4. Resort Concept
Executive summary
The Cocoa Beach Luxury Resort and Spa is the new premiere Resort in the Central
Florida area. Our mission is to promote, recruit, and retain a diverse group of talented individuals
who are actively contributing to the wellbeing and growth of our brand. In doing so we ensure
quality service/experiences to all guests. By staying true to our core values we promote the
wellbeing of others by acting with integrity, embracing change, striving to new levels of
achievements, and promoting the advancement of our people all while practicing sustainability.
The Cocoa Beach Luxury Resort and Spa was the brainchild of five University of Florida
students in 2012. The founders wanted to open a premiere resort outside of the Orlando and
Miami area that offered excellent service, quality cuisine, and luxurious relaxation. Three years
after the idea was conceived, the student broke ground on a beautiful beachfront property in
majestic Cocoa Beach. The resort opened on January 1, 2016. The resort holds 95 rooms, 5
villas, 2 restaurants, 15,000 square feet of conference space, 4 retail shops, 12 tennis courts, a
beautiful 18-hole golf course and so much more. The staff is made up of over 75 individuals
including part-time employees, full-time employees, and interns.
This document will outline the resort’s concept, management team and staffing system,
business objectives, mission and values, products and services mix, marketing plan and
strategies, revenue management plan, key management issues, recommendations for furthering
the success of the resort, and key takeaways.
5. Concept Introduction
No trip to Cocoa Beach is complete without treating yourself to all of the comforts Cocoa
Beach Luxury Resort and Spa has to offer. Staying at our resort best serves those looking for the
best of both worlds as it is conveniently located in the heart of sunny Cocoa Beach, Florida and
is only a one-hour drive from the beloved Orlando theme parks. Guests who stay with us will
have the pleasure of experiencing both a luxurious Florida beach-style getaway and a fun-filled
Orlando theme park vacation. With a combination of sleek design, serene atmospheres, and high-
quality service, Cocoa Beach Luxury Resort and Spa appeals to markets composed of affluent
mature travelers and upper-middle class families.
We are a privately owned resort receiving financial backing from one investor in order to
create the most indulging and escape-like experience for all. We aim to provide a resort
experience that caters to all of our guests’ desires and expectations.
6. Management and Staffing
This section focuses on our management and staff roles. Superior guest service is our
main focus at Cocoa Beach Luxury Resort and Spa. To ensure that each guest is adequately
satisfied, all staff must know the roles that are required of them.
Management and Staff Roles.
7. The General Manager: Ashley Finley
o The General Manager acts as a company figurehead and is responsible
for setting company objectives, choosing and implementing effective
strategy for the overall health and wellbeing of the hotel. The GM
will oversee each management category listed below. The General
manager will use input from the executive committee to make all
major decisions regarding the hotel. She/ He will oversee all directors
and ensure that company standards are being met throughout all the
divisions.
Revenue Manager: Baizhao Zhou
o The Revenue Manager will be responsible for all pricing and pricing-
related decisions. Their job is to ensure that our income outweighs our
expenses. He/she is to identify any new revenue opportunities. He/she
analyzes overall monthly resort performance and provides summary
reports with recommendations to improve long term strategies.
Food and Beverage Director: Lauren Watts
o The director of food and beverage will be held responsible for all
decisions associated with hotel restaurants, bars, room service, banquet
and catering services, and courtesy amenities. She/he manages all food
and beverage operations within budgeted guidelines and to the highest
standards. She/he will also see that all above-mentioned venues are
staffed accordingly and have proper inventories. She/he designs the
8. menus, purchases goods and continuously makes necessary
improvements.
Director of Retail and Sports: Jessica Charry
o The director of Retail and Sports will be responsible for all day-to-day
decisions relating to the hotel spa, gym, business center, golf course,
and other recreational facilities (i.e. pools, game rooms, tennis courts,
etc.) She/he is to ensure promotions are run accurately and to the
company's standards. She/he is to make sure that staff are all working
towards the target for the day and that excellent customer care
standards are met at all times.
Director of Meetings and Events: Tania Hernandez
o The director of meeting and events is responsible for managing events
and ensuring deadlines and budgets are adhered to. She/he directs the
coordination of activities to prepare for the day of the event and
manages the staff responsible for event coordination activities. She/he
coordinates details of events such as conferences, weddings, birthdays,
anniversaries, charity events, surprise parties, trade shows, sales
meetings, business meetings, employee appreciation events and virtual
events to be held at the resort.
Director of Marketing & Sales: Ashley Finley
The Director of Marketing & Sales Contributes to developing an
effective Marketing strategy by identifying short-term and long-range
issues that must be addressed; providing information and commentary
9. pertinent to deliberations; recommending options and courses of action
and implementing directives. He/she Obtains market share by
developing marketing plans and programs for each product while
directing promotional support. He or she maintains relations with
customers by organizing and developing specific customer- relations
programs.
Management and Staff size. Cocoa Beach Luxury Resort and Spa follows a 1:1 ratio.
There will be one employee for every one guest in order to achieve the highest levels of quality
standards. With a high number of employees, every guest is certain to feel that they and their
needs are important.
10. Resort Business Objectives and Goals
Resort Business Overview. The business objectives serve to detail the direction, vision,
and plan to achieve our goal of providing luxury and comprehensive resort services. Our overall
plan objectives are to:
Attract investment to secure property mortgage
Focus ideas and establish goals
Identify and quantify long-term expansion
Track and direct growth
Create benchmarks for measuring success
Cocoa Beach Luxury Resort and Spa will pursue reasonable goals, target the appropriate
markets, and set moderate prices. By using different types of guest rooms, our extensive list of
amenities, and excellent guest service, we will define ourselves as a "luxury" resort.
Quality and Service. Through thoughtful consideration on behalf of our customers,
Cocoa Beach Luxury Resort and Spa’s aims to provide quality and service that will satisfy every
expectation from customers within all operational departments. Our guests should expect high-
quality service throughout the entirety of their stay.
CSR & Social Responsibilities. Cocoa Beach Luxury Resort and Spa will not implement
any policies or procedures that might harm the society or environment. Work on all expansions
or new constructions will begin only if the regulator permits us to do so. The facility will be in
11. use only after passing all of the necessary safety tests. Insurance will be purchased covering both
employees and property.
Financial Expectations and Revenue.
ADR: We expect ADR to grow at an average annual rate of 5%.
RevPAR: Similarly, Cocoa Beach Luxury Resort and Spa expects strong RevPAR
and growth in 2016. We expect to increase 2 to 4 percent in the first quarter of 2016 and
5 percent for overall by the end of 2016. Cocoa Beach Luxury Resort and Spa also
anticipates room sales will increase 8 to 10 percent over the full year of 2016.
RevPASH: RevPASH tells you how much you’re making per available seat per
hour while RevPOR tells us how much Cocoa Beach Luxury Resort and Spa are making
per occupied seat. The goal is to fill the gap between RevPASH and RevPOR by
maximizing profit.
12. Vision, Mission, and Values Statements
A vision is a vivid mental image of what you want your business to be at some point in
the future, based on your goals and aspirations. Having a vision will give your business or in this
case your hotel a clear focus, and can stop you heading in the wrong direction. A mission
statement is a statement, which is used as a way of communicating the purpose of the
organization. Finally, value statements are used to help businesses identify with and connect to
targeted consumers, as well as to remind employees about its priorities and goals below are the
value statements of the Cocoa Beach Resort & Spa. Here are the vision, mission, and value
statements for Cocoa Beach Luxury Resort and Spa.
Vision. To enrich and delight guests with unforgettable memories by providing
exceptional customer service.
Mission. Our mission is it to promote, recruit, and retain a diverse group of talented
individuals who are actively contributing to the wellbeing and growth of our brand. In doing so
we ensuring quality service/experiences to all guest. By staying true to our core values we
promote the wellbeing of others by acting with integrity, embracing change, striving to new
levels of achievements, and promoting the advancement of our people all while practicing
sustainability.
Value Statements.
13. We are leaders who give back to others both domestically and internationally.
We take pride in giving back to the community. We actively engage in
community outreach programs that support the educational development of
underprivileged children. We support international causes that aid in poverty alleviation,
the wellbeing of children, and global aid projects such as operation smiles.
We act with integrity.
We always do the right thing regardless of circumstances. We hold ourselves to
the highest ethical and moral standards.
We strive for greatness.
We are leaders in our industry and take pride in setting the standard of excellence.
We embrace change.
We understand and value our constantly changing human nature. We are receptive
to change and focus on continuously integrating new, innovative platforms that match the
status quo of our time. We seek to anticipate the changing needs of our customers by
developing internally (staff development) and externally (reinvesting in the property).
We act with the environment in mind.
We are committed to sustainability practices. Our goal is to reduce our energy
consumptions by 5% annually. We strive to introduce green practices to our suppliers for
the greater reduction in electricity and water usage. It is our duty to contribute to the
overall wellbeing of the environment.
We invest in our people.
14. Our Company Culture is based on the growth and professional development of
our staff. We aim to help each staff member progress professionally by investing in
quality training and education.
We seek to understand, then to be understood.
Taken from Stephen Covey's “7 habits of highly effective people”, this value is
held at the core of our employee training. Every staff member should seek to understand
why team members are displaying certain actions and behaviors before making
generalized assumption. This principal fosters synergy and a teamwork atmosphere.
Cocoa Beach Luxury Resort and Spa understands the power of teamwork.
We believe in the power of numbers and that no idea is a bad idea. When
decisions, plans, and ideas are created in unison, amazing things are achieved. We
practice strong inclusion and acceptance principals.
15. Products and Services Mix
Customer Experience. Cocoa Beach Luxury Resort and Spa aims to provide our guests
with one-of-a-kind customer service. Our staff is well trained in seeing to our guest’s needs.
Everything our guests could require is provided on our property or a short distance away.
Structure, Climate, and Culture. Cocoa Beach Luxury Resort and Spa offers a fusion
between Spanish architecture and Florida flora complete
with: terracotta roof tiles, painted tile, curved
arches/windows, balconies, beautiful courtyards filled with
local flowers, and palm trees outlining the property. We
are located in Cocoa Beach, Florida where the weather is
always comfortable. Florida is also known for rain, which
is why we have included many indoor amenities. Our staff works tirelessly to create a warm and
welcoming atmosphere for our guests to relax and enjoy in their vacation.
16. Amenity Descriptions.
Rooms: The Cocoa Beach Luxury
Resort and Spa has a mix of private club
members, general public, and hotel guests. To
accommodate everyone we offer three room options. The
first option is a standard room. This room features a
bedroom (closet, desk, recliner, bed(s),
dresser with flat screen television affixed
to the top, and nightstand with
telephone) and a bathroom (toilet,
shower/bath, sink and efficient counter space). The resort contains 80 of these standard
rooms. The second option is a luxury suite, which there are 20 of. These suites feature a
common area (one couch, two recliners, entertainment system, and end table), bathroom,
and bedroom. Our third option is our private villas. These huts include two bedrooms
(one with king size bed and one with two full sized beds), three bathrooms, two common
17. areas, kitchen and bar area, dining room and foyer. The resort features 5 of these
beachside villas.
Restaurants: Our full service restaurant, Fuego, is a five star restaurant and bar
featuring a diverse menu to complement our diverse guests. Fuego is open from 11am to
11pm all week long. They serve delectable lunches and dinners. There is also a Beachside
Tiki Snack Bar for our guests to enjoy while lounging on our private beach open from
8am to 5pm.
Conference Center: Our conference center features an ample sized pre-function
space and 10 rooms that add up to 15,000 square feet of multi-use space. Our conference
center can house a multitude of events such as: conferences, weddings, parties, reunions,
etc. Business hours vary depending on the event(s). We have a dedicated staff able to
assist in planning and executing the event. We offer many packages to help our clients
execute the best meeting or event possible. As an added luxury, there is a Business
Center located adjacent to the Conference Center. The Business Center has five
computers and two printers that are available to all guests.
Serenity Spa: Our luxury spa features multiple private massage rooms, a steam
room, hydrotherapy, nail salon, hair salon,
juice bar, relaxing courtyard, and much
more. All of our specialists are highly
trained and reputable experts in their field.
Serenity Spa is open from 8am to 5pm.
18. Kids Zone: Kids Zone is our fun center for ages 13 and under. Kids Zone features
a full arcade, play areas and structures, a kid’s pool with water slides, and an outdoor kids
mini golf course. Kids Zone also features different activities to occupy the kids while
mom and dad relax. Kids Zone is open from 8am to 8pm.
Water Activities: Due to our wonderful location right on the beach, we are able to
offer specialized water activity packages. We offer scuba diving excursions and lessons
as well as water ski rentals. We also have two pools. Our leisure pool is 82 feet long and
its depth ranges from 3 feet to 6 feet. Our Olympic pool is 160 feet long and its depth
ranges from 4 feet to 6 ½ feet. Both pools are carefully watched by lifeguards and
provide complimentary poolside towels.
Sports: At the Cocoa Beach Luxury Resort and Spa we offer an 18-hole golf
course, a sand volleyball court, and a sports complex featuring twelve tennis courts and
one racquetball court. The golf course closes at 5pm; however, the volleyball arena and
sports complex are open until 10pm. Inside the sports complex we have a retail shop that
includes a Golf Pro Shop and Tennis Pro Shop. We also offer our guests a fitness center
that includes free weights, steam room, weight lifting machines, and a rock-climbing
wall.
Transportation: We are proud to offer a shuttle service. We have two shuttle
buses. The first will transport our guests to major Orlando, FL theme parks such as: Walt
Disney World, Universal Studios, Sea World, and Islands of Adventure. The second
shuttle bus will take our guests to the airport for their convenience. There is a sign up
sheet located at the front desk in the lobby.
19. Rentals: We offer many rentals for our guests to enhance their experience at our
resort. We offer bike rentals to aid guests traveling around the campus. We also offer
rentals for all sports and water activities. Guests are also offered rental packages in our
meeting and events department.
Resort Positioning
This section focuses on the market positioning of Cocoa Beach Luxury Resort and Spa.
We discuss our positioning elements and statement.
Elements.
Target Market(s): Travelling Seniors and Upper Middle Class Families
Category: Luxury Beach Resort and Spa
Differentiation: Delivers breakthrough customer service
Payoffs:
o Provides unique guest experiences that build brand equity
o Identifies and develops innovative new products for our guests
o Countless amenities for our guests to enjoy
20. Positioning statement.
"To traveling seniors and families, Cocoa Beach Luxury Resort and Spa is a resort and
spa that delivers specialized customer service because our travelers deserve a unique experience
they will always remember."
Target Markets
This section discusses our target markets and our segmentation schema.
Primary Target Markets.The first primary target market included in the marketing plan
for Cocoa Beach Luxury Resort and Spa is upper-middle class families. The Resort provides
many activities and amenities that appeal to children such as the Kid Zone, the leisure pool with
water features, and water activities. Also, being located just over an hour away from Orlando
theme parks, kids can get a fun-filled vacation and parents can find the relaxing getaway they
need. This market segment responds best to advertisements such as television commercials,
banner ads on websites, and billboards on major highways near the location of the resort.
The second primary target market is affluent mature travelers. These travelers are often
looking for high quality service and luxurious accommodations, both of which are offered by
21. Cocoa Beach Luxury Resort and Spa. Amenities located at the resort that are important to this
segment include the Serenity Spa, an 18-hole golf course, and a full service restaurant.
Advertising is also the most effective marketing activity for this segment. However less of the
marketing budget would be spent on Internet advertisements for these travelers as their age
indicates less frequent use of the Internet.
Secondary Target Markets. Secondary target markets include association meetings and
corporate/business meeting travelers. With our high-end, 15,000 square-foot conference center,
these segments will have ample space to hold whatever event they have in mind. The resort’s
event staff is available to assist in the planning and execution of any event, making the
conference center a top choice for anyone in these segments looking to hold large gatherings. We
feel that the inclusion of the corporate/business meeting segment as a secondary target market
will offset the high number of weekend travelers in the other segments by bringing in weekday
travelers. For both of these secondary segments, sales force is the most effective marketing
activity, with public relations being second most effective. Therefore, the majority of the
marketing budget for these two segments would be put into sales force activities.
Segmentation Schema. Our target markets can further be broken down by demographic,
psychographic, geographic, and behavioral characteristics. In all segments, travelers targeted will
be those living an active lifestyle within the United States. All guests will also have high
disposable income as Luxury Resort and Spa is primarily a luxury resort that offers the highest
quality amenities and service. In the families segment, parents will most likely be 30-45 years of
age with children 6-16 years of age. Affluent mature travelers will generally be 60 years or older.
The ages of travelers in the secondary target markets will not be a factor, as they will generally
include any individuals that are working in an upper-level position at the business they are
22. associated with. The hotel also expects to bring in a large number of return guests such as
families that visit each year and associations or businesses holding an event in the conference
center annually.
Marketing Strategy
This section focuses on our marketing mix strategies including price, promotion, place
(distribution channels), partnership and sample advertising, PR, media (digital, web, social,
traditional) tactics.
Price. Cocoa Beach Luxury Resort and Spa uses a mix of several pricing strategies. The
strategy used is dependent on the resort department and the product or service being offered..
Use of the spa, restaurant, golf course, and rentals will be an additional charge separate from the
room rate. Once the price for standard guest rooms has been set, we will charge $10-$20 more
for suites and $50-$60 more for the villas. Menu prices at the full-service restaurant will be mid-
range while the outdoor food and beverage facilities charge lower prices. There will be a group
discount rate for groups booking more than 10 rooms per night. At booking, guests will be
23. required to provide payment information but will not be charged until they check out of the
hotel. Guests will be required to acknowledge that they must pay an additional charge for any
damages to the room and these charges will be made with the payment of the room.
Promotion. Promotional efforts will be focused on advertising and sales force, as these
are the most effective methods to reach our target markets. A smaller proportion of the budget
will go towards all other marketing techniques such as public relations, sales promotions, and
direct marketing. The inclusion of all techniques is critical to the success of our marketing efforts
as we feel that to disregard some method would result in the loss of potential customers.
Advertising to families will involve Internet banner ads and social media advertisements
that present our products, service, and location in a way that makes both children and parents feel
like they cannot wait to visit. Advertisements to mature affluent travelers will be found mainly
on television and will largely promote the resort as a relaxing destination with the option of
keeping it active. For our secondary target markets, we will focus on personal selling that places
emphasis on the large conference center and even planning staff, a perfect amenity for groups in
need of meeting or even space.
Place. The Cocoa Beach Luxury Resort and Spa property will consist of one main
building containing 100 guest rooms and the conference center, five private guest villas, an
indoor sports complex, a full golf course, and a pool area. All of this will be located on Cocoa
Beach with private beach access for hotel guests. Each private villa will be located on the beach
side of the resort, adding to the value of these accommodations.
In order to sell our products and services, we will accept direct bookings as well as
booking made through intermediaries such as Expedia, Hotels.com, and independent travel
24. agents. Guests booking through intermediaries will receive slight discounts but the hotel must
take into account the cost of using these organizations. All other products and services offered by
the hotel must be purchased directly.
Partnership. Cocoa Beach Luxury Resort and Spa will form mutually beneficial
partnerships with local businesses. Businesses that could be considered potential partners include
any that offer services or products differing from those offered at the hotel. This may include
restaurants with different levels of service or types of cuisine, organizations offering local tours
or ocean sightseeing excursions, or shops selling artwork. These businesses would suggest the
hotel as a lodging facility to those who ask and the hotel would refer guests to these
establishments. By selecting businesses with different services from our own, we retain our
customers and do not lose customers to similar businesses due to our own recommendation.
Revenue Management Plan
Strategic Pricing
Food and Beverage. Prices set in the food and beverage department are both cost-based
and profit-based. Cost based pricing is pricing the items so that all costs are covered. Profit based
pricing is a strategy where a business prices their items high in order to make a profit. First, a
base price is determined using the costs of producing each menu item. Once a price that will
cover the cost is determined, it is raised higher to create a desired profit of 20% per item.
Retail and Sports. The retail and sports department is split up into the sports center,
retail shops, and the spa. Retail shop products are set using an economy pricing strategy. In
economy pricing, prices are set low in order to make consumers feel as though they are receiving
more value for their money. Spa prices are value-based and cost-based. Once again, cost-based
25. pricing is a strategy used to ensure that the revenue it generates covers the costs of providing the
services. With value-based pricing, the spa will set higher prices due to the value customers
place on its service. The Cocoa Beach Luxury Resort and Spa provides high-end spa services,
allowing higher prices. Finally, the sports center is divided into two pricing techniques. For club
members and local residents, prices are set using penetration pricing, where initial prices are set
low and gradually increased, in order to lure consumers away from pre-existing athletic clubs
and fitness facilities. For resort guests, use of the sports center is complementary and a resort fee
of $10 per night covers the costs.
Rooms Division. The rooms division uses several pricing strategies when setting rates
for the various room types available. These strategies include price skimming, psychological
pricing, and value-based pricing. Price skimming is a tactic used when a business sets their
prices high, and then slowly reduces the price over time to attract new consumers. The high
original price allows the resort to capture guests willing to pay high rates. As demand decreases,
the resort will slowly lower room rates in order to steady demand. Psychological pricing is a
strategy of setting prices slightly lower than rounded numbers, with the belief that customers do
not round up these prices, and so they treat them as lower prices than they really are. For
example, the peak-season standard room rate of $319.99 is designed to seem less expensive than
$320 per night. With value-based pricing, the rates are set according to the value guests place on
the resort and its rooms. Being located directly on the beach allows direct access as well as
ocean-view rooms, meaning that guests view the resort as being more valuable and are willing to
pay more per night.
Meeting and Events. The revenue generator in this department of the hotel is the 15,000
square feet conference center. Prices for the use of the conference center and related services are
26. set using cost-based pricing where the prices cover the cost of equipment, food production, and
labor.
Perceived Value
Perceived value pricing is an important price setting procedure. Perceived value pricing
indicates the importance of providing benefits and functionalities to the consumer and the
simultaneous need to price it effectively so that the firm can take appropriate value. (Pg.1,
Journal of Management & Marketing Research)
Cocoa Beach Resort & Spa wants customers to perceive high value in correlation with
higher prices, which will achieve higher quality ratings.
27. Differential/Discriminatory Pricing
The purpose of differential/discriminatory pricing analysis is to provide Cocoa Beach
Luxury Resort and Spa an approach of how to implement discounts or different rate codes to the
resort, and also to avoid the illegal discriminatory pricing. This helps the resort to attract more
customers and understand the market better.
Differential pricing. Differential pricing is the strategy of selling the same product to
different customers at different prices. Consider the pricing behavior at an auction. Everyone has
the same information and bids on the same item.
Price discrimination. Price discrimination is a pricing strategy that charges customers’
different prices for the same product or service. In pure price discrimination, the sellers charge
each customer the maximum price that he or she is willing to pay. In more common forms of
28. price discrimination, the seller places customers in groups based on certain attributes and charges
each group a different price.
Rooms and restaurants are two parts of our resort. They seem to have much in common
in those segments in terms of the management and pricing. These two sales of products (rooms,
food and beverages) emphasized customer is the key to stand out from their competitors in the
services. When it comes to how to set price they sell, we will focus on differential pricing.
Here are some examples to express different discounts and way in our hotel to price.
When guests contact us and request a purchase of ten or more rooms, they are transferred
to the Marketing and Sales Department where they are provided with information
regarding group discounts.
If the same guests of ten, on the same day in the same time, the restaurant table service
will not offer a discount, and in most cases, the mandatory service fee (actually a price
increase) is added to the guest's bill.
When the guests in the hotel request the room rate for the busiest week of the night's stay,
they will expect to see a higher room rate, and pay a premium rate of $40/10% higher
than in the same room of normal rate.
If they go on a popular restaurant busiest night of the week, they will wait a long time for
their table but they still pay the same as the restaurant's slowest night. This is how we
treat our room sales and food and beverage departments. Discounts offered not only
depend on the departments, but also on their characters.
29. Competitive Analysis
A competitive analysis is a critical part of your company marketing plan. With this
evaluation, we can establish what makes our products and services unique, therefore allowing the
resort to play up certain distinct, unique attributes in order to attract our target market. In this
section we introduce our competitive analysis in the Cocoa Beach area.
Top 4-Star Competitors.
1. Hilton Cocoa Beach Oceanfront
$ 246 per night on AVG
Hotel strengths: Oceanfront, Brand Name Flag Amenities include a seafood
restaurant, a lounge, a 24/7 fitness center, beach volleyball courts and an
oceanside deck with a heated outdoor pool, a tiki bar and a fire pit. Business
facilities include a business center and over 10,000 sq. ft. of meeting space.
Surfing lessons are also available, plus bike and boogie board rentals.
30. Hotel Weaknesses: The Hilton Cocoa Beach currently has poor reviews on
Internet intermediaries, indicating atmosphere did not feel “luxurious” they
also currently cannot support a spa.
2. Four points by Sheraton Cocoa Beach
$180 per night on AVG
Hotel Strengths: This beachside lodging is 1.1 miles from the Cocoa Beach
Pier and a 1.7-mile drive from Lori Wilson Park. The rooms have free Wi-Fi
and bottled water, plus flat-screen TVs and work areas with desks and
ergonomic chairs. Suites add kitchenettes. Upgraded suites offer whirlpool
tubs and separate living areas. Hotel amenities include an American restaurant
and a bar, as well as a 24/7 fitness center and outdoor pool, plus a hot tub.
Hotel Weaknesses: There's an airport shuttle (fee), they do not have a full
service spa, and they cannot accommodate conventions or big association
meeting events because they only have two small meeting rooms.
Top 3-Star Competitors.
1. Beach Place Guest House
$249 per night on AVG
Hotel Strengths: Refined, individually decorated beach bungalows with full
kitchens, porches, fire pits & hammocks. Private accommodations.
Hotel Weaknesses: They do not include Wi-Fi or any other additional
amenities typically included in well established brand flag hotels such as:
meeting spaces, a business center, an on onsite restaurant ext.
31. 2. Radisson Resort of the Port
$246 per night on AVG
Hotel Strengths: The classic rooms feature complimentary Wi-Fi,
coffeemakers and flat-screen TVs, as well as microwaves. Suites add separate
living rooms, and club-level rooms include breakfast and bar vouchers.
Hotel Weaknesses: They do not have beach front accessibility and they
currently hold low luxury ratings
3. The INN at Cocoa Beach
$195 per night on AVG
Hotel Strengths: Complimentary breakfast is served in a dining room with a
patio overlooking beachfront. Amenities include an outdoor pool, a fitness
area and a steam room. There's a self-service bar, and nightly wine and cheese
socials, as well as a cozy lounge with a fireplace and garden views.
Hotel Weaknesses: Poor depiction of quality depicted in travel intermediaries.
Top 2-Star Competitors. (Does not consider strong competition)
1. Cocoa Beach suites
$107 per night on AVG
2. La Quinta Inn Cocoa Beach
$140 per night on AVG
* This competitive analysis does not include the 146 beach rental options available on trip
advisor
Why Cocoa BeachLuxury Resort & Spa stands out. Cocoa Beach Luxury Resort &
Spa stands out because it is the only all-inclusive luxury resort available that will offer standard,
32. suites and villa style accommodations in the Cocoa Beach Area. Cocoa Beach Luxury Resort &
Spa is known for their quality rooms, superior customer service and overall luxurious
atmosphere. Cocoa Beach Luxury Resort & Spa is the first of its kind in the Cocoa Beach area
and serves as the ideal lodging role model for all surrounding competitors in the market.
Inventory and Price Management
This section focuses on the inventory and price management practices our resort has
adapted. Inventory and Price Management refers to the analysis and optimization of revenue
through inventory. Managing inventory and maximizing profits through effective pricing is key
to running a successful resort.
Rooms Division. For our Rooms Division Department, we are using a psychological
pricing and price skimming approach. With that in mind, our resort features 45 standard rooms
priced at $319.99 a night, 50 suites priced at $339.99 a night, and five private villas priced at
$389.99 a night. These prices are during our peak season of May-August of each year. During
our off-season we charge $279.99 a night for our standard rooms, $299.99 a night for suites, and
$349.99 a night for the private villas. As mentioned, we also use a price skimming strategy for
our room prices. We have set our room rates pretty high during our peak season to maximize our
RevPOR and Net ADR Yield. Then once the peak season ends, we slowly reduce our prices to
33. encourage guests to visit year round. For group rates, there must be a minimum of 10 rooms
reserved. Each room receives a 10% discount rate.
Food and Beverage. We offer two dining establishments at our resort. There is our five
star full service restaurant called Fuego located on the second floor and main balcony of the
resort and the Beachside Tiki Snack Bar located along the beach. Fuego is a Mediterranean style
tapas restaurant that is sure to please all our guests and locals. The menu features mouthwatering
cuisine that pleases herbivores, carnivores, and all in between. Due to the high quality
ingredients needed to craft our menu, the menu prices are rather high. The Beachside Tiki Snack
Bar offers an array of American snack classics like: hotdogs, french fries, hamburgers, salads,
wraps, and much more. Guests are allowed to sit inside at a booth or table or our servers can
bring their food to them on the beach. We use a combination of profit and cost based pricing. For
about every dollar made at one of our establishments 35 cents goes to food costs, 20 cents goes
to beverage costs, and 55 cents goes to labor costs. The average menu item price at Fuego is
$11.50 and the average menu price at Beachside is $5.50. Sample menu items and prices may be
found in the appendix.
Meeting and Events. We offer a conference center that features an ample sized pre-
function space and 10 rooms that add up to 15,000 square feet of multi-use space. Our rooms are
separated by dividers that can be moved to accommodate large events. Our conference center can
house a multitude of events such as: conferences, weddings, parties, reunions, etc. The pricing
strategy of the meeting and events department is cost based pricing. Everything except the base
fee is priced to cover the costs. The base rental fee is $1,500. The base fee covers the security
deposit and labor costs for maintenance of the facility. Each room is approximately 1,500 square
feet and costs $150 an hour to rent. Rentals include: tables at $25 each to rent, chairs at $10 each
34. to rent, and we offer linen packages starting at $2,000. This includes tablecloths, napkins, table
overlays, and chair covers. These packages come in a variety of colors. Hiring staff to plan the
event and additional amenities is also added to the price.
Retail and Sports. The retail and sports department employs a variety of pricing
strategies due to the types of products and services involved.
The retail stores offer towels, snacks, candy bars, Cocoa Beach and resort souvenirs,
sporting equipment, etc. We apply this strategy because not much marketing has to go into
promoting our stores. We have located all our retail stores in prime positions around the resort.
The Serenity Spa Center uses value and cost based pricing strategies. We first price our
services to cover the costs of the supplies, utilities, and labor. Then we assess the value of the
service. Everything offered at our resort is high quality. Because all the services offered are high
quality, we can charge a little more. This also changes our guest’s perception of the service.
Guests assume that higher priced items are of high quality. We offer everything from our deluxe
Peppermint Foot Scrub for $20 to our Deep Tissue Full Body Rub starting at $100 for 20
minutes.
We have a lot of sports amenities. The two major sports we offer are golf and tennis. Due
to our expansive course and numerous courts we offer golf and tennis memberships to Cocoa
Beach locals. The pricing strategy for members is the penetration strategy since we are a rather
new resort and are just entering the market. The cost of an annual membership for golf or tennis
is $3,500. This includes parking, access to facility, access to guest locker rooms, access to
reservation system, and access to guest fitness center. Over time, we may increase our rate as we
spend more time in the market. For guests, the golf course and tennis courts are managed through
35. a first-come-first-serve reservation policy. For tennis, we do offer the use of an automated ball
machine for $50. Some of our packages include the $75 tennis packages that include one racket
and three balls and the $100 golf package that includes a set of clubs, golf balls, and tees.
Rentals are a large moneymaker for the resort. We offer transportation rentals, water
sport rentals, and other sport rentals. Our watersports packages start at $200 for two Jet Skis and
run up to $500 for four-person scuba diving rental. We also offer lessons for all our sporting
amenities. A resort fee attached to the guest’s final bill covers the cost of the lessons. Guests do
have the option to waive the fee if they did not or would not like to partake in the lessons.
Demand Analysis and Forecasting
This section focuses on the demand of our resort and how we forecast the demand. There
must always be a healthy amount of demand to keep the resort running. Luckily for Cocoa Beach
Luxury Resort and Spa, we are in a prime location that generates the demand we need. To
accurately forecast our resort demand, we must analyze our historical data and current data,
predict and analyze our future data, and consider local events and insights. All of these elements
are highly important to us.
Customer Demand is the number of potential buyers with the interest and ability to
purchase the products sold by a business at the specific price offered. Our resort is located on a
perfect trip of beach not far from the Orlando Theme Parks and the Kennedy Space Center. Our
target markets are seniors, snowbirds, and traveling families. Due to our proximity to the Space
Center, we also attract their patrons.
36. The state of Florida is seen as a home away from home to most of the world and our
resort is the perfect escape. We are great for destination vacations, weddings, conferences, and
leisure activities. We are in a perfect location that is typically always in demand. Our target
markets are looking to get away from the hustle and bustle of busy cities like Orlando, Tampa,
and Miami. We provide that luxury all year long. We offer a variety of amenities that attract
guests. We have multiple swimming pools, beach access, spa, conference center, restaurants, and
so much more. With such amenities we attract travelers as well as locals.
Rooms Division. For our Rooms Division Department, we offer three room codes to suit
the needs of our guests and have determined the quantity of each room code based on predicted
demand. Our 45 standard rooms are perfect for single travelers or couples, our 50 suites for
families or business travelers, and the 5 villas for individuals or families that would like more
privacy or VIP guests who require more privacy. To forecast the demand for our rooms we first
analyze the ADR of the last few weeks and the ADR of the coming week from the previous year.
We do this to see if there are any similarities. There could also be an annual event located
nearby, so the data from last year can help us make our predictions. We would also look over
that STR report to see our rates compared to our competition. Like with food and beverage, we
also check calendars so see if there are any events coming. We must also take into consideration
our events, conferences, tournaments, and other happenings on our property to properly forecast
demand for rooms. We are already aware that peak season is from May to August so we would
plan accordingly.
Food and Beverage. For our Food and Beverage Department, we offer two dining
establishments and catering services for our conference center. This generates demand from
travelers looking to eat a great meal at their resort, locals who would like a unique dining out
37. experience, and businesses can utilize our catering during business meetings. To forecast the
demand of our restaurants we analyze the RevPASH of the last month and the RevPASH of the
week. We also check local and national calendars to see if there are any big events coming to the
area.
Meetings and Events. For our Meeting and Events Department, we offer 15,000 square
feet of space to meet the demands of any client. The space can be sectioned off to host more
functions if the demand is high. We also provide a catering service for our clients to use at their
discretion. Finally, we have an event planner on hand to help with the organization of the event.
The highest demand has been weddings due to the beautiful weather. For weddings there are
multiple packages as well as the option to customize a package to meet the demand. To forecast
this area of the resort we consult our calendar and event planner to see where we are booked and
where we are normally booked.
Retail and Sports. For our Retail and Sports Department, there is a demand to play on
one of our twelve tennis courts, or our 18-hole golf course, or swim in our Olympic pool. With
these amenities our resort is in constant demand from athletic groups, leisure athletes, and
possibly game associations wanting to host their tournament at the resort. The demand for retail
items aside from the Serenity Spa is low; however the demand for rentals is through the roof. As
mentioned, most guests visit our resort to get some rest and relaxation. To aid in that endeavor
we have the Serenity Spa Center. The center features everything from facials to full body
massages. The massages are by appointment only to generate more demand. We offer bike
rentals for guests to leisurely travel along the property, Jet Ski rentals for our brave-hearted
guests, snorkel gear for our adventurous guests, and plenty more aquatic, golf, tennis, racquetball
and volleyball rentals. To forecast demand for this department we analyze sales and rental data
38. from the previous year, last two weeks, and predict data based on the calendar of the resort.
Guests and members are allowed to reserve a court or tee time so we would also analyze that
data.
Distribution Channel Management
Indirect distribution channels. The Cocoa Beach Luxury Resort and Spa will use
indirect distribution channels including TripAdvisor, Expedia, Kayak, Tour operators, retail
travel agents, destination management companies, and professional conference organizers.
The problem with using intermediaries:
Limited assessments of costs per channel: Online distribution channels
acquire major expenses in commission for net rates, cutting to hotel profit
margins.
Mixed abilities in setting rates & determining inventory allocation for each
individual channel.
Lack of merchandising expertise: The quantity and quality of content needed
to occupy all of the online distribution channels are hard to manage centrally.
39. Management requires high levels of marketing, content creation ability and
facilitation.
Lack of technological software: The industry is currently lacking the
technological advancement that is able to detect and distribute, at the right
time, updated prices to all distribution channels, based on the markets daily
rate.
Time consuming: In order to effectively set prices managers must watch the
rates on all of the available distribution channels. It is difficult to assess all of
the available distribution channels in short periods of time.
Direct distribution channels. Resort guests may book using any of the previously
mentioned indirect distribution channels or though the following direct channels. However, any
community members looking to use only the sports center must make reservations and payments
through these direct channels only.
Direct “online” distribution channel:
Brand Website, email, Internet booking engine, social media
Direct “offline” distribution channels:
Direct phone call, walk-in
40. Evaluation of Revenue Management Practices
The purpose of evaluation of revenue management is to provide the resort an overall view
in terms of statistics about how every departments and branches working. Not only through the
numbers achieved, but also by comparing to the historical data and percentages, to see where
need to be improved in the future, and implement more suitable strategies. In the evaluation of
our revenue management practices, we look at the Cocoa Beach Luxury Resort and Spa income
statement located in the appendix of this plan.
% Improvement in Total Revenue Over the Period from Jan to June.
January: $347925; June: $443425;
% improvement=27%
Percent of the total revenue in the month of June.
Rooms = 14%
41. Food and Beverage = 14%
Other Operating Department Sales = 72%
The % of total revenue from department expenses.
Rooms = January: 7%; June: 7%; Total: 7%
Food and Beverage (F&B) = January: 10%; June: 8%; Total: 9%
Other = January: 4%; June: 4%; Total: 4%
The % of room’s departmental expense from total rooms revenue for June.
= 46% (which indicates we control and lower the cost)
The % of food and beverage departmental expense from total F&B revenue for
June.
= 41% (which indicates a decent % of cost)
The departmental gross income for January and June and the average. We did better
from Jan to June, because the sales and revenues increased sharply from Jan to June, the net
income eventually increased. So our Resort actually did better.
Jan = $274725
Jun = $362625
Average = $318675
Total undistributed operating expenses in Jan and June. We did not do a better job in
controlling the cost. Because not only the total amount of undistributed operating expenses
increased, but also the percentage increased.
42. Jan = $106800
June = $142900
The resort’s gross operating profit in Jan and June. We improved in this area because
both the amount and percentage increased from Jan to June.
Jan: $167925
June: $219725
The total amount of fixed charges in the months of Jan and June.
Jan = $41700
June = $42400
The resort’s net operating income (before tax) in the months of Jan and June. Our
performance in terms of net operating income over the period of Jan to June got better because
both the amount and percentage increased from Jan to June.
Jan = $126225
June = $177325
The resorts net income (or loss) in Jan and June. Our resort overall improved the
operating performance over the period of Jan to June because both the amount and percentage
increased from Jan to June greatly.
Jan = $75735
June = $106396
The total amount of net income (or loss) earned over the two periods.
= $182130
43. Overall Evaluation
Our evaluation of this resorts operating performance after evaluating the income
statement would be it is getting better from Jan to June. The increase of the net income would be
the best proof.
Overall Recommendation: 1. Forecast and manage the cash flow. 2. Timely and
accurately make the financial statements for the resort. 3. Pay attentions to the key financial
indicators. 4. Forecast and manage the operating budgets. 5. Update system and processes.
Key Strategic Management Issues
For this revenue management project, we are focused on the development of a resort
concept and a strategic revenue management plan. In particular, we outline a revenue
management plan for our firm that includes the following eight sections: 1) strategic pricing, 2)
perceived value, 3) differential/discriminatory pricing, 4) competitive analysis, 5) inventory and
price management, 6) demand analysis and forecasting, 7) distribution channel management, 8)
evaluation of revenue management practices.
1) Strategic Pricing: application of data and insight to effectively match prices charged with
buyers’ perceptions of value and willingness to pay
Strengths:
o Key tactic in effective revenue management
o Prices communicate much information to its customers
44. o Determines total sales revenue the company will achieve
Weaknesses
o Can sometimes result in a decrease of total revenue
o EX: if there are increased menu prices due to increased costs and there
is no added customer value, there may be reduced guest counts or
guests’ per-visit purchase
2) Perceived Value: buyer’s view of the benefits which in turn, indicates how a product
should be priced based on its worth to the consumer and to return a profit to the company
Strengths:
o Allows business to assess the benefits prior to making a purchase since
prices will be based on the view of value
o Perceived value – selling price = personal profit
Weaknesses:
o Increase in costs do not automatically equal to an increase in
customers’ perceived value
3) Differential/Discriminatory Pricing: practice of a seller charging different prices to
different buyers for the same product or slightly different versions of the same product
Strengths:
o Concept applied to optimize hospitality revenues
Weaknesses:
o just because a buyer is willing to pay a higher price for doesn’t mean
they would if they could secure a lower price for that same
product/service
45. 4) Competitive Analysis: an assessment of the competition around you to provide a context
for understanding a hotel’s relative occupancy, ADR, and RevPar
Strengths:
o Allows hoteliers to understand their own revenue management
challenges and success
o Enables a business to learn the effectiveness of their rate strategies by
assessing the revenue-generating performance of its competition
Weaknesses:
o GMs are sometimes hesitant to share their operating performance
numbers with their direct competitors out of fear that it will help them
optimize their revenues
5) Inventory and Price Management: management of a business’ inventory in order to
optimize revenues. This section also provides examples of how the inventory offered is
priced based on the strategies selected.
Strengths:
o Helps RMs to monitor the number of rooms available for sale and the
prices to be charged for them
o Allows hotels to generate more revenue without having to increase
prices
o If really effective, RMs may be able to increase total revenues when
reducing prices
46. Weaknesses
o Overbooking of hotel rooms can be controversial as it can cause
significant frustration
6) Demand Analysis and Forecasting: assists in analyzing the demand for a company’s
product and therefore can forecast what to price the product at and ultimately how much
revenue for this product will be brought in
Strengths:
o Determination of long range revenue budgets
o Impacts room pricing
o Crucial for planning for the hiring and training of new staff
o Important for scheduling of possible hotel renovation and repairs
Weaknesses:
o There can be other unseen factors that may impact future demand
7) Distribution Channel Management: process for RMs to target consumers by promoting
room sales among their various selling alternatives and, as a result, optimize revenues
Strengths:
o Considered an extra source to communicate with potential customers
Weaknesses:
o Losing out on loyalty of customers since their loyalty is to the
distribution channel
8) Evaluation of Revenue Management Practices: assessment of your performance efforts to
optimize revenue
Strengths:
47. o Helps improve future decision making
o Helps businesses identify the hotels’ strengths and weaknesses
Conclusions and Recommendations
The Cocoa Beach Luxury Resort and Spa is a full-service resort that offers a plethora of
room types and amenities, high end products and services, and fantastic customer service.
Located with direct beach access as well as being within a two-hour drive from Orlando theme
parks, the resort is the perfect getaway for affluent mature travelers and mid-high class families
alike.
With such a wide range of amenities, the use of a varied mix of pricing strategies is key
to the resorts success. The rooms division employs price skimming, psychological pricing, and
value-based pricing. The food and beverage department uses cost-based and profit-based pricing.
The conference center prices are cost-based to account for the costs of all services offered.
Finally, the retail and sports department uses economy pricing, penetration pricing, and resort
fees. By using this mix of pricing strategies, Cocoa Beach Luxury Resort and Spa is able to
achieve the highest possible profit while also giving guests and customers fair prices for all
products and services offered.
48. Recommendations
Using fewer pricing strategies in the future would create less confusion.
Though the differences in products and services require different strategies,
not so many are necessary.
Include more meeting markets in as primary targets in order to incorporate the
large conference center as a selling point and generate more revenue.
Implement two-tier pricing where guests may pay for movies, snacks, and
drinks in their guest rooms.
Create partnerships with nearby tourist attractions.
Host local events, such as the Cocoa Beach Food & Wine Festival, to
generate extra revenue and increase local awareness of the resort and its
amenities.
Allow locals to use resort amenities such as the spa with the purchase of a
membership.
Once new villas have been built, several may be sold as timeshares.
49. Key Takeaways
Key takeaways from this revenue management plan include:
The use of several pricing techniques are key when several types of products
and services are offered.
Prices should be set in accordance to target markets, quality of products and
services offered, the value guests place on the business, and the forecasted
demand.
A good management team works together in order to ensure that prices are set
in line with each other’s departments. Customers should not feel as though
they are being overcharged in one specific area of the resort.
Selection of target markets should help determine products and services
offered.
