Solberri case Essay

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Introduce Solberri operated in the hotel industry with the leisure travelers as their main customers. After many years of making losses, Solberri has finally turned its business around to be profitable. However, there are still many issues facing Solberri and the industry itself is in the beginning of a downturn. The industry After 9/11, and the following worldwide economic downturn, hotel groups performed poorly. Recent years have seen booming worldwide economies ensure high occupancy levels and increasing profitability. As a result, many have expanded, both the number of hotels, the quality and availability of facilities offered. But the industry is now entering another downturn (The broad industry environment is summarized in a PEST analysis in Appendix 1). This leaves Solberri in a vulnerable position. This downturn is also reflected in stock market valuations of hotel groups. And one trend of note sees an increase in the number and quality of spa facilities. With increasing supply of new spa hotels and the credit crunch, how can Solberri maintain this turnaround and increase profitability? Key issues There are a number of issues facing Solberri, some of them are key issues as they are either in need of an urgent response or with a significant impact on the company. We list them on the priority we think should be consider: 1. The financial director resigns 2. The need to keep the occupancy rates and earnings generated from extra charges to hit the forecast revenue for 2008. 3. Fall in spa revenues at one “premier” hotel 4. Poor customer experience and quality management programme. 5. How the cash generated from operations for the financial year ended September 2008 could be used. 6. The poor share price and vulnerability of Solberri 1. The financial director resigns This issue is identified as a key issue because the financial

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