24
GROUP 2 Deepak Prasad (210) Supriya Balakrishnan (246) Reuben Philip Abraham ( 234 ) Sharath Nair (241) Rohan Kumar ( 237 ) Surumi Abdulla (247) IIM Kozhikode 1

OM Ritz-Carlton Group2

Embed Size (px)

DESCRIPTION

Ritz carlton

Citation preview

Page 1: OM Ritz-Carlton Group2

GROUP 2

Deepak Prasad (210) Supriya Balakrishnan (246)

Reuben Philip Abraham ( 234 ) Sharath Nair (241)

Rohan Kumar ( 237 ) Surumi Abdulla (247)

IIM Kozhikode 1

Page 2: OM Ritz-Carlton Group2

The Ritz-Carlton Growth Chart

• 1898 – Founded by Cesar Ritz

• 1983 – Atlanta Based Johnson got rights for Ritz Carlton name

• 1997 – Purchased by Marriot International

• 1998 – Ritz Carlton in Kuala Lumpur received ‘Best Hotel in APAC (Asia-Pacific)’

• 2000 – Became a management company operating 38 hotels and resorts

• Growth Strategy – Obtain management contracts for hotels and resorts around

the globe from Europe to NA to Asia

IIM Kozhikode 2

Page 3: OM Ritz-Carlton Group2

About Millennium Partners…

IIM Kozhikode 3

Page 4: OM Ritz-Carlton Group2

• Charged Millennium Partners hotels a margin of 3% of gross revenues for franchisee

fee, management incentives, etc

• Royal service to guests considered their specialty ‘Technology Butler’ concept for

tech. assistance and Concierge desk for easy check-in at airports

• Creating Ritz-Carlton rooms in airports

• Event management to impress everyone

• Ritz-Carlton targeted two main customer groups

Independent travelers

Meeting event planners

• Key Indicators

Average Daily Rate (ADR)

Revenue per Available Room (RevPAR)

Business Model

IIM Kozhikode 4

Page 5: OM Ritz-Carlton Group2

• Helps in attracting independent business travelers worldwide

• Causing interaction of guests, making progressive trail in their evaluation

• The meeting event planners turned were customers who contributed to 40% of annual sales

Meeting Planning to lure customers

IIM Kozhikode 5

Page 6: OM Ritz-Carlton Group2

• Integrated and prioritize guidelines of Malcolm Baldrige National Quality Award in 1990 and succeeded in winning the award twice

• Emphasis on– Quality human resources– Total Quality Management (TQM)– Service Quality Indicators (SQI)– Other Safety Protocols– Offered programs to meet specific customer needs

• Focused on continuous improvement, quality planning, benchmarking, supplier certificates and quality audits program

Quality At Ritz Carlton

IIM Kozhikode 6

Page 7: OM Ritz-Carlton Group2

• Respect the employees and treat them with generosity and fairness

• Arrange for extensive formal and informal trainings to make sure that labour is highly skilled

• Turnover rate was only 20% as compared to an industry average of 100%

Ritz-Carlton Human Resources

IIM Kozhikode 7

Page 8: OM Ritz-Carlton Group2

• ‘ Day 21’ was an event to assess Ritz’s success in satisfying its employees expectations

• Tremendous growth opportunities as 25% of the managerial work-force began careers as Dishwashers and Servers

• Created an environment with no fear of retribution

• “Five Star Team” was identified and awarded $500 USD to spend, airfare for two and 5 days vacation at any Ritz hotel

Ritz-Carlton Human Resources – Contd…

IIM Kozhikode 8

Page 9: OM Ritz-Carlton Group2

• Running an established hotel different from opening a new one – differing core competencies

• New hotels : Two pronged approach – dealing with development site; involving HR

• Adjudged against PQIs – Letter of intent, overall development of operation plans, schematic designs etc.

• Developing – Complex process; Pitfalls given by PQI

Opening process of the Hotel

IIM Kozhikode 9

Page 10: OM Ritz-Carlton Group2

• The Property – Decisions to be made Site selection Concept and product development Feasibility studies Financial evaluations Contract negotiations

The Property

IIM Kozhikode 10

Page 11: OM Ritz-Carlton Group2

• Market Customization - Needs– Customize all the hotels in order to satisfy requirements of

customers– Creative ideas to impress customers like online reservation

and menu selection– Availability of art collections

Market Customization

IIM Kozhikode 11

Page 12: OM Ritz-Carlton Group2

– Three executive positions were recruited: • The General Manager• The Director of Marketing• The Controller

– The functional managers were selected by the executive committee

– The functional managers then hired line staffs

Staffing The New Hotel

IIM Kozhikode 12

Page 13: OM Ritz-Carlton Group2

– Skilled staff hired keeping in mind the difficulties of opening a new hotel

– Demand for skill-sets as per type of job for which a person was hired

Personnel Recruitment

IIM Kozhikode 13

Page 14: OM Ritz-Carlton Group2

• Organized on August 22 and 23, 2000 from 8:00 am to 8:00 pm

• Past applicants and new applicants to go through the screening procedure of Screening Questionnaire and structured interview

• Large number of applicants turned up in spite of low unemployment rate of 5.4%

• Those who did not make the cut treated the same as everyone else

• 400 recruited• Pre-employment call-back process to reduce

attrition rates

Ritz-Carlton Job Fair

IIM Kozhikode 14

Page 15: OM Ritz-Carlton Group2

• Started in the late 1980s to 1990s• Standardized hotel opening process• Starts 7 days prior to formal inauguration of the

hotel and a month after inauguration• Orientation for two days into to the Ritz-Carlton

culture and values• Skills training and trial runs for the next 5 days• Paper palm system is used• Time schedules are tight and inflexible

The Seven Day Countdown

IIM Kozhikode 15

Page 16: OM Ritz-Carlton Group2

• Cheering, chanting, sloganeering etc. took place and grand welcome by the hotel’s managers

• Everyone joined their respective divisions• Video shows, introduction to trainers,

corporate steering committee and Millennium Partners representatives

• Address by McBride and Schulze• Gold Standards• The service philosophy was given

Day One : Staff Orientation

IIM Kozhikode 16

Page 17: OM Ritz-Carlton Group2

• Currently 92% of the customers are satisfied which gives 80% occupancy

• Aim is to satisfy at least 5% dissatisfied customers in 3 years with 88% occupancy causing a $300 million increase

• People had to be given a purpose to work• There were obligations to rank-and-file employees

Leadership Orientation for managers

IIM Kozhikode 17

Page 18: OM Ritz-Carlton Group2

• Employees in each functional area introduced to their respective departments and Group exercises performed

• Quality standards and targets to be achieved were set

• Training and motivation on assessing a situation with a customer and appropriately responding to it

• Training and introduction to soft skills

Day Two: Departmental Vision Sessions

IIM Kozhikode 18

Page 19: OM Ritz-Carlton Group2

• Warm Welcome to some and Fond Farewell to others

• Review meeting every day morning at 6:00 am by leadership team,

trainers and managers

• Days 3 & 4: Uniform fitting, personal grooming, introduction of daily

line-up procedure etc

• Also, Safety instruction, wine tasting and product show

• Day 4: “Instant Guest Pacification” the Ritz-Carlton basic Instructs

standardized procedure for “Handling Guest Difficulties”

• Days 5-7: Routine training in their skill sets, two shift, dressed in full

uniforms, simulation of real time guest scenarios

Days Three through Seven: Skills Training

IIM Kozhikode 19

Page 20: OM Ritz-Carlton Group2

• Takes about 4 months to reach 80% occupancy

• Time to let employees acclimatize with the new setting and

make quality world class. This leads to a sacrificing of some of

the revenue

• Millennium partner thinks it is not cost effective - Proposes to

increase the 7 day training program and then start the hotel

• Present system proven successful, Ritz faced with a dilemma

between its brand image and the proposed new system

Dilemma Of Ritz Carlton

IIM Kozhikode 20

Page 21: OM Ritz-Carlton Group2

• Do not compromise with existing standard procedure that is associated

with the brand of Ritz-Carlton Hotels:

• Set standards first, flawless execution, comfort of new employees,

eventual increase in productivity with minor employee turnover

• Increasing the duration of the training program for employees from the

current 7 days to make them well prepared and launch hotel at higher

occupancy rate

• Higher revenue as shorter time to 80% occupancy rate and higher

polishing of service skills of employees enabling them to attract potential

condominium residents in a better way

Options

IIM Kozhikode 21

Page 22: OM Ritz-Carlton Group2

• For the month of JAN with 57.2% occupancy rate, profit: $

520,000

• From above, profit at 80% occupancy = $ 727,000

• Additional Training Expenses for 7-day period: $ 74500

• With change in training program, profit increases by $ 207,000

• Hence, this additional profit can support 2 extensions of the 7-day

period

• Potential revenue of $300 million and the satisfaction of 5%

customers is attained

Analysis Of Data

IIM Kozhikode 22

Page 23: OM Ritz-Carlton Group2

• The duration of the training program should be increased

as it causes an increase in the profits but the load due to

increased duration should be evened out

• There should be increased frequency of mock drills to

cope with increased occupancy rate

• Increase the number of demonstrations

Recommendations

IIM Kozhikode 23

Page 24: OM Ritz-Carlton Group2

Thank You

IIM Kozhikode 24