AVARIBy

Ajay NormanAnkur KislayaMelissa AlexShivam ShuklaSaurabh Arora

Avari Lahore is a 5 star hotel

It has in total 190 rooms, inclusive of –

-15 suites, 12 junior suites, executive, brida..l and prudential suits.

It’s clientele includes business executives, tour groups and Frequent Individual Travelers(FITs).

SWOT Analysis

•New entrants like Sheraton and Holiday Inn with good international image

•Flights from Europe and US were expected to start leading to increased business activity

•Formation of tax free zone giving boost to industrialization and business travel.

• Rooms less spacious • Relatively newer

management

• One of the few 5 star hotels• Located in heart of the city• Perceived Better services

S W

TO

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov0

10

20

30

40

50

60

70

80

90

100

Occupancy(%) chart

Avari Pearl

Inferences from Occupancy chart -

Average occupancy rate is almost same for both, throughout the year.

Comparison of occupancy rate suggests that Pearl has been able to take relatively greater advantage of it’s summer package.

Also in November, Pearl’s occupancy rate is more than Avari.

Pricing 1998Room Rates Single Room(Rs.) Double room(Rs.)

Pearl Avari Pearl Avari

Rack Rate 1786 1806 2086 1986

Commercial Rate 1680 1641 1980 1821

Preferential Rate 1350 1478 1650 1658

Executive Rate 1150 1165 1450 1345

Volume EBS 1000 1020 1300 1200

Suites

Junior Suite 3300 3300

Executive Suite 5500 5500

Presidential Suite 7150 7150

Bridal Suite Complimentry Complimentry

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov0

200

400

600

800

1000

1200

Average room rate(Rs)

Pearl Avari

Inferences from Average Room Rate -

Almost through out the year, average room rate of Avari is more than Pearl

In winters (Nov-Jan), Avg Rate of Pearl increases that of Avari due to more business.

Tourists and business executives prefer Pearl due to it’s spacious rooms and larger gardens.

Avari Clientele (%occupancy)

11%

61%

3%

9%

3%2%

7%4%

Avg of Oct(1987) to Nov (1988)

FIT Business Tours Special Summer Packages Conventions Airlines Others

Avari Clientele (%occupancy)

8%

30%

5%

45%

10%2%

November (1998)

FIT Business Tours Special Summer Packages Conventions Airlines Others

Options available -

A – Increasing prices of all rooms by 10%

B – Increasing all rates except EBS and VEBS

Pricing StrategiesOption 1:Increasing prices of all rooms by 10%

Option 2:Increasing prices of all rooms except EBS & VBS by 10 percent

Best Pricing Strategy It was found that option 2 is better than Option 1. EBS and VEBS is an important source of income and hence shouldn’t be increased by 10%, as it will cause a negative impact on the revenue.

As the increase for EBS and VEBS is growing, if Avari raises the prices, the companies may choose to go for the competitor’s services instead.

Solution - We saw that Avari’s occupancy rate decreased in November compared to previous years.

With hospitality business likely to improve in Lahore due to – ◦ Direct flights expected from US and Europe and,◦ Tax free zone will ensure industrialization giving boost to travelling.

In scenario like this it is not advisable to increase all rates without planning.

Considering option 1, where rates for business executives will also increase, we will be again in risk of loosing potential customers to competitors.

SERVQUAL - Reliability – Hotel should always abide by the standards in providing services to customer and maintain their position in longer term.

Assurance – The hotel should ensure the customers that they offer what they promise.

Tangibles – The hotel should make sure that they have the facilities as required.

Empathy – The customers should each be made to feel like they are being equally treated, even though they are paying different rates and should feel like they’re getting their money’s worth.

Responsiveness – If in case of any concern the customers have, the hotel must be ready to address such concern.

Future solutions Bundling as a solution

Creating a strong brand image of themselves especially after their disassociation with Hilton.

Can be done by conducting promotional events and sponsoring large scale events.

Thankyou!