Introduction
Pacific Trails Resort, a luxury resort located on the west coast of Vancouver Island, is struggling to maintain profitability. In chapter 6 of the case study, the management team is faced with a dilemma of whether to expand the resort or not. This article will examine the factors that led to this decision and the options available to the management team.
The Current Situation
The resort has been experiencing declining revenues and occupancy rates over the past few years. The management team has been trying to find ways to increase revenue and attract more guests to the resort. The team has identified two options: expand the resort or focus on marketing efforts to attract more guests.
The Expansion Option
The expansion option would involve adding more cabins, a restaurant, and a spa to the resort. This would require a significant investment of capital and would take time to complete. The management team believes that this option would attract more guests and increase revenue in the long run. However, there are risks associated with this option, including the possibility of not attracting enough guests to fill the new cabins and the increased competition in the market.
The Marketing Option
The marketing option would involve increasing the resort’s presence online and in the local community. This would require a smaller investment of capital and could be implemented quickly. The management team believes that this option would attract more guests to the resort in the short term. However, there are risks associated with this option, including the possibility of not being able to sustain the increase in occupancy rates and the increased competition in the market.
The Decision
After careful consideration of both options, the management team decided to pursue the marketing option. The team believed that this option would provide a quicker return on investment and would allow them to test the market before making a significant investment in expanding the resort. The team also believed that by increasing the resort’s online presence, they would be able to attract more guests and increase occupancy rates in the short term.
The Results
The marketing efforts implemented by the management team were successful. The resort’s online presence increased, and the resort was able to attract more guests in the short term. The occupancy rates increased from 60% to 80% within six months of implementing the marketing efforts. The management team believes that the marketing efforts will continue to attract more guests to the resort in the long term.
Conclusion
The management team at Pacific Trails Resort faced a difficult decision in chapter 6 of the case study. After careful consideration of both options, the team decided to pursue the marketing option. The marketing efforts implemented by the team were successful, and the resort was able to increase occupancy rates in the short term. The team believes that the marketing efforts will continue to attract more guests to the resort in the long term.