HOSP 1114 F22 Case StudyTurning Around the TurnaroundFairhills Hotels, a mid-size chain with an outstanding track record
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HOSP 1114 F22 Case StudyTurning Around the TurnaroundFairhills Hotels, a mid-size chain with an outstanding track record of turning around underperforming properties, recently acquired the Chalet Hotel. The Chalet posed a considerable challenge?even for the Fairhills chain. The transition began with corporate executives deciding to replace the Chalet's general manager with Marcus Wood, the most experienced and successful manager of the chain's turnaround team. Marcus would be responsible for assessing the current staff at the Chalet Hotel and making the necessary changes to improve the property's performance.The only restriction was that Marcus had to replace the current food and beverage director with Ted Waters, a rising star at the corporate flagship hotel. Joanne Land, Fairhills' vice president of food and beverage, insisted that now was the time for Ted's big test.Marcus expressed some concern. He felt that turning around the Chalet Hotel posed enough of a challenge. He didn't need the additional burden of mentoring some hotshot who never faced serious problems and always had the resources available to help him succeed.Joanne understood Marcus's concerns and took full responsibility for Ted's placement. "You'll see," Joanne said, "Just turn him loose and he'll turn it around." Unconvinced, Marcus gave in to the demand, but insisted that Ted had to be part of the management team at Chalet. Joanne readily agreed that Ted, like the other managers, would be accountable to Marcus. Her last comment was, "I don't want to interfere with your responsibilities, Marcus. I only want to give Ted a chance to shine at another property. I'll have HR send you a copy of his file this afternoon."Ted Waters was indeed a rising star at Fairhills. He had bused tables and worked as a food server in college while he earned his hospitality degree. After graduation, he entered Fairhills as a management trainee at the flagship hotel. He was soon promoted to assistant restaurant manager. His first department head position was as the room service manager. Most recently, he was the fine dining restaurant manager. He learned the chain's standards and procedures at the finest and best-run hotel in the chain. Even in this environment, he helped fine-tune an already profitable, smoothly running operation into an even more profitable one. In addition, he was instrumental in launching the company's new award- winning fine dining concept, which the company planned to roll out to other properties, like the Chalet.The next week, Ted arrived at the Chalet Hotel. At an hour-long meeting, Marcus welcomed Ted as the first new member of the high-performance team that would turn the hotel around."Ted," Marcus began," it's important that we start things off right. Change is always difficult, but at underperforming hotels, like the Chalet, change is often resisted, especially if managers and employees perceive changes as personal attacks.""I understand," responded Ted, "changing procedures at the flagship wasn't easy, you know. But once we let the staff know how serious we were, people straightened up and we moved ahead."Marcus paused and momentarily regretted giving in to Joanne. "Yes Ted. You did a fine job there. But we're not just changing procedures here?we're challenging and changing a whole culture of work.""Sure. It's a bigger job. What are some of the immediate problems?" asked Ted. Marcus handed Ted a short list of several areas that needed immediate improvement:? First off, the restaurant is operating at a loss. Profitability must be restored as soon as possible.? The inventory levels are too high, as are costs, but the staff also complains of frequent stock outs of critical items.? Food production is often of inconsistent quality and portion size and food items are late coming out of the kitchen for waiting guests.? Sanitation levels are often unacceptable both in the kitchen and in the dining areas.? Table linens sometimes come back from the in-house laundry with stains still on them, and employee uniforms are dated and poorly maintained.? A couple of ovens in the kitchen are not working properly and most of the appliances are old and need some sort of maintenance, but complaints to engineering just seem to pile up.? Guests often complain about poor service. The hotel's director of sales is reluctant to bring potential clients to the hotel's own restaurant because of the service, which has embarrassed her too often before.? There are scheduling problems, especially (but not only) during high occupancy periods, when the restaurant is often understaffed to meet the demand.Marcus continued, "As you can see, there are problems with the management team as well as with the line staff. I suspect that the director of sales and the rooms director are understating forecasts so they can always exceed them. This puts staffing in the restaurant at risk?you're always short-handed. I don't know what the deal is with engineering, but I'll find out.""I'm sure I can tackle my area's problems right away," Ted offered."Ted, for the next thirty days I'm going to be focused on several critical areas of the hotel. But don't be the Lone Ranger. I'm here for support and advice, so don't hesitate to meet with me. This has to be a team effort."Ted began by calling a restaurant department meeting, during which he made it very clear that the level of performance that had been acceptable in the past would no longer be tolerated. "I intend to make this restaurant's service rival that of our flagship property," he announced.He distributed a new procedures manual that he recently helped revise in his previous position and insisted that everyone read it thoroughly and begin following its contents. Ted pointed out, "There will be no more eating in production or service areas of this restaurant?that's why we have a break area."Ted continued, "I'm bringing in a leading customer service training program that guarantees to increase the restaurant's average check and total revenue. This training program will also address the top ten guest complaints and give the servers' responses and tools that will help them satisfy unhappy guests." He banned the servers' current practice of pooling tips, "I don't believe that pooling tips encourages the kind of superior service we want at this restaurant," he declared.A few days later, Ted unveiled a new work schedule with major changes in a deliberate attempt to upset underperformers. When some staff members complained, he responded, "There are a lot of restaurants in this town. If you don't like it here, a person has to do what a person has to do."Over the next couple of weeks, Ted was kept busy putting out one fire after another. He disciplined the chef for allowing cooks to give servers food prepared by mistake. He found a group of servers still pooling tips and threatened to fire them. It seemed like every time he turned around, the staff was doing all it could to ignore his directives and undermine his authority.One day, near the end of the month, things just blew up. The restaurant was very busy because of high occupancy at the hotel. As Ted walked through the dining room, he heard a guest complain angrily that his food was taking forever to arrive. Theo went to the kitchen and asked the chef what was causing the delay. The chef explained that he was not prepared for this business volume. "My cook was swamped and burned the first plate, which had to be redone."Ted returned to the waiting guest and as he comped the meal, another guest at the next table complained that she had been sitting for several minutes and no one had even brought her water to drink. Ted rushed to the kitchen and accused Beth, that table's server, of failing to take a guest's order.
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