CASE STUDY-Beachside hotel human capital dilemma
This is a case of two competing hotels, Sunrise Hotel and Beachside Hotel which are both situated in a medium sized, tourism based town in the Northeast U.S. The hotels are both competing for the same set of guests, and also the same set of potential employees. They are budget hotels, right next door to one other, with 60 guest rooms each and a view of the beach. The occupancy throughout peak season for the Sunrise Hotel is 98%, however during the winter months goes down to 65%. The Beachside Hotel has peak season occupancy of 90% and off peak occupancy of 50%.
Joe is the General Manager of Sunrise Hotel and has been in his present position for 5 years. He has been with Sunrise Hotel for a total of 10 years. He worked his way up at Sunrise Hotel from front desk agent to front desk supervisor, and finally to the Assistant General Manager before he became the General Manager. He does a good job of screening potential employees for his front desk area of the hotel as he realizes the significance of that area of the hotel, especially in tourist areas. He as well has incentives set up for excellent performance of the front desk agents and training and development programs designed to give everyone information which will help them do their job better. There is a sense of teamwork at Sunrise Hotel and which helps everyone want to do a good job. His guest satisfaction ratings for his hotel are in general excellent. On a rating scale of 1–10, his hotel averages a 9. The average length of tenure of his employees is 4 years, and his present front desk supervisor was promoted from within, all along with his Assistant General Manager. Since of the small size of the hotel, Joe is really involved with all of the hiring decisions and helps to give training programs himself, all along with his leadership team. The employee turnover at the Sunrise Hotel is 25% overall and that is primarily when hourly employees graduate high school or college and leave the Sunrise Hotel for a career somewhere else.
Brian is the General Manager of the Beachside Hotel and deals with very different circumstances. Brian was brought in from another hotel in the same hotel group around 6 months ago. He was told by his boss that he required to “fixing” this hotel so that it would start having better customer satisfaction ratings and more return guests. In spite of the fairly high occupancy noted during peak seasons, the off peak season occupancy is only 50%. As well noted by his boss, the occupancy must be as good as the Sunrise Hotel. Brian has been with his hotel group now for 2 years and he came out of the accounting and finance department in his old hotel. He has a great understanding of the numbers in the lodging industry, however has not been involved with the human resource aspects of the job. The turnover of hourly employees at Beachside Hotel is 120% and that means that Brian is constantly running the hotel shorthanded and with new employees.
The Beachside Hotel has been doing the hiring via a human resource practitioner in the hotel that was put in the position as she really could not handle serving guests at the front desk very well. Mary was promoted to human resources a year ago after she had one too many altercations with the guests at the front desk.
The owner of the hotel wanted to ensure that she would not make any of the other guests angry, so he promoted her to a human resources practitioner. Since that time, she has been busy trying to keep up with hiring and she has had no time for training employees. Since she is so busy, paychecks often come out to employees late, there are no policies written down for employees to use as a guide for performance, customers are treated badly by new and poorly trained employees and the departments of the hotel don’t communicate very efficiently and thus everyone blames everyone else when things go wrong.
The average length of tenure of the front desk agents at the Beachside Hotel is 3 months and the customer satisfaction rating at the Beachside is a 6 out of a 10 possible rating. Most of the front desk agents which are hired come from other hotels in the area after they quit or are fired. Brian is not included in the hiring for the hotel at all and doesn’t get involved with training and development. He spends most of his days looking at the financial reports for the hotel and analyzing average daily rate, occupancy rates and REVPAR. Brian knows that he has lots of problems to deal with and so he goes to the Sunrise Hotel to observe things over there for a while. He sees a happy crew and talks to Joe regarding how he is making that happen. Joe is happy to help, however wants Brian to go back and observe his employees first and come up with ways that he specifically can help guide Brian.
Question 1: What systems must Brian implement in order to start changing the human capital practices in the Beachside Hotel?
Question 2: What could Brian learn from Joe in terms of the human capital aspects of running a hotel?
Question 3: How could training and development programs is implemented in the Beachside Hotel in order to help with turnover and occupancy rates at the hotel?
Question 4: How could a return on investment viewpoint help or hurt the Beachside Hotel in trying to compete with the Sunrise Hotel?
Question 5: What other human resource initiatives could be undertaken by either the Sunrise Hotel or Beachside Hotel in order to help with the net performance of their particular organizations?