The planning process is crucial for any organization, including a hotel like Hotel Effectiveness. It involves a series of practical steps that help management make informed decisions and set goals for the hotel's future success. Here is a breakdown of the steps in the planning process that I would explain to the hotel:
1. Establishing goals and objectives: The first step in the planning process is to define the hotel's goals and objectives. This could include improving gross operating profit (GOP) margins, reducing overtime, labor costs, and distribution expenses, and maintaining a strong customer ambiance. These goals should be specific, measurable, achievable, relevant, and time-bound (SMART).
2. Analyzing the current situation: In this step, it is important to conduct a thorough analysis of the hotel's current situation. This includes assessing the current occupancy rates, labor market conditions, wage increases, and rising fuel prices. By understanding the current situation, management can identify the challenges and opportunities that need to be addressed.
3. Developing alternative strategies: Once the current situation has been analyzed, the next step is to develop different strategies or courses of action that can help the hotel achieve its goals. This could involve strategies to reduce overtime, optimize labor costs, and manage distribution expenses. It may also involve improving marketing efforts to attract more leisure and business travelers.
4. Evaluating alternatives: After developing alternative strategies, it is important to evaluate each option based on its feasibility, cost-effectiveness, and potential impact on achieving the hotel's goals. This evaluation should involve input from various stakeholders, such as employees, customers, and suppliers.
5. Selecting the best strategy: Once the alternatives have been evaluated, management can select the most suitable strategy that aligns with the hotel's goals and objectives. This decision should consider the potential risks, benefits, and resources required for implementation.
6. Implementing the chosen strategy: After selecting the strategy, it is important to develop an action plan to implement it effectively. This plan should include specific tasks, timelines, and responsibilities to ensure smooth execution.
7. Monitoring and reviewing progress: The final step in the planning process is to regularly monitor and review the progress of the implemented strategy. This will involve tracking key performance indicators, such as GOP margins, overtime hours, labor costs, and guest collection/dropping costs. Any necessary adjustments or changes can be made based on the results of this monitoring process.
By following these steps in the planning process, Hotel Effectiveness can address the challenges it is facing and work towards improving its gross operating profit margins and overall efficiency.
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.
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.
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