Operations Management

Michael Pinedo

Session 18

Ritz Carlton Case

Application of SPC
(P-Chart)
Ranking of US Hotels*
• Luxury Hotels
– Ritz-Carlton
– Four Seasons
• Upscale Hotels
– Omni
– Hyatt
– Intercontinental
• Full Service Premium Hotels
– Stouffer
– Embassy Suites
– Marriott
The Primary Function of Ritz-Carlton

• To manage property owned by someone

else (W.B. Johnson Company)

• Other hotel chains ..

– Own and manage properties
or
– License/franchise the brand to other operators

• Explains Ritz-Carlton’s single-minded

focus on service quality
Ritz-Carlton’s Parent Organization
Marriott International

- In 2010 Ritz-Carlton became part of the Marriott

International group (consolidation of Rewards
programs)

- Hotels in their marketing now follow the same

strategy as airlines: forming alliances
Ritz-Carlton: Twice winner of the coveted
Malcolm Baldrige National Quality Award

• First and only hotel company to win award

• First and only service company to win the
award two times (1992 and 1999)
• Award Criteria
Leadership
Strategic Planning
Customer and Market Focus
Information and Analysis
Human Resources Focus
Process Management
Business Results
 Industrialized Intimacy

• Warm, personalized service

• Use guest name when possible
• Anticipate a guest’s need and preferences
• Record guest’s likes and dislikes
• Develop memory of a guest’s stay
– good and bad experiences
– needs
– defects, etc.
 Goal of Ritz-Carlton
• Very high service quality through extensive use of
information systems.

• This in contrast to the Four Seasons, which invests

significantly less in information systems.

• What are the difficulties of maintaining reliable

information systems in the service industries?
 Difficulties in Maintaining Up-To-Date
Information in a Customer Database
in a Service Organization

• Customer names often not unique

• Customer names change (at times nick-names are used)
• Multiple addresses and (email) addresses and most of
these change regularly

• Frequent flyer accounts (now the customer is identified

by a number and maybe by an email address) and there
is now an incentive for the customer to maintain contact
with the company in order not to lose accumulated miles.
ID Date1 Date2 Time Count Keyword Memo Source Room Division Department

12606 ####### 4/5/1997 1 rm clean Room was dusty and the desk top had drink rings and was sticky. Comment Card 1203 Rooms Housekeeping
17673 1/6/1997 1/4/1997 1 res incorrec Wrong type room. Moved to second room GIAF 1830 Rooms Front Office
17674 1/6/1997 1/4/1997 1 rm clean Guest moved to second room. It was not clean. Moved second time. GIAF 1830 Rooms Front Office
17696 1/9/1997 1/4/1997 1400 1 rm clean No clean glasses at turndown GIAF 2122 Rooms Housekeeping
17697 1/9/1997 1/4/1997 1600 1 rm clean Wash cloths from previous guest left in shower GIAF 2122 Rooms Housekeeping

17722 1/9/1997 1/6/1997 1600 1 res incorrec Guest reserved and confirmed several times for baby shower in Lobby Lounge. When guests arrived they were GIAF F&B Rest. Res.
17724 1/9/1997 1/6/1997 1 rm assign Guest checked into room showing clean and vacant, but was really still dirty GIAF 1717 Rooms Housekeeping

17719 1/9/1997 1/7/1997 1130 4 rm assign Guest made reservation for club level 12 months ago. Did not feel 17th floor with club access only by elev GIAF 1708 Rooms Reservations
17720 1/9/1997 1/7/1997 1200 2 ph not answr Guest called hotel from Phipps to have cab sent to pick her up. Call was transferred to VP. No answer GIAF 1503 Rooms Valet Park
17709 1/9/1997 1/7/1997 250 1 wake-up call Guest received wake-up call at 9 p.m. which he did not order GIAF 1211 Rooms Communication
17712 1/9/1997 1/7/1997 1 ph not answr Reservations phones ring endlessly, then give recording GIAF Rooms Reservations
17713 1/9/1997 1/7/1997 1 ph not answr Operators put call on park for long time while they paged MOD. Call then went to voice mail recording GIAF Rooms Communication
17788 ####### 1/9/1997 2315 1 rm clean Bathroom dirty GIAF 1523 Rooms Housekeeping
17790 ####### ####### 1700 1 rm assign Guest put on 17th floor after requesting 18th several months ago. GIAF 1714 Rooms Front Office

17776 ####### ####### 2330 1 rm clean Guest sensitive to cigarette smoke asked for room to be deodorized. Room was sprayed with aerosol to which GIAF 1809 Rooms Housekeeping
17775 ####### ####### 945 1 rm clean Room not cleaned after guest requested it. GIAF 508 Rooms Housekeeping
17773 ####### ####### 0030 1 rm clean Hair balls on floor GIAF 1510 Rooms Housekeeping
17779 ####### ####### 2300 1 want double Reserved room with 2 double beds. Got king GIAF 814 Rooms Front Office
17765 ####### ####### 800 1 res incorrec Guest not given type of room requested. Suite not as described by Res. Agt. GIAF 1537 Rooms Reservations
17767 ####### ####### 2345 1 rm assign Guest reserved two rooms. Sold-out status allowed only one. GIAF 1618 Rooms Front Office
17755 ####### ####### 930 1 rm delay Guest upset that sold-out previous night made his club level room late in being readied. GIAF 1703 Rooms Front Office
17791 ####### ####### 730 1 wake-up call Wake up call too early by two hours GIAF 1614 Rooms Communication
17859 ####### ####### 1 want double Wrong type room assigned GIAF 814 Rooms Front Office
17911 ####### ####### 1022 1 rm clean Room was not cleaned FO Folio 827 Rooms Housekeeping
17860 ####### ####### 1 want king Guest called reservations three times requesting king room. Was told it was impossible GIAF 1033 Rooms Reservations
17892 ####### ####### 1700 1 res incorrec Change done in MARSHA did not drop into ENCORE. Guest reservations did not appear. GIAF Rooms Front Office
17826 ####### ####### 1955 1 rm clean Carpet stained, room dirty IDR HOTLINE 1810 Rooms Housekeeping
17851 ####### ####### 900 1 wake-up call Did not receive wake-up call GIAF 1522 Rooms Communication

17823 ####### ####### 1 res incorrec Authorization for reservations received for sold-out days. Had to change in system. IDR Rooms Reservations

17852 ####### ####### 1 check-in Guest had reservation confirmation number lacking one digit. Was not given room due to oversold situation. GIAF Rooms Front Office
17893 ####### ####### 700 1 wake-up call Did not receive wake-up call GIAF 1411 Rooms Communication
17863 ####### ####### 910 1 wake-up call Guest did not receive wake up call GIAF 723 Rooms Communication
17906 ####### ####### 1 rm delay Room not ready upon check-in GIAF 1637 Rooms Housekeeping
17867 ####### ####### 1100 1 rm clean Carpet stains in room GIAF 1437 Rooms Housekeeping

GIAF - Guest Incident Action Form


Date2 Day of week Occupancy check-in check-out msg light newspaper
1-Jan-97 Wednesday
2-Jan-97 Thursday
3-Jan-97 Friday
4-Jan-97 Saturday
5-Jan-97 Sunday
6-Jan-97 Monday
7-Jan-97 Tuesday
8-Jan-97 Wednesday
9-Jan-97 Thursday
10-Jan-97 Friday
11-Jan-97 Saturday
12-Jan-97 Sunday
13-Jan-97 Monday
14-Jan-97 Tuesday
15-Jan-97 Wednesday
16-Jan-97 Thursday
17-Jan-97 Friday
18-Jan-97 Saturday
19-Jan-97 Sunday
20-Jan-97 Monday
21-Jan-97 Tuesday
22-Jan-97 Wednesday
23-Jan-97 Thursday
24-Jan-97 Friday
25-Jan-97 Saturday
26-Jan-97 Sunday
27-Jan-97 Monday
28-Jan-97 Tuesday
29-Jan-97 Wednesday
30-Jan-97 Thursday
31-Jan-97 Friday
1-Feb-97 Saturday
2-Feb-97 Sunday
ph not want
answr res incorrec rm assign rm clean rm delay wake-up call double want king Totals
470   1 1 2
470   0
525   0
553   1 4 5
277   0
359   1 1 2
442   4 4 1 9
470   0
470   2 2
525   1 1 2 4
553   1 2 2 5
277   2 1 4 1 8
359   1 1 2
442   1 1 2 2 1 7
470 1 1 2 2 1 7
470   1 2 3
525   3 3
553   1 1
277   1 1 1 3
359   0
442 1 1
470   1 1
470 1 1 1 3
525   0
553   1 1 1 3
277   0
359   1 1
442   1 1 2
470   0
470   0
525   2 2
553   1 1
277   0
 p-chart

• Identify sample size: n

• In each sample, compute:
– p: fraction of defective items
• Compute means of sample:
– p-bar: mean p
• Compute standard deviation:
p (1  p )
p 
n

• Compute control limits

LCL p  p  3 p UCL p  p  3 p
 Questions

How are hotels going to develop reliable

databases of (honest, real) complaints ?

How are websites such as Tripadvisor going

to affect the behavior of customers and the
behavior of hotels?