CASE STUDY

Flamboyant Hotels

By Christel Ramloll, Charles Telfair Institute, Mauritius

Multinational hotel company Flamboyant Hotels & Resorts' strategic considerations have changed considerably since its creation two decades ago. They have now decided to focus strategically on developing a global company with standout hotels in important tourism markets. Previously, the company owned and managed 100% of its hotels, but this has proved too expensive, complex and risky across the globe, resulting in a new business model in which partnering with others is key. This means that multiple owners, management parties and cultural demographics need to be accounted for and used as opportunities for growth and profitability.

Sailli Kasvam was pensive this morning as he was drinking his cappuccino . . . 'What on earth am I going to do to help my team perform better?' he was thinking. 'Things can't go on as they are! We are running into a wall.' Sailli was originally from Greece and had been in Mauritius for a year now as a hotel director of the exclusive Gansan hotel. Before that he had held the same position in numerous countries, including Thailand, China, Dubai and Brazil. He had been working with Flamboyant Hotels & Resorts' management company for the past five years and, although he did not always think their current 'partnership' strategy was the best, he had to admit it had worked well so far for most of their hotels.

However, now he faced complex problems in his organisation. For one thing, there was a constant struggle to meet the requirements of both the management company and the owners of the hotelChinese-Mauritianswho did not have the same approach and values at all. The constant conflicting orders from both parties was a major cause of stress for all of the employeesfar removed from the philosophy of the hotel, which was about creating a sanctuary for employees and guests and nurturing an environment that would provide peace of mind and internal harmony. Furthermore, the diverse nature of the hotel staff made day-to-day management an issue. Differences in values and cultures also made coordination and performance a struggle.

Flamboyant Hotels & Resorts enjoys very strong brand recognition. With a strong focus on customer service, it has won over 400 accolades over the past years. It is able to offer a full range of services across the world that enables its local partners to grow. Flamboyant's services range from concept development to actual day-to-day management, with a strong focus on uniqueness and luxury. This is exactly what had attracted the Took Tem family. One of the oldest Chinese business families in Mauritius, they had a marvellous plot of land in the north-west of the island and more than enough capital to develop it into an exclusive resort. Initially when they built the hotel, they did not really know what they were doing, so when one of the sons, Andre, discovered what Flamboyant could do, this became a partnership made in heaven. The Flamboyant concept of introducing luxury from the Far East, combined with the unique Asian hospitality and the paradisal location, could only be successful, especially when combined with the company's international marketing prowess. The hotel turned out to be a jewel. It was an ideal destination for honeymooners, and the hotel rooms were designed so that guests would not want to leave. Although the hotel has great general spa facilities, each room was equipped with private spa facilities and a pool, so whether guests chose to be private or social, they would always experience total luxury.

Sailli thought back to when he had been appointed as the new director of Gansan in July 2013. He had believed that he could resolve the constant interference from the owners in the day-to-day running of the resort by sending them back to the management company. This did not work and he had instructed his staff that, although they couldnot ignore requests from the owners, they were taking orders from Flamboyant, which was their employer. He kept reminding himself that the Took Tem family trusted the management company to bring in revenue and profits as they were the ones with the expertise. Although his managers kept reminding him that it was not working, he had faiththat it would all sort itself out eventually. The resort was still young. However, he could not ignore the fact that this constant interference was creating major stress as well as affecting organisational commitment.

In an attempt to ease things, Sailli had instigated morning meetings two months ago, so the whole management team now met every morning at 8:00 a.m. to discuss issues affecting the business. He thought that engaging everyone and using these sessions to reinforce values would help, but he eventually realised that they often resulted in more frustration as people would use them to vent their grievances and argue with each other. Emotions were running high due to increased levels of stress and job dissatisfaction.

At the last meeting, the procurement manager and the chef had argued over the quality of the vegetables that had been ordered. The chef refused to use them, saying they were fit only for animals. A solution had to be found fast. Furthermore, members of the management team realised it was vitally important for the organisation to expand its offerings. The honeymooners' concept was working only for the Chinese market and did not do enough to bring in the kind of profitability the owners were looking for. They now wanted to introduce a new initiative they had been trialling, which involved turning the hotel into an exclusive nightclub with world-renowned DJs two Fridays a month. The guests would then spend the night at the hotel rather than drive back home. This was working very well. The marketing team also wanted to brand the hotel as an exclusive gastronomic destination. Chef Kon Tam would be instrumental in the development of such an initiativeif he did not kill the procurement manager first.

Sailli had met his head of HR & training, Valerie, that morning to discuss the numerous issues they were facing. Valerie could be trusted and, although she was still very young, she had proved that she could resolve a lot of issues. She knew that they needed to tackle a number of pressing issues to enable Gansan to perform.

Beyond being already overloaded, employees were under a lot of stress. They were affected by the inability of managersworn down from being stuck between the owners and the management companyto make decisions, and who had decided to stay on the sidelines and wait. Stephanie, the marketing executive, was bright and had come up with the ideas to help generate more profits, but she was also highly dissatisfiedwith herjob.Her manager, a Russian, did not seem to value her at all, repeatedly bringing her down.When Stephanie had come up with the idea of turning the hotel into a nightclub, her manager had laughed and tried to ridicule her. Thankfully, Sailli and the other managers thought the idea was worth trying.

Sailli and Valerie have set up a meeting to discuss relevant strategies to be taken quickly.They know everybody's help is needed, but will it work?

Discussion questions

1.What do you think are the major causes of job dissatisfaction at Gansan? Which strategies could be implemented to resolve them?

2.Thinking of the key factors known to influence an employee's organisational commitment, how could Sailli and Valerie ensure the employees are committed?

3.Stress seems to be a major issue at the resort. Review three major stressors relevant to the case and outline strategies to relieve stress levels.

4.Explain how the situation is affecting the employee's emotions, attitudes and subsequent behaviours.