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Are Seven Days Enough?<br />Daniel Rodic, David Hao, Jacky Lei<br />November 1, 2010<br />

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Agenda<br />1<br />Key Questions & Recommendation<br />2<br />Supporting Analysis<br />3<br />Potential Risks & Mitigation Plans<br />4<br />Next Steps & Key Takeaways<br />2<br />Ritz-Carlton Hotel Company<br />

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Ritz-Carlton Hotel Company<br />3<br />Key Questions & Recommendation<br />

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Ritz Carlton is facing a tough decision regarding its typical operating procedures in lieu of Collin’s requests.<br />Ritz-Carlton Hotel Company<br />4<br />Complication<br />Situation<br />Brian Collins from Millennium Partners is worried that 7 days is not enough time to properly train the Ritz-Carlton staff, and wants to open closer to 80% occupancy.<br />The Ritz-Carlton is in the process of opening a new hotel in Washington D.C. as part of a multi-use facility in partnership with Millennium Partners.<br />Should Ritz-Carlton heed Brian Collin’s requests?<br />What are the impacts of altering the “Seven Day Countdown”?<br />What are the impacts of opening closer to 80% occupancy?<br />How does this affect your relationship w/ Millennium Partners?<br />What is Four Seasons doing that could impact your decision?<br /><ul><li>Financial, Brand, Morale?

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What type of extra training is needed to achieve this goal?

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Positive / Negative effects?

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Does this decision affect the success of Four Seasons?</li></ul>1<br />2<br />3<br />4<br />Cancelling the contract is not a feasible option.<br />Hotel opens in <br />January 2001<br />Ritz cannot observe Four Season`s actions.<br />

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Ritz Carlton should extend the countdown and increase initial occupancy rates.<br />Ritz-Carlton Hotel Company<br />5<br />Should Ritz-Carlton heed Brian Collin’s requests?<br />What are the impacts of altering the “Seven Day Countdown”?<br />What are the impacts of opening closer to 80% occupancy?<br />How does this affect our relationship w/ Millennium Partners?<br />What is Four Seasons doing that could impact our decision?<br />Extend countdown and increase initial occupancy rate. <br />Extend countdown but maintain typical occupancy rates.<br />Reject Brian Collin’s requests.<br />Extend countdown and increase initial occupancy rate. <br />

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Accommodating Collin’s request best aligns with Ritz Carlton’s overall key success drivers.<br />Ritz-Carlton Hotel Company<br />6<br />Alignment <br />with Criteria<br />High<br />Medium<br />Low<br />

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Ritz-Carlton Hotel Company<br />7<br />Supporting Analysis<br />

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Accepting Collin’s request yields attractive benefits.<br />Opening at a higher occupancy rate provides earlier cash flows for reinvestment in other projects.<br />Less lag time between offer and start of work term reduces relationship building costs.<br />Provides confidence for future projects with current and future partners.<br />Ritz-Carlton Hotel Company<br />8<br />Reduced <br />Post-Hire Costs<br />Earlier Cash Flows<br />SERVICE<br />CULTURE<br />Long Term Enhancement of Partnership<br />Professional Service is at the core of Ritz Carlton<br />

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Increasing overall occupancy each month leads to large increases in year end cash.<br />Ritz-Carlton Hotel Company<br />9<br />Extra Week of Training<br />(+$75,000)<br />+0.25% in Total Occupancy<br />Figure 1: Projected Ending Cash Balance<br />

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Ritz-Carlton Hotel Company<br />10<br />Potential Risks & Mitigation Plans<br />

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Ritz Carlton is facing three key risks going forward.<br />Ritz-Carlton Hotel Company<br />11<br />Brand <br />Risk<br />Vet the new training process with all levels of management at Ritz Carlton to ensure it aligns with the company’s core values.<br />Quality <br />Risk<br />Extended training will ease new employees into their jobs, and better prepare them to handle an increased opening occupancy rate.<br />Partnership Risk<br />Involve Millennium Partners in the creation of the new training program to generate buy in, and build confidence for future hotel opening.<br />

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Ritz-Carlton Hotel Company<br />12<br />Next Steps & Key Takeaways<br />

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Ritz Carlton needs to act now to meet Collin’s expectations.<br />Ritz-Carlton Hotel Company<br />13<br />Continue other preparatory activities for the January 2001 Opening.<br />High<br />Contact new hires to advise them of new training timeline.<br />Launch revised countdown training program.<br />Inform Ritz Mgmt of Change in Training<br />1 Week<br />Priority<br />Engage MP in training development.<br />Vet revised training by upper Ritz management.<br />Medium<br />Begin revising <br />countdown schedule<br />1 Month<br />Determine length of revised countdown plan.<br />Low<br />Time from Today<br />3 Month<br />

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Ritz-Carlton Hotel Company<br />14<br />“As soon as two people come together, conflict will arise. It’s not the fact that we have conflict – it’s what we do with it. We all have the same dream of excellence; we all have the same goal: to be successful.”<br />- Howard Schulze<br />

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Appendix<br />

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Projected Cash Flows (1)<br />Ritz-Carlton Hotel Company<br />16<br />

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Projected Cash Flows (2)<br />Ritz-Carlton Hotel Company<br />17<br />