GROUP 2

Deepak Prasad (210) Supriya Balakrishnan (246)

Reuben Philip Abraham ( 234 ) Sharath Nair (241)

Rohan Kumar ( 237 ) Surumi Abdulla (247)




IIM Kozhikode 1
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
Ventured to
hotel industry to
catalyze
premium home
sales
New York-based
real estate
developer -1990
Core business -
build high end
luxury
apartments at
premium prices
Operate its hotel
business through
specialized
management
companies.
Currently owns 8
hotels 6 Ritz
Carlton and 2
Four Seasons
About Millennium Partners
IIM Kozhikode 3
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
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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
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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
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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
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Day 21 was an event to assess Ritzs 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
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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
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The Property Decisions to be made
Site selection
Concept and product development
Feasibility studies
Financial evaluations
Contract negotiations

The Property
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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
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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
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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
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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
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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
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Cheering, chanting, sloganeering etc. took place
and grand welcome by the hotels 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
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
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
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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
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
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
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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
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
Thank You
IIM Kozhikode 24