Case Study of Ramada Islamabad

Muhammad Shahmeer
Mujahid Hussain
Hamid Ali

Hijab Zahra
Hamza Khalid
Table of Contents
Problem Statement .......................................................................................................................... 1
Industry ........................................................................................................................................... 2
6 Commitments from Ramada Islamabad................................................................................... 2
Mission Statement of Ramada Islamabad ................................................................................... 3
Vision Statement of Ramada Islamabad ..................................................................................... 3
History of Ramada Islamabad ..................................................................................................... 3
SWOT Analysis of Ramada ........................................................................................................ 4
Strength ................................................................................................................................... 4
Weakness ................................................................................................................................ 4
Opportunity ............................................................................................................................. 4
Threats..................................................................................................................................... 4
Effect of Covid-19 on Hotel industry ......................................................................................... 5
Pressure from competitors .......................................................................................................... 5
Product/Service Analysis ................................................................................................................ 6
Product ........................................................................................................................................ 6
Ramada Dream Wedding Venues ........................................................................................... 6
Price ............................................................................................................................................ 6
Place ............................................................................................................................................ 7
Promotion.................................................................................................................................... 7
Branding .................................................................................................................................. 7
New Services .............................................................................................................................. 7
Financial Analysis ........................................................................................................................... 8
Profitability ................................................................................................................................. 8
Operating Income.................................................................................................................... 8
Profit before Taxes .................................................................................................................. 8
Net Profit ................................................................................................................................. 8
Return on Capital Employed ................................................................................................... 8
Return on Investment .............................................................................................................. 8
What is the return required for the shareholder in this company? .............................................. 8
Shareholder Value ................................................................................................................... 8
 Return on Equity ..................................................................................................................... 9
Return on Asset ....................................................................................................................... 9
Earnings before Interest and Tax, Depreciation, Amortization .................................................. 9
Liquidity.................................................................................................................................. 9
Quick Ratio ............................................................................................................................. 9
Current Ratio ........................................................................................................................... 9
Gearing .................................................................................................................................... 9
Possible Resource Requirement for Growth ............................................................................. 10
Maintain strong balance sheet ............................................................................................... 10
Invest in Business ................................................................................................................. 10
Return excess capital to shareholders ................................................................................... 10
Management .................................................................................................................................. 11
Organizational Chart ................................................................................................................. 11
Marketing Gaps ......................................................................................................................... 12
Discussion and Recommendation ................................................................................................. 12
Implementation ............................................................................................................................. 14
Contingency .......................................................................................................................... 14
Problem Statement
Ramada is a well-known hotel in the hotel industry. In many regions of Pakistan, Ramada is
mostly the first priority of every client but now the trend is changing specifically in twin cities
mostly foreigners is prefer Marriott and Serena because Ramada Islamabad is 4 star and Marriott
and Serena are 5 star hotels. In some cities of Pakistan, Ramada is considered as the 5 star hotel
as Ramada Multan has Pub in the basement but Ramada Islamabad don’t have any pub. That’s
why Ramada Islamabad is still not a 5-star hotel as compared to Marriott and Serena because
Ramada’s General Manager Tahir Raza Mian is a religious person he's against opening a PUB
(Bar) in the hotel. This is the reason, Ramada is a 4 five star and less number of foreigners visits
Ramada because of this. In Islam, Alcohol is Haram and we believe that drinking alcohol is
sinful act. GM Tahir Raza Mian decided to omit the pub from the plan of Ramada Islamabad.
The Health Care facilities at Ramada are not up to the mark they don’t have steam bath and the
gym equipment is not upgraded as they don’t focus on fitness side. Ramada has gym and pool
but it’s complementary for the clients who live in Ramada. Ramada thinks gym and swimming
pool is not the main source of income for us. That’s why they don’t market this side and they
don’t even encourage the outsiders for membership. But Marriott and Serena are earning very
much from their fitness center.

There is another reason, why Ramada has low market share and less number of customers than
its competitors. Ramada has no proper sales department like Marriott and Serena. Ramada has
few sales people and Ramada can’t acquire a proper sales work by few workers. These Sales
representatives work within twin cities. They capture new customers from the twin cities and
also collaborate with different companies for business within twin cities. But Marriott and Serena
have proper sales department, Marriott and Serena sent there sales team to different cities. The
sales team of Marriott and Serena deals with new clients of multiple cities and sign agreement
with different companies working in different region or cities of Pakistan. So, whenever that
company’s employees come to Islamabad for meetings, seminar and other professional work.
Those employees stay in Serena and Marriott and that’s the reason why Marriott and Serena have
more Market Share and Growth. The market share of Ramada is decreasing day by day and
Marriott & Serena are becoming the market leaders in the twin cities.

Ramada is facing all these problems because of the Seth culture like none of the Ramada hotel is
interlinked with each other. Every Ramada has different owner, different goals and different
strategies. Anyone can buy Ramada franchise by meeting certain standards and run that branch
by its own. If all Ramada branches work collectively then they can attract the whole market by
making new strategies and policies.

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Industry
Ramada Islamabad is near the Benazir International Airport Islamabad, and its essential area on
Murree Road, guarantees a smooth 20-minute drive to the airport, making it effectively available
for business and recreation voyagers, enormously saving money on schedule and transportation,
as you visit Islamabad. The inn's focal area offers simple admittance to the Diplomatic Enclave
situated on Murree Road, the Federal Secretariat, the Islamabad Golf Club, the Polo Club, just as
all the key business and mechanical focuses of Islamabad, and a large group of social and legacy
attractions. Islamabad's best business inn is effectively available by open vehicle or via vehicle
and is very much associated with Jinnah Avenue, the focal business region of Islamabad, the two
significant programming leaves – the Evacuee Trust Complex and Awami Markaz, and to
Rawalpindi through the two motorways. There are total 350 employees are working in the
Ramada Islamabad.

6 Commitments from Ramada Islamabad

There are six commitments for the employees of Ramada hotel Islamabad which are given in the
following.

R eady. I'm ready to deal with my visitors cheerfully and extraordinary mentality. I'm ready
with my uniform and unofficial ID. I'm ready to help my colleagues.

A nticipating. I'm anticipating my visitors' necessities, thinking ahead, and offering incredible
support since I understand what they go through when voyaging.

M aking a connection. I'm making an association with visitors by grinning, investigating

their eyes, and utilizing their names. I'm making an association with the correct non-verbal
communication and a cheerful, caring tone in my voice.

A ware. I am aware of my hotel’s facilities and amenities. I am aware of my hotels nearby

zone in order to give decent guidelines and appropriate info.

D elightful. I'm brilliant and care about the seemingly insignificant details my visitors
anticipate. I'm superb and never utilize "no" when I converse with my visitors and colleagues.

A ppreciative. I'm grateful, thank my visitors frequently, and welcome them to return. I'm
grateful, to be related with my Ramada and Ramada around the world. I'm thankful, of my
collaborators.

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Mission Statement of Ramada Islamabad
We have faith in making a warm and inviting experience for every one of our visitors. At
Ramada by Wyndham Islamabad, we offer a serene space to get comfortable with our carefully
selected visitor rooms. Remaining with us, investigate both Islamabad the capital recreation
attractions, and the business locale directly at your doorstep. It's your ideal base to discover the
twin city.

Vision Statement of Ramada Islamabad

The objective of Ramada inn is to get altruism and need to support at the highest point of the
cordiality business. Ramada hotel lodging likewise attempting to make its piece of the overall
industry greater than different contenders so that is the reason they are giving the best facilities to
their clients especially in Islamabad. Thus, Ramada lodging is attempting to catch the most
extreme space of the market in Islamabad needs to be a market chief.

History of Ramada Islamabad

The Ramada® brand started in 1954 when a gathering of investors opened the main Ramada Inn
in Flagstaff, Arizona-the first in a progression of "motors inns." That very year, the gathering
embraced the name "Ramada," a Spanish word signifying "a concealed resting place," and sold
its first establishment. From that point forward, Ramada Worldwide has developed to more than
850 areas in 34 nations. Ramada Worldwide is a worldwide presence that gives recognizable
paradise to voyagers. Situated to engage mid-market recreation and business voyagers, Ramada®
lodgings offer visitors an agreeable mix of solace and moderateness. Ramada Islamabad was
founded in 2004. Ramada Islamabad is a franchise of Midscale brand of Wyndham Hotels and
Resorts. In Pakistan Ramada Hotels are located in 3 cities Karachi Islamabad and Multan.

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SWOT Analysis of Ramada
Strength
 All in one facilities
 Multiple type of rooms and
meeting spaces
 Employee engagement and
motivation
 Promotion, branding and loyal
customers
 Only legal and licensed traders of
wine.
 Cut-price charges for
corporations and administrations.
 No employee grouping.
Opportunity
 Recruiting qualified, talented
representatives with great bundles
can improve their administration.
 As its laundry is best around so it
can open its outlets in different
pieces of the city for additional
extending its organizations.
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Weakness
 No Pub
 No proper fitness center
 Not a good image in the minds of
overseas customers
 No shops inside the hotel
 AC system is tragic.
 Very small wages as paralleled to
marketplace.
 Less incentives, facilities and
pluses for the workers.
Threats
 Price assault by its rivals
 Entry of new competitors in market
 Serena and Marriott are working
efficiently and are a thoughtful
threat to Ramada.
 Employee turnover is already very
high due to new hotels
Effect of Covid-19 on Hotel industry
Ramada Islamabad is facing multiple issues like due to Covid-19 hotel industry is affected badly.
2020 was the most difficult year for every business. Many government policies flatten the
growth of hospitality industry such as lockdowns, social distancing, stay-at-home orders, travel
and mobility limitations have brought about the impermanent closure of numerous hospitality
organizations and essentially diminished the interest for organizations that were wanted to keep
on working. Due to pandemic, international flights are also cancelled and no one is traveling as
everyone is fear of Covid-19. Every tourist spot is closed due to pandemic. Authorities and
government is reopening hotels but the SOPs are very strict. Use of mask and gloves are not
much easy to wear every time at the work place and maintaining social distance is more than a
fuss. Hotel organizations are relied upon to roll out considerable improvements to their activities
in the COVID-19 business atmosphere to guarantee workers' and clients' well-being and security
and upgrade clients' readiness to patronize their business.

Pressure from competitors

Ramada has two big competitors Marriott and Serena. Both have more market share in twin
cities than Ramada. As Marriott and Serena have better facilities and infrastructure than Ramada
and they are in the prime location of Islamabad. Both Serena and Marriot are very efficient in
their work. Marriot is earning from the already matured market and also from the emerging
market. Both are continuously changing their operations according to the market demand. Their
business strategy is more unique and effective than Ramada. Marriott and Serena have wide
range of product line for every customer. They are offering low to premium facilities to their
market and the capacity of rooms are also more than Ramada. Ramada is not evolving according
to the era.

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Product/Service Analysis
Product
Ramadan Islamabad offers different services to their customer. They provide different rooms to
different customer according to their choice and affordability. It includes Executive rooms,
deluxe rooms, deluxe suite rooms, Royal suite rooms, panoramic suite rooms and disabled
friendly rooms. Ramada also provides complimentary services to their valuable customers. It
includes

 Buffet Breakfast Complimentary

 Laundry Service
 Doctor-on-Call
 Wi-Fi connectivity
 Electronic Safe
 Fully stocked Mini bar
 32 inches LED TV
 Iron and Ironing Board
 Telephone line
 Evening Turn Down Service
 Expansive Work desk with Lighting

Ramada Islamabad provides services according to customer requirements that are why their
customers are loyal to them and prefer Ramada over other hotels.

Ramada Dream Wedding Venues

Ramada offers different wedding packages to their customer. They have two hall Noor hall, and
Mashal hall 350 guests can set at time at each hall also their rooftop venue have capacity of 450
guest. The Wedding Package that includes fabulous venues, accommodation and the wedding
banquet menu that is inclusive of space rentals. The Wedding Package also includes in-house
florists, make-up artists and specially created wedding menu sets that could be customized for
specific requirements and themes. Ramada also offer honeymoon package to their customers.

Price
Ramada Islamabad offer different rooms to their customer at according to their choice and
affordability. Room’s charges vary from 23 thousand to 18 thousand. They offer special
discounts on special events to their customers. To promote their rooms, they offer discounts on

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their website and social media pages. They also offer discount on different bookings site. They
offer discounts to attract more customers.

Place
Good location is very important for any kind of hotel. Ramada Islamabad has a very strategic
location. Ramada Islamabad is located Pl1, club road adjacent real lake, Shakar Parian,
Islamabad. The Ramada hotel is few minutes away from the Islamabad’s Diplomatic Enclave
and the federal Secretariat. From hotel ideal location customers can enjoy beautiful view of city
and relax their mind.

Promotion
Ramada Islamabad is using social media for its promotion. Company sales officers visit different
corporate organization to introduce them their packages. They offer membership to their regular
customers. They also announce different packages and promotion these packages through social
media. They also promote them through different websites and offer special discounts.

Branding
Ramada hotel Islamabad creating its own brands awareness through social media marketing
campaigns. They highlight through social media what different things they are providing to their
customer. Ramada hotel brand image is very strong people know about Ramada hotel. They are
using red color to in their logo.

New Services
Ramada Islamabad also launches new services according to customer and market demands.
Before adding new services, they check the demand and what benefits and competitive
advantage they will get through offering new services.

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Financial Analysis
Profitability
Operating Income
The gross profit margin of 2020 is 14.9%. The gross profit margin of 2019 is 15.14%. There is
decrease in gross profit margin due to increase in expenses by 10% and the revenue increased by
9% only which resulted in decreased profit.

Profit before Taxes

The profit before tax for 2020 is 10%. The profit before tax for 2019 is 11.9%. There is an
increase of interest expense by 66.67% which led to decrease of profit before tax. This indicates
that Wyndham Hotels and Resorts Inc. has taken huge amounts of debt in this year.

Net Profit
The net profit for 2020 is 7.6%. The net profit for 2019 is 8.6%. There is a decrease of
provision for income taxes by 18% which led to net profit but the decrease of taxes could also
show that corporation tax could have been decreased.

Return on Capital Employed

For the year 2020 the return on capital employed is 7.5% and for the year 2019 the return on
capital employed is 6.6%. This explains that the current liability has increased which led to
decrease in capital employed and no new assets could have been purchased or added.

Return on Investment
This information is not provided by the company.

What is the return required for the shareholder in this

company?
Shareholder Value
 Earnings per share
The earnings per share represent the value for every share that company is willing to give
right now. For the year 2020 the EPS for basic is 1.63 and for the year 2019 1.62. This
indicates that there is an increase of shareholders value.

 Diluted earnings per share

The diluted earnings per share are calculated by a proportion of right issue.

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 For the year 2020 and 2019 is 1.62.

Return on Equity
For the year 2020 the return on equity is 12.9% and for the year 2019 the return on equity is
11.42%. This explains that the shareholders will be making more money on their invested
capital as the returns have been increased from 11.4% to 12.9%. This will increase shareholders
confidence in the Wyndham Hotels and Resorts Inc. as they would be providing value addition in
share price.

Return on Asset
For the year 2020 the return on asset is 3.4% and for the year 2019 the return on asset is 3.2%.
The return on asset shows company’s capability to make money from assets in one years’ time
which is given above. The increase shows that the company is performing better by 6.25% for
the year ended.

Earnings before Interest and Tax, Depreciation, Amortization

EBITDA for the year 2020 is 416 for the year 2019 is 388. EBITDA tells us a different story
than proper accounting standards can ever tell which also explains non-cash expense has been
excluded in this calculation. The depreciation and amortization are systematic allocation done by
relevant accounting standards according to their class of asset. The interest and tax has not been
included because it is not controllable cost for the operating manager.

Liquidity
Liquidity describes how liquid is your asset which means that asset can be converted into cash.

Quick Ratio
The quick ratio for the year 2020 is 1.08 for the year 2019 is 1.22. This represents that if the
company has to pay liability today, what assets they have to trade against liability. In service
industry it is hard to comprehend what service is required by a client for a certain service that is
why the inventory value could not be assessed accurately.

Current Ratio
The current ratio for the year 2020 is 1.08 for the year 2019 is 1.22. This represents that if the
company has to pay liability today, what assets they have to trade against liability. The current
ratio represents the capability of giving money to the creditors as soon as possible.

Gearing
Gearing shows how much debt has been taken against equity. Higher the debt will increase the
chances of bankruptcy as the shareholders will require higher return.

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For the year 2020 it was 63% and for the year 2019 it was 60%. This indicates that gearing ratio
has increased by 3% which will affect the shareholders directly as their return could be sacrificed
as interest.

Possible Resource Requirement for Growth

Maintain strong balance sheet
Over $ 1.2 billion of liquidity should be present at the year-end for the company which means
the current asset ratio and quick ratio will improve gradually.

Repaid all revolving credit facility borrowings, which will increase the liquidity and decrease the
bad debt.

No near term debt maturities, it indicates that no debt will be taken for short term instead long
term loans will take which will reduce the cost of capital of Wyndham Hotels and Resorts Inc.

Invest in Business
Support franchisees’ health and recovery, the parent will invest money in franchisees so that they
can recover money which has been lost in Covid-19.

Increase deployment of capital to accelerate system growth, the investment will be spent in
different phases which will reduce the risk by a certain number for the shareholders

Investments in new mobile app, customer data platform and business traveler technology, the use
of mobile technology is spreading like a wildfire which will increase the customer base for the
service industry

Return excess capital to shareholders

Increased first quarter 2021 dividend by 100%, this will increase the return for shareholders as
they have been taking most risk as the gearing ratio has increased year by year.

Gradually increase total return as adjusted EBITDA increases and leverage ratio declines, it
explains the ability to pay back the debt and EBITDA increase shows company has a sustainable
future.

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 Management
Organizational Chart

MD

CEO

General R.D.M
Manager
Chief Exec.
H.R.M F.C Chief
Engineer
(House Keeping)
Purchase
Manager

Manager Manager Manager F&B

(Front Office) (Communication)
(I.T) Manager

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Marketing Gaps
Customer expectations are raising day by day but hotel’s budget are not increasing in a parallel
way. That’s why Ramada is losing its potential customers. The market share of 5 star hotels is
increasing gradually. Marriott market share is now 45% in the twin cities. They are meeting the
customer expectations properly. Marriott is at the 21st point of the world’s utmost advanced and
inventive companies. Marriott and Serena both take their business very serious. They provide the
best professional services to their consumers. Their customers become the most loyal customers
of the universe. Now the hotels are making new partners to reduce the competition. Now Alibaba
and Marriott are the partners. The customer orientation of Ramada is decreasing and they are not
even planning for better reach.

Discussion and Recommendation

The strategy which Ramada needs to adopt right now is first of all create strategic alliances with
different multinational firms so that the capturing of customer can be easy and approachable
which will eventually solve that sales department issue which is really lacking in this hotel.
Second is make sure work on social media and PR. They need to properly do R&D and hire a
proper team for social media running and to make sure that they will find those travel bloggers
and vloggers and be in contract with them offer them to visit hotel and do the marketing and also
they will let you know what is lacking and what needs to be updated according to market and as
this is really easy way of marketing to other people because mostly people do study before
travelling only this way they will get the idea to take Ramada as an option. Also needs to do a
quality check from some outsource team that can only present true condition facts and figures
and that will lead to get a real picture and will help to improve things like ac repair, better gym
and swimming area and promotion. As for as PUB issue we are not endorsing to any of this
activity but if it’s really effecting the impact they can go for an outsource team and company to
run pub for them and have no gain or loss to Ramada with this.

Third, Ramada is located in Islamabad, Karachi and Multan. Each of them is separately working
with their own policies, strategies, goals and objectives. Not a single one is contacted with other
two. As Ramada has no proper sales department and it can’t have one because it costs them very
high. But if Ramada make a contract with their other branches then it can be very helpful for
each branch. All branches of Ramada, work as a joint venture like if the customer of Karachi
branch wants to live or organize an event in Multan or Islamabad so the representatives of
Karachi branch will send that customer to Ramada Islamabad or Multan and same procedure will
be followed by Ramada Multan or Islamabad. Each of them will also advertise the other two
Ramada branches. It can be cost effective as they don’t need to hire a big sales team and they
don’t need to spend a big budget in advertisement. Each of them can support each other in their

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hard times. All branches will follow the same policies, regulations and visions. RAMADA can
regain its market position and lead the market again.

Ramada should adopt different branding strategies. As Ramada is currently a 4-star hotel and
Ramada can become 5-star hotel by further extension in products and services. Ramada can
make money from their Fitness Centre. Ramada is opening near airport and most of the clients
love to live in a hotel which is near to airport because through this client can save the money and
time. If Ramada properly advertise the new branch through different mediums and also give brief
introduction about the other branches so the clients can become more impressed to see the
alliance among all branches of Ramada.

Ramada Hotel needs to make a strategy to expand their target market. They can make strategy to
target the middle-class people who visit Islamabad for tourism purpose. But they think Ramada
is expensive for them. Ramada can make a strategy and give offers them to capture this market.
It is a huge market. Through this strategy Ramada can generate more revenue. Social media
marketing can help them to promote their offers. They are social media account are not so active.
They can hire an agency or in house team to coverage their events and promote these events and
offer on social media to attract more customer. Local visitors’ think Ramada is too much
expensive for them. Through social media marketing they can change the perception of the
people. They can also make a strategy to target to more corporate client. They can also promote
them in the local market through different CSR activities then they can highlight these activities
on social media. The high paying people think Serena and Marriott are more suitable them.
Ramada should make a strategy to compete with them. They can do this by increasing the quality
for their products.

Further strategy which needs to be adopted is that Ramada should get in touch with travel
bloggers who would write about Ramada and spread the word that Ramada is a hotel where all
classes of people can stay because of the very reasonable room rates, the complimentary service
of a child less than 10 years staying for free with the parents. They should also enlist the help of
reputed travel agencies like American Express who would also suggest to the customers the
qualities of Ramada. In other words, their marketing strategy needs improvement. Social media
is a strong platform for marketing which is not being used by Ramada. Ramada can hire a firm
to do a third party validation of their services and how they can improve.

Most customers look at the ambience of a hotel through the computer before deciding if they
want to stay there. The website should be updated keeping in mind the changing trends and like
and dislikes. For example, different floors for smokers and non-smokers, Mini cinema for
customers staying there, Spa and swimming pools on the roof top, Complementary pick and drop
from airport, Car rental service at cheaper rates and Tourist guide.
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The marketing department can initiate contracts with multinational firms offering them
competitive rates depending on the number of guests staying. They can also offer meeting
packages at competitive rates for the different functions.

Implementation
The strategy which needs to be followed from all of those will be a mixture Ramada needs to
works on strategic alliance, joint ventures, and social media campaigns. This mixture is because
of the high competition they are facing right now slow and steady win the face won’t work in
this situation they need to really go beyond of the capacity and better think out of the box and get
them out of the comfort zone.

All branches of RAMADA work as joint venture so that they can send their customer to other
branches of RAMADA in other cities if needed. Every branch needs to promote and advertise
other branches which will be cost effective.

Ramada should get in touch with travel bloggers who would write about Ramada and spread the
word that Ramada is a hotel where all classes of people can stay because of the very reasonable
room rates, the complimentary service of a child less than 10 years staying for free with the
parents. They should also enlist the help of reputed travel agencies like American Express who
would also suggest to the customers the qualities of Ramada.

Contingency
The backup plan should be to offer different offers and packages to customers which means to
provide incentives to get people interested. For example: hotel can give discounts to customers.
Offer different discounts, like international hotels provide to their customers. For example:
discount on dining, discounts on numbers of days you stay there.

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