Eagle Watch Hotel: Analysis of Annual Results and Strategic Goals

This report provides a comprehensive analysis of Eagle Watch Hotel's performance based on the provided simulation data. The report begins with an overview of the initial strategy, which involved developing a new restaurant concept theme to attract customers in the competitive Vancouver market. The team conducted a feasibility study, surveyed target customers aged 35-40, and identified a preference for organic food and aesthetically pleasing dining environments. Based on these insights, the team partnered with Earls Restaurant and employed a SWOT analysis to evaluate the venture. The report then details the building layout, supplier identification (focusing on organic farmers), and the mission, vision, and values statements. Hotel performance data, including revenue, occupancy, and financial metrics (current ratio, debt-equity ratio), are presented and analyzed. The report also examines decisions made each quarter, such as meeting room refurbishment, marketing campaigns, and cost-cutting strategies, along with their respective results. Furthermore, the report compares the hotel's performance with competitors, focusing on room and beverage pricing. Finally, the report concludes with the author's reflections on the lessons learned and the ability to make informed decisions based on industry and business performance.

Running head: HOTEL OPERATIONS 1
Hotel Operations
Student’s Name
Institution Affiliation

HOTEL OPERATIONS 2
Our Overall Initial Strategy
As the idea to come-up with a new theme concept dawned on us, our main concern was
how we could introduce something new that will serve customers existing in an already
competitive restaurant business in Vancouver city. In developing the initial strategy, the team did
a feasibility study of Canadian culture to determine a concept theme that could be in line with the
target customer’s preferences. Our concern was that as hotels endeavors to provide food services
to customers, there are possibilities of overlooking the health impact the food served has on the
society at large. The team purposed to explore a theme that could provide customers with an
experience of their choice. We conducted a research of the consumption trends of persons aged
35-40 years. In order to achieve this objective, we designed survey questions and asked
respondents within the age bracket of 35-40 years of what improvement they wished to see on
restaurants within the locality. Our findings were that most respondent preferred being served
while seated in a place where they could have a view of outside. In addition, there was a concern
on the quality of food being served by most restaurants as the customers considered it to have
been kept in refrigerators for long. The respondents indicated that being served with fresh foods,
grown using organic agriculture could do a great deal in helping them to meet their health needs.
This information was used as a basis of developing a sustainable strategy for the new venture.
How the team decided to use the strategy
With information about the concerns of our target customers, we decided to write a letter
to Earls Restaurant so that they could allows us to use their brand name in our new concept
theme. Earls is a reputable company in providing organic foods to customers, and as a result, we
considered partnering with them as an ideal thing to do. Earls approved our request and we were
ready to roll-out the business.

HOTEL OPERATIONS 3
Using SWOT analysis, we determined the Strengths, Weaknesses, Opportunities and Threats
associated with the new venture.
Strengths
 Using a brand name that most customers knew about
 A competent team that had experience in running start-up businesses
 Availability of space to expand the operations of the hotel,
 Financing from Eagle Watch Hotel
Weaknesses
 The hotel is not currently using food delivery apps but Earls restaurants do.
 The advertising budget is modest.
Opportunities
 Serving clients with foods in line with their preference
 Increased revenue for the hotel
 Serving more customers from using food delivery apps
Threats
 Competition from hotels providing organic food to clients
 The new concept theme may take longer than expected to break-even
 Availability of reliable source of supply for fresh supplies
Building layout
When coming up with the layout of the building, considerations will be given to
accommodate the preferences of customers as revealed in the survey. The layout will include a
bar and a private dining room. Most of the respondents preferred dining in comfortable seats that
provides an appealing view of the surrounding. In order to accommodate this request, dining

HOTEL OPERATIONS 4
areas will be set- aside in the ground floor and first flour. Additionally, mirror will be installed in
order to create an impression that the rooms are bigger than they actually are. This approach will
help us in setting up more tables than we could if no mirrors are fixed on the walls.
Identification of suppliers
Our suppliers will specifically be organic farmers. The restaurant will specialize in
preparing food from chicken, beef and fresh produce that are organically raised. This approach
will be inline with the requirements postulated by Earls hotels and our target customer’s
preference. When vetting the suppliers, the management will select several and include them in
the company’s database to ensure that there are no shortages or delayed deliveries that could be
occasioned by overlying on one supplier.
Setting up the mission, vision statements and values
The mission statement for the theme could read “To serve our customers with non-
genetically modified food”. The mission statement could read “To address health concerns by
serving you with organic food’ or “Promoting agricultural sector in Canada by encouraging
organic farming and serving you with organic food grown from Canadian borders”. The mission
and vision statements talk about what a company does. As a result, it is reliably determined after
the overall strategy of the company is established. The company values will include “respect,
quality client service, transparency and equality”.

HOTEL OPERATIONS 5
Hotel Performance
Table 1: Operation performance
Operations Dec Y1
Revenue
Room $10,368,040
Food $1,420,142
Beverage $165,152
Total F&B $1,681,452
Other Income $1,081,036
Total Revenue $13,130,528
Rooms Available 83500
Premium Rooms Out of Order 1794
Standard Rooms Out of Order 3000
Rooms Sold 62946
Weekday Occupancy % 75.07%
Weekend Occupancy % 75.95%
Total Occupancy % 75.30%
Table 2: analysis of revenue per revenue line
Revenue Amounts Percentage
Room $10,368,040 79%
Food $1,420,142 11%
Beverage $165,152 1%
Total F&B $1,681,452 13%
Other Income $1,081,036 8%
Total Revenue $13,130,528 100%
The total revenue generated during the year was $13, 130,528. Out of this balance, the
room income was 10, 368,040 which represented 79% of the revenue earned by the hotel in the
year. The remaining 11% was earned from food, beverages, breakfast and other income at 11%,
1%, 13% and 8% respectively.
Other operation performance indicators include room availability at 83,500. There are
instances where customers placed orders on rooms but none were available. This can be seen

HOTEL OPERATIONS 6
from the number of premium rooms that were out-of-order (1794) and 3,000 standard rooms that
were out of order. Rooms that were out of order represents lost revenues and are indicators that
the hotel should consider adding the number of rooms available.
The room occupancy was relatively equal during week-days and the weekends as shown
by an occupancy rate of 75.07% and 75.95% respectively. The split of occupancy was as shown
below.
75.07%75.95%
Weekend and week day occupancy
Weekday
Occupancy %
Weekend
Occupancy %
Financial performance
Table 3: finance summary
Finance Summary
Cash In Bank $1,668,431
Loan Outstanding $15,505,208
Accounts Receivable $970,147
Accounts Payable $181,975
Loan Monthly Payments $67,708
The company’s financial summary discloses that as at the end of Dec Y1, the company
had more than $15.5million loan balance that was outstanding and the monthly loan payment
was $67,708. The Trade payables were $181,975 and trade receivables were $970,14. The cash
balance in the bank was $1,668,431.

HOTEL OPERATIONS 7
Finance metric
Finance Metrics This Month
Liquidity
Current Ratio 9.52
Acid-Test Ratio 8.12
Account Receivable Turnover 1.2
Average Collection Period 25.03
Finance
Solvency 2.7
Debt-Equity Ratio 0.59
Debt Service Coverage Ratio 1.6
Interest Coverage Ratio 2.98
Debt to Capitalization Ratio 0.37
Operations
Labor Cost per Available Room $54.82
Labor Cost per Occupied Room $72.84
Financing rates
Interest rate 3.00%
Interest rate 9.00%
Interest rate 6.00%
Months to collect 1
Months to collect 2
The Current ratio is calculated by dividing the total current asset by total current liability.
This metric is used to measure the capacity of a company to meet its short-term obligations when
they fall due. Since the value was 9.52, which is greater than 1, it means that the company does
not have liquidity risks. The acid-test ratio is calculated by taking the total of current assets less
inventory and dividing the results by the trade payables. Since the value is greater than 1, the
company is not exposed to liquidity risk. The company collected its debtors balance within 25.03
days and with an efficiency of 1.2, which is an indicator of a good debt collection strategy.
The hotel operations are financed using debt and equity. A solvency ratio of 2.7 indicates
that the income earned by the hotel can cover the debts 2.7 times. This means that the after-tax
net-operating income can cover the company’s obligation to third parties (loans and trade
payables) in full. The debt -equity ratio is 0.59. Since the values is less than 1, it means that the

HOTEL OPERATIONS 8
company can comfortably pay its debt from its shareholders fund. As a result, the company is not
highly leveraged. Both the debt and interest are adequately covered by income earned in the year
as shown by debt coverage ratio of 1.6 and interest coverage ratio of 2.98. The total debts make
up 37% of the company’s capital structure as shown by a debt capitalization ratio of 0.37.
Financing was advanced to the company at a rate of between 3% and 9% and collection ranges
between 1 and 2 months.
Labor cost determines the amounts payable to employees. The total cost of labor incurred
from rooms occupied during the year was $72.84 per room. Unoccupied rooms cost of labor was
$54.82 per room during the same period.
Decisions Made Every Quarter and the Results
In the first quarter, the company came up with a plan to refurbish its meeting room.
Contracts were awarded to different contractors. Due to delays in supply of materials required to
refurbish some meeting rooms, the work over-flew to the next quarter and this inconvenienced
meetings that had been planned to take place in those rooms.
In the second quarter, advertising and marketing campaigns were launched with an aim of
increasing the number of guests who visited the hotel. The communication channels used
includes customer loyalty program that was estimated to cost $5,000, performance bench
marking service that was budgeted for $1,500 and guest response service that was budgeted for
$1,400, hotel website advertisement that was budgeted for $500 and Ecommerce service that was
budgeted for $ 1300. Marketing and advertising were considered necessary as most guests
indicated that they could not get the information related to the company online. The number of
guests requesting rooms in the hotel increased considerably leading to shortages from time to
time. These strategies were, therefore considered to be effective in marketing the company.

HOTEL OPERATIONS 9
The management decided to come up with a strategy to manage rooms occupancy in the
third quarter. Clients were encouraged to book hotel rooms in advance at a discounted price. The
response was not that good at first. However, when advertisement on the offer was publicized,
the hotel bookings were made up to a month in advance as client’s strived to take advantage of
the low prices.
In the last quarter, the management targeted minimizing the cost of food and beverages.
The plan was to cut the cost of breakfast by 26%, lunch by 15%, diner by 24%. In order to
achieve these objectives, the suppliers were engaged through a phone conversation and the mater
was discussed by the costing manager. Even if the company managed to get a relief for some
products, some suppliers did not agree to reduce their prices citing the fact that they were
supplying the company at the least price possible.
Based on the experience that I acquired in the last three months, I can now be able to
make decisions that are informed by the industry performance and the overall performance of the
business. I have learnt how to manage costs by engaging suppliers and requesting for price
reduction, I can make an advertisement that can sell a business and I can engage various
stakeholders with an aim of communicating the business plans and observable trends in the
business performance.
Comparison of Performance with Competitors
Room prices
The hotel room prices were relatively lower compared to the industry average and prices
quoted by competitors. It was noted that the company had adopted a constant pricing policy as
indicated by the graph below.

HOTEL OPERATIONS 10
Color red represents the room pricing for Eagle Watch Hotel, yellow is the average price,
green is the highest price and blue represent the lowest price that hotels charged for rooms last
year. Coincidentally, the least price charged in the market is similar to the prices charged by
Eagle Watch Hotel from the month of January to the month of September. This shows that the
hotel room rates are maintained within the average room costs.
Beverages
The beverage prices varied depending on the place where was served. The table below
shows the beverage prices during the period from different hotels
Beverag
es
Eagle
Watch
Hotel
Blis
s
Whitesan
ds
First
Wint
er
Haisla
Waterfro
nt Hotel
Hotel
5
Heave
n
Grace
Resor
t
Wonderla
nd Resort
Lighthou
se
Restaura
nt Bar
$9 $8 $7 $10 $25 $15 $11 $13
Lobby
Bar
$0 $0 $0 $0 $0 $0 $0 $0
Room
Service
$8 $9 $8 $12 $35 $20 $14 $15
Mini-
Bar
$0 $7 $0 $11 $0 $17 $4 $0

HOTEL OPERATIONS 11
The bar chart below represents the beverage information per restaurant.
Eagle Watch Hotel
Bliss
Whitesands
First Winter
Haisla Waterfront Hotel
Hotel 5 Heaven Grace Resort
Wonderland Resort
Lighthouse
$0
$5
$10
$15
$20
$25
$30
$35
Beverage Prices
Restaurant Bar Lobby Bar Room Service Mini-Bar
The column bar chart above shows that most of the beverages had different prices
depending on the location the beverage was served. Cost were relatively higher in the rooms
compared to the minibars and the restaurant for most of the hotels. However, it was noted that
Eagle Watch Hotel prices were relatively low compared to First Winter hotel, Hotel 5 Heaven
Grace Resort, Wonderland Resort and Lighthouse.
Food prices
The cost of food also varies with the hotel. See the table below.
Food Type Eagle
Watch
Hotel
Bliss Whitesands First
Winter
Haisla
Waterfront
Hotel
Hotel 5
Heaven
Grace
Resort
Wonderland
Resort
Lighthouse
Breakfast $16 $15 $11 $18 $10 $18 $20 $15
Lunch $18 $16 $17 $20 $15 $22 $25 $22
Dinner $30 $22 $26 $30 $25 $24 $38 $30
Room Service $25 $23 $24 $25 $7 $25 $34 $27
Mini-Bar $0 $10 $0 $15 $0 $20 $7 $0
Refreshments $12 $10 $10 $15 $10 $18 $19 $15

HOTEL OPERATIONS 12
A representation of food prices in a columnar bar chart was as follows:
Eagle Watch Hotel
Bliss
Whitesands
First Winter
Haisla Waterfront Hotel
Hotel 5 Heaven Grace Resort
Wonderland Resort
Lighthouse
$0
$15
$30
food type price
Breakfast Lunch Dinner
Room Service Mini-Bar Refreshments
The prices of food were relatively the sane in the 8 hotels. However, dinner price was
higher in Wonderland hotel compared to other hotels. Eagle Watch Hotel prices were average
and closely matched most of the competitor’s prices.
Charts of initial Team Goals
Marketing  Use road shows to market the company
 Print out brochures
 Put notices in various notice boards in the
city
 Use bill-boards to advertise
 Promotions and offering price discounts
 Use bring a friend strategy where couples
visiting the restaurant are given special
discounts
Financial  Sourcing for supplies from supplier
providing quantity discounts
 Offering price discounts to promote sales
 Allocating money for refurbishment
 Assessing the need to hire additional
staffs
 Allocating resources
Guest Satisfaction  Improving the quality of foods
 Providing room affordable rooms service
 Expanding the capacity to accommodate
guests needs
 Maintaining current room prices

HOTEL OPERATIONS 13
Associate Engagement  Increase the number of employees
 Involve employees in decision making
 Reviewing the terms of employment
Overall ranking  Provide first class customer services.
 Improve the welfare of employees
 Improve on the quality of food served to
customers.
The most important Decisions Over one Year Period
Marketing
In marketing, the decision to introduce an app to enhance sales led to increased revenue
at a rate of 24%. Customers can now order food online and delivery are made at their door steps.
This had not only been convenient to our customers but has also led to an improved score in the
survey conducted two months ago.
Financial
When determining the mode of financing the company’s operations, we had to decide on
whether to seek an investor in the business, get an additional loan facility or use the retained
earnings. After conducting an analysis, loan financing was deemed expensive, bringing-in an
additional investor would have led to reduction of ownership percentage by the existing
shareholders. As a result, a decision was made to use the use the retained earnings to finance
extension and operations from the new venture. Retained earnings were preferred as they were
not accompanied by additional costs to the company.
Guest Satisfaction
The guest satisfaction index was key. We noted that clients had consistently complained
about the quality of food they ate from our hotel. The management decided to hire three
professional chefs whose mandate was to ensure that the food served in the hotel was of high
quality and that there was consistency in food tastes. Since the new chefs came on board, the

HOTEL OPERATIONS 14
number of guests who complains of quality problems have decreased drastically, the company is
committed in making sure that quality issues are ironed-out in the near future
Associate Engagement
Employees are considered a key asset to the company. We have held meetings with
employees and discussed with them about the changes they would like to see in the company and
the results are impressive. The management decided to review salaries of employees on a yearly
basis based on performance. Since then, we have noted that employees are putting much effort to
deliver values to our customers, and that is impressive.
Overall ranking
Our overall ranking has improved by 2 positions in the year. This shows that the efforts
we have made in promoting the welfare of the employees and the service we offer to our clients
are recognizable.
Recommendation for future action plan
It is recommended that the company should seek to have advertisement happening more
regularly. The management should also delve in assessing how the prices charged on the hotel
rooms and food can be made more competitive. It was noted that the company mostly offer
services at prices that are relatively cheaper compared to their competitors. As a result, the
company had neglected investing in advertisements and hiring of professional chefs. Since these
costs helps to market the company, a consideration ought to be given on how to finance them, if
the company is planning to remain competitive in the hotel industry. Furthermore, the company
can use retained earning that has accumulated in the company’s books for years to finance
internal operations to improve on its image.