Business Analysis CASE 1 BUILDING CAPABILITIES AT THE WESTWARD HILTON Written by Cathy A. Enz of Cornell University, David L. Corsun of the University of Denver, and Linda Canina of Cornell University.The case study is adapted from a case written by the authors and published in Case Research Journal. The names of the organization and its members have been disguised at the request of the owners and investors. The affiliation with the Hilton Brand was not altered.
Sitting in the fashionable Cafe Lupe, an upscale restaurant owned by the company Peter Green worked for, were the company's owners, investors, and top corporate personnel. Hiller Hotels, a wholly owned subsidiary of the parent Hiller Enterprises, was headquartered in Phoenix,Arizona, with a portfolio of more than a dozen midscale and upscale hotels and three trendy, upscale restaurants. The hotel group was gathered for one of its irregular, informal celebrations of success. As Green, the executive vice president of operations, raised his glass to join in the merriment, he wondered whether his facial expression gave away the feelings he was suppressing. Green was torn-earlier in the day this same group discussed the possibility that the Westward Hilton and Towers, the only property in the Hiller portfolio he had personally ever run as a general manager, might be sold. An inquiry from a REIT (real estate investment trust) as to the property's availability had prompted the discussion. The Hiller Hotels subsidiary owned and managed all of its hotels, branding them with a variety of different mid priced and upper-priced hotel franchisers. The portfolio had grown over a 12-year period to around a dozen properties at any given time. The number wasn't stable because the corporate strategy was to take advantage of opportunities to buy undervalued, underperforming properties and turn them around. Each hotel was operated as a fully self-sufficient operation. When the opportunity to sell a property at a healthy profit presented itself, Hiller's management team had, in the past, generally taken advantage of the market opportunity. With the exception of a second Phoenix property managed as an independent (unbranded) hotel and acquired in 2006 to be the group's flagship, no property was supposed to be untouchable. Perhaps coincidentally, since Green had moved into his corporate position back in 2004, only one Hiller property had been sold.The portfolio had remained relatively stable, and its owners or investors had never broached selling the Westward. The investors were reaping healthy benefits from the portfolio. Green knew that Karen Connor, whose money was behind Hiller Hotels, felt as strongly about the Westward and the people who worked there as he did. Connor owned the largest share of Hiller Hotels, as well as a major share of the parent company. Her visibility in the local community as a patron of the arts and civic leader was legendary. While Connor was attached to the Westward, Green also understood that it was impossible for every decision to equally benefit owners, customers, and employees. He knew there were times when decisions would have an obvious ill effect on one group of stakeholders. Was the possible sale of the Westward Hotel one of those decisions? Was he too attached to this particular hotel because he had been its general manager when Hiller bought it out of bankruptcy at the end of 2000? Green's thoughts drifted back nearly 10 years to the year before he arrived in Phoenix. PROJECT PERSPECTIVE Peter Green grew up in the hospitality industry. He worked as a teen in his family's restaurant in Buffalo, New York. Through his twenties and thirties, Green used his restaurant experience to move into the hotel side of the industry, starting out in the food and beverage area. Over the course of about 20 years, he worked his way across the eastern half of the country, gaining the experience required to be a hotel general manager (GM). Prior to joining Hiller,...
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