$1$

QUALITY IN PRACTICE$-$SERVICE QUALITY AT THE RITZ$-$CARLTON HOTEL COMPANY, L$.$L$.$C$\mathrm{.}35$

Source: Adapted from the Malcom Baldridge National Quality Award Application Summaries of the Ritz$-$Carlton Hotel Company, L$.$L$.$C$.,$; Cheri

Henderson, $$Putting on the Ritz,$$ TQM Magazine $2,$ no$.5($November$-$December $1992),292-296$

Caesar Ritz defined the concept of a luxury hotel in the $1890$s$.$ In $1992,$ The Ritz$-$Carlton Hotel

Company, L$.$L$.$C$.$ became the first hospitality organization to receive the Malcolm Baldrige

National Quality Award; in $1999$ they became the second company to win the award a second

time, a testament to their continuous journey of improvement. The hotel industry is a very

competitive business, one in which consumers place great emphases on reliability, timely

delivery, and value. The Ritz$-$Carlton focuses on the principal concerns of its main customers

and strives to provide them with highly personalized, caring service. Attention to employee

performance and information technology are two of the company's many strengths that helped

it to achieve superior quality.

The Ritz$-$Carlton operates from an easy$-$to$-$understand definition of service quality that

is aggressively communicated and internalized at all levels of the organization. Its Three Steps

of Service, Motto, Employee Promise, Credo, and Service Values$-$collectively known as the Gold

Standards$-$are shown in Figure $2\mathrm{.}2,$ and instilled in all l employees through extensive training

approaches. They allow employees to think and act independently with innovation for both the

benefit of the customer and the company.

Figure $2\mathrm{.}2$ The Ritz$-$Carlton Three Steps of Service, Motto, and Credo

THREE STEPS $"$We Are

Ladies and

Gentlemen

Serving

Ladies and

Gentlemen"

THE RITZ$-$CARLTO

CREDO

The Ritz$-$Carlton Hotel is

a place where the

genuine care and

comfort of our guests is

our highest mission. We

pledge to provide the

finest personal service

and facilities for our

guests who will always

enjoy a warm, relaxed

yet refined ambience.

The Ritz$-$Carlton

experience enlivens the

senses$,$ instills wellbeing, and fulfills even

the unexpressed wishes

and needs of our guests.

OF SERVICE

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A warm and sincere greeting.

Use the guest name, if and

when possible.

$2$

Anticipation and compliance

with guest needs.

$3$

Fond farewell. Give them

a warm good$-$bye and use

their names, if and

when possible.

Source: Adapted from the Malcom Baldridge National Quality Award Application Summaries of the Ritz$-$Carlton Hotel Company, L$.$L$.$C$.,1998$

The Ritz$-$Carlton uses many sources of information to understand its customers. These

include alliances with travel partners such as airlines and credit card companies; focus groups

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and customer satisfaction results; complaints, claims, and feedback from the sales force;

customer interviews; travel industry publications and studies; and even special psychological

studies to understand what customers mean, not what they say, and how to appeal to the

customer in the language they most understand.

A formal strategic planning process sets business directions to achieve the company's

long$-$term vision: $"$To Be the Premier Worldwide Provider of Luxury Travel and Hospitality

Products and Services." Upper managers at the corporate and hotel level conduct monthly

performance reviews of the strategic plan, focusing on key indicators that reflect employee

pride and joy, customer loyalty, financial performance, and process performance. Quarterly

reviews focus on opportunities for improvement and innovation. A variety of comparative data

on competitors and other world$-$class organizations is used to evaluate and improve their

practices. For example, data revealed that front desk turnover was higher than usual. The

company found out that certain airlines were paying higher wages and attracting their

employees. The Ritz$-$Carlton reevaluated its compensation policy to match the airlines and

actually reduced its total costs by eliminating a supervisor who was required to constantly

monitor new employees.

The Ritz$-$Carlton gathers and uses customer satisfaction and quality$-$related data on a

daily basis. Information systems involve every employee and provide critical, responsive data

on guest preferences, quantity of error$-$free products and services, and opportunities for quality

improvement. They track a set of service quality indicators $($SQI$),$ shown in Figure $2\mathrm{.}3,$ which

represent the $12$ most serious defects that can occur during regular operations. Each day an

index is computed and disseminated to the workforce and reviewed by hotel managers.

Figure $2\mathrm{.}3$ Ritz$-$Carlton Service Quality Indicators

SQI Defects Points

$1.$ Missing Guest Preferences $10$

$2.$ Unresolved Difficulties $50$

$3.$ Inadequate Guestroom Housekeeping $1$

$4.$ Abandoned Reservation Calls $5$

$5.$ Guestroom Changes $5$

$6.$ Inoperable Guestroom Equipment $5$

$7.$ Unready Guestroom