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The precursor of Sofitel Legend Metropole Hanoi was Grand Métropole Hotel established in
1901 by two French investors. It is considered one of the most luxurious and famous hotels in
Hanoi. Moreover, with ancient French architecture, prime location, and long history, Metropole
Hanoi has contributed significantly to the prosperity and ancient beauty of the capital.
During the process of development, Metropole Hanoi always encountered many competitors in
the hotel industry. According to Aroche (2015), while the luxury hotel industry is competitive,
players are rising to meet rapidly changing market demands. Therefore, Metropole needs to
constantly innovate and have suitable business strategies to survive and thrive in this
increasingly competitive environment with the explosion of hundreds of hotels across the
country, typically JW Marriott Hotel Hanoi and Hilton Hanoi Opera.
In this study, I would like to clarify the legal status and sector, the vision, mission, objectives of
of Sofitel Legend Metropole Hanoi and its two above competitors. Then I will use the Balanced
Scorecard to assess the priorities and results of the hotel.
MAJOR FINDINGS
I. OVERVIEW
1. Background, products and services
1.1. Sofitel Legend Metropole Hanoi
Sofitel Legend Metropole Hanoi was first opened at the turn of the 20th century with
stunning French colonial style by two private French investors. Belonging to the world’s leading
hotel management Accor Group, Metropole has now become a five-star hotel of international
stature that attracts a host of elite tourists (aristocracy) as well as the choice of many heads of
state, famous people around the world when having the opportunity to set foot in Hanoi.
Besides, it located in Hoan Kiem district which is Hanoi’s Central Business District, near
government departments, government agencies and famous places. Metropole Hanoi has the
main function of business and provides accommodation, food and drink services and additional
services such as laundry services, transportation, massage, and seminar organization
(Metropole, 2021).
2.1. Vision
Sofitel Legend Metropole Hanoi’s vision is to be the most creative, high-performing, and
well-valued hotel business in the world (Accor, 2021).
On the other side, JW Marriott Hotel Hanoi creates the vision to be the World’s Favorite
Travel Company for the masses throughout the world. It was this vision in addition to the work
ethic and company culture that made it possible to achieve the success the company has
(Marriott, 2021).
The vision of Hilton Hanoi Opera Hotel is to be the luxury hotel of choice for discerning
travelers, building a world that embraces uniqueness in every way (Hilton, 2021).
2.2. Mission
The mission of Sofitel Legend Metropole Hanoi is “to make the impossible possible to
realize your dreams” (Accor, 2021).
JW Marriott Hotel Hanoi’s mission is to enrich the lives of its guests by developing and
facilitating unrivaled vacation and leisure experiences (Marriott, 2021).
Hilton Hanoi Opera Hotel’s mission is to be the most hospitable company in the world
(Hilton, 2020).
2.3. Goals
Metropole aims to support and empower the communities in which they live and protect
the planet that gives them so much every day. Therefore, they have set the goal of creating
sustainable value both locally and globally. In particular, the organization intends to launch the
Our Planet 21 – Acting Here initiative to promote "positive hospitality" by ensuring that their
clients receive high-quality goods and services that are both environmentally and socially
responsible. Its aim is to give guests a more responsible hotel experience and to inspire them to
participate in hotel activities (Accor, 2021).
Marriott’s goal is to find innovative ways to implement the most effective methods for
long-term hotel operations around the world. The business has spent a significant amount of
time and money designing its next-generation sustainability and social impact priorities,
involving internal and external stakeholders and collaborators in a rigorous process to identify a
new plan that builds on previous successes while also embracing new challenges (Marriott,
2021).
Hilton launched bold Travel with Purpose 2030 Goals to redefine sustainable travel. By
2030, they are committed to doubling their investment in social impact and cutting their
environmental footprint in half through responsible hospitality across their value chain (Hilton,
2018).
2.4. Objectives
Accor Group strategy aims to meet several key objectives (Accor, 2021):
Hilton Hanoi Opera sets the objectives to double their investment in programs that
contribute to sustainable solutions and economic opportunity for all. In terms of environmental
impact, the hotel targets to reduce water use and waste output in their managed operations by
50% (Hilton, 2021).
Customer Passion
Trust
Respect
Long-Term Results
Spirit of Conquest
Innovation
The core values of JW Marriott Hotel Hanoi is contained in 5 sentences (Marriott, 2021):
Putting people first
Pursuing excellence
Embracing change
Acting with Intergrity
Serving the World
Hilton Hanoi Opera's core values are expressed in 6 things (Hilton, 2021):
Hospitality
Integrity
Leadership
Teamwork
Ownership
Now
2. Legal structures
The legal structure of a company determines what activities it may engage in based on
its needs and goals such as raising capital, sharing profit, and so on. There are four main forms
of business structures including sole proprietorship, partnership, limited liability company, and
corporation (University of Minnesota, 2011). According to the Law on Enterprises (2014), a
limited liability company (LLC) is a type of enterprise with no more than 50 members
contributing capital for establishment. Moreover, the limited company is not allowed to issue
shares to the public to raise capital.
All three hotels including Metropole, Marriott and Hilton provides services regarding
accommodation or food for the guests and gains profit from them. Therefore, all of these hotels
are for-profit businesses.
4. Stakeholders
Government:
In the current Covid-19 epidemic, the government is considered one of the most
important stakeholders in all sectors. Due to the detrimental effects of Covid 19, the government
has issued a notice to minimize flights bringing people into Vietnam. As mentioned in the above
section, five-star hotels' main target market is the elite that includes foreign tourists.
Consequently, minimizing entry into Vietnam seriously reduced the total revenue as well as
profits of every enterprise in the hospitality industry, especially in luxury hotels. Therefore, it is
clear that the government holds high power that can significantly influence these hotels’
business results.
Shareholders:
Shareholders are the most important player in the stakeholder analysis of these three
hotels. In general, shareholders are concerned with profit and the amount of money they will
make from the company's operations. In Metropole, Shareholders and company owners are two
distinct entities. Accor Group has a high interest to satisfy the shareholders as well as take
care of the customers about the process and innovation. Meanwhile, the owners care more
about financial problems, especially profit. However, the hotel's direct income provides the
majority of the earnings to shareholders. According to Accor's annual report (2020), profits
come mostly from the management of other hotels, accounting for up to 60% of total revenue.
This means that they have high power.
Next, the only shareholder of Marriott and Hilton also happens to be the hotels’ owners.
Aside from being responsible in terms of finance, the owners need to control the company
management. For this reason, the owners have quite much interest and power in the
businesses. However, Metropole’s shareholders have less power than those of Marriott and
Hilton because 100% shares Marriott and Hilton belong to their only owners while Metropole’s
shares are separated 50% for each party (Hanoitourist Corporation and Singapore Indotel Ltd).
Customers:
All of these three hotels have expensive room rates. As a result, hotels' target customers
are all high-income individuals, and the revenues they will generate for the company are
substantial. However, due to social distancing during the Covid-19 pandemic, these five-star
hotels have suffered a damage when the demand for bookings from domestic guests as well as
the number of foreign tourists has decreased significantly. This leads to a great decrease in the
revenue and profit of these three hotels compared to previous years. Therefore, customers are
the factor holding high power position. In addition, because of the room price difference,
Metropole is the hotel which gains more interest of customers than the 2 remaining ones.
III. SIZE AND SCOPE
At present, Vietnam has no legal basis to determine how a large organization is.
According to Decree 39/2018/ND-CP, however, a medium company has a number of workers
less than 100 and the annual revenue less than 300 billion VND or the total capital less than
100 billion VND.
Metropole's main customers are the elite such as business customers, international
tourists and government officials... In addition to the main service of accommodation, Metropole
Hanoi promotes profits by combining with catering services to meet the needs of customers. In
addition, the hotel has well grasped the needs of the market when it put functional rooms into
operation for conferences and events, which has brought great success. Metropole Hanoi also
provides other services such as airport shuttle service, bar, spa, and so on. The hotel attaches
great importance to Internet distribution because it is less expensive and effective. In addition,
the hotel website has integrated online booking and payment, easy, fast and convenient
procedure for customers when using hotel accommodation services.
2. JW Marriott Hanoi
In case of JW Marriott Hanoi, the hotel is in the group of 5-star hotels with the largest
scale in Hanoi with an investment of up to 250 million USD from Bitexco Group (Zing News,
2019). According to an internship report at Marriott Hanoi, as of 2016, the hotel owns 540
employees with the total revenue of 480 billion VND (Pham, 2019). Hence, Marriott Hanoi is
also a large business.
As a five-star hotel, Marriott provides a host of services such as accomodation, food and
beverage, conference or wedding organization, and even modern gym and swimming pool
system.
About the business scope, Hilton has basic services at the hotel such as 24/24 customer
support, luggage storage counter, car rental service, 24/24 room service, laundry services,
currency exchange, babysitting services, airport transfers, and so on.
The way or process by which organizational tasks are separated, structured, and
coordinated is referred to as organizational structure (Greenberg, 2011). Organizations
developed mechanisms to organize work factors' activities and monitor members’ actions.
(Ahmady et al., 2016). The organization theorists consider mostly some types of structures as
follows: Hierarchical Structure, Matrix Structure, Horizontal/Flat Structure, Functional
Structure…
Under the management of the Accor Group, Metropole Hanoi's organizational structure
was formed according to the inherent model and standards decided by the group. According to
the above chart, standing the highest position in Metropole is the general manager named
William Haandrikman, followed by the directors. Under the director are the managers of each of
the small branches in the departments. It can be seen that the Metropole Hotel's organizational
structure separates into many layers of management and has a long chain of command from
the general manager through to the employees working under each manager at the bottom of
the hotel. As a result, Metropole is classified as a hierarchical structure. Moreover, Metropole is
divided into each department with different functions including Talent & Culture, Quality & Guest
Experience, Finance & Legal Admin, Sales & Marketing, Revenue, Engineering, F&B, and the
Acting Executive Chef. Each functional department is led by a manager and employees are
grouped according to their roles. This is a perfect match for the definition of functional structure.
Based on the theory of Usmani (2020), in a functional structure, businesses are divided into
smaller groups or teams according to their positions and expertise. Therefore, it can be
concluded that Metropole Hanoi uses hierarchical structure and functional structure to
control the enterprise.
With this organizational model, Metropole Hanoi can promote the advantages of
specialization because functional departments focus on jobs of similar nature, promote
economies of scale, and reduce overlap in operations, and simplify training (Awa, 2016). Due to
the bad effects of Covid 19, 5-star hotels such as Metropole would reduce operating costs by
easily cutting unnecessary employees thanks to each individual's specific function and
obligation. However, when it comes to setting priorities and modes of operation, the framework
may often lead to disagreements between functional units (Maciejczyk, 2016).
2. Balanced Scorecard
BSC is a management system that helps businesses set, implement, monitor and
measure to achieve their strategies and goals. After businesses establish and develop
strategies, businesses will deploy, implement and monitor the strategy through four aspects:
finance, customers, internal operations, learning & development (Kaplan & Norton, 1992).
Vision: To be the most creative, high-performing, and well-valued hotel business in the world.
Financial - Increase revenue - Total revenue - Back to break- - Cut off unnecessary
even point after 3- or less common
- Cut operating costs - Total expense
4 years products/services
during Covid-19
- Reduce 3% each - Make the most of
year machines instead of
employees
Attract both tourists - Customer - 90% this year - Discount hotel rooms
and local people to satisfaction rate
- Focus on domestic
stay in Metropole
during the pandemic - % market - Account for 2% tourism development
share index of Vietnam’s hotel
Customers
industry
First of all, the general manager is the person who holds the position and highest
management authority on financial matters, operating and supervising the entire operation of
the hotel. Based on the scale and grade of the business method, the target audience, and the
task plan, he needs to actively organize the arrangement of the main production and business
divisions to ensure compact, light, reasonable, serve customers with efficient and economical
quality by coordinating with relevant departments.
One of the goals outlined in the balance score card is to develop knowledge and
necessary skills to serve at work for Metropole’s employees. The Talent & Culture department is
responsible for providing employees with appropriate training to help them have a deeper
insight into customer psychology or how to handle some special situations. At the same time,
this department also needs to control the progress, effectiveness and staff's comments on the
quality of the course.
The Internal Process step involves processes that convert technologies into real outputs
that a hotel can use to reach customers. In order to attract a large number of customers to dine
at the restaurant during Covid-19, Metropole needs to develop an attractive menu that can hit
customers' psychology, especially when the target customer is Vietnamese people. To achieve
that, the F&B team needs to work closely with the Quality & Guest Experience Department. The
Quality & Guest experience department examines food trends and customer favorites. The F&B
department will rely on that information to offer a menu suitable to tastes, thereby increasing the
number of customers coming to eat.
Next, to attract domestic customers to choose 5-star hotel services like Metropole Hanoi,
the first thing to do is reducing room rates and investing in marketing activities through social
networking sites. These activities need a combination of the Revenue Department and the
Sales & Marketing Department. The revenue department needs to consider costs and offer an
appropriate discount to avoid damaging the company. At the same time, the marketing
department will make a marketing plan to convey discount information to target customers.
In terms of the financial goal, in order to minimize the operating costs of the hotel during
the pandemic, the technical department needs to focus on developing, upgrading as well as
regularly warranting machinery or automatic technology equipment , from there, can improve
working productivity for the whole company. The finance department will set up, monitor and
synthesize the cost for maximizing machines, then evaluate the efficiency with monthly financial
reports.
CONCLUSION
Through the study, it can be seen that Metropole Hotel has completely followed the
Accor Group's procedures and standards on organizational structure as well as how to organize
business activities. Furthermore, Metropole Hotel has shown its international class, making a
difference with other 5-star hotels in Vietnam. Although the organizational size of the hotel is
very large, it is not in the study scope to fully describe how the organization operates at the
hotel. However, I hope that this will be a relative perspective which contributes to a very few
number of documents about Metropole Hanoi Hotel.
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