The projection of improving the business
This is a report for the Directors Board of the Cosmopolitan Hotels, to identify the projection of improving the business of the Wheatley Park Hotel over the next year. After interviewed all the key people and a research through books, being the General Manager, I have the following analysis and recommendations, with a scope to get approval on investment proposals, which would further the business development of the Hotel. Wheatley Park, as a country hotel, has the ability to provide services for both business and leisure customers.
Her current situation of declining of turnover at a rate of 10% is the main issue we have to tackle by introducing new projects. The first target is to increase annual turnover from i?? 1. 2m to over i?? 2m in room lettings improving profitability by lowering the operating cost. The second target is to upgrade the hotel from 2 stars to 3 stars in one-year time. The plan is to have room refit first followed by building a well-equipped indoor swimming pool:
Measure customer satisfaction by questionnaires, rate of customer returns, complaints and recalls. Also, services have to exceed customers’ expectation and competition. Besides, we should receive customers’ responsiveness and achieve productivity to improve
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Chase Demand can provide a consistent service standard at minimum cost, and is flexible in recruiting part-timers or offer contract placements to manage peaks. Unused capacity in lower seasons can be utilized to increase staff motivation, build loyalty, and commitment within the hotel to reduce staff turnover. Combining these two capacity strategies can maximize the turnover all year round (Ng, Wirtz & Lee, 1998). The balance-score-card emphasizes the interrelationships of all perspective (fig.1).
This could achieve our objectives of growing profitability and continually improving services, we are able to response quickly to markets changes and customers, and provide distinctive service with value for money. Additionally, to develop skills of all employees and to recognize their performance, while maintaining awareness of competitors. (Brown & McDonnell, 1995) Firstly, even though we will rise in price for 20%, it is still lower than the normal pricing around 100 charged by other 3 stars hotel (Defender strategy).
Secondly, higher quality increases reliability and reputation, together with responsive to customers, it will increase reliability and satisfaction for customers, who possibly will become current customers and could be a way to promote our hotel, which is competitive advantage over competitors, enables us to raise prices in other sections and finally boost up in profits (Total Stay, 2002).
Thirdly, improved communication by installing MIS will increase productivity that lower the costs, thus higher the profits (fig. 2). Management Information System (MIS), is to manage an organized combination of people, software, hardware, communication networks and data resources, produce information products that support various day-to-day decision-making needs of management, explained as the “information triangle” (refer to fig. 3) (Keuning, 1998:543).
The bottom is operational, information on the daily execution of activities and regards details of the operational company processes, will go to different departments. The middle – tactical, is to compare planning data to actual attained results. The top part is important – strategic, supports the process of policy making and formation in the hotel in medium term, by collecting from both internal and external sources, then provide ad hoc information. (Keuning, et al. )