Read and Discuss Text 2 the golden bay star hotel

The Golden Bay Star Hotel was developed by a group of investors in the late 1970s to be the premier luxury property of its type in the Bay Area. The location in downtown was chosen for its proximity to the financial district and art gallery community.

In its early years of operation, the Golden Bay Star enjoyed modest success. But the ownership felt that better performance was possible. They decided that name recognition was what they lacked. By 1982 the ownership decided to affiliate the hotel with a national luxury manage­ment company. The hotel and management company signed an agreement that was renewable every five years.

For the next few years, the Star (as it is called) experienced record revenue performance. The boom in the financial markets was reflected in strong transient and group demand at high rates. The art market was experiencing strong interest from individual and institutional inventors from across the world. Auctions and other meetings were traditionally held at the Star. All parties involved were satisfied with the arrangement.

By the late 1980s, accelerated hotel construction in the vicinity of the hotel began to manifest itself. Properties of all product types and sizes began to pop up all around the Star. Newly developed hotel concepts (the extended stay and all suite) started to vie for the traditional business of the Star.

After several years of declining performance, the hotel owners began to get nervous. They needed to know why they were in this situation and how it would be remedied. The ownership sent a representative, Tom Anderson, to the hotel to monitor the situation. Tom met with the hotel's general manager, Shelly Burns. Shelly had been at the hotel for 10 years. She had been on board for the period of exceptional performance; so naturally as the leader, she had been lauded. She was not used to being in the position of having to explain poor performance.

Shelly Burns was a "hands on" general manager. She involved her­self in all aspects of operations and sales. She was so involved in sales and marketing, she saw no need for a change. They had never needed to advertise, and the sales office seemed to run itself. After all, she could make those decisions if need be, so why incur the extra salary costs?

The senior sales person at the Star, Frank Nevins, had been on staff since the opening of the property. He had long enjoyed a healthy relation­ship with the local financial community. His contacts were renowned, and he spent a great deal of time cultivating those relationships.

Tom asked Shelly to take a good look at the current state of the hotel. He needed to report back to the owners and wanted a solid plan from the hotel as to how it would improve performance. The owners were in the fifth year of their current management contract and needed to act quickly. He gave her one week to come up with a plan.

Notes

1. to vie for smth. - соперничать за что-л.

2. to remedy - исправлять (напр., положение вещей )

3. to laud - прославлять, хвалить, превозносить

4. renewable – возобновляемый

5. to pop up – неожиданно появляться

6. solid plan – основательный план

Task 1. Answer the following questions

1. Where was the Golden Bay Star Hotel located? Why was that location chosen?

2. How did the ownership decide to improve the hotel performance?

3. What was the boom in the financial markets reflected in?

4. Why did the Star face a strong competition in the late 1980s?

5. What did the hotel owners need to know?

6. How did the hotel’s general manager Shelly Burns and senior sales person Frank Nevis perform their duties?

7. What does “the sales office seems to run itself” mean?

8. What did Ton Anderson ask Shelly to do?

Task 2. Think and express your opinion

If you were Shelly, what would you do? Develop a plan for the Star.

Points to consider:

• the hotel’s age;

• its location;

• management contract;

• target markets;

• ownership;

• competition;

• management style;

• sales direction;

• advertising.