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I. Background of the Case

Victoria Court is the name of a chain of drive-in hotels in Pasay, Caloocan, Pasig, Malabon, and Manila owned by the Victoria Court Group. It was first established in 1970 by Angelo King. The first motel, located in Pasay City, was called the Anito Lodge. By 1976, King had opened three more motels in Pasig and in Caloocan.

During the 1980s, the rooms were improved by installing bath tubs and jacuzzis. At the same time, the term drive-on hotel was substituted for motel. In 1986, Angelo King decided to retire and the sites were divided between his two sons, Archie and Wyden.

The first Victoria Court was a thirty-eight room facility in Pasig. It also became Archie King’s testing ground for a drive in hotel with world class amenities and bigger rooms. Victoria Court in Pasig was performing so well that management decided to name the company the Victoria Court Group. Soon after, all sites that Archie King acquired were renamed Victoria Court. At around the same time, the company evolved a logo: the picture of a classy looking lady with a finger on her lips in a cautious and hushed pose; to the company, the logo stood for privacy, courtesy, prompt and efficient service, world class facilities, and state of the art housekeeping.

By late 1980s, Victoria Group had nine drive-in hotels. It had also acquired in August 1986 a five-story apartment building in the Malate district.

In 1988, Karl Velhagen joined the Victoria Group. Together with Archie King, they envisioned Victoria Court to be a place that provides quality, service, cleanliness, and value. In addition to this vision, Velhagen had developed strategies that aimed to reposition the company in the industry.

There are various concerns that the company’s General Manager has been facing. First, there was the image of Victoria Court. What more could be done to create a positive image for the company as a drive in hotel? Or assuming that repositioning is the key,

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