Evaluate Tristan Knaus’ present strategy. What should he do?

Explain. Tristan Knaus is trying to decide whether he should make some minor changes in the way he operates his Quiet Night Motel or if he should join either the Days Inn or Holiday Inn motel chains. Some decision must be made soon because his present operation is losing money. But joining either of the chains will require fairly substantial changes, including new capital investment if he goes with Holiday Inn.

Tristan bought the recently completed 60-room motel two years ago after leaving a successful career as a production manager for a large producer of industrial machinery. He was looking for an interesting opportunity that would be less demanding than the production manager job. The Quiet Night Motel is located at the edge of a very small town near a rapidly expanding resort area and about one-half mile off an interstate highway. It is 10 miles from the tourist area, which has several nationally franchised full-service resort motels suitable for “destination”

vacations. There is a Best Western, a Ramada Inn, and a Hilton Inn, as well as many mom-and-pop and limited-service, lowerpriced motels—and some quaint bed-and-breakfast facilities—in the tourist area. The interstate highway near the Quiet Night Motel carries a great deal of traffic, because the resort area is between several major metropolitan areas. No development has taken place around the turnoff from the interstate highway. The only promotion for the tourist area along the interstate highway is two large signs near the turnoffs. They show the popular name for the area and that it is only 10 miles to the west. These signs are maintained by the area’s tourist bureau. In addition, the state transportation department maintains several small signs showing

(by symbols) that near this turnoff one can find gas, food, and lodging. Tristan does not have any signs advertising Quiet Night Motel except the two on his property. He has been relying on people finding his motel as they go toward the resort area.