Eagle’s Nest Hotels Analysis

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Overview

Eagle’s Nest Hotels started as Eagle’s Nest Motels in 1951. It started of with 4 motels located along Las Vegas and Los Angeles highway. It mainly targeted travelers who constantly used the highway and who in one or the other could not afford the motels within Las Vegas. Due to the ideal location, the growth was commensurate with the growth in automobile industry as well as the wellness of e economy. This ensured that more and more people now used the highway. With time the Motel embarked on an expansion strategy acquiring a 3-star hotel in San Francisco. In the next one and a half decade the Hotel expanded aggressively by either purchasing other hotels or building new ones mainly in California.

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The company was listed in 1973 and by this time it had about twenty five 3-star hotels and about three 4-star hotels spread over San Francisco, Las Vegas and Los Angeles. Besides reliance in travelers the company would also benefit greatly from growth of tourism between 1970s to early 1990s, in fact this enabled the company make new investments this time in Europe where they invested in Paris, France and London. In 1997 the company which had now a huge number of Hotels spread in America and Europe sought to diversify, to achieve this they launched MoTravel. This recorded tremendous growth and in less than a decade it had grown to 250 franchises. After about five decades of continuous growth the company showed some signs of redundancy as was evidenced by declining company image in US and slowed expansion which saw the company acquisitions fall to only two 3-star hotels between 2007 and 2010.

Analysis

This decline in acquisitions will obviously affect the company’s profitability in future as well as increase risk for the company as there is no addition to their portfolio. This then requires a careful consideration of the current business and how profitability can be ensured. It is true the company’s image has suffered in its main market which is the US and this does no good especially in its current situation. In the first part of this study three options were floated on how to rekindle the company fortunes among these options were butler services, inclusion of online booking and finally refurbishment of the motels. A viability study was carried out to determine which of the options would provide the best way to rekindle the company profits and it was concluded that refurbishing the motels was most viable. In the next part we look at how to implement this process by examining the required undertakings as well as the required involvement.

Motels are the main business for the company. The company has also made a huge investment in this, as per current statistics there are about 200 motels which have 6000 rooms. These provide 58.3% of the total revenue generated by the company as a whole, and yet the occupancy of these motels is much below the set target. This definitely means that if an aggressive investment is made in raising the motel standards as well as improving the image of the hotel to the extent that the occupancy target is reached the company will not only realize value for their current shareholders but will also enable continued expansion.

One of the main factors to consider before the implementation process is the consumer needs. Any business wishing to attract consumers must design its products in such a way that they meet the needs of these consumers. According to Bowie and Buttle (2004) it is critical for an investor in the hospitality industry to design their physical environment to satisfy the needs and wants of the target markets. The physical environment must be maintained on a continuous basis so that the consumers can continuously relate with the product, failure only means that these consumers will continually seek other products which meet their needs. Bowie and Buttle (2004) note that damaged furniture, faulty equipment and tired décor pts off consumers and only a reinstatement of the facilities or a upgrade which would convince the customers to come back for these services. They (Bowie and Buttle 2004) note that the role of maintenance and refurbishment is to maintain the hospitality product at an acceptable level to ensure customer satisfaction and efficient operation.

Before we examine the involvement and the implementation process in detail it is important to note that besides the capital injected to facilitate the refurbishment process the company management should also provide for other indirect costs resulting from closure of food processing during refurbishment, reduction in sales, and customer dissatisfaction due to noise or any kind of inconvenience throughout the process.

The implementation plan

Project ID Task name Predecessors Duration
1 start
2 Committee formation 1 2 days
3 deliberations 2 3 days
4 Hiring 2,3 6 days
5 Actual refurbishment 4 36 days
6 Appraisal 5 4 days
7 Finish 5,6 0

Involvement

Any implementation process must have the management at the helm. This is because it involves two functions which are primarily managerial these are allocation of resources and guidance. Besides, in trying to figure out the way forward for any company it is expected that the bulk of the ideas floated at any given time are generated by the management. This is commensurate with their roles as identified by Gitman and McDaniel (2008) who describe the management process as comprising anticipation of potential problems and opportunities, coordination and allocation of resources needed to implement plans, guiding personnel through the implementation process and finally reviewing the process.

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The next group is the Motel employees these must be continuously involved in the implantation process as they are the ones to carry ones the actual process. They will be involved in various capacities and most importantly they will be required to inform the clients of the ongoing efforts to step up existent services.

Lastly, dependent on the technicality of the refurbishment process the company maybe forced to hire individuals who posses various skills required to make possible the process. Besides, there is definitely need to have specialists in fields such as décor if at all the company is to have the best there is in this field.

Actual Plan

The first thing as part of the implementation plan will be to set aside the required funds. As Kazmi (2008) notes financial capability has a great bearing on any organizations capacity to deliver on stated goals or implement identified strategies. Once funds are allocated the management should then appoint several individuals to head and constitute the implementation process. These individuals should be from the senior management and from the employees, this will ensure that the implementation process sticks to the plan as directed by the management, the process gets support from the employees and finally it ensures that it represents the interests of everyone within the organization. It is important that the implementation committee actively involve the Finance department, the Sales and Marketing department as well as HR and Organizational Development by having the respective heads form part of the committee.

Once the committee is in place the first thing they should do is draw up a budget. This ensures that the money allocated for refurbishment which is about $75 million is well planned for and addresses the particular areas which are worse of first and those which are considerably sound last. This way they ensure optimal utilization of the funds.

Once the budget is in place the committee may decide to hire expertise in various fields. This however should only be done if the existent personnel do not have adequate skills to carry out anticipated changes. Hiring process maybe competitively done through advertising to attract bids or maybe done through appointments. This though should be a decision which is unanimously reached by the committee members.

Lastly, the committee should set a time frame to ensure the refurbishment is completed within the earliest possible time to avoid prolonged inconveniences to clients. They should also explore on various options which allow for the implementation process to continue with less or no inconvenience to the motel activities. Another responsibility for the implementation committee is to continuously assess progress and offer guidance to technical personnel to ensure smooth running of the refurbishment process.

Conclusion

The implementation plan must involve all individuals within the organization. This is because the input of each is required to make necessary changes. However, due to the extent of the company it maybe impossible to have all directly involved, this prompts need to have an all inclusive body which is referred to as the implementation committee which basically carries out or oversees the implementation plan. This way the process is appreciated by all and this goes along way towards realizing the long term goals of the company. This is because if refurbishment is successfully done the Motels will once again meet the aspirations of the consumers. And as the marketing adage goes “a satisfied customer always comes back with another” and with time the company profits will increase allowing expansion and diversification of the existent portfolio.

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References

Bowie, D. and Buttle, F. (2004), Hospitality marketing: an introduction, New York, Butterworth-Heinemann.

Gitman, L. J. and McDaniel, C. (2008), The Future of Business: the Essentials, 4th edition, New York: Cengage Learning.

Kazmi (2008), Strategic Management and Business policy, 3rd edition, London: Tata McGraw-Hill.

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BusinessEssay. 2021. "Eagle’s Nest Hotels Analysis." December 11, 2021. https://business-essay.com/eagles-nest-hotels-analysis/.

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