Playa Dorado Tennis Club

Case Study
By: John Adams, Jack Cassidy, Ishan Deshpande, &
Brennan Hilger
Q1: What does
Playa Dorado
do?
• Villas
• Oceanfront Hotel
• Pool
• 18-hole golf course
• Boat Marina
• Tennis Courts
• Food & Beverage Facilities
What dilemma is Hall facing? What are the
options?
Issues Dilemmas
• Court capacity • Operations wanted profitable operation
• Increase in customers • Marketing and Sales wanted additional
courts, lounge and pro shop
• Old pricing structure
• Finance was interested in cash flow and
• Bad peak pricing ROI
• Lost revenue
• Development wanted courts to blend in
• Corporate wanted to mitigate
utilization issues
Options
• Short term options • Long term options
• Install lights for night-time • Build new courts
play • Build coaching facilities for
• Focus on internal-operations kids
• Convert hard courts to clay
• Change current pricing
courts
options • Build a multi-floor tennis
facility to accommodate
more guests
3] How many tennis courts will be needed in Mar 2007 and Apr 2007? How about Mar and Apr 2008? Assume the growth rate
stays the same.
Since the growth rate remains constant, the average difference of Court hours used/Guest -Night was calculated. It comes out
as 0.003. Assuming that the demand is increasing every month, this average was added to the Court hours used/Guest-Night of
the Jan 2007 month, and so on for the respective months.
Total number of projected hours = Court hours used/Guest-Night * Projected Guest Nights

For Mar – 2007, Total Projected hours = 7550 and total hours available for 23 courts = 6670.
290 hrs. in one month of March for 1 court. Therefore, 7550/290 = 26.03 ~ 26 courts.
Hence, an additional, 26-23=3 more courts are required for Mar 2007

For Apr – 2007, Total Projected hours = 8042 and total hours available for 23 courts = 7337.
319 hrs. in one month of April for 1 court. Therefore, 8042/319 = 25.21 ~ 25 courts.
Hence, an additional, 25-23=2 more courts are required for April 2007

For Mar – 2008, Total Projected hours = 16468 and total hours available for 23 courts = 6670.
290 hrs. in one month of March for 1 court. Therefore, 16468/290 = 56.786 ~ 57 courts.
Hence, an additional, 57-23=34 more courts are required for Mar 2008

For Apr – 2008, Total Projected hours = 16655 and total hours available for 23 courts = 7337.
319 hrs. in one month of April for 1 court. Therefore, 16655/319 = 52.21 ~ 52 courts.
Hence, an additional, 52-23=29 more courts are required for April 2008
Q4: What should Hall do for the coming
season?
Assumptions
• Uncertainty in demand due to Due to the capacity utilization
seasons being less than 50%, we advise Hall
• Economic conditions may change not to invest capital in the
• Only 50% capacity utilized expansion of tennis courts. Instead,
• First sector to be affected by the the pricing structure should be
economic cycle is real estate, changed to offer increased
therefore any investment should utilization with the courts already
be conservative present on property (23 courts).
• Scope to manipulate demand
  Bring the attraction of
What are the new buyers
implications for  Incredible investment
the future at PD option
Resort?  Bring business to to
complement the resort