The Accra Beach Hotel CaseGroup 5

1. What factors lead to variations in demand at a hotel such as the Accra Beach?

Hotels like the Accra Beach Hotel, which are located in a holiday destination like Caribbean islands, will naturally experience variation in demand in different parts of the year. Accra Beach hotel has following features to add on to its credibility: Situated at the Coastal region offering scenic beauty of the beach Short distance from the Airport Situated in the Capital City

The Accra Beach Hotel has both Vacation Guests and Business/Corporate Guest. Variations in the demand of rooms by vacationers are caused by the different seasons for going into vacation.In terms of the vacationers we may presume they expect a mild weather to make their holiday enjoyable. Especially for a place associated with the beach, holidaymakers expect warm sunny weather. It is a fact that the weather pattern of any place includes some rough times when the number of tourists is expectedly low. As for instance Barbados enjoys a hot tropical climate with two distinct seasons wet and dry. The wet season begins in May/June and runs through until November/December. As seen from Accra beach hotel monthly occupancy rate chart of the previous year, the occupancy rate was low throughout the months May to October. In fact the months throughout June to November bear the possibilities of hurricane. For the rest of the year Barbados sees an enjoyable weather accompanied by great number of tourists precisely for the months January throughout April.In terms of the Businessmen it is obvious that the demand emerges for working days of the calendar year as most of the meetings, seminars and deals are penned during official working hours. On the contrary clients on business purposes may not be found during holidays such as Christmas, Eid, New Year etc. Business clients may not follow weather patterns for their visit unlike vacationers.Again in case of business clients, much also depends upon economic conditions of businesses. Of course during recession periods staying at a luxury hotel may not be a top priority for businessmen.Also beautiful locations such as the Caribbean are often places of interest for hosting various cultural and sports events during the calendar year such as cricket series which may bring about a different trend in demand.

2. Identify the various market segments currently served by the hotel. What are the pros and cons of seeking to serve customers from several segments?

The Accra Beach Hotel on the islands of Barbados currently serves four different types of hotel guests.

1) Individual vacationers: They want to spend their vacations in a resort destination to relax and relieve stress from the daily life. The number from this group is steadily declining.2) Tour group participants: Vacationers who travel with tour operators to have scheduled Vacations without the trouble of organizing. The number from this group is steadily declining.3) Individual business travellers & Business conference participants: Business people and Corporate customers which make business with local companies and come frequently for business meetings.At Accra Beach Hotel, another form of segmentation is guests home location- Barbadian, other Caribbean, North America and Europe. The key marketing implications have to do with channels for reaching individuals versus group organizers, and allocation of promotional budget across different regions.Pros of serving several segments: Having a different clientele is a major pro for hotels to achieve a high occupancy rate during the whole year. As there are special seasons for vacationers to go into vacations, especially to a Caribbean island, it is necessary for hotels to also serve other guests to make sure there are not too many empty rooms. Business people are a large opportunity for hotels to occupy rooms outside the vacation seasons and as the Accra Beach Hotel has the advantage to be near to both the airport and the capital city of Barbados it can utilize these facts. It is not possible to fill up the all available or maximum capacity with a single segment, so having different segments is important to tackle this problem, which helps in utilizing the maximum capacity. The tour operators and individual vacationers help to fill up the rooms in the weekends when there are no business travellers.Cons of serving several segments: The biggest con for serving several unequal segments is that the different groups of guests might be annoyed by other group of guests. As the text mentions there are vacationers who feel uncomfortable with going to the beach and surrounded by business people while their vacation. Different market segments may have different demands and it may be difficult to efficiently serve each segment. The fact of serving different market segment may require some extra training of the staffs of certain segments the failure of which may result to poor service. Different market segments have different expectations from their stay at the hotel. Some seek solace, some seek adventure and thrill while some are more concerned about business. These varying expectation require different environments. Trying to serve all the segments under the same environment may see clashes between customers expectation.Conclusion: Accra Beach Hotel patronage seems to be shifting from vacationers to business people. Because business customers pay more and the business is more stable, hotel should probably market itself in ways that will eventually reposition the hotel as a business hotel with attractive conference opportunities.

3. What are the key considerations facing the hotel as it reviews the booking requests from the West Indies Cricket Board?

There ae several facts the manager of the accra Beach Hotel has to consider when making a decision whether hosting the cricket teams whie the West Indies Cricket Secives or not. First of all, the number of occupied rooms was decreasing in the last year, so when the declining rate continues the hotel can assure th atleast the 50 rooms are engaged and there are still 91 rooms left for other guests. It can can be expected that those rooms will be sold because the number of sold rooms in the past year was always above the number of 91. Second, there is the possibility that vacationers are attracted by staying in the same hotel like famous cricket players, especially guests from cricket loving nations like England and Britain, who were a big customer group in the past time. And even tell other people about the experience they made and so indirectly make promotion for the hotel. Furthermore, the head of the WICB promised that the Accra Beach Hotel will be mentioned as the host hotel in all promotional materials and during the televised matches. This could have a tremendous effect on the image of the hotel and attract other sport teams to stay over the Accra Beach hotel. The major point to consider for a corporation is the financial outcomes. Accra beach hotel had been enjoying a relatively high occupancy rate, consistent in generating revenue due to some loyal customer responses. In case they accepted WICBs request they would have had to give away the opportunity to maintain the consistency of revenue generation since WICB was willing to pay lesser than their general customers. Also the revenue from food servings would be expected to lower down since most athletes were supposed to dine out. Hence a financial setback for the two months was most expected resultant of accepting the request. Also, the presence of a large group of sportsmen would attract a huge number of fanatics and media attentions which might spoil vacationers seeking peaceful environment, and business people having to worry about privacy being exposed. Also, these sportsmen being highly regarded celebrities more focus of the hotel staff would have had to be put on them than the general customers which could create negative brand equity.

4. What action should Cherita Howard take and why?

A. The following calculation shows the revenue generated by 50 rooms in case of general customers for 28 days of the certain months of April through June considering the previous year RevPAR.Total number of nights (50 rooms times 28 days) = 1400 nights The Average revenue per room calculated from RevPAR of previous year is $107.74 Considering it, revenue from 50 rooms (1400 times $107.74)= $1,50,836

Now, revenue from Food

Considering 80% of 50 customers having breakfast, revenue (40 customers times $8 per serving) = $320 Considering 30% of customers dining in hotel, revenue (15 customers times $25 per serving) = $375Total Revenue from vacationers and businessmen = $1,51,531

B. The following calculation shows revenue generated by 50 rooms in case WICBs proposal is accepted.

If average revenue per room is $130 the revenue from 50 rooms (1400 times $130) = $1,82,000 Now since food cost and VAT cost were to be included, the Total revenue stands $1,82,000 For laundry costs in case Cherita decides for in house laundry (28 days times $20 per day)= $560 Deducting laundry cost Total Revenue = $1,81,440Thus, the net financial impact of accepting the WICB business is ($181440 - $151531) = $29,909. Hence we can see it would be profitable to accept the booking.

On another consideration, the promised promotion as hotel partner of WICB for the upcoming international cricket series holds a great prospect of promotion. Also since the hotel was moving from vacation oriented customers to more business oriented customers the damage done by turning down vacationers is most likely to be made up by increasing focus on business customers who are lesser likely to not consider a second visit due to temporary inconvenience.Considering these, Cherita Howard should accept the proposal.Submitted By:Ayush, Smriti, Toshita, Deepanwita, Neha

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