Ritz Carlton Abu Dhabi Hotel

Ritz Carlton Abu Dhabi Hotel

Background and Problem Statement

The Ritz Carlton Abu Dhabi is a refined brand that is known for its unique customer experience. In fact, the hotel is known as the ‘hotelier to kings’ (“Ritz Carlton,’ 2013). Henceforth, the growth of the Ritz Carlton has happened in four phases. The first phase was from 1898-1918 and is known as the era of Cesar Ritz. This was the era in which the founder, Cesar Ritz, after whom the hotel is founded and opened the first Ritz Carlton hotel in 1898 in Paris, and London in 1905 (“Ritz Carlton,” 2013). The second phase was the establishment of the Ritz Carlton Investing Company. Ritz’s wife, Marie, allowed the brand to be franchised under the Ritz Carlton Investing Company by Albert Keller (“Ritz Carlton,” 2013). The franchise led to expansion into the US, with the opening of the Boston Hotel in 1927, and Europe. Again, the third stage, the Ritz Carlton Expansion, was from 1983 to 1995, where the Ritz brand and hotels were bought by William Johnson, who established 40 hotels by the year 2000 (“Ritz Carlton,” 2013). Finally, the last stage was marked by the acquisition by Marriot in 1995 to date. Presently, there are 81 Ritz Carlton hotels and 26 countries. The latest addition was the Ritz Carlton Abu Dhabi Hotel.

Summary of Timeline

Problem Statement

The Ritz’s competitive advantage lies in enforcing hotel values and culture for sublime customer experience. As such, the services are geared towards exceeding customer satisfaction. For one, the customer is never wrong, according to the Ritz (“Ritz Carlton,” 2013). Again, the hotel’s service is very exceptional (“Ritz Carlton,” 2013). The first-class service is the epitome of luxury and is what makes the hotel stand out from non-luxury counterparts. Comparatively, the employees are chosen after thorough scrutiny and are taught the value of being customer-oriented (“Ritz Carton,” 2013). Known as ladies and gentlemen, the Ritz only hires people qualified for this role (“Ritz Carlton,” 2013). Additionally, the staff is taught how to impress customers and carry a credo card throughout. The card includes the 12 values of the Ritz, the employee’s promise, and the motto. The credo is a reminder that the Ritz is driven by customer service.

Nonetheless, the Ritz has also experienced challenges linked to its opening. Initially, the hotel was to be operated by J.W. Marriot, but the ownership changed to the Ritz (“Ritz Carlton,” 2013). Again, changes in design pushed the opening date to 2012. Worse still, there more delays that resulted in the company’s opening in 2013.

External Analyses

Porter’s Analysis

The competitive rivalry is stiff. The Ritz faces fierce competition from other hotels in Abu Dhabi. Some contenders include Qasr Al Sarab, the Abu Dhabi Edition, Abu Dhabi, Khalidiya Palace Rayhaan hotels, and Emirates Palace (“Hospitality and Leisure,” 2019). These hotels are renowned for their marvelous customer services (“Getaway for Growth,” 2015). The rivals also hire the best employees and managers to ascertain that the customer is always impressed.

Nonetheless, supplier power is moderate. The Ritz can bargain for better services as it is a known brand (“The Ritz,” 2013). As a global brand, the Ritz can negotiate for better trade terms because there are so many suppliers in the market that will willingly offer what the Ritz wants. The switching costs would be minimal. Conversely, customers have a lot of power. Since many luxury hotels offer the same products and services as the Ritz, they can easily choose which hotel they want to stay (“Getaway for Growth,” 2015). The available options make it easy to switch from one luxury hotel to another.

The threat of substitution is also high. The rental market catering to tourists for a short-term basis is a viable substitute for the Ritz. Some of these rental properties are luxurious villas and penthouses that have the same amenities as the Ritz (“Getaway for Growth,” 2015). Again, these homes are listed on popular rental companies like Airbnb and TripAdvisor, making them easy and convenient to access.  Moreover, the threat of new entry is very high. The UAE is encouraging investment in the hotel industry, which creates ease for investors (“Hospitality and Leisure,” 2019). Investors are willing to spend billions to create luxury hotels to set up a market in the country.

VRIO Framework

The resources of Ritz Carlton are valuable, guaranteeing a competitive advantage. Focusing on employee behavior ensures that only the best and suitable individuals are hired. Moreover, the workers are molded to provide outstanding services to the customer (“Ritz Carlton,” 2013). The management and company culture and values contribute to the success of the hotel, as they have made the Ritz brand unique. The managers ascertain that company values are followed by workers, regardless of their role. The company strategy has minimized competition and increased customer value.

Nonetheless, the resources of the Ritz are not rare, leading to competitive parity. Notably, although the customer service is impressive, other luxury hotels within Abu Dhabi already have similar strategies (“Getaway for Growth,” 2015). Moreover, human resources are easy to attain and train to match the Ritz’s standards. The values and culture can be modified and incorporated in the rival’s strategies. The Ritz’s strategy and services are good but are not rare.

The Ritz’s resources are inimitable, which yields a temporary advantage. This is the case, especially in luxury hotels. These hotels have access to financial, human, and technological resources to copy the same hiring and employee management strategy as the Ritz. Moreover, the rivals are also willing to spend as many resources as the Ritz to give the clients a luxurious experience, and can easily modify their values to outdo the Ritz.

The entire organization supports the Ritz’s strategy, which can lead to sustainable competitive advantage. The management is proactive in ensuring that the Ritz’s culture remains alive (“The Ritz,” 2013). The leadership has been credited with retaining exceptional services. Again, the culture and values guide the Ritz’s strategy and are widely adopted in the firm.

Summary of VRIO Analysis

Internal Analyses

SWOT Analysis

Alternative Solutions and Recommendation

The Ritz should conduct regular training to the staff workers in the Abu Dhabi hotel. Although the hotel spent ten days instilling values and culture into the ladies and gentlemen through training, this exercise must remain regular. The training would be instrumental in promoting exceptional services to customers (Pollock, 2018). The workers can anticipate and effortlessly address any changes to customer preferences and needs. Accordingly, the hotel can leverage technology to know what the customers want (Pollock, 2018). This is through conducting online surveys, monitoring trends, and analyzing customer feedback. With all this data, the Ritz can modify their training to adapt to emerging customer needs.

The Ritz can also utilize technology to increase employee efficiency and customer service. In this case, the hotel should create an online platform where the workers and customers know each other’s basic details (Pollock, 2018). For example, a bellboy should know the name and suite number of a guest even before they arrive so that they swiftly help them settle. It would impress the clients if the attendant identified them by their name and quickly helps them settle. Additionally, the customers would be very comfortable to know which gentleman or lady is serving them, and how to contact them. The ease in accessing staff would please the workers. Technology will also make check-in and check-out activities very swift (Pollock, 2018). Coupled with the praiseworthy services and attendant, technology will make the Ritz’s experience heavenly.

Equally, the Ritz should personalize the customer services. Although the services are already exceptional, personalization is very impressive and will keep the customers more loyal (Pollock, 2018). As such, the hotel should allow customers who are willing to pay extra to have their own concierge. Better still, the list of ladies and gentlemen can be placed on the website so that the client can take their own pick when booking. Ideally, the customers should pick the concierge at least a week ahead, and furnish the Ritz with enough details on reservations, likes, dislikes, and expectations. Advance knowledge of the customer will help in the preparation and customizing of services to appease the clients. The chosen lady or gentleman will also know what to expect and modify their conduct accordingly.

Recommendation

Personalizing customer services is the epitome of luxury. It takes the Ritz’s exceptional service to a higher level and redefines luxury. This is because the employees already know their clients and establish a cordial relationship even before they arrive at the hotel (Pollock, 2018). The worker will make advanced preparations, making the visitor feel at home. Further, this option upholds the culture and values of the Ritz and will improve its brand. Since the clients are paying extra for customization, the Ritz can afford to hire and train more ladies and gentlemen. Customizing services will make the client feel comfortable when engaging a staff member because they already have a relationship.

References

Getaway for growth. (2015). PWC Middle East Reports.  https://www.pwc.com/m1/en/publications/middle_east_hotels_report.pdf

Hospitality, Tourism, and Leisure in the UAE. (2019). US-UAE Business Council. https://usuaebusiness.org/wp-content/uploads/2019/01/Hospitality-Tourism-Leisure-report-January-2019.pdf

Pollock, S. (2018). 6 strategies for effective performance management. HR Daily Advisor. https://hrdailyadvisor.blr.com/2018/01/11/6-strategies-effective-performance-management/

Values-based organization – Ritz Carlton Abu Dhabi Hotel. (2013). Emerald Emerging Markets Case Studies, 3 (6), pp. 1-11.