GR Hotels
GR HOTELS INC
Preliminary Report
To: Andrew Mayd, CEO
From: Chris Mell, CMA
Subject: Analysis to increase occupancy rate
Date: January 15th , 2008
Introduction. The report was prepared for GR Hotels Board of Directors review. It examines current opportunities to increase profitability. Several options were examined and the most plausible solution proposed – Upgrade to upscale both hotels. This measure will increase long term profits and improve position in the core business.
GR Hotels current mission and vision :
MISSION: Clean Comfortable rooms(what), good quality service(how) to business and pleasure travellers(who) in Toronto and Montreal (where) at competitive prices ( how).
VISION: GR Hotels are hotels of choice for travellers in Canadian cities.
CURRENT SITUATION:
GR Hotels financial situation has been stable for the last 3 years. We have improved our profitability, our liquidity remained stable and ability to pay our debt improved. (Please refer to Appendix 1). GR Hotel Montreal occupancy rate is 59% with the revenue available per room of $56. Midscale hotels in Montreal have 64% occupancy rate and $59 revenue available per room. GR Toronto performance metrics are 64% and $64 in comparison to airport hotels 70% occupancy rate and $77 available revenue per room. Please refer to Appendices 1, 2 and 3 for detailed current situational analysis, and GR Hotels performance against industry benchmarks.
BUSINESS PROBLEM: How to increase percentage of business travellers in the customer mix and improve occupancy rates. WHAT ARE THE MAJOR ALTERNATIVES?
1. Exercise the land option:
a. Build a conference centre b Purchase land and keep for future c Sell the land for a quick profit
2.Upgrade one or both hotels to upscale status.
3. Attract more leisure travellers
PREFERENCES OF STAKEHOLDERS.
BOARD: Persue new direction: increase occupancy rate; attract business travellers.
SHAREHOLDERS: 15% Tax return on any
Preliminary Report
To: Andrew Mayd, CEO
From: Chris Mell, CMA
Subject: Analysis to increase occupancy rate
Date: January 15th , 2008
Introduction. The report was prepared for GR Hotels Board of Directors review. It examines current opportunities to increase profitability. Several options were examined and the most plausible solution proposed – Upgrade to upscale both hotels. This measure will increase long term profits and improve position in the core business.
GR Hotels current mission and vision :
MISSION: Clean Comfortable rooms(what), good quality service(how) to business and pleasure travellers(who) in Toronto and Montreal (where) at competitive prices ( how).
VISION: GR Hotels are hotels of choice for travellers in Canadian cities.
CURRENT SITUATION:
GR Hotels financial situation has been stable for the last 3 years. We have improved our profitability, our liquidity remained stable and ability to pay our debt improved. (Please refer to Appendix 1). GR Hotel Montreal occupancy rate is 59% with the revenue available per room of $56. Midscale hotels in Montreal have 64% occupancy rate and $59 revenue available per room. GR Toronto performance metrics are 64% and $64 in comparison to airport hotels 70% occupancy rate and $77 available revenue per room. Please refer to Appendices 1, 2 and 3 for detailed current situational analysis, and GR Hotels performance against industry benchmarks.
BUSINESS PROBLEM: How to increase percentage of business travellers in the customer mix and improve occupancy rates. WHAT ARE THE MAJOR ALTERNATIVES?
1. Exercise the land option:
a. Build a conference centre b Purchase land and keep for future c Sell the land for a quick profit
2.Upgrade one or both hotels to upscale status.
3. Attract more leisure travellers
PREFERENCES OF STAKEHOLDERS.
BOARD: Persue new direction: increase occupancy rate; attract business travellers.
SHAREHOLDERS: 15% Tax return on any