Case Study Analysis: StayTogether Hotel Chain - Strategies To Solve The Losses Issue

What Is The Fundamental Objective Of This Report?

In the provided case study, it has been stated that ten different hotel chains are forming a partnership to act as a single chain in order to solve the problem of regular losses on revenue. The fundamental objective of this report is to analyze the issue and the proposed strategies adopted by the combined management team. Previously, the hotels had manual booking system where the tourist or some customer had to be physically present in the hotel or its office in a certain place to book a room either in advance or instantly (Lee, Hung & Chau, 2013). The moment web based booking sites give rooms to the clients at a significantly less expensive rate. Subsequently, despite the fact that the client tally in the lodgings is expanding, there are misfortunes in the administration costs and henceforth, the corporate pictures of the inns are gradually getting diluted.

In this report, the problem has been identified and the proposed strategies and solutions of the company have been analyzed.

Previously, the hotels had manual booking system where the tourist or some customer had to be physically present in the hotel or its office in a certain place to book a room either in advance or instantly. However, with the development of technology, this situation has changed significantly. With the inception of smartphones and the different operating systems (Android, iOS), several apps have been developed for various purposes (for video calling, device customization, online messaging, social media and others). One of these apps is online hotel room booking system. These apps provide the option of booking hotel rooms online at very discounted prices. As a result, the rooms are rented to the customers at much lower prices than usual and the hotels face significant losses whereas the app developers gain a significant amount of money from the booking services (Kock, 2014). Moreover, due to the extreme convenience, the apps have become extremely popular with the tourists and other visitors. Due to the popularity of these apps, the customer count has increased significantly but on the other hand, the revenues of the hotels have decreased significantly. As a result, some hotels have even gone on to the verge of extinction.

The management team of the merged ten hotel chains has discussed the possibilities of several new offers that can be provided to the customers instead of providing huge discounts on the room prices. The team has decided the following services for the customers.

• The hotel chain will be merged into one single chain (namely StayTogether Hotel Chain) and the customers can avail the offers at any branch of the chain.
• The company will develop an Android and iOS app for booking the hotel rooms of this particular chain. However, there will be no discounts for booking through this app.
• There will be no discounts on hotel rooms unless some special bonuses are awarded.
• In the peak tourism months, the prices of the rooms will be higher than normal prices.

Chosen Strategy for Solving the Problems

The management team has decided to introduce some offers to compensate for fixed rates for the hotel rooms. The proposed offers are as follows.

Loyalty Program for Customers – In spite of the fact that there will be no immediate rebates on the lodging spaces for the customers, the administration group has chosen to acquaint a customer dependability program with reward the as often as possible going to customers. There will be various offers for the customers in light of the loyalty bonus score accumulated by them. Reliability focuses can be gathered by a customer with expanding visits to the lodging network and in addition the recurrence of the visits. The offers in light of these loyalty score will increment with the expansion in the focuses.

At one point, the customer will have the capacity to get to free transportation to the lodging from the rail station or the airplane terminal. The customers bringing their own particular cars will have the capacity to get to the lodging's free parking spot also. With considerably higher loyalty score, the customer will be granted with free night at the lodging. The administration group expects that these offers will intrigue the customers to visit the hotel chain all the more regularly and will bring about expanding income of the organization.

Buffet Meal System – The administration group has additionally chosen to change the current restaurant model to lessen additional costs, acquire benefit and give a more helpful service to the clients. In the current eatery framework, the organization needs to enroll servers to serve the dishes to the clients. Accordingly, the installments to the waiters are additional costs for the organization. The company also loses a significant amount of costs on the leftovers and excess food the visitors could not be able to eat. Hence, the buffet system will be introduced where the visitors will be able to take the right amount of food themselves. There will also be a small restaurant area for children, old and disabled.

Discounts and Rebates – The administration group is likewise considering tying association with some airline organizations for shared advantages in regards to clients. As per the proposed terms of this organization, the clients achieving the lodging through these carrier organizations, they will get certain refunds. These refunds will be appropriate on lodging admission or the feast costs. The administration group expects that this plan will profit them and in addition the carrier organizations.

Proposed New Offers

Nomination of Charity – The organization is additionally wanting to give cash some charity occasions designated by the clients themselves. To the charity nominated by a regular visitor, the company will be obliged to pay 1% of total billable amount.

The probable IT and IS issues related to the proposed new system are as follows.

Issues in App Development – As indicated by the proposed new management plan, the association will develop an electronic booking application for Android and iOS customers. Since the app development life cycle goes through a number of phases like α-stage, β-stage, demo stage and others, there are possibilities of issues in different stages of the development. Hence, selection of a suitable methodology is necessary so that these errors and issues can be avoided easily. Moreover, following the development of the demo version, the company should allow the customers to check the app and identify errors. Based on the customer feedback, the company needs to make suitable changes in the app.

Management of Online Data – There might be some issues rising in data organization and management if there is no proper data administration system. With growing customers, there will be merging of a colossal measure of data. Manual operations will not have the ability to manage each one of the data decisively (Ferrero & Sison, 2014). From this time forward, a modernized data organization structure is key or the association will stand up to basic test in managing all the customer information.

Issues Related to the Internet (Cyber Security Issues) – Cyber security will be a significant and challenging test for the hotel chain once the proposed information system application ends up being totally operational. For booking purposes, the customers ought to enter their own information in the application and in this way, the application will be the simple focus for different programmers and dishonest software engineers (Gattorna, 2015). Thusly, the assurance of the customers' information will be lost unless satisfactory digital security endeavors are taken.

Customer Service – A minor information system issue will be inability to address the issues expressed by the customer. Hence, a suitable customer service framework is necessary so that all the queries and issues expressed by the customers can be addressed very quickly.

If the proposed system is implemented, several new business opportunities will open up. These are as follows.

Automated Tour Guide (Personalized) – The organization can wander into business of customized tour guide (automated) with a specific end goal to help the visitors and tourists that take the services of the hotel network. The automated tour guide will be beneficial for international tourists and will also be an extra source of income for the company.       

Probable Issues Related to IT and IS

New Chain of Fast Food Shops – StayTogether hotel network can open another fast food chain network that can be an extra wellspring of income for the organization. The lodging network as of now has eateries joined to the hotel lofts. Nonetheless, there can be another chain for only eateries where clients can get fast food and in addition easygoing and full dinners. The eatery network can be made specific like Italian fast food network, Chinese fast food network, Mexican eatery network and others. With adequate brand esteem, there will be no time till deluge of clients begin in the eatery network.

Conclusion

In this report, the new proposed strategies of the organization have been investigated and suggestions have been accommodated boosting the advantages from these approaches for the organization. As indicated by the new proposed arrangements of the administration group, there will be just a single web based booking site and there will be uniform costs all the year round. The administration group has arranged a client dedication conspire so as to acquire reliability from the clients i.e. give extraordinary administrations to clients with the goal that they will profit their administrations again later on. The administration group has additionally chosen to change the current eatery model to lessen additional costs, acquire benefit and give a more advantageous framework to the clients. Another change the administration group is anxious to actualize is putting forth certain discounts to the clients in the event that they profit administrations of some specific aircrafts. The organization is intrigued is shaping associations with these carriers where both sides can profit by expanding measure of the travelers/clients. At long last, the organization is additionally wanting to give cash some philanthropy occasions selected by the clients themselves. As per this arrangement, a general client will have the capacity to assign a philanthropy to which, StayTogether will pay 1% of the aggregate billable sum. Notwithstanding, the issue with these approaches is that there are no specific advantages for the clients. Additionally, because of settled costs of the rooms, there will be no rebates for the clients. Then again, the clients look for rooms with exceptional rebates or low costs. Consequently, the administration group has chosen to actualize four new administrations that will profit the clients who will book rooms in the StayTogether lodging.

Based on the analysis of the case study, the following recommendations can be provided.

New Opportunities and Business Ventures

Internet Security – Internet security is an essential part of an information system of an organization. There are different threats of cyber attacks and malwares that can cause huge losses to the company. Hence, the company should implement appropriate security measures in order to minimize the chances of the cyber security threats. The insurance of the customers' information will be lost unless sufficient cyber security endeavors are taken.

Certain Benefits for the Customers – The organization must give certain advantages to the clients with a specific end goal to procure their trust and steadfastness. As indicated by the new arrangements of the organization, there will be just a single web based booking site and there will be settled costs all the year round. Be that as it may, the issue with these strategies is that there are no specific advantages for the clients. Besides, because of settled costs of the rooms, there will be no rebates for the clients. Thus, the organization must accentuate on giving different advantages to the clients.

Policies – On account of income and benefit, organization must be strict with their strategies without hurting the clients' advantages in any capacity. It is a propensity for the vast majority of the clients to deal with the specialist organization and lower the real costs of the administrations. Therefore, if the costs are really brought down, the organization will experience critical misfortunes in the business. Thus, the organization ought to execute strict evaluating strategy that must be brought down for some devoted clients in light of their reliability focuses or some occasion particular rebates.

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