49NL Year 3 Business assignment

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Decisions on prices and costs year 03

Check the page Year 1-2-3-4. During the years you have to take several decisions

  • on prices (five decisions)
  • on costs to be made (five other decisions)

Situation

On the page operating review you can see how the Emerald Forest has been managed in the past. You take over the hotel and have already chosen a new strategy. Now you choose the prices (five of them) which will bring revenues and the costs you are going to make on five specific choices.
All choices and boundaries are explained on the page Year 1-2-3-4 decisions. You will make all these decisions now for this year. After having seen

  • the results in your operating review of the years passed
  • read the info on this platform
  • making your plans and calculations

Your Team makes new decisions regarding year 3 in your Team File.

Tab year 1-2-3-4 in your Team File. Just an example of the five decisions on prices. The same goes for decisions on costs. The 'active' year will be 'yellow', a year which has passed will be greyed-out. Mouse over in row B gives you more info on the decision. You will also get an alert if the input is not okay. Be sure to explain in depth, with sources! and arguments and preferably calculations.

Goal

Keeping your decisions in alignment with your new strategy and your new customer segment(s) and its evolving behavior. Try to see the logics between your pricing, the occupancy rate and your results. Keep the Cost price in mind as well.
Your focus remains on the execution of your strategy while positioning your hotel to drive and sustain business growth and profitability in the long run. So, keep your professional hat on managing a good balance between prices and its related total costs (incl. new costs).

Deliverable

Fill out all ten decisions in your Team File, once more.
Most importantly, that you provide adequate and sound arguments behind every decision i.e., Why did you choose them?
Try to find benchmarks, (comparative sources), put URL or links in, make basic calculations, try to predict the outcome of your decisions. Particularly, when you are looking at costs as these will be incremental:

• exactly what are you going to spend the money on? and,
• what benefit do you think it will bring to your hotel? Be concrete, also share your calculations if and when necessary.

This is the second year, so you will have to foresee and support the type of costs that would enable you to drive and sustain growth and profitability while learning from the market responses.

Assessed elements

  • Are all choices made and within the boundaries set?
  • Is there a clear link to the strategy?
  • Are the arguments valid?
  • Is it clear what the costs are spent on exactly?
  • Are there basic calculations done to show the effect of the choices at each choice?
  • Is there is an established link to year 1 &2 and any new business insights that you can support?

Additional information


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