Answer & Explanation:Discuss how consumers from different cultures have different expectations for a hotel or resort experience. Be specific as possible and connect your thoughts with your readings about Four Seasons.this essay have to be at least 500 words.don’t use references. thank you
four_seasons_goes_to_paris.pdf
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REV: JANUARY 8, 2003
ROGER HALLOWELL
DAVID BOWEN
CARIN-ISABEL KNOOP
Four Seasons Goes to Paris:
“53 Properties, 24 Countries, 1 Philosophy”
Europe is different from North America, and Paris is very different. I did not say difficult. I said different.
— A senior Four Seasons manager
In 2002, Four Seasons Hotels and Resorts was arguably the world’s leading operator of luxury
hotels, managing 53 properties in 24 countries and delivering what observers called “consistently
exceptional service.” For Four Seasons, that meant providing high-quality, truly personalized service
to enable guests to maximize the value of their time, however the guest defined doing so.
In 1999, Four Seasons opened the Four Seasons Hotel George V Paris (hereafter, “F. S. George V”),
its first French property, by renovating and operating the Hotel George V, a historic Parisian
landmark. Doing so was, according to John Young, executive vice president, human resources, “one
of our great challenges and triumphs.” Young mused on what Four Seasons had learned from
opening a hotel in France, wondering what lessons would be applicable to other openings given the
firm’s growth plans, which suggested that new opportunities would be largely outside North
America. (Exhibit 1 illustrates property locations in 2002.)
Performance
Four Seasons generally operated (as opposed to owned) midsized luxury hotels and resorts. From
1996 through 2000 (inclusive), Four Seasons revenues increased at a compound rate of 22.6% per year.
Operating margins increased from 58.8% to 67.9% during the same period. Four Seasons’ 2001
revenue per room (RevPAR) was 32% higher than that of its primary U.S. competitors and 27%
higher than that of its European competitors. (Exhibit 2 provides summary financials.)
________________________________________________________________________________________________________________
Professor Roger Hallowell of Harvard Business School; David Bowen, Dean, Faculty and Programs, and Professor, Thunderbird, The American
Graduate School of International Management; and Carin-Isabel Knoop, Executive Director, Global Research Group (HBS) prepared this case.
HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or
illustrations of effective or ineffective management.
Copyright © 2002 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685,
write Harvard Business School Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. No part of this publication may be
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Four Seasons Goes to Paris: “53 Properties, 24 Countries, 1 Philosophy”
Management Structure and Team
Structure A general manager responsible for supervising the day-to-day operations of a single
property oversaw each Four Seasons property. General managers had a target bonus of 30% of base
compensation. A quarter of the bonus was based on people measures (employee attitudes), 25% on
product (service quality), and 50% on property profit. Four Seasons management believed that the
firm’s regional management structure was “a key component” of its ability to deliver and maintain
the highest and most consistent service standards at each property in a cost-effective manner.
Exhibit 3 describes this structure.
Italian in Italy, French in France The firm’s top managers were comfortable in a variety of
international settings. Antoine Corinthios, president, Europe, Middle East, and Africa, for example,
was said to be “Italian in Italy, French in France.” Born and educated in Cairo, Corinthios spent 20
years in Chicago, but described himself as a world citizen. He was the cultural chameleon he wanted
Four Seasons hotels to be. “If you are going global you cannot be one way,” he explained.
No bragging, no excuses Modesty, compassion, and discipline were also important. A
manager who stayed on with Four Seasons described the Four Seasons due diligence team that came
to the property as “very professional and not pretentious; detail oriented; and interested in people.
They did not come telling me that all I did was wrong,” he remembered, “and showed a lot of
compassion.” Excuses were not tolerated at Four Seasons: “Oh, but we have just been open a year” or
“The people here do not understand” were not acceptable statements. Customer service extended to
all levels in the organization: managers routinely helped clear restaurant tables in passing.
Strong allegiance to the firm Four Seasons’ top management team was noted for its
longevity, many having been at the firm for over 25 years. Both corporate and field managers often
referred to the firm as a “family,” complete with rules, traditions, and tough love. There was a strong
“one firm sentiment.” For example, as one general manager explained, “We are happy to let stars go
to other properties to help them.”
Four Seasons’ Approach to International Growth
Today, we have opened enough properties overseas that we can go into any city or town and pull people
together to fulfill our mission.
— Isadore Sharp, founder and CEO
Diversity and Singularity
According to Corinthios, “Our strength is our diversity and our singularity. While the essence of
the local culture may vary, the process for opening and operating a hotel is the same everywhere.”
He continued:
My goal is to provide an international hotel to the business or luxury leisure traveler
looking for comfort and service. The trick is to take it a couple of notches up, or sideways, to
adapt to the market you are in. Our standards are universal, for example, getting your message
on time, clean room, good breakfast; being cared for by an engaging, anticipating, and
responding staff; being able to treat yourself to an exciting and innovative meal—these are
global. This is the fundamental value. What changes is that people do it with their own style,
grace, and personality; in some cultures you add the strong local temperament. For example,
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Four Seasons Goes to Paris: “53 Properties, 24 Countries, 1 Philosophy”
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an Italian concierge has his own style and flair. In Turkey or Egypt you experience different
hospitality.
As a result, “each hotel is tailor made” and adapted to its national environment, noted David Crowl,
vice president sales and marketing, Europe, Middle East, and Africa:
Sharp once told me that one of our key strengths is diversity. McDonald’s is the same all
over. We do not want to be that way. We are not a cookie-cutter company. We try to make each
property represent its location. In the rooms, we have 40 to 50 square meters to create a
cultural destination without being offensive. When you wake up in our Istanbul hotel, you
know that you are in Turkey. People know that they will get 24-hour room service, a custommade mattress, and a marble bathroom, but they also know that they are going to be part of a
local community.
David Richey, president of Richey International, a firm hired by Four Seasons and other hotel
chains to audit service quality, believed that “Four Seasons has done an exceptional job adapting to
local markets. From a design perspective they are much more clever than other companies. When you
sit in the Four Seasons in Bali, you feel that you are in Bali. It does not scream ‘Four Seasons’ at you.”
A manager explained Four Seasons’ ability to be somewhat of a cultural chameleon with an
analogy to Disney: “Unlike Disney, whose brand name is so strongly associated with the United
States, Four Seasons’ brand doesn’t rigidly define what the product is. The Four Seasons brand is
associated with intangibles. Our guests are not looking to stay in a Canadian hotel.” In general, Four
Seasons managers were wary of being perceived as an “American” company. They found it useful in
Europe to position Four Seasons as the Canadian company it was.
According to Crowl, Four Seasons learned from each country and property: “Because we are an
international hotel company, we take our learning across borders. At our new property in Egypt, we
are going to try to incorporate indigenous elements to the spa, but we will still be influenced by the
best practices we have identified at our two spas in Bali.”
Globally Uniform Standards
The seven Four Seasons “service culture standards” expected of all staff all over the world at all
times are described in Exhibit 4. In addition, Four Seasons had 270 core worldwide operating
standards (see Exhibit 5 for sample standards). Arriving at these standards had not been easy: until
1998 there were 800. With the firm’s international growth, this resulted in an overly complex set of
rules and exceptions. The standards were set by the firm’s senior vice presidents and Wolf Hengst,
president, Worldwide Hotel Operations, who explained: “We had a rule about the number of
different types of bread rolls to be served at dinner and number of varieties of wine to be offered at
lounges. In countries where no bread is eaten at dinner and no wine consumed, that’s pretty stupid.”
Exceptions to the 270 standards were permitted if they made local sense. For example, one
standard stated that the coffee pot should be left on the table at breakfast so that guests could choose
to refill their cup. This was perceived as a lack of service in France, so it was amended there.
Standards were often written to allow local flexibility. While the standards required an employee’s
uniform to be immaculate, they did not state what it should look like. In Bali, uniforms were
completely different from uniforms in Chicago. Managers emphasized that standards set minimum
expectations: “If you can do something for a client that goes beyond a standard,” they told staff, “do
it.” As a result, stories about a concierge bringing a client to the hospital and staying with that person
overnight were part of Four Seasons lore.
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Four Seasons Goes to Paris: “53 Properties, 24 Countries, 1 Philosophy”
To evaluate each property’s performance against the standards, Four Seasons used both external
and internal auditors. “Our standards are the foundation for all our properties,” a senior manager
noted. “It is the base on which we build.” “When you talk to a Four Seasons person,” Richey
concluded, “they are so familiar with each of the standards, it is astonishing. With many managers at
other firms, this isn’t the case.”
“We have been obsessed by the service standards,” Hengst noted. “People who come from the
outside are surprised that we take them and the role they play in our culture so seriously. But they
are essential: talk to me about standards and you talk to me about religion.” Another manager
added, “Over time, the standards help to shape relationships between people, and those relationships
contribute to building our culture.”
Delivering “Intelligent, Anticipatory, and Enthusiastic Service” Worldwide
A manager stated: “We decided many years ago that our distinguishing edge would be
exceptional, personal service—that’s where the value is. In all our research around the world, we
have never seen anything that led us to believe that ‘just for you’ customized service was not the
most important element of our success.” Another manager added, “Service like this—what I think of
as ‘intelligent service’—can’t be scripted. As a result, we need employees who are as distinguished as
our guests. If employees are going to adapt, to be empathetic and anticipate guest needs, the
‘distance’ between the employee and the guest has to be small.”
There were also tangible elements to Four Seasons’ service quality. The product was always
comfortable—so much so that at guests’ requests, the company made its pillows, bedspreads, and
mattresses available for sale. “However, there are differences in the perception and definition of
luxury,” explained Barbara Talbott, executive vice president of marketing. “In the United States, our
properties have public spaces with a luxurious, but intimate, feeling. In the Far East, our properties
have large lobbies enabling guests to see and be seen. People around the world also have different
ways of using a hotel—restaurants, for example, are more important in hotels in Asia, so we build
space for more restaurants in each property there.”
Human Resources and “The Golden Rule”
Human resource management at Four Seasons started and ended with “The Golden Rule,” which
stipulated that one should treat others as one would wish to be treated. “The Golden Rule is the key
to the success of the firm,” founder and CEO Sharp emphasized, “and it’s appreciated in every
village, town, and city around the world. Basic human needs are the same everywhere.” Kathleen
Taylor, president, Worldwide Business Operations, provided an example of how Four Seasons
implemented the Golden Rule: “We give employees several uniforms so they can change when they
became dirty. That goes to their dignity, but it is uncommon in the hospitality industry. People
around the world want to be treated with dignity and respect, and in most organizational cultures
that doesn’t happen.” (Exhibit 6 summarizes the firm’s goals, beliefs, and principles.)
Managers acknowledged that many service organizations made similar statements on paper. They
believed that what differentiated Four Seasons was how the chain operationalized those statements.
Crowl noted: “A service culture is about putting what we all believe in into practice. We learn it, we
nurture it, and most important, we do it.” “People make the strength of this company,” a senior
manager stated. “Procedures are not very varied or special. What we do is fairly basic.”
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In 2002, for the fifth year in a row, Four Seasons was on Fortune magazine’s list of the top 100 best
companies to work for in North America. Four Seasons’ turnover was half that of the hospitality
industry average of 55%.
Going to Paris
Despite the success of Four Seasons’ approach and philosophy, management knew that entering
France would be a challenge.
The George V Opportunity
The six hotels in Paris classified as “Palaces” were grand, historic, and luxurious. Standard room
prices at the F. S. George V, for example, ranged from $400 to $700. Most palaces featured awardwinning restaurants, private gardens, and expansive common areas. The nine-story George V was
designed in the 1920s by two famous French art déco architects. (Exhibit 7 provides comparative data
on Parisian palaces.)
Observers of the Paris hotel scene noted that by the 1980s and 1990s, the George V, like some of its
peers, was coasting on its reputation. In December 1996, H.R.H. Prince Al Waleed Bin Talal Bin
Abdulaziz al Saud purchased the hotel for $170 million. In November 1997, Four Seasons agreed to
manage the hotel. “We needed to be in Paris,” Young explained. “We had looked at a new
development, but gaining planning permission for a new building in Paris is very hard. Since we look
for the highest possible quality assets in the best locations, the George V was perfect. It established us
very powerfully in the French capital.”
Physical Renovations
Four Seasons’ challenge was to preserve the soul of the legendary, almost mythical George V
Hotel while rebuilding it for contemporary travelers. Four Seasons closed the hotel for what ended
up being a two-year, $125 million total renovation. Since the building was a landmark, the façade had
to be maintained. The interior of the hotel, however, was gutted. Skilled craftsmen restored the
façade’s art déco windows and balconies, extensive wood paneling, gilding, artwork, and 17thcentury Flanders tapestries that had long adorned the hotel’s public and private spaces.
The interior designer hired by Four Seasons, Pierre-Yves Rochon, noted: “I would like guests rediscovering the hotel to think that I had not changed a thing—and, at the same time, to notice how
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much better they feel within its walls.” The fact that the designer was French, Barbara Talbott
pointed out, “signaled to the French that we understood what they meant by luxury.”
While Four Seasons built to American safety standards, it also had to adhere to local laws, which
affected design and work patterns. For example, a French hygiene law stipulated that food and trash
be carried down different corridors and up and down different elevators. Another law involved the
“right to light”: employees had the right to work near a window for a certain number of hours each
day. As a result, employees in the basement spa also worked upstairs in a shop with a window for
several hours a day, and as many windows as possible had to be programmed into the design.
The new Four Seasons Hotel George V Paris opened on December 18, 1999, at 100% effective
occupancy (occupancy of rooms ready for use). The opening was particularly challenging because
Four Seasons only took formal control of operations on December 1, in part due to French
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Four Seasons Goes to Paris: “53 Properties, 24 Countries, 1 Philosophy”
regulations. “The French are very particular about, for example, fire regulations, but the fire
department would not come in and inspect until everything else was complete,” a manager said.
Becoming a French Employer
Entering the French hospitality market meant becoming a French employer, which implied
understanding French labor laws, business culture, and national idiosyncrasies.
Rules
France’s leaders maintained social equity with laws, tax policies, and social spending that reduced
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income disparity and the impact of free markets on public health and welfare. France’s tax burden,
45% of GDP in 1998, was 3% higher than the European average—and 8% higher than the OECD
average. An additional burden on employers was the 1999 reduction of the workweek to 35 hours.
Unemployment and retirement benefits were generous.
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The country was also known for its strong unions. A French manager pointed out, “In France,
one still finds a certain dose of antagonism between employees and management.” The political
party of the union that was strongest at the F. S. George V garnered nearly 10% of votes in the first
round of the 2002 French presidential election with the rallying cry, “Employees fight the bosses!”
Four Seasons management was not unfamiliar with labor-oriented government policy. Young
explained that “Canada has many attributes of a welfare state, so our Canadian roots made it easier
to deal with such a context.” Corinthios added, “If you look at the challenges of operating in France,
they have labor laws that are restrictive, but not prohibitive. The laws are not the same as, for
example, in Chicago. You just need to be more informed about them.” The laws did give employers
some flexibility, allowing them to work someone a little more during peak business periods and less
during a lull. A housekeeper, for example, might work 40-hour weeks in the summer in exchange for
a few 30-hour weeks in the late fall. Furthermore, French employers could hire 10% to 15% of staff on
a “temporary,” seasonal basis.
A particularly tricky area of labor management in France involved terminations. “Wherever we
operate in the world,” a Four Seasons manager explained, “we do not fire at will. There is due
process. There is no surprise. There is counseling. So, Paris isn’t that different, except to have the
termination stick is more c …
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