Regal Carnation Hotel Harvard Case Solution & Analysis

Regal Carnation Hotel Case Solution

Problem Statement

Guam is an island with a population of 175,000 on the Philippine Sea, and the size of the island is three times the size of the capital of the United States (Washington, D.C.). The Island had an increase in its tourism industry after the restrictions carried out to the Guam by President Kennedy in 1962.

The major revenues of the island generated by the Tourism industry, which accounted for 60% of the total revenue and 35% jobs to the habitants at Guam. The incline in the economy of the Guam is due to the presence of the American Military with two permanent bases. However, the presence of the Military made the island more sensitive given the negative effects of the development in the US.

The Island also faces the threat of a typhoon due to its geographic location.Most of the tourists that come to this island are mostly from Japan and Korea. Steve McKenzie is a management consultant who has identified a number of root causes from his stay at Regal Carnation Hotel (Island of Guam). Regal Carnation is one of the new three star hotels.

The main problem faced by Island of Guam is the decrease in the occupancy rates and the prices of the hotel, which were at their all-time high during the 90s. The Island of Guam is at its fourth phase of the product life cycle, which is basically the declining phase. One of the other major causes of the decline are the emerging competitors in the other countries that have utilized the method of success of Guam efficiently. Regal Carnation Hotel is facing problems such as the lack in the customer services as well as the the efficiency of management has reduced.

Root Cause Analysis

The Root Cause Analysis is based on the experience by Steve McKenzie and the observations of the facts generated from Exhibit 1 to 7 provided in the case study. However, Steve McKenzie has mentioned a number of causes, therefore we should analyze the major root causes identified at Regal Carnation Hotel which has led to this problem.

Root Cause 1: Inaccurate Information

The main root cause identified was the providence of the inaccurate information. The website of Regal carnation hotel has a flashy look, which misleads the customers to believe that the hotel as an exceptional hotel such as 4 and 5 stars with comparatively low prices than the other hotels.

The example of the inaccurate information can also be viewed from the reviews of the customers. Many of the customers cancel their bookings at their arrival at the hotel,and some customers find their reviews, due to which they choose another hotel if they visit island of Guam again.

One of the examples of this is that Regal Carnation hotel promised its customers for the complimentary pick up, which was forgotten by the management. The description of the lobby and the pictures were different in the website as compared to the real lobby.Moreover, the rooms were also not similar to the rooms mentioned in the website of the hotel.

Root Cause 2: Poor Management

Another root cause identified in the case was the poor management of the Regal Carnation hotel,as it was earlier discussed in the case that the management was unable to keep its promises. The management was unable to provide the quality of services which it promised. On the other hand, the mismanagement can be observed by the unavailability of the pick up services as promised......................

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