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SMU547

STARK RESORTS: TAKING CARE OF WHAT’S “BUGGING”

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Jack Lim, the manager at Stark Resorts, had a pest problem and it was starting to cost him money.
The four-star hotel, a US$155 million investment, had been plagued by insects since its grand
opening near Orchard Road, Singapore’s premier shopping district, 15 months earlier in November
2017. It was common to find cockroaches in the villas, a typical problem for new constructions.
However, treating the problem sometimes caused more issues. For instance, while pesticides would
kill many of the cockroaches, there was also the risk that guests could find a dead bug in their room
or wake up to find one in their bed.

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Any negative feedback could hurt the hotel’s reputation. Lim encountered a case where an avid social
media influencer, who had stayed in the resort a year ago, was diagnosed with dengue fever1, which
she allegedly caught by the hotel pool. The guest held a bad impression of the resort and had shared
her opinion indiscreetly. She had sworn never to return and even dissuaded her friends, family, and
social media followers from staying at Stark Resorts.
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The negative word of mouth had come full circle to confront Lim and his team. In another instance,
one of the board members’ wives recently took a taxi to the resort. Along the way, the taxi driver
warned her about mosquitoes at the resort as he heard it from a passenger he dropped off a few days
earlier.

The company had been vigilant about initiating and overseeing the administration of pest control
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once a month but their diligence did not seem to solve the issue. They had had numerous heated
conversations with their pest control vendor and had even changed vendors, but to no avail.

Hotel employees, when approached with complaints of insects, would profusely apologise and
helplessly tell hotel guests that there was little they could do about it – a resort in an eco-friendly
environment was bound to have insects. Some staff members would attempt to rectify the problem
by sending housekeeping to catch the insects and to spray the room down with insecticide. Without
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a standard operating procedure, the staff were gradually losing confidence and morale as they tried
their best to handle the problem.

Other resorts in the area had pest problems as well, but they did not seem to be experiencing the same

1
Dengue fever was a tropical disease caused by a virus carried by the Aedes mosquito.
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This case was written by Professor Philip Zerrillo and Dr Josephine Tan at the Singapore Management University. The case
was prepared solely to provide material for class discussion. The authors do not intend to illustrate either effective or
ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information
to protect confidentiality.

Copyright © 2019, Singapore Management University Version: 2019-11-12

This document is authorized for educator review use only by HARISUNDAR GOVINDARAMAN, Other (University not listed) until Nov 2024. Copying or posting is an infringement of copyright.
[email protected] or 617.783.7860
 SMU-19-0035 Stark Resorts: Taking Care of What’s “Bugging” Your Guests

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reputational damage. Stark Resorts’ revenue rate per available room (RevPAR2), a key hotel metric,

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had fallen 6% over the past six months, while surrounding hotels had seen their RevPAR surge
upward by almost 8%. The most common guest complaint at the time of check-out had been the
prevalence of insects, and while this property of Stark Resorts did not have a long enough history to
determine guest loyalty, loyalty rates seemed much lower than their last two hotel openings.

Lim sat back in his chair and contemplated; the board would not be happy with these performance

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indicators. His gaze paused on the poster on the wall from the company founder that read, “Every
day we must do our best to delight our guest, for it is their delight that creates a satisfied customer
and a satisfied customer is our reason for existence.” The message renewed Lim’s confidence and
motivation. It was time to take a different course of action to tackle the pest issue, repair the
reputational damage, and gain the loyalty of guests at Stark Resorts.

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2
RevPAR was calculated by multiplying a hotel's average daily room rate by its occupancy rate.

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This document is authorized for educator review use only by HARISUNDAR GOVINDARAMAN, Other (University not listed) until Nov 2024. Copying or posting is an infringement of copyright.
[email protected] or 617.783.7860