solution

Read through the case study.

The Holiday Inn is a 40-unit chalets, no-frills operation in the less scenic part of a major Langkawi town. The owner, Mrs Hasimah, firmly believes that there is a need for his style of low-cost family accommodation amid the luxury and beauty of the area. Her rooms are large, family-style rooms (there is no television, for example). Although there is plenty of room for future expansion, the grounds are fairly bare with a bit of landscaping, but mostly grass.

Mrs. Hasimah can serve breakfast to the rooms and provides tea-making facilities. There are now a lot of good restaurants and take-aways in the area. Mrs. Hasimah’s prices are less than half of what similar motels charge and only a fraction of what the big five-star properties are charging. And, really, she isn’t all that far away from the beach, shops and other attractions.

The problem is occupancy. She has some regulars who come every holiday period (and have been doing so for the four years she has owned the property). Overall, occupancy is about 50% year round and she knows from the local tourist office that the other properties average around 68% occupancy year round. New developments could mean trouble. This lack of occupancy can be quite frustrating for Mrs. Hasimah. Cars pull in, drive around the parking areas, and then drive away.

Currently Mrs. Hasimah does very little advertising in local district guides and the holiday papers, mainly because she really thinks word-of-mouth is the best form of advertising. She is a member of the local tourist committee, but too busy to go to meetings. However, she does receive the local statistics and knows the average stay in the area is 4 nights, and that local families and couples and increasingly overseas visitors are her potential customers.

She’s not desperate yet, but she’s getting worried and disillusioned. She thought she would be overrun with guests, but that hasn’t happened.

From the case study, write down all possible risks that you can identify in relation to Holiday Inn. Identify the risk factors. Can you categorize the risks? What are the sources of risks? What are the consequences from the identified risks?