TYSONS CORNER Case Solution
Hollinswood Associates, is a joint venture organization, which has been operating a Marriott Hotel at the Tysons Corner, Virginia for the past 8 years. The partnership has created a considerable worth in the project and has made significant cash appropriations previously, but it is currently being confronted with a cash flow deficit. John Green, the Managing General Partner of Hollinswood Associates has to resolve the impending sash flow deficit, otherwise he would be exposed to the threat of either losing the hotel or being left with no other option than to sell the hotel. John Green has decided to conduct a meeting to discuss the reasons of cash deficits and to discover some appropriates procedures that would help them in overcoming the deficits.
The several factors that created shortfalls in the deficits, include: different competitive hotels surrounding the Tysons corner, lack of administrations and work, less gathering space and evaluating techniques. John Green and his accomplice need to introduce an improvement in the Marriot’s administrations and quality to contend it with its fellow competitors, arranging the expense system to improve the inheritance of the occupancy and bringing improvement in the services and locations.(Poorvu, 1989)
2.Brief Overview of Key Case Facts
The Tyson corner has significant importance in Fairfax. It is the center of attraction in the Fairfax country. It is located at the most crowded and competitive area in Virginia. The hotel is clearly well located and has enjoyed historical success for past 8 years. The key fact in this case is that the hotel is now facing the issue of cash flow deficit, which lies in the market prospectus. The hotel manager has decided to schedule a meeting with the adjacent partners in order to discuss the factors contributing to the deficits and to find the solution for the problem being faced. After looking into this matter; the manager has realized that since 1989; there has been a graduate decline in operating results for Marriot. The decline in the operating condition of Marriot is due to several factors, which are explained below:
- Room rates had been leaved off.
- Reduction in food and beverages profit.
- Competitive hotels surrounding the hotel.
- The hotel’s physical condition.
- An inflationary cost spiral.
- Increment in the insurance premium.
- Soaring labor costs.
These factors were continuously declining the hotel’s cash flow deficits. The manager was worried about the hotel’s revenues, because the hotel has to bear all the monthly commitments, such as: labor costs, taxes and lender’s money to keep the hotel operating. The hotel manager has to resolve these issues by either saving or losing the hotel. To improve the hotel’s cash flow, the manager either has to improve its fund capitals, refocus on marketing strategies, renovate the hotel and improve its occupancy.
The main issue that occurs because of the continuous deficits is that:………………………
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