CASE THOMAS September 30, 2011 1. What are
CASE #7 ACCRA BEACH HOTEL: BLOCK BUILDING OF CAPACITY & REVENUE MANAGEMENT PRODUCT SERVICE DR. KERK BURBANK DONE BY KEZIE THOMAS September 30, 2011 1.
What are the key considerations facing the hotel as it reviews the booking request from the WICB? Three concerns that Cherita and the GM should question when reviewing the booking request from the West Indies Cricket Board (WICB) are: i. Whether revenue- Income/Expenses, would be good or not ii. The impact on their regular guests, i. e. the individual travelers, the corporate travelers, & the tour operators. iii.Whether they would receive the publicity they are expecting to receive The hotel recalled from past experiences, the desired dates that the WICB requested were usually very busy days.
Therefore, their key considerations were whether to accept the business from the WICB. In terms of revenue: it was forecasted that the WICB would more than likely pay the average lower rates ($140-$150) that the hotel offered for the rooms. In addition to that, they presumed that the team members and officials would eat elsewhere because of the per diem budget they were placed on rather than eating at the hotel.On the other hand, their regular customers who frequent there for a number of meals such as breakfast accounting for 80% of all guests and 30% of them who dines in were a much promising crowd. On average, both vacationers and corporate customers spend about $8 per person for breakfast and about $25 VAT inclusive, per person for dinner.
They also wanted 50 rooms, each at $130 per night, including two additional suites at no extra cost. The WICB requested that the hotel do the team’s laundry services at no additional cost.Cherita estimated that it would cost the hotel $20 per day to do it in-house as oppose to sending it to an outside source which would cost them about $200. Other guest: The impact on these guests can be positive or negative depending upon their purpose for travelling. Their concerns about hosting the WICB were apprehensions such as whether they may disturb the atmosphere for the more high paying customers and thus cause them to lose business. Whether they would gain publicity by hosting the WICB: The WICB promised a publicity package in return for the number of rooms and other benefits they were asking for.
The agreed to promote the Accra Beach Hotel in all advertising materials and television broadcasts as the host hotel for the upcoming games. 2. How much revenue will the hotel lose or gain by accepting the WICB offer assuming that the current year’s ADR and occupancy rates will be the same as the previous years? The hotel will make a calculated loss of approximately $US 10726 if they accept the WICB offer. However, that would only be in the short run but in the future they will generate tremendous amounts of profits. 3.
What are the various market segments served by the hotel? How will each be affected by the proposed WICB offer?Are there opportunities here? The Accra Beach hotel is considerably becoming more service focused, whereby they offer narrow services to a fairly broad market. As they move away from being traditionally a resort destination by adding new segments, they need to develop knowledge and skills in serving each segment successfully. The various market segments that are attracted by the hotel are the individual travelers, the tour operators and the corporate business people. Based on pass reviews, the hotel had a number of tourists who voiced their opinions about the last WICB team that was hosted there. The individual travelers may be affected because they go to the hotel for vacation in which they expect peace and quiet time. Therefore, by hosting the WICB, they may feel uncomfortable or not at ease for example while they are lying out by the pool and business people are busy flying by on their mobile phones. That sort of atmosphere there for them may disrupt them from feeling totally relaxed.
•The corporate business people might feel annoyance; because they would be hosted there to create a work atmosphere, where they can conduct business and carry on with their busy worlds.They might see the WICB as a disturbance since the hotel could become somewhat noisy as the team members and some of the other guests exhibit their excitement and anticipation of the upcoming matches that would be played in Barbados. •The vacationers who travel with tour operators to have a scheduled vacation without the trouble of organizing. They may also be happy to stay at the hotel with the cricket team. The hotel and the tour operators interacts fairly well with each other, therefore they can help attract new tour operators and can put together a good package for them with the tour guides for the hotel. .
Are there packages or supplemental value enhancers that the hotel could offer its regular market segments to make up for reduced income from the WICB booking? What are they? Firstly, I believe the hotel should carry out satisfaction surveys and assessment during this time to find out how their customers really feel about being in the same hotel as the WICB team. •The hotel can offer vacationers, special customer discounts such as special family rates in the low season when business is not booming. (E. g.
ree breakfast for kids under the age of 12 years) •The hotel and the WICB can come together and market the upcoming event to their different markets segments. The package could provide discounted tickets to the cricket game, (as it is an international sporting game) and airfare costs and hotel accommodation prices. •Rent-a-car services packages can be included to all of their regular market segments at a reduced rate during the stay of the WICB. Also they can offer them a promotion of club cards (i.
e. cards that offer consumers special discounts and deals) where the hotel can gather information on these customers behavior. To their corporate customers, extra lengths should go through to ensure they receive quiet and peace to conduct their business conferences or meetings. A package they can offer includes free Wi-Fi, hotel car services to pick up and drop off, to and fro the airport at no additional cost; and, one free night stay at a room booking of 7 days and over.
5. What decisions should Cherita Howard Take and why? I think Cherita should take up the proposal of the WICB. Although taking this step may result in them losing their regular customers, it would only be for a short time.The vacationers could probably use another time in the year to go there when the WICB is not being hosted at the hotel, as it is not every year they would be there.
Extra valuable customer services can be extended to their corporate customers as they are their most profitable customers; thus ensuring that each segment is not compromised and left unsatisfied. However, the hotel has several benefits it can gain from hosting the WICB. Firstly, as the cricket games would be televised live on the big screens, the hotel ads have been set up to run during the intermissions of the game.This means that Accra Beach Hotel will gain publicity as the ads reach a mass amount of people who may be looking at the cricket game from wherever they are in the world; this would be great exposure for the business. In the long run, because people would now have knowledge of this resort destination, business will pick up making up for any customers that the hotel may have lost by hosting the WICB.
So the hotel would have lost a few customers by hosting the WICB team but would have attracted business from other tourists who saw the ads and loved what they saw.