Business Plan of Roeland International: A Lucrative Hotel Chain

The following is a business plan of Roeland International a hotel operating in the hospitality industry. The business plan is made based on four segments they include market structure, operations and technology human resources and finances. After taking into consideration the four major aspects one can easily say that the business plan is an lucrative one that will attract many entrepreneurs for business investment.

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Entrepreneurship

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Table of Contents
Executive Summary.........................................................................................................................3
Introduction......................................................................................................................................3
Business Canvas Model...................................................................................................................3
Market Structure..............................................................................................................................4
Operations and Technology.............................................................................................................5
Human Resource..............................................................................................................................7
Finance.............................................................................................................................................8
Conclusion.....................................................................................................................................12
Reference List................................................................................................................................13

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Executive Summary
The following is a business plan of Roeland International a hotel operating in the hospitality
industry. The business plan is made based on four segments they include market structure,
operations and technology human resources and finances. After taking into consideration the
four major aspects one can easily say that the business plan is an lucrative one that will attract
many entrepreneurs for business investment.
Introduction
According to Nadiri and Tanova(2010), initiating a hotel business is significant in terms of
greater profit. In the recent times there is greater degree of inception of tourism in different
segments for example foreign tourists, business tourists and young explorers who love to travel.
The millennial are the most important section that provides huge income to the hospitality
industry. The following is a business plan of hotel Roeland international based on the hospitality
industry operating across the world as a renounced hotel chain. Hospitality industry is involved
into a serious trade, which possess a essence in the industry. The industry induces large amount
of funds related to the services provided by the individuals. A well-integrated business plan of a
hotel is described below, which provides an idea of the market structure in which the hotel is
operating, the finances of the hotel and a business canvas model specifying the key need of the
industry in the market.
Business Canvas Model
Key partners
 Hotel franchisees
 Premium and
luxury brands
 Services and goods
suppliers
 Transport partners
 Financial partners
Key Activities
 Hotel
management
 Employee
training
 Online booking
 Luxury activities
 Operations
Value Proposition
 Luxury
services
 Rewards
 Events
 Meetings
 Packages
and deals
Customer
Relations
 Website
 Online
booking
 Exclusive
deals
 Customer
loyalty
Customer
Segmentation
 Business
Customers
 Millennial
 Foreign
tourists.

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 Payment providors
 Investors
 Communication
 Security
 Marketing
 Trade relations
programs
 Personalize
d
assistance
Key Resources
 Luxury market
 Service Quality
 Latest
Technologies
 Brand
 Revenue
Channels
 Resorts and
Hotels
 Travel
Agent
 Websites
Cost Structure
 Employee Salary
 Tax Payments
 Know How
 Brand
Revenue Streams
 Franchisee Revenue
 Bookings
 Additional Services
Market Structure
3.1 The market share of the hospitality industry in the year 2016 was nearly 495.17 billion
dollars. The figure has increased over the years and is increasing depending on the increased rate
of tourists.Over the years, the tourists have also increased resulting in high increase of the
revenue in the hospitality industry. Moreover, the capacity of the hospitality market ismuch
higher and it can accommodate greater number of hotels and hospitality housing facilities
(Bowie, Buttle, Brookes and Mariussen, 2016).
3.2 The hotel industry is one of the fastest growing industries in the world. The bookings are
hitting their highest rate in the recent times, as there is higher degree of tourists incoming. The
industry is competitive in nature because more number of individuals is entering the business and
are trying to gain a position in the hospitality industry. The number of hotel and motels

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hasincreased for which the degree of competition has also increased. The hotel industry need to
compete with other competitors for that they need to maintain certain aspects of the industry.
They include the health consumption spending of the consumers. The consumers prefer
appropriate sanitation in the hotels and are ready to pay any amount in order to stay in a sanitized
environment, which can be a lucrative opportunity for the hotel owners to provide them cleaner
services. Moreover, the most common barriers to entry in the hospitality industry is large
amount of capital involvement. The hospitality industry demands greater investments and they
earn profit after certain threshold period, which might be around 10 years. Therefore, the owners
of the hotel industry need to bear lose for the initial period after which they receive profits in a
greater degree.
3.3 According to Barrows and Powers(2008), the trends affecting the hospitality industry in a
positive manner include catering to the millennial, tech explosion, influx of the foreign visitors,
increased emphasis of the health and wellbeing, need of the technology, sustainability rules, new
roles for the staffs, promotion of the destination and controlling damage.
3.4 The market can be segmented based on age group and regionalism (Zhong, Couch and Blum,
2011). The millennial are the persons from the lower age group compared to other tourists and
the business class tourists are often of the higher age as they have to deal with other austerities in
life. Moreover, segmentation can be donebased on high paid customers and low paid customers.
According to Wright(2008), targeting the customers is essential for the hotel industry because it
is beyond logic to attract customers who do not travel.
3.5The targeted customers are the foreign tourists, business class tourists and the millennial
across the world who wants to explore the adventure of different places. It is very important to
position the brand of the hotel into the mind of the customers in order to attract them into the
hotel chain and gain greater profits.
3.6 The major competitors of the business are huge brands like JW Marriot, that operates
globally and are trying to capture the elite class hospitality sector.
3.7 The location of the business is in Australia and is trying to serve from Australia. The country
is diverse in terms of tourists as people from different parts of the world visits this place (Biggs,
2011).

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Operations and Technology
4.1 The emerging changes that are evolving due to changing technology, which can affect the
business of the hospitality industry, include the website building. If the website of the hotel is
played well and the search engine optimization process is optimum then there is a possibility of
huge customer moving into the hotel for their stay.
4.2 The hotels can develop certain applications that help the customers to find the hotel in the
maps. The hospitality industry businesses are expensive and are advised to be undertaken by
partnership. With partnership form of business, the risks are divided and both the partners
manage capital.
4.3 Joint venture can also be a feasible option for operating the hospitality industry. In joint
venture, form of business the capital is distributed according to the share of the individuals
resulting in risk division and greater efficiency of the business.
4.4The most significant factor in the hospitality industry is the skills possessed by the employees.
4.5 The suppliers of the equipment are essential for the industry as they are the resource upon
which the industry relies on heavily. Moreover, the industry have to maintain the legal rules
before entering and specifying their business. The industry standards have to be maintained
without which the hotel cannot provide services to its customers. There are certain certification
that needs the attention without which it is impossible to carry on business in the competitive
market because the competitors are ready to expose the competition in order to make it easy for
themselves to thrive in the market. The intellectual property of the business should be used in the
initial years in order to build up the momentum of business.
4.6 Intellectual property can be of several types they include trademarks, patents and copyrights.
Patents are the personal right of the organization to use certain technology prepared by them. The
technology or any other service created by the hotel is chargeable if other owners in the
hospitality industry use those. Trademarks are the symbols that are often used by the
organization in order to position their product or services into the mind of the customers. The
customers often understand the brands by observing the trademarks. On the other hand,
copyrights are the legal issues that are sold by the organization and are often in terms and
condition.

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4.7 Hotel Roeland International has to maintain the code of conduct and various types of ethics
in order to run its business in the market. The business should keep an eye on its employees so
that no customer sentiment is hurt by any kind of ill behavior of the clients. If the employees are
sophisticated and know how to behave with the customers, they stand greater chance of earning
good amount of profit from the market. No customer should be harassed in the hotel and every
employee should be open enough to accept any kind of problem of the customers and solve them
in minimum amount of time with the use of advanced technology.
Human Resource
5.1 The resources in the hospitality industry are very significant in nature. The employees in the
industry should be trained well in serving the customers in appropriate manner so that the
customers are pleased by the services and visit the place time and again whenever they visit the
place (Cho, S., Woods, R.H., Jang, S.S. and Erdem, M., 2006). Therefore, the resources the hotel
is hiring in term of employees must be trained in hotel management and should possess a
management degree. The employees should also be proficient in technology and must have
technical knowledge for supporting the technical default.
5.2 The owner of the hotel is an entrepreneur who is supposed to take risk and invest in building
several facilities in the hotel in order to attract more number of customers.
5.3 The ownership structure is based on partnership basis in order to share the risk in the
business.
5.4 The manpower requirement is the hundred employees who will serve the visitors in the hotel.
Fifty cooks who will cook food in the kitchen and ten mangers for the hotel who will manage the
staffs in the hotel. The above requirement is for the first year and it will increase by one fourth in
the consecutive years. The right kind of employees will be selected by several round of
interviews on managing a five star hotels. The employees will be compensated in terms of
knowledge and production they make and the period they work for in the hotel. Moreover, the
employees will be motivated on a monthly basis as motivation is very crucial for better
performance. Motivation also has a direct correlation with higher level of performance. If the
employees remains motivated then they will be able to bring greater profit for the
organization .Further, the employees will be provided training n the job role. They will learn to

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serve their customers while they are hired as this will induce greater incentive for the employees
because they are being paid for their job.
5.5 The growth strategy of the company is to grow with time. The hotel will initiate its business
by opening one outlet and will plan further to expand its services round the world. Moreover,
the quality of the hotel will be managed by the superior level of services by the employee.
Human resource are the best kind of resources using which the quality of services becomes
better. Therefore, for the employee growth factor the hotel will keep rewards and prices for the
best employee of the year.
Finance
6.1 Revenue of an organization can be termed as the final earning of the owner after catering to
the number of customers at the end of the year. The projected revenue of hotel Roeland
International is around 50, 00000.
6.2 The selling price per unit of the services such as the room services would be around 3000 per
night. Therefore, the cost of initiating a hotel business is depicted in the below table for the first
year. The following is the profit and loss statement for consecutive three years Financial
planning are often undertaken with the forecast on sales.
6.3 Prior-year proceeds is used by most of the companies that acts a guide for existing year.
Although, prior-year proceeds are being used, the major popularity is being accomplished by
flexible and zero-based budgets. The business is able to regulate the overall revenue with the
help of flexible budgets. On the other hand, the initiation of zero-based budgets starts with zero
expenses. This in turn requires department leaders to provide justification about each activity
based cost (Chan, G.R., 2008).
6.4The possible sources of financing are debentures equity and debt, retained earnings short-term
loans, working capital loans letter of credit venture funding (Hall, and Lerner, 2010). The source
of funding for Roeland international is the equity capital, working capital loans and share
debentures. The forecast is used in order to set up the revenue of the budget. The finance
manager acts as the reality agent for ensuring sales forecasts. These are pragmatic and attainable.
However, if the forecast is not correct, the base for the budget becomes faulty. Finance also

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works with units to generate operating budgets. The budgets include predictable revenue,
headcount of employees, occupancy expenses and a variety of other operating cost.
Prior-year proceeds are used by most of the companies that acts a guide for existing year.
Although, prior-year proceeds are being used, the major popularity is being accomplished by
flexible and zero-based budgets. The business is able to regulate the overall revenue with the
help of flexible budgets. On the other hand, the initiation of zero-based budgets starts with zero
expenses. This in turn requires department leaders to provide justification about each activity
based cost (Chan, G.R., 2008).
Profit & Loss for [Roeland international ] as at [Financial Year]
PROFIT & LOSS Month 1 Month n Year 1 Year 2 Year 3
Sales 500,000 550,000 600,000 800,000 100,000
less cost of goods sold 10,000 8500 8000 6000 5000
More… 400,000 550,000 700,000 8,0000 900,000
Gross profit/net sales $0 $0 $0 $0 $0

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Expenses
Accountant fees 100 100 100 100 100
Advertising & marketing 500 500 500 500 500
Bank fees & charges 100 100 100 100 100
Bank interest 300 300 300 300 300
Credit card fees 500 300 300 300 300
Utilities (electricity, gas, water) 100 100 100 100 100
Telephone [phone]
Lease/loan payments 100 100 100 100 100
Rent & rates 500 500 500 500 500
Motor vehicle expenses 300 300 300 300 300
Repairs & maintenance 100 100 100 100 100
Stationery & printing 100 100 100 100 100
Insurance 500 500 500 500 500
Superannuation 100 100 100 100 100
Income tax 200 200 200 200 200
Wages (including PAYG) 500 500 500 500 500
More… 100 100 100 100 100
Total expenses $4500 $4500 $4500 $4500 $4500
NET PROFIT (Net Income) $5000 $50000 $5000 $5000 $5000
Assumptions:
All figures are GST inclusive.

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Start-up Costing for [Roeland International] - [2018]
START-UP COSTS Cost ($) EQUIPMENT/CAPITAL COSTS Cost ($)
Registrations 100 Business purchase price 500
Business name 100 Franchise fees 300
Licences 200 Start-up capital 50000
Permits 100 Plant & equipment
Domain names 20 Vehicles 500
Trade marks/designs/patents 25 Computer equipment 300
Vehicle registration 30 Computer software 500
Membership fees 60 Phones 200
Accountant fees 90 Fax machine 100
Solicitor fees 100 Security system 300
Rental lease cost (Rent advance/deposit) 20 Office equipment
Utility connections & bonds (Electricity, gas, water) 10 Furniture 500
Phone connection 10 Shop fit out 600
Internet connection 10

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Computer software 50
Training 300
Wages 5000
Stock/raw materials 500
Insurance
Building & contents 1000
Vehicle 500
Public liability 500
Professional indemnity 500
Product liability 400
Workers compensation 900
Business assets 1000
Business revenue 1000
Printing 200
Stationery & office supplies 200
Marketing & advertising 500
Total start-up costs $7725 Total equipment/capital costs $8700
Assumptions:
All figures are GST exclusive.

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Conclusion
It can be observed from the above business plan that Roeland international is a world class hotel
that will be serving the customers across the world. Including the business clients and the normal
tourists. The hotel tend to grow at a slower pace over the years. The resources are highly capable
used by the organization and it will in future produce greater revenue for the organization.

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Reference List
Nadiri, H. and Tanova, C., 2010. An investigation of the role of justice in turnover intentions, job
satisfaction, and organizational citizenship behavior in hospitality industry. International journal
of hospitality management, 29(1), pp.33-41.
Barrows, C.W. and Powers, T., 2008. Introduction to Management in the Hospitality Industry,
Study Guide. New Jersey: John Wiley & Sons (7th ed.).
Wright, R.E., 2008. Targeting, Segmenting and Positioning the Market for College Students to
Increase Customer Satisfaction and Overall Performance. College Student Journal, 42(3).
Chan, G.R., 2008. Aligning collections budget with program priorities: A modified zero-based
approach. Library Collections, Acquisitions, and Technical Services, 32(1), pp.46-52.
Cho, S., Woods, R.H., Jang, S.S. and Erdem, M., 2006.Measuring the impact of human resource
management practices on hospitality firms’ performances. International Journal of Hospitality
Management, 25(2), pp.262-277.
Zhong, Y.G., Couch, S. and Blum, S.C., 2011. Factors affecting women's career advancement in
the hospitality industry: Perceptions of students, educators and industry recruiters. Journal of
Hospitality & Tourism Education, 23(4), pp.5-13.
Bowie, D., Buttle, F., Brookes, M. and Mariussen, A., 2016. Hospitality marketing.Routledge.
Hall, B.H. and Lerner, J., 2010. The financing of R&D and innovation.In Handbook of the
Economics of Innovation (Vol. 1, pp. 609-639).North-Holland.
Biggs, D., 2011. Understanding resilience in a vulnerable industry: the case of reef tourism in
Australia. Ecology and Society, 16(1).