THE CASE OF THE GREAT EASTERN HOTEL The Great Eastern Hotel, a privately owned, independent, five-star deluxe hotel located in Hong Kong’s commercial district, is faced with a turbulent external environment towing to the current financial crisis. Since its inception six years ago, the hotel has grown in prominence during the bustling economy from 2003 to 2007, and it has been one of the top performers in the upscale and luxury market segments over the four years preceding the economic crises. The hotel’s main target market segment is business travelers (75 percent of room bookings) who have no problem paying USD350 per night for a room. During the past six months, however, the hotel has been a victim of these economic conditions, which has led to a significant reduction in room bookings from the business travel segment. This has reduced profits significantly to the extent that the hotel is not knowledgeable about fixed costs. The owner, Jerry Kong, has called an executive committee meeting to discuss the future direction the company should take in the immediate term and maintain its competitive advantage
THE CASE OF THE GREAT EASTERN HOTEL
The Great Eastern Hotel, a privately owned, independent, five-star deluxe hotel located in Hong Kong’s commercial district, is faced with a turbulent external environment towing to the current financial crisis. Since its inception six years ago, the hotel has grown in prominence during the bustling economy from 2003 to 2007, and it has been one of the top performers in the upscale and luxury market segments over the four years preceding the economic crises. The hotel’s main target market segment is business travelers (75 percent of room bookings) who have no problem paying USD350 per night for a room. During the past six months, however, the hotel has been a victim of these economic conditions, which has led to a significant reduction in room bookings from the business travel segment. This has reduced profits significantly to the extent that the hotel is not knowledgeable about fixed costs. The owner, Jerry Kong, has called an executive committee meeting to discuss the future direction the company should take in the immediate term and maintain its competitive advantage
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