Question

CASE STUDY /big 4 Consultants has been appointed by a leading group in hotel industry to prepare feasibility report for opening a five-star hotel in Ras al Khaima. The group had been most successful one in the hotel industry and had always kept its eyes open for new opportunities.

In view of the very fast industrial growth in the city of Ras al Khaima, the city had attracted the attention of the group. It is historically known as Julfar, is one of the seven emirates that make up the United Arab Emirates (UAE). Its name could be taken to mean "headland of the small huts", which can be attributed to the indigenous buildings that existed along the coast. The Emirate is in the northern part of the UAE, bordering Oman’s exclave of Musandum. RAK, apart from being a developing city, has added advantage of pleasant weather and several places of tourist attraction in the neighborhood. Moreover, the closeness to Dubai and Abudhabi, a city of international stature, has made it very easily accessible to international tourists.

For this Consultancy, this was the first time in this area that an assignment concerning hotel industry had been received. They, however, soon realized that the assignment was not as simple as it appeared to be in the first place. The feasibility of such a hotel would depend essentially on two factors. Businessman visiting the city for work would constitute one segment of the market, while tourists would constitute the other. Further, the tourists could be from UAE or foreigners. The success of such a hotel would also depend upon the relative attraction of other tourist centres in the vicinity. Further, it was necessary to estimate fluctuations in demand for hotel accommodation so that attractive discounts could be offered during the off-season for business conferences, executive developmental programmes, etc.

The consultants realized that they would have to undertake a market research on a national scale to assess the tourist potential of the city. They would also have to survey the foreign tourists to estimate one of the most important segments of the market. They wondered whether such a survey will have to extend over a period of one full year to completely take into account the seasonal variations in tourists’ traffic. Moreover, they were undecided about the manner in which survey should be conducted. The company also feared that in absence of an accurate definition of the problem, they may land up surveying the complete tourist market in UAE rather than studying feasibility of a hotel in RAK.

Thus, the problem appeared well defined and that they were concerned as the preliminary report explaining methodology of the research and the questionnaires to be used to be submitted to the client along with the estimate of expenses within one month.

QUESTIONS

1. Apply your ideas in defining the problem of assessing feasibility of hotel in RAK so as

    to help designing the survey.

2. It is important to plan a survey for collecting information on expected demand for

    hotel space. Illustrate.

3. Being the coordinator of this research at Big 4 Consultants, explain various steps you

    would suggest to your research team in preparing the report to the Hotel management.

Answer 1

(1)Problems of constructing a hotel in RAK:-

i) To assess the tourist potential of the city the team have to make a national study to see the number of tourists foreign or from UAE visiting this place.But to study this separately, it is very difficult as it is practically impossible to differentiate tourists visiting UAE and particularly RAK. So they may end up studying the whole tourist market of UAE.

ii)It was hard to decide whether to do the survey for 1 year or more(to see the seasonal fluctuations)

(2)Report for the hotel management:-

A pilot survey(small scale survey) has to be done to see the travel agencies (for counting no. Of tourists),transport modes etc.

i) Expenditure-The total cost to prepare the questionnaire,cost of surveyors has to be estimated and then mention on the report

2) Questionnaire-The questionnaire is to be prepared including the questions.This has to be given in airports bus stands and travel agencies to be filled by the tourists.The questions like destinations of travelling,reason to visit,places of reciding must be included.