To the Board of Solberri

By Wonder4

Aspired as benchmark in late 1980’s…

What to expect from 2008?

TOPFacility

TOPMarketing

TOPService

• Refurbishment & Expansion

•HR & IT • All-inclusive Package

OBJECTIVEHuman Resource Issues

Human Resource Issues

Total

9.0%Premier

Superior

Super plus

8.7%

10%

9.0%

Category Repeat bookings

Treatment

19.0%Hotel Service

Leisure Facility

Spa Facility

20.0%

10.0%

7.0%

Category Rated as “Excellent”

It’s the employees of Solberri that deliver the service..

TOPService

Poor supervision

Insufficient motivation

Short-term employees

Induction training

TOPService

Human Resource Issues

Select high-quality applicants

Retain high qualified employees

Implement new reward system

Promote outstanding short term employees

Lengthen the time span of induction training

Offer continuing education

opportunities

.

HRM

TOPService

Human Resource Issues

Improvements to Solberri IT systems

Two

problems

1. Double bookings

problem

2. Outdated booking

systems

Affect management

Eat away customer satisfaction

Lead to extra charge

Solberri’s reputation might be eroded and the impact might undermine the high forecasted occupancy level set for the coming 2008/2009 Peak Season operation.

TOPService

Improvements to Solberri IT systems

Advantage

Advantage

Disadvantage

Fix the Bug ASAP

Adopt the Manual Booking System

Solve the problem once for all

No Director’s support Further financial burden

Eliminate system loopholes temporarily

High operation costFurther Human Resource burden

Disadvantage

TOPService

Fix the BMS problems at once under a cross-

department communication

Introduce virtual software that allow customers

to see typical hotel views

Grant €5 million budget on systems to

implement a better business

TOPService

TOPMarketing

TOPFacility

OBJECTIVE

•HR & IT

• Refurbishment & Expansion

• All-inclusive Package

TOPFacility

• Retargeting of customersThis proposal will take the 3 hotels away from its long-run path to be the top luxury hotel in the region.

• Slim future cash inflow

Cheap and safe though this proposal may be, the future of the 3 hotels will still be questioned.

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Non-peak Peak Additional

Incremental Revenue based on 2009 Forecast

• Sticking to long-run goalsUpgrading the 3 to Premier category solves the problems once for all in conformity with Solberri’s strategy.

•Promising future cash inflowAs could be seen in the chart, future cash flow looks fatty.

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Non-peak Peak Additional

The Future of Super-plus Hotels

Incremental Revenue based on 2009 Forecast

Proposal CSell the three Super-plus

hotels once for all at €15m.

Keep the three hotels

for refurbishment.

TOPFacility

AB

The Acquisition cost is lowbased on the numbers.

Eating up two first-class hotels wins Solberri a bigger share of the pie in

Mediterranean area.

More rooms are needed to support future growth

This is a positive signal sent to the market that Solberri is back on its foot.

Capacity Constraints

Market

SignalPrice

Cost of Acquisition: €12.5m*2Cost of Refurbishment: €4m*2

€16.5*2

Book value ofexisting Premier category hotels: €20.7m

peak season room revenue(without upgrading) €13.25m

peak season room revenue(upgraded to Solberri level) €17.14m

The Opportunity to Purchase Paradiso Hotels

TOPFacility

TOPFacility

Road to Top Facilities

Purchase the two Paradiso Hotels

Delay Proposal B

Carry out the 5-year plan in the next few years

Changes to all-inclusive package

TOPService

TOPMarketing

TOPFacility

OBJECTIVE

•HR & IT

• Refurbishment & Expansion

• All-inclusive Package

Changes to all-inclusive package

• differentiate itself

• increase the total revenue

• additional Human Resource burden

• easy to be imitated by competitors

Advantages

Disadvantages

May 2009

May 2007 All-inclusive package + additional charges

True all-inclusive packagein two of the four Premier Hotels

TOPMarketing

1

4

1. Raise the room rate from 650 to 800 in two Premier hotels on a trail basis.

2. Pay attention to the customer service and IT equipment to make sure that customer satisfaction will not be affected.

3.The market campaign should aim at previous customers who paid for additional activities.

2

3

4. If the true all-inclusive package gets desired outcome, it should be made pervasive among other hotels immediately.

Changes to all-inclusive package

TOPMarketing

Conclusion

Top Service

Top Facilities

Top Marketing

Market Leader

Wonder 4

Thank You!