Accra Beach Hotel Case Analysis

Case 2
Key Issues:
The key issue for the Accra Beach Hotel lies amongst the hotel’s tendency to serve several customer segments. The hotel is booked for the West Indies Cricket Board (WICB), and also tries to cater to frequent vacationers at the same time. These segments behave in different ways, thus their needs and expectations may conflict. The noisiness from the cricket group spoils the experience of other guests who have arrived to relax in a peaceful environment. The tension between both of these segments as well as the hostile glances from one another may lead to a stressful atmosphere. At times, the hotel has been fully booked, and the hotel was forced to turn down frequent vacationers, therefore it increases the risk that these loyal customers will find another hotel and refuse to return to Accra Beach Hotel. This results to a long term revenue loss.

Analysis:
Accra Beach Hotel is in the hotel and tourism industry that caters to vacationers, business travellers, tour groups, and its local community. The factors that lead to a variation in demand for rooms are the days of the week, economic cycles, and seasonal cycles. Accra Beach Hotel’s opportunity to book the members of the West Indies Cricket Board allows the hotel to create an exciting atmosphere for its guests and staff, creates an astounding publicity for the hotel, in particular for cricket lovers all over the world, creates an incremental profit, and generates a fully booked hotel during the two of the slower months of the year (April and May’s occupancy rate ranged from 74.7% to 82% over past two years).

Alternatives:
There are several ways for the hotel from being overbooked, and still cater to its loyal vacationing customers. The hotel can eliminate any future WICB bookings due to it potentially destroying the hotel’s long term revenue. The hotel can compile a list of frequent guests and advise them via email to book early, for they are expecting a busy season. The hotel can raise the rates for busy days to discourage price sensitive vacationers as well as decline block bookings from tour operators. The hotel can also block approximately twenty rooms for nights that are expected to be busy and overbooked, and only permit them for loyal and frequent guests.

Recommendation:
I recommend for the hotel to maintain its relationship and carry on booking the WICB as well as its frequent customers. Many times, filling the capacity of a hotel with a single segment can prove to be quite difficult, but attracting a mix of segments can be essential to the hotel’s success. If a list is compiled for the hotel’s frequent guests, and they are alerted to book early, that entails a personal and tailored service provided by the hotel, therefore it infuses a sort of loyalty for the consumer. The hotel is not very busy during the months of the WICB booking, therefore it creates an image for the hotel, that it is a hot commodity, and brings in more positive attention as well as imaging that Accra Beach Hotel can further profit from.

Appendixes:
The revenues received from the WICB booking = + 172 346 $

The direct costs associated with that booking (in this case simply as breakfast and laundry) = – 4 396 $

The revenues lost due to turning away guests who would have stayed if the hotel were not full due to the presence of the WICB group. = – 115 913 $

Net financial impact = + 52 037 $