Operating review
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What can you do?
In the game you have a number of possibilities to influence your hotel.
- The Team file which you have a private login link to. In this file you present your strategy and the links to your web site and social media. In this file you also do all your explanations of your decisions.
- Your Team finances spreadsheet: only accessible with your private link via your Team file, any hotel has its own. None of this is visible on the platform. In this file each hotel can follow:
- tab 1 the decisions tab where you fill out your decisions on prices and expenses
- on this page you have to confirm at decision 14 that your decisions have been accounted for in depth in your Team file.
- tab 2 the results tab where your hotel finds its results after each year, only after releasing by your coach.
- tap 3 for additional calculations which can be handy in some cases.
- tab 1 the decisions tab where you fill out your decisions on prices and expenses
- The social media, websites etc. (on the first page of your Team file there should be links to all your social media and website(s) used)
- Other live actions of your team: sometimes required, like the Trade Fair but maybe also at your own initiative.
A version of the Team finances is available at
example Team finances team Z01
You can not edit this example.
The requested explanantions for this demo-team Z01 - not filled out - are part of the Team file is available at:
example team Z01 Team file part explanations
We know look at the financial results you will get each year as ell as the and some coach comment.
All results
There are also pages on the revenues per room: RevPOR and RevPAR.
The results of your hotel will be calculated automatically by the accountant of your hotel. You just have to analyse the results, you do not have to calculate them yourselves. The prologue gives you information on how the hotel performs as you take over, you can not influence this, of course.
After each year they will be ready for you in your Team finances via the link in your Team file.
Your results presented there will be divided into the next parts:
- The results, the operating review with
- The Revenues
- The Costs: divided in costs fixed, costs variable and costs of your team's decisions
- Net profit
- The elements Key metrics, Market information from Top Research and Short comment of your coach are explained in separate pages.
How many costs can you make? How much can you spend?
Have a look further down in this page. In the past there was a total of € 2.430.595 of costs made. Part of this is fixed costs. The profit was € 436.307. So if you make new additional costs an indication is that this should not be more then last years profit. But, if you have more occupancy or higher prices, you will have more revenues an can spend more. So in the simulation we have limited the costs to a maximum: if you spend all to the max you can spend is an additional € 850.000 and with maximum investments up to € 1.225.000 in year 04. So, as in reality, the options are very uncertain.
Operating review
Please take into account that your hotel has 364 days (not 365) and some figures are rounded, we never use decimals, neither should you.
At the end of each year you will find in your Team finances on the tab Results your operating review. Your team (and your coach) are the only ones who can see these results. If a year has passed, you will see your results, as soon as they have been released by your coach.
You do not have to calculate anything in this operating review yourselves. You only take the decisions and the rest is automatically calculated for you. An extended algorithm calculates your occupancy rate depending on your decisions, your coach's mark (related to the quality of your explanations), the demand in the market and many other elements. Depending on your occupancy rate, you'll get more food & beverage and other revenues as well.
All the fixed and variable costs will automatically be calculated related to your occupancy rate and your decisions. The costs of your team choices will also be automatically brought to your operating review and will be visible here as well. So the operating review brings you the financial results of your hotel.
Revenues
Revenues consist of the average (sales) prices times the number of booked rooms (occupancy rate). You can influence the prices, because you set them, while the occupancy rate is defined by all of your decisions and your explanations through an algorithm. The mark your coach gives to you for your performing as a team is influencing your occupancy rate heavily. The maximum occupancy rate would mean all 100 rooms occupied during all days, so 52 weeks x 100 rooms x 7 days = 36.400 room nights which is an illusion.
Check the situation for real via benchmarks and you will se that the margin in somewhere between 50% to 70% occupancy rate.
All food and beverages are considered to be caused by these guests: so the higher the occupancy rate, the more revenues you get from food and beverages.
Banqueting is a totally separated unit in the hotel. The sales prices in the past varied from a minimum of €25 to a maximum of € 30 per person. You decide on the price of banqueting, so you do have some control. This gives you an indication: on the Banqueting page you can find some more info, pictures and videos on banqueting.
The above situation is just an example of the revenues as they will be shown in the complete operating review. So this example shows the history (column B, prologue) which is the same for all teams as they start. After each year the next column (so the next year) will be available and filled out automatically. In this example this is just year 1 in column C. In the example all years have been filled out.
Underneath you'll find an overview which gives some more insights into the revenue structure, as far as information is available in the Bergman's administration. This all reflects the year before you take over, this will be your starting position.
| Revenues History | ||||
|---|---|---|---|---|
| Rooms | Rooms revenues weekend | € 704.340 | 24,56% | |
| Rooms revenues weekdays | € 1.244.880 | 43,42% | 67,98% | |
| Food and beverage | F&B revenues weekend | € 266.080 | 9,28% | |
| F&B revenues weekdays | € 414.960 | 14,47% | 23,75% | |
| Banqueting | Banqueting revenues | € 100.123 | 3,49% | 3,49% |
| Other revenues | Other revenues | € 136.519 | 4,76% | 4,76% |
| Total revenues | € 2.866.902 | 100% | 100% |
Operating review costs
The situation below is just an example of the costs as they will be shown in the final operating review. So this example shows the prologue(column B) which is the same for all teams and as you take over. After each year the next column (so the next year) will be available and filled out automatically. In this example this is just year 1 in column C.
Underneath you'll find an overview which gives further insights into the cost structure as far as information is available in the Bergman's administration. This all reflects the situation as you take over, this will be your starting position. So this is all about the prologue.
| 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 expenses | € 0 | 00,00% | |
| Extra staff rewarding expenses | € 0 | 00,00% | ||
| Extra depreciations costs | € 0 | 00,00% | ||
| Environmental expenses | € 0 | 00,00% | ||
| Additional maintenance expenses | € 0 | 00,00% | ||
| Market research expenses | € 0 | 00,00% | ||
| Other expenses | € 0 | 00,00% | ||
| Total team decisions costs | € 0 | 100% | 00,00% | |
| Total all costs | € 2.430.595 | € 2.430.595 | 100% |
The different costs groups are all mentioned in the operating review table above.
- Costs: fixed
You can't influence these costs at all. These are costs which will be created no matter what the occupancy rate is. Over the years there can be small fluctuations, but the amounts will stay almost the same.
- Depreciation costs of existing assets: depreciations of all the assets especially the building and the inventory.
- Fixed staff costs: staff needed to run the hotel and which have to be paid even if there are no guests at all.
- Costs of premises: costs of maintenance, repairs small adaptions to the building and the parking lots.
- Insurance & interest costs: costs for insurance for staff, building an liability and costs for mortgage and other loans.
- Costs: variable
The variable costs will depend on the actual number of guests in the hotel so will only be filled out (automatically) after each year is finished. So there is a ratio between occupancy rate and all of these costs. You can't influence this, but it will be influenced by the occupancy rate you have created with your way of managing.
- Variable staff costs: the more guest you have the more work here will be to be done and the more staff is needed. So additional costs.
- Laundry costs: the more guest the more towels, bed linnen etc. needed.
- Cleaning costs: rooms need to be cleaned more often because of more guest and to be cleaned better.
- F&B purchase costs: more guest mans more breakfasts etc. for guest and more f&b for additional staff so the purchase costs go up.
- Costs: team decisions
All of your decisions numbers 7 -13 lead directly to expenses which can be seen directly at the costs side as expenses. They are directly connected to the choices you make in your decisions each year. As you can see in the past there were no expenses on these decisions. Of course this was good for the profit but it will come back like a boomerang! So Christina urges you to use this costs group team decisions in an efficient way, though she knows this will probably lower the profit!
Net profit
The total costs will be deducted from the revenues. If there is a bonus or a fine this is added or deducted from the profit leading to the net profit. There is no VAT or other taxes in the city. There is no reserve and as their is no liquidity in the game, there is no need for spending them. The balance sheets just show the individual profit of each year in the operating review and the total of the net profit over the years. No worries about liquidity: you can invest and pay, though you can't see the proper balance sheets.
In this example on taking over (prologue)
-Total revenues were € 2.866.902
-Total costs € 2.430.595
-Net profit € 436.307
For instance in year 4 there is a bonus in this case € 106.491 so this is added to the profit.
So the net profit on taking over seems to be 15,21% of the revenues, a good and interesting result.
But, the management did not make enough investments over the recent years, so the depreciation costs have been kind of low. There is no problem with liquidity at all.
Furthermore the Bergmans did not really consider themselves to be staff, so there are hardly any wages for them in the staff costs. Their income mainly originated from the net profit which they, partly, took out of the company, being the entrepreneurs.
Net profit index
Each year you will see the net profit index of your team. This reflect how your team is doing, comparing to the total of the market. The index starts at 100. If your results are above 100 you are 'beating the market', or outperforming the market. If in a year the index goes goes down or below 100, you are not necessarily doing a bad job, it is just that compared to the total market your net profit is not matching their growth or your dip is deeper then theirs.
Ranking
The position you have each year is reflected here.
Their is ranking on the total net profit, so you can have any position depending on the number of hotels in your city.
Their is ranking on creativity, this is linked to what you have done in all of the years related to creativity and evaluated by your coach. You can have any position depending on the number of hotels in your city.
Coach comment
In your Team file you will find some basic information per round as a feedback from your coach. With your ranking and other elements this gives you an idea how your hotel and your team is performing.
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