2.4 Return on capital employed (ROCE)
ROCE (Return on capital employed) is a ratio that reveals value of the business gains from its assets and liabilities. The first year of the PLUTO had -12.6% ROCE. One of reason is refurbishment and extra facilities. January of year 1, the PLUTO spent near $1,300,000 for room refurbishment. It was terrible decision and that affects to negative ROCE. Moreover, even though, hotel built diverse facilities such as extra car parking and conference room in year 1, Pluto recorded poor performance.
On the other hand, the ROCE of year 2 was 21.2%. High level of performance leaded $10,170,111 total revenue and total net income was $2,153,471. This figure indicates that total revenue has near twice different between year 1 and 2, but expense was almost same as year 1.
In year 3, the Pluto hotel picked highest ROCE within 3 years. Exactly, hotel recorded 27% of ROCE. At that time, occupancy rate was near 80% and hotel earned much money from all of departments. This high level of performance helps to get the highest ROCE. and extra facilities. As the report mentioned that
2.5 Occupancy, average daily rate (ADR), and REVPAR
The occupancy rate of the Pluto hotel indicates a gradual increase over the past 3 years. Especially, occupancy rate and REVPAR has very similar pattern of last three years. Through this graph, hotel could expect that December to March has emerged as the hotel’s high season, with May to August being the hotel’s high season. In year 1, the Pluto recorded 48.3% of room occupancy, $62.36 of average daily rate and $30 of REVPAR. At that time, the PLUTO was 2 or 3 star hotel. However, hotel decide high rate of room and, that make low occupancy rate.
In year 2, all of figure (OCC, ADR and REVPAR) have increased sharply. Exactly, 65% of room occupancy, $78 of average daily rate and $50.66 of REVPAR was indicated. Especially, between January to March, hotel had high level of occupancy rate and REVPAR.
Same as year 2, hotel recorded great performance in year 3. Especially, in July and August, occupancy rate was 100% and REVPAR also was high. However, in September, occupancy rate dropped from 100% to near 60%.
2.6 Refurbishment spending and extra facilities built
In the first year, the Pluto hotel spent much money for both refurbishment and extra facilities. Particularly, hotel made a terrible decision about room refurbishment. In January of year 1, hotel refurbished 250 rooms and other facilities for level 2 and spent near $1,300,000 in a month. Moreover, hotel built a reference/function rooms, extra car parking area, second bar, quick check in/out and business service from March of year
In year 2, hotel did not spend much money for refurbishment and facilities. Hotel spent $569,250 for 30 rooms and front desk of level 3. Actually, in year 2, hotel tried to keep good condition of all facilities, and built only 2 extra facilities which are hotel shop and leisure club.
In year 3, the Pluto spent $74,750 for refurbishment. In January of year 3, hotel refurbished 15 rooms for level 1 and 1 conference room for level 2. In march of year 3, hotel did 1 level of refurbishment for 20 rooms. Moreover, in September, hotel refurbished 30 rooms and restaurant for 1 level.
2.7 Short term and long term stability ratios
First year of PLUTO spent much cash for building extra facilities and refurbishing. Moreover, hotel loaned $ 1,000,000 from the bank and it leaded 1.3 of short term stability ratio and 20% of long term stability ratio.
On the other hand, year 2 and 3 recorded better ratio than year 1. Exactly, hotel achieved 2.0 and 3.1 of short term ratio and 24.3% and 22.9% of long term ratio in year 2 and 3. During that period, hotel tried to save cash for refurbishment, room and restaurant extension.
2.8 Staff turn over
The first year of PLUTO had 35% of annual staff turnover and hotel spent $ 13.90 average weekly training fee for keeping level 2 of employees. At that time hotel was less than 3 star rating hotel and occupancy rate was quite low.
In year 2, hotel had quite high staff turnover rate. Annual staff turnover was 45% and conference was near 63%. This figure can be defined as the Pluto did not expect about number of guests. This is because hotel’s occupancy rate increased sharply than expectation of hotel. Moreover, high staff turnover affected to low quality service and comments on social media.
Annual staff turnover was 40% in year 3. At that time, hotel spent $18.62 for weekly training fee.
2.9 Marketing spend and activities
There were diverse marketing ways for improving market index and occupancy rates. Within 3years, the PLUTO almost used Sunday newspaper and business press for both leisure and business travelers. Moreover, from the start of year 1, hotel allocated assets for local visitor guide, social media and website. In year 1, hotel spent 7% of total revenue for marketing.
Within 3years, the PLUTO spent asset for marketing less than 7% of total revenue.
Exactly, in year 1, hotel spent $447,548 for marketing and total revenue was $6,134,334.
댓글