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Hotel Continental

Mr. Oscar Mendoza, owner of a travel agency, is considering leasing the Hotel Continental to address difficulties obtaining hotel accommodations for his tour groups. Key factors to consider include the travel agency's need for reliable accommodations, the growing tourism industry in the Philippines, and numerous hotel competitors. Leasing the existing Hotel Continental would immediately solve accommodation problems while allowing Mendoza to improve hotel operations, but it presents fixed costs and new industry risks. Establishing a new hotel ensures long-term control but requires large startup funds and expertise. A partnership could provide accommodations with less cost and risk than other options.

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Dheeya Nuruddin
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175 views2 pages

Hotel Continental

Mr. Oscar Mendoza, owner of a travel agency, is considering leasing the Hotel Continental to address difficulties obtaining hotel accommodations for his tour groups. Key factors to consider include the travel agency's need for reliable accommodations, the growing tourism industry in the Philippines, and numerous hotel competitors. Leasing the existing Hotel Continental would immediately solve accommodation problems while allowing Mendoza to improve hotel operations, but it presents fixed costs and new industry risks. Establishing a new hotel ensures long-term control but requires large startup funds and expertise. A partnership could provide accommodations with less cost and risk than other options.

Uploaded by

Dheeya Nuruddin
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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HOTEL CONTINENTAL

1. Point of view: Mr. Oscar Mendoza (owner) / Consultant


2. Problem: What are the factors to be considered in deciding on leasing the Hotel Continental?
Suggestions:
What decision should Mr. Oscar Mendoza make to provide hotel accommodations for his tour
groups?
How will they be able to fill up the remaining 60% of his travel agency business to be able to
provide annual capacity utilization of the hotel?
How would Travel Tours agency (Mr Mendoza) overcome its (his) difficulties in
getting hotel accommodation to complement his travel agency? (main
problem/long term)
o What are the factors to be considered in leasing? (sub-problem/immediate)

3. Areas of consideration:
a. Difficulties in getting hotel accommodation for his tour groups
*either because there are few hotels
*or he has big tour groups
*
b. Industry Historical Background
*such as rising demand, improving peace and order situation which attracts
tourist
*Cory Administration - changes/improvements from the Marcos Regime
c. Expansion plan
*Mr Mendoza has been previously thinking about operating a hotel... (Par1)
d. Large number of competitors and emerging hotel businesses
e. Philippine economy (from Cory Aquinos presidency onwards)
f. Changing consumers preference, taste and/or budget
4. Assumption
Mr. Oscar mendoza is a businessman/entrepreneur with great management skills and solid
background in marketing. ???
5.Alternative course of action
- change/develop the style of the hotel (to be different/unique this time)
- Partnership with existing hotel
- Leasing Hotel Continental and improving it
*BPR
*cutting cost
*reviewing company rules(ex Employee benefits and bonus)
*integrate other sources of income
- Establishment of own hotel
- look for ways to minimize energy cost
Evaluation of alternative course of action and Final Decision
Leasing continental hotel
Strength- immediately solves the problems in hotel accommodation for tour groups, new source

of income, increasing number of tourists, chance to improve the operations of hotel continental.
Weakness- new to hotel industry, fixed lease payments,
Opportunity-improving economic conditions, tourism in the country, new government
administration
Threat- emerging hotel businesses, present competitors in hotel and lodging industries,
restrictive regulations that would be imposed by the new administration upon hotel industries, if
any,
Establishment of its own hotel
Strength- assured hotel accommodations in the long run, no lease payments,
Weakness- requires large financing capital, can't immediately satisfy hotel accommodations for
tour groups, inadequate knowledge in starting a hotel, too risky,
Opportunity- improving economic conditions
Threat- competitors in hotel and lodging industries, changes in circumstances over time
Partnership/ties/ joint venture with other hotel
Strength-assured hotel accommodations for tour groups, less costly, not risky
Weakness- difficulty of finding a hotel that satisfies the needs of triumph tour
Opportunity- improving economic conditions
Threat- deterioration of public relations with the partner hotel, competitors in hotel and lodging
industries

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