THH3113 Cost and Performance Management for Tourism and Hospitality
You are the RM at Luxury Resorts. Mayan is the property’s DOSM and Dasha is the FOM. All you three serves on the hotel’s RM boards committee headed by the DOSM.
The hotel has 250 rooms that it can serve to customers per night stay. Last year records showed that the hotel usually has 90% occupancy for the Easter holiday season from 1st April till 8th April every year. The rooms are selling at a rack rate of $99.99 per night.
Offer 1: Dasha has been approached by Tennis Australia to block 200 rooms per day (80% occupancy) for the Easter holiday season from 1st April till 8th April. The price quoted to them is $79.99 per night.
Offer 2: Mayan has been approached by the Football Associations to block 220 rooms (88% occupancy) per day for the Easter holiday season from 1st April till 8th April. The price quoted to them is $75.99 per night.
There are two offers that currently need to be considered. The RM committee requires you to calculate differentiate explain which of their costs are fixed and variable and any recommendations to change from the variable to fixed costs or would that be better to stay as variable costs according to the cost behaviour and driver.
Luxury Resorts Australia RM Committee are planning to find out whether Dasha’s offer would be beneficial or Mayan’s offer should be considered or should they open for business as usual to operate with the forecasted 90% occupancy.
Forecasted Expenses for the period 1st April 2021 – 8th April 2021
Full time staff Salary @100% occupancy
Casual staff wages @100% occupancy
Electricity charges @100% occupancy
Water charges @100% occupancy
Guests laundry charges @ 100 % occupancy
Room Cleaning charges @ 100 percent occupancy
Phone and internet charges yearly charges @100% occupancy
Weekly bank charges @100% occupancy
The DOSM, head of the RM committee has asked you to prepare the following and submit a report to the RM committee with the following requirements below to decide.
Task A: Prepare a short 6 to 8 mins video presentation about your findings and recommendations to the RM committee of Purple Resorts.
The DOSM would like to see these following in the video Presentation for the committee.
The Forecasted total cost and revenue for Dasha, Mayans Proposal and normal estimated occupancy
The Break-even units in rooms and dollars for 100% occupancy
Comparison of Dasha, Mayans Proposal and normal estimated occupancy and which would be yielding more?
Your proposal Recommendation and reason
The video presentation should be a created using a PowerPoint slide with a maximum of 10 slides and minimum 6 mins duration (anything less than 6 mins would be marked zero) Once the PowerPoint slides are created, you can use Microsoft PowerPoint to Present and record your presentation. (please go to LMS online learning page to see how to create video presentations)
Task B: Forum Discussion
Develop (thread) for online discussion based on the report by uploading your executive summary from Task C onto LMS discussion forum.
Your report should be presented in this format:
Cost Analysis (Here you must differentiate cost as fixed cost / variable cost and state the reason why they are fixed / variable related to their cost behaviours and recommendations to transform from variable to fixed costs or would that be better to stay as variable costs according to the cost behaviour and driver.)
Break even Analysis: (Here calculate your BEP using the BEP formula so you need your Fixed cost and variable cost per unit calculated for each room and find out what the Breakeven rooms per day and propose the committee what would be the BEP in units and dollars for 100% occupancy
Calculate and Analyse ADR, REVPAR and REVPAR index (Here you need to calculate the ADR per day and REVPAR per day with the data provided) and comment on the RevPAR index
Calculate and Analyse the Revenue dollar differences both in percentage and dollars: Here Calculate and Analyse the dollar difference & % difference in her total revenue compare which offer would yield more if she agreed to take the rooms offer from Dasha or Mayan or would she be better off not taking those offers and staying with 90 % occupancy
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