Palapa Politics
Case Study: Palapa Politics
Summary of Issues
The main issues in this case are regarding to a scarce resource, a beachfront Palapa, which is an important product for this resort adding great value to customers. Due to this very limited spots The Caribbean Palm Resort has been struggling for developing the right pricing strategy in order to achieve both revenue and customer satisfaction goals. However, the approaches to date they considered have been inconsistent and too complex. As a result, it could confuse customers and staff and also jeopardise their business.
Generation and Evaluation of Main Issues
Beachfront Palapas * Limited supply and High demand: The resort does not have as many as palapas as they have rooms. The palapa availability accounts for only about a quarter of the total room availability (26%, Room-350/ Palapa-92). * First-come, first-serve basis: This system is inefficient for such a scarce resource, which is in very high demand. The resort could generate revenue with rental system. If the hotel runs palapas with free operating system such as other hotel amenities, the customers tend to take using palapas for granted. And if they had no opportunity to use them they might feel more frustrated and have a negative perception of this resort. * The Claiming Process: The reservation policy of Palapas is an informal process with leaving customers’ items. The informal claiming process looks unprofessional and many incidents of lost items could occur in the resort. Again, due to these facts the resort could get a bad reputation.
Pricing Strategy (Current One) * Timeframe: All pricing policies are a daily basis. It might not be efficient to use palapas. The Users do not stay at palapas all day. Some could leave earlier (stay just half day). * Unfairness: 50% of palapas in each row are rented and the rest are free. Some customers who pay for
Summary of Issues
The main issues in this case are regarding to a scarce resource, a beachfront Palapa, which is an important product for this resort adding great value to customers. Due to this very limited spots The Caribbean Palm Resort has been struggling for developing the right pricing strategy in order to achieve both revenue and customer satisfaction goals. However, the approaches to date they considered have been inconsistent and too complex. As a result, it could confuse customers and staff and also jeopardise their business.
Generation and Evaluation of Main Issues
Beachfront Palapas * Limited supply and High demand: The resort does not have as many as palapas as they have rooms. The palapa availability accounts for only about a quarter of the total room availability (26%, Room-350/ Palapa-92). * First-come, first-serve basis: This system is inefficient for such a scarce resource, which is in very high demand. The resort could generate revenue with rental system. If the hotel runs palapas with free operating system such as other hotel amenities, the customers tend to take using palapas for granted. And if they had no opportunity to use them they might feel more frustrated and have a negative perception of this resort. * The Claiming Process: The reservation policy of Palapas is an informal process with leaving customers’ items. The informal claiming process looks unprofessional and many incidents of lost items could occur in the resort. Again, due to these facts the resort could get a bad reputation.
Pricing Strategy (Current One) * Timeframe: All pricing policies are a daily basis. It might not be efficient to use palapas. The Users do not stay at palapas all day. Some could leave earlier (stay just half day). * Unfairness: 50% of palapas in each row are rented and the rest are free. Some customers who pay for