Chapter 10
Managing the physical environment
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Understand the role of the physical environment in
marketing a hospitality business
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Have an awareness of design principles used in the
development of the hospitality product
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Identify the external and internal elements of the
hospitality physical environment
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Recognize the importance of maintenance and
refurbishment programs for hospitality properties in
delivering customer satisfaction
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The physical environment sends important signals to an
organization’s stakeholders, especially to customers
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Customers intuitively respond to the signals that the external
appearance and internal atmosphere project
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If the physical environment is appropriate, then target markets
are more likely to find the offer attractive
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Potential customers who do not ‘fit’ into the target market
profile can be deterred by the physical environment
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Most of this lecture refers to the ‘built environment’ but many
of the principles apply equally to the natural environment
Four elements influence our understanding of psychology
and the physical environment:
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individual behaviour
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social interaction
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customer responses
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characteristics of the physical environment
Figure 1.1 Customer behaviour and responses to the physical environment
People respond to the physical environment with one of two diametrically
opposed types of behaviour:
Approach behaviour
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people who are comfortable with the physical environment of a hospitality
unit demonstrate approach behaviour
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they are more likely to enter, stay and spend money, and return/
recommend the brand
Avoidance behaviour
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people who are uncomfortable with a physical environment demonstrate
avoidance behaviour
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they will probably walk or drive past the unit; if they enter the premises,
they may walk out without purchasing
The design of the physical environment needs to attract target markets and
create a positive environment for employees; environments can also be
designed to deter people who do not fit the target market profile
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The physical environment influences how customers and
employees interact and relate with each other
Design can encourage or discourage social interactions
Different types of hospitality product need to generate
different types of social interaction
Many business products are designed to create more formal
environments
Many hospitality leisure products are designed to encourage
interaction; indeed, social interactions can be critical to
delivering customer satisfaction
The character of social interactions needs to be considered
when developing the product concept or creating a design
brief
The physical environment sends signals to consumers about
what is appropriate behaviour and what is not
Three types of human response to the physical environment:
1. Cognition (knowledge and perception)
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Physical environment influences people’s beliefs about places and creates
preconceptions about the product or brand
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The physical appearance of hospitality premises reinforces or challenges
people’s prior beliefs about the hospitality offer
2. Emotion
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People have subconscious or overt emotional responses to the physical
environment
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There are two types of emotional response: pleasure and arousal (see Figure
10.2)
3. Physiological response
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People have different physiological responses to environmental stimuli:
• visual stimuli (brightness/darkness, colours and shapes)
• aural stimuli (the volume, cadence or rhythm of sounds)
• olfactory stimuli (fresh or foul scents and smells)
• taste stimuli (bitter/sweet/salty/savoury/sour tastes and hot/cold
temperatures)
• tactile stimuli (the texture of food products, the softness of furnishings and
the level of comfort)
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Managing the sight, sound, smell, taste and feel of the product can be
described as sensory marketing and is a key factor in creating a positive physical
environment
Figure 10.2 Emotional responses to the physical environment
Hospitality companies create atmosphere through design
Ambient dimension
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Refers to sensory elements colour, lighting and temperature
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Minor irritations amusing, extreme ambient conditions serious
issue for distressed customers
Spatial layout
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Use of space – how furniture and equipment are arranged in
rooms
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Size of property influences spatial layout
Signs, symbols and artefacts
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The tools that companies use to communicate with consumers
via the physical environment
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Contemporary hotels use modern art to convey a fashionable
image; historic hotels can use antique furniture to convey the
unique heritage
Different hospitality product concepts have different servicescape
characteristics
Self-service operation
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Relies on customers serving themselves and few (if any)
employees; the design of the physical environment focuses on
convenience and low cost
Interpersonal service operation
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Involves both customers and employees using the same physical
environment at the same time; design needs to ensure customers
are comfortable and employees can work efficiently
Remote service
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Means a physical environment where there are no customers, i.e.
contract catering – food production in remote kitchens, servicing
multiple units; design focuses on employees and efficient
production
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External environment for hospitality – a shop window in
retailing
Visual displays send powerful messages about product,
service quality and price
The surrounding environment, external appearance of
the building, landscaping, access routes, car parking
facilities, signage and logos and lighting are the shop
window for the hospitality business
The external appearance of the hospitality premises –
the building, its size, age, architecture and, in particular,
the quality of maintenance sends cues to customers
Attractive, well-maintained properties inspire confidence
Buildings that appear neglected can deter potential
customers
Internal factors include:
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layout
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décor
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furniture and furnishings
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equipment
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internal signage
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temperature and air quality
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music
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smell
Together, they convey the all-important atmosphere of the
premises
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Appearance, attitude and behaviour of employees should
complement the positioning, product concept and physical
environment
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Employees’ cleanliness and dress should reinforce design
theme and send a consistent message to customers
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For formal, business-orientated hospitality operations,
professional uniforms reflect the business environment
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With leisure and themed hospitality concepts, casual uniforms
designed as part of the theme or no uniforms are appropriate
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Customers may not notice employees’ dress and behaviour
when it matches the brand concept and physical environment
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If an employee’s appearance, attitude and behaviour is
inconsistent with the design concept, then customers will
notice inconsistency and may be dissatisfied
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Hospitality experiences are variable in content and
quality due to the presence or absence, and behaviour,
of other customers
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Customers in the physical environment contribute to the
atmosphere
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Customers see and hear other customers; if what they
see/hear conforms to their expectations, then other
customers will feel comfortable
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If other customers’ dress/behaviour seems
inappropriate, this may cause embarrassment or offence
and dissatisfy customers
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Maintenance and refurbishment has to maintain the
hospitality product at an acceptable level to ensure customer
satisfaction and efficient operations
Unfortunately, customers and employees accidentally, and
occasionally deliberately, cause damage to the property
Bathrooms and washrooms suffer particularly from abuse and
accidental water damage
The costs of not maintaining a property include:
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Loss of current/future revenue streams from customers
Loss of revenue from inability to sell rooms out of operation
because of maintenance problems
Inefficient performance caused by faulty equipment and
employee productivity
Liability for health, safety and other legal infringements
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Effective maintenance should be planned; financial planning includes
depreciation to cover the costs of wear and tear
Depreciation calculated by estimating life expectancy of décor, fittings,
furniture and equipment
1. Preventative maintenance comprises the regular servicing of equipment
– elevators, kitchen equipment, air-conditioning, etc. – to ensure they do
not break down
2. Breakdown maintenance includes all the minor damage caused during
the normal daily operations of the business
3. Corrective maintenance includes regular redecoration according to a
planned schedule; when the hospitality product becomes tired, major
refurbishment is needed
4. Designing out faults is necessary when design faults emerge during the
operation of the facility, and can improve guest comfort and operational
efficiency
Refurbishment of public rooms, bars and restaurants varies according to
usage and product concept
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Physical environment is important to attract customers
into hospitality premises and in contributing to the
customer experience during the service encounter
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Hospitality businesses need to continually invest in
refurbishment to enjoy high repeat and recommended
business and nurture customer loyalty
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Hospitality businesses that fail to maintain the physical
environment of their premises will eventually become
tired and will reduce their profit potential
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