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The Accra Beach Hotel Case

Group 5

1. What factors lead to variations in demand at a hotel such as the Accra Beach?
Hotels like the Accra Beach Hotel, which are located in a holiday destination like Caribbean
islands, will naturally experience variation in demand in different parts of the year. Accra
Beach hotel has following features to add on to its credibility:
Situated at the Coastal region offering scenic beauty of the beach
Short distance from the Airport
Situated in the Capital City
The Accra Beach Hotel has both Vacation Guests and Business/Corporate Guest. Variations
in the demand of rooms by vacationers are caused by the different seasons for going into
vacation.
In terms of the vacationers we may presume they expect a mild weather to make their holiday
enjoyable. Especially for a place associated with the beach, holidaymakers expect warm
sunny weather. It is a fact that the weather pattern of any place includes some rough times
when the number of tourists is expectedly low. As for instance Barbados enjoys a hot tropical
climate with two distinct seasons wet and dry. The wet season begins in May/June and runs
through until November/December. As seen from Accra beach hotel monthly occupancy rate
chart of the previous year, the occupancy rate was low throughout the months May to
October. In fact the months throughout June to November bear the possibilities of hurricane.
For the rest of the year Barbados sees an enjoyable weather accompanied by great number of
tourists precisely for the months January throughout April.
In terms of the Businessmen it is obvious that the demand emerges for working days of the
calendar year as most of the meetings, seminars and deals are penned during official working
hours. On the contrary clients on business purposes may not be found during holidays such as
Christmas, Eid, New Year etc. Business clients may not follow weather patterns for their visit
unlike vacationers.
Again in case of business clients, much also depends upon economic conditions of
businesses. Of course during recession periods staying at a luxury hotel may not be a top
priority for businessmen.
Also beautiful locations such as the Caribbean are often places of interest for hosting various
cultural and sports events during the calendar year such as cricket series which may bring
about a different trend in demand.

2. Identify the various market segments currently served by the hotel. What are the pros and
cons of seeking to serve customers from several segments?
The Accra Beach Hotel on the islands of Barbados currently serves four different types of
hotel guests.
1) Individual vacationers: They want to spend their vacations in a resort destination to
relax and relieve stress from the daily life. The number from this group is steadily
declining.
2) Tour group participants: Vacationers who travel with tour operators to have scheduled
Vacations without the trouble of organizing. The number from this group is steadily
declining.
3) Individual business travellers & Business conference participants: Business people
and Corporate customers which make business with local companies and come
frequently for business meetings.
At Accra Beach Hotel, another form of segmentation is guests home location- Barbadian,
other Caribbean, North America and Europe. The key marketing implications have to do with
channels for reaching individuals versus group organizers, and allocation of promotional
budget across different regions.
Pros of serving several segments:

Having a different clientele is a major pro for hotels to achieve a high occupancy rate
during the whole year. As there are special seasons for vacationers to go into
vacations, especially to a Caribbean island, it is necessary for hotels to also serve
other guests to make sure there are not too many empty rooms.
Business people are a large opportunity for hotels to occupy rooms outside the
vacation seasons and as the Accra Beach Hotel has the advantage to be near to both
the airport and the capital city of Barbados it can utilize these facts.
It is not possible to fill up the all available or maximum capacity with a single
segment, so having different segments is important to tackle this problem, which
helps in utilizing the maximum capacity. The tour operators and individual
vacationers help to fill up the rooms in the weekends when there are no business
travellers.

Cons of serving several segments:

The biggest con for serving several unequal segments is that the different groups of
guests might be annoyed by other group of guests. As the text mentions there are
vacationers who feel uncomfortable with going to the beach and surrounded by
business people while their vacation.
Different market segments may have different demands and it may be difficult to
efficiently serve each segment. The fact of serving different market segment may
require some extra training of the staffs of certain segments the failure of which may
result to poor service.
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Different market segments have different expectations from their stay at the hotel.
Some seek solace, some seek adventure and thrill while some are more concerned
about business. These varying expectation require different environments. Trying to
serve all the segments under the same environment may see clashes between
customers expectation.

Conclusion: Accra Beach Hotel patronage seems to be shifting from vacationers to business
people. Because business customers pay more and the business is more stable, hotel should
probably market itself in ways that will eventually reposition the hotel as a business hotel
with attractive conference opportunities.

3. What are the key considerations facing the hotel as it reviews the booking requests from
the West Indies Cricket Board?
There ae several facts the manager of the accra Beach Hotel has to consider when making a
decision whether hosting the cricket teams whie the West Indies Cricket Secives or not.

First of all, the number of occupied rooms was decreasing in the last year, so when the
declining rate continues the hotel can assure th atleast the 50 rooms are engaged and there
are still 91 rooms left for other guests. It can can be expected that those rooms will be
sold because the number of sold rooms in the past year was always above the number of
91.
Second, there is the possibility that vacationers are attracted by staying in the same hotel
like famous cricket players, especially guests from cricket loving nations like England
and Britain, who were a big customer group in the past time. And even tell other people
about the experience they made and so indirectly make promotion for the hotel.
Furthermore, the head of the WICB promised that the Accra Beach Hotel will be
mentioned as the host hotel in all promotional materials and during the televised matches.
This could have a tremendous effect on the image of the hotel and attract other sport
teams to stay over the Accra Beach hotel.
The major point to consider for a corporation is the financial outcomes. Accra beach hotel
had been enjoying a relatively high occupancy rate, consistent in generating revenue due
to some loyal customer responses. In case they accepted WICBs request they would
have had to give away the opportunity to maintain the consistency of revenue generation
since WICB was willing to pay lesser than their general customers. Also the revenue from
food servings would be expected to lower down since most athletes were supposed to
dine out. Hence a financial setback for the two months was most expected resultant of
accepting the request.
Also, the presence of a large group of sportsmen would attract a huge number of fanatics
and media attentions which might spoil vacationers seeking peaceful environment, and
business people having to worry about privacy being exposed.

Also, these sportsmen being highly regarded celebrities more focus of the hotel staff
would have had to be put on them than the general customers which could create negative
brand equity.

4. What action should Cherita Howard take and why?


A. The following calculation shows the revenue generated by 50 rooms in case of general
customers for 28 days of the certain months of April through June considering the
previous year RevPAR.
Total number of nights (50 rooms times 28 days) = 1400 nights
The Average revenue per room calculated from RevPAR of previous year is $107.74
Considering it, revenue from 50 rooms (1400 times $107.74)= $1,50,836

Now, revenue from Food

Considering 80% of 50 customers having breakfast, revenue (40 customers times $8 per
serving) = $320
Considering 30% of customers dining in hotel, revenue (15 customers times $25 per
serving) = $375
Total Revenue from vacationers and businessmen = $1,51,531

B. The following calculation shows revenue generated by 50 rooms in case WICBs proposal
is accepted.
If average revenue per room is $130 the revenue from 50 rooms (1400 times $130) =
$1,82,000
Now since food cost and VAT cost were to be included, the Total revenue stands
$1,82,000
For laundry costs in case Cherita decides for in house laundry (28 days times $20 per
day)= $560
Deducting laundry cost Total Revenue = $1,81,440
Thus, the net financial impact of accepting the WICB business is ($181440 - $151531) =
$29,909.
Hence we can see it would be profitable to accept the booking.

On another consideration, the promised promotion as hotel partner of WICB for the
upcoming international cricket series holds a great prospect of promotion. Also since the
hotel was moving from vacation oriented customers to more business oriented customers the
damage done by turning down vacationers is most likely to be made up by increasing focus
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on business customers who are lesser likely to not consider a second visit due to temporary
inconvenience.
Considering these, Cherita Howard should accept the proposal.
Submitted By:
Ayush, Smriti, Toshita,
Deepanwita, Neha