Hospitality Management

HIP140 Business Etiquette: Project 3

Ethical Dilemmas

Project Description:

In this project you will be presented with 2 case studies that involve ethical dilemmas. Please read each case and write a 1-paragraph opinion on whether or not you feel a breach of ethics has occurred for each of the dilemmas.

Ethical Dilemma #1

Both hotels and airlines generally operate with low profit margins (Sales minus expenses and salaries = profit margin), which are generally in the 1% to 5% range. In order to maximize revenue, hotels and airlines utilize the practice of overbooking. In the hotel industry, that would mean selling more rooms on any particular date than they have rooms available. In the airline industry, it would mean selling more seats than they have on any particular flight. Their reason is simple. Empty beds and empty airline seats mean lost revenue. Both hotels and airlines assume that a certain percentage of their customers are likely to be no-shows, cancellations, or maybe made last minute changes to their travel for a future date. However, there are risks that all booked hotel guests and flight passengers do show up. Then hotels may have to “walk a guest” and try to find them another hotel at the hotel’s expense. Airlines will have to “bump” passengers, and will usually offer some type of compensation to the passenger(s) bumped from the flight, such as a free flight voucher for a future flight, or sometimes monetary compensation. While the practice of overbooking is legal, do you believe that this is an ethical practice?

Ethical Dilemma #2

A new gourmet hamburger joint has recently opened in the downtown business district. The customers have been very critical of the food and service, and almost every review posted on Yelp has been just 1 star (poor). The owner is very upset, and comes up with an idea that she hopes will turn things around. The ownership has now added a message at the bottom of every receipt that says “Give us a 4 star review on Yelp and receive a free appetizer”. In addition, the owner just posted a message on Facebook that says “Like us on Facebook and receive a free appetizer”. Do you think these postings on social media by the owner are ethical?

Submit your minimum2 paragraphs to the Project 3 Dropbox folder on D2L.