Case 3 – Sleep Easy Motel
Eng Huang purchased the Sleep Easy Motel, 2 years ago. The motel occupancy is at approximately 55
Percent capacity, far below the average of 68 percent for this motel classification, Motels without
Restaurants. Eng Huang is faced with a decision whether to make minor changes to his motel or to join
with either the Days Inn or Holiday Inn motel chains.
Sleepeasy is approximately .5 of a mile off the provincial hwy, on the edge of a small town, which is
roughly 22KM from an expanding tourist resort destination.
The tourist area already contains several franchised full-service motels, Best Western, Ramada, and a
Hilton Inn, There are also a few lower priced motels and bed and breakfast facilities.
During Eng Huang’s career as production manager, he spent time travelling, staying in many hotels and
motels, he felt he had an idea of what travelers wanted. His intent was to provide a low cost, standard
facility, with comfortable beds and free cable.
The only form of advertising for the motel is a large sign on the side of the Highway, promoting the
tourist destination and a few smaller signs, indicating there is gas, food, and accommodations, by form
of symbols. Eng Huang has been relying on people finding his motel as they go towards the resort area.
A recent study conducted by the regional tourist bureau indicated the following information
1) 68% of the visitors to the area are young couples or older couples without children
2) 40% of the visitors plan their vacation and reserve rooms more than 60 days in advance
3) 66% of the visitors stay more than 3 days in the area at the same location
4) 78% of the visitors indicated the recreation facilities were important in their choice of accommodation
5) 13% of the visitors had family incomes of less than $27,000 per year
6) 38% of the visitors indicated that it was their first visit to the area
Operating motel at a profit loss.