Good Night Motel Case

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After analyzing the Good Night Motel case, we must take into consideration all factors before coming to an ultimate decision as to whether Justin McGregor should accept George Alward’s proposal to stay at the motel for half the regular rate during the weekend of the church convention. It is important to first look at the motel rates of competing independent motels in Grand Bend. We can see that the rates of the other high-end independent motels in the area are the same as the rate at the Good Night Motel. Although it does not state if this motel is high end in the case, we can assume that it probably is closer to a mid-range motel because it is 15 years old and has only 30 units. The Good Night Motel’s rate is higher than the other mid range and low-end motels in the area by $15 and $25, respectively. We can conclude that Good Night Motel’s rates are in fact higher than most other motels in the area. This may be a contributing factor as to why their occupancy rates had dropped 7-15 percent across all seasons of the year during 2008-2012. The increasing competitive environment and current economic conditions are critical factors in examining the motel’s performance. Recently, Good Night’s performance has slightly improved. The fiscal 2012 revenues increased to $389,150, a slight improvement compared to recent years but still not comparable to pre-2008 levels. 2012 marked the first time in 5 years that Good Night has made a profit but revenues are still predicted to remain flat for the next couple of years. This is not a good sign considering that competition keeps increasing and Good Night Motel’s rates are higher than its competitors. We must now decide if we should accept George Alward’s request to allow him to stay at the hotel for half the price of the regular rate. I believe that Justin McGregor should accept George’s request and offer him the discounted
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