The Inn on Cortes Island

The tourism industry in British Columbia has been growing rapidly over the past years thus making it quite possible for hotels within the hospitality industry such as Cortes In to enjoy more commercial success. As of the year 2000, the region had over 22 million visitors who raked in an amazing $ 10 million.Advertising We will write a custom assessment sample on The Inn on Cortes Island specifically for you for only $16.05 $11/page Learn More Additionally, the tourism mix of the district of British Columbia did not only come from locals but also from foreigners ensuring that demand is stable. Despite the fact that business opportunities did present themselves for those within the hospitality industry in Cortes Island, it apparently became difficult for those within the tourism industry especially inns such as The Inn on Cortes Island due to the threats on tourism industry that were brought by the 9-11-01 attack by terrorists that reduced tourist traffic. Issues of human resource availability and skill levels of those employees expected to serve within the industry also made it hard for the industry to flourish due to the perception jobs within that industry did not pay well. Additionally, the outbreak of SARS and the west Nile virus made it hard for the tourism industry to flourish. The Task environment within the Island was suitable and good for business considering that the industry raked in over $ 10billion annually. Vancouver was well known for its business expos and this had made British Columbia a respected destination in the tourism industry attracting millions of people especially during expos which brought the society together. The only form of political hostility arose from terrorism activities that followed 9-11 bombings. The availability of websites, DVD/CD technology available to customers meant that the customer experience was maximized. The task environment was thus highly favorable due to the fairly good political, economic and socio-economic culture that was good for tourists arriving from local and international destinations. The Hotel and hospitality industry within British Columbia was a free and fair industry in accordance with the principles of free market economy, meaning that just as Jonathan Armitage entered the industry since he had the capital, any other participant could to enter the industry. This fact made the threat of entry quite high within the market. Due to the fact that there were other many similar Inns and resorts in the region, some of which were in the high end and low end of the market this meant that consumers had a wider range from which they could choose from. Thus, making the business environment even more competitive.Advertising Looking for assessment on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Hollyhock retreat resort is one such resort that offered camping facilities which can serve as a substi tute for hotel rooms. Despite the unique ambience of the ICI, the presence of camping sites and Rustic dorm rooms have in some way increased the threat from substitute products because individuals who don’t opt to sleep in rooms may go to tents hoping to get close to nature. The product and service The Inn at Cortes Island is an establishment that targeted mainly middle income earners who paid somewhat average fees to enjoy their services (the average fee per room is $ 225 and $ 110 per cabin). These prices were found to be suitable for middle income earners who frequently toured the Inn and recommended it to others. The problem is that the price is too high for some target customers turning them away. The Inn had both rooms and cabin spaces facing the beach, Jacuzzi tubs, fireplaces, DVD/CD players for entertainment, and high quality linen in rooms, that were suitable for couples, tourists and even weeding events. Additionally, apart from offering sleep facilities the Inn al so provides local gourmets and exclusive food. The product design should also be differentiated for high end customers. The design of the room was quite cool because it was done by artists who ensured that earth tones were used to create an atmosphere of relaxation which was expected by the customers. In addition, the rooms and furniture ware fitted with high quality linen to ensure that the place looked good. The design of place has no weakness. The Inn used its website as part of their promotion tool and thus designed it properly. Additionally, the hotel depended upon word of mouth to promote its brand.ICI management also hired A media consultancy farm to create publicity for them occasionally. The current promotion efforts are not enough and should be more vigorous. Market segment The intended market of The inn Cortes Island was tourists and locals who especially fell under the middle class bracket of the economy who were searching for a unique spot that had the best ambience. Th e segmentation is good and highly attractive having no weakness. Other competitors within the Island were Hollyhock Retreat Resort and April Point, which provided high end services; also there were other many resorts and Inns in the Island which could provide services similar to ICI’s thus making competition stiffer. Because the Inn did not offer high end services it is bit of a disappointment for customers with high end needs.Advertising We will write a custom assessment sample on The Inn on Cortes Island specifically for you for only $16.05 $11/page Learn More The competitive advantage of ICI was the Inn had unique ambience and design, a good website and world-class cooks together with the availability of capital to expand the business. The Inn serves the affluent middle class who need to run away from the busy urban environment and go to the Island to watch and enjoy nature. Customers visiting this inn usually wish to have some peace and spend time with their loved ones. The technology The availability of a beautifully designed website has made it quite easier for the Inn to access its clients and serve them better. Also other technologies such as the availability of DVD/CD players for entertainment have ensured that guests who visit the place are well catered for in terms of entertainment. Management Jonathan is the sole shareholder and CEO the Inn. He decided to hire someone who would take the position of a general manager to ensure a smoother day to day running of the organization. ICI has its organizational structure divided into four main functional divisions, which include the front desk, housekeeping, maintenance and grounds, and food services each of this functional area is headed by an individual manager. At the beginning, the owner had decided to hire a mother and son team with the mother serving as the general manager while the son serving as the chief chef but the decision turned out to be a bad one the forci ng the owner to employ a more experienced and professional general manager, Edward Bourgogne. Upon his arrival the general manager put in place new systems and brought in a new chief chef Jackie Newcome, a move that saw improvement in the relationship and quality of work in the Kitchen. Investment-Pay Back Exit Plan The construction of the Inn was made possible by the help of loans and the forecasted Revenues are expected to assist the shareholder to repay the loans. The management forecast expects that approximately 70% occupancy rate of the Cabin throughout the year will be needed in repaying the loan. The bank current total loans have accumulated to $4.8 million, with the latest loan awarded to ICI being $1.8 million the current twelve-monthly principal and interest payments are expected to be around $38,700 per month, which will be spread across loan repayment schedule of 240 months. The business expects to make revenues of $2.2milion and this is expected to increase by 10% with in the following year although no profits are expected in first two years as the company is expected to start breaking even in the third year of its operations. This will ensure that the company repays its loans comfortably.Advertising Looking for assessment on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Tables Table 1. The Business Environment Opportunities Threats Political The resort was established after an approval was made by the local council, federal fisheries department and island trust The state supports tourism industry The September 11 incidence brought a decline of the number of tourists in British Columbia Economic The state puts tourism as a major source of the nations revenue totaling to about $10 billion from a total of 22.5 million overnight visitors Downturn in the economic position of the state reduces overall demand of services and products Societal The resort has established a reputation as being a family oriented resort Most residents residing in and around the result are frequent visitors The population present is small constraining the availability of staff People look at tourism sector with no good employment opportunities due to low pay Technological The resorts website provide quality and in-depth information to its c ustomers and aspiring visitors The media firm offers the resort an opportunity to avail information about the resort to the people for publicity purposes Not each person is conversant with new technologies Table 2. Industry Conditions Competitive Conditions High Neutral Low Threat of new entrants x Bargaining power of customers x Bargaining power of suppliers x Threat of substitutes x Intensity of competition x Key success factors Table 3. Financial Size-Up Strengths Weaknesses Profitability and Cash Flow: Has helped improve its dining room to fit in a world class menu It has also helped them estimate the expansion expenses needed Strains the relationship between the resort management and the banks Liquidity: Helpful for short term financial issues enabling the business meet its current obligation It can uncover the weaknesses in the financial position of the resort especially during bank scrutiny of the resort Stability : Indicates the strong interim profit performance of the resort The stability record may not be convincing to the banks due to poor timing for expansion plans Efficiency: Serves as standardized metrics to measure financial efficiency for investment opportunities Unexpected cash flow models may be used which will not much up predictions made Growth: the continuous interim performance of the Inn contributes to the need of wanting to undertake cabin expansion Constraints from financial sources hence intense scrutiny by the bank Table 4. Marketing Size-Up Strengths Weaknesses Market tactics Price Product Place Promotion The target market for the resort is the middle come earners meaning the place it quite affordable. It has a good reputation for food and beverage service. It’s situated along the richly stretched sandy beach with boldly well constructed rooms giving an earthling feeling that are featured with Jacuzzi tubs fire places dvd/c d players. In terms of product promotion, it has a media consultancy department that deals with publication for publicity purpose including a comprehensive website. Infatuation of the tourism industry leads to constant changes in the market especially in pricing Market analysis Segmentation Competition Competitive Advantage Customer Needs Its market segmentation targets the middle class hence affordable to many The resort is situated in a secluded area that is quite different from the urban environment It also enjoys an upscale world class menu for its clients Expansion plans will be an added advantage to the resorts competitors as it will attract more visitors The media consult department is a major advantage to the resort as it’s able to publicize to its target market. The poor cannot afford the resort facilities The product needs to be differentiated in market segmentation to provide high class customer services. Market strategy execution The strateg y was executed properly through positioning and segmentation giving ICI a good and definite market which it intended to serve. The management could have been more vigorous on implementing the strategy by launching more serious comprehensive campaigns. Table 5. Operations Size-Up Strengths Weaknesses Operations process Business operation are well managed hence the constant profit result Lack of organized and permanent staff Members Risk management issues The expansion plan is seen as A major project that will increase the number of visitors coming to the resort Its expansion plan is a risk taking step Legal issues Do not exist Do not exist Location issues Its strategic position creates a Good environment that is peaceful and fresh as compared to the city life Less staff for the resort due to low population size Use of technology Gives comprehensive information about the resort. Provides entertainment opportunity to the visitors Not each person is conversant with new technologies Table 6. Human Resource Size-Up Strengths Weaknesses Human Resource function Recruitment and Hiring Training and Development Compensation, Performance and Incentives Staff hiring and training was at first done quickly To retain staff members staff housing was a benefit for all staffs Employment of an individuals with decent leadership skills and with good interpersonal skills stabilizes staff relationship The rural location of the resort encounters low population for hiring staff members Most people discriminate the tourism sector because of its low payment Recruitment of employees is low due to small population size Leadership issues Organizational Structure Skills Development Teams and Teamwork Management Capabilities Its headed by a CEO who is the owner of the resort Besides the CEO, the resort has a general manager overseeing everyday operations including departmental managers Every staff membe r has to undergo training to develop their skills The resorts departments are divided into four each headed by a manger. The manager becomes the team leader of the department The resort was first run as a family â€Å"family team† which later became a problem Staff members do not stay on permanent basis Table 7. Technology Size-Up Strengths Weaknesses Technology concept and product Introducing DVDs/CDs was a good move to keep the visitors entertained just like in the urban areas. The concept of their comprehensive website provides quality information about the resort to those who visit it for any queries Not each person is conversant with new technologies Intellectual property issues Its competitive nature has increased the resorts ability to provide high value-added products and services at competitive price It Details company’s past experience to prove that the resort can execute on the opportunity It is not easy to put the company to b ank scrutiny Potential risk factors Expansion plans are promising to the growth of the business The expansion plans will have to surpass the internal challenges especially in the human resource department Table 8. Expansion decision Rationale and Risk Assessment Financial risk: Mitigated by: Financial planning, whereby the management laid out a good loan repayment schedule that would take close to 20 years to repay the loan easing stress on the shareholder. Market risk: Mitigated by: Developing a marketing mix that appeals tom customers and is up to date with competitors ensuring that ICI is more likely to succeed in the market Operations risk: Mitigated by: Hiring a good operations manager that is able to manage the employees and the heads of all, other department thus reducing conflict and enabling smooth flow of day to day activities. Construction risk: Mitigated by: By planning the entire construction process and assigning roles clearly to construction pe rsonnel in order ensure construction is according to schedule. Management risk: Mitigated by: Hiring qualified managers in all functional areas and hiring a professional operations manager to oversee management of the entire organization. This assessment on The Inn on Cortes Island was written and submitted by user Shiny Magpie to help you with your own studies. 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