Business Case Study: Wollongai Hotel & Resort
Introduction
The Woolloongabba Hotel & Resort runs a chain of hotels in central business district (CBD) of Sydney. Established way back in 1874, it is the oldest chain of hotels found in Australia. The CBD hotel has about 200 rooms for hire, large grounds and gardens, 3 restaurants, parking space for hundreds of vehicles, 4 pools and game rooms. Up to the 1990s, the Wollongai Hotel & Resort was highly successful, but gradually begun losing its market share to several new entrants. There is need to fix the problems of the chain of hotels coming into the 21st century. The First part of this report presents recommendations of improving the situation from a human resource consultant perspective. Part B of the report gives the Elements & Performance Criteria, where development and training need of the staff are discussed.
Problems of the Woolloongabba Hotel and their solutions
The Woolloongabba Hotel & Resort faces a myriad of problems that need to be urgently fixed if the chain of hotels is to remain relevant in the increasingly competitive Australian hospitality industry. The problems are as follows:
• Rising costs and decreasing profits – faced with growing turbulent business environment, the Woolloongabba Hotel & Resort increasingly reports low profit margins. Similarly, the company’s return on capital is not desirable. Overhead costs are comparatively out of line as a result of inefficient processes, poor communication as well as wanting execution throughout the entire organization. Its stocks have also been substantially depressed.
• Low staff morale and efficiency – the morale of the workforce at the Woolloongabba Hotel is at a low time low, which has significantly compromised their productivity and efficiency at work. The workforce endures poverty wages together with considerable pain and injury occasioned by the hotel’s unsustainable management practices.
• Outdated ways of running business and organizing of staff – The way of doing business at the Woolloongabba Hotel & Resort has barely changed from the mechanisms of the 1970s. The organization is also yet to fully modernize in terms of technology. The entire organization has only three computers, which are highly insufficient to meet the many demands of the hotel and resort business.
• Hierarchical structure of staff and management – the Woolloongabba Hotel’s staff and management structure is purely hierarchical, having seven levels from top to bottom. Furthermore, the offices of the three senior most management levels are not housed in company’s main facilities rather are situated on the 34th floor of a building downtown, some 800 meters away from Woolloongabba Hotel. As such, the senior management is rarely in physical touch with the middle level and lower level management as well as the ordinary staff.
• Aged workforce – Majority of the current staff members of the Woolloongabba Hotel have been with the hotel over 2 decades are aged over 50 years old. This translates that the workers are unaware of the functionality of modern hotels, and lack youthful vibrancy.
• Lack of coordination and transparency among divisions – the non-management staff of Woolloongabba Hotel is divided into 3 divisions: Office Staff Division; Service Staff Division; and Sales Staff Division. The sections in each division know too little about other sections and almost nothing regarding other divisions. In addition, the workers do not work to their full potential besides lacking cooperation and help with work. The company’s customers are also not happy with the customer service they receive because the staff is unhelpful and have bad relations.
• Poor communication systems – the Woolloongabba Hotel has poor communication systems between divisions, sections, management and ordinary employees. For instance, the plans to change the way of doing things at the hotel by the new CEO have not been communicated to the staff. As such, the staffs are left to hear from rumors, and wasting much of productive time to talk about prospects of losing their jobs. In other instances, the leadership shouts at and threatens the employees when work is poorly performed. There is need for developing excellent communication channels in the organization so as to boost efficiency and productivity.
• Poor leadership – the Woolloongabba Hotel is bedeviled with leadership problems. There is huge discrepancy between the credentials of the management and their actual performance. The manager in charge of the Office Division, in particular, has not lived up what she has claimed to able to do for the hotel. Furthermore, her leadership qualities are wanting because she is intolerant of failure and divergent opinion, calculating and revengeful. The hotel’s ordinary staff greatly lacks mentoring and coaching from their leaders
• Lack of proper incentive – the leadership at Woolloongabba Hotel is using the wrong incentives to motivate their workers. Low-performing workers are offered pay rises and expected to increase their performance accordingly. The staff is also threatened with being sacked if they do not meet the corporate goals.
• Poor team/group dynamics – the composition of the staff teams is largely wrong, where employees with conflicting roles have been grouped together. There are accusations of favoritism on the part of the leaders, which kills cooperation, trust and team spirit among the team members. The delegation of duties is thus problematic because members argue a lot about their roles and expected results.
• Dissipative corporate culture – The Woolloongabba Hotel & Resort maintains one of the most bloated bureaucracies in the hotel and hospitality industry in Australia. It is apparent that there is lack of vision, direction, and proper communication among the management of the hotel. As such, the organization is drifting and deteriorating at such rates that threaten its very survival.
Solutions
In light of the many operational problems that the Woolloongabba Hotel & Resort faces going forth into the 21st century, there is need to adopt strategic and tactical remedies so as to redefine its organization along with way of doing business. The following should be considered by the management:
• Redesigning the organization – there is need to align the organization with approved strategic priorities so as to speed up the decision making process in the Woolloongabba Hotel & Resort.
• Overhauling of the management team – changes should be taken to place the right persons in the right positions from a strategic standpoint. This practice need to be driven downward throughout the whole organization (Lockyer 2007, 246).
• Reducing costs and increase profitability – the Woolloongabba Hotel & Resort needs cut costs and improve profitability through process reengineering along with implementing better communication. The varied roles of the management and staff also need to be clearly defined so as to eliminate irrelevant work and streamline all the hotel processes.
• Optimizing capital – the Woolloongabba Hotel & Resort management through the finance department should undertake rigorous evaluation at the hotel level in order to determine the correct levels of ownership and their capital expenditures, after which adjustments should be undertaken accordingly.
• Hygiene and order concerns – the lack of coordination, dedication, and organization of workers of the Woolloongabba Hotel & Resort has resulted in dropping standards of hygiene and cleanliness along with lack of orderliness in dining rooms and inside guest rooms.
• Poor financial accounting systems – the chain of hotels has been experiencing increasing costs and declining profit margins because of problems with financial accounting methods. All financial data is not gathered in time from sections of the hotel (i.e. payroll, revenues, statistics, and accounts payable); there’s lack of quick & accurate compilation of financial statements; together with incorrect interpretation and course of action of on the information gathered.
Implementing the above recommendations would result in a more strategically-refocused chain of hotel, having new global organization that is aligned and streamlined (O’Fallon & Rutherford 2010, 322). In addition, there would be a resized organization with approximately 30% cost reduction; newly energized culture; significant improvement in the work environment together with confidence in the leadership; share price turnaround of more that 20%; and improved investor confidence that would help grow the chains of hotels (Mill 2007, 79).
PART B – ELEMENTS & PERFORMANCE CRITERIA
The leadership of the Woolloongabba Hotel & Resort are in dire need of such competencies as people management, business insights, viable skills, analytical skills, resources development, and succession planning. On the other hand, the employees need training in business and dining etiquettes, courtesy, excellent customer service, working as a team, as well as business communication (Mill 2007, 52). The employees need to understand that hospitality greatly entails handling people which requires having the right attitude, listening skills, efficiency, and tolerance. They need to inculcate good public relations together with interpersonal and intrapersonal skills.
The training and development programs that the Woolloongabba Hotel & Resort would need to implement relate to the following:
• Food production,
• Food and beverage service,
• Front office, and
• Housekeeping (Enz 2010, 485)
The hospitality training topics would therefore be as follows:
• Food, restaurants, hotels, and hospitality
• Leadership & chain management
Hotel and restaurant health & safety (Wood & Brotherton 2008, 356).
The training courses & programs needed are in catering, tourism skills, hospitality, healthy eating and food hygiene, guest house operations, bar service, catering services, food service, kitchen skills, beverage service, and accommodation services (laundry, self-catering, laundry, etc).
Training and development programs for employees would result in more professional, well-groomed, customer-oriented employees which will in turn result in happy customers, increased profitability and improved corporate image for the Woolloongabba Hotel & Resort (Wood & Brotherton 2008, 453).
References:
Wood, C., R., & Brotherton, B., 2008, ‘The SAGE Handbook of Hospitality Management’. New York: SAGE.
Enz, A., C., 2010, ‘The Cornell School of Hotel Administration Handbook of Applied Hospitality Strategy’. New York: SAGE.
Mill, C., R., 2007, ‘Resorts: Management and Operation.’ New York: John Wiley & Sons.
O’Fallon, J. M., & Rutherford, G., D., 2010, ‘Hotel Management and Operations’. New York: John Wiley & Sons.
Lockyer, G.L. T., 2007, ‘The International Hotel Industry: Sustainable Management’. Routledge.
