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The largest ski resort in Canada that is still owned by its original family, Blue Mountain Resort was founded in 1941. In the case study, Blue Mountain Resort's management plans to add facilities for night skiing or the winter skiing season. The biggest challenge is determining if making such an investment would be profitable and beneficial. The question of whether there will still be enough space for comfortable skiing is more important. The lift cities, hill size, and hill development are a few of the facilities that will affect comfort and capacity. To provide the most appropriate night skiing facilities, it is important that the management of the resort invests in the hill and lift facilities. For the CEO to install the night skiing facilities, he has to consider the price of a single night lift ticket, as well as the season, passes as they will be important in calculating the returns expected.
Considering the survey questions that were given out, the CEO has to consider the extent of the forecasted data in the survey. The reason will be to cater for the incorrect responses. More so it will assist in case the respondents wrongly optimize their behavior in the future. It is the goal of the management to offer the high quality services as there is stiff competition from other resorts who are offering the same services. The management wishes to provide better services by providing lighting the entire hill. In so doing, the resort will aver the highest vertical conditions, the longest run an even best snow conditions for night skiing in southern Ontario.
The resort has the choice of either investing in the night skiing facilities or not. Various conditions have to be met before implementing the installation facilities. Some of these conditions include the fact that is the installations are made ten they have to bring about new opportunities. More the facilities have to attain some use during the off season time. More so the facilities have to expand the primary earning power, protect the current earning power and at the same time minimize risks. Considering the conditions, it is best for the management of the resort to installing the facilities as the night skiing facilities can be used in the off-peak season to hold other activities both recreational and social. Also, once the services are installed, the maintenance and repair costs will be regulated throughout the year.
The installation of the night skiing facility is estimated to cost approximately $135500. Among the levels provided it would be most appropriate to install an intermediate level facility. The reason is that it is most likely that intermediate users, as opposed to beginners, are to use the facility. More so advanced level skiing would be a dangerous endeavor at night. The cost of operation will include the cost of operation per night estimated at $1000, promotional cost $5000, liability insurance for the skiers valued at $7.75 per every 1000 skiers and fixed allocation fee of $ 20000. The operation days will be estimated to be 120 days. Therefore the total cost of operation will be $280232.50. Assuming that the skiers will attend the resort 1- 10 times and the attendance will be more than two days then profit will be calculated as 2×5×5.5= 55. If 9000 skiers are expected throughout the year, then the total profit will be $495000. Since the profit exceeds the cost of operation, then it is recommended that the company invests in installing the facilities. Concurrently the resort ought to set the type of pass and the price of each ticket. From the survey, three types of passes will be the most appropriate choice. Therefore there will be day pass, night pass, and a combined pass. Also, the price of the night ticket should be lower than that of the day ticket.
From the survey, it was found out that the age group that produced the highest number of customers was 18-34. More so 60% of the projected customers would be male. 30% of the respondents asserted that they would use the night skiing facilities while 70% would not use it. The implication is that only small percentage is interested in night skiing. Therefore the resort should invest more in creating awareness swell providing other attractive night activities so s to attract more customers. However, the survey appears to be biased as it was given towards the end of the season. More so, it was only given to 200 people, and therefore the information provided could be inadequate, and the results might be misleading.
Blue Mountain Resort ought to conduct a comprehensive survey that is not biased such that precise data is collected. The sample should be selected from a more varied population. However, for the implementation of the night skiing facilities, it is important that the ticket price for the night is lower than that of the day. Moreno promotional activities should be carried out to create awareness and attract more customers for nights skiing. More so shops such as food and beverage, ski shop and rental and repairs should be operated as they demonstrated to have high gross margins.
Churchill, Gilbert A., and Dawn Iacobucci. Marketing research: methodological foundations. New York: Dryden Press, 2006.
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