Lean Hospitality - Application of Lean Management Methods in the Hotel Sector

Abstract

The tourism businesses faces the challenge to reduce significantly their costs in the future and to structure internal processes more efficient. The hotel and tourism industry, which showed continuous growth in recent years, now looks ahead to economic turbulences and general difficult times. Given these developments, hotel companies will earn in the future less than before. This phenomenon has not been considered in tourism, while it exists since decades of years in the industrial sector. The industry applies successfully for many years modern methods and instruments to optimize productivity and efficiency and to increase the quality of services even further. These existing experiences to increase productivity in the industrial environment were taught for years as “Lean Management”. This research aims to show practical experiences of the application of Lean Management methods in the hospitality sector and to make a statement about their suitability and the possible potential for optimization. The work refers to a case study in a hotel company, where several Lean methods have been implemented successfully.

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2212-8271 © 2015 The Authors. Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license
(http://creativecommons.org/licenses/by-nc-nd/4.0/).
Peer-review under responsibility of the scientific committee of 48th CIRP Conference on MANUFACTURING SYSTEMS - CIRP CMS 2015
doi: 10.1016/j.procir.2016.01.019
Procedia CIRP 41 ( 2016 ) 614 – 619
ScienceDirect
48th CIRP Conference on MANUFACTURING SYSTEMS - CIRP CMS 2015
Lean Hospitality - Application of Lean Management methods in the hotel
sector
Erwin Raucha, Andreas Damiana, Philipp Holznera*, Dominik T. Mattab
a Faculty of Science and Technology - Free University of Bozen-Bolzano, Universitätsplatz 5, 39100 Bolzano, Italy
b Fraunhofer Italia Research s.c.a.r.l., Innovation Engineering Center (IEC), Schlachthofstrasse 57, 39100 Bozen, Italy
* Corresponding author. Tel.: +39-0471-017111; fax: +39 0471 017009. E-mail address: philipp.holzner@unibz.it
Abstract
The tourism businesses faces the challenge to reduce significantly their costs in the future and to structure internal processes more efficient. The
hotel and tourism industry, which showed continuous growth in recent years, now looks ahead to economic turbulences and general difficult
times. Given these developments, hotel companies will earn in the future less than before. This phenomenon has not been considered in tourism,
while it exists since decades of years in the industrial sector. The industry applies successfully for many years modern methods and instruments
to optimize productivity and efficiency and to increase the quality of services even further. These existing experiences to increase productivity in
the industrial environment were taught for years as "Lean Management". This research aims to show practical experiences of the application of
Lean Management methods in the hospitality sector and to make a statement about their suitability and the possible potential for optimization.
The work refers to a case study in a hotel company, where several Lean methods have been implemented successfully.
© 2015 The Authors. Published by Elsevier B.V.
Peer-review under responsibility of the Scientific Committee of 48th CIRP Conference on MANUFACTURING SYSTEMS - CIRP CMS
2015.
Keywords: Lean Management, beyond Lean, Lean Hospitality
1. Introduction
The effects of the recent economic and financial crisis now
has also reached the hospitality and tourism industry. The
branch that until a few years ago was used to report continuous
growth today has to deal with new challenges. For the great
majority of the companies from these industries (especially
hotels) nowadays turnover decreases and at the same time,
costs increase. As a result, the profits are getting less or as the
case may be posting losses becomes inevitable. There are
several reasons underlying this phenomenon. First of all, the
cost of labor, food and energy are still increasing with no end
in sight. Secondly, also the tax burdens has a significant impact
on a company’s financial situation. Lastly, also the effect that
is widely known as “loss of the center (or middle)” plays an
important role in the current development since many
companies of the branch lose their core-client-group. In order
to counteract these developments, working in an efficient and
effective way and to focus on the complete fulfilment of the
customer needs becomes even more important. In other
markets, especially in the industry, these challenges has been
successfully faced with Lean Management. Unfortunately,
Lean approaches are not very popular in the hospitality sector.
In the existing literature there are only few and not well
documented examples for the implementation of Lean
Management up to now. The objective of this work is to
investigate the application of traditional Lean Management
methods in the hospitality area and to make a statement about
their suitability and the possible potential for optimization.
2. State of research and application of Lean Management
in different sectors
In the context of Lean Management, “Lean” essentially
means flexible, agile or light. Lean is a bundle of principles,
methods and actions for the effective and efficient
configuration and examination of the whole supply chain. Goal
of Lean Management is to create value without producing
waste (“muda”). Value is any action or process that a customer
would be willing to pay for. Lean tools therefore help to
© 2015 The Authors. Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license
(http://creativecommons.org/licenses/by-nc-nd/4.0/).
Peer-review under responsibility of the scientifi c committee of 48th CIRP Conference on MANUFACTURING SYSTEMS - CIRP CMS 2015

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Erwin Rauch et al. / Procedia CIRP 41 ( 2016 ) 614 – 619
identify and to eliminate waste. As waste is eliminated, quality
improves while production time and costs are reduced [1, 2].
2.1. State of the art in Lean Management
Principles of Lean Management
In the present literature exist various definitions regarding
the main principles of Lean Management. One of the most
widespread approach refers to the book “Lean Thinking” from
Womack and Jones. According the two authors the philosophy
of Lean Management is based on fife principles [3, 4, 5]:
1. Specify value: Specify value from the customers point of
view.
2. Identify and map the Value Stream: Identify all the
steps in the value stream for each product family
eliminating whenever possible those steps that do not
create value.
3. Create flow: Make the value-creating steps occur in tight
sequence so that products will flow smoothly toward the
customer.
4. Respond to costumer pull: As flow is introduced, let
customers pull value from the next upstream activity.
5. Pursue Perfection: As value is specified, value streams
are identified, wasted steps are removed, and flow and
pull are introduced, begin the process again and continue
it until a state of perfection is reached in which perfect
value is created with no waste.
Kaikaku vs Kaizen
The initiation, implementation and improvement of Lean
Management in a company’s processes proceeds usually on an
organizational and operational level [4, 6]:
Organizational Level: fundamental and radical changes (also
“Kaikaku”: japanese for radical changes) during a limited time.
Includes changes in peoples thinking and acting processes.
These changes are no continuous changes.
Operational Level: on the operational level the focus lays on
continuously improving processes, also called “Kaizen”
(japanese for “good change”). These step-by-step
improvements consists of Lean methods referred to the single
processes in a company. The underlying ideology of Kaizen is
that anything is perfect and everything can be improved.
2.2. Beyond Lean Manufacturing – application of Lean
methods in different industries
Today Lean Management is applied in many different areas
and belongs to the most important and most popular
management technics at all. For instance, it is used in the
administration, healthcare, construction, maintenance, product
development and many more.
Lean Office
Lean Office refers to the application of Lean Management
in a company’s administration, service and business process.
Principally it is about to increase the transparency regarding the
costs of these secondary processes, to manage and standardise
better the organisations complexity and to make the
administration process more efficient [7, 8].
Lean Healthcare
Since decades of years, the healthcare sector is faced with
one big problem: the costs are too high. To reduce rising
medical expenses based on expensive medication and
increasing labor costs, Lean Management has found its way
into the healthcare area. The main goals are: reduction of the
process and waiting time for the patient, standardization and
optimization of the interfaces between different divisions and
wards, integration of IT-systems to avoid extra work, reduction
of inventory and the reduction of patients length of stay [9].
Lean Construction
Lean Construction includes the planning, design and
execution of construction projects. Thereby the focus is laid on
the interfaces between the project planning and the project
execution. The peculiarity of the construction area in
comparison with the manufacturing industry is that companies
have to manage with continually changing partners/suppliers
and with the absence of permanent staff. To avoid long delays
for the completion of the construction object it is essential that
the parts and components as well as tasks are carried out in
highest quality and within the prescribed time. Therefore
flexible strategies and methods are needed to ensure a
continuous flow of all processes and tasks at the construction
site [10, 11].
Lean Management has shown that it is a very flexible and
universally applicable management technique with highly
customizable tools for many different areas. Because of this,
the obvious consequence would be the application of Lean
Management also in fields like the hospitality and tourism
industry. Unfortunately, Lean approaches are not widely
known in these areas up to now. In the existing literature there
where only a few examples for the application of Lean
Management in the hospitality area.
3. Examples of Lean Management in the hospitality and
tourism sector
In the past, Lean Management has shown its applicability to
the service or tertiary sector that includes also the hospitality
and tourism area. Nonetheless, in todays literature there are
only a few examples of companies that have implemented Lean
Management in their organisational processes up to now. This
may be caused by various factors. Surely, one of them is that
Lean methods are used only partially in the single departments
of an organization and therefore the overall approach is
missing. Consequently, these applications are not attributed to
Lean Management. Particularly worth mentioning is that when
Lean Management is applied in the hospitality area this occurs
mostly in combination with the management system Six Sigma.

616 Erwin Rauch et al. / Procedia CIRP 41 ( 2016 ) 614 – 619
Yukai Resort – Japan
The Yukai Resort in the famous Gero Onsen Hot spring area
of Japan is part of a traditional Japanese hotel chain that
performs Lean hotel operations in order to offer great value to
their customers, to reduce costs and to remain competitive in
the fierce hospitality industry. Thanks to Lean Management
methods for the resort it is possible to offer to its guests the
same standards and services as other hotels do, but for only half
of the price regardless of high or low season. In the Yukai resort
all resort duties are shared by all personnel. This has allowed
the resort to operate with minimal staff and reduce overall costs
while maintaining high quality. Dinner and breakfast are buffet
style, which reduces staffing requirements. Staff are also active
in Lean Management or Lean Kaizen efforts. The manager
leads Kaizen circles weekly and monthly. The receptionists, in
their free time will go to areas needing assistance, perhaps the
kitchen or laundry [12].
Apex Hotels – UK
The laundry at Apex hotels is one of the hotels largest
spends each month. The Lean team mapped out the end to end
cycle involving the laundry process demonstrating how each
morning the laundry service deliver clean linen to the hotel and
take away the dirty linen to be laundered. Further analysis
highlighted the non-value-adding activities of the process. By
eliminating these tasks and restructuring processes,
organisational structures and workforce planning, the Lean
team was able to save about 5.728 man hours per annum.
Applying Lean Methods not only lots of money can be saved,
also the service for the guests and the working conditions for
the hotel staff have improved significantly [13].
Towne Place Suites by Marriot Hotels – UK
One of the main goals of Lean Management is to maximize
the customer benefit and at the same time to minimize the use
of resources. This is what happened at the Town Place Suites
by Marriot Hotels. After 5-days of workshop about the
application and the effect of Lean principles, the customer and
staff satisfaction has increased significantly. The key for this
was:
 Nobody is negligible for the achievement of the goal
 The hotel’s staff is the first costumer
 More responsibility was assigned to employees.
In addition, Marriot’s Hotel elaborated 12 principles to
improve the customer service [14, 15].
Starwood Hotels
Starwood Hotels implemented Lean Six Sigma in 2001. As
a result, the company realized some quick financial wins.
Incremental revenue increased by 19% and overall spending’s
by customers, while staying at the properties, increased by
nearly 12% in the few months after implementation. By
centralizing the spa reservations group by utilizing tools of Six
Sigma, Starwood claimed a revenue increase from 91 to 141
million pounds. Food production, due to its similarities to the
manufacturing industry has had success on case-by-case basis
in using Lean and Six Sigma principles [16].
4. Identification of suitable Lean methods for the
hospitality sector
Today exist a lot of different methods and tools in the field
of Lean Management. Due to the fact that Lean was born in the
ambit of production, also the majority of its tools come from
this area. Through adaptation over time, today they are
applicable also in other fields and are no longer subjected to
single industries. Nonetheless, not every method would be
equally suitable for every section and process. Therefore, an
adequate evaluation procedure has to occur to get a ranking
with the most suitable Lean methods for the hospitality area.
4.1. Criteria definition
In order to get indications of which Lean methods are the
most suitable for the hospitality field, the definition and
weighting of appropriate assessment criteria is unavoidable. In
this validation model, four criteria were defined and differently
weighted.
Criteria 1 – Effort and costs for implementation: In practice,
the cost of investment and the use of resources should be as low
as possible to ensure a very short amortisation period. Also in
this validation model, this criteria plays an important role.
Criteria 2 – Time to visibility: Criterion two focalises the
short term visibility of positive effects regarding the practical
application of the methods. Project failure is often caused by
missing results in short terms. Therefore, also this factor should
be taken into account.
Criteria 3 – Impact on KPIs: KPIs have a big influence on
decisions taken by a company’s management and help to
decide on the continuation, extension, limitation or abortion of
a project, investment or other strategic activities.
Criteria 4 – Sustainability of outcome and application: In
comparison to criteria two, the focus is lead on the sustainable
outcome and use of the method. One main goal of Lean-
Thinking is the long-term benefit for the enterprise. Changes in
the mindset of people cannot occur in few days, but it takes its
time. Therefore, also this criteria should be affiliated in the
validation model.
4.2. Evaluation of suitable Lean methods for the hospitality
sector
As already mentioned the validation of the methods depend
on their performance regarding the four defined assessment
criteria. To ensure the adaptability of the validation model to
the needs of various enterprises in the tourism industry, the
single criteria can be weighted differently. In this research case
the above-mentioned criteria where weighted together with the
management of the case study hotel. To criterion three (Impact
on KPIs) was given the biggest weight in order to recognize the
fact that often KPIs are the main argument in taking strategic
decisions.

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Fig. 1. Analysis of the suitability of traditional Lean Management methods
As we can see from Fig. 1. not all of the listed tools and
methods are equally suitable for their application in hospitality.
We can observe, as expected, that methods from certain groups,
for example Organisation and Staff, Material flow and Layout
seem to be more suitable than others are.
Machinery and Equipment: Methods from this cluster show
in comparison to others a low suitability, especially regarding
criterion one and two. This may be caused by the high cost and
the excessive planning impact for implementation.
Material flow and Layout: The methods from this class
present a mixed picture. Some of them are performing very
well others again are legging fare behind. The strengths of
methods from this cluster lay in their effects on KPIs and
sustainability.
Organisation and Staff: In this cluster, there are not big
differences between the performances of the single methods.
Throughout they are suitable very well for hospitality.
Production Planning and Control: These methods are
particularly expensive in their implementation and suffer from
the effort and time needed to get the desired result, although
they are very sustainable in use and application.
Quality: Comparable with Material flow and Layout. Some of
the methods are time-consuming and very complex in their
implementation. In addition, their benefit is not always
recognizable at first sight.
The results from this analysis and validation model show
that the single cluster with their methods perform very different
regarding the single criteria. On average, the performance of
the methods satisfies the expectations. To verify these results
in the next chapter the application of some of the methods was
carried out in a real case study in a North-Italian hotel.
5. Case Study – Application of Lean methods in a
premium family hotel
The enterprise from the case study represents one of the
biggest and noblest family spa hotels worldwide. The hotel is
open all year round, has a maximum capacity of 110 beds and
employs about 120 persons.
5.1. Introduction of CIP-Workshops
CIP-Workshops (Continuous Improvement Process) are a
very flexible Lean Management method and applicable in lots
of different company areas. CIP-Workshops were implemented
in different departments of the hotel. CIP-meetings were and
are hold for example in the reception with front and back office,
in the kitchen and in the service, as well as in the hotel spa and
at the housekeeping.
Regularly hold workshops form the fundament for the CIP-
method. The participants should arrive well prepared to the
workshops. This could occur by on-site-visits, by analyzing
process specific data or reports. Employees that are involved
directly in the process usually have the most extensive
knowledge and should explain the process to the rest of the
participants at the beginning of the workshop. In addition, also
a CIP-leader has to be named. For example, at the kitchen
department, this was the junior chef. In sense of the Lean
principles, it was important to assign him more responsibility,
secondly it was a good opportunity to let him and his social
capabilities grow and thirdly the group-dynamic is much more
flexible if no one is afraid to speak one’s mind. The junior chef
was also responsible to take care that the agreed tasks were
realized until the next CIP-meeting.
In order to collect as much improvement suggestions as
possible and to motivate the hotel staff to care about the CIP-
method a reward system was developed (Ideas Management).
A CIP-board was placed for everyone visible in the hotel (see
Fig. 2). For the hotel staff it is possible to write their
improvement ideas on prefabricated idea cards. This ideas are
then rated by the CIP-jury and either endorsed or rejected.
Another CIP-board shows the status and the results of the
endorsed suggestions. At the end of the year, a lottery with the
cards of all endorsed suggestions is hold out. The employee
with the most suggestions therefore has the best chance to win
a price (for example a holiday travel to New York).

618 Erwin Rauch et al. / Procedia CIRP 41 ( 2016 ) 614 – 619
Fig. 2. Realized CIP-Board for Idea Management
5.2. Application of Lean methods in warehouse management
The hotel in the case study has different warehouses and
storages at different places and floors distributed over the
whole building. This circumstance should in effects be positive
for running the hotel because this makes it easier to place the
different goods near the destination where they are needed. Due
to the fact, that no one was responsible for the organization of
the warehouse, this happened more or less randomly.
Therefore, goods that were needed at the ground floor were
placed often two or even three floors off. To avoid such
inefficient situations in the future, the different warehouses and
their contents were analyzed. The articles were clustered into
different product families regarding their intended use and
place of consumption.
To reduce time and distance for moving goods in and out of
the warehouse and to improve the clarity, an ABC-analysis was
done. The focus was primarily hold on A-products that were
needed very often. These products were then placed as near as
possible to the entrance of the warehouse (for example pasta).
Applying this actions, not only the time to access has been
reduced, but also a so called quarantine zone found its place in
the storage.
To facilitate the warehousing even further and to reduce the
time for purchasing goods a barcode-system was implemented.
The barcodes were stuck to magnetic cards and placed in front
of the relative article. Now purchasing and reordering the goods
is much more easy than before. Provided with a scanner, it is
possible to scan the codes placed in front of the articles and to
insert then directly the desired quantity. Another positive fact
is that now it is no longer necessary to fill out order sheets
manually. By using the scanner, orders will be sent
automatically to the purchase department.
5.3. Reduction of movement in Housekeeping
Housekeeping is one of the most important activities in a
hotel. Firstly, because the majority of the guests attach high
value to order and cleanliness, especially in the price segment
of the case study hotel. Secondly, it is a major cost factor in a
company’s budget. To analyze the process and to identify non-
value-adding activities, a video recording was done and the
path traveled by the staff was set down with the help of a typical
spaghetti diagram known from Lean material flow analysis (see
Fig. 3). The advantage of the spaghetti diagram is that two
types of waste, transportation and motion, can be visualized in
a very easy way. At every floor were placed two trolleys. One
for the clean laundry and one for the dirty one. The
housekeeping staff was divided into single teams. One team
consists of two or three people, responsible for different tasks.
Task one is to free the rooms from dirty laundry and garbage
and put them on the assigned trolley. Task two consists in
taking the clean laundry from the second transport carrier and
change the covers. Task three is about replacing the dirty
towels with new ones and cleaning the room.
Fig. 3. Spahgetti diagram
The identified weakness in the process was that the two
transport carriers were positioned at a fixed point in the corridor
instead of moving them to the single cleaning locations because
it was nearly impossible to move them. They were completely
overloaded and therefore very unstable. To improve the process
the two old transport carriers were substituted by new and
ergonomically designed trolleys. Now every team had three
transport carriers: one for the clean laundry, one for the
material needed to clean the rooms and one for the auxiliary
staff. Overloading the trolley now is prevented by charging
only the amount of clean laundry and materials that are needed
during one day. A packing list for every trolley was made and
fixed on the carriers. Now the personnel can move the trolleys
to the single rooms. In addition, also the accessibility to the
different materials on the trolley has improved significantly.
Due to the optimization of the routes and an improvement of
the work management, savings in time and distance of about
30% were obtained. Therefore, not only the working conditions
for the housekeeping staff, but also service to the customer has
improved significantly.
5.4. Application of 5S in the hotels work place
The hotel also has an in-house repair workshop assigned to
the staff responsible for the maintenance of the building. The
workshop was also used as a warehouse for technical spare
parts and consumables. Analyzing the workshop more in detail
was identified high disorder and therefore high inventory as
well as searching time. The workstations were dirty, untidy and
unorganized and broken tools laid between good and

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Erwin Rauch et al. / Procedia CIRP 41 ( 2016 ) 614 – 619
functioning tools. This situation triggered the Lean team to
implement another Lean Management method, 5S (see Fig. 4).
5S stands for the Japanese words Seiri (Sort), Seiton
(workplace organization), Seiso (cleanup), Seiketsu
(standardize), Shitsuke (discipline). Starting with the first of
the five S, “sort”, the staff began to sort and check the tools
about their functionality on every workplace. Afterwards, all
the broken or not used tools were carted off.
The second step was to arrange the remaining tools and
materials systematically on the worktables and to assign to
every piece a determined place. The assignment of the position
for the single tools was influenced by the number of accesses,
the ergonomic use and their heaviness. Tools that were used
very often, were positioned in gripping distance from the
worktables, tools that were used only scarcely were placed
further away. Afterwards to every tool was assign a unique
place. On the wall behind the worktables were mounted
shadow tables to fix every tool at a given position.
Fig 4. (a) work place before and (b) after the application of the 5S method
To fulfill the third of the five “S” (cleanup) an agreement
with the workers was arranged. Everyone has to clean his/her
workplace periodically. In this way broken or damaged tools
can be sorted out immediately, the safety, quality and reliability
improves significantly. “S” number four asks for
standardization. This means, that all the previous steps need to
become a standard pattern, which has to be repeated in defined
periods. In reference to the last step, “sustain”, it was important
to sensitize the staff of the relevance of order and cleanliness
on their worktables. In the future, it will be their mission to
keep the 5S cycle alive.
6. Conclusion and outlook
The results of this paper in reference to the applicability of
Lean Management methods to the hospitality field are very
positive. Through the analysis and appropriate validation
process, a Lean Toolbox with suitable lean methods for
Hospitality could be identified. Unfortunately, not all of the
selected methods are suitable at all for the hospitality area. This
includes also methods like value stream mapping and other.
Some of the “suitable” methods were applied successful in a
real case study at a premium family resort. Through CIP
Workshops and Idea Management the staff could be integrated
in the reorganization implementing a lot of measures for cost
saving as well as increase of customer service. The warehouses
could be optimized by the implementation of barcodes and an
ABC-analysis. In housekeeping optimizations were found by
the use of the spaghetti diagram for visualization of
inefficiencies in the room cleaning process. In addition the 5S
methodology was applied in maintenance and administration
with the aim to tidy up and introduce standardization.
Concluding can be observed that the expectations where
fulfilled and Lean Management holds additional potential for
the tourism and hospitality sector in the future. Tourism should
be more aware in future for Lean methods. In addition, Lean
methods should be adapted to the special requirements of the
hotel sector.
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