Innovation

The company provides services which are not very different from any other hotel chain or business working in this sector. The real innovative aspect about HM hotels and whala! Hotels is that it keeps in mind, especially in Mexico and the Dominican Republic, the living conditions people experience in their everyday life.

Firstly, they maintain an equilibrium between genders since they feel this is the right choice (Gender equality SDG). Out of 901 employees, 514 are female (57%). At the central offices there are 29 people, of which 21 female (79%). Clearly, these are great efforts to guarantee employment for women as much as for men, or even more.

Then, working conditions are also taken care of. Workers are provided uniforms, an appropriate dressing room, they receive three emails a day to check on them and to ask for feedback about their conditions. Moreover, to create familiar bonds within the working environment, a party for employees is given once a year. Employees are paid higher than the minimum wage in Mexico and the Dominican Republic, and, depending on each case, they might also be provided with free housing or transportation. Every year, training courses are provided, either outsourced or given by their own executives.

Lastly, improvement of the society as a whole is also a central value related to the previous two. This is pursued by hiring local companies for furniture, civil construction, and engineering.

Inspiration

The leader and founder of this company is Antonio Horrach. His family has always been a referent family in Majorcan society. On the one hand, their business has always been based on the idea of making something good for their society and to benefit it someway. This is why they have always “hired local employees, worked with local suppliers, supported social causes, helped preserve the environment, and improved local areas”. On the other hand, what the Horrach family wanted was to provide good quality services to customers, “the best experience possible”, in order for them to obtain maximum satisfaction.

Overall impact

The innovation has mainly had an impact on the living and working conditions of people in developing countries, in terms of reduced general and gender-specific inequalities. Minimum wages in the Dominican Republic and Mexico are pretty low, respectively 8,310 Dominican pesos per month and 172.87 US dollars per day. HM Hotels is committed to paying its workers more than the minimum wage established in these countries. Of course, wages of workers are different depending on the department and position they work for, but it is possible to say that any member of the staff will be making approximately 20% more than the minimum wage after working two or three years for the company. Therefore, workers are benefitted both in the short term, since they immediately start working in decent conditions, but also in the long term, because of their wages.

Local communities of people have received part of this benefit as well, since out of a total of 1,526 workers, 625 are in the Dominican Republic, and of these 616 are local and 9 are foreign. This makes a percentage of 98.5 %. Moreover, the flows of tourists staying in the hotel create more selling opportunities for local businesses, restaurants, and shops. HM Hotels helped revive the city as well: one of the hotels they have in Mexico was, before being a functional structure, an abandoned and empty building, which has now been given a completely new life. Residential prices in the surrounding areas have gone up too, and continue to in a proportional way with respect to the tourists’ flows.

Business benefit

The business enjoys great benefits from this innovation. First of all, satisfied workers (as we said previously, workers can take advantage of many conditions). Workers are satisfied also because this business is a family business, and not a multinational enterprise. Therefore, relationships among staff members tend to be much closer and familiar. Staff rotation and turnover are very low with respect to other hotels chains and similar structures. Normally, employees’ turnover in hotels is around 20% and the staff dropout rate is around 70%. In HM Hotels, turnover rate is around 10-12%.

Satisfied workers mean satisfied clients. The satisfaction can be seen and evaluated from the ratings people leave on the website about the company: at the moment it has a 4.3/5 overall rate with more than 3,000 reviews done by clients.

The reputation of the hotel is great, not only among clients, but also among businesspeople. Indeed, besides constructing and managing its own hotels, HM Hotels offers the service of managing others’ hotels: entrepreneurs trust HM and they allow it to manage their own hotels taken for rent. This means more services for the company to offer and provide.

Social and environmental benefit

This business is a sustainable business in the sense that, mainly, it turns certain societies into more sustainable ones, considering variables like working conditions, quality of life, (gender) inequalities, general conditions of developing countries, and general working/waging standards (raising them). The benefit to the society has to be interpreted in a broader sense, as well as the meaning of sustainability, which is not necessarily something strictly related to the environment. And we have already provided clear evidence of how this business makes a society more sustainable and better off.

What we have not mentioned is that this business benefits the environment as well. As an example, they use natural plants and native species of plants for the decoration of their gardens, and they cultivate their own fruits and vegetables which are then used to prepare cocktails and aperitives for clients. In the last hotel they built, which opened in June, they used 6,000 air carnations to make a vertical garden in the reception. Moreover, they always try to recycle water from showers and bathroom sinks and use it to fill the toilet tanks and water gardens. And in the Caribbean, they clean the beaches daily. This cannot be done in Mallorca, since it is under the competence of local authorities.

Interview

Pedro Prats Mulet, Development manager