Hotel Continental

Nejudne, Sheatiel Kean P.

Ahig, Janmark E.
Galan, Josiah C.
Arrieta, Gerald Timothy
Case 1: Hotel Continental
Mr. Oscar Mendoza

Owner of Triumph Tours

Planning to lease Hotel

Continental to compliment
his traveling agency.

Mr. Ernesto de los Santos

Marketing Manager
Hotel Continental For Lease
What is in Hotel Continental?

27 Rooms

Three Functional Rooms

can occupy 12 - 40 person

Coffee Shop

Fast Food Cafeteria

Formal Dining Room

Swimming Pool
Competition
Hotels - 90

Inns - 67

Resorts - 60

Apartment - 9

Pension - 35

Lodges - 151

Motel - 8

Unclassified - 10
 New Administration

Cory Aquino reigned as

president.

The Philippines is still

recovering from the martial
law which Marcos ruled.

Peace and order situation of

the country is gradually
improving.
 Central Problem
M r . Me n d o z a o w n e r o f
Triumph Tours is experiencing
difficulty in finding hotel
accommodation for his clients
especially during the peak
travel months.

Should Mr. Mendoza bid for

Hotel Continental to address
the issue regarding the hotel
accommodation of his clients,
ultimately increasing profit?
Minor Problems

Getting hotel accommodation

for his tour groups.

They have little to no

experience managing hotels.

Facilities are underutilized.

Filling up the remaining 60%

annual capacity utilization.
 Objective

To analyze the current data

available and to establish a
solid argument in determining
weather or not leasing Hotel
Continental is sustainable and
profitable for Mr. Mendoza as
a compliment for his traveling
agency.
 SWOT Analysis

S - Strength

W - Weaknesses

O - Opportunity

T - Threats
 Strength
The fact that Triumph Tours has a marketing team proves to show that they are well
experienced in the business.

Hotel Continental have everything they need to accommodate the Triumph Tour tourist groups
especially during the peak travel months of December, January, July and August.

Hotel Continental has multiple amenities such as three function rooms that can seat twelve to
forty persons, a coffee shop, a fast food cafeteria, a formal dining room and a swimming pool.

Tourist increases during the peak of the travel months, which also means profit also increases.

Mr. Oscar Mendoza is also financially capable, since he has the power to lease a hotel.

Cory Aquino became President and the peace and order situation in the Philippines improved
thus encouraging more tourist to visit the country.

Economy is recovering from the Marcos regime, tourist can now confidently tour around the
Philippines which will give the hoteliers and restaurateurs a radical growth in their business.
 Weaknesses
Mr. Oscar Mendoza and his marketing team have little to no experience in managing a hotel,
which may lead to poor management and financial losses.

If they wont lease the hotel, Triumph tours may experience difficulty in providing hotel
accommodation for their clients, most especially during the peak of the traveling season.

Since number tourist are seasonal, the facilities of Hotel Continental may become under
utilized.

Finding employees that possesses the necessary skills and attitude for the hotel.

Feeling up the 60% remaining annual capacity utilization of the hotel.

When the lease term expires Mr. Mendoza loses its right on the property.

Mr. Mendoza incurs all operating responsibilities together with all the financial obligations;
therefore if the business does not perform well, Mr. Mendoza will suffer all of the losses.
 Opportunities
The possible promotions (e.g. Packaged trip) that will be established in order to
attract tourists, if they succeed in the promotion they can fill up the remaining
60% lacking of the hotel.

Because of the new administration, tourists have more freedom so they’ll have to
look for the most promising hotel out there, so Hotel Continental must think of
ways in getting the most of the tourists.

Gradual increase of the number of tourist in the country, since peace and order is
gradually improving.

Economic conditions improved and hotel occupancy rate are expected to increase.

Assuming that hotel continental will be rented, the Triumph Tours would assure
the accommodation of their clients.
 Threats
The opportunities for Hotel Continental it is also an opportunity for all so all of the other hotels will
also think of ways to get the people, considering that the hotel only has 27 rooms which is actually
pretty small for a hotel and the people would of course like it big “because bigger is better” as they
might say.

Facilities may become underutilized.

Increase numbers of competition from other hotel and travel agencies.

With little to no knowledge in managing a hotel, the risk of financial losses is relatively high.

If financial losses on the hotel is too high, the risk of closing the traveling agency is also high.

If the economy goes down it may affect the traveling industry, and may discourage tourist from
visiting the country.

If the economy goes down, then inflammation becomes inevitable, thus reducing the rate of
purchasing power.
 Alternative
Course of Action
Leasing Hotel Continental.

Finding other hotel to lease.

Jo i n t- v e n t u r e w i t h o t h e r
hotels.

Establishing own hotel

 Advantage
and
Disadvantage
Leasing Hotel Continental
ADVANTAGES
Re t a i n s to t a l co n t r o l o v e r e n t i r e
operation.
Hotel Continental have everything they
need to accommodate the Triumph Tour
tourist groups especially during the peak
travel months of December, January, July
and August.
Hotel Continental has multiple amenities
such as three function rooms that can
seat twelve to forty persons, a coffee
shop, a fast food cafeteria, a formal
dining room and a swimming pool.
Tr i u m p h To u r s w o u l d a s s u r e t h e
accommodation of their clients.
Additional profit for Mr. Oscar Mendoza.
DISADVANTAGES
Mr. Oscar Mendoza and his marketing
team have little to no experience in
managing a hotel, which may lead to poor
management and financial losses.
Finding employees that possesses the
necessary skills and attitude for the hotel.
Feeling up the 60% remaining annual
capacity utilization of the hotel.
W h e n t h e l e a s e te r m e x p i r e s M r.
Mendoza loses its right on the property.
M r. Me n d o z a i n c u r s a l l o p e r a t i n g
responsibilities together with all the
financial obligations; therefore if the
business does not perform well, Mr.
Mendoza will suffer all of the losses.
Finding Other Hotel to Lease
ADVANTAGES DISADVANTAGES
The bidding price may be May take a lot of time to
l o w e r t h a n o f Ho t e l find other hotels.
Continental.

The hotel may have better May lose the chance of

f a c i l i t i e s t h a n o f Ho t e l b i d d i n g f o r Ho t e l
Continental. Continental.
The hotel may have higher
accommodation.

You may find hotels on better

and more suitable location.
 Joint Venture with Other
ADVANTAGES
Hotels
DISADVANTAGES
Tr i u m p h To u r s c l i e n t s c a n a l l b e
accommodated especially during the
peak tra vel months of December,
January, July and August.
This can remove the risk of financial
loses of the hotel if ever the hotel
experiences one.
This will gradually build Triumph Tours’
name.
Mr. Mendoza can focus on improving his
traveling agency without worrying about
the hotel.
Since a joint venture is contractual, they
can freely choose wether or not to renew
the contract.
Hotel Management may ask a high amount
of tourist quota that Mr. Mendoza cannot
provide.
It takes time and effort to build the right
relationship
The partners have different objectives for
the joint venture.
There is an imbalance in levels of expertise,
investment or assets brought into the
venture by the different partners.
Different cultures and management styles
result in poor integration and co-operation.
The partners don't provide sufficient
leadership and support in the early stages.
 Establish Own Hotel
ADVANTAGES DISADVANTAGES
Takes a lot of time, money and effort.
E x p a n s i o n o f M r.
Mendoza’s business. Mr. Oscar Mendoza and his marketing
team have little to no experience in
managing a hotel, which may lead to poor
All income goes to Mr. management and financial losses.

Mendoza. Finding employees that possesses the

necessary skills and attitude for the
hotel.
All tourist clients can be
Problem in increasing the utilization rate
accommodated. of hotels facilities.

Mr. Mendoza incurs al l operating

Have total control of the responsibilities together with all the
financial obligations; therefore if the
facilities and its business does not perform well, Mr.
operation. Mendoza will suffer all of the losses.
 Conclusion
and
Recommendation
One alternative course of action is to venture with other hotels, in doing so Mr.
Mendoza may find another hotel that has better managerial skills and thus not losing
the name of his agency. On the contrary, the other hotels may have high quota rates
knowing that Mr. Mendoza’s agency is not really that popular yet so maybe he’ll have a
hard time. Another thing he might do is to build his own hotel simply put that he will
be able to control everything from bottom to top. The downside of this is he’ll be
needing a lot of money for that and he can’t really reach the certain amount of money
required to build a hotel because his agency is still growing.

So according to the data we gathered we came up of a conclusion that Mr.

Mendoza will not bid for Hotel Continental because they have little to no experience
in managing hotels. Furthermore, the risk is too high for Mr. Mendoza, he must not
invest into something that is too risky or he may suffer some irreversible damages that
may even lead to the closure of his traveling agency. Our recommended course of action
is to venture to other hotels, save up a lot of money, make his travel agency popular and
build up his own hotel in order that he will have complete control over the
establishment, the management, the money, etc.