Set in February 2019, Stark Resorts Hotel (“Stark Resorts”) is a case based on the real-world experiences of the authors. The hotel, a US$155 million investment, had been plagued by insects since its grand opening 15 months earlier. Of even more concern was the avid social media influencer who had stayed in the resort a year ago and was diagnosed for Dengue fever, which she allegedly caught at the hotel poolside. It didn’t take time for the negative word of mouth to spread.
While the staff tried their best to handle the problem and were vigilant about initiating and overseeing the administration of pest control, even they were losing confidence and morale. Stark Resorts’ revenue rate per available room (RevPAR), a key hotel metric, had fallen 6% over the past six months. Other resorts in the area had pest problems as well, but they did not seem to be experiencing the same reputational and financial damage.
Jack Lim, the manager at Stark Resorts has his work cut out for him – he has to tackle the pest issue at hand, repair the reputational damage, and win over customer loyalty of his guests.
The case will 1) Identify the repercussions that service breakdowns can have on the business of a hotelier, namely its impact on loyalty, guest satisfaction, employee morale, and revenue, 2) Discuss and determine how to handle customer service breakdowns that can undermine the firm’s position in the market, its reputation, customer loyalty, revenue model and, its very existence, 3) Learn about hotel property management principles that can be translated and applied to other service encounters.
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