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OM Ritz-Carlton Group2

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Ritz carlton
  • GROUP 2

    Deepak Prasad (210) Supriya Balakrishnan (246)

    Reuben Philip Abraham ( 234 ) Sharath Nair (241)

    Rohan Kumar ( 237 ) Surumi Abdulla (247)

    IIM Kozhikode*

  • The Ritz-Carlton Growth Chart1898 Founded by Cesar Ritz1983 Atlanta Based Johnson got rights for Ritz Carlton name1997 Purchased by Marriot International1998 Ritz Carlton in Kuala Lumpur received Best Hotel in APAC (Asia-Pacific)2000 Became a management company operating 38 hotels and resortsGrowth Strategy Obtain management contracts for hotels and resorts around the globe from Europe to NA to Asia

    IIM Kozhikode*

  • About Millennium PartnersIIM Kozhikode*

  • Charged Millennium Partners hotels a margin of 3% of gross revenues for franchisee fee, management incentives, etcRoyal service to guests considered their specialty Technology Butler concept for tech. assistance and Concierge desk for easy check-in at airportsCreating Ritz-Carlton rooms in airportsEvent management to impress everyone Ritz-Carlton targeted two main customer groups Independent travelersMeeting event plannersKey IndicatorsAverage Daily Rate (ADR)Revenue per Available Room (RevPAR)

    Business ModelIIM Kozhikode*

  • 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 customersIIM Kozhikode*

  • Integrated and prioritize guidelines of Malcolm Baldrige National Quality Award in 1990 and succeeded in winning the award twice Emphasis onQuality human resourcesTotal Quality Management (TQM)Service Quality Indicators (SQI)Other Safety ProtocolsOffered programs to meet specific customer needs Focused on continuous improvement, quality planning, benchmarking, supplier certificates and quality audits program

    Quality At Ritz CarltonIIM Kozhikode*

  • 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 ResourcesIIM Kozhikode*

  • 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 ServersCreated 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 ContdIIM Kozhikode*

  • Running an established hotel different from opening a new one differing core competenciesNew hotels : Two pronged approach dealing with development site; involving HRAdjudged against PQIs Letter of intent, overall development of operation plans, schematic designs etc.Developing Complex process; Pitfalls given by PQIOpening process of the HotelIIM Kozhikode*

  • The Property Decisions to be madeSite selectionConcept and product developmentFeasibility studies Financial evaluationsContract negotiations

    The Property IIM Kozhikode*

  • Market Customization - NeedsCustomize all the hotels in order to satisfy requirements of customersCreative ideas to impress customers like online reservation and menu selectionAvailability of art collections

    Market CustomizationIIM Kozhikode*

  • Three executive positions were recruited: The General ManagerThe Director of MarketingThe ControllerThe functional managers were selected by the executive committeeThe functional managers then hired line staffs

    Staffing The New HotelIIM Kozhikode*

  • Skilled staff hired keeping in mind the difficulties of opening a new hotelDemand for skill-sets as per type of job for which a person was hired

    Personnel RecruitmentIIM Kozhikode*

  • Organized on August 22 and 23, 2000 from 8:00 am to 8:00 pmPast applicants and new applicants to go through the screening procedure of Screening Questionnaire and structured interviewLarge 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 else400 recruitedPre-employment call-back process to reduce attrition rates

    Ritz-Carlton Job FairIIM Kozhikode*

  • Started in the late 1980s to 1990sStandardized hotel opening processStarts 7 days prior to formal inauguration of the hotel and a month after inaugurationOrientation for two days into to the Ritz-Carlton culture and valuesSkills training and trial runs for the next 5 daysPaper palm system is usedTime schedules are tight and inflexible

    The Seven Day CountdownIIM Kozhikode*

  • Cheering, chanting, sloganeering etc. took place and grand welcome by the hotels managersEveryone joined their respective divisionsVideo shows, introduction to trainers, corporate steering committee and Millennium Partners representativesAddress by McBride and SchulzeGold StandardsThe service philosophy was given

    Day One : Staff OrientationIIM Kozhikode*

  • Currently 92% of the customers are satisfied which gives 80% occupancyAim 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 workThere were obligations to rank-and-file employees

    Leadership Orientation for managersIIM Kozhikode*

  • Employees in each functional area introduced to their respective departments and Group exercises performedQuality standards and targets to be achieved were setTraining and motivation on assessing a situation with a customer and appropriately responding to itTraining and introduction to soft skills

    Day Two: Departmental Vision SessionsIIM Kozhikode*

  • Warm Welcome to some and Fond Farewell to othersReview meeting every day morning at 6:00 am by leadership team, trainers and managersDays 3 & 4: Uniform fitting, personal grooming, introduction of daily line-up procedure etcAlso, Safety instruction, wine tasting and product show Day 4: Instant Guest Pacification the Ritz-Carlton basic Instructs standardized procedure for Handling Guest DifficultiesDays 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 TrainingIIM Kozhikode*

  • Takes about 4 months to reach 80% occupancyTime to let employees acclimatize with the new setting and make quality world class. This leads to a sacrificing of some of the revenueMillennium partner thinks it is not cost effective - Proposes to increase the 7 day training program and then start the hotelPresent system proven successful, Ritz faced with a dilemma between its brand image and the proposed new system

    Dilemma Of Ritz CarltonIIM Kozhikode*

  • 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 turnoverIncreasing the duration of the training program for employees from the current 7 days to make them well prepared and launch hotel at higher occupancy rateHigher 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 wayOptionsIIM Kozhikode*

  • For the month of JAN with 57.2% occupancy rate, profit: $ 520,000From above, profit at 80% occupancy = $ 727,000Additional 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 periodPotential revenue of $300 million and the satisfaction of 5% customers is attainedAnalysis Of DataIIM Kozhikode*

  • 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 outThere should be increased frequency of mock drills to cope with increased occupancy rateIncrease the number of demonstrationsRecommendationsIIM Kozhikode*

  • Thank YouIIM Kozhikode*


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