Please post your answers to the following case study questions in this discussion board. What would be the advantages and

competition winner

Hotel General Manager Position in Dubai By Fezvi Okumus

Introduction This case study presents a scenario about a US born and educated

HGM currently managing a hotel in England but receives a similar job

ofer for a larger property in Dubai within the same hotel group. The

case study provides background information to the HGM, First Quality

Hotels group, the hotel property in Dubai and the hospitality industry

in Dubai. It ends by raising several questions about the HGM’s options

in response to the job ofer.

Background to Mr. David Miller After completing his undergraduate degree in Hospitality Man-

agement at a reputable university in the United States (US), Mr. David

Miller joined First Quality Hotels group as a management trainee

in 1995. He worked for this company at properties in New York, Las

Vegas, Chicago, Miami and Houston. He held various managerial po-

sitions in food and beverage along with sales and marketing in the

company’s hotels in Chicago, Miami and Houston. As a result of his

outstanding performance, he was promoted to Food and Beverage

Manager at the Chicago property in 2000; Hotel Manager in Miami in

2002 and became Hotel General Manager at the 400-room property in

Houston in 2004.

David completed his MBA in 2005 and was subsequently sent to

Athens, Greece, where he worked as the HGM at the chain’s 450-room

hotel for three years. In 2008, he was promoted to a larger five star

property (600 rooms) in London, England as the HGM. He has been

responsible for implementing a turnaround strategy for the hotel, with

impressive results in guest service metrics and overall profit margin.

He is often described by those who have worked with him or for him

as being a hard-working, analytical, approachable, team builder, team

player, fair, motivator, good communicator, good listener and inspir-

ing.

David is married to Jennifer and they have two daughters who

are six and nine. Jennifer has not been particularly pleased with their

moves from one location to another one every three/four years. She is

also concerned with their daughters’ education since it takes time for

them to settle down and get used to their new schools and the educa-

tion system in each location. David is less concerned with this since he

knows that there are generally first class private schools in every loca-

tion they go and the company pays for their daughters’ educational

Fezvi Okumus is Chair and Associate Professor at Rosen College of Hospitality of Central Florida at University of Central Florida.

expenses. He also thinks that it is a great exposure for their daughters

to live in diferent countries and cultures, which can give them a com-

petitive edge in the long term. On the other hand, Jennifer hopes that

one day they can go back to the US and she can perhaps start build-

ing a career for herself as well. Jenifer also believes that David works

for long hours and does not spend enough time with her and their

daughters. In other words, due to his demanding position, David has

not been very successful in managing work-life balance. In addition,

because of their moves from one location to another one, they do not

have many close family friends to socialize with.

First Quality Hotels Group As of May 2011, First Quality Hotels group manages 164 hotels

worldwide. The company has over 80,000 rooms and employs over

52,000 people globally. The properties are four and five star hotels tar-

geting business travellers and upper class leisure travellers. Of the 164

properties, 12 of them are owned by the hotel chain, 91 have manage-

ment contracts, and 61 operate as franchises. In terms of geographical

locations, 122 hotels are located in the USA, 16 in Europe, 12 in the

Middle East, 10 in Asia and four in Africa. The company plans to open

at least another 20 hotels in the Middle East and Asia within the next

10 years believing that compared to other regions, there will be major

growth opportunities in the Middle East and Asia.

Under First Quality Hotels Group, management practices devel-

oped and practiced in US properties are followed and implemented in

all other properties in globally. In other words, First Quality Hotels has

more an ethnocentric orientation (Roper, Brookes and Hampton, 1997)

in its management practices. This home country orientation has creat-

ed some conficts and challenges particularly in marketing and human

resources management practices at properties outside US but the

senior executives of the hotel group claim that their regional directors

and HGMs are empowered to resolve any problems and challenges in

such cases by thinking global and acting local. However, they further

acknowledge that the company needs to work on this area to develop

strategies and policies to make the company’s management practices

more international.

Hotel General Manager Position in Dubai During the company’s annual convention in Houston early 2011,

Mr. John Wise, the Regional Vice President of Operations for Europe,

the Middle East and Africa informed David that if he is willing, the

company is considering him for a move to Dubai to become the HGM

of the company’s five star hotel there. This can be a great career move

Journal of Hospitality & Tourism Cases 7

for David as two previous general managers of this property including

Mr. Wise were promoted to senior corporate positions.

The hotel property in Dubai is owned by a local corporation, but

First Quality Hotels group has been managing it since it was opened in

2004. It has 650 rooms, five restaurants and a convention center. The

hotel is located at Jumeirah Beach with its own private beach. Its direct

competitors are Hilton Dubai Jumeirah, The Westin Dubai Mina Seyahi

Beach Resort and Marina, Sofitel Budai Jumeirah Beach and Le Merid-

ian Mina Seyahi Beach Resort and Marina. David was a guest at this

property in 2007 during the annual regional hotel managers’ meeting

for the company. Overall, he was very impressed with the property

at that time. However, in recent years the property has started show-

ing some signs of aging, therefore it needs to be renovated within a

few years. In addition, several new luxury hotels have been opened in

Dubai which has put much pressure on the property.

David has learned that one of the competitor hotels in Dubai

has recently head hunted the hotel general manager of this property

and the human resources manager and the marketing manager have

followed him. Due to the economic recession in recent years, the ho-

tel has implemented some cost cutting exercises and as a result let

go about 150 employees. The property currently employs over 510

employees. Due to the labor shortage in the region, the hotel has

recruited employees from 14 different countries: 18 from the USA,

14 from England, 12 from Germany, 12 from France, 37 from Egypt,

32 from Jordan, 26 from Russia, 70 from Pakistan, 105 from India, 88

from Philippines, 25 from China, 47 from United Arab Emirates and 24

from other countries. The property’s executive team has people from

several diferent countries, including the USA, France, Greece, Spain,

England, Egypt, Jordan, and United Arab Emirates.

The Hospitality Industry in Dubai Dubai is the second-largest emirate in the United Arab Emirates

(UAE). It is located in the north-eastern part of the UAE with an area

of 3,885 km2 and is the only emirate without substantial oil and gas

revenues (Leemann and Younes, 2005). Over 900,000 people live in

Dubai and over 80% of this population is expatriates. As summarized

in several recent publications, Dubai has a very strong infrastructure

and it has become a major tourism and economic hub due to major in-

vestments (Balakrishnan, 2008; Henderson, 2006; Leaman and Younes,

2005; Sharpley, 2008). The ruling Al Maktoum family and investors

from the region and other countries sponsored major projects which

include Dubai Maritime City, Dubai International Financial Centre,

Dubai Festival City, Dubai Marina, Palm Project, Mall of Emirates, Dubai

Mall, Dubailand, Dubai Health Care City and Dubai Waterfront. Due to

regional and economic recession in recent years, completion of some

of these projects has been delayed.

The Dubai hotel market is divided into two major sub-markets:

Jumeirah Beach and the City. Europe, Russia, Arabic countries have

been the main feeder markets for upper scale hotel demand in Dubai.

The Dubai hotel market has often outperformed other hotel markets

in the Middle East in terms of occupancy and Revenue per Available

Room (RevPAR) (Leeman and Younes, 2005). However, starting from

2009 the hotel industry in Dubai faced major declines in occupancy

and revenues. For example, in 2009 RevPAR declined 31% to $163

(Anon, 2010) which was about $236 in 2008 (Walid, 2009). However,

starting from 2010, there have been signs of recovery in the hotel

industry in terms of the number of visitors, occupancy and RevPAR

(Department of Tourism and Commerce Marketing, 2011). In a recent

online article (Freed, 2011), it is stated that despite recent turmoil in

the region, Dubai, neighboring Emirates and surrounding countries

have a bright future with the economic potential and resources. In this

article it is further noted that “Political turmoil is the wildcard, but to

most it is a speed bump, even a catapult to an even greater future in

the region” (Freed, 2011).

Supporting this, there have been signs that the hospitality indus-

try in Dubai is on the way to recovery. For example, Gerald Lawless, the

Executive Chairman of Jumeirah Group, the hotel management com-

pany that operates Dubai’s sail-shaped Burj Al Arab stated that “There

is a lot more depth in the market than there has been in the past in

terms of the length of booking and amount of booking we are receiv-

ing… We are seeing an improvement in the conference market as the

economy improves globally” (Bloomberg, 2011). Similar to this, in a

recent interview, Starwood CEO Frits Van Paasschen was also optimis-

tic about the hotel industry in Dubai after occupancies remained high

in 2010. He noted that the market in Dubai is not saturated and there

is a room to have more hotels in Dubai and the region (Reilly, 2011).

Should David Accept this Offer? Although this could be an excellent opportunity, David has some

concerns regarding the potential offer. First, Dubai faced some finan-

cial difculties and the hospitality industry in the region has been

facing challenges due to low demand and reduced room rates. Based

on the company reports and other external industry sources, David

has found that since mid-2009 the property has been performing well

in key performance areas, although it was not one of the company’s

top performing hotels in the region. He also learned that the hotel

unit’s direct competitors have achieved better results than this prop-

erty.

David’s second concern relates to the global political and eco-

nomic effects on the hotel. This is a critical “time-milestone” in his

career with First Quality Hotels, since the next step for him would be

to a senior corporate position and this new ofer could be an excellent

stepping stone. However, David also knows that, even when a General

Manager is sharp and makes good decisions, his performance is often

dictated by fuctuations and changes in the economy and political en-

vironment. Global uncertainty has escalated, civil and political unrest

in several countries in the Middle East has increased (demonstrations,

street disturbances in several countries in the region), and global cur-

Volume 1, Number 1 8

rency stability continues to decline.

Finally, he is mostly concerned with how well he can work with

employees and managers from diferent cultures and countries. He

knows that national culture of employees and managers afect man-

agement practices (Ayoun and Moreo, 2008; Hofstede, 1989). During

his career in the US, Greece and England, he has worked with employ-

ees and managers from diverse backgrounds and cultures, but none

as varied as this one. One thing is certain: working in Dubai as a Hotel

General Manager would be the most challenging task he has faced

yet. He knows that if he says no to this ofer, this may be a missed op-

portunity for him and he may not be approached again for such ofers

within the hotel group. On the other hand, if he accepts this ofer, he

will continue working far more hours than before which means that

his work-life balance (Blomme, Van Rheede and Tromp, 2010; Deery

and Jago, 2009) will be worse than before. He needs to make a deci-

sion within one week: Should he accept the ofer?

Discussion Questions • What would be the advantages and disadvantages for David to

accept this ofer?

• If David accepts the position, what should he do to prepare for

success in his new role?

• What should First Quality Hotels do to prepare David for suc-

cess in his new role?

• If you were to develop a cross-cultural training program, which

topics and activities would you include?

• How can David better manage work-life balance?

References Anon. (2010). Dubai Hotel Occupancy Sees Sharp Jump in February,

Yahoo!Business Industries. Http://en.news.maktoob.com/20090000451930/ Dubai_hotel_-occupancy_sees_sharp_jump_in_Feb/Article.htm. [Accessed the 22nd of April 2011].

Ayoun, B. and Moreo, P. (2008). Does national culture affect hotel manag- ers’ approach to business strategy? International Journal of Contemporary Hospitality Management, 20(1): 7-18.

Balakrishnan, M. (2008). Dubai – a star in the east: A case study in strategic destination branding. Journal of Place Management and Development, 1(1): 62-91.

Blomme, R., Van Rheede, A. and Tromp, D. (2010). Work-Family Conflict as a Couse for Turnover Intentions in the Hospitality Industry. Tourism and Hospitality Research, 10(4): 269-285.

Bloomberg. (2011). Jumeirah Group plans to open at least six hotels this year, Arabian Business.Com, January 13, 2011. Http://www.arabianbusiness. com/jumeirah-group-plans-open-at-least-six-hotels-this-year-373586.html. [Accessed the 22nd of April 2011].

Deery, M. and Jago, L. (2009). A Framework for Work-Life Balance Practices: Addressing the Needs of the Tourism Industry. Tourism and Hospitality Research, 9(2): 97-108.

Freed, J. (2011). Dubai’s Hospitality Provides Platform for Discovery, HotelNews. com, May 4, 2011. Http://www.hotelnewsnow.com/articles.aspx/5473/ Dubais-hospitality-provides-platform-for-discovery. [Accessed the 22nd of April 2011].

Henderson, J. (2006). Tourism in Dubai: Overcoming barriers to destination development, International Journal of Tourism Research, 8(2), pp.87-99;

Hofstede, G. (1989). Organizing for cultural diversity, European Management Journal, 7 (40: 390-397.

Leemann, S. and Younes, E. (2005). The Dubai Hotel Market – Hot or Soon to Overheat? London: HVS International.

Reilly, D. (2011). Dubai hotel industry set for growth in 2011 – Starwood CEO, Arabian Business.com, January 14, 2011. Http://www.arabianbusiness.com/ dubai-hotel-industry-set-for-growth-in-2011-starwood-ceo-373646.html. [Accessed the 22nd of April 2011].

Roper, A., Brookes, M. and Hampton, A. (1997). The Multi-cultural manage- ment of international hotel groups. International Journal of Hospitality Management, 16(2): 147-159.

Sharpley, R. (2008). Planning for Tourism: The Case of Dubai, Tourism and Hospitality Planning and Development, 5(1): 13-30.

The Department of Tourism and Commerce Marketing. (2011). Statistics. Http:// www.dubaitourism.ae/Resource%20Center/Statistics. [Accessed the 22nd of April 2011].

Walid, Tamara (2009). Dubai Hotel Industry in Crisis, Yahoo!Business. Http:// en.news.maktoob.com/20090000006266/Dubai_hotel_industry_in_crisis/ Article.htm. [Accessed the 22nd of April 2011].

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Journal of Hospitality & Tourism Cases 9