1. What should Douglas Hall do for the coming season? For the next year? 2. What are the implications for the future of tennis at Playa Dorada Resort? Consider the following: Douglas Hall understands he needs to tackle both court capacity and price structure. The tennis facilities are at full capacity in March and April and near capacity in January and February. 287 housing units are scheduled to complete in the next 12 months which will result in the amount of guests to increase by about 50%. Guests have expressed their concern of peak playing hour time unavailability (9-11, 4-6). Playa dorado has been marketed as a Tennis hot spot and many guests have an expectation of playing tennis. Issue 1: Expense of preferred court type To maintain guest satisfaction and their continued frequency it is it seems important to get more courts, albeit at their expense, which might be a net loss the company as they will predominantly be used during peak months. Each guest should have a chance to play tennis for 1 hour a day, according to policy. Clay surface courts are more desirable that hard-surface courts, but more costly to buy upfront ($48, 000 each additional clay court). Issue 2: Lack of space There is only room for 4 courts, so a new facility will have to be built and therefore staffed. Issue 3: Douglas is dealing with multiple divisions with competing and separate interests. - Marketing and Sales Is encouraging hall to build more courts to promote PD tennis services, build a $100000 pro shop and club house and hire pros. Finance is interested is ROI and cash flow which is a challenge because there is no more room for more courts. Fixed costs are high and court operations won’t be able to contribute cash flow anytime soon. Development needs the courts to look cohesive and fit with the rest of the site and for optimally effective usage of land. Corporate management thinks that the expansion strategy will help with the rest of the resort’s operations who face similar seasonal demand issues. They are hoping for methodology to be developed for the rest of said divisions. Executives view tennis as an integral part of resort activities. Even though resort operations have not yet been profitable, management believes that tennis is a large part of the development plan, expecting a 25% contribution to profits. Douglas must shift demand for tennis from peak to off-peak periods, build more courts, or come up with another strategy that satisfies departments, creates value for stakeholders and looks towards future success of Playa Dorada Resort. From March 2007 to March 2008 the capacity utilization rate will be as follows: March 2007: 27 / 23 * 100% = 117.39% April 2007: 25 / 23 * 100% = 108.69% March 2008: 67 / 23 * 100% = 291.30% April 2008: 60 / 23 * 100% = 260.87% These numbers show that the future projected demand of tennis courts will significantly exceed the currently existing amount of available courts. Especially the projections for March and April 2008 show that a detailed plan for an expansion strategy is more than required as the demand for courts will rise rapidly. ------- Our ideas outside of tennis industry at Playa Dorada: Florida’s resort occupancy was still the highest out of any region in the US, is there something outside of the tennis market that could satisfy all departments and visitors? Couples like to vacation there. Maybe there could be a more couple-y retreat area with less emphasis on the clay courts, more on couple and spa activities, such as quiet outdoor couples massage places, fewer structures to build in some way when considering expansion. Parties spend at least $120 on property in addition to the rental and occupancy with 4.2 activities per day. In addition to tennis: dining, shopping, nature walks, swimming, and golf. Outside activities that the guys enjoy are sightseeing, fishing, sailing, horseback riding, and shopping for real estate. Could they use this for excursions that the hotel could charge for? Like a package that includes guided golf and beach tours.
Operation management
1. What should Douglas Hall do for the coming season? For the next year?
2. What are the implications for the future of tennis at Playa Dorada Resort?
Consider the following:
Douglas Hall understands he needs to tackle both court capacity and price structure. The tennis facilities are at full capacity in March and April and near capacity in January and February. 287 housing units are scheduled to complete in the next 12 months which will result in the amount of guests to increase by about 50%. Guests have expressed their concern of peak playing hour time unavailability (9-11, 4-6). Playa dorado has been marketed as a Tennis hot spot and many guests have an expectation of playing tennis.
Issue 1: Expense of preferred court type To maintain guest satisfaction and their continued frequency it is it seems important to get more courts, albeit at their expense, which might be a net loss the company as they will predominantly be used during peak months. Each guest should have a chance to play tennis for 1 hour a day, according to policy. Clay surface courts are more desirable that hard-surface courts, but more costly to buy upfront ($48, 000 each additional clay court).
Issue 2: Lack of space There is only room for 4 courts, so a new facility will have to be built and therefore staffed.
Issue 3: Douglas is dealing with multiple divisions with competing and separate interests. -
Marketing and Sales Is encouraging hall to build more courts to promote PD tennis services, build a $100000 pro shop and club house and hire pros. Finance is interested is
Development needs the courts to look cohesive and fit with the rest of the site and for optimally effective usage of land. Corporate management thinks that the expansion strategy will help with the rest of the resort’s operations who face similar seasonal demand issues. They are hoping for methodology to be developed for the rest of said divisions.
Executives view tennis as an integral part of resort activities. Even though resort operations have not yet been profitable, management believes that tennis is a large part of the development plan, expecting a 25% contribution to profits.
Douglas must shift demand for tennis from peak to off-peak periods, build more courts, or come up with another strategy that satisfies departments, creates value for stakeholders and looks towards future success of Playa Dorada Resort.
From March 2007 to March 2008 the capacity utilization rate will be as follows:
March 2007: 27 / 23 * 100% = 117.39% April 2007: 25 / 23 * 100% = 108.69% March 2008: 67 / 23 * 100% = 291.30% April 2008: 60 / 23 * 100% = 260.87%
These numbers show that the future projected demand of tennis courts will significantly exceed the currently existing amount of available courts. Especially the projections for March and April 2008 show that a detailed plan for an expansion strategy is more than required as the demand for courts will rise rapidly.
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Our ideas outside of tennis industry at Playa Dorada:
Florida’s resort occupancy was still the highest out of any region in the US, is there something outside of the tennis market that could satisfy all departments and visitors? Couples like to vacation there. Maybe there could be a more couple-y retreat area with less emphasis on the clay courts, more on couple and spa activities, such as quiet outdoor couples massage places, fewer structures to build in some way when considering expansion.
Parties spend at least $120 on property in addition to the rental and occupancy with 4.2 activities per day. In addition to tennis: dining, shopping, nature walks, swimming, and golf.
Outside activities that the guys enjoy are sightseeing, fishing, sailing, horseback riding, and shopping for real estate. Could they use this for excursions that the hotel could charge for? Like a package that includes guided golf and beach tours.
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