Case Study - Ritz-Carlton Hotel Company

Service can be an elusive concept. What is the essence of the Ritz-Carlton experience? What is
the Ritz-Carlton selling?
When you think of luxury hotels, only a few brands come to your mind, among them is Ritz-Carlton, with
its well established worldwide reputation for treating guests like royalty.
Service cannot be identified by one word or a particular act. Ritz-Carlton is there to provide finest service
to their customers by providing them superior facilities during their stay so that they can have life lasting
experience.
The service quality provided by Ritz-Carlton arises from their way of treating their customers and
employees, which is identified as The Gold Standard, a combination of three steps of service, The
Motto, The Employee Promise, and The Twenty Basics, to promote employee focus on Ritz-Carltons core
company value. The effect of this philosophy can clearly be seen in Ritz-Carltons operational efficiencies
(~80% occupancy rate) and only 20% employee turnover (as compared to industrys 100%).
All the above can be summarized by the words of Mr. Schulz :
We are not is the hotel business. The hotel business is about selling rooms, selling food, selling the bar.
We do these things incidentally, but our business is service. We charge for service. Our commitment to
our customers is excellence in service. Service is our profession.
How does the Ritz-Carlton create Ladies and Gentlemen in only 7 days?
A good alignment of employees vision with that of companys vision is essential for the success of the
organization. Recruiting team at R-C makes sure that there is a good value & purpose match between
employees and organization. In order to produce high quality service professionals it is essential to
remind the employees that they are there for a purpose.
The corporate motto is "ladies and gentlemen serving ladies and gentlemen." To provide superior service,
Ritz-Carlton trains employees with a thorough orientation, followed by on-the-job training, then job
certification. Ritz-Carlton values are reinforced continuously by daily "line ups," frequent recognition for
extraordinary achievement, and a performance appraisal based on expectations explained during the
orientation, training, and certification processes.
The process of creating Ladies and Gentlemen in seven days started way before that when candidates
to be interviewed were greeted with utmost hospitality and friendliness. After the recruitment the same
continued. Mr. Schulzes first address was another mile stone that clearly conveyed Ritz-Carltons values
and culture and his intent that Ritz-Carlton is here to create Ladies and Gentlemen who were there
to serve and to be served.
Seven days training to the new employees was a critical task that motivated and trained all the employees
to blend in Ritz-Carltons values and culture. Various tasks at the training sessions gave employees an
opportunity to familiarize themselves with their co-workers as well as Ritz-Carltons culture. This period
gave them opportunity to train themselves so that they could understand their and their customers
purpose and how R-C can help them to achieve it.

In what may be a first for the hospitality industry, Brian Collins, hotel owner, has asked James
McBride, Ritz-Carlton general manager, to lengthen the amount of time spent training hotel
employees before hotel opening. Should McBride lengthen the 7 Day Countdown? Or, is this the
time that McBride should consider a total overhaul of the hotel opening process. If yes, what
should he change, and how should he go about doing it?
1. We recommend that they should think of implementing additional training if it only takes additional 7 days
as it would provide them with an incremental revenue of $620,000. If it takes 21 days to train the
employees then we would recommed not the undertake the process.
2. The training plan would vary depending on the location of the hotel as lower average daily rates (ADR)
would make this process non-fesiable (due to constant training cost).
3. This plan has to be tested very carfully as implementing this strategy overall without testing may have
adverse effects.
4. We dont recommend total overhaul of the system as it is a well established standardized working system.

[1] Vijay Sings reason to work for Ritz-Carlton I came to work for two reasons. One, to achieve
excellence. The other, to achieve excellence with friends.
[2] Incoming employees were treated by the scores of managers with smile and by saying We are happy
you are here, welcome I am glad youve come.
[3] You are not servants. We are not servants. Our profession is service. We are Ladies and Gentlemen,
just as the guests are, who we respect as Ladies and Gentlemen. We are Ladies and Gentleman and
should be respected as such.