Sleepy in Motel - Case Study Example

Sleepy Inn Motel Sleepy Inn Motel is a 60-room motel located at the edge of a small town in a rapidly expanding resort area and only one-half mile off an interstate highway. It is 10 miles from the tourist area with several competitors. The owner, Eng Huang, is faced with a decreasing occupancy rate. He would like to increase the occupancy rate, profitability and maintain his independence. He is currently reflecting on affiliating with national motel chains, streamlining his choice between Days Inn and Holiday Inn.

Causes of the Problems: (1) too much competition in the area; (2) no advertisement; (3) no recreational facilities; and (4) does not scan his environment to adapt and adjust to the demands of the target market.Recommendations The objective of Mr. Huang is to increase occupancy rate, increase productivity and still maintain some independence. To achieve this, after identifying the root causes of the decrease in occupancy, Mr. Huang can address the problem by targeting the root causes, to wit:To increase occupancy rate, productivity and maintain independence: The location of Sleepy Inn Motel is just near the interstate highway with only two large promotional signs provided by the Tourist Bureau.

In this regard, Mr. Huang must strategically place promotional signs indicating his best features and amenities (low price, clean, with new recreational facilities). Since the survey indicated that 78% of the visitors consider recreational facilities as important in their choice of accommodations, Mr. Huang must invest in providing recreation for visitors. He can survey cost effective sources of recreation which can increase revenues and not substantially increase expenses associated with maintenance of the recreational facilities.

Scanning the environment requires taking into account the marketing strategies employed by his competitors within the area. He can offer the best price but without the needed amenities required by the visitors, he cannot compete. Actively promoting his service through local print and billboards will assist in making visitors aware of his location and what he is offering. In doing so, he can also adjust his price per day to a more competitive price to support the improvements he should do.To increase occupancy rate and productivity: By affiliating with either of the Daily Inn or Holiday Inn, Mr.

Huang would definitely increase both occupancy rate and productivity but would not maintain independence. His operations would somehow be dictated by the terms that would be stipulated by the national motels. After evaluating the facts, Mr. Huang would be better off affiliating with Daily Inn because of the following factors: no major capital investment, can avail of the reservation system particularly emphasizing on sales promotions, the target market is compatible with Sleepy Inn’s target market.

The advantage of affiliating is capitalizing on the names of these established national motels, utilizing reservation system and current advertising campaigns. The main disadvantage of this option is losing his independence.