Case: TRIUMPH

TOURS
November 13, 2010

I. BACKGROUND OF THE CASE

In July 1989, Mr. Oscar Mendoza, owner of Triumph Tours have been planning on operating a
hotel to compliment his travel agency business because he was experiencing difficulties in
getting hotel accommodations for his tour groups since last year during the peak months of
December, January, July and August. He had read in a newspaper advertisement about Hotel
Continentals facilities is for lease. The hotel is located in Diliman Quezon City along Don
Mariano Marcos Avenue. It has 27 rooms, 3 function rooms with capacity of 12 to 40 persons, a
coffee shop, a fast food cafeteria, a formal dining room and a swimming pool. For the last two
years the hotel incurred losses of about P2 to P3 million which led management to the decision
of leasing out its facilities. The room capacity is just right for Triumph Tours requirements
during the peak months but only 40% is utilized based average annual capacity and 60% was still
need to be utilized.
From the given data below and further study of the hotel situation (underutilized capacity).
The Company has joined the bidding for Hotel Continental leasing and had won.

Numbers of Competitors in the Lodging Industry:

Hotels
Inns
Resorts
Apartel

90
67
60

Pensions
35
Lodges
151
Motel
8
9
Unclassified

10

Metro Manila Hotels (28)

New Hotels to be constructed (6)

II.

STATEMENT OF THE PROBLEM

What strategies should the manager of Triumph Tours plan and implement to gain the
fullest utilization and benefit of the leased facilities?

III.

ALTERNATIVE COURSES OF ACTIONS

1. Set specific goals and objectives and planning premises.
2. Devise extensive marketing strategy to fully utilize the room capacity of the hotel.
3. Study the current competitive market and other factors that affect their revenues.
4. Based on the available financial data, develop a five-year plan that compliment with its
five year lease contract, to minimize cost and maximize profit.

IV.

ANALYSIS
Leasing the hotel could bring higher income for Triumph Tours not only for its hotel
business but as well as to its agency but we could identify that the company mostly would
have difficulties on the market particularly on customer share because of high competition
with other hotels and there is other alternative types of lodging Industry that are much
more cheaper in the market.
1. Set specific goals and objectives and planning premises.
Mr. Oscar Mendoza has the following Goals and Objectives in leasing out the hotel:
GOALS
1. Operating a hotel to complement his travel agency business
2. To utilized the 100% room capacity of the hotel
3. Study the background (trend) of the hotel industry
OBJECTIVES
1. To lessen the difficulties of his travel agency in getting hotel accommodations
for his tour groups during peak season.
2. To maximize the resources leased because only 40% average annual room
occupancy can be used by the travel agency.
3. To develop new marketing strategies concentrating not only on foreign tourist
but also on local tourist.(see Data considered under financial, the specific
Marketing and Promotion to be develop from year 1-5)
4. Maximize Profits (see financial analysis together with 5 year Target Income)

PLANNING PREMISES
External Variables
Types of Customer
Hotel rates dictated by market due to peak and off peak season
Market strategies of key competitors
Prices of hotel supplies
Lease Contract
Internal Variables
Financial resources available

Skills and attitudes of employees and other human resources factors like
number of employee (Being innovative and continuously maintain companys
integrity)
Physical resources such as facilities and machineries available
2. Devise extensive marketing strategy to fully utilize the room capacity of the hotel.
An annual average 40% only of room capacity can be use on his travel business the
company needs to utilize it to 100%. From the given data most of the hotel occupants are
dependent on foreign/tourist, either on convention or visitors but no local program in
developing local tourism. The company can now utilized it by further enhancing
marketing strategies targeting not only foreign tourist but as well as local one, like giving
promotion on company seminars, conventions and other company events that will not
only use hotel rooms as well as other facilities like function halls and can be given on
packages promo that will include the accommodation, food and organizing of the whole
event. The promotion program should give reasonable prizes to encourage more local
customer. The company could also develop its own Web page and service center or
hotline that could answer the customer queries and problems with 24 hours service
availability and other promotional activities like brochures, radio ad, newspaper and
television advertisement and developing trend of advertising through internet by
developing there on webpage.
3. Study the current competitive market and other factors that affect their revenues.
Hotels have stiff competition they should be flexible in developing marketing
strategies that will encourage customer and develop their loyalty. Triumph should further
gather information regarding the other hotel competitive rates, market share, types of
customer, customer satisfaction rate or using statistical data for further analysis of their
market trends. This would focus more of developing customer care center.
4. Based on the available financial data, develop a five-year plan that compliment with its
five year lease contract, to minimize cost and maximize profit.
From the given Income statement and other financial data the company could analyze
the increase or decrease in two years time and further gather information on every
account on what causes the increase or decrease of the amount for them to be able to
develop a strategies if whether they need to increase the revenue or minimize the
expenses.

100%

V.

RECOMMENDATION
From the analysis, Triumph Tours could really have a good opportunity in leasing the
Continental Hotel but should set specific goals and objectives that would help them established
plans not only short term but also long term (strategic plans) that compliment with its five year
lease contract that would cover up the rental expenses or even generate profit.
The company should concentrate on improving their revenues through intensified
market promotion and by studying the current competitive market and other factors that might
affect their revenues.