Question 3 [22] Read the case study below and answer the questions that follow:

CASE STUDY SEVEN TREES HOTEL

The owner of Seven Trees Hotel, Mr Dennis Long, has returned from his trip through Africa as a direct result of the poor performance of the hotel that he inherited from his father. He is convinced that the hotel has a lot of potential but that poor management in his absence has led to the current poor performance of the hotel. After analysing the financial performance of the hotel over the last few months, he was shocked to see that the hotel was on the brink of bankruptcy. He further discovered that bookings for the next few weeks dropped drastically, mainly because of Airbnbs that have opened in the town and on the farms. However, he also discovered that the booking system as well as other systems have almost collapsed completely. Upgrading the booking system is, to him, a definite priority. Another priority would be to see if he can convince the employees who have left to re-join his staff. The

visitors book was also an eye opener to him as many guests stated that the hotel was old- fashioned and did not keep track with the changing needs of the guests. One guest even

compared the hotel to an old ox-wagon. He felt that changing the perception of guests regarding his hotel would be a challenging task but something that he would have to do sooner rather than later. If at all possible in this situation, he was excited about a new game farm that would open its doors to the public within the next year. The farm was very close to his hotel and he was hoping that guests in future would stay for two or more nights and not just one night. He realised that he would have to formulate a strategic plan for the hotel to take it into the future. However, he struggled to decide on what type of hotel he should create for the future , who his real customers are and how he should offer the accommodation. In terms of the latter, he even considered outsourcing the management of the hotel to a professional group. In the end he decided to appoint a family member, Ms Jenny Black, as general manager of the hotel. She accepted the job and resigned as a bookkeeper from her firm in Gauteng. He realised that Ms Blacks goal of to make as much money as possible was confusing and not taken seriously by the staff. Although he felt that the hotel had a lot of potential, he knew it would be an uphill battle to restore the hotel to its former glory. The lack of suitably skilled workers and the high absenteeism amongst the housekeeping staff caused him nightmares. He was furthermore very concerned about the economy in South Africa but felt that he could do nothing about it. He was hoping that the economy would force travellers to opt for cheaper hotels such as Seven Trees Hotel. He also realised that the hotel does not comply with the Employment Equity law in South Africa. Furthermore, there are rumours that the government wants to raise the minimum wage of hotel workers to almost double the wage that he is currently paying his staff. Crime in the area has also increased as many people have lost their jobs in the nearby town as well as on the farms.

With the familys pride at stake, he decided to take the bull by the horns and spend quality time on formulating a strategic plan for the hotel. This would be his first attempt at formulating such a plan but he felt that he had no choice but to try his hand at it. Source: Adapted from: Smit, P. J., Botha, T. & Vrba, M. J. 2020. Management principles. A contemporary edition for Africa. 6th edition. Cape Town: Juta.

Questions:

3.1 Which information in the case study confirms that the owner is currently struggling to state a clear mission for the hotel? (6)

3.2 Use the table below to apply a SWOT-analysis to the case study on hand. (16)

Strengths

Opportunities

Weaknesses

Threats