Definition of the problem
Astor Lodge & Suites, Inc. (Astor) is expecting to see another unprofitable year, the fifth consecutive year (prior to 2005) to be exact. Astor’s sales and marketing functions are lagging behind the other functions in showing significant profit results from its expenditures. The overall goal is to keep Astor’s budget from being cut, to prevent this from happening Astor needs to become profitable within the next two fiscal years.
How will Astor Lodge & Suites, Inc. achieve profitability within the next two fiscal years and increase EBITDA by 7%?
Evaluation
A SWOT analysis is a tool used to indicate a company’s strengths, weaknesses, opportunities, and threats. Below is a SWOT analysis for Astor Lodge & Suites, Inc.
Astor’s strengths:
• High level of brand loyalty
• High revenue growth rate o Astor: 7.4%
o…show more content… can put an end to the “Free-Night-Stay” Deal. This deal is the main cause of many customer complaints, business customers are complaining about leisure customers. Also, the “Free-Night-Stay” Deal is a source of large revenue loss. While this deal is a great way to bring customers in, it is costing the company more than it’s worth. Removing this deal will prevent further lost revenue, however, net losses will still occur (occupancy held as a constant). A decrease in occupancy should be expected. In the second alternative, the “Free-Night-Stay” Deal could be replaced with “Weekend Special” Deal which will help increase weekend occupancy rate. However, it will not incur a significant increase/decrease in occupancy. This is a great alternative for families (leisure customers) looking for a low cost weekend getaway. This deal will not only benefit the customer, but also Astor; the “Weekend Special” Deal will return a portion of lost revenues (approximately 50%) from providing the “Free-Night-Stay”
