8/10/2019 Accra Beach Hotel Case- Respuestasss

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Max Barthelmess

Professor Case

Services Marketing

Case 7- Accra Beach Hotel

1. The vacation industry is a very seasonally oriented market. Many companies face problems

when predicting sales because those numbers are just predictions, not guaranteed figures.

Some similar industry companies, such as winter resorts, have to cater to different markets

during different parts of the year in order to make profits. During the winter they operate as a

ski resort. The spring and summertime usually house campers and hikers partaking in outdoor

activities. The fall will bring hunters venturing on a quest to land the big buck they have been

seeking for years. The bottom line is that resorts sometimes have to cater to different markets

during different times of the year in order to remain in business. Hotel resorts located in tropical

environments face the same problems but have a difficult time catering to different markets in

order to maintain profitability.

A vacation resort in Barbados is not exactly an option for everyone and during certain

months, the heat does not allow for it to be an attractive destination for the money required to

be spent. Usually people would rather go someplace closer and maybe a little cooler. The

economic crisis of the last few years have impacted consumers from being able to spend money

on luxurious items such as vacations to resorts in foreign countries. Places like Accra rely on

tourism during their busy winter months where a good amount of the world is cold and people

flock to the Tropics. Weddings are also popular in this region so a good amount of their

individual travelers are from nuptial adventures. Granted, you and I probably dont feel its

worth the money since divorce will end up happening anyway, but I digress. During the

summertime they are feeling the heat so to speak of not being able to maintain high levels of

occupancy due to the fact that people choose other destinations like Europe or the Americas for

travel. Its quite humorous how many people from Europe flock to the United States to get away

from Americans flocking to Europe!

Accra has managed to gain a decent amount of patrons who are on the business side of

the world. The hotel caters mainly to corporate clients during the downward cycle of the tourist

season. This has helped Accra to be able to operate the facility year-round, instead of having to

fold and shut down business during the months when tourism declines.

2. Accra caters to 3 markets; individual travelers, corporate clients, and tourists. The benefits of

having multiple target markets are that you do not have to limit yourself to relying on one

particular group to fulfill all of your business needs. With some diversity, Accra was able to sell

more rooms and maintain a decent occupancy percentage in months where tourism was slow.

Without having the corporate presence profits and vacancy would be very low during that time

period.

The Drawback to having corporate clients is that they usually dont spend as much

money at the property. Instead they go off the resort to different restaurants and attractions

around town. Accra is located so close to the city and the airport making it a more viable option

to venture off the resort, than other properties located in less rural areas. Having business

clients can also make vacationing guests feel uncomfortable. Consumers go on vacations to get

away from the repetitive nature of everyday life. Witnessing people walk around in suits

performing business activities tend to hamper the abilities one has to truly immerse themselves

8/10/2019 Accra Beach Hotel Case- Respuestasss

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Max Barthelmess

Professor Case

Services Marketing

Case 7- Accra Beach Hotel

in a vacation. These actions remind guests of home and hamper their ability to truly relax and

forget the world they left behind.

3. Accra needs to take several factors into account when coming to a decision about whether or

not to cater to the West Indies Cricket Board: The first is money, do they want to accept the bid

offered by the board that is lower than the amount of money they could charge to guests who

would be coming to vacation? They face issues of WICB demands for; reduced room costs,

requested laundry service. and the likely chance members of the teams will not spend a decent

amount of money at the resort. Secondly, there is the chance that having that many players will

make guests feel uncomfortable. I dont see this as being too much of an issue due to the fact

the team will be leaving during the day to play off property. This will leave little to no interaction

with guests during their daily activities. The problem I foresee, is what will happen if everyone

starts drinking after the daysevents are through? Most players are on strict rules due to the

competition, but lets face it; cricket players have to know how to drink! How else could they

play that awful game?

The WICB staying at the Accra Beach Hotel is not all doom and gloom. There is no

guarantee that the rooms would be sold as reliable sales figures had not been compiled. Also,

projected sales figures are just estimates, not guarantees. By allowing the teams to stay at the

resort, the hotel is guaranteed to make a profit. Another positive result of housing the teams is

the promise of free advertising and marketing. The WICB promised to put the Accra hotel on all

promotional items as well as on television during the matches. The fact that the matches will be

broadcast throughout all of West Indies ensures that the Accra Beach Hotel could gain a

monumental amount of exposure to markets that would otherwise be hard to reach without

considerable marketing expenses.

4.

I would suggest that Cherita go ahead and book the team for the requested dates. Past figures

have shown an average of 75% occupancy during the months the team needs to have

accommodations. With 122 standard rooms inside of the hotel, that percentage leaves an

average of 30 vacant rooms. The request of 50 rooms for the teams it is feasible. The hotel

would still be able to operate the rest of the property only having to accommodate 20 extra

rooms to the team, instead of vacationing guests. Based on the information provided in the

charts, Accra would be maintaining average profits per room of the entire hotel. A percentage

of the rooms do not always get booked, having the team there would ensure maximum capacity

of the hotel. The only downside would be the VAT tax, free breakfast, and laundry service. These

costs would have to be paid for by the hotel and not the players. The total extra costs the hotel

would have to pick up for the agreement would not be cheap. The average occupancy rates for

the months that the teams requested accommodations are estimated to be 75%, leaving 25%

unfilled. Having these rooms empty would result in possible lost revenue of around $125,860

(Appendix) dollars for the standard rooms. Having the teams there seems like a good option for

the Accra Beach Hotel. The gained exposure from the tournament and the estimated

guaranteed profit of at least $148,518 (Appendix) make this a good business decision.

8/10/2019 Accra Beach Hotel Case- Respuestasss

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Max Barthelmess

Professor Case

Services Marketing

Case 7- Accra Beach Hotel

Appendix

Costs of taxes on rooms- 50 rooms at $130 per night with a 7.5% tax rate multiplied by 28 days.

(130x.075)(50)(28)=$13,650

Cost of breakfast-$8 per breakfast (including tax) for assuming 52 people (50 rooms, 2 suites with one

coach in each) multiplied by 28 days and an expected consumption of only 25% of the players.

(52x8)(28)(.25)=$2,912

Best case laundry expenses- Laundry costs $20 a day for 28 days (20)(28)=$560

Worst case laundry expenses- Laundry costs $200 a day for 28 days (200x28)=$5,600

Possible vacancy lost revenue- $145 average room rate for period multiplied by 31 rooms left vacant by

28 days (145)(31)(28)=$125,860

Revenue gained by WICB- 50 rooms at $130 per night for 28 nights (50)130)(28)=$182,000

Total Revenue(182,000-13,650-2,192-560-12,040)= $153,358 or $148,518(expensive laundry)

Side Note- I didnt like the fact they didnt put the amount of players on the team. The rooms could be 2

beds or one bed depending on the request. The case did not provide critical information to develop

other alternatives. I Personally would have told them they could have rooms with double beds in them

and sleep 2 people per room, but I dont know if that was already the assumption or not. Like I said they

could have provided better info perhaps next time you should use a different case Professor Case! Lol

See you next week. Oh and please just submit the paper to the grammar website not this part. Dont

want the appendix to count towards that seeing how picky that program is.