Case study 15 - First steps in developing an international hotel brand

The client
Owned by a South Korean 'chaebol', the hotel company presently comprises two owned hotels in Korea and one managed hotel in China.

Background
The company recently commissioned a consultancy assignment from Deloitte which called for, among other things, a revamp to a more independent hotel HQ and robust management and organisation at hotel property level. A task force had been established led by HQ executives to develop standardised processes of various hotel functions. The task force is responsible for the integration of existing manuals and building a capability to expand the hotel brand overseas.

The Hotel Solutions Partnership Ltd was recommended by Deloitte because Hotel Solutions is in a position to access a wide pool of hospitality consulting skills in the area of hotel HQ and property organisation.

The client considers its core competency to be operational excellence. In order to develop internationally, it wished to introduce further competencies in both brand development and organisational support. And it recognised that it needed to strengthen its core competency of operational excellence through the development of appropriate global processes and procedures.

The company had not fully defined its strategy relating to development into new markets nor had it addressed any organisational implication that such development would give rise to. There are some standard operating procedures but these are not comprehensive and do not address the needs of the development of the business into new markets.

The client has received some advice in this matter from Horwath. The client believes that the Horwath proposals do not take full account of the strategic options available.

Consultant/s: Ian Graham, Katrina Craig, Mike Wrigley

Project date: autumn 2008

Project objective: to identify the tasks required to:

• integrate existing manuals
• build capability to expand the hotel brand overseas

Some of these tasks will be of short duration; some will be long. Some of the resources that are able to work on the tasks will exist within the client and some will not.

The plan needed to identify the resources, and where those resources are external and can be provided by Hotel Solutions the plan identified them.

Project scope
The scope was to ensure that the GSD team:

• learnt about hotel company organisational design, hotel company technology and hotel company SOPs as addressed by a variety of global competitors
• defined a strategy for the development of the business
• designed an organisation capable of delivering the agreed development
• identified the enablers of the organisational design (people, technology, etc)
• designed a specific map of tasks and processes
• (re) designed the project plan for the extension and / or integration of existing manuals
• built a capability to expand the hotel brand overseas
• possessed a project plan with identified internal and, as it relates to those that Hotel Solutions can provide, external resources
• possessed a template standard operating procedure

Methodology
This first phase took the form of a three-day workshop to be held face to face in Korea. The workshop was structured as follows.

Day 1

• Global hotel industry insights
  High-performing hotel and brand development strategies and processes
• Global hotel industry insights
  Getting the balance between HQ processes and hotel processes and using appropriate technology tools
• Global hotel industry insights
  Adopting agreed technology platforms and getting the balance right between local and global operating procedures (SOPs)

Day 2

• Development strategy
  Defining client development strategy in the context of client's overall strategy
• Organisational design 1
  Defining an organisation to enable achievement of development strategy
• Organisational design 2
  New organisation's implications and requirements for technology, people, business partners
• Development processes 1
  Defining and describing client's processes for successful development in the context of client's development strategy
• Development processes 2
  Defining the development processes that require ownership within client and which should be outsourced / delivered by third-party business.
• Development processes 3
  From the development processes to be owned by client, defining those that can be defined globally versus those that need to be defined locally

Day 3

• Development SOPs 1
  Agreeing roles and responsibilities for the development of the global SOPs
• Development SOPs 2
  Agreeing template
• Development SOPs 3
  Developing a project plan - resources (people, time, money) for the development of client's global development SOPs
• Next steps

Results
The client commented that:

"the three-day workshop was very interesting and valuable time for me and the team and I am satisfied with your output regarding global standard development processes. After the workshop, we have been researching and studying couple of other chain hotels' cases and benchmarking leading companies in the hotel business also. With our knowledge from the effort above and the results from The Hotel Solutions Partnership, we have started our work to specify and detail development processes. Once again, what we got from the workshop was valuable and satisfactory."

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