Continental

1. SWOT Analysis

II. Central Problem
A CASE ANALYSIS ON
HOTEL CONTINENTAL
"Should Mr. Mendoza bid for Hotel Continental or not?"

1. Minor Problem/s
   How to utilize the remaining 60% of the hotel facilities?
   Hotels in Metro Manila were underutilized before Corazon Aquino’s presidency. Yet despite improving conditions during her term, the hotel is still suffering losses.
   

STRENGTHS
- Multiple amenities
- Accessible / Good location

WEAKNESSES
- Facilities are underutilized
- Record of net loss for the past 2 years

OPPORTUNITIES
- Improving economic conditions
- Occupancy rates increasing

THREATS
-Many and still increasing number of competitions in the hotel industry

IV. Objectives
• To determine if Mr. Mendoza should bid for the hotel facilities or not

• Utilize the remaining 60% of the hotel facilities should Mr. Mendoza opt to bid.

V. Alternative Courses of Action
To Bid:
Advantages
- Potentially negotiable bid price
- Additional profit for him and the hotel
- Take advantage of the hotel's many amenities and visibility of location
Disadvantages
- Need to exert extra effort to provide more than 40% occupancy
- Compete against more profitable hotels with higher occupancy rates
- Long profit turnaround

Look for other hotels:
Advantages
- Avoid the anxiety of speculation
- Extra effort to further utilize hotel facilities not needed
- Potentially higher tourist accommodation for his travel agency by connecting with better hotels
Disadvantages
- Hard time negotiating for a lower bid price
- Could cost more than what he can afford

VI. Conclusion
Bidding for Hotel Continental is not profitable and sustainable.
Although it is possible to negotiate for a lower lease price, Mr. Mendoza will still have to increase its occupancy. Since the hotel is still suffering losses during a period of economic improvement, it implies that it is not performing well internally. Even if they had cut losses during the second year, it will take a few more years before it can make a net profit. If it cannot recover in a few years, the management might close it down, and Mr. Mendoza might have to look for another hotel again, which will be a waste of time and money.

VII. Recommendation
Mr. Mendoza should bid for other hotels instead.
Other hotels are performing better, some with as much as 80% occupancy rate or more, and are more profitable and sustainable. Taking advantage of an improving economy and increasing tourist visits into the country, These hotels have the image of a well-managed organization. Although there is a possibility of higher cost of leasing opportunities, the benefits for his travel agency business will outweigh the costs.

THE PROBLEM
Source: Rodriguez, R. A. & Echanis, E. S. (2001). Fundamentals of management: Text and Philippine cases (4th Ed.). Mandaluyong, Metro Manila. Diwata Publishing, Inc.
Thanks for listening!

1. Transcript of Management 101- Hotel Continental
2. Foundation SWOT Alternative Solutions VI. Evaluation of Alternative Solutions VII. Decision/Recommendation SWOT MATRIX I. Point of View Hotel Continental I. Lease a hotel/ Lease Hotel Continental.
   
   II. Joint venture with a hotel.
   
   III. Establish own hotel to complement the travel agency. Management 101-Y
   group 1 What is the best decision for Mr. Oscar Mendoza to provide hotel accommodations for his tour groups?

II. Problem Statement We assume the point of view of Mr. Oscar Mendoza, the owner of the Triumph Tours. 

• The peak travel months are seasonal particularly during the months of December, January, July and August. Macro / General Environment Analysis

 • The Philippine economy, under Cory Aquino’s presidency, is recovering from Martial Law regime.

• Economic conditions have improved that lead to an increase in occupancy rates.

 III. Analysis of Relevant Case Facts Task / Industry Environment

•A large number of competitors are present, which continue to increase, in the lodging industry in Metro Manila. Company Analysis

...