“Good Hotel: Doing Good, Doing Well?”
Background of the Case
Joie de Vivre is a hotel management group that is located in San Francisco that was founded in 1987 by Chip Conley. They run what is known as boutique hotels. Pam took the lead position at the Good Hotel and had it heading in the right direction.
Most hotels in the Mid 2000's were struggling. They couldn't fill rooms. They weren't making money. Things just were not going right. The market was just up and down and there could have been many factors causing this.
The possible problem is that maybe people were changing. Maybe they didn't want the same old hotel rooms. Maybe they wanted something more personal. Or maybe just the economy was bad and that things would eventually get better.
Two or three alternative solutions to identified problem
Strategy 1: Cheaper hotel rooms
Strategy 2: Maybe just do basic renovations and hope the market turns around Strategy 3: Get to know customers and make a more personal hotel experience for each individual.
Good Hotel decided to use strategy #3. They thought that if they got to know their customers then they could make a hotel that would have a comparative advantage over others. They would make the hotels more personal.
Implementation of solution
Good Hotel got to know their customers. They thought there was a market out there that was big enough and profitable enough for them to go after. This would be the “green market”. These would be customers who would want eco-friendly hotels that fit their personality and their lifestyle. The Good Hotel used recycled materials for lots of things in the hotel. They also had ways for customers to take care of their carbon foot prints. They had solar panels. They just did everything to be very green and eco-friendly.
In the end, the owners of the Good Hotel foreclosed on their holdings and sold...