Avari Ramada Case Report GR 3

Marketing Management
Case Analysis: “Avari Lahore

Ramada Renaissance Hotel”
Group-3
Submitted to: -
Dr. K. Abdul Waheed
Professor Marketing
Academic Dean
Institute of Management Technology
Dubai, United Arab Emirates
Submitted by: -
Name Roll No.
Rajesh Chaudhary 1901006
Shahbaaz Khan 1901009
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 Introduction: -
This case is about a hotel named Avari, which is located in Pakistan’s second biggest
metropolitan city Lahore. Lahore had a population of over 10 million. The city is full of
tourist attraction like Wazir Khan mosque, Badshashi Mosque, Lahore fort, Shalimar Garden
etc. and these attractions play a major role in attracting more and more tourists to Lahore.
Taking advantages of this Avari hotel attracts many customers. Avari is located at a very
strategic location which Shahrah-e-Quaid-i-Azam road, it is a very famous road in the city of
Lahore. Tax free zones in and around Lahore have also contributed to increase in the number
of travelers arriving in Lahore. And Avari being one of the four five-star hotels in Lahore
attracts many customers being located on this Mall road facing the zoological gardens,
Alhamra art council, WAPDA house and is a walking distance from Provincial assembly.
Avari has 190 rooms including 15 suits, 12 junior suits as well as executive, bridal and
presidential suits.
Problem Definition: -
Major problems faced by Avari are as follows:
 Increasing number of competitors
 Falling average room rates even below the room rates of Pearl’s their main competitors
 Should they raise the room prices by 10%?
 Should they increase all rates except for EBS and VEBS?
 Introduce a rate to reduce the difference between the group rate and individual rates
 Low bookings during summers
SWOT analysis of Avari:

 Strength- Prime location of the hotel, extensive choice of restaurants, five-star hotel tag
and higher average room rates then its competitors.
 Weakness- Avari has not yet established a name in the market and bran image in the
minds of potential customers, less spacious rooms and rooms lacked large windows.
 Opportunity- targeting more customers from industrial zone and acquiring customers
from competitors by promoting extra benefits provided by the hotel.
 Threats- rising competition from new entrants and competitive price in the industry which
is eroding the profits
 Formulate the alternatives: -
1. Individual Rates:
These are the rates offered to individual travelers and guests and it has three rate class
categories namely Rack rate, Commercial rate and Preferential rate.
2. Contract rate:
These rates are given to firms and enterprises who enter into contracts with the hotel and can
negotiate prices depending upon the number of rooms they are willing to book in a given
year. It also has three main categories.
3. Garbage rates:
These are varied rates which form a small fraction of hotels revenue and it consists of five
categories.
4. Promotion and Advertisement:
These are forms of discount used by Avari as a form of promotional and marketing strategy.it
include summer packages and other promotional activity.
Analyze the Alternatives: -

1. Individual rates-
 Rack rates: these are the highest rates which are offered to frequent individual travelers.
Priced rupee 1806 for single rooms and rupee 1986 for a double room. These rates play a
vital role in companies’ revenue and profits.
 Commercial rates: these are the second highest rates offered to business clients not having
an account with the hotel but have a good repute. These prices are lower than the rack rate
priced at Rs 1641 and Rs 1821 for single and double rooms respectively.
 Preferential rate: these are the lowest individual rates ranging from Rs 1478 and Rs 1658
for single and double room respectively.
2. Contract rates-
 EBS and Group rates: these rates were given to the companies who made a contract of
booking 75-100 room nights per year. These rates were 30% below rack rates ranging
from 1165 for single rooms and 1345 for doubles.
 VEBS rates: these rates were given to those companies who were under contract of
booking at least 200 room-nights per year and the rate for single room was 1020 and 1200
for doubles room.
 Special rates: these rates were given to large companies and organization’s and the rates
were 45-60% below rack rates.
3. Garbage rates-
 Government officials and diplomat rates: these rates were Offred to Pakistan’s
government officials and foreign diplomats. Under these rates a discount of 50% off the
rack rates was given for both single and double room.
 Net wholesale rate: these rates were especially given to tour organizer’s and agents. A
percentage of the rates charged was given to the tour agents as a commission.
 Journalist rates: as suggested by the name itself these rates were specially made for
journalist foreign as well as local. These rates were 20% below the rack rates.
 Airline rates: these rates were given to the crew of international airlines flying over to
middle east. These airlines had contra t with the hotel of providing them with 10 rooms
per day throughout the year.
 IATA rates: these rates were given to transit passengers of any airline at a 50% discount as
a part of an agreement with International air travel association.
4. Promotion and advertisement: to attract more customers during the summertime the hotel
was giving special summer packages of 2015 with Sigle rooms Offred at Rs 950 and
doubles at Rs 1050 also other benefits like complimentary breakfast and 10% on all meals
consumed with the hotel. Also, as a part of their promotional strategy Avari was also
giving free bed tea to EBS and VEBS account holders. Also, customer data base was
being created to keep a track of individual customer needs and improving the quality on
the basis of customers past experience and improving the hotels brand image.
 Recommend a Solution: -
 They should raise the prices of the hotel rooms and not compromise upon the quality
 From exhibit 2 and exhibit 4 we can say that during summertime the prices of pearl are
lower, and the occupancy rate is higher hence Avari should keep its price lower during
these months and give special offers to the customers to make these months more
profitable.
 Also, during the summers months when the occupancy is low therefor to earn profits
during these months Avari can organize family functions or business event.
 The hotel should also focus more on middle class of Pakistan and try to market their
hotel as an escape from city life where people can relax for day or two on weekends
helping them relieve their stress and improving work life balance, this strategy will help
the increase their customer base to a more wider market.
 Plan of Action: -
As for Avari Ramada’s plan of action they should first begin with formulating a marketing
strategy as their brand is not as well known as their new competitors. In other words, they
need to revamp the image of their hotel in the minds of the consumers.
Their target population should be people from the industrial zone as well as tourists who are
coming to visit the zoological gardens and art council for their more premium offerings.
They should target middle class Pakistani’s and market it as a relaxing weekend getaway so
that they can recharge their batteries and get back to work life with a fresh mind.
After the new marketing campaign and strategy they should increase their prices.
They should also renovate the rooms in order to meet customer satisfaction and increase
the number of indoor activities during the summer months in order to get more customers.
 Contingency Plan: -
The contingency plan for Avari ramada is to focus on their past and heritage when going
ahead with a marketing campaign, since Avari ramada is an old hotel that was formed in
1984 it can be tied to the heritage of Lahore and Pakistan. They can work this angle incase
the modern-day marketing campaign doesn’t do well.
And using this angle we can charge premium prices for the classic cultural experience. Our
target market should be foreign tourists as well as old rich Pakistani businessmen who want
to relive their heritage.
Annexure
1. Should Raza seek to increase the occupancy rate or average room rate?
What are the trade-offs? What factors should he consider?
Ans: The factors Raza should consider before taking the decision to
increase the occupancy rate or average room rate are the effect of
seasonality, the type of room and how much money they generate, and the
forecasted demand for increase in occupancy rate.
2. What other metrics could /should Raza use to evaluate the performance of
his pricing structure? Why?
Ans: To evaluate the pricing structure Raza can do a research and find the
price for hotels of similar caliber to Avari and accordingly adjust his price
also he can see if he can find why other hotels are successful and emulate
their strategies.
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Marketing Management

Case Analysis: “Avari Lahore

SWOT analysis of Avari:

4. Promotion and Advertisement:

Analyze the Alternatives: -

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