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Hyatt Hotels

Corporation Management Overview,


2010

Contributor:

Brigitte M. Jones: BBA Student

Corporation Summary

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Overview and Description

Hyatt Hotels Corporation is considered to be at the top of the list as a world’s peak

operator of extravagant hotel and resort and a key player in the global hospitality

industry. Hyatt Regency is known as the core brand; however, the company manages,

owns, franchises, and develops: residential, resort, and vacation properties around the

globe which are all Hyatt-branded under the brands: Grand Hyatt, Park Hyatt, Hyatt,

Hyatt Regency, Hyatt Resorts, Hyatt Place, Hyatt Summerfield Suites, and Andaz

(DATAMONITOR, 2010). The corporate headquarters is located in Chicago, Illinois with

approximately 45,000 employed individuals as a whole company.

History

In 1957, the hotel began as a Hyatt House motel in Los Angeles where the founder,

Jay Pritzker, bought it. As time passed, Mr. Pritzker and Donald Pritzker, his brother,

combined ideas and interests of other family members, which later led to the

establishment of the North American management and hotel ownership in 1962 (Farley,

2010). Based on many family differences about six years later, Hyatt International was

shaped and later became a separate company. According to Farley, “Hyatt Corporation

and Hyatt International Corporation were taken private by the Pritzker family business

interests in 1979 and 1982, respectively” (2010). They all tried to uphold the original

ideas for the business, but everyone had their own view of what would happen next. Then

December 31, 2004, the Pritzker family consolidated all of their hospitality assets,

including Hyatt International Corporation and Hyatt Corporation, to become a single entity

known today as Hyatt Hotels Corporation (Farley, 2010). The company has expanded and

grown tremendously over the years, but the best is yet to come with all the renovations

that are scheduled to take place.

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Products and Services

Hyatt, formally known as Global Hyatt, is an international hospitality focused

company. They take pride in providing exceptional customer service for each individual

guest, every time. Every employee is committed to creating a memorable experience for

not only the every guest, but their co-workers also. The organization empowers the

associates so they in return delight the guests. Besides customer interaction, the hotel

offers high-speed internet in majority of the guestrooms and all of the meeting rooms, a

pool, an indoor fitness center, full-service business center, automatic group billing, and

interactive meeting planning. Not to mention, a variety of dining options are available

within the hotels, a lounge to relax and have a few spirits, and a diverse team of

employees who help welcome a wide range of guests. The Hyatt Hotels Corporation has

many package deals for all occasions, meeting spaces large and small, and everything

necessary to maintain brand loyalty. The company’s goal is to be the preferred brand for

the owners, guests, and employees. But, it takes everyone within the company to work

together as a family to fulfill such desire.

Manufacturing and Marketing

Manufacturing comes primarily within the hotel being produced by the employees.

The products and services that are provided to the guests are not made and shipped;

they are all performed by the different departments at hand. The chiefs prepare food; the

staff provides service, and so on. As far as technology is concerned, the Point of Sale

computers are purchased from an outside source where they are repaired. Also, some of

the products needed to have a successful business are purchased for use within the

company. All other services are carried out with the Hyatt touch. Marketing on the other

hand, is spread out among television commercials, magazine ads, website banners, and

combined with other traveling agencies. The largest way of marketing within this industry

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is word of mouth. The guest arrives and has an amazing experience because of all his or

her needs are anticipated and carried out, in return, will acquire more guests based on

the communication among people.

Change and Development

Companies utilize every opportunity to apply growth and development to advance

the success of the property. Hyatt Hotels Corporation has followed that process by the

numerous expansion and renovation projects that are scheduled to take place or already

in motion. A significant occurrence within the company took place when the Pritzker

family began to carve up their family business empire and it wasn’t very pretty. According

to research, America’s richest family allows sibling rivalry and mixed ideas overpower

their “Family System” that was established for the Pritzker name (Weber, 2003). Next, the

Hyatt decided to change their company name in July of 2009 from Global Hyatt to Hyatt

Hotels Corporation. The reason for such change was to incorporate the view and ideas of

hospitality among the family into one single entity and that name was best suited. Finally,

a major decision on behalf of Hyatt took place in August of 2009, when the company filed

for an IPO which could earn up to $1.15 billion for the corporation. They declared a filing

that anticipated an initial public offering of public shares (EBSCO, 2009). The company as

a whole still remains a place where employees love to work and diversity can be applied.

Hyatt Hotels Corporation is very organized company that takes pride in

communicating the past, present, and future of the hotel. The goal among the entire

business is to stand out among the competitors and focus on being the preferred choice

for the owners, guests, and employees. As a whole, we all have the same denominator

which is providing exceptional hospitality services. Based upon the learning module, the

organizational structure is supported and they use the feedback as a way to improving

the overall composition.

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The Corporation’s Environment

Domestic Competitive Environment

Hotel and hospitality industry is continuously advancing allowing space for

competitors to gain advantages. The Hyatt provides hospitality services primarily

targeting business travelers, Conventions/Groups, and vacation/leisure guests. Hyatt

Hotels Corporation is considered to be one of the top suppliers in exceptional service

because the employees focus on providing excellent customer satisfaction to serve our

guests. The suppliers for the hotel are people form and in the form of raw materials. As

far as competition is concerned, we fall in line with hotels, restaurants, and other

companies who provide services to fulfill the needs of customers. Primarily, other lodging

facilities, local restaurants, and smaller lounges and bars remain a focus among the

company. The top three opponents specifically for the Hyatt are Hilton Worldwide,

Marriott, and the Starwood Hotels & Resorts.

Five Forces Analysis

The five forces a company must conquer in order to be successful but they are only

the basic components that help align businesses, the individual companies that take an

initiative to expand beyond the required criteria is what sets them apart from the others.

Hyatt is a company that focuses on customer satisfaction because the entire hotel desires

to meet the expectations of the guests. With that said, the bargaining power of the

customers is extremely high because they have the ability to purchase products or not.

When guests stay at hotel and they experience an issue or they are unsatisfied with

service, the associates take initiative to prove that “we care” and appreciate them. Prices

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are within the budget of people and accommodations are made if need be. As far as

substitute products or services, the threat is moderate because there are other hotels and

restaurants surrounding the area making it easy for alternatives, as long as the weather

permits. But, when it rains, people tend to remain indoors so the problem does remain

under control from time to time. Hyatt tends to offer discounts and promotions to

promote the products and services within the establishment.

New entrants on the other hand have to overcome barriers that express they are

able to survive in the hospitality industry. But, the threat of new competitors is fairly

moderate because new lodging facilities are growing and expanding which could

interfere with business. The Hyatt makes sure they provide the “Hyatt Touch” which is

what keeps our customers satisfied and desired to return. The intensity of competitive

rivalry is high and that is why the hotel tries to conquer the competitors and remain the

preferred brand. Knowing that innovation, quality , speed, and service are key

characteristics which help to ensure the company’s brand identity, the hotel ensures that

all of its associates are focused and committed to quality service. Also, every few months

the company rolls out new menu items with a variety of options for the guests. The

corporation is also expanding with renovations and properties to support the innovation

that they strongly believe. Not to mention, the Hyatt gossip about power of suppliers are

low because many of them are in the form of people within the establishment already.

That promotes the word of mouth advertisement to ensure the quality and guarantee of

expectations.

Ethics Code

The international hospitality organization is an extensively, conventional, industry

leading brand and a custom of innovation organized over more than a history of fifty

years. An ethical code is not written in stone, but the company has Core Values and

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Service Essentials that are required by every employee to uphold. These were

implemented by the Corporate Hyatt and unanimously enforced across all branches of the

organization. The Values were implemented to promote individuals that were honest and

moral. Also, they had to be able to carry out the Service Essentials to reinforce the vision

of the company. As a whole, the associates take responsibility in following the guidelines,

but they are encouraged to do so while having a personality and being themselves. “Our

initiatives, which fall into five key elements – Commitment, Accountability, Measurement,

Development and Communication - maintain and enhance Hyatt’s image as an Employer

of Choice, Business Partner, and Community Ally throughout the communities we serve”

(Farley 2010). That quote reinforces the primary goals and values the company shares as

a whole.

Corporate Social Responsibility

In Hyatt, they are dedicated to building a lasting impression among every

community they function. “They demonstrate a strong commitment to preserving the

natural environment through Hyatt Earth, by giving back to the local community through

Hyatt Community, and with the volunteer services of our associates through Hyatt's

Family of Responsible and Caring Employees (F.O.R.C.E.)” (Farley 2010). The company

enjoys making others feel accepted and be able to experience the world. While trying to

care for the world, we also strive to show the earth the same respect. Every associate and

individual is held accountable for success. The employees are the reason they make the

extra efforts. Collectively, they aim to leave a legacy both locally and globally. Honestly,

the challenges that are brought forth help the company recognize that there are always

things that can be achieved. The success of the company can be linked to the amazing

hospitality and the giving back to society, which together build the commitment within

the Hyatt Community.

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Hyatt Hotels Corporation is a well rounded company that continues to advance in

the community and business world because it provides a lasting impression on the area in

which it is located and to its associates. It appears that the hotels competitive domestic

environment is stable and allows success within the business. Although competition is

present, the company sets itself apart from others and that allows individuals to select it

as the preferred choice. The corporation has ethical standards that it implements for all

associates to abide by. It allows structure and communication to assure that every

employee is on the same page. As far as social responsibility, the hotel focuses on giving

back to the community and making a difference in the world around it. The goal of the

corporation is to create a legacy and encourage others to view them as the primary

establishment.

Corporation’s Strategic Management

Mission Statement & Corporate

Strategy

Hyatt Hotels Corporations has a mission to “provide authentic hospitality by making

a difference in the lives of people we touch every day” (Farley, 2010). That duty is

implemented to carry out the “strategic vision” of the company which is to become the

preferred brand for the guests, owners, and associates. A set of “core values” was

established for all associates to adhere by in order to inch closer to the company goal.

Together, the hotel family gives back to the communities and works diligently to delight

every individual that he or she comes into contact with, hoping to touch their life.

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Correspondingly, every property that is owned and operated by the Hyatt is held to the

same expectations. The company pursues a strategy of concentric diversification in order

to maximize their strengths at one business (property), which in return, will cause a gain

at other properties (businesses). For example, when the Hyatt began to expand the

company it established other businesses such as: Hyatt Regency, Hyatt Place, Andaz,

Grand Hyatt, and Hyatt Resorts, which are all related to the core business. They provide

services, attract customers, and they are all trained to have the necessary skills to

succeed in the industry. One perk to having the knowledge, an employee can be

transferred to another location and still be able to provide the same required skills for

success.

Domestic Competitive Strategy

The hotel utilizes a differentiation strategy in order to set themselves apart from

their competitors. They take a unique approach to uphold the “Service Essentials” and

“Hyatt Touch” to provide service that will delight the guests. Some of the essentials

include making a personal connection, engaging with the guests; utilize the guests name

at every opportunity, and to anticipate the needs of the individuals. Similarly, the hotel

enforces functional strategies so every department has the ability to add a personal

touch while still maintain the goal of the business. For example, Parrino’s Oven, the

Italian restaurant in the hotel, requires all new staff to complete an in-depth, weeklong

training which covers menu knowledge, steps of service, activity breakdowns, and all of

the necessary information to be successful. That strategy will in return ensure that

quality, unique service is executed. Also, the staff provides a complimentary desert at

random to their customers to provide a sincere conclusion to their meal.

The hotel has the mentality and desire to be different which is why they have a few

specific core competencies. First, they provide a warm and friendly, home-like

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atmosphere. This means that no matter where the customer is in the hotel, they feel

right at home being acknowledged as if they had been part of the family for years. Also,

the hotel is a historical based establishment that resembles a museum. Basically, they

whole hotel has different areas and they are all named based on history of Dallas. Some

of the names include: Cotton Bowl, Thorton’s Corner, Mondule’s, Skyline, Reunion, and so

on. There are plaques on the walls in every area that explains the history of the name

and event. Pictures surround the hotel which are past and present providing history at its

best. Not to mention, “Reflections of Dallas” is a book that was made that entails

everything that can be seen and explained for vacationers and tourist.

SWOT Analysis

Internal strengths are brand recognition, authenticity- personal touch, borrowed-

associates, strategic location, and the homely environment (EBSCO Host, 2010). First,

brand recognition is being the preferred choice which nowadays is very important to

retain guests. This strength will reassure employment for employees within the company

which is why it is so important. Second, authenticity or personal touch encourages

employees to make a connection with the customers to ensure that personality is brought

forth which identifies individuals. This is most important to maintain a diverse work

environment which allows associates to be themselves. Third, borrowed associates

program allows employees to be used in other departments to maintain their hours when

business becomes slow. The ability to keep employees paychecks whole is very important

in more ways than one. Next, strategic location allows business to increase and revenue

to be driven which is important for the success of the company. Finally, homely

environment provides a warm and friendly location for all types and ages. This is

significant because it satisfies all parties.

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Internal weaknesses are non-versatile management, turnover rates, and raw

materials. Non-versatile management means there is room for improvement on

knowledge and skills which in return make them better-rounded and it can help advance

the team. Turnover rates are critical because the more employees that leave or become

fired, then time and money are required to train new ones. Last but not least, raw

materials are always needed to maintain a functioning business and sometimes they are

not at hand to complete the task.

The external opportunities are the hotel occupancy; focus on renovation projects for

expansion, and diverse knowledge. All of these opportunities work hand in hand to

advance and grow. Increase in hotel occupancy will provide more hours for other

associates to work and it will help influence other renovation projects. The diverse

knowledge of surrounding competition would inform the coworkers what to expect. Also,

the external threats are intense competition, family owned establishments, and

increasing minimum wages. All of these threats will push the Hyatt to work harder to be

the preferred choice among its competitors.

Finale

The company as a whole uses many tools to be successful. The combination of its

mission statement and corporate strategy, the hotel has an understanding of what is

required of them to outweigh its competition and stand out. The SWOT analysis

highlighted the positive and negatives about the environment in which the associates of

Hyatt Hotels Corporation perform. The organizational structure remains intact which is

supported as a whole organization.

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Corporation Internal Structure and Operations

Organizational Structure

An organizational structure can be extremely helpful in providing information on the

formal structure and chain of command. Based on research, the primary structure of the

company operates based on a differentiated, centralized organization. The company has

a hierarchy in place with a top-down approach where major decision making that pertains

to the entire corporation is done by the Board of Directors. According to the table,

Thomas J. Pritzker, Executive Chairman and Founder, began as a key player in the entire

organization. The Hyatt Hotels Corporation organizational chart expresses the executive

leadership and board members (see Table 1 & 2) but it is an incomplete image of the

businesses organization. The tables do not express decentralization. Based on

observation, one cannot determine how decentralized the administrative authority is

among the bottom half of the company's direction. Based on experience, the company

has a more decentralized organization among the branch locations.

Further more, the company has many different properties to manage and maintain

so they implement hierarchy within the different establishments to oversee the particular

branches. These locations are highly differentiated and they utilize the different

individuals with specializations to ensure that every department remains in line with the

mission statement (Farley, 2010). The division of labor is spread out to ensure that tasks

are completed in a timely fashion as everyone works together to uphold the vision of the

company.

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Span of Control

Not to mention, there is a wide span of control among the lower levels of the

structure due to the delegation of authority among subordinates. The hotel utilizes

departmentalization among its line departments such as Human resources, rooms

division, front desk, concierge, food and beverage, and so on. They all directly influence

the outcome of the company’s primary goods and services. Some of these essentials

include providing exceptional customer service, selling rooms, making food and coffee,

engaging with the guests, and to anticipate the needs of the individuals. Similarly, the

hotel allows management to delegate authority to ensure business runs smoothly. For

example, every night one of the wait staff is appointed as a shift lead where they assume

the responsibility to ensure that all of the tasks get accomplished. The leader sets the

example for others to follow and be influenced by. That particular individual encourages,

models, inspires, enables, and challenges other associates to desire to improve their

performance. This strategy will in return ensure that quality, unique service is executed

due to superiors having fewer subordinates to oversee.

Size & Expansion

On another note, the Hyatt continues to expand and develop more properties all

over the world instead of downsizing. This in return requires a high-involvement of

commitment from the managers and employees to reassure they maintain the

competitive advantage to be the preferred brand. Even with change and growth, the

company still functions on the same structure, enforcing the hierarchy and chain of

command. All of which play a role in the success of the property and the organization as

a whole. The larger the corporation becomes the more of a need to implement structure

for a consistent flow of communication.

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The structure of the company is in place to ensure the formal way of following a

chain of command. That process will ensure that every associate is on the same page

when holding a conversation with a superior individual. With that in mind, further down

the structure the communication becomes less formal which allows more room for

opinions and flexibility. As a whole, the communication and organization remains intact

and successful.

Table 1

Officers for Hyatt Hotels Corporation

TITLE INFO

Executive Chairman Thomas J. (Tom) Pritzker

Age 59, $422,917 salary, $587,889 total compensation

President, CEO, and Director Mark S. Hoplamazian

Age 46, $979,167 salary, $3,670,913 total compensation

COO International Operations Rakesh K. Sarna

Age 52, $581,000 salary, $3,292,629 total compensation

CFO Harmit J. Singh

Age 46, $550,000 salary, $2,295,630 total compensation

Chief Human Resources Officer Robert W. K. Webb

Age 53

EVP Global Real Estate and Development Stephen G. (Steve) Haggerty

Age 41, $544,700 salary, $1,997,806 total compensation

VP Corporate Communications Farley Kern

Director Field Public Relations, North America Lori Alexander

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COO North America H. Charles (Chuck) Floyd

Age 49, $581,000 salary, $3,921,986 total compensation

General Counsel and Secretary Rena H. Reiss

Global Head Marketing and Brand Strategy John Wallis

Age 56

Note. From Jones E-Global Library. (2010). Hyatt Hotels corporation. Electronically

retrieved July 17, 2010, from Hoovers Database, from

http://premium.hoovers.com.jiuproxy.eglobal library.com/subscribe/co/people.xhtml?

ID=ffffcftyrj ftcshhks&FRID=30

Table 2

Board of Directors

Bernard W. Aronson

Richard A. Friedman

Mark S. Hoplamazian

Susan D. Kronick

Mackey J. McDonald

John D. Nichols

Gregory B. Penner

Penny Pritzker

Thomas J. Pritzker

Michael A. Rocca

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Byron D. Trott

Richard C. Tuttle

Note. From Jones E-Global Library. (2010). Hyatt Hotels corporation. Electronically

retrieved July 17, 2010, from Hoovers Database, from

http://premium.hoovers.com.jiuproxy.eglobal library.com/subscribe/co/people.xhtml?

ID=ffffcftyrj ftcshhks&FRID=30

Internal Structure

Hyatt Hotels Corporation has had a lot of fluctuation financially based on the drastic

change in the economy. The company has been on a roller coaster in regards to total

assets, liabilities, and equity. According to Table 2, the company has experienced a loss in

revenue and earnings per share have declined. Some individuals relate the results to the

decline in business because of the poor economy and others believe that the service

provided may play a role in it as well. Not to mention, statistics show that the owned and

leased hotels have played a role in the decline in total revenue because they are not

bringing in as much as they used to. However, as of December 2009, the total assets

increased while total liabilities and equity slightly decreased (see Table 1). That could be

due to business improving based on the many new properties or long term debt being

slowly minimized. Without concrete evidence, the reasoning behind the change is hard to

identify. Based on research and information collected, the hotel seems to have had a

rough year compared to previous ones (Farley, 2010). But, the company seems to be able

to balance out the pros and cons (see table 1) which allow functionality to ensure that

they remain in business. Hyatt is recovering from a recession, which many business can

attest, that forced a decrease in occupancy and room rates which affected the revenue as

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a whole (see Table 3). Despite the roller coaster in numbers, the company manages to

bounce back and still remain one of the top choice hotels.

Human Resources Practices

Human Resources (HR) makes every effort to indulge advantageously in the

procedures of our establishments. “A large focus is to attract, engage, develop and retain

dynamic, enthusiastic and diverse service professionals committed to providing excellent

service and exceeding business goals” (Farley, 2010). Some responsibilities of HR are to

forecast demand and anticipate the supply of labor.

Staffing the Organization

The company takes pride in their staff and the accomplishments that they endure.

Around recruitment time, which is when the staff levels have dropped or need fully

staffed to ensure the proper guest satisfaction, HR begins posting the positions internally

to see if any of the current associates are interested in changing job descriptions. The

process is almost always offered internally first because the employees already know the

company, what is required of them, the job titles, and the different departments. Not to

mention, very little training would be involved which saves time, money, and resources.

At times that process is unsuccessful, so they begin external recruiting through current

associates by seeing if they know of anyone who they would recommend that fit the job

description and if so have them go online and apply. If not, they go to high school career

fairs to try and gather up students who are graduating that want to pursue the F&B

industry, post positions online, and through other career finders. When applying, an

individual is asked to submit a resume, take a personality test, and wait for a call.

Selection Process

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Selection process is just as important and time consuming as the recruitment phase

to ensure that the correct candidate is chosen. The process begins by reviewing

applications, checking references, and then brought in for a behavioral description

interview. This type of interview fits well because it allows the applicants to express their

accomplishments in the past. But, the interview is conducted with the department head,

then the head manger, and final a supervisor. Upon completing those steps, then a

background check is done to ensure this candidate has nothing that will prevent them

from success. Finally, after a few days of the same routine, then an individual is selected

and they are offered the position with a discussion about the compensation which is

based on experience, prior knowledge, and the position that is applied for. If accepted,

then the person is brought in for orientation, a tour, and then training is discussed. Then,

the next day he or she is scheduled the actual training begins and the weeklong

adventure will test the validity of the person. More importantly, content validity is

monitored to determine the skills and abilities that he or she has to offer. For example, a

waiter would be asked to carry a tray with beverages on it or mimic taking a food order

at a table. These are just ways of discovering the amount of knowledge present.

Training & Development

On another note, the company takes pride in providing resources to help maintain

and improve the amount of information and training necessary to be successful. They

require staff to attend team building and diversity training. This takes place every few

months which allows staff to grow and feel comfortable working as a unit while

expanding their people skills. The hotel also provides food tasting events where the

menu is reviewed, food items are explain thoroughly, wine pairing for such items are

discussed, and then a devouring conclusion to the event. Also when there is downtime in

the hotel (slow period), the superiors will allow cross-training opportunities where staff

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can go to another department for their shift and learn about the way they conduct

service.

Benefits

The Hyatt has wonderful benefits in place for their employees. For starters, they

have a cafeteria health benefit program which allows the associates to choose what best

suits their needs. Health, dental, and vision are covered for the individual and family

members if chosen. Also, they provide a website that is geared toward providing all of

the information and resources necessary to utilize. The company has retirement and

investment programs, life and disability programs, and company programs. The company

programs are in place to provide ways of saving money such as comp and discount room

rates, employee assistance programs, tuition reimbursement, programs to quit smoking,

and computer and electronic discounts. Also, full-time employees that completed one

year at the Hyatt are entitled to twelve comp nights a year, a week vacation, with 50%

off of food and beverages within the hotel excluding alcohol.

Performance Appraisals & Reward Systems

Evaluations are continuously cycling which is implemented to make individuals

aware of their progress and what needs to be developed more. This one-on-one process

also allows managers to explain why they picked such ratings and employees have the

ability provide feedback. At this point, the employee receives a raise based on the points

acquired on their evaluation if sufficient enough. If not, then action plans are discussed to

improve their performance and knowledge. Similarly, incentive programs are put forth to

improve sales, encourage staff during slow times, sell items that are overlooked on the

menu, drive alcohol revenue, and to motivate the staff to carry out all the required steps

of service. The rewards for such incentives are movie tickets, a free meal, wine opener,

choice of schedule, and more.

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The Hyatt still remains a supported company despite the fluctuations in finances.

Just like any other company, they operate based on human nature and not one individual

is perfect. The hotel as a whole functions based on the many tasks that HR carries out

and enforces. But just like many people say, “someone has to do it”. The organization

works together to maintain a welcoming atmosphere for not only the guests, but also for

the associates.

Table 1

Hyatt Hotels Corp. Management’s Discussion & Analysis

10-K

02/25/2010

(in millions) As of December 31,

0
9 08 07 06 05

Consolidated balance
sheet data:

Cash and cash 1,32


equivalents 7 428 409 801 960

1,98 1,64
Total current assets 9 1,057 1,065 1,501 5

Property and 3,60 2,29


equipment, net 5 3,495 3,518 2,769 6

Intangibles, net 284 256 359 154 102

7,15 5,08
Total assets 5 6,119 6,248 5,522 1

Total current liabilities 495 653 697 1,001 600

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Long-term debt 840 1,209 1,288 173 500

Other long-term
liabilities 780 665 794 588 519

2,11 1,61
Total liabilities 5 2,527 2,779 1,762 9

Total stockholders’ 5,01 3,43


equity 6 3,564 3,434 3,731 0

Total liabilities and 7,15 5,08


equity 5 6,119 6,248 5,522 1

Table 2

Hyatt Hotels Corp. Income Statement

10-K

02/25/2010

2009 2008 2007

REVENUES:

Owned and leased hotels 1,782 2,139 2,039

Management and franchise fees 223 290 315

Other revenues 49 83 103

Other revenues from managed properties 1,278 1,325 1,281

Total revenues 3,332 3,837 3,738

DIRECT AND SELLING, GENERAL, AND ADMINISTRATIVE


EXPENSES:

Owned and leased hotels 1,462 1,583 1,524

Depreciation and amortization 270 249 214

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Other direct costs 13 26 42

Selling, general, and administrative 261 290 292

Other costs from managed properties 1,278 1,325 1,281

Direct and selling, general, and administrative expenses 3,284 3,473 3,353

Net gains (losses) and interest income from marketable securities


held to fund operating programs 29 (36) 15

Equity earnings (losses) from unconsolidated hospitality ventures (13) 14 11

Interest expense (56) (75) (43)

Gains on sales of real estate 22

Asset impairments (15) (86)

Other income (loss), net (48) 23 84

INCOME (LOSS) BEFORE INCOME TAXES. (55) 204 474

(PROVISION) BENEFIT FOR INCOME TAXES) 10 (90) (208)

INCOME (LOSS) FROM CONTINUING OPERATIONS (45) 114 266

DISCONTINUED OPERATIONS:

Income (loss) from discontinued operations, net of income tax


expense (benefit) of $(1), $0 and $2 in 2009, 2008, and
2007,respectively (1) 1 3

Gain on sale of discontinued operations, net of income tax


expense of $0, $28, and $1 in 2009, 2008, and 2007,respectively 55 2

NET INCOME (LOSS) (46) 170 271

NET LOSS (INCOME) ATTRIBUTABLE TO NONCONTROLLING


INTERESTS 3 (2) (1)

NET INCOME (LOSS) ATTRIBUTABLE TO HYATT HOTELS


CORPORATION (43) 168 270

EARNINGS PER SHARE Basic

Income (loss) from continuing operations (0.30) 0.89 1.98

12/11/2010 Corporation Management Overview – Hyatt Hotels Page 22


Net income (loss) attributable to Hyatt Hotels Corporation (0.28) 1.31 2.01

EARNINGS PER SHARE Diluted

Income (loss) from continuing operations (0.30) 0.89 1.98

Net income (loss) attributable to Hyatt Hotels Corporation (0.28) 1.31 2.01

Table 3

Hyatt Hotels Corp. Balance Sheet

10-K

02/25/2010

2009 2008

ASSETS

CURRENT ASSETS:

Cash and cash equivalents 1,327 428

Restricted cash. 11 37

Receivables, net of allowances of $12 and $24 at December 31, 2009


and 2008, respectively 226 281

Inventories 133 170

Prepaids and other assets 184 72

Prepaid income taxes 85 18

Deferred tax assets 23 51

Total current assets 1,989 1,057

Investments 223 204

12/11/2010 Corporation Management Overview – Hyatt Hotels Page 23


Property and equipment, net 3,605 3,495

Notes receivable, net of allowances 385 410

Goodwill 113 120

Intangibles, net 284 256

Deferred tax assets 74 126

Other assets 482 451

TOTAL ASSETS 7,155 6,119

LIABILITIES AND EQUITY

CURRENT LIABILITIES:

Current maturities of long-term debt 12 38

Accounts payable 196 318

Accrued expenses 183 177

Accrued income taxes 5 23

Accrued compensation and benefits 99 97

Total current liabilities 495 653

Long-term debt 840 1,209

Other long-term liabilities 780 665

Total liabilities 2,115 2,527

Commitments and contingencies (see Note 16)

EQUITY:

Preferred stock, $0.01 par value per share, 10,000,000 shares


authorized and none outstanding as of December 31, 2009 and10,000,000
shares authorized, 100,000 issued and outstanding as of December 31,
2008

Class A common stock, $0.01 par value per share, 1,000,000,000 2 1


shares authorized, 43,869,597 outstanding and 43,936,675issued at
12/11/2010 Corporation Management Overview – Hyatt Hotels Page 24
December 31, 2009, Class B common stock, $0.01 par value per share,
462,000,000 shares authorized, 130,005,588 shares issued and outstanding
at December 31, 2009 and common stock, $0.01 par value per share,
400,000,000 sharesauthorized, 119,830,381 issued and outstanding at
December 31, 2008

Additional paid-in capital 3,731 2,242

Retained earnings 1,338 1,381

Treasury Stock at cost, 67,078 shares (2)

Accumulated other comprehensive loss (53) (60)

Total stockholders equity 5,016 3,564

Noncontrolling interests in consolidated subsidiaries 24 28

Total equity 5,040 3,592

TOTAL LIABILITIES AND EQUITY 7,155 6,119

Note about all 3 tables. From Farley, K. (2010). Hyatt. Retrieved July 09, 2010, from

http://www.hyatt.com/ hyatt/index.jsp

Practices & Policies

Hyatt makes major use of teams and groups but to serve different purposes. One

purpose specifically is to allow leadership among other individuals within the workplace

that help maintain the teams, but with the understanding of the extent of formality. The

teams help carry out democracy within the company but are limited to advisory positions

because they allow employee participation and influence of others to persuade them. The

empowering groups have a voice in their department with direct involvement but based

on the decisional domain of the company, they must maintain the system of

communication.
12/11/2010 Corporation Management Overview – Hyatt Hotels Page 25
The hotel contains a large range of groups which include work processing and

decision-making. The Hyatt utilizes an “Impact Training Team” to ensure new associates

are educated and qualified for carrying out the expectations of the company thus

reducing the turnover rate. The managers play a part in who is involved in such team. The

whole picture is to widen the responsibility of associates to maintain skilled staff which

reduces the amount of service issues that could occur and limits the number of issues.

Another team is “Hyatt Quality Team (HQT)”. This team encompasses employees who are

committed to exceeding the expectations of the company and completing quality work.

This self-maintaining team is permanent and the individuals change from month to month

based on their actions.

The effectiveness of the teams has been phenomenal. Several individuals

mentioned that the Impact Training Team played a role in the success of our

establishment; encouraging others who meet the specific requirements to join the group.

Similarly, HQT influenced more people to take pride in their jobs and to lead others to

uphold standards. That is why these teams are extremely effective, expressing

leadership, and implementing structure and communication. The teams communicate

that the company as a whole takes pride in satisfying the guests and being successful.

Power and Leadership

The Hyatt’s power structure is derived from a loosely bureaucratic system with

some concertive control. This system of power allows for a top down approach with

authority while still leaving room for creativity, innovation, and adaptability among the

corporation. The hotel exploits all five of the bases of power.

Reward Power

Superiors have the ability to approve requests off, provide incentives to drive

revenue, and approve special meal preparations for breaks. Also, they have the ability to
12/11/2010 Corporation Management Overview – Hyatt Hotels Page 26
nominate individuals for HQT, where they receive a check for one hundred dollars if they

are selected.

Legitimate Power

This type of power is common sense among everyone due to the understanding that

every job has a boss and they have expectations to fulfill. The General Manger oversees

the entire location along with all of the departments.

Referent Power

The hotel encourages individuals who employ the mission statement while taking

pride in their actions. Many times the mangers will seek those who exemplify that criteria

and they work toward trying to please them. But, they utilize such power to encourage

others to do the same to ensure that leadership and fellowship are forming.

Expert Power

Every department within the hotel has experts who stand out among their

specialization. Some servers are experts based on being cross-trained because they know

a lot about several departments and they are not limited to their original hiring position.

This proficiency sets them apart from others and it allows for pressure and deferential

treatment.

Coercive Power

Management takes this approach when they desire to prove a point. When a CEO is

expected to arrive, then a voice is heard “clean this and do that… this is not an option, I

am the boss” which is quite annoying. Not to mention, derogatory actions of some take

place just to use discipline and enforce standards.

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The coercive approach is destructively used and begins to diminish the respect for

authority and causes communication to be hindered. As for the rest, power is used

effectively and it outlines different roles which help to enhance communication. Based on

experience, the power affects behavior within the company and sometimes when it is

abused; it will cause a minor disturbance with communication.

Analysis of Change

The Hyatt recently began benchmarking customer service to determine where they

stood as a company among competitors and what could be changed to set themselves

apart from other hotels. A change occurred when the restaurant changed the products

that they offered when they implemented a new menu. The substantive change required

different prep to prepare for the shift which changed the materials necessary for success.

But, without this course of action, the company could have been in jeopardy of losing

business because individuals enjoy having options to choose from. The effective

communication allowed for a smooth transition. The “trait approach” is used to allow the

individual leaders to stand out. The hotel was committed to the differences at hand with a

shared vision of becoming the preferred brand.

Decision-Making

On another note, the hotel requires a high-involvement of commitment for

rationality to ensure the managers and employees maintain the competitive advantage

despite change because there are many rationalities in the organization. They enforce

decisional premise to ensure the hierarchy remains intact for the formal decisions made

about important things and room is available to allow decisions to be made among lower

levels informally between the different department heads and supervisors. The bottom

line, depending on the decision that is being made always makes the difference as to

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how the flow of information is provided. Most of the time, the information is filtered to

prevent an overload among everyone.

Communication

The hotel tries to back and support every decision made with information that is

relevant while communicating the change to the associates. An example of informal

communication include when a decision arises about a change in the restaurant to the

floor charts or side work, then the greeter or other waiters pass along the information and

they explain why it occurred.

A formal communication example includes when HR decides to hire a new employee it is

done formally following all the criteria and steps to ensure the right candidate is chosen.

Upon their candidate accepting the position, they are then introduced to the entire hotel

staff to ensure everyone makes them feel at home.

The hotel takes pride in utilizing a team environment while enforcing the limited

structure at hand. Not to mention, leadership comes in many forms and depending on

how it is expressed will determine the success of the property. An effective environment

must contain communication, teamwork, leadership, and be able to accept change in all

forms. Life is all about change, so instead of refuting it, accept it and adapt.

Corporation Communications Plan

Plan

The downward communication at the Hyatt Hotels Corporation includes a variety of

media richness among the electronic media, written and oral channels. The organization

uses a less rich form of electronic media which transmits information from upper

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management because they submit a memo and messages through their inboxes which

forwards over to the cell phone. Also, they discuss change and policies through a written

channel utilizing email, using the computer to ensure the different shifts are on the same

page. That type of media is also not very rich because emotion and immediate feedback

are unavailable. As far as email protocol, the managers are required to send a carbon

copy to at least one other coworker to ensure someone is monitoring the information at

hand. But, the deliverance of information goes beyond that. The mangers then are in

charge of filtering the mass amount of notifications and passing along the most important

stuff to their associates. Most of the time, the superiors enforce an extremely rich two-

way oral channel to discuss the findings. Reason being, rapid feedback, emotion and

opinion, body language, and nonverbal communication are all observed at the time of

reveal. In fact, a message can cause individuals to act differently or without thinking,

which is why the company results in the process mentioned above to maintain a

downward approach.

Outside Contact

On another note, the amount of authority given to discuss personal matters with

contact outside the company is extremely limited to ensure that every bit of spoken

information is accurate and precise before being leaked out. The worst case scenario, a

random employee mentions an event that occurred and blows it out of proportion while

an unknown newspaper journalist is present. That will cause a large uproar that should

have never occurred. When hired, every associate is trained how to handle different

media and press related situations. On a corporate level, the Director of Personal

Relations (PR), the owners, and the executive board are the individuals who directly

interact with providing details to the outside of the company. On a more local level, the

branch PR and the General Manger are the people who are allowed to release information.

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However, the associates are allowed to attract business by discussing the menu and

environment with friends and family, and others outside the company. They are limited to

that type of information because they directly use it and it expresses the embodied

knowledge of the employee. Also, they are allowed to recruit people that they know

whom they feel can represent the hotel. At that point, they are allowed to briefly discuss

the benefits and perks but nothing further. The company tries to provide their staff with

leeway while covering their tracks corporately.

Instant Messaging

Based on research, especially the Hyatt website, information about instant

messaging was unattainable. However, information that is displayed though websites,

blogs, and other social networking sites by associates should be limited and professional.

If not, then the company will find out and repercussions are then reprimanded

accordingly. Every employee is responsible for the success of the property by how they

act and what they do daily (Farley 2010). That goes to show that people are always

watching and monitoring the actions of individuals.

Conflict Resolution

Conflict occurs in many styles that require different approached for resolving it.

Problems arise on different levels which sometimes occur between staff and other times

with a guest. The hotel uses a probe approach based on the constant interaction with

outsiders which is what drives the business. When a conflict sparks between associates,

the mangers ask that instead of avoiding it, we try to compromise and derive an

understanding that will solve the issue and allow success. If that cannot be accomplished,

then the issue is presented to the superiors and they assume the role of a mediator to

avoid escalation. Most of the time, conflicts are resolved among the first level, but when

12/11/2010 Corporation Management Overview – Hyatt Hotels Page 31


there not, then matters are taken into the hands of the boss and they are assertive in

solving the concern.

Similarly, when a conflict arises with a guest then the associates are empowered to

address the situation and take the best course of action to resolve it. Employees are

expected to take charge, investigate the situation, and actually attempt to provide a

solution. The mangers have given the staff the ability to express that “we care” and can

exceed their expectations. But, a manger is informed immediately so they can follow up

with the guest and ensure that problem was handled the way they anticipated.

The hotel enables their staff to engage in the success of the company by being an

active participant in providing service and hospitality. The team works cooperatively to

ensure that the hotel is represented in a professional manner. They limit the amount of

people authorized to communicate with the outside to ensure the company remains a

preferred brand. As a whole, the entire organization delivers and receives information in

many ways which allows variety and reiterates that different means call for different

measures. A plan is in place to maintain structure and stability for the success and future

growth of Hyatt Hotels Corporation.

Conclusion

The hotel utilizes every opportunity to give back to society to make a lasting

impression and strengthen their identity. Going above and beyond for every individual

that is connected to the company motivates others to do the same. The balance of

authority and relationships allow individuals to take work seriously while leaving room for

personality and humor. Honestly, the flexibility within the lower levels of the company

12/11/2010 Corporation Management Overview – Hyatt Hotels Page 32


allows for the informal use of communication which makes the organization a more

relaxed, family oriented, enjoyable place to engage.

Next 10 Years

The Hyatt appears to be a company that will be around for years to come based on

their optimistic view of diversity, modernization, and change. The corporation encourages

creativity and innovation which sets them apart from others. Over time, the established

business will continue to prosper and expand all over the world, more than they have

already. The competitive industry forces firms to adapt to survive and be successful.

Based on the structure and communication within Hyatt, they will continue to provide

opportunities for employment, growth, and diversity. They are a wonderful establishment

to be part of and their benefits are amazing. The company’s goal and vision to be the

preferred brand will also take part in their success over the next ten years because they

value their associates as much as their owners and guests. However, the three greatest

challenges among management will be guest satisfaction, time management, and

finances. These concerns stand out drastically among superiors on a day-to-day basis.

Guest Satisfaction

The mangers struggle to maintain complete happiness of the guests because not all

associates take pride in their job. They “fake it to make it” and the patrons are the

individuals who suffer in the long run. That challenge is hard to tackle because not all

guests will speak up and sometimes the issues are never addressed. Reinforce of training

and service recovery would help to minimize some of the issue that arises among guests.

Also, superiors should evaluate the way associates interact with others to witness and

document behavioral changes that may interfere with successful service.

Time Management

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Administrators have many tasks that they have to complete daily, but when

business declines they tend to be easily distracted. At that point, they are either in the

office all night and not walking the floor or they are unable to be found period. The

mangers seem to lack the ability to multitask, they forget about things, or the office

requires their undivided attention to meet deadlines. The company should provide

seminars or training that would enhance their ability to manage time better. Also, they

could utilize a laptop out on the floor to be able to monitor business while completing

necessary paperwork. Individuals approach multitasking differently and that is why a

foundation should be established to help improve such challenge.

Finances

Just as any company, finances must be met in order to be successful. The challenge

of improving revenue while trying to keep liabilities and prices low is extremely difficult.

The company as a whole has fluctuated over the past few years and trying to maintain a

certain level to satisfy the owners while meeting the guest’s expectations will be the

biggest issue. The Hyatt can try and balance the finances by improving service which

allows for repeat guests and an increase in word of mouth advertisement. Not to mention,

service drives revenue which in return helps to take care of finances. Unfortunately, this

challenge will require more time to overcome than the others.

Despite the trials that the corporation may face, they will still be successful

due to their wide range of brands, the “Hyatt” name that has formed, and the diverse,

multicultural environment they live by. Of course a company’s name plays a role in their

accomplishment; however the Hyatt goes beyond that. They utilize their internal aspect of

authentic hospitality, provided by their unique, personable associates, to touch the lives of

each and every individual that they come into contact with daily. Ultimately, that extra

step will continue to distinguish this corporation and allow them to be the employer of

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choice, business partner, and community ally. Success is about making choices that will

set you apart from competition which allows for growth and opportunities.

Works Cited

EBSCO Host. (2009). Hyatt Files For IPO. Successful Meetings, 58(10), 8. Electronically

retrieved July 08, 2010, from Business Source Premier database.

EBSCO Host. (2010). DATAMONITOR: Hyatt Hotels Corporation. Hyatt Corporation SWOT

Analysis, 1-8. Electronically retrieved July 08, 2010, from Business Source

Premier database.

Farley, K. (2010). Hyatt. Retrieved July 09, 2010, from

http://www.hyatt.com/hyatt/index.jsp

Jones E-Global Library. (2010). Hyatt Hotels corporation. Electronically retrieved July 17,

2010, from Hoovers Database.

Weber, J. (2003). The House of the PRITZKER. Business Week, (3824), 58-65.

Electronically retrieved July 08, 2010, from Business Source Premier database.

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