HOTO 7009 Hospitality Operations Management
Introduction
The Hotel Emerald is running their business operation for the last 4-5 years and made their popularity a satisfactory level. The management team of the hotel realise the requirements of the expert advice to increase their revenue in the upcoming years for the ultimate profit achievement for the hotel. In this essay, there is the entire market analysis will be discussed which presents the required key point to the hotel administration for making important decisions regarding the hotel’s future business operations to maximize their profits and also the revenue of the hotel.
The marketing department is responsible for creating and maintaining the hotel’s brand image, including logos, messaging and marketing initiatives. The process of conducting market research to determine the hotel’s target market and its preferences and behaviours. This will help to develop an effective marketing strategy. The marketing department is also responsible for the hotel’s online presence, including its website, social media pages and online reservation system. The marketing department develops and executes advertising and customer acquisition campaigns. This includes social media campaigns, email marketing, direct mail, and online and offline advertising. The marketing department needs to develop and monitor a loyalty program to persuade visitors to stay at the hotel again.
Department’s Key target
There are main three departments directly involved in the increasing function of the hotel’s revenue. The following departments are Food & beverages, Room services, and Business conference held.
The Food & Beverage division of the Emerald Plaza Hotel is a significant contributor to the expansion of the hotel’s profitability and revenue. The primary objective of the division is to provide high-quality food and beverages that meet or exceed the expectations of customers and make dining an unforgettable experience (Khatter, et al. 2021). Breakfast, lunch, dinner, snacks, and beverages are among the services and amenities that the division strives to provide. We likewise endeavor to furnish our visitors with a loose and cordial environment and guarantee that they generally have a positive encounter while eating at our lodging. This division is likewise answerable for valuing, advancements, exceptional offers and different drives to expand deals and benefits.
Another important part of the hotel is the room service department, whose main job is to make guests’ stay pleasant and comfortable. This division is liable for the support of all rooms and guarantees that all offices are kept looking great and neatness principles are kept up with. To ensure a pleasant stay for your guests, you are also responsible for providing towels, toiletries, and other amenities. In addition, we strive for prompt responses to inquiries and complaints as well as excellent customer service.
The Conference Holding Division is the third significant division of the Emerald Court Lodging and its main role is to give a scope of meeting and occasion administrations to corporate and individual visitors. Events like conferences, seminars, workshops, and business meetings are planned and carried out by this department. In addition, we strive to provide outstanding customer service in order to guarantee that each and every one of our guests will have the best possible time attending any event that is held at our hotel. In addition, this department collaborates with other departments to guarantee that all facilities and services are provided promptly and effectively (Liu, et al. 2021). Events like conferences, seminars, workshops, and business meetings are planned and carried out by this department. In addition, we strive to provide outstanding customer service in order to guarantee that each and every one of our guests will have the best possible time attending any event that is held at our hotel. In addition, this department collaborates with other departments to guarantee the timely and effective delivery of all facilities and services.
Hotel’s KPI
Just like the other hotel companies, Emerald Plaza requires its KPI or key performance indicators to determine their business strategy to achieve the ultimate goal.
Key performance indicators are measurable values that show how well a company or organization is meeting its goals. B. The typical room rate. KPIs frequently make use of calculations and data to demonstrate how goals are being achieved and assist business owners and managers in comprehending performance.
The hospitality industry is covered by the Key Performance Indicators, which include everything from operations to financial management to all departments with measurable results like marketing and front of the house (Nyawo, 2020). It is essential to keep this in mind in order to locate precise performance-enhancing metrics and data [Referred to in Appendix 3].
Hotels’ most important key performance indicators (KPIs) and methods for measuring them to guide business decisions are listed, “Revenue per available room” or “RevPAR”, “Average daily rate” or “ADR”, “RevPAR room type index” or “ReRTI”, “Occupancy rate”, “Market penetration index” or “MPI”, Public Awareness Index or “PAI”, and also other vital keys.
“RevPAR” is one of the most vital KPIs, based on income from all bookings, this is the metric used to examine the average revenue for a given period of time, which is typically reported as a daily average. The occupancy rate must be multiplied by the average daily rate in order to calculate this KPI. Divide the total revenue per night by the number of available rooms as an additional option. A price metric for the amount of revenue generated per room is created by “RevPAR”. A high “RevPAR” ordinarily implies a decent inhabitance rate as well as a high “ADR”.
The administration of the lodging can screen the outcomes at the inhabitance rate on a day-to-day, week-by-week, month-to-month, or yearly premise. The absolute number of rooms, the rooms that are not booked, and the rooms that are reserved are factors in this measurement. The lodging can partition consumed rooms by the absolute number of rooms accessible and duplicate by 100 to get the inhabitance rate (Vij, 2019). Because it provides you with a continuous stream of data, this KPI is crucial for assessing the daily performance of your hotel. On the off chance that you notice low inhabitance patterns on specific days of the week, you can run advancements to support more appointments on nowadays, or on the other hand smooth out your staff on the off chance that not every person is required.
All KPIs provide the information needed to make good decisions about future operations based on the findings of this market analysis.
Relation between the Marketing KPIs
Room inhabitance rate is a significant variable that influences the market examination of a lodging. The hotel’s success is typically measured in terms of demand for its services and capacity to fill available rooms. The hotel’s market analysis is also influenced by important factors like the public awareness index and the market image index. The market image index measures the public’s perception of the hotel, while the public awareness index measures public knowledge of the hotel and its services.
Room occupancy rates are strongly correlated with market image and public awareness indices. A higher room occupancy rate may be attributable to a higher market image index and public awareness index. This is because people will be more likely to select a hotel with a favorable public image. To maximize room occupancy, a hotel should strive to maintain a positive public awareness and market image index. Essentially, a higher room inhabitance rate can likewise prompt a superior public mindfulness record and market picture file. This is due to the fact that a successful hotel is more likely to receive positive customer feedback, which can improve public perception of the establishment.
In general, there is areas of strength for a between room inhabitance rate and public mindfulness file and market picture list. This demonstrates that an inn ought to endeavor to keep a decent open mindfulness record and market picture file to expand its room inhabitance rate.
Main Body
Company marketing report
The underlying objective of the lodging’s advertising division was to make the ideal brand picture, increment public mindfulness, and draw in and hold more guests. To raise public awareness, they hired his PR firm, which worked well. The division additionally carried out a few extraordinary missions to draw in clients to the inn’s eateries and bars, meeting lobbies and suites. However, the department’s decision-making regarding advertising campaigns was hampered by a lack of market research, resulting in low customer retention and reach. Through surveys and regular market research, hotels should concentrate on gaining a better understanding of their customers to boost department performance. They ought to likewise zero in on drawing in with your clients by expanding your virtual entertainment presence. The hotel must also monitor and evaluate the results of their marketing efforts to make adjustments to their budgets. The hotel’s marketing team can assist in achieving its objectives thanks to these steps.
Analysis & Discussion
Figure 1: Income statement of Emerald Plaza
(Source: http://oxfordbrookes4.nethots8.net/Graphs.aspx?type=0)
The above figure displays the Hotel’s last and current year’s income statements of the Hotel Emerald Plaza. It is clearly viewed that the Hotel failed to generate income and faced losses during the last year and current years of operations (Sánchez, et al. 2020). So the firm critically needs to change its approach and grow its profitability rate by generating revenue. It also shows that the current year’s losses are very huge than the last year’s losses [Referred to in Appendix 1].
The above graph figure shows the rate of the room sold at night. It indicates that the hotel had satisfactory room bookings at night to fulfil their purpose of generating revenue, but the executive rooms and suites are not getting booked as per the management’s expectations. The rate of the luxury accommodations and the business-related services bookings are not reached the expected level of the hotel’s management. This can be the probable reason behind the lack of the hotel’s profitability.
This graph mainly shows the result of the meals sold by the food & beverages department of the hotel. The graph explains that on weekdays the sales of meals rate is higher than the meal sold rate at weekends (Wieczorek-Kosmala, 2021). That means mainly the customers like to visit the hotel’s restaurants on the working days rather than the free days at the weekends. So the customer base of the hotel is a major part of corporate customers.
This figure also represents the drinks sold rate of the hotel from the same department as discussed earlier. This graph states that the drinks sales rate of the hotel was in a high range. However, the profit margin of the drinks product is not so high. That is why, through this service, the hotel can not reach its expected limit of revenue and generate profitability at a satisfactory level (González-Torres, et al. 2021). But the management can utilise this product in the attraction process of new customers by providing more varieties of drinks at a minimal rate of profit for generating more revenue for the hotel via other services provided with the drinks service as well.
This graph shows that how much food and drinks are sold to the non-resident customers of the hotel who came only for the dining purpose except the lodging. The graph clearly describes that the non-resident customers consumed the meals at a high level of amount rather than the low-level consumption of the liquor. A hotel always seeks to generate their revenue by selling high-priced liquor to their customers. So this can be also a reason behind the lack of the revenue of the hotel during the short rate of liquor sales.
This graph mainly wants to provide data regarding the conference delegate service bookings of the hotel. It shows that the weekend and the weekdays bookings are at the same level approx, which indicates that the requirement of this service is to maintain consistency but never make any growth during the whole year. The administration can promote this particular service for more bookings and generate more revenue by that method.
This graph indicates the group bookings of hotel rooms rate, which show that the group booking nature of the customers are very infrequent (Japutra, and Situmorang, 2021). It also pointed out that most of the group bookings are done ta the weekend period except the weekdays. It explains that the groups mainly like to spend their weekend relaxation times in this hotel but there is no customer reliability detected as the rates are high in some weeks and also very low in some weeks as well.
This graph shows the bookings in the hotel for the specific event of the customers. This displays that between weeks 101 and 144, the event booking rate of the hoit el is at a high point. So it is mainly a seasonally-based KPI which can not help or provide any relevant information to take the company’s further decision of the business operations.
The KPI of ARR mainly shows that the room rates are expensive on weekdays and less costly at the weekends. It means that the hotel has preferred for mainly the corporate activity over the normal vacation spending purpose. It hence proves that the main customer base of the hotel is corporate customers.
This is another important KPI because it provides a continuous stream of data and is essential for evaluating your hotel’s daily performance. If the hotel showed low occupancy patterns on particular days of the week, you can make changes to accommodate more appointments today or make the hotel’s staff more flexible if not everyone is needed. This figure clearly demonstrates that the hotel’s rooms are always booked, with the maximum number of available rooms close to being.
This graph shows the guest occupancy rate of the hotels. It indicates that the overall occupancy rate of the hotel was at a high level. It brings more difficulty to understand the business performnace of this hotel as the hotel’s revenue rate is at a high level regarding their high occupancy rates (Liew, 2022). Similarly, the occupancy rates are high at the weekends rather than the weekdays. It also contains the average booking rate for the whole week which is calculated by the weekend and weekday booking rates. The hotel mainly generates the maximum level of its revenue through this occupancy of rooms.
This is one of the most vital KPIs of the hotel indicating the market shares of the hotel in the competitive hospitality industry. The graph shows that at the beginning of the year, the market shares of the hotel captured the major part of the entire market. But during the operation period, in the middle time, the shares decreased by a major level and then recovers the shares later. But the firm failed to recover its beginning-stage market shares and never meet that range again. The graph explains also that the hotel business performance is not enhanced as per the need which brings difficulties and losses for the business of this hotel (Guillet, and Chu, 2021). If the hotel wants to return to the stage of profit, the first task for the management was to recapture the market share through various procedures like promotion and offers.
This figure refers to the market image graph chart of the Emerald Plaza. It is the most vital and required KPI for this project, which mainly indicates the image of the hotels’ product that is displayed in stores and online is called your market image. A perspective image of the packaging is recommended for a market image. Depending on the kind of packaging, the image is taken obliquely from the front or from the top. By examining the graph it is determined that the hotel’s administration needs to be more focused to increase the grade of the hotel’s market image which brings more new customers and increases the hotel, revenue level at its pick point.
This KPI is mainly a model-based theory which gives a piece of vital information in the whole market analysis task for a firm. The incremental level of claimed ad recall generated for every 100 GRPs is referred to as the Awareness Index in the model. When advertising ceases, the recall will gradually fall below the Base level. The graph clearly shows that this particular KPI has the enough level and maintains its consistency in each week. The difference between each week’s PAI is very little as well.
Conclusion
Recommendations according to the analysis
A hotel’s market analysis is an essential first step toward success. It’s critical to know how the hotel’s rivals are doing in the local market and the kinds of customers it wants to attract. The hotel can then adjust its pricing and marketing strategies to stay competitive based on the analysis (Tunio, et al. 2021). The consequences of the market examination can give a significant understanding of the lodging’s ongoing situation on the lookout. Additionally, it can offer a comparison to nearby rival hotels, giving the hotel an advantage in determining its strengths and weaknesses. Also, the investigation can assist the inn with distinguishing client inclinations and focus on its promoting endeavours appropriately. Pricing and promotion decisions can also be influenced by the market analysis’s findings. By understanding how the opposition is evaluating their rooms and administrations, the lodging can ensure it is offering cutthroat rates. Additionally, the analysis can be utilized to ascertain which promotions have the greatest impact on bringing guests to the hotel. Lastly, the hotel’s overall strategy decisions can be informed by the market analysis’s findings. By understanding the qualities and shortcomings of the opposition, the inn can design its drawn-out objectives and ensure it has an upper hand. In general, a hotel’s market analysis is an essential step toward success. By understanding the opposition and client inclinations, the inn can go with informed choices in evaluating, advancements, and long-haul objectives.
Key factors determine the Hotel’s future
Price Optimization, Customer Experience, Strategic Partnerships, Technology, and Social Media are the primary recommendations for a hotel to increase revenue and profitability.
The process of figuring out the best price for a product or service is known as price optimization. This is done by taking into account things like how much demand there is for the product, how competitive the market is, and how much profit is expected. This can be accomplished through dynamic pricing, in which the price is changed in response to changes in the market.
The overall impression a customer has after interacting with a hotel is known as the customer experience (Demir, and Emekli, 2021). Hotels must provide excellent customer service and amenities that make guests feel welcome and appreciated in order to foster a positive customer experience.
Key organizations are an incredible way for inns to expand their income and productivity. In order to offer discounts, promotions, or other benefits to customers, these partnerships involve collaborating with other businesses or organizations. A more positive customer experience and an increase in customer loyalty can both result from this.
Technology has the potential to significantly boost a hotel’s profitability and revenue. Technology can be used to streamline procedures, enhance customer service, and boost productivity in hotels. Hotels can reach potential clients effectively through social media. Deals can be promoted, customers can be engaged, and relationships can be built using them.
Enhancing the customer experience, establishing strategic partnerships, utilizing technology, and utilizing social media, these elements can assist a hotel in increasing its revenue and profitability. A hotel’s long-term success may be aided by putting these strategies into practice.
Personal Learning and Understanding
The overall calculations and analysis for the market research of Emerald Plaza Hotel provide the information and data which help me to understand the entire case about the hotel profitability problem as well as provide the learning of the market analysis of these types of businesses.
The Emerald Hotel is a sumptuous inn with a scope of conveniences to oblige a great many visitors. Despite this, the hotel has lost money and has not turned a profit in recent years. It is essential to investigate the factors that contributed to the loss in order to comprehend the causes of the loss (Luković, and Stojković, 2020). First, rates of hotel occupancy have decreased. This is in part because of the growing number of people who use online reservation services and the increased competition in the hotel industry. Also, hotels haven’t kept up with the hospitality industry’s changing trends, so they don’t have the latest ideas or amenities. In addition, the hotel was unsuccessful in acquiring new customers by providing appealing bundles and discounts. Additionally, the hotel’s revenue has decreased as a result of poor marketing and promotional strategies.
Also, the failure to really oversee inn spending has expanded working expenses. Lastly, the hotel’s inability to effectively manage relationships with customers contributed to their low level of satisfaction. In rundown, different elements added to Lodging Emerald Square’s benefit deficit. Hotels must address these issues if they are to maintain profitability and compete in the market. It is also understood that the firm requires its food and beverages services expansion for making profits more and especially in liquor sales.
Overall Conclusion
Hotel Emerald Plaza’s market analysis reveals that it is well-positioned to capitalize on the region’s rising demand for high-end accommodations. Midway was found in midtown, near well-known attractions and offers many conveniences and administrations. The inn is profoundly evaluated and has high memorability in the neighbourhood market. Moreover, the lodging is very much run and has a devoted group of staff fit for giving fantastic client care.
In general, the Emerald Square Inn market examination shows that the lodging is strategically situated to profit by the developing interest in extravagance convenience in the area. It is well managed, has a good location, a wide range of amenities, and strong brand recognition. Hotel Emerald Plaza will likely continue to attract customers and succeed with the right strategy and marketing efforts.
It is also understood that the firm needs some modification in its business approaches. The firm can provide more varieties of food and drink items which bring new customers. Also, the management of the hotel need to provide offers in their luxurious services to attract luxury customers which give a huge impact on the hotel’s yearly revenue. The overall report concludes the total market analysis of Hotel Emerald Plaza for their better performance ace in the upcoming days.
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