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Define and mention How to measure each of the topic given in balance scorecard (REVPAR, gross operating profit, marketshare, ROCE, guest and staff satisfaction, ADR, occupancy rate, public awareness, hotel quality index, annual staff turnover) 

- compare team 3(Eliza) with other groups and write whether it is running Good or bad? (actually it is bad because of low room rates and poor staffing in room division plus higher expenses in F&B) 
*(Eg good rev par is about 100) 
*prepare graphs (compareing year1 vs year2 or 24months’ review) ? 
*add value to result (eg compare with customers satisfaction) 

2.provide explainations (how or why) for performance according to scorecard 
*as you can see the team or hotel (Eliza) is in loss and my rev par is very low compare to other write according to that stituation 

Key Performance Indicators

Strategic planning is the process to determine the mission and vision of an organization for the future and to identify different objectives and goals. The process of strategic planning includes establishing and creating a system in which the company makes efforts to attain those predetermined objectives (Haines, 2016). When a company offers its services to the customers, it develops a strategic plan that includes company’s goals along with most appropriate strategies and tactics. It is very difficult to accomplish anything without a strategic plan so it is very important for each and every organization to develop a strategic plan.

For this discussion, Eliza Hotel is taken into consideration that is managing its business operations under HOTS (Hotel Operation Tactics and Strategy) simulation. The HOTS simulation is a team based problem solving exercise where different teams work together to make decisions. The major objective of this report is to review the key performance indicators of the hotel like REVPAR, gross operating profit, ROCE, market share, staff satisfaction, guest satisfaction, ADR, occupancy rate, hotel quality index, annual staff turnover and public awareness. Under HOTS simulation, it is a challenge to develop and apply a business strategy which results in a competitive positioning in the market and generates better financial performance as measured by occupancy, market share, revenues, profits etc. In this report, the chosen hotel i.e. Eliza is facing some issues with its management and operations. In order to enhance these issues, the report will develop some recommendations to different departments of hotels and prepare a strategic plan for the future of this hotel.

The major aim and objective of HOTS strategic planning is to develop effective strategies and tactics for a hospitality organization that assist the organization to attain its predetermined objectives and goals. By the adoption of this technique, the organization will be able to manage its operations and improve its key performance indicators.

There are various key performance indicators which enable the organization to measure its performance in competitive business scenario. A key performance indicator is a measure that shows the efficiency and effectiveness of a particular business organization. These key performance indicators can be used to achieve its objectives and goals. Companies practice these indicators at different levels to identify their growth and success at approaching the targets (Bai & Sarkis, 2014). There are two types of performance indicators i.e. high-level KPIs and Low-level KPIs. Both of the indicators focus on different processes and operations of the organization. An organization can evaluate and measure its key indicators by using balance score card that considers the mission and vision and focuses on the financial and non-financial performance of an organization.

Revenue per Available Room (REVPAR)

This report will identify different key performance indicators in context of Eliza Hotel. The balance score card enables the hotel leaders to measure the growth towards strategic goals in an effective manner. It has both financial and non-financial metrics which measure the performance focusing on different operations. In the hospitality sector, key scorecard categories provide the management a material feedback for use in improving their hotels (Parmenter, 2015). The review of different key indicators is given below:

Revenue per available room rate is the most important indicator in case of hospitality organization that is used by a hotel to see how much revenues they have generated within a specific period of time. This rate is calculated by dividing the Total Revenues by rooms available to that hotel. According to the given data, REVPAR of Eliza hotel is more than other team’s hotel in the year 1 i.e. 40.25$ in January and 42.75$ in December. In year 2, there was a heavy downfall in the revenues of Eliza and it has declined to 15.76$ (Eliza Hotel, 2018).

This downfall in the revenues is due to lower room rates and poor staffing in the room division. Its revenues are the least among all the hotels of different teams (Martello, Watson, & Fischer, 2016). Due to this, Eliza is ranked at 8th among eight hotels. It shows the performance of Eliza is poorer than other hotels.

Gross operating profit is also a significant indicator for a hotel because it provides the hotel managers a clear image about the profit potential of hotel. Moreover, it shows the management efficiency of hotel. It is determined by calculating total revenues and deducting operational and departmental expenses. The given table shows that the gross operating profit of the hotel in January was 10.88% and it has also been decreased to -10.29% in December in the same year.

In the year 2, Eliza has increased its gross operating profits to 23.87% that was more than other hotels (Radojevic, Stanisic & Stanic, 2015). Under this performance indicator, Eliza Hotel is on the first rank among other hotels.

Market share of an organization can be calculated by taking the sales of company over a specific period and dividing by the total sales of specific sector over the same time period. The given data indicates that market share of Eliza Hotel is 7% that is less than the hotels chosen by other teams. It shows that this hotel has lack of brand presence in the hospitality industry and not able to manage its profitability (Kandampully, Zhang, & Bilgihan 2015).

Gross Operating Profit

Considering this, the company needs to focus on its operations and brand reputation so that it can capture a higher market share.

ROCE

ROCE (Return on Capital Employed) is a financial ration that is practiced to measure the profitability of a company and efficiency level with that capital that company has invested in its operations. It is calculated by dividing the net operating profit by the employed capital of the company. The table shows that the Eliza hotel failed in using its capital effectively so that it is not able to generate returns. In the December year 2, the ROCE of his hotel is -0.61 that places it on 5th rank among hotels.

Enhancing guest satisfaction is the most important objective for the management and team of each and every hospitality organization. Eliza Hotels is making efforts to satisfy its guests and customers. To analyze the satisfaction level of the guests, the hotel has conducted survey and found that guest satisfaction is decreased in the year 48% that was 53% in the end of previous year (Fouad, Hussein & Attia, 2016). It shows Eliza is not able to satisfy its guest and Global Agents is on the first rank with 64%. The organization failed to provide quality and satisfactory hospitality services to its guests.

Guest satisfaction of a hospitality organization is directly connected with the staff satisfaction. It is very important to satisfy the employees if a hotel wants to provide complete guest satisfaction. The data shows that Eliza hotel is trying to develop effective relationships with its staff and employees (Clarke, 2016). The percentage of staff relationship survey for Eliza is 82% that indicates the organization is able to motivate and satisfy its customers. Global Agents is on the top in the list of hotels.

ADR is a simple metric or rate that is used to calculate the average rate per occupied room at any hotel. It is a good rate to analyze the performance of a hotel that is calculated by dividing total room revenues by the occupied rooms. Average daily rate at Eliza is 62.24$ that is decreased this year from 67.53. It shows that the performance of hotel is going poor every year (Simons, McLean Parks & Tomlinson, 2017).

Public Awareness is the performance indicator that is used to analyze how much people know about the services of a hospitality organization. For Eliza Hotel, the public awareness has been decreased to 29.11 as the company is not able to manage its operations and service quality. The guests are not satisfied with the services of hotel so it failed to manage relationships with public.

Market Share

Hotel quality index is the performance indicator that assists a hotel to evaluate the quality perceptions of customers of service quality delivery. Currently, the hotel quality index of Eliza Hotel is 12.50 that are less that Luxury Stars Hotel (Crick & Spencer, 2011).

This indicator can be determined by considering the hotel room cleanliness, facilities, customer feedback etc.

Annual staff turnover shows the number of employees who has left the company in last one year. Last year, annual staff turnover rate at Eliza Hotel is 50% and it is increased from last year. It shows that employees are not satisfied at Eliza and they are leaving jobs and shifting to other popular hotels. The staffing is very poor at Eliza hotel. At Paradise Consultancy, this rate is 122.64% which is highest among all the hotels (Yam & Raybould, 2011).

The above key indicators can be explained in the below-given balance score card:

Particular

Target

Measures

Indicators

Initiatives

Financial perspective

· To increase revenue per guest and available room

· To increase the number of guest arrival

· To decrease the costs and resource optimization.

· Number of Occupied rooms

· Number of guest arrived

· Production cost

· Percentage of booking as compared to competitors

· REVPAR

· ROCE

· Average Daily Rate

· Increase in the gross operating profits

· Improvement in the services

· Quality service Delivery and effective promotion

· Revision of cost structure and enhance asset value by strategic collaboration.

Customer Perspective

· To provide full guest satisfaction

· To develop guest loyalty

· To enhance guest service delivery

· Guests’ repeat intention to visit Eliza Hotel

· Number of loyal  customers involved

· Feedback from guests

· Guest Satisfaction

· Market Share

· Hotel Quality Index

· Making investment in life style segment

· Feedback form, questionnaire and survey

· Develop long term relationship with the guests

Internal Process

· To improve management and staffing

· To retain talented and skilled employees

· To decrease the staff turnover

· To improve hospitality operations  

· Number of retained employees

· Performance Appraisal

· Quality of operations

· Customer feedback towards room attendants and chef

· Annual staff turnover

· Number of top quality staff

· Staff Satisfaction

· Conducting cross audits

· Weekly follow-up of the employees

· Implementation of new policies.

· Performance appraisal

· Bonus and incentives to employees.

Learning and Growth

· To establish healthy relationship with customers

· Sustainable human resource

· To improve service delivery to the guests from different backgrounds and cultures.

· Performance evaluation

· Skills and abilities of employees

· Operational efficiency

· Service standards

· Public Awareness

· Staff Satisfaction

· Employee participation

· Conduct training and development program

· Implementation of innovative technologies

· Adoption of quality management techniques (Villaespesa, 2015).

By looking at the above balance scorecard, it can be stated that there are various indicators and perspectives which shows both financial and non-financial performance of Eliza Hotel. Financial performance of an organization is an indicator that determines the financial status of firm. It shows the ability of a company to utilize the resources and assets and show much it can generate more and more revenues and profits (Bergeron, 2017). These indicators are used by the organization to recognize and enhance different internal functions of a business and their external results. From the review of above performance indicators, the financial and non-financial performance of the hotel can be identified. As discussed, Eliza Hotel is bearing loss from last two years due to poor staffing techniques, low room rates and higher expenses on food and beverage division. The performance of this hotel is poor than other hotels and competitors in hospitality industry (Kylili, Fokaides & Jimenez, 2016). The explanation about the different indicators and perspectives of balance score card is stated below:

This is the first perspective of balance scorecard that can be used to analyze the performance of the organization. It views the financial performance of organization and utilization of financial resources. Under this, the company analyzes different indicators like sales, income and expenditures. These components of business assist to understand the financial position of organization. In the above review, there are various financial indicators of Eliza Hotel such as RAVPAR, ROCE, Gross Operating profits and Average Daily Rate. Eliza Hotel is operating its business with the target to increase the revenues per room and guest, number of guest arrival at hotel and to decrease the cost and resource optimization (Gibbons & Kaplan, 2015).

Return on Capital Employed (ROCE)

The above analysis shows that previously Eliza Hotel has more REVPAR than other hotel, but now it faces a heavy downfall in the revenues i.e. 15.76$. The data indicates that this is due to the fact that hotel has increased the number of hotel rooms i.e. from 3500 to 7000 but the percentage of room sold is less than previous year. ROCE of Eliza is negative in all the months that indicate that company is unable to make effective investment in its operations and produce returns. The revenues and profits of Eliza hotel have declined during past two years. Moreover, the average daily rate of the hotel is declining that shows guests are not interested to take the hospitality services of Eliza Hotels. In the period of last 24 months, the position of hotel has been downgraded. To enhance this, the company needs to make improvement in its operations and hospitality services (Yang, & Cai, 2016). It should revise its cost structure and improve the value of resources by establishing strategic collaboration with other well-established hotels in the country.

Customer perspective is one of the most important perspectives for a hospitality organization as it views the performance of the organization from the customer point of view and other related stakeholders which it is designed to cater. The perspective of customers is gathered to measure the guest satisfaction with the price, quality and availability of service. Under this perspective, the guests at hotel provide their feedback regarding the hotel services and about if their requirements and demands are being met with its services (Hansen & Schaltegger, 2016).

In this evaluation, the major indicators are such as guest satisfaction level, market share of hotel and hotel quality index. For each and every hospitality organization, guest satisfaction is the top priority but Eliza Hotel is failed to maintain this level last year. In the end of first year, the guest satisfaction percentage of Eliza hotel was 53% that was decreased to 48% in the second year. It shows that organization is not able to retain its guests and develop loyalty among them. It failed to use different offers and schemes so that it can attract more guests. During past 24 months, hotel was not giving attractive and profitable packages to the guests (Weinstein, 2013). The hotel quality index of Eliza Hotel is also lower than other hotels that show that company did not deliver the quality services to its guests. In addition to this, the market share of the hotel is very low this year i.e. 7% that shows it has been failed to capture the attention of market and new customer. Eliza Hotel needs to take some initiatives to enhance its performance and customer loyalty such as it needs to make investment in life style segment. It can take the feedback of guests through feedback forms and survey.

Guest Satisfaction

In addition to above perspectives, the third perspective of balance score card is internal process. It shows the performance of an organization via quality lenses and efficiency in relation to its products and services or other service delivery processes. Internal processes are assessed by considering how well the products are manufactured by a company. In the case of hospitality organization, internal processes can be analyzed by looking how well the hotel offers its services to its guests. Operations management is evaluated to find out the gap, service deficiency and service failure (Mcdonald, 2016).

According to the above discussion, there are some indicators like number of top quality staff, annual staff turnover and staff satisfaction. The performance table of the company shows that annual staff turnover at Eliza Hotel is 50% that is higher than previous year. It indicates that company is unable to motivate and satisfy its staff. This is the reason that they left this hotel and shifted to others. The organization has not managed its operations and internal processes effectively. It needs to focus on increasing employee morale by providing different bonuses and incentives.

Learning and growth is the perspective that is analyzed through the analysis of knowledge and training resources in an organization. This perspective deals with how the information and knowledge is captured and how good the human resources use the information to translate it to competitive edge over other players in the sector. This component views company’s performance thorough technology, infrastructure, human resources and other abilities which the key to advanced performance (Hrout & Mohamed, 2014).

At Eliza Hotel, there are various key performance indicators which can be included under this perspective. These indicators are such as staff satisfaction, employee participation and public awareness. Looking at the given data of Eliza Hotel, it can be analyzed that this hotel has lack of public awareness this year i.e. 29.11. The reason behind this is that company did not manage its service quality effectively. Additionally, the staff at hotel did not deal with the guests appropriately as they were having lower employee morale. It has affected the performance of Eliza hotel adversely in comparison to other hotels under HOTS (Nieves & Quintana, 2016).

Thus, this explanation shows that Eliza Hotel is in the loss from last 24 months as the revenue generation is lower as compared to other hospitality organizations.

To deal with the above issues and overcome the loss of business, the general manager of the Eliza Hotel should develop a strategic plan. This plan will be developed for its different departments such as front office, Housekeeping, F&B, marketing and human resource. It will assist in improving the current scenario of Eliza Hotel. For a hospitality organization, it is very important to focus on its core departments as growth and success of hotel is directly related to effective management of these departments (Goyat, 2011). Developing a strategic plan plays an important role in the organizational life of a hotel. If the company wants to enhance its revenues and profits, it is very important focus on its strategies and tactics which it will implement to attain its predetermined objectives and goals. Eliza Hotel has different departments like front office, Housekeeping, F&B, marketing and human resource, which assist the organization to provide the hospitality services effectively. Among them, front office is the department handles the guests when they just reach to the hotel. This department staff communicates with all other departments of hotel like sales and marketing, food and beverages, housekeeping, human resources, security etc. All of these departments at Eliza Hotel view the front desk department as a communication relation in offering services to guests. Moreover, the housekeeping department deals with the processes such as cleanliness in the room, cleanliness in hotel, room preparation for next guest and laundry services. Food and beverages division provides the food and other eatables to the guests who are saying in the hotel rooms. All of these departments are related to human resource department as it is very necessary to provide effective training to all the human resources and staff about their departments and core activities (Taylor, Caccamo, Daniel, & Bulatovic-Schumer, 2018). Marketing department plays an important role in the growth of Eliza Hotel. Through developing an effective marketing team and activities, this hotel will be able to increase its brand presence among a larger population.

Average Daily Rate (ADR)

As mentioned above, Eliza Hotel is facing the loss situation in the hospitality industry. From last 2 years, the performance of organization is confronting a heavy downfall. This hotel is failed to manage its operations and service quality. In addition to this, the firm did not pursue appropriate practices for staffing so that it has been facing the issue of employee turnover. Thus, it is very important to manage all the departments strategically so Eliza Hotel can improve its operations and performance among other hotels in the list. To manage and develop coordination among all the departments of Eliza Hotel, the manager will develop a strategic plan that will be applied for its future growth and success (Boella & Goss-Turner, 2013). This strategic plan will include the objectives for different departments. Moreover, the strategies will be recommended which can be used by the organization to enhance the operations of different departments. In addition to this, time frame is also determined for each and every department of Eliza Hotel. In a fixed time frame, the company will make efforts to attain different objectives. The strategic plan for Eliza Hotel is given below:

Activities /Department

Objectives

Strategies

Time duration

Concerned Authorities

Front desk

· To attend the guests in an effective and sophisticated manner.

· To make the guest perception positive towards hotel’s services.

· To ensure by its services that guests will visit them again.

To attain these objectives, the hotel will manage the staff by rotational methods or shifting so that staff will be available every time when guest reaches to the hotel.

Additionally, it should train the front desk staff to behave with the guests effectively.

Front desk area should be clean and attractive (McCamley & Gilmore, 2018).

3 Months

For this, the top management and front desk manager will be liable to deal with the guests excellently. The top management needs to conduct effective management training program for front desk staff as it is the most important part of a hotel.

Housekeeping

· To maintain cleanliness and hygiene in the hotel rooms at a maximum extent.

· To fulfil other service needs of guests.

The staff should be taught about the cleanliness and negative impacts of being unhygienic. T should do performance evaluation of motivate the staff towards their work.

3 months

Senior managers and Housekeeping department will be accountable for these strategic changes in the operations of Eliza Hotel.

F&B (Food and Beverages)

· To provide the food with high quality standards and safety

· To maintain the kitchen hygiene and variety of food offering.

· To provide food according to the demands and needs of guests.

Eliza Hotel should adopt some advanced and new cooking techniques so food can be delivered on time. It should keep the alliances and environment clean. It should hire expert chefs for the hotel

 2.5 months

Senior level management and head chefs are liable for this strategic implementation in this department.

Marketing

· To increase brand presence of hotel among a large population.

· To increase the occupancy rate at hotel

The organization should hire a talented marketing and promotional team that can reach to a large customer base through its advertising modes and campaigns (Mok, Sparks, & Kadampully, 2013).

3 months

Marketing managers and executives will be liable for this.

Human Resource

· To hire skilled and talented staff in all the above departments.

· To retain the employees for a long time.

The hotel should use effective techniques for recruitment and it should provide the training sessions so that it can train and motivate the staff towards their work.

3 months

For this implementation, top level management and HR department will be accountable at Eliza Hotel.

Conclusion

From the above analysis, it can be concluded that balance score card plays an important role to analyze the key performance indicators of an organization. The performance of the organization can be evaluated by looking at the four pillars of this framework. The above report includes the discussion about the key performance indicators of Eliza Hotel. The performance of hotel is very poor due to low room rate and poor staffing. Balance score card of Eliza Hotel includes all the initiatives which can be taken by the organization to overcome the related issue and enhance the indicators. In the future, the organization should use the given strategic plan so that it can implement effective strategies to enhance its different departments.

References 

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Public Awareness

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