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Astor Lodge & Suites, Inc.

The Place to Stay on the Way

Slide 2

Overview: Astor Lodge & Suites

Formed in 1979; operates 200 Astor Lodge properties and 50 Astor

Lodge Suites, Inc.

250 property hotel chain with locations in 10 western and Rocky

Mountain states

Average of 120 individual guest room or suite units

Projected lodging revenue (fiscal 05): $15.7 million

Slide 3

About Astor Lodges & Suites

Positioning

Limited service hotel (comparable to

Fairfield Inn, Marriott, Hampton Inn &
Suites and La Quinta)
Premium locations: along highways,
near airports, office complexes and
shopping centers

Lodging Statistics

Occupancy 67.1%

Average daily rate: 57.52

Revenue per room: $38.60

Slide 4

Hotel Guest Profile

50% business travelers

50% leisure/ vacation444 purposes

1 adult male (67%)

Age: 35- 54

Age: 35- 54

Household Income: $72,600

Employed in profession; managerial

position (50%)

Traveled by automobile 74%

Household Income: $81,100

Paid $89 per room per night

Paid $96 per room per night

45% stayed 1 night

39% stayed 1 night

28% 2 nights

24% 2 nights

20% 3 nights

27% 3 nights

7% > 4 nights

10% > 4 nights

Slide 5

Define the Problem

Fiscal year 2005 projected to be 5th consecutive unprofitable year for

Astor Lodge & Suites.

Goal: Achieve profitability within 2 years (using EBITDA as corporate

performance measure)

Corporate objective is a 7% increase in EBITDA over the next two fiscal years

Increase occupancy of rooms per night for vacation travelers

Budget Fiscal 2004

Objective: Increase overall occupancy at Astor Lodge & Suites

Modest emphasis placed on suite properties to attract the

pleasure/vacation traveler

Substantial increase in media advertisement budget (2% of revenue)

Budget: $11,360,000 (2.7% of revenue)

Sales

budget: $4.4 million + 2 national sales representatives

28% expenditures target pleasure/vacation travelers vs. 72% business

travelers

Achieved objective in 2014

Slide
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Budget Fiscal 2005

Objectives:

Increase overall occupancy

Attract 1st time guests; and

Increase length of stay per visit

Frontier Strategy was introduced

Media advertising budget: $12,500,000 (3% of revenue)- 35% targeted to

vacation/ 65% business

Sales budget: $4.47 million

2 additional sales representatives (@ $135,500 each)

Promotion: 50% discount 3rd night guest suite; 25% discount 3rd night guest room

Budget Fiscal 2006

Media budget: $12.5 to $12.9 million

Sales budget: 44.85 to $5 million

Issues to be addressed:

Allocation of Media advertisement dollars between the pleasure/ vacation

and business travelers

Frontier Strategy

Promotions: Weekend Specials replacing Free- Night Stay

Slide 8

Slide 9

SWOT Analysis

Strength

Location of Properties

New Management Team

Offer some full- service amenities

High revenue growth

Strategic Repositioning (Strengthen

Brand)

Increase average daily rate

Weaknesses

Five Consecutive losses

Low weekend occupancy rate

Astor: $57.52

Industry: $86.00

Opportunities

Highly Fragmented Market

Travel decline since 9/11

Threats

Alternative #1
Increase Average Daily Rate

Pros

Slide 10

Cons

Increased revenue

Attract business travelers

5 to 10 increase in occupancy

No out of pocket cost associated

Vacation/ Leisure customers

sensitive to price increase

Business travelers have more

disposable income

Alternative #2 Weekend Specials

instead of Free- Night Stay promotion

Pros

Cons

Help increase occupancy

Targets families looking for lower cost

No additional advertising

Boost weekend occupancy rate

Slide 11

Alternative #3 Eliminate Frontier

Strategy

Pros

Additional

Slide 12

Cons

costs eliminated:

10% decrease in media expenditures

Two

additional sales representatives not

needed in Fiscal 05 (@ $135,000 each)

Less brand awareness- not able to

attract 1st time guests

Without extra sales representatives,

unable to create working relationships
with companies

Unable to access strategy fully

Alternative #4: Maintain (Status

Quo)
Pros

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Cons

Conservative/ Safe

Targets both business and vacation

travelers

Operates under the assumption that

there will be constant linear growth

Does not account for financial crisis

or economic downturn

5th unprofitable year

2 year profitability objective will not

be met

Slide 14

EBITDA

Slide 15

Recommendation

Weekend Specials instead of Free- Night Stay promotion

Continue the Frontier Strategy "along with other integrated marketing

communications

Brand awareness does not happen over night

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Rationale for Decision