Recommendation:
My recommended solution is for La Hacienda Del Sol (LHDS) to target the Mexicali residents from the age of 15 to 24 with annual household income of greater that $16 012 that are looking to have a change of climate and enjoy a vacation. This issue will address LHDS’s problem of the lower amounts of occupancy and revenue during the off-season, as currently LHDS relies on sales made during the peak season to carry its business over the rest of the year. LHDS should offer their rooms from the following range, to both the Mexican and American consumers in order to not discriminate prices as this may make other the Americans angry.
In Exhibit 1 a detailed analysis of current and potential hotel guests can be seen. Based on this this analysis in order to increase occupancy rates in the offseason the hotel have promotions for Mexicali Residents or For Residents in Los Anglos or San Diego. An analysis of these two segments can be seen in Exhibit 2. This target market was chosen on a geographic, demographic, and benefits bases. Mexicali is only 124 miles from San Filipe and therefore is a drivable distances for these residents. The hotel has previously catered mainly to families and offers amenities and activities that can be enjoyed by a group of people. Also the hotel has rooms that can be occupied by 2 to 4 people. For these aforementioned reasons demographically the hotel should segment those between residents between the ages of 25 to 54 because, individuals between these ages are more likely to consists of young couples and couples that have children. On a benefits bases LHDS should segment that market at people who are looking to have vacation and have a change of scenery for a few days and people that would like to enjoy the more comfortable climate offered in San Filelepe. In order to effectively target Mexicali resident LHDS needs to change the perception that they are not welcome. Offering a lower price can only change this, this is possible as currently during the off season occupancy rates are as low as 20 %. This lower price should be offered both to the current American market and to the Mexicali residents. However timing of this promotional rate is very important occupancy rates, temperatures in Mexicali, and availability of Mexicali residents have been taken into account when determining the timing. An analysis can be seen in Exhibit 3, from this analysis we have concluded that the promotion should be offered from March to the third week in June.
In order to keep its current occupants in the off seasons and target the new Mexicali residents the hotel should use a differentiated segmentation strategy. The hotel should position themselves to the Mexicali resident market on benefits and symbolism basis, the hotel should emphasize the benfit of change in climate and scenery Mexicali residents could receive. A positioning statement can be seen in Exhibit 4. In Exhibit 5 there is analysis of promotion for you too look at. According to this