CASE STUDY

The Holiday
Kate and William had just returned from their annual two-week holiday. They had holidayed on the Indonesian
Island of Bali and stayed at the Telek Benoe Hotel in Nusa Dua. Upon returning, they organized a barbeque for
their friends so they could tell them all about their holiday and the BBQ also provided them with the opportunity
to give their friends the presents they had bought for them. Kate and Will's barbeque conversation with their
friends went something like this:

The Bali Tourism Board website[1] offered a good selection of hotels, so Will selected the 50-room Telek
Benoe Hotel located in the central area of Nusa Dua based on price and the fact The Telek Benoe Hotel was a
three star hotel1 and part of an international chain. Kate and Will had previously stayed at another of the chain's
hotels on a recent holiday in Dubai and they had a really great experience. A key strategy of the hotel chain was
that while each hotel would have its own personality and style, each hotel would provide modern clean rooms,
friendly efficient staff with a good understanding of English, high quality European-style food, and, high quality
service at an affordable price. Kate also liked the sound of this and the pictures she had seen on the hotel’s
website so she made an online booking. This turned out to be not as simple as it should have been as she (and
Will) both found that making sense of the site took over an hour. However, it did allow them to also provide
details of their flight numbers and expected time of arrival at the airport so they could be collected by the hotel
shuttle bus. Kate and Will were looking forward to their holiday.

They arrived at Denpasar airport at 10pm but were not concerned about the late arrival time because they had
booked the hotel’s shuttle bus to transfer them to the hotel. According to the transfer information on the hotel’s
website, all they had to do was call the hotel and the shuttle bus would pick them up within 15 minutes. The
problem was the phone number they had for the hotel was incorrect. After finding a hotel directory in the airport
lounge they again attempted to call the hotel, but, the person on the other end of the phone didn’t speak English.
Kate & Will both tried to explain that they needed to be picked up from the airport, but to no avail. In the end
the line went dead. They were stuck at the airport.

After waiting for another hour, the hotel’s shuttle bus unexpectedly turned up at the airport but the driver was
surprised to see them. He had come to drop guest off for their flight home and hadn't expected Kate and Will.
They said they didn't mind waiting for him to take them to the hotel. The driver estimated that it would take
about 30 minutes for the passengers to be processed through customs. He suggested they go and wait in the air
conditioned cafe where they would be much more comfortable than waiting in the bus. He guaranteed he would
come and collect them once the passengers were processed out of the airport

The 30-minute shuttle bus trip from the airport to the hotel was interesting; Kate and Will were grateful they
didn't have to worry about trying to catch a taxi and confront language problems again. By now they were very
tired. It was over fourteen hours since they had departed Brisbane; they were anxious to get to their room and
get some sleep.

The bus driver dropped them at the front door to the hotel around 1.00am and the Duty Manager was surprised
that they had arrived when they did as he thought their booking was not until the following day and anyway,
check in time was not until 2.00pm, but, they were fortunate as the room had just been serviced. When they
asked why the bus driver didn't know their arrival details he said that the bus service was provided by a
subcontractor who was notified by the reservations department of the hotel of any incoming passengers. This
was not the first time passengers had not been collected from the airport. The subcontractor always seemed to
have reasons for not collecting passengers (broken buses; schedule conflicts; staff shortages; and staff
absences).
The check-in process turned out to be very complex. Although they had already provided their personal details
when they booked their room online, they still had to fill out a number of forms. A staff member would then
take each form to different reception staff person to check that the forms had been completed correctly;
apparently there were strict Government requirements about foreigners checking into hotels. One form asked for
personal details they were unwilling to divulge; another form asked how they intended to pay for their
accommodation, even though they had provided credit card details when they booked using the hotel’s website,
and; a third form seemed to be some kind of marketing survey on behalf of the hotel chain. Will thought it was
weird to ask guests to complete a survey the moment they arrived at the hotel, especially at 1am in the morning.
After what seemed like ages (Will checked his watch - it had been 30 minutes since they arrived at the hotel),
they were finally taken to their room, but, it wasn’t ready. Even though the Duty Manager had said that cleaning
was finished, they had to wait for another twenty minutes in the corridor while it was completed. It took so long
because the housemaid was using domestic cleaning equipment, not the commercial cleaning equipment Kate
and Will had seen being used in the other hotels in the chain. While waiting, Kate quietly whispered to Will that
she thought she could clean the room quicker and more efficiently; there appeared to be no logic to the
housemaid’s cleaning process. However, the housemaid was very polite and apologised for keeping them
waiting but told Kate and Will that she had not been informed the room had to be ready for guests at 1.30am.
When they finally got into their room Kate and Will found that it was not exactly what they had expected. While
it appeared clean, it didn't really resemble the photos they had seen on the website. Unlike the website which
showed modern new furniture, all the furniture and fittings were all a bit worn and needed replacing. There was
old television on a scratched coffee table, and, the bathroom smelt musty. The carpets weren’t new like the
webpage pictures; they had bare patches from all the traffic through the room. At least they had hot water to
shower and wash off the grime accumulated during the sixteen hours since they had boarded their flight from
Brisbane.

After showering, Kate and Will surveyed their room. Perhaps, it did have the kind of facilities that they had seen
in the other hotels from this chain; it was just that the facilities at The Telek Benoe Hotel were old and worn,
and not as clean. One thing that really upset Kate was the Internet broadband service. When she went to plug in
her laptop to check her email, she discovered that they could use broadband but they would have to pay for it
(they hadn't been told this when they booked the room, the website just said that internet services were
provided). A note stuck to the wall near the internet connector informed them that Wi-Fi was planned but was
not yet available.

After a restive night, they went downstairs for breakfast. They had noticed that the hotel had a fine dining room
but the menu was in Indonesian and there was loud Gamelan music being played; after a while the constantly
clanging bells really got on Will’ nerves. When staff finally arrived to take their order, they happily translated
the menu for Will and Kate but it was a very time consuming process. They were told that the hotel did have
English language menus but they had changed a week ago and the hotel was still waiting to get the new ones to
come back from the printer. When the food arrived it was not what they expected, the burgers were neither like
a Big Mac nor an Aussie Burger. The burgers were served with Nasi Goreng (Indonesian fried rice), not chips,
and, the burger buns were very hard and stale. Not only was the food not what they had expected, so was how
they had to pay for it. In other hotels in the chain they just signed the food bill and the cost of the meal appeared
on the hotel bill they paid when they checked out. The restaurant staff told them that at The Telek Benoe Hotel
guests had to pay for their meals with cash. This upset Kate because they had exchanged just enough Aussie
dollars to buy presents for their friends at the famous Ubud Art Market (Pasar Seni). Having to pay cash for
their meals meant that they would have to use their credit card to buy gifts and that would cost them more and
they would incur expensive credit card and exchange rate fees. Their holiday was going to cost more than they
had expected.

After breakfast, Will and Kate decided to do some shopping and sightseeing but when they asked for directions
they found that the level of understanding of English by the reception staff was a problem. The staff tried to be
very helpful, and at one stage there was five staff members trying to give Kate and Will advice about the best
ways to see Nusa Dua and surrounding areas. There was a stand with tour brochures but they seemed old and
very tattered. Finally the concierge came to their rescue and organized a walking tours map as well as booking
them in for a number of different activities for the next week. The concierge also promised to get them a map of
shopping centres in and around the hotel area and would leave it at the reception desk for them to collect when
they returned from one of their trips    (Will said,'we never did get that map’).

Will was talking to the General Manager of the hotel one day over breakfast and was surprised to find he was an
expatriate Australian from Melbourne. Will asked him about his job and the General Manager said it was great.
The Head Office representatives from Brisbane never visited the hotel in person; head office simply requested
standard forms be completed and that budgets be maintained. If he achieved his targets, then no one was
concerned about how he ran his operation. Guest numbers had been declining according to the General
Manager, but he blamed this on global conditions rather than anything he was or was not doing, but he really
didn't know for sure. When asked about how quality was maintained at the hotel, the General Manager basically
replied that it was none of his business and left it up to his staff to maintain the necessary quality standards.
 They had all been trained and the hotel had been awarded a number of quality certifications. He didn't see the
need to have any procedures in place to constantly monitor the quality aspects of the performance of the hotel
and its staff.

When it was time to check out, everything didn't go smoothly. First, the lunch in the hotel restaurant that they
had paid for in cash on the first day appeared on their hotel bill. When this was pointed out there was a sudden
halt to the check-out process and reception staff huddled around all talking to one another in increasingly raised
voices. When Kate asked what was happening she was told - at least she thinks this is what she was told - the
Duty Manager had to authorize bill adjustments and all credit card transactions, but he had gone to lunch. A
staff member had gone to get him and the check-out process would be finished then. It took so much time for
them to check out, that Kate and Will were worried they would miss their flight home.

The trip back to the airport was uneventful although the shuttle bus that took them back did not have its air
conditioning working and for some reason Kate and Will had to walk about 100 metres in the hot sun to get into
the terminal (the temperature was a very hot 38 degrees), and, they had to carry their own bags. But at least they
saved money on the cab fare.

When Kate and Will got back home after their holiday they emailed the Telek Benoe Hotel telling them about
their terrible experiences; they heard nothing back.

Task
The experiences of Kate and Will have come to the attention of the Chief Executive Officer of the hotel chain
that owns and operates The Telek Benoe Hotel; a friend of the CEO had been at Kate & Will’s homecoming
BBQ. This was the first time the CEO had become aware that their Telek Benoe Hotel may have problems. The
CEO is concerned that Kate and Will had not had the kind of experience at the hotel that they had expected.
As an Operations Management Consultant, you have been hired by the CEO to investigate if The Telek Benoe
Hotel could have provided a better customer experience. To do this you need to apply Operations Management
theory to analyse the hotel’s operations and make recommendations to the CEO as to how to improve the hotel
so that future hotel guests do not have such a bad experience

Business strategies
Ensure business strategies are used to recommend how the organisation can improve on

Steps in the process:

1. Identify and evaluate issues/problems with the current operations using theory/ies covered in topics 1-6   
2. Provide a critical discussion of the key Corporate Social Responsibility issues facing your selected organisation.
3. Based on your research and analysis, prepare recommendations (3 or 4) on how your selected organisation can
improve the effectiveness and efficiency of the operations systems that produce its products and services.
4. Prepare a report on your analysis and recommendations.
Assignment set out guideline
Table of Contents
1.0 Introduction.........................................................................................................3
2.0 Identification and Evaluation of Issues.............................................................4
2.1 Customer Benefit Package (CBP)....................................................................................4
2.2 Quality Management.....................................................................................................6
2.3 Service Design Process.................................................................................................11
3.0 Recommendations................................................................................................14
3.1 Customer Benefit Package...........................................................................................14
3.2 Quality.........................................................................................................................14
3.3 Service Design..............................................................................................................14
4.0 Conclusion.............................................................................................................16
5.0 References.............................................................................................................17
1.0 Introduction
2.0 Identification and Evaluation of Issues

2.1 Customer Benefit Package (CBP)

The CBP is about providing value for the customer, for instance through the relationship between
what they are paying and what they expect; this is also linked with quality.

Figure 1: Operations Management and the CBP

 xx
xxx
xxx xxx

TELEK
xxx BENOE xxx

xxx xxx
xx

Figure 2: Current Hotel service

Figure 3: New Possible CBP

 Figure 4: Operations as a Transformation Process

(source: Russell and Taylor, 2014)

2.2 Quality Management

The business industry has seen an expansion in the definition of quality, which is now considered to
be the ability to deliver excellence to all interested parties.
 Figure 5: The Meaning of Quality

(source: Russell and Taylor, 2014)

2.2.1 The Gap Model

The gap model helps to determine where in the production process the quality issues are occurring.

Gap 1: Management Perception and Customer Expectation

Gap 2: Management Perception and Quality Specification

Gap 3: Quality Specification and Delivery

Gap 4: Delivery and External Communication

Gap 5: Perceived Quality and Expected Quality

 Figure 6: The Gap Model

2.2.2 The Deming Wheel

Figure 7: The Deming Wheel

2.3 Service Design Process

Figure 8: Service Design Process Diagram

 2.3.1 Service Concept
Service concept defines the target customer market and the desired customer experience.

2.3.2 Service Package

The service package includes the physical items, sensual, and psychological benefits of the product.

2.3.3 Performance Specifications

The concepts of customer requirements and customer expectations are designed in the performance
specifications process.

2.3.4 Design Specifications

Service design should outline in sufficient detail the desired service experience. The specifications
consist of activities to be performed, skill requirements,

Dining Batching Batching

Bar Dining Dining Time(8p Restaurant Batching Type(7p Type(8pm
Scenari Nightly Total Revenue Revenue Siz Time(Open Time(7pm m to Advertising Advertising Opening Type(Open m to to
o Profit Revenue Bar Dinner e to 7pm) to 8pm) 10:30pm) Budget Campaign Time to 7pm) 8pm) 10:30pm)

Scenari $4,527.9 $3,815.5 45 45 75 Happy Tables of 4 share a

o4 $546.93 8 $712.48 0 79 minutes minutes minutes 1.9 Hour 5:00 pm Tables of 8 8 table

Scenari $4,609.2 $3,885.0 45 45 75 Happy Tables of 4 share a

o3 $553.42 6 $724.26 0 79 minutes minutes minutes 2 Hour 5:00 pm Tables of 8 8 table

Scenari $4,698.5 $3,908.5 45 45 75 Happy Tables of 4 share a

o2 $533.60 2 $790.02 0 79 minutes minutes minutes 2.1 Hour 5:00 pm Tables of 8 8 table

Figure 9: Harvard School Simulation Data

2.3.5 Delivery Specifications

The delivery specifications outline the steps involved with scheduling, deliverables, and the location
at which the work is being performed.

3.0 Recommendations
3.1 Customer Benefit Package
By implementing a new CBP, with increased creativity and customer involvement from both the chef
and wait staff, in addition to including new ingredients and customer options, this will allow the
customer to enjoy a wider experience to meet their expectations.
 3.2 Quality
Understanding the gaps of quality, and by implementing the Deming Wheel process, the quality
management system can become more effective.

3.3 Service Design

By implementing the service design process, and monitoring consistency in following the steps to
service delivery, is a key element .

3.0 Conclusion

5.0 References