Suggested report format:

 Title Page
 Introduction – Explain the background to your individual problem in the context of the case
(250 words approx).
 Analysis of the individual problem – Summarise and interpret the data from your secondary
research into published literature and management theory. Describe and present your results
for effective management of the problem. A summary and justification of key proposals for the
resolution of the problem in the organisation (1500 words approx.)
 Conclusion – This should be a brief summary of findings of the analysis of the individual
problem. (250 words)
 Bibliography

Assessment Case Study – The Imperial Hotel, London

The assessment is based on a business and management case study which requires a critical approach
to identifying and problem-solving a range of business and management challenges within the case.
Throughout the term you will undertake research and analysis which will inform your individual
report. Within the individual report you will include a summary and key justifications for the resolution
of one of the problems in the case supported by management theories and principles.

The report will be an individual 2,000 words report which will address one of the five specific
‘problems’ identified in the case (e.g. a human resource management challenge, an ethical problem,
a performance and productivity issue, etc). You will receive a full briefing in Week 4.

Students will be expected to apply management theory to practice throughout the report.

Case Study – The Imperial Hotel, London

The Imperial Hotel is a London 500 bedroom hotel, which is owned and managed part of a well-
known international branded chain of hotels in the 4 star market – Star Hotels which operates 25
hotels in the UK. The Imperial Hotel, located in the heart of London’s West End, caters for mainly
international business and tourists guests who have high expectation in terms of service standards.

The facilities at the hotel include the following:

 500 bedrooms, all with en-suite facilities.

 Conference facilities for 1,000 people
 Leisure centre with swimming pool
 3 Bars and 4 restaurants
 12 conference rooms

Staff

 6 Heads of Departments: Food and Beverage; Housekeeping; Guest Services & Concierge;
Front of House & Reception; and Human Resources & training.
 450 staff in total (300 full-time and part-time)
  Outside contractors (for specialist cleaning; laundry services; management of the leisure
centre;)

A new General Manager, Peter Farnsworth, has recently taken over the management of the whole
hotel. He is an experienced manager having worked in several of the other Star city centre hotels
outside London. The previous General Manager, who had just retired, had been experiencing a
range of problems in managing the hotel, namely that:

 There was a very high turnover of staff in all the departments running around 80% a year
mainly due to poor staff morale;
 The hotel was graded the lowest in the whole Star chain in terms of overall guest satisfaction
running at a rate of 60% in the company’s benchmark grading system; the overall sales in
the hotel are improving,
 Although the hotel occupancy (the ratio of rooms sold against the total number of rooms
available) was running at 90% for the year, the actual average room rate (ARR) achieved,
currently running at £95 per room per night was relatively low compared to the local
competition.
 The poor performance is having a direct negative effect on the costs of the hotel and the
hotel’s overall profitability.

The Imperial is an old hotel having been in operation for nearly 100 years. The hotel was last fully
refurbished some 8 years ago but is now in need of some restoration and redecoration. There is a
programme of staged refurbishment in place which means each floor of the hotel is being closed for
building work to be undertaken. The consequence of this is that, at any one time for the next two
years, 60 rooms will be out of action. This is putting the hotel under budgetary pressure due to the
ongoing building costs as well as the loss of income from the 60 rooms out of action at any one time.
Planned Strategy for Resolving the Problems in the Hotel

Peter Farnsworth is under no illusion as to the challenges ahead and has decided to plan a strategy
for resolving the operational, management and business-related problems in the hotel. The first part
of the plan is to identify the top five problems for the hotel for the coming year. He identifies the
problems as follows:

 Problem 1: Poor guest satisfaction

 Problem 2: High staff turnover with 80% of the staff leaving within the
year
 Problem 3: A negative work culture amongst the staff with high levels of
sick leave and poor attendance
 Problem 4: Front of house staff (Reception, Conference & Banqueting,
and Restaurant & Bars )– poor team working and inefficient use of IT
systems including the reservation and property management systems
 Problem 5: Back of house staff (Housekeeping, Kitchen, Maintenance) –
poor operating and control procedures in place with stock being
regularly pilfered and evidence of staff not meeting basic Standard
Operating Procedures (SOPS) resulting in unusually high operating costs
The Problems in Detail

Problem 1: Poor guest satisfaction

The hotel was graded the lowest in the whole Star chain in terms of overall customer satisfaction
running at a rate of 60% in the company’s benchmark grading system. The company average is 78%.
In every hotel in the chain the company undertakes a monthly Guest Satisfaction Survey (GSS) with
regular guests and this includes a summary of guest cards completed by guests in their hotel rooms,
as well as more formal online monthly survey with major business clients. The survey asks clients to
grade all the facilities in the hotel (see Appendix 1 for the most recent monthly survey results for the
Imperial Hotel).

The most regular complaints received are in relation to issues about checking in and checking out of
the hotel, the quality of the rooms themselves and the poor quality of staff. There have been a
number of complaints about the reception staff being indifferent and sometimes rude to guests.
Other guests have been critical of having to wait in queues at reception both for checking into the
hotel as well as checking out. A considerable number of guests have complained of repeatedly being
charged incorrectly in their final bill. Most worrying is the fact that some guests are also complaining
that there has been little or no timely response to their complaints.

In terms of the accommodation in the hotel a growing number of guest are being critical of the
quality of the hotel rooms and in particular the cleanliness of the bathrooms, with numerous
requests for room changes due to showers not working properly, noisy air conditioning, and
technology not working in the rooms.
Problem 2: High staff turnover with 80% of the staff leaving within the year

Staff turnover in the hotel sector is generally high due to the temporary nature of employment of,
for example: students; foreign nationals from the European Union wanting to work for short periods
in London; and generally low pay (on average just at the living wage rate). The turnover of staff is
particularly high in the Imperial hotel for front-line staff.

The exit interviews with leaving staff have identified a number of issues around: poor perception of
the work culture within the hotel with sometimes aggressive supervisory and management styles in
evidence: the unsociable working hours; a lack of proper and regular training; poor pay levels
compared to working for example food retailing; little opportunity for promotion or bonuses; the
high cost of travelling to work in central London and difficulties in getting transport home at night;
A number of young and talented supervisory staff have also left the hotel to work at competitor
hotel companies who offer better pay, working conditions and benefits.

The high level of staff turnover puts direct pressure on the staffing budget with staff costs currently
running at around 35% of sales for the hotel which is a particularly high for this type of hotel. The
need to continuously employ new staff has considerably increased induction training costs as well
as had a negative impact of the overall quality of the service to guests, particularly the regular
guests who are now reducing in number and appear to be using other hotels.

There appears to be a cycle emerging which may be linked to the high level of staff turnover which
subsequently affecting the whole organisation. In terms of individual members of staff there
appears to be decreased job satisfaction and a lack of commitment to the hotel with an intent to
leave. This shows itself in attendance problems, decreased work performance, and sometimes
stress. As a consequence there is an increased pressure on colleagues to pick up the slack which
contributes to routine system problems and a ‘culture of turnover’. This operational staff as well as
management as well as this often results in a decreased pool of promotable staff and managers.
The result of this for the hotel is that there are managerial succession problems. Other consequences
include operational bureaucracy.
Problem 3: A negative work culture amongst the staff with high levels of sick leave and
poor attendance

The organisational culture of working within Star Hotels is performance driven. The General
Manager, and the Heads of Departments are under continuous pressure to increase sales month-by-
month by increasing the occupancy of the hotel as well as pushing up the average room rate. The
hotel is assessed on a monthly basis and managers’ bonus schemes are directly linked to the
financial performance of increasing sales and reducing and controlling costs. The espoused values
of Star Hotels is about excellence in customer service and hence performance is also linked to the
results of the Guest Satisfaction Surveys (GSS). The London hotels consistently perform worse than
the other hotels in the Star Group and this is linked to guests’ perceptions that London hotels are
overly expensive and offer poor value for money. The managers and Heads of Department often
complain that that the guest surveys put them at a disadvantage because comparing experiences
and views of guests staying in a London hotel is completely different to say a leisure-based hotel in
Scotland whereby guests are more relaxed.

The work culture in the hotel under the previous General Manager was somewhat toxic. The hotel,
being a busy London 24 hour and 365 day a year operation, means that there are often long working
hours, particularly for those staff covering for staff who may have gone off sick at short notice. Many
of the part-time staff are female and have family commitments, and in many cases have other part-
time jobs to fit round those family commitments. This has often resulted in these staff turning up
late for their work shifts, and there have been many occasions whereby staff ask their colleagues to
cover for them for short periods without informing their supervisors. The levels of supervision of
staff has been minimal because of the high turnover of supervisory staff.

In the recent past the style of management could be described as authoritarian and often dictatorial
with very little consultation with lower levels of staff in terms of ways of improving performance
and minimal feedback in terms of how to improve on working practices or meet the guests’ needs.
Problem 4: Front of house staff (Reception, Conference & Banqueting, and Restaurant &
Bars)

– poor team working and inefficient use of IT systems including the reservation and
property management systems

The front of house staff, particularly in the Reception have a pivotal customer-facing role in offering
service and support to guests. The Reception needs to be open 24 hours a day and is the first point-
of-call for guests as well key staff in all Departments to have up-to-date information and data on
guest arrivals and departures, specific guest needs and guest billing data. The Reception staff at the
Imperial Hotel work three, 8 hour shifts working in teams. Each team has a supervisor and they have
a particularly challenging function of managing Reception teams as well as in passing on important
guest information and data on to the next shift. The hotel uses a Micros Fidelio reservation and
Property Management System (PMS) which provides up-to-date information on real-time and
prospective guests and their reservations. The other departments including the kitchen, restaurants
and conferencing are dependent on Reception for guest numbers and data.

Some of the key Reception staff have been in conflict with the other Departments after numerous
complaints about wrong and inaccurate information being provided. Housekeeping have been given
wrong or out-of-date data on room availability, and whether a guest is staying on in the hotel.
Reception have also failed to inform Housekeeping about early and late arrivals and subsequently
rooms have not been cleaned in time with guests having to wait for long periods to get their room
keys. The conference and banqueting staff have complained that they have not been provided with
proper data on numbers of guests coming in for meetings and conferences. This, combined with
complaints from guests that Reception staff are often abrupt or even rude in dealing with even the
most basic request has caused a lot of animosity within the Reception staff and other staff
throughout the hotel. The Reception Department has become somewhat dysfunctional and there
are examples of Reception shift teams arguing with in the incoming teams about not providing
proper handover information.

A new Head of Department of Front Office and Reception, working closing with the General
Manager, is aware of the conflict issues within the department as well as with the other
departments within the hotel and intends to undertake a stand to manage the conflict quickly and
efficiently. The Reception teams’ dynamics are not good, and there is a blame culture with staff not
working constructively and there is a clash of some strong personalities within the Department. He
is going to review: the way the teams are structured; the individual performance of staff in terms of
performance and productivity; the rewards and benefit being offered for good performance; and
training and development needs. He also intends to develop and co-ordinate a team-based
approach to managing the staff. The poor data issues can be dealt with through improved use of
the IT systems (PMS) although the animosity within and between working teams will be more
difficult to resolve
Problem 5: Back of house staff (Housekeeping, Kitchen, Maintenance)
– poor operating and control procedures in place with stock being regularly pilfered and
evidence of staff not meeting basic Standard Operating Procedures (SOPS) resulting in
unusually high operating costs

Staffing the Housekeeping Department at the Imperial hotel is always a challenge. There are up to
400-500 rooms to service a day, and this overseen by the Executive Housekeeper and 12 supervisory
and administration staff. In the past year, it has proved very difficult to recruit room attendants,
and those who are employed only tend to stay for no longer than 6 months. The staff turnover in
the department is currently 60% a year. The hotel therefore resorted, two years ago to using a
recruitment agency, ABC (International) to fill 30 of the 50 room attendants jobs in the departments.
The 20 in-house staff are a hardcore of long-term employees who have worked for the company for
many years.

ABC (International) is a recruitment company run by Charles Santos who has considerable
experience in the hotel industry in England and Spain. Each candidate is interviewed and assessed
on their English before they are included on the database. All candidates produce three references
which are checked by ABC prior to their departure from Spain. They must have considerable practical
experience of working in a hotel housekeeping department before taking up a post. If the hotel
cannot provide staff accommodation then ABC will organise it for them.

The quality of the Spanish staffs’ work is good overall, and the cost of employing the staff through
the agency is only marginally more expensive that employing home staff. The Spanish staff tend to
stay with the hotel for up to a year. The Spanish staff prefer to work together in their shifts with
other Spanish staff, and are supervised and provided on-the-job training as to the brand standards
for the hotel by the in-house Assistant Head Housekeeper, herself a fluent Spanish speaker.

There has been considerable discontent from the in-house room attendant claiming that the Spanish
staff are un-cooperative when asked to work with non-Spanish staff. The Spanish staff are used to
working in teams in their shifts, working together in pairs who are allocated 20 room a day to
service. The standard of the in-house staffs’ working has been dropping. The hotel uses the Texlon
system, which is a hand-held tracker system whereby a supervisor will undertake a sample check of
the room standards and rank and score the standards of a serviced room. The results are
subsequently plugged into the hotel computer and each member of staff is given a ranking out of
100. The Spanish staff (75%+ scores) consistently score higher than the in-house staff (60%-65%),
which again has caused considerable resentment. The attendance of the in-house staff, all employed
on full-time contracts, is getting progressively worse which has put pressure on the housekeeping
budget.

There have recently been a number of complaints from hotel guests, who have not been happy with
the general level of cleanliness in the hotel bedroom and in particular the bathroom. There have
also been a number of complaints about housekeeping room attendants being abrupt and
sometimes rude. When these cases have been investigated, it is becoming clear that full-time staff
have poor motivation levels.
General information relevant to all the problems listed

Staff Incentive Schemes

There are currently a number of incentive schemes to encourage staff to meet excellent standards
of work, and to improve productivity. These include: Employee of the Month (for the whole hotel -
£200) and employee of the month for each department (£50); staff (including agency staff)
consistently meeting individual and performance targets in three consecutive months within the
department (£200 vouchers towards staying in any one of Star Hotels); department, end-of-year
parties (funded by the hotel); college fees being paid (NVQ levels 2-4).
Tasks

As an independent consultant, you have been asked by Peter Farnsworth to take responsibility for
analysing one of the five problems, putting forward and prioritise the problem.

Tasks for the report:

 Discuss the problem’s likely causes from a management and operational perspective
including any relationships with the other 4 problems
 Put forward a 3 point plan for resolving the problem particularly in terms of
improving the quality of service, staff morale, operational efficiency and
productivity to make the hotel financially sustainable.
 Support your answer with management and operations theories and principles

The expectation is that within 12 months there should be dramatic improvement and change in
performance in all five areas. You have asked to write a 2,000 word report addressing your single
problem topic to attempt to resolve that problem in the hotel.

End of case