Within Australia, Australian Hotels Inc (AHI) operates nine hotels and employs over 2000 permanent full-time staff, 300 permanent part-time employees and 100 casual staff. One of its recent ventures, the Sydney Airport hotel (SAH), opened in March 1995. The hotel is the closest one to Sydney Airport and is designed to provide the best available accommodation, food and beverage and meeting facilities in Sydney's southern suburbs. Like many international hotel chains, however, AHI has experienced difficulties in Australia in providing long-term profits for hotel owners, as a result of the country's high labour-cost structure. To develop an economically viable hotel organisation model, AHI decided to implement some new policies and practices at SAH.

The first of these initiatives was an organisational structure with only three levels of management, compared with the usual seven. Partly because of this change, there are 25 per cent fewer management positions, which allows a significant saving. The change also has other effects. Communication, both up and down the organisation, has improved considerably. Decision-making has in many cases been moved down to front-line employees. As a result, guest requests are usually met without going to a supervisor, which improves both customer satisfaction and employee satisfaction.

The hotel also recognised that it would need a different approach to selecting employees who would fit its new policies. In its advertisements, the hotel stated a preference for people with some 'service' experience in order to minimise traditional work practices being introduced into the hotel. More than 7000 applicants filled in application forms for the 120 jobs first offered at SAH. The rest of the positions at the hotel (30 management and 40 shift leader positions) were predominantly filled by transfers from other AHI properties.