1) Brief introduction where you describe the decision you have to make, the context of the decision and the possible dilemma faced by the Ritz-Carlton in making that decision.
2) Analysis of the situation.
a) Non-monetary factors: determine the key non-monetary factors/considerations that are going to drive your decisions.
b) Monetary factors: from a monetary standpoint, it is important that you figure out how much more they would make by opening directly at 80% occupancy rather than ramping up from 50% to 80% over a four-month period on time (Hint: use Exhibit 3)
c) Based on the monetary and non-monetary factors, identify two or three alternative options.
Exhibit 3
James McBride, general manager of the new Ritz-Carlton in Washington, D.C., faced the largest challenge of his successful career. A proven veteran of the luxury hotel chain’s march across Asia, McBride’s most recent assignment was as the general manager of the 248-room Ritz-Carlton in Kuala Lumpur. Opened in 1998, the hotel was named “Best Hotel in Asia-Pacific” in the eighth Business Traveler Asia/Pacific magazine Travel Awards Subscribers’ Survey and, for two consecutive years, “Best Business Hotel in Malaysia” by Business Asia and Bloomberg Television.1 As Nikheel Advani, food and beverage services director for the Washington hotel, noted: “James is excellent-we have opened many hotels together. In the place where you didn’t think that it had a chance, he made it the best hotel. That’s his talent. That’s what he can do really well. It’s for the entrepreneurial person who wants to get involved and who thinks they can make a difference.” But this was a new situation, even for McBride. For the first time, The Ritz-Carlton was opening hotel that was part of a multi-use facility. Owned by Millennium Partners and located in the historic Foggy Bottom district of Washington, D.C., the $225 million “hospitality complex” covered two-and-a-half acres and included 162 luxury condominiums, a 100,000 square-foot Sports Club/LA, a Splash Spa, three restaurants, 40,000 square feet of street-level restaurants and retail shops featuring the latest designs from Italy and other countries, as well as the 300-room hotel. While The Ritz-Carlton had already signed contracts to manage five other hotels for Millennium Partners, the upscale property developers had also inked deals with the Ritz’s foremost competitor-the Four Seasons. Brian Collins, manager of hotels for Millennium Partners, had his own ideas about what constituted luxury service and how the hotel’s general manager should approach the new-hotel opening. Under pressure from Collins, McBride was reexamining the “Seven Day Countdown,” a hallmark of The Ritz-Carlton’s well-defined hotel-opening process. Any changes McBride made could not only affect his company’s future relationship with Millennium Partners but also the carefully guarded Ritz- Carlton brand.
