Stenden Hots Part C

SCM HOTEL MODULE ASSIGNMENT PDO PART C SCM HOTEL MODULE ASSIGNMENT PDO PART C new(prenominal)(a) in operation(p) Expenses at the bon ton which makes a broad(prenominal) turn over and a bad round satib kayoed . e in the HOTS game. yr 2011-2012 provide 3 Team 8 separate direct Expenses at the graphemey which makes a spicy dollar volume and a bad staff satibout . e in the HOTS game. category 2011-2012 Module 3 Class 2PDOd Team 8 Inhalt 1 Performance splasher family 2 & angstrom unitere 33 primitive turnover4 human body 1 keep down tax. 4 earth aim 2 Net income5 prognosticate 3 do cortege sold6 cipher 4 Room line of work %7 Figure 5 The mean(a) live count (ARR)8Figure 6 Revenue per purchasable room (RevPAR)9 Figure 7 Public awareness10 Figure 8 rung turnover (annual %)11 Benchmark Internal billet 2 & 3 use variance analysis12 Sales13 Cost of gross sales13 Payroll and Related13 unrefined profit less yield13 Other direct cost13 Total stock-st ill cost14 Income earlier taxes IT14 3. 3 Benchmark Internal stratum 2&3 using DuPont analysis15 3. 4 Benchmark Best in competitive mark off17 3. 5 Benchmark with the persistence19 Conclusion21 Performance dashboard category 2 & 3 In the chapter performance dashboard of class 2 & 3 an analysis of important recruits in relation to the rail line SMC exit be given.The cyphers entail e truly month from e actually class this authority 4 stratums are shown, course 0 until course 3. A measure of 9 figures is used and will be apiece explained. Total turnover Figure 1 Total revenue. The total revenue of hotel SCM sack up be found in figure 1 which is shown above. The extreme two eld the hotel do a manage much revenue than previous social classs, this laughingstock be explained by the investment of the entrepreneurs. In the goal two year to a greater extent revenue empennage be do because of the investment in year cryptograph and one. Due to investment t he facilities and solelyeviate of hotel SCM expanded which results in high revenue.Figure 2 Net income The solve income over the 4 years that SCM exists are shown in figure 2. There is a lot fluctuation within one year especially when feeling at January and December year one. In year one and a little less in year two the tables shows that the figures are secondary and even negative. Year 2 and 3 are a mo more regular only with a remarkable negative figure in September year 2. These negative figures is collect to the investments that are do. slaying of services, refurbishment and investing in merc communicateising makes the total direct be high which makes the net income negatively.After year one the norm net income increase enormously. There were no big investments anymore and therefore no high cost which would influence the net income in a negative way. Figure 3 Total inhabit sold In figure 3 an overview of the total rooms sold is shown. The hotel opened in year zil ch and from that moment on the line is progressive which means on ordinary a growth in total rooms sold shadow be concluded. In year 1 on average 2797 rooms were sold on monthly basis, in year 2 this deem was 4196. The polish offure year the total rooms sols change magnitude once more to 4699 rooms average sold on monthly basis.On average hotel still alter itself every year with number of rooms sold because the total increased every year. Figure 4 Room occupancy % In figure 4 the room occupancy in personas is shown for the 4 years that hotel SCM exists. In year aught the occupancy percentage was the lowest and the highest for year tercet because of the progressive line which was also shown in total rooms sold. On yearly basis a stable line is shown with in April a high percentage and a decrease in occupancy percentage at the end of the year, this is related to the high and low season so is totally understandable.The low occupancy percentage in year zero derriere be explai ned due to the fact that the rooms werent do so couldnt be sold. Figure 5 The average room calculate (ARR) The average room rate of hotel SCM is related to figure 5. The average room rate is pretty stable and is close to the line of 100. Year one is on average around 10 $ dollars impose and year 2 shows relatively unstable line . The average room rate for year zero was 100. 10,for year one this is the lowest with a rate of 95. 38, year two shows an average room rate of 98. 32 and for the last year which is year three it is the highest with 103. 5. Figure 6 Revenue per easy room (RevPAR) Figure 6 gives an inside in the revenue per available room (RevPAR) of hotel SCM. The figure shows the influence of the high and low season again January and December are low season and show a glare RevPAR, where July, August and September which are high season show the highest RevPAR. When study January year 3 40. 74 to August year 3 93. 92 this is a difference of 53. 18 in RevPAR all due to t he influence of the high and low season. The RevPAR increased every year of existents of hotel SCM. Figure 7 Public awarenessPublic arwareness which tail end be found in figure 7 was roughthing that was very important for hotel SCM thats why a lot investments were do in marketing. It shows how aware the open is of the existents of hotel SCM. In Year zero the hotel started with a very high public awareness, in Year 3 the public awareness was the highest which is very positive because after 4 years sight are still aware of the hotel. The high public awareness can be explained by the high investment in marketing, but is shows that its impart and has a positive effect. The average public awareness for year zero 37. 65, for year 1 28. 65, for year 2 38. 07 and for the last year which is year 3 it was 48. 08. Figure 8 Staff turnover (annual %) Figure 8 shows the staff turnover in annual % over the 4 years. The figure shows that only year 1 is relatively stable year 1 and 3 are very unstable and fluctuated every month. In year zero the staff turnover was the lowest with an average of 27. 53%, in year 1 it increased to the percentage of 43. 44%, in year 2 it increased again while the average was 64. 13% and in year 3 this was the highest with an average of 70. 34%. Benchmark Internal year 2 & 3 using variance analysisIn this chapter the differences between the work out and the unfeigned results from year 2 and 3 will be given. A table with the estimated cipher which were made in HOTS assignment part B will be shown and explanation for the actual results will be given. The calculate in assignment B was based on the results of year 1. Year 1 Budget y2 Budget y3 Sales Rooms 3. 834. 606,00 6. 820. 937,50 9. 695. 312,50 Food 1. 943. 338,00 2. 332. 005,60 2. 681. 806,44 deglutition 887. 156,00 505. 689,20 581. 542,58 Other 328. 258,00 393. 909,60 452. 996,04 6. 993. 358,00 10. 052. 541,90 13. 411. 57,56 Cost of Sales Room 18. 321,00 32. 589,11 82. 397,41 Food & Bev 1. 182. 670,00 1. 185. 678,72 1. 366. 999,36 Other 62. 957,00 75. 548,40 104. 256,79 1. 263. 948,00 1. 293. 816,23 1. 553. 653,57 Payroll & Related Front office 203. 371,00 166. 799,36 208. 499,20 House holding 289. 856,00 166. 799,36 208. 499,20 Food & Bev 423. 309,00 416. 998,40 500. 398,08 Other 52. 594,00 109. 527,60 153. 338,64 969. 130,00 860. 124,72 1. 070. 735,12 Gross network less requital Room 3. 323. 058,00 6. 54. 749,67 9. 195. 916,69 Food & Bev 1. 224. 515,00 1. 235. 017,68 1. 395. 951,58 Other 212. 707,00 208. 833,60 195. 400,61 4. 760. 280,00 7. 898. 600,95 10. 787. 268,87 central adm. Payroll 320. 224,00 250. 000,00 240. 000,00 Total Other Direct cost 2. 347. 026,00 1. 200. 000,00 1. 150. 000,00 Income originallyhand FC 2. 093. 030,00 6. 448. 600,95 9. 397. 268,87 Total Fixed Costs 1. 180. 850,00 750. 000,00 850. 000,00 Income before IT 912. 180,00 5. 698. 600,95 8. 547. 268,87 Table 1 estimated budg et year 2 +3 SalesFor sales in year one the total pith 6. 993. 358,00 the hotel evaluate an sum total of 10. 052. 541,90 based on the findings in table 1 out of assignment b. The actual sales income for year 2 is 12. 504. 685,00 so the actual result is amend than expect. In year 3 the entrepreneurs expected an amount of 13. 411. 657,56 which was actually 14. 227. 255,00 again the result is make better than expected. These result can be explained because of the ARR that increased where in year 1 the figure ARR was around 90 in the 3 year it is around the 105/110. Cost of sales In year 2 hotel SCM expected a total of 1. 293. 16,2 in cost of sales but results in 2. 428. 178,00 which is almost 2 clock that high. For year the 2 estimated amount was1. 553. 653,57 this was actually 2. 631. 055,00. The big difference in the estimated budget and the actual figures can be explained due to the high marketing costs which were made as mentioned in chapter 1 figure 7. highschool costs in m arketing resulted in a high public awareness which was good for the guild.Payroll and Related 1. 362. 446,00 is the actual total amount for year 2 for payroll and related while the estimated amount was 860. 124,72, for year 3 the expectations were an amount of 1. 70. 735,12 which was finally 1. 556. 499,00. These amounts are a lot higher(prenominal) due to the trainings and employee costs which are made, hotel SCM had a high occupancy so all employees were assumeed and training was necessary to remain customer satisfaction and quality. Of course the training and salaries influence employee satisfaction and the entrepreneurs believe that happy employees do their line of work better. Gross profit less wages In year 2 a decrease in gross profit less wages is estimated to the amount of 7. 898. 600,95 and resulted in 8. 797. 635,00 which is a bit higher, for year 3 10. 787. 68,87 was expected where 10. 134. 228,00 which is a bit lower. The budget is very close to the estimated budget in year 2 the gross profit is 70,4% and in year 3 even 71,2% on the income statement. Other direct costs 3. 692. 438,00 instead of 1. 200. 000,00 for other direct costs in year 2, 4. 687. 714,00 instead of 1. 150. 000,00. These figures are hugely higher than were estimated, this is due to investment in facilities. The strategy of hotel SCM was non to fell that much on refurbishment but to remain quality the hotel had to do it to be able to compete with the other hotels.Therefore no hotel thieve was make because otherwise the other direct costs would be even higher. Total touch on costs In year 1 the Total fixed costs percentage was 16. 9% which meant 1. 180. 850,00$, for year 2 and estimation of 750. 000,00 was made and resulted in 1. 159. 593,00 (9,3%). In year 3 estimated budget was 850. 000,00 which was finally 1. 053. 443,00 (7,4%). The estimated budget was actually very low when looking at the percentage. The percentage for the fixed costs has decreased which is good and are relatively low, which is positive for hotel SCM. Income before taxes IT The income before IT year 2 was 3. 509. 143,00 which is lower than the expected amount of 5. 698. 600,95. 3. 913. 793,00 was the income before taxes in year 3 which is a lot lower than the estimated amount of 8. 547. 268,87. The income before taxes are a lot lower than expected which is unfortunate. 3. 3 Benchmark Internal year 2&3 using DuPont analysis In the following Text is explained which progress the Hotel SCM did based on the DuPont analysis. As one can see in the DuPont analysis year 2 related to year 3 the net profit and total revenue increased.That is positive but looking at the ratios like net profit circumference, asset turnover, return on asset, financial leverage multiplier and return on equity it can be considered that SMC performed in year 2 better even the net profit is lower. The Profit margin is an indicator for profitability in a participation. It shows how much notes is made out of the total revenue in percentage. In around(prenominal) years it was made around 20% which Is very good but in year 3 it was a bit lower. The reason was more costs which lowered the net profit. In both years is the asset turnover around 0. 9.That is all right because when the profit margin is high then in the most cases the asset turnover is low. That doesn? t mean that SCM performed bad, is moreover a unspoken rule in finance, because of that you involve to take more than one ration in consideration to decide which telephoner is sinewy or not. overtake on assets is in year 3 17,03% and in year 2 18,07%. It can be conclude that the ROA decreased provided 1%. It is interesting for new investors. A high ROA means that the federation generates a lot of bills out of a lower investment. So actually it can be assumed that investing more money can generate more profit.Furthermore the financial leverage multiplier is very important. In both years it is 1,21, that is for investors a good indicator to sound out on the healthiness of an company. A high leverage means that a Company covers the investments with foreign money. A low number means that the company uses the gained money to reinvest. The reason because SMC has a low leverage is because it was no need to invest a higher amount of money like to mannequin more rooms so SMC had not taken a higher bring or need to sale mire share which is not possible in the HOTS game.Moreover the last and one of the most important ratios is Return on equity. A high ROE is necessary for a company to attract more shareholders which invest in the company. It decreased in year 3 but it is still more than 20 %. SMC performed in both years very good just in year 3 it was worse. 3. 4 Benchmark Best in competitive set SMC had an end be of the 3rd place. We are going to compare ourselves to Lilihotel which won the game. trading operations SMC had the highest RevPar so it is not necessary to compare it. The gross operating Pr ofit was 34,91 % and lilihotel had 43,79%.That means lilihotel gained more money with less costs. Moreover lilihotel had a higher rooms market share. The reason is that lilihotel built more rooms so it could be sold more as swell up and it was sold 7 more in average compared to SMC. Owner SMC had 29,35% ROCE and lilihotel 40. 85%. That ratio shows how much the companies gained back out of the investment. The Hotel SMC did not invest so much in year 2 and 3 so the performing was worse. It was no Hotel shop and no more rooms were built even that SMC had no loan anymore. Looked at the balance sheet of the company SCM, there were more the 3 million $ on the ccount. On one hand it is positive to have saved money but so much is wrong to preventative because the money could be invested to generated more. Guest SMC is better than lilihotel so it should not be compared. But SMC was not as good as Team 7 which reached 100% leaf node satisfaction. It can be explained because the companys g et wind index was 109,81 compared to SMC which just had 74,76. The reason can be the missing Hotel shop. Staff Of both Hotels is the Staff satisfaction the same with 70%. SMC got the lower ranking because the staff turnover was lower than at lilihotel.The winner in that part was Team 7. They had the lowest staff turnover. That mean the company had a better planning in staff hiring in busy times. Overall it can be concluded that in every part were little differences, so it cannot be told that SMC performed so much less than lilihotel. 3. 5 Benchmark with the industry Hotel SMC Year 3 genus Hosta 2011>250 rooms Differences Revenue Rooms 50,7% 58% -7,3% Food 30,67% 24% 6,67% swallow 12,33% 8% 4,33% Other income 6,3% 10% -3,7% Total Revenues 100% 100% Cost of Sales Food 12,1% 7% 5,1% Beverage 5,0% 2% 3,0% Other Departments 0,7% 1% -0,3% Total Cost of Sales 17,8% 10% 7,8% Payroll & Related Rooms 5,3% 10% -4,7% Food & Beverage 5,0% 14% -9,0% Central Administration 2,7% 4% -1,3% Other departments 0,7% 3% -2,3% Total Payroll & Related 13,7 31% -17,3% Other operating(a) Expenses Rooms 6,9% 5% 1,9% Food & Beverage 1,3% 2% -0,7% Other departments 0,6% 2% -1,4% Total Other Operating Expenses 8,8% 9% -0,2% undistributed Operating Expenses Administration & General 2,6% 3% -0,4% Marketing 13,5% 3% 10,5% button Cost 0,3% 3% -2,7% Property Operating 1,9% 2% -0,1% Total Undistributed Expenses 18,3% 11% 7,3% Total Expenses 58,6% 61,2% -2,6% Income Before Fixed Charges 34,9% 38,8% -3,9% In the following the company SMC is compared to the Hosta draw 2011 which is a promulgate about the industrial averages in the hospitality industry. In that case we are just focusing on hotels with more than 250 rooms. Revenue In Food & Beverage the Hotel SMC performed better than the industrial average.In Food 6,67% better and in Beverage 4,33% better. Moreover the company is worse in rooms and in the account other income that can be because it was not imple mented a Hotel shop. As well SMC did not build more rooms. It can be concluded that SMC need more time to run the business properly to reach the industrial average in Rooms to gain more revenue. Cost of Sales In total SMC had 7,8% more cost of sales than the average. That shows that a lot of rise is necessary. The right balance between marketing, suppliers, extra services and the total revenue.Sometimes should SMC lower the standard to gain more net profit because the cost a lower than as well. Payroll & Related Take the Hosta report in consideration than it shows that the hotel SCM is 17,3% lower in Payrolls as the average. early it looks positive because that means less costs on the other hand when the employees now that there are underpaid related to the average then the will not work anymore at the company which makes a high turnover and a bad staff satisfaction. Other Operating Expenses The company SCM had 1,9% more expenses the in the hosta report. Moreover the total is 0 ,2% lower than the average.It can be conclude that the expenses a relative high because the hosta report is for hotels with more than 250 rooms. SMC has exactly 250 rooms which means that the expenses are to high. In the beside year It should be figured out how to lower it. Undistributed Operating Expenses SMC is spending too much on marketing, 10,5% more than the average. But overall the total expenses are 2. 6 lower the industrial average which means that SMC do a good performance in that part. But on the long term the Hotel has to increase the income because it is 3,9% lower than in the hosta report mentioned. ConclusionFinancial Based on the findings showed in chapter 3. 3 the conclusion is drawn that the hotel is very healthy. The ROA decreased 1% which basically means when there will be more investment, the profit will increase and the financial leverage multiplier staid the same with 1,21. Operations What we have seen before, the operations on twist new facilities was not that important in year 2 & 3. The hotel did not build extra rooms or hotel show, but did, again, a lot of refurbishments. Technology and maintenance Like said before, there were some refurbishments done in rooms, front office and restaurant.This was done because of the lower guest ranking. HRM The costs of staff training was very high. This caused mayor other costs and the company did not really create a very constant amount of staff turnover. Marketing SCM hotel spent a lot of money on marketing, far more than its competitors. This resulted in very high costs, but also in a very high, constant public awareness. following(a) year Next year the hotel should try to sell more rooms. This cannot be done with spending more money on advertising, but in positive experiences and mouth to mouth.In addition the staff need to be well trained, although it would be recommended not to higher the staff training costs. This needs to be done with improved planning skills and a better schedule In addition, because of the opportunities in the Return on Assets, it would be wise to make some investments during year 4. There is no loan to take care of, so it could be a very big one which requires a lot of money. Moreover there should be a good guest and staff survey, what they think about the company and what needs some attention, so the hotel can provide better service to the needs of its employees and the guests. Appendixa