Case Study 1 Dark Days at Sunnyvale: Can Teamwork Part the Clouds? The Sunnyvale Resort is...

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Case Study 1 Dark Days at Sunnyvale: Can Teamwork Part the Clouds? The Sunnyvale Resort is a 300-room luxury property with a lake on one side and a golf course, riding stables, and tennis courts on the other. Once considered the premier resort of the South, the rich (both old and new money) considered it fashionable to winter at Sunnyvale back in the twenties and thirties. However, by the sixties, its glory had begun to fade and so had its revenues. In 1978, the resort added 50 suites and 20,000 square feet of meeting space in an effort to attract group business. This helped for a time, but in the last five years both occupancy and room rates were caught in a seemingly unstoppable decline. Recently, the resort lost a star and was now listed in travel guides as a three-star property. Losing a star spurred Thomas Redgrave to take action. Mr. Redgrave was the resort's owner, and he was not happy that a property that should be making $15 to $16 million a year in revenue had grossed less than $12 million in each of the last two years. He gave the general manager, who had been with the resort since 1977, a nice farewell dinner and a gold watch, then hired Ken Richards, an experienced general manager from a convention hotel in Richmond, to come in and turn things around. At a meeting with Ken, Mr. Redgrave summed up the situation as he saw it. "I'd like to renovate Sunnyvale and really bring it back to where it ought to be. As a businessman, I know sometimes you have to spend money to make money. But I'd have to put several million dollars into the place to do it right. The way things are going at Sunnyvale right now, I'm not sure I'd get the kind of return on investment that I should. "The last general manager was here long before I bought the place and he didn't communicate with me very much. I try to be a 'hands-off' owner and I gave him plenty of room, but for the last few years the numbers have been bad and getting worse, and he didn't seem to know what to do about it. I'll be honest-I don't know that much about the hotel business. But that's why I hired you. I want you to find out what's wrong and get the revenues back up to where they should be. If I see signs that you've got Sunnyvale back on track, I'll open the purse strings. It'll take some time, but we'll make everything at Sunnyvale first-class again. That'll make me happy, and down the road it'll make your job a whole lot easier." Case Study 1 Dark Days at Sunnyvale: Can Teamwork Part the Clouds? The Sunnyvale Resort is a 300-room luxury property with a lake on one side and a golf course, riding stables, and tennis courts on the other. Once considered the premier resort of the South, the rich (both old and new money) considered it fashionable to winter at Sunnyvale back in the twenties and thirties. However, by the sixties, its glory had begun to fade and so had its revenues. In 1978, the resort added 50 suites and 20,000 square feet of meeting space in an effort to attract group business. This helped for a time, but in the last five years both occupancy and room rates were caught in a seemingly unstoppable decline. Recently, the resort lost a star and was now listed in travel guides as a three-star property. Losing a star spurred Thomas Redgrave to take action. Mr. Redgrave was the resort's owner, and he was not happy that a property that should be making $15 to $16 million a year in revenue had grossed less than $12 million in each of the last two years. He gave the general manager, who had been with the resort since 1977, a nice farewell dinner and a gold watch, then hired Ken Richards, an experienced general manager from a convention hotel in Richmond, to come in and turn things around. At a meeting with Ken, Mr. Redgrave summed up the situation as he saw it. "I'd like to renovate Sunnyvale and really bring it back to where it ought to be. As a businessman, I know sometimes you have to spend money to make money. But I'd have to put several million dollars into the place to do it right. The way things are going at Sunnyvale right now, I'm not sure I'd get the kind of return on investment that I should. "The last general manager was here long before I bought the place and he didn't communicate with me very much. I try to be a 'hands-off' owner and I gave him plenty of room, but for the last few years the numbers have been bad and getting worse, and he didn't seem to know what to do about it. I'll be honest-I don't know that much about the hotel business. But that's why I hired you. I want you to find out what's wrong and get the revenues back up to where they should be. If I see signs that you've got Sunnyvale back on track, I'll open the purse strings. It'll take some time, but we'll make everything at Sunnyvale first-class again. That'll make me happy, and down the road it'll make your job a whole lot easier."