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Ritz Carlton Hotel Company

Solution Id Length Case Author Case Publisher
2340 1718 Words (6 Pages) Sandra J. Sucher, Stacy McManus Harvard Business School : 601163
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The Ritz-Carlton Hotel Co. establishes its notion – profession as a service – by acknowledging all the new hotel employees as ladies and gentlemen. Such a motto exemplifies the standard of performance that the company aspires to achieve through its workforce. It is critical to inculcate a slow emotional response early on in order to give the authentic Ritz experience to both its guests and employees alike. In contrast to a single transactional relationship, the company has a long-term strategy aimed towards long-haul clientele associations. The Ritz-Carlton personnel can spend up to $2000 per incident to save customers’ experience without the intervention of the manager. Such a facet of "service excellence" at Ritz-Carlton Hotel Co. underlines the value of staff empowerment for the delivery of high-quality services. With an 88% occupancy rate, the company should strive for 100% customer satisfaction in order to become “the best” in the luxury hotel industry.

Following questions are answered in this case study solution:

  1. Why is it important for Ritz-Carlton Hotel Co. to insist that employees not think of themselves as servants, but rather as ladies and gentlemen?

  2. In what ways does Ritz-Carlton engage in relationship marketing?

  3. Is quality at Ritz-Carlton cost-effective? Even if it costs $2,000 an incident?

  4. Should Ritz-Carlton attempt to move toward the president's goal of 100 percent customer satisfaction? Why or why not?

  5. How could the Ritz-Carltons' credo and principles of customer service be applied to (a) haircare salons, (b) banks?

Case Study Questions Answers

1. Why is it important for Ritz-Carlton Hotel Co. to insist that employees not think of themselves as servants, but rather as ladies and gentlemen?

It is incumbent for Ritz-Carlton Hotel Co. to instigate its philosophy – profession is service – through addressing all its workers of the new hotel as ladies and gentlemen. Such an impetus defines the excellence Ritz-Carlton Hotel Co. wishes to deliver through its employees by and large. The employees are always on the front lines, which is why it is crucial to align them with the deeply rooted genesis of the company’s motto (We are Ladies and Gentlemen serving Ladies and Gentlemen). To deliver the true Ritz experience to the guests and employees alike, it is of utmost importance to instill a slow emotional experience early on. By mandating that employed personnel do not think of themselves as servants, the company very profoundly is establishing a behavioral change through significant emotional experience in order to mold employees as attentive and receptive ladies and gentlemen towards the peculiar wants and needs of other ladies and gentlemen just like them. 

Another impetus behind such a motto is to offer respect to all regardless of their prevalent socioeconomic differences. It is crucial for Ritz-Carlton Hotel Co. to treat each of its primary stakeholders (employees and guests) with utmost respect and dignity in order to deliver high-quality service at large. Such company values are reflective of its credo and culture that widely translates into low employee turnover and high occupancy rates. To become excellent relative to market competition, it is necessary for Ritz-Carlton Hotel Co. to lay the foundations of a deeply believed-in feeling and demand within the organizational frontier. This enables the company to not just offer hotel rooms to its guests, but to offer excellence in its services. The idea of ladies and gentlemen, thereby, strengthens the core of the company: our profession is service; we charge for service. 

2. In what ways does Ritz-Carlton engage in relationship marketing?

In its simplest form, relationship marketing embraces a long-term strategy directed at the induration of long-established clientele relationships contrary to a single transaction correspondence. The two fundamental indicators of success for Ritz-Carlton Hotel Co. comprised its average daily rate (ADR) and its revenue per available room (RevPAR). While the ADR was bounded on the upper end by what the local markets would bear, RevPAR was swayed by both ADR and occupancy rates. To develop long haul meaningful relationships with two of its primary customer groups (independent travelers and meeting event planners), Ritz-Carlton Hotel Co. indulged in various relationship marketing tactics such as technology butler, concierge desk, piano concertos, airport hotel rooms, mimosas on silver trays, horse-drawn carriages, and so on. To allure foreign diplomats’ clientele, the company profoundly delivered the proximity to several sites of interest including but not limited to the White House and Capitol Hill. 

The company also abstrusely adapted to the local market demands through the inauguration of secret service, creative entrances and exits, well-thought security design, and innovative exhibition kitchen. The KobaltExpress.com allowed condominium residents to experience high-quality service from the solace of their phones for prior meal orders and table selection ahead of the time. Concurrently, the three steps of service (warm welcome, anticipation of guests’ needs, and fond farewell) depicted Ritz-Carlton Hotel Co.’s customized service-oriented culture. Such perks altogether pronounced the hotel more something peculiar than any traditional Ritz-Carlton restaurant. In addition to the aforementioned aspects, the new hotel also broke the tradition through the active involvement of its Millennium Partners whilst maintaining the repertoire of the interior spaces. The choices of artwork worth $2 million, the highest thread-count Egyptian cotton fabric, the beige, and white marbles, and a 34000 square-foot Japanese Garden with a cascading waterfall, all such market customization efforts proffered Ritz-Carlton Hotel Co. to institute long-lasting relationships with its guests.

3. Is quality at Ritz-Carlton cost-effective? Even if it costs $2,000 an incident?

As per one of the Gold Standards of customer service, a Ritz-Carlton employee can spend up to $2000 per incident to rescue a guest experience without any discourse of a manager. Such an aspect to “service excellence” at Ritz-Carlton Hotel Co. accentuates the importance of employee empowerment in order to deliver a superior customer experience. It is, however, incumbent to note that the company did not pull the $2000 figure out of thin air. Like any profitable, savvy organization, the Ritz’s conviction in real-time feasibility analysis allowed the company to uncover two critical prospects to its cost-effectiveness: the fare to the developer and the price charged to the customers.

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