this will create increase in customers and creating more income for the Hotel.

having more income the Hotel can always upgrade as time progresses, keeping in mind that the customers always

and the rooms are not occupied at all times.

Strengths of the hotel is good pricing and it is not far from main tourist attractions.

There is an opportunity for the hotel to attract more quests if it can be advertised more.

The hotel can lose income if customers should reduce .

The Sweet Dreams Hotel is a 40-unit, no-frills operation in the less scenic part of Queenstown.  The owner, Mr Smith, firmly believes that there is a need for his style of low-cost family accommodation amid the luxury and beauty of the area.  His rooms are large, family-style rooms (there is no television, for example).  Although there is plenty of room for future expansion, the grounds are fairly bare with a bit of landscaping, but mostly grass.

Mr Smith can serve breakfast to the rooms and provides tea-making facilities.  There are now alot of good restaurants and take-aways in the area.  Mr. Smith’s prices are less than half of what similar hotels charge and only a fraction of what the big five-star properties are charging.  And, really, he isn’t all that far away from the mountains, shops and other attractions.

The problem is occupancy. He has some regulars who come every holiday period (and have been doing so for the four years he has owned the property).  Overall, occupancy is about 50% year round and he knows from the local tourist office that the other properties average around 68% occupancy year round.  New developments could mean trouble.  This lack of occupancy can be quite frustrating for Mr Smith.  Cars pull in, drive around the parking areas, then drive away.

Currently Mr Smith does very little advertising in local district guides and the holiday papers, mainly because he really thinks word-of-mouth is the best form of advertising.  He is a member of the local tourist committee, but too busy to go to meetings.  However, he does receive the local statistics and knows the average stay in the area is 3.8 nights, and that local families and couples and increasingly overseas visitors are his potential customers.

He’s not desperate yet, but he’s getting worried and disillusioned.  He thought he would be overrun with guests, but that hasn’t happened.