OM in the News: Service Quality at MGM Grand–the World’s Largest Hotel

The Wall Street Journal’s (Sept.22, 2011) headline, “When 12,000 Guests Spend the Night”, makes a great lead-in for teaching quality in Chapter 6. With 5,043 guest rooms in towers overlooking the famous Las Vegas strip and an occupancy rate of 96.8%, how can such a mega property counter perceptions that it’s just too big to give good service?  The strategy, at every point–from parking lots to check-ins to housekeeping–is to make its operations feel small. It’s not easy to do with a driveway entrance that’s 14 lanes wide, where the lobby has 100’s of people waiting to check-in,where 70,000 people enter the doors every day (for the hotel, casino, restaurants, shows, meetings)–all in an aging 18 year-old hotel building.

One of MGM’s techniques for service quality is to judge execs on how well their staff meet quality standards. Room service must be delivered within 30 minutes of an order (and there are 1,000 orders/day!), maintenance calls must be answered in 15 minutes  (by a staff of 186 engineering employees with mobile carts), a car must be retrieved by a valet in 8 minutes (not easy when the parking lot holds 9,487 cars!), and the 370 housekeepers must clean each room in 30 minutes.

To cut the perception that check-in queues are too long (for years guests stood in 2 long snaking lines), the MGM now has 36 small lines, one in front of each front-desk worker. “There’s the perception”, says the front desk manager,” that they’re going to get through quickly”. This makes a nice teaching point in Module D (Waiting Line Models), since it contradicts the mathematics of  a single queue with multiple servers.

To cut lines further, lobby greeters with iPads abound, giving directions and doing check-outs. New ID scanners download names and addresses from drivers licenses and passports so employees don’t have to type in the data–shaving time off each check-in.

Discussion questions:

1. How does the hotel help a guest who can’t find his car in the parking lot?

2. What other technologies can be used to make the MGM operations more efficient?