COLLEGE OF BUSINESS

TUNKU PUTERI INTAN SAFINAZ SCHOOL OF ACCOUNTANCY

BKAL 3063
INTEGRATED CASE STUDY

FIRST SEMESTER (A201)

2020/2021 SESSION

GROUP D
CASE 1 - DE CYBER HOTEL

PREPARED FOR:
DR ARIFATUL HUSNA BINTI MOHD ARIFF

PREPARED BY:
GROUP 6 MASTERMIND

NAME MATRIC NUMBER

PANG YI XUAN 255802

MUHAMMAD KHAIRUL ANAAM BIN MOHD SALEH 255524

NUR FATIN NABILAH BINTI JAFFRY 259518

SITI SARAH BINTI AZRAAIE 256063

NURUL HUSNA BINTI MOHD HASNI 252640

SUBMISSION DATE: 26 OCTOBER 2020

TABLE OF CONTENT
1.0 EXECUTIVE SUMMARY 1

2.0 STATEMENT OF PROBLEM 2

3.0 CAUSES OF PROBLEM 4

3.1 ANALYSIS OF THE PROBLEM 4

3.2 HUMAN RESOURCES (HR) VALUE CHAIN MODELS 5

3.3 SWOT ANALYSIS 7

4.0 DECISION CRITERIA AND ALTERNATIVE SOLUTION 11

4.1 CONTINUE THE ALLIANCE WITH ABC DIGITAL BOOKING 11

4.2 STOP THE ALLIANCE WITH ABC DIGITAL BOOKING 14

5.0 RECOMMENDATION SOLUTION, IMPLEMENTATION AND JUSTIFICATION

17

5.1 RECOMMENDATION SOLUTION 17

5.2 IMPLEMENTATION CRITERIA 17

5.3 JUSTIFICATION 19

6.0 EXTERNAL RESOURCING 21

1.0 EXECUTIVE SUMMARY

De Cyber Hotel was a budget hotel located in Cyberjaya, Selangor. De Cyber Hotel

was registered as a private limited company (syarikat sendirian berhad) and it was officially

opened on 19 January 2019. Company manager was Siti Alia and they have two directors

who are Anisah and Syariff. The manager was responsible for its day-to-day management and

financial matters. Under the manager there are two supervisors which are Afiq and Julia. Afiq

was responsible to supervise the front office and Julia was responsible to supervise the house

keeping.

However, it faced stiff competition from other more established hotels in the vicinity

because it is a new hotel. De Cyber Hotel still depended mainly on walk-in guests even the

hotel management distributed brochures and promoted the hotel via word-of-mouth. Siti Alia

and the management team knew that they must take immediate action and become more

proactive in order to ensure the survival of their hotel and they can compete with other hotels

that have the great name. It is because they realise that nowadays most of the people prefer

booking their hotel through the internet because it is easier to do and they also can compare

the price easily. It means that De Cyber Hotel was one step behind another hotel.

To overcome this, on 27 March 2019, De Cyber Hotel management accepted an offer

from ABC Digital Booking to implement a digital booking system for the hotel to increase

the rate of occupancy and the hotel’s revenue. ABC Digital Booking was a company that

provided an online platform to enable listing and booking of budget hotel accommodation.

De Cyber Hotel and ABC Digital Booking entered into a strategic alliance and they agreed to

collaborate for at least one year, from the date the agreement was sealed.

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2.0 STATEMENT OF PROBLEM

Madam Siti Alia the manager of De Cyber Hotel is not only managing the daily

operation of the hotel but also responsible to manage the hotel finances, which means she

needs to make sure that the hotel has enough money to operate as usual and sustain in the

hospitality industry. Hence, she is now facing a dilemma whether The De Cyber Hotel should

extend its strategic alliance agreement after a year of collaborating with ABC Digital

Booking or just terminate the agreement and stand by themself.

There are some underlying issues in the case that lead her to the confusion to make

the decision to continue with the strategic alliance agreement or not. Firstly, They must

comply with the conditions set by ABC Digital Booking, where all rooms will be handled by

ABC Digital Booking for sale using their booking system or Online Travel Agents (OTAs),

which mean De Cyber Hotel not directly collaborate with OTAs as it was done via ABC

Digital Booking and each month ABC will coordinate with OTAs in allocating and receiving

the payment.

Besides, If there are rooms that can’t be sold due to low demand seasons, ABC Digital

Booking will pay a specific compensation amount to De Cyber Hotel, and if the sales earned

exceed the minimum guarantee amount they must share the sale with a ratio of 80:20 which is

80 owned by De Cyber Hotel and the rest owned by ABC Digital Booking. Also, all room

prices are determined by ABC Digital Booking according to demand, in case of low demand

the pound price drops low and vice versa. Puan Siti Alia is worried if the price placed is too

cheap how they want to manage to pay all the cost because De Cyber Hotel will bear all the

cost of operating expenses such as hotel maintenance, staff training, salary, and others instead

of ABC Digital Booking.

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 Based on the information given, there are only two possible options that Puan Siti

Alia can make which is either to continue with the strategic alliance with ABC Digital

Booking or terminate it. For this case it recommends Puan Siti Alia to continue the strategic

alliance with ABC Digital Booking after taking into account its benefits and cons.

3
3.0 CAUSES OF PROBLEM

3.1 ANALYSIS OF THE PROBLEM

Before collaboration with ABC Digital Booking, De Cyber Hotel’s management used

to promote their hotel by distributing brochures to people and they also promoted it via word-

of-mouth. However, due to lack of proper marketing they only depended on walk-in guests at

the moment. From this point Siti Alia, the manager was aware that they needed to find online

booking platforms to ensure the survival of their hotels. Thus, they decided to do a

collaboration with ABC Digital Booking for the sake of increasing their sales. After the

collaboration, De Cyber Hotel had to strictly adhere to the terms and condition of the

agreement which Siti Alia as the manager felt unsatisfied with the contract terms.

The terms is the hotel must accept the prices for all rooms that are being set by ABC

Digital Booking where the room prices will be depended on the supply and demand.

However, the room prices would naturally be low if the demand decreases and high when

demand increases which will somehow cause loss when ABC Digital Booking tends to set the

low price for the rooms. Secondly, they are required to upgrade existing hotel rooms to meet

ABC Digital Booking’s standards which will incur more cost to the hotels even though the

cost incurred was minimal since they just set foot into this field. Next, they also need to

ensure that there is no damage or defects in the rooms or otherwise the room could not be

sold and a certain portion would be deducted from the minimum guaranteed amount which is

unfair for them. Hence, the hotel management needs to work hard to ensure that the defects or

problems were settled immediately to avoid more losses.

Furthermore, the other terms of agreement is where they set a based on a minimum

guaranteed amount where all the rooms were handed over to ABC Digital Booking for sale as

if the hotel management cannot interfere in the sale of rooms. Moreover, the increased

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occupancy rate and frequent use of the hotel rooms lead to higher maintenance costs and the

hotel management needs to bear with all maintenance costs, not to mention the deduction of

minimum guarantee payment if the hotel rooms cannot be sold due to defects and damages.

3.2 HUMAN RESOURCES (HR) VALUE CHAIN MODELS

Based on our reading, we can see that De Cyber Hotel has applied the HR Value

Chain models for their business process. The HR value chain is an instrument that shows how

HR increases the value of hierarchical objectives and this model is one of the best-known

models in HR. Moreover, everything that they measure in HR can be divided into two

categories which is HRM activities and HRM outcomes. HRM activities are day-to-day

activities which include recruitment, compensation, training and succession planning. These

activities are measured using the efficiency metrics such as cost of hire, time to hire, learning

and development budget, training time in days and time since last promotion.

If the hotel manages to follow the efficiency metrics, the HR processes will

successfully function because the main focus here is to save cost. In the text given, we can

see that De Cyber Hotel are very particular when it comes to hiring new staff. This is because

they realized that training and guidance were very important to provide the best service to

their guests. Especially for the housekeeping staff and the supervisor, all of whom were new

to the job. This shows that they managed to apply HRM activities in their business process.

For example, Siti Alia hired an experienced housekeeping staff to train her team as she knew

the key to De Cyber’s success would be a team of well-trained staff.

Next category is HRM outcomes where the goal is to try to achieve with the HRM

activities. Which they recruit, train and compensate to achieve certain goals or outcomes.

These outcomes include employee satisfaction, motivation, retention and presence. Even

though De Cyber Hotel managed to implement activities in terms of recruitment, training and

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succession planning, there are lack of work-life benefits. The lack of these benefits will affect

the employees’ overall work performance and lead to poor productivity. Besides, it will also

reduce the employee retention which will lead to employee turnover. The employees turnover

rate in the hotel was around 80% within one year of its operation which is one of their major

problems at the hotel.

Additionally, if they just focus on measuring HRM activities, they will automatically

focus on reducing cost which will maximize the efficiency. However, they should instead

focus on HRM outcomes as this would help them to align their processes with their goals.

Therefore, we would suggest the hotel to make every effort to retain good employees. This is

because the employees are their biggest asset, so investing in their happiness at work is vital

for ensuring a successful business. Even though this hotel just operates within one year, they

need to recognize and reward their employees' achievements. Offering rewards and

celebrating all achievements may seem unimportant but this kind of reward will increase their

loyalty to the companies.

Besides, the employer needs to ensure a good work-life balance. For example,

encourage employees to take their full lunch break and make sure their workload is

manageable enough. Also as an employer, it is important for them to consider employees'

work-life balance. For example, social outings, it can create positiveness and a good working

environment between colleagues. Hence, if the hotel manages to implement this model

successfully to their hotel it will somehow decrease the employees rate turnover and decrease

the cost of training new employees.

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3.3 SWOT ANALYSIS

Another analysis that is being applied is SWOT analysis. The cause and problem are

being analysed through SWOT analysis to show its relativity to the stated problems. A SWOT

analysis is a compilation of a company's strengths, weaknesses, opportunities and threats

where their primary objective is to help organizations develop a full awareness of all the

factors involved in making a business decision. *

3.3.1 STRENGTHS

Strengths are things that the organization does particularly well, or in a way that

distinguishes them from their competitors. The alliance between De Cyber Hotel and ABC

Digital Booking suits De Cyber Hotel’s strategy to be more outstanding and more

competitive among the hotel industry. It helps De Cyber Hotel to keep up with the large role

in the hotel industry. Strong recognition of brand may strengthen De Cyber Hotel position in

providing quality customer services to all customers. Besides, it also helps to attract more

customers through online platforms and indirectly increase the hotel revenue.

Furthermore, De Cyber Hotel’s location is strategic because it was centrally located to

shops and malls like IOI City Mall and Mid Valley Mega Mall. Moreover, their guests can

have easy access to the surrounding must-see attractions at Kuala Lumpur and the distance

between the hotel to airport is only 2 km away which makes it the strength. The location itself

also matters for marketing where the physical location of the hotel can extend to the

placement of the advertisements. Moreover, De Cyber Hotel also provides parking to their

guests where some of them might consider parking places in their list.

3.3.2 WEAKNESSES

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 Now it is time to consider their weaknesses, by stating the weakness in their business

process it could improve and sorts of the practices that they should avoid. Before the

collaboration with ABC Digital Booking, it showed that the management of De Cyber Hotel

lacked awareness on how to promote and advertise their hotel well to increase their hotel

recognition. It led to the difficulty in competing with established hotels among the hotel

industry. The management only distributed the brochures and promoted the hotel via word-of-

mouth and this has made the decision of De Cyber Hotel to alliance with ABC Digital

Booking. It required a longer length of time and higher costs for De Cyber Hotel to develop a

strong brand recognition if she insisted on promoting the hotel by herself without any online

platform. Thus, the problems might take a longer time to be solved. The higher the

promotional cost may affect the profit of De Cyber Hotel as they need to pay more.

Besides, as we know that De Cyber Hotels are very particular when it comes to

managing the recruitment of their staff, training and planning well for their hotel, but they

lack employee recognition. Within one year of its operation the employees turnover rate was

around 80% and usually they tend to resign because of better job opportunities and

unwillingness to do night shift. It will have an impact on the business operation of De Cyber

Hotel as Siti Alia had to spend more time to overcome the employee issue. Thus, the higher

the time consumption, the longer the period of time needed to overcome the problems.

3.3.3 OPPORTUNITIES

Opportunities are the chances for something positive that is about to happen, but in order

to get that they need to claim it for themself. Opportunities usually arise from situations

outside of the organization and require an eye to what might happen in the future. For

example they might arise as developments in the market that the hotel serves or in the

technology that we use. The opportunity for De Cyber Hotel arose when ABC Digital

8
Booking approached Siti Alia and offered a strategic alliance. With the collaboration with

ABC Digital Booking it will bring more benefit than bad effects to De Cyber Hotel.

Furthermore, people will get global access to De Cyber Hotel with just a few clicks. This will

give benefits for them to improve client service through a greater flexibility, cost saving, less

paper waste and give opportunity to manage their business from anywhere in the world. De

Cyber Hotel will also manage to develop strong recognition and lead to the increasing of

profit.

3.3.4 THREATS

Threats include anything that can negatively affect the business from the outside, such

as supply chain problems, low awareness in promoting hotels, shifts in market requirements

or shortage of recruits. It is vital to anticipate threats and to take action against them before

the business becomes a victim of them and impair growth of business. For example, the room

prices for De Cyber Hotel depended on supply and demand and would naturally be low if

demand decreased, and high when demand increased. Due to cheaper and greater hospitality

services like Airbnb are developing each day it may affect the hotel industry. Additionally, the

changing travel patterns of consumers in aspects of virtual reality is giving consumers options

to enjoy travel without much of travelling.

Lastly, COVID 19 pandemic is one of the major threats to the hotel industry overall

where people cannot travel due to the Movement Control Order implemented by the federal

government of Malaysia in response to breaking the chain of Covid 19 which will affect their

revenue. Hence, De Cyber Hotels need to carry the SWOT analysis with being realistic and

rigorous by applying it at the right level and supplementing it with other option generation

tools where appropriate.

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 Besides, if De Cyber Hotel breaches the contract, the higher cost will be incurred as the

breakup clause and it would make it costlier to call the deal off at a later date. The company

has to pay the higher amount compared to the amount when the company makes an

agreement for the alliance.

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4.0 DECISION CRITERIA AND ALTERNATIVE SOLUTION

The decision criteria in a business setting are principles, guidelines or requirements

which are important for an organization in making a decision. These principles, guidelines

and requirements are essential items which are used to help the organisation in selecting the

best choices by evaluating all available alternatives. Hence, the decision criteria should be

measurable and within the current scope of the problem. Therefore, based on the decision

criteria, appropriate solutions for the issues can be created.

There are certain decision criteria that Siti Alia should take into consideration in order

to solve the issues that their hotel is currently facing. This will help her to come out with

some suitable alternative solutions to be implemented to overcome the issues. The length of

time for planning and implementing the action is one of the decision criteria that should be

taken into consideration. Planning and implementations that need a longer length of time may

not be that preferable as the problems require a longer period of time to be solved. Thus, it is

more preferable that the shorter the length of time to solve the problems.

Furthermore, the next decision criteria that should be taken into consideration is that

the decisions made must have the acceptance from the management of the hotel. Any

decisions to be made should be informed to get the approval of the hotel management before

proceeding with the decision. It is a significant criteria when a decision is being made as it

can avoid any unnecessary misunderstandings in the future. Based on the criteria as listed

above, some solutions have been prepared to overcome the issue which includes:

4.1 CONTINUE THE ALLIANCE WITH ABC DIGITAL BOOKING

If De Cyber Hotel continues the alliance with ABC Digital Booking, the issue that Siti

Alia faced which made her in dilemma is they must comply with the conditions set by ABC

11
Digital Booking. They must accept the low price of rooms set by ABC Digital Booking, a

certain portion will be deducted if rooms cannot be sold due to defects or damages and if the

sales exceed the minimum amount which is RM21,000, the sharing of profit would be in the

ratio of 80:20. These conditions are not in favor of Siti Alia because she is the one who will

incur maintenance costs and everything and she is afraid that the low price set by ABC

Digital Booking will lead to low income for her hotel.

There are many benefits that could be received by taking the consideration of

continuing the alliance with ABC Digital Booking. The first and most important benefits is it

will help De Cyber Hotel to develop a strong recognition among the hotel industry. With high

recognition among the hotel industry will be beneficial in attracting more customers. This is

because when the customers have recognized De Cyber Hotel, they will undoubtedly stay

back at De Cyber Hotel during their next vacation. brings a positive impact towards financial

sustainability as it will increase the revenue of De Cyber Hotel.

Besides, by continuing the alliance with ABC Digital Booking, De Cyber Hotel will

be able to secure a certain portion of their income when the rooms are not able to be sold

during low demand. As the agreement had stated that when there are rooms that cannot be

sold, ABC Digital Booking will pay a specific compensation amount to De Cyber Hotel.

Moreover, it would be beneficial for Siti Alia to continue the alliance because she and

her partners can focus on the hotel management while ABC Digital Booking handles the

booking and does the marketing and promotion for De Cyber Hotel. It will reduce the burden

and workload of Siti Alia and her team with the assistance of ABC Digital Booking.

However, there are some cons for De Cyber Hotel to collaborate with ABC Digital

Booking. According to the terms of agreement, if the sales earned exceed the minimum

guarantee amount, they must share the sale with a ratio of 80:20 which is 80% owned by De

12
Cyber Hotel and the rest owned by ABC Digital Booking. Also, all rooms prices are

determined by ABC Digital Booking according to demand. It is unfair to De Cyber Hotel as

they have to share a part of their profit with ABC Digital Booking. At the same time, De

Cyber Hotel are the one who bear all the operating expenses if the rooms had any damages.

Hence, it will impact the financial sustainability as the revenue may be unable to cover the

other costs or expenses.

Firstly, we suggest that Siti Alia hire a technician for her hotel to be in charge of all

the maintenance for the rooms regularly. If Siti Alia wants to continue the alliance, she will

need to do hotel maintenance regularly so that customers will have a comfortable stay and

can use all equipment provided at the hotel conveniently. Furthermore, Siti Alia would need

to focus on ensuring that all rooms are in good condition so that she will not have to incur

losses and be able to prevent the deduction of minimum guarantee payment for rooms that

cannot be sold due to defects and damages. If she does the maintenance regularly, she will

have low probability to have damages or defects rooms and be able to avoid severe damages.

The wages for outside technicians to come and do maintenance for a few times at the hotel

are usually higher than a monthly salary of hiring a technician herself. But at the other end,

Siti Alia will need to be aware that maybe her technician has less expertise in certain parts of

the maintaining services. So, she will need to train her technician to become an expert.

Next, for the low-price rate of rooms, Siti Alia can try to negotiate with ABC Digital

Booking before they continue the agreement. This is important because it is to avoid Siti Alia

from facing difficulties in financial. She can try to negotiate to increase the rate for at least

10% of the usual rate that ABC Digital Booking set. It would be a huge relief for Siti Alia if

the price rate for the hotel rooms increase. But on the other hand, Siti Alia will face stiff

competition with the other hotels that offer lower rates for the same type of rooms. Thus, it is

13
really important for Siti Alia to provide the best services for her customers so that she can get

good feedback and their loyalty.

Besides, Siti Alia can also provide suggestions to ABC Digital Booking to capitalise

on the special offers available, especially during the low demand period because this is to

ensure that the hotel rooms are fully occupied and they can generate more income from that

and can cover the expenses incurred. During the low demand period they can offer various

types of promotions to the customers to attract them to stay at the hotel. ABC Digital

Booking also will need to do more marketing during that period to let people notice about De

Cyber Hotel.

4.2 STOP THE ALLIANCE WITH ABC DIGITAL BOOKING

If Siti Alia chooses to stop the alliance with ABC Digital Booking, it will benefit De

Cyber Hotel as no need to comply and strictly adhere to the terms and conditions in the

agreement. Siti Alia will be able to control the price rate for the hotel rooms by herself

according to the situations, but not being set by the third party. Besides, Siti Alia is able to

compete with other established hotels by adjusting the price of De Cyber Hotel from time to

time.

By terminating the collaboration with ABC Digital Booking, De Cyber Hotel can own

the profit themselves and no need to share their profit with ABC Digital Booking or other

third parties. Besides, a certain portion will not be deducted from the minimum guaranteed

amount despite the rooms could not be sold due to damages or defects. This option will

undoubtedly increase the profit of the hotel. Hence, Siti Alia may utilize the extra profit to

upgrade the quality of the hotel.

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 When Siti Alia decides to not continue the alliance with ABC Digital Booking, De

Cyber Hotel need not be worried about the changes in terms and conditions in the future. For

example, the adjusting ratio of sharing profit between De Cyber Hotel and ABC Digital

Booking that will affect the profit of De Cyber Hotel. Besides that, this option will not only

help the company keep themself away from contravening any terms and conditions but will

help them in avoiding all those unnecessary costs if the company breaches the contract

because the agreement has not been activated.

However, there are cons which if when they stop the alliance with ABC Digital

Booking, Siti Alia will face some difficulties in managing the hotel by herself. She had to

handle the responsibility in promoting the hotel and at the same time she had to focus on the

operation of business, staff training and so on. It will lead to poor management because there

is a lot of workload for Siti Alia and her team to handle. At the same time, they will consume

more time and cost on developing the hotel website and indirectly lead to the declining profit.

Not only that, they will not have an online booking system for their hotel. This will lead to a

reduction in the booking for rooms because people are not aware of the hotel since mostly,

the bookings are made online via OTAs.

If Siti Alia stops the alliance with ABC Digital Booking, she needs to design her own

online website for customers to book for rooms. She needs to get help from an IT expert or

website builder to build a website for her hotel. Usually it takes sometimes to build a website

since they need to identify many criteria and requirements that are needed in order to form a

good website. But there are some circumstances that Siti Alia might face. The first one is, Siti

Alia needs to wait for some time for the website to be fully developed. Once it is developed,

they need to monitor the website to see that the website functions well and there are no bugs

or unnecessary things occur. It is time consuming as a long length of time is needed. Next, the

cost for developing a website is high because they need to hire the expert to develop the

15
website since they can ensure that the developed website is functioning well and at the same

time ensure the legal and security of website development. The circumstances will make it

hard for Siti Alia, not only it is costly but she will need to depend on marketing of her hotel

either offline or online through Facebook and other platforms to attract customers. They also

must do the booking manually while waiting for the website to be developed. It is time

consuming and a lot of work for them to do and it is also hard to ensure that all rooms are

fully booked for the day.

After that, we suggest Siti Alia to create a marketing and promotion team if she wants

to stop the alliance with ABC Digital Booking. This is because they will still need the team

even though they have their own website because they cannot solely depend on the website to

get other people know about their hotel. The existence of the team will ensure that De Cyber

Hotel can run their business for a long time in the future. It is the only effective way to make

people notice their hotel existence and the team also can help her in handling OTAs page for

her hotel. To create a marketing and promotion team, Siti Alia needed to hire a few more

people to handle the team because the current staff that she has is not enough to help her with

the work. She also needs to give them training in marketing and promotion so they can work

more effectively since they are well trained for that area. Thus, Siti Alia will incur more cost

for hiring and training which might be a bit hard for her to handle with the financial.

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5.0 RECOMMENDATION SOLUTION, IMPLEMENTATION AND JUSTIFICATION

5.1 RECOMMENDATION SOLUTION

Based on the choices given, it is important for De Cyber Hotel to be able to evaluate

the advantages and risks of each decision. Based on the evaluation of the solutions based on

the SAF model, the recommended solution for the manager of De Cyber Hotel, Siti Alia

would continue proceeding the alliance with ABC Digital Booking. This is because this

option provides more benefits compared to the option of stop collaboration with ABC Digital

Booking. Besides that, it has met most of the decision criteria such as positive impacts or

best interest towards the company where De Cyber Hotel are able to achieve their goals

which is provide convenience to customers and achieve full customer satisfaction.

5.2 IMPLEMENTATION CRITERIA

Before being approached by ABC Digital Booking, Siti Alia confronted difficulties in

competing with other hotels as De Cyber Hotel did not establish an online website that

allowed customers to do online booking for the hotel easily. Thus, it led to the loss of

customers. Besides, lack of marketing and promoting strategies was also one of the

challenges for De Cyber Hotel to attract customers.

After agreeing to continue alliance with ABC Digital Booking, ABC Digital Booking

would act as a platform that could install an online system to enable listing and booking of

budget hotel accommodation. Besides, ABC Digital Booking also assists in implementing all

the marketing and promotion activities for De Cyber Hotel. Through these, it can reduce the

workload of Siti Alia so that she can spend more time to focus on the core area of business

instead of only focusing on how to promote their hotel. She can utilise the extra time to

17
monitor the operation of business and come out with new ideas to enhance the efficiency and

effectiveness of De Cyber Hotel. For example, she can spend more time on providing

professional training towards her employees to retain customer loyalty. She can also utilise

the extra time by keeping up to date with the latest trend to improve the hotel operation.

Furthermore, as stated in the agreement, if the hotel room could not be sold due to any

defects of room, a certain portion of revenue will be deducted. Meanwhile, Siti Alia is the one

who should bear the maintenance cost. Thus, even after collaborating with ABC Digital

Booking, Siti Alia should consistently monitor the condition of the hotel to ensure that the

hotel rooms are in pristine condition and free from damages in order to avoid losses. Siti Alia

should also implement some steps and improvements that can avoid the defeats of hotel

rooms. For example, maintain the plumbing system and electrical system of De Cyber Hotel

regularly to make sure that they are in good condition. Besides that, Siti Alia should also

implement fire risk assessment to ensure that all relevant fire safety tasks are conducted by

De Cyber Hotel in order to prevent damages of hotel rooms.

In this case that somehow ABC Digital Booking tend to set extremely low rates for

the rooms of De Cyber Hotel, the contingency plan is Siti Alia can try to negotiate with ABC

Digital Hotel regarding the price rate of hotels that being mentioned in the agreement and at

the same time request to make some amendment regarding the term and condition of the

agreement. She can try to negotiate to increase the rate for at least 10% of the usual rate that

ABC Digital Booking set. Besides, Siti Alia can also provide suggestions to capitalise on

some of the special offers that are available, especially during the periods of low demand, to

make sure that hotel rooms are occupied is the main priority of De Cyber Hotel in order to

generate more revenue to cover the expenses incurred.

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5.3 JUSTIFICATION

The recommended actions are justified because the benefit of continuing the alliance

with ABC Digital Booking is more than the disadvantages compared to stopping the alliance

with ABC Digital Booking. The benefit and drawbacks of the recommended action can be

justified in terms of suitability, acceptability and feasibility.

Suitability is concerned with whether an option addresses the key issues relating to

the strategic position of the company. In terms of suitability, ABC Digital Booking business

operation is similar to De Cyber Hotel. With the multiple hotel online platform held by ABC

Digital Booking, the collaboration suits the vision of De Cyber Hotel as a whole. By

collaborating with ABC Digital Booking, the management will have better control over De

Cyber Hotel in the other aspect. Agreement with ABC Digital Booking also suits De Cyber

Hotel goals to achieve customer satisfaction and generate more revenue and at the same time

maintain their sustainability in the hotel industry.

Acceptability is concerned with the expected performance outcomes of a strategic

option. In terms of acceptability, the collaboration would be accepted by the management of

De Cyber Hotel. This is because the online booking platform will undoubtedly lead De Cyber

Hotel to be more competitive with their competitors in the future and at the same time

increase their profit. For the shareholders of De Cyber Hotel, they are also likely to accept the

agreement because a 20% is paid when the sales of the hotel rooms exceed the minimum

guaranteed amount which is RM21,000. Besides, this collaboration will reduce the burden

and workload of Siti Alia and her team as well.

Feasibility is concerned with whether a company has the capabilities and resources to

deliver a strategy if it could work in practice. In terms of feasibility, the collaboration with

ABC Digital Booking is feasible in terms of funds as ABC Digital Booking will assist Siti

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Alia in promoting the De Cyber Hotel. Thus, De Cyber Hotel does not have to spend

additional money on promoting the hotel by herself as she needs to print the brochure and it

requires an amount of money. She can utilise the additional money for the other aspects such

as to cover the maintenance costs and operating expenses. Besides, by the assistant of ABC

Digital Booking as one of the online platforms, it is feasible because through the alliance with

ABC Digital Booking will develop a strong recognition in order to maintain their

sustainability in the hotel industry. At the same time become more competitive with their

competitors in the future.

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6.0 EXTERNAL RESOURCING

Lianda d'Auria, Micheál Ó Cinnéide. (2009) Integrating strategic environmental assessment

into the review process of a development plan in Ireland. Impact Assessment and

Project Appraisal 27:4, pages 309-319. Retrieved from:

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