Thursday, August 22, 2019
The Ritz Hotel Essay Example for Free
The Ritz Hotel Essay Despite the fact that rooms at the Ritz Hotel do not cost 2,000 Euros, employees of the Ritz are authorized to compensate guests up to 2,000 Euros for any problems they may have experienced. Why does the Ritz have this policy? There are primarily three factors that should be explored: one, the reputation of the Ritz, two, the costs beside room rate, and three, and the hidden costs.            First, the Ritz is known the world-over for high class service. It is the place to have your social event.  The name has carried great weight for many years now, and the reputation of the Ritz is not something the hotel owners would like to have tarnished. Established in 1906, this year marks the 100 year celebration of this world-class hotel. As part of the celebration, and as an example of the level of service the Ritz offers its clients, the Centennial Celebration includes pick-up from the Airport in the new Rolls Royce, accommodations for two nights, a bottle of champagne, Theater Tickets, Dinner, Salon Treatments, and complimentary membership to the Ritz Club for the length of the stay. The Ritz is â€Å"puttin’ on the Ritz’ for its 100 year celebration. The reputation of the Ritz creates its value in the marketplace. As a place for high society, elegance, and comfort, it has a name and reputation to live up to. One of the primary ways reputations are maintained is through word-of-mouth. Considering the fact that if a guest has a negative experience, they are ten times more likely to talk about it, it is therefore in the Ritz’s best interests to maintain a positive word-of-mouth cycle.            Second, additional costs which guests incur aside from the room rate can cause management to raise the level of compensation higher than the rate of the room.  For example, there may be phone charges, room service charges, movie charges, wet bar charges, laundry or dry-cleaning, and the list goes on. These are only the costs the guest may incur inside the hotel. Additionally, there is the cost of travel and transportation.  As a world-class hotel, the Ritz recognizes these as valid reimbursable expenses. If the Ritz is at fault for some inconvenience to the customer, the customer will also incur additional expenses remedying the problem.            Finally, the hidden costs to the Ritz. The first has already been mentioned – the word-of-mouth advertising. It is essential to the Ritz to maintain positive word-of-mouth advertising.  After a customer leaves the Ritz, it is impossible to communicate with them further, or to make amends. One of the worst things that can happen for the Ritz is an unhappy customer leaving. Therefore, the service staff at the Ritz has the permission to compensate the guests up to 2,000 Euros. The Ritz must review this policy and the history of compensations to make sure the policy is not being abused. Abuse of the policy is a hidden cost to the Ritz itself. However, with proper oversight, this cost can be minimal. One more factor to take into consideration is the costs of damage to a customer’s personal belongings. If a designer suit is taken in for dry-cleaning and is destroyed in the process, it is possible that the value of the suit could actually exceed the 2,000 Euros authorized for compensation. Based on the level of the guests, it is quite likely that their personal items may be of high value.            Finally, the management of the Ritz must weigh its risks. How likely is it that compensation up to 2,000 Euros would be provided for a guest? Based on the high level of service provided at the Ritz, including the level of training received b each employee, it is highly unlikely that a guest would have such a negative experience that only 2,000 Euros would satisfy them.  Therefore, the Ritz has even created a buffer zone for its employees. Not only are they authorized to meet the guests expectations, despite problems, they can even exceed the guests expectations. If the guest found a mouse in the bathroom, rather than simply refunding the room rental rate, the employee can also give the customer 500 Euro for emotional duress.  Ultimately, it is in the Ritz’s best interests to satisfy their guests to the best of their ability. If monetary compensation can help them achieve this goal, they should use this tool as long as it works for them.
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