Hotel Sogo

In partial fulfillment

Of the requirements for

MARKSEV

K31

Submitted by:

Billones, Ma. Lilia

Edeza, Jose Antonio

Jimenez, Trina

Tan, Camille

Submitted to:

Professor Jose Luis Liongson

April 8, 2014
 TABLE OF CONTENTS

I. Executive Summary 3

II. Scope & Limitations 3

III. Industry Analysis 4

IV. Current Company & Brand 8

V. Competitive Analysis 11

VI. TOWS Analysis 12

VII. TOWS Matrix 16

VIII. Porter’s Five Forces 18

IX. Fishbone Diagram 20

X. Goals & Objectives 23

XI. Target Segment Description 24

XII. Target Person 26

XIII. 8Ps 26

XIV. Flower of Service 33

XV. Investment Plan 35

XVI. Estimates of Profitability 37

XVII. References 38

XVIII. Appendices 40

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I. Executive Summary

Being 22 years in the business, the founders who developed the company had a

goal to give the public better and convenient low-cost lodging facilities. Having

numerous branches around the metro and in some provinces it is an advantage for

Hotel Sogo to be well-known nationally. Hotel Sogo is a major player in the Philippine

Motel Industry. Despite this, it is still behind its major competitor Victoria Court and

although both motels have the stigma of being highly sexual in a mostly conservative

country why does Hotel Sogo lag far behind? This paper seeks to answer that question

and more as well as give recommendations as to what should Hotel Sogo do to find a

new footing in the Philippine motel industry.

II. Scope & Limitations

The paper serves as a tool to further improve the marketability of Hotel Sogo by

knowing the industry and the usage, attitude and image of the brand. In this paper,

analysis regarding the company background, internal and external factors and, industry

analysis are integrated to form objectives and strategies to enhance the image of Hotel

Sogo. The paper presents series of results from the data they gathered from individuals

who live in and outside of Metro Manila and aged 18-25. The 32 respondents are

randomly selected but still fall under the category. The study is conducted from January-

March 2014 which is equivalent to one term.

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III. Industry Analysis

History of Motels

The history of motels can be traced back to early 20th century America

(Bizymoms, n.d.). As the construction of new highways was completed, American

people could travel much longer distances in their cars. Lodging was difficult to come by

in the more rural areas of the United States and so motels were created to satisfy this

growing need. The first motel was the Milestone Mo-Tel of San Luis Obispo and the

word was created by the combining of the terms Motorist and Hotel. After World War 2

the motel franchises and chains became much more popular (Cluskey, n.d.). This is

attributed to post-war prosperity as well as the demand for predictability in the quality of

motels.

In the Philippines the Motel Industry began post-World War 2 (Baking, 2010).

They weren't places for illicit affairs during that period but instead acted as places where

American soldiers could lodge. In the article the first authentic motel in the Philippines

was said to be established in Pasay. In the 1950s however, many American soldiers

returned to the United States and hotels began to be built in Manila. This forced the

motels to change their strategies and many began offering short time rates (rates of 1-3

hours). This is attributed in the article as due to the rise of bars and nightclubs in Manila.

it was during this period that they became known for illicit sexual affairs. Following the

rape of a woman in a motel the motels were then associated with crime as well. It was

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only in the 1970s and 80s that motels tried to save their image. Many motels changed

their names to names such as Victoria Court,Capri and Bermuda. They remodeled their

structures and emphasized on wholesome images.

The Philippine Motel Industry

According to the National Statistics Office of the Philippines the country had

around 1,475 lodging establishments in 2009, 89.3% of which were hotels and motels.

Hotel and Motels being defined as establishments providing regular reception,

accommodation or lodging of travelers and tourists and provision of services incidental

thereto for a fee and an establishment primarily located along the highway with

individual or common parking space at which motorists may obtain lodging and in some

instances meals, respectively. 19.7% of that percentage being found in the NCR which

has the largest share. Western and Central Visayas tie for second place at 12.7% and

CALABARZON follows at 9.5%. Besides having the highest share in terms of total

establishments, hotels and motels also have the highest share in terms of employees at

97.1% with males outnumbering females. NCR likewise also leads in this category by

holding 31.7% of all the employees. The hotel and motel industry is a multibillion peso

industry which generated 40.8 billion pesos in 2009, 13.1 billion of which come from

tourists. Motels are busiest in the month of February and November (NSCB, 2012) this

is suspected to be because of Valentine’s Day and Chinese New Year for the case of

February and All Saint’s Day and All Souls’ Day for the case of November.

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 Moreover, the boost in reported consumer spending in recent statistics offers

opportunities for motel industry players. This boost is indicative of an increase in the

willingness of Filipinos to spend more on recreational activities.

However, according to Hotel Sogo’s Chief Executive Officer, Edmund Las,

industry players today face barriers to growth as a result of increased costs. Expansions

are put on hold due to difficulty landing vacant real estate lots for new motel buildings,

high electricity costs, and relatively high wages. Las also mentioned that the number of

years it takes to recover cost is much higher as compared to before.

Recently, the BIR has begun clamping down on the hotel and motel industry

(Remo, 2014) as they suspect large amounts of unpaid tax are hidden by these

establishments. This suspicion is due partly from motel Mariposa declaring a largest tax

due than the luxury hotel Ascott Makati. The BIR acknowledges that this will be a

difficult undertaking as motel customers do not normally ask for receipts.

Love Motels

A significant portion of the booming hotel industry in the Philippines is owed to

short-term accommodations or the so-called "love motels." A love motel is defined by

urbandictionary.com as “A budget hotel (especially in Asian counties) where couples or

adulterous spouses can have discreet sexual encounters.” Las of Hotel Sogo claims

that these types of hotels cater to the short-term market or the “sachet” market where

specific primary needs are satisfied, stating that "People have basic needs in their lives:

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physical need, belongingness and accomplishment....They have to eat, wear clothes

and make love."

However, the growth of love motels in the Philippines has also contributed to the

further degradation of the reputation of motels in the industry. According to Ian King,

General Manager of Victoria Court, “The normal connotation for a hotel is that it’s dark,

dirty, sleazy everything that a description of a motel used to be in the Philippines."

(Lowe, 2013). This long-standing reputation has made it difficult for players to change

their image and present themselves as wholesome forms of accommodation.

IV. Current Company & Brand Situation

Hotel Sogo Background

Hotel Sogo was established in 1992 by two people who can only be described in

their official website as one hotel professional and one commercial developer and

"AAA" licensed contractor. The partners endeavoured to "satisfy the public's need for

better and more convenient low-cost lodging facilities." The hotel is Japanese-themed

so as to embody attributes like Cleanliness, Innovation, Efficiency, Courtesy, Discipline

and Teamwork. The chain also claims to merge these Japanese principles with the

sense of hospitality that Filipinos are known for.

The company envisions to lead and to dominate the lodging industry in the

Philippines. It intends to do so by operating "a growing chain of lodging facilities

profitably throughout the country, exceeding the expectations and earning the loyalty of

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guests through excellent accommodations and superior service." It's core values are

Makadiyos [Godliness], Ayos at Linis [Order and Cleanliness], Sama-Samang Saya

[Happiness in Unity], Integridad [Integrity], Pagmamalasakit [Compassion], Abilidad

[Ability], and Galang [Respect]. In fact, much of the attributes and values the company

stands for are actually embedded into its logo. Its namesake "Sogo" is a Japanese word

meaning unity and teamwork, brotherhood, cooperation and harmony. Also, their official

website explains: "the Sogo Lady gesture of the Sogo fan covering the mouth

symbolizes courtesy and service without question; the intertwined or interlacing letters

of the word Sogo symbolizes unity and teamwork; the sticks of the fan symbolizes the

people of Hotel Sogo and the paper that binds the fan together symbolizes the union in

a common vision of the Sogo family to dominate the walk-up hotel industry."

Today, the company has a chain of 30 branches: 22 branches in Metro Manila

and 8 branches in provincial areas. A good number of branches are strategically located

near MRT and LRT stations so as to provide convenience to customers and potential

lodgers. It is also currently in the process of constructing branches in Boracay and

Davao.

The hotel essentially caters to the 20 to 40 age group in which 60% to 65% are

single, while 30% to 35% are married. About 70% to 80% of the guests are Filipino, but

according to CEO, Edmundo Las, the number of Koreans and Japanese guests is

growing.

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 It was reported that 70% of their market book rooms for less than 12 hours, while

12% to 15% stay for 12 hours and 10% stay 24 hours. The hotel's busiest times are

generally between 3 pm and 11 pm, with the highest number of guests in their Pasay,

Cubao, Caloocan, Guadalupe branches (Lowe, 2013). The company also states a 30%

normal increase in volume of guests during Valentine's season which warrants longer

shifts and no days off for the employees. December is the company's busiest month

being that it is a month-long holiday celebration and there exists an influx of Christmas

bonuses.

Hotel Sogo has an official website that contains information about the

establishment. This information includes its history, branches, food and beverages,

career opportunities, and training academy. It also offers a chat-room facility and a

survey function for customer inquiries and feedback although these are not yet working

as of this paper.

The hotel is very present on social media channels such as Facebook and

Twitter with over 17,000 likes and 2,000 followers, respectively, as of March 2014. The

company continues to post and upload attention-grabbing advertisements and

campaigns that have created buzz amongst netizens all over the country.

Hotel Sogo is also present on the world’s largest travel website, Tripadvisor.com.

It rates a mere 26 percent out of an overall 100 percent, and ranks 33 out of 55 Manila

Bed & Breakfast or Inns on the website. Although it was often praised for its affordability

and proximity, a majority of its comments and reviews were negative. Some of these

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negative comments include dirty rooms, thin walls that would allow one to hear

neighboring customers, poor-quality mattresses and pillows, slow and untrained staff

service, no windows, and presence of pornographic channels on television.

The hotel is also available on Agoda.com, one of the fastest-growing online hotel

platforms worldwide. On the website, however, the pages on bookings and reviews are

different per Hotel Sogo branch.

V. Competitive Analysis

Basis for HOTEL SOGO VICTORIA COURT

Competition

Product There are different types of Rooms vary from

rooms such as the Taxi Rooms, Standard, Deluxe, Superior

the Garage Rooms, and the Deluxe, Mini Suite, and

Motorcycle Rooms. Each type Suite. Each room has

of rooms has various classes. different designs.

Deluxe, Executive and

Regency for Taxi Rooms,

Regular, Executive and Mega

Suite for the Garage Rooms

and lastly, Deluxe and

Executive in Motorcycle

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 Rooms.

Price Price range of the rooms Price range depends on

depends on the type and of the the type of rooms.

room and the hours of stay. Cheapest room which is

The cheapest price costs P565 the Zen rpom costs P369

and the highest price is P1225 and the suite costs P4,400.

for a standard 3 hours of stay.

Placement Some branches are located Some branches are

near the vicinity of Victoria located near residential

Court but others are located areas and crowded areas.

near train stations. There are Each branch is spacious

more branches compared to

the competitor.

Promotion Lower price is offered during Discounts are given during

certain promo periods. special events (Valentine’s

Day, birthday, etc.), but

only for the suite and party

rooms.

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VI. TOWS Analysis

THREATS OPPORTUNITIES

1. Unwholesome image 1. Increase in consumer spending

2. Increasing industry costs 2. Growth of domestic tourism

3. Rebranding of competitors 3. Corporate Social Responsibility

4. Technological proficiency

5. Younger domestic travelers

WEAKNESSES STRENGTHS

1. Inconsistent offerings 1. Strong social media following

2. Untrained and inefficient staff 2. Located close to public transportation

3. Low-quality structural features, 3. Affordability

equipment and amenities

4. Cluttered, unfocused online efforts

THREATS:

1. Unwholesome image

In the modern days, people have this bad perception of motels and so most of the

people (conservative) prefer to stay in hotels rather than in motels.

2. Increasing industry costs

Costs involving purchasing land constructing buildings are increasing. Moreover, these

costs take much longer to recover than it was in previous years.

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3. Rebranding of competitors

Key industry players are beginning to direct their efforts towards trying to reshape and

clean their brand images.

OPPORTUNITIES:

1. Increase in consumer spending

The economy of the Philippines is currently experiencing growth and development

which causes the purchasing power of the Filipinos to increase. Thus, people have the

tendency to spend more.

2. Growth of domestic tourism

Based on the 2012 Household Survey on Domestic Visitors, an estimated 25.7 million

Filipinos who are 15 years old and above had traveled to any place within the country

from April to September 2012. (Desiderio, 2013)

3. Corporate Social Responsibility

Recently, companies engaged in different corporate social activities. They have

established different advocacies.

4. Technological proficiency

More Filipinos are become more technologically adept and familiar with the Internet and

Internet advertising.

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5. Younger domestic travelers

According to a survey conducted by NSCB, out of the 25.7 million domestic travelers in
2012, 27.9 percent were in the age group 15 to 24, while 25.8 percent were in the age
group 25 to 34. The two age groups combined made up more than half or 53.7 percent
of the total domestic travelers.

WEAKNESSES:

1. Inconsistent offerings

The rates and number of rooms differ among Hotel Sogo branches, as well as the

available equipment and quality of service.

2. Untrained and inefficient staff

A number of complaints were made about the unknowledgable and improperly trained

staff. Notably, the front desk employees, bell boys, and the cleaning staff.

3. Low-quality structural features, equipment, and amenities

Much was said about the quality of the structural features, equipment, and amenities

that the hotel offers. Notably, the thinness of the walls, the uncomfortable mattresses

and pillows, the low lighting concepts, and the unsatisfying food.

4. Cluttered, unfocused online efforts

Hotel Sogo’s website is lacking in information such as that of room rates and available

rooms. Moreover, it has no reservation facility, nor is there any contact details available

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for any of the branches. Also, there appears to be no consistency or direction as to the

advertisements and promotions they put up on their social media pages.

5. Low to moderate volume of customers during non-peak seasons

Hotel Sogo reports a relatively low average number of guests during non-peak season

as compared to February and December.

STRENGTHS:

1. Strong social media following

Hotel Sogo is very present on social media channels such as Facebook and Twitter with

16,657 likes and 2,665 followers as of 2014 respectively.

2. Located close to public transportation

- A majority of Hotel Sogo’s branches are located near bus terminals and train stations.

They are situated within and outside the Metro.

3. Affordability

- Hotel Sogo has and is known for its cheap and affordable room rates.

VII. TOWS Matrix

STRENGTHS WEAKNESSES

1. Strong social media 1. Inconsistent offerings

following 2. Untrained and inefficient

2. Located close to staff

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 public transportation 3. Low-quality structural

3. Affordability features, equipment and

amenities

4. Cluttered, unfocused

online efforts

5. Low to moderate volume

of customers during non-

peak seasons

OPPORTUNITIES SO Strategies WO Strategies

1. Increase in consumer

spending 1. Initiate and publicize 1. Streamline service

2. Growth of domestic Corporate Social offerings of all branches on

tourism Responsibility efforts. the official website. (W1 +

3. Corporate Social (S1 + O3) W4 + O4)

Responsibility

4. Technological 2. Engage younger 2. Incorporate domestic

proficiency consumer market in tourism concepts in various

5. Younger domestic social media. (S1 + O5) promotions and

travelers advertisements. (W5 + O2

+ O5)

3. Revamp the hotel’s

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 official website. (W4 + O1 +

O4 + O5)

4. Invest in quality

structural features,

equipment, and amenities.

(W3 + O1)

THREATS ST Strategies WT Strategies

1. Unwholesome image

2. Increasing industry 1. Communicate the 1. Focus on the

costs hotel as an amiable and improvement of existing

3. Rebranding of inviting lodging facility for branches. (W1 + W2 + W3

competitors travelers. (S1+ T1 + T3) + T2)

2. Bank on accessibility 2. Improve the hospitality

and affordability relative skills and know-how of the

to competitors. (S2 + S3 staff. (W2 + T1)

+ T3)

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VIII. Porter’s Five Forces

1. Threat of New Entrants

The competitive pressure stemming from the threat of new entrants is low. Entry

barriers in the motel industry are very high since opening motels entail large capital

investments and high operations and utilities costs. Also, slow cost recovery rates may

not be attractive to potential entrants. Moreover, big time players such as Hotel Sogo

and Victoria Court have a very firm hold on the market. It should be mentioned however

that there are multiple micro level lodging facilities in Metro Manila however they are not

large enough to pose a threat to the industry giants Hotel Sogo and Victoria Court.

2. Threat of Substitutes

Substitutes like hotels provide the motel industry with the most competition,

claiming 21.1% of the total income generated from lodging establishments (NSCB,

2012). Hotels provide customers with the same or even better quality service and

amenities. Hostels and dormitories are also a big threat to the motel industry, which, in

spite of their shared living quarters concept, provide low rates while satisfying short term

accommodation needs as well.

3. Bargaining Power of Buyers

The pressure stemming from the bargaining power of buyers in the motel

industry is relatively high. Most drive-in motels rely on the affordability of their lodging

facilities to bring in customers, restricting their ability to raise prices.

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4. Bargaining Power of Suppliers

The bargaining power of suppliers in the motel industry is high due to the short

supply of available land and particularly prime real estate to build and expand on. This

gives the landowners more leverage in terms of setting prices. However, suppliers of

construction materials do not much have leverage because their offerings are relatively

more readily available.

5. Rivalry Among Existing Competitors

Key industry players in the motel industry have been very active in terms of

coming up with new ways to improve their market standing and business performance,

increasing competition among them. Both Hotel Sogo and Victoria Court have been

been very aggressive in releasing advertisements and promotional materials about their

special promos and their themed-rooms. Victoria Court has even endeavoured to

extend their target market by advertising their themed rooms as venues for parties and

other events or occasions.

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IX. Fishbone Diagram

Information

Although the rates of Hotel Sogo are shown on the website they are difficult to

find and they only show the rates for 12 hours and 24 hours for weekday and weekend

rates. Pictures of the rooms of only the Malate branch are shown while all the others

have stale images of the branch most of the time with poor lighting and occasionally

very pretentious effects.

Procedures

The inconsistent prices also reflect the inconsistent services of Hotel Sogo.

Filipinos seem to be more tolerant of the low and inconsistent quality of services

20
compared to foreigners. Walk-in clients are the most common as you cannot reserve at

Hotel Sogo.

Backstage Personnel

Sanitation is horrible in Hotel Sogo, with the time between room turnovers not

enough to allow proper cleaning of the rooms.

Frontstage Personnel

Frontstage Personnel are not accommodating and in fact slightly indifferent to

visitors. Multiple patrons mention a sort of emotional detachment of the personnel

towards them and in some extreme cases indifferent to illegal activities going on in their

branches.

Facilities & Equipment

The rooms are not maintained well and several customers of Hotel Sogo

complain of the lack of hot water and noisy air conditioning units. This clearly shows the

need for Hotel Sogo to allocate a greater amount of their budget to maintenance and

purchasing of new equipment. The televisions also provide pornographic channels and

this helps promote the idea of Hotel Sogo being a place where socially-unacceptable

activities take place.

Materials & Supplies

The mattresses in Hotel Sogo are said to resemble “Thick Plastic” and the bed

sheets quite thin and provide no warmth. The food is grossly unappealing and this

21
causes customers to feel as though they had been misled by Hotel Sogo’s food

advertisements.

Other Customers

Most of the problems stem from patrons of Hotel Sogo who carry out illegal

activities. Prostitution, pimping and rape stories help tarnish the brand image of Hotel

Sogo. As long as these activities still continue Hotel Sogo will have a very difficult time

rehabilitating its image.

Other Causes

Although the locations of the branches are in prime real estate, such as near

major avenues and close to bus and train terminals, this also leads to other problems as

well. The pollution due to the heavy traffic that passes through these areas makes the

maintenance of cleanliness extremely difficult. The fact that it is highly accessible also

means that unscrupulous characters can use it for their socially-unacceptable activities.

Worst of all however is that high exposure to these harsh conditions jade the frontstage

and backstage personnel to their existence and hence make them far less hospitable

and caring towards the clients.

X. Goals and Objectives

Short Term Goals

1. Improve brand awareness by 75% by aggressively advertising to people between the

ages of 18-25.

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2. Improve brand preference by 25% through better standardization of services

especially of cities located deep inside Metro Manila.

Medium Term Goals

1. Improve yearly sales performances by 20%.

2. Improve market share growth by 50%.

Long Term Goals

1. Have the largest market share of the motel industry in the Metro Manila area of

people aged 18-25.

2. Have the Greatest Brand Recognition in the Greater Manila Area among people aged

18-25.

XI. Target Segment Description

Demographics

Although Hotel Sogo caters specifically to Filipinos within the age range of 20-40

we would like to specifically target the age range of 18-25 of the social class lower and

upper C. The primary reason being they are young and impressionable enough to

change their views on Hotel Sogo. The older generation may hold onto the negative

stereotypes of the brand too much and hence spending time and money to change their

views may be futile.

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Psychographics

These would most likely be college students and would mostly function on a

student budget. They probably commute home from school or rent small condos near

their universities or terminals or train stations. Since they operate on student budgets

and starting salaries, they should be very price sensitive and would most likely only stay

in Hotel Sogo in groups, as splitting the bill would make it much more affordable.

Media and Purchasing Itinerary

Most of our respondents use the internet more than the television. On average

they spend 5.6 hours daily on the internet and only 1.83 hours on the television. They

spend 2.12 hours on the road everyday and this would explain why billboards are one of

the most common ways they are informed of Hotel Sogo. This may also explain why

most of them see it in the morning as it may be a staple of their daily drive/commute to

their university or workplace.

Behavior

Of all the different characteristics of a motel, cleanliness is the most important to

them with a mean rating of 4.63, slightly above privacy which is rated at 4.6. Security

follows at 4.5 and given Hotel Sogo’s reputation as a place where illegal activities take

place this may be one of the most challenging but rewarding characteristics to change.

Food is one of the lowest rated characteristics at 3.57 and shows that motels are places

that this target market would prefer to sleep in rather than to eat in.

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XII. Target Person

Profile

Jeremy Reyes is a twenty-one year old Business Management graduate. He

recently landed his first job as a management trainee and is excited to be making his

own income for the first time in his life. He loves to travel, and along with his closest

friends, have set out to explore the different travel spots in the Philippines. A self-

proclaimed adventurer, he gets a thrill out of visiting new places. He is always on top of

planning out of town trips and often keeps tabs on Piso Fares and discounts in hotel

lodging online.

XIII. The 8 Ps

Existing:

1. Product Elements

There are three main types of rooms in Hotel Sogo: Taxi Rooms, Garage Rooms,

and Motorcycle Rooms. The names of the rooms are dependent on the form of

transportation you took going there. Taxi rooms have three classes: Regular, Deluxe,

and the Regency. Garage rooms also have three types: Regular, Deluxe, and the Mega

Suite. Lastly, Motorcycle rooms only have two classes, namely, the Deluxe and the

Executive. Each room comes with a bed, television, bathroom and toiletries. They also

offer food such as Pancit Canton Spring Rolls, Grilled Pork Belly and Grilled Beef with

Red Curry Sauce. The person delivering the food up to the customers room is given

25
enough change to accommodate any amount of payment, and if the change is not given

immediately then the food is free.

2. Price and Cost Considerations

The Prices in Hotel Sogo widely vary from branch to branch, although all seem

uniform in charging more for weekend stays than weekend stays. In the website the

only prices listed are those for 12 hours and those for 24 hours however the prices of

each kind of room is mostly given. Appendix C contains the price list of the Mabini,

Malate Branch which was the primary branch of study.

3. Place, Time, and Cyberspace

Hotel Sogo has 22 branches within Metro Manila and 9 branches in the provincial

areas. Of the 22 branches in Metro Manila, 11 are located near avenues and 6 are

located along Epifanio de Los Santos avenue which is a major bloodline in Metro

Manila. They are open 24 hours and they maintain an official website, Facebook page

and Twitter page. They are also present on travel website, TripAdvisor, and hotel

platform website, Agoda. Our survey finds that Accessibility is rated the highest among

Hotel Sogo’s characteristics with a mean score of 5.14 with the highest possible score

being 7.

4. Promotions and Education

Sogo promotes mostly on flyers, banners and occasionally billboards. They also

promote heavily on taxis, pedicabs and other forms of public transportation. They also

promote themselves on their Twitter and Facebook pages.

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5. Productivity and Quality

The Hotel Sogo website has a chat room function for inquiries and a survey

facility that isn’t functioning. In the rooms proper, text feedback instructions are posted

on the upper right side of the vanity.

6. Process

Hotel Sogo is easily accessible as its branches are located close to public

transportation like trains and are alongside jeepney and taxi routes. Locating the check-

in desk was difficult, however, getting a room was pretty quick. A card key is issued a

few minutes after request and one is directed towards the room almost immediately

after. For checking out one only needs to go back to the counter and inform the

employees you are checked out.

7. Physical Evidence

The motel issues a written invoice as proof of stay. However, in our experience,

the check-in staff neglected to give us the invoice at first and we were forced to ask for

it.

8. People

Security guards are positioned at the gates of each entrance of the motel. They

direct vehicles where to park within the complex. The receptionists were not very

friendly, accommodating and willing in terms of providing information about the motel.

The check-in ladies seemed disoriented and unsure about the check-in process and

27
especially about the receipt process. Customers seemed mostly from the upper and

lower C socio-economic classes however occasional B customers from the nearby

universities also frequent the place.

Proposed:

1. Product Elements

Hotel Sogo Tour Packages

In an effort to transform Hotel Sogo’s image into a traveler-friendly motel, tour

packages will be established in partnership with local tourist attractions or sites. This will

be availed of by guests through the website or through the check-in counter.

Investment in Quality Structural Fixtures and Amenities

Given an increase in purchasing power, customers are more willing to spend on

leisure or quality products. Appropriating resources towards fixing current features of

the motels will help lessen the negative feedback from customers and improve their

experience. A deduced list of possible improvements to the fixtures and amenities of

Hotel Sogo is presented below:

1. Construction of thicker walls

2. Adding of corridor and area signs

3. Higher quality mattresses, sheets, and pillows

4. Shower dividers and curtains

5. Additional toiletries like shampoo and conditioner

6. Brighter, inviting room and corridor lighting systems

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 7. Additional windows

8. Pay-per-viewing or removal of adult channels

9. Air deodorants

2. Price and Cost Considerations

In order to accommodate the proposed improvements on quality aforementioned,

an increase in price is proposed in order to cover costs. This move is reinforced by the

increase in purchasing power which connotes an increased willingness to pay for

quality. Moreover, prices will be collated and posted for the convenience of customers.

3. Place, Time, and Cyberspace

Website Improvement

Hotel Sogo’s official website will be redesigned to look more aesthetically

pleasing and user-friendly. A reservation facility will also be established wherein all of

the motel’s room descriptions, images and rates will be collated to be viewed by website

visitors. Links to various online travel guides will be available as well as available

information on financial statements to improve investor confidence and hence lead to

more investment.(Appendix B)

4. Promotions and Education

Sogo Adventure Ads

Billboards, posters, and banners (Appendix B) will be created, promoting Hotel

Sogo’s features that cater to the needs and wants of domestic travelers who visit tourist

29
spots closely located to specific Hotel Sogo branches. These advertisements will be

placed in strategic locations in both urban and rural areas of the Philippines, as well as

on the Hotel’s various web channels.

Sogo Gives Back

To further the cleaning up of the image of the hotel, Hotel Sogo will diversify its

corporate social responsibility initiatives to other sectors of society including children.

These efforts will be aggressively displayed on social media so as to garner attention

and possibly sway perception.

Blogging Community Engagement

The marketing team of the hotel will spearhead an attempt to increase brand

recognition and awareness, as well as communicate its attempt at a new image to the

target consumers by contracting travel bloggers and online critics to come to Hotel Sogo

and blog about their experiences. These bloggers will also throw contests and the like

with the motel as a sponsor of prizes.

5. Productivity and Quality

More than the online feedback and inquiry facilities and text feedback

instructions, a suggestion box will be put up at the check-in counter and a hotline will be

established for the purpose of customer care and feedback. The survey section of the

the hotel should also be up and running.

30
6. Process

As already mentioned, a reservation facility will be established on the official

website. This will provide even faster check-ins and efficient querying. Also, brochures

(Appendix B) of room types with corresponding images and rates should be made

available at the counter.

7. Physical Evidence

An issuance of invoice at all times policy should be implemented by employees

and reinforced by management.

8. People

Invest in hospitality training for staff

The lack of courtesy and knowledge of the staff is concerning and should be

dealt with accordingly. Hotel Sogo will invest in hospitality and service seminars and

training sessions for its employees in order to improve customer relations.

31
XIV. Flower of Service

Existing:

32
Proposed:

33
XV. Investment Plan

Budget

For the Mabini Branch Cost (PHP)

Frontstage Personnel Training 200,000

Backstage Personnel Training 105,000

Security Guard Training 75,000

Lighting Fixtures 50,000

Lighting Control System 50,000

Air Fresheners 50,000

CCTV Camera Equipment 30,000

Pay-per-View Adult Entertainment 15,000

Channels System

New Mattresses 300,000

New Bedsheets 150,000

Total Cost is PHP 1,025,000

For Advertisement Cost

Internet Advertising 300,000

Space

Website Redesign and 100,000

Maintenance

Billboard Advertising 600,000

Total Cost PHP 1,000,000

34
XVI. Estimates of Profitability

35
XVI. References

Albert, J. (2012). Single Pinoys and Pinays: Are you ready to Mingle?. Retrieved on
February 24, 2014 from
http://www.nscb.gov.ph/beyondthenumbers/2013/02082013_jrga_marital.asp

Baking, J. (2010). History of Philippine Motels. Retrieved April 1, 2014 from

http://www.josebaking.com/2010/12/history-of-philippine-motels.html

Bizymoms (n.d.) History of Motels. Retrieved March 30, 2014 from

http://www.bizymoms.com/besthotels/history-of-motels.html

Cluskey, J. (n.d.). History of the Motel. Retrieved on March 30, 2014 from
http://www.jimmccluskey.com/history-of-the-motel/

Desiderio, L. (2013). Domestic tourism on the rise – NSO. Retrieved April

3, 2014 from
http://www.philstar.com/business/2013/12/29/1272913/domestic-tourism-rise-nso

Facebook. (2014). Hotel Sogo. Retrieved February 26, 2014 from

https://www.facebook.com/hotelsogo

Hotel Sogo. (n.d.). About Us. Retrieved on February 24, 2014 from
http://hotelsogo.com/aboutus.html

Lowe, A. (2013, February). The Economics of Love Motels. Retried on February 24,
2014 from
http://www.rappler.com/business/21746-the-economics-of-sexy-love-motels

National Statistics Office. (2012, January). Final Results Tourism Establishments in the
Philippines (STEP) Accomodation. Retrieved on February 24, 2014 from
http://www.census.gov.ph/old/data/sectordata/sr12665tx.html

Remo, M. (2014, February). No TINs, No Taxes: BIR goes after motels. Retrieved on
February 24, 2014 from
http://newsinfo.inquirer.net/579345/no-tins-no-taxes-bir-goes-after-motels

Trip Adviser (n.d.). Hotel Sogo. Retrieved February 24, 2014 from
http://www.tripadvisor.com/Hotel_Review-g298452-d1627943-Reviews-Hotel_Sogo-
Pasay_Metro_Manila_Luzon.html

Twitter. (2014) Hotel Sogo. Retrieved February 26, 2014 from

https://twitter.com/hotelsogo

Urban Dictionary. (n.d.). Urban Dictionary. Retrieved February 24, 2014 from
http://www.urbandictionary.com/define.php?term=Love%20Motel

Villegas, D. (2011, February). Philippine Love Motels. Retrieved February 24, 2014 from
http://dennisvillegas.blogspot.com/2011/02/philippine-love-motels.html

36
XVII. Appendices

APPENDIX A - Research Findings

Gender Sexual Orientation

Which one of these lodging establishments are you aware of?

Which one of the following are you aware of?

How did you know about these motels?

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Have you ever tried going to these motels you mentioned?

If yes which ones?

Which one have you visited recently? Which ones have you seen in ads?

38
How did you see them? When did you see them?

How often do you go to motels? Why do you go to motels?

Rate the importance of the following:

Accessibility Hospitality

39
Security Food

Cleanliness Privacy

Price

40
Rate the characteristics of Hotel Sogo:

Accessibility Hospitality

Security Food

Cleanliness Privacy

41
Price

42
APPENDIX B - Creative Executions

Sogo Adventure Online Posters

43
44
Sogo Adventure Billboard

45
Sogo Website

46
Sogo Brochure

47
APPENDIX C - Price List

APPENDIX - Branches

48
49
APPENDIX E - UAI Questionnaire

50
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