This report is in response to the request by Solberri hotel group for a review of its facing issues and identification of possible solutions.
STATE OF AFFAIRS
Solberri is a group of resort hotels registered as a listed company with 12 resort hotels in Europe. Established in the 1980s, it had run successfully until 2003 and also incurred losses in 2005 and 2006. To improve the situation, Solberri implemented strategy changes to the hotel operating environment such as the pricing changes and a refurbishment program. With these adjustments, situation gets better with a large forecast cash surplus in this financial year. Currently the chain of hotels is faced with critical issues revolving around its operation including human resources that are better explained with the help of SWOT analysis in Appendix 1. It is important for Solberri to make use of the management tools to understand the current situation and to achieve the revenue target, increased share holder value and better customer satisfaction.
ISSUES IN HAND
Solberri is faced with multiple issues that act as a barrier to meet their goals and target. From our review and understanding of the environment we put forth the below issues and rank them as priority and other issues. Priority issues:
Poor customer experience that could be a result of ethical issues such as o
Poor treatment of General manages and senior employees.
Misdistribution of tips
Investment in unprofitable environmentally friendly initiatives. •
The potential need to borrow money to enhance spas before the 2007/08 Peak season •
The need to raise occupancy rates and earnings generated from extra charges to hit the planned revenue for the financial year ending September 2008 •
The poor share price and vulnerability of Solberri
Installation of solar panels
Non-participation in the international star ratings system •
Potential problems with the quality of outsourced services •
Upgrading website to include a virtual tour of facilities
In this section, the analysis is done for top priority issues.
Customer service and relevant HR issues.
The quality of customer service is crucial to companies’ survival in service industry. Unfortunately, the service provided by Solberri failed to meet the expected standard of its customers. The main reason for poor customer service is employees’ lack of skills and motivation. The majority of Solberri employees are temporary, with limited knowledge of the hotel industry and relevant skills. Besides, all short-term employees only receive two days introduction training which is apparently insufficient. The customer service can be improved in two aspects. In the short term, Nick Silva, customer service Director, needs to review staffing level immediately to meet the upcoming demand. Strict selection and a specific regular training program are needed to ensure the quality of its employees. In the long term, adjusting the ratio of the number of long-term employees to that of short-term ones is necessary. Too many temporary employees lead to poor customer service and low stock of talents, resulting in General managers working long hours and under high stress (more details in ethical issues). Though more long-term employees mean more costs, the benefits from improved customer service will outweigh the costs. Furthermore, because recognition of employees’ efforts can stimulate them to offer better service, some motivation measures are recommended. According to ERG theory, people in different levels have different needs. Most temporary employees are in the existence level, they need money to maintain their existence requirements, and therefore incentives such as bonus will be useful. However, most long-term employees are in relatedness and growth level, so incentives such as vocation award or decision making involvement will be...
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