Hotel Continental Case Study

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Case 3-1
HOTEL CONTINENTAL
In July 1989, Mr. Oscar Mendoza, owner of Triumph Tours read in the newspapers anadvertisement for the leasing of Hotel Continentals facilities. During the last six months, OscarMendoza 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 groupssince 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 MarcosAvenue. It has three function rooms that can seat twelve to forty persons, a coffee shop, a fast foodcafeteria, a formal dining room and a swimming pool. During the last two years, the hotel incurredlosses 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 peakmonths. 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 theremaining 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 datathat will help me in deciding whether or not I should bid for Hotel Continental? The data could also helpme in figuring the appropriate bid price.Ernesto de los Santos immediately called his staff after the meeting with Oscar Mendoza. Hetold his staff to gather raw data related to the hotel industry. Just give me the data. Its up to you howyou 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 submittedby two of the five staff members of the marketing department (See...
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