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IJOPM
24,9 Critical success factors in UK
budget hotel operations
Bob Brotherton
944 School 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 hotel
operations through a questionnaire survey designed to ascertain the relevance and importance of a
range of factors referred to as critical in the extant academic and trade literature. From a usable
sample of 239 questionnaires the results show that budget hotel unit managers from the leading
brands largely agree with the criticality of the factors stated in the literature, this being verified via
the independent t-test and reliability analysis results that show most of the CSFs to be highly
statistically significant (p , 0.001) and the set of CSF items to be consistent (a ¼ 0.9360). The
data analysis, via principal components analysis, also facilitates the creation of a parsimonious
model that identifies two dimensions and five CSFs as being the “most critical”.

International Journal of Operations &
Production Management
Vol. 24 No. 9, 2004
pp. 944-969
q Emerald Group Publishing Limited
0144-3577
DOI 10.1108/01443570410552135
Introduction
The budget hotel sector has been one of the greatest success stories in the UK
hospitality industry over the last 10-15 years, and continues to be so; “The budget hotel
sector 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 the
leading operators engaged in a frantic scramble for market dominance. The first
annual UK budget hotels survey conducted by Deloitte & Touche (1997) indicated that
in 1992 there were 193 budget hotels, with 7,326 rooms and this was forecasted to
increase to 745 units with 40,375 rooms by 2000. Their 2000 report showed that
although this unit growth forecast was slightly optimistic – 682 units in 2000 – the
rooms 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 past
decade are likely to slow in the new millennium, Mintel (1999, p. 9) was still forecasting
that the number of budget hotels would increase; “to around 1,020 by 2003, generating
accommodation revenues in excess of £870 million”. However, this may have been
somewhat optimistic as the Deloitte & Touche (2002, p. 4, 8) UK Budget Hotel Survey
indicated that, “at the end of 2001, there were 847 branded budget hotels in the UK
representing some 51,900 rooms. . .. (and that) the number of branded budget hotels
and 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 which
relatively limited research has been conducted, this study was designed to identify
those factors regarded as “critical” in the relevant literature for the success of budget
hotel operations and to test the extent to which budget hotel managers would agree
with 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 critical
success factors (CSFs) may be contextually contingent or generic in nature and to
investigate the possibility of developing an emergent model of budget hotel CSFs.
Critical success factors UK budget hotel
The CSF approach to management has existed for some considerable time, with operations
Daniel’s (1961) work regarded as perhaps one of its earliest proponents. Historically, it
has been applied extensively to the information systems (IS) field (Brotherton and
Leslie, 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 been
applied beyond the IS field and used as a more “generic” approach to management, 945
particularly within strategic and operational planning/management (Black, 1990;
Devlin, 1989; Grunert and Ellegaard, 1993; Hardaker and Ward, 1987; Leidecker and
Bruno, 1984; Sousa de Vasconcellos e Sa, 1988). It has also been associated with core
competency (Hooley and Saunders, 1993; Lowes et al., 1994), value chain (Johnson and
Scholes, 1993) and business process (Ward, 1992; Watson, 1993) perspectives. Others
have 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 European
Quality 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 based
on three CSFs (Dupuis and Prime, 1996).
However, despite this range of application it does have a generic essence, which
Brotherton and Shaw (1996, p. 114) suggest as: “Focused Specialisation, i.e. the
concentration of resources and effort upon those factors capable of providing the
greatest competitive leverage”. Nevertheless, the question remains, what are CSFs?
Basically, CSFs are the factors that must be achieved if the company’s overall goals are
to be attained. They may be derived from the features of a particular company’s
internal environment, i.e. its products, processes, people, and possibly structures, and
are a reflection of a company’s specific core capabilities and competencies critical for
competitive advantage (Berry et al., 1997; Duchessi et al., 1989; Van der Meer and
Calori, 1989). However, the CSFs facing any given company will also be determined by
the nature of the external environment it faces. One feature of these external CSFs is
that they: “are less controllable than the internal ones, though they may still be subject
to 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 are
specific while others are generic to a given combination of industrial/market/broader
environmental conditions (Geller, 1985a). Rockart (1979) also categorised CSFs into
short-term (monitoring) and long-term (building) activities. Grunert and Ellegaard
(1993) have distinguished between conjunctive or compensatory and perceived or
actual CSFs and Ketelhohn (1998) discusses the differences between industry or
strategic and operational CSFs, a distinction that mirrors the context specific-generic
dichotomy referred to above. Finally, Griffin (1995) provides a range of different
categorisations related specifically to CSFs within an IS context.
Notwithstanding the attention given to the CSF approach in the generic IS and
business management literature an extensive search of numerous electronic databases
revealed relatively few other explicit and distinct hospitality-related CSF studies.
Notable exceptions include Geller’s (1985a, b, c) work on the US hotel industry that
focused 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 restaurant
success and hotel food and beverage leases, respectively. Griffin (1995) undertook
IJOPM a study designed to identify and categorise the CSFs associated with yield
24,9 management systems (YMS) in hotels. Again this was a study very much rooted in the
IS tradition. However, a number of departures from this tradition appeared in the latter
half of the 1990s. These include Croston’s (1995) investigation into the CSFs underlying
superior hotel profitability; Peacock’s (1995) investigation into the factors which are
regarded as critical for a hospitality manager to be successful; Singerling et al.’s (1997)
946 study into success factors in private clubs; Kaufman et al.’s (1996) study of the
attributes 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 for
effective meetings; Collie and Sparks’ (1999) study designed to identify practitioner
perceptions of the key success factors and inhibitors in Australian restaurant and
catering business operations; and Ingram et al.’s (2000) study on the CSFs associated
with 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 above
were 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 any
sustained manner is that being conducted by Brotherton and other colleagues. In this
programme, Brotherton and Shaws’ (1996) work constituted the starting point in
relation to CSFs in “UK Hotels Plc”. Work to identify the CSFs and “Critical
Skills/Competences” in UK “Licensed House Operations and Management” (Brotherton
and Watson, 2000, 2001), “UK Corporate Hotels” (Brotherton, 2004), and the testing of
Brotherton and Shaws’ (1996) UK Hotels Plc. findings on a cross-national basis
between the UK and Holland (Brotherton et al., 2001, 2002), has also been ongoing in
this programme.

Budget hotel operations

Though the terms “budget” or “limited service” hotels or “economy lodging” are used
quite widely in both common and specific hospitality parlance what exactly constitutes
a 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 to
define hospitality phenomena”. Indeed, some years earlier Roper and Carmouche (1989,
p. 25) had commented that: “There is, in fact, substantial segmentation within this one
sector of the hotel industry; it does not represent a homogeneous product group”, and
went on to suggest that this variation could be summarised by categorising budget
hotels into “New-System, Traditional and Upper-Tier”. Despite such differences Senior
and Morphew (1990, p. 6) claimed that “it is possible to identify five broad similarities
amongst them, (namely a) low tariff structure. . . minimum range of facilities. . . limited
range of services. . . strategically-located. . . (and of) new/modular construction”.
Finally, in spite of Fiorentino’s earlier reservations he also advanced a definitional
statement at the end of his work suggesting that: “The budget hotel. . . is a brand new
purpose-designed product concept in the hospitality industry which relies heavily on
three factors; branded product concept, value for money and service consistency”
(1995, p. 461).
However, regardless of the difficulties in establishing a universally accepted
definition of the budget hotel what can be said with reasonable certainty is that as the
branded budget hotel sector has developed considerably in the UK over the last 10-15 UK budget hotel
years. The nature of this product and its generic operational characteristics may be
summarised as:
operations
.
Strongly branded product;
.
Extensive geographic coverage of the hotel network;
.
Easily accessible; 947
.
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 site
selection, speed of hotel portfolio growth, competitive pricing etc., that may be deemed
as critical for success at a strategic brand level this research was designed to
concentrate on those factors critical to hotel level operational success rather than that
of the corporate entity or the brand as a whole. That said there are some difficulties in
any attempt to create a clear dichotomy in this respect. As a consequence, although
many of the potential 36 operational CSFs identified in the study can clearly be
classified as operational in nature/focus, there are some CSFs that could be regarded as
both operational and strategic in importance. For example, those relating to the
corporate/brand infrastructure such as the size of the hotel network, its geographic
coverage and standardised hotel design could be categorised as strategic CSFs. On the
other hand, factors such as warmth and/or speed of guest welcome, hygiene and
cleanliness, responsiveness to customer demands and staff recruitment and selection
are more locally determined.
The 36 potential CSFs were identified from a range of academic and industry
focused literatures. In particular, the annual UK budget hotel surveys produced by
Deloitte & Touche (1997, 1998, 1999, 2000, 2001) and Mintel’s (1999) Budget hotels
report were extremely useful sources for this exercise. Other industry focused literature
sources either confirmed the relevance of the Deloitte & Touche and Mintel material or
contributed additional ideas that included the work of Gauldie (2000), Gilbert and
Lockwood (1990), Hall (1998), Hall and Rawlinson (1998), Lilley (1996, 1998), McCaskey
(2000), Miller (1998), Szitasi (1989) and Windle (1995-1996). On the academic side the
work of Callan and Lefebve (1997), Fiorentino (1995), Roper and Carmouche (1989) and
Senior and Morphew (1990) was also found to be helpful in generating the list of
potential CSFs.
The final list of 36 items was essentially determined by both frequency of reference
to these items in the literature and relative importance ascribed to them by the
commentators concerned. In this sense the set of items represents a type of weighted
summary of the items commentators appear to regard as those being the most
important or critical for budget hotel operations to be successful and, hence, constitute
potential CSFs open to verification from the empirical data. Though it would have been
possible to produce a list containing fewer items, by concentrating on those with the
greatest frequency of reference and/or relative importance given to them by these
sources, it was felt that this would not have adequately covered the range of possible
IJOPM CSFs or given the respondents a full opportunity to provide their views on the
24,9 importance of these.

Methodology
In terms of research design it was clear that the most appropriate and feasible option
would be a survey. Given that one of the key purposes of this research was to ascertain
948 the CSFs for budget hotel operations in the UK per se a valid survey was clearly the
best choice available. This would allow the results derived from the sample to be
generalised to the population as a whole and was the most feasible option for collecting
the data required, especially in view of the very limited funding available to conduct
the study. In addition, the inclusion of appropriate categorical questions in the
questionnaire facilitated relevant sub-sample analysis to determine whether the CSFs
could be regarded as generic or contextually contingent in nature.
The results of the preceding budget hotel operations literature review were used as
the basis for the design of the questionnaire, particularly the CSF items. Though it
would have been possible to group or categorise the 36 factors and produce a more
structured conceptual framework to guide and inform the empirical research design
and data collection/analysis it was felt that leaving the 36 items as one unstructured set
would be preferable for two main reasons. First, this would avoid any potential bias in
the data collection instrument that could have occurred if the items had been grouped
under particular headings. Second, this approach facilitated the ex post determination
of a model based on the empirical results via exploratory factor analysis.
The questionnaire package was mailed to the general manager of each budget hotel
in the sample. In addition to the questionnaire the mailing contained a reply-paid
envelope, a covering letter explaining the nature and purpose of the research and
a definition of CSF to ensure, as far as was reasonably practicable, that all the
respondents had the same understanding of the concept/term prior to responding to the
questions.
The population for the sample selection was defined as the leading budget hotel
brands in this sector of the UK hotel industry (Table I). The sampling frame was
derived from the literature, i.e. the annual Deloitte & Touche UK budget hotel surveys
referred to earlier and the recent Mintel (1999) report on budget hotels. The names and
addresses of the constituent hotels were obtained from the companies’ budget hotel
directories and/or their Web sites. A sample of 549 was selected from this information.
This procedure generated an initial return of 209 completed and useable
questionnaires. To address the validity issues associated with non-response

Size
Brand No per cent Location No per cent Rooms No per cent

Travelodge 68 28.5 Motorway 44 18.4 1-20 2 0.8

Travelinn 108 45.2 A road 110 46.0 21-30 10 4.2
Holiday Inn Express 15 6.3 Airport 5 2.1 31-40 104 43.5
Campanile 12 5.0 City centre 32 13.4 41-50 40 16.7
Table I. Comfort Inn 6 2.5 Town suburb 36 15.1 51-60 10 4.2
Sample characteristics by Premier Lodge 30 12.6 Rural 12 5.0 Over 60 73 30.5
brand, location and size Total 239 100.0 239 100.0 239 100.0
appropriate follow-up action was taken. A reminder letter, with another copy of the UK budget hotel
questionnaire, was posted to all the non-responding hotels approximately one week operations
after the date given for the return of the original questionnaire. This resulted in a
further 30 questionnaires being completed and returned. Thus, the final useable sample
comprised 239 questionnaires, comprising a very satisfactory final response rate of
44 per cent for this type of mailed survey.
In terms of the analysis of the questionnaire data basic descriptive statistics were 949
initially produced to determine whether it was suitable for further analysis. Following
the identification of an encouraging situation from this analysis the scalar data were
then subjected to a one-sample t-test (on a two-tailed basis and at the 99 per cent
confidence level) procedure via the SPSS software. This test was selected because the
way it operates within SPSS allows the actual distribution of responses to each
question to be compared with those that would be expected if the null hypothesis were
to be supported by the survey data. In short, the procedure requires a “test value” to be
entered 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 this
case at three, it effectively generates a normal distribution as a comparator for the
actual distribution within the data. Therefore, this allows the null hypothesis of the
responses which will not indicate any statistically significant level of importance
(positive direction), or unimportance (negative direction) for the CSF items, to be tested
on a two-tailed basis.
Once the statistical significance of the individual CSF items had been established
via the t-test procedure those CSF items obtaining a suitably positive significance
value were subjected to split-half reliability analysis, in the form of Cronbach’s a
coefficient, to ascertain their internal coherence. Following these procedures the t-tests
were then repeated for each of the sub-samples based on the categorical variables
mentioned earlier. This was undertaken to explore whether the t-test results obtained
from these analyses, for any or all of the variables, would show any difference to those
obtained from the same analysis conducted on the full sample. In short, to test whether
the CSFs could be regarded as generic or contextually contingent. Finally, the data
were subjected to exploratory factor analysis, via the use of the principal components
analysis (PCA) technique, to establish whether this data reduction procedure would
indicate the existence of an underlying model.

The survey results

The 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 relative
importance of the CSF items. Finally, the results of the reliability and exploratory
factor analyses conducted on the data are indicated.

Sample size and characteristics

The size of the realised sample ðn ¼ 239Þ was very encouraging in terms of providing a
representative 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 the
population distribution of budget hotel brands in the UK. The sample was also
dominated by budget hotels in Motorway and A (Trunk Road) Road locations, with
IJOPM these accounting for almost two-thirds of the respondent hotels. However, this again
reflects the nature of the population distribution for budget hotel locations.
24,9 Interestingly, the more recent growth locations of suburban and city centre sites
also 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 single
category, followed by the over 60 bedroom group. Cumulatively these two size
950 categories account for 74 per cent of the total. If the 41-50 category were to be added to
these this would account for some 90 per cent of the total. Once again, this is strongly
representative of the budget hotel population distribution by size. Table II indicates
further characteristics of the sample. This suggests that the sample is very
representative of the breadth of budget hotel operations, as it comprises a considerable
range of responses in relation to average room occupancy, number of full- or part-time
staff and the business mix. Given all of these characteristics it is reasonable to claim
that the sample as a whole is highly representative of branded budget hotel operations
in the UK.

CSFs (Current importance)

The percentage frequency distributions of the responses to each of the 36 CSF items
contained in the questionnaire are shown in Table III. To test the hypothesis specified
earlier this data was subjected to a one-sample, two-tailed t-test analysis (at the
99 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. The
two exceptions to this were “Corporate Contracts” and “Limited Service Level” which
were found not to be significant. The means and standard deviations for this data set
are shown in Table IV. These results clearly indicate, with the exception of the two CSF
items referred to above, that the null hypothesis should be rejected.
To explore the data further the same t-test analysis was repeated for sub-samples
based on the categorical variables of budget hotel size, location and brand to
investigate whether each of these had any influence on the significance levels found in
the full sample analysis. In general, the t-test results by size did not exhibit any
meaningful variations to those found in the full-sample analysis, with only a few items
being indicated as significant at the slightly lower level of p , 0:01: However, the low
numbers of respondents in the 1-20 ðn ¼ 2Þ; 21-30 ðn ¼ 10Þ and 51-60 ðn ¼ 10Þ
categories meant that the analysis could not be performed on these groups.
The same analysis conducted locationwise indicated that the statistical significance
of the responses from budget hotels in “City Centre” ðn ¼ 32Þ; “Town Suburb”ðn ¼ 36Þ
and “A Road” ðn ¼ 110Þ locations were exactly the same as those recorded for the full
sample. The results for budget hotels in “Motorway” locations ðn ¼ 44Þ showed that
these hotels viewed two of the CSFs (low guest bedroom prices and added-value

Non-business
Average per cent No. of staff Business guests guests
Room price room occupancy Full time Part time (per cent) (per cent)
Table II.
Sample characteristics by Mean £42.48 83.45 10.54 13.91 65.57 34.23
pricing and occupancy, Median £39.00 85.00 8.00 10.00 70.00 30.00
staffing and business mix Range £36.50-£94.62 42.00-99.62 0.00-47.00 0.00-50.00 10.00-99.62 10.00-90.00
 Current importance Future importance
UK budget hotel
(per cent) (per cent) operations
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 37.9
Convenient locations 8.6 39.7 51.8 1.0 61.1 38.0
Standardised hotel design 0.8 6.3 27.8 41.2 23.9 1.9 81.3 16.8 951
Size of hotel network 0.8 5.7 26.5 38.1 30.0 2.9 49.5 47.6
Geographic coverage of hotel network 2.4 21.2 41.6 34.9 1.9 40.3 57.8
Consistent accommodation standards 23.5 76.5 53.3 46.7
Consistent service standards 3.1 18.8 78.1 52.6 47.4
Good value restaurants 2.4 24.4 41.3 31.9 2.4 55.0 42.6
Value for money accommodation 5.5 21.2 73.3 36.2 63.8
Recognition of returning guests 0.8 9.4 35.5 54.3 1.0 49.8 49.3
Warmth of guest welcome 3.1 22.7 74.1 57.6 42.4
Operational flexibility/responsiveness 2.3 18.3 51.4 28.0 1.0 60.7 38.3
Corporate contracts 9.3 23.0 31.9 18.3 17.5 13.9 48.6 37.5
Smoking and non-smoking rooms 3.1 21.0 34.6 41.2 62.4 37.6
Design/look of guest bedrooms 2.3 24.2 45.3 28.1 66.2 33.8
Size of guest bedroom 3.9 37.0 37.7 21.4 70.5 29.5
Guest bedroom comfort level 12.5 42.0 45.4 56.2 43.8
Responsiveness to customer demands 0.8 6.2 43.6 49.4 45.2 54.8
Customer loyalty/repeat business 5.8 31.9 62.3 1.0 49.0 50.0
Disciplined operational controls 1.6 18.6 45.1 34.8 62.1 37.9
Speed of guest service 12.1 40.9 47.1 57.6 42.4
Efficiency of guest service 5.5 38.8 55.7 51.9 48.1
Choice of room type for guests 1.6 6.2 33.1 38.1 21.0 1.9 66.3 31.7
Guest security 0.8 10.5 30.5 58.2 48.3 51.7
Low guest bedroom prices 2.3 5.4 27.6 40.1 24.5 3.8 56.7 39.5
Limited service level 5.9 22.2 41.8 19.7 10.5 12.1 59.6 28.3
Hygiene and cleanliness 0.8 12.1 87.2 55.3 46.7
Quality audits 4.7 14.6 33.2 47.4 1.0 59.1 38.9
Staff empowerment 6.1 25.5 39.7 28.7 1.0 62.1 36.9
Strong brand differentiation 5.9 18.8 36.5 38.8 2.4 49.0 48.5
Customer surveys/feedback 1.6 2.4 22.2 33.7 40.0 2.9 42.4 54.8
Staff training 1.2 24.2 74.7 40.2 59.8
Added-value facilities in guest rooms 4.3 8.9 33.9 33.1 19.8 3.9 51.0 45.1
Staff recruitment and selection 1.6 11.7 45.1 41.6 55.8 44.2 Table III.
Standard pricing policy 0.8 2.3 21.8 35.0 40.1 2.9 57.6 39.5 Current and future CSF
Quality standards 5.4 16.3 78.2 1.0 40.5 58.6 importance frequency
Notes: 1 ¼ Not at All; 2 ¼ Not Very; 3 ¼ Fairly; 4 ¼ Very; 5 ¼ Extremely table (percentages)

facilities in guest rooms) to have slightly lower ðp , 0:01Þ levels of significance. In the
case of hotels in “Airport” and “Rural” locations this analysis was not conducted due to
the 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 of
the brands deemed the CSFs to be significant, though sometimes at the lower levels of
p , 0:01 or 0.05. The results obtained for the Travelodge ðn ¼ 68Þ and Travelinn
ðn ¼ 108Þ brands were identical to the full sample. Unfortunately, the size of most of
the other brand sub-samples was too small to conduct this analysis. The only exception
being Premier Lodge ðn ¼ 30Þ who indicated two of the CSFs as significant at the
IJOPM CSFs Mean SD
24,9
Central sales/reservation system 4.13 0.82
Convenient locations 4.43 0.65
Standardised hotel design 3.81 0.90
Size of hotel network 3.92 0.90
952 Geographic coverage of hotel Network 4.09 0.81
Consistent accommodation standards 4.76 0.43
Consistent service standards 4.75 0.50
Good value restaurants 4.03 0.81
Value for money Accommodation 4.68 0.57
Recognition of returning guests 4.43 0.69
Warmth of guest welcome 4.71 0.52
Operational Flexibility/responsiveness 4.05 0.75
Corporate contracts 3.12 1.2
Smoking and non-smoking rooms 4.14 0.85
Design/look of guest bedrooms 3.99 0.79
Size of guest bedroom 3.77 0.83
Guest bedroom comfort level 4.33 0.69
Responsiveness to customer demands 4.42 0.64
Customer loyalty/repeat business 4.56 0.60
Disciplined operational controls 4.13 0.76
Speed of guest service 4.35 0.69
Efficiency of guest service 4.50 0.60
Choice of room type for guests 3.71 0.92
Guest security 4.46 0.71
Low guest bedroom prices 3.79 0.95
Limited service level 3.07 1.0
Hygiene and cleanliness 4.86 0.37
Quality audits 4.23 0.87
Staff empowerment 3.91 0.88
Strong brand differentiation 4.08 0.90
Customer surveys/feedback 4.08 0.92
Staff training 4.74 0.47
Added-value facilities in guest rooms 3.55 1.0
Staff recruitment and selection 4.27 0.72
Standard pricing policy 4.11 0.88
Table IV. Quality standards 4.73 0.56
Current CSF t-test results Note: All the CSFs are significant, in a positive direction, at the p , 0.001 level – except 13 (Corporate
(full sample) Contracts) and 26 (Limited Service level) which are not significant

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 of
importance they had ascribed earlier to the CSF items would be the same, higher or
lower in the future. This overwhelmingly shows that the importance currently ascribed
to all the CSFs will be at least as high in the future. Furthermore, the respondents also
indicated that overall eight items will have a greater importance in the future. These
items were:
 .
geographic coverage of the hotel network; UK budget hotel
.
value for money accommodation; operations
.
responsiveness to customer demands;
.
customer loyalty/repeat business;
.
guest security;
. customer surveys/feedback; 953
.
staff training; and
.
quality standards.
It was also possible to compare the relative emphasis given by the respondents as a
whole to the current and future importance of the CSFs by comparing the mean scores
for each. This indicated that four of the CSFs – customer loyalty, staff training, quality
standards and efficiency of guest service – were regarded as approximately,
i.e. within+/2 one rank position, equally important both now and in the future. In
contrast to this three other CSFs – hygiene and cleanliness, consistent accommodation
standards and consistent service standards – moved from a current importance
position 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 in
relation to two groups of budget hotel brands identified within the data. These two
groups 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 groups
to the full CSF item list was also possible using the same means-comparison criteria as
above. This analysis showed some commonalities, but also some divergence, between
the two groups. The CSF – staff training – was included in the top five current and
future importance lists for both groups and – Value for Money Accommodation – in
the top ten. Conversely, the market leader group placed – customer loyalty/repeat
business, efficiency of guest service and guest security – in its top ten current/future
importance list. In contrast to this, the Market Laggard’s group current/future top ten
included – hygiene and cleanliness, quality standards, recognition of returning guests,
consistent accommodation standards, consistent service standards and value for
money accommodation.
Finally, an examination of the CSFs included in the future top five, but not in the
current top five, again indicated some convergence and divergence. The CSFs –
geographical coverage and responsiveness to customer demands – appeared in both
Leader and Laggard groups’ top five. However, the Leader group contained customer
surveys/feedback and strong brand differentiation in its top five, while guest security
appeared in the Laggard’s top five. The significance of all these results will be
commented on later in the discussion section.

CSFs (relative importance)

The survey questionnaire also asked the respondents to rank the importance of the 36
CSFs 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 these
categories the five CSFs with the highest frequency were identified.
 24,9

954

Table V.
IJOPM

The most critical CSFs

Top Second Third Fourth Bottom
CSF N CSF N CSF N CSF N CSF N

Value for money Value for money Hygiene and cleanliness 29 Staff training 37 Staff training 23
accommodation 67 accommodation 43
Convenient locations 31 Consistent service Consistent service standards 26 Hygiene and Quality standards 20
standards 27 cleanliness 29
Consistent Consistent Consistent accommodation Quality standards 16 Hygiene and
accommodation accommodation standards and value for cleanliness 17
standards 27 standards 26 money accommodation 23
Central sales/reservation Hygiene and Warmth of guest welcome 18 Convenient locations 15 Guest security and
system 19 cleanliness 22 convenient locations 14
Warmth of guest welcome Quality standards 20 Quality standards 16 Consistent Efficiency of guest
and hygiene and cleanliness 17 accommodation service 12
standards 14
Given the data in Table V it was possible to take this relative importance, or UK budget hotel
“criticality”, issue further by producing an overall importance ranking for these CSFs. operations
This was calculated by taking the frequencies for each CSF in Table V and multiplying
it by a weighting factor, the latter being determined by the relative “position” of each
frequency to reflect the fact that not all the frequencies associated with a given CSF are
equally 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 carry 955
relatively more weight than that in the “Bottom” in any overall ranking. Therefore, the
frequencies for each CSF should be weighted by their relative position to generate a
valid 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 as
an example, this process generated an overall score for this CSF of 199 as it had a
frequency of 31 in the top, 15 in the fourth and 14 in the bottom categories. This gave
ð31 £ 5Þ þ ð15 £ 2Þ þ ð14 £ 1Þ ¼ 199: The application of this procedure to all the CSFs
in Table V produced the weighted scores and overall ranking shown below. These
results show the relative importance of the first three CSFs to be proportionately much
higher 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 analysis
The 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 statistically
significant, was 0.9360. Given an a value of 0.7 and upwards is generally regarded as
satisfactory (Pallant, 2001); the 34 item set clearly has a high level of reliability and
internal consistency. The SPSS output showed that this co-efficient could only be
raised slightly, i.e. to 0.9362 or 0.9364, if CSF2 (convenient locations) or CSF 1 (central
sales/reservation system), respectively, were omitted from the calculation. However,
this seemed to be a rather pointless option, as the level of reliability would only
increase marginally by eliminating two CSFs that had previously been found to be
highly statistically significant by the t-test analysis.

Factor analysis
The 34 items from the current CSFs scale found to be statistically significant in
the t-test results were then subjected to the PCA data reduction technique in SPSS.
IJOPM Before the PCA was conducted the quality of the data for this analysis was assessed.
24,9 Inspection of the correlation matrix indicated many of the coefficients to be of 0.3 and
above, 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 recommended
value of 0.6 and is at a level referred to by Ryan (1995) as “meritorious”. The Bartlett’s
Test of Sphericity (BTS) had a value of 4090.99 and was significant at the p , 0:001
956 level. On the BTS, Ryan (1995, pp. 255-256) suggests that “the researcher is looking for
a large test statistic for sphericity and a small associated significance level to reject the
hypothesis that the correlation matrix is an identity”. Clearly, the BTS results in this
case met Ryan’s conditions. In view of these results the data are deemed suitable for
PCA.
The PCA analysis indicated the existence of seven components with eigenvalues
greater than 1. These cumulatively explained 62.3 per cent of the variance. Though it
would have been possible to reduce the number of components examined from seven to
four, as the first four accounted for approximately 50 per cent of the variance, it was
decided that all the seven should be retained at this stage because the remaining three
components contained items deemed to be important and relevant to the development
of the emergent conceptual framework. The retained components were then subjected
to varimax rotation that converged in 14 iterations to produce the rotated factor matrix
results shown in Table VI. This contains only 25 of the 34 items as one of the
consequences of the decision to retain seven components for this analysis was that
some 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 had
a loading of 0.5 or above.
However, while the empirical data supports the claim that all 25 of these factors are
critical this would be inconsistent with the general CSF concept and operational
management reality. To reduce the number of items to a more sensible and
parsimonious level it was necessary to combine the results from the PCA analysis and
the items regarded as “most critical” by the respondents. The former revealed an initial
model of budget hotel CSFs (Figure 1).
This was helpful as it introduced a degree of structure to the set of items, but it still
embraced 25 items across seven dimensions or categories. To reduce this volume and
range of CSFs still further it was decided that only those items, included in the initial
PCA derived model, that were also indicated as being one of the 11 “most critical” by
the survey’s respondents, should be retained (indicated as * in Figure 1). This
immediately reduced the number of CSF items in the model to ten and its dimensions
from seven to six as the warmth of guest welcome item, indicated as the sixth most
critical, was not present in the dimensions revealed by the PCA analysis and none of
the 11 most critical factors were included in the core product dimension shown in
Figure 1.
On the other hand, a model containing ten CSFs across six dimensions was still not
as parsimonious as it could have been. To reduce the model further the two dimensions
of strategic control and location were combined to produce one of “Accessibility” and
those of pricing, consistency, hygiene and quality and customer service were combined
to create one of “Performance”. This is shown in Figure 2.
The model shown in Figure 2 is derived by taking the average weighted
ranking 199 þ 95=2 ¼ 145 of the two CSFs (central sales/reservation system
 Components
1 2 3 4 5 6 7
Item Customer service Core product Strategic control Hygiene and quality Consistency Pricing Location

Recognition of returning guests 0.66

Operational flexibility and responsiveness 0.71
Speed of guest service 0.64
Efficiency of guest service 0.72
Choice of room type for guests 0.63
Guest security 0.54
Added-value facilities in guest rooms 0.63
Smoking and non-smoking rooms 0.58
Design/look of guest bedrooms 0.81
Size of guest bedroom 0.63
Guest bedroom comfort level 0.74
Central sales/reservation system 0.59
Standardised hotel design 0.61
Size of hotel network 0.73
Disciplined operational controls 0.50
Quality audits 0.62
Hygiene and cleanliness 0.65
Staff training 0.81
Quality standards 0.56
Consistent accommodation standards 0.76
Consistent service standards 0.75
Value for money accommodation 0.69
Low guest bedroom prices 0.71
Convenient locations 0.79
Geographic coverage of hotel network 0.65
operations

Factor analysis (rotated

factor matrix scores)
UK budget hotel

957

Table VI.
IJOPM
24,9

958

Figure 1.
An initial model of budget
hotel operations’ CSFs

Figure 2.
A final model of budget
hotel operations’ CSFs

and convenient locations) and that 576 þ 336 þ 335=3 ¼ 415 of the three highest
ranked CSFs (value for money accommodation, consistent accommodation standards
and hygiene and cleanliness) from the other dimensions. This left a final model with
five CSFs across two dimensions. This being more consistent with Brotherton and
Shaws’ (1996) contention that the CSF approach is concerned with “focused
specialisation”, and one that emphasises both strategic importance of product/brand
accessibility and operational importance of superior performance delivery as being the
generic critical factors underlying the success of a budget hotel brand and its
constituent units.
It was noted earlier in the analysis that the budget hotel brands could be separated
into two distinct groups (Leaders and Laggards) on the basis of their relative market
position. Therefore, the PCA analysis was repeated for the current importance CSF
data across each of these two groups. The results of this indicated that in the Leader
group the KMO value was 0.785 and the BTS was significant at the p , 0:001 level.
Excluding items loaded at less than 0.5 produced a varimax rotated component matrix UK budget hotel
with eight components containing 28 items. For the Laggard group the KMO value was operations
0.568 and the BTS was significant at p , 0:001 level. Again, excluding items loaded
at less than 0.5, this produced a rotated component matrix with ten components
containing 31 items. This means that the data were deemed suitable for PCA, but only
just, as KMO values below 0.5 are not acceptable.
The interpretation of the rotated factor matrices for the two groups was not always 959
straightforward as some components were comprised of slightly inconsistent factors
and, hence, the nature/internal consistency of some of the components was not always
clear. Nevertheless, using the same PCA item and “most critical rankings” discussed
above it was possible to reduce the number of components retained to five in the
Leader group and seven in the Laggard group. The common themes these components
indicated across the two groups were quality and standards, consistency and value,
accessibility (which again largely reflected the accessibility and performance
dimensions in Figure 2), and, what may be termed, “Looking After The Customer”.
However, the distribution of the loaded items across the components also showed that
the Leader group tended to have a tighter focus on a more limited range of components
than the Laggard group.

Discussion
The results from this study generally tend to support the degree of importance
ascribed to the CSF items in the literature. Of the original 36 CSF items the t-test
analysis found 34 to be statistically significant, in a positive direction, indicating
strong empirical verification of the alternate hypothesis. In this sense it is clear that
there is congruence between the literature and reality. These results were also quite
consistent across the sample used for the study, within which any variations identified
by the main sub-sample characteristics were minimal and generally at lower
significance levels. Though it was not possible to conduct all the sub-sample analyses
desired, due to small sub-sample sizes in some instances, it is clear that variables such
as the size and location of budget hotels have no statistically significant impact upon
the factors regarded as critical for success.
This is also generally mirrored in the case of variations by brand, with the
exception of Premier Lodge where three CSFs were found not to be significant; these
being, central/sales reservation system, standardised hotel design and low guest
bedroom prices. However, at the time of the survey this brand was undergoing rapid
growth, Scottish and Newcastle had previously acquired the “Premier Inns and
Lodges” brand from Greenalls and they were in the process of assimilating and
rebranding it. Given this it may have been that the variation found in Premier Lodge
was more a function of these factors than anything else. Therefore, it may be
reasonable to assert that it was most likely this variation occurred as a consequence of
a temporary dislocation to “normal business” and that if the survey were to be
repeated today a more consistent response in line with the other brand leaders may
have been evident.
Nevertheless, this does raise the interesting observation, not recognised in the
extant literature, that CSFs may be susceptible to unusual or transitional periods or
events. There is a general assumption in the literature that CSFs can be classified
within fairly static and discrete categories such as short-vs long-term, monitoring vs
IJOPM building, and generic vs context specific. Though one might argue that the variations
24,9 evident 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 to
temporary, transitional or unusual contextual conditions. Though this categorisation
clearly does refer to differences between specific organisations or even time periods it
tends to assume a degree of stability or normalcy within the differing contexts. The
960 Premier 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 may
require suspension and/or modification.
However, despite this, it is reasonable to contend that the vast majority of the
CSFs in this study may be regarded as generic rather than contextually contingent
in nature. In turn this suggests that the operational environments, processes and
performance measures used within the branded budget hotel offer, particularly
across the brand leaders, are more homogeneous than heterogeneous. A view that
challenges somewhat the differentiation argument advanced by Roper and
Carmouche (1989). On the other hand, to be fair to these authors, their
categorisation was produced long before the market had evolved to its present
state where it is dominated by a handful of major players providing a relatively
similar product.
This does of course raise issues of competitive advantage. If the factors underlying
operational, and indeed brand, success are generic across the sector there are really
only two potential sources, beyond basic differences in the core offer, of competitive
advantage 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 from
another. The second is simply “performance”, or more specifically superior delivery
performance in terms of meeting customer needs and priorities. There is evidence of
both. 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/facility
creep and is designed to secure competitive advantage by adding differential value to
the tangible aspect of the product offer. However, the problem with this approach is
that 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 of
their offers to try and differentiate themselves on performance and Travelinn has
introduced a “100 per cent Satisfaction Guarantee” (McCaskey, 2001). Though it is too
early to tell whether this will prove to be a significant source of advantage, and hence a
CSF for Travelinn, indications from the pilot phase and early days of the full launch
suggest that this may be the case (Guild, 2001). Furthermore, the Travelinn managing
director (Carl Leaver) contends that it has been a huge success not only in relation to
customer complaint surfacing and early resolution via empowered front line staff but
that it is also operating under the budgeted cost of 0.5 per cent of room revenue at
0.39 per cent and has had positive effects on both customer and employee satisfaction
and loyalty that have, in turn, enhanced revenue and reduced staff turnover costs
(Leaver, 2002).
 Moving on to consider the issues raised by the relative current/future importance of UK budget hotel
the CSFs. The eight CSF items indicated in general as likely to be more important in the operations
future 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 for
market leadership begins to give way to a greater emphasis on retention of market
share, it is not surprising that the majority of these eight items are concerned with the
brands’ abilities to focus on customer service as a key source of competitive advantage. 961
Only one is concerned with establishing greater scale, reflecting the fact that while
growth still continues there is a need for both current market leaders to ensure they are
not threatened by the current Laggards and for the latter to take every opportunity to
catch up with the Leaders while there is still a possibility for this to happen. This is
really a classic picture of market/industry evolution that illustrates the relationship
between a change in competitive conditions and the sources of competitive advantage
appropriate to these different conditions.
However, the current/future importance data did embody some more subtle nuances
relating to the two strategic groups of Leaders and Laggards. In one sense this may be
seen as a product of the “context-specific” category as the two sets of
companies/brands are clearly different to each other in respect of their relative
market positions and associated strategies. On the other, as noted earlier, the
“context-specific” category is normally interpreted in the literature as one pertaining to
the structural and resource conditions specific to a particular organisation within a
given industrial environment, with the “generic” category referring to CSFs regarded
as common to all the inhabitants of such an environment. The fact that the
current/future importance results show some degree of commonality across the two
groups of brands does indeed verify the contention that “generic” CSFs exist as a
discrete category. However, the fact that there is some divergence between these does
not, of and in itself, simply verify the “context specific” alternative in the manner this is
usually interpreted.
Though it does support, to a certain extent, the monitoring vs building
categorisation this is again normally associated in the literature with relative time
and task orientations. Monitoring CSFs are usually associated with short-term,
operational concerns and Building CSFs with longer-term, strategic issues within the
structural and resource conditions faced by a particular organisation. The divergences
between the relative current/future importance levels given to the CSFs by the two
groups in this study indicates something more than a simple time/task based
dichotomy in relation to an organisation’s internal conditions. They suggest that
emphasis on the maintenance, and/or improvement of competitive advantage is related
to an organisation’s relative position in the sector or market.
In this sense the CSFs in question are neither generic across the sector/market nor
are they context-specific in relation to a particular organisation’s structure and/or
resources. In short, this suggests there is another dimension; in that some CSFs are
dependent upon the organisation’s relative position. Different organisations at
different stages of the market/product life cycle will clearly have different views on
what constitutes short- and long-term success and the imperatives they need to focus
on to achieve this.
This is illustrated by the relative emphasis given to the future importance of
differing CSFs by the Leader and Laggard groups. Though the data shows both groups
IJOPM indicating that some CSFs are primarily concerned with maintaining the
24,9 standard/quality of their provision from the present to the future, it also shows
others that are more concerned with improving their relative competitive position. For
example, CSFs such as staff training and value for money accommodation, included in
both Leader and Laggard groups’ respective top ten CSFs, i.e. those regarded as the
most important both now and in the future, are essentially concerned with maintaining
962 the 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 the
Leader and Laggard brands and the different priorities emanating from this. In the
case of the Laggard group there is a greater emphasis on the continued development or
improvement of a significant number of “core offer” CSFs such as consistent
accommodation and service standards. Whereas the Leader group places greater
emphasis upon capitalising on the lead they have through strengthening their relative
position via the opportunities this offers for greater efficiencies, i.e. the efficiency of
guest service CSF, and/or developing their business further through concentrating on
CSFs such as customer loyalty/repeat business.
In addition, an examination of the most future-oriented category of CSFs, i.e. those
in the future top five but not in the current top five, reveals another nuance. Here
certain CSFs are common to both Leader and Laggard groups, e.g. geographic
coverage of the network and responsiveness to customer demands. In the case of the
Leader group these are essentially concerned with maintaining the relative position of
these brands. Conversely, for the Laggard group, these same CSFs reflect the fact that
these brands are still developing their offer in an attempt to close the gap between
themselves and the Leader group brands. Thus, the same CSF may be either one
concerned with position maintenance or development/improvement depending upon
whether 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 extant
literature currently used as a basis to classify a given CSF into one category or another
may 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 be
allocated to, do not embrace the additional dimension of “relativity” the above
discussion identifies. Thus the rather static, bi-polar dichotomies of strategic vs
operational, maintenance vs building and generic vs context-specific may benefit from
further reflection and research to consider the extent to which an organisation’s
relative position in the market influences the nature and purpose of a given CSF. This
does add something of a confounding nature to the existing literature in the sense that
a given CSF may not be either generic or context-specific, in the way these are normally
defined and understood in the literature. Indeed a given CSF could be both one
fulfilling a maintenance and a developmental purpose at the same time in different
organisations with differing relative market positions.
Similarly, as indicated earlier, although the PCA results for the Leader and Laggard
groups suggested some themes common to both groups, they also contained some
subtle differences in emphasis and focus. At a general level this was illustrated by the
PCA/most critical CSFs analytical combination leaving all 11 of the most critical items
in the Laggard group’s seven retained components, but only nine in the Leader group’s
five components. This suggesting that a mature, market leader brand is likely to focus
on a more limited range of CSFs because of its more dominant and defensive position,
whereas the brand attempting to grow and take market share has to focus on a wider, UK budget hotel
and perhaps more diverse, range of specific CSFs as a means to develop and strengthen operations
its relative market position. This view is also reinforced in the detail of the combined
PCA/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 money
accommodation, central sales/reservation system, convenient locations, staff training 963
and quality standards, all indicating an emphasis on developing the brand
infrastructure and core product to a level capable of competing effectively with the
Leader brands. The same results for the Leader brand group only identified three such
unitary components in the form of convenient locations, warmth of guest welcome and
efficiency of guest service. Thus, accessibility would appear to remain as a generic
CSF, regardless of relative market position. That said, for the Laggard group, this also
involves 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 brand
infrastructure well established. The other differences between the two groups suggest
that an offensive vs defensive CSF categorisation may be appropriate.
While, on the one hand, this may be seen as synonymous with the monitoring vs
building dichotomy it is not. These are not categories based on either short- or long
term, strategic/operational or generic/specific dichotomies in the normal way such
categorisations are used in the literature. As argued earlier a given CSF could be
classified into more than one of these categories, depending on its primary purpose for
the organisation/s in question. In the same way a given CSF could be categorised as
offensive or defensive, but this dichotomy reflects a more dynamic view, that of
relative position, rather than the more static time/task criteria underlying the existing
dichotomies.

Conclusions
This has been a very successful piece of research. The empirical data analysis
confirmed, through a systematic empirical investigation, many of the views expressed
in the literature regarding the possible criticality of a range of factors advanced by
various academic and industrial authors. In this sense it has made a contribution to the
literature on budget hotel operations by providing original, objective, valid and reliable
empirical evidence to verify certain assertions made in this literature. It has also
highlighted 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 was
possible, by synthesising the results from two different aspects of this analysis, to
produce a final model illustrating the relative criticality of two categories of CSFs.
This, in turn, illustrating where both corporate and operational attention should be
focused to extract the maximum competitive leverage from the brand and its
operational units. This synthesis also highlighted the importance of the corporate –
unit operations CSF nexus, wherein the inseparability of the brand’s infrastructure and
the operational performance of its constituent units comprise the mutually supportive
components of accessibility and service delivery. In this sense it has also contributed
additional empirical support for the strategic vs operational CSF dichotomy expressed
in the wider CSF extant literature.
IJOPM On the other hand, some caution must be observed in this matter as the respondents
24,9 to the questionnaire survey were all drawn from the supply-side perspective. There is a
danger here of Gap 1 of Parasuraman et al.’s (1985) SERVQUAL Gap Model. In short,
the potential mismatch between management expectations of customer needs and
priorities and those actually held by customers. It would be interesting to repeat this
research using budget hotel customers as the target respondents. This would then
964 facilitate a comparative analysis of the various factors’ criticality from the supply and
demand-side perspectives.
It is indeed possible that the managers’ perceptions of the factors they regard
as critical for success would accord with those of their customers, however, it is
equally possible that they may not. Though not directly concerned with the CSF
focus of this study there is some evidence to support this view with the results of
Callan and Lefebves’ (1997) study that found both elements of convergence and
divergence between the views of budget hotel managers and customers on the
importance of providing a number of facilities and services. One reason for
the divergence found in Callan and Lefebves’ study may be summarised as the
differing views that managers and customers are likely to hold over what
constitutes success and the factors regarded as critical for it to be achieved. This
strengthens the feeling that further research to replicate this study from the
customers’ perspective would be an interesting extension on the grounds of both
potential academic and practical value.
However, that said, the work has also highlighted some possible inadequacies in the
body of extant literature referred to above, and more specifically the basis underlying
the existing CSF dichotomies. Though it is reasonable to contend that CSFs per se can
be allocated to discrete, bi-polar categories, i.e. those of monitoring vs building (long
vs-short-term) or generic vs context-specific, the results of this research suggest that
such an approach may not always be as valid and robust as it may appear. Given the
identification of two strategic groups of budget hotel brands (market leaders and
Laggards), and the finding that the relative status/position of an organisation’s brand
in the marketplace appears to act as a type of moderating variable in relation to a given
CSF item, it is clear that the same CSF item could simultaneously be allocated to more
than one of these rather static categories depending on the relative position of the
organisation’s brand. Similarly, the identification of unusual or atypical conditions that
affect a particular organisation at a particular point in time, i.e. the case of Premier
Lodge referred to earlier, also suggests that such occurrences should also be regarded
as a potential modifier.
In view of this it is suggested that the relatively simple task type/time period based
categorisations currently used to generate the CSF dichotomies found in the literature
be re-examined. The results of this study indicate that other issues threaten the
integrity and robustness of these dichotomies and the way they are currently used.
Therefore, some revision is required to incorporate the issues of relative organizational
position and, although more problematic, unusual/atypical situations and events. This
would involve a quite fundamental reorientation in that if, for example, relative
position is seen to be the prime influence on whether a given CSF should be regarded as
one performing both monitoring and/or building functions for different organisations
at the same point in time, the starting point for categorising the CSF would be relative
position and not the particular functional type it represents.
 In short, the function of a specific CSF is not necessarily discrete and/or universal UK budget hotel
but dependent upon the organisation’s relative position, thus a given CSF may be operations
legitimately allocated to more than one of the existing categories. In the present schema
found in the literature this is, and cannot be, the case. The procedure used to classify
CSFs 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 of
the categories available for it to be allocated to and thus, it can only be seen to perform 965
one function at a time. A preferable approach may be one such example derived from
this study and shown in Table VII.
Here the primary points of reference are the CSF itself and the relative position of
the organisation, i.e. the strategic group it belongs to. This is appropriate because CSFs
are a means to an end and organisations belonging to different strategic groups will
have differing starting positions and aims/objectives to pursue. In this sense a given
CSF may be simultaneously fulfilling a “building/offensive” function for a market
Laggard brand and a “monitoring/defensive” function for a market Leader brand. For
example, as noted earlier, certain CSFs identified in this study (geographic coverage of
the network and responsiveness to customer demands) are critical for the Leader
brands to maintain their relative position, whereas for the Laggard brands they are a
means to close the gap between themselves and the Leaders. Equally, others are not as
important for each group because of the differences in their relative position. For
example, Table II shows the two CSFs – efficiency of guest service and consistent
accommodation – to be specific to the Leader and Laggard groups respectively but
strategic in nature and fulfilling a “building” function for both groups. At the same
time the purpose of this “building” function for the Leader group is essentially
defensive, but offensive for the Laggard group.
This illustrates that the type, nature and purpose of a given CSF is more complex
and multidimensional than is implied by the type of categorisations currently
dominating the literature. Simple, mutually exclusive categorisations cannot
adequately capture this richer picture. Further thinking and reconceptualisations
are required to develop more inclusive and detailed schema for CSF categorisation.
CSFs are multifaceted and multidimensional, and the basis for categorising them
needs to reflect this. Without such further developments it will not be possible
to produce CSF typological frameworks that have greater utility for more
adequately conceptualising their multidimensional nature and enable practising
managers to understand more clearly the competitive dynamics within which they
are operating.

Function Function
CSF Basic type (market Leader) (market Laggard)

Geographic coverage Generic, strategic Monitoring, defensive Building, offensive

of the hotel network
Responsiveness to
customer demands
Efficiency of guest service
Consistent accommodation
Generic, operational Monitoring, defensive Building, offensive
Table VII.
Specific, strategic Building, defensive N/A CSFs – a new basis for
Specific, strategic N/A Building, offensive classification?
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