Establishing A Profitable Hotel Business In Sydney: Organizational Structure, Risks, And Opportunities

How To Established With The Aim Of Making Profits?

Business organisations are established with the aim of making profits. A business organisation undertakes various activities such that it can earn revenues or make profits for long-term sustenance of the business (der OMU-Theorie, 2008). For every business organisation a goal is defined, according to which vision and mission statements are set. The scope of this essay includes description regarding an organisational structure of a new hotel business in Sydney, Australia. The essay describes the organisational structure, internal and external forces that impacts the organisation, risks confronting the business, activities that will enhance performance of the business and key business functionalities (Catthoor, 2013).   

The hotel set up for purpose of catering to guests and tourists visiting Sydney, Australia. The hotel will be set up 7 kilometers from central city location and will have 30 rooms. It will aim to cater to low budget travellers, who are willing to travel the country at low costs. The organisation structure will be headed by me, the owner or proprietor and I will act as the CEO or head for the same. Below CEO will be finance, human resource, sales and marketing, operations department (Buelens, 2011). Finance department will be responsible for billing, payout of salaries and maintaining of accounts. Human resource department will be hiring staffs and employees, training them and allocating appropriate responsibilities to them. Sales and marketing department will conduct various promotions for the hotel and carry out events such to promote the brand name. Operations or maintenance department will be responsible for handling customers, rooms and breakfast orders. There will be a total of 20 employees for various department to manage functionalities. The operations department will employ most number of employees as it will cater to customers and attend to them. HR department will appoint personnel for each and every department such that they are able to carry out responsibilities well. 

The hotel being set up in Sydney will be impacted by major macro environmental forces as political influence, economic, social, technological, legal and environmental influences (Dcosta, 2012). Politically Sydney is stable with democratic government structure, which is conducive for conducting businesses. Economically Australia is stable, with stable inflation rate, growth rates and market structure, hence people have affordability to stay at hotels. Australia is socially advanced and westernized similar to other world nations, hence a lot of people travel. Technologically the country is advanced, hence the hotel will be listed with major ecommerce portals and create a website of its own. Legal and judicial system of Australia is quite transparent that offers immense potential for conducting business with ease. Australia has significant environmental regulations hence the hotel will adopt sustainable energy sources. The hotel will also aim to reuse some of its treated wastewater for sanitation purposes by installing filtration plants. The macro environmental factors for the hotel reflects that there are large amounts of opportunities that can easily be explored by it. Almost all factors are conducive for the hotel to conduct its business. It can easily obtain any sort of financial aid also from financial institution or banks such as to cater to its immediate needs.

Internal Analysis Using SWOT

Another integral macro environmental analysis can be done using Porter’s five forces analysis (Porter M. , 2008). Such analysis can be undertaken analyzing bargaining power of buyers, bargaining power of sellers, threats of new entrants, threat form substitute products and industry rivalry. The hotel established will face severe competition and threat from homestays and boutique hotels. Bargaining power of customers will be considerable higher as they can easily switch from one hotel to another (Porter M. E., 2008). Suppliers does not have much power over hotel businesses as they gain regular business from them. Hence, supplier bargaining power is considerably low for this case. Threats from new entry is high as Sydney is gradually becoming one of the most sort after location around the world, attracting large numbers of tourists and visitors each year.;

Internal analysis of a business can be conducted using SWOT analysis, which is an abbreviated form for strength, weakness, opportunity and threat. Strength for the hotel will away from hustle-bustle of the city and available at considerable low costs. A major strength of the hotel is the low costs at which it will be operating. As it will have lesser number of head count, it can easily lower rates for its rooms unlike other large chains. Weakness is that it is a newly established hotel and will have less brand recognition. Opportunity for the hotel is to expand its capacity and accommodate new guest in more rooms (Hay, 2006). Later the hotel can consider expanding to other cities or towns. Threat faced by the hotel is in regards to large number of international and national hotels entering low costs space. Though there are weaknesses and threats for the hotel there is immense amount of opportunity for the hotel to expand and establish its business.                   

Every business faces some or the other type of risks, such risks needs to be ascertained, diagnosed and treated. A risks can either be averted or mitigated however, most critical aspects is to recognize such risks prevailing in businesses (Knight, 2012). The hotel business has immense risk associated with uncertainty. Apart from seasonal risks, hotels face risks from customer choices, less demand, salary payments even in low seasons and so on. While some risks as customer choices can be catered to by means of target marketing and other factors, low demand cannot be attended to. There are certain macro level risks faced by the hotel as well that can only be averted. Macro level risks as those from natural calamities, or country’s economic crisis, or lowering of mortgage rates, unemployment and so on. Thus, the previous risk has been mitigated while the latter is avoided solely (Arena, 2010).

Risks Faced by Hotel Businesses

Business practices that can enhance organisational performance are appropriate and ethical marketing along with employee satisfaction schemes. Marketing is the heart and soul for any organisation, without which an organisation might fail to establish itself. While marketing is integral, the hotel needs to adopt recent trends in marketing as internet marketing, ecommerce marketing and social media advertisement in order that large target audiences can be catered to (Broadbent, 2009). Marketing enhances business scope hence is critical for sustainability of the organisation. Employees comprises of key stakeholder for any organisation hence it becomes critical that they have appropriate job design with satisfaction and motivation levels. Job design of each employee, their pay scales and other factors needs to be ascertained in an appropriate manner such that they develop long-term commitment towards the organisation. Such long-term commitments will enhance employee satisfaction and retention, lowering employee turnover rates. This will overall affect productivity within the organisation, leading to satisfaction of customers. Thus, organisational performance will increase overall basis (Chandrasekar, 2011).

The most critical function of the firm that can help attend performance of the organisation is its operational activity. For any hotel it becomes critical that various functions as room maintenance, welcoming guests, serving meals and other functionalities are conducted in an appropriate manner (Rasula, 2012). Operations department is the key driving segment for the hotel, which can yield organisational performance. All strategies and directive of the organisation is aimed at enhancing productivity of the organisation. Better organisational productivity will lead to more revenue earning and sustainable business model. Thus, goal of the organisation needs to be aimed at achieving highest levels of performance.                      

Recommendations and Conclusion

The hotel needs to adopt the professional organisational structure and develop codes of conduct. Appropriate strategies along with work policies will allow the organisation to cater to its aim and achieve its goals. The hotel can further develop its marketing endeavors such that it is able to attract large number of customers towards the hotel. Apart from low costs strategy the hotel can aim at providing exclusive services and free pick and drop to airport for attracting more customers.;

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Dcosta, A. (2012). Components of a PESTLE Analysis. . Bright Hub Inc.

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