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PM008 Case Study Summer 2014

Forest Castle Page Number 1
PM008 Case Study Summer 2014 (April Cohort)
Forest Castle Hotel
Forest Castle Hotel is a 4/5 star hotel based in the Highlands of Scotland. It is on a major trunk road (A9) and is
accessible by road and mainline rail. There are excellent connections by public transport from Edinburgh,
Glasgow and Inverness airports. All three airports are equidistant from the hotel and the railway line carries
trains to London and other parts of the UK.
The hotel has had a long history. It was built as a hotel in 1901 and it boasts large gardens and has many
facilities in its grounds, including a golf course, tennis courts and long nature trails. There are 150 rooms varying
from large suites, to family rooms, feature rooms, double and twin rooms and single rooms. The Hotel can
accommodate 400 guests in total, but the effective max imum number is 300 (average two per room) . Children
and other guests sharing a main room or suite are generally free, but pay for meals as taken. The hotel also
boasts both an outdoor and indoor swimming pool with a therapeutic bath and sauna, a gym and a spa treatment
facility. The restaurant serves haute cuisine (high quality food), and seats 100 people for a single sitting. The
average price of dinners is £30 per person. Around 20% of residents take dinner in the hotel on inclusive terms,
and there is a steady passing trade. The business of the restaurant generally tracks the occupancy rates. The
average price for functions is also £30 per head.
Over its long history, the hotel has served as a military hospital, a school and as a hotel. The effect of the
various changes in use has been that the maintenance of the building (which is stone built in the main) has often
been neglected because of the large costs involved. The history of the hotel has featured intermittent restoration
succeeded by years of d ecay.
The current owners of the hotel are based in Ireland and they purchased it some six years ago from a large hotel
group. They have invested substantial amounts in bringing the premises up to a high standard. They are now
considering investing a furt her £5,000,000 (five million pounds) in a functions suite to seat 300 plus, which will be
an addition to the existing 150 seating capacity room. If they make this investment they would hope to expand
the number of conferences held in the Forest Castle and to hold larger events at regular intervals. The owners
are confident that they will be able to double the gross income from functions by making this addition, based on
the 2 012/13 level of activity.
The peak times for bookings are the Spring and Summer quarters when rack room rates (double including
breakfast) can rise to £200 per night. In the Autumn and Winter quarters they offer packages at £150 per night
per room including breakfast and dinner. (Room only rates are £20 cheaper in both seasons.) The av erage
occupancy rates for the hotel, based on a 300 guest maximum and on a seven day week, is generally as
follows: – { In order to provide clarification, the seasons are Winter (January to March), Spring (April to June), Summer (July