HOTS Background Information
SH 1 Situation Report
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
1980s – 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.
1990s – 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.
HOTS Background Information SH 2
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 reestablish local leisure facilities and tourist attractions to meet the highest expectations of modern tourists. From 2012, 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 –
1. Sales reports and standard factors and ratios (Monthly and Weekly Indicators reports)
2. Income Statement – (Monthly and Consolidated)
3. Operating Statements – (Monthly and Consolidated)
4. Balance Sheet
5. Cash Flow Statement – (Monthly and Consolidated)
6. 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 standard rooms Weekend standard rooms
Quarter 1 29% 33%
Quarter 2 23% 23%
Quarter 3 24% 21%
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.
HOTS Background Information SH 3
Your Hotel (Continued)
Facilities
• 125 standard, air-conditioned guest rooms, all with private bathrooms. All rooms can accommodate singles, couples or families.
• The Front Desk is open 24 hours each day.
• There is a lobby lounge, a bar with snack service and a full-service restaurant.
• 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 Programmes
1. Guest Rooms – Very little redecoration or deep cleaning under the previous management team – general condition is poor.
2. Front Desk – average condition.
3. Restaurant – Refurbished several years ago and in average condition.
4. Bar – Average condition.
Note that refurbishment levels deteriorate over time, unless adequate refurbishment programmes are put in place
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 rather low compared to similar properties in the market.
HOTS Background Information SH 4
Market norms
This information defines what would be considered the norms for upper midscale, midscale and economy 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.
Upper midscale
100 – 225 guest rooms, including suites and executive rooms À la carte restaurant and coffee shop Two bars Spa/leisure facility Conference and function spaces and extensive business services Extensive car parking Standard of refurbishment – Most upper midscale hotels in the area are good or excellent
Midscale
80 – 250 guest rooms, including executive rooms, occasionally suites 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
Economy
70 – 250 Guest Rooms
Restaurant
At least one bar
No spa or leisure facilities
A few economy properties have limited conference facilities; most offer no business services
Adequate car parking
Standard of refurbishment – all good or excellent
Note: Your competition during the HOTS exercise will be the other hotels which are undergoing redevelopment under new management. Competitor information about these hotels will be available on an ongoing basis during the simulation.
HOTS Background Information
SH 5
Staff Consultative Committee – meeting minutes
Meeting held at 2pm on 15
th 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 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 generate a trading loss over the year as a whole, and this is
likely to be below the owners’ expectations. This is not unexpected, given the difficult
trading conditions of the past few months. Mr Jones thanked everyone for their efforts
and for maintaining morale despite the high staff turnover and less than idealtradingfigures.
Mr Jones then presented the hotel’s financial projections for the next year, which
indicated a potential for increased corporate business in the second quarter, once the
summer holiday season is over, and positive growth in demand for autumn leisure
breaks. He expressed a need to be pro-active in meeting heightened customer needs.
He expected there would be some adjustment when discussions with the new
management take place.
Mr Jones advised that initial projections for the current summer season were fairly
poor, and much work needed to be done to make the hotel fit for the following
summer so as to have some chance of achieving the owners’ goals. 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 in some areas during the
previous year and blamed this for the failure to achieve the required standards,
particularly in relation to meting acceptable training levels.
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
You will need to use the resources in your team as effectively as possible to make
your decisions. But don’t forget this is a training exercise and you should use it to
practise in those areas you are less familiar with.