The Ritz Hotel

Despite the fact that rooms at the Ritz Hotel do not cost 2 ,000 Euros employees of the Ritz are authorized to compensate guests up to 2 ,000 Euros for any problems they may have experienced . Why does the Ritz have this policy ? There are primarily three factors that should be explored : one , the reputation of the Ritz , two , the costs beside room rate , and three , and the hidden costs

First , the Ritz is known the world-over for high class service . It is the place to have your social event . The name has

carried great weight for many years now , and the reputation of the Ritz is not something the hotel owners would like to have tarnished . Established in 1906 , this year marks the 100 year celebration of this world-class hotel . As part of the celebration , and as an example of the level of service the Ritz offers its clients , the Centennial Celebration includes pick-up from the Airport in the new Rolls Royce , accommodations for two nights , a bottle of champagne , Theater Tickets , Dinner , Salon Treatments , and complimentary membership to the Ritz Club for the length of the stay The Ritz is puttin ' on the Ritz ' for its 100 year celebration . The reputation of the Ritz creates its value in the marketplace . As a place for high society , elegance , and comfort , it has a name and reputation to live up to . One of the primary ways reputations are maintained is through word-of-mouth . Considering the fact that if a guest has a negative experience , they are ten times more likely to talk about it , it is therefore in the Ritz 's best interests to maintain a positive word-of-mouth cycle

Second , additional costs which guests incur aside from the room rate can cause management to raise the level of compensation higher than the rate of the room . For example , there may be phone charges , room service charges , movie charges , wet bar charges , laundry or dry-cleaning , and the list goes on . These are only the costs the guest may incur inside the hotel . Additionally , there is the cost of travel and transportation . As a world-class hotel , the Ritz recognizes these as valid reimbursable expenses . If the Ritz is at fault for some inconvenience to the customer , the customer will also incur additional expenses remedying the problem

Finally , the hidden costs to the Ritz . The first has already been mentioned - the word-of-mouth advertising . It is essential to the Ritz to maintain positive word-of-mouth advertising . After a customer leaves the Ritz , it is impossible to communicate with them further , or to make amends . One of the worst things that can happen for the Ritz is an unhappy customer leaving . Therefore , the service staff at the Ritz has the permission to compensate the guests up to 2 ,000 Euros . The Ritz must review this policy and the history of compensations to make sure the policy is not being abused . Abuse of the policy is a hidden cost to the Ritz itself . However , with proper oversight , this...