Max Barthelmess

Professor Case
Services Marketing
Case 7- Accra Beach Hotel
1. The vacation industry is a very seasonally oriented market. Many companies face problems
when predicting sales because those numbers are just predictions, not guaranteed figures.
Some similar industry companies, such as winter resorts, have to cater to different markets
during different parts of the year in order to make profits. During the winter they operate as a
ski resort. The spring and summertime usually house campers and hikers partaking in outdoor
activities. The fall will bring hunters venturing on a quest to land the big buck they have been
seeking for years. The bottom line is that resorts sometimes have to cater to different markets
during different times of the year in order to remain in business. Hotel resorts located in tropical
environments face the same problems but have a difficult time catering to different markets in
order to maintain profitability.
A vacation resort in Barbados is not exactly an option for everyone and during certain
months, the heat does not allow for it to be an attractive destination for the money required to
be spent. Usually people would rather go someplace closer and maybe a little cooler. The
economic crisis of the last few years have impacted consumers from being able to spend money
on luxurious items such as vacations to resorts in foreign countries. Places like Accra rely on
tourism during their busy winter months where a good amount of the world is cold and people
flock to the Tropics. Weddings are also popular in this region so a good amount of their
individual travelers are from nuptial adventures. Granted, you and I probably dont feel its
worth the money since divorce will end up happening anyway, but I digress. During the
summertime they are feeling the heat so to speak of not being able to maintain high levels of
occupancy due to the fact that people choose other destinations like Europe or the Americas for
travel. Its quite humorous how many people from Europe flock to the United States to get away
from Americans flocking to Europe!
Accra has managed to gain a decent amount of patrons who are on the business side of
the world. The hotel caters mainly to corporate clients during the downward cycle of the tourist
season. This has helped Accra to be able to operate the facility year-round, instead of having to
fold and shut down business during the months when tourism declines.
2. Accra caters to 3 markets; individual travelers, corporate clients, and tourists. The benefits of
having multiple target markets are that you do not have to limit yourself to relying on one
particular group to fulfill all of your business needs. With some diversity, Accra was able to sell
more rooms and maintain a decent occupancy percentage in months where tourism was slow.
Without having the corporate presence profits and vacancy would be very low during that time
period.
The Drawback to having corporate clients is that they usually dont spend as much
money at the property. Instead they go off the resort to different restaurants and attractions
around town. Accra is located so close to the city and the airport making it a more viable option
to venture off the resort, than other properties located in less rural areas. Having business
clients can also make vacationing guests feel uncomfortable. Consumers go on vacations to get
away from the repetitive nature of everyday life. Witnessing people walk around in suits
performing business activities tend to hamper the abilities one has to truly immerse themselves

Max Barthelmess
Professor Case
Services Marketing
Case 7- Accra Beach Hotel
in a vacation. These actions remind guests of home and hamper their ability to truly relax and
forget the world they left behind.
3. Accra needs to take several factors into account when coming to a decision about whether or
not to cater to the West Indies Cricket Board: The first is money, do they want to accept the bid
offered by the board that is lower than the amount of money they could charge to guests who
would be coming to vacation? They face issues of WICB demands for; reduced room costs,
requested laundry service. and the likely chance members of the teams will not spend a decent
amount of money at the resort. Secondly, there is the chance that having that many players will
make guests feel uncomfortable. I dont see this as being too much of an issue due to the fact
the team will be leaving during the day to play off property. This will leave little to no interaction
with guests during their daily activities. The problem I foresee, is what will happen if everyone
starts drinking after the days events are through? Most players are on strict rules due to the
competition, but lets face it; cricket players have to know how to drink! How else could they
play that awful game?
The WICB staying at the Accra Beach Hotel is not all doom and gloom. There is no
guarantee that the rooms would be sold as reliable sales figures had not been compiled. Also,
projected sales figures are just estimates, not guarantees. By allowing the teams to stay at the
resort, the hotel is guaranteed to make a profit. Another positive result of housing the teams is
the promise of free advertising and marketing. The WICB promised to put the Accra hotel on all
promotional items as well as on television during the matches. The fact that the matches will be
broadcast throughout all of West Indies ensures that the Accra Beach Hotel could gain a
monumental amount of exposure to markets that would otherwise be hard to reach without
considerable marketing expenses.
4. I would suggest that Cherita go ahead and book the team for the requested dates. Past figures
have shown an average of 75% occupancy during the months the team needs to have
accommodations. With 122 standard rooms inside of the hotel, that percentage leaves an
average of 30 vacant rooms. The request of 50 rooms for the teams it is feasible. The hotel
would still be able to operate the rest of the property only having to accommodate 20 extra
rooms to the team, instead of vacationing guests. Based on the information provided in the
charts, Accra would be maintaining average profits per room of the entire hotel. A percentage
of the rooms do not always get booked, having the team there would ensure maximum capacity
of the hotel. The only downside would be the VAT tax, free breakfast, and laundry service. These
costs would have to be paid for by the hotel and not the players. The total extra costs the hotel
would have to pick up for the agreement would not be cheap. The average occupancy rates for
the months that the teams requested accommodations are estimated to be 75%, leaving 25%
unfilled. Having these rooms empty would result in possible lost revenue of around $125,860
(Appendix) dollars for the standard rooms. Having the teams there seems like a good option for
the Accra Beach Hotel. The gained exposure from the tournament and the estimated
guaranteed profit of at least $148,518 (Appendix) make this a good business decision.

Max Barthelmess
Professor Case
Services Marketing
Case 7- Accra Beach Hotel
Appendix
Costs of taxes on rooms- 50 rooms at $130 per night with a 7.5% tax rate multiplied by 28 days.
(130x.075)(50)(28)=$13,650
Cost of breakfast-$8 per breakfast (including tax) for assuming 52 people (50 rooms, 2 suites with one
coach in each) multiplied by 28 days and an expected consumption of only 25% of the players.
(52x8)(28)(.25)=$2,912
Best case laundry expenses- Laundry costs $20 a day for 28 days (20)(28)=$560
Worst case laundry expenses- Laundry costs $200 a day for 28 days (200x28)=$5,600
Possible vacancy lost revenue - $145 average room rate for period multiplied by 31 rooms left vacant by
28 days (145)(31)(28)=$125,860
Revenue gained by WICB- 50 rooms at $130 per night for 28 nights (50)130)(28)=$182,000
Total Revenue (182,000-13,650-2,192-560-12,040)= $153,358 or $148,518(expensive laundry)
Side Note- I didnt like the fact they didnt put the amount of players on the team. The rooms could be 2
beds or one bed depending on the request. The case did not provide critical information to develop
other alternatives. I Personally would have told them they could have rooms with double beds in them
and sleep 2 people per room, but I dont know if that was already the assumption or not. Like I said they
could have provided better info perhaps next time you should use a different case Professor Case! Lol
See you next week. Oh and please just submit the paper to the grammar website not this part. Dont
want the appendix to count towards that seeing how picky that program is.