Business and Management Challenges in Imperial Hotel, London: Case Study

Knowledge outcome – On completion of this module you will be able to demonstrate an understanding of the processes, procedures and practices for effective management in organisations.

Intellectual /transferrable skill outcome – Students who successfully complete this module will be developing their competence in using a range of basic analytical and managerial techniques and processes including objective setting, monitoring and evaluation as well as interpersonal skills of successful managers.

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 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, some of this theory to be identifiable from Moodle resources, lectures and seminars, supported with wider research and reading throughout the report.

Case Study – The Imperial Hotel, London

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

·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:

Intellectual /Transferrable Skill Outcome

·There is a very high turnover of staff in all the departments running around 80% a year mainly due to poor staff morale;  

·The hotel is 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 is 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.

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