The introduction section discuss about the Continuous improvement process in Hospitality and Event management operations. The process of continuous improvement for various organizations is inherent part which determines the way organization is doing its business. The main programs of the continuous improvement include TQM
This proposal is to put into action and find new instructions of business by using over the last three years economic and profitable performance to characterize the answers. The suggestion seeks different essentials of business performance, such as: marketing development; Crisis management; and Functional level strategy of Accor Hotels to categorize the results.
The outcome shows with the purpose of Accor Hotels are performing well in the past three year’s company performance. But still, there are a number of improvements are necessary in industry growth. Crisis Management needs to be compulsory that can helps the organisation to perform more effectively. Analysing the Past trends and issues that causes the crisis related to the organization and businesses are able to stop, manage, or moderate the belongings of crises in the future.
Accor have opportunity to develop the business by geographical extension around the world. Market development strategy focusing in particularly at Asian and pacific region that has future development like constructing Accor brands like Suite Hotel and Motel6. That gives strength and also helps to geographical extension of the company in order to attain the customer satisfaction and brand image.
Accor should have functional level strategy in human resource management that are rewarding and motivating the employees, customers and reselling by various methods like Gift vouchers, prepaid cards, rewards to enhance the relationships with the customers and employees.
Executive Summary: 2
1. Introduction: 4
2. Background of Accor hotels: 4
3. Future Strategy for Accor: 6
3.1 Crisis Management: 6
3.2 Market development: 8
By analyzing the (Table 3) Asian pacific region have a huge growth in Travel and Tourism between 2008- 2018. Where constructing and building of Suite hotel and Motel 6 of Accor brands in Asian and pacific region. Focusing on new customers with the same product and service but in different geographical areas is the Market development. However China and India are the emerging market building more suite hotel and motel 6 for the customers. So, Market development strategy for Accor hotels to develop the geographical extension around the globe. 10
3.3 Functional level Strategy: (Human Resource Management (HRM)) 10
4. Conclusion: 10
5. Reference 11
6. Appendix A 14
This report is about the Strategic of Accor Hotels past, current and future prospect. Section one evaluates the background of the Accor hotels in their past three years strategies between 2007-2009.Section two, it will be the future strategies that will consider the Internal and external Issues and trends on the hotel with SWOT analysis. Finally, it concludes and summaries the whole report.
Background of Accor hotels:
Around the world Accor is one of the foremost hotel operator in the world (Accor, 2008a), European organizer in hotels and tourism and the global organizer in Services to business customers and communal organization, Accor works in nearly 100 nation with extra than 150,000 employees (Accor, 2008a). Past 40 years, it has offer consumers with knowledge get in its two center businesses, Hotels and Service (Accor, 2008a).
Hotels: Hotels has a geographically and structurally reasonable business portfolio. Hotel action contains further than 15 corresponding product from comfort to wealth that are recognized and respected around the world for their service value (Accor, 2008a). Accor offers various luxury hotels brands like see Appendix A. Many lodging companies have developed many brands to give out multiple market segments (Jing, Dev, and Rao 2002).
Service: It operates over 40 nations; Accor Services plans, expand and handle elevated value-added services for corporation (Accor, 2008a). Accor Services propose a entire choice of prepaid services in the region of worker and community benefits (Accor, 2008a).
Accor hotels past and current strategies were evaluated with annual reports of the company and message given by Chief Executive Officer (CEO) of Accor Hotels. In 2006, Accor hotels have increased the number of rooms and available nearly double in 2010. The expansion model of 40,000 rooms per year focuses on organization contracts and franchise Accor (2010a).Accor has preferred four drivers to distribute the 40,000 new rooms per year by Expanding in Western Europe in Eco and Budget, and by franchise it increase the market share in established markets, Strengthen the location in rising countries, Management networking to expand the upmarket and luxury Accor (2010a). Accor has changed its strategy to focus more on increasing the business through franchising and organization contracts and less on construction of new hotels (Walsh, 2003).
Figure 1 Expansions and investment of Accor hotels around the globe.
Source: Accor (2010a)
The word ‘strategy’ refers to the wide direction, or holistic point of view, taken by an organization to plan for and make safe its long period goals (Marginson, 1988). Accor introduced acquisition of Motivano software in functional level Strategy of Human resource management (HRM) in the technological developments, which enables online management of employee benefits (Accor 2008b). Rewards and motivation for the employees, Customers and reselling by various methods like Gift vouchers, prepaid cards, Rewards to enhance the relationships with the customers and employees (Accor, 2009a). Kotler (2003) says that it is significant to make an excellent link among customers; and the suppliers in order to develop the issue of consumer faithfulness. Accor have product development for their customer’s relationship towards the organisation by having a multi brand A| Club loyalty program across the worldwide (Accor 2008b). An expansion method Accor service makes stronger its faculty for technical modernism with the gaining of Prepay Technologies Ltd. The achievement of Prepay Technologies makes stronger for Accor Services management and expands its collection of stuff and services in the UK (Accor, 2007b).
Accor focus strategy on French Polynesia for leisure travelers. It presents visitors the possibility to treat individuals with the crucial in leisure and luxury at three of its limited resorts in French Polynesia. Accor hotels are focusing particularly on the Le Spa at Sofitel, Sofitel Bora Bora Beach Resort and Sofitel Motu Bora Bora, a private island in French Polynesia (PR Log, 2007). Divertiture Strategy says that Selling a division or part of an organization (David, 2009). During 2007 Accor sold out 30 hotel properties in the United Kingdom for â‚¬711 million (Accor, 2007a). Because due to economic crisis and loss (Accor, 2007b). In product development Accor service start on UUB Premium card in the United Kingdom and the Commuter Check card in the United States (Accor 2008b). That helps to hold the customers and employees within the organisation. Accor Hospitality is to promote all its brands, collectively. That has various ranges of Facilities and low prices. That initially target business travelers and leisure break customers (Marketing magazine, 2009). Accor Hotels had a Net Loss of â‚¬282 million due to the economic crisis and restructure costs totalling â‚¬514 million (Accor, 2010).
Future Strategy for Accor:
3.1 Crisis Management:
“A crisis is the perception of an unpredictable event that threatens important expectancies of stake holders and can seriously impact on organization’s performance and generate negative outcomes” Coombs (2007: 2-3). Meyers (1986) categorized disaster into main belongings on community perceptions, product failures, sudden changes in the marketplace and changes in top administration. Meyers as well argue that crises can be caused by troubles with financing, business relations, take-over’s, global events and changes in rules and policy. For example, following the 9/11 attacks, most of the political and media debate on terrorism has decided on avoidance policies (Kahn and Weiner, 2002). Economic impact of 9/11 is sensibly incalculable; though the global travel and tourism council has approximate reduce of the travel and tourism demand worldwide to be 10%. This compare to the jobs loss of 8.8 million people worldwide including airlines, hotels and tour operators, generate a 1.7% decline of whole GDP for the global wealth. They were two different viewpoints about concerning crisis management. One group of Researchers (e.g., Perrow 1984; Gephart 1984) argued that crises are repeated and not avoidable; whereas others (e.g., Mitroff, Pearson, and Harrigan 1996; Roberts 1990) contended that in attendance are conduct through which association can stop, run, or moderate the belongings of crises.
Accor, which function the Sofitel, Ibis and Novotel brands in the UK, said it will cut 10% of its staff at its French head offices as it seem to make a 15% decrease in maintain costs due to the crash of the “unprecedented worldwide crisis” (Sharkey,2009). But Parsons (1996) put forward three categories of crises: 1. Immediate crises: Everywhere small or negative caution survives hence organizations are not capable to examine the crisis or arrange a preparation ahead of the problem or disaster strikes. 2. Emerging crises: These crises are identified and possibly it can be blocked or restricted through business act. 3. Sustained crises: This possibly will carry on for weeks, months or still for longer duration. The Bali terror operations in 2002 probably lost Indonesia half a million Visitors and $4.0 billion in revenue. And also in Jakarta hotels bombed in 17 July 2009 (Telegraph, 2009).
Hotels in Indonesia have been bombed which leads to afraid tourists will go to some other nation now, and hotels will have to expend a buttload more money on security to try to calm those panicky travellers down (Telegraph, 2009). In Mumbai, terrorist attacks train situation, a hospital, a café and two hotels – locations used by foreigners as well as local businessmen and leaders (BBC News 2008). It results in Negative travel advisories on India around various countries. According to the Federation of Hotels and Restaurant Association of India Booking by overseas travellers mainly from U.S and Europe comes down by 40% to 60% (Singh, 2008). According to Kash and Darling (1998) crisis prevention and planning can be managed by the following tools, strategic forecasting, contingency planning, issues analysis, scenario analysis. This prevention and planning are helpful to manage the crisis that affects the organization. According to Mitroff crisis can be prevented, manage, or moderate the effects of crises in the organization will helpful for the future crisis to be prevented. Accor should provided security to their visitors is unavailable very seriously, Sofitel Brussels Europe is endowed with a video recorder observation system communicate by 60 cameras and magnetic keys guarantee secure access to the hotel floors (Accor, 2010c). The Crisis Management Strategy is useful for the organisation of Accor in the future to overcome the economic crisis and threats of the organisation.
3.2 Market development:
Suggestion with the intention creates a character designed for an intangible body, products tell to customers feeling (Kim and Kim 2004). According to David, 2009 focusing on new customers with the same product and service but in different geographical areas. Brand justice besides let a group to enlarge and increase the product in a range of marketplace (Maharajan, Rao, and Srivastava, 1994). A hotel brand initially creates an importance for visitors by serving to declare them of a identical stage of excellence (O’ Neil and xiamo 2006).
The table1 shows Accor hotel brands geographic presence in the world, that there is a huge opportunities for start business in emerging market like Asia and Pacific regions. Because they have
Table 1 Accor hotel brands geographic presence in the world
MIDDLE EAST AFRICA
Source: Adapted from Accor (2010a)
Construction of Suite hotel and Motel 6 in Asia Pacific region, that has largest volume of Travel & Tourism Demand in the future prospective and increase the market place and exceeding the geographical perspectives around the globe.
World Travel and Tourism Council (WTTC) says that, Table2. China has climbed two places by beating Japan and Germany and it occupied the second position. Travel & Tourism service is lead by China (WTTC, 2008).
Table3: Over the next one decade, the image will change to some extent as emerging tourism markets start to gather greater benefits from their investment in Travel & Tourism development. whereas the USA, China, Japan and Germany will keep their current top four slots in terms of total Travel & Tourism Demand (in absolute terms), India will be the world’s number one in terms of yearly growth in Travel & Tourism require between 2008 and 2018, averaging 9.4% per annum – ahead of China, Libya, Vietnam and Montenegro (WTTC, 2008).
Table 2 Countries expected to generate the largest volume of Travel & Tourism Demand (TTD) in 2008 TTD,
S.No Countries (US$ bn)
Source: WTTC, 2008.
Table 3 Expected countries growth in Travel & Tourism Demand between 2008 and 2018:
S.No Countries 2008-18 (% annualised real growth)
Source: WTTC, 2008.
By analyzing the (Table 3) Asian pacific region have a huge growth in Travel and Tourism between 2008- 2018. Where constructing and building of Suite hotel and Motel 6 of Accor brands in Asian and pacific region. Focusing on new customers with the same product and service but in different geographical areas is the Market development. However China and India are the emerging market building more suite hotel and motel 6 for the customers. So, Market development strategy for Accor hotels to develop the geographical extension around the globe.
3.3 Functional level Strategy: (Human Resource Management (HRM))
Hotels are the most important components in tourism business and Human resource issues exist dangerous to examine value, and revolve the answer to global competitive (Jones and Haven- Tang, 2005). The significance of trouble describing to skills deficiency for the hospitality sector is clearly shown by (Zhang and Wu, 2004:425). Zhang and Wu observed that in China the qualified candidate have to be promoted by the hotelier to handle the decision-making or administrative tasks. So by rewarding and motivating to the employees, customers and reselling by various methods like Gift vouchers, prepaid cards, rewards to enhance the relationships with the customers and employees.
The evaluation of past three years annual report, environmental opportunities and threads is set up much helpful information about the conditions of Accor Hotels located in all over the world. However, it is essential for the organization to think again to put into practice the necessary strategic performance for the future business development. The Current trends and issues faced by the Tourism and Hospitality organisation in Crisis that’s hits both the economic and the Organization background. So Accor hotels should have the Crisis Management strategy to overcome the threats like terrorism and issues like recession that they have currently facing. And Accor have an opportunity to expand their geographic existence in the Asian pacific region by focusing on the new segmented customers. Accor are increasing the rooms per year for the customer to retain with their strong portfolio in nature. Accor have weakness in man power shortage that can be solved by the future Functional level strategy that is managed by Human Resource Management. Rewarding and motivating of staffs in the organisation.
(total quality management) and JIT (just in time). The main purpose of implementation of these programs is to maintain the efforts in enhancing the effectiveness and efficiency at work place. Different types of work practices are adopted to improve continuously at the work place.
The continuous improvement process has become vital in the hospitality and Event Management industry because it forces the organization to achieve the short term strategies along with the long term strategic options. The continuous improvement will provide the foundation for maximizing the efficiency of competitive strategies through adding value and it achieves best practice (Heizer, 2011). The organization in this industry will have to foster and identify the key competencies and develop them through supporting variations in behavioural routines. The continuous improvement processes also assist in matching the internal response with the external activities in order to transfer the benefits to customers and other stakeholders.
The changes taking place in the demand and supply of Event management and Hospitality throughout the world are similar to the change in manufacturing industry. AS similar to the manufacturing industry, it has become evident to measure the strategies of Continuous Improvement in the Hospitality industry. The hospitality organisations should develop competitive advantage through creating long term value and continuous improvement will be the mechanism to measure such activities (Render, 2011). This paper discusses about the continuous Improvement process at Ritz Carlton and the strategies and measure it implements to achieve it.
The Ritz-Carlton, Berlin is environmentally friendly in all aspects. According to the high standards of the demanding European environmental management system EMAS (Eco-Management and Audit Scheme), the hotel now gives a binding environmental statement which aims at continuous improvement of environmental protection and sustainability. All areas of the hotel are not only environmentally scrutinized and tested rigorously, but are also involved in the future of environmental management system and regular reviews (Frances, 2009). The Ritz-Carlton, Berlin is thus the first five-star hotel in Europe that combines exclusive luxury with sustainability.
“Environmental protection is a good idea – not only at home but also outside their own four walls, such as on business trips or vacations. This starts with an environmentally safe arrival and will stay at the hotel, “said by Robert Petrovic, General Manager: The comfort should not stand it, and the measures go much further than to give up paper towels and disposable bottles. According to Petrovic the importance is that all employees follow suit. “Ensuring a healthy environment is part of our quality strategy (Marshall, 2009). The environment is now established as a corporate principle and incorporated into all parts of our house”. Internally cares in the Berlin Grand Hotel as well as in other buildings of the Ritz-Carlton Group, a specially compiled “REACT” team about implementing the guidelines to comply with and to identify new opportunities. The acronym stands for “Ritz-Carlton Environmental Action Conservation Team”. A separate environmental officer directs to it. Its place has been specially created to support sustainable operation of the building and to emphasize the importance of environmental management (Ahmed, 2012). The following are some of the measures taken by Ritz-Carlton to continuously improve in environmental reporting.
Light, water, Heat: Environmental protection at all levels
Ritz-Carlton has replaced Green Light by the new energy saving lighting concept as compared to the previous year already 16.7 percent of the energy savings. In addition, Ritz-Carlton, Berlin refers to 100 per cent green electricity. Ecologically and “really clean” also works housekeeping when washing and cleaning are paid to environmentally friendly cleaning products. Many measures contribute in saving a considerable volume of water consumption in different areas of the Hotel (Dane, 2012). Through the installation and of water aerators and small cisterns in all rooms and public areas, the water consumption of the entire hotel is reduced by up to 50 percent.
Recycling – from waste paper are exercise books
Aggressive water conservation and recycling programs support the hotel in all areas of environmental exposures. Currently, the entity contracting with Berlin Sales Office operates at complete paperless. To avoid paper waste in the form of paper towels energy efficient hand dryers were installed in all staff areas. Since 2008, the Ritz-Carlton Berlin, together with recycling accumulates the waste paper and produces the school notebooks. Per quarter, approximately 25 tons of papers are collected and it produced 1,300 books. These are distributed to various social welfare organizations in Berlin and abroad (Clarke, 2012).
Colonies – benefits for the environment and guest
since mid-2011, the hotel has three hives on the hotel roof. Overall, the winter will be about 9,000 to 15,000 bees in the summer and expects an estimated 50,000 to 150,000. In this manner, per year production approximates around 70 and 120 kilograms, of which the hotel decreases even 40 pounds a year for its guests. The guests also enjoys the organic breakfast self made. This means that all products involved have been independently awarded (Terry, 2003).
Suppliers – Inclusion and motivate
While considering efficient use of resources and sustainable environmental protection, the members and guests of the suppliers are actively involved. The deliveries of goods are made in deposit boxes and Ritz-Carlton continually refuses to use the disposable bottles, and packaging materials are returned to suppliers.
The major issue faced by Ritz-Carlton in achieving continuous improvement is to satisfy the customer at 100% level. If any of the customer’s expectations are not met then it means that specific customer is lost to the competitor entity. Ritz-Carlton has also won many awards on delivering Quality service to customers (David, 2003).
Top quality management (TQM) and Inspection are other ways for the Ritz Carlton to monitor their continuous improvement in quality. Not only does it cost the Ritz-Carlton less to “do things right” the first time, it affects every company; it even affects individuals in their daily lives/activities. If the Ritz-Carlton “half-assed” everything they did, they would lose a lot of money, customers wouldn’t be satisfied, employees would be unhappy, and eventually the Ritz-Carlton would have a bad image (Hansen, 2005). The Ritz-Carlton performed their “self-examination,” to improve future quality, as well as giving employees opportunities to take additional hotel training in hotel operations. Everything that Ritz-Carlton did, has won them many outstanding awards.
Taking care of the guests, building strong relationships with them, resolving their problems, and being responsive in a timely manner to their requests will keep them coming forever. I know when we have been treated well in a Hotel, we always go back, and tell all of our friends about the experience. “Word of mouth” is a great non-financial way to keep returning customers, and new customers coming to the Ritz-Carlton (Michael, 2011).
The implementation of policies & strategies and information communication is the major feature of TQM which Ritz Carlton must give attention to control the Quality and link them with the short and long term goals of the organization (Cherrill, 2011). Ritz Carlton has focused on five aspects which lead to the continuous improvement in the work place:
Benchmarking practice: It is becoming increasingly common in the Hotel industry. Ritz Carlton is selecting one of the industry leaders and copying them in order to achieve continuous improvement and adopt their level of standards.
Zero Error Rate: Any mistakes committed in the Hotel impacts the Goodwill and reputation of the Hotel. A minor mistake might lead to the loss in potential customers. The managerial level at Ritz Carlton is focusing to reduce the errors at zero level so that there is no negative perception by the customers.
Teamwork: A single customer is been served by different segments of the Hotel. Ritz Carlton is implementing collaboration and Team work at the work place in order to provide Quality service to the customers.
Quality Training: The Training and development of staff serving the customers is also essential in the hotel industry. Ritz Carlton has initiated Training programs which enhance the skills and abilities of existing and new staff as per the standard of doing right first time.
Demand Estimation reducing waste: Ritz Carlton is also emphasizing to minimize the wastage and recycle the resources. It has adopted a strategy that is working to reduce the global wastage.
In the year 1991, Ritz-Carlton has won 121 awards relating to Quality and was ranked first in all three ratings of the Hotel organizations. In the past Ritz-Carlton has benchmarked with baldrige winners and this provides the understanding of leadership factor in continuous improvement. The company views that executives are responsible for strategic planning and the employees must know their team members before deciding on the level of improvement they wanted to achieve (Bacon, 2003).
Apart from the luxury brands there also lies a continuous training program for new Products, sales processes, and addressing the corporate values. The Employees of Ritz-Carlton get 230 Hours of training per year, nearly four times as much as the employees of competitors. The top brands have all established processes to measure customer and employee satisfaction. The Hotel centers on the customer standing & employee loyalty and financial success to continuously improve the performance and service offering. This holds up the company’s enthusiasm and results in the low employee turnover (Mary, 2009). Although there is no such process to ensure customer satisfaction, but there are four principles adopted by Ritz-Carlton. Firstly, it creates a customer-centric culture which defines the Core value of service and it always nourishes and strengthens again. Secondly, the Hotel follows a rigorous selection process that strengthens the organization with first class sale and service professionals. Thirdly, they train their employees at regular basis, by guiding fundamental values â€‹â€‹of the company, its products, processes and optimal control. Fourthly, they systematically measure and reward the customer-centered behavior on sales and service in order to strengthen the high standards and to exceed customer expectations (Leila, 2009).
The quality system used by Ritz-Carlton is fully dynamic. No permits remain static thus adapting to the dynamics of the hospitality market. It is also flexible enough to adapt to the specific needs of each of the Hotel guests. This is based on the values â€‹â€‹and principles of the company, also known as the Gold Standards which always point towards achieving the company’s Vision and Mission using as a springboard the Critical Success Factors, which integrate their Clients, Ladies and Gentlemen, Owner, Product and of course profitability (Doris, 2010).
The model of the National Quality Award in Mexico and the U.S. Malcolm Baldrige, development platform have been in the system of Hotel’s Total Quality. Both are very similar and interact perfectly. Using a fusion of these models, Ritz-Carlton has created a solid platform to start competition in the hotel business, residences, clubs and restaurants (Robert, 2011). The customer focus enables Ritz-Carlton to reach levels of competitiveness in the market that they are seeking. At the Ritz-Carlton Hotel Co LLC is not sufficient to achieve satisfied with having guests stay free of defects but they go one step forward. What they seek is the emotional commitment of their guests to the brand (Herriott, 2012). They build relationships with their guests. Ritz-Carlton anticipates customer needs; create exceptional memories in order to get their loyalty to the level where they cannot imagine a world without this Hotel.
Ritz-Carlton uses different tools to achieve Quality, analyze, integrate, implement and measure the systems, processes and indicators. These tools use cause and effect diagrams, force field, histograms, Pareto, 6 steps to solving opportunities, 9 steps to creativity and innovation, among others. A fundamental part of their tools are also the internal and external audits of company standards at both process and service level (Jabnoun, 2002). The internal communication system, allows them to share knowledge, increase participation and involvement of the ladies and gentlemen in the planning of their work and maintain a strong organizational culture, which eventually leads to the core of Hotel’s Critical Success Factors.
The market in which Ritz-Carlton is operating is changing and highly competitive, that is why it requires continuous improvement in a dynamic and flexible form which is able to adapt to the needs of internal and external customers. The Strategic business planning also plays a fundamental role in Total Quality at the Hotel. It took into account all market projections, anticipate customer needs, analyze the competition and understand our internal strengths and weaknesses in order to create a functional strategic plan, real and flexible to allow Hotel to achieve the business objectives in the short, medium and long term. This also helps to implement continuous cycles of constant and consistent improvement in each of the subsystems and processes involved in the daily operations.