Strategic Expansion and Service Excellence at a Spanish Resort: A Mode 2 Approach

QUESTION

An established medium sized resort in Spain is known for its unspoiled beaches and gently rolling acres bordering a national park. The resort has an excellent reputation with an international clientele. It is completely booked from March to the end of October every season and is 75-80% full during the off season. There are many repeat customers. The resort is looking at expanding its venue. The expansion requires additional funds to purchase an adjacent property and complete construction for additional accommodations. The owners are older and have contracted an Argentinian hotel management company to manage the resort so they can focus on the expansion. The Argentinian firm has also invested in the project and will be managing the hotel for an additional five years. The hotel management firm will be sending over a management team to assist the owners. What mode of service is provided by the owners of the resort? Mode 1 Mode 2 Mode 3 Mode 4

ANSWER

The owners of the established medium-sized resort in Spain are primarily engaged in providing a Mode 2 service, which is characterized by the management and operation of the resort. In this mode of service, the owners are responsible for the day-to-day management, maintenance, and guest services of the resort. They oversee all the activities related to running the resort, including accommodation, food and beverage services, recreational facilities, and customer service. This hands-on approach allows them to maintain the resort’s excellent reputation and cater to the needs of their international clientele.

The resort’s core service is the provision of a unique and attractive vacation experience, making use of its unspoiled beaches and the picturesque acres that border a national park. This natural setting, combined with the resort’s excellent services, has led to high demand and full occupancy from March through the end of October each season. Even during the off-season, the resort maintains a substantial occupancy rate of 75-80%, which indicates its year-round appeal. This high level of occupancy and the presence of repeat customers demonstrate the resort’s ability to consistently deliver a quality vacation experience.

However, it’s important to note that the owners are currently in the process of expanding the resort. This expansion involves purchasing an adjacent property and constructing additional accommodations. The expansion is a strategic move to capitalize on the resort’s popularity and meet the growing demand for their services. While this expansion might suggest elements of Mode 1 (cross-border trade in services), it primarily falls within the realm of Mode 2 as it involves the physical management and operation of the extended facilities.

In a unique twist, the owners have enlisted the services of an Argentinian hotel management company to manage the resort. This partnership involves a financial investment from the management company and a commitment to manage the resort for an additional five years. This arrangement combines elements of Mode 2, as the management company will oversee the day-to-day operations, with aspects of Mode 4 (presence of natural persons), as the management team from Argentina will be physically present at the resort to assist the owners. This collaboration ensures that the resort will continue to provide a high level of service while the owners focus on the expansion project.

In conclusion, the owners of the resort in Spain primarily offer a Mode 2 service, which involves the direct management and operation of the resort to provide a memorable vacation experience. The expansion project and partnership with the Argentinian hotel management company introduce elements of Modes 1 and 4, demonstrating their commitment to growth and maintaining the resort’s reputation. This blend of service modes ensures that the resort will continue to thrive and cater to its international clientele.