Paige Crockett, Hailey Powell

LEI 3360: Hospitality Management

April 22nd, 2019

Lake Superior Lodge

CASE ASSIGNMENT QUESTIONS

1. How would you characterize the U.S. hotel industry in general and the local

competitive environment in particular?

The hotel industry is a subdivision of the hospitality industry specializing in

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accommodation. Hotels offer almost every sector of goods and services this can include

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food and beverage, lodging, and health and fitness along with other amenities.

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The 2017 revenue for the U.S. hotel industry was 208 billion U.S. dollars globally the
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hotel industries total revenue was 570 billion. The occupancy rate was 65.9 percent the

highest since 2001 and the average daily rate of the hotel rooms that were occupied
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were occupied at 126.72 U.S. dollars for the U.S. hotel industry (Statista).
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Write about the competitive environment in particular

2. What is the current competitive position of Lake Superior Lodge?

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Lake Superior Lodge is a limited service hotel with no amenities. Hotel

classification and positioning are based upon location, function, market segment, the
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distinctiveness of property, price, size, rating, and ownership. Most of the hotel guests
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were leisure travelers with an average of $109 per night. The location of the hotel is on

the edge of beautiful and scenic Lake Superior with a niche drinking bottle shop next
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door. The hotel is also located next to a boat harbor, Clearwater Grill, and less than ten

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 miles away are other ethnic and fast food restaurants. The function of the hotel serves

as a getaway from society.

The rooms do not offer A/C, television, or room service. There is no pool, no

restaurant on site, and no entertainment. Lake Superior Lodge’s market segment

consists of 40% business travelers and 60% leisure travelers. The average age is 35-54

years, males with an annual income of $116,000 normally staying one night at a

frequency of 40%, two nights at a frequency of 22%, and 38% spending three or more

nights. The average leisure travelers are adults aged 35-54 earning $90,000 annually,

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47% spending one night, 27% spending two nights, and 26% spending three or more

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nights.

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When the property was first purchased, due to its location, it did not produce a
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profit. The occupancy rate and profitability are severely lacking, causing the owner to

consider selling the property. The property is trying to promote itself solely on the
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wonderful view and connection to nature, which is why they do not have cable, satellite
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tv, or other amenities. This is a negative for people when they have nothing to do or

have children who want to watch tv. They also still have 70’s style decor, and will not be
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able to afford changing this in the near future. The property is distinct and unique as it

provides an escape from regular life. The lodge is remote, shows a scenic view, and
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offers a peaceful atmosphere. The property is also small and the prices are on the lower
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end of the spectrum.

Having only 15 rooms, the hotel has a unique pricing system. Five rooms are
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reserved for long term stays of three months or more at $800 to $1350 per month. The

other ten rooms average at $112-$115 during the season and only $99 during the

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 offseason. The occupancy rate is consistently horrendous and the hotel is repeatedly

facing loses. The owners have a site backstory and love of the location but ultimately

cannot manage the property in its poor competitive position.

3. Conduct a SWOT analysis for Lake Superior Lodge.

Strengths of the Lake Superior Lodge include the unique and beautiful scenery.

The quiet peaceful atmosphere offers an escape for guests that the owners can

capitalize on. The location has no television or other standard amenities like A/C, which

can be seen as a further removal from the regular fast-paced life. The location of the

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hotel, next to a boat harbor, is also a strength. The lake serves as a way to bring in

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guests and leisure travelers as well as boaters.

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Weaknesses of the Lake Superior Lodge include the rooms not offering A/C,
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television, or room service, There is no pool or restaurant onsite. The property has not

been turning a profit and the occupancy rate is lacking. The owners are considering
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selling the property. The lodge is lacking many if not all forms of amenities trying to sell
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itself off as just a wonderful view, which would be ok for people who want to immerse

themselves in nature and just have a bed to sleep, but it gives no opportunities for
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families or business travelers to stay who need these extra services.

Opportunities of the Lake Superior Lodge include the small and isolated function
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of the hotel. This location has the opportunity to become a retreat location. Religious
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groups specifically look for locations like these to conduct bible studies and prayer

groups in an atmosphere that is further removed from regular society and everyday
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distractions. The distinctiveness of the hotel is an opportunity for the lodge to succeed.

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 Lake Superior is a major tourist attraction with a couple of threats. A threat that

Lake Superior Lodge will suffer from is competitive hotels that offer a surplus of

amenities with great views and lower prices. Examples of some hotels are Beacon

Pointe Resort for $89 with free Wifi and breakfast, lakeside views, pool, bonfires, with a

suite or condo style room. Another place is Larsmont Cottages on Lake Superior, with

one to three bedroom cottages with a private beach, pool, dining experience, sauna,

exercise room and many other resort amenities for $71. The Lake Superior Lodge

average rate is $112-115 in season and $99 off season. These locations that are listed

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are nicer and cheaper than Lake Superior Lodge during their off season pricing which is

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unfortunate. Lake Superior Lodge has higher rates than their competitors but they do

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not offer amenities that compete in the same segment. The lodge pricing is outlandish
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compared to the competition unless they offer the same quality of service or more.

4. What should Mark Willie propose in his 2013 sales and marketing plan?
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Mark Willie should propose turning this location into a retreat instead of
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marketing it as a standard motel. The limited space and availability of rooms would

serve small groups greatly. Religious groups taking trips for bible studies, or businesses
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looking to do bonding retreats could utilize this location as an escape from the everyday

world while becoming closer with other people. The limited amenities can serve as a
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purposeful act to further individuals from their regular environment. Marketing to groups
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who need this location would help occupancy rates improve.

The lake also serves as a way to create activities for these groups to participate
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in. The boat harbor and beautiful scenic location work in favor of this change in

marketing for Lake Superior Lodge. When marketing the Lake Superior Lodge

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 emphasizes the location as an escape from reality. Where individuals can grow closer to

each other while getting more involved in their natural environment. Use pictures of the

scenic location and humble lodge as a basis for promotion. Also consider adding a

convening room, or large group area, either inside the lodge or outside, for groups to

have their meetings. Adding a fire pit could also inspire the campy nature of the location

and will help individuals reminisce about their good experiences when taking a break

from regular society. Also look into providing lake activities such as kayaks, canoes, and

fishing activities people can do together as well as activities on land like biking, low

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ropes course, and hiking which are all great bonding activities for pretty cheap prices to

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implement.

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In addition to this new marketing plan, Have Beth Leland make new booking
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fees, having the location as a whole instead of individualized rooms. Booking for entire

groups, who must reserve the entire lodge, will bring in more profit, than having one or
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two rooms occupied at various times during the year. This guarantees that even if a
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group does not fill all the rooms, that all the rooms are at least paid for. As a retreat

location, it will be acceptable for a reservation to require the entire lodge, as a meeting
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space and a place to stay.

5. Should Beth Leland sell the property?

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Beth Leland should not sell the property but instead, follow the marketing plan
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laid out above. Turning the location into a retreat escape, made for group bookings, will

help occupancy rates, and establish the location as a go-to spot for a trip in nature, to
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grow closer to the people around you. If this new plan does not provide the profits

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 necessary to keep the lodge operational, then Beth Leland should consider selling the

property.

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 References

hotelnewsnow.com. (n.d.). Revenue of the United States hotel industry from 2001 to 2017 (in

billion U.S. dollars). In Statista - The Statistics Portal. Retrieved April 19, 2019, from

https://www.statista.com/statistics/245841/total-revenue-of-the-us-hotel-industry/.

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