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Fontalba, Kathleen Mae Salenga

BSA 4-2
March 18, 2019

Case Analysis: GRETCHEN HOTEL

Gretchen Hotel is a five-star high-end hotel that is located in Manila, a five-minute

walk from Cultural Center of the Philippines. It is named after its owner, Gretchen. It is

composed of 375 different, neat and maintained rooms, some rooms are for meetings and

business discussions that are complete and equipped with technology gadgets and other

communication requirements. It has three different kind of restaurants, two of it is for

casual and fine dining and the other exclusively offers Japanese food only. It also has two

swimming pools for children and adults for them to be relaxed, a gym for guests who are

conscious with their health, and a bar that allows the guests to have a quiet conversation

while drinking wines and listen to soft music that will relieve their stress and tiredness. On

the ground floor, there are different boutiques that sell different kinds of items like

medicine, imported cookies, bags, antique items, shirts, and other items for casual needs.

It offers quality services with reasonable and affordable prices to their customers and it

does not impose extra or hidden charges, they are transparent, that’s why their customers

are happy. Overall, Gretchen Hotel has complete and state-of-the-art facilities and it also

has disciplined and well-mannered employees.


Despite of the complete and state-of-the-art facilities of Gretchen Hotel and

disciplined and well-mannered employees, it encountered a difficult challenge. Its average

monthly occupancy rate is only 48.9%. A good hotel occupancy rate will vary, depending

on the type of hotel, location, and guest experience and the factors that affect the occupancy

rate of a hotel are cleanliness, quality amenities, and price so for the Gretchen Hotel to

have higher occupancy rates, it must consider the said factors.

There are different alternative courses of action for Gretchen Hotel to increase its

occupancy rate, these are: widening and targeting the right market, creating packages,

discounts and promotions, partnering with local businesses, and working with real estate

agents.

The revenue of hotels always fluctuates throughout the year and this is because of

many external factors and unpredictable events. Widening and targeting the right market

is one of the alternative course of action in increasing the occupancy rate of Gretchen Hotel.

Widening the market segment means including the middle and upper-middle class

customers and targeting the right market means reaching the possible customers that will

most likely stay in the hotel and that could be business travelers, young couples with

families, or any other specific types of groups and by these course of action, knowing the

target market, it will lead to higher occupancy rate.

Creating packages, discounts and promotions will also yield to higher occupancy

rate because there are more to offer than its competitors. Examples are creating a customer

loyalty program to ensure that guests will return, advertising during seasonal cultural
events, and hosting weddings. The packages, discounts and promotions that will be offered

must be carefully created because even though it will yield to a higher occupancy rate, if

the offers are not reasonable, prices of the services are too low, and the hotel is not making

any money from its guests, the occupancy rate is irrelevant because it will only result to a

loss for the business. The packages, discounts and promotions must be justifiable not only

for the customers but also for the business.

Partnering with local businesses will increase the occupancy rates of the hotel

because most of the local businesses need hotels especially when their employees are send

to various locations, when there are business meetings and discussions, and when they need

a space for their company’s events like Christmas Parties, get-togethers, etc. If the hotel

will be partnered with them, it will be easy for the both of them because the hotel will be

easily contacted and vice versa, and the hotel can work with them to provide amenities and

services that the local businesses may appreciate.

Working with real estate agents will help the hotel in increasing its occupancy rate

because the people who are coming in the city or in the country that is looking for properties

to buy or to rent needs somewhere to stay, so if Gretchen Hotel will work with real estate

agents, the latter can recommend the hotel to those people they work with and as a return,

the hotel can offer the realtor or agent special rates and free advertising of their

properties in the hotel.

A hotel's occupancy rate and revenue always fluctuate throughout the year because

of external and internal factors and unpredictable events. Increasing the occupancy rate
means increasing also the revenue of the hotel. The best alternative course of action to

increase the occupancy rate of Gretchen hotel without incurring loss is widening and

targeting the right market. It must know who is its customer and it must also know who are

its possible customer. Widening the market can be effectively done by providing unique

and effective marketing strategies that will attract possible customer like using their

imaginations to create a special one-day conferences, poetry readings, art shows and other

events that will surely attract customers especially the people in their late 50s and early

60s. Targeting the right market means knowing who might be a target audience and

geographically where they are.

Focusing on increasing the occupancy rate of a hotel is good if the revenue will also

increase. With a higher occupancy rate, there are more people coming in and out the hotel

and a word-of-mouth advertising will spread that's why the hotel must leave a good

impression to its guests and it can also help the community and environment to show that

they are socially responsible.