Hidden Valley Cabin

Posted: October 17th, 2013

Hidden Valley Cabin

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Table of contents

Executive Summary                                                                                                                2

Introduction/Purpose of the Report                                                                                        3

Findings                                                                                                                                  3

1. Background Information                                                                                        3

2. Opportunities                                                                                                          5

3. Financial Viability of Opportunities                                                                       6

4. Rank of the Opportunities                                                                                      7

5. Changes to Current Operations                                                                              7

6. Impacting on Existing Customers                                                                           7

7. Resources Required                                                                                                8

8. Communication to the Stake Holders                                                                     8

Conclusion                                                                                                                              8

Recommendation                                                                                                                    8

Executive Summary

The main aim of this analysis is to evaluate the most viable market opportunity for Hidden Valley cabin. This is where the resort is experiencing massive growth in the industry but still there are some untapped markets. In this case, the analysis intends to find the most viable option. This option must have returns on investment as compared to the other options. Finally, at the end of the analysis recommendations on which is the best option for the resort will be made.

Hidden Valley Cabin

Introduction/Purpose of the Report

Hidden Valley Cabins is an Australian tourism eco resort. Both local and international tourists visit this place and hire a cabin where they can enjoy the beautiful sceneries and the environment. Hidden Valley Cabin is located northwest of Townville, neat Running River on the western slope of the Paluma range in Queensland Australia (Hidden Valley Cabins, 2012). Initially, the resort was started as a place where timber cutters could stay as they do their work in 1982.

However, in 1986, it was bought by Ian and Bonnie McLennan who brought down the existing building and rebuilt the entire resort. For more than twenty-four years, the two have successfully managed the resort to where it is currently placed today. It runs daily tours to their guests. The tours run for more that one-hour and a half and they offer the customers an experience to see the ecosystems and animals in the woods. Additionally, they offer a place for their customers to spend for a night. However, the market trends keeps on changing from time to time. In this case, a clear evaluation of the market data, establishment of new marketing options and establishment of areas that need changes should be made (Dave, 2006).

Findings

1. Background Information

The resort targets a number of customers who come in almost everyday. The first bunches of clients are those who come for daily tours and they do not spend a night in the resort. They come on a daily basis depending on their free time and they pay for the tours where they are taken to see the ecosystem and the animals. Additionally, they are offered with the bush experience of Australia. The other type of customers is those who come for the tour and they spend a night in the cabins. After enjoying the sceneries, these customers spend a night in the cabins. The estimated market price for this nice resort is more than three million dollars (MSN Nine, 2007).

According to statistics, the market price of the region has been growing at an increasing rate. Clients have been streaming in for a get away to enjoy the beautiful scenes of Australia. Additionally, the department of tourism in Queensland has been on the forefront to promote tourism increasing the market size of Hidden Valley Cabins. One of the main competitors of Hidden Valley Cabins is the gold coast hotels. The gold coast hotels attract more many clients due to the coastal advantage they have as compared to Hidden Valley Cabins where it is a bush like adventure (Travel Online, 2012).

There are several environmental factors that Hidden Valley Cabins must always consider in it business operations. Due to the location of the resort, Hidden Valley Cabins should protect a number of ecosystems from being destroyed. Additionally, they should protect the forests surrounding the area from any loggers. This ensures that all the animals are protected. Despite their aim of trying to go green, technology has greatly improved. Many customers are update with the current technology. Therefore, this proves to be a great challenge to the management team.

Economically, politically and social factors are some of the environment factors to consider. For instance, politics often affect the environmental policies that affect the resorts policy. The economy of the country might affect the environment of the region. Finally, many of their clients come from different backgrounds. These people have different social cultures that might affect the environment. In this case, they should consider these as part of their environmental factors (Kotler, 2000.

The resort main market segment is the people who want to make a retreat or a get way from the city life. The resort market segment is mostly the local tourists in Queensland who come almost every day to have an exciting experience. The customers are mainly people from all ages, from families to couples who want to take a retreat for themselves. Additionally, those people who come on a daily basis want to enjoy hiking in the bush and get back to the comfort of their houses in the evening.

2. Opportunities

There are a number of potential markets for Hidden Valley Cabins that is yet to be tapped. Since the business seems to be thriving, the most possible market is to expand the resort. In this case, they should try to build more cabins or create camping cites. This way they would have catered for those customers who like camping and at the same time they would increase the number of customers who are visiting the resort. Another marketing option that is not tapped is business consultancy. Since they have gained vast experiences in the field of eco-tourism with success, they should offer consultancy services to other people or companies who are intending to follow this line of business. This will lead to the increase of their revenues (Kotler, 2000).

Another possible marketing opportunity for Hidden Valley Cabin is the sale of solar panels. Over the years since the resort was started, they have been using solar panels for the cabins. They have successfully maintained the ecosystem and the bush areas by going green. The resort is known by the people due to its usage of the solar panels as their main source of energy. In this case, they have already established a ready market for the solar panels since the customers can trust them. This is because they have used them for more than twenty-four years and they are still running.

Lastly, they can establish educations tours for the students from all ages. For instance, they can attract Camping Mariah to the resort by providing different educative resources to the students who enroll in Camping Mariah (The Fresh Air Fund, 2012). In this case, they are likely to attract a wide range of customers. Finally, they should consider creating packages for the business executives and companies retreat programs. For example, many companies have team building exercises where they go out of their and take their employees in such resorts for team building. In this case, Hidden Valley Cabins should provide this package to this market segment. This way they are likely to attract a wide range of companies from all over Australia.

3. Financial Viability of Opportunities

The first and the most expected opportunity is expanding the resort. The overall expenses of expanding the resort can cost more than one hundred and fifty dollars. The maintenance cost of the expanded resort might cost twenty thousand dollars inclusive of the employee’s salary in a year. If one cabin is twenty-five dollars and the expected extension is thirty more cabins, the expected revenues generated in a year from that cabin are likely to be two hundred and seventy three thousand dollars. When expenses are subtracted, the profit is likely to be two hundred and fifty three thousand dollars.

The other option is consultancy services. The only cost that will be accrued to this opportunity is marketing coast, which can be roughly five thousand dollars. The fee to be charged on consultancy is fifteen percent of the revenues generated by their ideals. Roughly, they are likely to make two hundred thousand dollars a year from these opportunities. The other marketing option is the sale of the solar panel. In this case, they can sources the product from China at ten dollars per unit. If it estimated that they would sell five hundred units, it can cost them five thousand per unit. If they sell them for fifteen dollars per unit, they will make seven thousand five hundred dollars. In this case, they will make a profit of two thousand five hundred thousand dollars.

The last potential markets are for the educational tours and camping. In this segment, the company’s retreats are also included. The cost of establishing the necessary facilities and the entire program might cost one hundred thousand dollars. In the education category, each student might be charged twenty dollars while in the company segment each persona might be charged thirty dollars. Assuming one thousand children would visit in that year and five hundred people from companies, they will earn a total of twenty thousand from the students and fifteen thousand from the companies. The cost of maintenance is five thousand dollars. The total profits gained are thirty thousand dollars.

4. Rank of the Opportunities

According to the estimated financial calculations, the most viable opportunity that will give many returns on investments is the expansion of cabins and camping sites. It is then followed by the business consultancy. The other one is the creation of the educational and company retreat package. Lastly, it is the buying of the solar panels. However, the amount of capital contributed and the amount of work done in each opportunity should be considered before deciding which market to consider.

5. Changes to Current Operations

Obviously, they will require new staff members if they want to invest on the opportunities. Additionally, they are going to require new structures to cope with the demand of the goods sold. Finally, they are going to experiences changes on their websites and in the media due to the new marketing of the new opportunities made by the resort (Kerin, Hartley & Rudelius, 2009).

6. Impacting on Existing Customers

If the changes are to be made by the management of the resort, they should ensure that the areas where the extensions are being made do not affect the customers. For instance if the new cabins are being built, they should not affect the movement of the customers in the resort. This will ensure continuation of efficiency and quality of services done.

7. Resources Required

Obviously, they will require finances so that they can be able to make the implementation. Secondly, they require government approval on any implementation. Finally they require contractors if any who have the equipments to make the implementation.

8. Communication to the Stake Holders

            In this case, the first people to be consulted are the owners since they are the ones providing finances, the second stakeholders can be the banks or the creditors to the resort. The other people who are to be consulted are the government since they are going to approve any implementation. The use of memos and meeting would be the best way to advice them.

Conclusion

            According to the above analysis, the resort is performing its operations very gaining recognition in the whole of Australia. Therefore, the resort has the opportunity to grow and expand its business operation to the market. A number of options are available to the resort for investments.

Recommendation

Based on the above opportunities, the most viable option for the resort to consider is the one for expansion. The resort is likely to receive massive revenues from this option. Additionally, they are going to gain more market in the tourism industry and eventually they can venture in the other options.

References

Hidden Valley Cabins, (2012). Hidden Valley Cabins. Retrieved from: http://www.hiddenvalleycabins.com.au/

MSN Nine, (2007). Tourism. Ninemsn Pty Ltd. Retrieved from: http://finance.ninemsn.com.au/smallbusiness/howtoadvertise/8123918/tourism

The Fresh Air Fund, (2012). Camp Maria. Retrieved from: http://www.freshair.org/programs/summer-camping/camp-mariah

Travel Online, (2012). Queensland Islands. Retrieved from: http://www.queenslandislands.com/