2. Before discussing the situation with your group, and from the perspective of your assigned role, what are the underlying ethical issues, if any, in this situation?

Write down the issues. Hotel S is a large hotel in a Maritime city. The hotel is a franchise operation run by an international hotel chain.

The primary source of revenue for the hotel is convention business. A major tropical storm is working its way up the east coast and is about to hit the city. When that happens, heavy flooding is likely.

The Dilemma Because HotelS is a licensed operation, it must maintain numerous quality standards in order to keep its licence.

This licence is important because the international management company handles advertising, reservations, and so on. If it were to lose its licence, it is almost certain that the hotel would have to reduce its staff.

For the past few years, members of the Hotel S team have been lobbying the investors who own the hotel to undertake a major renovation. They fear that without such a renovation, the hotel will lose its licence when it comes up for renewal in a few months. The owners, however, have balked at investing more of their funds in the hotel itself but have indicated that hotel management can use revenues earned above a specified level for upgrades.