To the Hotel Effectiveness management team,
In order to address the issues with gross operating profit margins, overtime, labor costs, and distribution expenses, it is necessary to follow a systematic planning process. This process consists of several practical steps that can be applied to any level of management, regardless of the complexity of the situation.
Step 1: Identify the purpose of planning
The purpose of planning for Hotel Effectiveness in this case is to improve gross operating profit margins by addressing issues such as overtime, labor costs, and distribution expenses. The goal is to find strategies that will allow the hotel to maintain its strong ambiance while reducing costs and maximizing efficiency.
Step 2: Establish goals
The hotel should establish specific, measurable, attainable, relevant, and time-bound (SMART) goals related to improving gross operating profit margins. These goals could include reducing overtime hours, optimizing labor costs, and minimizing distribution expenses.
Step 3: Develop commitment
Developing commitment among the staff is crucial for the success of the planning process. It is important to involve employees from all levels of the organization in the planning process and ensure that they understand the goals and objectives. This will help create a sense of ownership and motivate the staff to actively contribute to the implementation of the plan.
Step 4: Develop alternative plans
Hotel Effectiveness should brainstorm and develop alternative plans to address the issues at hand. This could include exploring options such as cross-training employees to handle multiple roles, renegotiating contracts with distribution partners, and implementing cost-saving measures without compromising the hotel's ambiance and guest experience.
Step 5: Evaluate the different alternative plans
Each alternative plan should be carefully evaluated, considering factors such as feasibility, cost-effectiveness, and potential impact on the hotel's ambience and guest satisfaction. This evaluation should involve input from key stakeholders, including employees, management, and customers.
Step 6: Implement the plan
Once the best alternative plan has been selected, it is essential to create a detailed action plan for its implementation. This plan should outline specific tasks, responsibilities, and timelines. Clear communication and coordination among different departments are crucial during this phase.
Step 7: Control and evaluate the results of the plan
After the implementation of the plan, it is important to continuously monitor and evaluate the results. This involves comparing actual performance against the established goals and making necessary adjustments if the desired outcomes are not being achieved. Regular communication and feedback loops with employees and customers will help ensure that the plan remains on track and that any necessary modifications can be made in a timely manner.
By following these practical steps in the planning process, Hotel Effectiveness can address the issues with gross operating profit margins, overtime, labor costs, and distribution expenses effectively. The key is to involve the entire staff, develop and evaluate alternative plans, and continuously monitor and adjust the plan as needed to achieve the desired outcomes.
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 and sports teams.
1.4 Planning 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.
step 1:Identify the purpose of planning
step 2:Establish goals
step 3:Develop commitment
step 4:Develop alternative plans
step 5:Evaluate the different alternative plans
step 6:Implement the plan
step 7:Control and evaluating the results of the plan
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