HOTS Learning Guide 2021 PDF

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3215THS Hotel Service Operations Management, T1 2021

HOTSLe a r ni n gGu i deV8 & Ba c k g r ou ndDo c ume nt

3215THS Hotel Service Operations Management

T a b l eo fCon t e n t s 3215THS Hotel Service Operations Management, T1 2021.....................1

.....................1 HOTS Learning Guide V8..........................................................................1 &...............................................................................................................1 Background Document.............................................................................1 3215THS Hotel Service Operations Management....................................2 Table of Contents......................................................................................2 Introduction..............................................................................................1 Planning phases.......................................................................................4 The First Steps:.....................................................................................4 Positioning and Mission statement........................................................4 Objectives.............................................................................................5 Strategies..............................................................................................5 The Strategic Action Plan......................................................................6 Budgeting..............................................................................................6 3215THS Hotel Service Operations Management....................................8 HOTS Decisions TABS...............................................................................8 Rates.....................................................................................................9 Revenue Management........................................................................11 Food & Beverage.................................................................................13

Staf....................................................................................................14 Number of Staf:...............................................................................14 Staf Pay level:.................................................................................15 Training...............................................................................................16 Turnover:..........................................................................................16 Advertising..........................................................................................17 EMS.....................................................................................................19 Refurbishment.....................................................................................20 ............................................................................................................21 Guest comfort.....................................................................................21 Extra facilities.....................................................................................22 Finance................................................................................................23 Market Research.....................................................................................24 Reports & Financial Performance............................................................25 HOTS Background Document.................................................................26 Hotel Location..................................................................................26 Hotel Economic Background............................................................27 1980's – Tourism Growth........................................................................27 1990's – Small Industry Growth..............................................................27 2000's – Decline.....................................................................................27 2010's – Revitalisation Plan....................................................................27 Your Hotel.........................................................................................28 Business Levels................................................................................28 Business Mix....................................................................................28 Period...................................................................................................28 Weekday standard rooms..................................................................28 Weekend standard rooms.................................................................28 Customer Profile...............................................................................28 Facilities...........................................................................................29 Staf Details.....................................................................................29 Training............................................................................................29 Market norms...................................................................................30 Upper midscale / 4 star.......................................................................30 Midscale / 3 star...................................................................................30 Economy / 2 star...................................................................................30

I nt r o d uc t i o n HOTS is a web-based tool for management training and development that simulates the management of a service business. The ‘business’ is a hotel with problems and is not profitable. Working in teams, you will take over the operations of the hotel and enter in better decisions to improve the financial performance of the hotel. 

This HOTS Learning Guide and Background Document will assist in basic decision making and also describes the hotel you are taking over. Your team also has access to Market Research reports and Help Files (labelled with a “?”) within the simulation.

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The simulation is based on a hotel model, and all teams start from the same position. Teams (hotels) will compete interactively against each other within each workshop. You will be competing with the other hotels (teams) in your workshop for a share of the hotel business within the town where your hotel is located. This means that your hotel competes interactively with other hotels in the market place and every hotel’s decisions impact each other.

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Each team makes a series of business decisions and enters them directly into the HOTS website. The HOTS simulation will evaluate these decisions, together with past performance, to calculate a new trading position. This “cycle” is repeated on a simulated monthly basis for three years (see the 3215THS Course Schedule for the HOTS cycling schedule).

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Each cycle will be one month worth of business trading. It is crucial that you update your decisions after each cycle.

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Within HOTS, there are examples of market norms or ‘benchmark’ hotels, that is to say, decisions which a typical four-star, three-star and two-star (budget) hotel would likely make (on average). These decisions will guide your team’s initial decision making and should be used as a starting point. If your team is not performing, go back and compare your decisions against the market norm hotel information. Remember only one of these types of hotels is your ‘real’ competition, depending on your positioning in the market (i.e. budget, luxury hotel), although all hotels in your workshop could take your hotel’s market share at any time, depending on the price/value relationships on ofer.

Your operational decisions will be evaluated by the simulation, which will then ‘reward’ you with customers for your hotel and restaurant. All of your decisions will remain the same after each cycle, except for Refurbishment which will be reset to ‘None’ (if your team makes no

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changes). That means, if you do not enter new decisions after each cycle, your last entered decisions will remain as the default. Your HOTS Balanced Scorecard (35% assessment weighting) is based on analysing your performance and decisions made by the management team (you!) throughout Year 3. It is recommended that your team record decisions in your Action Plan which have been made each month of each year. This will assist your performance analysis which should be conducted at the end of each trading year. Ensure the decisions made by your management team are relevant to your hotel (being proactive not reactive). If your hotel goes broke (bankrupt), a penalty of 5% is subtracted from the total possible you could achieve for the HOTS Balanced Scorecard. When this happens in the simulation, you will be locked out of your hotel because you exceeded your overdraft ($500,000), similar to a bank ‘freezing’ a business from trading. You will know when you have gone bankrupt, as you will get a message (in a yellow bar) telling you have exceeded your overdraft. You will also be unable to enter new decisions (along with the yellow bar, this will be obvious to you because the “Save” button will have disappeared). If this happens to your hotel, you will need to apply for an extension of your overdraft facilities to keep trading (contact your tutor immediately – any delay in advising your tutor could mean more cycles go past without you being able to enter decisions). The first year is where your strategy (i.e. market position: 2-star, 3-star, 4-star, 5-star) is being implemented; in the 2nd year the strategy will come to fruition and then in the 3rd year your hotel should be established and profitable. This may not occur for your hotel if significant strategic changes (or poor operating decisions) are made through the three year period. If all hotels are competing in the same market (e.g. all 3 star conference hotels) your group may decide to change positioning in order to become more competitive and profitable. Decisions to change market position should not be taken lightly however, as you will have already invested substantially in your first position and this investment should not be wasted. This document will outline the planning phases of how to manage your hotel most efectively throughout the semester. The main Decision Tabs within HOTS are also discussed in order to provide you with some hints and tips on running your hotel. Together with this Learning Guide, you must also read the Background Document (at the end of this document) and the User Guide (which provides more details on each Decision TAB within HOTS). The User Guide link is located in HOTS in the top right hand corner of the main screen.

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PCa ndpl a t f or m: Take a moment to check your regional settings: 

Ensure that your decimal place setting is a full stop not a comma. This is located in Control panel – Region and languages – Additional settings – Decimal symbol.

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This is important if you want your room rates to be understood as $100.00 and not $10000 (which is how $100,00 will be interpreted in HOTS).

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Clear your cache regularly.

Browser 

It is recommended to use Firefox. Internet Explorer has been found to be an unstable platform and will not save your decisions.

Logging on: 

You will be supplied the link to your HOTS Griffith site in your first workshop. Each team member will receive a unique User ID and password. Your team will enter in a hotel name when you first log in (only occurs once and cannot be changed later).

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Only one team member can have ‘write’ access at one time. Having ‘write’ access means you can save changes. The first team member to login has ‘read/write’ access, whilst other team members who login will only have ‘read' access.

Logging of: 

Ensure you log of when you are finished with HOTS. If you do not log of, you will still have ‘write’ access and your team members will not be able to make changes.

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If the network or your computer shuts down unexpectedly, wait 5 minutes before logging back in.

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Pl a n ni n gp ha s e s HOTS provides an excellent environment in which to develop the skills and techniques of strategic planning and problem solving. There is a wealth of economic, market, financial and business-specific data in the market research documents and help files provided within HOTS. These will enable your team to analyse the environment, plan and implement your strategies, review your business performance and take corrective action where necessary.

T h eF i r s t St e p s : First of all, you need to become familiar with the market place and environment in which your HOTS hotel is operating. After reading the Background Document, you should buy some of the market research reports available to you. These include National and Local Economic reports, Hospitality Industry Forecasts, Prices and Facilities report (competitive information), Efect of Advertising (marketing and advertising information), Prices and Facilities report amongst others. You have taken over an existing hotel, one that comes with a variety of in-built problems. You might have already identified problems like poor sales, staf turnover and limited facilities, so you may conclude that it would be better to concentrate on the major obstacles, both external and internal, that your business faces before you focus on more longterm goals.

Po s i t i o n i n ga ndMi s s i o ns t a t e me n t The management team (you and your fellow team members!), after creating a new hotel name, must determine the market positioning of the hotel that you have just taken over. After holding a strategic planning meeting with the other members of your team, you will identify and list the key issues that have emerged from your external and internal analyses and then turn these into objectives and goals that your organisation must meet. At this stage, you will determine your positioning strategy (that is, do you want to be an budget, mid-range or luxury hotel). Review the Prices and Facilities report in HOTS – Market Research to review your benchmark competitors ‘average’ decisions.

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Ob j e c t i v e s Your business’s objectives are, in broad terms, the results you aim to achieve. They must be SMART: Specific, Measurable Achievable, and Realistic with a Timeframe. Your objective might be to achieve an average occupancy of 50% for Year 1 by the end of Year 1. Your hotel should have 4-6 objectives which cover financial targets, marketing targets and staf issues e.g. staf turnover. Remember that objectives are goals to achieve (e.g. achieve 10% ROCE in Year 2), while strategies are specific actions to take that will enable you to achieve the objectives/goals (e.g. install a conference facility by January Year 2).

St r a t e g i e s Strategies should be developed to meet your positioning and mission statement. Start of by considering the main strategic issues facing your company. In your first year of operation, you might want to concentrate on the weaknesses and threats you have identified, but you will also consider the opportunities and strengths you have identified (i.e. SWOT analysis). For instance “high staf turnover” is an important issue, which relates to staf pay, training and workload (correct number of staf). Once you have listed all of the strategic issues, you will set objectives and strategies to deal with them. Your objectives should state your ultimate target in that area and the strategies will be the approaches you will take to get there. Specific managers roles must be allocated for each member of the team, giving everyone full responsibility for a designated department or area of work. Strategies should be developed by each team member based on their management role:    

Rooms Division Manager Marketing & Sales Manager Financial controller & Operations Manager Human Resource Manager & F&B Manager

These roles will be allocated in the first workshop. For example, the Operations Manager will be allocated to look after refurbishment and EMS issues. That person would be given the task of (for example) implementing the strategies to achieve the goal of refurbishing 40% of all rooms to level 3 by the end of the year and would be required to report back regularly on progress to the rest of the team. Naturally, the Financial Controller must consider the resources (e.g. cash flow) to make available to the Operations Manager to ensure they can get the job done within the parameters of solvency and profitability. Therefore, no one

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role can operate in isolation, every team member must communicate and plan in accordance with the rest of the team.

T h eSt r a t e g i cAc t i o nPl a n Once your team members’ roles have been identified and your objectives and strategies have been decided, each manager can develop their action plan. Use Excel to develop a plan for the year ahead. An example of this template is available on Learning@Griffith. The template will make your cycling process so much easier as you are planning for the future. It will also make your hotel’s performance much easier to analyse at the end of each year to ensure you achieve your targets for your Balanced Scorecard (30% weighting for your overall grade) as you will have a clear record of which decisions were made when.

Bu d ge t i n g The final task for your first year is to develop and manage your budget for your business. You will need to make some tough decisions on things like refurbishment, building new facilities, staffing and marketing. For the first year of operation this might seem like an impossible task. How can we know how much business we will achieve? Well, you have the previous owners’ records for last year, plus the market research documents that tell you what the economic forecasts are for the national and local areas and for the hospitality industry. These provide you with a means of identifying a “base” level of available trade, a level of business that should be achievable even if nothing was done to improve the operation. Your management team should plan to improve the hotel operations and make a profit. You will presumably be attacking new markets, adding facilities, improving service levels and so on. How will the market react to this? At first you will have to estimate, but you will adjust your budgets as you start to operate your hotel. For the first year, it is important to monitor all of your spending so you do not go broke due to insufficient funds (remember there is a penalty of 5% on your Balanced Scorecard mark). Monitor cash flow each month. You can apply for an additional bank loan (contact your tutor, who is your Bank Manager) in order to build extra facilities or complete your refurbishment. Note that bank loans will NOT be given to cover the cost of upgrades that you have already installed at the time of applying for the loan (i.e. you cannot save yourself from going bankrupt by requesting a loan).

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When applying for a loan, serviceability of the loan is the key determinant of receiving the loan. In addition, you must have a positive bank balance when you apply!

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3215THS Hotel Service Operations Management

HOTSDe c i s i o n sT ABS On each Decisions page, the question mark on the top right hand corner will provide more information for each decision TAB. Decisions within HOTS which must be considered each month include: 

Rates

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Revenue Management

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Food & Beverage

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Staf

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Training

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Advertising

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EMS...