Sleep Well Motel

Topics: Marketing, Property, Case study Pages: 6 (1521 words) Published: January 29, 2010
Case Study #1
The Sleep Well Motel

In April 1990, Will Shelton was evaluating information received from the owner of a motel that was for sale in Fort Morgan, Colorado. Will had answered an ad in the Wall Street Journal under the heading “Business for Sale.” To Will’s surprise, he received a call directly from Hank Bennington, the owner of the Sleep Well Motel of Fort Morgan, Colorado. During the conversation, Mr. Bennington described his motel and his reason for wanting to sell. He also described the many advantages of living in Colorado and promised to send Will more information on his company. The next day an overnight package of information arrived at Will’s home. Background on Will Shelton

At 44 years of age, Will felt that he had climbed the corporate ladder about as high as he was likely to go. He also had doubts about remaining in a large corporation for the rest of his working life. The present position Will held was director of marketing research for a large electronics corporation located in Houston, Texas. Despite the title, Will felt his position was not satisfying. “Marketing research in an industrial company just isn’t very exciting or personally rewarding; in fact, it’s downright dull.” This statement pretty well summarized Will’s feelings. Although Will had been trained as an engineer, he discovered that engineering wasn’t his primary interest and began to move into marketing. When the position of marketing research director opened in his company, Will applied and was elated when he learned he had received the position. In reviewing this move, Will stated that he believed the fact that he had recently completed an MBA during part-time studies had helped him to obtain the position. Will had recently gone through a divorce and his former wife had been awarded custody of the two boys. Because the laws of Texas called for a division of shared property and child support, Will had suffered a financial setback and was faced with large ongoing payments to his former wife other than for child support. Despite his recent financial problems, Will felt he could raise sufficient money to purchase the motel with a bank mortgage. In his earlier years, Will had studied and worked in New Mexico. He had learned to ski and also enjoyed hunting and fishing in that state. Will felt the people in that part of the United States were somehow more genuine and that life was better in many ways than his present life in Houston. As a result, when he read about a motel for sale in Colorado, Will had an automatic interest. Background on the Sleep Well Motel

As Will began to pull his thoughts together, he reviewed what he had already learned about the Sleep Well Motel. This information had been gained through the telephone conversation with Mr. Bennington plus sales literature and a brief historical sketch that had been included with data sent by Mr. Bennington. The motel had 80 rooms. It was affiliated with a chain several years ago, but was no longer associated with that company. The property was located off U.S. Highway 76, which carried traffic between Denver and Nebraska. Mr. Bennington did not have data concerning the profile characteristics of his customers, but told Will that his customers were commercial travelers such as repair crews, independent sales reps, middle-aged retired couples and young budget-minded travelers. The motel did not have an attached restaurant, but there was a café about two blocks away. There was also a laundromat nearby that was frequently used by the guests. The property was 17 years old and was described as clean and comfortable, but in need of “cosmetics” and new carpeting. Mr. Bennington said he had a dependable night clerk, but served as the manager/front-desk clerk himself during the day. He said that dependable maid service was a problem for all of the motels in the area, and his was no exception. Reasons for Selling

In the telephone conversation, Mr. Bennington stated he had recently lost...

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