Case Study

Steve's Royal Problem Steve Tritsch was enjoying his first month as a full-fledged GM. He'd enjoyed his previous position at a large, downtown property in Philadelphia. In fact, his GM there had been a valuable reference for his new job. But it was exciting to now be out on his own. Although the Royal Court was a smaller property, with 198 rooms, it was still a full-service hotel with numerous strengths: it was in a prime location just off the expressway, it was a well-known brand with a national reputation, and it seemed to have an excellent, well-trained staff. The only real problem was financial. Apparently, the previous GM had not been able to turn those strengths into a sufficient number of bookings. Steve's job was to keep expenses down, increase revenue as much as possible, and turn the Royal Court around.

After 30 days on the job, he was well on his way to turning those goals into realities. Then the letter from Lawhead, Alexander, and Fisk arrived. Apparently, a female guest had her purse snatched in the hotel's parking lot three months ago, on June 4. Now her attorneys were threatening to file suit unless the Royal Court made restitution. They requested payment of $25,000 as compensation for their client's loss of property, multiple injuries, and pain and suffering. Steve took a deep breath. He knew what writing a check for $25,000 would do to his property's struggling bottom line: $25,000 represented an awful lot of room nights - especially when his insurance deductible was twice that amount. But he also wondered if the letter might be nothing more than an empty threat. He had to get the facts. First, he checked the previous GM's files for any record of the incident.

Although he did find one folder labeled "OnPremises Security," it only contained a form letter of dismissal that had apparently been sent to all of the hotel's security staff this past March, six months ago. He also paged through the previous GM's planner and found no notations regarding a June 4 incident. Increasingly frustrated, he dialed his executive housekeeper, a 15-year veteran who seemed to have an almost infallible memory. "Ginnie, do you remember anything about a purse snatching earlier this year?" Steve asked. "You'll have to be more specific than that, Steve," she said. "There was one in late winter that happened in the corridor upstairs, and there was another one in June. That was out in the parking lot." "So, it's true," Steve said. "A guest got injured during a purse snatching on our property." "Well, there were injuries," Ginnie began, "but I seem to remember that she wasn't exactly a guest. I'd want to check on that." "Thanks. I'll take care of it," ended Steve. Steve picked up the letter and walked down to the front desk.

Malia Etoise, another long-time staff member, was working this afternoon. "Hi, Malia. I need to find out if," he glanced down at the letter, "a Lauren Heidegger was a guest here on June third or fourth." Malia entered the necessary information into her computer terminal. "Hmm," she began, "I'm not showing a Lauren Heidegger or any Heideggers for those dates. But for some reason, that name's ringing a bell." "She's claiming to have been the victim of a purse snatching on June 4," Steve prompted. "Oh, I remember that," Malia said, nodding her head. "It was awful. She came running in here and her knees were bleeding and her dress was torn. Once all the other women heard about it, there was total chaos for a while." "All the other women?" Steve asked. "Mrs. Heidegger was here for a women's luncheon of some kind. I don't remember all the details. But once the word spread, women just streamed out of the Briar Room and filled the lobby wanting to know everything that happened, wanting us to call the police." 26 "Which you did, of course," Steve stated in a matter-of-fact tone. Malia paused for a moment. "Yes, that time I'm sure we did call the police." "That time? So, there were other incidents when you didn't call the police?" Steve asked. Malia rolled her eyes and nodded. "Not my choice. But the way it was explained to me was that all police calls show up in the newspaper, and your predecessor didn't want that kind of publicity." Steve returned to his office and fell into his chair, not certain what his next step should be. It certainly sounded as if the incident had occurred on Royal Court property and that there were witnesses to that fact. But Mrs. Heidegger wasn't a guest after all; maybe the property wasn't liable. Besides, the previous GM hadn't even felt the incident warranted a written record. At Steve's former job, the hotel was large enough to afford a full-time security staff and he hadn't paid much attention to their work. Now, it seemed the responsibility for security rested firmly on his shoulders, but he was stymied. "Maybe Carson has some advice for me," Steve thought, recalling how his former boss had gone out of his way to be a mentor for him. He picked up the phone. "That's a tough spot," Carson agreed. "But I'm sure you'll handle it fine." "Great," Steve said, sounding less than confident. "Where do I go from here?" "I'll lay it out for you," Carson replied. "First, call the legal department at the corporate office. Let them know about the letter and that you're researching the matter. They may ask a lot of questions you can't answer yet, but you'll get the answers as you continue the investigation." "To me, the only real question is: do we settle or go to court?" Steve remarked curtly. Carson calmly replied, "But you can't answer that until you know how strong your position is. You need to find out whether your operation has taken `reasonable care.' There aren't any hard-and-fast rules about what that is - it can vary from community to community. You need to find out what reasonable care means for your location. "First, contact the police department and get a computer printout of all the calls made to your address. They can probably do it while you wait. Now, some incidents on that list may not really involve your hotel at all - maybe there was a car accident on the street and the driver came in to use the phone, that kind of thing. You'll need to go through the list and find out which incidents apply. "Next, I'd call up the local newspaper and ask them to search their morgue for all of the stories with the name of your hotel in it. Chances are, any problems that would generate a police call would also show up in the newspaper. There might even be some mentions in the paper that didn't involve the police. Give the newspaper's librarian a couple of days to get the information you need. "While you're waiting, though, I'd recommend talking to some of the other GMs in your area. Ask them what types of crime problems they've had or are having. Some might not want to talk specifically about their own operation - you know, nobody wants to give the impression that their place isn't as safe as can be - but you should be able to get a good feel about what kind of neighborhood you're in. "You've already started talking to your staff, and that's good. I'd suggest that you do more of that. Just walk around and ask your people what incidents they might remember, what their overall impression is of hotel security and crime in the area." "Carson," Steve interrupted, "you and I both know that perceptions aren't always accurate. They're subjective." "That's true," Carson replied. "But, accurate or not, do you want a dozen members of your staff on the witness stand telling a jury that they didn't feel safe at the Royal Court Hotel? I don't think so. Better to find out sooner than later." "I understand," Steve sighed. 27 "One last thing," Carson added. "Drive around your neighborhood and try to see it through the eyes of a plaintiff's attorney who wants to prove negligence. Is yours the only property without a fence? Without security lighting? In other words, does it look as if you care about security?" The next few days proved both valuable and anxiety-filled. The police call sheet only noted the June purse snatching, not the late-winter incident that Ginnie remembered. But it also listed three car burglaries in the parking lot, one break-in during a wedding reception (in which the bride and groom's wedding gifts and honeymoon luggage were stolen), some vending machine vandalism, and two calls in response to guestroom parties that resulted in property damage. All during the last 12 months. The first local GM Steve called began the conversation by thanking his predecessor. "If he hadn't let those three security officers go," she said, "I'd still be reviewing rsums." She went on to explain that a rise in criminal activity throughout the area had led most of the other hotels to actually increase their security. As far as she knew, Royal Court was the only property to eliminate staff - and she had immediately added two of them to her payroll. Another property down the road had hired the third security officer. "I think a lot of us felt he was just shooting himself in the foot," she admitted. "Sure, he saved some money upfront - and I know things have been tight for everybody - but..." She didn't have to finish the sentence. Steve was beginning to understand. Other incidents surfaced once Steve began chatting with his staff. Some tires were slashed by vandals. Some fights erupted in the bar. Malia recalled that there had even been rumors that the Royal Court recently had a reputation as a favored place to buy drugs for dealers who wanted fast interstate access. That activity had diminished, though, when the Carriage Bridge Hotel across the street started offering doughnuts and coffee to the police working the night shift; the close proximity of a squad car was enough to scare the dealers away - at least at night. Unfortunately, that didn't completely convince the staff at the Royal Court. Some employees continue to ask not to work the night shift and others only enter and leave the hotel in pairs. The newspaper search only confirmed what Steve had already learned: the Royal Court had seen more than its share of security problems. Apparently, he'd just been lucky in not seeing any new incidents during his first 30 days on the job. He realized that luck was not good enough. Not only did he have to present the facts of his investigation to the corporate legal department along with his recommendation, he also had to implement an effective security program immediately. With his notes in front of him, Steve picked up the telephone and placed a call to the corporate office.

Questions

1. What evidence can Steve share with the corporate legal department that would support a recommendation either to settle for $25,000 or to take the case to court?

2. What steps can Steve and his staff take to effectively reduce the number of security incidents at the Royal Court, while still working to keep expenses to a minimum?

Case Number: 3871CA The following industry experts helped generate and develop this case: Wendell Couch, ARM, CHA, Director of Technical Services for the Risk Management Department of Bass Hotels & Resorts; and Raymond C. Ellis, Jr., CHE, CHTP, CLSD, Professor, Conrad N. Hilton College, University of Houston, Director, Loss Prevention Management Institute.