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Unformatted text preview: Shanghai Majestic Hotels S UM MARY : Majestica Hotels Inc. is planning a late arrival into the Asian Pacific hotel industry. It is currently in midst of negotiations with CPS (Commercial Properties of Shanghai Ltd) a government subsidiary assuming the role of owner and Majestica as the operator of the hotel. However the negotiations have reached a deadlock with many issues that need to be resolved before an agreement may be reached. The dispute reflected the conflict between Majesticas operating philosophy and CPSs own approach as the owner. I SSUES AND A NALYSIS : Length of the contract term 50 year contract a 50 year contract as suggested by Majestica means that it would give both parties ample time to adjust and fully establish the hotel in Chinas industry allowing Majestica to concentrate on its own ownership plans for the future. However it could also prove to be too long for the saturated market in Shanghai. 30 year contract although not as long as the 50 year contract, a 30 year contract is still long term for Majestica to establish this hotel and gain knowledge on the hotel industry from this strategic alliance. Additionally the operation period may also be extended to another 30 years giving Majestica an exit strategy in case of failure. Name of the Hotel Name Majestica Hotel Shanghai Suggested by Majestica this name gives the advantage of brand recognition as an established leader in the luxury hotel industry. This means added profits from brand loyalty and brand leader in the luxury hotel industry....
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This note was uploaded on 01/26/2010 for the course ADMS 4900 taught by Professor Jungchinshen during the Spring '10 term at York University.
- Spring '10