Identifying More Opportunities to Increase Room Occupancy Rate of Hotel Daspalla in Visakhapatnam

                                                                                                  MEMO

Identifying more opportunities to increase room occupancy rate of Hotel Daspalla in Visakhapatnam

Daspalla has been in the hotel industry for past 25 years in Visakhapatnam and lies in the heart of Vizag’s business district.  Recently the 4-star hotel has witnessed a major decline in its occupancy rate. Despite a major opportunity in the budget hotel space, the brand has barely managed to break even in the last two years. A sharp fall of 35% in the room occupancy rate is mainly attributed to an increase in the number of aggregator start-ups (OYO rooms, MMT) and other nearby affordable hotels. Moreover, the hotel has failed to retain its loyal customers despite making drastic changes in its pricing plans. The hotel’s old architectural style and heritage does not meet with the needs of the new generation and might need a complete overhaul in its strategy to keep the business running in future.

Daspalla is located in the busiest place of Vizag with hospitals, cloth markets and major industries in its vicinity. The occupancy rate can be improved by targeting the corporate sector and hospital industry. Tie-ups with major industries and hospitals to reserve booking for their company employees or visiting specialist doctors can prove to be an added advantage for its business. An immediate rebranding plan and changes it its current setup will help the business to regain its position in the market and influence consumer behaviour.

Tie-ups with major industries and tourist companies will elevate Dasapalla’s image and reposition it in the minds of consumers. Nearby luxurious hotels are built keeping the customer’s expectations in mind and have used differential pricing to suit the pockets of different segments of customers. Therefore, the introduction of new features in the hotel is just a one-time investment which would help the brand to remain profitable in the coming years.

The management should now identify the gaps in its offerings and strategize to make necessary changes keeping the customer’s needs in mind. A thorough competitor analysis is required to identify the loopholes and make changes in its plan accordingly. The next step would be to identify the target market and the companies/hospitals/tourist brands with which tie-ups can be initiated in future. This requires heavy engagement of resources, employees and senior officials to start with the idea of  tie-ups and promotional plans.