Mr Smith is the owner of Sweet Dreams Motel in Far North Queensland. He owns the property since four years ago and he is not happy with the occupancy in the motel which only 50% year round while the other property can reach to 68% occupancy rate. Mr Smith believe his property have some strengths especially if we look at locations, large grounds, cheap rate, and room size. But he also aware of some weaknesses issue in the property such as: no television units in the bedroom, less attractive grounds, very little promoting activities and no restaurant services in the premises.
In order to increase the occupancy rate , there is still some positive external factor to consider of such as : the needs to install the entertainment unit in the rooms, opportunity to construct the landscape to become more attractive, and a options to increasing the room rate. This case study will try to provides an overview to Sweet Dream motel current status in the market, a summary of products, competition and distribution analysis in challenging market opportunities. It will be a brief summary of internal strengths and weaknesses compare to external threats and opportunities for Sweet Dreams motel.
2. Situational Analysis
This case study is driven by a need understanding of how to make a better of improvements for Sweet Dreams motel in Far North Queensland to achieve a higher occupancy rate and stable growth in the future. In addition of how to increase the performance, this study will also look at internal and external factors that shape in SWOT analysis, market objectives, focussed target market and marketing mix. An explanation of current market analysis and overview of competitor and distribution process. The last part of this study is the a review of how the feedback will be measure to make sure the proposed of marketing strategy can be achieved.
2.2 Product, Competition and Distribution Analysis
The Sweet Dreams Motel is a very basic low-cost accommodation located in popular tourist regions in Far North Queensland. There a some similar motel facilities in the area as well as some five-star hotels. The location is near to beach, shops, takeaways, restaurants and some additional attraction, but the scenic around the motel is described as less attractive. The environments in the premises is also consider as less appealing, because nothing special, only a huge area covered with grass. The property contains of 40 units and so far they can achieved 50% tenancy year round. Mr Smith have been running the business for four and he can assure that they have some regular customers who stay there every holiday periods.
Sweet Dreams provides the rooms with tea-making facilities and he also supply breakfast to the rooms with some little extra charges. The rooms in the motels does not have a lot of features, no TV, no internet or Wi-Fi, no microwave, no bathtubs only shower, no room options and no kitchenette. Local statistic shown that the average occupancy rate for other properties in the area is 68% and the average stay in the area is 3.8. He also notice that there is a significant increase of visitors from overseas, and also local families and couples. Mr Smith does some advertisement in local tourist guides and holiday newspaper. He rarely attend the meeting of local tourist committee because looks like he is too busy managing his property.
2.3 SWOT Analysis
The following table is a summary of Internal factors of strengths and weaknesses and , external factors for opportunities and threads for Sweet Dreams motel.
A. Internal factors
Strengths (S)| Weaknesses (W)|
Located in a high traffic resort town| Lack of features : no TV, no Internet/Wi-Fi| Near the beach and main attractions| Low tenancy rate| Close to good restaurants and takeaways| Empty and unappealing grounds| Very affordable price, only half from similar competitors| Fail to sell on the spot, because some people has drive in and have a look but then leave| Big rooms ( able to accommodate family)| No restaurant service in the premises| Large and open sites | The motel name is not attractive|
Lot of rooms available | Lack of advertising and only local | Clean premises| No strong relationship between owner and local tourist committee | Breakfast service available | No strong relationship with local shops, restaurants and takeaways near the hotels| Good relationship with some loyal customers| Low rate could give an image of low quality| | |
B. External factor
Opportunities (O)| Threads (T)|
Improve the ground site to make it more interesting| Potential failure if occupancy not increased.| Establish the TV connection| Similar product in the market with better price, better premises.| Establish the internet connections | Downturn in economic that can affect to holiday expenditure| Add outdoor features : BBQ and picnic area, kids swimming pool, mini golf (if it not too costly).| | Increase the rooms rates | |
Build the marketing network with local and international | | | |
From the above analysis, the business can achieve the better result if they are able to use their strength to take advantage of the opportunities. And to assess the weaknesses and threats before it make impacts on company goals. The strongest points for Sweet Dreams will be the location, good relationship with the repeat customers, and their price. They have opportunities to upgrade the premises, do some research from the repeat customers and apply the result to make some improvements, and if possible they still can increase the price to get it in line with buyer perception because their price is below the market price. The main weaknesses are the low occupancy rates, near to ground advertising activities, and unappealing premises. They must be very careful in implementing some new improvements because Sweet Dreams facing the threads from a lot of competitor in the market, the economic is on the down turn or it is not very promising and they still haunted by the possibility of less occupancy in the future.
3. Marketing objective
Having analyse the potential strengths and weaknesses, I have decide the marketing objectives for the Sweet Dreams motel will be: 1. To increase the occupancy rate from 50% to 80% in one year period 2. To develop the landscapes and adding some new facilities in the premises to make it more beautiful, appealing and draw people attention on the spot, with appropriate budget line. We are expecting from number of people who drive in and have a look, 50% will stop and make booking right away.
3. To increase the advertising activities, from local area only into more widely scope of advertisements. I think it is the time for Mr Smith to do partnership with international and online booking agency, such as wotif.com, agoda.com, lastminute.com.au, booking.com, expedia.com. etc. I believe the information about the motel is hard to find by interstate and international travellers because Mr Smith only done some local advertising. 4. To established a small coffee shop in the premise in the year ahead, so we can serve the guest with drinks, ice creams and some light lunches and also to make profit from people that roam around in the surroundings. 5. To launch a new name for the motel, I would like to put Motor Inn in the name. Because the future the target market will be domestic tourists who travelling with car. The large open ground is the main idea behind this name launching
4. Target market.
I am suggesting Mr Smith to focused on 3 target market groups so the motel management can be concentrated to have a cost-effective marketing activities and each target market recreational needs. 1. Family travellers from local areas.
As we know the Far North Queensland region is neighbouring to some local mining towns in Central Queensland. People that living in these mining towns is considered as highest earning in the regional’s and they are crave for some good places to have a quality time with family and maybe friends or just normal short getaway, since the area they are live in cannot offer much to residents due to the locations near the mine site. With the less traffic in to Far North Queensland, a family with kids can easily get into the cars and drive to North region rather that spend long hours of driving to Brisbane or take the plane to short getaway in Sydney or Melbourne.
2. Grey Nomads and the people who travel with recreational vehicles By quoting the online dictionary, Wikipedia: ‘A grey nomad is someone who is 55 or older and is taking a long term camping trip around Australia. Although they may travel in lots of different kinds of rigs such as motor homes, caravans, camper trailers and tents, grey nomads can be characterised by their sense of adventure, humour and their camaraderie. The grey nomad is an exact picture of the demographic trends in Australia that has been acknowledge as an ageing population (Rix , 2011, p.46) I believe the grey nomads have made some essential economic contribution to regional tourism in Queensland.
Because statistics number has shown: * Queensland received 4.5 million mature age visitors from around Australia in 2009, representing a two percent increase on 2008. * The drive tourism market accounts for approximately 70 per cent of the overnight leisure market in Queensland. * Grey nomads are important to the commercial camping and caravan park industry in Queensland.. * By 2021 there are expected to be 9 million Australians over the age of 50 , and tourism forecasts predict that senior travellers will increase their contribution to the RV industry in the future as the baby boomer generation begins retiring
The growth of the budget travellers market has created a demand for inexpensive accommodation that is of a reasonable standard, safe, clean and value for money. Budget travellers usually seek accommodation in the hub of a town/city or in close proximity to sites and attractions. The budget travellers may be attracted by the opportunity to stay in remote and picturesque locations that offer an alternative tourist experience, but unless there is available public transport and good promotion, they are unlikely to find their way in sufficient numbers to such spots. As Mr Smith believes, there is always a need for a low-cost family accommodation amid the luxury and the beauty of the area. I strongly believe with the strong Australian currency at this moment, a lot of overseas travellers will adjust their holiday recreational needs rather than delay it. I also consider the fruit-picking workers from neighbourhood regions can be include into this target market group.
5. Marketing Mix
5.1 Marketing mix for family travellers from local areas.
Location is the strongest point for Sweet Dreams motel, because Far North Queensland has known as one of the main holiday destination in Queensland. Sweet Dreams motels can benefit from family travellers by offering the large rooms and their ability to provide the catering for the guest. Price will not be the biggest concerns since the rate in Sweet Dreams is already cheap For the loyal customers who come every holiday period, we can get the idea about the motel quality, because they must be coming not only for the price. Customer will not stay loyal if they receive different levels of satisfaction each time they buy. (Rix, 2011, p.325) For the place features, Mr Smith will need to make some improvements in order to draw people attention to stay in the premises.
To build a small playground in the premises will be a good idea, to install TV and microwave in the rooms is also a must and set up internet connectivity is highly recommended. So while the rest of family explore the region, the father still can connect to his office and check up for updates. In this typical family travellers, the booking usually made by the mother so it is important to send the message that Sweet Dreams motel has done everything to make the property become the safest place for the kids to have fun and rest. It is also advisable to do some advertise in local television network, women magazines and women websites. One common practise that I used to see while living in the regional area is fridge magnet promotions. Sweet Dreams motel can insert this little stuff in the mailbox at potential the target market area, or put them for free in the hair salon shop, nails salons, malls, boutiques, cafe, restaurants and even home appliances shop.
5.2 Marketing mix for the grey nomads (with or without caravan) Base on my experience travelling to some local tourism areas in Queensland I can see that the older population is one of the potential target market tourism industry. The grey nomads want safe, inexpensive accommodation to stay after some long hours driving and also to keep socialised with the community and spend some time to explore the regions. They are looking for a basic accommodation because for some with the caravan they have everything already packed with the vehicles. If they feel welcome and enjoy the local attractions they probably will spend a few more time in the property.
And price will be a main consideration to this group, also they will look up for some facilities during the stays such us banking and car repair, good quality food or restaurant or cafes to refresh the day after several days with the camp-style food. Price promotions like book for two nights and the get one free night will work for this group.
Large parking space is essential for them and also the quick, easy booking will be consider as the important factor as well as the warm-welcomed greeting from the owner or the reception. There is a challenging of opportunity with this type of travellers since they are communication with the same group in the community. If they are happy with what they get from the Sweet Dreams, the world of mouth will be spread to the community. And it might be the cheapest promotional tool we can rely on. Since the demand for recreational vehicle tourism is also come from overseas, especially China in the future, it is recommended to include the RC tourism information on Sweet Dreams website in some different languages such as Mandarin, Japan, German, Italy and French.
5.3 Marketing mix for budget travellers
Budget travel is not about travelling on as little money as possible. But it is about travelling with prioritize spending, getting the best value for the money and create the best travel experiences.(Branham, 2009, [online] Available at http://www.budgettraveladventures.com/traveltips/budgettravel/what-is-budget-travel/) Because travelling is not for wealthy people only and the budget traveller puts customer value as the main concern.. The budget traveller normally plan ahead, they normally do some little internet research about their next vacation destination. So it is important for Sweet Dreams motel to be exist in the internet world. The budget traveller will look for the best deals they can ever get from the similar accommodation in the market such as : discount on motel, free coupons especially for meals , free entry ticket to the tourist attraction, or extra night free in the package deals.
The budget traveller if they have kids, will bring the kids to parks rather than mall and cinemas. It is essentials for the staff to have a common knowledge of your area, history and attractions, locals activities or may be local events event so this information can be delivered to the target market. It is essential to give some detailed information in the motel’s website to draw budget traveller’s interest. They are likely want to know about the public transport choices from and to motel. Free Wi-Fi connection on the spot, affordable local takeaways, where the outlets shop, where to get the best deals for souvenir etc.
The last thing to consider for Sweet Dreams motel marketing process will be the feedback or evaluation. Plans need to be monitored and evaluate regularly. Review on your marketing plan will help the management to be more prepare and more realistic to achieve the future goals. There are some ways to measure the performances of the marketing plan and these are knows as marketing metrics. Peter Rix explains marketing metrics will figure the changes in (Rix, 2011, p.529-530) : Market size = Total market annual sales
current year sales – previous year sales
Market growth rate (%) = ————————————————– X 100%
previous year sales
Market share (%) = ——————————- X 100%
total market sales
And this is some tips of how Mr Smith can make an effective monitoring working : * Establish a budget and commit to it.
* Stick to a reasonable amount of time.
* Watch the revenue and know your new customer activity * Get feedback from the customer, friends, local tourist committee, business
associates and employees
The main findings for Sweet Dreams motel are :
* The need to improve the motel appearance
* The needs to add some facilities to the property, such as : TV instalments, internet connection, kids playground * The need to build a strong relationship with local tourist committee and set a distribution channel with international hotel booking networks * Lack of advertising activities
Conclusions and recommendations :
* To maintain the quality, the comfort of the rooms, the cleanliness * Add extra facilities to the property as mentioned before to established a small coffee shop in the motel * Customer needs is always change from time to time, so Mr Smith should be flexible with what’s to offer and open to any new global issues * Set up the loyalty cards because the motel already has some repeat customers * Develop a fast and efficient booking and check in process. * Do more advertisement activities. Promotion on social network such as Facebook, Twitter and Instagram is highly recommended because it is very simple, doesn’t take a lot of effort, cheap and it is direct to the customers * Always remember customer value = Bundle of benefits delivered to customers
Branham J, 2009, What is budget travel?, Available at http://www.budgettraveladventures.com/traveltips/budgettravel/what-is-budget-travel/ (Accessed: May 8, 2013) Grey Nomad Australia, What is a Grey Nomad [online] Available at http://www.greynomadsaustralia.com.au/index.php?option=com_content&view=article&id=86:what-is-a-grey-nomad&catid=35:articles-page&Itemid=18 (Accessed May 8, 2013) Kotler P, Adam S, Brown L, Armstrong G,2006, Principles of Marketing, 3rd Edition, Prentice Hall, 2006 Lane W, Reference