As tourists walk across the Széchenyi Lánchíd Chain Bridge in Budapest, Hungary, they approach the stunning Gresham Palace. The Four Seasons Hotel Gresham Palace obtains a remarkable site due to the panoramic view of the famous Danube River, Buda Castle, and Fisherman’s Bastion from the front rooms of the hotel. As you enter this Four Seasons, your eye is drawn towards a glass atrium leading up to the front desk. A crystal chandelier is in the center of this atrium and further adds to the grand interior architecture and design of the hotel. After having the opportunity to walk through the Four Seasons Hotel Gresham Palace and stay in the Four Seasons Firenze, I understood why this hotel chain is one of the most well known in the world. The Four Seasons brand is one of luxury and is a part of one of the most influential industries in the world: hospitality. However, even though this hotel chain is luxurious for customers, the hospitality industry the Four Seasons falls into entails poor employee wages, high employee turnover, and lack of stability. Furthermore, this industry has created mass tourism leading to social discrepancies, economic dependencies, and weakened culture. Thus, is the Four Seasons Hotel Chain ethical for partaking in an industry that has led to such problems? Should the Four Seasons shift their attention from customers to employees in order to address industry concerns?
First, let’s explore the Four Seasons and examine the hospitality and service industry and tourism. Specifically, let’s focus on how these impacted this hotel chain’s development. Then, let’s explore the current model of tourism and look at an alternative model for tourism development. What we might be able to gather from this is whether or not the current hospitability and tourism model need to change and whether or not the Four Seasons should adjust their model to create higher employee satisfaction and equality.
The History of the Four Seasons
From the 15-minute room service in Boston to the private dinners in a chapel with 15th century frescoes in Florence, the Four Seasons has become one of the most recognized global brands in the world. The customer service, various amenities, and exotic locations have helped this hotel chain expand and grow. So, what was the route cause of their growth? Larry Yu states, “national economies of developed nations began to become dominated by the service industry in regards to employment. Thus, a shift occurred and led businesses to specifically focus on providing services in areas such as hospitality and tourism (5).” This major shift occurred within a 30 year timespan between the late 1960s and 1990s. Isadore Sharp in Toronto, Canada founded the Four Seasons in the midst of this shift in 1960. The first Four Seasons hotel was opened in 1961 and from there the chain began to take off. Due to the development of the hospitality industry and tourism, the Four Seasons was able to go international and entered the US and England, as well as expanded in Canada, during the 1970s.
As mass tourism developed in the 1980s, the Four Seasons brand name became recognized in countries around the world. The Four Seasons created private residences and further added new locations to their portfolio, which enabled them to create an initial public offering in 1986. Furthermore, the hotel chain developed in Europe and Asia in the 1990s and due to their expansions, the Royal Highness Prince Al-Waleed bin Talal decided to become a huge stakeholder in the company. The company launched a website and society became more revolved around technology and was then listed on the New York Stock Exchange because of its success. In 1992, the chain “exceeded 10,000 guest rooms and 20,000 employees worldwide (Four Seasons).” The Four Seasons achieved notable awards and recognitions such as a rank in Fortune Magazine’s 100 best companies to work for and was included in the 30th issue of the Robb Report as on of the most exclusive brands of all time. In the early 2000s, the company held 50 properties on every continent except Antartica. Bill Gates and Prince Al-Waleed bin Talal partnered together and led the Four Seasons back to private ownership.
Jordus states, “the hospitality industry is a truly global industry, connecting every corner of the world and being of great significance to the global economy. Estimates attributed travel and tourism with approximately 9 per cent of total world gross domestic product, providing about 255 million jobs in 2011 (1).” Of the world gross domestic product and jobs, the Four Seasons Hotel Chain has made up a large amount. The company has grown in correlation to the expansion of the hospitality industry and increase of tourism. The company had 20,000 employees in 1992 and grew to “40,000 worldwide” in 2008 (Redman). Due to the growth of the company, the Four Seasons encouraged mass tourism by offering a vast amount of amenities and experiences at each one of their locations across the world. Furthermore, this hotel chain has continued to grow and develop alongside the hospitality industry. The mass tourism and hospitality industry have impacted the success of the Four Seasons. Consequently, Four Seasons has developed a focus on customer satisfaction.
Today’s Four Seasons
Through the expansion and growth discussed within the Four Season’s history, the Four Seasons developed and follows four main pillars to ensure the customer satisfaction required to succeed in the hospitality industry. On the Four Seasons “Our Company” web page, the company discusses how its chain is “dedicated to perfecting the travel experience through continual innovation and the highest standards of hospitality.” In order to achieve the perfect travel experience, Four Seasons innovated four pillars for employees to follow within each hotel. Higley features the Four Seasons pillar of quality, service, culture, and brand within his article The Man Behind the Brand (26). These four goals revolve mostly around the customer and other executives have further supported Sharp’s customer oriented business model in recent interviews. Forbes Travel Guide Editor Hayley Bosch interviewed Executive Vice President of Product and Innovation Chris Hunsberger in regards to the Four Season’s business. Hunsberger states, “Four Seasons has always been and will continue to be the leader in luxury hospitality, delivering the highest caliber guest experience. We are focused on harnessing the company’s culture — commitment to our people, a passion for service and customer-focused evolution through innovation ensure we continue to position ourselves as industry leaders as we continue to grow. We believe that the only sustainable differentiator is one’s ability to customize the guest experience, to truly understand their needs (known and unarticulated) and to deliver against them for a memorable experience at all levels (Bosch).”
Even though the employees are provided with company wide benefits such as profit sharing, complimentary stays, discounted meals, paid holidays, dental and medical assistance, life insurance, and retirement benefits, the Four Seasons still focus mainly on customers. Bosch quotes the Executive Vice President saying, “keeping ahead of our guests is key” and “as our business has grown and our guests have evolved, we’ve continually pushed the bar on innovative services and products to enhance the guest experience. Our new customizable bed is the latest example of this ongoing commitment.” Because “the tourism industry is entering a stage of maturity after its 40 years of rapid expansion and development (Murphy, 429),” “tourists now expect and demand more because they are experienced travelers (Murphy, 430).” To keep up with the industry, the Four Seasons is required to innovate and develop new experiences associated with their guest experience. The company has demonstrated that they are evolving and growing to meet this industry demand. But, has this shift caused Four Seasons to shift their focus from employees to customers?
According to Payscale, Four Seasons pays employees only 5% above the market. Fortune Magazine says the average base pay for hourly employees is $31,890 and the average base pay for salaried employees is 50,957 (Fortune). Fortune says the voluntary turnover is 13% at Four Seasons. Voluntary turnover is when employees decide to leave on their own and thus this means that 13% of employees were not satisfied with their jobs at Four Seasons. If you take the current amount of employees within the US and divide that by 13%, then a grand total of 1,781 employees left Four Seasons in 2015. Peter Redman describes the level of input and peer pressure employees have at the Four Seasons hotel chain in his article Four Seasons Hotels and Resorts – “Golden Rule” is Measure of Success. Employees are able to give their feedback and input on company culture through answering surveys distributed to the corporate offices and hotels. Additionally, the employees face annual performance reviews to determine what areas they need to improve on and what areas they are succeeding in. Redman states, “all hotel employees are judged on their embodiment of company values.” So, if employees were able to provide the Four Seasons with an evaluation and state their satisfaction did the Four Seasons disregard 1,781 employees? In an interview with Guest Services Manager LisaJane Mcbain, Hackett states, “the company says roughly 15% of its internal transfers have necessitated a physical relocation (Hackett).” After looking at the current status of the Four Seasons, do you think employee wages, the employee turnover rate, and relocation rate are ethical and fair? Let’s look at mass tourism and the hospitality industry further to evaluate whether or not the Four Seasons model is ethical.
Is the Four Seasons ethical?
The Four Seasons is a part of the hospitality industry. So, what does this industry entail? The hospitality industry is one of the Jordhus claims, “hospitality positions are sometimes “accepted as a last resort or because it can be tolerated in the light of wider commitments and constraints” (Wood 1992:154). High employee turnover is thus common, which reflects workplace problems (Poulston 2008b) (198).” The Four Seasons currently demonstrates a high rate of voluntary turnover and due to a focus towards customer experience, it may not value employees as much as they should. Additionally, Jordhus states, “service workers are among the lowest paid and least experienced of all workers, yet they are probably the most important given their encounter with the customer (Barbee and Bott 1991) (198).”
The Four Seasons hotel chain promotes travel and new experiences to their customers and this have helped increase the amount of tourism their guests partake in at each of their site locations. Murphy argues, “at one extreme tourism-induced social change can lead to development, representing socio-economic advances in the community, an improvement in the quality of life indices, and overall net social benefits. At the other extreme, change can lead to dependency, represented by economic growth, which leaves an underdeveloped social structure or reinforces existing social discrepancies (320).” Murphy further discusses the negatives associated with tourism; these issues include a “greater financial and leisure-time affluence than many local residents (318)”, “growing hostility towards visitors (105)”, and a reduction in tourisms “overall economic benefit to the community (110)” due to outperforming “the local infrastructure and resource base (110).” The mass tourism generated through the hospitality industry has posed problems for popular travel locations.
After looking at the Four Seasons, the hospitality industry, and mass tourism the ethics of this industry and thus the Four Seasons can be questioned. One ethical angle to consider is from the point of view of virtue ethics. One branch of virtue ethics is known as “ethics of care” because these “ethics should focus solely on justice and autonomy; it argues that more feminine traits, such as caring and nurturing, should also be considered (Athanassoulis).” The Four Seasons institutes self-judgment and group enforcement, which can be seen as exemplifying virtue ethics because the company is demonstrating that they would like to improve their relationship with employees and maintain employee satisfaction. However, there are more ethical issues faced within the hospitality industry and within luxury hotels than there are good ethics. One ethical issue is in regards to the way employees at the Four Seasons Hotels are expected to act; hotel employees are expected to be at the service of their customer. Two key inequality issues are “the structural asymmetry between workers and guests and the interactive self-subordination of workers to guests (Sherman, 57).” Rachel Sherman discusses how “their dignity, in this case, seems constantly compromised by their subservience to guests (11).” Furthermore, Sherman claims, “the guest’s entitlement to workers’ physical labor- what some guests refer to as pampering (38)” is “not explicitly acknowledged (38).” “The imperative to never say no to a guest is a mantra in luxury hotels (Shareman, 37)” and this causes hotels to tend to bend the rules and procedures of their services to accommodate customers. Overall, the Four Seasons could be seen as needing improvement with their virtue ethics.
Addressing ethics issues in the hospitality industry, mass tourism, and within the inequality presented in the structure of luxury hotels is very important. To address the hospitality industry issues of poor employee wages, high employee turnover, and lack of stability the government should increase the minimum wage of employees interacting with customers. If hotel companies began to listen more to their employees and prove that they are valued, then the employees would not leave companies and this would reduce the amount of turnover. The Four Seasons specifically could employ an internal employee relations program or a mentor program in order to help with the issues. Lastly, hotels like the Four Seasons should provide not only travel opportunities for employees but should also employ stable job opportunities that do not involve massive amounts of travel. In regards to mass tourism, the hospitality industry should develop a community centered tourist plan that ensured social discrepancies, economic dependencies, and a weakened culture do not occur within a particular location. In order to complete this, the companies within the industry should have meetings with local business and locals to make sure that the local business will benefit and that locals will be less annoyed with tourists. The hotels could specifically provide tutorials on social norms or standards to follow within each location of travel. Additionally, to address a weakened culture and the impact on base resources, the hotels or hospitality business could provide the town with a small portion of their profit to ensure the culture flourishes. One way to address the inequality issue is to have unions “broaden their scope beyond worker-employer relations to encourage critiques (Sherman, 270).”
The Four Seasons and the hospitality industry need to make changes in order to improve their virtue ethics and solve inequality issues. The company should shift their focus from mainly on the customers towards a balance between employees and customers. Industry concerns of poor employee wages, high employee turnover, and lack of stability could be addressed with a shift in focus from customers to employees. Furthermore, concerns with mass tourism leading to social discrepancies, economic dependencies, and weakened culture could also be addressed through implementing more virtue ethics in luxury hotels.
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