1. Two micro-environmental factors that Hotel Effectiveness faced are:
- Tight labor market issues: This factor refers to the difficulty of finding and retaining qualified employees in a competitive job market. The hotel experienced a steady escalation in overtime hours due to increased occupancy, which can be attributed to the challenge of finding enough staff to meet the demand. This factor affects the hotel's ability to efficiently manage labor costs and maintain optimal staffing levels.
- Rising fuel prices: This factor relates to the increasing costs of guest collection and dropping at various locations. As fuel prices rise, the expenses associated with transporting guests or delivering services and amenities also increase. This factor adds to the hotel's overall distribution expenses and can impact profitability.
1.3.1 Recommendation: Hotel Effectiveness can make use of technological innovations by implementing a workforce management system. This system can help optimize staffing levels, manage overtime, and streamline scheduling processes.
1.3.2 Benefit: By using a workforce management system, the hotel can improve labor cost control by accurately forecasting staffing needs based on occupancy levels and other factors. It can also automate the scheduling process, ensuring efficient allocation of resources and reducing the need for overtime. This will help improve gross operating profit (GOP) margins by minimizing unnecessary labor costs.
1.4 The planning process can be explained to the hotel using the following practical steps:
Step 1: Set objectives and goals - The hotel management should identify the specific objectives and goals they want to achieve, such as improving GOP margins and optimizing labor costs. They should consider the current challenges they are facing, including the tight labor market and rising fuel prices.
Step 2: Assess the current situation - The hotel should analyze its current operations, including reviewing financial data, evaluating staffing levels and performance, and identifying areas where costs can be reduced or efficiencies can be improved. This assessment will provide a clear understanding of the hotel's strengths, weaknesses, opportunities, and threats.
Step 3: Develop a plan - Based on the objectives and assessment, the hotel management should develop a comprehensive plan that outlines specific actions and strategies to address the identified challenges. This plan should include cost control measures, such as implementing a workforce management system, as well as strategies to attract and retain qualified employees.
Step 4: Allocate resources - The hotel management should allocate the necessary resources, including financial resources, technology, and human capital, to execute the plan effectively. This may involve investing in technology solutions, training staff on new systems, or reallocating budget to prioritize cost control measures.
Step 5: Implement the plan - The hotel should put the plan into action, ensuring that all stakeholders are informed and involved in the process. This may involve making changes to staffing levels, implementing new systems, and monitoring and analyzing data to measure the effectiveness of the plan.
Step 6: Evaluate and adjust - The hotel management should continuously monitor and evaluate the results of the plan, comparing actual outcomes with the set objectives and making adjustments as needed. This evaluation process should be ongoing to ensure that the hotel remains responsive to changes in the market and can adapt its strategies accordingly.
By following these steps, Hotel Effectiveness can effectively plan and implement strategies to address its challenges and improve its performance.
Hotel Effectiveness, a 120-room select service hotel with a strong ambience, was having issues with its gross operating profit (GOP) margins including overtime, labour costs and distribution expenses. Two years ago, the hotel began experiencing a steady escalation in overtime hours due to increased occupancy combined with tight labour market issues. The significant increase in hourly wages created a challenge—some roles were up by 25%+. And, guest collection and dropping costs at various locations have been on the rise due to rising fuel prices. All these cost increases posed a problem for the hotel’s management company. The staff comprises of 40 people, blending longtime employees with newer hires. The hotel has ten different job positions, including supervisory roles. Since opening 15 years ago, the hotel has welcomed a balanced mix of leisure and business travellers—with particularly healthy weekend bookings, which include room-only guests, and small groups for social events . 2List two (2) micro-environmental factors that Hotel Effectiveness faced. Motivate your answer from the case study.
[2 x 2 = 4]
1.3.1Provide one (1) recommendation to Hotel Effectiveness on how they can make use of technological innovations to deliver better performance by the hotel.
1.3.2Indicate the possible benefit that could be derived from your recommendation.
[1 + 1 = 2]
1.4Planning can be divided into practical steps, irrespective of the level of management, and irrespective of the complexity of the situation. Write a report of 200 – 300 words on how you would explain the steps in the planning process to the hotel.
HINT: This cannot only be theory. You should use the theory and apply it to the hotel.
[7 x 2 = 14]
1 answer
1 answer