Introduction
In the 21st century, the global business environment has been experiencing major changes caused by various factors. Accordingly, management and leadership strategies have had to adjust to the new reality across industries, which is equally true for the hospitality sector. All segments related to tourism imply increased attention to personal impressions and customer satisfaction. Four Seasons Holdings, also known as Four Seasons Hotels and Resorts, is one of the prominent players in this market, offering high-quality accommodation worldwide.
Its performance and structural organization appear to be a valuable example of quality management in tourism and hospitality. The purpose of this paper is to examine the structure and operational context of Four Seasons, evaluating its performance in the light of hospitality management and leadership.
Fundamental Structure and Objectives of Four Seasons Hotels and Resorts
The industry of tourism and hospitality has been on a stable increase over recent years. Modern technology has introduced new means of transportation and communication, thus creating new opportunities in the segment. The industry itself has centuries of traditions and experience, but the 21st century is characterized by the spirit of innovation, which translates into new tourism opportunities. Conventional strategies of marketing and structural organization have been losing to new approaches, forcing even the most tradition-based companies to reorient their activities per modern trends. Litvin et al. (2018), for example, describe the growing importance of online communication and social media reviews, to which they refer as the electronic world-of-mouth. Simultaneously, large companies aim at expanding and encompassing new regions worldwide, which adds complexity to the structural organization. However, the exact structure will vary for every organization, as it is supposed to serve the company’s overall objectives.
Structure
Four Seasons is a large, multination company, which offers quality accommodation across the globe. According to the company’s website, its hotels are present on all continents, allowing guests to expect familiar comfort in various destinations (Find a Four Seasons hotel or resort, n.d.). The organization’s headquarters, as well as its first hotel, are based in the United States of America (About us, n.d.). Accordingly, such a dispersed range of locations makes it more difficult to exercise direct control over the chain. The Board of Four Seasons serves as the company’s organizational core, setting the strategic vision for the entire chain of hotels and resorts. It comprises people who are directly involved with policy-making and ownership of the company, including Isadore Sharp, the founder and the chairperson of Four Seasons.
While the organization’s geography is broad, encompassing over eighty hotels on all continents, very few of them are owned by the company. The vast majority of Four Seasons accommodations are franchisees, which facilitates global management through increased autonomy of each particular location. The internal relations within the chain appear to rely on the supportive model of organizational behavior.
According to the company’s founder, Isadore Sharp (2012), a positive work environment is a matter of priority for Four Seasons. It is achieved through increased support of employees, ensuring their comfort and well-being at the workplace. Kundu and Lata (2017) state that the supportive organizational behavior model is the key to employee retention and improved quality of services. Accordingly, it is possible to attribute a considerable portion of Four Seasons’ impeccable reputation and resounding success to its supportive management.
Objectives
As discussed previously, understanding the company’s objectives is important in analyzing its strategy and organization patterns. According to the words of Isadore Sharp (2012), the founder and former CEO of Four Seasons, the quality of customer service has been the cornerstone of his organization since the moment of its foundation. His philosophy corresponds to the Golden Rule of treating others the way one would like to be treated. Four Seasons’ strategy is person-centric, meaning that it puts the needs of customers above all other aspects of work. Besides, Sharp (2012) acknowledges the importance of encouraging and supporting local talents.
He believes that international companies are supposed to spread positive influence across the globe and contribute to the development of communities within which they operate. The franchise-based structure of Four Seasons Holdings helps it attain this objective. Such an organizational model increases the company’s input into local economies and supports the area’s entrepreneurs while contributing to Four Seasons’ overall positive image. Besides, local franchisees are familiar with their business environment, making it easier to recruit and promote the region’s talents while meeting customers’ demands.
Operational Context of Four Seasons Hotels and Resorts
Each organization operates within a particular context, which is characterized by its distinct factors. It appears possible to divide such factors into two major groups: the internal organization and the company’s surrounding context. In the first case, the list of internal aspects comprises the management strategy and the vision of the leadership, as well as internal relations and the level of employees’ motivation.
Sharp (2012) described in his autobiography that it is crucial never to underestimate the importance of internal relations. It appears nearly impossible to attain a proper level of customer service, which is the very basis of the entire hospitality industry, without providing employees with satisfactory work conditions. At the same time, businesses do not exist in total isolation from the environment, which is why external factors retain their importance. This aspect deserves additional attention in the case of large, multinational chains, such as Four Seasons. Overall, an organization’s operational context is determined by a complex combination of inside and outside influence.
Tourism and Hospitality Organization Types
Its exact type and purpose dictate the nature of a tourism organization’s internal context. Novak (2017) distinguishes between four major categories of hospitality organizations, in which virtually all companies fall. First of all, some locations specialize in food and beverage services, and a restaurant serves as the most vivid example. Second, travel companies primarily organize their clients’ transportation by air, water, or land. Third, lodging organizations, such as hotels, provide people with temporary accommodation for the required period. Finally, recreation companies offer entertainment and leisure to the customers willing to relax and enjoy their time.
The case of Four Seasons is unique, as it encompasses at least three of the aforementioned categories. It specializes in lodging, as hotels and resorts form the core of the company’s operations. However, Sharp (2012) also devotes considerable attention to food and beverages, even calling them key customer experience elements. Consequently, all Four Seasons locations and franchisees are recommended to attract their local culinary industries’ brightest talents. Finally, entertainment is another aspect, which is considered by Four Seasons, making it a highly complex organization.
External Context
In addition to the complex internal relations, Four Seasons, as well as all other organizations, is influenced by the external context in which it operates. Normally, the diverse geography of the company’s activities leads to substantial differences between its units and departments. Each country and city imply a unique cultural and business context, posing additional requirements for the company. This fact serves as another argument supporting the choice of Four Seasons’ business model relying on franchisees to continue its expansion worldwide. Nevertheless, in addition to the general challenges faced by multinational players of the hospitality market segment, the year 2020 has highlighted the importance of external context for such organizations.
The Covid-19 novel coronavirus pandemic has practically paralyzed the entire planet, entailing severe restrictions in terms of direct human contact and tourism activities. For example, according to Kitamura et al. (2020), the pandemic has led to immense economic losses within the entire industry, and millions of hospitality workers became unemployed. Covid-19 showed the fragility of the sector, and even the most important players of the global tourism market have suffered from the colossal negative impact of the pandemic.
Critical Evaluation of the Performance of Four Seasons Hotels and Resorts
As discussed in the previous section, each company in the sphere of tourism and hospitality relies heavily on combining internal and external factors, which influence its operations. Accordingly, the organization’s performance in terms of its reputation, financial situation, and customer satisfaction reflects the degree to which it manages to cope with the challenges. Today’s business environment is highly competitive, which is explained by the rapid globalization processes, broadening markets, and introducing new opportunities worldwide. According to O’Cass and Wetzels (2018), failure to adjust to the changeable reality can be costly even for successful players, as rivals with better strategies may be quick to conquer their share of the market. Accordingly, the multilateral analysis of an organization’s performance in its industry will provide a better understanding of its ability to respond to modern challenges.
Performance of Four Seasons Hotels and Resorts
Overall, Four Seasons Hotels and Resorts operate in the hospitality industry’s luxurious niche, offering high-end accommodation at relatively high prices. The list of its competitors comprises other global chains of hotels, offering five-star services worldwide, for example, Marriott International and Hilton. As far as the company’s financial performance is concerned, it remains quite secretive about it, not disclosing the recent statements to the public.
Four Seasons is a private company, which was purchased by Bill Gates and Prince Al-Waleed bin Talal for $3.8 billion (Das & Karmin, 2017). It is possible to suggest that the organization demonstrates exceptional financial performance since it has attracted such serious investors’ attention. The reputation and the public image of Four Seasons remain virtually impeccable, as it continues to accommodate a large number of guests in all its facilities across the globe. Sharp (2012) writes about the importance of constant growth for his company, which is why Four Seasons continues to open new locations in various countries annually. Such a process can only be enabled by a stable stream of revenues.
Potential Means of Improvement and Innovation
Although Four Seasons has been demonstrating stable performance, the modern business environment is highly demanding in terms of innovation. As the landscape remains changeable in terms of social, political, and economic aspects, all companies must adjust accordingly to retain their market positions. The year 2020 and the coronavirus pandemic have shown the vital importance of modern technology in the contemporary context. As the possibility of direct human contact has been reduced to a minimum, people and entire organizations quickly recognized the potential of the online environment.
Therefore, the improvement area for Four Seasons, as well as for the whole industry, is related to the Internet. Today, as most guests are unable to visit the company’s locations in person, they may be offered a remote experience. For example, Four Seasons already has an online shop, offering people quality linen and bedding. It may be appropriate to continue to utilize the potential of electronic commerce, thus introducing a hybrid, online, and offline business model. Such an approach appears relevant in the context of the 21st century characterized by rapid technological development.
Leadership and Management Functions in the Context of Tourism and Hospitality
Since the dawn of humanity, society has recognized the vital role of quality leadership. People have been admiring strong personalities capable of inspiring others and leading them toward new achievements. However, while the general notion of leadership has retained its importance across centuries, the key values of management have been changing along with prevailing social philosophy. The 21st century has seen an increase in the attention devoted to people-centric views and ideas. Customers and their satisfaction have become the key concepts of business and marketing, as person-centered models acquire a special significance in the modern environment.
In a way, the contemporary situation can be considered a transition period, as it symbolizes the shift toward a new business model on a global level. One of the primary purposes of business and leadership is to ensure a quality, seamless transition, from which both the company and its customers will benefit. The hospitality industry occupies a particular position in this regard, as its entire existence is based on customer service and satisfaction. Therefore, quality leadership is essential for this market segment, as it ensures proper communication between the service provider and its clients.
The Role of Leadership and Management Theories in Tourism and Hospitality
The tourism and hospitality sector is an area with rich, century-long traditions, which define the image of its primary companies. Nevertheless, this sphere demonstrates an unparalleled level of direct customer interaction, as every aspect of a hospitality organization’s functioning is pointed at client satisfaction. Therefore, tourism exists in a complex social environment, and, as confirmed in the previous sections, it experiences a strong influence from external factors. In other words, society is a changeable structure, and all alterations within it are inevitably reflected in the hospitality industry.
Therefore, all companies, such as Four Seasons, must possess a strong spirit of innovation in order to find a new solution to the emerging issues. Management plays a role of paramount importance in this regard, as all innovations must be promoted by the leadership. Hassi (2019) argues in support of the innovative management model, which is supposed to create a positive environment for employee creativity and empowerment. In this scenario, quality leadership serves as the force, which unites all workers in a single innovation system, and such organizations are more likely to respond to their challenges effectively.
As people and human resources are at the front-line of innovation, the supportive organizational model of Four Seasons is an effective instrument in this regard. Engen and Magnusson (2018) emphasize the importance of front-line workers in terms of a company’s modernization and growth. Such employees remain in direct contact with clients and products, making their experience highly valuable. However, to inspire their innovativeness, management must ensure that front-line workers feel comfortable enough to share their creative ideas. Such a situation is attained through supportiveness and well-being, as satisfied employees always demonstrate better performance.
Human Resource Management in Tourism and Hospitality
As it becomes clear from the presented findings, a person is a central concept of the entire hospitality industry. This idea comprises both sides of the process, which are employees and customers. Furthermore, many organizations support the idea that the good conditions for the former entail better service for the latter. Four Seasons is of such companies, which adhere to the principle of person-centric management.
According to Sharp (2012), in order to attain the exceptional quality of service, Four Seasons begins by ensuring the comfort of its employees. The founder’s philosophy dictates that each front-line worker of his chain must feel recognized by the management. If people feel comfortable in the workplace, they will be more likely to remain loyal to the company and its philosophy. In addition, since it has been established that innovation is crucial in the hospitality industry, it is necessary to encourage creativity, as regular employees have enough practical experience to propose effective solutions. Overall, human resource management can be considered one of the vital aspects of the hospitality business, ensuring sustained growth and success.
Conclusion
In conclusion, tourism and hospitality form one of the most unusual areas of contemporary business activities. This market is characterized by the direct, profound interaction between an organization and its clients, which is why quality human resource management is required to ensure the development. Four Seasons Hotels and Resorts serves as an excellent example of a successful player in the hospitality market. The company has been growing rapidly, encompassing new areas and expanding its activity due to a good strategy and organizational structure. Nevertheless, the year 2020 has introduced unprecedented challenges, which underline the importance of constant yet accurate innovations in tourism and hospitality.
References
About us. (n.d.) Four Seasons. Web.
Das, A., & Karmin, C. (2017). Two VIP billionaires teamed up to run luxury hotels. It’s been a slog. The Wall Street Journal. Web.
Engen, M., and Magnusson, P. (2018). Casting for service innovation: The roles of front-line employees, Creativity and Information Management, 27(3), 255-269. Web.
Find a Four Seasons hotel or resort. (n.d.) Four Seasons. Web.
Kundu, S. C., & Lata, K. (2017) Effects of supportive work environment on employee retention: Mediating role of organizational engagement, International Journal of Organizational Analysis, 25(4), 703-722. Web.
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Sharp, I. (2012). Four Seasons: The story of a business philosophy. Penguin Publishing Group.