CASE 8 The Accra Beach Hotel: Block Booking of Capacity During a Peak Period

SHERYL E. KIMES, JOCHEN WIRTZ, AND CHRISTOPHER LOVELOCK

Cherita Howard, sales manager for the Accra Beach Hotel, a 141-room hotel on the
Caribbean island of Barbados, was debating what to do about a request from the West
Indies Cricket Board. The Board wanted to book a large block of rooms more than six
months ahead during several of the hotel's busiest times and was asking for a discount. In
return, it promised to promote the Accra Beach in all advertising materials and television
broadcasts as the host hotel for the upcoming West Indies Cricket Series, an important
international 'sporting event.
The Hotel
The Accra Beach Hotel and Resort had a prime beachfront location on the south coast
of Barbados, just a short distance from the airport and the capital city of Bridgetown.
Located on 31/i acres of tropical landscape and fronting one of the best beaches on
Barbados, the hotel featured rooms offering panoramic views of the ocean, pool, or
island.
The centerpiece of its lush gardens was the large swimming pool, which had a
shallow bank for lounging plus a swim-up bar. In addition, there was a squash court
and a fully equipped gym. Golf was also available only 15 minutes away at the
Barbados Golf Club, with which the hotel was affiliated.
The Accra Beach had two restaurants and two bars as well as extensive banquet and conference facilities. It offered state-of-the-art
conference facilities to local, regional, and international
corporate clientele and had hosted a number of large summits in recent years. Three conference rooms, which could be
configured in a number of ways, served as the setting for
large corporate meetings, training seminars, product displays, dinners, and wedding receptions. A business center
provided guests with Internet access, faxing capabilities, and
photocopying services.
The hotel's 122 standard rooms were categorized into
three groups-Island View, Pool View, and Ocean View-and
there were 13 Island View Junior Suites and 6 Penthouse
Suites, each decorated in tropical pastel prints and handcrafted furniture. All rooms were equipped with cable/satellite TV, air conditioning, ceiling fans, a hair dryer, a coffee
maker, direct-dial telephone, a bathtub/shower, and a balcony.
Standard rooms were configured with either a king-size
bed or two twin beds in the Island and Ocean View categories,
while the Pool Views had two double beds. The six Penthouse
Suites, which all offered ocean views, contained all the features
listed for the standard rooms plus added comforts. They were
built on two levels, featuring a living room with a bar area on
the third floor of the hotel and a bedroom accessed by an internal stairway on the fourth floor. These suites also had a bathroom containing a Jacuzzi, shower stall, double vanity basins,
and a skylight.
EXHIBIT 1: Beach View

of the Accra Beach -a.el

2010 by Sheryl E. Kimes, [ochen Wirtz, and Christopher Lovelock.

Note: Certain data have been disguised.
541

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EXHIBIT 3:

Accra Beach Hotel: Monthly Occupancy Rate

Occupancy(%)

Year

Month

2 Years Ago

January

87.7

2 Years Ago

February

94.1

2 Years Ago

March

91.9

2 Years Ago

April

78.7

2 Years Ago

May

76.7

2 Years Ago

June

70.7

2 Years Ago

July

82.0

2 Years Ago

August

84.9

2 Years Ago

September

64.7

2 Years Ago

October

82.0

2 Years Ago

November

83.8

2 Years Ago

December

66.1

Last Year

January

87.6

Last Year

February

88.8

Last Year

March

90.3

Last Year

April

82.0

Last Year

May

74.7

Last Year

June

69.1

Last Year

July

76.7

Last Year

August

70.5

Last Year

September

64.7

Last Year

October

71.3

Last Year

November

81.7

Last Year

December

72.1

vacationers and had found the volume of corporate business much more stable than
that from tour operators and individual guests.
The West Indies Cricket Board
Cherita Howard, the hotel's sales manager, had been approached by the West Indies
Cricket Board (WICB) about the possibility of the Accra Beach Hotel serving as the
host hotel for next spring's West Indies Cricket Home Series, an important international sporting event among cricket-loving nations. The location of this event rotated
among several different Caribbean nations and Barbados would be hosting the next
one, which would feature visiting teams from India and New Zealand.
Cherita and Jon Martineau, general manager of the hotel, both thought the marketing exposure associated with hosting the teams would be very beneficial for the hotel but
were concerned about accepting the business because they knew from past experience
that many of the desired dates were usually very busy days for the hotel. They were sure
the rate that the WICB was willing to pay would be lower than the average rate of
$140-$150 they normally received during these times. In contrast to regular guests, who
could usually be counted on to have a number of meals at the hotel, team members and
officials would probably be less likely to dine at the hotel because they would be on a per
diem budget. On average, both corporate customers and vacationers spend about $8 per
person for breakfast and about $25 per person for dinner (per person including VAT). The
contribution margin on food and beverage is approximately 30 percent. About 80 percent
of all guests have breakfast at the hotel and approximately 30 percent of all guests dine at
the hotel (there are many other attractive restaurant options nearby). Martineau thought
only about 25 percent of the cricket group would have breakfast at the hotel and maybe
only about 10 percent would dine at the hotel. Also, they worried about how the hotel's
other guests might react to the presence of the cricket teams. Still, the marketing potential

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Case 8 The Accra Beach Hotel

EXHIBIT 5:

Accra Beach Hotel: Revenue per Available Room {RevPAR)

Year

Month

2 Years Ago
2 Years Ago
2 Years Ago
2 Years Ago
2 Years Ago
2 Years Ago
2 Years Ago
2 Years Ago
2 Years Ago
2 Years Ago
2 Years Ago
2 Years Ago
Last Year
Last Year
Last Year
Last Year
Last Year
Last Year
Last Year
Last Year
Last Year
Last Year
Last Year
Last Year

January
February
March
April
May
June
July
August
September
October
November
December
January
February
March
April
May
June
July
August
September
October
November
December

Revenue per Available Room (in U.S.$)

139.49
144.66
144.28
120.96
110.45
96.64
100.15
102.75
79.87
105.80
118.18
101.05
141.90
148.67
143.02
123.12
105.87
94.23
98.55
90.59
82.24
94.62
115.89
109.24

"lote: RevPAR refers to revenue per available room and is computed by multiplying the room occupancy rate
see Exhibit 1) with the average room rate (Exhibit 2). Revenue per available room is inclusive of VAT.

4,000 ~--------------------------

0 Individual
travelers
0 Corporate
Tour
operators

Market Segments as per Last Year

545

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