Joie de Vivre hospitality:Case Study andManagement AnalysisBy Arturo Cuenllas

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I learned about Joie de Vivre hotels and Chip Conley,its founder, when I first researched and wrote aboutWhole Foods. I was looking for new models ofmanagement and best practices outside ourhospitality industry, and found this inspiring HotelCompany. Maybe Joie de Vivre hospitality is bestknown in the U.S, but it is certainly not well knownenough in Europe and Asia. It is uncommon to findentrepreneurs like Chip Conley. In my career, I havenever worked, nor seen people with such vision,ideas and mind-set in management.

Our hospitality industry is mainly a mature sectorbecause of its management. We may see innovationin product development, or some technologyimprovements but we seldom see importantdevelopments in management. Few people, unlikeChip, will accept that, before profits, there are otherpriorities such as developing a strong companyculture with proper and solid values; empoweringemployees; enhance leadership; provide higher valueto customers; and reinforce the relationship betweensuppliers and the Community. In this case, changingthe order of the factors does change the product.

On the contrary, the prevailing idea is profitmaximization. Such idea has been planted in theunconscious business mind-set. As in the filmInception, by Christopher Nolan, this seed wasplanted in the businessman’s mind and changedeverything. The way we understand the profitobjective usually defines the way we will manage ourcompanies. This basic approach is based on theuncritically adopted view that a company must bemanaged in the interest of shareholders, maximizingshareholder value. The trouble with this vision is thatprofits maximization is normally a misleading anddangerous path. Fredmund Malik exposes the effectof such well-planted idea in the business realm, andthe inevitable and dangerous consequences of thisexclusive shareholder orientation. It´s the temptation,even the pressure on managers to do anything tomake the company look profitable, in particular whenit is not.

Malik tells us there is only one right solution: toprovide value to the customers.

What is inspiring in this Case Study is the simple logicfor good corporate management. This logic is basedon the idea that in hospitality serving customers betterthan competitors is key, and, as a consequence,providing them with higher value. In order to do this,Chip Conley knows that front-line employees must bethe cornerstones of the entire system. So teammembers must be put in the same priority leveltogether with customers, and both beforeshareholders. Then the rest follows as a virtuouscircle: suppliers, community, knowledge,differentiation, collaboration, organizational learning,innovation, shareholders value and finally,sustainable profits –even higher profits.

This virtuous circle however is little understood.Hoteliers and managers will surely recognize theimportance of this logic. But, immediately, thepowerful idea about profit maximization in the shortrun will turn the order of priorities around. The myth ofprofit maximization appeared with theWashingtonConsensus prescriptions and Milton Friedmaneconomic theories. This vision demands thatcompanies focus on maximizing their profits. Themajor task of management is to provide more value tothe company shareholders.

Inasmuch as other groups of interest, such as theemployees, were supposed to be the responsibility ofgovernments. John Mackey and Raj Sisodia in theirbook Conscious Capitalism remind us that theprinciple of profit maximization became codified intocorporate law as the de facto definition of fiduciaryresponsibility. Then, economists and eventuallybusiness scholars integrated these ideas into theirtextbooks, shaping the thinking of virtually everystudent who pursued higher education thereafter.However, with few exceptions, entrepreneurs who

Profits indeed are important and a majorobjective in management, the differencelies in how entrepreneurs such ChipConley, John Mackey and many otherschose their path to obtain profits. Profitsare the final outcome. Before that,management priorities should befocusing on how to provide better valueto customers’ and enhance employees’strengths, which, as a consequence, willlead to obtaining higher sustainableprofits.

start successful business do not do so in order tomaximize profits. Bill Gates did not start Microsoftwith the goal of becoming the richest man in theworld, nor did Ingvar Kamprad when he found IKEA.

Boutique hotels: concept and history.

Joie de Vivre is the second largest boutique companyin the EEUU, a peculiar collection of boutique hotelshis founder launched in his native California in 1987.

Chip Conley, 53, founded his company when heopened his first hotel, The Phoenix, at the age of 26.Joie De Vivre Hospitality is a San Francisco-basedcollection of 29 hotels mostly located in SanFrancisco and the West Coast. Merged with Thomsonhotels, with a total of 41 hotels, the two brands arereunited under the newly created parent company,Commune Hotels & Resorts. Chip Conley retained anequity stake in the new company and remainsinvolved as strategic advisor. Chip and his companyhave been constantly given awards: 2007-Mostinnovative Bay area CEO of the year by the SanFrancisco Business Times; in 2008 Chip was selectedas a final candidate for Hotelier of the World, byHotels Magazine. Joie de Vivre was awarded the 2ndBest Place to Work in the San Francisco Bay Area bythe San Francisco Business Times; NationalHumanitarian Hospitality Company of the Year…etc.

Boutique hotels were developed as a response of anuncovered guest´s desire, as Chip Conley noticed. Bythe early 1980s many travelers were getting tired ofthe same hotel standardized products offered by thechains. These hotel groups were basically focusingon demographics segments of the market such as,age, gender, race or income; i.e., how guest´s lookedfrom the outside. Then they categorized customersinto segments within these specific classifications. Incontrast, entrepreneurs such as Ian Schrager and BillKimpton started their boutique hotels as a disruptiveinnovation. They were the first who saw a potentialopportunity focusing on psychographics aspects suchas customer´s personality, values, and attitudes. They

were more concerned about those intangible aspectsof customers, that is, how guests see or aspire to seethemselves and their life styles. These Boutiquehotels were created on the premise that just meetingcustomer expectations wasn´t good enough for manyhotel guests.

There are different definitions of boutique hotels. Forexample, in Europe, boutique hotels are known to besmaller and well located in the city centres, luxurydistricts or exotic destinations. However, boutiquehotels in the U.S are not necessarily seen as smallerhotels in primary locations. Although no standarddefinition of boutique hotels has been adopted, andthe sizes of these types of hotels vary considerably,most boutique hotels do share some commonaspects based on the trendy atmosphere, décor andpersonalized serviced. In Europe, it is more commonto see a traditional architecture with the comfort andluxury of modernism, without losing the personality ofthe local community. Inasmuch as boutique hotelswere seen as high end product exclusively, Joie deVivre spotted a business opportunity within themidprice and hotel mid-category.

Chip writes: “What are the best and worst things youcan say about the hotel industry´s best-knownmidprice hotel chains like Holliday Inn and Radisson?These are not the typical questions you ask yourcustomers. But the answers to these questionshelped Joie de Vivre realize that there was a hugemarket of middle-income Americans who werelooking for a moderately priced boutique hotel productthat was both stylish and functional. It gave usconfidence that, unlike some of our boutique hotelcompetitors who were developing only high-endshotels, we should continue to create midpriceboutique hotels for the masses”.

Identity refreshment and strategic marketing

Maslow´s pyramid hierarchy of needs always inspiredChip Conley. He perceived Maslow´s humanisticpsychology also as a strategic model of application tohis company management. Chip, very cleverly,reminds us that it is not enough to satisfy guest´sbasic needs. Just as the higher experiences can onlybe obtained at the higher levels of the hierarchy ofneeds, only if we have fulfilled the lower levels, guestsatisfaction does not leads to customer loyalty.Satisfying customers can be considered as a basicneed. Indeed, it is a common strategy in our industry,and one of the reasons that explains why many hotelbrands are commoditized products. Instead offocusing on simple guest satisfaction, companiesshould rigorously track customer retention andcustomer “evangelism” (how your customers areusing word-of-mouth and word-of-mouse on theInternet to spread the word about you, your product,or service). Yet most of the hotel brands basically findthemselves struggling to just satisfy the basicexpectations of their guests. Hotel management thenmonitors guests’ feedback through conventionalsurveys based on common quality performancemetrics, such as quality of the food or services, roomcomfort, maintenance, property conservation, staffefficiency and friendliness, etc. Withoutunderestimating the importance of these variables,what matters most and differentiates hotels fromcompetition is fulfilling unrecognized needs. Chipcalled this exercise: “identity refreshment”. In Chip’swords, "you do not only get inside the customer'shead, you get inside his heart”. Somehow, by stayingin one of his hotels you feel renewed and refreshedas though the hotel helped reconnect you with whoyou are (or who you aspire to be). It is not just about“selling sleep” but also to “delivering dreams”. Todaywe talk about delivering unique experiences to ourguests, but this objective can only be accomplished atthe highest level once he have fulfilled the basicsaspects of quality and service.

So Chip´s Customer Hierarchy of needs -followingMaslow´s hierarchy of needs- starts at the bottom ofthe pyramid with the basic needs such as confortablebed and a clean room –still something not veryobvious to some. In the second level, customerswould demand for Safety needs such as Well-litParking, Electronic Doors, and lock, etc. Then,climbing to the upper levels we would address socialand belonging needs; how friendly and professionalthe hotel staff is in delivering service. Up to this point,we would still be meeting the average in the hotelindustry. Commoditization still occurs in these firstlevels.

Differentiation may happen once esteem needs aremet; this is the second higher level, and it occurswhen guests feel like VIP because of a personalizedservice and treatment. However, it is only at the topwhen we may generate guests who are passionateabout our brand. Chip called this level “identityrefreshment”, which corresponds to the self-actualization level of Maslow´s hierarchy of needs.

Joie de Vivre business model is based on strategicmarketing. This marketing is more powerful becauseit is reached after a deep understanding of the needsand desires of the existing and potential customers,and designing the business model (products,services, delivery mechanism, customer experience,branding, outreach, etc.) to meet and exceedcustomer´s needs and desires. So it is a outside-inmanagement as opposed to tactical marketing wherewe first create a hotel product, basically copyingothers, and then we concentrate our efforts inadvertising, promoting, and selling the hotel inside-out. Hence, it is normally done with a bigger effort,since competition is offering and doing the samething.

Joie de Vivre business model is basedon strategic marketing. This marketing ismore powerful because it is reachedafter a deep understanding of the needsand desires of the existing and potentialcustomers, and designing the businessmodel (products, services, deliverymechanism, customer experience,branding, outreach, etc.) to meet andexceed customer´s needs and desires.

How is this “identity refreshment” delivered in Joie deVivre hotels? Chip Conley saw in magazines a modelto meet lifestyles and fulfill uncovered niches of themarket. Chip declares: “Joie de Vivre hotels startedgrowing by imaging new niches in the market thatwere underserved, finding a magazine that definedthat segment, creating a unique boutique hotel, andthen tapping into this psychographic population andletting them evangelize about the product. We havehotels based on a wide variety of magazines andpersonalities fromWired to Town and Country to theNew Yorker. Some of our most interesting hotels arebased on a hybrid of two magazines like our GalleriaPark Hotel, where Business Week meets Vanity Fair,or our Hotel Vitale, which goes after the post W, pre-Four Seasons guests by marrying Dwell to RealSimple, creating a hip yet holistic and matureambience”. By using that distinct magazinepersonality, Chip and his development and designteam could articulate a clear vision of how thispersonality could relate to the guest room design, thetype of staff hired, the unique service and amenitiesthat would be offered and even the kind of communityphilanthropy the hotel might pursue.

The best example for this niche-magazine approachcan be better seen in the development of his firsthotel: The Phoenix. The Phoenix is a Case Study ofniche marketing. Chip writes in his book Rebel Rules.“Niche marketing works well when you have a limitedbudget […] I dreamed about the great parties I couldthrow and the sense of community celebration wecould create around the pool, paying no attentioninitially to the potential hotel market. I ran no focusgroups or feasibility studies. I simply knew I wascreating a niche product that my competition wouldnever imaging copying”. This hotel is away from thecommon concept shared for a boutique hotel; it´sneither a high end product, nor it could be considereda luxury hotel and classical architecture. Contrary tothis, The Phoenix can be classified as a midscalehotel in a suburb location away from the Center ofSan Francisco. However, the hotel had historically ahigher ADR and Occupancy Percentage thancompetitors. Why is so? Because of the “identityrefreshment”. The Rolling Stone Magazine waschosen to be the personality of The Phoenix. Theyalso introduced the practice of using five words todefine the kind of hotel they wanted to create:"irreverent, adventurous, cool, funky, and young atheart “. So by staying at the Phoenix guests feelfunkier, cooler, and more irreverent. Identityrefreshment means that his core customer will pay apremium for the experience. Rock stars have longmade this quirky converted motel their San Franciscocrash pad. The long roster of rockers who havestayed at The Phoenix since the hotel opened in thelate '80s includes Joan Jett, Keanu Reeves, DavidBowie, Moby, Little Richard, the Red Hot ChiliPeppers, Pearl Jam, and the Shins…and manyothers.

Culture and complexity.

Peter Drucker, the greatest and pioneeringmanagement thinker, wrote once: “Culture eatsstrategy for breakfast”. What he wanted to say wasthat it doesn´t matter if you have the brightest ideaand plan for your business, if you lack the propercompany culture. Right management is developingthe right culture. Nevertheless, developing a strongculture is frequently the least of the priorities whenmanaging. Why is this happening? Because of thepriority given to shareholders in business. ProfessorMalik stated very sharply that neoliberalism led to theeconomization of society, hence to a primitive form ofeconomization; one in which everything is perceived,measured, and judged in monetary terms. Thus, quickmoney used to be the highest value and so thereason why many companies cannot sustain strongcultures is because of the monetary objective ofmaximizing value to shareholders. If only short runprofits matter, then there is no way to developcompetitive values like trust, empowerment, integrity,transparency, justice, egalitarianism, accountability,sincerity and commitment. Such powerful values donot thrive in Excel spreadsheet, charts, or PowerPoints. The reality is that these values are alwaysaffected because managers, inevitably will have toface trade offs. As long as one group of stakeholders–in this case shareholders- is overly dominating, thewhole system will be threatened.

A strong company culture can only be crafted ifmanagers understand complexity instead ofreductionism. Every company is a complex systemthat needs to be understood in a holistic manner. Themore complex a system is, the greater its range ofbehaviours or the more varied the ways in which it ispossible to respond to changes in its marketenvironment, such as in customers, suppliers,economy, technology or competition. As Mackey andSisodia stated: ”No complex, evolving, and self-adapting organization can be adequately understoodmerely through analyzing its parts and ignoring thefull system”.

There are companies, such as the one we areanalyzing that can be considered to be healthier,which means, in this context, that shareholders’ valueand profits are in balance with other fundamentalstakeholders’ values, such as customers andemployees, suppliers and communities. However, inthese companies everything starts with the customer.Customers are the reason for any company’sexistence. Such companies also have a higherpurpose or meaning.

Higher Purpose.

Meaning was the highest form of realization accordingto Victor Frankl. This Austrian neurologist andpsyquiatrist was a Holocaust survivor. In his veryharsh and matter-of-fact book Man´s Search ofMeaning, he mentioned that happiness cannot bepursued; it comes up as a consequence of living a lifeof meaning and purpose. “Meaning in work”, at Joiede Vivre, relates to how an employee feels about thecompany, their work environment, and the company´smission. Meaning in work relates to how an employeefeels about their specific job task. In this way Joie deVivre mission is “developing dreams”; a purpose thatcertainly inspires employees.

Joie de Vivre's Dreammaker program encouragesabove-and-beyond commonplace service solutionsdelighting customers with the unexpected.Dreammaker services are meant to meet a guest'sneeds or desires even before they are articulated.Employees are encouraged to pull a "dreammaker"act for a loyal, repeat guest or one who would seemwilling to spread the word.

Joie de Vivre Strategic Heart

Chip mentioned in his book Peak that, “successfulcompanies create a culture of capability in whichemployees are well prepared to be empowered. Thusemployees feel a deep resonance with the companyculture, and they also appreciate the ability toinfluence that culture”. Joie de Vivre created the heartdiagram (see picture bellow) helping employees andmanagers to better understand the causes andeffects of everyone behavior. Joie de Vivre´s heartcould be considered as a much more simple andclear approach than Norton and Kaplan´s BalanceScore and Strategy Map.

First step: creating a unique corporate culture.

It starts by creating a unique corporate culture. This isthe first step, which ultimately will provide outstandingand sustainable profits. Or at least maintain them.Southwest Airlines competitive advantage it´s beenalways been considered to be its powerful workingculture. Chip Conley often quotes from his role modeland inspiration CEO, Herb Keller, founder ofSouthwest Airlines. Herb said: “Culture is not thesame thing as a technique. Culture is a framework ofvalues and meaning. It is not a system of specifiedprocesses geared specially to efficiency and results.Culture is authentic and often nonlinear. It doesn´t fitinto a simple box or some equation. You can´t beguaranteed that by taking steps one, two, and three,you will automatically produce a certain result. Yet,when it´s incrementally planted, pruned, andharvested, culture develops into a dense and fertilesystem that yields more than any one leader couldhave imagine alone”. Creating a culture is atremendous task for managers. But it is always easierto create a strong culture from scratch than to changean existing one.

Second step: building up an enthusiastic staff.

So if the first step it to create a unique corporateculture the second is to build up an enthusiastic staff.Front-line employees are key to deliver the highestservice. These front-line employees represent ourproduct to our customers. In the most realistic sense,they are the product itself. So Joie de Vivrerecognizes the importance of service employees to beempowered, constantly enhancing “Moments ofOpportunity”. Chip refers to his company strategicprogram, as "I feel powerful at work". This programhas a significant impact on his employees’ sense ofesteem and engagement. “Years ago, we realizedthat if we truly wanted to empower our employees asentrepreneurs, we needed to include our front-deskstaff, bartenders, and bellmen in an annual off-siteretreat for each hotel so that they could have a voicein where their hotel was going in the next year withrespect to customer service initiatives, capitalimprovements projects, and enhancements to theemployee work environment”.

Trust must be established as a core value in order tosustain empowerment; with higher levels of trust, bothvertically (between the leadership and front-line teammembers) and horizontally (within the leadershipteam as well as within and across teams at all levels).Trust is more important than motivation. Trust doesnot replace motivation and it is not the same asmotivation but it is the key prerequisite that enablesmotivation. Trust is the basis of any reasonable formof management.

Third step: Developing Strong Customer Loyalty.We have already referred to this goal before. Creatingloyal customers nowadays is much more complicatedthan it was before. Guests are constantly evolving.As Gilles Lipovetsky -an important French sociologist-illustrates this by saying that guests, at present, aremore changing, and, of course, have less loyalty tobrands. Customers are more unpredictable.

In the recent past it was much easier for hoteliers tokeep customers coming back to their hotels. Hotelmanagement was more predictable and the causesand effects of management actions were morestraightforward. We used to listen and read about thesimple cause-effect that, by providing a good serviceand a good product we could maintain our guests'loyalty. But this is no longer true. Developing strongcustomer´s loyalty now has to do with providing morevalue to guests than we used before. It is not an easytask. Joie de Vivre does this by “refreshing identities”focusing on niche markets, delivering a differentproduct, and providing higher levels of servicebecause its very committed team members.

Fourth step: Maintaining a Profitable andSustainable Business.

The unqualified economic law of maximizing profits isfocused on the short run. But this objective alone isnever sustainable in the long term if it forgets aboutthe other leading indicators that managers shouldstrive to improve, such as: reinforcing companyvalues; empowering staff; seeking to provide highervalue to customers; developing a strategicpartnership with key suppliers; collaborating with localcommunities; making innovation happen as aconsequence of improving operations and the sharedresponsibility among team members; decentralizingand collaborating more efficiently among teams. Allthese will ultimately make a given business more

adaptable and competitive to changes in the businessenvironment. In this sense, John Mackey at WholeFoods refers to profits as follows: “Just as peoplecannot live without eating, so a business cannot livewithout profits. But most people don’t live to eat, andneither must businesses live just to make profits.”Although he also states “Without profits,entrepreneurs cannot make the necessaryinvestments to replace their depreciating buildingsand equipment or to adapt to the always evolving andcompetitive marketplace. The need for profit isuniversal for all businesses in a healthy marketeconomy”.

Profits are a lagging indicator, the outcome of thebusiness equation. Today, it is a more complexequation since hyper-competiition and hyper-consumption have given the bargaining power to thecustomers –and distribution channels. Hence, Joie deVivre and Chip Conley’s understanding that there willnot be sustainable profits if they do focus only in theshort term. Indeed, short and long runs must be put inbalance. What do we have to do today to achievesustainable profits? As Drucker said, “the best way topredict the future is to create it”.

Customers’ feedback: word of the mouse. Onlinereputation.

Internet, and especially the Social Media providewide-open hotel visibility. Not so long time ago, it wasvery easy to camouflage any hotel shortcomings byhaving a good department of marketing or publicrelations. It was relatively simple to sell, let’s say anold-fashion and decadent hotel, as an elegant,comfortable and beautiful property. Today, this is notpossible anymore: guest comments and pictures arevery clear.

Although Joie de Vivre sales strategy is very focussedon how to increment direct sells from its brand.com,online distribution channels are still very importantand hotels still depend heavily on them. OTA´ssharing room night grew substantially in 2010-2011,as figures from a report conducted by the HSMAIFoundation clearly show. OTAs are gaining marketshare; all three models (ie.merchant, retail andopaque). The retail model (i.e. Bookin.com) had thefastest growth in 2011 –in Europe it used to be thetop. In the new scenario, prices and guests’ opinionsbecome crucial. The fact is that potential customerswill look to other guests’ online opinions. Even thosehotel guests who may book direct to the propertiesIhave analyized Joie de Vivre hotels online reputationin TripAdvisor together with two other hotel groupswithin the same hotel category. These other samplesare very interesting for our purpose of analysisbecause of their different strategy and type of

management.

(I) The first chain in my analysis is Marriot,specifically, AC hotels by Marriot. Recently in jointventure. AC hotels are a very standardized,customized and mechanical management model hotelgroup, in which every step in operations has beenthought of in corporative offices. In this company,empowerment is limited, even to hotel directors. Thelevels of company service could be considered to bewithin industry standards. AC hotels major valueproposal equates its outstanding hotel product -comfort and decoration.

(II) The second hotel group is also a fast growinghotel group in Spain called Eurostars. This hotel chainoffers good products, yet not as good andstandardized as AC. It clearly has a vision ofmaximizing profits negatively affecting hotel serviceand employees’ morale. So, for instance, if “n” issupposed to be the minimum number of employeesneeded to sustain hotel operations, they would workon an n-1 basis. Eurostar strategy is to sell at lowerprices because of its lower costs.

TripAdvisor.comAlthough Joie de Vivre´s ADR is higher, the averagescore for its 27 hotels (excluded hotels in Hawaii) inTrip Advisor is not affected by value for price. Theaverage score in Trip Advisor is: 4.14 (out of 12.5Kopinions). AC by Marriot has a score of 4.09 (10K),and Eurostars hotels 3.97 (7.1K).

Booking.comIn Booking.com I have only analyzed Joie de Vivrehotels, still it is interesting to see scores in quality andguest´s value. Thus, the average for Joie de Vivre is8.49 (out of 3K opinions). Clean: 8.92; Comfort: 8.53;Location: 8.68; Facilities: 8.27; Staff: 8.81; Value forMoney: 7.79.

My opinion is that although it offers a distinctivedesign for each property, Joie de Vivre hotels doesnot have a better product than AC hotels overall.However, what guests value the most in Joie theVivre are the staff. Among thousands of comments inTrip Advisor and Booking.com, Joie de Vivrecustomers point out to this “can do” attitude, whichhas been encouraged by Chip and his managementteam. What Joie de Vivre customers are valuing mostin front-line staff service is: efficiency, friendliness,empathy, attentiveness, and professionalism.Through guests comments it is possible to quicklyidentify Joie de Vivre distinctive culture;notwithstanding its midscale size or category, whatbest defines this hotel boutique company is itsservice. Value for money, and product, not service, iswhat prevents Joie de Vivre from obtaining an

average of 4.5 (out of 5; in Trip Advisor) or over 9 (outof 10; in Booking.com) on the same level with hotelcompanies like Four Seasons or Ritz Carlton.Certainly, regarding service, there is always adifference in the final outcome between a midscaleand a luxury hotel, but in essence, the behaviour,vision and attitude toward guests in this case isbasically the same.

It is not that easy to make a hotel company stand outbased on of its team members and higher levels ofservice. The axiom that states that providing anexcellent service is key, sounds logic in hospitality,but it is always far from being easily sustainable inpractice, much less making it to be a differentiatingfactor to gain a competitive advantage. There arecountless other factors that will always affect thispurpose: rigid company rules, lack of talent, short-term profits, trade offs, low employee morale, poormanagement and leadership, wrong values andbelief, to name only a few. Management should neverassume that providing good service is effortless, letalone providing an outstanding service.

will stop by TripAdvisor or booking.com to examine:reputation patterns, prices, customer’s more realisticpictures and comments. Furthermore, a thoroughanalysis in Trip Advisor or Booking.com can easilyportray how the hotel is managed.

I would not be sure whether Chip´s opinion about thenature of OTA´s customers is still the same as whenhe published his book Peak in 2007. At that time hestated that the nature of his guests was starting tochange because online guests were focusing more onprice. This was probably the reason why theirsatisfaction scores started to plummet; because theywere more price oriented. They wouldn´t value Joiede Vivre, as it deserved. But the reality is that OTAscame to stay and became more powerful with time;customers found in OTAs new sources of value.Nowadays, not every customer booking throughOTAs are price oriented -yet lower prices is alwaysguaranteed. The reason why OTAs are so valued isdue to the purchase experience; convenience,security, visibility, usability and service, and of coursethe BAR (best available rate). As a consequence,online reputation becomes more relevant.

Review of the Theory and conclusions

Even role model and inspirational companies are notperfect. In order for excellence to exist, it must beachieved through constant job improvement andcompany knowledge. Indeed, because Joie de Vivremodel of management and culture is above theaverage in our hospitality industry, I dare to be morecritical in my conclusions. We must be more

demanding concerning further improvement withthose that have already reached higher levels ofaccomplishment. Which is the case for this stunningcompany.

1. Chip’s use of Mallow’s hierarchy of needs isbrilliant. In his book “Peak”, he also applies it toshareholders and employees. However, my viewpointregarding customers is that nowadays such pyramidcould be reduced to three levels: basic, esteem, andself-actualization). Quality issues such as security,comfort, cleanness and –average- service, can all beat the bottom level. Today, new hotel facilities such ashigh speed and free Wi-Fi Internet connexion isconsidered by guests as a basic need. Anotherimportant feature that Chip didn´t mention and itsseldom-fulfilled in hotels is soundproofing in rooms.Although the fact that many hotels fail to providesoundproofed rooms in our industry, may affect itsconsideration as a basic need, customers continue tocomplain about this issue. The same is true for roomand bathroom space; there are minimum dimensionsto be expected.

What about architecture, decoration, atmosphere andtrendy designs? At present these are normal featuresin product development, and routinely improved inhotel properties and markets…are they still topdifferentiators? I suppose the answer depends on thespecific market we are considering.

2. Company know-how knowledge. Without havingconducted any on-site research –I have based myresearch on Chip’s books and the internet, I stillperceive that Joie de Vivre has room for improvementregarding its model of management to enhanceknowledge; brainworkers or knowledge serviceworkers. The axiom goes: “providing good service byfocusing on employees”, but what about boosting thecompany’s knowledge? Improving service is alsoabout applying knowledge to operations, analysis,collaboration, process monitoring, improvements, in-group collaboration…and this must happen as anormal job competence and responsibility from thebottom-up, not only top-down. In this 21st century itshould become clear that management is thetransformation of resources into value. In developedeconomies, the most important resource today –if notthe only one- is knowledge. So we might say –withMalik, that management is the transformation ofknowledge into value. Thus, any advanced system ofmanagement in hospitality should strive not only toprovide higher levels of service but also to boostknowledge in operations –and innovation. For thispurpose, front-line employees, and other teammembers together with managers are key. Joie deVivre has made important improvements in thisrespect, yet Whole Foods Case Study and its

management model is the best role model.

3. Guests’ feedback survey and working systems.I am sure that Market Metrix provides an outstandingtool regarding guests’ opinions analysis. Thiscompany analysis is key but should be consideredonly as 50% of the job. Every hotel and group shouldalso encourage front-line workers to collect personallyfeedback direct from guests in the moment of service.It can be done by (1) asking at the moment of service“how is service going?” (2) Solving problems ifnecessary, (3) recording the feedback collected fromguests (4) and finally, analysing in-group togetherwith managers: results, suggestions, problems arisen,the actions that front-line staff took to solveproblems…It´s obvious that this working method willnot be possible before fundamental company valuesare firstly well established. Values such as trust,sincerity, transparency and recognition of mistakes…this is the hardest part. However, Joie de Vivrealready has it!

4. Open Book Management. Chip states that he hasapplied an OBM philosophy and working method.However it is not very clear how far Joie de Vivrehospitality goes with this philosophy and workingmethod. Open Book Management does not imply onlysharing financial information, but also encouragingemployees’ commitment to improve economic results:(1) increase revenues or (2) save cost by makinghotel processes more efficient –without, of course,affecting guest´s value. This working method ideallyshould be a responsibility at all levels includingbottom line employees. Do Joie de Vivre encouragealso all front-line employees to accomplish thesepurposes? I am not sure how far they go…

5. Merge Strategies, Innovation, companyknowledge and best practice sharing. If a companyit close to establish such ambitious method of workingthat will be Joie de Vivre, but throughout allinformation I have analyzed, I have not found anefficient model of best practices sharing amongproperties, nor how the purpose of innovation –andjob improvements, it is established.

Merge strategies start from something small such asa job improvement best practice, to become biggerafter it´s been shared. Once, it has been proven to bea success and implemented elsewhere we may endup with a global strategy also involving topmanagement. This small and merge strategy did notcome from a logical approach, but instead from asudden surprise: “Suddenly, the opportunity is there!”Of course we made that opportunity happen, thedifference is that we never thought it was going to bethat successful; our knowledge service workers madeit happen. It wasn’t upper management.

Does Joie de Vivre consider innovation to be also asa responsibility of team members like in WholeFoods? How are best practices from team member’sinitiatives improving operations? How are theyshared? Technology is available through theCompany’s Intranet to share company knowledge andinformation. Is this technology used to boost companyknowledge and innovation? Does innovation risebottom-up? Are front line employees encouraged to“do it better (faster) and cheaper to better controlcosts like in Southwest Airlines? If so, how areimprovements and best practice shared among teammembers within the group?