Read the case carefully and then answer the problems which follow.

ROUGH SAILING

The Mauritian economy has undergone tremendous transformation since independence. During the colonial period, Mauritius had an agricultural-based economy. Sugar was the main export of the island, followed by tea. Independence brought with it a number of challenges, the most important one being to make the island self-sustaining. Unemployment was at its peak. Many saw only dark days ahead and prefer to migrate. The Export Processing Zone was set up in 1970. Incentives were offered in order to attract foreign investments. Things worsened in the late 1970’s, with two devaluations of the rupee in 1979. However with a change of government in 1982 and courageous measures taken, things improved. People started talking of the Mauritian miracle. There was full employment and foreign labour had to be imported from China and India in order to cater to the needs of the textile and construction industries. At this time the manufacturing sector was the main creator of jobs but not for long. The labour force was now more educated and the job of machine operator was no longer attractive. The answer was the Services sector. Several avenues were explored. These included financial services, tourism, freeport and information communications technology. The services sector is now the largest employer and the biggest contributor to the GDP. One sector which stands out is the tourism sector. For successive years it registered a double figure growth. Mauritius is now a popular destination with tourists and tour operators. The name ‘Mauritius’ is now regarded as a brand in the hospitality sector.

The tourism sector in Mauritius is dominated by few big players: Beachcomber group, Naiade group, Sun group, Constance group and of course international names like Sheraton, Hyatt, Apavoo. There are also some small players, who due to inadequate strategies often find themselves in rough waters. One of these is Levuka resort.

For long the South was neglected but remained an area of great scenic beauty. It was spared the savage development of the North, West and East. In September 2000 the MMM/MSM Coalition came to power. It soon set to work. The Cyber City was created   to give an impetus to the ICT sector. It then set about to develop the South the ailing sugar estates in the region saw this as an opportunity. Together with government’s help, the necessary infrastructure was provided. Several hotels sprung in the region. These include Movenpick, Shanti Ananda, Heritage, Le Telfair.

Raj Gopee was born and grew up in the South. In1070 he migrated to the UK. He often visited the island and in 2003 decided to set up a small resort on the family plot at Riambel. He saw the developments in the region as a blessing in disguise. For him the location of any business is crucial for its success. The 20 acres plot was the ideal location for a tourist resort.

He set about to materialise his dream. The necessary permits were obtained without many hassles. The design was affected by his Singaporean architect friend. Construction started in January 2004. No efforts were spared in creating the ideal physical evidence. Three months before the opening of Levuka Resort, the personnel were carefully chosen. Raj always felt that the people factor was the main differentiating factor in any service sector and it constitutes the principal source of competitive advantage.

The resort welcomed its first guests in December 2004. The quality of service was excellent. The rooms were marketed through a network of tour operators in Europe and it enjoyed full capacity during the peak period of 2004 and 2005. During 2006 with the opening of several hotels in the region, Levuka became an ideal poaching ground for personnel. Many left. It was not easy to get labour of the right quality in the region. People were recruited and trained on the job. The net consequence was a fall in the level of service quality. No mechanism to monitor customer satisfaction was in place.  Also customer complaints were on the increase and most of them remained unsolved. Many clients cancelled their reservation. The situation was getting out of control. In September 2006 Raj recruited a customer service manager in order to reverse the trend and remedy the situation.

problem1. From your knowledge of the Mauritian society and economy, discuss five other factors, besides the creation of jobs, which have contributed to the growth of the services sector in Mauritius.

problem2. ‘The success of any business depends to a large extent on its location.’ Discuss factors determining the location of a business like a tourist resort.

problem3. describe how People can be the most important differentiating factor in a service sector like the hospitality industry.

problem4. With reference to a tourist resort, describe the term physical evidence.

problem5. What is the function of the physical evidence?

problem6. Why is it important for an organization to monitor customer satisfaction?

problem7. Discuss a mechanism for obtaining a feedback from customers.

problem8. Why are complaints important to organizations?

problem9. Propose a mechanism for handling complaints for Levuka resort.