Contents - Resort + Recreation Magazine

Frontline Tactics | By Joe Wheeler
Be Our Guest
Forging the Next Generation
of the
Service Profit Chain
For over 10 years the service profit
chain has powered the profits of the
world’s leading hospitality organizations.
Now companies like Fairmont
Hotels & Resorts and Harrah’s Entertainment
are creating the next evolution of the
chain: employee and customer ownership.
In its simplest form, the service profit chain is
about developing a working environment in
which carefully selected employees interact with
customers to create customer value far superior to
that offered by the competition. At Fairmont
Hotels & Resorts, management has studied the
relationship between employee engagement and
quality of service and found that hotels with the
highest employee engagement scores also have
the highest guest service scores.
Fairmont’s operational philosophy, as
described by Carolyn Clark, Senior Vice
President of Human Resources, characterizes the
service profit chain perfectly. "We believe that
talented and engaged colleagues will provide
memorable service and create guest loyalty, which
in-turn drives profitability and long-term sustainability,"
says Clark. Fairmont’s Employee
Engagement Survey uses three indices to measure
employee ownership. Their 2007 study revealed
that the Emotional Index had the strongest correlation
of the three. As Clark explains, “It measures
the ‘heart’ and the ‘will’ of Fairmont employees
that is so critical to creating an emotional
connection with their guests.” Hotels in the top
10% on their Emotional Index score demonstrated
a 12% improvement in their Richey score -
and better results in terms of revenue and profitability.
The Service Profit Chain in Action
Harrah’s Entertainment is the largest gaming
company in the world, operating over 40 properties
and 38,000 hotel rooms. “We use the service
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