Sleepy Inn Motel: A Marketing - Case Study Example

? Sleepy Inn Motel: A Marketing Case Study Word Count: 1060 (4 pages) There are three things that Huang needs to do in order to ensure success: buildan indoor pool; build or offer a restaurant or restaurant-like atmosphere with a free continental breakfast; and become part of the franchise of Days Inn. Huang should definitely build the pool. Even though this would cost a large sum of money to the tune of $300,000 to $500,000 dollars. However, if he made this improvement in the facilities at Sleepy Inn, he could then charge $75 per night. If he also offered a restaurant, that would also be more ideal because then guests could eat at more reasonable prices than if they were to go out to a traditional restaurant. If the Sleepy Inn could manage to maintain 90% occupancy at the rate of $75 per night, they would make roughly $4,050 per day. If about half of that were put towards paying off the loan on a $300,000 inground pool to be installed ($2000 per day, or $60,000 per month)—Huang could pay off the pool in 150 days or less, depending upon occupancy rates. The other $2,050 that Huang would collect could be divided between salaries for the staff and upkeep. If he had the forethought to do so, it might behoove Huang to also set aside some of that daily income towards a retirement account. He could even retire early if he wanted. The addition of a restaurant to the Sleepy Inn could also generate some more business. When people get up after their night in a motel, the last thing that some of them want to do is to have to dress up really nice to go to breakfast—especially if they’re on vacation. Thus, flip-flops, a comfortable, old, worn T-shirt, and jeans might be the preferred clothing of choice. Having a restaurant in the inn, not only do the patrons of the motel not have to dress up in anything special for breakfast, but with excellent service and reasonable prices—motel patrons may be tempted to just eat breakfast in the motel, especially if Huang decides to make the restaurant or eating area an area for eating a free continental breakfast. Usually a continental breakfast is a complimentary element that motel managers seek to include in their package. Huang might consider taking a portion of the fee from the $75 for the room to cover free continental breakfast instead of having to have to manage a restaurant within the motel. There is no necessity to have a restaurant—in fact, it could bring more problems than it’s worth. However, having an area that still has juice, coffee, and rolls—but with a more ‘spiffy’ appearance, instead of just an informal smorgasbord in the lobby area—could definitely suit the needs of travelers who are looking for a classier place to eat. Becoming part of the Days Inn chain seems like it might be Huang’s best bet to stay in business. As it is, the business is currently losing revenue. If he continues on this path, most likely, the Sleepy Inn will have to be shut down. Therefore, it makes sense that he should capitalize on the fact that Days Inn does significantly more advertising, not to mention types of outreach to snag customers. Sleepy Inn, unless it develops an awesome marketing plan with a surefire plan to garner more customers to better itself—is not going to rise above its current occupancy rate of 55%, which is still way, way below the average occupancy rate for the industry of 68%. In that regard, since what he is already doing is not working well enough, it’s time to examine other options. The Days Inn seems like a natural choice. Not only does Sleepy Inn fit the profile that Days Inns usually propagate, but its rewards and incentives program is much more extensive than the Holiday Inn’s sole program called Priority Club Worldwide. Basically, becoming part of the Days Inn would greatly enhance Huang’s profits. Not only that, but perhaps Days Inn would be willing to undertake the project of installing an inground pool as a business expense with its company, so it could be written off taxes. Therefore, Huang would not have to pay for the installation of the pool, per se. Days Inn would underwrite the cost of the pool, and that would take a lot of pressure off Huang to have to pay back a very, very large loan for investing in a pool that would raise the price of his rooms to $75. If Huang continues to lose money and he decides, for example, that he does not want to join Days Inn, it looks like Huang might have to close the Sleepy Inn indefinitely. This is because, every day that goes by, is another day that Huang will be losing money. In that case, it makes sense to just join the ranks of a competitor with a proven track record. It doesn’t make sense to try to beat the competition by solely adding a nicer continental breakfast and a pool. What Huang needs, ultimately, is name brand appeal, something that he currently doesn’t have. A lot of people have heard of the Days Inn, and it generally has had a good record in the eyes of the public. Many people have probably not ever heard of Sleepy Inn, and if they came to a town they had never been to before, they are most likely to choose an establishment whose name they know has a proven track record—rather than a mom-and-pop place like Sleepy Inn. For these reasons, it is important that Huang consider either joining the Days Inn as a franchise, or shut down Sleepy Inn completely and sell the land to another commercial chain which would be interested in turning the motel into one of their franchises. So, Huang has to decide if he wants to keep losing money or if he wants to make money. He either has to shut down, sell the place, or admit that his competition is doing better than he is and to join the Days Inn as a franchise. In order to ensure success, it would be a good idea for Huang to do the following: install a pool; offer free continental breakfast or have an on-site restaurant; and finally, make Sleepy Inn a franchise of Days Inn. Read More