Many things are consideration when making certain decisions, but the most important is in relation with improving the hotels revenue and maximization of profits. However, it is achievable if the organization carefully plans certain things. One of the ways to do this is by use of budgets and performance reports.
Sydney Terminal 2 Imperial Hotels
The revenue collected from the occupancy is not consistent. At the beginning of the month revenue variance was $ 2.24 while on the 3rd of December the revenue variance begun to decline by showing a negative of $ 0.72. Later in the month, it started to increase rapidly. This made the revenue collection for the month unpredictable as shown by graph below.
The above graph visibly shows that the Actual – forecast room (ADR) revenue of company has been consistently reasonable even they were at an all time high during the beginning of the month.
The total revenue variances indicate the same position, fluctuation of revenue from time to time but on downward trend. At the beginning of the month, the variance was positive of $ 584, which went down to a negative of $3,100 in the 21/12/10. At one point, it was as low as $ 4,566. Surprisingly the variance seemed to improve in on the 7/12/10 but the following day it went deeper south, this means that the hotel cannot rely on such trend to make it in industry. The graph below shows the trend taken by the revenue per room,
From the above graph, it is clear that revenue was fluctuating but had a downward trend, which calls for review of hotel policy. When consideration of the occupancy and revenue per room, you will find that revenue per room plays an important role in determining the profitability of the room. When you considers higher rate some customers will not patronize the hotel but all efforts geared towards attracting more customers as well as retaining the existing.
Conclusions, Implications and Recommendations/Suggestions
It will be beneficial Sydney Terminal 2 Imperial Hotels to have constant revenue policy especially to outside business interests for the sake of transparency and accountability. This unfavourable performance may reduce the growth and dilute the profit. Economic Factors may distort the revenue collection of the hotel, which is fundament to the overall performance of the company, but it appears the policy plays an important role. This is in view of the fact that teach day has it is own rate something that is not good for any business. During month, there is a dramatic fluctuation on rates as shown from the case study. Hotels are run with a fixed rate of revenue, which is reviewed by the management.
Low average daily rate can considerably reduce the operating income of the hotel. In case of Sydney Terminal 2 Imperial Hotels, the management should begin their journey with stabilizing revenue per room. This is achievable through consistent, experienced, competitive, and aggressive managers who can face the cutthroat marketing competition, timeliness of demands, and foster sales through vigorous market skimming. There has been a phenomenal decrease and the company should look to the future by making sure that some of inefficiencies of the operations are ironed out in order to help them achieve improved things in terms of their business vision and mission.