Majestica and CPS have the problem of agreeing on a large amount of issues—Majestica wants to keep everything consistent with the operations of their current hotels, while CPS wants to have a controlling hand in the construction and management of the hotel. First, CPS wants to learn how to manage the hotel themselves in the near future. Majestica wants to sign a contract term no less than 50 years because that is what they have on their current hotels elsewhere. However, since the average hotel management term in China is only 10 years, CPS is prepared to offer no more than a 30 year contract. CPS also does not want Majestica to control all aspects of the construction and design of the control, whereas Majestica feels is necessary they do control these aspects.
Since Majestica has named all of the hotels it manages as “Majestica Hotel, (Location),” it feels it should name this hotel “Majestica Hotel, Shanghai” in order to be consistent. CPS disagrees and wants to name the hotel “Shanghai Oceania – Majestica Hotel.” The management and general staffing of the hotel is the most important issue at hand here. Majestica believes that creating a service culture at the hotel is the most important part of being a successful luxury hotel. Therefore, experienced expatriate managers and carefully selected employees is a must in Majestica’s eyes. CPS disagrees and wants to have a Chinese general manager in the near future as well as Chinese employees at every level. CPS wants to learn how to properly manage a luxury hotel and thinks this will take only a few years at most. Majestica’s Richard Roy knows that careful staffing is the secret to success in this business, and on average it took 12 to 15 years for the service culture to be understood by hotel professionals.
Where to buy supplies, equipment, and all other hotel products is another issue. Being affiliated