Shangri-La Hotels and Resorts: Leading Player in the Luxury Hotel Industry

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In November 2006, Symon Bridle, the newly appointed chief operating officer of Shangri-La Hotels and Resorts, was reviewing the progress the Hong Kong-based company had made over the previous 10 years as it grew from a regionally focused business into a rapidly expanding international deluxe hotel group. With 18400 employees, 50 hotels, and $842 million in revenues, Shangri-La Hotels and Resorts (Shangri-La) was a leading player in the luxury hotel industry and was growing rapidly to satisfy increased demand for deluxe hotels and resorts in Asia, Europe, and North America and bridle was in charge of ensuring that Shangri-La’s signature standards of “Shangri-La Hospitality,” a service model based on traditional Asian hospitality, were maintained during this expansion. For the past two weeks, Bridle and a task force of his top managers had been discussing a number of organizational issues that presented challenges to Shangri-La’s rapid expansion strategy There were three major issues at hand: (1) the company was expanding into high-wage economies in Europe and North America; (2) the company was expanding its presence in China--a country where front-line employees were not used to exercising decision-making authority; and (3) newcomers in the Chinese hotel market were poaching Shangri-La's staff and driving up wages in historically low-waged markets. All of these issues weighted on Bridle’s mind as he wondered what he should do next. “How do you still articulate your brand in tight labor markets with these pressure points?” he pondered. Shangri-La Hotels and Resorts, a deluxe Asian hotel chain, was founded in 1971 in Singapore by the Malaysian-Chinese tycoon Robert Kuok. Inspired by British author James Hilton’s legendary novel Lost Horizon, the name ‘Shangri-La” meant “eternal youth, peace and tranquility” and embodied the serenity and service for which the hotel chain was renowned throughout the world.
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