Rafael Souza Tavares
S40054357
Comfortable Hotel Sydney Business Information
Comfortable Hotel Sydney is considered to be a leisure hotel, i.e. most guests are travelling on
holidays. Business is affected by typical tourism/leisure events in the city, and holidays/vacation
seasonal patterns of Australia country-wide.
Additional information:
f Each year a special event occurs in March being the Sydney Mardi Gras.
f Each year Student Groups arrive from such places as America, Japan and China during summer
vacations in the Northern Hemisphere, Jul -Aug.
f New Year’s Eve is considered a major event.
f The Housekeeping department in 20XX included a productivity-based performance indicator,
whereby if each of the housekeeping staff achieved a target of cleaning 17 rooms on average per
shift over the month, they would receive a $100 bonus to their pay at the end of that month in which
the target was achieved.
f The related industry benchmarks for the stated performance indicators were as follows: Occupancy
81.5%, average room rate $112.50.
f The Hotel does not currently have any designated facilities to cater for the corporate guests, such as
Wi-Fi, a Business Centre and individual work stations in designated rooms.
f The key performance indicators for the Hospitality industry would include:
REVPAR (Revenue per available room), Rooms - Payroll & Related Expenses, and Rooms cleaned per
housekeeping attendant, Cost of Sale and GOP. The reports would include the ‘daily revenue report’
(flash report), payroll productivity report and guest questionnaires analysis.
f The Hotel is located on Oxford Street in Darlinghurst. It is in close proximity to Hyde Park, St
Vincent’s Hospital and the shopping precinct of Paddington.
1. Comment on the following for Budget year 20XY and Actual year 20XX.
a. Identify any operational trends in the various sub-headings of the annual budget of Comfortable
Hotel Sydney for the year 20XY. (10 marks)
According to this numbers, it is possible to identify a variance in the line Occupancy % during the
months, let’s see what happened in the months with significant variance
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January was a month with low rate of occupancy, it was probably explained due to fact
people usually spend a lot of money in December due to Xmas time and then they are
short of money to travel in January, but regarding that it wasn’t a bad month. In February
for other hard the number jumped up for 10% higher than January, this good numbers may
be related to Australian high season where many overseas tourist come to Sydney to enjoy
the breath taken beaches and do cruises. In March, Sydney hosts one of the most
important event in Australia the Mardi gras, The Comfortable Hotel in Sydney is located in
the heart of Sydney, so the occupancy rate tends to be higher than average.
We see the occupancy decreases from April to June due to the low season.
From July to September the rates increased again because of many student groups arrived
from overseas such Japan, China and America for vacations in the Northern Hemisphere.
From September to December the prices per room increase as Sydney starts the high
season, that prices increasing reflects in a lower demand in December. The occupancy rate
is very good due to Christmas time and New Year’s Eve.
Overview of the whole year – Looking at the benchmarks the occupancy rate is 81.5%,
Comfortable Hotel works mostly above of this figure. However, the price per room in this
benchmark is $112.5 and our hotel has the average in $90.00.
The numbers are very good when there are important events in Sydney and when it is high
season. However, in normal months the occupancy is lower because the hotel doesn’t have
Wi-Fi that is crucial for the guest.
b. What might they suggest about the trading activities of the Comfortable Hotel Sydney that need
attention? (10 marks)
The suggestion that they might suggest would be:
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The hotel needs to create urgently a designated facilities to cater for the corporate guests,
such as Wi-Fi, a Business Centre and individual workstations in designated rooms, once
they do that, the occupancy rate will grow up.
January is considered high season in Australia, the Comfortable Hotel is very well located
in Sydney, so they need to invest more in promotions or create a good packages to attract
more customers.
During the low seasons the hotel needs to work together with marketing department to
create good ads, there is a very important event in Sydney between May and June, the
Vivid Festival, this event attracts tourist from different states in Australia to Sydney.
The Hotel should decrease the expenses during the high seasons, hiring temporaries extra
employee to supply the higher demand.
2. Given the opportunity to make suggestions to improve the performance of Comfortable Hotel
Sydney based on year 20XX’s actual performance.
a. What recommendations would you make for year 20XY looking at the monthly budget
requirements? (10 marks).
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According to the analysis made my main recommendation to the Hotel is to they improve
basic structure such: hiring a Wi-Fi network, providing free car park for the hosts and a reliable
business centre, it is costly at the beginning but you can increase the prices up and begin to be
more competitive in this marketing.
During the low season the hotel the numbers wasn`t bad, it was basically a slightly below
of average, I’d recommend that the hotel works in create some promotional packages from
customers who are interested to stay more than 5 nights.
The Comfortable Hotel should also encourage Companies to do conferences in the space
offering food and beverage to their guests, this is also a good way to increase the hotel earnings
and increase the occupancy rate.
During the high season, could hire casual temporary employees that is cheaper than hire
full time workers and also motivate the employees offering a premium per production for those
who show proactivity, in this case the hotel would hire less professionals.
b. On what analysis have you relied upon to support your recommendations? Explain your reasoning.
(10 marks)
According to the analysis made in 2.A Comfortable Hotel Sydney have to improve a basic
infrastructure by manage finding strategies to increase the number of customers mainly during the
low seasons, they need to maintain and improve basic structure and keep the room availability
and price on bench mark details in following :
The hotel have a plan to create a promotional package for customers who are willing to stay at
least 5 nights and contact many companies who do conference with their employees in a hotel.
•Low seasons(Jan, April-Jun, and Dec): Occupancy of hotel is around 79.5%-81% that’s affect to a
budget of payroll and food and beverage and other operating expense will go down. It’s mean in
low season a hotel don’t need to hire more workers and buy more food and beverage to stock for
service guest in low season.
•High Seasons: Occupancy of hotel is around 83.6%-92.9% that’s lead to cost of the expenses
higher during February, March, October and November, the average room rate increased a lot from
September and December, due to this December the room rate got much higher than the average
and attracted less customers to stay there. For the next year the hotel need to manage better their
expenses to avoid the room’s price to increase up like that in the high season.
3. To monitor and manage finances within the budget set for Comfortable Hotel Sydney, what
performance indicators and reports would be required?
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a. Name the key performance indicators and reports you would use. (5 marks)
REVPAR (Revenue per available room), Rooms - Payroll & Related Expenses, and Rooms
cleaned per housekeeping attendant, Cost of Sale and GOP. The reports would include the ‘daily
revenue report’ (flash report), payroll productivity report and guest questionnaires analysis.
b. Explain why you have chosen these key performance indicators. (5 marks)
RevPAR is one of the most important metric used in the hotel industry to asses a property's
ability to fill its available rooms at an average rate. This KPI makes the manager’s decision more
accurate and he can make key assessments regarding the hotel property based on the RevPAR. The
manager can see how well the hotel is filling its rooms and how wisely the average hotel room is
priced. When you have an increase in a property's RevPAR means that its average room rate or its
occupancy rate is improving. But you still need to do a good analyse to verify if your performance
is doing good or would you have to improve something.
Assessment 2 total: 50 marks
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