The Issues Facing Fairmont Chateau Lake Louise

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Introduction Problem Statement Fairmont Chateau Lake Louise (CLL) is unable to translate its world's most spectacular natural surrounding into profits. The many issues facing CLL today include the declining Asian tour group market, due to the 1997 Asian economic crisis, the concentrated, summer and winter, seasonal demand, and the emergence of Internet, which empowers customers to make short-term decisions. The analysis below will present several key elements that will potential increases CCL's long-term profitability regardless of its highly volatile business cycle. Analysis Market Segmentation A SWOT analysis (see Appendix: A-Market Segmentation SWOT) was performed on the market and aimed to identify CLL's potential market…show more content…
"Tour Customers" - The Tour Group and the Fully Independent Tours (FIT): In 1997 the "Tour Customers" accounted for the highest business volume at CLL with 57% (1,710,000 overnight visitors) and rented over 80,000 nights. During the winter period this segment stayed the longest at CLL, between 7 to 14 nights. The greatest benefit from this sector to CLL was that rooms were booked well in advance and were guaranteed to be full. In the summer they spend the shortest duration at CLL, only one night, while receiving the highest discounts amounting to 27% of that of the independent customers. Perhaps, instead of such a high discount CLL can offer bundle compensation for size of the tour and number of nights spent at the hotel. The potential danger, resulting in a 25% decline in this segment, exists if CLL does not undertake any form of action that will further promote the "Tour Customers". The "Tour Customers" preferred smaller rooms; thus did not generate as much of revenue as they would have by renting larger rooms. Some of them demanded greater flexibility than the tours usually allowed. These customers required a lower level of service, which could potential transfer to CLL having more time to serve the customers that demand higher service, but also who are willing to pay for it. Due to the Asian economic crisis, CLL faces a threat of potentially losing its entire Asian market that accounts for 65% of the "Tour Customers". A

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