In the case study titled "Customer-Driven Learning at Radisson Hotels Worldwide" the background, growth, and service guarantees of the Radisson Hotel chain is discussed. Radisson Hotels was founded in 1938 by Curtis L Carlson of Carlson Companies Inc. The company's headquarters were located in Minneapolis, Minnesota and was divided into four operating groups - Carlson Hospitality Worldwide, Carlson Wagonlit Travel, Carlson Marketing Group, and Carlson Leisure Group. In 1975 Radisson only had ten hotels but quickly grew to three hundred and sixty locations in forty seven countries by 1998 by partnering with existing hotel companies creating Radisson SAS Worldwide under the "growth at any cost" model. By 1998 Carlson Hospitality Worldwide included Radisson Hotels Worldwide, Country Inns & Suites by Carlson, TGI Friday's, Regent Hotels, Italianni's, Friday's Front Row Sports Grill, Friday's American Bar, and Radisson Seven Seas Cruises (Schroeder, pg 454).
Also in 1998 Curt Carlson's daughter Marilyn Carlson Nelson took over as CEO of the Carlson Companies. It was at this time that Brian Stage, Radisson's president, and Maureen O'Hanlon, Radisson's executive vice president, started taking initiatives to transform the "growth at any cost" model to becoming a more customer-focused brand. To achieve this transformation from the current diverse hotel quality, they included a service guarantee, a guest satisfaction measurement program, and employee satisfaction measurement program, and an information technology initiative. Their goal was to make Radisson the "most trusted and respected brand worldwide" (Schroeder, pg 454). To support these strategies, Stage and O'Hanlon initiated a 100% guest satisfaction program, a fully integrated guest information system, guest and employee satisfaction measurement programs, guest recognition and rewards program, and a genuine hospitality program.
Customer satisfaction is a relative concept that varies from one customer to another (Schroeder, pg. 147). A service guarantee is a promise by a company to compensate the customer in some way if the defined level of service delivered is not duly met. An effective service guarantee sets clear standards of performance for customers to expect and to which employees adhere (Al, 1993; Rose, 1990; Hart, 1988). It communicates to workers the level of service the organization intends to offer to its customers, as well as provides a clear and strong task identity (Cahill & Warshawky, 1995). It mandates that every decision and employee must focus on the customers. Successful implementation of a service guarantee would require managerial emphasis and proper allocation of resources on key determinant variables. Management staff is primarily responsible for the formulation and communication of service priorities to frontline staff as well as the design of recovery measures for resolving customer complaints.
Quality of service and the ability to attract and retain customers dictate the success or failure of hotel service providers. Hotels typically measure quality through inspections and with customer-satisfaction data. David Kearns once said "Performance benchmarking is the continuous process of measuring products, services and practices against the toughest competitors or those companies recognized as the industry leaders." In today's competitive environment, customers are quick to abandon services that do not meet expectations. The ease with which customers can switch from their current service to another, demands that providers deliver the highest possible levels of service quality and performance. To be successful, hotels must deliver positive customer experiences with rich, value-added services supported by comprehensive service quality management. Significant changes are occurring in the hotel industry that affect how providers run their businesses as well as what services they offer. There is a greater need to attract new customers, find new revenue...
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Schroeder, Roger. (2008). Operations Management: Contemporary Concepts and Cases 4th Edition. McGraw-Hill. New York, New York.
The Radisson Story. http://www.radisson.com/section/aboutus.story/aboutus.sidemenus
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