Case Reports: 2019 Vol: 25 Issue: 5
June E. Clarke, Delaware State University
Julaine Rigg, Morgan State University
Cynthia Mayo, Delaware State University
The case discusses how a hotel, Panam Classic breached a hotel guest privacy by releasing pertinent and confidential information to an external individual. Even though the hotel invests in guest satisfaction and employee training, inappropriate communication, and inadequate training led to a breach of it's guest’s privacy. This resulted in guest dissatisfaction and could have led to legal problems for the hotel. The hotel had to evaluate its policies, guest privacy as well as assess its training programs and its communication within the organization. The hotel is now task with doing service recovery, in a bid to uphold its reputation.
Dilemma, Employee Satisfaction, Management, Intervention, Hospitality and Tourism
The objective of the Morocco Guest case is to present information related to the vulnerability of guests and guest services assocites as they become friends and how the friendly relationship can create critical issues regarding privacy, duty of care and eventually loss of trust, integrity and law suits. A familiar guest to a hotel property may skip some steps because associates know they come often, spend lots of money and are provided executive privileges. The case involves a breach of the code of ethics and the breach of privacy of a male guest when his wife called and was given pertinent information regarding her husband’s stay at the property.
Additionally, the case serves as a reinforcement of hotel privacy laws that have been standard for many years. But with the need and advent of “Exceeding guests expectations”, the laws can be easily relaxed. Therefore, the case signals the need for hoteliers to review privacy standards monthly with employees, while providing guests with excellent services that do not invade guests privacy. Hotels are a home away from home, as such guest privacy issues should be of concern to hotel operateors. Guest privacy in the hotel industry has been getting increasing attention from researchers all over the world but there is still much to do in order to help the industry to adopt the best practices that can maximize profit while protecting their guests’ privacy rights. Privacy issues spans legal requirement as well as managerial and marketing opportunity for hotels (Magalhaes et al., 2016).
Mr. Saudi Morocco is a prominent executive, entrepreneur and the fuel behind the successful Suddan Industries Incorporated. He is well-known and respected by all individuals within and beyond his community. Due to the nature of his illustrious business, Mr. Morocco spent hours attending business meetings and conferences, dinners, cocktail receptions, and community fundraisers among other events. Although he was a celebrated business owner, Mr. Morocco tries to keep his family and private life out of the public and from the attention of the media. He is father to three children, two daughters and a son, whom he hopes will someday lead the efforts of Suddan Industries Inc. He is also husband to Alena Morocco who is affectionately referred to as Lady Morocco and to whom he has been married for thirty-four years. They both met in college in their undergraduate psychology class and have been together since that time.
In November of 2010, a group of companies including Suddan Industries hosted one of the largest technology conference in the eastern region of Panam Bay. The conference included a retreat and business meetings with important clients and new business prospects. As a result, several hotels and resorts were expected to be booked to capacity because the conference was projected to be well attended based on the conference registration, as well as room reservations. Panam Classic Resort was also booked to capacity; however, Mr. Morocco was able to secure one of the three presidential suites because of his affiliations, status, and the fact that he was well known to the management and staff at Panam Classic Resort. At the time of the reservation, he made sure to request extra room supplies and amenities, enough to last him for his week of stay. He wanted to exceed the basic “Duty of care” standard for this group.
Panam Classic is located on acres of well-manicured and architecture landscape on the outskirt of Panam Bay, which is on the east coast of Panarama. Its botanical gardens and lush green surroundings make it the ideal location for secrecy and exclusiveness. In addition to its quality service and amenities, Panam Classic is highly rated for its elegance, posh settings, ambiance, décor, authentic antique furniture and Arabian marble flooring. The service at Panam Classic is second to none. Employee training and development are emphasized and take place on a continual basis as management believe in staff who are trained and empowered to deliver quality customer service at every level in the operation. According to management, each guest must experience a stay that is unforgettable. This is emphasized in the credo of Panam Classic which states “Live, love, and enjoy it all.”
Lodging facilities are entrusted to provide a “Duty of care” for guests. This means protection related to privacy, safety, and security of guests. Therefore, the operation of lodging facilities must be planned and executed around the principles, policies and procedures of privacy, safety and security of guests. Under the tort law, lodging owners and managers are liable and when the duty of care is breached, can be charged for negligent or reckless behavior. This is extended to all persons who may come to the lodging property and include such persons as third parties, vendors and other guests. While privacy policies governs all guest using hotel facilities, celebrities, vips, and dignitaries are especially susceptible to privacy issues. In their article Goh & Law (2007) indictated that celebrities and dignitaries are valuable customers to all hotels, as they not only directly generate high revenues, but create important endorsement through positive word-of-mouth and publicity for the hotel. Thus, for hotels endeavoring to serve this category of guest security and privacy takes precedence.
The most paramount task is developing policies and conducting training for managers, supervisor and employees related to the requirements and perils of assuring that guests are protected. The training must focus on the lodging operations policies, as well as the principles of providing lodging experiences that exceed guests expectations.
As industry professionals know and understand, training must be a constant and on-going event. As lodging issues change constantly, so does the need to provide the information to the employees who serve lodging guests. Training is not a choice, it is a must for businesses to operate and provide for guests what is expected and deserved. Employees must know and be able to provide excellent guest services that assures consistency and an excellent guest experience. This can only be done through consistent, on-going training of all employees (Barth & Barber, 2017). As found in a study by Berezina & Kwansa (2012), information security breach impacted guest satisfaction, revist intention and word-of mouth. The study purported that hotel reputation will decline in the event of such breach.
Saudi Morocco requested and arrived at the Panam Classic Resort self-chauffeured a day prior to the start of the conference and two hours ahead of the normal check-in time. He wanted to avoid the crowd, hustle and bustle, and long lines that can become the norm at the front desk during check-in hours. His companion and close friend, a female business icon, met him in the lobby of the resort, both under heavy disguise, including hats and sunglasses. Mr. Morocco handled the check-in process and paid the hotel bill to ensure the anonymity of his guest/companion.
Lady Morocco as she is affectionately called was informed a month ago by Mr. Morocco about the conference, his business plans, tight schedule, and back-to-back meetings in some cases. In light of Mr. Morocco’s hectic itinerary, Lady Morocco decided not to hang around at the conference since her husband might be too busy to spend time with her. She instead decided to visit with her longtime friend, close pal, and confidante from high school through university. Mr. Morocco was pleased with her plan because he knew Saleen very well and the fact that his wife was very fond of her, he knew she would be in good company. Additionally, Lady Morocco would not be around to interfere with his plan, which suggested that he would be extremely busy and would not have time for her. However, his whereabouts outside the conference and meetings would be a secret as he intended to keep a low profile while at the hotel. As agreed, his wife would contact him via his cell phone, which would be on ring only at designated times outside of the conference and meetings.
Although Mr. Morocco boasts a level of sophistication, he can be very down to earth. He is sociable, respectful and respected, and well admired by his peers and associates. Others always envy his mannerism, demeanor, and character traits developed as a result of his strict upbringing. As a result of his hard work, drive and tenacity, Suddan Industries Corporation is well established, both locally and internationally. The company has become a household name, famous for brands such as:
1. “Onix”, the every spot remover – a mild chemical agent that is used to remove stains from even the most delicate fabric.
2. “The love of my life”, – a unisex brand of cologne for both men and women.
3. “The softest sweetheart”, a special brand of pillow.
Suddan industries is a generational company that was handed down through the family by Mr. Morocco’s great grandfather who started the business in his garage, out of a need to provide for his family. Today, through the careful and thoughtful planning, and guidance of Saudi Morocco, Suddan Industries has become an empire. The words on the street and in news media are that, “without Saudi Morocco behind the wheels of the Suddan Industries Corporation, they might have stopped turning” No more will the Morocco family have to worry about Suddan Corporation failing or going bankrupt or the overall success of the company: In their minds, the company was in great hands.
Mrs. Morocco accepted her husband’s plans gracefully without any thought of trepidation, as she has never had a reason to doubt him. On the other hand, she was elated to go shopping, get some rest and relaxation, and spend some well-deserved time with her former high school friend whom she has not seen in a while. Additionally, Mr. Morocco’s response was favorable since he would be having company back-to-back meetings, conference attendance, and needed some private time away from his wife.
Even though Panam Classic Hotel Management team learned that Mr. Morocco was staying at the hotel, not all departments were made aware of this or the special instructions regarding his stay and how to handle any requests made by Mr. Morocco. What the staff did not know was that Mrs Morocco was not going to be with her husband. Neither were they made aware of the fact that he would have a female companion with him. In fact, Mr. Morocco did not communicate to Mrs. Morocco about where he would be staying. The expectations were that based on his discussion with his wife, she would be able to reach him via cellphone at the appropriate times discussed and agreed upon by both. During the check-in process, Mr. Morocco was given the regular courtesies, a warm Panam Classic welcome along with extra amenities such as a chilled bottle of his favorite wine, his favorite cigars, and a bouquet of flowers for Mrs. Morocco. Mr. Morocco did not refuse the bouquet, as he did not wish to draw attention to the fact that his wife would not be with him. He however refused to be escorted to his room, so he took his keys and politely told them that he could find his way to the suite that was assigned to him. Prior to checking in, Mr. Morocco requested that the in-room refrigerator be stacked with extra supplies. He also requested that no calls be transferred to his room as he would be busy and would not be able to accept any calls.
Exiting the front office lobby area, Mr. Morocco’s companion followed closely behind without drawing any attention. He went directly to his room with her in tow. As he entered the room, he made sure that the “Do not disturb” sign was affixed and displayed on his door and remained there for the full duration of his stay. That night for dinner, Mr. Morocco ordered room service and ensured that he was in the dining area of the suite to collect the meals. As noted, the conference was busy, however, Mr. Morocco chatted with his wife a few times during the day as scheduled. By the third day, Lady Morocco was missing her husband, she wanted to tell him how much she misses him and cannot wait to see him. Unfortunately, she could not reach him via his cell phone. In a desperate attempt to locate him, Mrs. Morocco started to contact hotels that she thought her husband would be staying. After a few calls and identifying herself to the telephone operator who was relatively new as she was working with Panam Classic for just a little over three months. The new operator was never given or introduced to the hotels policy regarding guests of the hotel, neither was she made aware of the requests by Mr. Morocco. Consequently, Lady Morocco was given detailed information about her husband’s accommodation at the hotel. Along with giving Lady Morocco pertinent information, the operator proceeded to connect Lady Morocco to her husband’s room. Unfortunately, Mr. Morocco at the time was in a meeting. Eager to speak with her husband, Mrs. Morocco blurted out “Hi honey, I missed you” as soon as the receiver was picked up from its holder. While, on the other end, Mr. Morocco’s companion who was in the room and picked up the receiver, said, “Hi sweets, is everything ok.” Both women were astonished at hearing each other, they immediately thought they were speaking to the wrong person as they apologize and hung up from each other. Lady Morocco redialed the operator to ensure that she had been connected to the correct room number. The operator confirmed and reassured her that the number and the information provided was correct. Once again, the operator dialed the room and put through Mrs. Morocco’s call. Mr. Morocco’s companion answered the phone as she thought it was the same person misdialing for whatever the reason. As soon as she answered the phone and said “Hello” Mrs. Morocco asked the question, “May I speak to my husband?” there was no response, and then she heard click as the phone was replaced on its holder. Lady Morocco was infuriated and started calling her husband’s cell phone nonstop. Mr. Morocco was still in a meeting and had his phone turned off, hence, he was not able to accept any phone calls.
After the meeting, Mr. Morocco hurried back to his room and was told about the phone calls and what had transpired. At that point, he realized that his cell phone was still off and he immediately turned it on. To his amazement, his wife had dialed his phone thirty-three times within the last hour. His thoughts began to race within him as he tried to figure out what happened, when did it happened, how did it happened, where was his wife, what was going on inside of her head, what was he going to say to her, and how was he going to get himself out of this situation. As he continued to think things through and recollect his thoughts, he remembers quite clearly that he did not disclose or share his hotel accommodation with his wife. The question that followed was, “How did she find out where I was staying, I thought hotels were responsible for protecting their guests’ privacy?” Nonetheless, Mr. Morocco kept his composure and remained calm as he assured his companion that she did not do anything wrong and he would take care of the situation. Amidst the dismal situation that he was confronted with, Mr. Morocco promised himself that he would get to the bottom of it. In the meantime, he needed to locate his wife to make sure she was doing okay and not about to do anything drastic or crazy.
Hospitality Ethics and Guest Privacy
Ethics in the hospitality industry is very critical and can contribute to the productivity of an operation by minimizing the cost of business transactions, establishing guest loyalty, and creating trust with the guest, suppliers and employees. On the same note, hotels are obligated to protect the privacy of their guests, not only out of respect and out of loyalty to guests, but also to avoid legal implications, which could lead to negative publicity. Employees are confronted with a broad range of ethical matters and the opportunity to do something unethical often presents itself. Some of the most important issues that the hospitality industry faces as it relates to ethics are integrity, trustworthiness, respect for others, and accountability. Based on integrity, employees have to be honest and have a desire to do the right thing. Trustworthiness is essential, if employees are not trustworthy, customers may not continue to do business with the hotel and the entire business will suffer. Respect for others is also important as the company should always do what is right and good for the guests and value them as a person. Employees must make a deliberate choice and be willing to account for their action, as well as take ownership.
Keeping it Private for the Guest
Lodging facilities have a responsibility to ensure that the guest feels safe and secure while staying at their establishments, failure to do so could result in hospitality companies facing major unplanned financial penalties for failing to safeguard consumers' information in the midst of this growing threat.
Hotel guest seek privacy during the stay at establishments. In their study assessing the service experience in tourism, Otto & Ritchie (1996) discovered that privacy was one of the most significant psychological measures of hotel guest’ satisfaction on service experience.
Hotels in the United States are generally ill-prepared to protect their guests from most security problems. Based on most hotels policy, if you lose your hotel key, these hotels are reluctant to hand you a new one without some proof of who you are. They are also reluctant to disseminate information regarding what room an individual is staying in, even if you are family.
These rules are part of a hotel's privacy policy that is in place to protect the personal information and identity of the guests. However, most of these hotels have policies and guidelines to address how employees handle guests' information at the property as well as online. Although there are standard privacy protocols for hotels, these tend to be optional with details varying from one hotel to the next (Shelton, 2018).
Service associates need to be aware of the challenges and issues of guests privacy cconcerns and reminded of court cases that impact financial losses. The consequences of guest privacy breaches can be seen in the prominent court case where a jury awarded sportscaster Erin Andrews $55 million, because of a hotel that refused to safeguard her privacy. The suit alleged that her privacy was violated when a guest videotaped her in her room while she was naked. The guest who videotaped her had a room next door to her room. The hotel had provided the information to the person who videotaped her. The Marriott hotel, the management team and owners of the Nashville hotel were charged. The person who videotaped Erin shared it online. She testified that it causes her great emotional harm (Bieber, 2016).
The case focuses on the dilemma experienced by a high-profile guest at a very prestigious hotel. This presents issues that tend to happen when hotels/lodging facilities fail to ensure that the guest privacy is protected at all cost. In the case of the Moroccon guest, the hotel may or may not have policy and guidelines in place to protect the privacy of the guest. However, it could also be a lack of and poor communication of important guest requests, inadequate training of new hire, as well as poor hotel policies which led to a breach of guest privacy in a high-end hotel known for its usual quality service.
Hotels, under the innkeeper’s liability has a duty of care to protect guest and their privacy. Hotel’s that do not communicate pertinent guest information to departments and ensure appropriate training regarding hotel’s policies may find themselves breaching guest trust and privacy which can be detrimental to the establishment. A major part of a guest retention and repeat business focuses on the ability of hotel to not only provide quality of the highest level but also to ensure that a level of trust, reliability and assurance is sustained.
Readers of the case are required to conduct an analysis of Panam Classic Resort and the current issue it faces regarding the privacy breach. Specific areas that need to be taken into consideration are ethical consideration, effective communication within the hotel policies regarding hotel guest privacy, training effectiveness and how these affect the hotel overall operation and guest satisfaction. Actions that led to the issue need to be assessed as well as actions that can be taken to remedy the situation. Readers of the case should discuss service recovery strategies that the hotel management can take to ensure a problem of this nature doesn’t reoccur, result in a lawsuit, and will ensure that Mr. Morocco remain a repeat and valued guest.
Target Audience
This case is suitably designed to cultivate critical musings by undergraduate and graduate students in hospitality management. Students may be reading for a degree in any field of hospitality, law, ethics, human resource management or any course addressing issues of management. It is also intended for practitioners and industry personnel as the case provides a real-world situation that is not uncommon in the industry. It can be utilized in legal seminars, workshops and any types of forum where the need to discuss policies and legal ramifications are warranted. This case is also suitable for use in hospitality law courses, students should have some knowledge of hospitality law and the application of the innkeeper’s liability.
Learning Outcomes
The case is designed to enhanced students critical thinking skills and to test application of knowledge of pertinent policies and service recovery strategies used in hospitality operations. Students attempting this case should be able to discuss hotel policies on guests’ privacy, the need for effective communication, and the importance of new hire training. Students should also be able to discuss identify service recovery strategies necessary to retain customers and build trust and confidence. Skills gained may be used to not only solve challenges in the hospitality and tourism industry but may also guide practitioners in other industry in how to ensure effective communication, knowledge of pertinent policies and how to protect customer privacy in general. This will ensure continued guest confidence, repeat business, thus impacting the bottom line. As such, the instructional objectives are:
1. Develop effective communication strategies within organizations
2. Discuss service recovery strategies for hotel that have breach hotel/guest implied contract
3. Discuss the importance of policies in new employee orientation and training
4. Know and discuss issues of ethics vs breach of privacy
5. Know the innkeepers’ liability as it relates to protection of guests safety and security
6. Discuss effective strategies that may be implemented to protect guest privacy
7. Identify possible legal implications that could arise from this case and the new threat of data breaches.
Teaching Plan
The case may be discussed by individual students or via teams. Students should have a fair knowledge of hospitality law and policies regarding securing guest information and privacy. Special attention should be paid to the innkeepers’ liability. Students should pay keen attention to the objectives and outcomes of reading the case. The course facilitator should ensure the students have the requisite knowledge and information to answer the case. As such, the need to understand policies, norms and standards within the industry is necessary. The facilitator should be very clear regarding expectations from the case in terms of what knowledge, skills competencies and principles need to be pulled from the case analysis. As usual, there should be a prior discussion of the case before discussion or/and presentation. In addition, to ensure that issues surrounding the case are understood prior to presentation of solutions and recommendations, a case simulation could be conducted by students.
Case Study Questions
Question 1
In a one (1)-page analysis, give a brief description of the case while highlighting the key ethical, guest privacy, or customer service related issues in the case.
Responses
The response for question one (1) will be based on the student analytical and critical perception of the case and what constitute ethics, guest privacy, and customer service related issues.
Question 2
Do you think that this is a case of ethics gone wrong, a case of guest privacy or was it a case of bad customer service or a combination? Please provide reasons for your response.
Responses
Students should be critical and very analytical in their responses. For example, if the student wishes to speak on the danger of ethical breaches, they should discuss how such a phenomenon could result in the fundamental change in the ethics of your organization. If the student chooses to speak on guest privacy, they should discuss how and what hotels should do to ensure guest privacy. They should also familiarize themselves with the innkeepers’ liability and use the information to assist with the response. With regards to customer service, the student should research the actions/activities hotels and their employees should engage in to ensure good customer service as well as what is considered bad customer service.
Question 3
What led to the challenge that Panam Classic is currently facing? Give reasons for your answer. Provide a discussion on how Panam Classic could have avoided this situation?
Responses
In the case of the Morocco guest or with any other guests, the hotel may or may not have policies and guidelines in place to protect the privacy of the guest. However, it could also be a lack of and poor management, communication of important guest requests, inadequate training of new hire, as well as overall poor hotel policies that led to a breach of guest privacy in a high-end hotel known for its usual quality service. Hotels, under the innkeeper’s liability has a duty of care to protect guest and their privacy. Hotel’s that do not communicate pertinent guest information to departments and ensure appropriate training regarding hotel’s policies may find themselves breaching guest trust and privacy which can be detrimental to the establishment.
Question 4
Describe strategies you would put in place to protect your guests’ privacy and protect your business. How would you go about searching for a solution?
Responses
Protecting the guest privacy as well as their information starts with the appropriate training of all new hire as it relates to the hotel policy and guests’ privacy. It also requires that all pertinent information as it relates to the guest is kept private and confidential. Information should be restricted with access only be granted on a need-to-know basis. The human resources office should screen out job applicants with criminal records, or at least assure that such people cannot access private records. Employee Handbooks should remind all staff that compromising guest data or information will result in termination and prosecution. Business center computers must be monitored closely by Hotel IT and Security Departments. Older Ethernets may require complete overhauls to guarantee security.
Question 5
Do you believe Panam Classic can recover from this situation? If yes, what are some service recovery strategies that can be use? Why would the service recovery be important?
Responses
Panam Classic can recover from this situation. Firstly, they need to meet with the guest at the heart of the situation and apologize for the dilemma that occurred because of their lack of attention to detail. Most importantly, the hotel should give the guest a platform to communicate to them how he would expect Panam Classic to resolve the situation. This is important from the guest perspective and also, since Mr. Morocco may not just accept a free stay or meals as the situation at hand has created problems that could have long-term impact on his relationship with his wife.
Student could expound on this question as well as list and explain other resolutions that Panam classic could apply to resolve the situation and convert Mr. Morocco into a loyal customer.
Service Recovery is very critical, especially in a hotel setting where the guest is key. A failure to exercise service recovery, whether big or small, can make or break relationships between the organization and the customer. However, if service failures are recovered correctly, they can lead to greater value by increasing customer loyalty and trust.
Question 6
Assume you are Mr. Morocco, what are some possible actions you would take to deal with the situation.
Responses
Based on Mr. Morocco status, affiliates, and successful business ventures, he would be hesitant to plaster his integrity and character in the public based on the situation at hand. Mr. Morocco would rather settle the incident in private, making sure every detailed was worked out and he was happy with the result, while ensuring that he, his family, and his business were kept out of the public shame.
Question 7
Discuss some possible legal implications if any, that could be brought against Panam Classic (Legal liability, 2018).
Responses
Hotels/lodging facilities are opened to the public and are conducted for travelers and transient individuals. An innkeeper’s liability exists only in the case of one who is a traveler and seeks the hospitality of the inn as a temporary guest, as in the case of Mr. Morocco. Therefore, under the common law, the hotel owes an extraordinary duty of protection, both of person and of his property. However, when an employee from Panam Classis Hotel disseminated information regarding Mr. Morocco stay at the property, the hotel breached that duty of protection. As a result, Mr. Morocco can sue the hotel based on this breach. Students may list and discuss other implication that they deem fitting for the study.
Question 8
Assume you are the manager that Mr. Morocco aired his complaint to what would be your first response? What guarantee would you give?
Response
In this response, student could place themselves in the position of the manager as well as the guest. Based on both perspectives, discuss and analyze appropriate measures that could assist in resolving the problem. For examples, as the guest, what would you like to see management do? From a management perspective, what could Panam do to ensure that the guest accepts, appreciate the response, and believe that the matter will truly be handled appropriately?
Question 9
Do you believe management/leadership has a role to play in the breakdown at the hotel? Why or why not?
What action/s if any should management take regarding the telephone operator?
Responses
For this response, the facilitator could divide the students in groups and allow each group to brainstorm and come up with responses. Then allow each group to present their responses while accepting questions from the audience to clarify responses where necessary.
Question 10
Do you believe that ineffective training had a role to play in what happened at the hotel? If so, discuss the importance of having employees who are effectively trained?
What are some procedures hotels and other organizations can devise to ensure that employees are aware of and practice of pertinent standards and policies?
Response
The responses to these questions could vary. Students need to give information to support their choice of response. For example, if students determine that training is necessary, they should provide information to support their answer.
The case presents a very timely and pertinent ongoing issue in the hospitality industry. Guest breaches especially privacy breaches, can lead to unwarranted consequences for hospitality organization. The case highlighted how a breach of privacy at hotel Panam Classic created unwanted consequences. This teaching case challenges readers to think critically about possible issue why the breach occurred, how it could have been avoided and what might be possible consequences for the hotel. The case presented one of the most noted case in hotel privacy breach at Marriott, a well known hotel brand, which was found liable and was fined millions in a law suit. It is incumbent of hospitality organization to ensure the necessary polices and procedures are in place to prevent breaches and protect guest will in their care. While many hospitality organizations do have policies and procedures in place that speakes to guest privacy, accountability and conformance to these standards must be monitored on a continuous basis so that breaches like that of Mr. Morocco and Ms. Andrews do not reoccur.