Amber Inn & Suites Case Analysis Essay

1382 WordsFeb 25, 20126 Pages
Amber Inn & Suites, Inc., Case Analysis Case Recap Amber Inn & Suites, Inc. is a 250-property hotel chain with locations in 10 western and Rocky Mountain States. Their market position lies between a limited-service and full-service hotel chain. Joseph James is the newly appointed president and CEO. He initiated an aggressive goal for the senior leadership team (SLT) to formulate a strategy to achieve profitability in the next two years and sustain future growth (Kerin and Peterson, 2010). This case study will offer a summary and analysis of Amber Inn & Suites options and an examination into the company’s strengths, weaknesses, threats and opportunities. Problem Identification Despite three consecutive years of growth in…show more content…
Amber Inn & Suites 2005 lodging expenses are expected to increase 5 percent year-on-year, which is a 1 percent increase compared to 2003 to 2004. The variable cost attributed to lodging expenses are associated with the operation of the property, they include, direct labor, utilities, and supplies. Corporate expenses for sales, general and administrative (S, G & A) are expected to increase by 5 percent totaling $44.9 million. The increase is attributed to health care premiums, information technology expenditures, and sales and marketing costs (Kerin and Peterson, 2007). Additionally, the advertising and media budget has had a considerable year-on-year increases. The budget increased 30 percent from 2003 to 2004, and expecting another 9 percent increase in 2005. Identifying the Root Problem Components Despite Amber Inn & Suites lodging revenue growth, they are not profitable due to year-on-year increased advertising media budget, and the “free-night-stay” promotion. Simply put, they must harness their variable cost in order to achieve the profitability goals of the corporation. Amber Inn & Suites revenue per available room is approximately $5 less than the national average (Kerin and Peterson, 2007). VP of Lodging and CFO cherish the business traveler market, and are obstructive when presented with expanding their

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