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Case Study of Diamond Hotel

Jan 9, 2013 •
1535
Words
•
7 Pages

University of Perpetual Help System Dalta- Calamba Campus

Brgy. Paciano Rizal, Calamba City, Laguna, Philippines

A Case Study Report at

“Diamondback Plaza Hotel”

In partial fulfillment of the requirement for the degree of

Bachelor of Science in Hotel and Restaurant Management

December 2012

I- Title

II- Executive Summary

III- Time Context

IV- View Point

V- Statement of the Problem

VI- Objectives

VII- Areas of Consideration

VIII- Alternative Course of Action

IX- Decision Matrix

X- Recommendation

EXECUTIVE SUMMARY

Diamondback Hotel is a large hotel in a popular vacation area. The hotel is known on
their reputation of casual elegance and is known among local for their dignified
advertising and for sticking to the “rack rate”. The hotel average nightly occupancy rate
is just 68%. The average for their geographic area is 78 percent.

These percentages are actually low when you compare it with their target average.
New strategies as well as alternatives must be made by the hotel in order to increase
their occupancy rate especially on their nightly rate. Increase on their occupancy rate
means increase on their sales.

Their consultant have some recommendations and they have to coincide with it, but in
line with these recommendations means there will be an increase on their room rate so
they have to think another strategy so they can cover up this increase.

The company can offer group packages or family packages especially on summer and
special holidays as well as special occasions. They could also offer services that come
with this promo packages like a discounts, free meals and the likes. They could also
give some freebies so the guests can have a memory of the hotel. Thorough marketing
must be accomplished on this strategy. They could also have their own website where
the people can have an easy access on inquiring regarding their promos and packages.
Through these strategies, they can reach more of their markets and their markets will
be more informed regarding the hotel. At first, sales will not sky rocketed by in the end
once they are fully established increase in sales is expected and their average nightly
occupancy will also improve.

TIME CONTEXT

Diamondback Plaza Hotel is a large hotel in a popular vacation area, in order to have a
more profit for the hotel Mr. Robinson must make changes when it comes to his
strategies in a year.

VIEW POINT

Mr. Robinson holds the power to manage the Diamondback Hotel. He is the one who
will implement new policies as well as the new changes in managing the hotel to
generate more profit.

STATEMENT OF THE PROBLEM

What approach should Mr. Robinson do to achieve higher occupancy rate than the
average especially at nightly occupancy which can result more profit for the hotel?

OBJECTIVES

To have higher rate than the average especially at night, in order for the hotel to gain
more profit and they will achieve the assumed yield of every room in the hotel.

AREAS OF CONSIDERATION

INTERNAL FORCES | STRENGTH | WEAKNESS |

Human Resource Management * The hotel has reliable staffs that can handle their
work really well. | * | |

Organizational Structure * Mr. Robinson manage the whole hotel but with the help of
his associates | * | |

Labor Forces * They have enough employees that can really make the work done. | * | |

Orientation, Training and Seminars * Employees are oriented time to time regarding
their policies. | * | |

Operation Management * The hotel is known on its reputation of casual elegance. * The
hotel is known among local hoteliers for dignified advertising and for sticking to the
rack rate. * He thinks that it is not fair for the guest to pay full price. * The debt relative
to property value is low; they don’t have high interest charges to cover. * The rooms are
not yielding the income they should generate because of same price per room | * * * | *
* |

An Ideal and Excellent Operation * The hotel has its average nightly occupancy rate of
68 %. * The average for his geographic area is 78%. * There’s only one price in every
room. | * | * * |

Performs a unique quality assurance system * Maintaining casual elegance and

dignified advertising. * The hotel is sticking to the “rack rate” | * | * |

Computer Information System * They also used advance technology like other hotels. |
* | |

Safety and Security * The guests feels safe staying at the hotel | * | |

Marketing Management * Product * The hotel is known for its reputation of casual
elegance * Place * The hotel is in a popular vacation area. * Price * They have low price
approach than their competitors. * They stick with the “rack rate” wherein rooms have
only one price * Promotion * They are known for their dignified advertising * Target
Market * The guests are satisfied with their services | * * * * * | * |

Financial * Financial Performance * * The rooms are not yielding the income that they
should establish. * Nightly occupancy rate is just 68%. * The average for his geographic
area is 78%. * Income and Sales * They are not yielding their expected income
especially at nightly rate | * | * * * |

EXTERNAL ENVIRONMENT | OPPORTUNITY | THREAT |

Competitive Forces * Other hotels give more services than the Diamondback Hotel. | | *
|

Economic Forces * There had been a great effect with the hotel when the economy is
unstable. | | * |

Socio-Cultural Forces * The hotel is in a popular vacation area. | * | |

Technological Forces * They explore new technologies that can help the hotel | * | |

Government, Laws and Regulations * They abide with the rules and regulation given to
them by the law; they would not be operating if they are not. | * | |

ALTERNATIVE COURSE OF ACTION

Based from the foregoing SWOT analysis, this is to present the two solutions to the
problem, the ACA 1 and ACA 2 respectively. This may possibly meet the objectives and
solve the problem at different levels.

ACA 1:

They should offer rates on their rooms, wherein each rate comes with different services
for their guests. Each room also has to have character different with each other. They
could also offer buffet breakfast for those who will stay for the night. With this guest
will think that it is good to stay a night with them.

ADVANTAGES | DISADVANTAGES |

a. New image for the hotel and many guests will be attracted to try their services.b.
Increase on sales and a possible increase on nightly rate of the hotel.c. Guest will have
an interest to stay on the hotel especially at night. | a. There will be an increase in the
number of employees.b. Increase in company’s expensesc. Other companies might
have greater services that can be offer to the passengers. |

ACA 2:

The company can offer group packages or family packages especially on summer and
special holidays as well as special occasions. They could also offer services that come
with this promo packages like a discounts, free meals and the likes. They could also
give some freebies so the guests can have a memory of the hotel. Thorough marketing
must be accomplished on this strategy. They could also have their own website where
the people can have an easy access on inquiring regarding their promos and packages.

ADVANTAGES | DISADVANTAGES |

a. It will increase sales and a possible increase on their nightly rateb. It will catch more
guests.c. It will be a new image for the hotel and many guests will be attracted.d. They
can extend the company’s reach to their market.e. Information about the hotel will be
more accessible to the market.f. The hotel will be more appreciated by the market. | a.
They are in need of more labor force in order to attend to their guests needs.b. Increase
in company’s expenses.c. Competitors may see this opportunity to attack their
marketing strategy. |

DECISION MATRIX

Decision Matrix using five-point Liker scale was used in deciding which alternative
courses of action is to be recommended.

Criteria | ACA 1 | ACA 2 |

1. Market Growth | 4 | 5 |

2. Competitiveness | 4 | 5 |

3. Capital Requirement | 5 | 4 |

4. Profitability | 4 | 5 |

5. Corporate Image | 4 | 5 |

Total | 21 | 24 |

Mean | 4.2 | 4.8 |

Legend:

5- Most Likely

4- More Likely

3- Likely

2- Less Likely

1- Unlikely

RECOMMENDATION

Upon assessment and studies Diamondback Hotel must coincide with the strategy
given to them by the consultant. It will give the Hotel new perspective on their guests
and the guests will be more appreciative and more guests will be attracted with the
hotel.

In line with this strategy there are guests who might have a second thought on staying
with the hotel, because there will be an increase on their room rates. That’s why the
Hotel has to offer new services for their guests to somehow cover-up this increase on
the room rates.

The hotel can also offer promos and group packages or family packages, especially
during summer as well as on holidays and special occasions. They could also offer
services that come with this promo packages like a discounts, free meals and the likes.
They could also give some freebies so the guests can have a memory of the hotel.
Thorough marketing must be accomplished on this strategy. They could also have their
own website where the people can have an easy access on inquiring regarding their
promos and packages.

Through these strategies, they can reach more of their markets and their markets will
be more informed regarding the hotel. At first, sales will not sky rocketed by in the end
once they are fully established increase in sales is expected and their average nightly
occupancy will also improve.