On Monday May $14,2012,$ Justin McGregor, owner and manager of the Good Night Motel $($Good Night$),$ located at the north end of Grand Bend, Ontario, received a visit from George Alward. Alward was seeking accommodation for the delegates to a church convention on Friday and Saturday nights, October $26$ and $27,$ respectively. The number of rooms needed would fill Good Night for both nights. The idea of a full house at that time of year was exciting, but when Alward proposed a room rate of half the regular room rate, McGregor was taken aback and very reluctant to accept the business. Alward said he would be in the area for the next two days and would return tomorrow for a decision. He said the church convention was being held in Grand Bend at that time of year intentionally, because the motel and hotel business was so seasonal and rates would be much lower at this time of year. The church conference operated on a very limited budget and several attendees were being billeted in private homes and summer cottages$.$

GRAND BEND

Grand Bend was a summer resort town bordering Lake Huron, wherein all businesses in the area were exposed to highly seasonal business patterns. As such, many retail shops closed around the first of October. In the summer, it was estimated that $10,000$ people lived in Grand Bend and many others arrived daily to enjoy the beach, the sun, the water and all the "action" offered with that environment. Grand Bend had a reputation as a party town, attracting primarily the $15-$ to $30-$year$-$old demographic, who resided within a one to $1\mathrm{.}5$ hour drive to the town.

THE MOTEL

Location

Highway $21$ and Highway $81$ intersected at Grand Bend's primary retail shopping district. The Good Night Motel was located on Highway $21,$ three kilometers north of this main intersection. The motel was $15$ years old, had $30$ units, and was within walking distance of a family style restaurant that was open all year. The

Good Night was a family$-$style motel, careful about its reputation in a town that loved to party. Several other motels were located in Grand Bend.

Occupancy Rates Pre$-2008$

For many years, Good Night operated almost at capacity from June $15$ to September $15.$ While May $16$ to June $15$ and September $16$ to October $15$ were not fully occupied times, weekends were half to three quarters full. October $16$ to May $14$ was always slow, rarely more than a quarter full at any time. The motel was closed the month of February for paid staff holidays.

Occupancy Rates $2008-2012$

Over the past four years, Good Night's occupancy rates had dropped seven to $15$ per cent across all seasons of the year, resulting in lower annual revenues and increased competition for guests. There were two reasons for this sales decline and increasing competitive environment. One was the $2008$ U$.$S$.$ financial crisis and the resulting U$.$S$.($and eventually North American$)$ economic recession. Secondly, the Canadian dollar had strengthened considerably against the U$.$S$.$ dollar, making it less attractive for U$.$S$.$ tourists to travel to Canada. Consequently, the number of tourists had dropped significantly and more of those who travelled to the area "shopped around" for the best value in accommodations.

Good Night's fiscal $2012$ revenues had improved, but had not yet returned to pre$-2008$ levels. In fact, $2012$ was the first time in the last five years that Good Night had earned a profit. Based on what he had read about the uncertainty of the future economy's recovery, McGregor believed revenues would remain flat for the next two years.

Operations

McGregor managed the motel with the help of his wife, Marie. The critical tasks were room registration, supervision of services. pavroll bookkeeping and inouiries. The motel emnloved a fill$-$time maintenance

Operations

McGregor managed the motel with the help of his wife, Marie. The critical tasks were room registration, supervision of services, payroll, bookkeeping and inquiries. The motel employed a full$-$time maintenance man on an annual salary, two women $($Mary Driscoll and Sheila O'Toole$)$ who worked on a part$-$time basis, and two students during the busy summer season to clean the rooms and the common areas.

The maintenance man, Jack Snelgrove, worked Mondays to Fridays from $10$ a$.$m$.$ to $8$ p$.$m$.$ and on the weekends from $10a.m.$ to noon. His job was to maintain, clean and add chemicals to the pool seven days a week from June $15$ to September $15,$ and to keep the gardens tidy, the grass cut and the snow shovelled throughout the year. Snelgrove was also responsible for the room technology, the plumbing, the internet, the TV and the coffee maker, and he was on call on weekends for any problems that arose with these services.

Driscoll and O'Toole cleaned rooms and performed routine maintenance such as replacing light bulbs and batteries, and identifying problems that required either more complex maintenance work, plumbing problems or electrical concerns. Mary Driscoll had been with the McGregors from the outset.