Case Study Analysis

Ritz-Carlton Hotel Company

Submitted by:

Berroya, Eula Mae Q.

Besana, Stephanie J.

Dalino, Danielle Joan

Delos Santos, Nellaine

Martin, Angela Joyce C.

IE31S1

Ritz Carlton Case study Analysis

Introduction
The hotel industry is the servicing business conducting another significant branch in the economic
development of the country. The hotel industry associates many types of industries, such as the tourist
industry, the transportation industry, and the food servicing industry. According to the British laws, a hotel is
a place where a “bonafide” traveler can receive food and shelter provided he is in a position to for it and is
in a fit condition to receive.

Ritz-Carlton is one of the leading companies in the hospitality industry, with branches across the world. The
corporation is an auxiliary of the Ritz-Carlton hotels, which runs over eighty-four sumptuousness hotels and
resorts in main cities internationally. The company was formed in 1983 following the merger with another
company with a similar name that operated in Atlanta Georgia.

The Ritz-Carlton hotels were known for their luxury and the world-class service they offered to guests. As of
September 2013, it operated 81 hotels and resorts in different countries like the Americas, Europe, Asia,
the Middle East, Africa, and the Caribbean, with 30 more projects under development across the globe.
Further Ritz-Carlton was the only service company to have earned the prestigious Malcolm Baldrige
National Quality Award twice, the year 1992 and the year 1999. In addition to this, the company earned
many other awards and certifications in recognition of its quality excellence and achievements.

Even though Ritz Carton hotels being one of the leading luxury hotels, they still have encounter problems.
First and foremost their customer retention rate, according to Jacobson, the Ritz-Carlton Hotel Company is
trying to establish themselves as the first hotel company to maintain a 100% customer retention rate.
Unfortunately, after comparing the corporate goal with the New York City location, the disparity is alarming.
The New York City location was able to muster a 65% customer retention rate. This rate would be
considered very well by any industry standard, but not for the Ritz-Carlton Hotel Company. Next is, its
quality services, the company is unable to provide good services to their guests, the common complaints to
them are their poor room services, it takes an hour to deliver the food or worst is it is not delivered at all.

Background

Ritz Carlton Hotel Company is an American based company known to its luxurious service- from the
furniture used, facilities, and food and beverages. It is located in different areas in North America, Europe,
the Middle East, Africa, Asia, and the Pacific providing the same quality of service. Ritz Carlton is one of
the best-known luxury hotels that has been on decades already.
20 years ago, Ritz Carlton provides traditional luxuries because it was the most mature luxury brand in the
market. They provide European chateaus with brocade crystal on which guests might say that it was
traditional. But today, they focused on more modern luxuries on which may be relevant to the guests and
the role of design and style became more important.

They provide training for all the staff in the hotel on which they call ladies and gentlemen so that they could
meet the customer’s satisfaction. They ensure that all the staff is properly trained to provide quality in all
aspects of their service such as in furniture changing, preparing meals, and housekeeping.

Ritz Carlton was established in the United States by Albert Keller. During the 1980s Ritz Carlton served
most places like Boston, Philadelphia, Pittsburgh, Atlantic City, and Boca Raton. However during 1940’s
the Ritz Carlton on the said place were not operating except the Ritz Carlton on Boston because this hotel
embodies the finest luxury experience for all of their guests and this became a benchmark for all Ritz
Carlton hotels in all places when it comes to the standards of service, dining and facilities.

Evaluation of the case

Hotel businesses have been rapidly increasing in popularity and demand due to the increase in travelers
(Svagzdiene & Simanavicius, 2016). To satisfy the demands, requirements, and expectations of the
customers' hotel service quality is an important part of running a hotel business. With the increase in
innovative and competitive ability of the business environment, it is necessary to provide quality service in
which it has a great impact for the old customers to be retained and new customers will be attracted. The
satisfaction of customers has a great impact, both direct and indirect to the hotel industry (Kandampully &
Hu, 2007), in which it will be a stepping stone to be recognized by many people.

Ritz Carlton has been providing a high-quality standard in hotel service in which it has been recognized and
known for its added-value services. The establishment has been recognized for its high quality and fulfills
the criteria of the Malcolm Bridge National Award. Improve its system through management strategy and
Guest Incident Action Form. Also, its heterogeneity in services in which it is noted for its uniqueness.

Ishikawa diagram is used to distinguish the problems and their effects on the company. The 5P's method is
used to analyze the causation in the service industry. In the diagram the following category was used to
analyze the cause of the retention of the customers in Ritz Carlton: Process, Place, Product (Service),
Promotion, and Price. Ritz Carlton is famous for its outstanding quality of service and has been praised by
many. According to the review of its customers, Ritz Carlton has a seamless process of check-in in which it
offers both walk-in and online. Employees are also well trained and practice transparency of treatment and
respect the privacy of the customers. The Place has been praised for its accessible locations, in which all of
the chains have a high-level security system. The Product, in which it offers service to the customers who
experience excellent food quality, modern and exemplary interiors, and facilities, and an outstanding
booking system. The Promotion, which contributes to the sale by providing complementary services, loyalty
points gained by its club members, an informative website, and good quality photos that attract attention to
the public. Lastly, its Price, Ritz Carlton offers budget-friendly amenities and packages, in which many
enjoy its variety of rooms and their complementary services.

Proposed Solution

From an article entitled “Your Customer Service Is Your Branding: The Ritz-Carlton Case Study”, customer
experience consultant Micah Solomon (2015) mentioned that today's customers demand an authentic,
unscripted customer service style. In the hospitality industry, service failures are bound to occur due to the
high degree of interaction between frontline employees and guests. There are 3-5 stars hotel in Accra,
Ghana such as Labadi Beach Hotel, Accor, Golden Tulip Worldwide B.V. (Mensah, 2009), Best Western,
Holiday Inn, and Möevenpic Ambassador, that experienced customer dissatisfaction amidst of being the top
in their corresponding locations. By applying the Total Quality Management, hotels can make sure that they
are fully aware of customers’ expectations and determine if these were met during their check-in.
Consistency allows us to measure our work. If there were issues that kept happening, it reflects the overall
service providence. It is also important to have urgency in taking action of customer’s dissatisfactions
reflected on their reviews after check-out. DMAIC approach can be used to have certainty that every
problem that the customer experienced would be solved and be put under the management’s control.
DMAIC Approach is applicable in the existing process, industries that are a customer-focused and
continuous improvement.

The difference between the five mentioned hotels and the Ritz-Carlton Hotel is their adaptability to change.
As people constantly change, customers’ preferences as well. The hotels from Accra, Ghana failed to
satisfy customers in which their competitors did. On the other hand, the Ritz-Carlton Hotel listens from their
customers’ reviews and reactions by having its employees communicate with them effectively and
personally. Amidst having multiple competitors, they were stable and continue to be on top because of
consistent and continuous improvement that came from being scripted up to not so formal but honest
relation to the customers.

Recommendation

Ritz Carlton has provided a high-quality standard of service across its different branches. To continue the
quality standard, a few recommendations have been suggested by the researchers.

First, the Human resources department should strengthen the importance and improve the training
programs wherein, it will boost the employees' morale, productivity, satisfaction, and retention, as well as
on service consistency and customer satisfaction. Also, staff will undergo different interactive training
programs to develop and improve their critical thinking skills to, be able to come up with solutions in
unforeseen events and circumstances and to be able to adapt quickly to the environment and situation.

Second, Human resources should focus on the employee’s performance appraisals to provide feedback on
the effectiveness of the training programs. According to Kreck (1985), Performance appraisals provide
adequate and immediate feedback to serve as a basis for modifying or changing toward effective work
habits and practices of the employees.

Lastly, is to follow the Economic Survival Guide Action Plan of the American Society for Training and
Development (ASTD) in which it has 9 guidelines for companies to remain "competitive, innovative and
customer-focused". It focuses on the interactive relationship between the company and employees to
improve the quality performance and company culture.
 References:

Luxury Hotels & Resorts | The Ritz-Carlton. (2020). Retrieved 23 September 2020, from
https://www.ritzcarlton.com/en/about/history
The Ritz-Carlton Hotel Company. (2016). Retrieved 23 September 2020, from
https://en.wikipedia.org/wiki/The_Ritz-Carlton_Hotel_Company
Gallup, I. (2006). How The Ritz-Carlton Is Reinventing Itself. Retrieved 23 September 2020, from
https://news.gallup.com/businessjournal/24871/how-ritzcarlton-reinventing-itself.aspx
Solomon, M. (2020). Your Customer Service Is Your Branding: The Ritz-Carlton Case Study. Retrieved 24
September 2020, from https://www.forbes.com/sites/micahsolomon/2015/09/24/your-customer-
service-style-is-your-brand-the-ritz-carlton-case-study/#7570a78455ef
Mensah-Kufuor, Adelaide & Mensah, Ishmael & Amenumey, Edem. (2015). Service Failures in 3- to 5-Star
Hotels in Accra, Ghana. J. of Tourism and Hospitality Management. 3. 10.17265/2328-
2169/2015.04.003.