The Portman Hotel Case Study

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Generation 2017/2018

COURSE: Human relationship management

Participant: Urška Gornik

The Portman hotel case

Providing advanced customer satisfaction, I believe is the crucial plus factor a company can have. With retention of customers company has competitive advantage. After all customers are the key. Regarding mentioned in my opinion Portman Hotel had a great opportunity to achieve above mentioned, however human relationship problems arose.

Portman Hotel had an innovative concept providing guests not just great services but an experience. The hotel aimed to overwhelm guests by the professional, cheerful and immediate response to every request. There were no rules for guests, Portman employed were to give each guest a memorable experience through service. To support this business idea a new concept of job description was made called personal valets  (PVs), who were like butlers; no other American hotel had anything similar, the PV,s were set to be a key competitive difference for the hotel.

Firstly I will point out external challenges:

• Market analysis was not done. The owners wanted to directly duplicate business model from one of Hong Hotels. This is in my point very troubling, because the cultural differences, habits and behaviour among Chinese and Americans are huge. When constructing such a different business model from other hotels, a thorough analysis of the market should be done, are PVs something Americans or more broadly western world would enjoy? As it was described in the paper, guests did not know what to do with PVs, therefore also the tips were not in the amount they were predicted. As they said they had to re-educate the public. For a brief time hotel left a letter to each guest explaining the role of the PV, but this made the guests uncomfortable. If this was done before constructing the concept, business model could be adapted.
• This business model is sustainable where employee’s costs are low, like China. In San Francisco, not only workers were unionized, costs are quite high.

Secondly there was a number of internal problems (problems of the 5 star plan):

• I believe that the broad spectre of services that PV’s had to cover, two-week preparation is not sufficient to learn all the skills.
• Very crucial problems were also lack of supervision and the disorganization of employees. Company decided to minimize management, especially middle management, therefore Scott was carrying too much of burden, as a consequence he did not have control, employees complained that they never saw him. There was a confusion among the employees. Some of them took advantage of the situation and did not work properly (floaters and slackers), which meant additional work for other employees. Low occupancy rates at the beginning created floaters.  
• This lack of supervision brought disharmony among the PV’s and floaters. PV’s did not saw the floater as part of the group, and floater were on the worse position due to continues switching of location. They worked on different floors every time, which made a problem also for collecting tips. r
• Conversely all mentioned above brought to low morale and employee effort. In the first year turnover rate was 50%. High employee turnover can represent significant costs. It was found out that job dissatisfaction was the main reason to quit. The employee’s expectations were not met. The level of tips were below as promised, the extent of the job was not as promised (cleaning to 80% of the time instead of 50%) and constant reassignments caused meticulous workers to cover slacking colleagues. There was relatively week relation between employees’ performance and reward they deserved for it.  On top of that company had no discipline method, to deal with poor performers, they thought that low tips were a punishment enough.
• Another point is that employees had a too wide range of duties, causing that they could not fulfil the PV role properly.    

Later they tried to resolve some problems stated above by implementation of supervisors, whose job was to assist PVs, however they did not resolve the lack of discipline problem and accountability. Maybe they did not wanted to inforce formal discipline, due to fear of the unions and belief that positive reinforcement will be successful.

Basically the lack of management, worsening behaviour, floaters, no hierarchy approach, disciple, and method of motivation were the main issues.