BM1710

Project Management at the Phoenician

The Phoenician in Phoenix, Arizona is part of Starwood’s Luxury Collection and is the only
AAA Five Diamond Award resort in the southwestern United States. Sophistication, elegance,
and excellence only begin to describe the guest experience at the hotel. Guests can dine in one (1)
of nine (9) restaurants, relax poolside, play tennis, take in 27 holes of golf on three (3) 9-hole
courses, or relax with a variety of soothing spa treatments at the 22,000-square-foot Centre for
Well-Being.

The Phoenician recently embarked on an ambitious $38 million spa and golf renovation program.
The resort’s golf and spa programs historically earned high marks from surveys in their
industries over the years, but the environment was changing. Evidence of this change was seen in
the explosive growth of new golf courses and spas in the Southwest region. Phoenix alone has
over 275 golf courses, and the Southwest boasts the largest concentration of new luxury spas
anywhere. The Phoenician’s facilities, while world-class and highly rated, were more than 15
years old. The hotel has recently been awarded Five Diamond statusrenewed emphasis on
bringing every process and service at the property up to Five Diamond level.

The decision to renovate the golf course and existing spa became not a question of whether to
undertake the projects, but to what degree they needed to be pursued. Key considerations
centered on (1) whether to build basic facilities or commit to the grandiose luxury level, (2)
having a domestic versus international reputation, and (3) developing creative packaging of the
new facilities to attract loyal guests, such as a spa and golf “country club-like” membership
program. Such a program would be limited to about 600 spa/golf memberships, with a one-time
fee of $65,000 each.

The company’s senior management considered three (3) options for the Centre for Well- Being
spa. First, the existing space in the heart of the resort could be renovated. This option would
require relocating the spa to another part of the resort and offering limited treatments during this
time, thereby reducing spa revenues significantly. With option 2, hilly terrain directly behind the
resort could be carved out to create a new mountainside

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facility with sweeping vistas. This option meant the closure of one of the hotel’s buildings
housing 60 guest rooms and suites during the construction period. The existing spa could remain
open, however. Under option 3, a parking structure on existing hotel property could be used,
having the least impact on revenues. The first option was seen as a short-term fix, while the
remaining two (2) were viewed as having longer-term potential.

Additional discussion centered on the type of spa to be built. A recent acquisition of the Bliss spa
brand forStarwood’s W Hotels was an option, offering day spa amenities and an indulgence
atmosphere. The second option was to remain a holistic resort spa with an emphasis on health and
restoration. The third option was to become a destination spa with dedicated guest stays by
offering week-long programs. Day spas are the fastest- growing category, with few destination
spas.

The Phoenician management team, with assistance from Starwood Field Operations and
Corporate offices, prepared an extensive analysis of strengths, weaknesses, opportunities, and
threats to understand the environment better. The result of this analysis was used by the team to
identify the set of activities necessary for each option. The Corporate Design and Construction
group developed architectural and engineering plans, as well as the work breakdown structure
and diagrams showing the critical path for the

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possible project options. The work breakdown structure, activity times, and activity
precedencerelationships are shown in the table on the previous page.

Work Breakdown Structure Activity Activity

Time Precedence
(days) Relationships
Project Conception
A. Kick-off Meeting 2 -
B. Creation of spa specifications 30 A
Geotechnical Investigation
C. Preliminary site characterizations 10 B
D. Subsurface investigations 10 C
E. Laboratory testing 5 D
F. Geologic hazard assessments 10 E
Design Development
G. Initial designs 70 B
H. Preliminary zoning compliance plan 15 C, G
I. Final designs 18 H
J. Owner approval of designs 5 I
Documentation and Cost Estimation
K. Construction documentation and 80 F, I
landscapepackage
L. Acquisition of contractor estimates and 90 J, K
bids
Decision
M. Owner approval of one (1) of the three (3) 60 L
projects

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Outline:

I. Background
One of the most luxurious and well-known resorts in the United States, the Phoenician, a
part of the Starwood Luxury Collection nestled in Phoenix, Arizona. The Phoenician
offers a boutique hotel, ten restaurants and lounges, a championship golf course, tennis
courts and a world-renowned soothing spa. As its sophistication, elegance and
excellence described by its guests, the Phoenician is the only AAA Five Diamond Award
resort in the southwestern United States.

As part of a capital improvement project, resort leaders sought an upgrade. Recently,

they have been planning to renovate its golf courses and spa with a $38 million budget.
These two earned high marks from the surveys over the years. One of the reasons why
management decided to have an improvement is the changing environment that leads to
growth of new golf courses and spas in the region of southwest.

However, the Phoenician management team is considering (3) possible breakdown

structures in order to compare different project options and opt for the best selection for
the renovation of the center for well-being. Each option must consider vitally,
circumventing negative consequences that may affect the reputation of the resort and
even its guests.

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II. Statement of the

Problem A.
i. In defining and organizing the project, it is important to know operations as well
as the assigned personnel as a way of preparing the plan. The senior
management of the Phoenician must ensure their project will be promptly
finished within its budget.

ii. Management must prioritize jobs and examine the budget when planning the project.
The relevance of listing all tasks and ranking them according to their importance is significant
because senior management uses that list to estimate the amount of money and time required
to accomplish the project.
iii. It is the preferred implementation choice for monitoring and supervising the project;
tasks were assigned to the appropriate employees who are capable of handling responsibilities.
To minimize disagreements that could damage the entire project, a representative should
check their project plan to ensure that it is working properly.

B. Option 2, which is steep territory right behind the resort, might be chiseled out to create a
new hillside complex with panoramic vistas, was my personal favorite. This option is linked
to some significant intangible factors, such as the fact that Option 2 has a longer-term
potential, which means that some guests will seek out other spa salons, the resort's
revenue will decrease, and it must operate legally because the terrain will be used is not
owned by the resort.

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C. Network Diagram for the Spa Selection Process

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III. Areas of Consideration

 Budget deficiency for the project
 Income
 Planning takes too long
 Customer/Guest Satisfaction
 Project options

IV. Alternative Courses of Action

 Consider the guests’ opinion.

Advantage: Can increase customer satisfaction.

Disadvantage: Too many opinions.

 Choose cheaper materials.

Advantage: Save money.

Disadvantage: Can affect their reputation.

 Eliminate one of the project options.

Advantage: Management can evaluate well the two options.

Disadvantage: Leads to fewer ideas.

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V. Recommendation

The resort's management should make the final decision. Choose the best solution for
both the resort and the guests. Implementing this suggestion will assist management in
maintaining its world-class status. Choosing the best alternative can have a significant
influence because it can avoid undesirable implications such as budget constraints,
delayed customer satisfaction, and determine if the project will be completed on time.

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