Argyle Hotel Group: Detailed Physical Asset Management Report Analysis

This report provides a comprehensive analysis of physical asset management for the Argyle Hotel Group, a hotel management company operating in the Asia Pacific region. The report begins with an introduction to physical asset management, defining its scope and importance in optimizing business operations and reducing costs. It then delves into Task A, which includes an overview of the business activities of the Argyle Hotel Group, the rationale behind asset acquisition and replacement, specifications for various assets like buildings, furniture, and pools, and price quotes from different suppliers. It also explores financing options from financial institutions and discusses the process of asset acquisition. Task B focuses on the creation of an asset register and a maintenance register to track and manage the assets effectively. Task C addresses customer feedback, types of maintenance required, maintenance locations, expected durations, scheduling, potential operational disruptions, workplace health and safety (WHS) issues, and the cost impact of maintenance on human resources and parts. The report concludes by summarizing the key findings and recommendations for effective physical asset management within the organization.

Manage physical assets

Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK A...........................................................................................................................................1
Overview of business activity conducted by organisation ..........................................................1
Purpose of acquisition or replacement of physical assets ...........................................................1
Overview of Specification for each assets...................................................................................2
Price from different supplier for each assets................................................................................3
Financial institution along with financing option and its cost.....................................................4
Finance variants...........................................................................................................................4
Process to be followed to finalise acquisition of assets...............................................................4
TASK B...........................................................................................................................................4
An asset register...........................................................................................................................4
Maintenance Register...................................................................................................................6
TASK C ........................................................................................................................................7
Provision for collecting feedback from customers and reports from staff...................................7
Types of Maintenance required in business.................................................................................7
Location of Maintenance ............................................................................................................8
Expected duration of Work related to maintenance ....................................................................8
Timing of Schedule maintenance.................................................................................................8
Likely Disruption operation.........................................................................................................9
WHS issues..................................................................................................................................9
Cost impact for human resources...............................................................................................10
Cost of scheduled maintenance for part required .....................................................................11
CONCLUSION..............................................................................................................................11
REFERENCE ................................................................................................................................12

INTRODUCTION
Physical asset management refers to management of those tangible assets of business
which can be sell or used in business operation (Badri, Boudreau-Trudel and Souissi, 2018). It
include plant, machinery, equipment, office furniture, property, stock etc. Physical assets are
used for business purpose, sold or exchanged for other assets for business. Business Utilise
physical assets and get best result out of them to get profit in their whole life. Management of
Physical assets include various process and techniques which helps an organisation in decreasing
total cost of business. It helps an organisation to track assets and ensure optimum utilisation of
assets. It also provide information related to maintenance required by those assets. This asset
management improve accuracy of assets as it repair and maintain them in good condition which
result in increase life of assets. It helps to estimate and forecast budget of company as it provide
detailed information about assets and its cost.
Argyle Hotel Group is a hotel management company in Australia which provide hotel
and resort service. The company is providing hospitality service in Asia Pacific region including
Australia, China, Philippines. The organisation is established in the year 2002 by Kevin Zhang
in Australia. The business has 141 hotel in its management and is one of largest company in
Australia. This project report include acquisition plan of different resources along with purpose
of acquisition, overview of each assets, price quote. It also include asset register, maintenance
requirement, schedule of maintenance of each assets along with strategy adopted by organisation
to monitor efficiency of each assets.
TASK A
Overview of business activity conducted by organisation
Argyle Hotel Group is an organisation conducted its business activity in hospital or
tourism industry. The organisation has various hotels and resort which are providing services of
hotel service, event planning, transportation (Bahrami and Ghadim, 2019). The company require
different assets for conducting its business activity like building, furniture and pools etc.
Activities of company for building include regular inspection of building, lifts, air conditioning,
fire suppression. It also include cleanliness in building and its other part. Activities for
management of commercial kitchen include regular cleanliness, proper exhausting facility, safe
1

water and availability of vegetable and other food items. Activities for management of pool site
include clean water, greenery around pool, daily watering in plant etc.
Purpose of acquisition or replacement of physical assets
An organisation acquire or replace organisation for various reason including increased cost,
obsolete technology, needs of repair and maintenance etc. which are as follow:
Incurs increased maintenance cost: Acquisition or replacement is important when
existing assets has started increasing cost of company (Borghesi and Chang, 2020). This is the
situation in which productivity of assets is decreased and assets start cresting cost more than
productivity. Increasing maintenance cost can reduce profit of business and also waste time of
organisation.
Obsolete technology: Obsolete technology or obsolete assets is not appropriate for
productivity of organisation as new assets or technology attract customer. For instance furniture
in hotel should be up to date as obsolete furniture reduce attractiveness of interior of hotel
business. Obsolete technology is costlier as it incur cost to company and make working of
organisation old.
Need more repair and maintenance: An organisation need replacement of assets when
the assets present in organisation need more repair and maintenance. Repair and maintenance
incurred cost to company and to decrease these assets, organisation replace or acquire assets. It
not only increase cost of company but also waste time and efforts of company.
Overview of Specification for each assets
Building:
 Capacity: Capacity refers to maximum output a business can get to create product or
service (Brown, Andersson and Jo, 2016). It include an organisation's ability to meet its
objective and its mission. Building in hospitality industry meet that requirement to meet
objective of business.
 Performance: Performance refers to ability of an asset to meet service requirement of
customer. It include measures like capacity, reliability, availability and meeting customer
needs and wants. Performance of building is depend on organisation to manage
availability of rooms and booking for customer.
2

 Size: Size of building is measure in different terms which include bedroom as there are at
least 15 rooms in a hotel, parking area in which has space for vehicle of customers,
dining area, reception and bathroom.
 Location: Location of building should be in that area which is easily accessible by
customer (Cavka, Staub-French and Poirier, 2017). Location should has transportation
facility, good surrounding and weather conditions. Budget: Budget for building plays important part as it create great cost to company and
cover large part of total budget of company.
Furniture:
 Capacity: Capacity of furniture include maximum output a business can get to produce a
product or perform a service. In hospitality industry, furniture plays very important role
as it create value for organisation and make its interior more beautiful. Capacity in term
of furniture include meeting requirement of business and essential as it is pert of service
as guest in hotels need bed, table, chair, cupboard which is made up of furniture.
 Performance: Performance of furniture refers to its ability to meet requirement of
customer. It include measure like durability, comfortable, appropriate. Furniture in hotels
should be comfortable and fine as it create a impression in minds of customer.
 Size: Size of furniture in different terms like how many bed, chair, table, cupboard, doors
etc. is required in hotel. Size of furniture should be appropriate as it is part of interior of
hotel which attract customer.
 Location: Location is the place where furniture is required. Furniture in hotel required in
every room, hall, reception, enquiry, entry etc. Budget: Budget for furniture cover important role in total budget as furniture is costlier
and increase cost of company.
Pool:
 Capacity: Capacity is ability of an asset to meet its business objective and pool meet its
objective in hospital industry as it is required to provide relax to gust of hotels.
 Performance: Performance of pool is to meet customer requirement and hotel provide
pool service to their gust as it provide them an extra space (Cheng and Ray, 2016). It also
helps to fulfil their requirement of relax and having fun.
3

 Size: Size of pool should be appropriate and depend of size of hotel as large hotel has big
size pool where as small hotels need small pool.
 Location: Pool is always acquire spacial space of hotel and need proper space to built.
 Budget: Budget of pool is depend on size of organisation as hotels built pool as per their
requirement.
Price from different supplier for each assets
Building
Goodman Property Services Aust
Pty Ltd
Supplier Goodman Property Services Aust Pty Ltd is
offering $5 million for building.
Cushman & Wakefield Sydney Supplier Cushman & Wakefield Sydney is offering $1.5
million for building.
Colliers International - Sydney Supplier Colliers International - Sydney is offering building
for $3 million.
Furniture
Resortium Concept Supplier is providing complete furniture for hotel in $1
million
Siesta outdoor hospitality furniture Supplier is providing furniture for hotel in $ 900000.
Nufurn Furniture Supplier is providing hotel furniture for $1.1 million.
Pool
Yardstick Landscape Services Supplier is offering $50000 for making pool in hotel.
JB Pool Construction Supplier if offering $45000 for making pool in hotel.
Momentum Pools Supplier is offering $65000 for making pool in hotel.
Financial institution along with financing option and its cost
Commonwealth bank of Australia: Commonwealth bank of Australia is a Australian
multinational banks which provide different financial services like retail banking, fund
4

management, insurance etc. The provide finance to hospitality industry like Argyle Hotel Group
to buy various asset for doing business and expanding its operation.
Supplier: Argyle Hotel Group can buy building from Cushman & Wakefield Sydney as
they are providing building g at relatively cheaper price and as per requirement of company.
Whereas they can buy furniture from Siesta outdoor hospitality furniture as they are offering best
quality furniture in budgeted price.
Finance option: Finance option available for Argyle Hotel Group are loan, credit
instalments, overdraft and invoice financing. Selection of financial option depend on cost of
these source as it can affect total cost and budget of business. A company assess stability of
financial resources while selecting one resources for company. Selection of financial resource
depend on purpose of finance and times period of requirement of finance.
Finance variants
Finance Variance is calculated by subtracting old value from new value and dividing it with old
value and multiplying it with 100. Various finance variants offer to business are as follows:
Capital Work Deduction
Income year Capital works deduction claimable
2014-15 562.18$
2015-16 3609.83$
2016-17 3600$
2017-18 3600$
2018-19 3600 $
2019-20 3609$
2020-21 3600$
2021-22 3600$
Commercial Kitchen Equipments
5

Income year Opening
Adjustable
Value
Decline Value Taxable Use Deductible
decline in
value
Adjustable
value in the
end of year
2014-15 100000$ 1561.60$ 100.00% 1561.60$ 98438.40$
2015-16 98438.40$ 10027.30$ 100.00% 10027.30$ 88411.10$
2016-17 88411.10$ 10000$ 100.00% 10000$ 78411.10$
2017-18 78411.10$ 10000$ 100.00% 10000$ 68411.10$
2018-19 68411.10$ 10000$ 100.00% 10000$ 58411.10$
2019-20 58411.10$ 10027.30$ 100.00% 10027.30$ 48383.8$
2020-21 48383.8$ 10000$ 100.00% 10000$ 38383.8$
2021-22 38383.8$ 10000$ 100.00% 10000$ 28383.8$
Process to be followed to finalise acquisition of assets
Asset acquisition process refers to a strategy in which capital used by business to buy
assets to meet financial guideline for this process using financial guideline. This process include
various steps including planning, acquisition, review and improvement process.
Resource Securing: Resource securing refers to a process in which value of physical
assets are assessed and checked by government guideline. This administration is important to get
benefits of getting right value of assets and helps to transfer of assets.
Documents to be required for assets disposal and acquisition of assets include are as follows
Terms of Reference: Terms of reference is a statement in which purpose of project is
decided through meeting between two people. It include vision,object of project, responsibility,
resources and structure. It provide background information to both parties which is helpful to
prepare proposal. It is important to carry out project and expected output. It should be short and
flexible not detailed and should be understandable.
Financial evaluation: It require asset purchase agreement which include all terms and
condition of buyer as well as seller related to purchase of assets. A company purchase assets to
earn profit for business and not are using to conduct operation of business. Physical assets
6

required for hospitality industry are land and building, pool, furniture & other equipment for
commercial kitchen. Sale or transfer of these assets require GST registration as this sale is count
as taxable sale for business.
TASK B
An asset register
Asset register refers to a list which contain information about all business assets (De
Soto, 2020). In include detailed information about assets, owner, purchase date, value and
condition of assets. It helps mangers of company to know about location, depreciation, price,
purchase date of each assets. Maintaining asset register for a business is a complex process but it
helps them to increase revenues and managing cash flow of organisation. Benefits of maintaining
asset register in business of Argyle Hotel Group are as follows:
Transparency of assets data: Assets register provide transparency in maintaining data
of all assets present in company. It helps manager to know about issues and schedule date of
maintenance. Maintaining asset register provide benefits to Argyle Hotel Group in transparency
related to data of assets which helps manager to estimate next date of maintenance.
Track asset status: Asset register helps an organisation to track status and condition of
assets in organisation. It helps manage to know when assets needs repairing and replacement. It
helps in Argyle Hotel Group in tracking condition of assets which helps them to take decision
which assets require urgent repairing among all assets.
Estimate repairing and maintenance cost: Asset register also provide information
which is essential to estimate cost of repairing and maintenance. It allow manger to estimate
budget related to repairing and maintenance. Assets register helps Argyle Hotel Group in
panning and prepare budget as it estimate cost of maintenance and also allow manager to make
reserve for these costs.
Helps to calculate depreciation: Asset register helps an organisation to calculate
depreciation as it provide information related to date of purchase of assets, value, price etc.
(Gyódi, 2019). It helps managers of Argyle Hotel Group to calculate depreciation and values of
assets.
Argyle Hotel Group is maintaining asset register on daily basis which provide many
benefit to them and asset register of Argyle Hotel Group are as follows:
7

Asset Register
Organisation: Argyle Hotel Group
Address: Sydney, Australia
Asset Description Asset
serial
number
Purchase
date
Cost Depreciation
amount
Closing written down
value
Building 1 January,
2012
$ 3000000
Furniture 2 August,
2015
$ 500000
Pool 3 01/07/15 $ 65000
Maintenance Register
Maintenance register is a list which include description of maintenance and date of maintenance,
name of individual who performed maintenance and remark (Hamid, 2018). It helps an
organisation to know date of next maintenance and maintain record of maintenance process. The
maintenance requirement of Argyle Hotel Group for different assets are as follows:
Maintenance requirement:
Building: Maintenance of building include building regulation act 2006 and under this
act, safety measure are essential to maintain health and safety in a building (Hastings, 2021).
Safety of building also maintain health of people living or working in building. It should include
emergency lighting, place of smoking, fire emergency tools, cleaning and integrity of building.
Maintenance of building is important and should be conducted on weekly basis and monthly
basis. Some maintenance should be performed daily basis and some weekly depend on
requirement.
Furniture and equipment of commercial kitchen: This maintenance requirement
include maintaining standard of food of kitchen, health and safety of employee working in this
area and their profitability. It also include cleaning of kitchen, breakdown for emergency,
cleaning of equipments present in kitchen , exhaust fan cleaning etc. It should be clean on daily
8

basis but it is difficult for commercial kitchen to clean some equipment on daily basis, so they
should be cleaned on weekly basis. Daily maintenance include washing of opener, meat slicer,
chopping board, cleaning of grill and fryer used in kitchen. Monthly maintenance include
cleanliness of coffee machine, refrigerator, ceiling gases etc.
Pool: Maintenance of pool include maintenance of cleanlinesses of water present in pool.
It is important factor as it can create adverse impact on health of people. It include cleaning of
water, change water on timely basis, checking defects in pool like broken tiles etc. Daily
maintenance in pool include cleaning of pool through net or other equipment and inspection of
site to check there is no broken glass or anything which can harm employee and guest in hotels.
Weekly maintenance include changing water of pool and clean surface of pool as it can pollute
water inside pool and affect health of people.
TASK C
Provision for collecting feedback from customers and reports from staff
Feedback from customer helps an organisation to improve their services and improve
their efficiency (Hussinger and Pacher, 2019). Customer provide details of defect in organisation
which helps an hotels to improve in that areas. Reports prepare by staff also helps to identify area
which need improvement in terms of repair and maintenance. Following are ways in which
customer provide feedback to organisation:
Valuable suggestions: Customer always provide valuable feedback to business as they
feel service directly. This feedback provide business with ideas which helps them to improve
their services and allow them to implement effective maintenance plan in business. Company is
carry out its operation to satisfy needs of its customer but sometimes they fails to satisfy needs of
consumer due to various reason. These reasons are not identified by business but consumer
through its feedback provide reason for dissatisfaction faced by consumer. It helps business to
improve themselves and provide services next time with more effectiveness.
Quick Damage Control: The object of hotel business is to provide best service to their
customer and enhance their experience with their service (Jeannotte, 2016). Feedback from
customer is important as it helps to provide information about damage in hotel and defect in any
assets of hotel. This feedback will enable owner to repair and maintain assets of business. At the
9

same time, reports from staff about hotel and rooms are also helps to identify damage and control
on that damage by repairing.
Improve services: Feedback from customer helps manager of Argyle Hotel Group to
improve their services and provide better quality service of customer. These feedback can be in
term of poor services, out dated design which enable business to work in these area. Like
customer, reports from staff also helps organisation to improve themselves in terms of quality,
efficiency etc. Reports of staff include various detail about organisation including their area of
improvement. It helps business to improve themselves in order to provide services effectively in
future.
Types of Maintenance required in business
Maintenance refers to checking, repairing and replacing equipment and assets used in
business (Joseph, 2017). It helps to keep necessary assets in good condition and increase
efficiency of these assets. Maintenance in any business are of four type which are as follows:
Corrective Maintenance: This type of maintenance is carried to detect defect in assets
and efforts are carried out to restore conditions. In hospitality industry, this maintenance include
repair of doors, repair of furniture etc.
Preventive Maintenance : This type of maintenance include protecting assets and are
carried out on timely intervals. It include service of vehicle of organisation, service of air
conditioner in hotels etc.
Risk Based Maintenance: This maintenance include those assets which include high
risk of loss. It include cheaper source of maintenance as it minimise possibility of loss of assets.
It include repair of lights and electric item in hotel.
Condition based Maintenance: This type of maintenance is based on condition that
whether assets is required maintenance or not. It can be applied on assets which are decreasing
performance. For example, changing water of pool or repairing in pool.
Location of Maintenance
Maintenance aims at keeping assets of business in good condition (Nezamian and Burns,
2020). Maintenance can be done on site or off site depend upon nature and type of assets. As
maintenance for assets like building and pool can be take place on site as it does not repair off
site because one cannot move building and pool to other place to repair. Furniture can be repair
both on site and off site as it is movable. Repairing furniture off site is better as it does not create
10