West Indies Yacht Club Resort Case Analysis

The West Indies Yacht Club Resort (WIYCR), located on the island Virgin Gorda in the British Virgin Islands (BVI) has been experiencing operational difficulties during the recent two years. Herein, I will first provide a brief overview of the tourism industry of BVI that is quintessential for better understanding of the situation as a whole. Subsequently, I will analyze the causes of the resort’s ails and conclude delineating possible cures. 2. BVI Tourism Industry Overview

British Virgin Islands, a former British colony situated in the Caribbean (approximately 60 miles east from Puerto Rico), were granted autonomy from the Crown in 1967. The islands have an overall population of 24,939 inhabitants and the US dollar is the legal tender. Moreover, BVI is famous as an offshore tax haven, boasting more than 400,000 companies in its registry at the end of 2000. As of 2008, tourism constituted 45% of national income, services 88% of GDP. However, the BVI government imposed a set of stringent labour regulations to protect domestic workers from seasonal discharges, reducing its unemployment rate to mere 3. %. Whilst such policy is highly effective in terms of unemployment reduction, it poses significant challenges to the operations vacation resorts that suffer from insufficient capacity during peak season and overstaffing during the rest of the year. The employees are difficult to fire as the BVI Labour Code was designed to protect domestic workers against foreign competition. In BVI, companies are required to furnish reasons for an employee dismissal and attend a formal hearing to defend its actions.

Work permits for foreigners are granted rarely and only after substantial evidence has been provided that no local can qualify or desires the position. [ As of 1991, 97. 8% of the population are literate, yet employees are excessively reliant on management’s guidance (i. e. demonstrations) in lieu of proactively learning various procedures of their day-to-day work by reading memos. ] The history of the BVI tourism industry dates back to 1950s – a time when the first affluent American began discovering the relaxing atmosphere of the Caribbean tropical paradise.

The government revolutionized the industry by enacting a policy that favored bareboat chartering (i. e. renting a 28-50 foot boat without the assistance of a licensed captain) in the 1970s, extending the islands’ affordability to the U. S. middle class. The subsequent years witnessed a boom in tourism and accommodation institutions sprung up to cater to the ever-increasing influx of visitors. British Virgin Islands are a home to five major hotel resorts: Peter Island Yacht Club, Little Dix Bay Resort, Drake’s Anchorage Resort, Biras Creek Resort and West Indies Yacht Club Resort.

Remarkably, Little Dix Bay is the oldest of the five: established in 1964 as a part of the Rockefeller Resort chain. Double-room occupancy rate ranges from about $400 to $1000 per night across the five hotel spectrum. 3. Situation at WIYCR Jim Johnson, the General Manager identified symptoms of aggravating resort’s operations: (1) tripling of the weekly number of guest complaints, (2) high expatriate manager turnover rate and (3) intensifying tension between local employees and expatriate managers. 3. Growing Guest Complaints According to Jim Johnson “guest complaints have increased from 10 per week to more than 30 per week over the past 2 years. ” The majority of the complaints commented on the declining level of service and attentiveness from the part of local BV Islanders, namely in regards to motivation. To quote a dissatisfied guest: “The staff just doesn’t seem to be as motivated as it used to be. ” To add oil to the fire, the Chicago office that governs the resort’s operations has consistently overbooked the resort for past three years.

Under these conditions, it was not uncommon to ask a newly-arrived guest to stay on board of a charter boat until a room became free. 3. 2 High Manager Turnover Jim Johnson cited that “in the past 2 years the resort had hired and then failed to retain three expatriate waterfront directors and three expatriate food and beverage directors. ” High management turnover not only incurs excessive training costs, but also (and more importantly) has detrimental effects on manager-employee relationships and hence exacerbates tension in the workplace. 3. Workplace Tension Each manager generally has a unique approach to work to which the employees have to adapt. Currently, manager is replaced approximately every eight months, hence the employees’ willingness to acclimatize reached its the limits. Fergus, who works on the waterfront voiced his dissatisfaction with his manager’s working style. 1 The resort’s personnel tacitly separated into two camps: expatriate managers and local employees.

BV Islanders value friendship higher than career advancement, while the vice versa holds true for the expatriates (some of them may view orking at WIYCR merely as a stepping stone for securing a better position in the U. S. ). In certain instances a local employee would refuse to become a manager, quoting Muhammad (another waterfront employee): “I’m not interested in leaving my friends behind just to make a little more money. ” 4. Summary Upon further analysis, a high level of causal interconnection among the above concerns has been estimated. In addition, such symptoms have merely revealed the tip of the iceberg; we shall examine the deeply underlying causes, particularly in context of cultural differences and government policies.

The difficulty of firing and legal impossibility of laying off employees (please refer to section 2) in essence guarantees job security for locals, regardless their actual performance. Furthermore, locals do not seek job advancement as they value friendship (3. 3). As a consequence of both factors, locals truly have no reason to perform the job well, unless they truly enjoy it. High turnover of managers renders the job utterly impossible to enjoy, as the friendship cannot be continued after the manager leaves and is replaced. 5. Recommendations

Consistent overbooking of the resort led to diminished services for the guests, which prompted them to complain. Angry guests discouraged local employees from taking pleasure from their otherwise 1“Things went smoothly when Bill (Jones) was around. He gave us clear directions regarding what we had to do and we did it. Things are different with Enrik (Harrigan) He’s really laid back, and we often don’t know what we’re supposed to be doing. ” guaranteed job and managers left in a rapid sequence as they saw no possibility of advancing their career in a declining resort.

A set of new policies must be implemented to solve the current problems that are menacing the resort’s future profitability. 1. 2. 3. 4. 5. If the resort Overbooking must be stopped Employ managers on contracts for several years Provide managers with cultural training prior to arrival Incentivize managers to create warm and lasting relationships with their local subordinates Negotiate with the Government to allow seasonal employment contracts above policies are realized, it is our opinion that the WIYCR’s tatus as the premier vacation in the British Virgin Islands will be restored.

Bibliography “British Virgin Islands Labour Regulation. ” Lowtax. net – Offshore, Tax, Law, Business, E-commerce Information Resource. Web. 24 Nov. 2010. . “CIA – The World Factbook. ” Welcome to the CIA Web Site — Central Intelligence Agency. Web. 24 Nov. 2010. .

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