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The Best Hospitality Case Studies You Can Learn From

In our digital age, it’s so easy to see what other guests thought of their stay at your property, and hopefully your Google and Facebook reviews are top notch.

You’ll find that the overall guest experience is vital to your success in the hospitality arena. It’s up to you and your staff to make your guests as comfortable as possible and treat them like they were in their own home.

We find it’s often good to learn from others and those who are doing it right or turned things around.  Let’s take a look at the best hospitality case studies you can learn from.

The Taj Mumbai

According to the Harvard Business Review , the Taj Mumbai is one of the world’s top hotels. Not only is it known for its beauty, but it is known for having the most well-trained employees who are always willing to go the extra mile.

They even note that many of them have worked at the hotel for decades. There is never any question about the job to be done and how to meet the needs of the guests.

While the Taj Mumbai is known for their excellent customer service, they took it to a new level during several terrorist attacks a decade ago.

The employees never left their posts and made it their duty to protect their guests. They were quick thinking and thought of the safety of the guests before their own. Many of them even lost their lives.

So, you can see that the Taj Mumbai has created a customer-centered culture. Their employees know the customers come first, and they seem to enjoy this culture of service.

Experts tend to agree that the recruiting system employed by the hotel has helped them find the most ideal candidates to provide this extraordinary culture of service.

The Hiring System of the Taj Mumbai

Instead of looking to the metropolitan areas for new hires, they head out to the smaller towns. This is because they find employees with more traditional, old-school values. These include a respect for teachers and their elders, a humble spirit, discipline, honesty, and an empathetic nature.

This also helps them find loyal staff members who truly care about the hotel’s many guests.

Often recruiting younger people, the hotel sends new team members to a certification center where they live room and board free for 18 months to learn how to be the best employees they can be.

They also look to schools for their management teams and again spend a great deal of time (18 months is the norm even for management staff) and money training them.

The prospective employees are also trained in a very different manner. They are not told to look out for the hotel’s interests, but they are told to put the guest’s first. They should always put the guest’s needs before those of the hotel.

This not only empowers employees to take the right action at the right time, but it engenders loyalty in both the employee and the customer.

Finally, the hotel instituted a special rewards and recognition program that relies on compliments from guests, compliments from colleagues, and the employee’s very own suggestions.

Every day thank yous are encouraged, and the employees strive to be better every day.

The Wit Hotel

Located in Chicago, the Wit Hotel knew it needed to provide more options for its health-conscious travelers. They wanted to appeal to more appeal, including their loyal clientele, by providing more nutritious food options.

The brought in SPE Certified to help this 300-room Doubletree by Hilton, with one of the best rooftop lounges in the world, meet travelers’ growing demands.

They wanted to up their hospitality level by offering the tastiest, most nutritious food, both catering to their current guests and working to attract new guests from an even younger demographic.

With the help of their consultants, and in collaboration with the hotel’s chefs, they identified existing menu items to enhance. They worked on a number of items and now offer many SPE certified dishes.

These are menu items that are certified and show the hotel’s commitment to sustainability and nutrition and most importantly, to their customers’ health and well-being.

Their changes have had great results and enhanced customer satisfaction.

Arenas Del Mar

Located in Costa Rica, the Arenas Del Mar is committed to new avenues in the hospitality industry.

They are committed to providing their guests with just what they want.

For example, they invest in green technology and only source products that meet their green philosophy. Their goal is not only be sustainable but efficient.

At their resort, they rely on solar energy because they are dedicated to keeping their carbon emissions low. They do this by using solar energy to heat water for their guests’ rooms as well as their staff rooms.

They even take it a step further on cloudy days by using their energy-saving auxiliary water heaters as a backup. Their guests never have to worry, though, as their hot tubs and shower are always as hot as they want.

When it comes to their food service, they have their very own gardens that they irrigate with wastewater. They also work with local suppliers and only source organic food and hormone-free and grass feed meat.

In addition, because the resort is right in the middle of 11 acres of nature preserve, they only use natural cleaning products.

They went 100% organic so as not to leach toxic products into the nature reserve because they want to preserve the fragile ecosystem.

Final Thoughts

You can see from these three different case studies how important it is to put the needs of the customer front and center.

In this highly competitive arena, it is absolutely vital to provide proper customer service training.

Strive to be a customer-centric property. Put the needs of your guests first and allow your employees the leeway to provide the best service to your guests. Don’t tie their hands by making them jump through hoops. (tweet this)

Your goal is happy employees first. Finally, when your team is happy in the workplace, then everything falls into place.  Your customer culture is set, and your customers are incredibly satisfied as a result.

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Radisson hotels

Making every moment matter for every guest

Radisson Hotel Group is one of the world's largest and most dynamic hotel companies, with seven distinctive hotel brands and more than 1,400 hotels in operation and under development around the world. Targeting accelerated growth with its 5-year operating plan and aiming to be one of the three top-of-mind hotel companies in the world, the Group rebranded in 2018 and launched a new brand architecture – including new commercial drivers - to leverage the powerful brand awareness of Radisson.

The goal? To leverage the greater equity of the Radisson brand to drive up consumer awareness, while increasing the efficiency of global marketing spend and continuing to curate exceptional digital customer experiences .

With direct-to-consumer channels ever more important in today’s hospitality industry, Radisson Hotels also wanted to drive more traffic to its branded website and enhance its ability to increase digital sales and create new cross-selling and up-selling opportunities.

Reinventing experiences

Radisson Hotel Group's Vice President of Digital talks about programmatic media.

Strategy and solution

Radisson Hotels chose Accenture to be its global digital agency of record and support the group’s five-year growth plan. The reason? In addition to its renowned expertise in technology-led digital marketing and deep experience of the hospitality industry, Accenture offered a unique approach.

As well as growing digital traffic and optimizing paid media on a global scale, Accenture is leveraging its end-to-end digital expertise to drive a sales boost across all channels and touchpoints. That’s transforming Radisson Hotels digital marketing in the following key areas:

Operating model Developing the new operating model needed to support a single global Radisson Hotels brand including a new Digital organization to support the model.

Technology Defining an integrated AdTech and MarTech stack to support new capabilities in ad verification, ad serving, bidding, demand-side platforms, data management, data visualization, and more.

Market analysis Offering in-depth analysis of Radisson Hotels’ principal markets, local media partners, competitor landscape, and individual customer behavior.

Forecasting and cost recovery Defining a global forecasting and cost recovery model, supporting the development and planning of Radisson Hotels’ growth agenda.

Advanced analytics Embedding advanced analytical capabilities to support data-driven attribution and propensity models and optimize digital campaign performance.

Transformation

With Accenture’s help, Radisson Hotels is building its new global brand, enhancing customer experience and creating a foundation for competitive differentiation and future growth.

Blending technology and data with creative know-how, Accenture is crafting personalized campaigns across all digital channels to drive qualified traffic to the soon-to-be rebranded and upgraded global digital platforms & channels.

Importantly, the approach is looking to in-house Radisson Hotels AdTech stack, ensuring the company can take ownership over its technology and data. That’s set to help the company take back control of its marketing budget, offering improved spend visibility on a global scale.

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Major chains and small hotels: business recovery case studies, scenarios, and strategies 

The impact of the coronavirus pandemic is huge and not yet predictable on the hospitality business. Fortunately, we see a slightly higher performance from earlier in the year. According to the STR , the recent September occupancy is at 48.5%, compared to 20% in April. 

However, performance increases are not so meaningful. For example, Hilton’s second-quarter revenue per available room (RevPAR) decreased 81% on a currency-neutral basis for the second quarter from the same period a year ago, as the company swung to a net loss of $430 million from net income of $260 million.

Christopher Nassetta, President and CEO for Hilton Worldwide, said “Never in Hilton’s 101-year history has our industry faced a global crisis that brings travel to a virtual standstill”.

Meantime, the company focused on developing new strategies to return guests and ensure they could trust the entire brand. These strategies proved to be quite effective. According to the Hilton Reports Second Quarter Results , Adjusted EBITDA was $51 million, and Net Unit Growth was at 4.8%.

In many cases, COVID-19 speeded up the evolutionary process and became the starting point for many new trends, including work from home, safety and cleanliness standards, social distancing, new tech solution uses, and more. The ability to quickly ride these trends can help hotels become as strong as they were pre-pandemic.

In this article, we’ll provide you with case studies and navigate through post-coronavirus scenarios and strategies that worked out for well-known and not-so-famous hotels.

Major hotel chains: building new loyalty

The hotel industry is beginning to plot a path to recovery. So we find it helpful to learn from the hoteliers that turned things around and managed to succeed.  Let’s take a look at the case studies on how chain hotels work in post-coronavirus time.  

Marriott has reopened 91% of its global hotels. The hotels’ worldwide occupancy rates reached 34% in August. The company marked a significant jump in China from 10% occupancy in January to 55% in July. Marriott hopes the worst is over and expects to get back to 2019 levels of revenue as early as 2021. 

Before the coronavirus pandemic, in Spring 2019, Marriott International launched a luxury  “Airbnb-like’ property lodging service, Marriott Homes & Villas. It offered customers a private residence alternative to hotel rooms. The properties in these programs have become highly sought-after as they had a number of advantages, including professional management by housing management companies. 

Arne Sorenson, Marriott CEO, said, “What people are drawn to in terms of home-sharing particularly in a Covid-19 environment is, ’do you have a place where I can take everybody and where we can be on our own? … I don’t really want an apartment that somebody lives in regularly. I don’t want the old style home sharing because I can’t be certain about the cleanliness or comfort of that.”

As a result, the company saw record performances in top booking days, up to 2x historical highs from May to August. This summer has been the highest in gross revenue since launch, with bookings up by 700% over last summer, and revenue increasing by more than 800%.

Marriott Homes & Villas business pays off for the hotel giant. The company names three major trends they benefited from, namely leisure, drive-to, and “whole home” preferences. Yet, there are other offerings that Marriott launched. It made investments in technology to survive in a tech-centric era. The hotel chain has a good loyalty program, 140 million-plus, and lots of data. Besides, Marriott International launched the Global Cleanliness Council to tackle the realities of the coronavirus pandemic.  

Hyatt group

The Hyatt group has 296 hotels in the pipeline across its 15 brands. Amid the coronavirus pandemic, the company had to put 38 projects on hold and cancel three ones. As of now, the company opened almost all of its hotels. Occupancy levels for Hyatt hotels in Greater China reached 65% in July. In the USA, occupancies are increasing on a steady basis, yet it’s still 55% down from 2019. 

“China serves as a great example that travel recovery is possible even without pharmaceutical treatments or a vaccine as long as proper, well-coordinated actions are taken to significantly reduce the spread of the virus,” said Mark Hoplamazian, the CEO of Hyatt.

Overall, Hoplamazian is positive about the future and considers this crisis as a potential growth opportunity. The company is trying to create a calming and healthy environment, as well as come up with creative solutions. For example, the yoga class is conducted on the roof instead of sweating it out with others in a crowded fitness room. The Hyatt Regency Huntington Beach in California (pictured above) offers a socially distanced picnic basket dinner. Guests can take blankets onto the lawn, gaze out at the Pacific Ocean at sunset, and enjoy live music. 

To protect guests, the hotel group announced a Global Care & Cleanliness Commitment that focuses on the safety and wellbeing of both staff and guests. In addition, the company reconsidered its loyalty program. First, they extended the cancellation policy and expanded the “Work From Hyatt” extended-stay package. 

Furthermore, the group celebrated the o fficial openings of several hotels in Autumn, 2020, including Hyatt Place Moncton-Downtown, Hyatt Place Sioux Falls, and Hyatt Place at Wichita State University. 

In July 2020, Hilton reopened 96% of its hotels. In the second quarter, the company opened 6,800 rooms, contributing to 5,500 net additional rooms in the system.

Chris Nassetta, Hilton president and CEO said, “We hit a low point of 10% global occupancy in April. We have now sort of clawed our way back. We’re now running close to 50% occupancy around the world.”

Today, the company is thinking hard on how to innovate its loyalty programs, as well as remove restrictions and cancellations to attract customers. Hilton announced a new strategic partnership with Country Garden to develop 1,000 Home2 Suites by Hilton in China, representing the first major extended stay offering for Hilton outside of North America. 

Hilton invested in technology as well. Members of their loyalty program can check-in digitally, get to a room with a digital key, as well as choose the room they want to stay in. Besides, the chain understands that a hotel is not just a bed to sleep in. It can provide hybrid work environments, leaning into the local community and staycation customers.

Also, the hotel launched Hilton CleanStay. The new program is created in collaboration with RB, maker of Lysol and Dettol, and Mayo Clinic. It focuses on delivering an elevated standard of cleanliness and disinfection to properties worldwide. The hotel also developed the Hilton EventReady program aimed at providing cleanliness and customer service specific to meetings and events. All the initiatives above are parts of Hilton’s promotional strategies. 

Boutique and small hotels: seeking a way ahead

The coronavirus crisis hit smaller hotels differently, but it hurt just as much as larger chains, if not more, reaching remote locations as well. Even after restrictions were eased and enhanced cleaning procedures were implemented, businesses still needed to figure out how to operate in the new normal. Below, we’ll provide some more case studies of smaller hotels to help you overcome the crisis, inspire ideas, and actions.

HayMax Capital LLC’s HayMax Hotels

HayMax Capital LLC’s HayMax Hotels include four boutique hotels in Aspen, Colorado & Sun Valley, Idaho. At the start of the COVID-19 outbreak, the company didn’t attach importance to the pandemic as it seemed like it might affect the large cities, and smaller cities might be less impacted. Instead, ski resorts had to cease their operations as well.

HayMax Hotels’ Bay tried to find ways to deal with the crisis while focusing on the guests’ needs and responding to them quickly. 

The first thing the company did was invest in technology. To help customers feel more safe and secure in the hotels, the managing director made the check-in process more efficient by letting guests access their room with a digital key.

“The public wanted many of these things for many years, but the hotel industry was slow to adopt them. The old days of checking in at the front desk and ringing the bell are kind of nostalgic,” said Jeff Bay, managing director of HayMax Capital LLC’s HayMax Hotels.

The guests appreciated this tech convenience. Implementing safety protocols also helped ease fears of infection. 

Then, the company focused on the fact that people go to resort hotels to enjoy the area, not to stay at the lodge. The local community, government, and other area businesses focused on the same thing and came together to set up a lodging task force. 

As a result, this strategy worked. There was an increase in demand and many ‘within-stay’ extensions at HayMax Hotels’ Bay. Hotel guests stayed longer than originally planned. For instance, they booked for two nights but stayed for four.

Historic Smithton Inn

Historic Smithton Inn is a 257-year-old bed and breakfast, with seven rooms and a guesthouse in Ephrata, Penn., in Pennsylvania Dutch Country. When the pandemic began, Rebecca Gallagher, owner and innkeeper, realized that the old-school way of doing business when money came only in one way didn’t work anymore. She needed to find new ways to survive. 

First, Gallagher had to take on more responsibility to save money, starting from mowing the lawn by herself to doing the payroll.  

Next, Rebecca looked at the crisis as an opportunity. She applied for every grant, aid program, and loan available to small businesses, and was approved for a Small Business Administration disaster loan. Thanks to this loan, Gallagher hardwired every room with Internet access and invested in smart TVs. 

Also, she did the room upgrades, namely bought smaller individual coffee pots for each table in the dining area, plate covers and trays to deliver food to rooms for people who wanted social distancing. Now, the inn provides its guests with two electric-vehicle chargers for free.

Then, Gallagher focused on reconsidering inn’s marketing strategies and acting quickly, as well as concentrated on creating new ways to make money. As Pennsylvania shut down liquor stores, she could sell alcoholic beverages from the Historic Smithton Inn’s wine bar. 

Finally, Gallagher created e-commerce sites with the help of point-of-sale technology to sell more than just wine. She sold branded sheets, candles, and soaps. This approach fostered different revenue streams to flow. She continued to spend on marketing as well.  

All these upgrades helped attract a much younger audience. In the past, the inn appealed mainly to people in their 50s, 60s, and 70s. What’s more, Gallagher noticed that now people are staying longer than they used to. 

Bottom line: what can we learn from these case studies?

Recovery may prove challenging. Yet there’s no challenge that hoteliers can’t overcome. And we are witnessing now that both top hotel operators and small hospitality businesses have found their ways out of the coronavirus crisis. 

Based on the case studies above, we can develop several viable strategies, which are as follows:

• Invest in technology. Mobile check-ins , contactless orders, and payments are must-haves in hotels. Do not delay the implementation of innovations.
• Apply for grants and funding programs . Learn about all the grants, aids, and loans available in your area. In Germany, you can apply for the “ Digital now ” funding program. Thanks to it, you can get up to € 50,000 financing and almost 70% funding on digitization expenditures. 
• Reconsider marketing strategies . Make your hotel’s hygiene concepts part of the marketing plan . Promote every hotel benefit across all channels, namely the website, emails, social media channels (Facebook, Twitter, Instagram, etc).
• Create your hotel’s safety and cleanliness standards . Every respectful hotel has its own safety protocols in place. If you haven’t made it yet, make it immediately. You can learn more about them here . 
• Do upgrades . It’s high time to improve. Make a list of everything that needs to be repaired, do an inventory of maintenance supplies, upgrade old equipment, or invest in a new one.
• Find additional revenue streams. Think of your additional offers that you can sell and advertise them. Adopt Mobile POS Systems as the fuel for a revenue boost.
• Build a new loyalty program . Create attractive deals and packages that combine as many offers as possible. 
• Be creative. Do research, look at your hotel’s area in more detail, and consider what else you can offer your guests. SWOT Analysis will be of great help. 

In post-COVID-19 times, we see how exceptional customer experience and tech innovations help hotels rebuild guest confidence and protect their future revenues and growth. We hope that the case studies above will contribute to strengthening your business and staying positive in the future. 

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Hotel Case Studies

Discovering the most fascinating hotel case studies from around the world, spreading inspiration & knowledge.

Building a strong guest database and driving revenue with a robust CRM and Digital Marketing – The Pilgrm success story

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The sales strategy that led two hotels to profit in the middle of a pandemic

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Unique Interior Design lessons, from a fascinating Hotel in Paris

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A “natural” hotel in Santorini, becomes an excellent example of how the local experience & absolute luxury can be combined

A hotel is, by definition, a unique ‘destination within a destination’, that becomes the visitor’s reference point regarding the local experience. It is now clear, that the visitors look for … Read More

A Hotel in Stockholm teaches the true meaning of the term ‘Boutique Hotel’

The widely used term ’boutique hotel’, might be among the biggest hospitality trends, however, it continues to have a rather vague meaning, without any clearly specified characteristics and expectations. Today, … Read More

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AccorHotels’ digital transformation: A strategic response to hospitality disruptor Airbnb

The hotel industry is being disrupted by new digital players who have entered the market and challenge the conventional hospitality approach. The sharing economy in particular, with the Airbnb start-up in the lead, has created a major challenge, if not a threat, to established hotel chains. As a response, AccorHotels, Europe’s leading hotel group, is going through a major digital transformation that impacts its corporate culture, organizational structure, value proposition, and overall business model. The goal is to turn the traditional asset-heavy company into an active player in the new hospitality economy, able to compete head-on with the industry’s digital disruptors.

• The case discusses the strategic response of industry incumbents to the challenges coming from digital disruptors.
• Participants will be asked to compare the two business models from different angles: how do the different approaches deliver on the consumer proposition, and which are the strengths and weaknesses of each business model.
• Participants will further be asked to assess the strategic options of an asset-heavy incumbent to react to asset-light competitors in a context of digital disruption.
• The case serves as a basis to discuss the opportunities and challenges of industry incumbents to transform themselves and better compete in an increasingly digital business environment.

IMD retains all proprietary interests in its case studies and notes. Without prior written permission, IMD cases and notes may not be reproduced, used, translated, included in books or other publications, distributed in any form or by any means, stored in a database or in other retrieval systems. For additional copyright information related to case studies, please contact Case Services .

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Sustainability practices in hospitality: case study of a luxury hotel in arrábida natural park.

1. Introduction

2. theoretical framework, 2.1. sustainability in the hotel sector, 2.2. environmental and social sustainability practices, 2.3. motivations for sustainability practices, 2.4. benefits of implementing sustainability practices, 2.5. sustainability from a customer perspective, 2.6. sustainability practices and performance, 3. methodology, 4. findings, 4.1. environmental sustainability practices, 4.1.1. practices for reducing water consumption, 4.1.2. energy reduction practices, 4.1.3. waste separation, 4.1.4. food leftovers, 4.1.5. ecological products, 4.1.6. prevention of co 2 emissions, 4.1.7. laundry, 4.2. raising customers’ awareness of environmental issues, 4.3. social sustainability practices, 5. discussion and conclusions, 5.1. theoretical contributions, 5.2. managerial implications, 5.3. limitations and future research, author contributions, institutional review board statement, informed consent statement, data availability statement, acknowledgments, conflicts of interest.

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Share and Cite

Pereira, V.; Silva, G.M.; Dias, Á. Sustainability Practices in Hospitality: Case Study of a Luxury Hotel in Arrábida Natural Park. Sustainability 2021 , 13 , 3164. https://doi.org/10.3390/su13063164

Pereira V, Silva GM, Dias Á. Sustainability Practices in Hospitality: Case Study of a Luxury Hotel in Arrábida Natural Park. Sustainability . 2021; 13(6):3164. https://doi.org/10.3390/su13063164

Pereira, Vitor, Graça Miranda Silva, and Álvaro Dias. 2021. "Sustainability Practices in Hospitality: Case Study of a Luxury Hotel in Arrábida Natural Park" Sustainability 13, no. 6: 3164. https://doi.org/10.3390/su13063164

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This report demonstrates the business benefits of building sustainable hotels and offers tangible recommendations tailored for hotels investors, owners and developers, operators, and franchisees.

About business case for sustainable hotels, the business case for sustainable hotels provides a thorough analysis of the business benefits of building sustainable hotels and offers tangible recommendations tailored for investors, owners and developers, operators, and franchisees..

The report explores how sustainable hotels can:

• boost profit margins through utility savings
• increase revenue through satisfying consumer preference
• future-proof investment strategies
• safeguard against regulatory risk and benefit from incentives
• increase value and validation through certification
• ensure long-term energy supply

The case studies provide examples of best practice from our members and demonstrate the resource-use reductions, utility savings and return on investment that are possible when hotels are built and operated sustainably.

The recommendations provide tangible actions, often simple and low cost, to ensure every stakeholder considers sustainability integral and increases efficiencies by working together, in order to achieve maximum benefits and address the scale of the changes required.

Who is it for?

All stakeholders in the hotel property value chain can use this business case to support conversations with their business partners to create a more joined up approach to building, refurbishing and operating sustainable hotels and make sustainability integral to all development decisions.

How was the report created?

This report was created in collaboration with IFC – a sister organisation of the World Bank and member of the World Bank Group. IFC have provided insight based on their extensive experience in resourcing sustainable building projects and developing their free software (EDGE) to support the design of resource-efficient buildings.

“This research fills a major knowledge gap with focused and quantitative analysis. It shows that the costs are lower than previously thought while the benefits are high, with actionable recommendations for each stakeholder group. The collaboration between IFC and ITP has the capacity to move the entire hospitality industry onto a greener path.” Shamsah Fatima Dhala, IFC’s Global Sector Lead for Tourism.

• Executive Summary
• Recommendations for hotel investors and asset managers
• Recommendations for hotel owners and developers
• Recommendations for hotel operators
• Recommendations for franchisees

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How Wyndham Hotels & Resorts improved their data capabilities to get to know their guests better

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Hospitality and leisure

We helped modernize Wyndham’s data architecture for better guest insights

Amazon Web Services

Running one hotel isn’t easy - running 9,000 hotels across 80 countries is a challenge on a different scale

In 2020, Wyndham Hotels and Resorts, a franchisor which operates brands ranging from Super 8 to Wyndham Grand, was four years into a “cloud first” strategy and migration that had seen some early successes. Still, opportunities remained. Like many hospitality enterprises, Wyndham has grown in large part by acquisition to become a major international hotelier spanning 20 separate brands processing more than a million reservations a day.

Wyndham knew that data could provide a better understanding of guests, their stays and their preferences at Wyndham properties—and thus help positively impact the overall guest experience and loyalty. In 2016, the company undertook a large-scale data architecture overhaul as a first step. However, despite the years of investment, Wyndham still had opportunities for maximizing the potential of its data assets and to derive further benefits from investments already made.

Redesigning Wyndham’s data architecture with an eye toward a more efficient future and better guest experiences

The goal: Manage the Wyndham business more effectively by redesigning the data landscape to glean further insights and connect with guests in a personalized manner.

Wyndham had already implemented Amazon Web Services (AWS) as the basis for a new, cloud-based back end for data processing. However it was still relying on legacy platforms to ingest, move and process data. The first step was to help Wyndham more fully utilize AWS tools and services, while standardizing the methods by which data was transferred between its core systems. Specifically, Wyndham’s move to a more robust, scalable cloud environment provided improved quality checks, better error controls and better overall accuracy of its guest data.

One significant challenge was revamping the way that Wyndham handled data, including reviews for data integrity requiring manual review of each error—a painstakingly, slow and costly process. In the new data architecture, numerous AWS Platform as a Service (PaaS) tools were used, such as Amazon Kinesis, SFTP, Amazon API Gateway, to make sure that Wyndham’s data was streamlined, automated and moved to the new AWS environment securely. From an operational standpoint, tools such as Amazon CloudWatch, Amazon Elasticsearch and Amazon QuickSight enabled Wyndham to quickly visualize guest and property metrics through interactive dashboards. In aggregate, the newly established architecture – packaged using AWS Serverless Application Model (SAM) - allowed Wyndham to access guest insights at a depth and speed which they had never experienced before.

Dramatic improvements in efficiency and accuracy , using the features of AWS

Before PwC entered the engagement, a single piece of data would travel an average of nine system steps to get from its point of creation to Wyndham’s central database, an error-fraught trip which would take up to two-and-a-half days to complete. Today, that number of steps has been reduced to four, and the journey now takes as little as five minutes. The quality of data has also been improved because it has been so effectively centralized, reducing the likelihood of inconsistencies and conflicts.

Wyndham has also seen an estimated 40 percent decrease in the time spent on managing its computing environment, thanks to being able to fully leverage the serverless architecture enabled through AWS. This in turn has helped reduce cost for the company, while now allowing Wyndham’s properties and corporate team to develop a fuller, more accurate understanding of its guests and their needs.

While the COVID-19 pandemic has slowed the travel industry in general, Wyndham is well-positioned for the impending recovery, thanks to a more efficient and accurate data architecture, rewarding the hotelier to help its owners spend more time focusing on their guests and less time investigating root causes behind data anomalies or inconsistencies.

“From better error handling to improved performance, we’re seeing a huge improvement in our technological capabilities which is positively impacting numerous areas of our business - and allowing us to focus on what matters most: our guests.”

Scott Strickland CIO, Wyndham Hotels & Resorts

“The underpinnings Wyndham had in place helped us redesign their data landscape to use AWS to its fullest potential - with a lens on protecting the integrity of Wyndham’s information and improving the accuracy of their guest data.”

Ali Abidi Principal, PwC

Are you in control of your data?

Pwc and aws are helping companies modernize in the cloud., explore pwc's case study library, share this case study.

The right data at the right time can make all the difference. Learn how PwC and AWS helped Wyndham Hotels modernize their data…and level up their guest experience.

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• Hospitality Industry

How city hotels are reinventing their business models to stay competitive

November 16, 2021 •

6 min reading

City hotels are far from dead. They are just having to reinvent their offer to include more innovative and community-inspired ventures, activities and products to address the changing needs of their clientele.

How crises may trigger business models renewal

In spite of numerous threats, with crises also come new opportunities. While many hotels had already started their digital revolution and were thinking of creative and innovative business strategies, the pandemic has turned this will to change into a real must . Finding ways to better monetize and commercialize different offers is mandatory, as clients’ habits have evolved and now include non-room products and services such as eating in a restaurant, drinking at a bar, benefitting from packages, visits and activities. This change of habits does not only regard clients, but the needs of each individual. People have adapted to new ways of working, and concepts such as online shopping, catering services or take-out and delivery by hotels, restaurants, or even grocery stores have become the norm.

Hospitality Industry Trends 2021

Thereby, the pandemic offers a potential for hotels to reorganize their strategy by, for example, reserving areas for hybrid reunions or temporary working spaces, and offering personalized products and services in line with their clients’ new needs. However, even though hotels did as much as they could to adapt to this particular situation, they remain strongly competitive with short-term rentals or serviced-apartments allowing more privacy, private kitchens, bigger spaces, socially distancing ability and a cleaner environment. Furthermore, everyone directly or indirectly involved in the sector agrees that after the pandemic, the level of what is termed ‘business tourism’ will not go back to how it used to be and will take years to recover.

As Accenture rightfully points it in its report , the whole travel industry has been restructured by the pandemic, with a new type of demand induced by the generalization of teleworking. Consequently, businesses worldwide have realized that a non-negligible number of meetings may actually happen virtually, saving them significant costs and time. Even though face-to-face encounters will remain as important, they will know a consequent drop that might be filled by leisure travel. However, it must be kept in mind that the gap in business clients created by Covid-19 will not easily be filled, as the market will be even more competitive. To sum it up using the words of Accenture, “All players in the industry are now competing for a bigger slice of a smaller pie”. As such, it is even more critical for business hotels to remain creative and quickly implement strategies that will attract new clients and meet old clients’ new needs.

Innotour project: The Future of City Hotels in Switzerland

The EHL Institute of Customer Experience Management is currently involved in the project funded by Innotour “The Future of City Hotels in Switzerland” which brings together professionals and academics from the tourism industry in Western Switzerland (Association Romande des Hôteliers (ARH), Geneva Tourism and the Institute of Tourism at HES-SO Valais-Wallis) to develop potential survival strategies for the tourism and hospitality sector.

To accompany city hotels that lost a majority of their (business) clients, a multisectoral and intersectoral approach is necessary. Uniting key players from various backgrounds allows for an expertise and know-how both in theory and practice to efficiently reach the common aims and objectives for the future of any industry. An approach considering all aspects of a business - sustainable, resilient and financially viable for all stakeholders - will help put in place the best short- and long-term strategies to foster competitiveness by supporting hoteliers to reinvent their business models towards the generation of new avenues of attractiveness and revenues. The project could foster innovation for business hotels in the urban context not only for the entire Swiss touristic sector, but also internationally, as the industry has been similarly affected worldwide.

The first phase of the project was to issue a survey to hoteliers in Swiss cities in order to get a first glimpse on how the industry was affected by Covid-19. The research looked into the ways in which the hotel spaces freed by the loss of clients could be reassigned or transformed, and how hoteliers could reinvent their basic business model to meet their clients’ needs and potentially target new kinds of customers. The second phase of the project focused on generating ideas for the future of the city hotels by organizing several think tanks and an online contest. The third phase is ongoing and exploring in details the ideas generated during phase II. A specific number of ideas will be chosen and focus groups will take place with hoteliers to develop together a way to implement those ideas. The next step will be to synthetize all the inputs, validate the ideas, and present them in a playbook that will accompany hoteliers in their transition.

Intitial survey results from Swiss Hoteliers: diversification is key

The first survey (March-April 2021) highlighted that a majority of hoteliers foresee a change in the nature of the customer base and are ready to collaborate with urban players like tourism operators to better exploit the assets of the cities in which their establishment is located. They understand that personalization and flexibility will be key to meet their clients’ needs and improve their experience, whether it be by creating new offers or implementing new business models, such as providing areas for teleworkers, accommodating medical patients, considering hybrid models or offering new services. Even though these results reflect the situation within Switzerland, the issues and potential solutions mentioned are international and shared by hoteliers worldwide.

Following the survey, an ideas contest was launched (May 2021) to involve the public and students (HES-SO Valais-Wallis and EHL) to share their vision of the future of the business hotel industry, as well as their expectations as potential clients. Their proposals included new business models, new packages, new room usage, putting an emphasis on new trends and needs such as offering immersive activities or creating an eco-friendly environment within and around the hotel. The most popular ideas were thus the reallocation of rooms (and hence targeting new kinds of clients) and the restructuration of current free spaces as co-working spaces.

Additionally, three think tanks made up of professionals from the hotel industry and relative sectors met over various workshops. The ideas discussed were relative to the concept of hybridization, and participants agreed that the traditional business model of city hotels is outmoded and that a diversification of their offer is mandatory. All the outputs converged towards a similar point, which is that the hotel should go back to being a place full of life and multifunctional. Hoteliers could for example offer non-room products and services as USPs by welcoming external businesses (pop-up concepts: hairdresser, bakery, etc.) or create offers oriented towards all types of client (birthdays, events, etc.).

Major trends for business hotels

The common vision addressing the future of the hotel industry by 2030 describes it as a mix between international, regional and local hotel industry, with services oriented towards health, social, wellness and economy. Hotel services of the future will be “uberized”, meaning that the services will be provided on-demand. Giving more flexibility to the clients and enabling them to personalize their experience will thus become critical, while every space or service provided by a hotel shall be marketable. In short, clients will choose what they need and pay for what they use.

Four major recurring trends regarding the future of the business hotel industry were identified:

• The hotel becoming a “Coeur de quartier”, a place open to the neighborhood.
• The hotel as a hybrid, flexible and quickly adaptable place.
• The hotel offering co-working spaces and relative services.
• The hotel as a destination where activities and events take place.

The trends above are all relative to the hotel becoming a place of interest and attraction, where people feel the will to gather, whether it be for locals who want to have a meeting point close-by, professionals seeking to work in a pleasant environment, businesses expecting specific services, or tourists and locals wishing to experience something new, fun and authentic.

The target is no longer the business client, and the hotel does no longer represent a simple place to sleep. It wants to become essential and be open to everyone: families, locals, leisure tourists, business tourists, students, workers, etc. By doing so, the hotel aims to respond to every client’s need, hence the necessity to adopt flexible strategies, as well as personalizing the experience of its customers.

A promising transition for hotels

Hotels worldwide may thus go further than just hosting people by becoming a place that welcomes everyone, whether they intend to stay for one hour, one day, overnight or much longer. This flexibility and the diversification of the offers will surely attract new clients and make it possible to meet their needs. Rooms will no longer serve at night only, but will be adapted in ways that will enable a wide range of activities. Bearing in mind that the industry has already shifted, hoteliers must take a leap of faith and embrace this change now if they intend to survive in this new, competitive and yet exciting era that will shape the future of this industry. In the end, the variety and amount of the ideas generated actually reflects the resilience of the industry and its businesses, which itself echoes a promising transition.

For further information:

• Innotour project website
• Accenture report
• Institute of Customer Experience Management website

Research Assistant at EHL

Associate Professor at EHL

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Case study challenge invites students, alumni, and hospitality experts to weigh in

Professor chekitan dev’s co-authored case examines options for expansion of a luxury resort. how did the industry respond.

Creating a luxury villa resort brand—what kind of resort would you build for Beach Enclave?

Imagine you’re the CEO of Beach Enclave , a company that operates a luxury resort on Turks and Caicos Islands. You’ve just purchased three acres of beachfront property to expand your resort. With three possible choices of how to proceed, how do you ensure your decision makes sense financially and aligns with your existing branding strategy?

This is the scenario co-authors Chekitan Dev, professor of marketing at the School of Hotel Administration (SHA), and Laure Stroock, research associate, propose in their new case study challenge: “ Beach Enclave Turks & Caicos: Creating a Luxury Villa Resort Brand .”

The business case, posted to the Scholarly Commons in early June 2020, was shared with Center for Hospitality Research subscribers, students, alumni, and other hospitality industry professionals with an invitation to submit their response to the challenge. Since its release, the case study challenge has been downloaded more than 500 times, viewed nearly 3,000 times on social media, and has garnered responses from all over the United States and other countries, including Canada, Mexico, Belize, the United Kingdom, Dubai, India, and Nepal. Respondents work at all levels of small and large companies and many are Cornell graduates. Notably, we received ten individual responses from students at Christ University in India.

Readers consider three resort expansion options

Readers were given three options and asked to send in their responses, which would ultimately be compared with the solution of the real-life case protagonists, Vasco Borges and Annie Lee Borges ’10, Beach Enclave’s CEO and revenue manager, respectively.

Option A: Villa Collection

Beach Enclave Long Bay (BELB) would add three, five- to seven-bedroom luxury villas for sale and rental while maintaining the present model of luxury private villas with a dedicated butler and amenities provided mostly in-villa.

Option B: Villa Resort

BELB would add six, two to three bedroom beach cottages for sale and mandatory rental. A concierge would be shared across three or four beach cottages. The resort would include a Club Lounge with a full bar/restaurant, event space, and children’s program, as well as upgraded sports facilities and new tennis courts.

Option C: Villas and Suites Resort

BELB would add four, two to three bedroom beach cottages for sale and mandatory rental, plus a 24-suite hotel. Beach Enclave would retain ownership of half of the suites; the other half would be converted into six condominiums for sale (two- to three-bedroom condo units). BELB would become a full-amenity resort with a rooftop wellness spa, multiple restaurants and bars, common pools and decks, and a sports area.

Hospitality industry leaders weigh in

Select reader responses for each option, along with Vasco and Annie’s solution, are presented below. (Responses were minimally edited for formatting.)

Bob Alter ’73 Chairman Emeritus, Sunstone Hotel Investors, California

“I consider it the least risky solution. Most brands in the hospitality space have had the most success when they have stayed true to the brand. Any variance dilutes the brand’s value. As the world of wealthy people has grown, it has evolved into the uber wealthy, so finding three clients to snap up the five- to seven-bedroom villas should be successful. The brand would stay pure and the opportunity to expand to other islands would be greater. The opportunity to profit from the sales would be great. The excel model might show differently but reality (MIF: money in first) will prove correct.” Read more about Bob Alter ’73 , who serves on several SHA advisory boards.

Abhay Bakaya, MMH ’09 VP of Development, SH Hotels & Resorts, New York

“I recommend Option B, but suggest building the cottages in sets of two or four (as duplex or adjoining structures) to generate additional scale and to give Annie more bandwidth to price her product. A small hotel development leads to added construction risk and layers of operating expense and also causes brand dilution. In the mid/long term, BE can create a platform to centralize their amenity experiences across the three properties. This could ultimately lead to a membership structure with stable revenues, where individuals buy into the option to stay at any of BE’s properties across the Caribbean.”

Carmen Lam Principal, Crikx & Co, Hong Kong

“Highest IRR [internal rate of return]. Positive EBITDA [earnings before interest, taxes, depreciation, and amortization] by year three. Debt free by year four. Offer still in line with current brand positioning while catering to needs of current customers with families looking for smaller villas with more activity options. Demand—unexplained, but RPV [revenue per visitor] trend after opening of Long Bay could be an indication that customers are looking for more ex-villa amenities and activities than what Long Bay could offer, so Option A will not be able to cater to that. In addition, to capture lifetime value of customers, smaller units are needed, which means Option B has higher potential for BE to leverage demand from existing customers. Risk— Option C requires and carries higher debt load, more selling and operating risks. Adding F&B will require additional competence beyond the current team and will reposition the brand into the ‘resort with villa’ category. That means a different competitive set and it may not appeal to the current customer base.”

Jacqueline Nunley, Head of Hospitality, Salesforce, Texas

Option C: Villa and Suites Resort

“Diversifying the portfolio is key. It may be a larger investment up front but pays off in the long run where you have EBITDA at $2.5 million. The hotel rooms will allow them to create a base business and it’s more accessible for couples and smaller traveling parties. The product at five- to seven-bed villas presents a problem for return business/occupancy. Large parties typically will do something different every year. When other options are available (separate property) the villas could access/utilize the amenities of the ‘hotel’ as an attraction. The brand could focus on attracting destination audiences that typically travel in smaller groups/couples.”

Martin Pinsker ’08 Commercial Real Estate Investments, Canada

“A mix of resort suites and 2-3 bedroom beach cottages would provide the most operational flexibility for sales with a skilled revenue manager, and could capture new group business and weddings with more predictable F&B. Unlike Option B, the combination of an all-suite resort and smaller homes would also provide flexibility to individual guests seeking privacy; they could still play host at their beach cottages for meals but retire separately. Finally, Option C may capture guests lost to Beach Enclave’s competitive set properties with hotel / resort / clubhouse amenities. Thoughtful site planning and landscaping can ensure privacy for the existing villa owners and guests. On the residential sell-out side, retaining ownership of the 24-suite hotel past stabilization may be less risky than selling individual homes, given the market’s volatility and new supply. The hotel also generates solid proforma returns.”

Sabita Chettri Finance Controller, KLA, California

“The resort is already at the top position (re: Trip Advisor) on the island. Since their occupancy is seasonal, if they provide half of the resorts for sale then it can stabilize seasonality and increase revenue by adding amenities and offering personalized experiences to create value. Having a wellness spa, multiple restaurants, and bars and sports area will provide services and activities for the current consumer needs. The revenue is expected to be higher and the expenses can be minimized. IRR is lesser, which can be improved, but the NPV [net present value] shows the strength that investors can rely on to invest.”

More than one right answer

Dev writes, “For a case researcher and writer, it is always gratifying and fun when those that analyze the case pick all three solutions, clearly telling us there is no one ‘right’ solution. As we read the proposed solutions, it became clear to us that the case analysts have correctly identified the three ‘tensions’ between the options, which can be summarized into branding, operational, and financial considerations.

Tension 1: Branding

• Maintaining the current brand position to focus the firm’s efforts and put all eggs in one basket, or
• Broaden the ‘footprint’ for the brand, taking it into additional ‘sweet spots’ to diversify risk, but risk losing the brand’s raison d’être;

Tension 2: Operational

• Cashing-in on already accumulated ‘experiential capital’ by doing more of what has worked well for the firm in the past and selling to more of the same kind of owners and guests, or
• Venture beyond the ‘tried and true’ to newer pastures to expand the scope and scale of the firm to attract a broader profile of third-party developers, buyers and guests; and

Tension 3: Financial

• Options that offer very different financial returns, and
• The most ‘diversified’ option offering the highest return.”

What option did Beach Enclave choose?

Vasco borges, ceo, beach enclave annie lee borges ’10, revenue manager, beach enclave.

“We chose Villas & Suites for two main reasons: stand-alone and portfolio. As a stand-alone option, it provides the best financial returns, together with a wider diversification of real estate and hospitality profitability drivers; allows for full range of amenities while keeping a boutique, low-density feel; and the disadvantage of only having larger villas is solved by bringing the main Beach Enclave design ethos and signatures into a vertical development. Condos will be oversized, all master bedrooms and common living areas will face the ocean, each with ample outdoor space. Competitively, Beach Enclave Grace Bay is pure villas, Beach Enclave North Shore is being expanded with a collection of one- to three-bedroom cottages plus a club lounge, and so Beach Enclave Long Bay will be differentiated by becoming a full-service resort. As a portfolio, the Villas & Suites option creates a new ‘proof of concept’ for the company. The three-property model (villas, cottages, suites) creates multiple opportunities for Beach Enclave to expand as different property models might be better suited for different locations.”

Professor Dev and Ms. Stroock deeply appreciate the efforts of all those who took the time to send in their thoughtful responses. Their solutions made it clear that hospitality branding decisions can be complicated, and a careful consideration of multiple factors is needed to rank the available options and pick the “right”’ solution. Please contact the Center for Hospitality Research if you would like to engage with us on more case studies.

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Case Studies

Hyatt hotels: developing an integrated csr strategy, june 3, 2011, the challenge.

One of the biggest industries globally, travel and tourism contributes up to 10 percent of the world’s economy and about one in every 12 jobs. Yet most companies in this sector are still in the early stages of assessing and addressing their sustainability impacts. To better communicate the newly public company’s commitment to responsible practices, and to prepare for the increased transparency required of public companies, Hyatt leaders partnered with BSR to articulate a vision for an integrated sustainability strategy.

Our Strategy

Our goal was to help Hyatt build a strategy that connects corporate responsibility objectives to business goals in ways that:

• Deliver value and innovation to Hyatt’s operating companies.
• Identify and mitigate sustainability risks.
• Build trust externally and engage colleagues internally.

At Hyatt, which owns, manages, and franchises hotels, engaging internal stakeholders such as general managers, owners, associates, and executives was an essential first step in understanding the unique global and local sustainability challenges each property faces.

First, BSR interviewed several executives to establish senior management’s current and future conception of CSR. We then conducted workshops in Asia, the Middle East, Europe, and the United States to identify current activities, prioritize CSR issues, and understand regional nuances. Several key themes emerged:

• Addressing poverty and inequality in local communities through education and economic self-sufficiency
• Recruiting, developing, and retaining staff
• Managing the environmental footprints of its hotels, expanding its commitment to sustainable sourcing, protecting the biodiversity of the areas surrounding its hotels, and using sustainable design and construction

This work allowed Hyatt to develop and implement “Hyatt Thrive,” a strong, practical CSR vision representing Hyatt’s goal of creating “thriving communities, places where we are proud to work, our neighbors want to live, and our guests want to visit.” The platform, which establishes a global CSR framework with a common vision and strategic focus that can easily be implemented locally, is centered on four pillars: educational and personal advancement, health and wellness, environmental sustainability, and economic development and investment. Hyatt Thrive’s primary objective is to help the company communicate its philanthropic, environmental, and community engagement initiatives, and to position Hyatt to focus on and articulate the value it brings as a global company to the many communities it serves.

The CSR strategy has spurred additional sustainability initiatives, including a new human rights policy statement that references specific industry issues such as human trafficking. Hyatt Thrive also led to an improved approach to aligning Hyatt’s giving and volunteerism with the four pillars of the Thrive framework.

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Back to Case Studies

What is the Hotel Business Case?

Defining Project Opportunities

The first step in the property development process is opportunity definition . This is when alternative projects are explored, identified and selected.

For any project, a business case must first be developed and presented in a carefully constructed document that describes, refines and defines a project concept. It justifies the project based on its expected commercial benefit and success and is used to determine the intended stakeholders and generate support and approvals.

The business case for a new project establishes the need, defines the nature of the business, justifies its financing and investment, provides a cost-benefit analysis, and estimates its potential profitability benefits. It also determines the most appropriate business model and leads to detailed financial modeling and analysis.

The business case examines alternative opportunities, the project's production and investment, and recommends the course of action that will create the most business value. It may result in the selection of an alternative project that meets the opportunity definition.

A preliminary feasibility analysis is generally conducted for the "go/no-go" decision to further pursue the project development concept. If favorable, a comprehensive market and financial feasibility study is generally undertaken as the basis for the business case and a full business plan is developed.

The preliminary funding analysis projects how much capital is needed, the sources of capital, returns on investment, and other financial considerations. It serves as the basis for the financing terms and conditions.

The resulting capital plan will explain financial risks and opportunities and the impact of proceeding or not proceeding with the project. Recommendations are made along with providing evidence that the proposed action is the optimal solution under the given circumstances.

The business case for sustainability establishes the business benefits to sustainable development and the " greening " of operations. The economic benefits include cost savings, competitive advantage, employee loyalty, customer retention, regulatory compliance, and risk management.

The Hotel Business Plan

The business plan provides a detailed summary of the objectives of an intended business undertaking and an outline of the actions required to achieve its operational and financial goals, growth targets, and strategic direction. It provides measures of revenues, margins and profits and is used to monitor the performance of the business.

The business plan of a project in a new market will normally include:

• Market-entry strategy - The plan to enter a new target market and consider entry barriers, the competitive environment, the project ownership structure, and the business model;
• Management and organization plan - The organization structure and arrangement of responsibilities, authority, rights and communication;
• Financial and investment plan - The details of the investment and financing requirements and the projected costs, operational expenses and revenue;
• Human resources plan - The current and future human resources requirements, areas where there will be staffing needs, and actions to fill the vacancies;
• Marketing and sales plan - An outline of the advertising, marketing and sales efforts to achieve the financial and sales goals;
• Risk management program - The procedures used to identify potential events that may negatively affect the organization and to protect and minimize these risks;
• Project exit strategy - The developer's plan to exit the project, generally either upon project completion or asset sale;
• Road map - A description of the project's strategic direction, for tracking the progress of initiatives; and.
• Action plan - The specified activity required to achieve the strategic objectives.

Business plans are subject to adaptation as business develops or objectives change and when new opportunities or threats arise. This necessitates that they are updated accordingly.

Sustainability calls for the planning of a prioritized set of actions that positively impacts the environment and society, while increasing the project's economic value. Sustainable development must consider the interests of all stakeholders.

The Project Development Strategy

Development strategy is a detailed plan outlining how an organization intends to succeed through development over time and used to gauge its overall success. For a hotel development project, it defines such internal and external issue as:

• The objectives of the developer, its investors and the other stakeholders;
• Control over the project's marketing and operations throughout its extended life cycle
• The strengths, weaknesses, opportunities and threats of the development project;
• The brands, products or services to be supplied;
• The pricing policy and price sensitivity;
• The competition, their strategies, and any competitive advantage of the project;
• The profile of the prospective guests; and
• External influences that are likely to affect the market.

Build-to-hold is a basic business strategy to develop income-producing property that the developer owns (holds), commonly with other investors, and to manage over the long-term. Build-to-sell is the other basic strategy where hotel property is developed, sold and transferred upon project completion, marking the developer's exit from the project.

Property development projects create value for developers through five basic operational strategies :

• Development or redevelopment - When the total cost is lower than the asset's market value upon project completion, profit is realized;
• Lower cost of capital - When financing is favorable, developers can outbid competitors while increasing leverage;
• Financial leverage - Through the use of debt funding to finance the business, the return on equity (ROI) increases;
• Superior investing skills - Using systematic selection procedures and market-timing strategies, good deals are sought and bad deals avoided; and
• Superior operating skills - When operated more efficiently than competitors, revenue is enhanced and superior net operating income (NOI) is produced.

The strategies are generally combined. Each requires different skill sets and has different implications for a project's overall risks and returns.

Sustainability as a business strategy calls for consideration of the prevailing and changing social and cultural norms, values and practices. Sustainable development is undertaken for the benefit of all stakeholders.

Copyright © 2020 Pecunica LLC. All rights reserved.

Gregory Autin SEEDIS

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The Middle Path to Innovation

• Regina E. Herzlinger,
• Duke Rohlen,

Too many companies are failing to innovate. One reason, say the authors, is the polarized approach companies take to innovation. At one end of the spectrum, corporate R&D efforts tend to focus on product refreshes and incremental line upgrades that generate modest growth for lower risk. At the other end, venture capitalists favor high-risk “transformational” innovations that seek to upend industries and generate outsize returns. But there’s a better, middle, way.

This article presents the growth driver model, a framework that partners corporations with outside investors to identify and develop innovation opportunities, drawing on corporate resources and talent and externally recruited entrepreneurs. The authors illustrate the model with a detailed case study of how it revived innovation at Cordis, a large medical technology device maker.

Forget disruption and incrementalism. Here’s how to develop high-growth products in slow-growth companies.

Idea in Brief

The problem.

All too many companies, large and small, are failing to innovate. As a result, problems remain unsolved, technologies aren’t invented, and jobs go uncreated. Lost productivity cost the U.S. economy more than $10 trillion between 2006 and 2018.

Companies take a polarized approach to innovation. Corporate R&D efforts focus on safe product refreshes and incremental line upgrades; venture capitalists favor funding high-risk, high-return and often disruptive innovations, anticipating that returns from the few successes will compensate for the investments in failures.

The Solution

Exploit the space in the middle through a growth driver model that partners corporations with outside investors to identify and develop innovation opportunities, drawing on corporate resources and talent and externally recruited entrepreneurs.

An innovation crisis is brewing in the United States: Too many firms, both large and small, are failing to innovate. As a result, problems remain unsolved, technologies are never invented, and meaningful jobs go uncreated. According to one estimate, lost productivity cost the economy more than $10 trillion between 2006 and 2018, roughly equivalent to $95,000 per U.S. worker.

• RH Regina E. Herzlinger is the Nancy R. McPherson Professor of Business Administration at Harvard Business School and the author of multiple books, including  Market-Driven Health Care (Perseus, 1997).
• DR Duke Rohlen is the founder, chairman, and CEO of Ajax Health.
• BC Ben Creo is an executive fellow at Harvard Business School.
• WK Will Kynes is the chief of staff at Ajax Health.

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How Mastercard Uses AI Strategically: A Case Study

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In the ever-evolving landscape of financial technology, Mastercard stands out as a pioneering force in leveraging artificial intelligence (AI) to drive innovation and operational efficiency. This case study delves into how Mastercard strategically applies AI, scales its applications, and maintains robust governance processes to ensure responsible and impactful use of this transformative technology.

Mastercard's Strategic Use Of AI

Mastercard has long recognized the transformative potential of AI. According to Ed McLaughlin, President and CTO of Mastercard, "AI has been an essential capability for Mastercard for years now, and we see it only increasing in importance and impact." The company has seamlessly integrated AI into its core operations, enhancing both the security and personalization of its services.

One of the primary ways Mastercard utilizes AI is through its decision management platform, which serves as the AI brain running within its network. This platform enables the company to make real-time, complex decisions on transactions, significantly enhancing fraud detection and prevention. McLaughlin highlighted, "In the last 12 months, we've stopped over $20 billion worth of fraud."

Choosing The Right AI Applications

The strategic application of AI at Mastercard is not a matter of chance but a result of a meticulous decision-making process. The company employs a two-tiered review mechanism to evaluate AI opportunities: an AI review board and a subsequent deep technical review.

The AI review board consists of experts from various domains, including legal, privacy, product, and business. This board assesses the intent, data provenance, and ethical implications of potential AI projects. McLaughlin explained, "We start with legal, privacy, product, business intent, and that is really important to understand—what are we trying to do here? Should we do it? Can we do it?"

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Once a project passes the initial review, it undergoes a rigorous technical evaluation. This involves assessing the scalability, ROI, and operational efficiency of the proposed AI application. "If it doesn't scale, it doesn't matter," McLaughlin emphasized, highlighting the importance of scalability in AI initiatives.

Scaling AI Across The Organization

Mastercard's approach to scaling AI involves silent mode validation, where new AI techniques are tested in parallel with existing systems. This method allows the company to measure the impact and efficacy of AI without disrupting current operations. McLaughlin noted, "We can run this in production in parallel with what we already have and then decide if the delta is worth the additional expense."

To ensure that AI initiatives can be effectively scaled, Mastercard invests heavily in training and upskilling its workforce. The company has established specialized workbenches for different roles, such as software engineering, data science, and sales, to provide tailored AI tools and training. "We are saying, what’s the right level of investment in data science, engineering workbench, generative and otherwise? How do you tailor it to your environment?" McLaughlin said.

Governance And Ethical Considerations

Governance plays a crucial role in Mastercard's AI strategy. The company has implemented a comprehensive AI governance framework to oversee the ethical and responsible use of AI. This framework includes continuous monitoring, compensating controls, and feedback loops to ensure ongoing model efficacy and to mitigate unintended consequences.

Mastercard is also a founding member of the Harvard Council for the Responsible Use of AI, reflecting its commitment to ethical AI practices. McLaughlin stressed, "We published a data bill of rights to our consumers: your data is your data. You have the right to know what data we have from you, how we’re using that data."

The company's governance processes ensure that all AI applications align with its core principles and regulatory requirements. This involves regular reviews and updates to its AI models to address concept drift and other challenges that may arise over time.

Looking Ahead: The Future of AI At Mastercard

Mastercard continues to explore new AI technologies and their potential applications. McLaughlin discussed the impact of generative AI and quantum computing on the company's future strategies. "We are looking at quantum computing both from a security perspective and as a means to solve complex combinatorial problems that are beyond the reach of classical computing."

Mastercard's forward-thinking approach ensures that it remains at the forefront of technological innovation while maintaining the trust and confidence of its customers. The company's strategic use of AI not only enhances its current operations but also positions it to tackle future challenges and opportunities in the financial technology sector.

Mastercard's strategic application of AI serves as a powerful example for other organizations looking to harness the potential of this technology. Through a well-defined governance framework, rigorous review processes, and a commitment to ethical practices, Mastercard ensures that its AI initiatives deliver significant value while upholding the highest standards of responsibility and integrity. As AI continues to evolve, Mastercard's proactive and strategic approach will undoubtedly keep it at the cutting edge of innovation in the financial industry.

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How FS AP-N515H Enhances Hotel Room Wi-Fi Connectivity

In today's digital world, seamless internet access has become a fundamental requirement for hotel guests. With travelers relying heavily on their smart devices for both work and leisure, the demand for high-quality hotel room Wi-Fi connectivity has never been higher. Meeting these needs is no longer just an amenity but a crucial factor influencing guest satisfaction and loyalty.

Current Issues with Hotel Room Wi-Fi Performance

Today's hotel guests expect more than a comfortable bed and a hot shower—they seek a connected experience. The growing reliance on smartphones, laptops, and tablets for both work and leisure means that dependable internet access is a non-negotiable part of their stay.

Despite this critical demand, many hotels struggle with providing a satisfactory Wi-Fi experience. Inconsistent connections, slow speeds, and dead zones can turn an otherwise pleasant stay into a frustrating ordeal. Without reliable Wi-Fi, guests find it difficult to stream media, participate in video conferences, or even browse the internet. These issues not only diminish the guest experience but also harm the hotel's reputation, making a strong case for the need for robust room Wi-Fi access points like the FS AP-N515H.

Introducing FS AP-N515H: An Ideal Choose in Hotel Room Wi-Fi

Firstly, what is FS hotel room AP? The FS AP-N515H is a panel access point (AP) designed with the hotel industry's unique challenges in mind. Unlike traditional APs, a panel AP is a compact wireless access point that is usually mounted on a wall or other surface to provide wide wireless coverage. Compared to other types of APs, the panel AP is flatter in design and looks like a rectangular thin plate, hence the name. This FS AP-N515H is designed specifically to enhance hotel room Wi-Fi connectivity, ensuring guests enjoy a superior online experience.

Then, why FS AP-N515H is ideal for hotel room Wi-Fi ? The FS AP-N515H stands out due to its specific design features that target and alleviate common Wi-Fi issues in hotel rooms. Its integration of the latest Wi-Fi 6 technology ensures that guests enjoy a superior online experience, marked by high-speed connections, expansive coverage, robust security, and easy management. Next, we will introduce it to you in detail.

Key Advantages of FS AP-N515H in Hotel Room Wi-Fi

High-speed connectivity.

Wi-Fi 6 Technology: Utilizing the latest Wi-Fi 6 (802.11ax) standard, the AP-N515H significantly boosts data transfer rates and enhances overall network efficiency. This ensures guests experience faster downloads, seamless streaming, and smooth online browsing—crucial for both work and entertainment purposes in hotel room Wi-Fi solutions.

OFDMA, MU-MIMO, TWT: OFDMA enables more efficient channel use, and reduces latency between AP and client devices; The MU-MIMO (Multi-User, Multiple Input, Multiple Output) technology supports up to eight client devices and provides greater network efficiency, ensuring a high-quality hotel room Wi-Fi experience. TWT reduces power consumption, schedules wake times, and extends the client battery life of mobile devices, enhancing their hotel room Wi-Fi experience.

Enhanced Coverage

Advanced Antenna Technology: Equipped with high-gain antennas, the AP-N515H extends Wi-Fi coverage, effectively eliminating dead zones within hotel rooms. This ensures that guests enjoy a consistent and strong hotel room Wi-Fi signal, no matter where they are in the room.

Beamforming: Beamforming technology focuses the Wi-Fi signal directly towards the user's devices, instead of broadcasting in all directions. This targeted approach enhances signal strength and coverage.

Robust Security

In today's digital landscape, data security is paramount. The FS AP-N515H integrates state-of-the-art security features, notably WPA3 encryption, to safeguard guests from cyber threats. WPA3 offers enhanced password protection and fortifies overall network security, allowing guests to work, browse, and stream with complete peace of mind, knowing their personal data is well-protected on the hotel room Wi-Fi network.

Easy Installation and Management

Plug-and-Play Design: The uncomplicated installation process allows hotel staff to quickly set up the device without extensive IT expertise. This ensures minimal disruption during the deployment process.

Intuitive Management Interface: The user-friendly interface facilitates easy network monitoring and management. Hotel staff can effortlessly handle tasks such as firmware updates, device configuration, and performance monitoring of the hotel room Wi-Fi.

Supports Airware: With built-in support for Airware, the AP-N515H further simplifies network management. This powerful software suite offers advanced tools for network analysis, diagnostics, and optimization, allowing hotel staff to manage peak network performance easily.

Cost-Effective Solution

Infrastructure Efficiency: By providing robust performance and extensive coverage, the AP-N515H minimizes the need for multiple devices within a hotel, thereby reducing setup and maintenance costs. This enhances the overall value of the hotel room Wi-Fi service while maintaining high-quality service.

Energy Efficiency: The device is designed to consume lower power while delivering top-tier performance, contributing to reduced operational expenses.

Case Studies of Hotels Using FS AP-N515H

A hotel located in Tennessee, USA, aimed to cater to both business and leisure travelers but faced challenges due to thick walls and cabling issues, which negatively impacted network services when installing hotel room Wi-Fi solutions in guest rooms. To address this, FS introduced the compact hotel access point, AP-N515H, which can be easily deployed next to the TV area or beside the desk without damaging the walls. This hotel room Wi-Fi solution is built on the hotel's existing network infrastructure, enabling hassle-free internet services while maintaining the aesthetic appeal of the rooms. The AP-N515H significantly expanded the hotel's wireless coverage, ensuring a secure and satisfying internet experience for guests. Its unobtrusive design and seamless integration into the room's layout ensure that guests enjoy uninterrupted, high-speed Wi-Fi connectivity, whether for business or leisure purposes. Not only did the hotel room Wi-Fi solution resolve connectivity issues, but it also improved guest satisfaction and solved a problem that had been plaguing the hotel.

Conclusion: Upgrade Your Hotel Room Wi-Fi with FS AP-N515H

In an era where flawless internet connectivity is crucial, hotels must prioritize upgrading their Wi-Fi infrastructure to meet guest expectations. The FS AP-N515H stands out as a comprehensive solution that addresses the necessary parameters for high-speed, reliable, and secure Wi-Fi. By investing in this cutting-edge access point, hotels can significantly enhance their guests' online experience, ensuring satisfaction and fostering loyalty. Additionally, the FS AP-N515H comes with a 3-year warranty, and FS offers free expert team consultations.

Embrace FS AP-N515H to transform your hotel room Wi-Fi connectivity, and offer your guests the seamless internet access they deserve.

Relative article:

Exploring Hotel WiFi Systems: Get WiFi in Every Room

FS Upgrades Hotel WiFi Solutions to Achieve Win-win Situation for Hotels and Guests

6 Things to Consider When Choosing the Best Wireless Access Point

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Winfried Ruigrok

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

This is the latest in an FT series of mini case studies on business dilemmas, for exploration in the classroom and beyond. Read the argument and then consider the questions raised in the box below

Across the western world, big pay rises for chief executives have triggered shareholder dissent.

In May, aerospace group Boeing’s outgoing chief executive David Calhoun was awarded a pay rise of 45 per cent to $32.8mn despite shareholder opposition, following a series of recent incidents and accidents .

In March, the board of pharma giant AstraZeneca proposed to pay chief executive Pascal Soriot £18.7mn. Two proxy advisers called the package “ excessive ”, but one major shareholder argued Soriot was “ massively underpaid ” and the package was approved. Also in March, a proposed increase to the fixed salary part of Banco Santander executive chair Ana Bótin’s package drew fire from adviser ISS.

These debates about executive pay, on both sides of the Atlantic, raise questions about the checks and balances on remuneration.

ISS research found that chief executive officers’ pay went up by 9 per cent in the US in the first part of 2024, even when company performance went down. And, in response to a widening pay gap between US CEOs and their European counterparts, many FTSE 100 companies have also proposed significant pay rises this year.

To retain senior executives, the chair of UK-based medical devices maker Smith & Nephew argued it was necessary to raise pay for US executives working at “Brilo” companies: “ British in listing only ”. The head of the London Stock Exchange Group even called on investors to support higher executive pay , to prevent UK-based companies that generate only a “ fraction of their revenue in the UK ” relocating to the US.

Research on the effects of CEO pay on performance is extensive but many questions remain. Some work suggests that long-term stock options most effectively align incentives between shareholders and executives, and that large differences between senior and junior employees may be associated with higher long-term profitability. Other studies warn that high pay and large differentials may undermine the extrinsic motivation of top executives and hurt employee morale.

Executive pay is subject to a company’s governance. In line with the OECD’s principles of corporate governance , the board of directors establishes a remuneration committee, which proposes the components and level of the CEO’s and executive team’s remuneration. Ultimately, shareholders vote on this proposal at the company’s annual general meeting.

Occasionally, a board of directors is criticised for not having done its work properly. In January, the Delaware Court of Chancery turned down a $55.8bn pay deal proposed by the Tesla board for Elon Musk. The judge said the board behaved “like supine servants of an overweening master” and the chair’s objectivity had been compromised by “ life-changing ” sums of money she received when selling Tesla shares worth $280mn in 2021 and 2022. Musk replied that Tesla should move its headquarters from Delaware to Texas.

In theory, when the board fails, shareholder democracy should kick in. But it is rare for an AGM to vote down a remuneration package. One exception was in May 2023, when Unilever shareholders rejected a base salary increase for Hein Schumacher, the incoming CEO.

Sometimes, a large minority will vote against a pay proposal, as happened with the €36.5mn package put forward for carmaker Stellantis’ CEO, Carlos Tavares , in April. However, while such signs of dissent may be embarrassing, they rarely change the outcome.

There are concerns, therefore, that shareholder democracy is not functioning properly.

One explanation for this is that an increasing percentage of shares is owned by passive investors such as BlackRock, Vanguard and State Street. They act on behalf of other financial actors, such as pension funds, but rarely voice opinions on CEO pay. In 2020, BlackRock, the world’s largest passive investor, announced that, by the year-end, “all active portfolios and advisory strategies will be fully ESG integrated” — raising hopes among activists that executive pay would be linked to environment, social and governance standards. But the recent anti-ESG backlash has left some boards uncertain if, and how, to link remuneration to sustainability goals .

A second explanation, as at AstraZeneca and Banco Santander, is that proxy advisers play a growing role. Many institutional investors delegate their voting rights to these specialists. The two largest of them — ISS and Glass Lewis — control most of the proxy advisory market and state opinions on a growing variety of issues . As a result, board members increasingly complain about the influence on pay that these advisers have.

To many critics, then, shareholder democracy is failing in arbitrating on fair executive pay.

Questions for discussion

In your view, has CEO pay become excessive?

Should European CEO pay follow the levels set by US companies?

How credible is the risk that European companies will move their head office to another state or country? How damaging would this be to the original state or country?

How do you evaluate the growing role of passive investors in a corporate governance context?

Have proxy advisers become too powerful?

Should executive pay be based more on ESG criteria?

In your opinion, is shareholder democracy failing us when it comes to executive pay? Why (not)? If so, what should be done to improve it?

Should executive pay be capped? What would be the benefits? What would be the cost?

Read more FT ‘instant caselets’ at ft.com/business-school

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International Edition

The Strategic Business Model of Costco: a Case Study on Efficiency and Growth

This essay about Costco highlights the company’s strategic brilliance in the retail industry, focusing on efficiency and sustainable growth. Established in 1983, Costco’s membership-based model cultivates customer loyalty and provides a solid financial foundation. The essay discusses Costco’s operational excellence, employee welfare, innovation, and cautious expansion strategies. By leveraging technology and diversifying its offerings, Costco maintains a competitive edge and ensures long-term growth and success in a dynamic market.

How it works

In the dynamic retail landscape, Costco shines as a paragon of strategic brilliance, characterized by its unique model that emphasizes efficiency and sustainable growth. Since its establishment in 1983, Costco has forged an innovative path, disrupting industry norms and setting new standards for success. By blending operational excellence, a customer-centric approach, and forward-thinking strategies, Costco has become a formidable force, demonstrating how a well-constructed business model can drive consistent growth in a highly competitive market.

At the heart of Costco’s success is its steadfast dedication to delivering exceptional value to its members.

Unlike traditional retailers, Costco operates on a membership-based system, where customers pay an annual fee to access its warehouses. This model not only cultivates strong customer loyalty but also serves as a significant revenue source, providing Costco with a robust financial base to support its expansion plans and strategic investments.

Central to Costco’s strategic approach is its unwavering focus on efficiency across all aspects of its operations. The company’s warehouses are meticulously designed to optimize space utilization and reduce overhead costs. By offering a carefully curated selection of high-quality merchandise in bulk quantities, Costco can negotiate favorable terms with suppliers, reducing procurement costs and passing the savings on to its members. This streamlined inventory management approach allows Costco to offer competitive prices while maintaining product quality, reinforcing its value proposition to consumers.

Additionally, Costco’s commitment to operational efficiency extends to its workforce management practices. Known for its dedication to fair compensation and employee welfare, Costco offers above-average wages, comprehensive benefits, and opportunities for career advancement. By investing in its employees, Costco fosters a culture of loyalty and dedication, resulting in higher productivity levels and superior customer service. This employee-centric ethos not only enhances operational efficiency but also strengthens Costco’s reputation as an employer of choice, enabling it to attract and retain top talent in the industry.

Innovation and adaptability are also key pillars of Costco’s strategic model. Recognizing the changing preferences and needs of consumers, Costco continuously diversifies its product offerings and ventures into new categories, including groceries, electronics, travel services, and financial products. This diversification strategy enhances Costco’s competitive position while increasing its relevance in an ever-changing market.

Moreover, Costco leverages technology as a driver of growth and efficiency. The company invests heavily in digital infrastructure and e-commerce capabilities, meeting the growing demand for online shopping while seamlessly integrating its online and offline channels. Through initiatives such as Click and Collect and same-day delivery, Costco increases the convenience and accessibility of its products, catering to the evolving needs of its members and expanding its reach beyond traditional brick-and-mortar locations.

Furthermore, Costco’s strategic model is characterized by a cautious approach to expansion and geographic diversification. Instead of pursuing rapid growth at the expense of profitability, Costco adopts a measured and disciplined strategy for store openings, carefully assessing market dynamics and consumer demand before entering new markets. This prudent expansion strategy minimizes risks and ensures that each new warehouse positively contributes to the company’s bottom line, driving sustained growth and shareholder value.

In summary, Costco’s strategic model exemplifies the power of efficiency, innovation, and customer-centricity in fostering long-term growth and competitive advantage. By prioritizing value creation, operational excellence, and strategic investments, Costco has established itself as a leader in the retail industry, reshaping industry standards and inspiring imitation from peers and competitors. As Costco continues to evolve and adapt to changing market dynamics, its strategic model will undoubtedly serve as a blueprint for excellence, guiding its path towards sustained growth and prosperity in the years to come.

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The Strategic Business Model of Costco: A Case Study on Efficiency and Growth. (2024, Jun 17). Retrieved from https://papersowl.com/examples/the-strategic-business-model-of-costco-a-case-study-on-efficiency-and-growth/

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PapersOwl.com. (2024). The Strategic Business Model of Costco: A Case Study on Efficiency and Growth . [Online]. Available at: https://papersowl.com/examples/the-strategic-business-model-of-costco-a-case-study-on-efficiency-and-growth/ [Accessed: 23 Jun. 2024]

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PapersOwl.com. (2024). The Strategic Business Model of Costco: A Case Study on Efficiency and Growth . [Online]. Available at: https://papersowl.com/examples/the-strategic-business-model-of-costco-a-case-study-on-efficiency-and-growth/ [Accessed: 23-Jun-2024]

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