Amber & Suites Inn Case Analysis

2341 WordsNov 15, 201010 Pages
Mene Kude Dr. Dixie Marketing 601 November 17, 2010 Amber Inn & Suites, Inc. Strategic issues and Problem Identification The Amber Inns & Suites, Inc. is a 250 property hotel chain, struggling with net operating lost since 2002, with fiscal year 2005 projected to be its fifth consecutive unprofitable year. The company has projected lodging revenue of $422.6 million and a net loss of $15.7 million for fiscal 2005. Joseph James, the company’s new president and chief executive officer, wants an hour presentation that describes initiatives, expenditures, and outcomes for the past two fiscal years, and a planned initiatives and budgetary needs for fiscal 2006. Mr. James goal for the company is to achieve profitability within two…show more content…
Amber Inn & Suites, Inc positioning has always been highly targeted at the business travelers with 80% of the travelers staying at the chains being business travelers. The business travelers market is more stable, less price sensitive and has less room for growth as full service hotels compete aggressively for their business. Amber Inns & Suites locates its properties on premium sites, on major highways close to industrial, office complexes, and shopping centers for the most part in order to carter to its business traveler’s market. This excessive catering to business travelers leaves room for growth with leisure travelers. Overview of Past Performance In 2002 and 2004 guest profile, Average number of nights stayed on most recent visits improved from 2.4 average nights to 2.6. There are improvements in the likelihood of customer retention in the extremely likely and very likely category. 2002 sees an average of 81.6% favorability rate and favorability rate of 84.5% was recorded for 2004. There is an increase in the average number of occasions a guest stays at Amber Inn, from 9.9 in 2002 to 10.8 in 2004. In spite of these increases, 2005 still sees a projected net operating lost. As such Amber Inns & Suites have to rethink its strategic and make cost saving decisions like investments in technology so as to reduce direct labor cost. Improvement of energy efficient

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