Sleep Easy Motel Essays

Sleep Easy Motel Essays Sleep Easy Motel Paper Sleep Easy Motel Paper Essay Topic: Easy Tonia Simatos 045-262-078 Case # 6- SleepEasy Motel 1. Problem Statement a. Current State: * SleepEasy motel is losing money. Occupancy of the hotel is around 55 percent of capacity which according to industry figures is 13 percent below the average of 68 percent for similar motels in the area. * Large number of customers driving around the parking lot of motel and leaving. * A lot of competition In the area, other hotels offer better facilities. b. Desired state * Have the occupancy of hotel go up to and stabilize to at least 68 percent capacity to generate more profit. Better facilities to attract more customers and have them choose SleepEasy Motel instead of other competitors. 2. Analysis c. Why did this problem arise? SleepEasy’s facilities are lacking. Facilities are most important to approximately 78% of the visitors in the area when choosing accommodation (no restaurant or pool). Huang is relying on customers coming to the resort by just finding it when they drive toward the area however, 40 percent of the visitors plan and reserve their rooms more than 60 days in advance. There are no signs advertising the motel. d. What is important from a 5C or SWOT or PEST perspective 3. SWOT- Strengths- located in a rapidly expanding resort area. – Only 22km away from a tourist area. Weaknesses- No recreational facilities. – No advertising or signage to attract customers. Opportunities- Join a franchise to attract more customers. Threats- a lot of current competition of bigger hotel chains. – More motels opening in the area. 4. Alternatives e. Make changes to SleepEasy Motel to accommodate and attract more customers, create a loyalty program and launch advertising initiatives. Pro- Huang will keep the revenue from sales and can manage the hotel’s maintenance and improvements on his own. Con- Since the hotel is not doing well Huang may have to take out a loan to renovate the hotel and he may not be able to afford it. f. Join the Days Inn franchise to target more customers. Pros- no major capital investment. – Recognized national chain, use of central reservation system and website will attract more customers. Offers- InnCentives loyalty club for frequent travelers and corporate rate programs for business travelers. September Days Club for travelers to receive discounts and quarterly travel magazine. -Past promotion sold an additional 10, 000 rooms. Cons- Huang must pay 8 percent of gross room revenues to the franchise. Huang must agree to maintain, repair and improve the facility in accordance to Days Inn’s franchise standards. g. Join the Holiday Inn Franchise to target more customers. Pros- Huang will probably be required to build a pool, can charge $75 per day as opposed to $45. – Recognized national chain, use of central reservation system an d website will attract more customers. – Offers loyalty program, Priority Club Worldwide. – Advertises on TV and in print. Cons- must pay 8 percent of gross room revenues to the franchise. – Huang must contribute a capital investment of between $300,000 to $500,000. Huang must agree to maintain, repair and improve the facility in accordance to Days Inn’s franchise standards. 5. Recommendation h. Considering that 78 percent of the visitors to this area indicated that recreational facilities were important in their choice of accommodation, Huang should join the Holiday Inn franchise. 6. Implementation i. If Huang does not have the money for the capital investment he must take out a loan to renovate the hotel. He must then implement maintenance of the hotel, repairs and improvements in compliance with Holiday Inn. 7. Theory / Jargon / Concepts I USED in analyzing this case. S. W. O. T analysis