Case Astor Lodge & Suites Essay

883 Words Mar 24th, 2014 4 Pages
BUS827 Astor Lodge and Suites, Inc Case1 Hints
Dr David Gray Email: david.gray@mq.edu.au

Astor Lodges Caase 1

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Case Questions
Problem Losing Money: Astor Lodge & Suites, Inc., a 250 property hotel chain, is about to post its fifth consecutive unprofitable fiscal year. Requirements: Prepare Presentation for new President and CEO, Joseph James, describing each VPs 1) his or her initiatives, expenditures, and outcomes for each of the past two fiscal years, and 2) planned initiatives and budgetary needs for fiscal 2006. 3) Show how their staffs prior and planned initiatives and expenditures contributed the company's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) - the corporate performance metric recently
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occupancy rates, first time guests (Exhibit 6), average length of stay, pleasure/vacation trips, advertising awareness for the fiscal 2004 and 2005 2. Think about how to link sales and marketing initiatives and expenditures to corporate financial performance metrics. 3. Several approaches are possible:
1. Approach 1. One approach for determining the effect of marketing and sales on EBITDA for fiscal 2004 and 2005 is to perform an incremental contribution analysis. It requires a student to: (a) calculate room-nights sold, (b) multiply this figure by room dollar contribution (average daily rate minus the direct cost per room/suite from case Exhibit 5), to determine total incremental dollar contribution; and (c) subtract the incremental dollar expenditure for marketing (advertising) and sales. 2. Approach 2. Another approach also uses incremental contribution analysis, but focuses on occupancy in more specific terms: attraction of new/first-time guests at Astor Lodge & Suites, Inc. properties. Indeed, efforts to broaden the target market to include pleasure/vacation travellers and the "frontier" strategy were intended to attract new/first-time business and pleasure travellers to increase occupancy.

Astor Lodges Caase 1

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5. What should Kelly Elizabeth propose in her Fiscal 2006 Marketing Plan and Budget?
Major Questions to be considered a) What

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