SHANGRI-LA HOTELS

Corporate BackgroundShangri-La Hotels and Resorts, a deluxe Asian hotel chain, was founded in Singapore by the Malaysian-Chinese tycoon Robert Kuo !"nspired by #ritish author $a%es Hilton&s Legendary no'el Lost Hori(on, the na%e )Shangri-La* %eant )eternal youth, peace and tran+uility* and e%bodied the serenity and ser'ice for which the hotel chain was renowned throughout the world! ,ith its first and flagship hotel in Singapore, the co%pany +uic ly differentiated itself fro% the co%petition and pro'ided distincti'e Asian standards of hospitality and ser'ice! ,ithin a decade, Hong Kong-based Shangri-La established a world-class reputation and beca%e one of the world&s finest hotel %anage%ent co%panies, garnering international awards and recognition fro% prestigious publications and industry partners-)#est #usiness Hotel Chain in Asia -acific* by #usiness .ra'eler and )#est Hotel Chain* by Chinese Hurun Report! Expansion History "n the early /012s, Shangri-La went through a period of rapid expansion in Asia and built 30 hotels o'er the next decade! .he hotel chain continued to prosper throughout the 3/002s,in step with Asia&s econo%ic boo%! #y /000,Shangri-La had a total of 45 hotels and resorts located in Asia&s %ost sought after leisure destinations! "n the early 3222s,Shangri-La began expanding beyond its core Asian %ar ets through both %anage%ent contracts and owner6operator de'elop%ents! .he Shangri-La 7ubai, in the 8nited Arab 9%irates, opened in $uly 3224,followed a year later by the .raders hotel 7ubai, and a destination Shangri-La : Spa Resort in Muscat, ;%an! As of 322<,Shangri-La was the largest Asian based deluxe hotel group in South Aisa!.he Co%pany %anaged a total of 52 hotels under two brands-the fi'e star Shangri-La and the four star .raders! 7espite its aggressi'e expansion elsewhere, the co%pany re%ained focused on business and capital in'est%ents in the Asia -acific Region, in particular China! .he -ri%ary reason for this decision was the fact that China&s successi'e relaxation of tra'el restrictions dating bac to the late /012s,coupled with rising urban inco%es, had created a boo% in Chinese do%estic and outboard tra'el! ,ith an additional role as the host of the ,orld 9xpo 32/2,Shangri-La planned to capitali(e on China&s econo%ic ad'ance%ent and expand its hotels in China fro% /= to o'er 42 by 3221!

inancia!sShangri-La early focus on the Chinese %ar et helped the co%pany shield itself fro% the worst of the Asian econo%ic crisis of /00=-01,which hit South-9ast Asia hard but left China relati'ely unscathed! "n 3225,the co%pany benefited fro% continuing robust tra'el de%and in Hong Kong and China to post re'enues of >1?3 %illion! #oth roo% and food be'erage re'enues continued to i%pro'e and occupancy rates of Shangri-La hotels increased to =4 percent in 3225,co%pared with =/ percent for 322?!,hile hotel operating costs were %ar et-specific,labor,utilities and %aintenance costs together accounted for approxi%ately 43 percent of gross operating re'enue in a typical Shangri-La property in Asia with 32 percent due to labor costs and the re%aining /3 percent due to utilities and %aintenance costs! Ser"ice #ode!$% S&angri-La Hospita!ity% Starting with its first hotel, Shangri-La Hotel-Singapore,Shagri-La built its brand on ser'ice excellence with a staed %ission to )delight custo%ers each and e'ery ti%e* ,e en'ision a co%%unity of responsible and educated citi(ens who are en'iron%entally conscious, practice social responsibility in their daily li'es and inspire others to do the sa%e! ,e co%%it to operating in an econo%ically, socially and en'iron%entally responsible %anner whilst balancing the interests of di'erse sta eholders! ,e stri'e to be a leader in corporate citi(enship and sustainable de'elop%ent, caring for our e%ployees and custo%ers, see ing to enrich the +uality of life for the co%%unities in which we operate, and ser'e as good stewards of society and the en'iron%ent! Our Approach .he diagra% explains our o'erall approach to ensuring that we deli'er on our CSR Co%%it%ents! 7ri'en by our core 'alues, the areas of CSR that we wor within are ;ur -eople, ;ur #usiness, ;ur 9n'iron%ent and ;ur Co%%unities!

#ission State'ent -hilosophy-Shangri-La hospitality fro% caring people! @ision-.he first choice for custo%ers,e%ployees,shareholders and business partners! Mission-7elighting custo%ers each and e'ery ti%e

Auiding -rinciples-.hey ensure leadership dri'es for results! .hey %a e custo%er loyalty a ey dri'er of our business! .hey enabled decision %a ing at custo%er contact point! .hey co%%itted to the financial success of our own unit and of their co%pany! .hey will create an en'iron%ent where their colleagues %ay achie'e their personal and career goals! (e!egation o) Aut&ority.o achie'e exceptional custo%er ser'ice, Shangri-La used a fi'e le'el organi(ation design! .he co%pany grouped its e%ployees into fi'e tiersB Le'el / Cdi'isional %anagersD,Le'el 3 Cdepart%ental %anagersD,Le'el 4 Csectional %anagersD,Le'el ? Cfront Eline super'isorsD and Le'el 5 Cfront-line e%ployeesD!9ach le'el had separate guidelines,discretion,and a dollar a%ount they could use without %anage%ent&s appro'al in handling custo%er re+uests that were outside of nor%al operational guidelines! Chinese e%ployees were 'ery good at perfor%ing their duties in strict accordance with operational guidelines!Howe'er,the cultural predilection was not to ta e initiati'e but to be told by a superior how to handle a gi'en situation! ;nce an order was gi'en to a specific tas , %ost Chinese wor ers followed the instructions to the letter! ,hile this was an ad'antage in getting %any operational steps co%pleted in their right order, it also %eant that s%all proble%s encountered by guests too a long ti%e to be corrected!