Case study final LOEWS HOTEL PDF

Preview

Summary

Fall 17 Mr Bruner, MSU HB graduate program. Analyse Loews case...

Description

HB80 7–Fa l l ’ 1 7| Ca s es t ud y| LN

1

Linh Hai Phuong Nguyen

The School of Hospitality Business Michigan State University

Case study: Loews Hotels

HB 807: Workforce Management in the Hospitality Industry Fall Semester 2017

Professor: Richard A. Bruner

HB80 7–Fa l l ’ 1 7| Ca s es t ud y| LN

2

About Loews Corporation and Loews Hotels & Resorts

Loews Hotels and Resorts is a New York based hotel chain, headquartered in Madison Avenue in New York City, and owned subsidiary of Loews Corporation. Loews Hotels and Resorts are operated by Tisch’s family, and Jonathan Tisch is the current chairman. Loews Corporation’s revenue in 2013 was recorded at 15.053 billion USD and its number of employees is around 18,175 people.

The company currently operates 26 properties in 16 cities across the US and Canada. In addition to offering amenities such as fine dining options, spas, and golf courses, the properties also feature facilities for weddings, meetings, and other events. Their aim is to be widely recognized as the best global luxury hotel group, providing 21st century luxury in each of its hotel. Loews Hotels and Resorts offers guests a unique four-star experience, their target customers are both business and leisure travelers. The properties are very well known for outstanding decoration, impressive surroundings and personalized service. The employees are trained to offer the highest quality for guests.

The company regularly receives international recognition and awards for quality management and legendary service hospitality. This is being achieved by investing in the company’s exceptional facilities and its people, while maximizing profitability and long-term shareholder value.

The top competitors of Loews Hotels Holdings Corporations are The Ritz-Carlton Hotel Company LLC, Park Hotels and Resorts and Omni Hotels Corporation.

HB80 7–Fa l l ’ 1 7| Ca s es t ud y| LN

3

SWOT analysis of Loews Hotels & Resorts

Strengths Domestic market

Weaknesses Small business units

Reduced labor costs Skilled workforce Existing distribution and sales networks Opportunities Growing economy with high growth rate

Threats Technological development and problems

Human Resources Practices in Loews

The hospitality industry is a highly guest service–oriented business where encounters between employees and guests determine the success of the business. Consequently, hospitality researchers and business leaders have acknowledged the significance of hiring and retaining competent employees and have arguably considered the company's employees as the most valuable asset to hospitality firms. Therefore, raining has become an increasingly critical area of management for companies to enhance service quality, reduce labor costs, and increase productivity.

According to the research of Youngsoo Choi and Duncan R. Dickson from Rosen College of Hospitality Management, University of Central Florida, the development and implementation of quality management training programs can be considered the only significant intervention that could have led to higher employee satisfaction and lower turnover rate. Current and new managers who received the rigorous training were expected to perform more effectively and efficiently particularly in their human resource-related responsibility.

HB80 7–Fa l l ’ 1 7| Ca s es t ud y| LN

4

After all, the ultimate beneficiaries from quality management training should be their subordinates who are line employees. Loews recognized that in order to execute on the company’s global growth strategy, manpower and talent planning would play an important role. To drive this growth, Loews selected Training and Development program as key of Human Resources processes.

“We need to provide the hotels with a comprehensive labor management system for effectively managing our labor force at all levels of volume,” said Zack Miller, Loews Hotels’ corporate controller (The bottom line, April 2002). “The system needs to apply the same assumptions to budgeting, forecasting and scheduling so that staffing decisions are the same, whether they are applied at the corporate office or in the trenches at the property level. The system should provide the hotels with a valuable tool for improving service and/or achieving savings.”

It can be seen that labor standards – the idea that staffing guidelines for all levels of volume could be established and managed – is mainly focused in the statement. About 50,000 hours of training is spent every year in Loews and the key is “to train all departments of your organization to be customercentric”, said by Tisch. Hence, guests are priorities in Loews.

According to the article in the Managing Human Resources book, Loews designs a lot of training programs for both managers and employees such as “Living Loews”, “Green”, or “Loews Meeting Experience”. The objective of training programs is to align with the company’s strategy which is “Four diamond and more”. Employees can reach better understanding of the mission, values and goals of the company and it can motivate them to provide exceptional customer services. The reason the company encourages its employees to be customercentric is because the quality of service differentiates one company from another

HB80 7–Fa l l ’ 1 7| Ca s es t ud y| LN

5

in the hotel business. Employees have direct contact with customers, so it is crucial to make the employees understand the importance of meeting and exceeding the guest’ expectations. In addition, Loews proactively provides awareness to colleagues that there are career plans and opportunities in place. Loews tries to grow its own talent and support employees to build their career path, from line-level jobs to manager position. It has a business impact on building a globally consistent and structured competency based HR practice. This company also welcomes undergraduates to work as paid-interns. After completing the internships, students are suggested to write a report as a cultural audit. By better matching between the new hires and the jobs available, it is expected that the managers help prevent the company from losing its new hires due to a mismatch at the early stage of their employment.

Plan of action – How to reduce cost of training As training programs are the most important part in HR strategy in Loews, I would like to discuss more in my plan of action section about how to reduce cost of training. Developing necessary skill sets and delivering vital information to staff members is typically a significant and necessary investment. Hence, organizations are always looking for a way to cut costs and improve their bottom line regardless of their budget size. Firstly, offer eLearning can be an effective way to deliver training modules every time in everywhere. The company won’t have to allocate employee working hours to training, given that they will be learning while on-the-job. In addition, with eLearning, both designers and learners can have access to a wealth of multimedia tools and delivery formats. As such, the training experience will be more interactive and engaging, which can lead to a more effective knowledge acquisition and retention.

HB80 7–Fa l l ’ 1 7| Ca s es t ud y| LN

6

Secondly, “reduce, reuse and recycle” can be a compromising method in HR training and development. Reduce the amount of learning material by reviewing the content and the maintaining only what is required, interesting or engaging. Sometimes, more learning does not mean better learning. Then, reuse or recycle such as materials purchased or created in the past can be a good idea. To summarize, employee training is vital to corporate growth and increased revenue, but it can be pricey. Corporate leaders can lower the cost of learning and development by reducing the number of tutorials offered to workers, encouraging mentoring relationships, and implementing online learning.

Conclusion

From my point of view, Loews training programs lead to greater employee satisfaction and a reduction of employee turnover that offsets the cost of the training. Loews Hotels & Resorts is in high-growth mode and aims to build a globally integrated talent management system that can support their corporate initiatives in manpower planning and automating HR processes for future growth plus identify talent and career path planning. Furthermore, the world today is constantly evolving, with customers demanding more, which in turn adds pressure in training and development to companies and their employees. Therefore, in times of recessions, decreasing the budgets of training programs is a way for companies in all industries to manage and minimize their financial losses.

References

HB80 7–Fa l l ’ 1 7| Ca s es t ud y| LN

7

Real Estate Development | Loews Hotels. (n.d.). Retrieved November 12, 2017, from https://www.loewshotels.com/development The Journal of Hospitality Financial and Technology Professionals. Volume 17, Number 3. Retrieved November 13, 2017, from https://www.heathandco.com/articles/LoewsHotels.pdf A Case Study into the Benefits of Management Training Programs: Impacts on Hotel Employee Turnover and Satisfaction Level. (n.d.). Retrieved November 12, 2017, from http://www.tandfonline.com/doi/full/10.1080/15332840903336499 Five tips to reduce your business' training costs. (n.d.). Retrieved November 12, 2017, from https://www.coxblue.com/five-tips-to-reduce-your-business-training-costs/ Sunny, K. (2016, December 16). Staff Training and Overtime Costs are Affecting your Hotel's BottomLine. Retrieved November 14, 2017, from http://www.hotelogix.com/blog/2015/12/01/are-high-stafftraining-overtime-costs-impacting-your-hotels-profitability/...