifically the basis underlyingthe existing CSF dichotomies. Though it is reasonable to contend that CSFs per se canbe allocated to discrete, bi-polar categories, i.e. those of monitoring vs building (longvs-short-term) or generic vs context-specific, the results of this research suggest thatsuch an approach may not always be as valid and robust as it may appear. Given theidentification of two strategic groups of budget hotel brands (market leaders andLaggards), and the finding that the relative status/position of an organisation’s brandin the marketplace appears to act as a type of moderating variable in relation to a givenCSF item, it is clear that the same CSF item could simultaneously be allocated to morethan one of these rather static categories depending on the relative position of theorganisation’s brand. Similarly, the identification of unusual or atypical conditions thataffect a particular organisation at a particular point in time, i.e. the case of PremierLodge referred to earlier, also suggests that such occurrences should also be regardedas a potential modifier.

In view of this it is suggested that the relatively simple task type/time period basedcategorisations currently used to generate the CSF dichotomies found in the literaturebe re-examined. The results of this study indicate that other issues threaten theintegrity and robustness of these dichotomies and the way they are currently used.Therefore, some revision is required to incorporate the issues of relative organizationalposition and, although more problematic, unusual/atypical situations and events. Thiswould involve a quite fundamental reorientation in that if, for example, relativeposition is seen to be the prime influence on whether a given CSF should be regarded asone performing both monitoring and/or building functions for different organisationsat the same point in time, the starting point for categorising the CSF would be relativeposition and not the particular functional type it represents.

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In short, the function of a specific CSF is not necessarily discrete and/or universalbut dependent upon the organisation’s relative position, thus a given CSF may belegitimately allocated to more than one of the existing categories. In the present schemafound in the literature this is, and cannot be, the case. The procedure used to classifyCSFs into the existing dichotomies is one based on mutually exclusive categories.By definition this does not permit a particular item to be included in more than one ofthe categories available for it to be allocated to and thus, it can only be seen to performone function at a time. A preferable approach may be one such example derived fromthis study and shown in Table VII.

Here the primary points of reference are the CSF itself and the relative position ofthe organisation, i.e. the strategic group it belongs to. This is appropriate because CSFsare a means to an end and organisations belonging to different strategic groups willhave differing starting positions and aims/objectives to pursue. In this sense a givenCSF may be simultaneously fulfilling a “building/offensive” function for a marketLaggard brand and a “monitoring/defensive” function for a market Leader brand. Forexample, as noted earlier, certain CSFs identified in this study (geographic coverage ofthe network and responsiveness to customer demands) are critical for the Leaderbrands to maintain their relative position, whereas for the Laggard brands they are ameans to close the gap between themselves and the Leaders. Equally, others are not asimportant for each group because of the differences in their relative position. Forexample, Table II shows the two CSFs – efficiency of guest service and consistentaccommodation – to be specific to the Leader and Laggard groups respectively butstrategic in nature and fulfilling a “building” function for both groups. At the sametime the purpose of this “building” function for the Leader group is essentiallydefensive, but offensive for the Laggard group.

This illustrates that the type, nature and purpose of a given CSF is more complexand multidimensional than is implied by the type of categorisations currentlydominating the literature. Simple, mutually exclusive categorisations cannotadequately capture this richer picture. Further thinking and reconceptualisationsare required to develop more inclusive and detailed schema for CSF categorisation.CSFs are multifaceted and multidimensional, and the basis for categorising themneeds to reflect this. Without such further developments it will not be possibleto produce CSF typological frameworks that have greater utility for moreadequately conceptualising their multidimensional nature and enable practisingmanagers to understand more clearly the competitive dynamics within which theyare operating.

CSF Basic typeFunction(market Leader)

Function(market Laggard)

Geographic coverageof the hotel network

Generic, strategic Monitoring, defensive Building, offensive

Responsiveness tocustomer demands

Generic, operational Monitoring, defensive Building, offensive

Efficiency of guest service Specific, strategic Building, defensive N/AConsistent accommodation Specific, strategic N/A Building, offensive

Table VII.CSFs – a new basis for

classification?

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