Delawana Inn Resort Canada Case Study

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ACC 4291
INTEGRATED CASE STUDY

SECTION 1

CASE REPORT

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“DELAWANA INN B”

TABLE OF CONTENT

1.0        EXECUTIVE SUMMARY

Delawana Inn is a family-run resort located in Honey Harbour, Georgian Bay, Ontario, Canada. It is established in 1900 and managed by Grise Family for three generation. Delawana Inn is transforming from a fishing resort to full-service resort lodge. The original structure of the building was built on 1955 and no longer meet the current requirement. The building is now due for and upgrade.

          Peter Grise is analysing the situation Delawana Inn is currently experiencing. Few alternatives have been formed from the analysis. The alternatives are whether to renovate or rebuild B3 building. Peter Grise is evaluating each alternative by a few criteria which is customer satisfaction, return on investment, cost of construction and sales. Peter Grise decided to choose rebuilding as the best alternative for Delawana Inn. Few recommendations have been proposed as well to complement the decision to rebuild the B3 building to achieve the maximum benefit.

2.0        SYMPTOMS

There are few symptoms or problem that can be seen in the case. The first one is the neighbouring resorts closed due to the rundown state of the facilities. Next is that the business requires huge initial capital expenditure and need further capital planning throughout the operation. After that, the building is now due for an upgrade. Then we can see the symptom is that the occupancy rate is quite low during off-season. Next is that the industry has uncertain return on investment which made the other resort owners took out the earnings and ignore the capital needs of the resort. Then the building does not meet the customer expectation and satisfaction which resulted in reducing in revenue.

3.0        MAJOR ISSUE

The major issue of the case is whether Delawana Inn is still capable to meet the customer satisfaction with the current facilities it is offering. This is due to hospitality industry is a service-based industry that need to meet the customer’s preference. It is challenging due to the customer preference changes over time. Therefore, the need to increase the quality of services and continuously upgrading the facilities is required to stay profitable in the business in the long run.

4.0        THE PROTAGONIST

The protagonist in the case is Peter Grise. He is the co-owner of Delawana Inn. Based on the case, Peter Grise is responsible for the capital planning needs of the resort.

5.0        SITUATION ANALYSIS

Two analytical tools are used to analyse the situation which are critical success factor analysis and financial analysis – capital budgeting.

5.1        Critical Success Factor Analysis

The first critical success factor in the hotel industry is customer satisfaction. The underpinning competencies for this factor is providing multiple choices of room. Various choice of room for example double bed, king bed, connecting room, or junior suites is vital for Delawana Inn because now their target segment is the young couples and family whereas during the low season they are targeting the convention segment. The rooms available must be able to satisfy the accommodation needs to these customers. Next is that to achieve customer satisfaction, close monitoring of room and facilities condition so that everything will stay top-notch. Then the restaurant of the resort need to provide good quality food and beverages. This is as delectable cuisines can give optimum satisfaction to the customer and making it memorable. This would be an essential area since that Delawana is offering full service including the food and beverage. Next is that being responsive to customer complaints is one of the key to satisfy customer. For example, upgrade of room to the customer can make the customer forgive the shortcomings from the rooms that is being complained before.

        Next is the customer retention factor. It is a factor for Delawana Inn because repeat business and word of mouth accounted as much as 50% of the sales. Therefore, it need to ensure these customers would choose Delawana Inn as the favourite holiday destination. Among the competencies essentials is by introducing loyalty program for the customers. This would entitle them for discounts or special perks like free room upgrade. Program like this would create a strong relationship between the hotel and the customers. This is a shift from traditional marketing to Customer Relationship Management (CRM) (Ilieska, 2010). It would make them to think twice if they want to choose other holiday destination. Next is that the hotel need to monitor the customer preference and customer complaints so that the customer would feel like they are being attended personally.