Temptation Resort can't compete in the 5 star market even with upgrade

The new resort concept for Temptation looks interesting with a South Beach type of "modern" design. Clearly, they are looking to substantially upgrade the resort from its current 3 star status to most likely a 5 star hotel , with major price increases to match.

I am skeptical this is a good business decision considering that Temptation resort was largely a niche market for 3 star hotels in Cancun that was "adult themed". It was definitely a market leader in that segment.

Switching from 3 star to 5 star will likely be very problematic considering the different tastes of 5 star customers.

The typical 5 star customer in Cancun is usually an older, family oriented person with demands such as:

1) Good location and beach: Temptation resort will always be in a bad location with a poor beach

2) Top food and amenities: Temptation MAY be competitive here with the upgrade but even here it is unlikely they can top the Ritz or other top places

3) A quiet, laid back atmosphere: Most 5 star customers don't want loud music until 3 AM with a "party, raunchy" atmosphere. They are usually older conservative people that like mostly good food, amenities and beaches in a relaxing environment.


Competitors include:

https://www.tripadvisor.com/Hotels-g150807-zfc5-Cancun_Yucatan_Peninsula-Hotels.html

Notice how all of these resorts are very modern, have great pools, great beaches, great food choices, etc. Temptation would have to up its game dramatically to attract this highly competitive segment.



With an increased number of rooms at a 5 star price point, i am worried this is a very bad business decision for this resort.

But what do I know? Maybe they did a lot of research into the 5 star segment and found a large demand for an adult themed raunchy resort in a poor location with a poor beach.


I just hope that if it isn't successful, they can afford to lower the prices after such a large investment in both capital expenditure and opportunity costs of closing for a year.

 

Agreed.

It seems to be real this time.........but still........I'll believe it when I see it. That resort on that location doesn't seem to make good business sense.

 

Temptation struggled with smell sometimes, mediocre food, revolving door on ent staff, keeping rooms cool, etc. Yet they were almost always booked full. People weren't going there for luxury, for the chic design, or the gourmet food. I think this is a mistake. They want to compete with Hedo and the like. They are giving up a market they control to dabble into a market that had a following. They may struggle to attract 5 star guests away from their current favorite resorts, while pushing away their loyal 3 star guests to make a buck.

Old enough to know better, too young to care

 

All very good points. I'm not sure where the thought process came in to pursue a five-star Resort when 3-star to three-and-a-half is their niche. Not to mention, their pricing out many of their customers. They already tried to appeal to those customers through the Desire brand which is only sold out 40% of the time. Where do they think they're going to find four times as many customers to fill up Temptation

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SPOT ON! Why give up a large, enthusiastic, very loyal client base just to try and compete with the five star resorts that rarely sell out? Makes no sense to me. McDonalds never tries to be a Ruth Chris Steak House for a reason.

Just my .02

 

You guys may be missing the point here...comparing Desire and TTR is apples and oranges. The party is different, the theme is different. I think there is plenty of 5 star clientele that enjoys a "raunchy, party til 3 am" resort. What 5 star resort are they trying to compete with??? read between the lines.

 

Truth... when you order a Big Mac, you don't expect a Prime Steakhouse burger. Sometimes you just want a greasy cheeseburger. What a great analogy , Temptation is the greasy cheeseburger to Desire or new Temptation Prime Cut ground sirloin burger.

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No you're not wrong, however there are more that just like the party to 3 a.m. and aren't so much into the five-star. A lot of people we've met over the years at Temptation are regular working-class people who scraped money together and came to Temptation because it was affordable and offered a lot of fun escapism for them. Those are the customers they're not going to retain and have been a big piece of their business over the years.

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We're not in disagreement on that fact. But like I said, look beyond the pretty pictures everyone has seen yesterday and today...

 

It's all going to come down to price. Will they be pricing themselves out of their market?