Class Discussion Essay Example | Topics and Well Written Essays - 1250 words

Class Discussion - Essay Example There is no other better way that could explain of economic globalization that this. According to Mittelman (53), globalization goes through macroregionalism supported by economic and states forces that seek to open larger markets as a way towards greater competitiveness. This is certainly true. Others have referred to the process of continental globalization in line with North America indicating that regionalism is the force through which globalization is conveyed (Scholte 7). Likewise, Mittelman’s analysis points to the emergence of global regions as the key factor leading to globalization. Take Europe for instance. The continent houses a majority of the world’s economic giants because of its regionalism policy advocated by the European Court for Human Rights. This body advocates for a ‘Social Europe’, the proposal of a federalist post-national Europe, which a majority of European nations have embraced, (Scholte 7). In these, the countries see the likelih ood of a non-neoliberal, progressive regional system of authority in which the freeing of the markets for capital, goods, and labor occurs in the context of a rights-based, progressive, social system. These regional financial arrangements are rather different and range from foreign exchange reserve pooling and government financing to currency swap arrangements. What is widespread to all these schemes, in spite of their intrinsic variety, is that they all wish to promote regional integration along with financial and macroeconomic stability. Even though, there is a considerable stream of academic contributions on economic regionalism, people’s understanding of financial regionalism is fairly limited, despite its potentially wide-ranging effects in shaping the global financial structures (Veseth 40). Take for instance a continent like Europe, where the newly projected European Stability Mechanism is projected to be a legal tender union lending arrangement to offer direct assista nce to countries in Europe and other regions. In Europe, just after the Second World War, the interdependence of the continent’s economies led to the formation of the European Payments Union, a forerunner of a much advanced framework, which culminated with the creations of the currency union in 1999. The organizations have been able to influence globalization all through Europe (Scholte 7). Latin America, on the other hand, boasts the oldest, even though less renowned tradition of regional assimilation efforts among the developing nations. These economic relations, in South America, also go as far back as the 50s. Hoping to produce a regional common market for countries in South America, lawmakers, in the region, have succeeded in setting up clearing arrangements for intraregional expenses, FLAR and two development banks. FLAR refers to a small and cozy membership of seven small, as well as medium-sized, economies with strong traditional ties. They also portray a wide set of common interests (Veseth 50). In reality, FLAR offers a direct proof to the potential of regional associations to offer greater ownership to member countries that would otherwise put a lot of efforts to be heard in the international, 188-member IMF. The search for alternative futures for the region, in the Americas, in many ways, reflects the talks taking place within the broader "anti-globalization" movement. They perceive

The End of American Exceptionalism Assignment Example | Topics and Well Written Essays - 750 words

The End of American Exceptionalism - Assignment Example However, Woods tainted his reputation and that of his country despite the global respect that he had attained over time in his career. This had a major effect of undermining the historical American exceptionalism that had put the nation at a superior level in the face of the global nations (LeVine, 2009). As an indirect technical rejoinder, Obama proves to the world that America still owns its superpowers. He delivers a powerful speech to the world that shifts the global attention from the tainted side of America to a more convincing side of the same. However, either through America’s leadership history or Woods’ misdeeds, the brand that America has boasted about long is under threat (Beinar, 2014). Like Obama, Woods humbly accepts his mistakes and expresses willingness to change and restore their country’s reputation. Obama who is a victim of the mistakes made by his predecessors openly accepts the nation's failures attributed to historical mistakes. This is so despite the fact that he may not mention or wish to know the how, where and when the misdeeds caused by his predecessors came about. On his part, Woods accepts his mistakes and he pretty understands how his wrong deeds served to tarnish the nation’s image. Both Woods and Obama intercept at the point that mistakes recognized and accepted, preserve and or restores America’s national brand despite the fact that challenging the costs and justification for such mistakes may not be possible (LeVine, 2009). Obama understands very well what the repercussions for mentioning and detailing the mistakes would be felt severely by the U.S. Mentioning what exactly transpired during the past regimes, even if he knew a million about them, would threaten the country’s reputation and international pride. The world views America as a powerful and autonomous nation that wields a vast socio-economic command over other nations in the world... However, Obama understands that when the past mistakes, injustices and constraints of the predecessors were to be unearthed in details, the nation could lose considerable amounts of power and command in the socio-economic aspect.  Ã‚  

Shakespeare Character Analysis - Richard III Essay

Shakespeare Character Analysis - Richard III - Essay Example Although Richard III appears to be the devil, yet he is indeed human Richard III is a unique novel by Shakespeare and is totally different from the whole range of novels by Shakespeare in that audience experiences a very ambiguous, highly alterable, and complex relationship with Richard, who is the play’s central character. Right from the conception of the novel, the fact that Richard is a villain with evil machinations dawns upon the audience when Richard makes an overt expression of his intention of leaving no stone unturned in the way of gaining his nefarious objectives in these words: I am determined to prove a villain, And hate the idle pleasures of these days. Plots have I laid, inductions dangerous, By drunken prophecies, libels and dreams, To set my brother Clarence and the king In deadly hate the one against the other. (Shakespeare 14). Paradoxically, there is a unique sanctity hidden in his approach that makes the audience consent with him. For a major part of the st ory, Richard sounds quite fascinating, charismatic and appealing to the audience in spite of his allegiance to evil and the audience feels like approving of his behavior and sympathizing with him. Richard impresses the audience with his charisma. The relationship of audience with Richard compliments that of Richard with other characters of the play. The power of his persona can be estimated from the fact that Lady Anne, who is totally aware of the intrinsic wickedness of Richard can not help being seduced by the skillful argumentation, articulate mannerism, brilliant wordplay, and the relentless pursuit of Richard’s selfish wants. It is important to note that Lady Anne is aware of Richard’s evil character, and also conveys her understanding of his character to him in these words: Foul devil, for God’s sake, hence, trouble us not; For thou hast made the happy earth thy hell, Fill’d it with cursing cries and deep exclaims. If thou delight to view thy heinou s deeds, Behold this pattern of thy butcheries. (Shakespeare 19). Throughout the play, Richard’s confessions of his evil plans grab the audience’s attention. In fact, Shakespeare has purposefully made use of the monologues of Richard in a successful attempt to allow him to work his charms upon the audience. Every human being wants to be loved. Love is the fundamental need of humans. Owing to his need to love and being loved, man is called as a social animal. Physical deformities ruin an individual’s looks, but his/her self-esteem is never lowered unless there is negative response from the society about such a deformity. Society makes a lot of difference in the way a person feels about himself. People’s criticism towards something as a physical deformity, that is beyond the control of an individual inculcates hatred for himself/herself in the individual. It is the very hatred that fills abhorrence against the society in the individual. Owing to this explan ation of the cause of abhorrence, it makes complete sense for Richard to be human, and yet hate others. Not that a human is justified to hate others for such reasons, but it is true that humans feel like hating others when they are hated. Richard hates other characters of the play for a similar reason. Shakespeare has fully conveyed the underlying reason of Richard’s wickedness by making Richard declare that he has a

Diversity Issues in a Healthcare Setup Assignment

Diversity Issues in a Healthcare Setup - Assignment Example Moreover, it promotes efficacy and timeliness as its programming is guided by the objectives that would promote productivity. Kennedy highlighted the broad responsibilities of every human resource department and elaborated the importance of their competency. He so illustrated that beside duties that include hiring, training, compensation, development and event planning, the HR departments should be cohesively knit to meet other requirements like the changes in every environment. Changes, as the author noted, may include the rapidly expanding cultural diversity of the nation. Such would require that every department and all its members objectively meet cultural competence as a purpose. This is a strategy that can be achieved through mechanisms that involve training and even retention of the competent staff members. Anderson and Scrimshaw elaborate the significance of cultural competence in every healthcare setup. They so explained that cultural diversity has affected service delivery. This is a factor that has largely been projected through misunderstanding/misinterpretations and in some extreme instances, insensitivity, and discrimination. These factors, as the authors illustrated, have largely negated the elements that define productivity in healthcare setups; cohesion, awareness, and precision. The authors, therefore, highlighted programs that can get used for cultural integration and the facilitation of service delivery. The programs include training in cultural competency or even the application of interpreter services. Essentially, such programs eliminate the cultural parities that are caused by cultural incompetence in staffs. The author noted the developments in the healthcare system in 2004 as the staffs encompassed cultural diversity and competence amongst their core objectives.

To combat poverty and increase growth in the worlds poorest countries Essay

To combat poverty and increase growth in the worlds poorest countries policy makers need to focus on decreasing world income inequality - Essay Example In the second section I will be dealing with the effectiveness of the policies in reduction of poverty and growth of economy in poor countries. I agree with the statement because, income inequality affects a country’s economy; which comes as a result of poverty in the society. Research done shows that income inequality is reflected in high relation to income poverty rates. Income inequality has also been linked with health problems. This is because income inequality is associated with many issues that affect the health of children adversely (Wilkinson 1996). Many health problems are also associated with the amount of income people earn. In a psychological interpretation, the health status of person affects their income and thus if one is unhealthy, there is a possibility of low income. Income inequality is also associated with mental illness. People with poor living standards are at higher risks of physical and mental illnesses as a result of stress and lack of balanced diet. According to Wainwright (72-69) to help in fighting poverty, equal distribution of income, developments in social and economic environments mus t be looked into. Income inequality affects the economy in ways and it leads to inflation too. It is therefore necessary for the government and the citizen to come up with policies to help curb income inequality which has lead to poverty in the society mostly affecting the poor countries. To combat poverty and economic discrimination, there has to be application of polices that are made and implemented by the society with total assistance by all sectors of the government. The implemented policies should enhance and promote equal opportunities and offer access to basic social services, strengthen collective and individual participation and responsibility in the fight against poverty, establish specific

Hotel and Information Systems Essay Example for Free

Hotel and Information Systems Essay It has been accepted for inclusion in Communications of the Association for Information Systems by an authorized administrator of AIS Electronic Library (AISeL). For more information, please contact [emailprotected] org. 102 Communications of the Association for Information Systems (Volume 15, 2005) 102-118 OUTRIGGER HOTELS AND RESORTS: A CASE STUDY Gabriele Piccoli School of Hotel Administration Cornell University [emailprotected] edu ABSTRACT This case describes the history, strategy, and current information systems infrastructure of a midsize, privately owned hospitality firm. The case is designed to provide the substantial background information needed to engage successfully in setting direction for IS resources and their use at Outrigger Hotels and Resorts headquartered in Hawaii. It enables students to analyze the firm’s strategy thoroughly and to assess its current use of information systems resources. With this assessment as a starting point, students can develop an appropriate IS vision, IS architecture, and a strategic IS plan for Outrigger Hotels and Resorts. The case was originally designed to use the process of setting direction for IS resources as described by Martin and colleagues [2005], but is flexible enough to adapt to the structure of other approaches to planning for information systems use. Keywords: IS planning, IS assessment, IS visioning, infrastructure, hospitality. Editor’s Note: A teaching note is available from the author to faculty so requiring it that are listed in the MISRC-ISWorld Faculty Directory. I am involved with every decision that senior management takes. They look to me for an IS slant to it – whether an IT solution can capitalize on opportunities or eliminate threats. They also expect my team to independently develop an IS strategy that will further the business. Joe Durocher, Senior Vice President CIO Every manager must have an IT strategy. You can’t delegate to technologists and only worry about your allocated cost or what training your employees need. You must understand how to be master of your own destiny and make IT work best for you. Too many managers still don’t get that. Rob Solomon, Senior Vice President Sales Marketing Outrigger Hotel and Resorts: A Case Study by G. Piccoli Communications of the Association for Information Systems (Volume 15, 2005)102-118 103 I. INTRODUCTION Outrigger Hotels and Resorts, a mid-size lodging firm focused on leisure travel to the Hawaiian Islands and the South Pacific, uses Information Technology (IT) in numerous aspects of its operations and therefore must carefully engage in the information systems planning process. After analyzing Outrigger’s strategy and assessing the firm’s current use of information systems resources, we can develop an appropriate IS vision, IS architecture, and a strategic IS plan for Outrigger Hotels and Resorts. On Black Friday, September 13, 1929, Roy C. Kelley arrived in Hawaii with his wife Estelle. An architect by training, Mr. Kelley joined the firm of C. W. Dickey and was responsible for designing many of Honolulus landmark buildings, including the main building of the old Halekulani Hotel and the Waikiki Theater on Kalakaua Avenue. Nine years later Kelley set out on his own, building numerous homes, apartment buildings, and hotels on the island of Oahu. In 1963, Kelley took over the land occupied by the old Outrigger Canoe Club. Outrigger Hotels then became a reality with the mission of bringing the dream of a vacation in Paradise within the reach of the middle-class traveler. Included in the agreement were leases on three Waikiki lots that later became the Outrigger East, Outrigger West, and Coral Reef hotels. The Outrigger Waikiki Hotel was built on the site of the old canoe club, arguably the prime spot on Waikiki beach, in 1967. Throughout the next two decades, Outrigger Hotels Hawaii, as the company was named, continued its expansion in Waikiki. When in the 1970’s the zoning authority put a cap on new construction in Waikiki, Outrigger began to expand through acquisition rather than construction, ultimately becoming the largest chain in the State of Hawaii, with over 7,000 rooms and a total of 15 properties concentrated in Waikiki. Thanks to its clustered configuration, with all of its hotels located within one square mile, Outrigger was able to maintain a centralized management structure fitting Mr. Kelley’s ‘management by walking around’ style. In 1989, Outrigger Hotels Hawaii, now under the leadership of Roy Kelley’s son Dr. Richard Kelley, took over management of The Royal Waikoloan Hotel on the Big Island of Hawaii. When hurricane Iniki, heading for Waikiki in 1992, barely missed Honolulu and ravaged the island of Kauai, it provided further impetus for Outrigger’s geographical diversification strategy to and beyond neighboring islands. The firm, expanding into management agreements with third party owners, added properties on Maui and Kauai and ultimately grew to a total of 26 locations in the Hawaiian Islands. In 1996 the firm made its first international foray, opening the Outrigger Marshall Island Resort on Majuro Atoll in the Republic of the Marshall Islands. Through partnerships, joint ventures, acquisitions, and new developments the firm continued to grow internationally, adding properties in Guam, Fiji, Tahiti, Australia, and New Zealand. While growing geographically, in 1990 Outrigger Hotels Hawaii began to diversify its product portfolio by adding condominium resorts. Because of ts geographical and product diversification, in 1995 Outrigger Hotels Hawaii changed its name to Outrigger Hotels and Resorts, and in 1999 re-branded fifteen of its hotels in Waikiki to launch a new hotel brand called OHANA Hotels of Hawaii. We had an identity crisis because the market moved up, we upgraded the onbeach properties where we had higher demand and bought some nice properties in neighboring islands. But we had huge variation in the portfolio—if you stayed at a budget property vs. a beach front property, you’d be very confused as to what an Outrigger was. President and CEO, David Carey Outrigger Hotel and Resorts: A Case Study by G. Piccoli 104 Communications of the Association for Information Systems (Volume 15, 2005) 102-118 Figure 1: Outrigger Properties in Waikiki Figure 2: Outrigger Properties in the Hawaiian Islands Outrigger Hotel and Resorts: A Case Study by G. Piccoli Communications of the Association for Information Systems (Volume 15, 2005)102-118 105 Figure 3. Properties Managed by Outrigger Hotels and Resorts (International) The on-beach properties became upscale full-service hotels under the Outrigger brand. The condos, also typically on-beach upscale locations, maintained the Outrigger brand. Conversely, the OHANA brand was positioned to cater to the budget traveler looking for value on off-beach properties. Condominiums represented an increasingly important share of the total portfolio of properties, even though the firm stumbled upon the opportunity that condominiums offered. Condominiums appealed to independent travelers who would do much research and planning on their own. Condominiums were also complex, non-standard products that travel agents and wholesalers found hard to sell. Because condos were rarely built as business ventures, but rather were designed as primary or vacation homes for the tenants, they offered little office or staging space for management companies to operate in. They also lacked many of the typical hotel services and departments such as food and beverage, room service, laundry, and daily maid service. These difficulties notwithstanding, Outrigger found the condo business appealing because it provided a means for expansion through management contracts without the need to acquire expensive properties. By 2005, Outrigger was a sizable firm, with about 3,600 employees (of whom about 230 were at corporate headquarters), a portfolio of properties exceeding US $1. 4 billion, and approximate revenues of US $45 million [Hotel On-Line, 2003]. But at the heart of its strategic positioning a commitment remained to providing a ‘sense of place,’ an experience attuned to the culture and the characteristics of the destination, and to avoiding a cookie cutter approach. Our business is really about being a â€Å"window† to an experience, not the experience itself. We are the enabler through which people can engage in the leisure experience they desire. We don’t try to export Hawaii when we go elsewhere, but we do honor the same values in the places we operate hotels and resorts. David Carey Outrigger Hotel and Resorts: A Case Study by G. Piccoli 106 Communications of the Association for Information Systems (Volume 15, 2005) 102-118 Outrigger’s senior management believed that its key competencies resided in providing hospitality to guests visiting their properties and marketing those properties successfully through leisure distribution channels. To complement these basic competencies, Outrigger’s management developed what it believed to be a superior capability to manage in a multicultural environment, including multicultural and multilingual employees and guests. Aided by a turnover rate in the single digits and an average of 25 years of employee tenure with the company, Outrigger managed to be a mostly non-union shop in the heavily unionized Hawaii labor market. We operate properties that have good locations, we have a strong travel distribution network, and our employees really provide hospitality from the heart. That creates a differentiated product making price less important. David Carey Outrigger was wedded to the success of its destination markets and to the well-being of airlines serving its destinations. If Hawaii does well, so do we. I spend a lot of time working with local tourism authorities to improve the appeal of the destinations we operate in. But airlines can be a bottleneck. We may not have available lift at times when we need it. If the airlines are full or they have decided in their yield model that they are going to only sell their top fares, there is nothing we can do. From purely the hotels’ perspective, the best thing for us is an airline price war to Hawaii. David Carey III. THE HOTELS AND RESORTS INDUSTRY As the 21st century dawned, the global lodging industry was estimated to exceed $295 billion in sales (about 11% of the world’s economic output) and employed more than 250 million workers [Encyclopedia of Global Industries, 2003]. The leisure travel segment accounted for about 45% of total volume [Horwath International, 2002]. THE HAWAIIAN HOTEL MARKET In the Hawaiian market, which was Outrigger’s traditional stronghold, 2004 data showed performance levels above the average of the global industry. Being quite isolated from any large population pool, Hawaii was a classic destination market with an exclusive fly-in customer base. The major feeders were U. S. westbound traffic and Japanese eastbound traffic. These markets were thought to yield very high return rates1—estimated by some to be around 50% westbound and over 65% eastbound. This trend made for a very location-savvy customer base. Peculiar to this market was also the trend of multi-island stays, with guests visiting more than one destination during the same trip. Table 1. Performance of Hawaii Hotel Market Occupancy Avg. Number of rooms Average Daily Rate2 Revenue* * Amounts per available room 72. 1% 706 $198. 41 $78,488 In the hotel business, return rate is used to refer to the percentage of visitors who come back again for more than one visit to the same location. 2 Average Daily Rate (ADR), is the average of all rates charged on a given date for all rooms sold that day. A yearly ADR can be computed by averaging ADRs for all days of the year. 1 Outrigger Hotel and Resorts: A Case Study by G. Piccoli Communications of the Association for Information Systems (Volume 15, 2005)102-118 107 PRICING Because the Hawaii and Pacific Rim markets were exclusive destination markets, the use of packages – including air and accommodations – was pervasive. Historically, packages were assembled and sold by wholesalers and tour operators who purchased both air and hotel rooms in bulk and re-marketed them to the traveling public. With the widespread adoption of the Internet, a new type of package was emerging under the leadership of large online travel agencies: dynamic packages. A dynamic package was one that enabled the guest to choose air, hotel, car rental, and even activities, ticket them independently, and then price them out as a bundle. Dynamic packages were appealing to suppliers because the price of each item was not disclosed, making price comparison difficult and alleviating commoditization fears. They were appealing to prospective travelers because they increased choice and fostered flexibility. Finally, they appealed to online travel agents because they built upon their value proposition—customer choice—and could potentially improve their margins. COMPETITORS As a mature destination, Hawaii had been entered by many of the larger branded hospitality and resort companies. The largest hospitality firms, such as Marriott International, Hilton Hotels and Resorts, and Starwood, developed a significant presence with eight, five, and eleven properties respectively. But the largest operators in Hawaii were geographically- and leisure-focused players such as Outrigger, ASTON Hotels ; Resorts Hawaii (with twenty-eight properties), and Marc Resorts Hawaii (with eleven properties). IV. OUTRIGGER CUSTOMERS AND THE COMPETITION THE OUTRIGGER HOTELS AND RESORTS CUSTOMERS Outrigger’s original mission was to bring the opportunity for a vacation in Paradise within the reach of middle-class families. As the firm began to diversify its portfolio, the profile of its customers and the competition also changed. The typical guest staying with the premium brand – Outrigger – was often a multigenerational customer with a sense of loyalty to the brand (about 25% of guests were returning to Outrigger) and an annual income exceeding $75,000. Outrigger guests were almost exclusively leisure travelers. This customer base created seasonality, with winter and summer being the high seasons when properties like the Outrigger Waikiki on the Beach reached an ADR of $260 and an overall occupancy around 90%. Our customers are independent-minded and look for an experience that is more regional and attuned to the destination, but still within their comfort zone. They may stay with big brands in their road warrior capacity, but that’s not what they are looking for in a tropical destination. Rob Solomon Table 2. Outriggers Portfolio and Sample Competitors Location Properties Rooms Lowest Rate * Outrigger Hotels and Resorts Waikiki 2 1,383 $160 Starwood Hotels and Resorts Waikiki 4 4,132 $150 Marriott International Waikiki 1 1,297 $209 Hyatt Hotels and Resorts Waikiki 1 1,230 $210 Outrigger Hotels and Resorts Guam Fiji 2 895 $203 Starwood Hotels and Resorts Guam Fiji 3 995 $145 Hilton Hotels and Resorts Guam 1 587 $110 *Rates for comparable rooms as they appear on the company website, December 2004, for January 2005 stays Outrigger Hotel and Resorts: A Case Study by G. Piccoli 108 Communications of the Association for Information Systems (Volume 15, 2005) 102-118 Competing for these customers, Outrigger went head-to-head with major brands that enjoyed name recognition amongst the traveling public, a flow of customers redeeming points, available capital, and availability of programs for employees such as discounted travel beyond Hawaii and the Pacific region. In response, Outrigger leveraged its assets: some of the premier locations in the markets in which it competed, strong name recognition, long-term relationships with the travel distribution network, a strategic focus on vacation destinations, a deep local knowledge and community ties, and good employee relations. THE OHANA HOTELS CUSTOMERS The typical OHANA guest was a value-minded and Hawaii-savvy leisure traveler with income below $100k a year. Typically, OHANA guests had visited Hawaii multiple times, stayed longer than average, and visited more often. Business travel was mainly military personnel and employees of corporations who operated on multiple islands. Groups accounted for less that 10% of OHANA’s overall traffic. We have about 50% return guests. Your first trip you want a beach front hotel, the atmosphere, the ambiance—you want the full Hawaii experience. When you come more often, you still want the experience, but you look for more value and instead of spending $250-$300 a night for a beachfront you can stay longer offbeach for $70-$80 a night. Chuck Shishido, OHANA Hotels VP of Operations With seasonality similar to that of the full service Outrigger Hotels, OHANA Hotels typically achieved an ADR around $66 and approximate occupancy levels of 75% over the year. A number of small regional chains (such as Marc Resorts and Castle Resorts) and many off-beach independent hotels existed in the Waikiki market. Pricing for off-beach properties was much harder to manage because of the commodity nature of the hotels not enjoying a premium location. OHANA was the largest operator in Waikiki and the largest Hawaii-owned operator. Table 3. OHANA’s Portfolio and Sample Competitors Location Properties Rooms Lowest Rate * OHANA Waikiki 13 4564 $76 Marc Resorts Waikiki 4 314 $74 Castle Resorts Waikiki 6 N/A $75 * Rates for comparable rooms as they appear on the company website, December 2004, for January stays CONDOMINIUMS CUSTOMERS Two types of customers typically stayed at the condominiums. On the low end of the $90,000 to $160,000 income bracket were families visiting during school breaks, looking to control expenses, and control their vacation experience. They valued the full kitchen – a standard in every unit – and the two bedrooms and two baths. This assessment was substantiated by the fact that condos had four times as many reservations coming direct from the Internet and tended to recover faster after a soft economy. On the upper end were ‘newlyweds’ and ‘nearly dead’ couples who liked the privacy and space afforded by a condo. Because of the need to convince individual owners to join the pool of Outrigger managed units, the firm competed with small local management companies and individual owners’ beliefs that they could do a better job alone. This idiosyncrasy of condominium operations amounted to dealing with two customers—the unit owners and the guests. The guests were unaware of the workings of condo operations and looked for the same level of service they would receive at a resort. On average, a condominium with mostly two bedroom units would achieve an ADR around $175, while properties with mostly studio and one bedroom units would go for around $140. Outrigger Hotel and Resorts: A Case Study by G. Piccoli Communications of the Association for Information Systems (Volume 15, 2005)102-118 109 MARKETING AND DISTRIBUTION Outrigger operated a Central Reservation Office (CRO) in Denver, Colorado with anywhere from 40 to 70 reservationists (FTEs), mainly depending on the volume of business. A corporate marketing staff of 12 people, allocated about 6% of revenue, was responsible for managing the brand and for going to market. An additional 2% of revenue was used to fund reservation and other distribution costs. Reservations were centralized for all properties in Hawaii; beyond Hawaii reservations were only taken at each property. Outrigger’s executives believed that distribution was a cornerstone of the company’s success, with about 50% of the business coming from wholesalers. Consumer direct (via voice or the Web), travel agents, government and military, and corporate clients made up the rest. For international properties, the source of business percentage from wholesalers was close to 80% and almost all reservations were faxed to the property. V. OUTRIGGER’S ORGANIZATION Outrigger Hotels and Resorts was a management company wholly owned by a holding corporation called Outrigger Enterprises. Reflecting its real estate development roots, Outrigger Enterprises also owned a real estate ownership company called Outrigger Properties. Figure 4 shows the Outrigger organization. Figure 4. Organization Chart Outrigger Hotel and Resorts: A Case Study by G. Piccoli 110 Communications of the Association for Information Systems (Volume 15, 2005) 102-118 Outrigger Properties wrote and managed real estate contracts with third party owners and supervised the owned assets (accounting for about a third of all properties in the Outrigger portfolio), as well as the development, acquisition, and sale of properties. Outrigger Hotels and Resorts, the operating arm of Outrigger Enterprises, was responsible for the writing of new management contracts, and for overseeing property renovations and operations of the managed hotels, resorts, and condos. Outrigger Properties generally negotiated a base rent and a 3 percentage of revenue with tenants; revenues from leased space were assigned to the hosting property’s own PL. Room revenue made up the bulk of each property’s revenue. Income from leased space ranged from as low as 5% in hotels with little retail space to as high as 20% in some of the most appealing locations. Other more marginal revenue was derived from parking, in-room entertainment, telecommunications, and kids’ clubs operations. Outrigger Hotels and Resorts historically maintained a highly centralized organizational structure. As the firm grew in size and geographical distribution a more distributed structure emerged, but, reflecting its roots, Outrigger Hotels and Resorts remained consolidated where possible. We have centralized services – accounting, IT, finance, engineering, purchasing, special projects – that support all the properties on Oahu, as well as indirectly the neighboring islands. There is also one executive housekeeper in charge of all properties. We run the OHANA Hotels like a 4,200 room distributed hotel. It is very efficient. Chuck Shishido As the firm expanded internationally it became more decentralized, with resorts in the Pacific Rim working much more like independent operations and organized like traditional resorts. Recognizing the significant advantages offered by its centralized structure, Outrigger was looking at the possibility of integrating its international resorts better. However, distance presented new challenges: We need a reservation solution for Australia, a real-time coordination with a central reservation service. They are operated as individual hotels; the central 800 number today is just switched to the correct hotel. A centralized system would offer tremendous value because we get drive-in business and substantial potential cross-property traffic. Executive VP and COO Perry Sorenseon, VI. OUTRIGGER IT INFRASTRUCTURE Joe Durocher, the CIO of Outrigger Enterprises, was hired by David Carey in 1986. Mr. Roy Kelly was a hands-on manager. He once told me he hated two things: computers and vice presidents. As the VP of IT, I had two strikes against me. Yet, in 1986 I was brought in to overhaul Outrigger’s IT infrastructure and we built Stellex—our integrated CRS/PMS. At the time all our properties were in Waikiki, within one square mile of each other. Joe Durocher In this type of agreement the landlord receives a fixed payment plus a percentage of the total sales made by the tenant business (e. g. , restaurant, shop). 4 The CRS, Central Reservation System, is the computer system used by a hotel chain to support call center operations and, generally, its web site. The CRS holds chain-wide inventory and allows reservationists to sell room inventory at all the hotels affiliated with the chain. The PMS, Property Management System, is the â€Å"brain† of hotel operations. It is the computer system that is used to manage the inventory of hotel rooms at an individual property. 3 Outrigger Hotel and Resorts: A Case Study by G. Piccoli Communications of the Association for Information Systems (Volume 15, 2005)102-118 111 Figure 5. Timeline of Major Infrastructure Developments at Outrigger OUTRIGGER’S SOFTWARE Stellex, to which Durocher refers, was introduced in 1987 as a COBOL application that guaranteed complete redundancy and 24 x 365 uptime. These two properties are particularly important in the hotel business, which depends on being able to make reservations at any time during the day and wants to make sure that its computer system is always operational. For the technically minded, the application ran on a Tandem NonStop platform and a proprietary Enscribe database management system. 5 In 1992, Outrigger introduced its first major update to Stellex, Stellex 2. 0, which ran on a Sun Microsystems UNIX platform and provided revenue management functionality and reservation center support. Because of its unique need for substantial wholesale interaction, Outrigger engaged Opus, a software company specializing on revenue management systems,6 to build their revenue management module for Stellex 2. 0. Outrigger retained control of Opus’ source code7 and over the years made substantial enhancements, mainly to manage wholesale relationships. Outrigger implemented JD Edwards ERP as the cornerstone of its back-office operations in 1990, years before the ERP craze swept the business world. JD Edwards ran on an IBM AS 400—widely considered to be a mature and stable platform. The firm felt that its centralized IT infrastructure was a source of competitive advantage. Durocher discussed the trade-offs associated with centralized IT: Decentralizing IT would decrease our capabilities while increasing overall costs. But centralized IT creates friction at times. When a hotel is sold for example, the IT allocation may increase for other properties. 8 Joe Durocher Stellex provided the anchor to which all other operational systems connected, including telephone switches, call accounting, and in-room entertainment. All of the properties in the Hawaiian Islands had access to Outrigger’s centralized IT systems, served from the Honolulu-based data center, through the firm’s proprietary Wide Area Network. Stellex, for example, was accessed using an ASP model by all the properties in the Hawaiian Islands, the firm’s Denver-based Central Reservation Office, and the Portland, Oregon-based Web servers, thereby greatly simplifying the achievement of single image inventory, disaster recovery, and overall IT management. This configuration enabled the properties to operate with PCs (as few as 12 in a 5 Tandem Computer Systems was bought up by Compaq in 1997. Compaq, in turn was purchased by HP. Enscribe is still in business in December 2004. 6 Opus was subsequently bought by Micros-Fidelio, the dominant hospitality-focused software company. 7 ‘Source code’ refers to the original, human readable computer program. By owning it, Outrigger could change it as they saw fit. Note that Microsoft, for example, guards its source code jealously so that others can’t change Microsoft’s programs. 8 In many companies, such as Outrigger, IT costs are allocated to users, such as hotels, on an annual basis. IT cost is relatively fixed and not affected much by the number of units it supports. If a property is sold, the fixed cost allocated to all other properties must therefore go up. Outrigger Hotel and Resorts: A Case Study by G. Piccoli 112 Communications of the Association for Information Systems (Volume 15, 2005) 102-118 Figure 6. Outriggers IT Infrastructure typical 500-room property) and networking equipment. The Point of Sales (POS) systems9 were not centralized, since Outrigger leased retail and restaurant space. This state of affairs generated some friction at times: The POS is the computer software used to support retail and restaurant operations. It enables operators to keep track of sales and accurately bill customers. Outrigger Hotel and Resorts: A Case Study by G. Piccoli Communications of the Association for Information Systems (Volume 15, 2005)102-118 113 We offer to interface their POSs to Stellex and pay for interfaces to automate room charges. But many of those POS ar e old and can’t interface, they must be upgraded first. Restaurants have to write a manual charge voucher and walk it to the front desk for input. It’s not a popular or efficient way to do it. VP of Property Technology, Allen White Due to the need for local support, the high telecommunication costs to and from Hawaii, and the unacceptable reliability of international networks, Outrigger did not extend this centralized model to its operations in Australia and the Pacific. The properties in Australia and New Zealand, all condominiums, used a highly specialized PMS particularly well suited for their condominium properties and their unique tax code requirements. None of the properties in Hawaii has a server on property. In the outer regions we have standalone PMS’s and on-property reservations. We don’t even try to keep Stellex in sync, they just open and close. If a date is getting full, they issue a stop-sell. Reservations that are taken centrally are automatically emailed. Joe Durocher APPLICATION DEVELOPMENT Beyond maintaining and upgrading Stellex, Outrigger’s IT professionals engaged in minimal application development—mainly writing customized reports, and configuring and interfacing offthe-shelf applications. The use of outsourcing was limited to the Web site, developed and hosted by a third party in Portland, Oregon. Yet, in order to maintain the integration of direct channels, Stellex served as the booking engine behind Outrigger’s Web site. A key initiative for Outrigger was the development of electronic interfaces with wholesalers. These interfaces were customdeveloped by the firm’s IT group using XML. 10 With many wholesalers we have real-time electronic interfaces—they can check availability and we get their reservations instantaneously. Without the interface, if they create a reservation six or three months out, we don’t see it until reporting time, ten days out, when we receive a fax and manually input it. It is virtually impossible to revenue manage like that. Many big brands have great revenue management systems, but don’t have real-time wholesaler data. Moreover, we can write wholesale contracts brand-wide. Joe Durocher Outrigger felt that its electronic interfaces afforded it a competitive advantage and preferential treatment from interface-enabled wholesalers, a relationship that proved particularly important during slow periods or a soft economy. Electronic interfaces generated substantial efficiencies, including automatic billing and invoicing without human handling, lowering estimated costs for these functions to $0. 75 from an estimated $10 for manually handled ones. But not all wholesalers were able or interested in automating reservation processing. This lack of interest was particularly true for small operations or those for whom Hawaii and the Pacific represented a small percentage of business. The industry is a mess from a connectivity standpoint. We are fortunate that we have the in-house expertise and the recognition from senior management of how important this is. Even the big companies often don’t understand the conditions for success. The dirty little secret of the travel industry is that the fax machine still rules. Rob Solomon 10 XML stands for eXtensible Markup Language. It is a language used to create a protocol enabling computer applications of partnering firms to exchange information easily. Outrigger Hotel and Resorts: A Case Study by G. Piccoli 114 Communications of the Association for Information Systems (Volume 15, 2005) 102-118 I spend 30-40 hours a week working with wholesalers on interfaces. There are many legacy systems out there; the fax is state of the art. We have made great progress with the more advance wholesalers or those that upgraded recently. Alan White Outrigger found the Open Travel Alliance (OTA) XML standards, specifying common message format and common content, of great help. But being able to pick the right partner, and avoid costly failures, remained the major challenge. While Outrigger felt it had been successful to date, with an estimated 33% of total reservations received electronically through the various channels, it still handled more than half a million faxes a year—about eight hundred a day from its largest wholesaler alone before that wholesaler migrated to the electronic interface. The firm felt that it had been able to capitalize on the use of technology to increase distribution efficiencies in the face of ever rising labor costs. Conversion rates at the Central Reservation Office improved from 20% to 45%-50% with widespread consumer adoption of the Internet. The firm estimated that as much as 60% of callers had already researched the Outrigger website and made a purchase decision but, as Solomon put it, â€Å"had one more question. † In an effort to provide support right on the website, the firm introduced live chat functionalities and offered email confirmation for significant savings in labor and postage costs. DATA MANAGEMENT In 2001, Outrigger acquired business intelligence software, a data mart, and analytical tools from 11 E. piphany running on a Windows 2000 platform. The data mart held detailed data for three years, enabling analysis down to the individual guest folio. Data were consolidated afterwards, enabling only aggregate analyses. While E. piphany was a recent purchase, Outrigger had been disciplined in collecting data for some time. We had 10 years of high quality data from Stellex; we are very rigid about data capture standardization like room category, naming conventions, request codes, [and] what goes where. For example, postal and country codes are mandatory fields. Our employees’ long tenure helps, and peer pressure is a great asset— nobody wants to be the one that ruins the value of these reports for all. Alan White The data collected by Stellex, including source of business, stay information, and consumption, were extracted every night by load programs that scrubbed (i. e. , cleaned) them, and transferred them to the JD Edwards ERP system for accounting and to the E. piphany system for analysis. Feeding historical data and forward looking availability and reservation activity, Outrigger learned to harness the analytical power of E. piphany to do forecasts and generate business intelligence both at the source of business and at guest levels. We want the marketing data. It is stupid to have a treasure trove like that and not use it. We mine it. We send thank you letters to recurring guests, we can give you history on who visited, how they got here, what in-flight magazine we should hit. We sold a resort once and they figured they would have to hire 3 people to achieve manually what our reports gave them automatically. They even set their rates based on E. piphany forecasts. Alan White The IT group served as custodian of the data, but any user with security clearance had access to E. piphany data though a web interface; the data was used for marketing and operational analysis (e. g. , analysis of call patterns to evaluate the appeal of Voice over IP solutions). Incorporating the information into daily operations was more challenging. Definitions of technical terms such as Business Intelligence, Data Mart, Data Mining, and many others used throughout this case study can be found free of charge at http://www. whatis. com. 11 Outrigger Hotel and Resorts: A Case Study by G. Piccoli Communications of the Association for Information Systems (Volume 15, 2005)102-118 115 Outrigger found it hard to justify a frequent guest program—with an average repurchase cycle for returning guests of three years, a once a year purchase was considered very high in Hawaii resort operations. Speaking about recognition programs, Individual properties have their own customer database and a strong informal recognition system. We haven’t been able to justify the investment technologically to do it brand wide. It would be a natural extension of the recognition we give our return guests, but it must be cost-effective. Perry Sorenson If a guest did not tell us he is returning when making the reservation, our current system does not have a database with guest history. Many times we recognize our frequent return guests only at the door, or during check in at the front desk. We have special programs (e. g. , for honeymooners, wedding anniversaries), but we need to know their history to appropriately acknowledge these returning guests. VP of Operations for Outrigger’s Waikiki Beachfront Hotels Kimberly Agas, a 20 year veteran with the company, IT STAFFING AND ORGANIZATION Outrigger’s IT staff consisted of 26 full time employees. Of these, 4 data entry operators and 3 developers were housed in a separate limited liability company to help Outrigger take advantage of tax incentives offered by the state of Hawaii.

Renegotiating Contractual Terms under PPPs

Renegotiating Contractual Terms under PPPs Renegotiating contractual terms under PPPs- Moral Hazard or Practical Solution? Table of Contents (Jump to) Executive Summary 1. Introduction 1.1 Evolution of PPP model in India 2. PPP mechanism in India 3. Current status of PPPs in India 4. PPP model and schemes 5. Why closed approach to contract renegotiation? 5.1 Risk Involved in PPP 5.2 Case Study of Delhi Metro Express Line 6. Moral hazard or Practical solution? Executive Summary The development of the India depends on the extent to which the ongoing and planned projects are successgully executed. In twelfth five year plan 2012-1017 a total of $1 trillion is envisaged to be expensed on infrastrucural development and out of which around 50% will be catered by private sectors. The basic principle of partnering with public entity is profit maximization. Any disputes can adversely effect the project. This delay comes with a cost and loss of revenue for private partners. Thus, the effectiveness of partnership lies in the Dispute Resolution System (DRS) of the country. The practical solutions such as amicable settlement, mediation concilliation, arbitration and expert adjudication by statutory bodies are some of the measure to settle disputes. Other solutions can be mutual concessions and adjustments which can merge the differences between a concessionaire and the contract-granting government entity. Re-negotiation in a transparent and equitable manner can be the key adjustment solution for dispute resolution. This dissertation delves in the fundamentals of public-private partnership (PPP) model in India. It reflects on evolution, mechanism, current status, models and schemes, renegotiation factors. It concludes by giving recommendation on residing to practical solution of renegotiation rather than considering it a moral hazard. 1. Introduction A public-private partnership (PPP) is a joint agreement between government and private sector for the purpose of provisioning of public service or infrastructure. In order to develop a world class infrastructure for huge Indian geography and economy, mammoth investment is needed which posed liabilities to government sector. The partnership with private sector to develop public infrastructure is a possible solution to cater infrastructure bottlenecks. It shares knowledge risk and resources for development. Lack of adequate and improved infrastructure from public transport, housing, ports, education, and healthcare may turn out to be an impediment to growth. The rapid increase of population need and demand creates budgetary constraints in building large projects. Involvement of PPPs into the development framework is a more effective, disciplined, efficient and commercial way of approach. 1.1 Evolution of PPP model in India The evolution of PPP model in India dates back to mid-18th century where railway and tramway services were built on this model. There wasn’t much development in infrastructural development post-independence until the year of liberalization in 1991. Later which the government and private players jointly built large projects. The overall concept and implementation is still nascent in India when compared to developed nations. The policy framework of legal, institutional and regulatory are in evolutionary stage. Today, it is the favored model of project execution involving resource management by private sector. India Infrastructure Finance Company Limited (IIFCL), a government owned body incorporated by Ministry of Finance to provide long term debt finance to infrastructure projects and help central and state government in capacity building. Public Private Partnership Appraisal Committee (PPPAC) approves project proposal worth Rs. 100 crore or more. The World Bank, Asian Development Bank, IMF and the United States Agency for International Development (USAID) aims to promote aggressive PPP policy in India and help in attaining long term vision of development. 2. PPP mechanism in India The Department of Economic Affairs, Ministry of Finance manages the PPP mechanism in India. The process starts from Phase-1 of project identification where various projects are identified through strategic planning and pre-feasibility analysis. A detailed sustainability of the project as PPP is studied and evaluated against alternatives. Other parameters such as value for money, internal clearances and suitability checks are carried out. Value of Money analysis helps in decision making and choosing between PPP procurement and conventional procurement options. It gauges project on the three basis of: Viability- Will the project meet desired expectations? Desirability- Will the project outweigh costs? Achievability- Will the project be completed within stipulated timeframe? The ultimate goal is to maximize the profit of all stakeholders involved which can done by identifying risks and understanding mitigate measures. The partnering party must commit to adhere to the contract legislation and abide by them throughout project lifetime. Phase-2 of full feasibility ensures the commitment of contracting parties. It starts from PPP project development, structuring, contract making, getting project clearances and necessary approvals. The implementing agencies undergoes: Economic assessment- understanding project need, cost-benefit for all stakeholders and impact of micro and macro-economy. Financial analysis- revenue source model, cash flows, net present value (NPV) using discount rate (cost of capital), rate of return and other critical financial ratios. Affordability analysis- land acquisitions, environment and regulatory clearances, rehabilitation resettlement policies, tariffs and user charges etc. A qualitative assessment of value for money is performed to know the systematic risk of project. This risk must be optimally allocated between implementing parties rather than unequally transferring to private party. Phase-3 is related to project procurement and award. In order to imbibe public confidence, these procurements must be unbiased, competitive and non-discriminatory. It must be allocated timely and encourage maximum participation from several parties involving in competitive bidding. All applications must follow PPP rules and procedures as framed by Government. Request for qualifications (RFQ) and Request for proposals (RFP) have to be submitted by parties after expression of interest (EOI). Technical and financial proposals must also be submitted in case of large and complex projects. A prescribed bidding procedure and model documents should be followed by implementing agencies after getting approvals from competent authorities such Cabinet Committee on Economic Affairs (CCEA) or Public Private Partnership Appraisal Committee (PPPAC). E-tendering and online auction are also conducted to invite participation from large number of agencies. The contract draft containing legal rules, regu lations and standards are provided to prospective parties before bidding. Arrangements are made for speedy implementation of project. Phase-4 of contract management and monitoring is done after project allocation. It actively supervises project as per contract throughout the project life cycle. It is a phase where majority of dispute occurs and is most crucial due to changing business and economic scenarios. A credible and efficient dispute resolution mechanism is set up to deal with any differences. It must be in accordance to contract that has been made during bidding process. Project monitoring Committees are formed to assist parties and resolve issues among implementing agencies. 3. Current status of PPPs in India The sector wise distribution of PPP projects shows that 53% out of 758 projects are in road projects having worth of 46% by total value (Figure) mainly because of small size of projects. Urban development project accounts for 20% of total number of projects. Ports having larger project size accounts for only 8% of total number but 21% by total value. The expansion plans of highways, inadequate berth at Ports, inadequate capacity at airports, saturated routes with low payload to tare ratio in railways and energy shortages are some of the factors that drives the need of infrastructural development in India. The total cost of all the project is INR 3,833 billion. Some states have taken this model to far more extent than others. Karnataka, Andhra Pradesh, Madhya Pradesh, Maharashtra and Gujarat with 104, 96, 86, 78 and 63 projects are top five states following PPP based development. It can also be seen that states and municipalities have much larger role to play in boosting private investments in healthcare, e-governance and education sectors which seems to be untapped across India. National Highways Authority of India holds maximum of 155 projects and fall under Build-Operate-Transfer (BOT) or Build-Own-Operate-Transfer (BOOT) type of PPP. Government policies in favor of alluring private participation as well as innovation in implementation has rewarded success. Most of the contracts are awarded by domestic or international competitive bidding while remaining are awarded by negotiated MoUs. The valuation graph shows that almost 78% of total project worth 500 or more. 4. PPP model and schemes PPP model was formulated in order to improve public sector infrastructure and services. It includes whole spectrum of partnership between private and public agencies through contract making and revenue sharing. This arrangement includes significant risk due to imbalance in project finance and future uncertainties. Precautions are taken to keep the process flexible and discernible during contract formulation through various models and schemes which are summarized in figure xx. 5. Why closed approach to contract renegotiation? A big question is that why India does not have a defined and established legal and regulatory dispensation to address the issues relating to renegotiation and life-cycle management of PPP infrastructure assets? The struggle for reset of imported coal based projects for Adani Power and Tata Power, the GMR and GVK break up from mega-highway projects, The Gurgaon Expressway case, Delhi Metro Rail Express Line case of arbitration and private telecom operator case for fighting against government bodies poses a very clear demand for policy change. An independent, impartial and credible body should be set up in line with others created in emerging economies such as Infrastructure Concessions Regulatory Commission in Nigeria, the PPP Advisory Unit in Ghana, the PPP Centre in Philippines and the PPP Unit in South Africa. This empowered body should dispense judgment related to disputes in contract renegotiations. An overview of more than 1,000 PPP concessions studied by the World Bank Institut e in Latin America and Caribbean from 1985-2000 throw up these characteristics of PPP renegotiation: Some expert believes that perception among investors that PPP model will never face contract renegotiation related problems is a root cause of dispute. How can a large project having life of more than 20-30 years be expected to be never renegotiated? Several international case studies shows that it is rare to see project without renegotiations. In fact, in changing times, no human ingenuity can predict zero problems over a life cycle of PPP project. 5.1 Risk Involved in PPP Figure below shows some of the risks associated with public and private partnership that can result in conflict. 5.2 Case Study of Delhi Metro Express Line The Reliance Infrastructure and Delhi Metro Rail Corporation (DMRC) partnered subsidiary DAMEPL was the country’s first PPP project in railways. The airport express line project was commissioned in February, 2011. The dispute in this project was not a surprise as it was into controversy from day one on safety clearances and technical glitches. The tussle between parties was on payment of delay penalty. After commissioning of the project, the issue became severe and resulted in operational closure of service for six months. It settled only after payment of fees by Reliance infra who later claimed along with its lost reputation as penalty. Analysis: The fiasco that resulted in withdrawal of Reliance Infrastructure from airport express line of Delhi metro questioned the policy of PPP in India. The major factor for dispute of Express Line PPP was wrong projections of daily passenger traffic by DAMEPL. The actual passenger never exceeded 20,000 per day which was against the expected 40,000 per day. This skewed the financial liabilities towards the Reliance Infrastructure. Some critics suggests the private party to meet the commitment of concession agreement without asking for contract renegotiation. The penalty of Rs. 795 crore slapped by the private partner set the stage for a long drawn legal battle between the two agencies. Had the terms of contract been renegotiated, and financial implications been revisited, the dispute would have never been raised. A practical solution of dispute resolution by an independent government body could have rescued the parties entering into dispute and later penalty payments.