given number of rooms which can be sold each night. Excess capacity represents a loss of business, while undersold rooms represent a loss of revenue (the property could have charged more for the rooms that were rented for the night). Periods of shortages cannot be covered by selling additional rooms in the future.
In order to maximize profits, hoteliers have developed specific products to meet the needs of particular niche markets. Some markets are served by all-suite hotels that cater to business travelers; other properties use a discount approach to bring in one-night travelers. Some properties appeal to families, while others seek to attract singles or couples. Some hotels serve airport areas, while others are located near convention centers and market to groups almost exclusively.
Motels are usually one or two stories and offer limited food service. These facilities are designed for family travelers and not for extended stays. Hotels are multistory buildings that include a coffee shop, lounge, room service, convenience shops, and banquet facilities. Resorts generally offer a vacation atmosphere with extensive recreational facilities for special interests, such as golf or tennis.
This research explores the opportunity of opening a resort property on the Gulf Coast of Texas, specifically at Galveston, which is a seaside location.
Situational Analysis - Situational Environment
Business conditions are favorable for opening a resort property in that the country is emerging from a recession that affected the chosen area, Texas, less than the rest of the country. Interest rates have recently climbed somewhat, due to the Fed's efforts to keep inflation at bay, but financing should be available and the property should be able to operate profitably even in this environment.
The state of technology also offers a strong reason for entering the resort market. More than transient hotels or motels, resorts depend on a...