Case Study 1: Package Deal at Hotel Progeny Hotel Progeny is a 420-room, full-service, upscale downtown hotel in the heart of a major metropolitan area in North America. The hotel offers meeting and con- 140 Chapter 10 vention facilities, a spa, and an underground parking garage. The hotel also has a steak house, an Irish pub, a cafe, and a business center. Each well-appointed guestroom is equipped with in-room safety deposit box, flat screen HD TV, coffee maker, hair dryer, and iron and ironing board. High-speed wireless Internet access is also provided throughout the hotel. The best available rate (BAR) on weekends is $160. About 80 percent of the hotel's clientele is made up of business travelers, who spend on average 1.8 nights per stay. The remaining 20 percent comprises leisure travelers, who stay 1.2 nights on average at the Progeny. The hotel has experienced somewhat softer demand this year compared to the previous year, as did all hotels in town, although a rate increase did not encounter measurable resistance. At a weekly revenue meeting, the discussion focused on generating demand through package offerings. There was consensus around the table that a creative, appealing, and well-targeted bundle could help increase demand. Teams of sales and marketing, front office, and revenue management employees cooperated to develop the following two package proposals. The Director of Rooms is convinced that only one of the two proposed packages can be introduced at this time. Package A: Target: Pleasure travelers. Pitch: Getaway weekend for the family. Two-night package at the Progeny: Arrival Friday any time after 3 r.M., departure Sunday with guaranteed late check-out time up to 4 P.M. at no charge. Room rate: 40 percent discount off BAR, complimentary breakfasts on both Saturday and Sunday. Kids under 12 stay for free in their parents' room. The offer includes complimentary parking and one complimentary inroom pay-per-view movie, plus a 50 percent discount coupon for one spa treatment over $80. Free local calls, unlimited Internet for $9.95/ day, Package B: Target: Business travelers. Pitch: Extend your stay with a fun weekend. The package: Add a Friday and a Saturday night to your business trip and get 30 percent off BAR. Offer includes complimentary breakfast for each night, free parking, free unlimited Internet and free unlimited in-room pay-per-view movies. Buy any spa treatment over $80 and get the neat one free. Discussion Questions 1. Which package has more revenue potential? 2. Which target customer generates higher room revenue? 3. Which package has the potential to generate higher food and beverage rev enue? Higher spa revenue? 4. Which offer creates higher value perception