HOTS Strategic Plan: Strategic Recommendations to Improve KPIs

This report presents a strategic plan developed within a HOTS (Hotel Operation Tactics and Strategy) simulation environment, focusing on Eliza Hotel and its key performance indicators. The analysis covers various metrics such as REVPAR, gross operating profit, market share, ROCE, guest satisfaction, staff satisfaction, ADR, public awareness, hotel quality index, and annual staff turnover. The report identifies areas where Eliza Hotel underperforms compared to competitors, particularly in revenue generation and market share. It examines the financial, customer, internal process, and learning and growth perspectives to provide a comprehensive overview of the hotel's performance. The strategic plan includes recommendations for different hotel departments (Front office, housekeeping, F&B, Marketing, Human Resource) aimed at improving overall performance and achieving a competitive positioning in the market. The ultimate goal is to enhance financial performance, increase guest and staff satisfaction, and improve the hotel's brand reputation.

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

STRATEGIC PLANNING 3
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

STRATEGIC PLANNING 4
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).

STRATEGIC PLANNING 6
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.

STRATEGIC PLANNING 7
The data shows that Eliza hotel is trying to develop effective relationships with its staff and
employees (Clarke, 2016). The percentage of staff relationship survey for Eliza is 82% that
indicates the organization is able to motivate and satisfy its customers. Global Agents is on the
top in the list of hotels.
Average Daily Rate (ADR)
ADR is a simple metric or rate that is used to calculate the average rate per occupied room at any
hotel. It is a good rate to analyze the performance of a hotel that is calculated by dividing total
room revenues by the occupied rooms. Average daily rate at Eliza is 62.24$ that is decreased this
year from 67.53. It shows that the performance of hotel is going poor every year (Simons,
McLean Parks & Tomlinson, 2017).
Public Awareness
Public Awareness is the performance indicator that is used to analyze how much people know
about the services of a hospitality organization. For Eliza Hotel, the public awareness has been
decreased to 29.11 as the company is not able to manage its operations and service quality. The
guests are not satisfied with the services of hotel so it failed to manage relationships with public.
Hotel Quality Index
Hotel quality index is the performance indicator that assists a hotel to evaluate the quality
perceptions of customers of service quality delivery. Currently, the hotel quality index of Eliza
Hotel is 12.50 that are less that Luxury Stars Hotel (Crick & Spencer, 2011).
1
0
5
10
15
20
25
30
35
Hotel Quality Index
Team 1
Team 2
Team 3 (Eliza)
Team 4
Team 5
Team 6
Team 7
Team 8

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This indicator can be determined by considering the hotel room cleanliness, facilities, customer
feedback etc.
Annual Staff Turnover
Annual staff turnover shows the number of employees who has left the company in last one year.
Last year, annual staff turnover rate at Eliza Hotel is 50% and it is increased from last year. It
shows that employees are not satisfied at Eliza and they are leaving jobs and shifting to other
popular hotels. The staffing is very poor at Eliza hotel. At Paradise Consultancy, this rate is
122.64% which is highest among all the hotels (Yam & Raybould, 2011).
The above key indicators can be explained in the below-given balance score card:
Particular Target Measures Indicators Initiatives
Financial
perspective
 To increase
revenue per
guest and
available room
 To increase the
number of guest
arrival
 To decrease the
costs and
resource
optimization.
 Number of
Occupied rooms
 Number of
guest arrived
 Production cost
 Percentage of
booking as
compared to
competitors
 REVPAR
 ROCE
 Average Daily
Rate
 Increase in the
gross
operating
profits
 Improvement in
the services
 Quality service
Delivery and
effective
promotion
 Revision of cost
structure and
enhance asset
value by
strategic
collaboration.
Customer
Perspective
 To provide full
guest
satisfaction
 To develop
guest loyalty
 To enhance
guest service
delivery
 Guests’ repeat
intention to visit
Eliza Hotel
 Number of loyal
customers
involved
 Feedback from
guests
 Guest
Satisfaction
 Market Share
 Hotel Quality
Index
 Making
investment in life
style segment
 Feedback form,
questionnaire
and survey
 Develop long
term relationship

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with the guests
Internal
Process
 To improve
management
and staffing
 To retain
talented and
skilled
employees
 To decrease the
staff turnover
 To improve
hospitality
operations
 Number of
retained
employees
 Performance
Appraisal
 Quality of
operations
 Customer
feedback
towards room
attendants and
chef
 Annual staff
turnover
 Number of top
quality staff
 Staff
Satisfaction
 Conducting cross
audits
 Weekly follow-
up of the
employees
 Implementation
of new policies.
 Performance
appraisal
 Bonus and
incentives to
employees.
Learning
and Growth
 To establish
healthy
relationship
with customers
 Sustainable
human resource
 To improve
service delivery
to the guests
from different
backgrounds
and cultures.
 Performance
evaluation
 Skills and
abilities of
employees
 Operational
efficiency
 Service
standards
 Public
Awareness
 Staff
Satisfaction
 Employee
participation
 Conduct training
and development
program
 Implementation
of innovative
technologies
 Adoption of
quality
management
techniques
(Villaespesa,
2015).
C. Explanation on Key Indicators
By looking at the above balance scorecard, it can be stated that there are various indicators and
perspectives which shows both financial and non-financial performance of Eliza Hotel. Financial
performance of an organization is an indicator that determines the financial status of firm. It

STRATEGIC PLANNING 10
shows the ability of a company to utilize the resources and assets and show much it can generate
more and more revenues and profits (Bergeron, 2017). These indicators are used by the
organization to recognize and enhance different internal functions of a business and their
external results. From the review of above performance indicators, the financial and non-
financial performance of the hotel can be identified. As discussed, Eliza Hotel is bearing loss
from last two years due to poor staffing techniques, low room rates and higher expenses on food
and beverage division. The performance of this hotel is poor than other hotels and competitors in
hospitality industry (Kylili, Fokaides & Jimenez, 2016). The explanation about the different
indicators and perspectives of balance score card is stated below:
Financial Perspective
This is the first perspective of balance scorecard that can be used to analyze the performance of
the organization. It views the financial performance of organization and utilization of financial
resources. Under this, the company analyzes different indicators like sales, income and
expenditures. These components of business assist to understand the financial position of
organization. In the above review, there are various financial indicators of Eliza Hotel such as
RAVPAR, ROCE, Gross Operating profits and Average Daily Rate. Eliza Hotel is operating its
business with the target to increase the revenues per room and guest, number of guest arrival at
hotel and to decrease the cost and resource optimization (Gibbons & Kaplan, 2015).
The above analysis shows that previously Eliza Hotel has more REVPAR than other hotel, but
now it faces a heavy downfall in the revenues i.e. 15.76$. The data indicates that this is due to
the fact that hotel has increased the number of hotel rooms i.e. from 3500 to 7000 but the
percentage of room sold is less than previous year. ROCE of Eliza is negative in all the months
that indicate that company is unable to make effective investment in its operations and produce
returns. The revenues and profits of Eliza hotel have declined during past two years. Moreover,
the average daily rate of the hotel is declining that shows guests are not interested to take the
hospitality services of Eliza Hotels. In the period of last 24 months, the position of hotel has been
downgraded. To enhance this, the company needs to make improvement in its operations and
hospitality services (Yang, & Cai, 2016). It should revise its cost structure and improve the
value of resources by establishing strategic collaboration with other well-established hotels in the
country.

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Customer Perspective
Customer perspective is one of the most important perspectives for a hospitality organization as
it views the performance of the organization from the customer point of view and other related
stakeholders which it is designed to cater. The perspective of customers is gathered to measure
the guest satisfaction with the price, quality and availability of service. Under this perspective,
the guests at hotel provide their feedback regarding the hotel services and about if their
requirements and demands are being met with its services (Hansen & Schaltegger, 2016).
In this evaluation, the major indicators are such as guest satisfaction level, market share of hotel
and hotel quality index. For each and every hospitality organization, guest satisfaction is the top
priority but Eliza Hotel is failed to maintain this level last year. In the end of first year, the guest
satisfaction percentage of Eliza hotel was 53% that was decreased to 48% in the second year. It
shows that organization is not able to retain its guests and develop loyalty among them. It failed
to use different offers and schemes so that it can attract more guests. During past 24 months,
hotel was not giving attractive and profitable packages to the guests (Weinstein, 2013). The hotel
quality index of Eliza Hotel is also lower than other hotels that show that company did not
deliver the quality services to its guests. In addition to this, the market share of the hotel is very
low this year i.e. 7% that shows it has been failed to capture the attention of market and new
customer. Eliza Hotel needs to take some initiatives to enhance its performance and customer
loyalty such as it needs to make investment in life style segment. It can take the feedback of
guests through feedback forms and survey.
Internal Process
In addition to above perspectives, the third perspective of balance score card is internal process.
It shows the performance of an organization via quality lenses and efficiency in relation to its
products and services or other service delivery processes. Internal processes are assessed by
considering how well the products are manufactured by a company. In the case of hospitality
organization, internal processes can be analyzed by looking how well the hotel offers its services
to its guests. Operations management is evaluated to find out the gap, service deficiency and
service failure (Mcdonald, 2016).
According to the above discussion, there are some indicators like number of top quality staff,
annual staff turnover and staff satisfaction. The performance table of the company shows that

STRATEGIC PLANNING 12
annual staff turnover at Eliza Hotel is 50% that is higher than previous year. It indicates that
company is unable to motivate and satisfy its staff. This is the reason that they left this hotel and
shifted to others. The organization has not managed its operations and internal processes
effectively. It needs to focus on increasing employee morale by providing different bonuses and
incentives.
Learning and Growth
Learning and growth is the perspective that is analyzed through the analysis of knowledge and
training resources in an organization. This perspective deals with how the information and
knowledge is captured and how good the human resources use the information to translate it to
competitive edge over other players in the sector. This component views company’s performance
thorough technology, infrastructure, human resources and other abilities which the key to
advanced performance (Hrout & Mohamed, 2014).
At Eliza Hotel, there are various key performance indicators which can be included under this
perspective. These indicators are such as staff satisfaction, employee participation and public
awareness. Looking at the given data of Eliza Hotel, it can be analyzed that this hotel has lack of
public awareness this year i.e. 29.11. The reason behind this is that company did not manage its
service quality effectively. Additionally, the staff at hotel did not deal with the guests
appropriately as they were having lower employee morale. It has affected the performance of
Eliza hotel adversely in comparison to other hotels under HOTS (Nieves & Quintana, 2016).
Thus, this explanation shows that Eliza Hotel is in the loss from last 24 months as the revenue
generation is lower as compared to other hospitality organizations.
D. Strategic Plan
To deal with the above issues and overcome the loss of business, the general manager of the
Eliza Hotel should develop a strategic plan. This plan will be developed for its different
departments such as front office, Housekeeping, F&B, marketing and human resource. It will
assist in improving the current scenario of Eliza Hotel. For a hospitality organization, it is very
important to focus on its core departments as growth and success of hotel is directly related to
effective management of these departments (Goyat, 2011). Developing a strategic plan plays an
important role in the organizational life of a hotel. If the company wants to enhance its revenues