Hotel Effectiveness, a 120-room select service hotel with a strong ambience, was having issues with its gross operating profit (GOP) margins including overtime, labour costs and distribution expenses. Two years ago, the hotel began experiencing a steady escalation in overtime hours due to increased occupancy combined with tight labour market issues. The significant increase in hourly wages created a challenge—some roles were up by 25%+. And, guest collection and dropping costs at various locations have been on the rise due to rising fuel prices. All these cost increases posed a problem for the hotel’s management company. The staff comprises of 40 people, blending longtime employees with newer hires. The hotel has ten different job positions, including supervisory roles. Since opening 15 years ago, the hotel has welcomed a balanced mix of leisure and business travellers—with particularly healthy weekend bookings, which include room-only guests, and small groups for social events and sports teams.
1.4 Planning can be divided into practical steps, irrespective of the level of management, and irrespective of the complexity of the situation. Write a report of 200 – 300 words on how you would explain the steps in the planning process to the hotel.
HINT: This cannot only be theory. You should use the theory and apply it to the hotel.
step 1:Identify the purpose of planning
step 2:Establish goals
step 3:Develop commitment
step 4:Develop alternative plans
step 5:Evaluate the different alternative plans
step 6:Implement the plan
step 7:Control and evaluating the results of the plan
To the Hotel Effectiveness management team,
In order to address the issues with gross operating profit margins, overtime, labor costs, and distribution expenses, it is necessary to follow a systematic planning process. This process consists of several practical steps that can be applied to any level of management, regardless of the complexity of the situation.
Step 1: Identify the purpose of planning
The purpose of planning for Hotel Effectiveness in this case is to improve gross operating profit margins by addressing issues such as overtime, labor costs, and distribution expenses. The goal is to find strategies that will allow the hotel to maintain its strong ambiance while reducing costs and maximizing efficiency.
Step 2: Establish goals
The hotel should establish specific, measurable, attainable, relevant, and time-bound (SMART) goals related to improving gross operating profit margins. These goals could include reducing overtime hours, optimizing labor costs, and minimizing distribution expenses.
Step 3: Develop commitment
Developing commitment among the staff is crucial for the success of the planning process. It is important to involve employees from all levels of the organization in the planning process and ensure that they understand the goals and objectives. This will help create a sense of ownership and motivate the staff to actively contribute to the implementation of the plan.
Step 4: Develop alternative plans
Hotel Effectiveness should brainstorm and develop alternative plans to address the issues at hand. This could include exploring options such as cross-training employees to handle multiple roles, renegotiating contracts with distribution partners, and implementing cost-saving measures without compromising the hotel's ambiance and guest experience.
Step 5: Evaluate the different alternative plans
Each alternative plan should be carefully evaluated, considering factors such as feasibility, cost-effectiveness, and potential impact on the hotel's ambience and guest satisfaction. This evaluation should involve input from key stakeholders, including employees, management, and customers.
Step 6: Implement the plan
Once the best alternative plan has been selected, it is essential to create a detailed action plan for its implementation. This plan should outline specific tasks, responsibilities, and timelines. Clear communication and coordination among different departments are crucial during this phase.
Step 7: Control and evaluate the results of the plan
After the implementation of the plan, it is important to continuously monitor and evaluate the results. This involves comparing actual performance against the established goals and making necessary adjustments if the desired outcomes are not being achieved. Regular communication and feedback loops with employees and customers will help ensure that the plan remains on track and that any necessary modifications can be made in a timely manner.
By following these practical steps in the planning process, Hotel Effectiveness can address the issues with gross operating profit margins, overtime, labor costs, and distribution expenses effectively. The key is to involve the entire staff, develop and evaluate alternative plans, and continuously monitor and adjust the plan as needed to achieve the desired outcomes.
To the management team at Hotel Effectiveness,
Planning is a crucial process that helps organizations achieve their objectives and navigate through various challenges. Regardless of the complexity of the situation, planning can be divided into practical steps that will assist in addressing the issues faced by the hotel. Let's explore these steps and how they can be applied to the specific context of Hotel Effectiveness.
Step 1: Identify the Purpose of Planning
The first step in the planning process is to clearly define the purpose of planning. In the case of Hotel Effectiveness, the purpose could be to address the issues affecting the gross operating profit (GOP) margins, including overtime, labor costs, and distribution expenses. This step involves understanding the current challenges and setting a clear direction for improvement.
Step 2: Establish Goals
Once the purpose is identified, it is essential to establish specific and measurable goals. For Hotel Effectiveness, the goals could include reducing overtime hours, optimizing labor costs, and minimizing guest collection and dropping costs. These goals should be aligned with the overall mission and vision of the hotel.
Step 3: Develop Commitment
Planning requires the participation and commitment of all stakeholders involved. In the case of Hotel Effectiveness, it is important to engage the management team, employees, and potentially external consultants to develop a shared understanding of the challenges and commitment to finding solutions. The commitment should be obtained through clear communication and involvement of all parties.
Step 4: Develop Alternative Plans
In this step, various alternative plans should be developed to address the identified issues. For Hotel Effectiveness, these alternative plans could include strategies to reduce overtime, optimize staff scheduling, negotiate better distribution deals, and explore cost-effective ways to handle guest collection and dropping expenses. The development of these plans should be based on a detailed analysis of the current situation and market trends.
Step 5: Evaluate the Different Alternative Plans
Once the alternative plans are developed, it is crucial to evaluate their feasibility, effectiveness, and potential risks. This evaluation should be based on thorough research, data analysis, and input from relevant stakeholders. The evaluation will help in selecting the most appropriate and achievable plan for implementation.
Step 6: Implement the Plan
After selecting the best alternative plan, it is time to implement it. This step involves allocating the necessary resources, assigning responsibilities, and establishing a timeline for execution. Communication and coordination among the different departments, especially with regards to labor cost management and distribution strategies, will be vital during this phase.
Step 7: Control and Evaluate the Results of the Plan
Once the plan is implemented, it is important to continuously monitor, control, and evaluate its progress and outcomes. Regular review meetings, budget tracking, and performance metrics can be utilized to measure the success of the plan. Adjustments and modifications should be made as necessary to ensure the desired results are achieved.
By following these practical steps in the planning process, Hotel Effectiveness can systematically address the challenges related to its GOP margins. This will enable the hotel to better manage overtime, labor costs, and distribution expenses and ultimately improve its financial performance.
Remember that planning is an ongoing process, and it is important to continuously reevaluate and adjust the plans as circumstances change. With a structured approach to planning, Hotel Effectiveness can overcome its current challenges and achieve sustainable success.
Please let me know if you need any further assistance.
Best regards,
Step-by-Step Bot
To effectively explain the steps in the planning process to Hotel Effectiveness, I would provide a practical approach that applies the theory to their specific situation.
Step 1: Identify the purpose of planning - The hotel needs to understand why planning is important and how it can help address their current challenges. In this case, the purpose would be to improve the hotel's gross operating profit (GOP) margins, reduce overtime, labor costs, and distribution expenses.
Step 2: Establish goals - Together with the hotel management team, we would set specific, measurable, achievable, relevant, and time-bound (SMART) goals. For example, the hotel could aim to reduce overtime hours by 20% within the next six months or decrease guest collection and dropping costs by 15% through more efficient routing and vendor management.
Step 3: Develop commitment - It is crucial to ensure that all relevant stakeholders, including the hotel's staff and management, are committed to the planning process and the established goals. This can be achieved through effective communication, collaboration, and providing incentives for participation and achievement.
Step 4: Develop alternative plans - Brainstorming sessions with the management team can generate a range of alternative plans that address the identified challenges. These could include implementing strategies to enhance labor productivity, renegotiating vendor contracts to counter rising fuel prices, or exploring new revenue streams with targeted marketing campaigns.
Step 5: Evaluate the different alternative plans - Each alternative plan should be carefully evaluated based on its feasibility, potential impact on costs and revenue, and alignment with the hotel's overall vision and goals. Financial analysis, market research, and input from relevant departments and staff can help in this evaluation process.
Step 6: Implement the plan - Once the most promising alternative plan has been selected, it must be effectively communicated and executed. The hotel's management team should allocate resources, assign responsibilities, and create a timeline for implementation. Regular monitoring and feedback mechanisms should also be established to ensure progress.
Step 7: Control and evaluate the results of the plan - Regularly measuring and evaluating the results is crucial to determine the success of the implemented plan. Key performance indicators (KPIs) related to cost reduction, labor efficiency, and revenue growth should be monitored and compared against the established goals. Adjustments may be required along the way to maximize the effectiveness of the plan.
By following these steps, Hotel Effectiveness can develop a comprehensive and tailored planning process that addresses their specific issues related to GOP margins, overtime, labor costs, and distribution expenses. The practical application of these steps will help the hotel align its resources, set clear goals, and implement strategies to achieve sustainable improvement in their financial performance.