The Drowling Ski Resort Case Study Example | Topics and Well Written Essays - 1250 words

The Drowling Ski Resort - Case Study Example Its financial trouble started in back in 2000 when it went into receivership and there seemed to be no buyer willing or able to finance the resort, after it remained closed for a year, it was reopened by Ian Mac-Arthur through an arrangement with the Syracuse development cooperation. The city was willing to fund the project since they believed that the resort represented and important economic entity and if it was left to collapse, it would harm the community especially owing unemployment of the hundreds of locals who worked there. After 5 years, MacArthur decided to discontinue his ownership of the resort because the capital investment required to repair and retransform the resort to its former glory was too much. Consequently, it was bought by a Peter Bass who assumed the debt and arranged with MacArthur to pay buy him off the debt in installments. The resort however continued to lose money and the visitors patronizing it went down considerably resulting in reduced revenue and depe ndence on government bailouts to remain in business (Huang & Leong 2). The management of the resort tried channeling back profits and even took on long term debt but the huge losses the firm had incurred in the course of the last two years had eaten too deeply into the cash reserves. Drowling Mountain is dependent primarily on the population of Syracuse since the customer base is predominantly local, for financial and practical reasons the firm did not market beyond the Syracuse area. The pricing is marginally higher than the neighboring resorts and this is justified by the variety of exclusive packages offered in the resort although admittedly clients sometimes found them too complex and therefore ignored them. Carter also says that the operations were far from smooth owing to the fact that they had cut down on the labor cost as much as they could and as result there was a perennial shortage of employees and the few ones were often overworked. After an incisive analysis of the situ ation, one the ground I came up with the following recommendations which if implemented successfully could reasonably be expected to curb the downward trend of the resort and gradually help it recover its prestige and profitability. For one, it is apparent that the resort justifies its higher prices by virtue of its exclusive package offering that are not available in other resorts, however, it has also emerged that these services are often viewed as too complex and the clients often ignore them. This leads to wastage since they require staff and maintenance they clearly do not justify the cost and complexity. Therefore instead of cutting down on costs by laying off staff, the management should carry out a thorough assessment on the redundant services, eliminate them or make drastic changes to simplify or make them more adaptable to customers. A strategic evaluation into the profitability of individual services and a comparison with their uptake in other resorts would give the manag ers a better understanding of what needs to be retained and what needs to be cut off. As a result, the services will be streamlined the staff will be more flexible and the costs or running the resort will marginally reduce, the surplus funds can then be used to service other facilities that can help resume profitability. The manager’s approach is based creating a culture of skiing and therefore he does not view the fact that other resorts are encouraging customers to engage in the sport as a threat since he felt they were promoting the uptake of skiing culture. Notwithstanding, this