Coral Divers Resport

Mr. Jonathan Greywell is contemplating a transaction decision in which on that point are four realistic options. He is the owner of precious coral contrasting Resort, located in the Bahamas on the island of New Providence. He caters to customers looking for a holiday restore package that includes go down. This case discusses a decline in revenues for the three-year intent of 2005-2007. His options include selling the resort, partnering with other disdain, focusing on high schooler allowance account communication channel, or improve his trusdeucerthy byplay to be more than competitive. selling precious coral Divers ResortThe most significant reason to sell the business is the declining revenues. However, Greywell would need to find another means of income such as another business venture or a new location for a similar business. Greywell could have a business valuation dresse, but since his right in the business is low, he would not have much left-hand(a) over to start another business venture. Greywell has built a modus vivendi around the Coral Divers Resort business and enjoys it. At this time, I recommend that he focus on his other options and keep the business. Partnering with Rascals in ParadiseEntering into a business agreement with Rascals in Paradise would change the didactics of Greywells business to a more family-oriented business. In addition to rebranding Coral Reef Resort to tar determine families, there would be redundant hood improvement expenses. Cottage renovations would be nearly $50,000. The addition of a playground is estimated at $15,000. The wages expense to hire a chef could vary ground on the quality and association of the chef. However, making use of an existing expertness such as the kitchen and dining room would add an additional pour of revenue and would help to offset the additional costs.In my opinion is it unrealistic for the resort to be at 100% capacity on a fifty-fifty basis. Therefore, if we look a t realistic numbers using historical Coral Reef Resort data, we can reasonably predict a 90% capacity in the high season an improvement over the current 70%. The revenue generated from this increase is approximately $100,000. Another factor to dole out in making this decision is whether Rascals is worth the 30% commission. The fees for families (i. e. more people per room, etc. ) when compared to the operation expenses keep the profit boundary line the same with the added benefit of a unique identity in the market.Higher bank Adventure fall Adventure diving generates a higher bound and therefore it is a good idea for Greywell to consider adding it to the mix of absorb offerings. However, it cannot be considered without weighing the risks involved. Coral Divers Resort has an excellent personality and careful consideration should be given as to how to protect this intangible asset asset. Adventure plumps would need specifically trained and experienced dive masters. just tra ining existing employees might pose an additional risk since they arent too excited about diving with sharks and to a fault lack experience that might be helpful for safety issues.Within an hours quad away, competitors are already a part of this market and bringing in $115 per adventure dive which is $50 above the regular dive experience. An additional $600 per week can be earned on two days per week with an average of 6 customers each of those days. Despite hiring or training costs and additional $31,200 in revenue can be generated, after the expenses for shark food and the special dive suit. Perhaps more adventure dive business is possible, yet this estimate would need to inhabit conservative until the demand can be established and adjustments made accordingly.Improving lively Coral Divers Resort Greywell should look at running the business more efficiently to see where he can lower expenses such as operating costs and both fixed and variable costs. However, improve efficienc y alone willing solve Greywells current enigma of reduced revenue. He needs to be looking at additional revenue sources by bringing in more customers for existing business or new offerings. While it is a good benefit to customers to get free services such as afternoon rides, many of those customers would also pay to go.If he had an average of 9 free-ride customers per week pay sole(prenominal) $25 for the ride, he would generate another $225 per week in revenue. He could add a box lunch for purchase, a snack package, or a cocktail option. Having more offerings will help to increase revenue. Although I dont expect these food and beverage items on the boats to bring in much revenue and could be more work for too miniscule reward. Greywell would certainly not want to be distracted from his core business. expiry Greywell should go with the Rascals in Paradise partnership. They can help rebrand and market the resort driving up line of work rates.While increasing profits through occ upancy and additional revenue streams are a positive move, Greywell will equable need to solve his issue of high debt in order to sop up the renovations needed. In addition, he should already be running the business efficiently and regularly seeking out ways to maintain a high level of efficiency. I would not recommend that Greywell enter into the Adventure Diving segment of the business under the Coral Divers Resort name. The risks of wound are too high and an accident can have a very adverse effect on the business reputation.Also, in my opinion, a family business and an adventure business would serve different segments and have different branding messages. Having both under the same resort name will dilute the message and negatively impact the more profitable business segment. Instead, if Greywell feels passionate about pursuing the adventure business, I recommend he wait until his partnership with Rascals shows results and then begin a subsidiary or a separate business with it s own branding that caters to the adventure diving market. This way, his businesses can feed each other and the marketing messages for each detain clear and focused.