mission hills final case study

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Mission Hills Golf Resort: A Case Study

University Of South Florida Sarasota Manatee

Strategic Management for Hospitality

Sharon Litchfield

Molly Moore

Anthony Henson


Background

Dr. David Chu is the founder and visionary behind Mission Hills; his vision was based in

part on China's growth and the need for leisure activities. He wanted to become the premiere

brand in leisure and golf. As part of this plan he developed his first two golf courses which are

located in Shenzhen, China. They are situated on what was previously swampland, which was

extremely inexpensive because it was located in a small fishing village. (Mark and Howell,

2012).

In 1997, Dr. Chu set a monumental goal of being the largest golf resort facility in the

world. From 1997 to 2005, Dr. Chu and a group of investors built a luxury hotel to accommodate

nearby Hong Kong visitors, thus becoming a private golf club. Later on the investors sold their

shares, disenchanted by the lack of return on their investments. Dr. Chu and his family then self-

financed the balance of Mission Hills from two golf courses to twelve (designed by some of the

most famous names in golf) and more hotels. This resulted in the resort being awarded the status

of the world's largest golf resort by the Guinness World Record, which accomplished one of his

main goals. (Mark and Howell, 2012). This also led to the expansion in Dongguan which was

just north of the original resort.

Dr. Chu has created a world-class golf facility which attracts some of the largest golf

events such as the World Cup of Golf. In later years, Mission Hills would accommodate up to

100 international events a year. One of the main reasons for these successes is his son, Ken Chu,

who returned to China in 1995 to help manage and run his father's golf facilities. (Mark and

Howell, 2012). Ken Chu attended college in Canada and earned his undergraduate degree in


administrative and commercial studies. Ken Chu credits his time in Canada as a great influence

in developing his management style. (Mark and Howell, 2012). When he started at the resort he

cross trained in every department so he could understand how they all worked and interacted on

a daily basis. "As Mission Hills expanded its facilities, its employee complement grew from the

low hundreds in 1997 to 4,000 in 2000. As the firm added golf courses and built another hotel,

the number of staff steadily increased. By 2007, Mission Hills had more than 7,000 employees to

serve its 12 championship golf courses, three golf academies, two five-star hotels, three award-

winning spas, Asia’s largest tennis facilities with 51 tennis courts and a professional tennis

academy, numerous dining outlets and meeting and convention centers." (Mark and Howell,

2012). All this success and expansion has led to their biggest challenge which is a shortage of

qualified employees. They are also starting to lose some of their more talented staff to rival

hotels who offer a faster track to supervisory positions.

Analysis

This analysis will be focusing on Mission Hills’ ‘human resources capital’ reviewing

what is in place and what needs to be implemented in the future to keep their brand at the top in

the world. Mr. Ken Chu recognizes that if they want to be the best they need to recruit and retain

the brightest and best employees so they can complete the “mission statement” by providing

unrivaled guest service. (Mark and Howell, 2012).

Using the “configuration” strategic management school of thought, the SWOT analysis

will start by looking at Mission Hills’ internal strengths which will help the company succeed

and continue to grow in the resort business. The company has managed to keep employee

turnover below industry average since opening by implementing many employee programs


including ongoing training, education, promotions, and focusing on creating a family

environment. They also have a very well trained staff in part due to hiring graduates from local

hospitality schools. In addition, Mission Hills offers competitive packages which includes health

insurance, as on-site living quarters, an employee clubhouse, free daily meals, and many others.

(Mark and Howell, 2012). All these benefits make for a very desirable place to work, but is it

enough to recruit and retain for another five star resort?

The current senior management staff has developed their officers and supervisors to this

point in their success, but there are also some weaknesses that should be addressed. The

‘officers’ are defined as front line staff, and are comprised of mostly a ‘less’ educated group of

people, who have very low self-confidence, unable to act independently or take initiative when

dealing with guests. As a result middle management needs to take on more operational duties

which takes away some of the human resources responsibilities needed to move their staff

forward. As Mission Hills attracts more diverse guests to their resorts they are also experiencing

trouble with communication from front line staff (officers) to guests. (Mark and Howell, 2012).

This is an issue because your guest’s level of comfort and satisfaction is dependent on being

understood.

Mission Hills is presented with the external opportunity to expand their already massive

resort conglomerate to an area known as Haikou. It is the provincial capital of the Hainan Island

off the south China coast; the island is mostly comprised of lava rock. (Mark and Howell, 2012).

By expanding into a new location they can offer an exciting new resort with different vistas and

experiences, less pollution; which will attract new and returning guests from around the world.

They will need to hire an additional few thousand staff, most of which will come from the

countryside of the island. The Haikou resort will also open up opportunities for current


employees at Mission Hills to promotions that may not have been available at their current

location.

External threats that could hinder expansion would include the one child policy, which

has affected the population of young people in the workforce. Another threat is the pampered

children of China’s new middle-class, who are not striking out into the work place as their

parents once did. The rural, agrarian area of this expansion is also very remote and will require

Mission Hills to reach out to prospective employees from other parts of China and other

countries. The final threat is that other five star resorts are now being built across China, which

will compete for Mission Hills market share and employee resources. (Mark and Howell, 2012).

Assumptions

Although Missions Hills is paying a competitive wage to their employees, employees are

leaving for better opportunities, which may include career advancement and better standards of

living. (Mark and Howell, 2012). It can also be assumed that the construction of new five star

hotels will continue to grow as China prospers and outside interests from other countries come in

to do business. This will mean an increasingly competitive job marketplace that Mission Hills

will have to compete in. The Chinese government is also relaxing the one child maximum which

will alleviate the workforce problem over time.

Problem

The main problem for Mission Hills’ future is the lack of a diverse, well trained, educated

and exemplary staff that meets Ken Chu’s definition of attitude and potential which is

consummate with a five star luxury resort.


Alternatives

Based on the employment opportunities within the surrounding area of the Hainan Island,

and with the advent of five star hotels, it’s clear that a robust human resources benefits package

is necessary. In order to compete, Mission Hills needs to keep loyal, highly trained, educated and

experienced staffing levels to keep the momentum needed for growth of the company. This

includes employee perks, PTO, better living accommodations, employment contracts and

continuing education and a higher standard of living.

Recommendations

These recommendations are based on the human resources needed within Mission Hills

to move this company forward in their expansion into other areas of China. (Mark and Howell,

2012).

One of the initiatives recommended would be to provide students of the local Hospitality

and Tourism University with an internship program; which upon graduation would guarantee

them a position within Mission Hills, with choice of property, in supervisory positions. Mission

Hills should also partner with local school systems and study abroad programs in another

country’s university system. This will bring diversity and knowledge from around the world to

Mission Hills. They also need to work with the Hainan Island local school system to enhance

curriculum with exposure to different cultures and languages needed in today’s society.

Mission Hills should also provide entry level staff with ongoing education in partnership

with the local Hospitality and Tourism University. This would be available, at no cost based on

need, their current education level; and in some cases they would offer a full scholarship if the

staff member meets criteria requirements. It is also strongly recommended that “English” be


taught to every staff member, since it is universally recognized as a second language for many

countries.

Another recommendation that would instill loyalty would be to provide employment

contracts which would benefit both the employees and the company. Front level staff would have

continued education benefits along with a two-five year contract based upon years of education

needed. Mid-level management, assuming minimum education requirements are met, would

have a three year contract. Upper-level management would have a five year contract. This would

help provide stability and a sense of worth to the employee. This would benefit the company as

well, ensuring that the staff they hire and train are most likely going to remain if they feel the

company is investing in them and offers an employment contract.

Another recommendation would be to offer housing as follows. All single, qualified staff

members would have on site-dormitories provided, as long as they are enrolled in continued

education studies. Qualified staff members who have a family would receive stipend assistance

to live “offsite” in the local community.

Mission Hills recognizes that many of the staff come from other areas of China and have

relocated for this great opportunity to work and learn at one of the premiere resorts in the world.

Therefore, it is recommended that PTO (paid time off) be given based on length of service. After

one year of employment it is recommended that each staff member, independent of their staff

level, shall be given three weeks paid time off, which can be used at their discretion as vacation,

sick, or other (PTO). After three years of service an employee will receive four weeks per year in

PTO, after ten years of service they would receive six weeks PTO per year. PTO is necessary to

show that the employer values the employee’s needs for family and wellness.


Finally, employee perks are some things that a lot of employees look for and desire, it

shows the company cares about their well-being and not just the bottom line. Listed below are a

few suggestions to be considered for all Mission Hill employees.

Offsite outings for employees and families such as picnics, sporting events, etc.

Discounts off the hotel’s offered services: golf, tennis, gym, spa, etc.

It is also very important to have a strong employee recognition program.

The analysis and recommendations discussed in this paper are part of the ‘configuration”

strategies in providing a workforce that is needed for the future transformation of Mission Hill's resorts

into one of the most sought after in the world because of their exemplary service. They will fulfill their

mission statement if they follow these recommendations; it is the foundation of their vision.

Learning Experience

From analyzing the Mission Hills case study, I realized how important and valuable a company's

human capital is to their success and the customer experience. I think in the US, companies take people

for granted, in that, if they build a company, there will be people to work there. I now have an

understanding around foreign companies that attract and cater to an English speaking market segment

especially one of luxury. It is extremely challenging to find qualified, educated and career-driven minded

workers to not only work in an Asian foreign market, but in a rural, underdeveloped if that.

Mallory Moore

This was a good case study to start using the lessons learned as it showed that although there

were some initial strategies, it emphasized the need for ongoing strategy in order to reach your goals and

stay relevant. The whole process of working within a team was great since it was like working within the

company itself. I learned that listening to my teammates and then opening it up to discussion was very

meaningful because everyone has a different perspective, which may vary from your own, but is valuable


nonetheless. I also learned that we could have gone much further into the case if there were more time

available, because I’m sure there were other aspects that could have and should have been addressed, i.e.

the current culture vs the older generations culture and values. This again reinforces the need to delve

deep into the subject so you’re presenting an unbiased strategy.

Sharon Litchfield

References

Mark, Ken. Howell, Jane. (2012) MISSION HILLS: TAKING THE NEXT STEP. Richard Ivey

School of Business, University of Western Ontario.

mission hills final case study

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