Institut Hotelier Cesar Ritz: Group 11 - ELEVEN Hotel

Group 11 ELEVEN Hotel
INSTITUT HOTELIER CESAR RITZ
Assignment: HOTS Year 1 Report
Submitted on Sunday, November 21, 2010
By: Pamela Brown ~187312 Mengyuan Zhu (Vivien) ~190531 Jiaqian Wu (Stella) ~186306
Word Count: 3937
Submitted to: Mr. Hains

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Table of Content
Overall Introduction .................................................................................................... 3 Introduction of Quarter 1............................................................................................ 3 Business Result of Rooms ............................................................................................ 3 Business Result of Food and Beverage ....................................................................... 4 Performance Analysis with graphs ............................................................................. 4 Rooms Budget V Actual Analysis of Quarter 1 ......................................................... 8 F&B Budget V Actual Analysis of Quarter 1 .......................................................... 10 Conclusion of Quarter 1 ............................................................................................ 11 Introduction of Quarter 2.......................................................................................... 11 Business Result of Rooms .......................................................................................... 12 Business Result of Food and Beverage ..................................................................... 12 Performance Analysis with graphs ........................................................................... 13 Rooms Budget V Actual Analysis of Quarter 2 ....................................................... 16 F&B Budget V Actual Analysis of Quarter 2 .......................................................... 19 Conclusion of Quarter 2 ............................................................................................ 20 Introduction of Quarter 3.......................................................................................... 20 Business Result of Rooms .......................................................................................... 20 Business Result of Food and Beverage ..................................................................... 21 Performance Analysis with graphs ........................................................................... 21 Rooms Budget V Actual Analysis of Quarter 3 ....................................................... 25 F&B Budget V Actual Analysis of Quarter 3 .......................................................... 26 Conclusion of Quarter 3 ............................................................................................ 27 Introduction of Quarter 4.......................................................................................... 27 Business Result of Rooms .......................................................................................... 28 Business Result of Food and Beverage ..................................................................... 28 Performance Analysis with graphs ........................................................................... 29 Rooms Budget V Actual Analysis of Quarter 4 ....................................................... 32 F&B Budget V Actual Analysis of Quarter 4 .......................................................... 33 Conclusion of Quarter 4 ............................................................................................ 34 Overall Conclusion..................................................................................................... 34 Ratios Analysis of Year 1 (from balance sheet) ....................................................... 34
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Overall Introduction This report shows the performance made by ELEVEN Hotel in its first year, given an overall result in rooms and F&B division departments, which also gives an idea about all decisions made by the owners to obtain the best result in the hotel revenue.
Another objective of this report is to shows the result between decisions made in the budget with actual income statement results, in some cases was affect by external event occurred during some months and for decisions made by the group, which at the end it will help to make better decisions for the coming years.
The monthly average of the rooms revenue was $187972.5 and F&B revenue of $88141.58 giving a total revenue of $276114.1, the average net income $20578 given a total through the year $246936. Introduction of Quarter 1 The following ratio tables demonstrate the changing performance according to weekly decisions made. To ensure the minimal loss, the operation tried to save cost. The business had to pay more on advertising to get the market and train the staff being more professional and productive. Business Result of Rooms
Room Division Rooms Revenue Avg. Rev./ week Room Occupancy % Guest Occupancy % RevPAR Business : Leisure Labour Cost % Labour Cost / room sold Productivity / staff member Staff Turnover % Room Adv. Cost / Room Rev.$
January (4) 126745 31686.25 15.66 8.73 18.11 10.89 28.1 32.45 377.22 82.59 1.74%
February (5) 228990 45798 22.75 11.69 26.78 47.23 16.3 19.21 467.33 111.43 4.15%
March (4) 166079 29019.75 21.82 13.68 23.86 4.14 15.2 16.61 494.28 0 1.32%
Total/Ave. 521814 35501.33 20.08 11.37 22.92 20.75 19.87 22.76 446.28 64.67 2.40%
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Business Result of F&B

Food and Beverage Food Revenue Avg. Food Rev. / week Beverage Revenue Avg. Beverage Rev. / week Seat Turnover RevPAS revenue per available seat Number of meals (to in-house guests) Number of in-house guests Ratio of meals to guests sleeping Ratio of beverages sold to in-house guests Ratio of Food / Beverage sales Food Cost % Labour Cost % Productivity / staff member F&B Adv. Cost / External Sales $ January (4) 51882 12970.5 18659 4664.75 0.33 40.11 1551 1147 1.35 2.99 2.78 15.4 32.8 251.93 0 February (5) 87722 17544.4 33298 6659.6 0.48 37.3 2884 1969 1.46 3.11 2.63 15.1 23.7 314.34 0 March (4) 69460 17365 29371 7342.75 0.51 37.74 2670 1678 1.59 3.22 2.36 14.7 22.3 320.88 0 Total/Ave. 209064 15959.97 27109.33 6222.37 0.44 38.38 2368.33 1598.00 1.47 3.11 2.59 15.07 26.27 295.72 0
Performance Analysis with graphs
Apart from the F&B going up gradually, the rooms average revenue per week floated up and down. The business decided to cancel the room service part to add more revenue to F&B. Mainly reason for rooms revenue floating significantly there is that the management decided to refurbish 50 rooms (level 1) on February, because the poor room condition cannot be matched up with the higher ADR in competition.
The room average revenue per week dropped by $16778.25 (around 37%) from
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February to March; accordingly, the total amount went down by 16275.75 (around 23%).
Total room sold jumped up by 849 (77%) from January to February, which caused by weekday corporate increasing so much during that period.
Due to the poor performance of weekend rooms and tour part, the business decided to promote out weekend room packages and tour part by different kind of advertising. Even though the result is not very rapid and obvious, the room sold increased slowly by approximately 100 rooms.
During the whole quarter 1, the corporate room sold experience a significant increase, caused by high season demand, none staff turnover in January on accommodation (having effects in the service quality), persistent advertising efforts.
Turning to the leisure part, the management made a decision to decrease the room rate by around $15 of leisure room, so the weekday and weekend leisure went up together.
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Guest occupancy grew moderately resulted from the relatively reasonably ADR, especially the business offered a competitive tour pricing $59 (from the psychological view of consumers).
The room market share decreased slightly during the quarter 1, even though the management insisted on improving the image of the property. Unsurprisingly, in the area, the competition is more fierce than before, which means that the competitors was making efforts to run their business even more than us.
Under the macroeconomic environment, according to the decreasing market share, the room occupancy was supposed to decline from February. Because the room part went down, trying to save personnel cost, the business decided to fire 2 persons on hotel service.
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The market image index decreased by 2.81 (12.5%) through the whole quarter 1, which caused by the bad quality products and facilities such as lack of facilities, poor rooms condition and a relatively higher ADR. Owing to continuous advertising efforts, the public awareness leveled off at 27%. The integrated trend is not a good one, so the management keeps on refurbishing the facilities.
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Rooms Budget V Actual Analysis of Quarter 1
Budget V Actual Income Statement

Budget $ ROOMS DEPARTMENT Revenue Weekday Weekend Conferences Tours Events Other Total Rooms Revenue Payroll & Related Expenses Front Office/Uniformed Staff Housekeeping Total Payroll & Related Expenses Other Direct Costs Guest Comfort Laundry Training Total Other Direct Costs Departmental Contribution Actual $
Quarter 1 Variances $ %
382,678 38,698 0 5,590 0 0 $426,965
462,372 54,530 0 4,912 0 0 $521,814
79,694 15,832 0 678 0 0 $94,849
F F U
20.8% 40.9% 12.1%
22.2%
38,698 25,799 $64,496
46,735 50,674 97,409
8,037 U 24,876 U $32,913 U
20.8% 96.4% 51.0%
19,349 10,749 3,010 $33,108 $329,361
17,329 10,518 747 28,594 $395,811
2,020 231 2,263 $4,514
F F F F
10.4% 2.2% 75.2% 13.6% 20.2%
$66,450 F
In this quarter is possible to see that most of the result was positive for example: The estimate room occupancy was 18%; result for this quarter was 20.8%, which means that the hotel made more revenue of the predicted thing that was possible because the hotel did not expend a lot money making refurbishment in the first month and also it was decided to lower the prices of the room. Estimate room rate $105; and the result was $114.23 o That give as result the achieved of the revenue 2.8% more in room occupancy $9.23 More in room rate
o The expectation for tours was not so high even that it could not possible to achieved it from 1.3% to 1.0% with a different of 12.1%,
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some of the reason could be that the competitors offered better facilities than our hotel, because during this three months the hotel spend money making advertising in it. The overall reason for these result are the following: o The rate of the room was accessible and match with the level of the hotel o The guest comfort in level 2 o Different media of advertising was used o Refurbishment of the hotel was made in level 2 For the departmental of contribution the estimate amount was 76.6%; the result for this quarter was 75.9% o Giving as a result a favorable different of 20.2 % in compare with the budget
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F&B Budget V Actual Analysis of Quarter 1

Budget $ FOOD & BEVERAGE DEPARTMENT Food Revenue Restaurant Conferences Tours (75% of Tour Rev.) Events Room Service Total Food Revenue Beverage Revenue Bar Mini-bars Total Beverage Revenue Total Food & Beverage Revenue Costs of Sales Food Beverages Total Cost of Sales Gross Profit Food Beverages Total Gross Profit Payroll & Related Expenses Food & Beverages Conference & Banqueting Total Payroll & Related Expenses Other Direct Costs China & Glassware Laundry Training Total Other Direct Costs Departmental Contribution Actual $
Quarter Variances $
191,100 0 16,769 0 11,865 $219,734
169,356 0 14,744 0 24,964 $209,064
21,744 0 2,025 0 13,099 10,670
U U F U
11.4% 12.1% 110.4% 4.9%
108,000 0 $108,000 $327,734
81,328 0 $81,328 $290,392
26,672 0 26,672 37,342
U U U
24.7% 24.7% 11.4%
65,920 46,440 $112,360
43,664 34,964 $78,628
22,256 11,476 33,732
F F F
33.8% 24.7% 30.0%
153,814 61,560 $215,374
165,400 46,364 $211,764
3,610
F U U
0.0% 0.0% 1.7%
81,934 0 $81,934
72,634 0 $72,634
9,300 0 9,300
F F
11.4% 11.4%
2,294 5,899 11,471 $19,664 $113,776
2,277 7,386 1,251 $10,914 $128,216
17 1,487 10,220 8,750 14,440
F U F F F
0.7% 25.2% 89.1% 44.5% 12.7%
Talking about the F%B department the estimate average seat turnover per day was 0.5%; the result was 0.44% Estimate meal price was $30.00; the result for the meal was $29.95 o The revenue was not achieved because no advertising for the whole
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quarter o And also the refurbishment of the restaurant could affect in the revenue The F&B department had a revenue of 11.4% less that estimated o Over estimate about the result o The principal factor was the lack of advertising, so not many people know about the restaurant The departmental contribution estimate amount was 34.7%; and the result was 44.2% The estimation was achieved because: o o Actual costs of sales were 2.8% favorable Actual payroll expenses were 11.14 favorable
Conclusion of Quarter 1 The facility levels from average to good, then to excellent After adjusted continuously between January and February, the business got a good result in March, which the staff turnover is zero. Room & guest occupancy were rising The biggest problem is net income, therefore it required a more effective planning to make more profit Introduction of Quarter 2 To attract more customers, the price was slightly adjusted. Public awareness and market image index were increasing in this quarter presenting a good trend. The business did not do much refurbishment considering the heavy cost.
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Business Result of Rooms
Room Division Rooms Revenue Avg. Rev./ week Room Occupancy % Guest Occupancy % RevPAR Business : Leisure Labour Cost % Labour Cost / room sold Productivity / staff member Staff Turnover % Room Adv. Cost / Room Rev.$
April (4) 167319 41829.75 23.93 17.07 24.04 1.9 14.5 14.57 497.97 0 1.31%
May (5) 206139 41227.8 22.17 14.33 23.72 3.41 15.2 16.29 490.81 120 3.40%
June(4) 166030 41507.5 22.08 15.44 22.5 2.28 26.8 28.98 296.48 0 5.39%
Total/Ave. 539488 41521.68 22.73 15.61 23.42 2.53 18.83 19.95 428.42 40.00 3.37%
Food and Beverage Food Revenue Avg. Food Rev. / week Beverage Revenue Avg. Beverage Rev. / week Seat Turnover RevPAS revenue per available seat Number of meals (to in-house guests) Number of in-house guests Ratio of meals to guests sleeping Ratio of beverages sold to in-house guests Ratio of Food / Beverage sales Food Cost % Labour Cost % Productivity / staff member F&B Adv. Cost / External Sales $
April (4) 80186 20046.5 31228 7807 0.45 45.46 1186 1959 0.61 2.92 2.57 14.6 19.9 10128.55 0
May (5) 89374 17874.8 36241 7248.2 0.44 41.45 3159 2160 1.46 3.07 2.47 14.5 22.5 11419.55 0
June (4) 78486 19621.5 35192 8798 0.44 45.5 2685 1734 1.55 3.16 2.23 14 19.5 10334.36 0
Total/Ave. 248046 19180.93 34220.33 7951.07 0.44 44.14 2343 1951 1.21 3.05 2.42 14.37 20.63 10627.48 0
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Compared with the quarter 1, the average earning per week decreased somehow, and the reason should be that the business changed the menu type 2 to menu type 3, but in the meanwhile the business kept the supplier level the same. This decision more or less would have an influence on our food and beverage quality, so our food and beverage sales did go well this whole quarter.
The property did a better job on rooms, and the average room revenue went up by about 12000 (40%) from the end of quarter 1 to quarter 2, and this level kept stably during the whole level. The management used the same room rates for different type, and this increase owed that the high season would be coming.
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From March to the quarter 2, weekday and weekend corporate dropped together by 163 (16%) and 24 (24%), the reason for decreasing: Put too much advertising efforts on tours on March and April For room rates adjustment, the discount not given when the room occupancy is less than 30%, which does not attract potential customers enough
The amount of room sold about leisure went up significant, and the number of then beginning of the quarter 2 almost is the double as quarter 1, which caused by: The right season coming for leisure (spring)
During the rest of quarter 2 the weekday and weekend leisure did not change so much and just experienced a moderate decrease by around 40 rooms. On the other hand, the weekday and weekend corporate rebound back as the same level as March on May, and went down again on June. All the business performance here not only show the unstable demand between business and leisure mix during spring, but also there is fiercer and fiercer competition in the area.
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Although compared with quarter 1, room occupancy increased a little bit because of the continuing advertising effort and stable ADR, the percentage went down during the whole quarter 2.
The room occupancy increased compared with last quarter caused by installing extra facilities: Internet access data point-room Business service June: extra facilities: min-bar The room occupancy deceased during this quarter caused by: Average facility level Not enough training for staff
Compared with the first quarter, the guest occupancy increased a lot by 5.7% (33%) on April but floated and decreased a little during the rest of quarter 2 caused by unstable room sold and tours sold; hence the figures of tours also went down floated as the same stream.
The market share kept sliding, but as the management kept the same ADR and put the same degree of advertising efforts it just drops a little by 0.75%.
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Both market image and public awareness went down by around 1.4% from April to May, several reasons taken into consideration: For market image, we did less effort on training our staff, which still kept on level 1; another thing, we also did less on refurbishing our facilities for saving cost. For public awareness, the management actually chose the wrong type of advertisement, and the independent local radio is not a feasible way to promote the tour part.
The business grasped the only chance to make advantages of local visitor guide to promote the property, and thus the market image rebounded a little bit from May to June. Rooms Budget V Actual Analysis of Quarter 2
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Budget $ ROOMS DEPARTMENT Revenue Weekday Weekend Conferences Tours Events Other Total Rooms Revenue Payroll & Related Expenses Front Office/Uniformed Staff Housekeeping Total Payroll & Related Expenses Other Direct Costs Guest Comfort Laundry Training Total Other Direct Costs Departmental Contribution Actual $
Quarter
Variances $ %
483,438 56,875 0 11,375 0 0 $551,688
416,841 96,102 0 17,149 0 0 $530,092
66,597 39,227 0 5,774 0 0 $21,596
U F F
13.8% 69.0% 50.8%
3.9%
45,500 28,438 $73,938
45,260 54,081 $99,341
240 F 25,644 U $25,404 U
0.5% 90.2% 34.4%
26,731 13,081 8,531 $48,344 $429,406
30,990 16,407 870 $48,267 $382,484
4,259 3,326 7,661 $77
U U F F
15.9% 25.4% 89.8% 0.2% 10.9%
$46,922 U
The estimate room occupancy was 25%; the result was 22.73%, the factor that made not to achieve this number was because during this month we decrease the room rate of the hotel making that the revenue decrease o This also affected by the refurbishment made in the hotel in level 2 which take more days to finish them The estimate room rate was $100; the result $103.10 o The revenue for this quarter was not achieved with 3.73% less in room occupancy But in opposite the room rate was achieved with $3.10 more, so we realize that change the room rate does not help to increase the room occupancy. Tours estimation 2.0% was achieved in compare of the budget that was 3.2% with a different of 50.8% that happened because: o The settle rate price was de adequate for the facilities that the hotel offer
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o It was developed advertising within the three months to attract more customers, which was effective for the hotel The guest comfort facilities was increase to 100% o All the complementary items in level 3 Which include laundry / dry clean services, cable TV, and others o Also during this quarter the hotel include some extra facilities to offer more conform to the guest as: Internet access data point room Business services Mini bar
The payroll & related expenses estimate was 8.0%; the result 18.4% with a different of 34.4% which made then an unfavorable amount, reason: o The difference is obvious in the department of housekeeping because it was not enough employees for this department o That is why in this quarter we can see the turnover in this department because of the understaffed Estimate departmental contribution 75.5%; result for the period 72.6% o The result was unfavorable because of the payroll expenses in housekeeping department was 5.0% more than the expected amount o In general the payroll expense were 5.4% more
Related with the budget it was a different of 10.9%
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Budget $ FOOD & BEVERAGE DEPARTMENT Food Revenue Restaurant Conferences Tours (75% of Tour Rev.) Events Room Service Total Food Revenue Beverage Revenue Bar Mini-bars Total Beverage Revenue Total Food & Beverage Revenue Costs of Sales Food Beverages Total Cost of Sales Gross Profit Food Beverages Actual $
Quarter Variances $
210,210 0 34,125 0 15,000 $259,335
196,588 0 51,458 0 0 $248,046
13,622 0 17,333 0 15,000 11,289
U F U U
6.5% 50.8% 100.0% 4.4%
117,000 0 $117,000 $376,335
97,414 5,247 $102,661 $350,707
19,586 5,247 14,339 25,628
U F U U
16.7% 12.3% 6.8%
77,801 50,310 $128,111
50,350 44,135 $94,485
27,451 6,175 33,626
F F F
35.3% 12.3% 26.2%
181,535 66,690 $248,225
197,696 58,526 $256,222
7,998
F U F
0.0% 0.0% 3.2%
Payroll & Related Expenses Food & Beverages Conference & Banqueting Total Payroll & Related Expenses Other Direct Costs China & Glassware Laundry Training Total Other Direct Costs Departmental Contribution
94,084 0 $94,084
71,274 0 $71,274
22,810 0 22,810
F F
24.2% 24.2%
1,882 7,150 11,290 $20,322 $133,819
2,344 9,762 1,287 $13,393 $171,555
462 2,612 10,003 6,929 37,736
U U F F F
24.6% 36.5% 88.6% 34.1% 28.2%
Estimate average seat turnover per day was of 0.55%; result was of 0.44% Estimate meal price $30.00; result was of $35.00 o It could not achieved because High expectations and not advertising during this quarter o The high turnover in the month of May affect the result of the revenue,
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the turnover of the staff was caused of under staff in the department of F&B, front desk and accommodation. The difference in F&B revenue was 6.8% from the result because of low guest occupancy and the lack of advertising The departmental contribution budget was 35.6% and the result was 72.6% it was achieved with 28.2% more because: o The cost of sales was favorable with 26.2% more than expected in the budget o The payroll was 24.2% below of the expected
Conclusion of Quarter 2 After decreased the rates slightly, the leisure had a big increase. Staff turnover, In addition to a large floating in May, April and June kept on zero. The net income of the second quarter had a significant return earning.
Introduction of Quarter 3 The management made a new decision of price for high season and added more staff for service. The business also changed into menu of type 3. Making more outside promotion to attract more guests for high season and increased the tour profit. Business Result of Rooms
Room Division Rooms Revenue Avg. Rev./ week Room Occupancy % Guest Occupancy % RevPAR Business : Leisure Labour Cost % Labour Cost / room sold Productivity / staff member Staff Turnover % Room Adv. Cost / Room Rev.$ July (4) 196047 49011.75 27.46 22.19 26.47 0.9 21.2 32.45 350.08 114.71 2.20% August (5) 241216 48243.2 29.64 26.49 26.04 0.39 13 19.21 344.59 30.59 1.14% September (4) Total/Ave. 191858 47964.5 30.81 26.31 25.75 0.56 21.4 16.61 342.6035714 74.29 5.60% 629121 48406.48 29.30 25.00 26.09 0.62 18.53 22.76 345.76 73.20 2.98%
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Food and Beverage Food Revenue Avg. Food Rev. / week Beverage Revenue Avg. Beverage Rev. / week Seat Turnover RevPAS revenue per available seat Number of meals (to in-house guests) Number of in-house guests Ratio of meals to guests sleeping Ratio of beverages sold to in-house guests Ratio of Food / Beverage sales Food Cost % Labour Cost % Productivity / staff member F&B Adv. Cost / External Sales $ July(4) 102574 25643.5 49312 12328 0.45 58.15 1253 2364 0.53 2.82 2.08 13.7 15 333.03 0 August (5) 144766 28953.2 68670 13734 0.49 60.29 1586 3397 0.47 2.67 2.11 13.8 13 376.016 0 September (4) Total/Ave. 110693 27673.25 54924 13731 0.52 54.30 1389 2879 0.48 2.52 2.02 13.6 13.7 359.39 0 358033 27423.32 57635.33 13264.33 0.49 57.58 1409 2880 0.49 2.67 2.07 13.70 13.90 356.15 0
The rooms average revenue per week increased by $7504 (18%) from last quarter, and then the numbers were almost on a line to develop, which shows a stable sales the business made caused by the higher demand of this quarter.
The food and beverage average revenue per week boomed up fast from May to this
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quarter by $23066 (118%) mainly caused by: Much more in-house guests Good quality food and service
Total room sold went up rapidly by 385 (25%) resulted directly from the high demand of summer time; especially for the leisure part, weekday and weekend leisure contributed a lot. The management gave more discounting space, which when the room occupancy is less than 30%, the room rates would give in by 12% off. Even though the business still advertised corporate rooms, the demand of season had a serious effect on weekday and weekend corporate. In particular, the weekday corporate and the weekend corporate decreased largely by 553 (45%) and 73 (57%) respectively from the peak figure of quarter 2, and then weekend corporate leveled off at around 50 and weekday corporate kept going down a lot in quarter 3.
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During all the months in quarter 3, the room occupancy went up rapidly by 3.35% because of the high season. The business kept the same room rates, just on September as the management thought the high season might go, the rooms rates were adjusted less by $10 on average.
As leisure parts and tours increased gradually from the last quarter, the guest occupancy grew moderately accordingly, but on September (the last month of quarter 3), the percentage of the guest occupancy decreased a little bit. The guest occupancy going down is another reason that the management decreased the room rates.
Even though the room and guest occupancy, these two figures, looked better, there were many strong competitors in the area, especially for the high season, in order that the rooms market share dropped by about 1.5%, compared with June.
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During the whole quarter 3, shown as the line graph, the market image and public awareness index leveled off at 16.5 and 26.5 respectively. Under the fierce competition in the area, the property could be kept on a stable level for which the management decided to add our own webpage and choose the proper and effective advertising way such as newspapers and posters. The property had a very high staff turnover (less training), which directly affected the market image of business.
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Budget $ ROOMS DEPARTMENT Revenue Weekday Weekend Conferences Tours Weddings/Social Other Total Rooms Revenue Payroll & Related Expenses Front Office/Uniformed Staff Housekeeping Total Payroll & Related Expenses Other Direct Costs Guest Comfort Laundry Training Total Other Direct Costs Departmental Contribution Actual $
Quarter
Variances $ %
705,432 132,269 0 44,090 0 0 $881,790
380,266 171,322 0 41,039 0 0 $592,627
325,166 39,054 0 3,051 0 0 $289,163
U F U
46.1% 29.5% 6.9%
32.8%
96,997 70,543 $167,540
53,544 78,514 $132,058
43,453 F 7,971 U $35,482 F
44.8% 11.3% 21.2%
52,907 28,217 4,409 $85,534 $628,716
69,320 31,837 1,248 $102,405 $358,164
16,413 3,620 3,161 $16,871
U U F U
31.0% 12.8% 71.7% 19.7% 43.0%
$270,552 U
Estimate room occupancy 38%; result for this period was 29.30% Estimate room rate $102.00; result for this quarter 89.27% The expectation for this quarter was higher, due this quarter is the high season it was expecting get more customers and because of that cause an unfavorable total revenue of 32.8%
Payroll and related expenses was 21.2% favorable but: o The turnover in the department of housekeeping made the result unfavorable with 11.3% o Bad decision was taking in the amount of the people need it for the high season
Estimate departmental contribution was 71.3%; result was 62.7% with a different of 43.0% o It could not achieve because payroll expenses were 2.0% more and the direct cost were 6.6% more, guest comfort level 3 and in room
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entertainment level 3 o Bad estimation of room occupancy, room rate was the cause of that the revenue could not be achieved F&B Budget V Actual Analysis of Quarter 3

Quarter Variances $
267,540 0 132,269 0 25,000 $424,809
234,906 0 123,127 0 0 $358,033
32,634 0 9,142 0 25,000 66,776
U U U U
12.2% 6.9% 100.0% 15.7%
192,000 50,000 $242,000 $666,809
126,004 46,902 $172,906 $530,939
65,996 3,098 69,094 135,870
U U U U
34.4% 6.2% 28.6% 20.4%
148,683 111,320 $260,003
72,674 74,339 $147,013
76,009 36,981 112,990
F F F
51.1% 33.2% 43.5%
276,126 130,680 $406,806
285,359 98,567 $383,926
22,880
F U U
0.0% 0.0% 5.6%
180,038 0 $180,038
72,006 0 $72,006
108,032 0 108,032
F F
60.0% 60.0%
6,001 16,670 13,336 $36,008 $190,760
3,779 15,754 1,287 $20,820 $291,100
2,222 916 12,049 15,188 100,340
F F F F F
37.0% 5.5% 90.3% 42.2% 52.6%
Estimate average seat turnover per day was of 0.6%; result was of 0.49% Estimate meal price $35.00; result for this quarter.
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o No advertising for this period in Food and beverage department o Less guest than expected Total budget food and beverage revenue had a different of 20.4% from the result, because: o The hotel did not care about the advertising in this department because the main goal was sell room o o As the result in occupancy was low that affect this department revenue The high expectations was one of the weaknesses to achieved
Conclusion of Quarter 3 The third quarter is the travelling season, so room occupancy and guest occupancy got an obvious rise. Because of so much work and less training, the quarterly staff turnover was not ideal at all; there was a big floating of change. Introduction of Quarter 4 The business made guest comfort be a higher quality. After high season, the business plan would be changed. The operation gave in some pricing and did more advertisements for rooms. In winter there is more demand of meal sold from outside guests
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Business Result of Rooms

Room Division Rooms Revenue Avg. Rev./ week Room Occupancy % Guest Occupancy % RevPAR Business : Leisure Labour Cost % Labour Cost / room sold Productivity / staff member Staff Turnover % Room Adv. Cost / Room Rev.$ October (4) November (5) December (4) Total/Ave. 196845 49211.25 28.19 19.59 26.55 2.11 20.9 20.89 351.51 37.14 2.23% 223494 44698.8 23.64 13.45 24.21 8.54 21.6 23.44 336.08 60.4 2.46% 144908 36227 19.55 15.03 19.47 1.13 27.9 29.08 272.38 76.47 4.69% 565247 43379.02 23.79 16.02 23.41 3.93 23.47 24.47 319.99 58.00 3.13%

Food and Beverage Food Revenue Avg. Food Rev. / week Beverage Revenue Avg. Beverage Rev. / week Seat Turnover RevPAS revenue per available seat Number of meals (to in-house guests) Number of in-house guests Ratio of meals to guests sleeping Ratio of Food / Beverage sales Food Cost % Labour Cost % Productivity / staff member F&B Adv. Cost / External Sales $ October (4) November (5) December(4) Total/Ave. 90032 22508 47012 11753 0.53 43.33 1428 2344 0.61 1.92 13.5 16.3 292.31 0 85707 17141.4 46582 9316.4 0.46 38.02 1628 2193 0.74 3.06 1.84 13.3 19.9 244.88 0 66817 16704.25 33218 8304.5 0.36 47.35 938 1750 0.54 2.55 2.01 13.8 22.8 216.94 0 242556 18784.55 42270.67 9791.30 0.45 42.90 1331 2096 0.64 2.79 1.92 13.53 19.67 251.38 0
Ratio of beverages sold to in-house guests 2.77
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The room revenue per week in quarter 4 performed in a sustained decrease by $12984.25 (26.4%), which mainly caused by the high season and holidays gone even though the business promoted all kinds of rooms by advertising. The management thought December (Christmas time) was supposed to have a higher demand, and decided to increase the room rates by $10 on average. Easily seen from the graph, it did not work so much, the revenue kept going down.
The food and beverage revenue also went down relatively, although winter time normally has a high demand for restaurants, there were less in-house guests.
The business had a high staff turnover around 73% and 58% in quarter 3 and 4, however it would call the property pay more to get new staff and influence the earnings.
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The total room sold decreased by 184 (9%) on October, but a little rebounded on November, and then to December the figure dropped so much by 696 (34%), caused by: The low-demand season The staff turnover was kept increasing
Obviously, weekday and weekend leisure went down significantly by nearly one second time because of the low demand of winter time. The weekday corporate jumped fast by 1037 (180%) from last quarter to November, and then dropped a lot by 1042 (65%) on December, for which people normally were on holiday.
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The room occupancy plummeted fast by 8.6% during the whole quarter, caused by the same reason as room sold.
The guest occupancy decreased by 6% initially and rebound back a little bit by 1.6%, for which tour part grew during the Christmas time.
The rooms market share did well and increase to around 4.34 on average, which means in the area the business became more competitive after one years effort.
Compared with the quarter 3, the market image grew up to around the 17.7 level, and on November the index even went up to 18.79 which close to quarter 1 (around 20%). Related to the decisions the business made, adding hotel webpage exerted a really positive effect on the image of the property, and for the rate adjustment, we put some discount reasonably. Focus on the customers accommodating experience, the guest comfort made at level 3.
Relying on the continuous efforts of advertising, more and more people are getting to know the property, which reflected on the public awareness index keeping a stable increase.
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Budget $ ROOMS DEPARTMENT Revenue Weekday Weekend Conferences Tours Weddings/Social Other Total Rooms Revenue Payroll & Related Expenses Front Office/Uniformed Staff Housekeeping Total Payroll & Related Expenses Other Direct Costs Guest Comfort Laundry Training Total Other Direct Costs Departmental Contribution Actual $
Quarter 4 Variances $ %
1,088,588 137,638 0 25,025 0 0 $1,251,250
424,961 93,943 0 14,158 0 0 $533,062
663,627 43,695 0 10,867 0 0 $718,188
U U U
61.0% 31.7% 43.4%
57.4%
112,613 75,075 $187,688
54,286 73,807 $128,093
58,327 F 1,268 F $59,595 F
51.8% 1.7% 31.8%
62,563 31,281 10,010 $103,854 $959,709
51,797 20,336 1,194 $73,327 $331,642
10,766 10,945 8,816 $30,527
F F F F
17.2% 35.0% 88.1% 29.4% 65.4%
$628,067 U
Estimate room occupancy was 55%; result was 23.79 Estimate room rate $100.00; result for this period was $98.71 o That happened because a high estimation of amount o Poor advertising just 3.13%
Total revenue was 57.4% unfavorable Estimate departmental contribution 76.7%; result was 64.4% o The result was less because less occupancy than expected
In comparison with the budget was different of 65% o The reason are the following Poor advertising Bad estimation of room occupancy and room rate Direct cost were favorable by 29.4%
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Quarter Variances $
289,835 0 75,075 0 20,000 $384,910
200,067 0 42,489 0 0 $242,556
89,768 0 32,586 0 20,000 142,354
U U U U
31.0% 43.4% 100.0% 37.0%
192,000 35,000 $227,000 $611,910
97,511 29,657 $127,168 $369,724
94,489 5,343 99,832 242,186
U U U U
49.2% 15.3% 44.0% 39.6%
134,719 104,420 $239,139
49,995 54,517 $104,512
84,724 49,903 134,627
F F F
62.9% 47.8% 56.3%
250,192 122,580 $372,772
192,561 72,651 $265,212
107,560
U U U
0.0% 0.0% 28.9%
152,978 0 $152,978
70,359 0 $70,359
82,619 0 82,619
F F
54.0% 54.0%
4,895 14,686 12,238 $31,819 $187,975
2,089 8,713 1,242 $12,044 $182,809
2,806 5,973 10,996 19,775 5,166
F F F F U
57.3% 40.7% 89.9% 62.1% 2.7%
In this quarter, easily to see: Did not meet its revenue budget, affecting gross profit naturally, even though Control the cost very well
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Conclusion of Quarter 4 After high season there was a moderate drop on average revenue. Staff turnover had not improved; hence it should be taken more care next year. Starting to plan the new decision for next year, and making that could be more reasonable and profitable. Overall Conclusion For the first year, the business developed in a stable and conservative way, and did not invest so much. For the revenue and expenses, the business met most of its budget, but did not make the expected profit. The Management is going to expand the business (products and service), on the other hand, trying to control costs and make the business being more profitable. Ratios Analysis of Year 1 (from balance sheet)
Category Liquidity Solvency
Ratio
CA / CL A/L L/A D/E
Year 0
0.95 14.9 0.07 0.04 -7.50% 1.70%
Year 1 3 months
1.07 10.99 0.09 0.06 -20.20%
Year 1 Year 1 6 months 9 months

0.79 11.07 0.09 0.06 1.40% 1.88 11.32 0.09 0.05 21.90%
Year 1
2.36 11.58 0.09 0.05 15.10% 3.10%
Profitability Trading Profit ROCE%
The solvency ratio is much bigger than the current ratio, which means the property focused more on long run planning and had more long-term debts to pay such as the property itself and hard equipment. If the solvency ratio is greater than 1, the business would be more secured. Compared with the previous owner, the solvency ratio decreased by 4.09 times therefore the business in quarter 1 was less able to meet the long-term debts, but after that the ratio rebounded and kept gradual increase during the rest of year 1.
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The debt-equity ratio maximizes the return in investment by using the leverage. If the leverage is high (the management controlling more), debt-equity will increase. Less than 1 means the owners equity is greater than liability so the risk for investor is much less. The debt-equity ratio during the whole year is 0.6 and 0.5, from the debt-equity point of view, the business developed healthily.
The property makes the use of trading profit to analyze the profitability of the business. At quarter 1, trading profit decrease so much compared with year 0 by 12.7%. After that because of some effective decisions made, the trading profit percentage grew rapidly until to the high season. At the end, the figure went down by 6.8% from September.
ROCE means how the business develops effectively and profitably. It increased by 1.4% from the previous year showing that the business did much better than before.
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Institut Hotelier Cesar Ritz: Group 11 - ELEVEN Hotel

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Institut Hotelier Cesar Ritz: Group 11 - ELEVEN Hotel

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Group 11 ELEVEN Hotel