Reference no: EM132259920

Assume that you are the general manager of a hotel located on a tropical island. The hotel is situated along a beautiful stretch of beach and is one of six large resorts in the area. The hotel, owned by a group of investors, is one of the oldest on the island. For several years, the hotel has been operated as a franchise unit of a large international hotel chain, as are all of the other hotels on the island.

For the last few years, the hotel's owners have been taking most of the profits for themselves and putting relatively little back into the hotel. They also have let you know that their business is not in good financial health; the money earned from your hotel is being used to offset their other loses. in contrast, most of the other hotels around you have recently been refurbished and plans have been announced to build two new ones in the near future.

A team of executives from franchise headquarters has just visited your hotel. The executives expressed considerable disappointment in the property. They feel that it has not kept pace with the other resorts in the island. They also informed you that if the property is not brought up to their standards, the franchise agreement, up for review in a year, will be revoked. You see this situation as potentially disastrous since the hotel will lose its Brand Name access to the franchisers' reservation system and so forth.

Sitting alone in your office, you can identify several variable alternatives:

1) Try to convince the owners to remodel the hotel. You estimate that it will take $5 million to meet the franchiser's minimum standards and another $5 millions to bring the hotel up to the standards of the top resort on the island.

2) Try to convince the franchiser to give you more time and more options to upgrade the facility

3) Allow the franchise agreement to terminate and try to succeed as an independent hotel

4) Assume that the hotel is going to fail and start looking for another job. You have a good reputation, although you might have to start at a lower level with another firm (perhaps as an assistant manager).

Tasks:

1) Rank the four alternatives in terms of their potential success (make assumptions as appropriate)

2) Identify other alternatives which are not already noted.

3) Prepare a Plan with your decision-makings in reflection to the Hotel's situation and to your self-interests' protection.

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Words: 1500-1700