In the first four years of its existence, 12 firms won the Malcolm Baldrige National Quality
Award: eight came from manufacturing; three were in the small-business category; and only one, Federal Express, hailed from the service sector. Certain aspects of the service encounter that are endemic to the hotel industry may make it difficult but not impossible to apply many of the management principles from other industries. Those aspects include the intangibility and
perishability of the product, variability of delivery, simultaneous production and consumption of
the service, and the changing needs and expectations of providers and users.(2) In a seminar held
at the 1991 Annual CHRIE Conference in Houston, hospitality educators and industry
professionals stated their belief that the hotel industry could successfully apply Baldrige award
criteria and achieve performance levels needed to win the award.(3) That belief was substantiated
on October 14, 1992, when the Ritz-Carlton Hotel Company was named a winner of the 1992 Baldrige award, making it the first hotel company to win this coveted honor.
In this article, I will relate the lessons of the Ritz-Carlton experience, based on an extensive interview with Patrick Mene, Ritz-Carlton's corporate director of quality. At the conclusion, I will
discuss some of the issues relative to implementation of TQM in the hotel industry.
The contemporary Ritz-Carlton. The Ritz-Carlton Hotel Company is a management firm that
develops and operates luxury hotels worldwide. It was formed in 1983 when Atlanta-based W.B. Johnson Properties purchased exclusive U.S. rights to the Ritz-Carlton trademark along with the Boston Ritz-Carlton Hotel. Today, under the leadership of William B. Johnson (CEO) and Horst Schulze (COO), the privately-owned company operates 27 hotels and resorts in the United States and Australia.(4) Its future international expansion plans include adding hotels in Hong Kong, Barcelona, and Cancun. Ritz-Carlton also has nine international sales offices and employs 11,500
people.