Who is right Mr Favre or the Palace management? Why? What went wrong in this situation? What did the Palace Hotel do wrong (if anything)? What did Mr. and Mrs. Le Favre do wrong (i
marketing case study
I need a assistance in a Marking case study about The Palace hotel (the case study is attached). Please read and follow the attached project instruction (outline). Please do not hastate to ask me if things are not clear.
Requirements: Max 1500
Assignment title: Mini Project
Weighting: 25%
Course name: Marketing Strategies for Hotel Management
Hand-in date in Moodle: Last day of the module at 23:59h
Learning outcomes:
2, 3, 4.
Organization and methodology:
This assignment is individual.
Word count:
Maximum 1500 words.
Resources available:
Course bibliography, library tools (books, newsletter, online magazines, etc.), internet, professionals from the industry, in-class discussions.
Assessment tasks & weighting:
Presentation content: 15%
Cover page and table of contents 05%
Length 05%
Overall professional appearance 05% Content: 85%
Common skills: assessed (bold) or developed (italics):
Special instructions:
This coursework consists in resolving a case study: The Palace Hotel. The case study is available as a separate document.
These are the questions that need to be answered by the students:
Who is rightMr Favre or the Palace management? Why?
What went wrong in this situation? What did the Palace Hotel do wrong (if anything)? What did Mr. and Mrs. Le Favre do wrong (if anything)?
How could The Palace have avoided this situation?
Conclusion: What would be your plan in order to avoid this situation from happening again?
Besides the answer to the questions, the coursework should contain a short briefing of the case information itself, and then an identification of the problem(s).
The final version should contain a cover page, table of contents, and references used, if any. Remember that any material should be presented in a professional way, and submitted to Turnitin section in you course in Moodle.
CASE 38The Hotel Palace??1Danilo Moriconi swiveled his desk chair and stretched his clasped fingersinto the morning sunlight streaming through the lace curtains of his officewindow. His knuckles cracked one after the other. He had just read the man-aging director?s response to a critical letter to the editor in the largest re-gional newspaper, Die Tagesblick, and was feeling quietly self-satisfied.Although the original complaint letter had been something of a public rela-tions disaster for the H??tel Palace, he was content with the hotel?s officialresponse, which had upheld both the hotel?s integrity and his own, and withthe overall outcome of recent events. Surely God was smiling on the H??telPalace again and, despite the current economic climate, Moriconi felt surethat a new era was dawning for the venerable hotel and for his career. Thenext 75 years?or at least the next few years?would certainly witness thereturn of the Palace to its former glory, and Moriconi felt that the hotel wasfinally back on track.The Palace at 75The H??tel Palace had just celebrated its 75th anniversary under the eco-nomic cloud of a major recessionary period. As part of its celebration, it of-fered a special promotional rate of US$150 per person inclusive of breakfastand dinner in the hotel?s renowned dining room to anyone celebrating hisor her 75th birthday during the same year, an unprecedented special offerin an establishment unaccustomed to discounting. The ?Merci? package wasadvertised as a gesture of gratitude to local people who had supported thehotel through its many years.Although the hotel was internationally famous?a member ofLeading Hotels of the World?and a recognized institution withinSwitzerland, its market base of wealthy foreign aristocrats had deterioratedto a point where it achieved less than 40 percent annual occupancy of its160 rooms. Its once numerous permanent residents, who maintained apart-ments at the hotel for seasonal occupancy, had dwindled to a handful of oc-togenarians. Younger affluent travelers had developed interests in adventureand experience tourism not readily available in the well-established city/resort region surrounding the hotel, and the remaining regular visitors tothe region preferred to invest in condominia or real estate. Few transientguests were willing to pay the hotel?s rack rates, which started at approxi-mately US$350 per room.The hotel?s physical plant had deteriorated to an appallingly low levelas a result of the property?s poor financial showing (the hotel lost several mil-lion francs annually) and the owners? resulting unwillingness to reinvest infurniture, fixtures, and equipment. In fact, the Palace almost certainly wouldhave declared bankruptcy and closed were it not supported by a prestigiousinternational sporting association whose patronage of banqueting facilitiesand restaurants kept the hotel looking at least somewhat successful. The own-ers therefore continued to operate the hotel as a trophy property in the hopethat new management might be able to reposition the hotel in line withmodern tastes and needs.38The H??tel PalaceThe Management TeamThe Palace had been operated for the last five years as part of a smaller ?col-lection? of hotels, composed of several disparate international propertiesranging from newish four-star airport hotels to five-star palaces. Ownershiphad recently insisted on replacement of the hotel?s general manager who hadoperated the hotel for the chain unsuccessfully since the management con-tract had been signed five years earlier. During the last year, the hotel man-agement team, headed by a new managing director, Jakob Aebersold (who hadbeen released by a famous palace hotel in St. Moritz,) had hired Karin van denWelden, a sales account executive with two years? experience at NestlŽ. ThePalace was just beginning to experiment with promotions and discounting,amove strongly resisted by Moriconi and other palace veterans.The hotel?s staff was oddly divided between associates who had beenwith the hotel for several decades?the concierges, porters, and waiters?and hotel school trainees. The management team was composed ofAebersold, the managing director; Moriconi, the assistant director; Fran?oisdu Champs, the vice director, who also served as food and beverage direc-tor; a director of rooms division; a director of human resources; and a fi-nancial comptroller who coordinated accounting operations with an outsideaccounting firm. The director of human resources, Heidi Lutz, who had comeover with Aebersold from the St. Moritz property, doubled as his personalassistant and public relations manager. A handful of assistant managers wereengaged in actual supervision of employees. Aebersold had been in his po-sition for approximately one year and was under pressure to increase the ho-tel?s profitability. He was given to fits of extreme temper and was often seenliterally jumping up and down with his fists clenched shouting at associatesand other managers. This behavior was often exhibited in the hotel lobbyand restaurants as well as in private and departmental offices.Aebersold was secretly resented by both Moriconi and du Champs,who had been with the hotel for many years and who had been passed overfor promotion. Moriconi had emigrated to the country 20 years earlier as ayoung apprentice and believed that his ŽmigrŽ status was the reason for hisfailure to be promoted. In the early years, he had been awed by the spectreof the Swiss hotelery. But as time went by and he watched his beautiful ho-tel progressively disintegrate, his southern temperament had boiled at theagonizingly slow pace of events in Switzerland. Although the company hadinvested in so-called ?Management of Change Seminars,? the only changesMoriconi perceived were short-term, quick-fix schemes to increase revenue,which ruined the hotel?s image, taking it farther and farther away from thevaunted position of its heydey years. Moriconi believed that a grand hotelwas an institution that must remain aloof from the swirling tides of eco-nomic and demographic trends if it were to maintain its integral character.The company, he believed, had increasingly sold the hotel out to a class ofclientele that could not appreciate its essential finesse and charm and thatwould only be dissatisfied with the expensiveness of the offer, without con-sideration for the renovation work needed to maintain the product.1This case was written by Jeffrey B. Catrett, Dean, Business and Hospitality, Kendall College. Used by permission. Names have been disguised.Copyright ? 2007 by Pearson Education, Inc. All rights reserved. This material is protected by copyright, and permission should be obtained from the publisherprior to any prohibited reproduction or transmission in any form or by any means. For information regarding permission, write to: Rights and Permissions Department.CASE
2??CASE 38The H??tel PalaceWith respect to his own career, Moriconi had grown wary of the anti-foreigner sentiment and local hotel chauvinism prevalent in the region. Hehad painstakingly established close connections to important people withinthe international sporting association, however, and his tenure was in littlejeopardy. Du Champs was considered by many, including himself, to be thetoken Swiss French on the management committee. In a company head-quartered in Zurich, he felt he had little chance to gain a general manager?sposition. He accepted his fate with a kind of permanent sulk and was rarelyseen around the hotel.A Foray into MarketingMiss van den Welden had enlisted the support of the chain?s corporate mar-keting department, dominated by former marketers of SwissAir, in providingan internal relationship marketing and upselling instruction course to asso-ciates. The program was administered on a compulsory basis to all line-levelstaff both in the rooms area and in the hotel?s outlets, and was also attendedby line-level associates and assistant managers. Attendees were not paid forthe time they invested in the course, which was given in the hotel ballroom.Tipped associates were told that the course would increase their gratuities,and nontipped associates were assured that the course would serve as animportant credit on their resume. The course was introduced by Miss van denWelden but was led by airline sales staff and stressed both the importanceof building relationships with potential return guests and of upselling hotelproducts and services. At the conclusion of the course, each staff associateand assistant manager was tested on the material, and each earned a na-tionally recognized certificate. The course was completed just two weeks be-fore the beginning of the 75th anniversary celebrations.The Unfolding GalaWhen the first big night arrived?a Saturday night during a normally busyperiod in the early fall?invited local dignitaries and socialites as well asrepresentatives of the international sports association were ushered into thehotel?s many banquet rooms for specially prepared dinners and speeches. Thepress was in attendance, and the event was covered extensively in regionalpapers and magazines including Die Tagesblick. Additional banquet staff hadbeen enlisted from local hotel schools to aid in preparation and service. Thehotel?s restaurant, La Rotonde (16 Gault Millau points out of a possible 20*)was reserved mainly for persons who had been attracted by the ?Merci? pack-age offer. La Rotonde?s long-time m??itre d?h??tel and president of the na-tional M??itre d? Association, Antoine Rey, had recently stormed out of therestaurant as a result of a personality clash and power struggle withAebersold, vowing to take away La Rotonde?s return guest base and ruin itsreputation in the local community. Older waiters resented the loss of them??itre d?, who they believed had been largely responsible for maintainingthe reputation of the restaurant and ensuring their substantial incomes(13.04 percent of revenue plus considerable incidental tipping.) Someyounger waiters were relieved at the removal of this traditional autocraticmanager and welcomed the arrival of a young Austrian, Hans-RudolphScheer, a hotel school graduate who had been hired to fill the position.The Favre IncidentMr. and Mrs. Marcel Favre arrived for dinner in the restaurant on the firstnight of the 75th anniversary celebration dressed in their finest attire?ex-pensive if somewhat poorly tailored clothing?and proudly presented theircoupon for the menu being offered as part of their ?Merci? package. (Thecoupon was valid for the fixed menu, which included coffee but no bever-ages.) Mr. Favre had celebrated his 75th birthday during March of the sameyear and was looking forward to his first H??tel Palace experience. After manyyears of farming, he had sold his land for a handsome profit and was enjoy-ing his retirement with his wife of over 50 years. They were graciously*Gault Millau is a famed and prestigious restaurant rating company based in Paris. Very few restaurants are rated 16 or above.received by Scheer, who escorted them to a table in a station manned byone of the hotel?s most experienced waiters, Antonin Propescu.The Favres took note of the fancy menu cards with the history of theestablishment, the Gault Millau rating, and the prices printed exclusively onthe gentleman?s card. Mr. Favre ordered the prix fixemenu for himself andhis wife and selected a bottle of lower-priced local wine when the waiterpresented the wine card?a wine he recognized that was widely available inlocal supermarkets. During the course of the meal, the Favres remarked thatPropescu seemed somewhat cool and distant, but decided that this appar-ent hauteur was probably considered appropriate in such a distinguishedrestaurant. Propescu made several attempts to offer another bottle of wine,but the Favres remained with their initial selection throughout the dinner.All in all, the experience was somewhat formal for their taste, but they sa-vored the luxurious surroundings and were impressed with the excellent foodquality.At the conclusion of the dinner, Mr. Favre asked Propescu?s advice inselecting ?something special? as an after-dinner drink for the couple totoast the occasion. He told Propescu, with a wink, that the Favres had beenaccustomed to their own homemade eau de vie, but wanted something ?a little better? for this important occasion. Propescu did not present thecard, but indicated with a flourish that he had ?just the thing for a specialevening,? mentioning the name of a French vintage unfamiliar to the Favres.He returned with two glasses and a delicious dessert wine, which the cou-ple enjoyed immensely. At the conclusion of the meal, Propescu indicateddeferentially that he would place the beverages on the couple?s hotel bill.Although the evening had been somewhat stiff, and the Favres had feltsomewhat out of place, they retired for the night satisfied with their oneand only H??tel Palace experience.At checkout the following morning, they were told that the hotel?scomputer was not functioning properly. The reception trainee politely re-quested an imprint of Mr. Favre?s credit card and said that a copy of the billwould be sent to them in the mail within a few days.Two weeks later, Mr. Favre received the bill as well as a major shock.The dessert wine?a Ch??teau d?Yquem?had been charged to the bill atUS$75 per glass. The ?special after dinner drinks? had cost more than therest of the experience combined. Mr. Favre duly called the hotel to complain.Service Recovery?Mr. Favre?s first complaint was answered by an Asian reception trainee whoasked him in awkward French if they had, in fact, consumed the drinks. Whenhe replied that they had, the trainee responded by saying that there wasnothing she could do?the credit card had already been charged, and it wasthe hotel?s policy to alert the accounting firm only if disputes were madeasto the validity of charges. Mr. Favre placed a second and angrier call tothe hotel and asked to speak to someone responsible for the restaurant. Af-ter some time, his call was transferred to a banquet m??itre d?, the only per-son of responsibility from the food and beverage department on duty duringthe afternoon. Against a din of background noise, the banquet m??itre d?ex-plained that he was supervising a function at the moment and that Mr. Favrewould have to call the m??itre d?for La Rotondein a few days after the checkand bill could be secured from the accounting firm. He promised to haveScheer look into the matter. Mr. Favre then called the hotel a third time anddemanded to speak to the managing director. He was told, after several min-utes on hold, that Mr. Aebersold was not available, but that the assistantdirector, Mr. Moriconi, would return his call within the hour.Moriconi called back 45 minutes later after investigating the incident,announced himself, and listened respectfully to Mr. Favre?s complaint. Mr.Favre argued that he had not been advised of the charge for the Ch??teaud?Yquemat the time of the service and would never have selected such an ex-pensive option if he had been aware of its price. He suggested that he wouldbe willing to pay a reduced amount for the drinks, but that he felt he shouldnot and could not pay the full price for something he had not directly ordered.
CASE 38The H??tel Palace??3While relating his frustrations, Mr. Favre became increasingly abrasive, usingrough language in an incredulous tone of voice. He finished by relating hisfury at having been mishandled by the reception trainee and the banquetm??itre d?and having to wait beside his telephone for a management response.After letting Mr. Favre speak his mind, Moriconi responded in a toneof cool, controlled authority. The H??tel Palace, he explained, was well knownthroughout the community as a hotel with certain standards and, of course,certain prices?a hotel for connoisseurs. The special ?Merci? package hadbeen arranged to allow members of the local community to share in a spe-cial moment in the hotel?s history. Moriconi defended the actions of thewaiter Propescu by pointing out to Mr. Favre that he had asked specificallyfor ?something special? as an after-dinner drink in an environment where?something special? certainly meant ?something expensive.? Propescu hadmentioned the name of the wine and would assume normally that Mr. Favre?sfailure to ask for the wine card or the price meant that he knew the wineand its reputation for quality and expense. Moriconi suggested that it wouldhave been inelegant and patronizing for the waiter to discuss prices openlyand inappropriate and equally patronizing to offer a low-priced substitutewhen ?something special? was requested.Favre responded somewhat sheepishly that he had not wanted to ap-pear ignorant when Propescu mentioned the vintage. Moriconi proceeded byagreeing with Mr. Favre?s assessment of the hotel?s awkwardness in re-sponding to his calls but pointed out that the Palace was a large establish-ment with a complex internal hierarchy and a variety of levels of experience.Nevertheless, he assured Mr. Favre that the hotel would take steps to rem-edy its clumsiness in reacting to customer concerns. In the end, however,Moriconi summarily rejected Mr. Favre?s offer to pay a discounted price forthe Ch??teau d?Yquem pointing out that the wine had been consumed andthat the hotel had incurred the associated costs. Mr. Favre reacted angrilysaying that he would refuse to pay and threatening that repercussions wouldfollow. Moriconi calmly replied that the Palace would not be threatened, andthe charge would remain on the card.The FalloutThe next day, an inflammatory letter to the editor composed by Mr. Favrewas published in Die Tagesblick. In it, he described in detail his own per-sonal background, the events as they unfolded, and his impressions of theinsensitive response given by Palace management. After several days of con-templation and consultation with his PR assistant, Aebersold respondedwith a letter that expressed the hotel?s regret that Mr. Favre had been up-set by the matter but also expressed anger that the incident had been re-ported in a one-sided and disproportionate manner. Aebersold affirmed thehotel?s right and responsibility to maintain its position as an upholder oftaste and standards within the community, noting that high prices were nec-essary to keep the hotel open, providing the services expected by that com-munity. La Rotonde, the letter asserted, was clearly a gourmet restaurant,and Mr. Favre, it concluded, had been treated with the same discretion andin the same manner as would any guest in La Rotonde regardless of socialstation.Conclusion: ASmall VictoryThe fog, traditional for this time of year, had thickened around Moriconi?soffice, and the sun had been reduced to a small distant bright spot in theheavens. Moriconi swiveled around toward the jumble of reports he wouldneed to consider for the week?s upcoming meetings and absently stroked theleg of his fine Italian Renaissance writing table. The room had grown darker,but his spirits had not dimmed. Although he had had to put up with a fewof Aebersold?s trademark fits, it had been worth it. It was a small but im-portant victory for an old hotelier, and he had learned to relish these smallvictories and bide his time. For the first time in many weeks, he found him-self actually looking forward to the endless round of meetings. Though itwould be subtle and slow, change?at least the kind of change Moriconiyearned for?was definitely in the air.
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