CASE STUDIES

Strategic Review and Reporting on Hotel C’s Renovation Plans

Restoring the Preeminence of a Long-Established Regional Hotel

Background

Located in a regional city, Hotel C has been in operation for some 30 years, and is renowned for its refined character. Run by a prominent Japanese operator, business has trended well, but in recent years the entry of new hotels has caused changes in the business climate and sharpened competition.

To restore its edge in the market, Hotel C is currently planning renovations. But to assure success it requested a strategic review and proposals from an objective standpoint.

Implementation Summary

Methodology adopted by Abilitas Hospitality:

Local market trends

From domestic business trends to local area information, data was collected from public institutions and from within the industry, as well as from visual inspections of competing hotels and comments from industry insiders, and the market’s present situation and future possibilities were analyzed.

On-site inspection of Hotel C

Guided by hotel staffers, we performed an on-site inspection of the hotel’s public spaces.

Interviews with Hotel C executives

The general manager and directors of each department were interviewed regarding guest trends, competitor analysis and business conditions.

Quantitative business analysis

Numerical data was analyzed, and the possibilities of renovation-driven revenue growth were studied.

Based on revenue-per-guest estimates, the number of functions, occupancy rates, revenues and other data derived from the study, we proposed the market positioning that C Hotel should pursue. From analysis of sales figures we computed return on investment, and in regard to the planned renovations we made specific proposals for both tangibles and intangibles.

From initial consultation to reports and presentations, the time required was about six weeks.

A Word from the Person in Charge

Based on the effects of investment on the hotel as a whole, unique strategic renovation proposals for several properties were drawn up in a short period of time by a small working group. The client understood that the return on investment would be not only measured by the improvement in facilities, but would also be examined from the standpoint of the investor, and backed by a proactive marketing plan that maximized the opportunities resulting from the renovation.

April 2011