SWOT Analysis Case Study
Read through the case study. Write down all the strengths and weaknesses,
opportunities and threats you can think of in relation to the Sweet Dreams Motel.
The Sweet Dreams Motel – Far North Queensland
The Sweet Dreams Motel is a 40-unit, no-frills operation in the less scenic part of a
major Queensland resort town. The owner, Mr Smith, firmly believes that there is a
need for his style of low-cost family accommodation amid the luxury and beauty of
the area. His rooms are large, family-style rooms (there is no television, for
example). Although there is plenty of room for future expansion, the grounds are
fairly bare with a bit of landscaping, but mostly grass.
Mr Smith can serve breakfast to the rooms and provides tea-making facilities. There
are now a lot of good restaurants and take-aways in the area. Mr. Smith’s prices are
less than half of what similar motels charge and only a fraction of what the big five-
star properties are charging. And, really, he isn’t all that far away from the beach,
shops and other attractions.
The problem is occupancy. He has some regulars who come every holiday period
(and have been doing so for the four years he has owned the property). Overall,
occupancy is about 50% year round and he knows from the local tourist office that
the other properties average around 68% occupancy year round. New developments
could mean trouble. This lack of occupancy can be quite frustrating for Mr Smith.
Cars pull in, drive around the parking areas, then drive away.
Currently Mr Smith does very little advertising in local district guides and the holiday
papers, mainly because he really thinks word-of-mouth is the best form of
advertising. He is a member of the local tourist committee, but too busy to go to
meetings. However, he does receive the local statistics and knows the average stay
in the area is 3.8 nights, and that local families and couples and increasingly
overseas visitors are his potential customers.
He’s not desperate yet, but he’s getting worried and disillusioned. He thought he would be overrun with guests, but that hasn’t happened.
SWOT analysis of the Sweet Dreams Motel
Compare your analysis with the following points:
? Located in a popular tourist region ? No television (crucial for the
? Big rooms family market) ? Large grounds and open areas ? Bare and unappealing grounds ? Breakfast service to rooms ? Initial interest by people who ? Good restaurants and take-away drive in and look but then leave
nearby (probably because of the bare
? Low prices (but this is also a grounds)
problem!) ? Location poor in relation to other
? Regular customers (but not very services, attractions, etc.
many) ? No separate restaurant services ? Membership in the local tourist ? Low occupancy compared to other
? Property large enough for coach ? Very little advertising
groups ? Only local advertising ? Property is clean ? Uninspiring motel name ? Access to information about the ? Low rates being charged could be
industry perceived as unappealing ? Mr smith acknowledges he has a
problem – the first step towards
? Install televisions immediately ? Potential failure if occupancy
? Landscape the grounds and make doesn’t improve
them more attractive ? Potential failure if other properties
? Add more outdoor facilities – begin cutting rates
playground, BBQ facilities, ? Potential problems if other
perhaps a pool or tennis courts properties begin big promotional
depending on finances campaigns ? Increase the level of advertising ? Potential problems if more budget
? Increase the rates being charged motels are built ? Work in with other attractions,
restaurants, etc (charge-back
facilities with nearby restaurants,
? Attend tourist group meetings –
do more networking
? Add own restaurant or do-it-
yourself catering facilities for
? Investigate other markets
Mr Smith’s most important action is to raise rates immediately. At less than half the
price of other motels his price is too low which conveys a poor image. This combined
with the bare grounds, may be driving potential customers away. His rates can still
be low, but should be comparable to the rates of competitive properties.
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