Good Night Inn - Case Study Example

Running Head: Case Study: Good Night Inn Case Study: Good Night Inn [The of the will appear here] [The of the will appear here] [The name of the Professor] [Course] The position that Anton Cahoon is facing right now is the low occupancy of his motel as compared to industry figures which should be 65 percent. Cahoon’s low 55 percent is translating loss for the motel as Cahoon is already selling his rooms at the lowest prices. This means that Cahoon is attempting to generate profit by increasing the sale of his rooms but decreasing the price is not translating as increased sales.

In order to increase the occupancy rate, Cahoon has the option of affiliating with a national motel chain in order to increase sales. This would require considerable investment on the part of Cahoon and would also increase the price of the motel room but Cahoon would be able to benefit from increased customers through promotion and the centralized booking system offered by these national motel chains. Anton Cahoon, at this point of time, should seriously consider getting an affiliation with national motel chain.

This is because Cahoon needs the added customers or otherwise his motel would further fall below. Though investments would be required, Cahoon would be able to cover the costs through increased revenues. Also national motel chains have a brand identity that Cahoon can cash on when people visit the resort area. Cahoon has noticed that people do come to the parking lot but they do not get inside. This is because of the lack of recreational activities and because the name Goodnight Inn does not inspire customers.

With an affiliation with a national motel chain, Cahoon would benefit from the investment in recreational activities and thus attract customers who are even passing by. The centralized booking system of these national motel chains would also benefit Cahoon as the results of the survey show that most people book in advance when they plan for a trip. Thus, with the booking system, people would book more often with Cahoon. While choosing between Days Inn and Holiday Inn, Cahoon should favor Days Inn.

This is because Days Inn does not require a huge amount of initial investment that would already be difficult for Cahoon to obtain. Also Days Inn is economy lodging and with the ongoing recession, people are usually more cost conscious. Also the income of the visiting families is not too high and therefore they would most probably opt for an economic motel. Another reason for choosing Days Inn is the target market of the motel chain which is older customers or young couples. Since people visiting the resort area mostly belong to that group of customers, it would be more logical to choose Days Inn.

References Dines, N. (2008), The Effect of the Recession on the Hotel Sector, Tourism Insights, Retrieved from http://www.insights.org.uk/articleitem.aspx?title=The%20Effect%20of%20the%20Recession%20on%20the%20Hotel%20Sector