Seaview Apartments

Contact: 0405658457

Prepared By Rafiyat Husnain Workshop: Wednesday, 1630 1830 S3400025

Contact: 0405658457 Business Computing 1

Business Computing 1 ISYS2056

Wednesday; 1630-1830
Tutors: Illiya Ananiev & Steven Wolff

Profitability & Analytical Report 2012 Seaview Apartments

Table of Contents
Introduction ................................................................................ 3 Analysis of Data Using the Spreadsheet Model .......................... 4 Problems Surfaced From Analysis Report ................................... 5 Possible Factors Leading To Observed Problems........................ 6 Research from Secondary Sources ............................................. 8 Analysis of Research ................................................................. 13 Summary of Report .................................................................. 14 Recommendations & Solutions ................................................ 15 Appendix................................................................................... 17 References ................................................................................ 17

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Profitability & Analytical Report 2012 Seaview Apartments

Introduction

What is this report about?

This report discusses the business data for the year of 2011 and secondary information essential to the business operations. Analysing the profitability & popularity of each of the 4 types of units at Seaview Apartments, certain conclusions have been drawn out about the business and its overall scope and potential. Also, comparisons have been made among and between the different apartment styles to evaluate their utilized and un-utilized capacity and identify & suggest changes to the business strategies and options to maximize the overall profitability and growth of the entity. While considering the primary information provided about the business, external sources of information will also be concentrated upon to illustrate and explore various ways and options available to the business.

Aims For The Business

Customer Outreach: This report will introduce new and efficient methods to attract customers from as many backgrounds (e.g. professionals, families, couples, single holiday makers) as possible. Strategy Development: This report will suggest improvements and changes to the business current policies and strategies such as price ranges and holiday package structures to create a framework that increases its long-term sustainability and maximizes its profits. Leadership In The Industry: Recommendations to lead this business to the top of its industry and achieve greater heights in the long run will also be discussed in this report.

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Profitability & Analytical Report 2012 Seaview Apartments

Analysis of Data Using the Spreadsheet Model

Overall Profitability & Comparability

This section provides a transparent analysis of the reported facts and figures of the performance of Seaview Apartments in the year of 2011. The reported data is also organized in an appropriate pivot table in the Appendix. The profitability and comparability of the various kinds of apartments have been identified and inferred from the spreadsheet model, as shown by the table organized below. Data Analysis Maximum number of nights booked Least number of nights booked Highest Profit Lowest Profit Highest proportion of regular customers Highest Nightly Rate Highest % Of Guests Staying >6 Nights [Thus entitled to 15% discount] Highest number of bookings Lowest number of bookings Highest number of bookings in peak periods Lowest number of bookings in peak periods Deluxe Studio Two Bedroom One Bedroom One Bedroom & Two Bedroom Apartment Styles Deluxe Studio One Bedroom & Two Bedroom One Bedroom Deluxe Two Bedroom One bedroom Two Bedroom One Bedroom Deluxe

Figure 1 Key: (Peak Periods assumed to be end-of-year [summer] or mid-year [winter] holiday periods)

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Profitability & Analytical Report 2012 Seaview Apartments

Problems Surfaced From Analysis Report

Identification & Discussion

Referring to the information gathered in figure 1 above, I have concluded that the most profitable apartment is One Bedroom Deluxe, which, in spite of not having the highest nightly rate or the highest number of bookings, has managed to fetch the greatest proportion of the income at Seaview Apartments. This could mainly be due to two reasons: The length of stay per customer is the longest as compared to the other types of apartments. As shown in Figure 1 above, the highest percentage of guests staying longer than six nights is under the One Bedroom Deluxe apartments. The difference in facilities between a one bedroom deluxe and an ordinary one bedroom apartment is assumed to be greater than that of each of their nightly rates ($15). Under this circumstance, the cost paid is lesser than the benefits gained from the more lavish and greater equipped deluxe apartment. Thus, customers interested in booking for longer periods (e.g. >6 days) choose the one bedroom deluxe over the one bedroom apartments as they weigh their benefits associated with the stay. However, considering the advantages of the one bedroom deluxe apartment, a higher profit level could be attained. Currently, the number of bookings for this type of apartment during peak periods is relatively low, leading to a lower income earned from this type of apartments during holidays than it should earn. Once again, referring back to Figure 1 above, it can be seen clearly that the two bedroom apartments are the least popular, and the lowest number of customers book this kind of apartments. Thus, insufficient revenue is collected from the bookings, leading to an overall loss.

The third piece of information that can be drawn from Figure 1 is that one bedroom apartments are not earning as much as they should even though the majority of customers arriving during the peak holiday periods book this kind of apartment.

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Profitability & Analytical Report 2012 Seaview Apartments

Possible Factors Leading To Observed Problems

Digging Deeper Into the Stated Problems

The main outlying problems surfacing from the spread sheet model are the relatively low profit levels from what could be earned given the wide potential of the apartment complex, especially considering its ideal location for a holiday by the beach, the apartments not being used to their maximum potential, and the flaws in the nightly rates which lead to an insufficient number of total bookings at the complex throughout the year. The problems are further specified below: Under Publicized/Inefficient marketing schemes

The marketing schemes utilized by the business currently (e.g. local newspapers) are not efficient enough to attract sufficient travellers and holiday-makers to the complex. This results in a relatively lower profit level than what could be achieved if various different kinds of advertising methods were put in place to spread the word as far and wide as possible. Also, apart from the limited variability of the advertising campaigns currently in place, the business does not yet recognize peak periods of opportunity when it is necessary for the general public to know of the existence and exciting possibility of staying at Seaview Apartments. This is mainly due to the fact that the business is not advertised at the appropriate times of the year when potential customers are actively searching for ideal vacation spots and lodgings. Rate charged for the apartment in high demand is too low, and that in low demand too high Under the current list of customers, two bedroom apartments are in low or negligible demand as they are too expensive ($60 more than the one bedroom deluxe) and redundant for couples or singles, who seem to make up the majority of customers at Seaview Apartments [Deluxe Studio took up the highest number of bookings]. Also, while the demand for this kind of apartment is as low as it is at the moment, such a high nightly rate is unsustainable and will continue to hike down the total revenue of the business.
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Profitability & Analytical Report 2012 Seaview Apartments

Similarly, as it has been observed throughout 2011 that the maximum number of nights booked at Seaview Apartments is that of the Deluxe Studio, such a low nightly rate is inappropriate for the business while the demand for this type of apartments is so high. Also, the one-bedroom apartments are especially popular during holiday periods, but the constant rates throughout the year are too low during these periods when the demand for this type of apartments is observed to be much higher. Change In Global Travel Patterns due to the appreciation of the Australian Dollar & the fall of the U.S. Dollar Although not fatally essential, this is a possible external source of problem that may prevent the number of bookings from being as high as it could be. The appreciation of the Australian Dollar in the recent years has considerably increased the travel costs of air tickets and accommodation in Australia for international tourists and holidaymakers, who are still earning in lower currencies. This is a reasonable hindrance for these travellers living overseas who may be easily discouraged from coming to Australia for a holiday as compared to going to another country such as the USA, where the currency has fallen drastically over the past few years, making their holiday a lot cheaper than it would be in Australia.

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Profitability & Analytical Report 2012 Seaview Apartments

Research from Secondary Sources

Reaching Out To External Parties

Now that the reported data for Seaview Apartments has been analysed and the problems in the business identified with relevant factors of contribution to these problems, it is essential that we consider the trends, practices and patterns of other business in this industry. I have performed a comprehensive amount of research on businesses in the same industry and their strategies to attract customers to their motels/hotels.

Industry Competitors & Their Marketing Strategies

We need to compare the approaches and pricing strategies of accommodation business in Rye itself in order to assess the comparability and competitiveness of the businesses effectively.

1. Aquabelle Apartments

Figure 1.2- Webpage Of Aquabelle Apartments

Along with an effective and efficient website to increase the convenience of potential customers and reach out to a greater number of holidaymakers seeking a seaside holiday around
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Profitability & Analytical Report 2012 Seaview Apartments

the world, Aquabelle Apartments also includes an informative table of apartment rates throughout the year in their online booking system on the webpage. The rates are enclosed in the snapshot of the table below:

Figure 2 - Nightly Rates Of Aquabelle Apartments

As seen in the snapshot above, the nightly rates of the apartments are not constant throughout the year. Different rates are provided according to different times of the year, suited according to weekend and weekday rates. It is common for a greater number of bookings to take place during weekends (Friday/Saturday), which explains the higher nightly rates during those two days of the week. Also, it can be observed that the nightly rates at Aquabelle Apartments are generally higher than those at Seaview Apartments.

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Profitability & Analytical Report 2012 Seaview Apartments

2. Moonlight Bay Resort

Figure 3- Webpage of Moonlight Bay Resorts

Similar to Aquabelle Apartments, Moonlight Bay Resorts also provides a comprehensive and efficient website with an online booking system for its potential customers convenience. Moonlight Bay Resorts also includes a table of apartment rates throughout the year in their online booking system on the webpage. The rates are enclosed in the snapshot of the table below:

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Figure 4-Moonlight Bay Resorts nightly rates

Profitability & Analytical Report 2012 Seaview Apartments

Similar to Aquabelle apartments, Moonlight Bay Resorts also provides different nightly rates according to a weekday and weekend pattern with the rates being higher during the weekends. Their nightly rates are higher than those of Seaview Apartments as well.

3. Rye Family Apartments

Figure 5- Rye Family Apartments Webpage

As is made obvious from the name of the accommodation, this particular kind of apartment complex mainly targets holidaymakers who are families, especially those with children. Their website, although not as well designed as the other two apartments mentioned, provides a clear insight to the family-friendly environment at the complex as well.

Figure 6- Rye Family Apartments nightly rates

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Profitability & Analytical Report 2012 Seaview Apartments

Differing from the other two apartments mentioned, Rye Family Apartments provides nightly rates differing according to seasons and holiday periods instead of weekdays and weekends. Assuming that holidaymakers prefer seaside holidays more during the summer as compared to the winter, their rates are higher during the summer. Also, the nightly rates during winter when the demand is low are lower than that of Seaview Apartments.

Figure 7- Packages offered at Rye Family Apartments

Apart from setting apart nightly rates according to seasons, Rye Family Apartments also provides specific customized packages for different types of customers, suiting to their individual needs accordingly.

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Profitability & Analytical Report 2012 Seaview Apartments

Analysis of Research Discussing the differences: Price Differentiation

Firstly, Seaview Apartments lacks the function of the variability of nightly rates throughout the year, which is common in the industry as the businesses adjust their rates according to the popularity of days such weekdays and weekends or holiday periods and off-peak periods. This is a great shortcoming for this business due to two reasons: It deters customers during off-peak periods when the rates are still as high as they are during holiday periods, while the other businesses attract these customers by providing a relatively lower rate than their holiday periods, presenting a more sound and reasonable differentiation of prices to their potential customers. It brings in lower profits than should be earned during peak periods when there are naturally a higher number of bookings. This is because the rates are not hiked up to maximize profits by taking advantage of the high demand.

Discussing the differences: Lack of Packages

Secondly, unlike the other businesses, Seaview Apartments does not provide customized packages for different groups of customers. This decreases the overall attraction and marketability of the apartment complex due to the absence of specific incentives for potential customers. Thus, the business fails to encourage holidaymakers to choose this complex for their accommodation during their vacation, naturally bringing in a lower number of customers than it would otherwise bring in.

Discussing the differences: Lack of a Proper Website

Thirdly, unlike the other businesses, Seaview Apartments does not have a proper, functioning website, which makes its outreach to customers extremely limited and thus greatly reduces the influx of customers at the complex as potential holidaymakers all over the world are unable to know of the existence of the complex unless they have relevant contacts in Australia who are aware of it.

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Profitability & Analytical Report 2012 Seaview Apartments

Summary of Report Consolidating Ideas & Findings

By analysing the reported data including the facts and figures of apartment bookings, costs and total revenue collected in the year of 2011 at Seaview Apartments, this report demonstrates and discusses issues related to the overall profitability, comparability, and profit potential of the business. It also analyses the approach of other businesses in the industry and evaluates the major shortcomings that this business possesses, which are also identified as its biggest sources of problems related to low profit levels and unutilized capacities of apartments.

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Profitability & Analytical Report 2012 Seaview Apartments

Recommendations & Solutions

Referring back to the analysis of profitability and comparability of the apartment styles at Seaview Apartments, I will now introduce recommendations and solutions for the business which will overcome the problems that it is currently facing to a great extent and heighten the level of profits and maximize its marketability and reputation in the industry.

Suggestive Changes To Advertising & Publicity Procedures

As is evident from the analysis report, Seaview Apartment lacks proper and efficient advertising methods. It is essential that the business reaches out and establishes a mark of recognition to as many potential customers around the world as possible, and the only way it can achieve this is via extensive and effective advertising methods. While certain businesses may prefer conventional advertising methods such as advertising on television and handing out flyers in public places, the majority of todays businesses are constantly on the outlook for technologically advanced marketing schemes. A few suggestions of such schemes are listed below: Designing an official website is one of the first and most essential advertising methods in a business. The internet is such a platform that has the ability to reach out to an infinite number of people from all over the world. By building a properly designed, graphic and detailed website for the company and ensuring that it is listed on search engines such as Google and Yahoo, potential holidaymakers will be able to access information about Seaview Apartments conveniently. Even if they do not know the name of the apartment complex, a simple search on accommodation in Rye will ensure that Seaview Apartments turns up in the results. Also, by setting up a website that looks attractive and is able to be browsed easily from link to link will present a high level of persuasion to customers who are hesitant to make a decision. The website should include: Different categories of information necessary for holiday makers to make a decision about their accommodation [location, facilities, apartment styles, etc.]

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Profitability & Analytical Report 2012 Seaview Apartments

The choice of online bookings with the availability of units and the comparison of prices per night listed conveniently for customers. This saves a lot of time, especially for working adults who are occupied with their jobs and duties all year round. Having an official website enables the business to reach out to potential customers from all over the world instead of only those in Australia. This method of global outreach guarantees an influx of customers from different countries throughout the year as holiday periods vary in individual countries. Blog advertising is another form of advertising that enhances the level of information provided to potential customers browsing through the internet for a suitable accommodation option in Rye. Blogging websites are extremely popular in todays world where a vast number of users are regularly active. By creating and updating a blog with current and past events in Rye, guest reviews which provide an insight to the kind of experience customers will gain at Seaview Apartments, touring guides providing information about what to see and where to go for holidaymakers, and last but definitely not least, latest promotion packages individually suited for different groups of customers such as families, couples and singles.

Updating Nightly Rates

Deducing from the research of secondary sources, it can be seen that the other businesses in this industry do not keep their nightly rates constant throughout the year. They adjust their rates either according to weekdays and weekends, or seasons and holiday periods. This is mainly driven by the fact that the demand for these apartments fluctuate throughout the year, thus it is inappropriate and disadvantageous for the business to maintain the exact same nightly rates all year long. In order to maximize profits, Seaview Apartments should increase its nightly rates specifically during peak periods in the summer and winter as well as during weekends.

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Profitability & Analytical Report 2012 Seaview Apartments

Introduction of New Facilities

Since it has been found that a high percentage of the guests stay for a relatively longer period of time, they should be encouraged to return to the complex for their long stays in the future as well. Also, new customers should be attracted to the complex knowing that they will have a complete experience at the complex instead of just being confined to the fully contained apartments. The best way to do this is to update the facilities at the complex to ensure a more homely and welcoming environment. Adding facilities such as barbecue pits, a heated swimming pool and tennis court will give customers the impression that they will enjoy a wholesome vacation at the complex. Moreover, these facilities will attract more families on the lookout for vacation spots as the family members will be able to spend time relaxing and participating in these activities together after coming back from a tiresome day of touring the region.

Appendix

Pivot Table Analysing Data from spread sheet model

Sum of Number of Sum of Total Sum of Average Sum of Average nights apartment number of number of nights Sum of Total Profit Sum of Percentage of Sum of Total Revenue revenue per night was rented bookings per booking per Apartment Total Profit per Apartment during 2011 (365 days) 129 16 8.06 7662.5 53% 14162.5 38.80 63 14 4.5 1596.5 11% 8096.5 22.18 125 12 10.42 10452 72% 16952 46.44 63 7 9 -5241 -36% 1259 3.45 380 49 31.98 14470 1 40470 110.88

Row Labels Deluxe Studio One Bedroom One Bedroom Deluxe Two Bedroom Grand Total

References (Aquabelle Apartments, 2012) (Moonlight Bay Resorts, 2012) (Rye Family Apartments, 2012)

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