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Re-Branding Gone Bad - The Importance of Change Management.
By Gert Noordzy Managing Director, Northside Consulting
Sunday, 3rd January 2016
 

Exclusive Views: Luxury Travel Intelligence (LTI) recently listed Shangri-La’s Le Touessrok, Mauritius, and St Regis Mumbai in the top 5 worst luxury hotel openings in 2015.1

The report describes the former as “poor service and inadequate staff training plus a distinct impression that management is not present”, and states for the latter that is was “a rare slip up by this well regarded brand, due to a rushed and badly executed takeover of an existing (and troubled) property”.

One must realize that the above cases did not constitute new hotel openings, but rather re-branding projects of existing properties.

The comments made in the report suggest that the hotel associates were not “won over” by the re-branding. If we consider their buy-in as critical (and we should!), then resources and attention should have been invested in a credible change management program.

According to the Project Management Institute2, change management is a comprehensive, cyclic, and structured approach for transitioning individuals, groups, and organizations from a current (inadequate) state to a future (desired) state with intended business benefits.

Re-branding a property without change management is like upgrading your laptop to the latest hardware model, but continue running it on 1990s MS-DOS. Similarly, hotel hardware renovation and re-branding are cosmetic, but do nothing to “upgrade” the software.

A study by PricewaterhouseCoopers3 identifies a strong causal relationship among project performance, maturity level, and change management: “The majority of the best performing and most mature organizations always or frequently apply change management to their projects”.

Research further indicates that there is a strong correlation between how often companies apply change management in their projects and the reported success of their projects.  

However, the importance, complexities and difficulty of executing change management successfully during hotel re-branding projects are often underestimated and not well understood by hotel owners and operators.

It is interesting to note that change management, like hotel opening or re-branding, is a sub-project. It is part of a re-branding project, integrated and synchronized with it, and must be managed as such, using proper change management techniques.

Before these can be applied successfully at property level, senior management has to make commitments and fundamental changes at corporate level to build a foundation for success. 

Notes:

1 - Daily Mail. (2015). www.dailymail.co.uk/travel/travel_news/article-3359072/Robert-Niro-s-Nobu-Manila-named-worst-luxury-hotel-2015-questionable-developments-expansion.html

2 - Project Management Institute. (2013). Managing Change in Organizations: A Practice Guide.

3 - PricewaterhouseCoopers. (2004). Boosting Business Performance through Programme and Project Management: A First Global Survey on the Current State of Project Management Maturity in Organizations across the World.

Also Read: Exclusive Interview for Gert Noordzy, Managing Director of Northside Consulting recently spoke at a number of industry conferences in Hong Kong, Singapore and Shanghai on root causes of hotel opening delays.

Gert Noordzy " Managing Director, Northside Consulting

Gert Noordzy is an international hotelier, Organizational Project Management subject matter expert and doctoral candidate. Gert graduated from Hanze College Hotel Management School, Zwolle, the Netherlands, and holds an MBA from the University of Saint Joseph, Macau with majors in Strategic Management & Marketing and Financial & Business Analysis.

He is also a Certified Associate in Project Management of the Project Management Institute and holds a Financial Advisors’ International Qualification (FAIQ) from the Chartered Insurance Institute.

He has over 20 years’ professional experience in Greater China and South East Asia and has been involved in opening over 30 new hotels. In 2014 he founded Northside Consulting Company Limited. 

Gert can be reached at gert.noordzy@northside-consulting.com. For more information, visit www.northside-consulting.com

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