Sleepy Hollow

1. Situation Analysis
Sleep Inn Motel is owned and operated by Eng Huang and his wife. He bought the motel two years ago after leaving his job as a production manager. He wanted something that would be less demanding. Huang was very content with his purchase in the beginning. He traveled a lot, so he knew what customers would want in a hotel. He did not want to add a swimming pool or a restaurant because of the amount of stress and work it would take to maintain them. He soon added a continental breakfast. His occupancy rate was a little low, but they never seemed to go above average. As far as marketing and advertisements, all he has are two large signs near the turnoff of the interstate.
To avoid competition with the full-service resort motels, Huang lowered his prices by 40 percent. This made his prices more comparable to the lowest-price resort motels. Still Huang was not bringing in a lot of customers. People would come into the parking lot but not register. He does not know whether to make some minor changes or join either the Days Inn or Holiday Inn motel chains.
Demand for Product
Currently, Huang’s occupancy rates are below average and have been that way for two years. His occupancy rate has been about 55 percent and the average is about 68 percent. There are other hotels in the area that offer more amenities then the Sleep Inn Motel. For example, there is not a swimming pool or a restaurant, and some customers may not want to leave the resort for food or entertainment. This could be a deciding factor between hotels travelers may choose to stay at.
Competitive Environment
Sleep Inn Motel is located 10 miles from the tourist area with a number of franchised full-service resort motels. There is a Best Western, a Ramada Inn and a Hilton Inn and several mom and pop and limited-service motels. Some of these other resort motels have swimming pools and restaurants and Sleepy Inn Motel does not have either one. At this point the competition...