The Eleganzia Group Case Solution

1. Problem Statement

The economic recession had had people spending less on luxury activities. Eleganzia’s most popular property, the Forte Village was faced with customers spending less on additional activities. Also, the four-star hotels, a part of the Eleganzia, were more affected by this economic recession. The dilemma faced was either to upgrade the four-stars into five-star resorts or to leave it as it is.

2. Objectives

The main objectives of this case are to;

• Determine the pricing strategy for Eleganzia’s hotels.

• Determine the marketing strategy for the other hotels apart from the Forte Village.

• Assess whether the hotels, including the Forte Village, be marketing under the brand name of Eleganzia.

3. Alternatives and Consequences of Alternatives

There are several alternatives that can cater to each of the problems raised in the case. The main problem of the economic recession and the brand Eleganzia must be solved by the given alternatives. The final recommendations will solve both the issues raised in the case.

• The guests are charged on an all-inclusive basis as opposed to the pay-as-you-go basis for each additional activity.

• Up-gradation of 4-star into 5-star rooms.

• Bring all Eleganzia properties under the name of Eleganzia including Forte Village.

• Focus on the strengths of the brand and develop newly acquired properties under the same concept. Forte should be included in the brand once the brand has been developed.

4. Consequences

• The consequences of an all-inclusive basis would be raised prices for the five-star hotels. This might seem very forceful to some customers, and they might not opt for the hotel at all.

• The up-gradation of the rooms would leave it restricted to high-level individuals and those who cannot afford it would have to go for other alternatives.

• The umbrella branding of all the hotels under the Eleganzia group including Forte Villages would form a perception that Forte is under new management. The hotel has been around for many years, and it has built its trust on people.

5. Tradeoffs / Analysis of Alternatives

The alternatives have positives as well as negatives. This case is a decision case and thus, the alternatives presented must be assessed to determine the alternative that solves the problems presented in the case.

Firstly, the alternative of the all-inclusive basis would increase the prices. The regular price increase in the peak season was 7% of the five-star hotels and 2% for the four-star alternatives. So, the economic crisis could decline the number of customers. It has been mentioned that the five-star hotels have a high-level of demand as compared to the four-star hotels. Also, the four-star hotel’s demand has decreased considerably. This would mean that the increase in costs would not have much effect on the five-star customers, but will have an effect on the customers that opt for the four-star rooms.

The second alternative of the up-gradation of the rooms is connected to the first alternative. The reason is that the demand for five-star suites is more in the peak seasons as compared to the off-peak seasons. The four-star rooms’ demand was lesser than five-star suites and has further declined because of the economic recession. However, if the complete conversion is done, there would not be any choice for the people who have opted for four-star rooms before. The economic recession would not allow them to spend more and opt for five-star suites.