West Indies Yacht Club Resort Case Analysis

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West Indies Yacht Club Resort Case Analysis
1. Introduction
The West Indies Yacht Club Resort (WIYCR), located on the island Virgin Gorda in the British Virgin Islands (BVI) has been experiencing operational difficulties during the recent two years. Herein, I will first provide a brief overview of the tourism industry of BVI that is quintessential for better understanding of the situation as a whole. Subsequently, I will analyze the causes of the resort's ails and conclude delineating possible cures. 2. BVI Tourism Industry Overview

British Virgin Islands, a former British colony situated in the Caribbean (approximately 60 miles east from Puerto Rico), were granted autonomy from the Crown in 1967. The islands have an overall population of 24,939 inhabitants and the US dollar is the legal tender. Moreover, BVI is famous as an offshore tax haven, boasting more than 400,000 companies in its registry at the end of 2000. As of 2008, tourism constituted 45% of national income, services 88% of GDP. However, the BVI government imposed a set of stringent labour regulations to protect domestic workers from seasonal discharges, reducing its unemployment rate to mere 3.6%. Whilst such policy is highly effective in terms of unemployment reduction, it poses significant challenges to the operations vacation resorts that suffer from insufficient capacity during peak season and overstaffing during the rest of the year. The employees are difficult to fire as the BVI Labour Code was designed to protect domestic workers against foreign competition. In BVI, companies are required to furnish reasons for an employee dismissal and attend a formal hearing to defend its actions. Work permits for foreigners are granted rarely and only after substantial evidence has been provided that no local can qualify or desires the position. [ As of 1991, 97.8% of the population are literate, yet employees are excessively reliant on management's guidance (i.e. demonstrations) in lieu of proactively learning various procedures of their day-to-day work by reading memos. ] The history of the BVI tourism industry dates back to 1950s – a time when the first affluent American began discovering the relaxing atmosphere of the Caribbean tropical paradise. The government revolutionized the industry by enacting a policy that favored bareboat chartering (i.e. renting a 28-50 foot boat without the assistance of a licensed captain) in the 1970s, extending the islands' affordability to the U.S. middle class. The subsequent years witnessed a boom in tourism and accommodation institutions sprung up to cater to the ever-increasing influx of visitors. British Virgin Islands are a home to five major hotel resorts: Peter Island Yacht Club, Little Dix Bay Resort, Drake's Anchorage Resort, Biras Creek Resort and West Indies Yacht Club Resort. Remarkably, Little Dix Bay is the oldest of the five: established in 1964 as a part of the Rockefeller Resort chain. Double-room occupancy rate ranges from about $400 to $1000 per night across the five hotel spectrum. 3. Situation at WIYCR Jim Johnson, the General Manager identified symptoms of aggravating resort's operations: (1) tripling of the weekly number of guest complaints, (2) high expatriate manager turnover rate and (3) intensifying tension between local employees and expatriate managers. 3.1 Growing Guest Complaints According to Jim Johnson “guest complaints have increased from 10 per week to more than 30 per week over the past 2 years.” The majority of the complaints commented on the declining level of service and attentiveness from the part of local BV Islanders, namely in regards to motivation. To quote a dissatisfied guest: “The staff just doesn't seem to be as motivated as it used to be.” To add oil to the fire, the Chicago office that governs the resort's operations has consistently overbooked the resort for past three years. Under these conditions, it was not uncommon to ask a newly-arrived guest to stay on board of a charter...
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