Assignment Details and Instructions.
- You are required to write a 2500 word report.
- The report must demonstrate critical analysis, evaluation, comparison and contrast of various situations that impact on service providers.
- You will underpin your work with theoretical concepts and there must be evidence of synthesis and justification that reaches logical conclusion.
- Your report should draw on a wide range of published sources – academic & provider’s authenticated reports / articles.
- The use of ‘Harvard Referencing System’ (Author/Year).
- All sources must be fully acknowledged in the report and in its reference page.
It is an individual report on a failing hotel business that has several short and long term problems (see case study) to be resolved in order to make it a success and profitable.
The report will clearly state a set of objectives for the development of the business and strategic management techniques, including the management of finance, marketing and human resources.
It is expected you will use a range of literature to support your developments with some examples (data) used from the case study.
Appropriate business models and tools will be used to support the development of the report to include elements of SWOT analysis, Ansoffs matrix, and the balanced scorecard (Approx. 2500 words).
- It is expected you will outline the theory and practice of applying the balanced score card within the hotel sector.
- Critical review the operational and strategic application of the balanced score card.
Hotel Location
This hotel was built and opened in the second half of the last century, when the area was growing in popularity for vacations and short breaks. The growth of this and other nearby destinations was due in part to the easy access provided by new road and rail networks.
Many hotels in the town offer modern facilities in well-constructed buildings. Our hotel is situated in the town centre, close to other hotels and a short distance from the main shopping centre.
The town is less than 30 minutes from the nearest airport, and there are good road, rail and bus links to other major cities and towns.
The town has a resident population of 145,000.
Hotel Economic Background
1980’s – Tourism Growth
In the 1980s increased affluence and the desire for regional and national travel produced a boom for this town as it developed into a popular destination for vacations and off-season breaks. This influx encouraged the establishment of a range of annual leisure events, which, in turn attracted increased levels of tourism. Many hotels entered the market during this period offering comfortable facilities in well-constructed buildings and conveniently situated for business and leisure activities.
1990’s – Small Industry Growth
The town’s population grew to 160,000 residents and in the 1990’s the local economy began to diversify into service and soft industry, which generated a growing market for commercial room nights. The combination of regional tourist events and commercial growth prompted the town council to build an excellent central conference centre. With a diversified economy, an easily-reached location and good hotel facilities, the town seemed to be in a strong position.
2000’s – Decline
Unexpectedly, in the early 2000’s the tourism market in the city began to soften as tourists looked for new venues and new types of tourist experiences. There was also public criticism of the town’s hotel facilities, which had not kept up with the times. By 2005, only 50% of the previous levels of tourism remained and this was largely due to the annual tourist events which had become very well established. No longer a boomtown, and short on tax funds to maintain its infrastructure, the town was also losing its appeal for small industry relocation and the resident population decreased to around its current figure of 145,000.
2010’s – Revitalisation Plan
In the early 2010’s, many companies were looking to relocate to areas that offered lower commercial costs, lower taxes, and a higher quality of life. The local authority decided to offer an exceptionally favourable economic relocation package to small and medium size firms. This plan has been very successful and many companies have relocated or have committed to relocate. The council has used tax income from these commercial developments to re-establish local leisure facilities and tourist attractions to meet the highest expectations of modern tourists.
From 2010, the town has become a popular location for conferences, both in and out of season.
Your Hotel
Business Levels
For full details, refer to reports given for previous trading periods.
Information available includes –
- Sales reports and standard factors and ratios (Monthly and Weekly Indicators reports)
- Income Statement – (Monthly and Consolidated)
- Operating Statements – (Monthly and Consolidated)
- Balance Sheet
- Cash Flow Statement – (Monthly and Consolidated)
- Average Indicators for the Year
The previous management team have provided these historical reports for the business year just ended.
Seasonal patterns of demand
The following table gives an indication of demand by financial quarter over the previous year. (Figures are approximate and represent the proportion of the year’s total demand achieved in each quarter, based on most recent published figures)
| Period |
Weekday rooms |
Weekend rooms |
| Quarter 1 |
23% |
21% |
| Quarter 2 |
25% |
25% |
| Quarter 3 |
28% |
30% |
| Quarter 4 |
24% |
23% |
Customer Profile
During the week mostly 30-50 age group and middle to upper management. At weekends, the clientèle is mainly the 30-50+ age group, middle to upper management with their families.
Your Hotel (Continued)
Facilities
- 125 standard, air-conditioned guest rooms, all with private bathrooms. All rooms are able to accommodate singles, couples or families.
- The hotel does not currently have a class or star rating.
- The Front Desk is open 24 hours each day. There is a lobby lounge, a bar with snack service, and a full service restaurant.
- There is an enclosed garden, with some outbuildings, which are currently used as office space and storage.
- Car parking is available on site but is very limited. Additional parking is available in a nearby multi-storey car park, but this is expensive. Parking is considered a general problem in the town.
- There are currently no Leisure Facilities, Business Services, Conference Facilities or Meeting Rooms in the hotel.
Refurbishment Program
- The exterior of the hotel was painted last year and all signs were replaced – general condition is good.
- Guest Rooms – There was some redecoration and spring cleaning under the previous management team – general condition is average, although some rooms are in poor condition.
- Front Desk – average condition. Does not make a good first impression
- Restaurant – Refurbished several years ago and in fair condition..
- Bar – Needs attention.
Staff Details
Staff pay and numbers employed are as shown on the staff decisions page. The administration costs, including the costs for the General Manager, Financial Controller, Secretary and clerical support are given on page 4 of the Departmental Operating Schedule. NB – These four persons are outside operational headcount.
Training
The average training spend per employee per annum has been sufficient for between level 1 and level 2 training up to now, which is low compared to similar properties in the market.
Market norms
This information defines what would be considered the norms for 4-star, 3-star and 2-star hotels operating in this market. Information about these ‘typical’ hotels will assist you in determining the style of hotel you wish to operate. Additional information on these three types of hotel is contained in some of the Market Research which is available to assist you while you are developing your Business Plan. Remember that this information shows you what the average standards and facilities are and what the market expects for hotels in these segments.
4 star
- 100 – 175 guest rooms, including suites and executive rooms
- À la carte Restaurant and Coffee Shop
- Two bars
- Spa facility
- Conference and function spaces and extensive business services
- Extensive car parking
- Standard of refurbishment – Most 4-star hotels in the area are good or excellent
3 star
- 80 – 200 guest rooms, including executive rooms
- Restaurant
- At least one bar
- Small spa/leisure facility
- Conference Facilities and Business Services
- Ample Car Parking
- Standard of refurbishment – good or excellent in most properties
2 star
- 70 – 200 Guest Rooms
- Restaurant
- At least one bar
- A few 2-star properties have limited conference facilities; most offer no business services
- Two Conference Rooms, no Business Services
- Adequate car parking
- Standard of refurbishment – all good or excellent
Staff Consultative Committee – meeting minutes
Meeting held at 2pm on 15th December
Present: Representatives from: KITCHEN, RESTAURANT, HOTEL SERVICES & FRONT DESK
Apologies: Representatives from: BARS & MAINTENANCE
Chair: Robert Jones (General Manager)
- Mr Jones opened the meeting, expressing thanks to those members of the Committee who had spared their time to attend.
- The minutes of the previous meeting were discussed. Representatives of Hotel Services and the Restaurant expressed concern at the delays in introducing the revised pay structures and training schedules, which were promised by Mr Jones earlier in the year. Mr Jones said this would now be a matter for the new management.
- Mr Jones continued the meeting with the agenda items:
- The hotel is expected to suffer a trading loss over the year as a whole, which is a disappointing result, but not unexpected, given the difficult conditions of the past few months. Mr Jones thanked everyone for their efforts and for maintaining morale despite the high staff turnover and poor trading figures.
- Mr Jones then presented the hotel’s financial projections for the next year, which indicated a potential for increased corporate business in the first quarter, and positive growth in demand for spring breaks in the second quarter. He expressed a need to be pro-active in meeting heightened customer needs, particularly in view of recent shortfalls in planned maintenance activities and the cancellation of much-needed new facilities. He expected there would be some adjustment when discussions with the new management take place.
- Mr Jones advised that initial projections for the coming summer season were relatively poor, so belts may need to be tightened. Further discussions will need to take place with the new management prior to taking any specific actions.
- Mr Jones expressed concern at the high turnover of staff during the previous year and blamed this for the failure to achieve the required standards, particularly in relation to meting acceptable refurbishment standards.
- Mr Jones advised he would be leaving the hotel at the end of the month once the formal handover to the new management team was complete, and thanked everyone for their support.
- There was no further business and the meeting closed at 4.00pm.
Date of next meeting – t.b.a.
Decision Areas
Your team will be making decisions in the following areas during the simulation,
- Rates (and discounts)
- Revenue management, including distribution channel management
- F&B – choices of menu, supplier and prices
- Staff – staffing levels by department, managed monthly, plus pay levels
- Training – allocation of funding for training in all departments
- Advertising – involving traditional media, web reviews, social media and direct guest feedback
- Refurbishment – spring cleaning, redecorating and rebuilding
- Environmental management system – investment in ‘green technology’ plus environmental initiatives
- Guest comfort – in-room provision, concierge and room service
- Capital items – investments in new facilities
- Finance – loan and dividend management
Business Data from your hotel
Online review
Staffing
Staff Quality
Business Advice (based on your current hotel position)
- STAFFING LEVELS
Below are the most effective staffing levels. These will produce a good balance between Guest Satisfaction, Staff Satisfaction, and costs.
| Fixed Staffing Levels |
| Front Office (to 200 customers/day) |
6 |
| Front Office (per extra 200) |
2 |
| Room/Lounge Service (to 150 room users/day) |
3 |
| Room/Lounge Service (per extra 150) |
1 |
| Shop(to 150 room users/day) |
2 |
| Shop(per extra 150) |
1 |
| Health Club (to 300 members) |
4 |
| Health Club (per extra 300) |
2 |
| Conference/Banquet (office) |
2 |
| Bar (to 150 drinks/day) |
4 |
| Bar (per extra 150) |
2 |
| Variable Staffing Levels |
| Maximum number of staff per department head |
12 |
| Hotel Services – Staffing For 100 occupied standard rooms |
14 |
| Hotel Services – Staffing For 100 occupied executive rooms |
18 |
| Hotel Services – Staffing For 100 occupied suites |
22 |
| Food and Beverage |
| Staffing per 100 restaurant covers |
| For Menu Type 1 or 2 |
8 |
| For Menu Type 3 |
11 |
| For Menu Type 4 |
15 |
-
CURRENT CONDITION OF FACILITIES: (rated on a scale of 1, very poor, to 100%, Excellent )
| Facility |
Rating (%) |
| Standard Rooms |
80.6 |
| Executive Rooms |
0.0 |
| Suites |
0.0 |
| Bar |
80.4 |
| Restaurant |
80.9 |
| Front Desk |
80.9 |
| Conf. Rooms |
0.0 |
NOTE: After making investments in refurbishments, your facilities still need annual cleaning and maintenance in order to maintain high ratings.
3. CURRENT FINANCIAL CONDITIONS
| Share Capital (£) |
8,750,000 |
| Net Property & Equipment (£) |
11,885,590 |
| |
|
| Cash at Bank(£) |
98,630 |
| |
|
| Overdraft Available (£) |
1,500,000 |
| Overdraft Interest Rate (%) |
7.0 |
| |
|
| Loan (£) |
3,105,032 |
| Loan Interest Rate (%) |
5.0 |
| Inventory (£) |
11,513 |
| Accounts Receivable (£) |
88,244 |
| Accounts Payable (£) |
290,224 |
| Amount of Credit Sales (%) |
|
| |
|
| Creditor period (weeks) |
9 |
| Debtor period (weeks) |
5 |
