Peaceful Rest Motor Lodge Edit
Peaceful Rest Motor Lodge: Case Analysis The present operation of Peaceful Rest Motor Lodge is losing money and the occupancy is below the industry average despite the low price. Tristan Knaus must decide between making minor changes in the operation or joining a motel chain such as Days Inn and Holiday Inn.
Critical Issues
Advertisement and Sales Promotion The management does not use enough time or funds to advertise or launch sales promotions, resulting in low occupancy rates. This keeps the cost low for Knaus and the customers but he relies on his customers to find the motel as they go towards the resort area. There are no signs that indicate the location of the motel except for the two signs in front of his motel. According to the U.S. Small Business Administration (n.d.), signs are an inexpensive and effective form of advertisement that works every day of the year. Without a sign, potential customers of the motel will pass by without knowing about the business’ existence.
Customer-Centric Culture The current culture of the motel is not customer-centric, resulting in few online reviews and low occupancy rates. According to Anderson, there are an increasing number of customers that utilize online reviews before making a purchase. Furthermore, he found that there was a positive relationship between the cumulative impact of user reviews and the overall hotel performance (2012). Gustavo (2013) suggests that online review sites such as TripAdvisor can be a “strategic tool in the relationship with the consumer by ensuring a privileged and efficient means of communication and information management.” Although customers generally leave positive reviews for Peaceful Rest Motor Lodge, there are not enough. This may deter potential customers from booking a room.
Lack of Recreational Facilities The motel does not include recreational facilities such as a pool in order to cut unnecessary expenses and avoid direct competition with full-service resort motels, resulting
Critical Issues
Advertisement and Sales Promotion The management does not use enough time or funds to advertise or launch sales promotions, resulting in low occupancy rates. This keeps the cost low for Knaus and the customers but he relies on his customers to find the motel as they go towards the resort area. There are no signs that indicate the location of the motel except for the two signs in front of his motel. According to the U.S. Small Business Administration (n.d.), signs are an inexpensive and effective form of advertisement that works every day of the year. Without a sign, potential customers of the motel will pass by without knowing about the business’ existence.
Customer-Centric Culture The current culture of the motel is not customer-centric, resulting in few online reviews and low occupancy rates. According to Anderson, there are an increasing number of customers that utilize online reviews before making a purchase. Furthermore, he found that there was a positive relationship between the cumulative impact of user reviews and the overall hotel performance (2012). Gustavo (2013) suggests that online review sites such as TripAdvisor can be a “strategic tool in the relationship with the consumer by ensuring a privileged and efficient means of communication and information management.” Although customers generally leave positive reviews for Peaceful Rest Motor Lodge, there are not enough. This may deter potential customers from booking a room.
Lack of Recreational Facilities The motel does not include recreational facilities such as a pool in order to cut unnecessary expenses and avoid direct competition with full-service resort motels, resulting
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