HOLY ANGEL UNIVERSITY ANGELES CITY THE ACCRA BEACH HOTEL (Case Study 7) Group 2 Arceo, Alexsandra L. Jacinto, Charito H. Maniago, Kim Russel B. Quiazon, Lady Lin T. YFRESMAR/TTH – 4:30-6:00 PM Ms. Cristina Naguit Introduction • The Accra Beach Hotel and resort had a prime beach front location on the South Coast of Barbados, just a short distance from the airport and the capital city of Bridgetown. The centerpiece of its lush gardens was the large swimming pool, which had a shallow bank for lounging plus a swim-up bar. In addition, there was a squash court and a fully equipped gym. The Accra Beach had two restaurants and two bars, as well as extensive banquet and conference facilities. It offered state-of-the-art conference facilities to local, regional and international corporate clientele and had hosted a number of summits in recent years. A business center provided guests with Internet access, faxing capabilities and photocopying services. • The Accra Beach enjoyed a relatively high occupancy rate, with the highest occupancy achieved from January through March and the lowest generally during the summer.
The Accra Beach had traditionally promoted itself as a resort destination, but in the last few years, it had been promoting its convenient location and had attracted many business customers. • Cherita Howard, the hotel’s sales manager, had been approached by the West Indies Cricket Board (WICB) about the possibility of the Accra Beach Hotel serving as the host hotel for the following spring’s West Indies Cricket Home Series, an important international sporting event among cricket-loving nations. • Cherita called Ferne Armstrong, the reservations manager of the hotel and asked her what she thought.
Like Cherita, Ferne was concerned about the possible displacement of higher-paying customers, but offered to do further investigation into the expected room sales and associated room rates for the desired dates soon after Cherita returned to her office. Background of the Problem • Sometimes, guests who were on vacation felt uncomfortable finding themselves surrounded by business people. As one vacationer put it, “there’s just something weird about being on vacation and going to the beach and then seeing suit-clad business people chatting on their cell phones. • They were sure that the rate WICB was willing to pay would be lower than the average rate of US $140-$150 (including VAT) they normally achieved during these times. In contrast to regular guests, who could usually be counted upon to have a number of meals at the hotel, team members and officials would probably be less likely to dine at the hotel because they would be on a per diem budget. • Also, they worried about how the hotel’s other guests might react to the presence of the cricket teams. Still, the marketing potential for the hotel was substantial.
The WICB had promised to list the Accra Beach as the host hotel in all promotional materials and during the televised matches. • In addition, the WICB insisted the laundry service for team uniforms (cricket teams typically wear all-white clothing) and practice gear be provided at no additional charge for all team members. Cherita estimated that it would cost the hotel about $20 per day if they could do the laundry in-house, but about $200 per day if they had to send it to an outside source. Statement of the Problem • How can Accra Beach Hotel serve customers from several market segments? ) What will Accra Beach Hotel do to face the consequences of serving several market segments? b) What are the key considerations facing the hotel as it reviews the booking requests from the WICB? • How should ABH decide on the booking request of WICB? a) What action of the management should be taken? Analysis of the Problem • The case is about the Accra Beach Hotel on the Caribbean island of Barbados. The hotel manager got a request from the West Indies Cricket Board (WICB) about hosting several cricket teams, which is an important international sporting event. The head of the WICB was asking for a discount for 50 of the 141 rooms of the hotel. Now the sales manager has to decide whether to accept the inquiry or not. One important thing for her to consider is that business people, who are the most important guest group, would be stay away because of the cricket teams. • On the other hand would hosting the teams have a publicity effect as the marketing exposure through the Board could be very beneficial for the hotel. Alternative Courses of Action How can Accra Beach Hotel serve customers from several market segments? a) What will Accra Beach Hotel do to face the consequences of serving several market segments? ? The biggest consequences for serving several unequal segments are that the different groups of guests might be annoyed by the other group of guests. There are vacationers who feel uncomfortable with going to the beach and be surrounded by business people while their vacation. This could be one of the reasons why number of vacationers is decreasing.
But the hotel business faces a decreasing number of vacation guests all over the world, so on the one hand hotels need to vary their served segments, on the other hand they should focus on a group of guests to provide superior service in the chosen segment. ? ABH should probably market itself in ways that will eventually reposition the hotel as a business hotel with attractive conference opportunities. b) What are the key considerations should the hotel give attention to as it reviews the booking requests from the WICB? ? ABH should consider the inancial impact such as if their hotel will lose money on the WICB deal. ? Next is the marketing impact is how valuable is the publicity that the WICB booking will generate for the hotel. And if it will be positive for the hotel’s image, neutral, or negative. In addition to the impact on room sales is that if it will help/hinder the hotel in obtaining local patronage for meals, bar, and conferences/group events for customers from the Bridgeport area who don’t need rooms (note that it has state-of-the-art conference facilities). Guest experience impact should also be considered, if the presence of the hotel of a large group of sportsmen will enhance of detract from the experience of vacationers and business people staying at Accra Beach Hotel. ? Lastly, is the guest relations’ impact, ABH should consider if loyal guests will be upset if they cannot reserve a room at the hotel during the periods when the cricket home series is playing and if it will weaken their bonds with the hotel. • How should ABH decide on the booking request of WICB? a) What action of the management should be taken? Cherita Howard should conduct a financial analysis if the booking request of WICB will be profitable. She needs to calculate the revenues received from the WICB booking, the direct costs associated with that booking such as breakfast and laundry, and also 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. If the net financial impact yields a high profit then it would be profitable to accept to the booking request of WICB. Recommendations • We highly recommend all the alternative courses of action under the first statement of the problem.
Having a different clientele is a greater chance for the hotel to achieve a high occupancy rate during the whole year. As there are special seasons for vacationers to go into vacations, especially to a Caribbean island, it is necessary for hotels to also serve other guests to make sure there are not too many empty rooms. Business people are a large opportunity for the hotel to occupy rooms outside the vacation seasons and as the Accra Beach Hotel have the advantage to be near to both the airport and the capital city of Barbados it can utilizes these facts.
Also, careful selection of segments to serve is recommended so that the hotel could focus on providing superior service on a specific group. • We also recommend all the alternative courses of action under the last statement of the problem where the Manager of ABH should consider if the cricket group is noisy and boisterous; it may spoil the experience for other guests, both businesspeople and tourists. This may generate bad word-of-mouth and lead to long term loss of business, with existing guests fearful that more large sporting groups will be using the hotel in the future.
The manager should look on this kind of situations and immediately do actions and alternative plan to anticipate these consequences. ABH continues to shift more toward the business and conference business, but will always need tourists/vacationers to help fill capacity during seasons/days when business usage is lower. Learnings • Serving several market segments may have implications on the company if it not careful selected which group to focus, because different segments behave in different ways and their needs and expectations may clash. We have learned that serving West Indies Cricket World will be a great publicity for the hotel, especially throughout cricket loving nations in the English-speaking Caribbean and perhaps in the United Kingdom. • In serving certain market segment, we have also learned that we should conduct analysis on that segment and make evaluations to ensure if there is a big opportunity for the company to yield a higher profit or if there will be loss.