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Hotel Continental Swot Case Study

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Autor:   •  May 14, 2018  •  Case Study  •  1,086 Words (5 Pages)  •  18 Views

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CASE STUDY 1

HOTEL CONTINENTAL

Submitted by:

Calvin E. Penilla

ITEFRELEC2

May 8, 2018

  1. Time Context

The problem was observed in July 1989. It was at this time that the Philippine economy, under Cory Aquino’s presidency, is recovering from Martial Law regime. Also during this time, economic conditions have improved that lead to an increase in occupancy rates.

  1. Perspective / Viewpoint

The viewpoint assumed in this case is the perspective of Mr. Oscar Mendoza, the owner of the Triumph Tours.

  1. Central Issue / Statement of the Problem

Mr. Mendoza, owner of Triumph Tours, struggles in finding enough hotel accommodation for his clients, especially during the peak travel months where there is an increase in number of tourists. What would be the best decision for Mr. Mendoza to provide hotel accommodations for his tour groups? Should he bid for Hotel Continental to address this issue?

  1. Statement of Objectives

To analyze the available gathered data and to establish a strong argument in determining whether or not leasing Hotel Continental is sustainable and beneficial for Mr. Mendoza as a compliment for Triump Tours.

  1. Areas Consideration

Strength

  • Excellent list of customers.
  • More profit gained during peak travel months since the number of tourists’ increases.
  • Triumph Tours has a marketing team, which imply their experience in this type of business.
  • Hotel Continental has multiple amenities.
  • Mr. Mendoza is financially capable to lease a hotel.

Weaknesses

  • Triumph Tours have difficulty providing hotel accommodations during peak travel months.
  • The challenge to find employees who possess the necessary skills and attitude for the hotel.
  • Triumph Tours have little experience in hotel management.
  • The facilities of Hotel Continental may become underutilized during off-peak travel months.
  • Mr. Mendoza incurs all operating responsibilities together with all the financial obligations; therefore if the business does not perform well, he will suffer all of the losses.

Opportunity

  • Increase in the number of tourists because of the gradual improvement in peace and order in the country.
  • Presence of the new administration, which observes peace and order, makes tourists more likely to express more freedom to look for hotels.
  • Hotel Continental complements the Triumph Tours’ business, and they would assure the accommodations for the clients of their travel agency, assuming that the agency leases the facilities of Hotel Continental.
  • Economic conditions improved and hotel occupancy rates are expected to increase.

Threats

  • Competition from other travel agencies and hotels.
  • Indirect competition from all other lodging establishments.
  • A slump in the economic conditions may affect the travel industry.
  • Presence of inflation which decreases the rate of purchasing power.
  • With little knowledge in hotel management, the risk of financial losses is relatively high.

Course of Action

Advantages

Disadvantages

Leasing the hotel

  • Have total control over the entire operation.  
  • Hotel Continental has multiple amenities.
  • Hotel Continental can accommodate the clients of Triumph Tours especially during the peak travel months.
  • Triumph Tours would assure the accommodation of their clients.
  • Additional profit for Mr. Oscar Mendoza.

  • Triumph Tours have little experience in hotel management.
  • Recruiting employees that possesses the necessary skills and attitude for the hotel.
  • Mr. Mendoza incurs all operating responsibilities and financial obligations; therefore, Mr. Mendoza will suffer all of the losses if the business does not perform well.

Establish own hotel

  • All tourist clients will be accommodated.
  • Addition to Mr. Mendoza’s business.
  • The hotel will complement the needs of the travel agency.
  • All income will go to Mr. Mendoza.
  • Takes a lot of time, money and effort.  
  • Triumph Tours have little experience in hotel management.
  • Recruiting employees that possesses the necessary skills and attitude for the hotel.
  • Problem in utilizing hotels facilities.
  • Mr. Mendoza incurs all operating responsibilities and financial obligations; therefore, Mr. Mendoza will suffer all of the losses if the business does not perform well.

Joint Venture with a hotel

  • Hotel Continental can accommodate the clients of Triumph Tours especially during the peak travel months.
  • Eradicates the risk of financial losses for the hotel.
  • Mr. Mendoza can focus on improving his traveling agency.
  • Since it is contractual, Mr. Mendoza can freely choose whether or not to renew the contract with the hotel.

  • The Hotel may have high quota rate in customers that Triumph Tours can’t provide.  
  • The partners have different goals and objectives for the joint venture.
  • It takes time and effort to have a good relationship with the partner.
  • There is inequality in the amount of investment and expertise contributed by different partners.
  1. Alternative Course of Action

  1. Decision Matrix / Conclusion

After analyzing the advantages and disadvantages of the alternative solutions in solving the problem of Mr. Oscar Mendoza, my conclusion is that Mr. Mendoza should not bid for Hotel Continental because as everything falls under the management of the hotel, he must not risk a lot of money if the hotel has a bad managerial history. My recommended course of action is the third alternative which is to have a joint venture with a hotel.

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