Year 1-2-3-4: Difference between revisions
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====7. Staff development costs==== | ====7. Staff development costs==== | ||
No costs made on this in the past: 0 or N/A means not available.<br> | No costs made on this in the past: 0 or N/A means not available.<br> | ||
Apart from the salaries, extra costs can be made for this. This can be spent on necessary skills and resources to support the [[staff]] member's career goals and the | Apart from the salaries, extra costs can be made for this. This can be spent on necessary skills and resources to support the [[staff]] member's career goals and the organisation's business needs. This will be things like training, developing skills or for instance courses on hospitality. | ||
''<br><font color="green"> → '''Limitations'''</font color="green">''<br> | ''<br><font color="green"> → '''Limitations'''</font color="green">''<br> | ||
''You can use any amount between € 0 and € 100,000 per year, to protect your hotel from high impact of too extreme changes.''<br><br> | ''You can use any amount between € 0 and € 100,000 per year, to protect your hotel from high impact of too extreme changes.''<br><br> | ||
Revision as of 14:17, 16 June 2023
The Team File is crucial to your team in managing the hotel. In this Team File you will find 4 tabs:
- tab Year 0 where you do all your Strategic choices, introduce your hotel, strategy etc.
- tab Year 1-2-3-4 where you take your decisions each year and give explanations each year, after your Strategic choices in Year 0.
- tab Dashboard where you can find an overview of the most important financial results
- tab Results where you find an operating review and other details on results and costs after each year
After a year has passed, the new dashboard and the results will only be visible after releasing by your coach.
There is a Example Team File you can check, with a completed Team File at the end of an example Game.
Each competition is set-up is a specific way: so check your competition's assignment and timeline for details.
You will see some 'locked' symbols on the tabs of your Team File: don't worry. On the tabs year 0 and tab year 1-2-3-4 you can edit in the indicated cells. Do be careful in handling the file, it is a spreadsheet.
The tabs Dashboard and Results you can never edit.
Team File tabs Emerald Forest Hotel
Working on your decisions Year 1-2-3-4
Christina Bergman has decided that she only wants to be informed of the highlights of your choices. Therefore, the number of items you can decide upon is limited. These decisions need to be filled out on the tab Year 1-2-3-4, each year. Year 0 is the year when you take over, so Jill's last year as CEO. Most of the decisions, regarding costs e.g. have already been made. She did not spend any money on some of the expenditure groups, such as marketing. So you will see the indication N/A, not available or 0.
Rules on the decisions and further information on their limitations. You might have a brilliant other plan, but it has to stay within these limitations.
- Please take into account that your hotel has 364 days and nights per year (52 weeks * 7 nights)
- The basic occupancy rate of your hotel is 50%
- The number of rooms in your hotel is 100
- The weekend days are 43% of the total number of nights (rounded)
- The weekdays are 57% of the total number of nights (rounded)
- The average number of guest in a room in the weekend days is 1.7
- The average number of guest in a room during the weekdays is 1.0
- We completely refrain from (adding) VAT and or other taxes on profit
- You can not change the number of rooms of your hotel
- You can not sell the property
- You can not 'spend' or use profit (or cash flow) or do other or bigger investments then indicated
- The effects of all of your decisions only last for one year (unless it is an investment)!
List of decisions
Underneath you will find the list of 10 decisions you will have to make each year (and enter in your Team File). Adapt the decisions to your new plans and strategy each year.
The explanations of your decisions are very important and account for the biggest part of your occupancy and so your results. Also, make calculations in your explanations, to justify your choices.
- Ranges
In all decisions, there are a few ranges to make it possible for you to make your decisions appropriately and to prevent you from going bankrupt. Managing this hotel is more than just filling out numbers in a spreadsheet, therefore you have to explain your decisions in your Team File, and we encourage you to behave like an entrepreneur throughout the entire game.
- Price systems, rates
You can use psychological pricing, flex prices, dynamic pricing, revenue management or whatever system you want to use in your decisions. The better your explanations in your Team File (and especially your calculations), the higher your coach will rate your business mark, the higher your occupancy rate. The more change your stand having the right prices and costs, to make an attractive profit.
- Euros
Only make your decisions in whole euros, don't use cents or other currencies. In filling out the amounts do not mix up comma (,) just use the numbers also do NOT use decimals! Not on prices and not in costs
Five Management Team decisions on (sales) prices, creating revenues
As you can see in the example: if you mouse over the description of the decision (like cell B8 in this example) you will get more information what the decision is all about. You are allowed to fill out the pink cells according to the instruction.
You will have to decide what prices you will charge (per room per night) for hotel's weekdays or weekend days which serve the markets. In the pages on room you can read a bit more on the history as well as in the page on prices. Depending on your performance as a team and your choices made, you will get a certain occupancy rate and so a number of guests. These guests prices will bring your revenues in each of the five revenue categories, depending on the prices decided upon and this occupancy rate. So setting the prices too low (think of your cost price) will bring your , even with a very high occupancy rate, maybe revenues, but hardly any profit or even loses.
We offer you just 5 possibilities on types of prices to decide on: we realize that there is many, many more. But, to keep thing logical and inline, you will have to do with these five.
You can not influence how many people will stay in the room.
→ Limitations
Strongly recommended: never change any of the five price more than + or -20% per year to protect your hotel from high impact of too extreme changes.
1. Weekend last-minute room-price (rate) per night
In the past, the average price was € 80. The last-minute price is the minimum price you will accept to fill up the empty rooms, the gaps in your occupancy.
2. Weekend rack rate room-price (rate) per night
In the past the average price was € 100. The rack rate price is the highest price you will get.
3. Weekdays last-minute room-price (rate) per night
In the past the average price was € 100. The last-minute price is the minimum price you will accept.
4. Weekdays rack rate room-price (rate) per night
In the past the average price was € 140. The rack rate price is the highest price you will get.
5. Banqueting and other activities price (rate) per person per day
In the past the average price was € 28. You can not skip this activity totally, so price 0 is not allowed. The occupancy rate of the rooms also has impact on the numbers of booked banqueting arrangements and other activities.
Other ideas
Of course there is many other prices next to last-minute and rack rate possible. We focus on the total of five price settings: rather explain them more in depth and find benchmarks for this and give links arguing why you chose these prices for these target groups.
If you think a specific, different prices is absolutely necessarily, use the marketing costs, or other costs, to promote this. Use the row Extra Information for your coach for explaining your plan. Then be sure to make calculations on costs and revenues and predicted additional revenues compared to the normal situation. Your coach might reward this with a bonus, if consistent, well-thought over etc. If so, you could find additional results from this at the bonus or fines (row 51-52). This will always be profit or losses, not revenues. But please (first) focus on the regular opportunities, they are plenty.
Five Management Team decisions on costs to be made
Of course, you cannot influences the Fixed costs which are in your operating review, nor can you influence the variable costs: they are set by your occupancy rate.
Other things you will have to make decisions upon decisions 6 till 10. This will create costs you decide on and which will be visible directly in your operating review after any year. On mouse over in the file you'll get more info on these choices. All these decisions bring extra costs compared to the past, as Christina did not spend money on these elements in the history. Try to explain, at each and every form of costs what you expect that it will bring you. So, how will you earn back these costs and what will it bring additionally? All costs will have effect just and only in the year as you make them. For maximum effect you will have to repeat them.
In case you think you have an idea like this, please also explain this to your coach at the end of your Team File.
6. Marketing costs
No costs made on this in the past: 0 or N/A means not available.
This is the total spending for all paid marketing actions in the past: maybe this is on the shy side? There was very little going on at the Emerald Forest Hotel, especially nothing on social media or affiliates and also not in bartering. So this part is also aiming at distribution and partners. You could also include costs related to clean air, to green energy, to social responsibility, ecological footprint etc. So, probably this is a decision you can not afford to leave out.
→ Limitations
You can use any amount between € 0 and € 200,000 per year, to protect your hotel from high impact of too extreme changes.
7. Staff development costs
No costs made on this in the past: 0 or N/A means not available.
Apart from the salaries, extra costs can be made for this. This can be spent on necessary skills and resources to support the staff member's career goals and the organisation's business needs. This will be things like training, developing skills or for instance courses on hospitality.
→ Limitations
You can use any amount between € 0 and € 100,000 per year, to protect your hotel from high impact of too extreme changes.
8. New investments
No costs made on this in the past: 0 or N/A means not available.
You can choose to spend a maximum of € 900,000 each year on additional investments. This investment is the number you should fill out in your Team file decisions. The depreciation costs related to this NEWLY planned investments will be visible after each year in your results, as depreciation costs of new investments. And, as you can see on the footage available, the hotel is in need for some additional investments in the rooms, facilities etc.
Check the specific investments page on this. In your decisions you fill out the investment itself: you will find the corresponding depreciations on your operating review. All your investments will be linearly depreciated in 4 years without any residual value; there is no choice in this. So you fill out the investment itself. The depreciation costs during all four operational years will be calculated by the program. There will be no other costs of new investments, like interest. For the rest see the max numbers in the table underneath. So if you want to invest € 900,000 in year one, fill this out and the system will create € 225,000 (row 44 tab results) in year 1 as depreciation costs. And later also for the other years to come.
Investments have direct effect in the year they are done, so you can make them in any year of the game, including the last year. So an investment will have effect during more years: four to be precise.
The costs of equipment and furniture buy in hospitality totally different from what you would buy privately (at the Ikea): realize that. There is standards of safety, usability, hard-wearing, cleaning, safety and many other reasons to buy professional material.
→ Limitations
You can do any investment with a maximum of € 900,000 each year. So over four years you can invest a maximum of 4 x € 900,000 = € 3,600,000. The costs of this will be the depreciation, automatically calculated and always linear over four years (a simplification, no residual value, no interest, but still). The maximum is built in to protect your hotel from too extreme changes and costs.
9. Market research package costs
No costs made on this in the past: 0 or N/A means not available.
These are the cost of buying information from Top Research which will be analysing the past year and it will be visible, if bought, on your results tab after any year. It will give you a benchmark on the prices asked in the market (small package) as well as the costs made in the market (large package).
→ Limitations
You can use chose the amount from the choice box so € 0 buys you no information, € 25,000 buys you for the small package and € 50,000 gets you the large package. Elements not paid for will show up in your operating review as 'Not bought'. Make sure you explain very clearly in your explanations why you think buying this will benefit your company. The company Top Research will carry out the research and report to you.
10. Other costs
No costs made on this in the past: 0 or N/A means not available.
This could be anything apart from the groups mentioned above. So things like supporting the distributions chain, cooperation with partners, maybe costs or legal issues. Maybe a contribution to tourist information offices activities.
Make additional calculations explaining the profit it might bring. If you explain pro's and con's and the costs and the results and the expected additional profit of a specific action, your coach might reward this with a bonus. A bonus is net, it is directly added up to your profit in a year.
→ Limitations
You can use any amount between € 0 and € 100,000 per year, to protect your hotel from high impact of too extreme changes.
A year has passed
Once a year has passed, you input will be processed. You are not allowed to change the content anymore. You will also see, that the year that has passed, will be greyed out. On top of the column with the year passed, will be indicated 'Year x - Completed'.
A year has passed.
No decisions or no explanations
If any team fails in delivering the decisions or explanations before the deadline this is a serious problem. This could end in a low business mark and as this is an essential part of the algorithm bringing you clients, also jeopardizing your occupancy rate. You might also get fined.
After all, you argumentation is assessed by the coaches, your dashboard will be made up. You will only see the results after the coach has 'released' them. Which is done in a plenary meeting.
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