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Answers the Question for Hotel Management Students
Document Type: Marketing
Subject: Hotel Management
Number of Words: 3200 total. 800 per question
Citation/Referencing Style: Harvard
Carefully read the City@Hotels case to an extend that you fully understand the text (this takes time). Only with a complete understanding of the case you are able to answer the questions below to a sufficient level.
Read the Case Questions & guidelines for completion of the assignment: answer the 4 questions below, each related to a corresponding chapter(s) of the book Services Marketing. Approximate number of words to answer each question is 800 words (for a total of 4 questions* 800 words = 3200 words). Keep in mind that all answers should integrate the information and details specified in the case.
QUESTION 1: ‘INTRODUCTION TO SERVICES’
One of the underlying frameworks discussed in class is the service marketing mix. Discuss how each of the extended service marketing mix elements (process, people, and physical evidence) is implemented and executed by City@Hotels in general, and how each of these elements contribute to customer satisfaction. How could the 3 service marketing mix elements be differentiated for a typical B2C customer in the U.K. market?
QUESTION 2: ‘BUILDING CUSTOMER RELATIONSHIPS & CUSTOMER PROFILING’
Hotel Management students only:
Develop about 3 customer profiles, leaning on a multivariate segmentation approach, that are relevant for a hotel operating in the UK market. Does the value proposition of City@Hotels fit the requirements of these segments – why would these potential customers actually choose City@Hotels? Integrate concepts such as customer profitability segmentation, customer lifetime value and related degrees of customization.
Facility Management students only:
Consider you are a major Facility Management company operating in the UK market, willing to sell integrated services to hospitality firms…
Based on which criteria would you approach such firms (consider City@Hotels as one of the hospitality firms). Segmentation, customer lifetime value, related degrees of customization are to be analysed and discussed for B2B customers in the UK market (if appropriate). Develop profiles leaning on a multivariate segmentation approach to support this.
QUESTION 3: ‘SERVICE INNOVATION & DESIGN’
A brand can only be successful if it is well positioned in the mind of the customer. This will only be reached if the complete customer experience lives up to the promise the brand has made. Explain for City@hotels how it can successfully build its brand by making use of Keller’s brand equity model. Argue for every building brick of this model how it can be applied by City@hotels and don’t forget to elaborate how all the bricks in the end work together to build a successful brand. As the interactive customer experience plays a crucial role in building the brand you have to incorporate topics like the social and physical context (the interactive experience model) to your answer. Suggestion are welcome of course.
QUESTION 4: E-MARKETING & WEBSITE DESIGN
Use the ‘E-marketing mix’ (Kalyanam & McIntyre, 2002) to describe and explain how the company website should function as information source to attract a target market of your choice. Identify the customer or business that would be attractive to target for City@Hotels and develop arguments to support the choice of specific e-marketing elements to achieve the above-mentioned aim. Explain how these website elements influence customer expectations using the variables of the Customer Gap in the ServQual model (Parasuraman, Zeithaml & Berry, 1988). – Consider making a selection of most relevant e-marketing mix elements for your target market to create sufficient depth in your answer.
Abbreviations in case-text
|BCE||European Central Bank/Banque Centrale Europeenne|
|BEM||Business Excellence Manager|
|BRS||Brand Recognition Score|
|City@Citizen||Loyalty scheme of City@Hotels|
|City@Up!||The fast-track programme|
|CSI||Customer Satisfaction Index|
|CSR||Corporate Social Responsibility|
|DMC||Destination Management Companies|
|EBITDA||Earnings before Interest, Taxes, Amortisation and Depreciation|
|EMS||Employee Motivational Survey|
|H&S||Health and Safety|
|IMF||International Monetary Fund|
|IT PM||Program management|
|KPI||Key Performance Indicator|
|MGE||Mystery Guest Evaluation|
|MPC||Mystery Phone Call|
|PMAP||Preventive Maintenance Action Plan|
|RDoF||Regional Director of Finance|
|REVPAG||Revenue per Available Guest|
|REVPOR||Revenue per Available Guest|
|RDM||Regional Development Managers|
|R&D||Research and Development|
|ROA||Return on Assets ratio|
|ROCE||Return on Capital Employed|
|SOP||Standard Operating Procedures|
|SPC||Strategic Planning Committee|
|SRP||Strategic Review Planning|
|SSP||Strategic Support Partners|
|TellUs||Employee suggestions programme|
CITY@HOTELS – overview
Basic facts and figures of City@Hotels
City@Hotels is part of the City@ Group, a limited liability company operating from Amsterdam. The hospitality section of the Group was launched in 2003 and proved to be pretty successful, despite the economic downturn. Twelve units were opened across European countries, and the Group will soon develop the concept across Asia. The Group provides, on behalf of private hotel owners, hotel facilities that include accommodation, food and beverage (F&B) and IT services. Halfway 2017, the portfolio of businesses and operations were:
12 Hotels or Business Units (BU): The Netherlands (4), Belgium (2), France (2), Spain, (2) and Italy (2).
City@Hotels Training Centre: an educational facility located close to the head office in Amsterdam.
City@Hotels Corporate and regional structure:
- All 12 Business Units generating revenue
- Several Support Units (SU), offering support processes to the BU’s.
City@Hotels works with a total of 3100 employees, with about 20% working across the SU’s and 80% active on BU level. When looking at the activities of the employees at BU level, it appears the spread is as follows:
- Accounting and finance: 8%
- Various (Business Centres, Leisure): 21%
- Front of the house (Front Office/F.O., Rooms Division/R.D.): 23%
- Housekeeping: 16%
- F&B: 18%
- Marketing: 14%
History and past achievement of City@Hotels
Before 2006, all BU’s were owned by City@ Group. However, and in line with common business practices and models, the Board decided to move from an asset-owner and operator to a management company. On behalf of various property owners, City@Hotels now delivers management agreements to operate businesses on their behalf. In exchange, property owners pay agreed fees – and form the key business stakeholders of City@Hotels. Key successes achieved by the company are outlined in detail in the Results section of this document. It is important to mention the company has invested heavily in developing structures that will support its future development. The various awards gained over the past few years illustrate this: (Best ‘People & Talent’ Management Program 2010, Best Initiative in Sustainable Development 2015, ‘The Trendiest Hotel in the World’ Award by Trip Advisor two years in a row – 2016 and 2017, etc.).
Challenges and strategy of City@Hotels
Operating only 12 BU’s at this stage, the Board is aware of the need to develop further at a rapid pace in order to expand and develop the brand throughout Europe and Asia. The aim is to attain a total of 40 BU’s under management contract by 2021, with openings foreseen in Southern E.U. countries, the U.K. as well as Asia. This significant development plan implies numerous new employees (about 7000) will have to be recruited. This is planned as follows:
2019: +2000 employees
2020: +2000 employees
2021: +3000 employees
New BU will be located in key cities, and benefit from the up-to-date processes and systems that characterize the City@Hotels brand. Several regional sales offices will be opened in order to support the expansion plans and ensure market penetration where required. The brand uses several maps and frameworks to make these aims tangible. An overview of key goals from City@Hotels is outlined in the assessment card below:
Customers: We are easy to do business with We make our customers feel special We work with a team of preferred suppliers
Processes: We support co-operation with our customers to maximize sales Our success is supported by excellence in the services provided With our standards, we deliver the promised value
Learning & growth: Our employees form our best guarantee of success Technological innovation is key in our development and overall efficiency All our customers are listened to
Finance: The value of the brand equity must be maximized We aim to increase the value of the assets under management contract We plan financing for a sustainable growth
Customers, target markets and key value proposition
The City@Hotels concept began with the observation that a new type of traveller has emerged:
“Today’s (business or leisure) traveller often travels in jeans and t-shirt, tends to wear an expensive watch, drinks Champagne or Cava and takes public transport as he considers driving in cities with his own car (or a company car) is not efficient in terms of time, cost or because of ecological issues”. City@Hotels classifies its customers in three major groups: guests, clients and partners. The guests directly purchase the City@Hotels products and services. They are classified by geographical area, and the company carefully monitors the development of customer profiles by gathering all data possible pertaining to its guests. The company’s typical guests just want a good bed, a shower, and then they spend most of their time out in the city or in the social spaces of the hotel. This focus on public social spaces plays a key role in the way the brand develops social media content and is discussed in section 4d/Technology is managed to support the delivery of strategy. Guests are incentivised to share their (positive) experiences online, sharing a blog or content about the company. Trying hard to exceed customers’ expectations and creating a WOW factor, City@Hotels has managed to develop a unique design concept and service-oriented social media presence that encourages people to talk about the brand online. This virtual element is supported by the social spaces within the hotels, which tend to spontaneously encourage conversations amongst users.
Clients are customers who organize large conferences on the company’s premises, or book bulk room nights.
Partners do work directly with City@Hotels, generating significant sales (e.g. Tour Operators, Travel Agents and airlines).
In order to ensure the development of positive customer relationships along the relationship marketing strategy defined by the Group, both clients and partners are managed through a key account structure. Numerous data sets are generated and interpreted in order to analyse the performance with guests. The owners of the properties managed by City@Hotels are considered as key business stakeholders. They receive regular assessments of the company’s performance, quantified through ratios such as the Revenue per Available Guest (REVPAG) or the more traditional Revenue per available room (REVPAR). Details of this are provided in section 9, Key results.
The company’s main competitors are brands such as Ibis, Holiday Inn Express, Comfort Inns or Bastion Hotels in the Netherlands. In the Asian market, key competitors are Days Inn, Home Inns or Jinjiang Inn. For the U.K. market, key competitors are Premier Inn, Hampton & DoubleTree by Hilton, Thistle Hotels and other premium budget brands. Considering the current economic climate affecting businesses worldwide, it is likely many more competitors will emerge in the top-end of the budget market.
Operations, partners and suppliers
City@Hotels has a number of core assets and resources that enable consistent service delivery. In order to save costs and ensure standardization of products delivered, the City@Hotels are all constructed from pre-fabricated modules build in offsite factories. Another core resource lies with the use of ICT in order to optimize processes and capture customer data, leading to the development of strong relationships with customers, clients and partners. City@Hotels relies on the latest technology and digital communications to grow their business, with fast and free Wi-Fi attracting customers that are always connected and carry their iPads and iPhones everywhere. The brand clearly positions itself as a lifestyle hotel to its customers, trying hard to reach out proactively to bloggers, writers, and other social media users. The company uses a digital magazine to develop brand awareness, leaning on a wide variety of writers that contribute to lifestyle-oriented content. The style is informal and international, with most contributors regularly using the City@Hotels facilities. In order to optimize relationships with the partners, these are segmented as follows:
- Recruitment agencies, also called Employee development partners
- Strategic Support Partners (SSP) such as Apple or IBM, providing City@Hotels with support functions
- Marketing agencies (conducting market research for the Group) and (local) sales partners
- Legal advisors, segmented by country. These advisors also develop the relationships with local/national authorities
Management structure and key management activities
Headquartered in The Netherlands, the City@Hotels management board includes professionals from both the hospitality and the interior design industry. With an experienced management team, City@Hotels is preparing itself for a rapid European (providing the UK can still be considered as being ‘European’) and Asian expansion. City@Hotels Credo: to offer affordable luxury for its customers.
Core values of City@Hotels:
Credibility: it is the company’s aim to deliver a unique experience to the clients, repeatedly in any BU of the Group.
Innovation: the rooms all feature an XXL king-size bed (2.20 by 2m), a rain shower with several lighting options, free Wi-Fi internet access, Skype phone rates and an international plug system. On top of these features, the room is controlled by a so-called CustomerPads that enables customers to regulate the television, window blinds, temperature of the room, lighting or the wake-up alarm themes.
Technology: using contemporary technology, the company runs its BU’s with a lean back office. This approach leans on network standardization and application virtualization to streamline operations.
You can! All customers are encouraged to socialize and interact with one another, using the social spaces within the hotels to do so. They are also stimulated to share photos of the hotel with their online followers. This contributes to the overall brand awareness of City@Hotels as well as the word of mouth.
When City@Hotels was launched, the C.E.O. established a clear vision statement (as illustrated in the credo of the company). The core values were determined at the same time, reflecting the company’s culture. All employees are systematically encouraged to work and live along the lines of the City@Hotels credo, and the core values do underpin the culture and behaviour of the employees. In order to ensure each BU develops its own potential at best, they are required to develop their own mission statement. In terms of corporate structure, City@Hotels operates as follows…
The Chief Executive Officer (C.E.O.) is supported by 6 Department Heads (D.H.). Each of the latter is in charge for operational or support functions in the following areas:
D.H. Sales & marketing in charge of sales, Customer Relationship Marketing (C.R.M.), communication and branding
D.H. Business development Executive in charge of planning and design of development plans
D.H. Human Resources (H.R.) in charge of training and overall H.R. strategic management, as well as the Training Centre
D.H. Operations in charge of Rooms Division (R.D.), Food and Beverage (F&B), service excellence and facilities management
D.H. Information & Communication technology (I.C.T.) in charge of all design & implementation of I.T.-related strategies + interactions with the Sales & Marketing team to ensure proper exchange/interfaces between systems
D.H. Finance & legal: in charge of financial planning and forecasting, tax issues as well as legal aspects
B. The Enablers
1a Leaders develop the mission, vision, values and ethics and act as role models
The core values of City@Hotels were developed as from the creation of the company, by the C.E.O. To ensure one single vision encompasses the company’s corporate culture as well as its position in the market, a vision statement was created.
Vision statement: City@Hotels delivers luxury at affordable prices to its customers, in a trendy and contemporary environment that focuses on their core requirements
The employees are constantly remembered about the core values of the company and encouraged to live them. These 4 values are at the heart of the service proposition to thecustomers and underpin the company’s vision. The company’s vision and core values are communicated to the employees and other stakeholders through a wide array of communications tools:
- The staff intranet, accessible by all employees with a personal identification code received when starting their employment within City@Hotels
- The company’s magazine simply called City@Hotels, published four times a year and distributed across all BU. An online version of the magazine is also available for download
- The company’s website also reflects the vision and core values of City@Hotels
- All leaders (all employees leading a team of more than 4 people) do also promote the company’s core values through numerous activities: continuous feedback to their team members and rewards to excellent staff members.
Making sure the vision as well as the core values of City@Hotels are understood and applied by all employees is key when considering service excellence. Consequently, much energy is dedicated to the measurement of the core values’ implementation. The tools used to achieve this objective are very diverse:
- Customer satisfaction surveys
- The appraisals taking place every 6 months do also focus on the core values, looking at creative ways used by employees to ‘live’ these
- Employee satisfaction surveys, which also assess how employees perceive their managers
- Mystery guests
- The annual ‘Manager on the floor’ day, where numerous leaders across the company swap their job/duties with employees on the floor
When considering leadership within the company, it is essential to identify potential staff members possessing the skills required to evolve towards General Manager (GM) positions. These competencies are carefully looked at during the interview process and supported further down the road through an internal program of executive leadership. This 2-weeks training is currently delivered at the head office of City@Hotels in The Netherlands, aiming at developing the rapid development of potential GM’s.
1b. Leaders define, monitor, review and drive the improvement of the organisation’s management system and performance
City@Hotels uses the latest technology as well as people-based business systems to review procedures and improve processes. Leaders across the company have contributed to the improvement of key systems, focusing on essential functions to deliver the company’s strategic objectives. Some examples are provided here below:
Balanced Scorecard (BSC) & strategy management framework
2015: the team of executives defines the strategic objectives of City@Hotels, along the 4 dimensions of the BSC (finance, process, customers and growth). The strategic planning process is reviewed every 4 years by the members of the Board/D.H. level.
2016: external consultants are engaged to facilitate the development of a strategic map and determine relevant Key performance Indicators (KPI’s)
2017: the executive team updates the KPI’s of the BSC, for approval by the C.E.O.
Facilities management systems (FMS)
The Preventive Maintenance Action Plan (PMAP) was developed as from 2008, supported at Board as well as BU level.
Health & safety (H&S)
2012: H&S committee created at Board level + at BU level, managed by the GM
The Board meets every 3 months toanalyse the data used to manage the BU’s, both at strategic as well as at operational level. The role of the board is to ensure that:
- the data analysed, and targets outlined are consistent with the company’s strategy
- the data obtained is usable by segment and accurate, based on efficient data mining to monitor the causal relationships between data sets
1c. Leaders engage with external stakeholders
City@Hotels interacts at various levels (Board as well as on BU level) with several stakeholders: customers, partners, society, professional bodies and finally government bodies. The development of partnerships with the stakeholders is facilitated by activities at all levels (local as well as regional or global). Several examples are provided below:
Customers: leaders across the company interact with customers, focusing on guest satisfaction and the development of profitable relations. Loyal guests are rewarded through the exclusive loyalty programme as well as personalized recognition at BU level. The loyalty scheme used by City@Hotels is called City@Citizen.
Partners: City@Hotels works with a list of preferred partners in various areas of activity: exclusive sales partnerships with specific Travel Agents (T.A.), marketing research agencies, certification bodies, major retail brands (e.g. Starbucks). Annual appreciation awards for the most productive partners are attributed.
Society: City@Hotels aims to focus on issues of Corporate Social Responsibility (CSR), and the leaders do focus on projects designed to sustain global resources for future generations. The leaders are involved in several charity events.
1d. Leaders reinforce a culture of excellence with the organisation’s people
The leaders explain all City@Hotels core values in full detail to new employees, with an emphasis on the culture of excellence that prevails in the company. Several induction workshops are held in each BU, depending on the number of new recruits. However, a minimum of 2 annual induction workshops must be held within each BU – it can eventually be converted in a refresher course. The City@Hotels core values are also communicated through the BU’s mission statements, the strategic objectives and the objectives and performance against business targets, networking events with senior managers, monthly meetings between departments in each BU, daily briefings within the operational departments (at the start of every shift actually). On top of these activities, leaders are available for discussions with employees through GM/managers lunches and employee birthday breakfasts with their GM.The effectiveness of the various strategies used to convey the City@Hotels core values to the employees is assessed through the Employee Motivational Survey (EMS). Excellence achieved by employees is recognized by the C.E.O., who delivers rewards and messages personally to the employees (via e-mail). Using the platform of the staff intranet, the C.E.O. launched his very own personal site in 2010.
His aim was to increase visibility of top executives’ actions and develop a platform where employees could communicate directly with him through a link called ‘share your thoughts with the C.E.O.’
In 2016, City@Hotels employees across the company (front-line up to mid-managerial level) have been invited to complete a questionnaire focusing on the improvement of the B2B incentive scheme. Employees can also submit their suggestions and comments to the C.E.O., using his private link on the intranet. Such suggestions and comments are sometimes implemented, and rewards are given to the best ones (see section 3c People are aligned, involved and empowered). The company’s employee base is represented by about 41 different nationalities. Considering issues of gender within the company’s, the front-line staff accounts for about 55% males and 45% females. A cross-cultural training scheme was recently developed at head office level andhas been delivered within each BU as from January 2017.
1e. Leaders ensure that the organization is flexible and manages change effectively
Major change within City@Hotels is based on factors in the external as well as the internal environment. Considering the external environment, the PESTEL factors (Political, Economic, Social, Technological, Environmental and Legal) are carefully monitored on continuous bases. All initiatives that imply changes in policy and strategy within the company are based on the analysis of internal trends and comparisons with the targets defined. The Strategic Planning Committee (SPC) meets once a month to look into the analysis and information distilled from the market intelligence obtained. Major decisions are systematically taken at Board level in The Netherlands, but minor changes are decided upon – and coordinated at BU or regional level. The BSC serves as the standard template to measure effectiveness of change.
2.a Strategy is based on understanding the needs and expectations of both stakeholders and the external environment
Considering the City@Hotels strategy focusing on the employees, it is the company’s aim to attract, develop and retain the most valuable people. Internal communication is a cornerstone of this strategy, supported by continuous scanning of the internal and external environment. Several sources of information lead to strategic choices: information of pay scales by country and specific region, measures of employee turnover and satisfaction, industry ratios pertaining to HR issues as well as an overview of internal promotions gathered annually.
City@Hotels wants to position itself towards the guests as a company that is easy to do business with (with a specific focus on IT-supported processes to simplify procedures – more information on this in section 4d pertaining to technology).
Quite unfortunately, the strategic decision taken to develop the brand in Southern European countries has backfired with the 2008 emergence of the real estate bubble in the US, closely followed by the financial crisis in the E.U. zone. Peripheral countries in the E.U. are at the core of major preoccupations these days (Greece, Portugal, Ireland and to a lesser extend also Spain and Italy). The International Monetary Fund (IMF) has imposed to several of these countries drastic austerity measures and monitors the implementation closely. The City Hotel market intelligence also entails the screening of new hospitality projects developed by competitors, as well as detailed information about tourist visitation and planned developments in several countries served by the company. The potential for expansion in the U.K. has long been considered by the Board, and despite the looming hard or soft Brexit the option is still actual.
Strategies are communicated to all City@Hotels stakeholders by meetings between employees and key members of the Board. This happens at regional as well as BU level, with dates and related information being communicated through the staff intranet. Attendance by employees is facilitated by their line managers, and attendance has proven to be extremely high in the past. Measuring the effectiveness of how information about corporate strategies reaches the employees on the floor is done through the EMS. The strategic objectives are updated annually, ensuring new BU’s are launched and the corporate culture is properly instilled within the company. Working on brand recognition is another key aspect focused on by the Board and the Department Heads. The effectiveness of these strategies is measured through Brand Recognition Scores (BRS), the amount of hotel management contracts signed, the Customer Satisfaction Index (CSI), the output of the mystery guests’ site visits (Mystery Guest Evaluation or MGE) and the assessment of the Mystery Phone Calls (MPC). These measures are used as core KPI’s, part of the data assessment portfolio.
3. People management
3a. People plans support the organization’s strategy
The HR strategy as outlined by the HR Department Head is directly linked to the BSC. Consultative meetings between the D.H. and leaders or employees at both regional and BU level are organized in this regard, together with data coming from the EMS or the benchmarking analysis. HR strategy is communicated through the staff intranet, as well as in the online magazine called City@Hotels. On top of these global communication tools, numerous activities are organized to inform employees about HR issues: induction days for new employees, briefings, notice boards in the common areas such as the employee kitchens, additional letters provided together with payslips. A key HR issue proper to the hospitality industry relates to the difficulty to find and retain good employees. As such, City@Hotels aims to offer competitive compensation packages to its employees. Employees with high potential are currently flagged up by their line manager or the GM of the unit they work in. A special program (called City@Hotels2020) has been developed over the past couple of years, aiming at developing systems to recruit enough qualified employees for the expansions plans of the company in Southern Europe and Asia (additional employees by 2020, see ‘Challenges and strategy of City@Hotels’). City@Hotels2020 focuses on 3 core elements (attraction, selection and retention of employees) and has been designed by the D.H. Human Resources.
In order to support the recruitment process, a ‘recruitment’ page has recently been added to the City@Hotels website. The site includes detailed information about all vacancies, segmented by region and area of specialism. Potential employees are shortlisted based on their competencies, and the company aims at recruiting candidates from multi-ethnic origins. Proper service-oriented skills are a must, as well as basic knowledge of the language spoken on location.
Today, more than 243 employees are receiving language allowances to develop this. Considering issues of employee retention, it’s the aim of the HR department to meet the company’s requirements in terms of staffing and support the aspirations of employees with a high development potential. Tools for the HR department to assess the effectiveness of these strategies lie with the EMS, feedback provided during the appraisals and the evaluations obtained from the company’s training centre. To save on travel cost, communication between employees working in different geographical locations is facilitated by the staff intranet – as additional software has been installed to facilitate this. The EMS has been in use ever since the creation of City@Hotels, and all data obtained archived and used for comparative analysis& development of improvements.
3b. People’s knowledge and capabilities are developed
Properly training the employees is a top priority for City@Hotels, and the company has developed processes that support organizational objectives in this regard. Employee retention is improved based on data obtained about employee’s ability to further develop their career path. Information about the most promising employees within the company is stored in a specific database, and it is reviewed every 6 months by the D.H. in HR, the GM of the unit the employee works at as well as his line manager. The database with the various profiles is systematically compared to vacancies that pop up within the company, the aim being to recruit internally before advertising to a wider public. Whether an employee needs training is determined through the internal appraisal system with the line manager, the CSI or specific actions such as the MPC.
All competencies looked at within City@Hotels reflect the core values of the company (Credibility, Innovation, Technology and ‘You can!’). Cross-training programmes are delivered within the company, enabling employees to envisage career switches. At this stage, these trainings are provided on request of GM’s and are not formalised in any way. Similar to what Hilton has called the Elevator Programme, City@Hotels has developed the City@Up! scheme, which is based on regular reviews from future staffing requirements. The programme aims to train potential GM’s at unit level, with the first intake in 2012. Candidates go through an extensive recruitment process, and currently the company has 6 people completing the 5-years scheme. All trainees have documented development plans and receive regular feedback about their progress and overall performance.
3c. People are aligned, involved and empowered
Empowerment of staff members is at the core of the City@Hotels HR strategy, facilitated through several activities such as training sessions, the continuous development of leadership skills or the documents related to empowerment and posted on the company’s intranet. An overarching project focusing on empowerment has been developed by the D.H. of Human Resources as from 2012, and the concept itself is integrated in the core values of the Group. The effectiveness of the empowerment strategy is regularly measured through the CSI, MPC or MGE. Employee feedback related to empowerment is captured through the EMS. Employees throughout the company are involved in improving corporate performance, through the TellUs scheme (where employees can voice their feedback through the staff intranet). A company-wide programme of process review integrates suggestions from all BU’s, in line with the core values. In order to improve communication within the company and encourage team building, social events as well as external conferences are organised (predominantly in The Netherlands).A fixed budget allocated to team building activities is given annually to each BU. Each hotel can use this budget according to its own needs. ACity@Hotels sales & marketing conference was held in 2016, and a Rooms Division conference has been organised in 2018.
These conferences bring together front-line employees, BU managers, regional managers as well as the related Departmental Heads.
3d. People communicate effectively throughout the organisation
As from the creation of the company, internal communication amongst employees has been a key element in the City@Hotels corporate strategy. To measure the effectiveness of internal communication, a rather structured approach has been developed. Internal communication is managed by the D.H. of Human Resources, who has developed an internal communication strategy in line with the overall company strategy…and supported by a deployment timeline and specific calendar of events. Communication with employees is not only top-down, but also bottom-up or horizontal. The company’s aim is to facilitate the exchange of all information required, through a vast array of communication channels.
Some examples are provided here below:
- A monthly newsletter that is spread across the company, both in paper format as online (intranet)
- Cross-functional meetings between hotels of the brand
- Company presentations to all employees
In 2018, a questionnaire has been issued to employees – collecting their feedback on the effectiveness of the intranet – in order to make improvements to the site and adapt it to the latest requirements of the staff members. Employees consulted the company’s vacancy pages, the latest news page, internal communications or incentives provided. The effectiveness of the communication strategy is measured through the EMS. The City@Hotels aims and actions pertaining to communications are summarised here below:
- Content of communication is differentiated according to the audience targeted (e.g. messages for the external audiences are adapted to the ‘internal’ audience, advice to communicate with employees is provided through new guidelines). Internal and external messages are aligned, with PR messages or new appointments posted on the intranet along with (or even before) external messages
- Provision of information is facilitated by numerous tools (intranet, info news board within the canteen of each BU, regular information meetings within an across BU’s)
3e People are rewarded, recognised and cared for
Within City@Hotels, employee motivation is supported by the Incentive Schemes (IS) that work at 2 different levels:
- Regional managers & above (measured through score card targets and team performance measures)
- BU managers and below (KPI measures of the BU and overall targets)
The Incentive Scheme is composed by 3 different elements, leading to a total reward package for City@Hotels employees. The package is composed as follows:
- Cash at the end of the month or year: fixed pay (base salary) + variable pay (bonus based on the incentive schemes, overtime and eventual commissions)
- Various benefits: discounts, vacation leave or others, transport, medical cover, meals and eventual accommodation at BU level or on external location when required
- Non-financial: numerous career development opportunities, challenging working practices, continuous development schemes and recognition-based practices (birthday celebrations, employee of the month scheme in each BU)
The amount and structure of remuneration and benefits is based on extensive internal and external benchmarking, in order to remain competitive within the marketplace. Based on the outcome of previous benchmarking analysis, several changes have been implemented in the past: free public/train transport to-and from the BU for all employees andincreased base salary for the waiters in all F&B operations across the BU’s. Recognition of employee contribution is another element of significance for the H.R. department within City@Hotels. Several employee recognition programmes are in place within the company in order to reward particular achievements or efforts. The Special Employee (SE) scheme is a high-profile recognition programme, aimed at retaining the employees offering most development potential within the company. The scheme was initially piloted within the Amsterdam BU in 2008, before being rolled out in all units across the company.
Today, 9 employees are involved in the program – which includes management training and media handling. Effectiveness of the SE scheme is evaluated by several KPI’s pertaining to employee retention – and this was attained in 2014, with a 91% retention of employees involved in the scheme. Considering specific benefits, employees on the SE scheme receive discounts or significant upgrades when using City@Hotels services. These employees act as ambassadors of the brand, also doing presentation in hotel schools or attending industry-related conferences. The latter extends to all employees, who are encouraged to attend or participate to industry awards. At the 2016 International Hotel Awards, the GM of the Amsterdam unit (Wout van Tankeren) was nominated ‘GM of the year’.
4. Partners and resources
4a. Partners and suppliers are managed for sustainable benefit
Corporate strategy implies relationships are supported at all levels within the company. City@Hotels works with a system of preferred partners and suppliers, who are selected based on the following criteria:
- All customer feedback related to the product or service is shared between City@Hotels and its supplier
- Compliance with the initial product specifications as developed by City@Hotels
- Staff training to improve the improve the relationships, applicable to both parties
- All partners must be aligned with the City@Hotels brand in terms of target audience(s), quality of database and overall compliance with data protection
- Suppliers must be HACCP certified, as is City@Hotels
Although the company is only at the beginning of an ambitious international development, the D.H. Operations as well as the D.H. Marketing are currently developing a cohesive sales partner strategy in order to maintain and develop market share. Both D.H. are responsible for developing, implementing and managing most aspects of a ‘strategic’ relationship. City@Hotels has developed alliances with partners in several industries, even though the company doesn’t have the purchasing power of competitors such as Hilton or Starwood. At this stage, the company has developed alliances with retail and airline companies. Current account partners included retailers such as Expedia or Hotel.com or airline alliances such as OneWorld or Skyteam. In terms of measurement of the productivity of such partnerships, results are reviewed against the set objectives every 6 months. When specific campaigns are developed, the Return On Investment (R.O.I.) is calculated right after the event (e.g. joint promotion of the Amsterdam BU’s together with KLM, whereby the related promotion code is identified in the central reservation system of the company). In The Netherlands, a strategic alliance is the one with the Breda University of Applied Sciences (commonly called BUAS) located in Breda.
The City@Hotels employees attend Courses of Professional Development (C.P.D.) within this University, and the company is currently negotiating a formal agreement for the delivery of a 1-year Master degree. This would be organised within the City@Hotels training Centre as well as on the BUASfacilities in Breda. Being a technology-driven company, City@Hotels has, over the past few years, developed strategic partnerships with several providers: Fidelio for the development of a new-generation Property Management Systems (PMS) or new yield management software with Optims. The D.H. of the IT function regularly meets up with developers at Fidelio, in order to ensure the software is developed in accordance with the company’s requirements. Working with such common development team has proven useful, leading to significant value co-creation. Other support partnerships include working together with some airports, local or international recruitment agencies, local municipalities, the local police regional tourism agencies.
4c. Buildings, equipment, materials and natural resources are managed in a sustainable way
A key strategic objective of the company is to ‘Increase the value of the assets managed’. In line with this objective, extensive Preventive Maintenance (PM) on the mechanical and electrical systems of the BU’s has been implemented – in order to improve efficiency, maximise life cycle and reduce downtime as much as possible. The D.H. Operations is in charge of facilities management and has put in place a centralised system to manage requests for technical assistance across the BU’s. All requests from the various BU’s are regularly assessed in order to improve efficiency of the workforce dedicated to maintenance. Technical assistance is provided by external contractors, BU staff or qualified regional maintenance staff working directly for City@Hotels. Based on feedback from the BU’s GM and the information issues by the centralised request management system, several actions were undertaken:
- Development of a system of priority codes, in order to distinguish between urgent and less stringent maintenance activities to be deployed across BU’s
- Defining KPI’s to assess the contractors’ performance. The output of these KPI’s will be used when eventually re-negotiating contracts with the existing contractors
Health and safety of the employees and guests is paramount. City@Hotels employees as well as all facilities meet legal requirements in terms of inspection of systems and equipment. Maintenance plans across BU’s are based on manufacturer guidelines and managed through the centralised request management system. Because of the numerous inspections and normal servicing, the machinery as well as systems across properties are kept in an optimal state of readiness. Another aspect of cost control/cost reduction linked to the machinery and systems within City@Hotels lies with the control and reduced usage of electricity.
This enables the company to minimise operating cost and the impact on the environment (usage of low energy light bulbs, centralised management systems to manage the buildings and monitor energy consumption of unoccupied rooms, tank overflow alarms, scheduled lighting programmes, collection of paper and plastic waste, the use of recycled wash water in all BU’s laundries,use of grew water for irrigation of the flowers, etc.). However, all BU’s are empowered to manage their own stock and inventory – a decentralised approach that reduces the cost/need of expensive central storage facilities. At country/regional level, a health & safety team monitors building design and overall coordination with local authorities.
4d. Technology is managed to support the delivery of strategy
The D.H. Information & Communication technology (I.C.T.) oversees all design & implementation of I.T.-related strategies + interactions with the Sales & Marketing team to ensure proper exchange/interfaces between systems. The technological approach of the D.H. is integrated in the BSC. IT-related request or proposals from BU’s are all directed to the D.H. Information & Communication technology (I.C.T.) for assessment and eventual approval. Presence through social media channels has been a key focus over the past couple of years, as stated by the D.H. for I.C.T.: “Whenever we have the opportunity, we casually bring up our social media presence. We encourage guests to share photos of the hotel with their followers. Our goal for Facebook isn’t necessarily to generate room sales, but to increase our brand visibility and encourage word of mouth”. Management within City@Hotels believes this organic approach works much better with its clientele than trying to be too pushy in asking for online content contributions. Much of the IT applications as developed within the company are provided by an outsourced network of experts, enabling City@Hotels to focus on its customers.
Since launching its first hotel in 2003, City@Hotels has established a unique brand identity of affordable luxury that gives global travellers a unique experience, as much as it is on maintaining low operating costs. The smart use of contemporary technology enables City@Hotels to run its hotels with a lean back-office, and to tune its operating cost to the effective delivery of personalized guest experiences.Network standardization and application virtualization enable the company to streamline its operations while focusing on its guests. IT outsourcing is central to this approach. In 2006, City@Hotels turned to Swisscom (www.swisscom.ch/en/hospitality.html) to advise on the most efficient use of technology for its BU’s. Swisscom developed a technology blueprint for City@Hotels where the hotels and guest services would be integrated into one unified network infrastructure.
From a catalogue of IP-compliant technologies, City@Hotels chose its preferred service providers for itsroom lighting and Heating, Ventilation and Air Conditioning (HVAC). Swisscom coordinated the interfaces among all the vendors concerned, which included NEC (www.nec. com) for Voice over Internet Protocol (VoIP) and Philips (www.philips.com) for the Customer Pads (CP) in the guestroom. Nowadays, all these systems run on the same, integrated wired and wireless network infrastructure. Through their shared IP platform, the systems tend to talk to one another and share guest data – hence enabling a high level of seamless service personalization. The IT network is remotely managed 24/7 through Swisscom’s specialized network operations resources according to mutually agreed upon service levels. Application virtualization also plays a big part in City@Hotels forward-looking IT strategy. Together with Swisscom, the hotels managed to drastically reduce the number of on-site servers and systems. Its VoIP solution as well as its central hotel system, which encompasses traditional (central) reservations, property management andCRM (provided by StayNTouch: https://www.stayntouch.com/. StayNTouch have been entirely moved into the cloud. This enables City@Hotels to avoid on-site system maintenance and support. This software-based approach allows the company to benefit from flexible, pay-per-use pricing. As a result, City@Hotels saves on acquisition, installation and maintenance as well as energy consumption.
Moreover, throughStayNTouch’ virtualized suite of hospitality management applications, City@Hotels now has a single database for all guest profiles and certain applications to service its guests in a consistent and personalized manner. For instance, it stores guests’ music choices and room ambiance settings, and then proposes them to the guest the next time he/she reserves a room on thewebsite or checks in at BU’s.An advantage of a software-based approach is the fact that all future City@Hotels can hook up to centrally-hosted data and applications while avoiding the costs associated with additional set ups. By choosing the same application providers for its new properties, the company tends to create a template for its hotel IT frameworks. This template supports the strategic expansion plans of City@Hotels, meets stakeholder expectations and illustrates the proper use of IT resources. The progress of the IT projects and the collaboration with the various partners is regularly monitored and measured against the objectives.
Reports about the advancement of projects are developed every 2 months to keep the members of the Board informed about all relevant IT activities. The approach of the IT template has been reviewed in 2018. This will be completed to become more transparent, easier to manage and control globally when considering the expansion plans at strategic level. The development of further IT application to support employee empowerment will also be at the core of the review process. Hardware systems are replaced every 5 years, in agreement with the company’s partners.
5a. Processes are designed and managed to optimize stakeholder value
As from the launch of the Hotel subsidiary, the management focused on obtaining ISO9001:2000 certification for the BU’s systems. The process owners use the communication platforms on the intranet to adapt content and nominate a list of users for specific projects/process reviews.
Other documents containing key information (e.g. SOP) are also available through the intranet, and frequently used by managers within the BU’s to inform employees about company requirements, objectives etc. Overall performance indicators are reported every 4 months, comparing trends against the targets. These trends versus targets are reported at D.H. level on a quarterly basis. Recent process improvements relate to:
- improved (fully automated) check-in processes across BU’s, leading to reduced check-in waiting times for customers
- recruitment of employees has been centralized by region/country, in order to save on recruitment and training costs
- maximization of sales though process automation of the reservation systems, whereby client information is shared amongst all relevant stakeholders
5b. Products and services are developed to create optimum value for customers
The core values of City@Hotels include ‘Innovation’ and ‘You can!’, driving the process approach within the company. The focus is on improving the guest experience, by delivering luxury at affordable prices. In order to create new service ideas or develop new products, structure mechanisms are in place across the company:
- capture of qualitative and quantitative guest feedback through satisfaction surveys and secondary data sources (industry conferences, trade press etc.). Tools used to achieve this are the CSI, MPC and the MGE. On top of this, feedback is captured from partnering travel agents, duty manager logs and competitor benchmarking
- outsourcing of research to external agencies, who organize focus group sessions involving top clients, partners/suppliers and employees (see the TellUs scheme). The output of these sessions is shared at D.H. and GM level, through the intranet platform. Key concepts uncovered in the 2011 focus group sessions and forming the cornerstone of further development (service & product design) in the company are: value creation, simplicity for check-in/out procedures, authenticity and sustainability
Outsourcing part of the company’s research is necessary at this stage, as there is no critical mass to support an autonomous Research & Development (R&D) department. However, in the future, this is likely to be developed at D.H. level in order to support the company’s aim for continuous innovation. The F&B operations within all BU’s have been designed and improved based on customer feedback, both in terms of service delivery and products on sale (vegetarian options, Asian-style sandwiches etc.). Numerous criterions come into play when a decision to develop new products or services is evaluated: technological developments in the marketplace, trends in society, evaluation from the existing services by the customers (ROI within the product portfolio) and overall perceived added value. On-site visits to competitors is another element that enables benchmarking and eventually leads to the development of new products or services.
These visits are coordinated by the regional directors or at D.H. level. In 2014 numerous new improvements have been introduced to deliver additional value to the customers:City@Hotels pins with the languages spoken by the employee, introduction of Japanese menus across BU’s as well as the development of additional (free) room amenities targeting the Japanese market in The Netherlands.
5c. Products and services are effectively promoted and marketed
The City@Hotels product and services are promoted and marketed in a well-structured manner to all its customers, partners and corporate accounts. The company proposes an innovative concept, driven by one desire: to create affordable luxury for people (this is the brand promise that is emphasized in all marketing campaigns developed). The City@Hotelscustomers are a smart new breed of international travellers, crossing borders as they would cross streets.
The company’s goal is to offer affordable luxury to all mobile people around the world, by creating a global portfolio of City@Hotels, located on prime locations in metropolitan cities. The company has the resources and team to realize this roll out strategy, believing in local partnerships and always work with local partners for the acquisition, finance, design and construction of the hotels. The unique value proposition proposed to developers, investors and land owners combines the following characteristics:
Upscale hotel performance (revenues), due to the hotels unique and innovative lifestyle guest experience
- High profitability: due to an efficient operating model, with a centralized management structure
- Low distribution cost: as a result of an effective sales and distribution strategy
- Reduced floor area (and land) requirements: due to efficient design and layout of the rooms and other areas (up to 50% reduction compared to ‘traditional’ upscale hotels)
- Reduced development cost and time: due to the use of City@Hotels readily available design information and innovative building technologies
- Reduced development risk: as a result of the pro-active involvement of the design &construction team, ensuring compliance with the high quality and brand standards
- Full dedication to developing and operating the hotels with a high standard of sustainability. All City@Hotelscomply with BREAAM ‘Excellent’ or ‘Outstanding’ standards, and minimally requires a ‘Green Key Silver’ certification (and strive for a ‘Green Key Gold’ certificate). Key aspects of the BU’s sustainable design process are as follows: integrationof passive system technologies, low energy HVAC and lighting systems, integration of renewable energy solutions
The company’s products and services are launched using numerous channels including press announcements, personalised e-mails, up or cross-selling by the employees, targeted sales campaigns and an extensive word-of mouth approach supported by social media strategies. Every day, the City@Hotels’ websites are updated in order to communicate the latest information about the BU’s promotions. The customer base is segmented as follows: Meetings Incentives Conferences and Events (MICE), Corporate, Leisure and Airlines.
The various segments are managed through a system of key accounts, whereby a single point of contact is offered across all properties of the Group. A relationship manager is in charge of managing a specific set of corporate accounts, focusing on the specific requirements from the company’s best clients. Large corporate partners are selected based on their presence in the key countries targeted by the company.
These companies receive preferred rates and are assigned an account manager within City@Hotels. The account manager, together with the hotel management (at BU level), determine rates, policy related to cancelations as well as overall availability of rooms. The account manager also organises meetings between the clients and sales team members across BU’s. Key accounts are reviewed annually. According to the law of Pareto, the company does focus on the 20% of customers that provide most income. These clients are pampered and considered as the top-tier of a 3-step classification scheme composed by gold, platinum and silver members. The criteria for classification across tiers are well defined: gold members must score above 80 to 100, platinum members above 50 and silver members above 20 points.
Each tier enjoys specific benefits such as free upgrades, familiarisation trips for travel agents, marketing funds and brochure contributions. Annual key account plans are prepared for all key accounts, with an action list (visits, specific events of meetings). This structure of key accounts is reviewed annually, with room allocation based on what has materialised the previous year + future prospects. At BU level, each hotel defines minimum standards for recognition of repeat & VIP guests (amenities, welcome cards, free transportation etc.).
5d. Products and services are produced, delivered and managed
Within City@Hotels, each aspect of the guest experience is supported by a vast array of policies and SOP in order to ensure consistence across BU’s. Interdepartmental communication is essential to deliver on the promises of the brand. This aspect is ensured through briefings, meetings, team building and cross training in order to ensure seamless delivery of a consistent guest experience. Details of core aspects pertaining to the guest experience within City@Hotels are provided below: enquiries and reservations for individual guests are received online through the website (including e-mails) or eventually walk-inns.
Corporate accounts can also book through the website, or via the account manager in charge. Standards related to reservations and general enquiries imply any request is taken care of within 16 hours maximum.In line with the company’s core values (see below), the products and services are delivered in a cost-effective way, without hampering the ‘luxury’ aspect.
Core values of City@Hotels: credibility, Innovation, Technology and ‘You can!’. Guest satisfaction (measured through the CSI) is high, and illustrates that the core values of the company are applied by the employees. The workforce is well trained, motivated and experienced – compliance with standard practices within the company is high. Understanding and responding to the requirements of the customers is done in various ways: guest history profiles are developed and maintained + the information is spread across the company in order to ensure responsiveness, key information is shared through frequent briefings and log books within various departments (front office, banqueting, housekeeping and sales & marketing) in order to ensure the employees are up to date on incidents with guests or specific requirements.
Delivering on the brand promise also implies support processes are in place, such as proper training, recruitment, administrative procedures through seamless integration of back-office processes. Both the front-liners within the company as well as the employees running support activities frequently work together on performance reviews or common projects focusing on improving the experience of the City@Hotels customers. Measures are in place across the company to ensure security, confidentiality and safety of the customers. All employees are trained to face emergency situations, and regular drills are conducted on the premises across BU’s. Customer feedback is captured through various mechanisms, assessing whether the company’s services are produced and marketed properly. These mechanisms imply the MPC, the CSI and overall customer feedback, Occupancy %, several KPI’s such as market share, ADR and REVPAR as well as external audits focusing on the delivery of quality services within City@Hotels. The MPC measure the efficiency of the reservation & enquiries process across BU’s, although a vast majority of reservations are booked online. The MGE is conducted by an external company in order to ensure objectivity and professionalism.
5e. Customer relationships are managed and enhanced
Data mining techniques are extremely well implemented within City@Hotels, facilitating the development of strong relationships with customers and partners. See section 4d. “Technology is managed to support the delivery of strategy.” for additional details about IT processes facilitating the development of CRM. The sales force is structured in regional teams, who focus on developing and managing regional accounts. Sales team also coordinate sales activities by region, develop sales strategies and search for new business opportunities. The regional sales teams also convey outbound and inbound business to the local BU’s.
Strong relationships with customers are paramount for City@Hotels, and based on interaction and continuous feedback through several channels: customer complaint system, guest newsletters, PR activities with customers or courtesy calls and visits. The City@Citizen loyalty scheme rewards loyal customers, as points can be gathered and redeemed within the company or with retail partners. The loyalty scheme is regularly reviewed and upgraded to include new (online) incentives and benefits. Members of the scheme also receive regular (monthly) updates about their status, on top of news about the company’s events and special happenings.
In 2018, a survey focusing on the loyalty scheme has been conducted amongst its customers in order to conduct further improvements. The surveyfocused on the programme’s effectiveness in terms of other (possible) desired benefits or the customers’ awareness of tiers and the usage of the benefits attached. The repeat guest programmes are currently centralised at D.H. level (D.H. Marketing). In the future, a review is likely to be held to eventually empower BU to design parts of the rewards programmes based on the specific requirements of their most loyal customers. However, and even at this stage already, guest preferences are used to customise relationships through recognition and the anticipation of their needs (see section 5c.). Customer feedback/complaints are reacted upon promptly, with the SOP stating an acknowledgement of receipt must be issued within one hour after receipt. A solution of alternative action must be issued to the customer within 48 Hours maximum, unless the problem is too complex to solve. In such case, the customer will be informed, and a new deadline will be communicated to him. The CSI scores feature in the company score card and support the strategic objectives – the scores are linked to the bonuses received by the employees.
C. Survey Results
6. Customer results
The data sets used by City@Hotels illustrate what the different types of customers think of the company. Customer feedback is collected through wide variety of ways: the CSI, MPC, the MGE as well as paper comment cards left in all rooms (both conference rooms as well as accommodation). Evaluation surveys are also distributed to all employees attending training sessions. The results of all feedback collected is segmented and analysed for internal as well as external benchmarking comparison. Results are measured against the targets defined and posted online. A core component for measuring customer satisfaction is the CSI. The questionnaire was redesigned in 2017 in order to facilitate benchmarking and increase statistical representativeness of the results (BUAScontributed in redesigning the questionnaires). City@Hotels focuses on assessing the quality of a service, using the five generic dimensions of service quality (SERVQUAL) that must be present in the service delivery in order for it to result in customer satisfaction:
- Reliability: the ability to perform the promised services dependably and accurately
- Responsiveness: the willingness to help customers and provide prompt service
- Assurance: the knowledge and courtesy of employees as well as their ability to convey trust and confidence
- Empathy: the provision of caring, individualized attention to customers
- Tangibles: the appearance of physical facilities, equipment, personnel and communication materials
City@Hotels collects part of the CSI information online, supported by a company called Medallia (see www.medallia.com). The company obtains guest feedback online from a large proportion of its customers staying at City@Hotels.Survey response time was reduced from what formerly took weeks, to an average of three days after a guest’s stay. The new survey program provided numerous advantages:
- cost efficiencies
- facilitated communication across all levels of management
- enabled pinpointing difficulties in service delivery and take appropriate action much sooner.
As most guests book online, all members of City@Citizen are surveyed through this channel. Complete integration of non-City@Citizen guests into the online guest survey program will be achieved end of 2019. Surveyed guests appear to prefer the on-line method of satisfaction surveys, stating quite clearly that they preferred the improved timeliness and convenience of the survey process. Hotel managers also have found the new system responsive and powerfully informative, since the program provides the very latest guest feedback results for their property. The Medallia system provides a fast and effective way for hotel management to stay on top of the guest experience, channelling guest feedback to different levels of management using three different reporting modules, and an integrated guest recovery system allowing the company to pinpoint at-risk customers and respond appropriately. The CSI output is used for internal benchmarking as well as for external comparison with the ley competitors in the market: Ibis, Holiday Inn Express, Comfort Inns or Bastion Hotels in the Netherlands.
For the Asian market, key competitors are Days Inn, Home Inns or Jinjiang Inn. Several competitors for the U.K. market have been provided above but should be discussed or identified in further detail. The targets for 2018 have been reviewed and changed from one single, consolidated company target, to regional targets per BU.
The CSI scores obtained do exceed the targets for 2018, as well as other assessment tools. Key examples are provided below:
CSI Overall for City@Hotels
Comparison of CSI with key competitors in the EU market
Check-in times distribution across City@Hotels
6b Performance indicators
City@Hotels has won various awards over the past few years (Best ‘People & Talent’ Management Program 2010, Best Initiative in Sustainable Development 2015, ‘The Trendiest Hotel in the World’ Award by TripAdvisor two years in a row – 2016 and 2017, etc.).But the company has many other achievements to show:
- Fodor’s 100 Hotel Awards, 2014
- Simplifying awards for social media excellence, 2011: Best hotel in social media
- Condé Nast Traveler Hot List 2016
- Wallpaper and Fortune Magazine – Best Business Hotels 2015
- Hospitality Design Awards 2014: Best Hotel Design in Mid-range Hotels
- Sunday Times Travel Magazine: The World’s 100 Best Hotels 2015 (Number 26 of the World’s Best Hotels).
- CNBC Top 25 Business Hotels 2016 (Number 4 best new business hotel)
- Venuez Awards 2017(Best Hotel Concept)
At corporate level, strict policies are in place to ensure award participation is in line with the company’s strategy. Award nominations are centralised in the D.H. Sales & marketing also in charge of sales, C.R.M., communications and branding. Centralising these activities at corporate level facilitates coordination and share awareness on award nominations and successes. Several key performance indicators have been developed over the past few years. A detailed overview of several key indicators is provided here below.
a) The quality of the guest profiles is assessed every 2 years, in collaboration with Hetras (see section 4.d for additional information) and huge improvements have been booked in this regard.
b) The Market Penetration Index (MPI) is essential in understanding performance of BU’s in specific markets. The market mix varies from BU to BU – and the MPI is close monitored at local, regional and corporate level. The MPI illustrates the extent to which City@Hotels exceed the ‘fair share’ of room nights sold within a specific competitive set. In order to understand a bit better, the concept of fair share and related KPI’s, the example below will be covered in class…
7. People Results
The Employee Motivational Survey (EMS) is used across the Group to gather employee feedback and understand their perceptions. The questionnaire was redesigned in 2015, based on the feedback of some line managers who found it too limited in capturing employee perceptions. The survey questions go to the heart of the working environment issues that have the highest potential for causing job dissatisfaction. These include 4 core measures, and 3 peripheral ones that do impact on employee satisfaction:
- Remuneration package: recognition for good work
- Learning and development: adequacy of training
- Innovation within the company
- Employee retention and turnover
- Tools and resources available to deliver a good job
- Sense of involvement and commitment in the business
- Quality and effectiveness of communication between management and staff
7b. Performance indicators
The response rate to the EMS is rather high, and this reflects the relevance of this approach to the employees within City@Hotels. Increasing participation to the survey has been encouraged over the past few years, by enabling employees to complete the survey online and increase the number of sessions in physical locations where employees can do this. In 2015, the overall response rate to the EMS within the company was 86%. The four key indicators of the EMS are discussed in further detail below.
Innovation within the company: as City@Hotels won several awards related to innovation (“Venuez Awards 2012 – Best Hotel Concept” and the “Simplifying awards for social media excellence, 2011: Best hotel in social media”, it is clear that innovation is entrenched in the corporate culture. The company compares very favourably with market leaders in innovation schemes, and employees are encouraged to share their ideas. In the future, potential ROI from such ideas will be assessed in a more detailed manner in order to ensure financial viability of the projects undertaken. Participation rate is measured as the total number of employees who have submitted at least one idea, divided by the total number of employees.
Employee retention and turnover: turnover is closely monitored, and a great emphasis is put on understanding the reasons for leaving. Turnover amongst City@Hotels has increased significantly in 2015/16, essentially due to the postponement of new properties leading to delays in potential promotions of employees. Benchmarking shows the company is below industry average when it comes down to employee turnover. Most frequently, employees leave the company in order to progress further with competitors – especially at mid-management level. The company continuously tries to increase retention, developing succession-planning strategies as well as an attractive retirement scheme.
Turnover by grade City@Hotels
8. Society results
City@Hotels has, over the years, developed several CSR guidelines with supporting information (posted on the intranet and communicated to employees through the City@Hotels magazine). BU managers are currently going through a training program focusing on social responsibility, whereby customer health is a major issue City@Hotels does focus on, working with preferred food suppliers to ensure healthy products are put on offer across all units. The aim is to contribute to the reduction of obesity, but still deliver tasty, exciting dishes that match the profile of the company’s customers. This comes down to preparing low-fat, healthy menus…as stated by the GM of the Amsterdam BU, Wout van Tankeren: “We’re using high energy things like blueberries. Blueberry smoothies on arrival, low-fat blueberry and cranberry yoghurt. Some products are made in-house, with no preservatives. It’s almost getting to the point where we can’t use things with a high sugar content. Instead, we want to use high-potassium stuff like bananas. We’re also looking at things like gluten-free bread and high rye content pastries.”
These comments follow recent research from food supplier Unilever Food Solutions, which also highlighted the growing importance of health in the hospitality industry.It found that more than half of diners want healthier options when eating out, but that many worry that nutritious dishes will be less appealing and that they will go home hungry.However, and according to Unilever, it is perfectly possible to deliver tasty food that is also low in fat and high in nutrients by making small changes to the recipe. Within City@Hotels, chefs are able to use a new ‘Top Nutrition’ online tool which will show them how to cut calories while keeping taste a priority. This system has been developed in partnership with Unilever and under supervision of the D.H. Operations who is also in charge of F&B.City@Hotels also supports numerous charities through the City@Hotels Community Foundation.
The Foundation is dedicated to supporting young people in need. Focused on disabled children, children in hospitals, hospices and homelessness, grants supporting disadvantaged young people are made in the Benelux. In the event of an international disaster, grants are made to relief organisations at the discretion of individual BU’s. Since its establishment, the Foundation has raised 125.000Euro for charity. This money has been used to support more than 21 education projects and 11 health projects.
An additional 75.000Eguro has been granted to relief projects in the event of natural disasters where the company operates. The Foundation’s core costs are funded by City@Hotels, so every Euro raised goes directly to good causes. Donations are funded almost entirely through the generous efforts and contributions of City@Hotels members, family and friends and with the support of City@Hotels guests and company suppliers.
City@Hotels knows the hotel industry is among the mostenergy-intensive sectors of the tourismindustry. The prevalence of fossil-fuelgeneratedpower and the marginaluse of renewable energy resources translateinto emissions of carbon dioxide,particulates, nitrogen and sulphur oxides. But where it is estimated thata typical hotel annually releases between160 and 200 kg of CO2 per m2 of roomfloor area, City@Hotels only release 105 kg of CO2 per m2 of room floor area. And where on average customers consume between170 and 360l. of water pernight, the company has observed an average consumption of 150l. per room per night. Waste per guest is not in excess of 1 kg a day, with a large proportion ofthe materials that constitute this waste that can be recycled or reused. This is facilitated by extensive recycle, return and reuse initiatives in place for paper, batteries, oil, cartridges and IT hardware…as well as:
- minibars with thermo-electric technology to reduce toxic emissions
- an odour control system to reduce odours from the kitchen
- clear and properly documented fire protection and property safety systems
About 90% of the bookings are made online, directly through the City@Hotels website. The company continuously measures the conversion rate from lookers to bookers, and this ratio has steadily increased over the past few years (from 35% in 2016 to 47% in 2018). These online bookings are a direct reflection of the integrated sales and marketing activities deployment within City@Hotels. Continuous analysis of the sales data enables marketing managers to identify weak processes and spot opportunities in the market. The strategy has always been to ensure the website City@Hotels.com is the preferred method of booking.
This was supported by the introduction of allowing both corporate and group market segments to book their rooms through the web as opposed to the hotels directly or through travel agents. On all advertising campaigns, the website is the first call to action for potential or existing customers…therefore driving more customers to book online. Site traffic is a reliable measure of e-CRM efforts in email marketing and search engine optimisation. Understanding traffic growth and movement across the site is critical to the development of high quality and dynamic website content.
It has been observed that website traffic pikes during City@Hotels media campaigns – which is a good indication of consumer interest in the brand and the market penetration of the message. This information guides further investment in high profile marketing activities across countries and possible website development. A user session is a period of activity spent on the City@hotels website by a user with a unique IP address, during a specific period of time. The number of user sessions on a site is used in measuring the amount of traffic a website gets. Each session is actually considered as a real opportunity to sell. Frequency is identified by dividing the number of sessions by the number of unique visitors. Frequency enables City@Hotels to assess the efficiency of marketing efforts undertaken.