Hotel Case Study Project - Essay Example

For this reason, private and institutional investors still favor the hotel sector in the United Kingdom. The demand for housing in the city is still high making the demand for hotels in central London also high. Development outside the capital is virtually at a standstill and those seeking to develop hotels are faced with many economic challenges. The investment products in the market are also unrealistically priced with the banks being the main regulators of the hotel industry. The Olympic Games were indeed a success story for London and realized a 41% growth in ADR in various pockets that were within the territory including Manchester.

Bedroom supply has increased tremendously over the last ten years with the annual growth rate reaching 15.5%. To date, a total of 1,622 new bedrooms have entered the market but with the current economic crisis, this may be detrimental. The long term occupancy for a room outside London is about 65%.  In future, it is expected that 3,800 new bedrooms will come into stream by 2016, an expected 70% increase in supply. It is expected that the current market weakness will take a turn and create a demand which will catch up with the new supply.

How to Position the Hotel in Terms of Possible Customer Groups and Hence Prices GreenCo will be set up in a place with several target groups in order to increase their customer base. It will have visitors from Manchester Business School who may be coming in briefly to either view the school or give lectures. The Oxford Railway Station will also provide customers in the form of visitors coming in who may need a place to stay. It will also engage in the development of offices that will seek to target business owners who may set international offices and in addition, require accommodation.

It will target the business hotel user and as such, pricing should be carefully evaluated to ensure that it provides the lowest possible rates for rooms in the area. What the Likely Turnover of the Proposed Hotel Is, and Drawing on Other Hotel Operators’ Financial Performance, an Indication Of Likely Profits UK Hoteliers are faced with widespread difficulties that have predicted a fall in occupancy and extra work for regional owners despite continued investor interest. The hotel team at PWC has predicted a 70% drop in occupancy in the regions, 79% drop in London as well as 1.

2% drops in the average daily room rates (ADR). This is expected to have ADR in the provinces at $58 and $137 in the capital. Because of increased supply and greater competition, hotel revenue per available room (RevPAR) will drop by 1.4% in the regions and 3.2% in London. This will leave RevPAR at $108 in the capital and $41 elsewhere. Despite this gloomy outlook, after the Eurozone crisis is felt and further new room supply enters the market further pushing down the prices, tour operators who previously avoided the capital are expected to return to the capital.

With these estimations in mind, an estimated, the projected sales in 2012 for Holiday Inn in Stanstead Airport of 5 million with an occupancy rate of 73.5%. This is expected because this hotel is located near the capital as compared to GreenCo which is located in the province. Gold which also operates in an area similar to GreenCo expects annual revenue of 2 million. Drawing on the operation of other hotels, GreenCo is likely to receive profits of about 3 million. Any Additional Ideas on Marketing would be Welcome