HBS Case Four Seasons

¶ … Seasons Hotel Case Study The Four Seasons is positioned as a luxury hotel. Its hotels are mid-sized, and often with downtown locations, so the company is excluded from the boutique category but is not specifically a resort hotel either. The luxury segment for hotels is defined by the service level offered. Luxury hotels focus on a very high end service experience, and the hotels themselves are luxurious in terms of their decor. The staff ratios are higher, and these hotels also pay more attention to staff training, and to detail.

There are a couple of different customer segments that the Four Seasons caters to. The wealthier traveler is the main one, especially in the vacation segment. These are travelers who have sufficient financial means and the taste to always demand luxury and a high level of service. The other major customer segment is the high-end business/corporate/government segment, where higher-ranking individuals are the guests, and somebody else is the payer. The Four Seasons is not for the average business traveler, but more for the executive level business traveler.

The company's organizational culture supports the pursuit of these customers. The organizational culture emphasizes perfection in performance, and delivering a high level of customer service. Excuses are not accepted, and there is a very formal detailing of the universal service standards to which the hotels are to adhere. Both of these are important -- at the luxury end a hotel needs to be operationally as close to perfect as possible, because the guests pay a lot of money and demand excellence.

Thus, customer service has become a core value for the company that helps it to deliver on its service promise. What is worth noting is that in this category, excellent service is basically a baseline. The customer expects it, and the hotel will lose the customer if it is not there. But all of the other competitors in this industry do the same thing -- the major competitors for Four Seasons all have similar cultures with respect to customer service and operational excellence. 2.

Four Seasons seeks to adjust its approach in foreign markets, to reflect the different visions of hospitality in those markets. There may also be some changes that are done at the management level. What the company does emphasize, however, is that the global operating standards are mandatory, and there can be no compromise on these. But after that it makes allowances that the hospitality tone and theme can be appropriate to the region, at a high end standard of course.

The company assumes that some level of flexibility is needed when operating in international markets, and to an extent this is also something that the customer values. The Four Seasons customer is usually well-traveled, so perhaps the company is reading its customers right -- they can handle different types of luxury, as long as it is luxury. Cultural differences, especially with the staff, are among the biggest challenges to which the Four Seasons has to adjust.

The company has to retrain some of the staff with respect to the aspects of its culture that specifically support its business strategy. The example of putting the customer first is salient here. Managers are told that they may need to retrain people within the company, but that they also might need to retrain themselves, given that there are going to be legal and cultural differences for any foreign manager working overseas. 3.

The Four Seasons human resource approach emphasizes bringing everyone into understand the high standards that are expected in service. As noted, the service is allowed to retain its local flair, but everybody is expected to adhere to the global service guidelines. Foreign managers usually arrive to ensure that standards are being met. The Four Seasons also imposes certain other elements of its policy from home. An example of this was the use of female concierges and male housekeepers, which ran against French tradition.

This is very much, however, fitting with the Canadian traditions of the hotel. The French hotel industry, however, adapted to the idea just fine. Four Seasons also modified its approach to hiring a chef. It normally uses in-house talent but in Paris hired a distinguished local chef. This move was done because it was felt that in Paris this was a key success factor. So these are examples of how the company has standardization in some areas, but is willing to bend to local needs in other areas. 4.

There were a number of issues with respect to opening in Paris. The company settled on an existing hotel, rather than building a new site, but that raised challenges. First, they needed to bring the staff up to Four Seasons standards. This was a challenge because some of the best people left, and many of the worst remained. Ultimately, management needed to spend time ensuring that everybody with the company was capable of executing the standards of the Four Seasons. There were French cultural issues in particular.

The French temperament seemed to be quite at odds with the North American way of doing things, which created both training and personnel management issues. The local laws also proved to be a challenge. There were laws about access to natural light, and France's labor laws are in general favorable to the worker. As such, there were adjustments that needed to be made.

However, the company has enough experience working in these sorts of countries that none of these law were too onerous -- it was just a matter of learning about them and then finding ways to deal with them. Overall, the legal issues ended up being more of a nuisance than anything else. 5. One of the major difficulties in a hotel conversion is that the physical space must be transformed.

This usually means that the space should have been for a hotel in the same category previously, but even then the new owner will want to differentiate the space from the prior owner, no matter how successful that hotel was. This is a fairly easy challenge, however, reflecting a new vision for the decor. The bigger challenge is that the old hotel's staff are usually acquired with the purchase. They know the facility, the guests and many have years or even decades of experience.

However, they are also from the old organizational culture. It is important for the new company to bring in some of its own people, and transform the organizational culture. This is especially the case when the new owner, such as a Ritz Carlton or a Four Seasons has a strong brand identity that they wish to project.

In the case of the George V, there were a lot of changes that Four Seasons wanted to make in terms of human resources, and that necessitated turning over a certain amount of staff, retraining the French staff on North American management techniques and other issues such as that. Even then, there were still some issues that related back to cultural differences, either national or organizational, between management and the staff. The decor problem, of course, was relatively easy to solve.

They did not even move the spa, despite the human resources problem that the spa's location presented. They brought in trainers from North America to help explain the changes to the human resources system that the staff were going to see. The good news for Four Seasons is that this was not their first time opening overseas -- they may never have been in France before but they had an approximate sense of the process.

Building the new culture, quickly, was the focal point of a lot of the work that they did. They hired a number of people who either had Four Seasons experience or North American experience, so that those people could help authenticate the new human resources.