Case Name :      Hotel Latvia: Sell Out, Hang Out or Partner?

Authors :           Stephen Grainger

Source :             Ivey Publishing

Case ID :            W14660

Discipline :        General Management

Case Length :    10 pages

Solution Sample availability : YES

Plagiarism : NO (100% Original work)

Three friends have followed their entrepreneurial dream to build a five-star hotel in Liepaja, a seaside city in Latvia. After a few early profitable years, the hotel is struggling, due to the massive downturn in the Latvian economy as a result of the European Union financial crisis and slow recovery. The hotel has declined from generating an annual profit to now making a loss or barely breaking even. On several occasions, the co-owners have considered selling up while they can still break even. With the European Union showing signs of recovery, business confidence is returning and the future is starting to look up. The co-owners must decide whether to put all their struggles behind them, retain the ownership of the hotel and look forward to the potential days of profit that lie ahead. Alternatively, they can move in an almost opposite direction, by selling up and moving on. What strategic direction will produce a successful outcome?