Anber Inn and Suites

6446 Words Jan 25th, 2012 26 Pages
Strategic Marketing Problems. Cases and Comments, Eleventh Edition
Chapter : Case: Amber Inn & Suites, Inc.*
ISBN: 9780131871526 Author: Roger A. Kerin, Robert A. Peterson copyright © 2007 Pearson Education
Case: Amber Inn & Suites, Inc.*
*This case was prepared by Professor Roger A. Kerin of the Edwin L. Cox School of Business, Southern Methodist University, as a basis for class discussion and is not designed to illustrate effective or ineffective handling of an administrative situation. All names and the company data have been disguised. Copyright © 2005 by Roger A. Kerin. No part of this case may be reproduced without written permission of the copyright holder.
Late in the afternoon on April 4, 2005, Kelly Elizabeth,
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Brad was of the view that successful companies grow sales not prune expenses. Since 2003, when Brad and I joined the company, our media advertising budget has grown 55 percent and our sales budget increased 15 percent. Revenue growth has exceeded industry averages even with a decline in the number of operating properties and guest rooms and suites since fiscal 2003.
She went on to say:
The process outlined by Mr. James reflects a growing practice today. I was not surprised by the charge given us. Companies in the hotel industry are looking for and expecting a documented favorable financial return on their expenditures. Admittedly, sales and marketing has lagged behind other functions, such as lodging operations, in showing measurable profit results from its efforts. The new planning and budgeting process will be a challenge because it is “bottom-up” and profit driven rather than “top-down” and revenue driven. But it is a worthwhile undertaking to achieve profitability within two years. I hope the planning and budgeting process doesn’t turn into a cost-cutting exercise.
The U.S. Hotel Industry
The U.S. hotel industry recorded revenue of $113.7 billion and grossed $16.7 billion in pretax profit in 2004. As of December 31, 2004, there were 4.4 million hotel rooms in the United States. Approximately two-thirds of all U.S. hotel rooms were affiliated with a brand; the remaining one-third were independently owned and not brand-affiliated. The

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