MARKETING MANAGEMENT BUS506
Case Study Analysis: Amber Inn & Suites, INC
Merima Bejtagić-Makić, Ediba Rizvanbegović
International Burch University, Sarajevo
MARKETING PROBLEM DEFINITION
Company mission statement states that company provides, in essence, business travelers with
clean and comfortable accommodations in convenient locations at reasonable prices. So, here
we can see that the business users are actually the target market. The problem is that Amber
Inn & Suites Inc. recorded five consecutive years to be unprofitable and found that it is about
time for company to find a strategy that will lead to growth of 7% in 2 years. Amber Inn &
Suites promotes their commodities to business travelers who usually don't stay in the hotels for
more than one or two nights and the main challenge for company would be to to decide
whether or not to expand their marketing and advertising expenditures between
pleasure/vacation guests or business professionals. For fiscal 2005 company managed to record
the growth of 7,4% percent. Still, it is slightly below the overall hotel industry average of 7.6%,
but higher than the average limited-service growth rate of 5.8%. However, Amber Inn & Suites,
Inc. is also projected to reflect its’ third year net loss while the hotel industry as a whole and the
limited-service operations reported profitable operations over the past three years following
improved economic conditions.
COMPANY OVERVIEW
Formed in 1979, the company operates 200 Amber Inn properties and 50 Amber Inn& Suites
properties, each with an average of 120 individual guest room or suite units. The company
projected lodging revenues of $ 422.6 million and a net loss of $15.7 million. Mission of Amber
Inn & Suites Inc. is to provide principally business travelers with clean and comfortable guest
accommodation in convenient locations at reasonable prices. The company is positioned as a
limited-service hotel between economy hotels and full-service hotels. The company locates
properties on premium sites on major highway close to suburban industrial and office
complexes, airport and large regional shopping centers.
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INDUSTRY OVERVIEW
The U.S. hotel industry recorded revenue of $ 113.7 billion and grossed $ 16.7 billion in pretax
profit in 2004. As of December 31, 2004 there were 4.4 million hotel rooms in the U.S. Two
thirds of all U.S. hotel rooms were affiliated with a brand, the remaining one third were
independently owned and not brand affiliated. The U.S. hotel industry is highly fragmented,
with no one company or no brand controlling a majority of hotel rooms. Based on the number
of hotel rooms, the ten largest hotel companies in the U.S. are :
1. Cendant Corporation (439,279 rooms)
2. Marriott International, Inc ( 380,218 rooms)
3. Hilton Hotels Corporation ( 357,332 rooms)
4. Inter Continental Hotel Group ( 337,643 rooms)
5. Choice Hotels International, Inc ( 313,982 rooms)
6. Best Western International ( 186,422 rooms)
7. Accor North America (134,803 rooms)
8. Starwood Hotels & Resort Worldwide, Inc (123,747 rooms)
9. Carlson Hospitality Worldwide ( 82, 739 rooms)
10. La Quinta ( 65,382 rooms)
CONSUMER ANALYSIS
One-half of all guests stayed at hotels for business purposes and one-half stayed for vacation
purposes. In 2004, the typical business room night was generated by one adult male (67
percent), age 35-54 (52 percent), employed in a professional or managerial position (50
percent) earning an average yearly household of $81,100. These guests paid $96 per room
night. The typical leisure room night was generated by two adults (51 percent), ages 35- 54 (45
percent), earning an average yearly household income of $ 72,600. These guests paid $89 per
room night.
COMPETITION POSITIONING
Hotels compete on the basis of amenities, price and service. Full service hotels offer food and
beverage outlets such restaurants and lounges, meeting, banquet and convention facilities,
luggage service, room service. Limited hotel service hotels do not offer many of the full service
facilities, such as restaurants, lounges and banquet rooms. They focus primarily on renting
hotel rooms.
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SWOT ANALYSIS
POSITIVE
INTERNAL FACTORS
STRENGTHS


250 property hotel chain with
locations in 10 States.
Reputation on providing a
clean, comfortable, cheaper
and convenient place.
EXTERNAL
FACTORS
OPPORTUNITIES


Attract the travelers of price
orientation
Increase the length of stay per
visit
NEGATIVE
WEAKNESSES


Aging facilities and limited.
Business orientation.
THREATS


Competition from other hotel chains
Lower price strategy
ALTERNATIVES AVAILABLE



Focus on business travelers : If company focuses on Business travelers then it should
also provide them some additional services, such as Wi-Fi and study cooperative, and do
weekend special deals for tourists.
Focus on vacation travelers, Vacation travelers are very price sensitive, so the company
can also make a good offer to them by introducing weekend special offers or to focus on
this type of users and change the identity of the hotel.
Leave everything like it is now.
SOLUTION
Business travelers are in the mission of the hotel, and are the audience that can be more
profitable for Amber Inn. They are less price-sensitive and pay more for the staying. The
needs of those travelers are more standard than the vacation travelers, so is easier to find
out what do to. It should also abolish non-useful advertisement, increase Internet
promotion and internet-sales.
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