Costs Management Team Decisions

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Structure of the costs groups

In the example file at the tab results there are three major groups of costs. On mouse-over the firsts cells with the small black triangle, you will get additional information on the numbers.

Example of all costs data in the last available year, history, and testing four years ahead.

As you can see in this example above which shows the operating review of a example team after four years: the history we know for sure (these data are available), the other four years are just an impressions how things might develop:

• the fixed costs have stayed the same during all four years, the fixed depreciation costs are one of them.
• the variable costs depend on the occupancy rate like laundry: the more rooms occupied the more laundry.
• the Costs Management Team Decisions, will depend the decisions made by the new management team.

The is a Demo Team File which shows what a Team File, with all decisions and results look liken, after all rounds-years played in Game.

Overview of total of the costs of Management Team Decisions

Let's check the costs related to the decisions you took for the hotel. At the moment you take over they are none: in the picture the grey area. In the table underneath the green numbers.

Costs
Costs: fixed	Depreciation costs of existing assets	€ 525,187	34.64%
	Fixed staff costs	€ 550,271	36.29%
	Costs of premises	€ 390,473	25.75%
	Insurance & interest costs	€ 50,012	03.29%
Total fixed costs		€ 1,515,943	100%	62.36%
Costs: variable	Variable staff costs	€ 355,170	38.95%
	Laundry costs	€ 118,390	12.94%
	Cleaning costs	€ 236,780	25.88%
	F&B purchase costs	€ 204,312	22.33%
Total variable costs		€ 914,652	100%	37.63%
Costs: team decisions	Marketing costs	€ 0	00.00%
	Extra staff development costs	€ 0	00.00%
	Extra depreciations costs	€ 0	00.00%
	Market research costs	€ 0	00.00%
	Other costs	€ 0	00.00%
Total team decisions costs		€ 0	100%	00.00%
Total all costs		€ 2,430,595	€ 2,430,595	100%

As you take over the hotel, there are no expenditures on this costgroup. So all expenditures in this part will come extra next to the existing ones. So these are the only costs the new management team can influence directly.

Explanations on this

All of the new decisions decisions (numbers 6 -10) in this group, lead directly to costs. They are directly connected to the situation the family Bergman explained: they have been neglected. As you can see in the past there were no costs made regarding these decisions. Of course, this was good for the profit but it will come back like a boomerang! So the family urges the new management to use this costs group team decisions in an efficient way. The screenshots just show a few years as example during some testing with the accountant. The history is the only valid, last year's result.
Most important, neglected elements in the situation on Emerald Forest Hotel:

• Marketing costs
• Staff development
• Depreciation costs of the new investments
• Market research costs
• Other costs

Running a hotel

In the file Running a hotel we've gathered some benchmarks, examples of cost overviews, operating reviews etc. from different organisations. Of course, any situation is different, any time frame (think of the Covid period), the owners ship, the state (quality) of the premises etc. The file, though, this might give some ideas from a calculative perspective.

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Emerald Forest Hotel offering an emerald hotel experience! | Run your own hotel in this management simulation.