Hots: Net Income and Hotel

Topics: Net income, Revenue, Hotel Pages: 21 (4548 words) Published: August 28, 2013

1. Introduction
Crystal Hotel is a quality 3-star hotel, which has been operating for three years since taken over by a new management team. The goal for the new management team is to improve the hotel’s reputation, market share and financial performance in a competitive market area. This report consists of two main sections. First section is to analyse the objectives, strategies and outcomes of the business for first three years in detail. Secondly, a financial analysis such as total revenue and net income analysis will be done through different data graphs.

2. Overview of Business Plan for the last three years

2.1. Positioning and Mission statement
Hotel positioning

Crystal Hotel is positioned as a quality 3-star hotel. It is located in a resort area with a growing population for coastal vacations. The main competitor of Crystal Hotel is The Park Hotel which is a standard 3-star hotel; nonetheless, there are 7 other hotels around such as the Place Hotel, Mariner Hotel and so on (HOTS, 2012d).

According to the business mix and customer profile (HOTS, 2012b), the majority of hotel customers are business travellers during weekdays and leisure family guests at weekends. The key market segmentation was divided based on the demand of the hotel guests, which is shown as corporate market, leisure market, tour market, conference market and event market. In the future, Crystal Hotel is planning to develop as a 4-star property that will guide the decision-making in following years.

Mission statement

Our mission is to completely delight and satisfy our customers, to protect customers’ privacy and safeguard their personal identifiable information, to offer superior service at competitive prices, and we are committed to provide quality accommodation and services to the customers. We train employees who are willing to learn new skills and accept greater responsibilities and also provide all employees with a fair package of employment and the conductive working circumstances. Crystal Hotel aims to build up positive images and expand brand reputation and market share. Therefore, the hotel will focus on catering customers’ needs and wants.

2.2. Year 1:

2.2.1. Objectives
• Achieve average room occupancy rate of 40.1%.

• Increase the average monthly revenue to $459,908.

• Achieve average monthly net income to $50,000.

• Reach the monthly food and beverage revenue to $192,058.

• Reach the annual staff turnover of 45%.

• Increase Public Awareness Index to 40.

• Reach the hardware standard requirements of 3-star hotel.

• Implement parts of EMS system at level 2.

2.2.2. Strategies

Room Rate section

In year 0, the average room occupancy was 18.2%, which was quite low (HOTS, 2012g). For achieving the objectives, the room rate was decreased to the appropriate level (around $85). New management team thought that the lower price strategy would be the most effective way to attract customers in year 1.

Food and Beverage section

The hotel used menu type 2 and supplier type 2 for meal and set the meal price of $20 and liquor price level at band 1. With the increased occupancy, the menu type was changed to type 3 with the meal price increasing (up to $26) and liquor price increasing (band 3). Besides, the hotel offered the 24-hour room lounge services to gain more revenue.

Staff Section

Crystal Hotel paid department heads at level 2 and other department staff at level 1. The training level was at level 2 for all the staff, with $20 for the heads and $10 for the other staff each week. To motivate staff and reduce the staff turnover, a higher level of payment was applied and the number of staff was adjusted.

Refurbishment Section

The hotel refurbished a part of rooms at level 1 (up to 135 rooms in July) monthly in the first half year. 110 rooms were refurbished at level 2 in the second half year. Additionally, restaurant, bar and...

References: HOTS. (2012b). Background Information. Southport: Griffith University.
HOTS. (2012c). Business Advice. Southport: Griffith University
HOTS. (2012e). Cash Flow. Southport: Griffith University.
HOTS. (2012f). Departmental Income Statement. Southport: Griffith University.
HOTS. (2012g). Indicator Averages. Southport: Griffith University.
HOTS. (2012h). Learning Guide. Southport: Griffith University.
HOTS. (2012i). User Guide. Southport: Griffith University.
HOTS. (2012j). Monthly Indicator. Southport: Griffith University.
Ladhari, R. (2009). Service quality, emotional satisfaction and behavioural intentions
-A study in the hotel industry
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