The Ritz-Carlton has, since its founding in 1983, been synonymous with luxury and true hospitality. As the company declares on its own website, it is a ‘place where the genuine care and comfort of our guests is our highest mission’.
The Ritz-Carlton is a luxury hotel chain that operates 89 hotels and resorts in 29 countries, competing with the likes of the Four Seasons, the St. Regis, and the Peninsula. The Ritz is the only hotel company to twice win the Malcolm Baldrige National Quality Award from the United States Department of Commerce, and consistently wins awards from Conde Naste, J D. Powers, Forbes, Travel + Leisure, AAA, Conde Naste, and many more.
The company’s business is well-aligned in strategy, marketing, and operations. Its marketing is most visible: Ritz-Carlton properties are ostensibly adorned with extravagant chandeliers and gold finishing; the crest bears the image of a lion (symbolizing wealth) and a crown (representing royalty).
However, true luxury depends not only on the product, but on all the ‘magic’ that accompanies it. The secret to Ritz-Carlton’s success lies in its operational excellence. The company utilizes many operational levers in order to serve their business strategy of delivering genuine care and comfort.
- Focus on data collection and analytics. Daily, employees record data points to track a myriad of customer interactions and events. These data points serve two purposes. First, it allows managers to better analyze the business in real-time and react quickly to any arising trends. Second, it permits front-line employees to utilize information to surprise and delight frequent customers with their favorite scented candle or personalized welcome tray.
- Empowered employees. In order to allow employees to offer a high quality of customer service, the Ritz-Carlton has eliminated the bureaucracy typically involved with flagging and resolving customer complaints. Instead, they have decentralized this power by granting every employee discretionary spending of $2,000 (per incident) to satisfy a customer.
- Internal processes to ensure organizational alignment. Employees have a daily 15-minute ‘line-up’ meeting during which daily plans, special events, special guests, and ‘wow’ moments are shared with the entire staff. These ‘line-ups’ allow the company to frequently and consistently communicate its values with all 35,000 employees.
- Cultural alignment across geographies and roles. To ensure that a culture of class and luxury permeates all Ritz-Carlton hotels, the company utilizes frequent trainings and specific language. The vision and values of the Ritz-Carlton are not simply words on a page: employees undergo a lengthy upfront training period with frequent re-trainings. The goal is that all employees, across its 89 locations, can both articulate and live the Ritz-Carlton’s mission. Additionally, the use of language is important in instilling culture. The company motto, which is oft referenced, is, “We are Ladies and Gentlemen serving Ladies and Gentlemen,” signaling the importance of employees as a resource.
- Designs to maximize customer experience. The Ritz-Carlton focuses on both physical product designs and process designs to maximize travelers’ hotel experiences. Care is taken to ensure that sophistication and elegance is communicated in even the subtlest details. For example, many Ritz-Carlton hotels continue to set their tables with cobalt blue glasses. This cobalt blue was considered a status symbol in 1920s New England, because only the wealthy could afford the blue glass, which had to be imported from Europe. In more recent years, the Ritz-Carlton has become one of the earliest luxury hotels to incorporate mobile technology into the customer experience. By incorporating mobile into customer processes like checking in or poolside ordering, the hotel is able to create an experience that younger generations appreciate.
The Ritz-Carlton has been highly effective in utilizing operational excellence to drive performance. Employee turnover, when compared to other luxury hotel operators, is incredibly low – 18% versus 158%. Additionally, consumer engagement, as measured in Gallup polls, ranks Ritz-Carlton in the 90th percentile. The Ritz-Carlton will continue to compete successfully as it continues to use operational tools like employee feedback and detailed customer data to adapt to changing travel trends.
Ritz-Carlton company website. http://www.ritzcarlton.com/en/Corporate/Default.htm
How The Ritz-Carlton Manages the Mystique. http://www.gallup.com/businessjournal/112906/how-ritzcarlton-manages-mystique.aspx
Ritz-Carlton’s Big Announcement And The Luxury-Mobile Paradox. http://www.forbes.com/sites/micahsolomon/2014/08/18/ritzapp/
Secrets of the Ritz-Carlton’s ‘Legendary’ Customer Service. http://www.psafinancial.com/2014/05/secrets-ritz-carltons-legendary-customer-service/
Interview: Ritz-Carlton COO on Adapting to Luxury Travelers’ Expectations. http://skift.com/2015/02/09/interview-ritz-carlton-coo-on-adapting-to-luxury-travelers-expectations/