Majestica hotel in shanghai? 5th team
Majestica was founded in Western Europe and focused exclusively on Europe and the United States initially, the expansion into China had been on management’s agenda since 1999, the opportunity emerged in late 2003, Majestica’s proposal to operate the luxury hotel satisfied CPS’s ambition to build a pre-eminent hotel in Shanghai, but there are 5 issues between Majestica and CPS. First, the length of contract term, Majestica asked for a contract term of 55 years, it was based in its typical management contract term in the world, CPS just had been prepared to offer 12 years, it based on the level of licensing in China. After consideration, CPS made a concession, CPS countered with an offer of 30 years, but Majestica insisted that the hotel management contract term should be at least 50 years. Second, pre-opening assistance, CPS couldn’t accept Majestica’s request for retaining the approval right over all design aspects relating to the hotel, Majestica argued that it was make sure that the hotel would be developed as an excellent hotel. Third, name of the hotel, CPS suggested that the hotel be named “Shanghai Oceania – Majestica Hotel”, but Majestica insisted “Majestica Hotel, Shanghai”. Fourth, the form of the hotel should be defined well. The purpose for CPS, they require the owner should have the privileges that have the special access to the hotel and the office use as a hotel room, but Majestica thinks it would make confusion for the hotel management. Majestica really sticks to its philosophy of the hotel management. Fifth, the sovereignty of Corporate Governance, CPS proposed Chinese general manager would be used in the near future, the number of the expatriate managers should be reduce and local managers trained to replace them, and the equipment purchase in domestic also, but Majestica believes that the competence of the general manager was more important issue than their Chinese background,...
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