Amber Inn Case Study

Introduction The Amber Inns & Suites, Inc. is a 250 property hotel chain in the western and Rocky Mountain states. Amber Inn & Suites, Inc. was established in 1979 and is made up of 250 hotel chain properties each consisting an average of 120 individual guest rooms or suite units. Amber Inn & Suites, Inc. can be found in locations among ten western and Rocky Mountain States with two hundred fifty different property hotel chains. On average, each property consists of one hundred twenty individual guest rooms or suite units. Amber Inn & Suites Inc. locates its properties on premium sites on major highways close to suburban industrial and office complexes, airports, and large regional shopping centers. Industry Analysis The U.S. hotel industry recorded revenue of $113.7 billion and grossed $16.7 billion in pretax profit in 2004. As of December 31, 2004, there were 4.4 million hotel rooms in the United States. Approximately two-thirds of all U.S. hotel rooms were affiliated with a brand; the remaining one-third was independently owned and not brand-affiliated. Although companies such as Cendant Corporation, Marriott International, Inc., Hilton Hotels Corporation, InterContinental Hotel Group, and Choice Hotels International, Inc leads the industry in having the most hotel rooms in the United States, the... Problem Delineation Fiscal year 2005 was projected to be the fifth consecutive unprofitable year for Amber Inn & Suites Inc. The company projected lodging revenues of $422.6 million for fiscal 2005 and a net loss of $15.7 million. The companys new president and chief executive officer, Joseph James, wants an hour presentation that described (1) initiatives, expenditures, and outcomes for the past two fiscal years, and (2) planned initiatives and budgetary needs for fiscal 2006, starting June 1, 2005. Based on this direction, the V.P. of Sales and Marketing, Kelly Elizabeth, and the V.P. of Advertising, Catherine Grace, have to work together to decide on...

Amber & Suites Inn Case Analysis

Mene Kude Dr. Dixie Marketing 601 November 17, 2010 Amber Inn & Suites, Inc. Strategic issues and Problem Identification The Amber Inns & Suites, Inc. is a 250 property hotel chain, struggling with net operating lost since 2002, with fiscal year 2005 projected to be its fifth consecutive unprofitable year. The company has projected lodging revenue of $422.6 million and a net loss of $15.7 million for fiscal 2005. Joseph James, the companys new president and chief executive officer,

wants an hour presentation that describes initiatives, expenditures, and outcomes for the past two fiscal years, and a planned initiatives and budgetary needs for fiscal 2006. Mr. James goal for the company is to achieve profitability within two years. To this end, the V.P. of Sales and Marketing and the V.P. of Advertising has to corroborate on resource allocation in their respective budgets. The company would use growth in Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) as a corporate performance measure and a basis for determining senior management executive incentive compensation. It should be noted that EBITDA often disguises the financing effects of operations and allows allot of leeway in what is reported. This analysis looks at marketing strategies that best justify potential budgetary objectives that could lead to profitability. Industry Analysis The U.S. hotel industry recorded revenue of $113.7 billion and grossed $16.7 billion in pretax profit in 2004. As of December 31, 2004, there were 4.4 million hotel rooms in the United States. Approximately two-thirds of all U.S. hotel rooms were affiliated with a brand; the remaining one-third was independently owned and not brand-affiliated. Although companies such as Cendant Corporation, Marriott International, Inc., Hilton Hotels Corporation, InterContinental Hotel Group, and Choice Hotels International, Inc leads the industry in having the most hotel rooms in the United States, the

Amber Inn Case Study

Case of Amber Inn & Suites, Inc. Integrated marketing communication strategy and management Problem The problem that Amber Inn & Suites has to face is to decide whether or not to expand their marketing and advertising expenditures between pleasure/vacation guests or business professionals. Primarily, Amber Inn & Suites promotes their commodities vastly to business travelers who usually only stay in the hotels for one to two nights. Business users are the target market that is in the company mission. After three years of continue loss, company must find a strategy that will lead the Ebidta, to growth 7% in 2 years. They have also to decide if continue, and if so how, the frontier strategy and what to do with the promotion as weekend special or do a free night stay in the weekend (25% discount). Alternatives 1) Focus on Business users, giving more services as Wi-Fi and study cooperative, increase prices a 2% per year, and doing weekend special deals for leisure users. Cut not useful advertisement, increase Internet and internet-sales. Leisure users are very price sensitive, so is not the market to focus on (a few dollar increase can lead the choice to another hotel). Stop

the frontier strategy and do weekend special offers. 2) Focus on leisure users, but this is like changing the identity of the hotel. 3) The leave everything like it is right now is always an option. Recommendation Business users are in the mission of the hotel, and are the audience that can be more profitable for Amber Inn. They are less price-sensitive and pay more for the staying. The needs of those users are more standard than the leisure and vacation users, so is easier to find out what do to. As stated from researches, the advertisement is not really relevant in the decision of which hotel to take. Internet can be a key factor, as a sales tool (like Booking.com or Trivago for example). I suggest to cutting ad for almost 4,4 million, reducing the budget at 7,8

Case Study
Amber Inn & Suites, Incorporated. 1. STRATEGIC ISSUES AND PROBLEMS The Amber Inns & Suites, Inc. is Amber Inn & Suites, Inc. was established in 1979 and is made up of 250 property hotel chain in the western and Rocky Mountain states. Fiscal year 2005 was projected to be the fifth consecutive unprofitable year for Amber Inn & Suites Inc. The company projected lodging revenues of $422.6 million for fiscal 2005 and a net loss of $15.7 million. Joseph James, the companys new president and chief executive officer, wanted an hour presentation that described (1) his or her initiatives, expenditures, and outcomes for the past two fiscal years, and (2) planned initiatives and budgetary needs for fiscal 2006, starting June 1, 2005. Based on this direction, the V.P. of Sales and Marketing and the V.P. of Advertising have to work together to decide on the proper allocation of their respective budgets. The major problem with Amber Inn & Suites is they are trying to decide whether or not to expand their marketing and advertising expenditures to include a larger customer base. Primarily, Amber Inn & Suites promotes their commodities vastly to business travelers who usually only stay in the hotels for one to two nights. By enlarging their customer base, Amber Inn & Suites would be able to offer their amenities to not only business travelers but also families on vacation using the complex for leisure activities. Amber Inn & Suites is facing a dilemma because they have seen their net profits decrease within the last three years, and they now are charged with a new management team that must decide what the best course of action is. The Amber Inn & Suites management team has two options to consider; they can either allocate extra funds in their advertising and marketing department to enlarge their customer base or they can choose to keep their operations status quo and hope they can return to financial success