Marketing Strategies of Hotel Products and Services (HRMN 300)

HRMN_300_ROLE_PLAY_PAPER-1.doc HRMN 300 ROLE PLAY PAPER I. The Situation A major hotel company in the US has an opportunity with the potential of significantly increasing their revenue base and global market share. There are, however, human resource issues that must be considered. The non union, United States based company has the opportunity to purchase a chain of hotels in Italy. The Italian company?s hotel employees are represented by unions and are accustomed to many more benefits such as more time off, more expansive health care benefits and more say in the operation of the hotel than US employees. They also have boundaries around their work schedules and limitations to work they will perform in the hotel. In addition, the labor market for hotel employees is very limited. The employees available for work in the cities where the hotels are located require extensive training. If the hotel chain is purchased there will be the need to retrain all employees, possibly change the shifts worked and jobs performed as well limit the input into the decisions about the operation of the hotel. Most likely the US based employees will need to assist with the training of the current employees and most have never traveled to Europe and therefore are not familiar with the culture. One known difference in the culture is the lack of EEO laws and regulations and a tolerance for sexual harassment. The executive team, without the CEO present, has convened a meeting to discuss if the hotel chain should be purchased, what the risks and rewards could be and if the chain, what needs to addressed and what should be included in the budget to ensure a smooth transition of ownership. Each member of the team has a role to play in the conversation and is expected to look at the situation through the lens of their discipline. For example, the CFO may want to cut benefits in order to reduce the costs of the labor, the COO may be concerned about the flexibility in the employees assignments and the building, the CMO may be concerned about whether the guests in the US hotels will expect the same level of service and type of hotel in Italy and if not, how to market the change. The CHCO is concerned with achieving the organizational objectives but knows that without the ability to attract and retain employees who are capable of being trained to deliver good service, the hotels will not be able to remain open. Please role play the meeting and the conversation that would likely transpire beginning first with reviewing the message from the CEO below that shares with the executive team the situation they face and the recommendation they are to make. II. Formulating Assumptions. Please note that not all the specifics about the possible acquisition have been given such as the cost of the acquisition, number of hotels and employees, the current profit margins, the current cost of benefits as a percentage of total labor cost, competitive data on the room rates, etc. If you feel it is necessary to make assumptions about these factors prior to your role play. III. Memo from CEO To: Executive Team From: Chief Executive Officer Subject: Potential Acquisition As you know, I am on vacation in Italy. I have just learned that there is a chain of hotels in Italy that our company could purchase if we desire. We certainly need the added revenue but only if it provides us with profit and good will with our current guests. While there are some risks since the quality of the buildings and the service of the current staffs are not up to our standards, the acquisition could allow us to expand into the Italian market quickly. There are several unions representing the employees and the employees cannot work except in their defined job unlike in our non unionized hotels in the states. Further, the benefits offered to the employees seem very generous but perhaps either the unions can be decertified or we could raise the hotel room rates enough to continue their current package. The salaries and wages seen high too but again maybe we can raise the hotel rates to accommodate this. You all know I believe in respect for each individual and it is one of our core values. From what I observed, we may need to change our value or have some serious talks with some of the employees about their behavior toward women and minorities. I have to wonder if there are not laws in Italy that addresses discrimination and sexual harassment like we have in the states. We know our US business travelers go to Italy and I think they would welcome seeing our hotel sign on hotels here but we may have to do some work on some of the hotels to bring them up to our standards. I expect, upon my return, you will have a memo ready for me that will address the pros and cons of this potential acquisition along with your recommendations for whether we purchase the chain. Thank you in advance for your memo and your time. I will see you in one week. My Role: I am the Chief Marketing Officer (CMO) Assignment: To make recommendation to the Executive Team about the potential acquisition presented in the CEO memo in reference to the situation. Professional focus of the Chief Marketing Officer (CMO) is tasked with advertising, sales, the image of the product or service and is concerned with increasing revenues and expanding the market. Their mantra could be ? the more products we can sell, the better!