Hotel Continental Case Study

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Case Study:

Hotel Continental

Prepared by:

William Andrew G. Bulaqueña

Ricci A. Tilos

Nympha Marie R. Rubin

Sheila Mae N. Chua

Tristram A. Gamo

John Paul T. Antiquiera

Safie Jane M. Ayco

MGT 12-G

Prepared for:

Asst. Prof. Dina Wong – Remoto

HOTEL CONTINENTAL

In July 1989, Mr. Oscar Mendoza, owner of Triumph Tours read in the newspapers an advertisement for the leasing of Hotel Continental’s facilities. During the last six months, Oscar Mendoza has been seriously thinking about operating a hotel to complement his travel agency business. Oscar Mendoza had been experiencing difficulties in getting hotel accommodations for his tour groups since last year during the peak travel months of December, January, July and August.

Hotel Continental is a 27 room hotel located in Diliman, Quezon City along Don Mariano Marcos Avenue. It has three function rooms that can seat twelve to forty persons, a coffee shop, a fast food cafeteria, a formal dining room and a swimming pool. During the last two years, the hotel incurred losses of about P2 to 3 million pesos which led management to the decision of leasing out its facilities (See Exhibit A).

The room capacity of the hotel is just right for Triumph Tours’ requirements during the peak months. “My travel business can provide annual capacity utilization of the hotel to as much as 40% only,” Oscar Mendoza told his Marketing Manager, Ernesto de los Santos. “How do we fill up the remaining 60%? Before Cory became President, I read in the daily newspapers that most of these five-star hotels in Metro Manila were underutilized? What led to this situation? Could you gather some data that will help me in deciding whether or not I should bid for Hotel Continental? The data could also help me in figuring the appropriate bid price.”

Ernesto de los Santos immediately called his staff after the meeting with Oscar Mendoza. He told his staff to gather raw data related to the hotel industry. “Just give me the data. It’s up to you how you will divide the work. I’ll take care of writing the report for the boss,” he informed his staff.

Several days later, Oscar Mendoza found on his desk a packet of information jointly submitted by two of the five staff members of the marketing department (See Exhibit B). Ernesto de los Santos immediately read the data to see if he could prepare a preliminary report for Oscar Mendoza.

QUESTIONS:
1. What are the major determinants of success in the hotel business? 2. Who are the competitors of Hotel Continental?
3. What are the three most critical sets of data that you would need to seriously consider pursuing this opportunity?

|Exhibit A | | | | | | | | | | | | | | | |HOTEL CONTINENTAL INCOME STATEMENT | | | | |For the Years 1987-1988 | | | | | | | | | | |1987 | |1988 | | | | | | | | | |Revenues | | | | | | | |Rooms1 | | | |P 1,969,722.18 | |P 2,515,575.96 | |Food | | | |4843486.42 | |5426843.98 | |Beverage | | |...
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