Accra Beach- Case Solution

CASE STUDY- ACCRA BEACH HOTEL Services Marketing

SUBMITTED TO Mr. SYED KAMRUL ISLAM (SKI) SCHOOL OF BUSINESS, North South University

SUBMITED BY Ahmed Siffat Naveel Nur ID 1210234030 Section: 5

1. What factors lead to variations in demand at a hotel such as the Accra Beach? Answer: A hotel having the location similar to Accra beach hotel will naturally experience variation in demand in different parts of the year. Some points to be noted in terms of the location of the Accra Beach hotel:  Situated at the Coastal region offering scenic beauty of the beach  Short distance from the Airport  Situated in the Capital City When we consider these aspects of the hotel by default we can say that the clients of this hotel are i. ii.

Vacationers Businessmen/ Corporate job holders

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 though 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, Puja 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? Answer: The various market segments currently served by Accra beach hotel are:    

Holidaymakers Business Customers Individual guests Vacationers via Tour operators

The Pros of serving customers from several segments Let’s consider Accra beach hotel in this case. There is a counter cyclical trend in visiting of different segments. Different segments visit the hotel in different parts of the year. Mostly vacationers seek times of the year including holidays and also suitable weather conditions. On the other hand business customers are found during official working days when there may not be many holidaymakers. Serving both the segments mean the hotel is never idle throughout the year and resources are utilized. Cons of serving customers from several segments The Cons of serving customers from several segments can be summarized along the following points  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.

2. What are the key considerations facing the hotel as it reviews the booking requests from the West Indies Cricket Board? Answer: As the West Indies Cricket Board has put up a booking request, before making a decision to approve it or not there is a number of issues to be considered. Revenue and Finances: 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 WICB’s 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. Promotional Prospect: In return of low hotel charges WICB promised to promote ABH in their live match broadcasts as hotel partner which was indeed a mammoth opportunity for them to promote their hotel in the international arena. Experience of other Guests: In case the proposal was accepted, Accra beach hotel would have had to turn down a big portion of their general customers due to accommodation constraint. This could hamper relation with regular customers. 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?

Answer: 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 as standard. Total number of nights (50 rooms times 28 days) = 1400 nights 1. The Average revenue per room calculated from RevPAR of previous year is $107.74. Considering it as standard of comparison, revenue form 50 rooms (1400 times $107.74)= $150836 Now, revenue from Food 2. Considering 80% of 50 customers having breakfast, revenue (40 customers times $8 per serving)= $320 3. Considering 30% of customers dining in hotel, revenue ( 15 customers times $25 per serving)= $375 Total Revenue from vacationers and businessmen= $151531 B. The following calculation shows revenue generated by 50 rooms in case WICB’s proposal is accepted. If average revenue per room is $130 the revenue from 50 rooms (1400 times $130)= $182000

Now since food cost and VAT cost were to be included, the Total revenue stands $182000 Again laundry costs incase Cherita decides for in house laundry (28 days times $20 per day)= $560 Deducting laundry cost Total Revenue = $181440 Thus, the net financial impact of accepting the WICB business is ($181440$151531) = $29909. 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, I think Cherita Howard should accept the proposal.