Strategic Planning for Global Hospitality Operations

Running Head: STRATEGIC PLANNING 1
Global Hospitality Operations

STRATEGIC PLANNING 2
Table of Contents
A. Background about HOTS Strategic Planning........................................................................................3
B. Aim and Objectives of HOTS Strategic Planning..................................................................................3
C. Review of Key Indicators......................................................................................................................3
REVPAR....................................................................................................................................................4
Gross Operating Profits...........................................................................................................................5
Market share...........................................................................................................................................5
ROCE........................................................................................................................................................5
Guest Satisfaction....................................................................................................................................5
Staff Satisfaction......................................................................................................................................6
Average Daily Rate (ADR)........................................................................................................................6
Public Awareness.....................................................................................................................................6
Hotel Quality Index..................................................................................................................................6
Annual Staff Turnover..............................................................................................................................7
D. Explanation on Key Indicators.............................................................................................................8
Financial Perspective...............................................................................................................................9
Customer Perspective............................................................................................................................10
Internal Process.....................................................................................................................................10
Learning and Growth.............................................................................................................................11
E. Strategic Plan.....................................................................................................................................11
F. Conclusion.........................................................................................................................................15
References.................................................................................................................................................17

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A. Background about HOTS Strategic Planning
Strategic planning is the process to determine the mission and vision of an organization for the
future and to identify different objectives and goals. The process of strategic planning includes
establishing and creating a system in which the company makes efforts to attain those
predetermined objectives (Haines, 2016). When a company offers its services to the customers, it
develops a strategic plan that includes company’s goals along with most appropriate strategies
and tactics. It is very difficult to accomplish anything without a strategic plan so it is very
important for each and every organization to develop a strategic plan.
For this discussion, Eliza Hotel is taken into consideration that is managing its business
operations under HOTS (Hotel Operation Tactics and Strategy) simulation. The HOTS
simulation is a team based problem solving exercise where different teams work together to
make decisions. The major objective of this report is to review the key performance indicators of
the hotel like REVPAR, gross operating profit, ROCE, market share, staff satisfaction, guest
satisfaction, ADR, occupancy rate, hotel quality index, annual staff turnover and public
awareness. Under HOTS simulation, it is a challenge to develop and apply a business strategy
which results in a competitive positioning in the market and generates better financial
performance as measured by occupancy, market share, revenues, profits etc. In this report, the
chosen hotel i.e. Eliza is facing some issues with its management and operations. In order to
enhance these issues, the report will develop some recommendations to different departments of
hotels and prepare a strategic plan for the future of this hotel.
A. Aim and Objectives of HOTS Strategic Planning
The major aim and objective of HOTS strategic planning is to develop effective strategies and
tactics for a hospitality organization that assist the organization to attain its predetermined
objectives and goals. By the adoption of this technique, the organization will be able to manage
its operations and improve its key performance indicators.
B. Review of Key Indicators
There are various key performance indicators which enable the organization to measure its
performance in competitive business scenario. A key performance indicator is a measure that
shows the efficiency and effectiveness of a particular business organization. These key

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performance indicators can be used to achieve its objectives and goals. Companies practice these
indicators at different levels to identify their growth and success at approaching the targets ( Bai
& Sarkis, 2014). There are two types of performance indicators i.e. high-level KPIs and Low-
level KPIs. Both of the indicators focus on different processes and operations of the organization.
An organization can evaluate and measure its key indicators by using balance score card that
considers the mission and vision and focuses on the financial and non-financial performance of
an organization.
This report will identify different key performance indicators in context of Eliza Hotel. The
balance score card enables the hotel leaders to measure the growth towards strategic goals in an
effective manner. It has both financial and non-financial metrics which measure the performance
focusing on different operations. In the hospitality sector, key scorecard categories provide the
management a material feedback for use in improving their hotels (Parmenter, 2015). The
review of different key indicators is given below:
REVPAR
Revenue per available room rate is the most important indicator in case of hospitality
organization that is used by a hotel to see how much revenues they have generated within a
specific period of time. This rate is calculated by dividing the Total Revenues by rooms available
to that hotel. According to the given data, REVPAR of Eliza hotel is more than other team’s
hotel in the year 1 i.e. 40.25$ in January and 42.75$ in December. In year 2, there was a heavy
downfall in the revenues of Eliza and it has declined to 15.76$ (Eliza Hotel, 2018).
REVPAR
0
5
10
15
20
25
30
35
40
45
Year 1
Year 2

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This downfall in the revenues is due to lower room rates and poor staffing in the room division.
Its revenues are the least among all the hotels of different teams (Martello, Watson, & Fischer,
2016). Due to this, Eliza is ranked at 8th among eight hotels. It shows the performance of Eliza is
poorer than other hotels.
Gross Operating Profits
Gross operating profit is also a significant indicator for a hotel because it provides the hotel
managers a clear image about the profit potential of hotel. Moreover, it shows the management
efficiency of hotel. It is determined by calculating total revenues and deducting operational and
departmental expenses. The given table shows that the gross operating profit of the hotel in
January was 10.88% and it has also been decreased to -10.29% in December in the same year.
1
-15
-10
-5
0
5
10
15
20
25
30
Gross Operating Profit
Year 1
Year 2
In the year 2, Eliza has increased its gross operating profits to 23.87% that was more than other
hotels (Radojevic, Stanisic & Stanic, 2015). Under this performance indicator, Eliza Hotel is on
the first rank among other hotels.
Market share
Market share of an organization can be calculated by taking the sales of company over a specific
period and dividing by the total sales of specific sector over the same time period. The given data
indicates that market share of Eliza Hotel is 7% that is less than the hotels chosen by other teams.
It shows that this hotel has lack of brand presence in the hospitality industry and not able to
manage its profitability (Kandampully, Zhang, & Bilgihan 2015).

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11%
12%
7%
10%
15%
13%
16%
16%
Market Share of All Hotels (Teams)
Team 1 Team 2 Team 3 (Eliza) Team 4
Team 5 Team 6 Team 7 Team 8
Considering this, the company needs to focus on its operations and brand reputation so that it can
capture a higher market share.
ROCE
ROCE (Return on Capital Employed) is a financial ration that is practiced to measure the
profitability of a company and efficiency level with that capital that company has invested in its
operations. It is calculated by dividing the net operating profit by the employed capital of the
company. The table shows that the Eliza hotel failed in using its capital effectively so that it is
not able to generate returns. In the December year 2, the ROCE of his hotel is -0.61 that places it
on 5th rank among hotels.
Guest Satisfaction
Enhancing guest satisfaction is the most important objective for the management and team of
each and every hospitality organization. Eliza Hotels is making efforts to satisfy its guests and
customers. To analyze the satisfaction level of the guests, the hotel has conducted survey and
found that guest satisfaction is decreased in the year 48% that was 53% in the end of previous
year (Fouad, Hussein & Attia, 2016). It shows Eliza is not able to satisfy its guest and Global
Agents is on the first rank with 64%. The organization failed to provide quality and satisfactory
hospitality services to its guests.
Staff Satisfaction
Guest satisfaction of a hospitality organization is directly connected with the staff satisfaction. It
is very important to satisfy the employees if a hotel wants to provide complete guest satisfaction.