Round 5-Team Goodness

Profitability ratios and Analysis

Gratitude Aspiration Courage Perseverance Goodness

Profitability, $ 0 0 0 0 0

EBIT % 16.42702 23.80124 9.013721 24.49708 25.30422

Net income 23785.13 39481.21 13905.44 44718.97 48467.51

Gross Operating
Profit Per
Available Room
(GOPPAR) 34.96003 38.00828 18.91675 37.97195 38.75152

GOP conversion
(%) 0.434394 0.241929 0.274423 0.254303 0.072729

Revenue and
costs split by
function Gratitude Aspiration Courage Perseverance Goodness

Hotel revenue 163516.5 169881.8 148888.4 188510.2 192087.8

Room rental 145377.4 154422.4 135096.2 168748.5 165562.8

Additional hotel 19761.68

revenue

18139.14 15459.39 13792.2 26524.95

Total revenue 218 866 245 265 242 289 268 843 281 430

Above are some key figures of the Hotels Performance. In the above figures, the Net income for
team Goodness is 48467.51and the total Revenue is 281 430. So, the formula for the profit margin
is Net Income/Total revenue.
So, Profit Margin will be. 48467.51/281 430= 0.172 or 17.2%.
That means that the profit margin for team Goodness is 22.2% which implies that for every $1
sale, there is profit of 17 cents. A high profit margin not only ensures adequate returns to the
owners, but also enables a hotel to holdup against adverse conditions like price rise, escalating
costs or declining demand. A lower net profit has reverse implications during unfavorable
conditions.
At the same time, lower profitability does not necessarily mean that the hotel is facing financial
crisis. Hotels with low profit margin can earn a high rate of return with high inventory turnover.
Return On Investment
Operating costs Gratitude Aspiration Courage Perseverance Goodness

Personnel costs 82714 81863.2 106287.8 80590 91135.2

Outsourcing
costs (HK,
breakfasts,
improvements) 15017.11 14401.8 13665.82 18016.85 19086.82

Purchases 41626.86 47198.63 58895.51 47845.79 51551.06

Other variable
costs 15054.44 14425.02 13100.46 16531.38 19943.09

Other fixed costs 13500 14000 13500 25000 13500

Total operating
costs 167912.4 171888.7 205449.6 187984 195216.2

The Formula for return on investment is,

So ROI for team Goodness will be, 281 430-195216.2/195216.2= 86214/195216.2* 100 = 44.1%
Return On Assets
Formula with example:
Assets Gratitude Aspiration Courage Perseverance Goodness

Property and
equipment 2910000 2910000 2910000 2910000 2910000

Inventory 20947.37 5428.976 21210.78 7329.11 8735.315

Receivables 31266.5 35037.82 34612.69 38406.08 40204.26

Cash and cash 360541.7

equivalents 316059.2 363730.9 333968.2 329680.3

Assets total 3278273 3314198 3299792 3316277 3288620

ROA= 48467.51/3288620*100=1.4%
A very low profit may be the result of inadequate profits or excessive assets. A very high ROA
may indicate supplementing the existing assets. High or low ratios can be ascertained by
benchmarking against industry average.
So the ROA got team Gratitude, aspiration, courage and perseverance are .72%,1.1%,.42%
and 1.3% respectively. So when looking at the performance of team Goodness, its good and is in
the flow with other teams.
Return on Equity

Equity Gratitude Aspiration Courage Perseverance Goodness

Share capital 840000 840000 840000 840000 840000

Retained
earnings 193273 209525.2 187134.1 190271.3 151633.6
Net income for
the period 23785.13 39481.21 13905.44 44718.97 48467.51

Equity Total 1 057 058 1 089 006 1 041 040 1 074 990 1 040 101

A major profitability ratio that compares profit of the hotel to the owners investment is calles
return on equity (ROE).
The ROE for team goodness is 48467.51/1 040 101=4.6%.

Revenues, $ Gratitude Aspiration Courage Perseverance Goodness

Average Daily
Rate (ADR) of
Rooms Sold 105.6522 112.2419 109.0365 113.2449 98.02418

Revenue Per
Available Room
(RevPAR) 74.17212 78.78692 68.92664 86.09616 84.47084

Total revenue 113.7287

per occupied
room per night
(RevPOR) 118.8347 123.4785 120.1682 126.5067

Revenue per
restaurant
customer 24.83131 26.77902 30.81505 26.27819 26.61364

Costs, $ Gratitude Aspiration Courage Perseverance Goodness

Hotel costs per

available room
per night 44.78207 45.34976 53.37734 54.92609 55.58306

Hotel costs per 72.24595

occupied room
per night 63.78841 64.60643 84.43872 64.50136

Average Daily Rate-It is a KPI to calculate the average price or rate for each hotel room sold for a
specific day.
It is one of the most common financial indicators to measure how successful the performance of
the hotel is against other hotels that have similar characteristics such as size, clientele and location
and/or its own previous figures.

It is a Hotel KPI calculation that shows the percentage of available rooms or beds being sold for a
certain period of time.

It is important for hotels to keep track of this data on a daily basis to identify the average daily
rate, forecast and apply revenue management.

The ADR for rooms for team Goodness is one of the lowest when compare to other teams and
when we look at the occupancy percentage all the hotels it is 86%. So in this case team Goodness
must have gone for much higher

rates as the financial conditions of the goodness was not good during the last rounds and keeping
much higher rates would have very much beneficial for team goodness.

Team Goodness may face adverse situation due to lower ADR because lower ADR may affect the
image of the hotel badly and it may affect the brand standards of the hotel.

The number of rooms available for a hotel to sell or distribute across all channels is called an
Inventory.

An Inventory makes it possible to control what type of rooms and how many you make available
to a particular market segment.

Sometimes, a hotel may want to make accessible a certain number of rooms to a particular market,
for example: a group of business people who wish to use the hotel's conferencing facilities over a
two- or three-day stay. After making this group booking, the hotel can enter into their Inventory
book the number of rooms filled. Based on this information they can then adjust their prices for
the remaining available rooms in the hotel, if they need to.

Most hotels have an Inventory. In fact, not to have one is a poor business decision, as knowing
room availability at all times can be useful when making rapid decisions. When looking to
maximize profits, having room availability data at your fingertips can give a hotel a competitive
advantage in the marketplace.

This is again one of the very big factor came out for team Goodness. Although team goodness
keeps a very high amount of future boking in their books but at the same time Goodness needed
more inventory in this level because the demands for the rooms had reached the skies and no matter
what the hotel was going to attract many customers.

REVPAR stands for: Revenue Per Available Room

RevPar is a very classic KPI and regarded as one of the most important financial calculations for
any hotel to see how much revenue they have made within a certain period of time.

When an analysis is carried out, RevPar figures can be compared to RevPar of the hotel during the
same time frame of the previous years or to its compset.
 How do you calculate Revpar?

RevPar Formula: REVPAR = Rooms Revenue / Rooms Available

With RevPAR you can only evaluate your income as a percentage of room sales, not including any
other factors that also take account into making profitability (like toursales, room service, and
spa bookings).

RevPOR stands for: Revenue Per Occupied Room

RevPOR, unlike RevPAR, considers revenue per occupied room which gives you a better
understanding of how much profit you make from the guests who actually stay at your property.

When we compare the RevPor of team Goodness and the costs for per occupied rooms it is $114
and $ 64 respectively. But when we see some other teams they have kept the higher ADR and even
though their rates are high they managed to get higher profits in the rooms. So playing with high
ADR can a good thing for team Goodness in future rounds.

One more thing came into notice in this round is the cost of per occupied room has been increases
from the last round. And the margin is also high. Team should look for measures and keep the
cost reduced.

Restaurant Operations

Restaurant
profitability Gratitude Aspiration Courage Perseverance Goodness

Revenue 55349 75382.95 93400.42 80332.43 89342

Costs 72917.56 76503.13 93638.01 73898.89 79081.36

Contribution -17568.6 -1120.18 -237.589 6433.542 10260.64

Contribution per
unit ratios
Contribution per 516.7504
staff member -1098.04 -77.2536 -15.8498 796.6337

Contribution per
customer -7.88181 -0.39793 -0.07839 2.104528 3.056491

Contribution per
seat -219.607 -14.0022 -3.95981 107.2257 128.258

The restaurant for team Goodness flourished this round whereas most the other teams struggled to
earn any profits. The restaurant of team Goodness has really managed to reduce the costs at a high
rate.

Total by function (excluding managers)

Desk 9.5 6.93 10 7.85 12
Housekeeping 7.27687 13 16.5 15.6 14
Kitchen 12 9 7.99 6.85 6.88
Dininghall 4 5.5 7 5.6 6
Maintenance 3 3 3 3 3

Contribution per Staff is Profit (or Loss) per Employee quantifies what value, as reflected by profit
or loss, employees contribute to the organization. This calculation removes all expenses to provide
a measurement that demonstrates what profit (or loss) human productivity generated over a period
of time.
Profit (or Loss) is calculated by taking Total Revenue and subtracting out all operational expenses
(Direct and Non-direct non-personnel costs) and human cost expenses (Direct Personnel Costs)
This is divided by the number of Full Time Equivalents (FTEs).

Profit per Employee =

( Revenue - Total Operating Expenses [before taxes and interest] )
Total Number of Full Time Equivalents (FTE's)

So when we look at the contribution per staff member it is pretty good for team goodness and one
of the highest among its competitors.

Restaurant menu
details Gratitude Aspiration Courage Perseverance Goodness
Dish 1: main Chicken
ingredient Chicken Salmon Chicken Salmon(pr)

style Salad Salad Salad Salad Salad

speed Normal Fine Fine Fine Normal Least

Price 12 12.95 13.99 9.99 12.5 sold

Dishes sold 323 492 419 759 334

Dish 2: main
ingredient Beef(fz) Chicken Beef Chicken(pr) Salmon(pr)

style Stew Stew Stew Stew Oven Baked

speed Normal Normal Fine Normal Fine

Price 20 15.85 24.65 13.99 21

Dishes sold 235 469 490 507 891

Dish 3: main
ingredient Game(fz) Beef(fz) Salmon Beef(pr) Beef

style Fried Oven Baked Oven Baked Oven Baked Stew

speed Normal Normal Fine Normal Normal

Price 25 25.15 22.99 24.99 20

Dishes sold 1064 357 753 443 515

Dish 4: main
ingredient Salmon(pr) Game Game Game Game

style Oven Baked Fried Fried Fried Fried

speed Normal Fine Fine Fine Fine

Price 19 26.45 30.99 29.99 28

Dishes sold 607 1497 1369 1348 1617

Beverage
selection Typical Wide Typical Parade Typical
Margin, % 75 73 70 75 80

Beverage sales
total 8640 13003.7 15723.33 14160 10880

Inventory
For managing inventory, team goodness should keep in mind the following two things which can
help the team to reduce some costs to some extent.
Firstly, from the inventory report it is visible that there are lots of unplanned extra purchases. The
team goodness should do forecasting accordingly and order raw materials because as per my
interpretation there are lots cost incurred by last minute order.
Secondly, the restaurant should have no spoilage of food because again there are costs attached
when the raw materials get wasted. Moreover, if the team is not using a specific raw material the
costs of holding it in the inventory also comes into picture.
The present inventory lists are showing a high unplanned purchases and there are also reports of
spoilage of raw materials.

Personnel
Stress % Gratitude Aspiration Courage Perseverance Goodness

Management
(plain
average) 33.50834 45.91703 37.54161 35.27465 33.81312

Desk 69.928 69.9885 72.0775 68.594 72.646

Housekeeping 28.978 33.753 34.8495 29.454 35.7675
Kitchen 40.4935 55.9695 53.2865 58.527 56.1825

Dininghall 18.471 27.1545 12.513 22.2645 3.5535

Maintenance 23.577 26.365 23.11 21.532 12.172

The stress among employees for team goodness has increased from previous rounds. The stress among
desk employees are reaching skies and one has to look over it.
By factor (1-
low...5-high) Gratitude Aspiration Courage Perseverance Goodness

Service, overall 2.477607 2.341954 2.472603 2.803195 2.533101

Facilities, overall 2.878776 3.040743 2.86274 2.988809 3.010383

Cleanliness,
overall 2.390428 1.928864 2.518804 2.659664 2.863251

Atmosphere and
style overall 2.874394 2.928204 3.037415 3.011073 3.016396

Hotel location
and surrounding
services 3.5 3.5 3.5 3.5 3.5

By area (1-
low...5-high)

Reception,
overall 2.093853 2.066893 2.066446 2.476882 2.226583

Room, overall 2.872946 2.765324 2.976586 2.999214 3.265665

Restaurant,
overall 2.62174 2.596216 2.932426 2.979008 2.918738

Other facilities
and services,
overall 2.678261 2.851302 2.551383 2.68572 2.775678