HOTS Strategic Plan: Financial Performance and Key Indicators

HOTS STRATEGIC PLAN
Introduction:
Every hotel has both financial and managerial aspects that are needed to
analysed and worked on. Like every other business, both internal and external factors affect
the hospitality industry. Concentrating on just one aspect would confine the benefits and
sometimes hinder the overall performance as each element would be supporting and affecting
each other directly or indirectly (Alexander, 2016). If the technical aspects are strong, but
if the hotel fails to focus on managerial and financial issues, then it would be of no use. Here,
we are going to see all the necessary financial calculations that help us to recognise the
performance of the HOTS. Also, it is divided into eight different teams and each one has its
unique performance that has a need to understand and rectify. So, there will be a ranking
allotted to individual team in very individual aspect and it would be easy to compare their
performances and understand where they are exactly lagging. Apart from the rankings, all the
rates are needed to be calculated to actually derive the financial performance of the hotel for
two years and notice their retrospective effect with the changes happened. Later, all the key
strategic plans are mentioned and elaborated in an informative manner.
Reviewing key performance indicators from the
balanced score card
REV PAR (REVENUE PER AVAILABLE ROOM)
It is one of the most important ratios used in the hotel. It is a ratio between occupancy and
room rates and it also gives us a clear picture about how well the rooms are filled and how
good are they charged. Based on HOTS, REVPAR results show a very good positive trend. If
you have a look at the tables you can see that the first year results are poor comparing to the
second year (Arnott, Lizama, & Song, 2017).
BALANCED SCORECARD
COMPARISON OT TEAM RESULTS
KEY INDICATORS
YEAR 1
TEAM1 TEAM2 TEAM3 TEAM4 TEAM5 TEAM6 TEAM7 TEAM8
Team1b 666 Team3 GRACE abc Druk110
00
F7 Team8a
Ave
rage
Ra
nk
Ave
rage
Ra
nk
Ave
rage
Ra
nk
Ave
rage
Ra
nk
Ave
rage
Ra
nk
Ave
rage
Ra
nk
Ave
rage
Ra
nk
Ave
rage
Ra
nk
OPERA
TIONS

REVPA
R($)
59.07 2 60.37 1 48.57 4 44.86 5 50.17 3 42.74 7 44.20 6 37.30 8
Gross
Operati
ng
Profit
(IBFC
%)
2.39 3 -9.30 7 -11.52 8 -1.08 6 12.88 1 1.96 4 0.06 5 8.34 2
Rooms
Market
Share
%
( Transi
ent
Busines
s)
9.49 1 9.22 2 9.23 2 7.77 6 8.36 4 7.56 7 7.89 5 5.63 8
Relative
Market
Share
%
14.6 14.2 14.2 11.9 12.8 11.6 12.1 8.6
OWNE
R
ROCE
% - Pre-
tax
profit/C
apital
Employ
ed
-12.08 4 -19.69 8 -19.07 7 -15.59 6 -6.58 1 -11.42 3 -12.63 5 -9.21 2
Guest
Satisfac
tion
Survey
(%)
49 1 47 2 47 3 45 4 45 5 45 6 44 7 42 8
Staff
Relatio
nship
Survey
(%)
75 3 76 2 62 7 74 4 77 1 63 6 71 5 60 8
OVER
ALL
RANKI
NG
1 3 4 4 2 6 6 8
The above results shows us a clear depiction that the hotel revenues were not so good at the
year 1.Whereas, if u have a look at the results below you can see a huge difference when
compared to year 1. This also explains that the second year was a good one for the hotel. For
example, the highest result for year 2 is 80.70 whereas for year 1 it is 60.37 but the lowest

value for the second year is 28.94 and for first year it is 37.30, this shows that there is a huge
inconsistency in the operations of the hotel (Werner, 2017).
BALANCED SCORECARD
COMPARISON OT TEAM RESULTS
KEY INDICATORS
YEAR 2
TEAM1 TEAM2 TEAM3 TEAM4 TEAM5 TEAM6 TEAM7 TEAM8
Team1b 666 Team3 GRACE abc Druk110
00
F7 Team8a
Ave
rage
Ra
nk
Ave
rage
Ra
nk
Ave
rage
Ra
nk
Ave
rage
Ra
nk
Ave
rage
Ra
nk
Ave
rage
Ra
nk
Ave
rage
Ra
nk
Ave
rage
Ra
nk
OPERA
TIONS
REVPA
R($)
80.70 1 62.60 2 55.63 5 57.39 4 59.12 3 28.94 8 44.73 6 29.72 7
Gross
Operati
ng
Profit
(IBFC
%)
10.98 6 17.55 3 22.31 1 20.14 2 11.34 5 12.74 4 4.30 7 -4.54 8
Rooms
Market
Share
%
( Transi
ent
Busines
s)
10.10 1 9.78 3 8.25 6 10.03 2 9.76 4 7.61 7 9.58 5 4.49 8
Relative
Market
Share
%
14.5 14.1 11.9 14.4 14.0 10.9 13.8 6.5
OWNE
R
ROCE
% - Pre-
tax
profit/C
apital
Employ
ed
-8.18 5 -3.77 2 -4.34 3 -2.83 1 -7.28 4 -11.28 6 -19.9 8 -14.47 7

Guest
Satisfac
tion
Survey
(%)
60 1 48 6 50 3 56 2 49 5 44 7 50 4 41 8
Staff
Relatio
nship
Survey
(%)
83 1 82 2 65 6 80 4 82 3 55 8 73 5 65 7
OVER
ALL
RANKI
NG
1 3 4 1 4 7 6 8
Gross Operating Profit:
This is the total profit of the hotel after subtracting all of their operating
expenses. The results clearly disclosed that the performance has been improved from
Year1 to Year2. Team abc’s performance was best in the Year, as they generated
12.88% while Team3 has failed to generate any profit and instead incurred a loss and
their gross profit turned out to be -11.52%. When it comes to Year2, Team3 has
delivered the highest gross profit of 22.31% which is a thorough improvement when
compared to its previous year, while the Team8a who was the second best in Year1
has delivered a worst performance in Year2 (Boccia & Leonardi, 2016). Since,
Gross profit is a result of change in various factors; it becomes quite unpredictable for
us. Due to some minor changes in their strategic plans, some other team who has been
performing at its best can drop to the lowest level while others can still improve. We
can easily notice this in the above tables, as the performance of teams in parameters
has been reflected in their Gross profit rate. It is quite astonishing that Druk11000 has
managed to maintain its performance by delivering average rate for both the years.
Market Share:
Market share represents the total sale that the hotel able to generate in the
market that year. If the market share is positive, then it means that the business is
performing extraordinarily well. It indicates the amount of contribution of a particular
hotel in the entire economy of the hospitality industry. A good market share always
adds a value to the hotel and only a better performance can make that happen. It is
seen that Team1b has the highest market share for both years (Meroño-Cerdán,
Lopez-Nicolas, & Molina-Castillo, 2017). In the Year1, it has a market share of
14.6% which is 3% more than the average share in the hotel. While in the second year,