Four Seasons Goes to Paris

Four Seasons Goes to Paris: 53 Properties, 24 Countries, 1 Philosophy Four Seasons is the world’s leading operator of luxury hotels and resorts. They are well known not only in the U. S. but they are a huge international hit. They have been successful over the last thirty years because of their strengths of diversity and originality. Four Seasons does not want to be a globalization of markets like McDonald’s, where everyone is the same. They are not a “cookie-cutter company. This is a great tactic to have because then you would not be such a high class hotel and resort. Also, when you go international you have to be in touch with all of the cultural changes which can make or break your business. They have done an exceptional job of adapting to the different cultures. When you walk into a four seasons hotel “it does not scream four seasons at you. ” Another reason why they are so successful is because the top management have been around for over 25 years.

This means that they are extremely familiar with to the company and how everything works and they can easily train the new employees. Once trained then they become part of the family. “Both corporate and field managers often referred to the firm as a family, complete with rules, traditions, and tough love. ” I believe this is a one of the main reasons why they are so successful. If your employees are happy to wake up and come to work in the morning knowing everyone is basically a family member makes them work a lot harder because you do not want to let down a family member.

The workers made the guest feel so comfortable and at home that the guest wanted to buy the linens to remind them of the stay. The seven four seasons “service culture standards” rules make the guest always feel welcome in the hotel and make them always want to come back and tell people how well of a stay they had. The last and I think the most important reason why the four season have been successful for the past four years is because the emphasis on the golden rule. “one should treath others as one would wish to be treated. If you work in a people oriented business where you need to please your guests, this is the mindset you should be in for a successful business. “Despite the success of four seasons, approach and philosophy, management knew that entering France would be a challenge. ” I feel that how they entered was perfect. They entered in a very powerful manner by deciding to manage the George V which is right in the middle of the French capital and is the “highest possible quality asset in the best location. They basically came in and took over and told everyone how it is going to be run. They did respect a lot of the working hour rules, and the hours by a window rules and stuff like. I really liked the aspect that they kept the hotel running like it always has been even though in France they do things a lot differently with customer service. It was good that they hired depending on the attitude. “What we need is people who can adapt, either to guests from all over the world or to operating a variety of countries. I like this because it says that the workers need to adapt to the guests no matter where they are from because that is how the four seasons does it. If they would of came into this situation any different, I feel that they would have been pushed out and the hotel would of turned bad. They only bad thing I can come up with is that they did change a lot of the culture around because the French are different on their customer service than Americans. They are polychromic people compared to how we operate as a monochromic people.

If you are a firm entering a market you have to be very familiar with what the culture is your are dealing with. Some cultures are very religious and if you try to change their ways then it could be going against their religion. But in the lessons from this case I believe you can enter a market like they did but you have to be cautious of what you change because if it goes bad then your reputation could go under and then you are bankrupt in that market.

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Foltless towers hotel – an internal controls case study

Table of contents

Introduction

     What do you think will happen to a business not being managed by the investor itself?  It can be as chaotic as a jungle or may evaporate as water under the heat of the sun without even trying to see the sunrise.  This will truly happen unless you do something about it.  This is where effective internal control manages a business.

     Understanding Internal Controls provides an additional reference tool for all employees to identify and assess operating controls, financial reporting, and legal/regulatory compliance processes and to take action to strengthen controls where needed.  By developing effective systems of internal control, management can contribute to enhancing the company’s ability to meet its objectives.

     The main reasons for having internal controls is to efficiently ; effectively manage the business.  This is mainly to avoid and eliminate fraud.  There are generally three requirements for fraud to occur – motivation, opportunity and personal characteristics.  Motivation is usually situational pressures in the form of a need for money, personal satisfaction, or to alleviate a fear of failure.  Opportunity is access to a situation where fraud can be perpetrated, such as weakness in internal controls, necessities of an operating environment, management styles and corporate culture.  Personal characteristics include a willingness to commit fraud.  Personal integrity and moral standards need to be “flexible” enough to justify the fraud, perhaps out of a need to feed their children or family illness.  By developing effective systems of internal control, company can remove opportunities to commit fraud. (Delaney, P., 1983, p 458)

     Managing a business would mean a lot of internal controls to be implemented to prevent possible frauds.  With the supervision of Herman and Lily to Foltless Towers Hotel there are a lot of possibilities that they can be engaged in Fraud:

Intentional misstatements or omissions or amounts or disclosures in Financial Statements to deceive Financial Statements users.  May involve:
1.      Deception, such as manipulation, falsification or alteration of accounting records or supporting documents from which the Financial Statements are prepared.

2.      Misrepresentation in, or intentional omissional from, the Financial Statements of events, transactions or other significant information.

3.      Intentional misapplication of accounting principles relating to measurement, recognition, classification, presentation, or disclosure. (Delaney, P., 1983, p 498)

Examples of misstatements in Financial Statements:

1.      Recording of cash without any collection at all to have a very good image to all investors.

2.      Un-recording of expenses to overstate profit.

3.      Understate the revenue from customer’s payment and pocket the money.

4.      Intentional overstating of revenue and understating expenses to have a higher profit on the Financial Statements.  This means additional bonus is given to Herman and Lily asides from the $25,000 salary. (Delaney, P., 1983, p 458)

Misappropriation of assets that involves the theft of an entity’s assets.

Misappropriation of assets can be accomplished in a variety of ways:

·         Embezzling receipts

·         Stealing physical or intangible assets (such as golf equipments, badminton or tennis rackets, patent, etc.)

·         Causing an entity to pay for goods and services not received  (often accompanied by false or misleading records or documents in order to conceal the fact that the assets are missing)

·         Taking kickbacks or bribes from suppliers or customers.  This can occurred from bulk orders to the company’s suppliers by getting big discounts without notifying company’s owner.

·         Un-recording of cash collections or accounts receivables from customers payment from accommodations, tennis courts and badminton courts and pocket the money and collections from accounts receivables. (Horngren, T., 2006, p.112)

·         Purchase ; use of merchandise or equipments for personal use. (Horngren, T., 2006, p.445) Example of these are:

  • Purchase of beds, golf equipments, badminton gadgets, swimming pool’s chlorine at the expense of the company for personal use.
  • Purchase of tennis rackets as a gift to a friend’s birthday or out pouring of liquors for personal parties at the expense of the company
  • Use of all company facilities and equipment for personal use.  More so, inviting relatives and friends for free use of all hotel’s amenities.

One of the Foltless Towers Hotel Company’s safeguards is to select an auditor of Professional ethics in dealing with the company as his client.  He should not be someone you can bribe for something.  He should be a man of his profession.  With this, the company is being assured that audit services will be served, as it should be.  As an auditor he should be equipped with the understanding of the accounting and internal control systems sufficient to plan the audit and develop an effective audit approach.  He should use professional judgment to assess audit risk and to design audit procedures to ensure it is reduced to an acceptably low level.

With the management letter, the auditor schedules the audit-planning meeting to start the audit process.  This is to attest the Materiality ; Risk and Internal Control being managed by the company.  Presentation of audit program may include audit sampling of the company’s receipts, disbursement, systems and management style. (Horngren, T., 2006, p.562)

Foltless Towers Hotel should have good internal controls in order to eliminate and prevent fraud.  To accomplish this it should have a strong system controls that can be either Accounting System and Internal Control System.

Accounting System – The series of tasks and records of an entity by which transactions are processed as a means of maintaining financial records.  Such items:

  1.  Identify, assemble, analyze, calculate, classify, record, summarize and report transactions and other events.

Internal Control System – All the policies and procedures (internal controls) adopted by management of an entity, to assist in achieving management’s objective of ensuring, as far as practicable:

  1. The orderly and efficient conduct of business, including adherence to management policies,
  2. The safeguarding of assets,
  3. The prevention and detection of fraud and error
  4. The accuracy and completeness of the accounting records, and
  5. The timely preparation of reliable information (Komodo, K., 2006, p. 56)

Why study the accounting system and internal controls?

The understanding of the relevant aspects of Accounting and Internal Control Systems (AICS) together with the inherent and control risk assessments and other considerations, will enable the auditor to:

  1. Identify the types of potential material misstatements that occur in the Financial Statements.
  2. Consider factors that affect the risk of material misstatement; and
  3. Design appropriate audit procedures

Other Notes:

  • In a Financial Statement audit, the auditor is only concerned with those policies and procedures within the Accounting and Internal Controls Systems that are relevant to the Financial Statement assertions.
  • When developing the audit approach, the auditor considers
  1. The preliminary assessment of control risk* and
  2. The assessment of inherent risk* in order to determine:
  3. The appropriate detection risk to accept for the Financial Statement assertions

Control risk – the risk that a misstatement, that could occur in an account balance or class of transactions and that would be material Individually or when aggregated, will not be prevented or detected and corrected on a timely basis by the accounting and internal control systems. (Komodo, K., 2006, p. 66)

Inherent risk – susceptibility of an account balance or a class of transactions to misstatement that could be material, Individually or when aggregated with misstatements in other balances or classes assuming that there were no related internal controls.

The internal control system extends beyond those matters, which relate directly to the functions of the accounting system and comprises. (Komodo, K., 2006, p. 66)

 The control environment” which means the overall attitude, awareness and actions of directors management regarding the internal control systems and its importance in the entity.  The control environment has an effect on the effectiveness of the specific control procedures.  A strong control environment, for example, one with tight budgetary controls and an effective internal audit function, can significantly complement specific control procedures.  However, a strong environment does not, by itself.  Ensure the effectiveness of the internal control system. (Komodo, K., 2006, p. 126)

Factors reflected in the control environment include:

  1. The function of the board of directors and its committees
  2. Management’s philosophy and operating style
  3.  The entity’s organizational structure and methods of assigning authority and responsibility
  4. Management’s control system including the internal audit function, personnel policies and procedures and segregation of duties. (Komodo, K., 2006, p. 356)

“Control procedures” which means those policies and procedures in addition to the control environment which management have established to achieve the entity’s specific objectives.  Specific procedures include:

  1. Reporting reviewing and approving of reconciliation’s.
  2. Checking the arithmetical accuracy of the records.

Controlling applications and environment of computer information systems, for example, by establishing controls over:

  1. Changes to computer programs
  2. Access to data files
  3. Maintaining and reviewing control accounts and trial balances.
  4. Approving and controlling of documents.
  5. Comparing internal data with external sources of information.
  6. Comparing the results of cash, security and inventory counts with accounting records.
  7. Limiting direct physical access to assets and records.
  8. Comparing and analyzing the financial results with budgeted amounts.

 Identify ways to increase security in users’ computer, record keeping and payment systems. (Komodo, K., 2006, p. 696) According to the software security company Symantec, it takes only 20 minutes for an un-patched and unprotected computer to be attacked once connected to the Internet.  In that time, the pristine computer could be turned into a zombie. Zombies are machines that have been secretly taken over by hackers. The zombie networks are leased to criminals who use them to send spam or attack Web sites.

Some criminals want to put keyloggers on the computer, to steal passwords, credit card numbers and other sensitive data. There are plenty of vandals out there, too, who want to destroy the data for fun. And advertising outfits, many shady, hope to put spyware on the computer. With that, they will track what have been surfed and buried. (Investor Words, 2006. p 34)

Audit Planning

Macro-level planning, a process that is usually conducted by audit management, identifies the audits that will be performed within the organization, while micro-level planning focuses on how to plan an individual audit. The importance of macro planning and its implications are relatively obvious. In this instance, we’ll examine micro-level planning: how to scope the audit, acquire management cooperation, and ensure that the right skills are available. (Hubbard, 2000, p 4-57)

The process of deciding which areas, cycles, functions, activities, systems, or other entities to audit is often linked to a risk assessment process. Sometimes auditors are uncertain about how this process relates to the overall COSO risk assessment formula, which focuses on objectives, risks, and controls. In fact, the COSO model is relevant from both internal auditing and management perspectives and objectives. (Hubbard, 2000, p 4-57)

For example, the objectives for an audit could relate to internal auditing’s aims for performing the audit, such as, “Ensure the audit provides a value-added service to management.” The risks could correspond to those aims: “Management may not think auditors have the technical abilities to add value to their operations” or “The audit may           the Internal Audit assignment or ensuring that staff plan and conduct the audit assignment under the Internal Auditor’s supervision. (Hubbard, 2000, p 4-57) Work papers documenting the planning will include:

  1. The audit objectives and scope of work
  2. Background information about the activities to be audited, including the risks associated with the area
  3. The resources necessary to perform the audit
  4. The names of individuals who need to know about the audit

The results, if appropriate, of an on-site survey to become familiar with the activities and controls to be audited, to identify areas for audit emphasis, and to invite auditee comments and suggestions

The audit program

How, when, and to whom audit results will be communicated; and (8) the approval of the Internal Auditor if the audit work plan was completed by an assistant. (Hubbard, 2000, p 4-57)

The Internal Auditor will prepare an audit assignment for each new audit. The audit assignment will designate the staff, beginning date, completion date, and audit objectives. The audit objectives will be determined by the Internal Auditor but may be altered jointly by the Vice Chancellor for Administrative Affairs and the Internal Auditor. (Hubbard, 2000, p 4-57)

Areas of accountant’s liability

  1. Common law (case law)
  2. Statutory law (SEC regulations)
  3. Criminal law

Common Law Liability

Case Law

A. Liability to clients direct contractual relationship

1.  Liability occurs if accountant fails to perform as agreed under contract

1.1 Accoun­tants are required to perform professionally with same degree of skill and judgment possessed by an average accountant

1.2 Accountant is not an insurer of F/S and thus does not guarantee against losses from irregularities.  (Hubbard, 2000, p 4-57)

The “normal” audit is not intended to uncover fraud, shortages, defalcations, or irregularities in general but is meant to provide audit evidence to express an opinion on fairness of F/S.

1.3 Accountant is not normally liable for failure to detect fraud, irregularities, etc. unless

  • “Normal” audit would have detected it, or
  •  Accountant by agreement has undertaken greater  responsibility such as defalcation audit

1.4 The accountant is liable for damages attributable to his

 1.4.1 Breach of contract

1.4.2 Negligence lack of reasonable due care

1.4.3 Gross negligence lack of even slight care

1.4.4 Fraud??intentional wrongful act causing harm

2.  Damages

2.1 For the accountant to be liable, damages must be the proximate result

2.2 Limited to losses that use of reasonable care would have avoided

2.3 Punitive damages not normally allowed for breach of contract or ordinary negligence

3. Defenses

3.1  Best defense is to show that you did a high quality audit

3.2  Contributory negligence may be a defense in many states if client’s own negligence substantially contributed to accountant’s failure to perform audit adequately.

B.     Liability to third parties (Hubbard, 2000, p 4-57)

1. For many years, the courts held that the CPA’s liability extended only to those with whom he was in privity.  In the normal accountant client relationship, there is no privity of contract between accountants and third parties. Traditionally, accountants could use a defense of no privity against suing third parties. More recently, the courts have expanded liability to some third parties:

1.1 Ultramares landmark decision

1.1.1 upheld precedent that disallows third party action for ordinary negligence

 1.1.2 set precedent that allowed third party action for gross negligence

2. The courts now allowing third parties in all states to recover damages when gross negligence or fraud  is involved.

3. The ability of third parties to recover against accountants for negligence is more complex and varies by state.

3.1 Credit Alliance States–allow recovery to third party beneficiaries (Hubbard, 2000, p 4-57) Third?party beneficiary ?? client and accountant intended this party to be primary beneficiary under contract

3.2 Second Restatement of Torts States–allow recovery to foreseen (Hubbard, 2000, p 4-57) parties

3.3 Foreseen party ?? nonprivity third party who CPA knew  would rely on financial statements for specified transaction Leading case is Rusch Factors–1968

3.4 Rosenblum States–allow recovery to all those whom the auditor should reasonably foresee as recipients of financial statements

3.5 Foreseeable party ?? nonprivity third party not identified to the CPA by specified person or member of limited class, who may foreseeably be expected to receive the accountant’s audit report, and in some way to act or forebear to act in reliance upon it. (Hubbard, 2000, p 4-57)

3.6Foreseeable third persons have some form of business relationship to or interest in the client which makes such reliance plausible.

4. To recover damages, plaintiff must prove

4.1 Material misstatement or omission on financial statements

4.2 Accountant’s fault caused damages to third party

4.2.1 Actual damages if based on negligence

4.2.2 Actual damages plus punitive damages may be added if based on gross negligence or fraud

Statutory Law

Although the intention of the Securities Act was good (to protect the investing public), the legislation has been a nightmare for CPAs. (Hubbard, 2000, p 4-57)

 A. Securities Act of 1933 regulates the initial offering of securities through the mails or interstate commerce.

Companies must file registration statements (R/S) and prospectus, which contain F/S that have been audited by an independent CPA. (Hubbard, 2000, p 4-57)

1. Section 11 of the Securities Act of 1933 makes it unlawful for the  initial registra­tion statement to contain an untrue material fact or to omit a material fact

2. Proof requirements

2.1 Any purchaser of registered securities may sue; the purchaser generally must prove that the specific security was offered through the R/S

2.2  Plaintiff (purchaser) must prove damages were incurred

2.3 Plaintiff must prove there was material misstatement or omission in the F/S included in the R/S (Hubbard, 2000, p 4-57)

2.4 Plaintiff need not prove reliance on F/S (unless purchase took place after one year of the offering)

3. Defenses

If  “2.2” and “2.3” above are proven, it is a prima facie case (sufficient to win against the CPA unless rebutted) and shifts the burden of proof to accountant who may escape liability by proving

3.1 Due Diligence — i.e. after reasonable investiga­tion the CPA has reasonable grounds to believe th(Hubbard, 2000, p 4-57) at the F/S were true and there was no material misstatement

3.2 Plaintiff knew financial statements were incorrect when investment was made, or

3.3 Lack of causation ?? loss was due to factors other than the misstatement or omission (Hubbard, 2000, p 4-57)

 B. Securities & Exchange Act of 1934 ??regulates subsequent trading

  1. Regulates securities sold on national stock exchanges
  2. Requires each company to furnish to SEC an annual report (Form 10?K) which includes audited F/S (Hubbard, 2000, p 4-57)
  3. Accountant civil liability comes from Section 10 (and Rule 10b?5) and Section 18 (Hubbard, 2000, p 4-57)

3.1  Section 10 (and Rule 10b?5) ?? make it unlawful to

                                    a.        Employ any device, scheme, or artifice to defraud

                                    b.        Make untrue statement of material fact or omit a material fact

                                    c.        Engage in act, practice, or course of business to commit fraud or deceit in connection with purchase or sale of security(Hubbard, 2000, p 4-57)

4. Proof requirements (Hubbard, 2000, p 4-57)

4.1 Purchasers and sellers of registered securities may bring suit

4.2  Plaintiff (purchaser or seller) must prove damages were incurred

4.3 Plaintiff must prove there was a material misstatement or omission in the financial information

4.4 Plaintiff must prove reliance on the financial information

5. The auditor’s defense is to prove to scienter or no reliance.

Criminal Law (Hubbard, 2000, p 4-57)

A. Securities Act of 1933 and Securities Exchange Act of area 1934 (Hubbard, 2000, p 4-57)

1.Can be found guilty for willful illegal conduct

1.1 Omission of material facts needed to not mislead

1.2 Putting false information on the R/S

1.3 Examples of possible criminal actions

  • CPA aids management in a fraudulent scheme
  • CPA covers up prior year’s F/S misstate­ments

2.  Subject to fine of up to $10,000 and/or up to 5 years in prison

3.  Key court decision

  1. 3.1 Continental Vending (1969)
  2. 3.2Equity Funding (1978)
  3. 3.3 ESM (1986)

B.     Criminal violation of Internal Revenue Code (Hubbard, 2000, p 4-57)

  1. For willfully preparing a false return (perjury)
  2.  For willfully assisting other to evade taxes (tax evasion)
  3. Federal False Statement Statute (Hubbard, 2000, p 4-57)
  4. Federal Mail Fraud Statute (Hubbard, 2000, p 4-57)

Conclusion

In the Foltless Towers Hotel Company, Mr. Basil Foltless manages the business well remotely.  It is how important that a company displays the use of effective internal control.   Positively, internal controls are things done by owner/management and their employees to get the job done right.  Doing it right could be mean quality manufacturing delivered on time, safely and for a reasonable profit.

An internal control system is efficiently implemented with proper recording of sales with the use of Official Receipt for and reference to all deposits of all collections after a given cut off.  Reports should be of proper aging of receivables. The use of Requisition form and Purchase Order for every transaction should be followed. All deliveries are supported by Delivery Receipts and Memorandum of Receipt is accomplished for every issuance. Disbursement is being made through checks monitored through its payment terms. Releasing of thus is done only with the supplier’s official receipt. It is required that Access of funds is restricted for Custodian only. Remember to use of petty cash system for small expenses.  Replenishment of the established fund duly represented by official receipts. Bank Reconciliation is being done every month to balance receipts and disbursement of the company. Cash flow statement is properly presented for the company’s use. Financial statements are being presented fairly and duly signed and certified by a Certified Public Accountant.

Reference

  1. Delaney, P., 1983. Delaney/Gleim Cpa Examination Solutions. New Jersey: John Wiley & Sons, Inc. pp 400-600.
  2. Horngren, T., 2006.  Introduction to Financial Accounting.  Charles T. Horngren 2006.  Accounting for Dummies. John A. Tracy. Pp. 115-700.
  3. Komodo, Kim., 2006. 6 steps to help secure your brand-new PC. [internet]. Available from: http://www.microsoft.com/smallbusiness/resources/technology/security/6_steps_to_help_secure_your_brand_new_pc.mspx. [cited 30 April 2006, p. 100-989
  4. USNH Vice Chancellor for Financial Affairs/Treasurer., 2001. PETTY CASH FUNDS. [Online].
    Available from: http://www.finadmin.unh.edu/pol_proc/chapter_04/pro04_001.html
    [cited 01 May 2006].
  5. Investor Words, 2006.  MOST COMPREHENSIVE FINANCIAL GLOSSARY.  [internet]. Available from:  http://www.investorwords.com/ [cited 01 May 2006].
  6. Microsoft, 2006.  Try Microsoft Update today. [internet]. Available from:  http://go.microsoft.com/?linkid=3646726 [cited 01 May 2006]. P. 4.
  7. Tohmatsu,  Deloitte Touche, 2006.  Auditing Standards.  [internet]. Available from:  http://www.iasplus.com/country/philippi.htm [cited 01 May 2006]. P.16.
  8. Information for accountants, 2006.  Internal Controls and Auditing. [internet]. Available from: http://www.informationforaccountants.com/internalcontrolsites.html [cited 02 May 2006]. P 67.
  9. AICPA, 2006.  Accounting Standards.  [internet]. Available from: http://www.aicpa.org/index.htm [cited 02 May 2006]. P. 89.

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Developing a Powerful Service Brand

Founder: Ho Kwon Ping.
Banyan Tree: One of the leading player in the luxury resorts and spa market in Asia.

Get its first customer in 1994 in Phuket, Thailand

In mid. 2004 BTHL operated 15 resorts and hotels,35 spas and 38 retail shops in more than 40 locations in 20 countries.

STRATEGIES
?

Niche marketing strategy

?

Public Relations & Global Marketing Programs

?

?

Focused “human touch” instead of high tech energy consuming equipments
Introduced services like: Spa
Individual villas
Intimate packages for couple

FACTORS BEHIND SUCCESS
?

Choice of target segment

?

Exotic designs in architecture.

?

Product/service design and delivery

?

Aggressive internal marketing

?

Winning the support of local communities and
public interest groups

?

Pioneer status: first mover advantage

?

Pro-environmental business practices

VILLA

SPA

UNDER WATER MARRIAGE

MARKETING & BRAND VALUES
BTHL marketing strategies were managed by international advertising agency
? Promoted as “Banyan Tree Experience”
? Focused on extensive advertising
? Building public relationship
? Membership in small luxury hotels and leading hotel of world
? Work with agent specialization in exclusive luxury holidays.

LOCAL COMMUNITY INVOLVEMENT

? Indigenous materials for construction of resort
? Promote traditional art and handicraft
?Purchase fresh produce
?Source of income for local people through art gallery

SOCIAL INTERACTIONS

?

?

?

Disparity in life styles and living standards between guests and the local community Scholarships for the needy children, building schools, child care centre , hosting lunches and parties Support local cultures and religious activities

NEW BRANDS INTRODUCTION
? The

“Angsana brand”

? The

“Colours of Angsana”

Resort & spa, complete with an Angsana Gallery Penetrate the soft adventure and cultural tourism market, creating to the more adventurous segment of market.

Q– What are the main factors that contributed to
Banyan Tree’s success?

CONTRIBUTES TO SUCCESS
Choice of target segment
? Pioneer status: first mover advantage
? Public relationships as a tool of promotion.
? Product/service design and delivery
? Aggressive internal marketing
? Support of local communities
? Pro-environmental business practices
?

QUESTION:
Evaluate
Banyan
Tree’s
brand
positioning and communications strategies. Can Banyan Tree maintain its unique positioning in an increasingly overcrowded resorts market ?

?

Brand positioning .

?

Focused promotion efforts with minimal wastage

?
?
?
?

?
?

Unique positioning sustainable
Unique service experience at Banyan
Tree(Appeal to “the senses,”)
Retaining “Human touch”
Individual treatment.
Employee programs.
The “Gallery”

Q–Discuss whether the brand portfolio of
Banyan Tree, Angsana, and Colours of Angsana, as well as the product portfolio of beach resorts and city hotels, spas, galleries, and museum shops fit as a family. What are your recommendations to Banyan Tree for managing these brands and products in future?

Banyan Tree targeted the higher end of the luxury resorts market
? Angsana was more mainstream and contemporary, targeting the wider market
? The Colours of Angsana range of boutique hotels catered specifically to the soft adventure tourism segment,
?

“THE ROMANCE OF TRAVEL AND THE
BEAUTY OF DISCOVERING THE WORLD”

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How Hilton Hotels Builds a Relationship with Its Customers

Introduction This study aims to apply the application of value chain to a selected organisation in a service industry. This study aims to use Hilton Hotels as the focus of this paper. The main purpose of this study is to examine how Hilton Hotels builds a relationship with its customers, how it improves the added value to retain customers and what should be improved under the context of value chain to improve the better services in order to effectively deliver customer satisfaction and exceed their expectation.

The paper will start from providing brief information about Hilton Hotels and then move on to analyse and discuss the key issues. About Hilton Hotel Hilton Hotels is one of the leading international premium hotels in the world. The company was founded by Conrad Hilton (Hilton Hotels, n. d. ). It offers full-services hotels and resorts to customers in many major cities around the world. Through different kinds of customer service programmes, it attempts to develop a good relationship with the targeted market. It also attempts to use the ‘Hilton Honors’ which is customer loyalty programme to retain existing customers (Hilton Hotels, n. . ). The programme does not only enable Hilton Hotels to assess quality premium services from the hotel and its affiliated firms, but also helps them to experience the feeling of privilege. How effective are the organisation’s resources in delivering its service offering? Based on the concept of value chain, it can be assumed that Hilton Hotels attempts to add value to its offerings with the use of effective support value chain activities. Hilton Hotels uses different support value chain activities to sustain the effectiveness of primary activities to exceed customer satisfaction and expectation.

These can be explained below. Primary Value Chain Activities of Hilton Hotel Inbound Logistics Hilton Hotels have several suppliers in each country in order to have sufficient supplies as part of a good quality service for customers. There are three most important areas that Hilton Hotels pays a lot of attention on because they influence people to pay more for premium services. These include food and drink, pick-up and other motor service and interior design. For example, Hilton Hotels decides to use different suppliers for fresh meat and vegetables to get the best products from suppliers with specialised offers.

Once the goods are delivered, food and catering department of Hilton Hotels will store them in the right temperature until they are required. Before they are put in the stockroom, catering staff will put different colour stickers on the package. For example, fresh meat will have the maximum lifetime of five days. If it arrives on Monday, the blue sticker with the word ‘FRI’ should be put on the package to inform the chef and other kitchen staff that it should be used by Friday or otherwise, it should be binned to avoid food poisoning. The same practice is also true for car courtesy service and interior design.

For example, Hilton Hotels has a contract with Mercedes Benz and other luxurious car brands to support its car courtesy services, while its interior design is done by a professional firm which will be in charge for all events held at the hotel. Operations As previously explained, this stage involved with transforming the goods into the finished offerings for end users. At Hilton Hotels, there are many goods that need to get through the operations process before being delivered to the end users. For example, all rooms will be cleaned once the customers check-out to ensure that that they are ready to serve the next guest.

Outbound Logistics This is about delivering the finished goods to final users. For Hilton Hotels, this is about the presentation of both tangible and intangible products to customers. For example, the room must be spotless and equipped with facilities as promised and advertised. Also, the food should be cooked in the right manner, such as if the customer asks for a medium rare steak, they should get what they have requested. Once the food is cooked, it should be served to the customer within five minutes and the table must be cleared within ten minutes.

Marketing & Sale This is about developing the marketing communication and promotion strategies that meet the needs and demands of customers. The marketing communication message used by in the poster is ‘Never feel away from home …… When living any of our over 514 hotels worldwide!!! ’ This slogan informs the target market that wherever they go, they can always be comfortable like staying at home at the Hilton Hotels which has more than 514 outlets worldwide. Hilton Hotels does give some discounts to customers during the low season.

It does not do this on a regular basis like many budget accommodations. This is because it targets customers who are less price-sensitive and they are willing to pay more for premium services. Service Through the customer loyalty programme ‘Hilton Honors’ to monitor behaviour of customers. This loyalty program enables card holders to access other premium quality services from the partnership companies of Hilton Hotels, such as car rental firms and airlines. The loyalty scheme allows the hotel to improve the products and services to meet new demand in the market more effectively.

Support Value Chain Activities of Hilton Hotel Firm infrastructure Hilton Hotels is an international hotel chain with many resorts and leisure accommodations in many cities around the world. Customers should expect to get the same quality standard of leisure hotel services. This is because Hilton Hotels has an effective system to control the performance of the company. There are five main factors that Hilton Hotels uses to maintain its performance in all cities. These include cleanliness, quality, service, maintenance and atmosphere (Roubi & Litteljohn, 2004).

All hotel rooms and common areas of the hotel should be spotless, the service should be delivered in a professional manner, cars, tools and equipments should be maintained and checked to ensure that they work effectively when required and the interior design should provide comfort. All of these elements are part of the organisational culture of Hilton Hotels. Human resource management Both frontline and management workers of Hilton Hotels are well-trained to deliver a perfect customer serving. Hilton Hotels tends to select employees with the right skills and knowledge.

It is revealed that Hilton Hotels welcomes and prefers employees who have degrees from hospitality institutes in Switzerland. However, those with appropriate experiences are also welcomed. All workers of Hilton Hotels are required to attend both on-the-job and off-the-job training programmes to ensure that they are equipped with the right tools to carry out a good customer service. At the same time, to motivate all workers to work towards the assigned tasks with their best effort, Hilton Hotels provides its workers with financial and non-financial rewards.

Some employees who have been working for the hotel for more than two years are eligible for organisational rewards, which are in the form of shares that are sold to workers at a discounted price (Watson et al. , 2007). Technology department Like other companies in the hospitality segment, the technology development and web-technology is used by Hilton Hotels to improve customer satisfaction in terms of fast and instant customer service. Hilton Hotel develops an official website which enables customers to book a hotel room, make a request for the airport pick up and other additional services.

The website of Hilton Hotels does not only make it easy for customers to access the services of the hotel, but it also enables the hotel to promote its brand and offers worldwide at the lowest cost (Lo et al. , 2010). Procurement Hilton Hotels is very selective about its suppliers. This is because it positions itself as the international premium hotel chain. Thus, apart from good quality products and services that these suppliers have to provide, they must also follow the rules set by Hilton Hotels.

Hilton Hotels requires all of its suppliers to be environmental-friendly and should not be involved in any kind of unethical issues, such as sweatshop and using underage workers (Hilton Hotels, n. d. ). How is Hilton Hotel attempting to build a relationship with the customer? Under the concept of value chain, it can be assumed that the targeted customers of Hilton Hotels are those who are quality conscious and they are willing to pay extra for the best service. Hilton Hotels uses differentiation strategy to develop a good relationship with customers and this enables it to retain customers more effectively.

Differentiation & Value Chain – Customer Service Based on the analysis in the previous section, it can be assumed that Hilton Hotels develops a strong bond with targeted customers through value chain differentiation strategy. This is done by making its customer service different from others in the same segment. Hilton Hotels aims to offer the best leisure products and services in the industry. This strategy does not only enable it to charge customers premium price, but it also allows Hilton Hotels to retain and influence the repeated purchase behaviour (Vukmir, 2006).

The loyalty scheme ‘Hilton Honor’ does not just makes customers feel that they are more privilege than others, but also enables them to access many premium services. Hilton Hotels must work hard to ensure that the promised offerings are delivered to customers. Differentiation & Value Chain – Technology To keep customers updated with new offers, Hilton Hotels sends electronic mails to customers who sign up for the service. The technology makes it easy for Hilton Hotels to develop a customer database and this can help them to monitor the behaviour of targeted customers more effectively.

Hilton Hotels also utilises other new forms of media to keep a good relationship with customers through social networks like Facebook and YouTube. This enables customers to share experiences about their stay at Hilton Hotels. At the same time, this also allows Hilton Hotels to keep customers informed about recent events and activities. Conclusion According to the analysis in the previous sections, it can be assumed that there is little evidence about customer satisfaction towards the services of Hilton Hotels.

However, based on the review of Hilton Hotels on TripAdvisor website (2009), it can be seen that it receives four out of five stars and 87 percent of customers who stay at the Hilton recommend it to others. The only problem that many customers appear to complain about is the pricing tactic of Hilton Hotels. Thus, under the current difficult economic conditions, it seems that customers will become more price-sensitive as they have less disposal income or start being cautious about their spending habits.

They may look for substitute leisure accommodations which offer quality lodging services at affordable and reasonable prices. This means that even customers with a high spending power may still want to stay in a hotel room without breaking a bank. Therefore, there are two possible tactics that Hilton Hotels can consider in order to add value to its offerings. These include (1) promotional offer or competitive deals; and (2) complimentary or free gifts.

The first strategy does not only add value to the offerings and exceed customer expectation, but it is also attractive to those who look for value for money. By contrast, the second strategy will satisfy customers who pay a full price on services. Complimentary offers would be perceived by them as a thank you gift from Hilton Hotels. This tactic will also make high spending-power customers feel privileged. Thus, it can be concluded that both strategies should effectively add value to the offerings of Hilton Hotels and satisfy customers with different spending powers.

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Industry Report – Hotel & Tourism

However, the easing of the Australian dollar has been a welcome development. The latest Mastered-OTF sentiment survey indicates that international industry sentiment remains relatively stable. Notably, however, 50% of those surveyed saw the Australian dollar as having a high impact on their business, highlighting the potential upside of the local currency easing. Growth In International visitor arrivals continues to Impress International visitor arrivals grew 4. 9% over the year to March while International visitor nights grew 7. 2%, significantly outpacing average growth of the last decade. While this growth has been largely led by the emerging Asian economies, particularly China which accounted for more than a third of total growth in visitor arrivals, there has also been a sustained pick up in visitor arrivals from the US. ; Increasing length of stay by Japanese visitors was also a key contributor to visitor night growth. The outlook for international visitors remains robust ; Despite a marginally weaker economic outlook, Dolomite Access Economics continues to project solid growth in international visitor arrivals and nights over the next three years, with arrivals forecast to grow by 4. 5% p. A. ND nights by 4. 9% p. A. ; While the outlook for growth in Chinese visitors has moderated slightly, China is expected to remain the single largest contributor to growth, with visitor nights forecast to grow by 6. 7% p. A. Over the next three years. Overall, Asia is projected to account for two thirds of forecast growth In International violators nights. ; In an encouraging sign for the nation’s larger regional tourism destinations, recent trends have revealed Chinese travelers Tropical North Queensland are now frequented more commonly by Chinese leisure visitors than by international leisure travelers generally.

The domestic visitor market entities to expand After a decade of weak or negative growth, the domestic tourism market rebounded strongly in the first half of 2012. While this rapid rate of growth has not been maintained, the domestic market has continued to expand, with visitor nights increasing 2. 2% over the year to March 2013. Strengthening leisure market forecast to be the key driver of domestic growth Corporate travel has been the predominant driver of domestic tourism growth over the last decade.

However a softer domestic economic outlook and signs of a continued pick-up in holiday travel indicate the leisure segment playing a more reorient role in driving domestic tourism over the next few years – particularly if the Australian dollar continues to recede. ; Holiday visitor nights grew 1 1. 6% in the March quarter and by 3. 7% over the year to March. This represents the fastest rate of growth since before the SGF and considerably narrowed the gap with outbound leisure travel, which grew by 4. % over the same period. ; Overall, Dolomite Access Economics forecasts domestic visitor nights to grow at an average rate of 1. 6% p. A. Over the next three years. Hotel occupancy rates in Brisbane and Perth ease while mailer markets record strong growth ; In a clear sign that travel associated with the mining sector is slowing, the last two quarters saw a softening in occupancy rates in Brisbane and Perth with average occupancies for the year to May 2013 around 2% lower than the previous year. However, growth in domestic holiday travel has been good news for destinations such as the Gold Coast where occupancy rates continue to improve, while Tropical North Queensland has benefited from strong growth in international visitor nights. A softer domestic economic outlook is moderating growth recasts for several major hotel markets ; Growth in occupancies and room rates in markets associated with mining-related corporate travel, such as Brisbane and Perth, is forecast to be more subdued, as the resource-related construction boom reaches its peak.

At the same time, the weakening of the Australian dollar is forecast to provide further support for room rates and occupancies in leisure-oriented markets. ; Nevertheless, and despite a strengthening investment pipeline, demand is forecast to outstrip supply and, accordingly, occupancy rates are forecast to grow 2% and room rates by 3. % p. A. Nationally over the three years to December 2015. Tourism and Hotel Market Outlook – Half yearly update 2013 2 The macroeconomic context with the US dollar since early 2011, the Australian dollar lost significant ground in May.

By the end of May, the Australian dollar had fallen to IIS$O. 96, while the Trade Weighted Index (TWIT), which measures the strength of Australia’s currency against its trading partners, fell from 78. 2 on the 1st of May to 74. 0 by the end of the month. At the time of writing the Australian dollar had fallen to IIS$O. 92 and the TWIT had fallen to 71. 2. The decline in the Australian dollar against its major trading partners was partly precipitated by the Reserve Banks decision in May to reduce the official cash rate to 2. 5%, while an announcement by the Federal Reserve of a possible tapering’ of its quantitative easing strategy has caused a more recent drop against the US dollar. The decline in the Australian dollar is good news for local tourism operators. Previous Dolomite Access Economics research for Tourism Australia found that the value of the Australian dollar has a relatively modest impact on the decision to visit Australia. However, it has a more pronounced impact on the level of spending undertaken by visitors once they arrive, which is likely to be of greater importance for many tourism operators.

The moderation of the Australian dollar is also likely to further slow growth in outbound travel by Australians as the overcompensation’s of local destinations improves. Despite the pace of the recent moderation, the longer term outlook for the local currency remains relatively unchanged with the Australian dollar projected to remain at IIS$O. 80 from 2018-19. The global outlook The moderation of the Australian currency relative to the US dollar as been driven in part by an improved outlook for the US economy.

The most recent figures from the US show that real GAP grew by 0. 6% in the March quarter up from the 0. 1% recorded in the December quarter. Over the year to March, US real GAP grew by 1. 8%. Moreover, the US housing market continues to strengthen, with the S&P Case Sheller 20-City Composite Home Price Index rising by 10. 9% over the year to March 2013 and housing approvals rising almost 21% since May 2012. Encouraging figures have also appeared from the US labor market, with the unemployment rate falling to 7. % in April (though it edged up to 7. % in May). However, looking beyond the headline data reveals a labor market which remains soft. This is especially evident in the employment to population ratio (capturing both unemployment and workforce participation), which remains essentially unchanged from the depths reached in late 2009. This data suggests that the falling unemployment rate has mainly been due to individuals dropping out of the labor force rather than strong employment growth.

These emerging signs of recovery – along with recent improvements in consumer confidence – suggest that, although fiscal consolidation ill limit the speed of the nation’s economic recovery, the US is better placed than previously to handle the impact of $85 billion in budget cuts associated with the ‘sequester’ and a 2% increase in payroll tax. By comparison, the outlook for Chinese growth is slightly weaker than forecast six months ago with growth falling from 7. 9% over the year to December 2012 to 7. 7% over the year to March 2013.

Growth continues to be supported by infrastructure spending and housing construction with recent growth in real estate prices prompting renewed concerns about the potential or a housing price bubble in China. Growth in both consumer spending and the longer term, China will need to rebalanced its growth towards higher wages and increased consumer spending, which is likely to imply a slower but more balanced growth trajectory. The COED Economic Outlook forecasts Chinese growth to remain at 7. 8% in 2013, before rising to 8. 4% in 2014 on the back of an acceleration of global trade.

In Europe, fiscal austerity has continued to hamper growth with unemployment in the region climbing further. While austerity measures have increased the level of lattice instability in some member states, the European Central Banks actions in purchasing government bonds has reduced the risk of a severe collapse over the last eighteen months. The COED expects growth in the Euro area of in 2013 before recovering to 1 . 1% in 2014. By comparison, the outlook is slightly stronger for Japan as monetary easing has led to a depreciation of the yen since November 2012, although the COED is forecasting growth of only 1. % in 2013. On the whole, the global outlook remains broadly similar to six months ago, with more promising signs f recovery in the US being counterbalanced by a slightly softer outlook for China’s economy and continued weakness in the Rezone. The domestic outlook In Australia, concerns have been growing about the capacity of the non-mining sectors to sustain growth once the resource-related construction boom peaks. The economy grew by 0. 6% in the March quarter to be up by 2. 5% over the year, but growth was largely driven by an improvement in net exports.

A decline in new engineering construction in the quarter has prompted increasing concerns that the mining construction boom has begun to peak. While Dolomite Access Economics expects resource-related construction to plateau for some time before receding, alternative sources of growth must be forthcoming if an economic slowdown is to be avoided. While there is evidence that housing construction and the retail sector are beginning to grow, the recovery in both sectors has been relatively mild to date. Residential construction activity grew by only 2. % over the year to March, while retail expenditure grew by 3. 1% over the year to April. The decision by the Reserve Bank to cut interest rates to a record low of 2. 75% in May should act to Arthur stimulate the housing and retail sectors. At the same time, while the decision by the Federal government to delay a return to budget surplus to 2015-16 has been welcomed, indicators suggest business confidence has weakened in recent months due to concerns about the impending peak in construction activity in the resources sector.

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Case Study on The Hotel Industry in Kenya

Table of contents

This chapter examines the background on the study, the statement of the research problem and the purpose of the study. The research objectives research questions, the significance of the study, and limitation of the scope of the study are also explained.

Background of study.

Hotel industry is all forms of business relating to provision of accommodation in the lodging, food and drinks and various types of other services that are interconnected and form intended for the public services, both of which use the lodging facilities or ho simply use the services or the production of certain services of the Hotel. As such Hotel mean commercial establishment providing lodging to travelers, tourist and sometimes to permanent residents and often having restaurants, meeting rooms, stores that are available to general public.

Hotels are being classified into -start-05-star) even though there are no standard methods of assigning those rating and compliance with the customary requirement is voluntary. Hotel chain provides a uniform standard through out non-chain hotel(even within the same country)may not agree on the standard, although both World Health Organization WHO) and International Standard Organization(also)have been trying to persuade Hotels to agree on some minimum requirement as world norm, the entire membership of Paris base International Hotel and Restaurant.

Association opposes any such moves. According to (II&RA) to harmonize the hotels classification base on single grading(which is uniform across national boundary; as a rough guide on the bases of I-star Hotel, 2 star hotel, 3 star hotel. A star hotel and 5 star hotel such rating differentiate the hotels with regard to provision of their services as ranging of emitted amenities but adhered to a high standard of facility, wide cleanliness to widest range of most luxuries premises and guest services as well as swimming pool, sport and facility.

In sass the Government of Kenya was quite aware of the adverse effect of dominance and control of hotel industry by the foreigners due to repatriation of profit, importation of personnel and some foodstuff, therefore establishment of Kenya Tourist Development Corporation in 1965 aimed to break of the monopoly enjoyed by foreigners despite the commitment to the modernization of the hotel industry and sustenance of the tempo of tourism, the Government focused its attention mainly on the international tourism while a substantial amount of money was set aside to promote domestic tourism in the first decade of independence. R. M. Macon, 1992) A continental research study released for Africa Hotel Investment Forum which was for Nairobi September (2012) revealed a positive spike touching on the number of multinational hotel investors rushing to set up operation in sub Sahara Africa. Kenya is emerging as a fast growing hotel investment destination with international chain such as; Best Western, Radios Blur, Park Inn, and Three Cities branded hotel all under construction- and 200- room Lonesome Hotel. New brand on the drawing board; (Mr.. Needed 2012).

Kisser (2003) the term service delivery platform usually to set components that provide service Case Study on The Hotel Industry in Kenya By Chester service different players define its component and it breath and depth is a slightly different way of Maintaining high quality services, the hotel is faced by the challenges of accommodation and food if the services rendered and product issued o not fully fit the customers’ expectation, poor quality service deliveries will be established from the customers’ perspectives.

Its vital for the hotel industry therefore to acknowledge the message that quality is really about satisfying the needs and expectation of the customers. Menial al (2010) agree that the provision of duty is not easy task to meet because it feature. Product too, and high level of interaction and that implies that their should be high degrees of professional an other factors like staff motivation, efficiency, consistency, speed of the delivery as well as friendliness of the employees s also integral elements for customers and these attributes attract them to revisit.

To ensure public counter ability ,yet to goon optimum impact, through the use of commercial best practice, there is a need or for professional training and education of those personnel responsible for the strategic direction and partial action . Professionalism can be only come from full understanding of all the issues involved ,a sound knowledge of the legal and commercial aspects and the confident to make decision that effectively balance the tension , it has been rated as the most influential factors in gaining the customers’ satisfactory loyalty and intentions to revisit.

Profile of Nairobi Serene Hotel

Nairobi Serene Hotel is situated in the heart of Nairobi city; the extensive ground of Serene Hotel contains a fitness centre and spa. Justly fame for its exceptional standards of efficiency services and five- star hospitality, the elegantly sophisticated Nairobi Hotel is a member of the leading Hotel of the World group and is consistently voted “Best Hotel” in Nairobi City by Airline and International Travel Magazine alike. Despite its pivotal central location, the Serene Nairobi Hotel remains true to its title ND offer s an oasis of serenity a mid of bustle of one the Africans most vibrant capital cities.

Nairobi Serene Hotel offer a fine -dinning restaurant with a seasonal menu and extensive wine- cellar Guest can enjoy a variety of snacks and drinks at the pool side bar, cocktails at the Assume Bar. The 24 hrs front desk can organize concierge, limousine and baby setting services or make an appointment for guests at a site hair salon, free private parking is provided and a shuttle is provided upon the request to Zoom Kenya Airport (AKA ) km away, Railway Golf Course is 3 km away and Nairobi Park is within 9 km drive.

The elegant and precious rooms and suites are decorated, with worm colors and wooden furniture, equipped with air conditioning and a private bathroom. The interior deco reflects an entirely Pan Africa theme featuring art and inspiration from Ethiopia, the Massager. West Africa and East Africa, offering a range of dinning experiences, the Hotel in Kenya is renowned for its Madrid fine – dining restaurant which is rated as one of the Seaman’s finest. Nairobi Serene Hotel also offers a world class conferences entire and the elusive “mash” Health Club and Spa . The regional corporate events.

Planners, Nairobi Serene Hotel offer unrivalled choice of the executive suits, global connectivity conferences planning proficiency, product launch experts and high- proof international corporate events venues. Organization Structure Source: Serene Journal (1998)

Statement of the problem

The Hotel industry is a broad categories of field within the services industry that Include the lodging and restaurant, event planning them park, transportation cuisine Line and addition fields within the tourism industry, it is several 1 billion dollars industries that mostly depends on the availability of leisure time and dispensable income.

The dynamic of the customers’ culture, need and expectation not only computed the hotel industries to high professional in the field. It is also invested in the sophisticated assets challenge the unique services like conferences facilities that can be matched with other partners in the same field . As such the industry has been communication technology where by the manager of the hotel industry are tying to find a working formula to take advantage of the others for proper satisfaction of their customers needs and expectations. For services delivery to be noticed by both parties that is the customers and the hotel management there is a need to find a plan for meeting such objectives in form of strategy and that will enable the management offer continues improvement services delivery. Therefore this study is being looked into to find how the competition, training strategy and Information Communication Technology pose challenge to the hotel industry to the management in service delivery.

Objective of the study

The purpose of this study is to establish challenges facing services delivery in the hotel industry in Kenya with reference to (Serene Hotel)

Specific objective I.

To determine the effect of the staff training on service delivery in Hotel industry it. To establish the effect of competition in service delivery in the Hotel industry iii. To find out the effect of the government policy in the Hotel industry ‘v. To investigate how the Information Communication Technology affects service in Hotel industry v.

To find out the effect of the strategy on service delivery in the Hotel industry

Research questions

In order to conduct this research study the successfully, the following questions are asked by the researcher:- I How does the staff training affect services delivery n the hotel industry in Kenya? Ii To what extent does the competition affect delivery in the hotel industry? Iii. How does the government policy affect the delivery in the hotel industry in Kenya?

To what extend does information and communication technology affect delivery in the Hotel industry in Kenya.

What is the role of strategy in the Hotel industry in Kenya?

 Significance of the study

The study has five components of the study that explore whether training staff, Government policy, competition, information and communication and strategy technology have effects or influence services delivery in the hotel industry (Serene Hotel)it opens different aspect of the theory generation that may support further research into services delivery aspect as a whole. . 6. 1 The Organization This study well enables the hotel to beat the competition that will win the customers loyalty and confidence. It will result in increase of the income of the hotel and lead to the growth of the business as well the entire hotel industry. 1. 6. 2 The Employee This study will enable the employees learn new ways of satisfying guests better with world class standards. This study will also help to develop close support between employees and the guest. . 6. Government The government of Kenya is responsible for general welfare of citizens, like any other citizen by offering the employment opportunity , the challenges facing services delivery in Hotel industry ,therefore the Government on rules and regulation in setting any commercial business affecting hotel industry .

Other researchers

The researchers who are doing related study may use this research as their data. The research will also propose other areas which explore further.

Limitation of the study

The unwillingness of some respondent will mostly affect the study adversely, whom re not quit conversant; with ‘hotel industry management and the entire needs and expectations of the customer and with regard to services delivery.

Confidentiality

Some of the respondents will have the perception that confidentiality of their response will not be kept with a fellow employee so they will not willingly give some information especially touching on the management.

Accessibility

It will be difficult to have access to some confidential information in the hotel under study; the study confined itself into five challenges which are being investigated. Data will be gathered and interviews conducted within the scope of these challenges thus contributing to availability of limited data for analysis since there are many other challenges that the study failed to incorporate and have an effect towards service delivery.

Non-cooperation from respondent

The researcher to experience some aspects of unwillingness to disclose information to be considered important for the study.

They will not be able to cooperate because t of thinking that the study is a private research and collecting information may be used for wrong purpose. However the researcher will overcome his by assuring them it for academic purpose only. 1. 8 Scope of the study. The study is to be carried out in Nairobi Serene Hotel Nairobi city along Kenya Avenue Street to determine challenge facing service delivery in the hotel industry, the target population obtained is 60 employees.

The study is to be taken within five months.

LITERATURE REVIEW

Introduction

This chapter is a review of relevant literature which is considered necessary in helping to understand the research study. It represent the review of literature on the topic under study which has been done by various researchers, theorist and tutors . The researchers have drawn materials from several sources which are closely related to the theme and objective s of the study .

This will guide the researchers to come up with the best solutions to solve the problem at hand and add more strength to the existing studies in the same field and highlights the identified gaps and presents the conceptual frame work.

Review of Theoretical Literature

Training Staff

Training refers to methods used to give new present employees the skills, they needs to perform their Job . This necessitated by the fact that employees have had to adapt o rapid technological changes, improved product and service delivery, quality and boost productivity to stay competitive.

Employees today need skills in team building, decision making and communication as well as technological and computer skills. Guppy (1992) describes training as any process which the attitude and abilities of the employees to perform specific Job are increased . Training is aimed at achieving the learning necessary for improving Job performance (Kenny and Reid, 1994). According to Cole (1997) training is any activity that is desired towards the acquisition of specific knowledge and skill for the purpose of an occupation or task.

Vigor’s and Mayors (1997) view training as enhancement of knowledge which acts not only as motivator to the employees but also an opportunities for better Job that has more responsibility with good achievement . Training is a planned process to modified attitudes, knowledge or skills, behavior through learning experience to achieve Performance in any activity or range of activity. Its purpose is to develop the individual and satisfy the current and future. Man power needs of the organization must be looked into effective training contributes to organization performance .

This was illustrated in a case study how an international companies producing high value added manufactured goods in North America and West Europe. To succeed and survive an organization needs to reinvent themselves regularly . Learning underpins the effort of management team that does not shy away from challenges of change and pro-actively seeks to find better ways of doing things. Manager needs to support and engage in effective learning process . The routine act ,find out what work reflect and refrain retain desirable behavior, needs to permeate all levels of the organization at both individual and the groups level.

These does not mean that the learning for the sake of learning or permanently engaging in one experience as the other experience as the others. Experimentations, reflection and learning will assume grater important as the future become more between learning and control, change and stability, thought and action. Porter ,(1988), points out other key factors for organizations; effective management of customers satisfaction and loyalty, maintain the right skill mix in a rapidly changing environment , enhancing employees flexibility, effective introduction of new routine and technology.

According to Kamala el al (2005) training can be formal or informal; which is either the off the Job or on the Job. In the planning stage of change process managers of change should be able to anticipate the skill that would be required to implement the change and clear plan on training program for the targeted workers. This make up the part that is formal training. Aldrich (1997) however further observes that the organizations are increasingly opting for formal training unstructured, unplanned and easily adopted to situations and individual for keeping the employee current.

In the reality, the informal training is nothing more than employees helping each other out sharing information on work related problems with one another. He observers that perhaps the most important of this outcome as that many manufacturers are supportive of what used to be considered “idle chatter”. Training in organization is perceived as a way to respond to the change early which will propel the organization and gain reward in term of security profit or attainment of these goals of training and department arise because the world changes.

These change affect environment which the organization operates, employees are affected by new hanged and they must adopt, learn new skill, cope with different pressure acquire, new knowledge and forge new relationships. Training bring additional resources to individual to enable them change and develop change as affected by political, economic, social ,technology, the law and the environment . The business training views, training not as off investments but as continuous investment not only if it is needed to create the skill workforce but never before have the changes been so expensive.

The things people do, the way they do them and their importance to business is all changing rapidly . He attributed the change the to vast expansion in the development of application of computer automation in the factory and in the office and disappearance of many traditional traders. In conclusion, He said the environment employees trained is also effective depends on the people wanting to learn, change nature and encourage the desire and will to learn. (Tactics el al, 2001).

Training is the process of increasing the knowledge and the skills of the employees for doing particular Job. It’s _he organized activity designed to create a change in the thinking and the behavior of people and enable them to do their Jobs in a more effective manner. Industry, it implies importing technical knowledge, manipulative skills, problems solving ability and positive attitude on the other hand development means growth of an individual in all aspect .

An organization makes arrangement for the development of its executive or staff as to improve the efficiency of managements. Training is a large Job centered while development is career bound. To him the need for training arises because of non availability of trained personnel, suitability of enterprise need and proficiency is latest method ( ABA lye, 2005). According to Leasing (2001) training enables the organization viability and transformation process, the primary goals of most of organizations in their viability is continuously influenced environment pressure.

The productivity of the organization depends on the effectiveness of the human resources that the organization process Employees effectiveness of human can be secured by proper training, training ensures that there are technological advance in order to survive and to be effective then should adopt the latest technology mechanization, computerizing and automation. Adoption of latest technology means and methods will not be complete until they are manned by employees processing skills to operate them as much The Nairobi Serene hotel should train employees to enrich them in the areas of changing skills and knowledge from time to time.

Sizable Robinson {2007) Training is specific way in the which learning can take place within the organization. Training can be viewed as the bounded activity focused on equipping employees with the knowledge and the skills necessary to form work roles and responsibilities to the satisfactory standards; ‘According to Manpower service commission (MASC.) 1961-62) define raining as plan process to modify attitude, knowledge, or skill behavior through the learning experience to achieve performance in activity or range of activities.

Its purpose in the work situation is to develop the ability of the individual and satisfy the current and future of the organization. From that definition it was further illustrated by IANA McKee, Area HRS manager, Hilton Hotel, Belfast that “we can’t train every one to do every thing . The emphasis is getting to learn within the environment where they work and getting to adopt and apply that knowledge . Every customer has different expectations.

There is no way we can train for every eventuality we want our staff to be spontaneous and react and respond to guest expectations” Solomon (2003) – Both training and development can be concerned with development of knowledge skills and attitude but where training is specifically focused on immediate short term requirement of the Job or the task, the concept of the development is to focus on the longer term growth and the development of the individual in a way that fulfill their potential. It is defined as systematic modification of the behavior through learning.

This occurs as a result of education, instruction and the planned experienced . Training is a task oriented as it focuses on the specific areas of work . The training standard are derived from the Job. Training is provided when there is skill gap between an expected and the actual standards of performance. Training is planned process to modify attitude knowledge or skills behavior through learning experience. It aims at achieving effective performance in an activity or range of activities. Its purpose in work situation is to develop the ability . He individual and to satisfy the current and the future manpower needs of the organization, it must eave the purpose. It can be well defined it the learning needs of the organization and the groups and the individual have systematically identified and analyzed (Armstrong 2000) . He further continues by saying that Job analysis for training purposes means examining in details of Job content, the performance standards required in term of quality and output , the skills know ledge and competence needed to perform the Job completely and thus meet performance standards .

This involves analyzing what the individual needs to know. It may be technical or commercial knowledge or may be or immemorial economic or market environment, Procedures to be ;followed or customers, colleagues and subordinates he, she is in contact with and challenge that affects their behavior . Let may also refers to the problems that occurs . And how they applicable to the hotel industry to involve their employees for training make them productive and be relevant to the organization changes as do occur to the business environment.

Decedent & S Robin (1998), training is a learning experience in that it seeks relatively permanent change in an individual that will improve his or her ability to perform on the Job . They typically say training can involves the changing of skills 1 knowledge 1 attitude or social behavior . Let may mean that changing what the employees know, how they work 1 their altitude toward their work, or their interactions with their co-workers or their supervisor. According to Cole (2002) organization adapting systematic approach to training and development would usually be a bout defining their needs for training.

In accordance with a well organized procedure. Such a procedure well entails looking at training need from a number of different perspectives. The organization that is corporate requirement. The department of or function, the Job or occupation group and the individual employees. The particular perspective chosen will depend on the circumstance. For example if the change in the environment of the organization are entering pressure change internally, the corporate perspective needs to be taken . F however the issues is one of the improving skills in particular category of employees then that category of employee under that of occupational group under the focuses for effort. Usually organizations analyses training needs in response to n operational weakness ported in by line managers or to meet the demand of change . The former reason suggested their is something of improving or entertaining guest in Hotel that makes an element in training needs analysis,the later suggest that it can be deployed as an element of planned change in an organization.

Competition

by definition n is an effort of two or more parties acting independently to secure the business of a third party by offering the most favorable terms. It refers to rivalry among the firms operating in the market to fill the same customers’ needs. Competition is all about the on lying to out do the other, Webster (2008), she further said decomposition is a pillar of capitalism in that in stimulate innovations encourage sufficiency or drive down price ,competition causes commercial firms and private sectors to develop new products.

According to Soot Barkiest{ 1997) there are further basic types of competition. These are; pure competition where every industry or firm has a similar product ,monopoly competition where only the one firm sell the product, monopolistic competition is where by the many sellers compete with their reduce on suitable basic and finally, oligopolies competition which is common industry structure and occurs when a few competition control the majority of industry sales. Competition is a business relation in which two parties offering the same service or proving the same product to the market complete to gain customers.

Competitors are those organizations offering the services or products to the same category of the market direct competitors are the most obvious competition competitors, those are other , service providers with the same services to compete for he some customers,{Brown,2008). According to Porter (1992) competition is at the organization may base on the competition. It determine if an organization in a certain industry ,innovation, creativity, cohesive , strategy or implementation can contribute to its performance, Intensity of competition in an industry is neither a master of coincidence or bad lack.

Instead it is rooted in its underlying economic structure and political competitors. To emphasis that there are several players in Hotel industry where Serene Hotel is trying to out do them . Likewise to them, for example Sartor toll, Pan Africa Hotel Jacaranda Hotel all these are providing similar services to the customers and everyone giving each one competition. Competition can either be healthy or unhealthy. Healthy competition has its benefit attributes in any business venture as it leads to improvement of products or services and effective communication . His benefit the consumer. It can also lead one player in such industry like Hotel industry to improve, this is because positive or good competition enables one to admire a competitor’s business success and inspire one to improve its services to customers. Unhealthy competition puts competitors firms in an industries too much pressure delivery for results which in most cases end up . Being disastrous to competing firms. Rivalry amongst established firms has negative attribute, each of the firm wants to outdo. He other through authentically means such as lowering prices beyond acceptable levels, stealing customers from the competitors, negative publicity of the competitors as well as waging cold war’s in the market arena( Porter 1980) . Threats of new entrants: they bring to the industry anew capacity; desire to gain the market share and substantial resources. Threats from substitute product limit the potential return of an industry by placing a ceiling on the pride. Technology is the most significant barriers to competitors.

This is when technology differences are considerable and infrastructure in the market does hot exist to make friendly . Lack of credible competitor in market spine off new competitors and motivate efficiency for firms to enter the market with better solution portfolio lowering prices or a range of services that is unknown to the market. Consultants act as an advertisement to the competitions that is when a strong nutritional feels all is pride of his own country offers to prevents customers for using or adopting foreign brands .

The ability of the customer to push down prices due to their bargaining power can affect the return in business . This result increased competition particularly market players offering the same product and service in relation to the number of customer. (Kenneth London (2006). Reagan( 2004) also identifies barriers that bars an entry and exist of firms in the market . The government policy is the most significant entry barriers in any market through its protection of local industry against dumping or unfair foreign industries monitors is often the excuse of the government intentions in the market place.

Competition needs mapping in terms of the needs it fills rather than in product term, once the business has been defined, It is necessary to define the served customers groups. The decision should be based on market potential estimate and to company understanding of segments of needs. Reagan further noted that ‘competition’ is necessary evil. It is necessary for the health of industry and spur new development, competition being an important force needs to be tracked and analyzed and hence

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City Center

City Center, Las Vegas is made up of multiple skyscrapers with contemporary designs. The inside is just as lavish as the outside, where world famous artists have put in there own tweeks and installations to make City Center one of a kind. Combined City Center has 2,400 condominium and condo hotel units and approximately 4,800 hotel rooms. They are all distributed within several high rise and mid rise towers around the “CRYSTALS” retail and entertainment district. The multi use project is designed with green technologies to make it one of the world’s largest environmentally sustainable urban communities.

Private investors had to dish out 11 Billion dollars for the funding to build this extravagant addition to Las Vegas. City Center’s opening will boost Las Vegas economy when the country gets back on its feet after the economic collapse. Right now at least 50% of the 12,000 employees are only working part-time which means when business picks up more people will be getting paid and that puts money straight into Las Vegas businesses. I did the research about what materials were used to build this massive project and this is what I found: FACILITY • 7,000 guest rooms across 5 separate buildings City Center resort & casino will tower 60 stories • 165,000 sq ft casino • 70,000 sq ft spa • 2,000 sq ft theatre PROJECT SCOPE Hollow Metal Doors, Hollow Metal Frames, Architectural Wood Doors, Architectural Hardware, Rolling Steel Doors, Architectural Mouldings and Trim. Project Owner: MGM Mirage General Contractor: Perini Construction Architect: HKS Architects, Inc. Project Amount: $9. 8 Billion Completion Date: December 2009 60% of the remains of the former hotel that occupied the lot, The Boardwalk hotel, were used for the construction of the project.

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