Hotel Continental Case Study

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    Hotel ContinentalNejudne, Sheatiel Kean P.

     Ahig, Janmark E.Galan, Josiah C.

     Arrieta, Gerald Timothy 

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    Case 1: Hotel Continental

    Mr. Oscar Mendoza 

    Owner of Triumph ToursPlanning to lease HotelContinental to complimenthis traveling agency.

    Mr. Ernesto de los Santos

    Marketing Manager

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    Hotel Continental For Lease

    What is in Hotel Continental?

    27 Rooms

     Three Functional Rooms

    can occupy 12 ! 40 person

    Co" ee Shop

    Fast Food Cafeteria 

    Formal Dining Room

    Swimming Pool

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    CompetitionHotels ! 90

    Inns ! 67

    Resorts ! 60

     Apartment ! 9

    Pension ! 35

    Lodges ! 151

    Motel ! 8

    Unclassified ! 10

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    New Administration

    Cory Aquino reigned aspresident.

     The Philippines is stillrecovering from the martiallaw which Marcos ruled.

    Peace and order situation ofthe country is graduallyimproving.

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    Central Problem

    M r . M e n d o z a o w n e r o f Triumph Tours is experiencingdifficulty in finding hotel

    accommodation for his clientsespecially during the peaktravel months.

    Should Mr. Mendoza bid for

    Hotel Continental to addressthe issue regarding the hotelaccommodation of his clients,ultimately increasing profit?

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    Minor Problems

    Getting hotel accommodationfor his tour groups.

     They ha ve l i t t l e to n oexperience managing hotels.

    Facilities are underutilized.

    Filling up the remaining 60# annual capacity utilization.

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    Objective

     To analyze the current data

    available and to establish asolid argument in determining

     weather or not leasing HotelContinental is sustainable andprofitable for Mr. Mendoza as

    a compliment for his travelingagency.

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    SWOT Analysis

    S ! Strength

     W ! Weaknesses

    O ! Opportunity 

    T ! Threats

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    Strength

     The fact that Triumph Tours has a marketing team proves to show that they are wellexperienced in the business.

    Hotel Continental have everything they need to accommodate the Triumph Tour tourist groupsespecially during the peak travel months of December, January, July and August.

    Hotel Continental has multiple amenities such as three function rooms that can seat twelve toforty persons, a co" ee shop, a fast food cafeteria, a formal dining room and a swimming pool.

     Tourist increases during the peak of the travel months, which also means profit also increases.

    Mr. Oscar Mendoza is also financially capable, since he has the power to lease a hotel.

    Cory Aquino became President and the peace and order situation in the Philippines improvedthus encouraging more tourist to visit the country.

    Economy is recovering from the Marcos regime, tourist can now confidently tour around thePhilippines which will give the hoteliers and restaurateurs a radical growth in their business.

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    Weaknesses

    Mr. Oscar Mendoza and his marketing team have little to no experience in managing a hotel, which may lead to poor management and financial losses.

    If they wont lease the hotel, Triumph tours may experience di$culty in providing hotelaccommodation for their clients, most especially during the peak of the traveling season.

    Since number tourist are seasonal, the facilities of Hotel Continental may become underutilized.

    Finding employees that possesses the necessary skills and attitude for the hotel.

    Feeling up the 60# remaining annual capacity utilization of the hotel.

    When the lease term expires Mr. Mendoza loses its right on the property.

    Mr. Mendoza incurs all operating responsibilities together with all the financial obligations;therefore if the business does not perform well, Mr. Mendoza will su" er all of the losses.

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    Opportunities

     The possible promotions % e.g. Packaged trip & that will be established in order toattract tourists, if they succeed in the promotion they can fill up the remaining60# lacking of the hotel.

    Because of the new administration, tourists have more freedom so they’ll have tolook for the most promising hotel out there, so Hotel Continental must think of ways in getting the most of the tourists.

    Gradual increase of the number of tourist in the country, since peace and order is gradually improving.

    Economic conditions improved and hotel occupancy rate are expected to increase.

     Assuming that hotel continental will be rented, the Triumph Tours would assurethe accommodation of their clients.

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    Threats

     The opportunities for Hotel Continental it is also an opportunity for all so all of the other hotels will

    also think of ways to get the people, considering that the hotel only has 27 rooms which is actually

     pretty small for a hotel and the people would of course like it big “because bigger is better” as they

    might say.

    Facilities may become underutilized.

    Increase numbers of competition from other hotel and travel agencies.

    With little to no knowledge in managing a hotel, the risk of financial losses is relatively high.

    If financial losses on the hotel is too high, the risk of closing the traveling agency is also high.

    If the economy goes down it may affect the traveling industry, and may discourage tourist fromvisiting the country.

    If the economy goes down, then inflammation becomes inevitable, thus reducing the rate of

     purchasing power.

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    Alternative

    Course of Action

    Leasing Hotel Continental.

    Finding other hotel to lease.

     Jo int! venture wi th otherhotels.

    Establishing own hotel

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    Advantageand

    Disadvantage

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    Leasing Hotel Continental

    Reta ins tota l contro l over ent i reoperation.

    Hotel Continental have everything theyneed to accommodate the Triumph Tour

    tourist groups especially during the peaktravel months of December, January, Julyand August.

    Hotel Continental has multiple amenitiessuch as three function rooms that canseat twelve to forty persons, a co" ee

    shop, a fast food cafeteria, a formaldining room and a swimming pool.

     Triumph Tours would a ssu re theaccommodation of their clients.

     Additional profit for Mr. Oscar Mendoza.

    Mr. Oscar Mendoza and his marketingteam have little to no experience inmanaging a hotel, which may lead to poormanagement and financial losses.

    Finding employees that possesses thenecessary skills and attitude for the hotel.

    Feeling up the 60#   remaining annualcapacity utilization of the hotel.

    When the lease term expi res Mr .

    Mendoza loses its right on the property.

    Mr. Mendoza incurs a l l operat ingresponsibilities together with all thefinancial obligations; therefore if thebusiness does not perform well, Mr.Mendoza will su" er all of the losses.

    ADVANTAGES DISADVANTAGES

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    Finding Other Hotel to Lease

     The bidding price may belower than o f Hote lContinental.

     The hotel may have betterfac i l i t ie s than o f Hote lContinental.

     The hotel may have higheraccommodation.

    You may find hotels on betterand more suitable location.

    May take a lot of time tofind other hotels.

    May lose the chance ofb idd ing for Hote lContinental.

    ADVANTAGES DISADVANTAGES

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     Joint Venture with Other

    Hotels Triumph Tours c l ients can a l l beaccommodated especially during thepeak travel months of December, January, July and August.

     This can remove the risk of financialloses of the hotel if ever the hotelexperiences one.

     This will gradually build Triumph Tours’name.

    Mr. Mendoza can focus on improving histraveling agency without worrying aboutthe hotel.

    Since a joint venture is contractual, theycan freely choose wether or not to renewthe contract.

    Hotel Management may ask a high amountof tourist quota that Mr. Mendoza cannotprovide.

    It takes time and e" ort to build the right

    relationship

     The partners have di" erent objectives forthe joint venture.

     There is an imbalance in levels of expertise,investment or assets brought into the

     venture by the di" erent partners.

    Di" erent cultures and management stylesresult in poor integration and co!operation.

     The par tners don't provide suf fic ientleadership and support in the early stages.

    ADVANTAGES DISADVANTAGES

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    Establish Own Hotel

    Expans ion of Mr.Mendoza’s business.

     All income goes to Mr.Mendoza.

     All tourist clients can be

    accommodated.

    Have total control of thefac i l i t i e s and i t soperation.

     Takes a lot of time, money and e" ort.

    Mr. Oscar Mendoza and his marketingteam have little to no experience inmanaging a hotel, which may lead to poor

    management and financial losses.

    Finding employees that possesses thenecessary skills and attitude for thehotel.

    Problem in increasing the utilization rate

    of hotels facilities.

    Mr. Mendoza incurs a l l operatingresponsibilities together with all thefinancial obligations; therefore if thebusiness does not perform well, Mr.Mendoza will su" er all of the losses.

    ADVANTAGES DISADVANTAGES

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    Conclusionand

    RecommendationOne alternative course of action is to venture with other hotels, in doing so Mr.

    Mendoza may find another hotel that has better managerial skills and thus not losingthe name of his agency. On the contrary, the other hotels may have high quota ratesknowing that Mr. Mendoza’s agency is not really that popular yet so maybe he’ll have a

    hard time. Another thing he might do is to build his own hotel simply put that he willbe able to control everything from bottom to top. The downside of this is he’ll beneeding a lot of money for that and he can’t really reach the certain amount of moneyrequired to build a hotel because his agency is still growing.

    So according to the data we gathered we came up of a conclusion that Mr.Mendoza will not bid for Hotel Continental because they have little to no experiencein managing hotels. Furthermore, the risk is too high for Mr. Mendoza, he must notinvest into something that is too risky or he may su" er some irreversible damages thatmay even lead to the closure of his traveling agency. Our recommended course of actionis to venture to other hotels, save up a lot of money, make his travel agency popular andbuild up his own hotel in order that he will have complete control over theestablishment, the management, the money, etc.