Round 4- Team Goodness

HOTEL PROFITABILITY and Ratios

Gratitude Aspiration Courage Perseverance Goodness

Profitability, $ 0 0 0 0 0

EBIT % 31.63809 32.78406 26.14329 29.41916 32.29813

Net income 73689.07 90638.19 68929.65 88629.42 82319.27

Gross Operating
Profit Per
Available Room
(GOPPAR) 53.20251 67.13309 47.8794 64.96844 56.37209

GOP conversion
(%) 0.819572 0.792728 0.510754 0.826024 0.974842

Revenue Gratitude Aspiration Courage Perseverance Goodness

Room rental
revenue 204229 220233.8 205840 232139.7 204308.4

Additional hotel
side revenue 22503.34 24950.47 21285.21751 27328.42 25024.5

Restaurant
revenue 112240.2 155795.6 157085.2233 177620.4 140884.5

Total revenue 338972.5 400979.8 384210.4408 437088.6 370217.4

Above are some key figures of the Hotels Performance. In the above figures, the Net income for
team Goodness is 82319.27 and the total Revenue is 372017.4. So, the formula for the profit
margin is Net Income/Total revenue.
So, Profit Margin will be. 82319.27/370217.4 = 0.222 or 22.2%.
That means that the profit margin for team Goodness is 22.2% which implies that for every $1
sale, there is profit of 22 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
Profitability Ratios also relate profits on investment.

Operating costs Gratitude Aspiration Courage Perseverance Goodness

Personnel costs 103080.6 90880 138214.84 108080.4 105668.8

Outsourcing costs
(HK, breakfasts,
improvements) 17474.86 21631.98 17534.04 17389.86 17952.16

Purchases 61872.34 106446.9 78899.24044 115792.4 77119.4

Other variable
costs 20800.3 22063.44 20617.06525 22238.13 21703.75

Other fixed costs 13500 13500 13500 30000 13200

Total operating
costs 216728.1 254522.4 268765.1857 293500.8 235644.1

The Formula for return on investment is,

So ROI for team Goodness will be, 372017.4-235644.1/235644.1 = 134,573.3/235644.1 * 100 =

57.1%
Return On Assets
Formula with example:

Assets Gratitude Aspiration Courage Perseverance Goodness

Property and
equipment 2925000 2925000 2925000 2925000 2925000

Inventory 5094.913 933.2111 3644.79145 6778.918 9785.659

Receivables 48424.65 57282.83 54887.20583 62441.22 52888.2

Cash and cash 382854.5

equivalents 324784.1 374134.1 365669.8438 292906.5

Assets total 3303304 3357350 3349201.841 3377075 3280580

ROA= 82319.27/3280580*100=2.5%
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 2.2%,2.6%,2.0%
and 2.6% 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 119583.9 118887 118204.424 101641.9 69314.37
Net income for
the period 73689.07 90638.19 68929.64802 88629.42 82319.27

Equity Total 1 033 273 1 049 525 1 027 134 1 030 271 991 634

A major profitability ratio that compares profit of the hotel to the owners investment is called
return on equity (ROE).
The ROE for team goodness is 82319.27/991634=8.3%.

Revenues, $ Gratitude Aspiration Courage Perseverance Goodness

Average Daily 120.2049

Rate (ADR) of
Rooms Sold 104.8942 113.4524 105.1277 104.4415

Revenue Per
Available
Room
(RevPAR) 104.1985 112.3642 105.0204 118.4386 104.239

Total revenue 134.3559

per occupied
room per night
(RevPOR) 116.4522 126.3055 115.9986 117.2339

Revenue per
restaurant
customer 24.15846 23.84018 31.32308 35.83948 28.53646

Costs, $

Hotel costs per

available room
per night 58.79256 55.07317 64.31611 63.72856 56.96511

Hotel costs per 57.07576

occupied room
per night 59.18512 55.60654 64.38181 64.67895
Facilities
utilization Gratitude Aspiration Courage Perseverance Goodness

Hotel
98.53061
occupancy, % 99.33673 99.04082 99.89796 99.80612

Restaurant
customers per
day per seat 4.148214 5.834821 5.970238 5.9 4.408036

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 are almost fully booked. 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.

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
maximise 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 $117
and $ 57 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.

Restaurant Operations

Restaurant
profitability Gratitude Aspiration Courage Perseverance Goodness

Restaurant
profitability

Revenue 112240.2 155795.6 157085.2 177620.4 140884.5

Costs 94272.68 140918.9 135483.6 161370.8 116800.5

Contribution 17967.51 14876.61 21601.62 16249.64 24084

Contribution
per unit ratios Gratitude Aspiration Courage Perseverance Goodness

Contribution
per staff
member 1197.834 998.43 1085.509 923.2747 1425.089

Contribution
per customer 3.867308 2.276451 4.307402 3.27878 4.878266

Contribution
per seat 224.5939 185.9576 360.027 270.8273 301.05

When we look at the profitability of restaurant operations at a glance, team Goodness has achieved
the highest profit and even they have incurred less costs in restaurant operations.

Personnel Gratitude Aspiration Courage Perseverance Goodness

Cooks

Weekday 5 5.2 6.95 6 4.95

Weekend 5 5.2 6.95 6 4.95

Approx 17 employees.
Waiters/Waitresses

Weekday 2.5 2.25 3 2.8 3.5

Weekend 2.5 2.25 3 2.8 3.5

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.

Gratitude Aspiration Courage Perseverance Goodness

Dish 1: main
ingredient Vegetable Salmon Chicken Vegetable Chicken(fz)

style Salad Salad Salad Salad Soup

speed Normal Fine Fine Fine Normal

Price 8.75 10.95 13.99 10.99 12.5

Dishes sold 535 1335 781 530 553

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

style Soup Stew Stew Fried Oven Baked

speed Quick Normal Fine Normal Fine

Price 11.75 12.85 24.65 27.99 20.5

Dishes sold 764 1382 894 1985 1517

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

style Fried Oven Baked Oven Baked Oven Baked Stew

Lowest
speed Normal Normal Fine Normal Quick selling
Price 23.25 20.15 22.99 37.99 22.5 Dish

Dishes sold 2009 1185 1206 1539 529

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

style Oven Baked Fried Fried Oven Baked Fried

speed Normal Fine Fine Fine Fine

Highest
Price 17.5 24.45 30.99 26.99 29.5
Selling
Dishes sold 1338 2633 2134 902 2338

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.

Personnel and Customers

Stress % Gratitude Aspiration Courage Perseverance Goodness

Management
(plain average) 30.86476 44.88856 39.40495 33.7908 27.13126

Desk 71.005 67.46 68.6525 65.915 68.401

Housekeeping 19.335 31.0285 34.184 27 22.5795

Kitchen 51.082 69.7675 55.9 61.951 55.8475

Dininghall 21.9765 44.641 35.2575 32.7715 0

Maintenance 13.107 11.852 23.372 12.97 1.581

Personnel count

Permanent 41.5 26.5 31.6 28.4 34

Temporary 7.3 8.9 11.5 8.9 8.4

Flexible 0 8.21225 10.32 8.7 5.43361

When looking at the staff stress, it is evident that team members of the housekeeping and kitchen
are very stressed. The team should take actions to boost up the energy and morale of these
employees.
Customer Satisfaction

Satisfaction
with facilities
(1-low...5-
high) Gratitude Aspiration Courage Perseverance Goodness

Room

Room comfort
and style 2.943025 3.013725 2.844983 3.080281 3.116008

Room
cleanliness 3.218034 3.32128 2.824989 3.266703 4.138762

Room facilities 2.943025 3.013725 2.844983 3.080281 3.116008

Other

Restaurant
facilities 2.900737 3.108637 3.074295 2.900737 2.89872

Reception 2.884918 3.092818 2.784076 2.884918 2.882901

Spa, overall 2.805825 3.5 2.704983 2.805825 2.803808

Conference,
overall 3.187462 3.045362 2.73662 2.837462 3.171585

Other areas 2.946247

comfort and
style 2.944532 3.068397 2.84369 2.85848

Needs Improvement