develops premiums resorts, hotels and spas Banyan Tree, 2010. Banyan Tree owns and manages hotels under the Banyan Tree and ‘Angsana ‘ trade name names. From the first flagship resort in Phuket in 1994, Banyan Tree has grown into a multi-business operator globally ( 2010 ) . After it was listed on the Singapore Stock Exchange in 2006, Banyan Tree had expanded outside of Thailand, and is projected to increase to 85 locations in 30 states by 2012 ( 2010 ) . The doctrine behind its operations is based on offering a topographic point for a alone experience and the sense of privateness and familiarity that no other hotels can offer.

The chief signifiers of inducements operated in Banyan Tree Hotels and Resorts are comprised of service charges, fillips, committees and wages.

Incentive Bonus – At Banyan Tree, an single fillip inducement plan for the financial twelvemonth is determined by a subjective rating of each individual ‘s public presentation and the company ‘s public presentation for a whole twelvemonth.

Service Charges – Monetary values on eating house bill of fare and spa bill of fare, and hotel room rates are nominal monetary values which are capable to 7 % Government Tax and 10 % service charges. All service charges will be deducted from the resort ‘s gross at the terminal of month and will be paid to employees every 15th of the month.

Best services for writing your paper according to Trustpilot

Premium Partner
From $18.00 per page
4,8 / 5
Writers Experience
Recommended Service
From $13.90 per page
4,6 / 5
Writers Experience
From $20.00 per page
4,5 / 5
Writers Experience
* All Partners were chosen among 50+ writing services by our Customer Satisfaction Team

Since frontline employees ever interact with invitees, the company utilize performance-based inducements to actuate them to hike gross revenues volume of other extra or superior goods and services available in the resort by utilizing up selling and add on selling or cross merchandising tactics. These gross revenues tactics besides help the company to bring forth a selling chance and the company can bask an advertisement cost advantage for other services or merchandises.

Spa Incentives – Banyan Tree Spa launches spa incentive plan for frontline employees of Banyan Tree Resort to help it in advancing and selling its services to fall back invitees. Add on selling or cross merchandising to spa interventions and bundles by frontline employees does non increase gross of the hotel but of Banyan Tree Spa who is the sister company under the parent umbrella.

Figure 1: Spa Incentive for Banyan Tree Phuket Frontline Employees

Front Office Upsell Program – Concentrating on the invitee needs, frontline employees can depict how a higher class of Villas can profit them. This maneuver is called Villa up selling and helps give added value invitee ‘s experience. A frontline employee who can carry a invitee to pay for auxiliary charges for upgrading to a higher type of Villas will have 3 % auxiliary charges as inducement on his or her attempt. In the interim, other frontline employees will besides have 2 % auxiliary charges, since the company considers an addition in grosss as a consequence of a team-based attempt. Thus, incentives from Villa up selling are considered as both single and team-based inducements.

Employee of the Month – Like other houses ‘ pattern, campaigners are nominated by each section in the company and eventually selected by the commission. In footings of wages, the company will host a retreat which is one-night complimentary at a luxury Villa with erstwhile dinner at the resort eating house for two individuals. Furthermore, the employee of the month will travel the Hall of Fame for societal acknowledgment.

Performance-Based Incentives and their Related Issues

Even if performance-based inducements are critical in the company, there are their related issues such as hazard averse, multitask job and squad production that the company needs to take into history and attempts to get by with.

Hazard Averse

In world, the gross of a hotel company tends to fluctuate due to several factors that are beyond employees ‘ control. Random events in the service industry are as follows:

1.1 Economic Situations- Global touristry gets affected by the planetary fiscal crisis. For illustration, in the center of 2008 a terrible worldwide recession discouraged the desire to go. Numerous touristry concerns worldwide suffered from the recognition crunch and many consumers were cutting back on travel disbursement ( United Nation, 2008 ) .

1.2 Political Situations- Thailand ‘s political instability causes negative effects on touristry industry. For illustration, in 2008 after airdrome closing by yellow-shirt protestors, around 80 % of foreign visitants fly to Thailand so the impact on touristry was tremendous ( Fernquest, 2008 ) .

1.3 Disaster- For illustration, Tsunami is one of the strong menaces for touristry industry, particularly seaside touristry. In instance of Phuket Island, this catastrophe consequences in cut downing Numberss of tourers. For illustration, after Tsunami in 2004, Phuket has already lost at least Bt60 billion in touristry gross in the six months ( Thai Websites, 2005 ) .

These random events and other factors such as demand and supply of the market have impacted on the company ‘s gross and employees ‘ gaining severally which is chiefly based on their fixed wage and other chief signifiers of inducements. To forestall employees from being hazard averse, the company compensates them by supplying an attractive compensable bundle such as child instruction aid, calling development, societal and recreational activities, etc. ( Banyan Tree, 2010 ) . Compensated for bearing the ensuing hazard from the random events and other factors, employees feel more relieved to accept their occupations. It can be implied that offering an attractive compensable bundle can retain employment.

Multitask Problem

In a service industry like Banyan Tree, inducement system is non merely used to actuate extra gross revenues, but besides to promote employees to supply service to clients continuously until the terminal of stay. For case, frontline employees can non concentrate merely on up selling or add on selling and neglect other chief occupations. A failure to make their ain occupations might impact another chief signifier of inducements such as service charge from invitees who will return to the resort once more and once more.

Team Production

Team production issue is besides found in the company. It is impossible to give full ownership over the excess value persons create so service charges which are one signifier of inducements are every bit paid to all employees including free-riders. Banyan Tree efforts to extenuate a job of free equitation by making as follows:

Making a teamwork environment to heighten productiveness such as set uping squad edifice activities between sections.

Supporting sanctioning and detering free siting through common monitoring in squads.

Supplying cross preparation in different sections or within the section itself to better apprehension of the different sections and the hotel as a whole for better coordination and teamwork. A

Banyan Tree Hotels and Resorts ‘ Performance and Performance-Based Incentives

Kotler and Keller ( 2009 ) argue that as services are intangible, inseparable, variable and perishable, each feature has its ain challenges and requires certain schemes. There are two challenges concerned with client service attempt. The first 1 is to happen ways to increase the productiveness of service suppliers and another 1 is to happen ways to increase and standardise the quality of the service. To get by with these challenges, all service industries need attempts from their employees who have client orientation to advance strong client trueness.

Banyan Tree Phuket has performed good over old ages. To happen the relationship between the company ‘s public presentation and its performance-based inducements, we assess the company ‘s awards and awards and its grosss from hotel investing[ 1 ].

Awards and Awards

Banyan Tree Hotels and Resorts have won 490 new international awards and awards in 2009, since it was established 16 old ages ago. Banyan Tree ‘s flagship resort, Banyan Tree Phuket affirms its place one of the universe ‘s best, after being voted as one of Conde Nast Traveler Magazine ‘s Readers ‘ 2010 Gold List. These awards are grounds to Banyan Tree ‘s strong planetary stigmatization and continued committedness to service criterions as the Group is spread outing globally.

It is inevitable to reason that attempts made by its employees to supply first-class service are partly an of import part to its awards and awards. With regard to the great service, the company gives the importance of positive employee attitudes to client satisfaction by reenforcing customer-centered attitudes and attracts the best employees it can happen.

Figure 2: Banyan Tree Hotels and Resorts ‘ Awards and Accolades 2009 ( Banyan Tree Holding Limited, 2009 )

Grosss from Hotel Investment

With respect to compensation and inducements, it can be argued that employee satisfaction raises staff morale and motivates employees to seek harder for better work outcomes which help to increase the company ‘s grosss and net incomes in the procedure. Additionally, client satisfaction helps to better an organisation ‘s fiscal public presentation as the organisation is assured of grosss from loyal clients. Figure 4 illustrates its grosss grew invariably from 2005 – 2007, but declined continuously from 2008 to 2009 due to planetary economic crisis, and political instability in Thailand which are external factors.

*Banyan Tree owns and manages luxury hotels under its ain trade name.

Figure 4: Banyan Tree Group ‘s Grosss from Hotel Investment from 2005-2009


A assortment of performance-based inducements provides important motive to Banyan Tree Phuket ‘s employees. The company has designed particular inducements to promote frontline employees whose occupations are involved with invitee contact to bring forth extra grosss to the company by utilizing up selling and add on selling. These gross revenues schemes besides help the company to bring forth a selling chance and the company can bask an advertisement cost advantage for other services or merchandises. Even if there are some issues about its performance-based inducements such as hazard averse, multitask jobs and squad production, the company tries to extenuate their impacts on the company ‘s public presentation.

To go on to be recognized as one of the World ‘s best resorts and bring forth more gross to the company, performance-based inducements play a important function to actuate its employees to accomplish concern ends. In add-on to offering extra goods and services to bring forth add-on gross revenues, employees are willing to supply a positive experience for invitees and exceed guest satisfaction through effectual service bringing to make guest trueness. The more the figure of invitees every bit good as the more gross the company increases, the more inducements and wages employees earn.


I'm Niki!

Would you like to get a custom essay? How about receiving a customized one?

Check it out