Hotel Service Operations Management: HOTS Report 2016

The HOTS simulation is a team based problem solving exercise, where teams will be working

together making decisions throughout the semester.  Each team member has a role and

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function to ensure that your hotel performs well over three simulated ‘years’. This report,

however, is an  individual report which demonstrates your understanding of your hotel

performance over the three years, as well as the current situation of your hotel.


Business decisions will be made each ‘month’ (within the simulation), based on

the performance of your hotel.  Ensure that all decision processes are recorded during the

semester, as these are required for this report.  Business simulation cycling will occur from

Week 5 through to Week 11 (which will result in 3 years of business operations).

The first part of this report is an analysis of your hotel’s performance based on

the decisions/strategies which your team implemented over the last three ‘years’.  The second

part of the report is a Business Plan for the fourth year.  This Business Plan will outline your

current environment, and develop strategies to improve your performance (based on your

results from the last three years).

Specific items that you must include, but not limited to:


Cover Page:  Provide identifying details on your cover page.

Table of Contents:  Include numbered headings (as shown below) with starting page


  1. Introduction: Outline the purpose of your report, with a positioning statement (the

star rating of your hotel). In a few sentences, state overall how you feel your hotel

performed over the last three years.

  1. Performance and financial


Under each of the following sub-headings, analyse your hotel’s performance for the

last three years, providing data in graph form where required (showing monthly

figures, see examples on L@G).

2.1.   Hotel Improvements. In this section, you will discuss the decisions that you

made relating to refurbishments, extra facilities, guest comfort and EMS. Create

sub-sections for each year (i.e., 2.1.1 Year 1; 2.1.2 Year 2; 2.1.3 Year 3), and

include the ROCE figure achieved in each year. Explain any unusual

decisions/performance in appropriate business terms (i.e. do not state that you

“forgot to enter decisions before cycling”).

2.2.   Performance of Major Operational Departments. In this section you will

describe and analyse the performance of the Rooms department and the F&B

department. Use appropriate sub-headings (i.e., 2.2.1 Rooms Department;

and 2.2.2 F&B Department). For each sub-section, include a line graph that

visually depicts (month by month) the departmental revenue and the

departmental net income.  To create the graphs, download the data from your

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HOTS site (see L@G for a sample graph).

Write three paragraphs for each

sub-section (i.e. one paragraph for each year).

In your discussion, include

annual figures of total departmental revenue and total departmental

net income, explaining performance (i.e., what decisions were made). Your

discussion should also highlight such things as departmental revenue as a

% of total hotel revenue

, and F&B GP%.for each year. Explain any unusual

decisions/performance in appropriate business terms (i.e. do not state that you

“forgot to enter decisions before cycling”).

2.3.   Revenue Management Strategy. In this section you will describe and analyse

your revenue management strategy for each of the three years (i.e. write three

paragraphs). Include a line graph that visually depicts (month by month) your

hotel’s ADR, RevPAR and occupancy percentage (download the data from your

HOTS site and see L@G for a sample graph with two y axes). In your

description/analysis, as a minimum you must i

nclude annual figures for average

occupancy, average daily rate and

REVPAR, explaining performance and rate


decisions such as distribution channels, discounts and letting limits. The

best reports will relate rate strategy to STAR report indices. Explain any unusual

decisions/performance in appropriate business terms (i.e. do not state that you

“forgot to enter decisions before cycling”).

2.4.   Marketing and Service Delivery. In this section, you will discuss your

marketing strategy (i.e. 2.4.1 Marketing Strategy) and service performance

(i.e. 2.4.2 Service Delivery). In terms of marketing, as a minimum you need to

discuss your marketing spend as a % of total revenue and your Public

Awareness Index, including the relevant decisions that affected these figures.

In terms of service delivery, as a minimum you need to discuss your Market

Image Index as well as staffing decisions. Explain any unusual

decisions/performance in appropriate business terms (i.e. do not state that you

“forgot to enter decisions before cycling”).

  1. Business Plan for Year

4:Introduce this section.  Your Year 4 business plan should be based on outcomes of


3.1.   SWOT:

Assessment of current environment (as at January Year 4). Your business’s

strengths and weaknesses are internal factors, while the opportunities and

threats are external trends or facts. You must include your STAR report


as either a strength or weakness.

Each point identified must have supporting evidence. For example, if you state

you have good service quality, provide evidence (e.g. consistently low staff

turnover %).  If you have good occupancy, state your average annual occupancy

%.  If

you say your restaurant is best in town, it has to be more than just because

one customer says so (remember you had 1000’s of customers dine in your

restaurant).  A better indication of a well-run restaurant are things such as gross

profit and number of covers per day.

Each opportunity and threat requires a reference to support the fact/trend

discussed. Ensure a discussion of your competitors are included under ‘threats’,

but for the best marks you must consider other realistic threats other than just

your competitors.


The majority of the supporting references should be from HOTS documents.

Do NOT present information in a table format, but use full sentences,


and supporting in-text citations.  These can be presented in bullet points. A

minimum of three dot points is required for each of the four SWOT sub-headings.


3.1.1.  Strengths:



3.1.2.  Weaknesses:



3.1.3.  Opportunities:



3.1.4.  Threats:



3.2.   Objectives:

Each objective must be clear, achievable, measurable and with a time frame. A

minimum of four objectives are required (with at least six for the best marks)

including both financial and marketing objectives, and should be presented in point

form. Refer back to the Week 2 Lecture for the difference between objectives and


For the best marks, there will be a clear and obvious link between the SWOT and

your objectives/strategies.  The most important weaknesses, opportunities and

threats will be addressed in the objectives and strategies, e.g. if you have good

revenue but low profit, then increasing your profit % is an important objective that

can be supported by strategies aimed at cost control.

3.3.   Strategies:

Your strategies are the HOTS decisions that you would implement for Year

4, in order to achieve the objectives you have just stated above. You can


previous decisions in the areas where you are doing well (if any) but focus your

strategic plan on areas that are poor (need improvement).  Identified weaknesses,

opportunities and threats should therefore be addressed in this process (not

necessarily explicitly, but the link will be obvious to the reader if done well).


A list of headings are supplied on the next page but more can be added.  For

example, after 3.3.2 you could then have 3.3.3 labelled ‘Conference market’ (not

‘Other’ as the headings need to be descriptive). For each discussion on market

segments, e.g. corporate and leisure, discuss the basic HOTS decisions first.  For

example, if are you building any new ‘product’ for corporates in Year 4, what

weekday rate are you planning to charge, how do you plan to promote weekday

rooms, what discounts you are offering etc.  This information is the minimum level

required for PASS and CREDIT mark on this assessment criterion.

Then you can introduce external ideas which are referenced from journals. For

example, you may read the latest academic peer-reviewed research (i.e. not a

random blog on Google) which identified corporates want mobile check-in

opportunities. This would then be a recommendation in 3.3.1 to install this

technology. This additional information is required for a DISTINCTION and HIGH

DISTINCTION on this assessment criterion.



3.3.1.  Corporate/weekday Market (discuss each of the following:

Product, promotion and sales, pricing and distribution, as relevant to the corporate



3.3.2.  Leisure/weekend Market (discuss each of the following: Product,

promotion and sales, pricing and distribution, as relevant to the leisure



3.3.3.  Other market segments…(use a descriptive heading e.g., conference

market) (discuss each of the following: Product, promotion and sales,

pricing and distribution)

3.3.4.  Food and beverage (discuss your food and beverage decisions including

menu, supplier, liquor and selling price. Also include relevant advertising



3.3.5.  Staffing and Service quality (Staffing: minimum discussion is pay,

training and number of staff based on forecasts. Service quality:

strategies to improve service quality providing specific steps)

3.3.6.  Physical property condition (current status, building and renovations

planned, EMS initiatives)

  1. Reference List
  1. Appendices

5.1.   Current Balance Sheet (December Year 3) (one page only)

5.2.   Statement of Income for the whole of Year 3 (one page only)

5.3.   Monthly Indicator report for all 12 months of Year 3 (two pages only)

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