Exploring Ethical Issues in Hospitality: A Case Study

Background and Scope

This case study offers you something a little different from the other three because it does not focus on one particular company or issue. It therefore gives you a certain amount of scope to focus on an issue in hospitality that interests you. It is therefore, in some ways more challenging because it is less directed than the others, but also it is perhaps more exciting because it gives you a chance to explore different issues. It still asks you to think about ethical issues, but this time it is looser.  You could look at issues of exploitation for hotel staff, about how hotels manage their supply chains, or about how hotels are often the site of human trafficking; your thinking will be about how easy it is to be ignorant of these, or even to turn a blind eye.

As with the other cases we will give you background based on selected reports and articles. There is a chance. Indeed a need, to do more of your own research. You will still be doing the same exercises – writing management report pointing out the ethical issues connected with running hotels and applying theory to whichever issue you focus on (and writing the leadership section, but that, of course is not connected to the case study).

A good place to start to think about what you would like to focus on is a report published in 2019 called Beyond Compliance in the Hotel Sector: A review of UK Modern Slavery Acts (Minderoo Foundation et al 2019).  The report said that, despite UK legislation to report on modern slavery, 75% of hospitality businesses were failing in some aspect of what was required. The thrust of the report covers three aspects – people sex trafficked in hotel rooms, goods made for hotels that come from supply chains tainted with forced labour and sub-contracted workers at risk of abuse.

We recommend reading this report if you choose this case study. Issues to bear in mind are things like the extent to which hotels might be used for trafficking. One Canadian report noted American research which detailed that 75% of human trafficking survivors report having some contact with hotels and motels during their trafficking (Luz 2020). Reports in this area can be quite disturbing of people forced into sexual exploitation. Stories tend to be reported when court cases result, but it is probably fair to say that the court cases are not indicative of the extent to which this happens. What we should note is that cases reported highlight the extent to which  hotels were complicit through actually helping traffickers, or turning a blind eye to what was happening (Kesslen 2019; Hee 2021). And, although these might be US courts cases, the UK Mail Online also drew attention to where a US case named six major hotel chains including Hilton and Marriott (Court 2019).

Issues to Explore

Hotels are also implicated in modern slavery for their own workforces, or perhaps more typically when cleaning and housekeeping are sub-contracted. Hotels under these circumstances may be unaware of what is happening to staff. The question is should they be. In the linked reports you will find stories of people who have had their workloads reassessed mid-contract to inevitably mean less pay and more work, who are paid less than minimum wages, are bullied and abused and, sometimes linked with the more clearly understood ideas of trafficking, where people have paid contacts on the promise of jobs which turn out to be indentured, bonded, modern day slavery. While this might seem more prevalent in hotels in other countries, the below reports will challenge you to think about whether that matters when the name of the hotel is an international brand, whether the excuse that the hotel in question was a franchise of the brand and not directly managed by the brand is enough and the fact that actually it does happen in the UK as in the case of the Stewart Hotel in Argyll Scotland (Jethwa and Armstrong 2017). Linked also is a report on the experience of Latin American women migrant workers in London. One said “Cleaning companies working with hotels sometimes take your documents when you start to work as ransom. They keep your passport for months and some don’t even know that is not OK. We are told by our bosses that that’s the law in the UK” (de la Silva et al 2019: 7). The experience of these women typifies the extent to which people who are vulnerable, for whatever reason, can be preyed upon for profit.

Lastly the Beyond Compliance in the Hotel Sector: A review of UK Modern Slavery Acts (Minderoo Foundation et al 2019) talks about the extent to which hotels are knowledgeable about where the  everyday items they use come from – how can they be sure their supply chains are slavery free? There are fewer stories with examples of where things have gone wrong, but the incidents of where hotels buy without knowledge (or checking) are probably more prevalent. If you are thinking about this issue it is probably worth looking at the week we do on supply chains.

But one thing is clear, this issue of exploitation in cleaning and housekeeping is often linked to cost cutting. It is startling obvious how this comes about – have a KPI for cost cutting and for productivity for room cleaning for example and the likelihood is that the brunt of the costs cut fall on the worker, in fact the report notes that one hotel chain recognises that underpayment can occur if ‘productivity rates for house-keeping contracts are ill-advised’ (Minderoo Foundation et al 2019:28). In other words decisions taken to hit KPIs within the hotel can have catastrophic impacts on other parts – and if that other part is a sub-contractor and the hotel then does not monitor what the impact is, it is no surprise when the experience of these six Polish women is exposed:

The Importance of Ethical Considerations

Part 1

a) You are now required to write a brief report to senior managers and you should imagine and play the role of an employee who has been asked to write a report outlining the ethical issue involved in running a hotel chain. Imagine your organisation both owns and manages its own hotels but also franchises its brand to other hotels. These could be in the UK or indeed anywhere in the world. The reports you have give a good background, now you should present at report outlining the case from the perspective of business ethics.

Why should your organisation be considering the issue you are focussing on from the perspective of ethics? What is the issue here do you think? Is it a lack of integrity? Transparency? Has it exploited someone or something? How would you characterise the ethical transgression? (It could be more than one thing)

How might this issue influence the public image of the company? What will be the result for the company if/when it is/was found out?

Like with the  other case choices we are interested in how you tell your managers how you think business should define itself – should it be focussed on reducing costs and maximising income with little attention too wider costs?  What alternatives ways are there to think about a  business’ role in society? Is it for example shareholder value or the interests of a range of stakeholders? Think about who will benefit most if rooms are fully booked with few questions asked about what happens in those rooms (indeed isn’t a guests business private?), who benefits when costs are kept low either by sourcing cheaply or keeping cost like cleaning down? This is where we expect to see you using the ideas of Friedman and Freeman. Do not be afraid to argue in a nuanced way – it is highly unlikely that any organisation would actually condone some activities because it is financially beneficial to the hotel (no hotel would stand for trafficking if it knew it was happening in rooms), but can ‘we did not know’ be a strong enough defence?

There is a section asking you to examine who/what are the stakeholders impacted in the scenario you are reporting on and how are they impacted on? Think about who gained/lost WHEN you make decisions not to ask questions/to go with the cheapest contract tender and so on, not when a scandal is exposed.

 Where are there examples of business that act responsibly and ones that do not? You should illustrate this by including research you can find  e.g where is there research that shows good choices benefit companies and bad choices have a negative impact? We are looking for academic research first and foremost, examples of companies actions are OK but not without research showing – for example – that people want to work for companies that uphold values.

Finally you should conclude with some recommendations for what the company should do  - a tip here is to pay particular note to the video guidance where concluding remarks for this section are covered. This part of your assessment should be written as a report, but should be referenced in the normal academic way using Harvard citations and referencing.

b) For this part you should again use the case study – but this time choose TWO ethical theories (using ones we have looked at in class) and demonstrate that you can apply these to the case to show how your chosen theories lead you to a view on the ethics of the case. For example, if you applied utilitarian thinking to the idea of cutting quality to boost profit what would you need to consider and how might the issue look from that perspective? Or, what if you apply Kant’s thinking here? NOTE – you do NOT have to use ‘opposing’ ideas, we are interested most in how you use theory, if, when you apply two theories they seem to give the same answer that is fine, if they seem to give different outcomes that is fine too. This section is written in a more academic style than the report.

Part 2

Part 2 is NOT related to the case study. This section requires you to discuss what makes an ethical leader and how you would, as an ethical manager, manage your business and/or others to a high ethical standard.

You will need to think about personal ethics, about the conditions that bring about unethical organisations and practices, about organisational values and methods of compliance. This part can be written in a more reflective style, where the first person can be used.