Assessment Case Study of The Imperial Hotel, London

Case Study of 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. 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.

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

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.

-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

- 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:

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.

Staff and Facilities

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.

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.

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. 

Problems Faced by the Hotel

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. 

Planned Strategy for Resolving the Problems in the Hotel

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.

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

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.

 – 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 

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).

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. 

-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.