Well, first you have to understand how a hotel makes revenues.

The first thing source of

revenue in a hotel is room. Room revenues comprised of revenues received as room tariffs.
The second is Food and Beverage revenues. F&B included revenues from restaurants within
the hotel. Some hotels by virtue of their location or the brand image of their restaurants had
higher F&B revenues. That’s not the case with our hotel.. here we don’t have many customers
turning up neither in rooms not at the restaurants. Some hotels specialized in banqueting and
conferences, which acted as important contributors to hotel revenues. However, there isn’t
much business tourism in Amritsar, hence we don’t generate considerable revenue from
conferences or seminars. The ability of a hotel to host events like weddings, parties and
business meetings is determined by the availability of a banquet room area, banquet hall area,
connectivity and technology. The occupancy of the banquet and conference areas depended
on the target market of the hotel. We have one banquet hall with a capacity of 300 people.
The hotel had three restaurants: Barn, the dining hall for 250 guests; Berta, the authentic
Italian restaurant for 130 guests; and Barre, which had a 25-guest capacity and served hard
drinks and high tea. Other revenues at the hotel included revenues from spa services,
telecommunication services, laundry services and transportation services. However, we are
only able to generate some revenues from the rooms occupied. Other sources hardly generate
any revenue. The costs incurred at a hotel facility are primarily fixed costs. The capital
investment is one that takes very long to be paid back. Second is various fixed costs incurred
by hotels, e.g., employee salaries for housekeeping staff and reservations. However, they
don’t change with increments to number of rooms occupied. One of the major costs that we
are incurring is the electricity cost.