Sleep-EZ Inn Case Study

Sammy and Bennie Jones have recently purchased the Sleep-Ez Inn, a 40-unit no-frills hotel located in a major Minnesota resort town. The hotel is located in the less scenic part of town and is not near the epicenter of town, but it is just a 10-minute drive to the beach, restaurants, shops and other attractions.

Sammy and Bennie firmly believe that there is a need for this style of low-cost family accommodation amid the luxury and beauty of the area. The area has many luxury options, but is lacking accommodations for budget-travelers and larger families. The rooms in the Sleep-EZ Inn are large, family-style rooms. All rooms are equipped with one queen size bed and two sets of bunk beds, allowing for up to 6 people to sleep comfortably. The rooms are very basic with a small bath, small TV with basic cable (no streaming or games), and a coffee maker and room prices at the Sleep-EZ are less than half of what other hotels in the area charge.

The hotel has a small pool that desperately needs renovation. Although there is plenty of room for future expansion, the grounds are fairly bare with minimal landscaping. Sammy and Bennie are considering updating the pool area with a water slide and hot tub, as well as adding a playground and outdoor games. They know these amenities will be attractive to families, but also know that they require a significant investment into the hotel.

Currently the hotel does not allow pets; however, they have noted that many people inquire about the hotels pet policy, and research indicates that many families desire to bring their pets with them on vacation. They are considering allowing pets at the Sleep-EZ, but know that pets might cause bigger messes and could potentially cause damage to the property.

Currently, the hotel does not offer any breakfast options. Sammy and Bennie have considered providing a free continental breakfast or a low-cost breakfast option for guests. In order to do this, they may have to increase prices to cover these costs and they are unsure if customers are willing to pay a higher price. Additionally, they would need to hire additional staff to provide this service, and it is already difficult to find good employees.

The hotel has also been struggling with occupancy. They have some regulars who come multiple times per year, however, occupancy is only about 50% year-round and they know from the local tourist office that the other properties average around 75% occupancy year round. The previous owners did very little advertising mainly because they thought word-of-mouth was the best form of advertising. Sammy and Benny know they need to increase their advertising but are unsure of the best places to promote their hotel. They have become members of the local tourist committee and receive the local tourism statistics. Based on these statistics, they know the average stay in the area is 3.8 nights. The data indicates that most individuals visiting the area are from the Twin Cities metro area; however, the area is seeing an increase in visitors from Wisconsin, Michigan and North Dakota.

Data from the tourist committee also indicates that the area has seen a 5% increase in visitors in the past year, and some new attractions are coming to the area. A nearby hotel is installing a large water park that will be open to the public. Sammy and Benny think this might be a great attraction for their guests but are also worried their guests may choose to pay more and stay at the hotel with the waterpark. Additionally, the city is constructing a new biking and walking path that will go from a park near the Sleep-EZ Inn, wind along the lake, and end downtown. This will be a great option for guests who enjoy hiking and biking. Sammy and Benny have even thought about purchasing bikes for their customers to rent so they can bike downtown, rather than drive.

Sammy and Benny know they need to do something to increase their occupancy but are unsure what. They have hired you to conduct a SWOT Analysis and provide them with recommendations on how to move forward.

• Identify the strengths, weaknesses, opportunities and threats of the Sleep-EZ Inn. Plot these in a SWOT analysis
  • What should the hotel continue to do (i.e. keep), based on their strengths?
  • How can the hotel overcome their weaknesses?
  • What can the hotel do to exploit, or take advantage of opportunities in the external environment?
  • What can the hotel do to neutralize threats?