Business

1 Introduction

Located in several European countries along the Mediterranean Coast, Solberri is a group of 12 resort hotels which are categorized into 3 types. Its competitive strategy is uniquely based on the hotels' wide range of trendy facilities and the high quality of its staff and IT systems.

Thanks to the policy of all-inclusive pricing structure, extensive upgrades and marketing campaigns, it has returned to profit in 2007 after experiencing two years of operating losses and achieved good forecast occupancy level for 2008, which will have a direct positive impact on both cash flow and profitability. However, as reflected by the customer feedback and low repeat bookings, the unsatisfying customer service has long been a great concern for the Board of Solberri.

To realize its long-run goals and secure a better position in the market, Solberri needs to maintain its operating growth and develop a distinctive feature for its hotels.

2 Terms of reference

We have been asked to provide a report evaluating issues facing the hotel group and to offer appropriate recommendations to the Board of Solberri in May, 2008.

3 Identification and prioritization of issues

3.1 Customer service and HR issues- Priority Number One

The level of service expected by Solberri’s customers is greater now than ever before. However，Solberri appears to have neither adequate nor qualified human resources to meet the demands. The majority of its employees are short-term contracted and only work for one peak season, which causes a high employee turnover. Besides, the reward system seems insufficient to have a positive effect on employee motivation.

If the improvements of customer service were not addressed urgently, this could result in a fall in occupancy level in 2009, casting clouds over Solberri’s goal to achieve future revenue growth. Even worse, poor customer service will reduce Solberri’s competitiveness by differentiation, and thereby strand Solberri’s long term...