American Motel: Case Analysis
Lauren Sauls should join the Days Inn franchise. The Days Inn franchise deal will allow Lauren’s American Motel to be a part of the large chain while keeping the management control. With the Days Inn franchise, the American Motel will become a part of the chain of national and international reservation system; get managerial assistance to standardize hotel facilities and procedures. Through the Days Inn franchise, Lauren will also have the rights to purchase supplies through the chain suppliers, getting advantage in price and quality.
In addition, it is important to note that many business travelers attach more importance to brands than to star ratings. This implies that even with as low as $65 charges per night a great number of customers will still drive in, look around a bit, and drive off without registering. This is because 66% of business travelers say that recognition of a hotel brand either has a great deal or fair amount that influences their decision to use a hotel. The Days Inn brand will promise the customers certain things they can expect.
The Days Inn franchise deal is more appropriate to Lauren because it will cost around $12,000 for the computer and reservation system as compared to Holiday Inn, which costs more than $500,000. Also based on the $75 charges per night Lauren will still maintain her market segment while at the same time operating under a bigger and well recognized brand. Days Inn has over the years reported that a significant proportion of its guests are seniors. Lauren will have a competitive advantage over the other resorts in the area because the American Motel under Days Inn franchise will attract the economy segments that are aimed at rate-conscious consumer groups such as retirees.
The franchise will enable Lauren to pursue a focus strategy through differentiation, cost leadership and best value. Staying ahead of the competitors in service development requires constant innovation Also, it is essential to realize that Lauren’s target clients highly appreciate the products and services combined by aspects of Days Inn. The economy sector targeted by American Motel has undergone an extraordinary growth during the previous years, offering their customers basic comfort at a somewhat low price, which results in a high rate of perceived value to consumers.
In conclusion, Lauren should note that service unfortunately has nothing tangible to show. The guests will leave the hotel with only the memories of their experiences. Despite joining the Days Inn franchise, Lauren should try to create an image of their service that is powerful, clear and precise. The hotel’s excellent service becomes an instantly recognizable feature of American Motel. Lauren must ensure that this brand’s image provided by Days Inn is sustained by all hotel staff through their commitment to service excellence.