El Hotel Terminus Part: A



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Language: Spanish
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Case Study


The “Terminus” Hotel, a 200-room facility, is located within the city walls of one of the most impressive medieval towns in Southern Europe. As consequence of poor management and old-fashioned interior design, the Hotel experienced slumping demand since 2001. In 2004, the Hotel was on the brink of bankruptcy.  In a sudden, these dark prospects turned into hopeful ones; the Hotel was located on a historic building and the regional authorities approached Mr. Leo D. Marcial, chair of the Chamber of Commerce, to mobilize local entrepreneurs in order to take over hotel ownership. 

This case presents the opportunity to do a profitability analysis of Hotel Terminus, which after a general renovation has once again opened its doors to guests. This analysis is motivated by poor results, that even though they were planned to be in red numbers, the losses are larger than expected. The hotel offers three distinct services: accommodation, restaurant and entertainment (flamenco).

For the writing of this case, several bits of data have been modified to protect the identity of the company.

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