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Report is based on idea of opening a Seven Star Hotel in Lahore for the first time. It also contain Business Plan of seven star hotel, 5 years balance sheet, income statement, Ratio Analysis.
Report is based on idea of opening a Seven Star Hotel in Lahore for the first time. It also contain Business Plan of seven star hotel, 5 years balance sheet, income statement, Ratio Analysis.
Report is based on idea of opening a Seven Star Hotel in Lahore for the first time. It also contain Business Plan of seven star hotel, 5 years balance sheet, income statement, Ratio Analysis.
2014 FINAL BUSINESS PROJECT (BBIT) LA DOLCE VITA PROJECT ON SEVEN STAR HOTEL
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PROJECT SUPERVISOR:
Maam Heena Saleem
GROUP MEMBERS:
Fiza Talat F10BA109
Iqra Younus F10BA113
Fizza Khalid F10BA114
Amina Hassan F10BA133
Anum Saeed F10BA136
INSTITUTE OF BUSINESS AND INFORMATION TECHNOLOGY UNIVERSITY OF THE PUNJAB
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A PROJECT ON SEVEN STAR HOTEL
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ACKNOWLEDMENT:
We would like to express our gratitude to the Institute of Business & Information Technology, University Of Punjab for giving us the opportunity and arranging such a comprehensive final business project.
We would also like to acknowledge our Supervisor Heena Saleem at IBIT who had been extremely helpful for us.
We would like to offer bundle of thanks to her. She had been a permanent source of encouragement and guidance. She gave us a comprehensive summarization of the work we have done in our project. She made us able to perform all the functions of this project.
Thank you
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TABLE OF CONTENTS
Executive Summary 01
Project Idea 02
Introduction 03
Problem Statement 05
Aims & Objectives 06
Significance of Research 07
Impact on Training & Education 07 Economic Impact 08 Literature Review 09 Analysis of Data 21 The Survey Chart for our Project 23 Analysis of Data using Charts 25 Business Plan 33 Introduction 34 Our Mission 35 Our Vision 35 Our Objectives 35 Hotel Profile 36 Our Competitors 37 Facilities at our hotel 38 Restaurants & Lounges 39 Breakup of Start up Cost 40
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Industry Analysis 42 SWOT Analysis 43 Govt. Policies 44 Demand & Supply Movement of Market 44 Core Competencies 45 Major Competitors 45
Marketing Strategies 46 The Marketing Process 47 Application of Marketing Strategies 49 Strategic & Market Analysis 49 7 Ps of Marketing 50 Marketing Plan & Implementation 53 Keys to Success 53 Operational Strategies 54 Our Quality Control Measures 55 5 Ms of Management 56 Manufacturing & Organizational Strategies 58 Hotel Organizational Chart 59 Hotel HR Requirements 60 Our HR Process 60 HR & Management Hierarchy 63 Structural Dimensions 63 HR Strategies 64 Different Departments in Hotel 65 Major Suppliers of our Hotel 67 Financial Strategies 73 Income Statement 74 Balance Sheet 78 Ratio Analysis 80 Cash Flows 85 Financial Analysis on Excel 87
The business idea we are going to contrivance in our final project is developing a 7 star hotel in Lahore. We have nominated our hotel name as La Dolce Vita
The basic reason for proposing the hotel business as a project is that the hotel industry is an emerging enterprise. The hotel industry is advance enough that it let the people to work in different areas of interest and still be employed within the hotel industry. This development is increasing not just in Pakistan but worldwide. The main reason to choose Lahore as a location to build 7 star hotel is because there is no other 7 star hotel here yet .Another interesting reason is that the Lahore is the city of sub continental traditional legacy like historic and iconic places. These places will make the city a heavy duty tourist resort and it is very advantageous for our hotel business.
It is our primary objective to provide luxurious ambiance and a wealth of top-notch amenities to our respected guests. The capital investment needed for our project is 2,930,411,260. We have also very carefully looked over the demand and supply movement of market. Also there are chances of successful international trade in the coming years across the borders of the country. We also have engrossed our marketing and HR very intensely. As HR is our most valuable asset.
The calculated income statement of our hotel shows increment in revenues .The revenues have been expanding due to an increase in the marketing efforts. Looking at 5 years calculated balanced sheet of our company we perceive a snowballing trend in the current assets have increased. Since the company is making sales and the net income has increased over the five years so the company has invested in more marketable securities to secure income from a secondary source. Positive NPV of Rs. 4,284,565 shows that the company is able to produce more cash inflows as compare to the present/ current value of cash outflows. Profitability index is 1.001. All these aspects seem good enough to accept the project.
But still as we are grossing positive profits also we are getting back our investment seeing the time value of money in 4.9 years and our net income is growing with every passing year so we will accept this project. And our future plans are to expand our business by opening its new branches in other big cities like Karachi and Islamabad after the 3 rd year of operations.
PROJECT IDEA:
For the intention of our project, we have crop up with the idea of establishing a seven star hotel in Lahore.
The basic reason for choosing this project is that one of the fastest growing sectors is the hotel industry. The hotel industry is sundry enough for people to 2 work in dissimilar areas of interest and still be employed within the hotel industry. This trend is increasing not just in Pakistan but globally.
Reason for choosing Lahore is that Lahore is a lively city with big population and still it is not having a seven star hotel. Furthermore Lahore is the city of sub continental heritage. ( Badshahi mosque, Shalimar Gardens, Lahore Fort and the Lahore museum and zoo all dating back to the Mughal era) making the city a heavy duty tourist resort. Due to its heritage, a big proportion of tourists are attracted towards Lahore.
Heritage hotels are best if one is looking for sheer elegance, luxury and royal treatment. They are not just another accommodation options but tourist attractions in themselves. Exquisitely designed and decorated, meticulously preserved, high standards of service and ethnic cultural motifs would help the tourists and other people get the complete experience of Pakistan.
Well established hotel brands clearly illustrate that its inadequate for such industry as hospitality to augment only service quality. Its crucially significant to show trustworthy care for your clients and envisage a priority their demands in order to obtain success.
INTRODUCTION:
The business idea we are going to implement in our final project is developing a 7 star hotel in Lahore. We have selected our hotel name as La Dolce Vita
Why hotel?
The basic reason for choosing the hotel business as a project is that the hotel 3 industry is a growing enterprise. Hotel business is an exciting, never boring business which offers you unlimited opportunities with the passage of time. The hotel industry is diverse enough that it allows people to work in different areas of interest and still be employed within the hotel industry. This trend is increasing not just in Pakistan but globally.
Why seven star Hotel?
Greater investment will help the country fight extremism and terrorism both evil stemmed from poverty, illiteracy and the lack of economic opportunities. This will let other think to invest in Pakistan, its first step towards modernizing the mind of our people. This landmark project will provide hundreds of jobs for people in Pakistan. This project will also encourage other developers to invest in Pakistan by raising their confidence.
Why Lahore city?
Reason for choosing Lahore for our hotel is that there is no 7 star hotel in Lahore yet. Another interesting reason is that the Lahore is the city of sub continental cultural heritage, as Lahore has historical places like Badshahi mosque, Shalimar Gardens, Lahore Fort and the Lahore museum. These places will make the city a heavy duty tourist resort and it is very beneficial for our hotel business. Keeping in mind the demographics of the city, the weather and amiable environment, the diverse streams of food culture and a relatively better political and security situation, Lahore will be the best city to open up the chain of ---hotels.
Importance:
Seven star hotels are best choice if one is looking for sheer elegance, luxury and royal treatment. They are exquisitely designed and decorated with high standards of service and ethnic cultural, which would help the tourists and foreigners to get the complete experience of Pakistan with elegancy.
About The Hotel:
La Dolce Vita stands at the intersection of the posh phase 7 and Phase 8 Intersection of the Defense Housing Authority Lahore on 25 acres of land. The area is supported by lush green gardens, adjacent with local farms with the Pakistan-India border in close proximity about 30 minutes away. The architecture and interiors of this fabulous Hotel building would be a mere reflection of our traditional Pakistani cultural heritage, depicting the skills and craftsmanship of native artisans. This state-of-the-art building will combine local traditions elegantly combined complemented by the latest technologies in order to provide a divine and comfortable stay to our prestigious guests and valuable life changing facilities for the local population.
Hotels true spirit is mirrored by the aesthetics of the public areas, corridors, rooms, and restaurants highlighting upon the Pakistani heritage as well as the trademarks of Islamic architecture. The architecture, a remarkable one indeed 4 would be a mixture of rich, elaborated, vivid designs depicting artisans magical efforts and skill especially on the ceilings, floors, and walls. The Hotel would be built on five levels with its terraces reflecting the lush green pavilions depicting the natural topography of Lahores true plains. The main entrance of the lobby allows an easy access to Hotels resident guests and patrons using the restaurants and other facilities. The Hotel stresses upon its valuable guests utmost care and concern being highly particular towards the security and well-being of Hotel guests. 24-hours security system upgraded with extremely high-tech capability and a complete and comprehensive Crisis Management plan has been deployed at the Hotel to tackle any unforeseen incidents. The city encompasses all the four seasons of summers, winters and little phases of autumn and spring as well. Observing the general hotel industry occupancy trends, we observe that the demand of the hotel would be the greatest in the summer season. Our hotel incorporates total 300 rooms divided as follows:
Room Type Tariff per Night Quantity of Rooms Average Occupancy High Season Average Occupancy Low Season DIAMOND Lodges 91,759 10 4% 2% Executive- GOLD 53,400 20 7% 4% Executive- PLATINUM 48,950 20 9% 5% Executive SILVER 40,050 20 19% 9% Executive-BRONZE 26,700 15 25% 15% REGULAR 24,475 215 38% 20% TOTAL - 300
PROBLEM STATEMENT:
Problem statement refers to a document which consists of all those problems and issues which we will face throughout our business. Those problems will be addressed to problem solving team for solution. After that we will find a solution for all those problems by the consensus of problem solving team. Problem statement focuses on problems to the business strategy and to the customer. But our problem statement enunciates to be customer-focused problem statements instead of business focused problem statement. Because we are niche and by solving customer focused problems we are actually protecting our niche. The main purpose to make a problem statement is; How can we satisfy and delight our customers, especially the tourist and foreigners. The possible ways by following which we can fortify an image that prevents competitors from grabbing market Main purpose of establishing this 7 star hotel is that its a niche. There is no 7 star 5 hotel in Lahore yet. So our hotel is going to be the best experience for the people of Lahore.
A good problem statement follows 5ws which are Who, What, Where, When and Why. These 5ws will help to make a good problem statement which will lead to a proper solution.
Who: It defines that who does your problem affect the most? For example, is that problem affecting your business, specific customer or all customers? Who needs the solution of the problem?
What: It defines that what is the problem? What is the kind of problem? What is the impact of problem if it remains unsolved? What will be the impact if the problem will get solved? How much disturbance that problem is actually creating? What is the outer limit of the problem?
When: It defines the time when the problem occurs? What is the reason of occurrence of problem? When will problem be solved?
Where: It defines the where the problem occurred? Is the problem occurred in processes or system or location?
Why: It defines the reason of occurrence of problem and why it is so important to solve this problem? Does the problem affecting customers, stakeholders, suppliers or employees?
So with the combination of 5ws we will make and manage our problem statement. A problem well stated in the problem statement is half the problem solved, so we will make a solvable problem statement. AIMS AND OBJECTIVES:
Aims and objectives of our hotel are very candid as we seek to ensure that we run a professional, profitable and ethical business by building firm relationship with our customers, suppliers, stakeholders and investors. We are committed and dedicated in providing best of the best to our customers and to delight them. We will run our business by doing continuous attempts to improve our overall system. We will take every step by keeping in mind that we will not compromise on our customers satisfaction. We aim to: To achieve credibility by doing responsible business practices. To maintain our standard at any cost. To develop and build firm and long term relationship with our customers so that they keep visiting our hotel. To reinforce best position in the market as a niche and innovative hotel. To provide complete satisfaction to our customers and clients regarding facilities and service of high standards and providing food, beverage and related products at reasonable price. To provide high standards of ethics and taste. We will adopt the best practice and ethical standards in dealing with our clients, suppliers and vendors of goods and services and other contacts. 6 To minimize and manage waste production, ensuring its negative impact on the environment. To efficiently communicate our policies, practices and standards to stakeholders and the general public, customers. To comply the local legislations by abiding all the rules and laws regarding the quality and standard of food and living. To measure and compare our daily performance with our policies, objectives, aims and targets and quality. To ensure a safe, secure and healthy environment according to the condition. In order to cope up with these aims and objectives we need to understand our business in depth. We need to understand our goals, aims and objectives and the scope, limitations and opportunities of the hotel. We will tailor our services as niche to ensure the best fit for our hotel.
SIGNIFICANCE OF RESEARCH:
Independent studies and research show that hotels and tourism sector investments can create a significant economic opportunities in poor countries. Greater investment will help the country fight extremism and terrorism as both evils stemmed from poverty, illiteracy and the lack of economic opportunities. This will let other think to invest in Pakistan, its first step towards modernizing the mind of our people. This landmark project will provide hundreds of jobs for people in Pakistan. This project will also encourage other developers to invest in Pakistan by raising their confidence.
Research has shown that hotel enjoyed high rates of return on invested capital(ROIC), a characteristic often associated with high quality companies the ratio can indicate whether a company deploys its capital in an efficient and profitable fashion.
It is evident that the companys returns would be attributable to the rates it will charge for services. Those rates are quite high and might seem excessive, especially relative to local income levels in our countrythere might be a vibe that this will choke off nascent demand. However research indicated that the supply of formal hotel rooms was shockingly small relative to potential demand and all the good hotels say Serena, Marriott and PC in Lahore and Islamabad are almost full when the season is at peak. However the company (and the rest of the industry) would be happy to exploit this situation.
Impact on Training and education: We have come up with an intension to give training (hotel management, customer service, language, culinary) that helps widen the sector and creates ultimate skills for workers and upcoming self-employment opportunities for others. It will improve quality standards for the hotel industry. This is particularly significant with the more established hotel chains that transfer skills and knowledge. We will connect with local communities to prop up training and education.
7 Economic Impact:
Some of the careers opportunities in the hotel industry are as follows:
The industry offers more career options than most: No matter what kind of work we enjoy and wherever our aptitudes lie, there is a segment of the industry that can use our talents.
The work is varied: Because hotels and restaurants are complete production, distribution and service units, and managers are involved in a broad array of activities. There are many opportunities to be creative: Hotels and restaurants managers might design new products to meet their needs of their guests; produce training programs for employees; or implement challenging advertising, sales promotions and marketing plans.
Hospitality jobs are not nine-to-five jobs: Hours are highly flexible in many positions. Many more opportunities are waiting in a queue. With these the role of HR is drastically change. Its fields of operation in todays worlds knew no boundary. Each day it is confronted with new challenges in new division of hotels. Therefore before knowing the role of HR it is essentials to know different department of the hotels as well their functions.
Introduction to Hospitality Industry:
As the industry trends are changing peoples attitudes towards standardization and class levels are also changing. Peoples basic needs have now transferred towards luxuries. Now people have become competitive with the growing needs of market and industry. Reflecting rapidly alteration industry trends, this aggregate consolidates all aspects of foodservice, abode and tourism operations into an up-to-date, absolute overview of the adaptation industry. To advance an industry-wide perspective, the argument is disconnected into 5 capital parts. A hotel cant be called a hotel if these five capital perspectives dont fulfilled properly. With the growing demands of customers these allotments are equally important for the hospitality industry. Allotment 1, perspectives on careers in adaptation presents a affiliate on demographic trends, one on the appeal for adaptation casework from assorted customer segments, and one on the accumulation of labour. It means that hospitality management should properly take great care of demographic trends. Because the demographic needs of customers are very important. Customer segmentation is done demographically and geographically the needs and desires of customers are different from one another. It might be 8 possible that a local customer needs something which is totally different from a tourists or some international customer. Allotment 2 takes an all-embracing attending at aliment service, presenting a altercation of restaurant types, the alignment of this sector, and bloom and ecology and business concerns. The major concern of allotment 2 is on the presence of restaurants, bars, casinos and their organisation and division in a certain hotel. How these activities are arranged in a hotel are equally important and a major issue of concern. Besides this health and hygiene concerns are very important. For becoming a good hotel and earning a good name in hospitality industry , one must take great care of food quality, clean atmosphere, quality services under a very healthy and hygienic environment. Allotment 3 looks at adaptation with alone capacity analytical demand, bazaar segmentation, alignment of the industry, and business and aggressive advantage. Allotment 3 clearly looks at the market demand and supply, current market conditions, forecasted market conditions, what are your customers, who would be your customers in future, your targeted customers and also about your competitors, your core competence and your competitive advantage. Allotment 4 looks at tourism, presenting alone capacity which appraise its bread-and- butter and amusing impacts, what are the economical benefits your hotel is getting from tourism, what you have in your hotel which attracts tourism, including its accent to the US antithesis of trade, the above categories of destinations and the types of business and activities that drive centenary destination sector.
If these allotments are adopted appropriately then efficiency in hospitality management will be increase. Also application of these allotments will help in getting effective and successful outcomes.
(C.W, Introduction to hosoitality industry, 1999)
Title: Introduction to the hospitality industry. Author: Powers, T. Barrows, C. W.
Publication: Introduction to the hospitality industry, Book Date: 1999.
Operational Issues and Trends in Hotel Industry: Trends In Accommodation Breadth Accommodation is all about alms amore to anyone who looks for advice at a aberrant or acrimonious place .People from different areas where they dont know anyone or they are not perfectly comfortable with that place usually tends towards the choice of hotels. As this is the era of business and development so, it is obvious that the trend of travelling is getting more and more. This trend also gave rise to hospitality industry. It refers to the act of accepting and absorbing a bedfellow with goodwill. Accommodation in the bartering ambience refers to the action of hotels, restaurants, catering, inn, resorts or clubs who accomplish a vocation of alleviative tourists. Helped With different efforts by government and all added stakeholders, including auberge owners, resort managers, bout and biking operators and advisers who plan in the sector, Indian 9 accommodation industry has acquired a akin of accepting apple over. If we talk about our neighbour country, India then we come to know that there is a very great trend of hospitality management. It has yet to go afar for acceptance as a apple baton of hospitality. Many yield Indian accommodation account not for its superior of account but India getting a bargain destination for leisure tourism. As it is discussed before, the quality, service as well as customer service of Indian hotels is not so very good but there is tremendous level of hospitality service and tourism attracts just because of its economical destination. With absolute tourism and beginning business prospects, in the advancing years Indian accommodation is seeing blooming pastures of growth. Availability of able animal assets and beginning bounded assets accord abundant affairs to the accommodation industry. The amount of tourists advancing to India is growing year afterwards year. Likewise, centralized tourism is addition breadth with abundant potentials. 1. Low amount carriers: Travellers in accepted are added amount acute to airfare than they are to auberge allowance rates. Often a low airfare will activate appeal for biking even if aubergine prices are increasing. LCCs are a acceptable advantage for business travellers, as they accept advantages like low costs, added options and connectivity.| 2. Account hotels: Added than 50 per cent of control of a majority of hotels comes from the business biking segment. The boilerplate allowance amount (ARR) accomplished from business travellers is commonly college than from leisure travellers. Heightened appeal and the advantageous control ante accept resulted in an access in the amount of account hotels. (2011, 03). Trends in Hotel Industry. StudyMode.com. Retrieved 03, 2011,
This article or commodity makes some predictions about the approaching by because operational issues in the aboriginal allotment of the next century. This article knocks about some operational issues of the hotel industry Accommodation operations administration is advised at two levels the close akin at which cardinal operations administration (strategic operations) takes place; and the assemblage level (unit levl). It is proposed, application a archetypal developed by Jones (1999, International Journal of Contemporary Accommodation management), there are seven cardinal concerns: location, integration, affiliation, configuration, organisation, accomplishing and adaptation.
Location concerns with the strategic operations of hospitality management, It is a big issue of concern. It me It means location should be as good as possible to attract the tourism and also should be in reach of travellers and customers. Usually good locations more easily attract people. Integration is also one of the concern of strategic operations. It means how to put up things together for the purpose of management. Affiliate means how to link up things and how make a bridge between two things that are directly or indirectly linked with each other. Configurations refers to the way by which things are properly arranged and lined up for a specific purpose. Organization being an important part of strategic operations concerns with the proper set up that how hospitality activities and services are organized in a proper manner. Accomplishing means fulfilling tasks which are planned for doing a particular purpose or activities properly. Adaption is a very important part of strategic operations in hospitality management. Adaptation means to bring change. It means to change your organization according to external as well as internal environment. Its basic purpose is to cope up with change. Unit operations are somewhat called as assemblage operations. For assemblage operations administration the framework of assay is based on Lockwood and Jones (1989, The Administration of Hotel Operations). This identifies seven key after effect areas: assets, employees, accommodation (or customers), productivity, service, assets (or control), and quality. Assets are referred to as machinery, plant etc. but as this is modern world people are changing with the environment so now a days, in the era of global warming assets are considered as the 10 organisations employees and its information which cant be shared with anybody in any case or at any cost. Employees are also a big issue of concern. Giving fair and equivalent rights to employees and taking care of their rights is very important. Customers are the most important part of all the strategies in the hospitality management. It is very important for all the hotels to satisfy their customers, focus on customer delight and their needs by giving them a very special and satisfactory ambiance as they expect from them. Productivity is also important because as productivity increases, economies of scale increase. Quality should also be focused because good quality attracts customers automatically. Application these frameworks an appraisal is fabricated of accepted issues and trends in accommodation operations management, arch to a prioritisation of accessible approaching outcomes. (jones, 1999)
Title: Operational issues and trends in the hospitality industry Author: Peter Jones Publication: International Journal of Hospitality Management Publisher: Elsevier Date: December 1999 Copyright 1999, Elsevier
Business Travellers Hotel Expectations and Disappointments : A Different Perspective to Hotel Attribute Importance Investigation:
Hotel aspect accent studies accept a continued attitude in accommodation research. This abstraction investigates the affair for business travellers by allurement the respondents to accompaniment their expectations and disappointments / annoyance in an accessible catechism architecture instead of appraisement the accent of attributes directly.
In a aggressive marketplace, market analysis is the key to success. The abstraction of market analysis can be implemented best, if there is a complete base of ability about the ambition group. This abstraction investigates expectations and accomplished disappointments of business travelers blockage at hotels with altered brilliant appraisement categories. Thus, it is based on two curve of accomplished tourism research, which will both be briefly advised in the afterward paragraphs: auberge aspect studies and business adventurer descriptions.A all-inclusive amount of studies was conducted in the accomplished investigating what the optimal auberge action looks like. The studies about-face out to be acutely amalgamate in agreement of analysis interest, the ambition articulation studied, the attributes advised and the analysis design. This advanced array of studies makes it absurd to draw ambiguous conclusions.
The one a lot of archetypal appropriate aural this band of analysis seems to be, that the attributes are provided to the respondents as a account of some affectionate and respondents acknowledge to the appearance by ranking them as added or beneath important. One barring to this aphorism is provided by Dube and Renaghan (2000) allotment an accessible catechism architecture allurement for important auberge attributes and ending up with 1275 altered answers. Both approaches accept advantages and drawbacks. The closed catechism architecture eases statistical testing it restricts the array of answers and appropriately is in danger of blank accessible important added factors. The 11 accessible catechism architecture allurement for the accent of attributes on the added duke provides the widest accessible appearance but makes it difficult to differentiate which attributes are amount requirements and which ones alone add little value to a affable auberge experience. The abstraction presented in this cardboard takes a hardly different point of view: In adjustment not bind the ambit of accessible answers, accessible acknowledgment architecture is called and to anticipate respondents to account beneath accordant attributes (by allurement anon which factors are perceived as important), the questions accumulate the associations to expectations prior to seeing the auberge and the disappointments accomplished in the past. The acceptance is, that answers to these questions would advice to pin down axial issues of a auberge offer.
The analysis abstracts is acclimated to investigate whether the allegation appear in abstract are mirrored or not, on the one hand, and, on the added duke to apprentice about expectations and accomplished disappointments in adjustment to accommodate auberge industry with added acumen for the assignment of customizing their art fact by auspiciously abbreviation aflutter animosity and affair expectations as bidding by the guests.
The empiric abstraction was conducted in Austria during the winter and summer division of 2001. Tourists were questioned in their hotels all over the country. The sample was not fatigued in a representative address but in a antecedent aggressive way ambiance quotas for winter and summer season as able-bodied as the auberge brilliant categories. The interviews took 15 account in boilerplate and included accessible questions on the expectations towards the auberge class visited a lot of generally and disappointments that accept been accomplished in the past. The accessible catechism architecture was called in adjustment not to access the respondents by providing accessible fabricated answers. The respondents were not bound in the amount of statements they chose to make. In addition, abundant accomplishments variables as age, years of academy education etc. The absolute sample admeasurements amounts to 195. 60 percent were questioned in the winter season, 40 percent in the summer division of 2001, 17 percent backward in hotels graded one- or two-star, 35percent in three-star, 33 percent in four-star in assuredly 15 percent in 5 brilliant accommodation. The boilerplate age of the respondents was 40 years, the sample consisted of 72 percent macho and 28 percent changeable business travelers.
The catechism investigating the expectations of business travelers apropos the auberge was posed in the afterward way: you accept a lot of acquaintance with hotels aural the .... Brilliant category. What do you apprehend from ....-star hotels? The catechism had to abode the affair of star grading, as it represents a above amid capricious in this question. The questions was posed in accessible catechism format. The respondents were accustomed to accompaniment as abounding factors as they wanted to.
Cleanliness is mentioned most often by the respondents (16 percent of all factors named were included in the category cleanliness), followed by friendliness, good food, a television set in the room and service. The location and the price issue rank 7th and 8th. As this as open question, the answers had to be categorized. The bias from this categorization has to be held as small as possible. Therefore e.g. the categories good service and service are listed separately. It could not automatically be assumed that high quality service was meant by respondents stating service. Three abstracts can be conducted.First, business travelers blockage in one- or two- star-hotels enunciate abundant added axiological expectations than the actual guests. They acknowledgment issues that assume to be bright in the added categories, as e.g. a shower, availability of aliment or a adequate bed. With the guests blockage at three brilliant apartment they allotment the apprehension to get acceptable food, accept a TV in the allowance and an own toilet. Aswell the amount issue is mentioned by these guests, admitting business travelers blockage in college auberge categories do not acknowledgment amount or value-for money actual often. Guests blockage in 5 brilliant hotels on the added duke apprehend acceptable service, a acceptable location, 12 affable atmosphere, ample rooms, abundance in accepted as able-bodied as the availability of internet added often.
Thus from the angle of expectations it becomes bright that the accumulation of business travelers is actual amalgamate and that associates of this articulation not alone accomplish use of altered auberge categories but aswell accurate differing expectations apropos their accommodation.
The aforementioned cessation can be fatigued for the disappointments declared by the business travelers. Disappointments apropos altered brilliant categories are actual distinct. The catechism was airish in the afterward manner.
Survey gives the consistent analytical factors declared aboriginal for the business travelers in percent of statements. Again, the abridgment of cleanliness is in the lead. Nearly one fifth of all answers accustomed by the respondents blow the affair of hygiene and cleanliness, followed by weaknesses in the fields of allowance architecture and setup, cadre and service. Both area and bulk do not represent above factors of dissatisfaction, as these issues alone bulk to 5 percent of the statements, 4 percent respectively.
The annoyance catechism actual acerb mirrors the apprehension question. Although there is some aberration in the accepted abundance administration (E.g. affability and acceptable aliment are expected abundant added generally than declared in the account of annoyance factors.), the analysis of differences amid brilliant categories of the hotels mirrors the after-effects accustomed at from the expectation point of view. Again, the axiological issues are called added generally by business guests blockage in lower auberge categories, admitting affluence auberge business travelers accurate their disappointment with affluence as e.g. service, superior in accepted and cadre far added often.
13 CONCLUSION: The abstraction investigates the affair of auberge aspect accent for business travellers by allurement the respondents to accompaniment their expectations and disappointments / annoyance in an accessible question format. The empiric abstracts consisted of 195 business travellers questioned in their hotels with quotas imposed on the brilliant category, in adjustment to be able to ascendancy for this intervening capricious accepted to accept above access on the results. The aim of the abstraction is twofold: (1) to apprentice about expectations and accomplished disappointments of this accurate articulation in adjustment to accommodate auberge industry with added acumen for customizing their artifact by affair expectations and alienated disappointments as bidding by the guests and (2) to investigate whether the allegation appear in abstract so far are mirrored or not. Concerning the axial auberge attributes, the agency cleanliness is in the lead, no bulk whether the affair of auberge aspect accent is apparent from the expectations or the dissatisfaction perspective. Friendliness and acceptable aliment still annual for added than 5 percent of the statements on expectations each. From the annoyance point of view, weaknesses in the fields of allowance personnel, account and agents accept bulk to added than eight percent of the answers each. Strong differences amid business travelers blockage in altered auberge categories can be detected both from the apprehension and the disappointment perspective. The general award apropos these differences is, that bedfellow in lower categories are added concerned about the axiological auberge components, admitting affluence business travelers emphasize the abstract aspects more. The abstracts fatigued in above-mentioned studies on the affair of auberge aspect agency accent for the segment of the business travelers are not mirrored actual able-bodied in this study. Location and reputation were not an affair at all, while amount ranked rather low. The acumen for this is the form of the catechism cartoon the absorption to added aspects than by allurement the archetypal catechism that is acclimated in auberge aspect studies which anon requires accent ratings. The award that amount plays a altered role for business travelers blockage in altered auberge categories is accurate by this study. Good amount for money is accepted far added generally in low hotel categories. Amount disappointments, on the added hand, are appear added generally in college hotel categories. While the access of belief accessible apprehension and dissatisfaction statements does draw the respondents absorption to added issues and appropriately generates some absorbing allegation for hotels specializing on business travelers, generalizations of this allegation should be fabricated with abundant caution only. In adjustment to access generalizability, the analysis would accept to be conducted in more countries and acutely a beyond sample admeasurement would access the ability of statistical tests. Another awful absorbing acreage of added analysis would be to investigate asymmetries in apprehension and disappointment statements as e.g. appear in the case of affability or good food. Within the framework of this abstraction it nor accessible to accept why they emerge, only hypotheses can be formulated as e.g. such factors getting abundantly provided by the majority of hotels or differences in accent weighting depending on abrogating or absolute surprises. Finally, as the beeline catechism of accent was not included in this survey, direct allegory of the absolute accent analytic and the access called actuality unfortunately was not possible.
14 (Dolnicar, 2002) Title: A Different Perspective to Hotel Attribute Importance Investigation Author: Sara Dolnicar Publication: A Different Perspective to Hotel Attribute Importance Investigation, Asia Pacific Journal of Tourism Research Date: July,2002
IMPROVEMENT OF HOTEL SERVICE QUALITY: AN EMPIRICAL RESEARCH IN PAKISTAN:
Meeting the difficulties of an unsteady and unsettled environment is not simple. The late effects on the accommodation administrations economy of evolving engineering, mergers of organizations, progressively requesting buyers and expanded rivalry have made an environment of unpredictability and quick change. With a specific end goal to get by in this requesting commercial center, administration associations have stand out decision, to effectively create and dispatch new administrations. In any case, the disappointment rate of new administration activities is high, on the grounds that the learning on how new administrations ought to be created is restricted. Tragically, not at all like substantial new item advancement hones which have the profit of far reaching examination into how fruitful new items are produced, the administration part has just as of late started to investigate approaches to guarantee the achievement of new administrations. Thusly, this study concentrates on a superior understanding of how effective new lodging administrations are created and researches the components, which have affect on achievement or disappointment in new administration improvement (NSD) in the inn area. The consequences of the exploratory study are outlined in a calculated model for further research.
Introduction:
The lodging business, specifically, and all organizations whose administration rely on upon building long haul relationship need to focus on keeping up client's devotion. In this admiration, faithfulness is extraordinarily affected by administration quality. Accordingly, lodgings regularly put resources into dealing with their associations with clients and keeping up quality to guarantee that clients whose reliability is in the fleeting will keep on being steadfast in the long haul. Together with client's dependability, quality is a just as essential component and may prompt the accomplishment of the tourism business and likewise control tourism firms to effectively experience the aggressive difficulties without bounds. Implications.
The fundamental objective of this study has been to attain a superior understanding of how effective new inn administrations are produced. This will be fulfilled by looking at the real improvement exercises and a percentage of the going hand in hand with authoritative matters. The fruitful provision of a relative procedure with an arrangement of multivariate tests, will attain the segregation of various potential elements that influence the result of another administration. Consequently the ID of another prescient model will be led which could viably anticipate achievement and disappointment. The result will give various ramifications to promoting 15 researchers, for administration included in new administration improvement, and additionally for inn executives.
CUSTOMER LOYALTY AND TOURISM SERVICE QUALITY:
As it may be, emotions and demeanor accomplished by clients through the administration gave by lodgings structure the impression of administration quality. Taking into account their individual impression of the administrations, clients by and large structure their encounters Many studies have examined the relationship between administration quality and client steadfastness on the objections accepted from clients .Here an objection is seen in the light of the client's appeal for better administration and conceivable proceeded use of the item within a brief span of time. Also, client dependability is seen as one of the real facilitators of administration quality that rose up out of the writing. Client steadfastness happens when there is rehashed buying by the same clients and their readiness to propose the item to different clients without any altogether profits, and inevitably the rehashed uses would produce positive and quantifiable monetary results. Among the budgetary profits of client reliability are enhancements in maintenance and expand in the offer of a company.
Checking client dependability has turned into an imperative center for all directors in the inn business. Disappointment to perceive the force of client fulfillment, particularly their feelings, could annihilate the force of client maintenance and faithfulness
Accordingly, the inn administration's most awesome test lies on pulling in clients as well as particularly on distinguishing client fulfillment separately. Clients may concur that the lodging gives large amounts of administration quality yet not so much concur that the inn guarantees high fulfillment. On the off chance that costs are seen to be high, this may even now have a negative impact on faithfulness. Larger amounts of value are just genuine to the degree that clients accept that esteem is, no doubt improved. Thusly, supervisors should painstakingly execute value rivalry and comprehend the quality saw by distinctive business portions. Clients might in some cases avoid buying when cost is seen to be excessively high, while some got suspicious of value when cost is excessively low. In rundown, understanding the relationship among administration quality and reliability will help administrators settle on choice and arrangement their methodologies in the focused accommodation nature.
Hotel attributes :
Few issues in tourism exploration are in this way, basically important to the business as the examination of the part lodging properties play in the shoppers' brains. Knowing the properties that focus settlement decision, the gimmicks that are seen as being paramount in an inn and the inn qualities that prompt higher client maintenance empowers lodging administrators to settle on ideal inn advancement choice.
Various creators considered the imperativeness of inn traits without particularly concentrating on the conduct affected by these significance explanations.
(1993) concentrated on the customary inn visitors.
Not just does the field of "lodging property examination" draw in a considerable measure of consideration among specialists inside the field of tourism and cordiality, the studies researching the criticalness of both unmistakable and elusive inn aspects are to a great degree heterogeneous as far as the essential exploration premium, the business portion contemplated, the characteristics included in the overview, the survey plan picked and the information dissection procedures 16 connected. This wide mixed bag of studies with distinctive introduction sadly makes it difficult to determine general comes about the vitality of lodging qualities for the universe of visitors. The schema recommended for the grouping of observational studies inside this field of examination offers a three-dimensional matrix that serves to structure the sorts of results gave by distinctive exploration bunches. The three measurements considered incorporate the essential examination engage, the danger versus utility methodology and if an exchange off circumstance is made for the respondent. Adjacent to these criteria it is clearly vital to recognize the sections considered when thinking about consequences of diverse overviews.
Improvement of Hotel Service Quality in Pakistan
Client fulfillment assumes a vital part in fiscal execution of inn. There are a few components that have critical part in measuring client relationship with inn: age, sexual orientation, pay and society. The administrators of inns are key component of chiefs. It is important to investigate the view of lodging supervisors about inn positioning and they ought to connect it with enhancing administration quality and execution. Inn administrators ought to concentrate on keeping the amount of administration disappointment low and watch client grumblings always. System to advancement administration quality ought to involve issues of client dismemberment, administration gave, society of inn, correspondence with clients, recruitment and preparing of administration workers, and their evaluation framework. To get change administration quality, there is a need to accentuation on unmistakable and elusive possessions.
For lodging administrators, it is not important to simply get room related income, yet income might be created by enhancing administration related offices like better administration generation, failure free conveyance, overhauling visitor offices and expanding esteem of inn (Narangajavana and Hu, 2008). Inn workers for the most part see that just two things are vital in administration quality, one is cleanliness of room and different is kindness of representatives (Shi & Su, 2007), yet different angles that make a standard of neighborliness and paramount for administration quality change are climatic impression and improvement of lodging (Shi & Su, 2007) alongside past two perspectives. Clients interest and desires keep on chaning as per market that is the reason inn directors should auspicious know those desires and enhance their administration quality likewise [5] Innovation in Services of Hotel
A QM framework focused around the usage of specialized standards will gain a comparable importance as the authority lodging evaluation (Josep Maria Bech Serrat, Feb 2010). With the promote of lodging industry being serious, it is discriminating that inns offer a mixture of asset and more adaptable structures to help an evolving commercial center (Cheng-Hua Wanga, Kuan- Yuchenb, Shiu-Chunchena, 2011). The climbing rivalry rising up out of prospering worldwide markets exasperates the interest for lodgings to advance their administrations and courses of action for an ensured achievement (Wen-Jung Chen, 2011)
CONCLUSION:
This study inspected the parts of administration quality in lodgings that impact the fulfillment of clients and their expectation to return to. The results of this exploration close to give quality administration is the amalgamation of diverse components which are complicatedly interfaced with one another. The discoveries of this study recommended that effect of administration quality influences the client fulfillment that brings about accomplishment of lodging and it is a verifiable reality. Additionally, supporting the client fulfillment level is a progressing process that involves unremitting change in administration quality at lodgings.
(Afshan Naseem S. E., Jun, 2014) 17
Title: Improvement of Hotel Service Quality: An empirical research in Pakistan Author: Afshan Naseem, Sadia Ejaz, Prof. Khusroo P. Malik GPHR Publication: International Journal of Multidisciplinary Sciences and engineering, Vol.2, No.5 Publisher: Salman Shahid Date: Jun,2014
INTRODUCTION:
It was intended to locale diverse stages and points that will be followed in carrying out the study. It concerned a proposal for the compilation, measurement, collection and analysis of data. The study was focused at structuring theoretical frameworks on how hotels in East Africa would compact with environmental challenges and customers expectations. The basic purpose was to know about that actually what people want from a seven star hotel.
DATA COLLECTION:
The study was done with the help of primary data. The primary data was gathered through questionnaire survey (given in Appendices) to the elite class, departmental heads of various five star hotels, business men etc and the result was generated in line with the goal of the study.
This technique helped in extracting some in detail information through directed questions to the respondents in which a questionnaire by itself was very helpful. The questions were constructed about the research proposition that were expected to be answered in this research.
SAMPLE SIZE:
We have done survey with the sample size of 50 respondents.
QUESTIONS FROM RESPONDENTS:
18 The respondents were requested to answer about the questions regarding their income range, hoteling experience, reason for hoteling, the area and the services they prefer the most etc.
THE SURVEY CHART FOR OUR PROJECT:
There were 50 form in total and the data collected is now shown in percentages(%)
Age Tean agere =8 up to 40 years =72 up to 55 years =14 senior citizens =6 Occupation Business =64 Govt. Servant =20 Private Employ =12 student =4 Resident Lahore (Local) =66 Out of Lahore 12 overseas =20 Foreigner =4 Income Range Less than 100K =12 100-300K =44 300K or above =40 in Foreign Currency =4 Hoteling Experience Oftenly Visit =20 Quarterly =36 Annually =24 Occasionally = 20 Reason for Hoteling Business/official/Govt. Meetings =64 Function /Ceremony attending =20 Political / Religious / social gathering =8 Recreation / Entertainment /Refreshment =8 Expense rang per Visit Rs. 10K =16 Rs. 25K =72 Rs. 100K =6 In Foreign Currency =4 Staying at hotel duration One Day Trip =64 Weekly stay =20 Monthly stay =6 or Long =10 19 Area where you would like to Stay Posh areas (DHA, Gulberg, Model town etc. =50 Peripheries of Lahore =4 Congested Area (Johar Town, Allama Iqbal Town etc. =10 Cantonment area =36 Services you like the most: Laundry =10 Room Services =40 Restaurant/Bar etc =36 Pick n Drop =14 While selecting a hotel you go for Economy =24 status =24 stars =16 Pomp n show =36 Where you find the hotel for Internet =34 Newspaper / magazines / publications =18 Friends Recommendations =16 others =32 Does it matters for a 7 star Hotel Security system =72 Parking system =22 Electronic facilities =2 all above =4 In which Time do you like the most for hoteling Seasonal =28 Festivals / Events / ceremonies =14 Annual/Biennial /Quarterly meetings =54 Family Functions =4 What is your concept for a 7 star hotel luxurious =30 Spacious =10 free of cultural boundaries =32 All above =28
ANALYSIS OF DATA USING CHARTS:
Age
Occupation
teen ager 8
Business 64
up to 40 72
Govt servant 20
up to 55 14
Private Employ 12
senior citizens 6
student 4
tean ager up to 40 up to 55 senior citizens 0 20 40 60 80 Business Govt servant Private Employ student 20
Resident
Income range
Lahore 66
less than 100 K 12
Out of Lahore 12
100-300K 44
Overseas 20
300K n above 40
Foreigner 4
Foreigner Cyrrency 4
0 10 20 30 40 50 60 70 less than 100 K 100-300K 21
Expense Range per Visit
Staying Duration
10K 16
1 day 64
25K 72
weekly 20
100K 6
Monthly 6
foreign currency 4
Longer 10
10K 25K 100K foreign currency 0 20 40 60 80 22
area in Lahore you like
Services you like
Posh area 50
Laundry 10
Peripheries of Lhr 4
Room service 40
Congested Area 10
Resturant etc 36
Cantt 36
Pick n Drop 14
0 10 20 30 40 50 Laundary Room service Resturant etc Pick n Drop 23
7 Star matters?
taming for Hotling
Security 72
Seasonal 28
Parking 22
Festivals 14
Electronic 2
Meetings 54
all above 4
Family function 4
0 10 20 30 40 50 60 70 80 0 10 20 30 40 50 60 24
25
Concept of 7 star
luxuries 30
spaciaus 10
free of culturs 32
all above 28
0 5 10 15 20 25 30 35 26
Hoteling Experience
Reasons fo hoteling
Oftenly Visit 20
business 64
quarterly 36
function 20
Annually 24
plitical 8
Occionally 20
recreation 8
0 20 40 business function plitical recreation 27
Selection criterion
How to find Hotel
Economy 24
internet 34
Status 24
newspaper 18
Stars 16
friends 16
pomp n show 36
others 32
0 10 20 30 40 economy status stars pomp n show 0 5 10 15 20 25 30 35 28
29
30
OUR MISSION:
To be the worlds most luxurious hotel with a team dedicated to outstanding personalized service, surpassing guest expectation by providing the ultimate standards of service and ethnic cultural motifs of Hospitality Experience
OUR VISION:
To be a world class international hotel and hospitality company, committed to being the industry leader in all our activities through dedication to our customers and colleagues
OUR OBJECTIVES:
Following are our main objectives:
Customer Service:
Our main objective is to be the largest hotel chains in all over Pakistan by maintaining the standards of excellence and high-quality customer service. It is our foremost objective to provide luxurious ambiance and a wealth of first-class services to our valuable guests.
Profitability:
In order to maximize profit in the course of sourcing new business, diverse marketing engagements would be made which contain joint ventures.
Growth Profile:
The marvellous growth can be accomplished with high-quality services, improvement in furnishings and facilities, variety of cuisines, and giving an extra ordinary ambiance to the guests.
Traditional Hospitality:
It is one of our objectives to give traditional hospitality to our clients, having the true sense of our cultural values.
Compatibility:
It is our objective to get our self engaged in to keep tempo with the change through constant pains and shall continue to accomplish better results through elevated sales and better profitability.
31 Training:
Investing in people and Human Resource development will be an ongoing process in our hotel. Our HR will be considered as our assets. They will be more important than any other resource. For this purpose we will be doing continuous efforts for their training and development.
Environment of Professional Enhancement:
We strongly believe that without the development of top quality personnel, energetic growth is not possible. Our core value is development and growth for all with the elements of learning environment having colours of latest technologies and trends. Also stipulation of high-class education and training.
HOTEL PROFILE:
Address:
The intersection of the posh phase 7 and Phase 8 Intersection of the Defense Housing Authority Lahore
By considering the demands and life style of people, we have decided to open our hotel La Dolce Vita at this area. The area is supported by lush green gardens, adjacent with local farms with the Pakistan-India border in close proximity about 30 minutes away. . Contact info:
Type of Business: We are doing business with respect to ownership as Partnership
OUR COMRETITORS:
Our competitors in Lahore are mostly five star hotels :
Pearl Continental Avari Royal Palm Country Club Park Plaza Hotel Crown Hospitality Inn Hotel one Fletties
FACILITIES AT OUR HOTEL:
Our hotel will include state of the art facilities being provided for our valuable guests. They would include the following:
Health club Business Centre Swimming pool Spa Dinning (restaurants & bars) Non-smoking floors/rooms Currency exchange 24-hour Room Service Safe deposit boxes Boutiques Barber shop Concierge service 33 Pets are welcome (at no extra charge) except in the restaurants Outdoor activities Family and children activities Fitness counselling Steam room Separate women and men lounges Wi-Fi hot spot Sweet Mattress and pillows Automatic curtain opener and closer Automatic Light sensors Central heating and cooling Dual telephone lines with voice mail Valet Parking Same day laundry service Complimentary newspaper and magazines
RESTURANTS AND LOUNGES:
Restaurants and lounges incorporating the following cuisines: Continental Mexican cuisine Thai Chinese Italian Arabian cuisine Japanese Indian Coffe shops Caf
34
35 BREAK UP OF START UP COST:
Expenditure Heads Vendor Costing Sheet Nos. of Units Cost Cost/ Unit Land in Defence phase 8 (kanal) Direct purchase from D.H.A 7,000,000 200
1,400,000,00 0 Construction cost & Architecture Habib Rafiq Group of companies 200
701,600,000 Furniture & Fixtures Kalamkar & Thomas Industries
300,000,000 Commercial Kitchen and Catering Equipment Varioline Kitchens 1,437,252 5
7,186,260 Central Heating and Cooling System HMG Enterprises
15,000,000 Interior Designing and Decoration Costing Hughes Design Associates
3,000,000 Generators MAXIM POWER SOLUTIONS 25,200,00 0 10
252,000,000 Legal Charges 400,000
400,000 Misc Expenses 5,000,000
5,000,000 Capital Investment
2,930,411,26 0
INVESTMENT NEEDED FOR HUMAN RESOURCE:
36 Monthly Expense Number of people Pay per person Total Amount Directors 7 60,000 420,000 Management staff 50 45,000 2,250,000 IT Specialists 15 45,000 675,000 Serving Staff 500 12,000 6,000,000 Janitorial Staff 200 8,000 1,600,000 CSR 10 17,000 170,000 Receptionist 30 14000 420,000 Control Room Monitors 20 10000 200,000 Security Guards 40 11000 440,000 Monthly Salaries 12,175,000 Annual Salaries 146,100,000
37
SWOT ANALYSIS:
For the purpose of our project, the SWOT analysis is as follows:
Strengths: Cultural and Sub-continental Diversity Hospitable environment Lahore the city of Mughal Heritage Differential Advantage , or first movers advantage in heritage hotel experience Cheap and less expensive manpower availability.
Weaknesses: Extremely high initial cost of setting up Sky-scraping tax configuration in the industry makes the industry not as good as off than its international equivalent. Lack of proper managerial training in the hotel business industry
Opportunities:
Demand stuck between the local and the international tourists can be managed without any trouble due to dissimilarity in the time period of holiday. For the tourists at international level the zenith season for departure is stuck between September to end of March when the climatic condition and environment are appropriate whereas the local tourist wait for school holidays, normally the months of summer. Unique experience in heritage hotels.
Threats:
Susceptible to political instability and political turbulence Tourist fluctuation Competition from existing hotel businesses prevalent in Lahore Guest houses varying trends in the west side demand parallel change in Pakistan, which are complicated to execute here Poor and unpredictable economic conditions Pakistans image of being a terrorist hub would highly affect the rate of tourists visiting the nation.
38 GOVERNMENT POLICIES:
We are accountable to abundant federal, accompaniment and bounded government laws and regulations affecting the hotel industry, including usage, architecture and zoning requirements. An abuse of any of those laws and regulations or added government adjustment could crave us to accomplish adventitious expenditures and after effect in operating costs. In addition, our success in accretion our operations depends aloft our adeptness to access all- important architecture permits and zoning variances from bounded authorities with respect to government policies. Compliance with these laws is time accelerated and may abate our revenues and operating income . Our Hotel, like all absolute property, are accountable to authoritative Regulations advised to assure the environment. However, if we abort to accede with such laws and regulations, we may become accountable to cogent liabilities, fines and/or penalties, which could abnormally affect our banking action and after- effects of operations.
We are as well accountable to laws administering our accord with employees, including minimum or active allowance requirements, overtime, alive altitude and plan admittance requirements. An access in the accompaniment or federal minimum allowance rate, agent account costs or added costs associated with advisers could access costs and after effect in lower operating margins.
DEMAND AND SUPPLY MOVEMENT OF MARKET: It is evident that the companys returns would be attributable to the rates it will charge for services. Those rates are quite high and might seem excessive, especially relative to local income levels in our countrythere might be a vibe that this will choke off nascent demand. However research indicated that the supply of formal hotel rooms was shockingly small relative to potential demand and all the good hotels say Serena, Marriott and PC in Lahore and Islamabad are almost full when the season is at peak. Also there are chances of flourishing international trade in the coming years across the borders of the country. For this purpose the potential demand of good hotels will be expected to increase for the accommodation workers from different countries. However the company (and the rest of the industry) would be happy to exploit this situation.
CORE COMPETENCIES:
We La Dolce Vita have the first movers advantage in heritage hotel experience. As there is no other seven star hotel in Lahore yet, we would be having a large number of local and international visitors.
MAJOR COMPETITORS:
Our direct and indirect competitors are:
39 Pearl Continental Hotel Avari Hotel Marriott Hotel Serena Hotel Sheraton Hotel
THE MARKETING PROCESS:
The marketing process manipulates the marketing strategies of an organization. There are the four steps in Marketing process of La Dolce Vita, given as follow:
1. Analyzing the Marketing Opportunities:
La Dolce Vita will be having the proactive approach to grasp the potential opportunities of Market. This is the part in which the supervision and management of hotel requests a proactive approach instead of reactive approach. This analysis is very crucial for providing an improved and excelled quality and services to their customers in the ever-increasing competition.
2. Selecting the Target Markets:
La Dolce Vita aims to target the business and corporate consumers of multinational organizations like Nestle, Packages, P&G, Uniliever, Kohinoor Group, PIA etc.
3. Developing the Marketing Mix:
La Dolce Vita aims to build up a very conventional marketing mix strategy The need for using the term marketing mix arise because Promotion and Price are two key factors where they are using conventional plans to survive with ever-increasing competition of service and quality.
4. Managing the Marketing Efforts:
La Dolce Vita would be having a very strong competitive marketing environment. As we are adopting very effective policies and rules in order to achieve a dignity and identity in the hotel industry. In each organization the marketing environment is of two types: a) Micro Environment b) Macro Environment
a) Micro Environment:
40 Micro environment refers to the inside forces which may influence the organization by its direct and indirect notion, means the capability of organization to serve up its customers. The most influencing forces to our hotel La Dolce Vita are discussed here as follows:
Marketing Intermediaries:
The large part of the business of La Dolce Vita would depend on the different type of marketing intermediaries. The major business of this hotel depends on the marketing service agencies. The marketing service agencies will assist the hotel to transmit the messages of target customers. The advertising agencies and media firms will facilitate the hotel to pass on messages about promotional strategies to the end users and target customers.
Customers:
Like every organization, La Dolce Vita also intends to study its customers very deeply. La Dolce Vita will be focusing on two types of customer market groups locally General Customers Market i.e. Individual and households that avail services and the other is Business Customer Market i.e. The business representatives that gain services for additional processing. And internationally, these customer market groups are Tourists and Business Customer Market.
Other categories of users and customers of our hotel domestic and foreign are given as follows:
Sportsmen Business Officials Political bodies Educationists Trade representatives officials Students
Competitors:
Our hotel is willing to give more comfort and more facilities to our customers than our competitors. Also we going to maintain our dignity by providing better quality and services than our competitors.
b) Macro Environment:
Macro environment refers to the outside forces which may influence the organization by its direct and indirect notion. The most influencing forces to our hotel La Dolce Vita are discussed here as follows:
Demographic Environment:
La Dolce Vita will be having a strong demographic environment. We are intending to provide different services according to demographic characteristics. Hotel offers unique packages according to different demographic factors.
Economic Environment:
41 The management of La Dolce Vita is intending to pull off a well-built economic environment in the hotel. The hotel is intending to make available services according to the dissimilar income level of the people in order that all the people can benefit the services for this hotel.
Technological Environment:
This environmental force is focussing on building up new technologies, new services, and market opportunity. With the assistance of this force our hotel will be responsive of modernization and innovation concerned through technological improvement adoption particularly for the intention of service quality.
APPLICATION OF MARKETING STRATEGIES: Here are some marketing campaigns that will make our Hotel to reach its targeted market.
Strategies:
We will aware our target market through different marketing tools like, flyers, newspaper ads and last but not the least through word of mouth. The main link which we will use to connect to our target market is by making our hotel website on which we will provide: Hotel name Contact Information Online Directions About Us Services Offered by Us Location
STRATEGIC AND MARKET ANALYSIS: Economic Condition Overview:
This is the analysis of economic situation of our society along with taking a look on our Hotel industry, our customer's profile, and competitors. Our economic condition is not so good these days.
Market Analysis:
This industry is more saturated in Pakistan so its scope is good.
Customer Profile:
7 stars average client will be upper class man or woman living in the Companys target market
42 7P's OF MARKETING: Products and Services: Health club Business Centre Swimming pool Spa Dinning (restaurants & bars) Non-smoking floors/rooms Currency exchange 24-hour Room Service Safe deposit boxes Boutiques Barber shop Concierge service Pets are welcome (at no extra charge) except in the restaurants Outdoor activities Family and children activities Fitness counselling Steam room Separate women and men lounges Wi-Fi hot spot Sweet Mattress and pillows Automatic curtain opener and closer Automatic Light sensors Central heating and cooling Dual telephone lines with voice mail Valet Parking Same day laundry service Complimentary newspaper and magazines
Place:
Our hotel will be in DHA. The location is best to open Hotel because it will be surrounded by our target market i.e. upper class and these target market. Second reason is that there is no direct competitor in that area. The distribution channel consists upon only one entity because we are producing services and also delivering this to our customer by own.
Promotion:
To make our target market aware of our services we will be communicating to them through different marketing tools:
Flyers It is an inexpensive way to communicate to our target market. We will Paste these flyers in most rushy areas like shopping malls markets, restaurants and community centers. For this we have to take permission from upper management (e.g. manager, CEO or Directors). 43
Brochures On second we will be distributing brochures of our prehotel. These brochures can be distributed in offices, schools, personal offices of business, Govt. agencies, colleges and universities.
Business Cards Business cards are excellent thing to make target market remember you. This card have following things printed on it: Our Hotel name, address, telephone, email, hours of working.
We can pass these cards from customers to other interested customers Ask customers, friends and relatives to pass them out to interested people at work. Business or public organizations are good sources. Give flyers and cards to these organizations so that they make referrals to you so that you will get easily a prospective clients.
Networking Networking is the main way to communicate you to your target market Perhaps one of the best ways to market your center is through networking. Since most customers decide things about their hotel from word-of-mouth, talk to people personally.
Classified ads We will place different ads in newspapers because there are many people who read classified ads and business and commercial sections.
Electronic media- We will place different ads in tv channels because there are many people who watch classified ads and business and commercial sections.
Price:
While introducing a new product in the market the price should the price should be set according to purchasing power of the target market, economy situation, our cost, competitors price and your companys goals and objectives. We used competitive pricing strategy (in which we set price same as our biggest competitor sets). It will effect psychologically on our target markets mind as a quality product and we would have an competitive advantage that we are offering more than our competitor in the same price it will grasp the attention of our targeted customers towards us.
People: To address best to our customers all the things should be working on their accurate place; To communicate with target audience we have developed a proper marketing department and appointed individuals on marketing activities. To address customers, address their complaints and to give a solution to their problem there is a customer contact person. An individual for procurement. Individual for training and skills enhancement of staff. Individual for Remuneration.
Processes:
Our hotel goal is to achieve customers delightedness and satisfaction in order to achieve this, our processes must be customer centric. In order to achieve 44 efficiency these processes are also IT supported and research and development margin is also be the part of our processes to coap up with the changes in environment and make adjustments to have continuous organizational development.
Physical evidence: We will interact with our customers in both environment using Brick and Click model having existence in both physical and virtual environment. While interacting in physical environment we have our office in Dhaas service scape. And to interact with virtual environment we interact or communicate with our customers through our website.
MARKETING PLAN AND IMPLEMENTATION:
La Dolce Vitas marketing plan is prearranged to attain the strategic goals, we have set for ourselves, in terms of building strategies to growing by and large revenue as a consequence of differentiate our products and services from competitors. Our marketing team ensure that the plan is implemented to the top of its capability and with the highest intensity of efficiency, effectiveness and accuracy.
KEYS TO SUCCESS:
Following are the keys to success for achieving our strategic goals:
Carry on developing ongoing relations with regular and new guests. Carry on developing and execute well-built communication plan in both nationally and internationally. Influence our strength in the local market as the component of the community by supporting local events. Continue ongoing staff training and skill maturity to certify the maximum standard of service.
45
OUR QUALITY CONTROL MEASURS:
Quality assurance system is a very important component of any business strategy. Quality is currently seen as a significant force for gaining competitive advantage, notably with the patron. A hotels interaction with customers will last from many hours to many days so the most important thing is quality assurance and management while concentrating upon satisfaction of the client.
Quality assurance concerning clients satisfaction is classified into psychological perceptions of the client and to judge how a client gives feedback to your services and quality. So within the hotel business this objective is to do and engender a high level of client satisfaction so as to completely influence our customers' repurchasing and communicative behaviour but, to realize this aim the business must perceive what drives client satisfaction and therefore the solely issue that drives client satisfaction is quality.
Further identifies that, among a service setting like a building, shopper satisfaction doesn't merely depend upon the standard of service satisfaction received from business workers, though this can be a vital component. The physical setting, as an example the dcor, bedrooms and alternative facilities offered, also are parts of the consumers perceived worth and satisfaction. If any of those are deemed as sub-standard, notably once associated with the 46 worth paid, this can cut back the customers enjoyment and levels of satisfaction. All of these varied quality assurance systems and standards are accessible and can be used among the business surroundings. Client feedback is one such source for getting to know about the quality so as a whole consumer feedback may be achieved by 2 ways. The primary approach is to supply questionnaires among the visitors and ask them to fill it up before leaving the hotel. The second technique is to rely on outwardly conducted questionnaires, interviews and polls, which might be conducted on never- ending basis.
There are few aspects which can be used as a tool to judge quality, they are:
Tangibles: Tangible means physical facilities, instrumentation and look of personnel.
Reliability: Reliability means ability to perform the secure service reliably and accurately.
Responsiveness: Responsiveness means disposition to assist customers and supply prompt service.
Assurance: Assurance includes ability, courtesy, believability and security data and courtesy of workers and their ability to inspire trust and confidence.
Empathy:Communication Empathy includes access, communication, understanding the customer. Caring and personalized attention that the firm provides to its customers.
5 MS OF MANAGEMENT:
- Man - Material - Machine - Money - Methods
Man:
Man in management is referred as a personality's resource. Even within the automatic world no organization will flourish with the absence of human resource. Human resources confirm the workings with the help of four basic business resources. So, human resource at La Dolce Vita ensures about these four resources which are materials, machines, cash and strategies. They ensure that if all these four things are utilized in a very productive manner to attain goals or aims and objectives of organizations and enterprises. We have got labor that's needed to perform major tasks which can be supply of product. We believe that if our labor is not happy then we will be troubled, so caring 47 about the rights of labor is very important.
Materials:
Without materials, human resource is formed redundant so each right thinking and right coming up with organization is aware of that materials required for any business or service must be in perfect in order to get effective side of business management. So we believe that poor material quality directs toward the doom for loss. Quality compromised is business pauperized. Poor quality of materials probably ruins entrepreneurship. This is often associate proven fact.
Machine:
The metal contraptions referred to as machines have created man fulfil virtually effortlessly varied dreams of making things that create existence a lot of worthy. Machines have replaced man in cultivation, planting, and harvest home. Man has been replaced with looms in cotton and material process. Recently, computers joined within the fray of skyrocketing production and reduction in time spent by man for producing and general production of products and services. However, while not man and materials, machines are useless. They have to be operated by man and fed with materials. So whenever it comes to selection of machines we use the best option.
Money:
Without cash, no venture or enterprise will encourage staff, get quality and spare materials, get the proper machines and maintain them or perhaps make sure that time is correctly managed. Cash management, once not properly organized has been the foremost notable issue concerned in collapse of enterprises in history. So managing the money in proper way is very necessary for us. The number and quality of cash spent in ventures will show up the fruitfulness of over time. Wherever there's not enough cash, no smart staff, materials, or machines are used or purchased or no heritable. In different words, such a venture is wasting its time existing within the initial place.
Method:
Everything incorporates right way and plan to do and this right approach is thought as a perfect way for managing your business. In brief it suggests the art of doing a group of procedures and tasks according to the directions. So the visible strategies of a corporation embrace plans, policies, procedures and knowledge so we also follow strategies and plans in order to achieve our goals.
48
HOTEL ORGANIZATION CHART:
49
HOTEL HUMAN RESOURSE REQUIREMENTS:
Staff Placement Number of people Directors 7 Management staff 50 IT Specialists 15 Serving Staff 500 Janitorial Staff 200 CSR 10 Receptionist 30 Control Room Monitors 20 Security Guards 40 Total 872
General Manager Director Sales and Marketing Chief Engineer Resident Manager Executive House Keeper House Keeping Manager Laundry Manager Front Office Manager Reservatio n Manager Front Desk Manager Guest Services PBX Manager Controller Human Resources Food and Beverages Director Catering Director Executive Chief Sous Chef Steward Banquet Chef Administrative Assistant Resturant Manager Beverage Manager 50
OUR HR PROCESS:
Hiring: The Human Resource Team, hire Hotel managers, waiters, Hotel house keepers, desk clerks & other staff after gathering information about the applicants' education, experience and background (as stated in resumes and by references). After a preliminary screening, the committee will conduct informal telephone and face-to-face interviews formal interviews of qualified candidates. The screening method will consist Current recruitment efforts include the running of advertisements in national magazines and periodic announcements for positions. We will recruit the staff which have extraordinary skills and have polite behaviour.
Staff Screening: All staff must be of responsible personality and suitable to meet the needs of Customers. The staff members will be required to sign documentation that they have not been ever placed on the central registry for substantiated abuse or neglect. Employees will also be asked to sign an authorization to investigate past employment history of them from previous employers regarding work experience and qualifications.
Health of Personnel: All employees must have a current physical signed by the physician. All physicals must be updated annually. All employees must have a current TB test stating that the employee is of tuberculosis. It must be updated annually. The sick employees will be encouraged to stay at home and will be replaced with a skilled substitute.
Senior Staff Manager:
Each Senior Staff Member will plan & execute a structured curriculum.
Qualification:
In addition to training and certification in Hotel Management, Senior Staff Members will have at least two years experience. They must have an associate's degree or equivalent experience within the field of Hotel management.
Job Description:
The Senior Staff Management are responsible for: Reading and reviewing the Curriculum Guide and the Staff handbook. 51 Establishing learning objectives that are consistent with the Center's philosophy. Taking daily attendance. Working cooperatively with the Director, as needed, in developing and implementing new plans. Attending all staff meetings and in-service workshops. Planning at least one classroom event per month with staff Reviewing customer's records monthly and updating as needed. Being attentive to health, sanitation, nutrition and safety at all times. Dressing and conducting of teachers and the workers in a professional manner. Planning at least one field-trip event per month.
Typist: Qualification:
They must have One Year experience in school work. Have Bachelors Degree, at least one year as a server. They must be at least 25 years old. They must possess friendly and outgoing personality and have good personal hygiene.
Job Description:
They will be responsible for oversight of the server. They will work under the ` general manager. He is responsible for book keeping record, managing daily cash and over viewing inventory financial activity.
Cook Qualification:
The cook must have minimum 3 years experience: two years must be as cook not as assistance. They must have minimum high school diploma. The cook will submit resume and fill out an application. They will be interviewed and hired by the HR Team.
Job Description:
The cook is responsible for cooking hygienic food in the IKIPS. He will be also responsible for preparing food items in proper hygienic and delicious way. Another responsibility is to see that kitchen must be kept in a clean, sanitary and working order.
Guard Qualification:
For this post qualification doesnt matter a lot but he must be at least middle 52 pass and must possess good behaviour.
Job Description:
He must be active and fit enough to remain alert during the hotel timings. He will be responsible for safeguarding the hotel and for gate keeping.
HR & MANAGEMENT HIERARCHY:
Structural Dimensions: Work Specialization:
We will concentrate on work specialization as the individual which is spent significant time in the showing field will do a great job, which will benefit our organization. The managers and workers having polite and kind conduct will be preferred for our hotel. Workers will have the capacity to focus more and be more proficient and compelling on their own assignments.
Formalization:
In the start, our hotel is following the manual method of communication and processes but in the future we will InshaAllah transform our ways of communication and processes more through the help of technology and different softwares.
Span of Control:
Our span of control is narrow as all the staff have to report to the senior manager and all the managers also will report directly to the CEO, hence our hotel is centralized. Communication: We will use formal communication as our communication approach. Top management Marketing Manager Financial Manager
Operational Manager
HR Manager
Hotel managers Workers (Peon, Guard, Cook, Shopkeeper etc.) Desk Clerks 53 Vertical Communication: - Downward communication will be used by senior manger to provide directions and to control the subordinates through some rules and disciplines. - Upward communication will be used by subordinates like working staff etc.to communicate with the managers.
Horizontal Communication: Horizontal communication will be used by managers to communicate to the other managers which have the same level with them like marketing manager, financial manager, Human Resource manager etc.
HR STRATEGIES: Motivation:
We will use Douglas McGregors theory which is Theory X and Theory Y. In our hotel we will use Theory Y. We believe that if we will follow this theory then we will be able to create employee engagement. We will share ownership of tasks with them as managers will have the right to share their ideas of implementing new and innovative methods to delight our customers . We believe that they will find work more rewarding if they were given any responsibility and a variety of tasks to do. We will also motivate them through providing appreciation.
Controlling:
We implement Controlling process method. The steps are establishing standards, measuring the performance of the institution, comparing the performance against standard and determining need for corrective actions to be taken.
Performance Management:
To maximize our institute performance, we will need to Align, Develop, Recognize and Reward outstanding performance . Compensation Management:
We will train them to adopt our institution culture and business goals. We will clearly identify the disciplines & ethics. We will provide them with bonuses, award of appreciation which will help us in retaining them in our hotel
DIFFERENT DEPARTMENTS IN HOTEL:
The classification of these departments is done on the basis of its function. They are as follows: 54 Core Functioning Department:
Food and Beverage (F&D) Department:
F & B deal primarily with food and drink service related activities. Altered division would be there in F & B like Restaurants, Specialty Restaurants, Coffee Shop (24 hrs.), Bar, Banquets, Room service etc. Apart from that we will have Utility services (Cleaning).
Front Office Department: The front office is the command post for processing reservations, registering guests, settling guest accounts (cashiering), and checking out guests. Front desk agents will also handle the distribution of guestroom keys and mail, messages or other information for guests. The most visible part of the front office area is of course the front desk.
Housekeeping Department: The housekeeping department is another important department in hospitality world. Housekeeping would be responsible for cleaning the hotels guestrooms and public areas. This department would have the largest staff, consisting of an assistant housekeeper, room inspectors, room attendants, a house person crew, linen room attendants and personnel in charge of employee uniforms. We will also have laundry and valet service.
Food Production Department: Food production deals with the preparations of food items. It will basically engaged in preparing food, ordered by the guest and afterwards is catered by the F&B department. Cuisine like Pakistani, Continental, Thai, Italian, Chinese, Mexican, etc. Different Chefs will be appointed for the specialty cuisine.
Support Department (Cost Centres)
Marketing & Selling Department:
Sales and marketing is one of the most vital functions of the hotel business and an integral part of modern hotel management. It includes packaging for selling, sales promotion, advertising and public relations. The marketing division is charged with the responsibility of keeping the rooms in the hotel occupied at the right price and with the right mix of guests.
Engineering and Maintenance Department:
The energy crisis throughout the world and especially in Pakistan has given a great importance to the engineering department of a hotel. This department 55 provides on the day-to-day basis the utility services, electricity, hot water, steams; air-conditioning and other services and is responsible for repair and maintenance of the equipment, furniture and fixtures in the hotel. The engineering department has an important role in satisfying the guest- demand and helping to maintain the profit level of the hotel. The cleaning, up-keep, repair, replacement, installation and maintenance of property and its furnishing, machinery and equipment are the joint responsibilities of Engineering/Maintenance and the Housekeeping Department.
Finance, Accounting and Control Department:
A hotels accounting department is responsible for keeping track of the many business transactions that occur in the hotel. The accounting department would do more than simply keep the books-financial management is perhaps a more appropriate description of what the accounting department does. Whereas the control department is concern with cost control guidelines by way of reducing in investment, reduction in operating cost, control of food service costs, control of beverage costs, labour cost control, etc.
Safety and Security Department:
The security of guests, employees, personal property and the hotel itself in a country like Pakistan is an extreme alarm for todays hoteliers. In the past, most security safety measures concentrated on the prevention of theft. On the other hand, today such brutal crimes as terrorist attack have become a trouble for some hotels. Unfortunately, crime rates in most majors cities are rising. Hence today security department also concentrate on these additional criminal activities too.
Administration Department:
Top managerial members typically oversee and supervise the Administration Department in a hotel. This department is accountable for all the work related with management, administration, personnel, manpower, employees wellbeing, medical, health and security.
Human resource Department:
There shall be plenty of employees concerned in different jobs in diverse fields.There is a dreadful need to look over them and organize them, so an HR department is crucially required.
MAJOR SUPPLIERS/VENDORS OF OUR HOTEL:
A major part of any business is dependent on its vendors, through which they are able to deliver quality and good services and products to their customers. Following are the major vendors of our hotel: 56
Construction: HabibRafiq (Pvt.) Limited is one of the largest construction company in Pakistan. It has presence in various countries worldwide. For the purpose of our project we have decided to get in contract with HabibRafiq (Pvt.) Limited as it has, national and international significance relating its excellent work for the preceding 50 years.
Furniture: Since 1991 Kalamkaar has been continuously manufacturing the best quality furniture. Established in Pakistan Kalamkaar has always been and continues to be dedicated to training and mentoring native craftspeople in support of a vibrant and self-sustaining local economy. Kalamkaar has showrooms in Dubai, Karachi, Lahore, Los Angeles, New Jersey and the United Kingdom. Kalamkaars furniture designs are influenced by the beauty of South Asian art and culture and the simplicity of form prevalent in Western design. Each piece is a hand-crafted masterpiece that exudes a unique sense of style and sophistication.
Contract Furniture: o Hospitality Restaurant / Hotel / Club o Executive Suite o Reception / Lobby o Lounge / Sitting Rooms
Central Heating: Since 1999 HMG has been focusing on achieving its goals of providing very reliable and proficient gas appliances and energy in Pakistan. For our project we have decided to get in contract with HMG for the purpose of central heating as it will provide us excellent quality services. Actually the main purpose of central heating here has come up with the objective of no alteration in humidity level within the rooms and no flames within the rooms. 57 Interior Designing: Hughes Design Associates is one of the leading firms of interior designers in the United States. The firm specialize in designing, restoring and refurbishing prestigious custom interiors for: Distinctive Residential Properties, Residential Developments, Luxury Condominiums, Hotels, Resorts, Clubs, Restaurants and Healthcare Facilities.
CCTV Cameras: Since 1998 Cytech Technology Ltd. is amongst the leading, emergent and competent distributors of electronic workings in Hong Kong and China today. Cytech technology will provide us with IRBD N365E waterproof all in one camera.
Computer system: HP Touch smart: 9100 Business PC Server: IBM power 710 Express Fire extinguishers: MVH: Fire Extinguishers Maintenance and Supply of Fire Equipment and related services. Smoke Alarms: We will take the services of smoke Alarms through Enigma Technology. Walk through gate: Self Secure international will give us the facility of walk through gates Fax Machine/Intercom: Panasonic will give us the facility of fax machine/ intercom. 58 UPS: GenPro Power Systems, Inc will give us UPS facility according to our demand.
Generators:
MAXIM Power Solutions Recognizing the need for a professionally managed Service Company in the rapidly growing Generator Sales and service Market of Pakistan, three qualified engineers with a combined engineering experience of over half a century, established Maxim Power solutions in June 2008.
Bathrooms: Varioline bathroom designs are incredibly beautiful that will perfect for our hotel. These designs are inspired by spa centre where there is a place to relax and enjoy massage and bath Types of bathrooms: o Space Efficient Bathrooms with rooms. o Bathroom in lobbys and Halls.
Kitchen: From Varioline Kitchens (Pvt.) Ltd. we will take the facility of all the kitchen related stuff. Reason for choosing Varioline kitchen is that it caters its clients in a step-wise way satisfying them and providing quality services with a name of trust. Thus Varioline Kitchens is the place where modern luxury living gets an edge.
59
Details of kitchen: No. of kitchens: 5 o Joinery work: No. of cabinets in each: 50 o Laminations o Solid Wood o Solid Surface Appliance & Fittings: o Oven (Double) o Fitted Microwave Oven o Fitted in Steam Oven o Twofold Fuel assortment Cooler o Built Under Fridge o Built Under Freezer o Wine Cooler o Dishwasher o Coffee Machine o Water Disposal Unit
Electronic Work: o Under Cabinet lightening o New Cooker Feed o Kitchen Plinth Lighting o Ceiling Lighting General Work: o Wall Tiling 60 o Floor Tiling o Windows/Doors o Rubbish Certification: o Gas Safe Certification o Electricity safe certification
INCOME STATEMENT FOR 5 YEARS
INCOME 1 st Year 2 nd Year 3 rd Year 4 th Year 5 th Year
Rooms
1,562,203, 650
2,603,672, 750
3,124,407,3 00
3,384,774,5 75
3,645,141,8 50 Food
296,818,6 94
494,697,8 23
593,637,38 7
643,107,16 9
692,576,95 2 Beverages
84,358,99 7
140,598,3 29
168,717,99 4
182,777,82 7
196,837,66 0 61 Other Food and Beverages
74,985,77 5
124,976,2 92
149,971,55 0
162,469,18 0
174,966,80 9 Telecommunications
7,811,018
13,018,36 4
15,622,037
16,923,873
18,225,709 Rentals and Other Income
70,299,16 4
117,165,2 74
140,598,32 9
152,314,85 6
164,031,38 3 Cancellation Fee
31,244,07 3
52,073,45 5
62,488,146
67,695,492
72,902,837 Gift Shops
3,124,407
5,207,346
6,248,815
6,769,549
7,290,284 Interest Income
22,653,97 2 23,316,89 5 23,653,055 24,316,094 24,738,608 Total Revenue
2,153,499, 751
3,574,726, 526
4,285,344,6 12
4,641,148,6 14
4,996,712,0 92
EXPENSE ITEMS Production Expense Cost of Sales
781,101,8 25
1,301,836, 375
1,562,203,6 50
1,692,387,2 88
1,822,570,9 25 Operating Supplies
78,110,18 3
130,183,6 38
156,220,36 5
169,238,72 9
182,257,09 3 China, Glassware, Silverware and Linen
156,220,3 65
260,367,2 75
312,440,73 0
338,477,45 8
364,514,18 5 China, Glassware, Silverware and Linen
3,124,407
5,207,346
6,248,815
6,769,549
7,290,284 62 Interior Design and Decoration Expense
30,000,00 0
-
-
-
- Total
1,048,556, 780
1,697,594, 633
2,037,113,5 60
2,206,873,0 23
2,376,632,4 86
Indirect Expenses
Fixed Expenses Property Taxes
56,239,33 1
93,732,21 9
112,478,66 3
121,851,88 5
131,225,10 7 Insurance Expense
18,746,44 4
31,244,07 3
37,492,888
40,617,295
43,741,702 Total
74,985,77 5
124,976,2 92
149,971,55 0
162,469,18 0
174,966,80 9
Operating Expenses Payroll Expenses
146,100,0 00
146,173,0 50
146,246,13 7
146,319,26 0
146,392,42 0 Marketing Expense
112,478,6 63
187,464,4 38
224,957,32 6
243,703,76 9
262,450,21 3 General and Administrative Expense
140,598,3 29
234,330,5 48
281,196,65 7
304,629,71 2
328,062,76 7 63 Property Operations and Maintenance
78,110,18 3
130,183,6 38
156,220,36 5
169,238,72 9
182,257,09 3 Energy Costs
68,736,96 1
114,561,6 01
137,473,92 1
148,930,08 1
160,386,24 1 Total
546,024,1 34
812,713,2 74
946,094,40 5
1,012,821,5 51
1,079,548,7 33
Total Expenses
1,669,566, 689
2,635,284, 199
3,133,179,5 15
3,382,163,7 54
3,631,148,0 28
Profit before Depreciation and Amortization
483,933,0 61
939,442,3 27
1,152,165,0 96
1,258,984,8 60
1,365,564,0 64 Depreciation Expenses
234,742,2 52
234,742,2 52
234,742,25 2
234,742,25 2
234,742,25 2 Amortization (License Fee)
137,000
137,000
137,000
137,000
137,000
EBIT
249,053,8 09
704,563,0 75
917,285,84 4
1,024,105,6 08
1,130,684,8 12 Interest Expense
298,901,9 49
298,901,9 49
298,901,94 9
298,901,94 9
298,901,94 9 EBT
(49,848,13 9)
405,661,1 26
618,383,89 6
725,203,66 0
831,782,86 3 Corporate Tax Rate (30% of EBT)
(14,954,44 2)
121,698,3 38
185,515,16 9
217,561,09 8
249,534,85 9 64 NET INCOME
(34,893,69 7)
283,962,7 89 432,868,72 7
507,642,56 2
582,248,00 4
BALANCE SHEET FOR 5 YEARS
Year 1 Year 2 Year 3 Year 4 Year 5 ASSETS
Cash
91,626,368
152,710,614
183,252,737
198,523,79 8
213,794,860 Marketable securities
78,625,756
92,895,996
94,235,277
96,876,869
98,560,193 Inventories
90,254,869
545,733,955
608,559,957
750,591,33 1
968,186,420 A/R
19,532,675
32,554,458
39,065,350
42,320,795
45,576,241 Current Assets
280,039,668
823,895,023
925,113,321
1,088,312,7 94
1,326,117,714
Fixed Assets
Land
1,400,000,000
1,400,000,00 0
1,400,000,0 00
1,400,000,0 00
1,400,000,000 Other Assets
500,000
500,000
500,000
500,000
500,000 Machiney and Other Equipment
1,524,511,260
1,524,511,26 0
1,524,511,2 60
1,524,511,2 60
1,524,511,260 Acc. Dep
234,742,252
469,484,504
704,226,756
938,969,00 8
1,173,711,260 Net fixed Assets
1,289,769,008
1,055,026,75 6
820,284,504
585,542,25 2
350,800,000 Total Assets
2,970,308,676
3,279,421,77 9
3,145,897,8 25
3,074,355,0 46
3,077,417,714 65
LIABILITIES
Accounts payable
31,962,559
53,270,931
71,027,909
76,946,901
82,865,893 Notes payable
5,728,057
9,546,762
11,456,114
12,410,790
13,365,467 Salaries payable
12,174,951
12,181,039
12,187,129
12,193,223
12,199,320 Interest Expense Payable
24,908,396
24,908,396
24,908,396
24,908,396
24,908,396 Current Liabilities
74,773,963
99,907,128
119,579,548
126,459,31 0
133,339,075
Long Term Liabilities
Loan Payable
1,758,246,756
1,758,246,75 6
1,172,164,5 04
586,082,25 2 -
Total Liabilities
1,833,020,719
1,858,153,88 4
1,291,744,0 52
712,541,56 2
133,339,075
OWNER'S EQUITY
Retained Earnings
(34,876,547)
249,103,391
681,989,268
1,189,648,9 80
1,771,914,134 Sharholders Equity
1,172,164,504
1,172,164,50 4
1,172,164,5 04
1,172,164,5 04
1,172,164,504
Total Equity
1,137,287,957
1,421,267,89 5
1,854,153,7 72
2,361,813,4 84
2,944,078,638
TL & O.E
2,970,308,676
3,279,421,77 9
3,145,897,8 24
3,074,355,0 46
3,077,417,714
66
RATIO ANALYSIS FOR 5 YEARS
PROFITABILITY RATIOS: Return on Assets (ROA): Return on assets has been increasing over the period of five years. This increase has been accompanied by the increase in net income but it is misleading for the profitability of the company because of two reasons. Firstly, the total assets have been decreasing which reduces the significance of these ratios. Secondly, interest is excluded from the net income but total assets include debt as well as equity.
Return on Equity (ROE):
Return on equity shows how much profit has been earned by the company with respect to the amount invested by the owners. In our case it has been increasing which is a good sign for the companys profitability.
Net income to total sales shows how efficiently the cost incurred to make sales has been managed. The ratio has been increasing which is a good sign for the companys future prospects.
Earnings per Share (EPS):
Net income to average number of shares shows how much earnings are available for shareholders and as it has been increasing while keeping the number of shares constant shows the simple increase in the net income.
1 2 3 4 5 Profit Margin Ratio -0 0.08 0.1 0.110.19 -0.05 0 0.05 0.1 0.15 0.2 0.25 1 2 3 4 5 Earning Per Share Ratio -0.32.423.694.334.97 -1 0 1 2 3 4 5 6 68 Year 1 Year 2 Year 3 Year 4 Year 5 0.23 0.06 0.07 0.06 0.05 Inventory Turnover ASSET MANAGEMENT RATIOS:
Inventory Turnover Ratio :
A ratio showing how many times a company's inventory is sold and replaced over a period.
Return on Invested Capital (ROIC): According to The Harvard business review a study done by Michael Porter says that during 1992-2006 the average ROIC of the Hotel Industry was around 10.4%. Initially our ROIC was less than the industry average because the business was new but as we started generating revenues and started investing back into the business the %ages for ROIC for the next years are quite healthy for the investors.
Year 1 Year 2 Year 3 Year 4 Year 5 6% 16% 21% 24% 27% ROIC 69 Return on Total Asset Ratio:
A ratio that measures a company's earnings before interest and taxes (EBIT) against its total net assets. The ratio is considered an indicator of how effectively a company is using its assets to generate earnings before contractual obligations must be paid. This ratio have an increasing trend each year so, it means that our hotel will be effectively using its assets to generate earnings.
DEBT MANAGEMENT RATIOS: Total Debt Ratio:
Our hotel management had initially take debt to start off the business so the ratio came out to be 62% but as we went along and over the years we have been paying back the debt and after 5 years of operations our debt was only 0.04 for every I dollar invested which again is healthy for the bank that it is getting off the debt.
Year 1 Year 2 Year 3 Year 4 Year 5 0.62 0.57 0.41 0.23 0.04 Total debt Ratio Y e a r
1 Y e a r
2 Y e a r
3 Y e a r
4 Y e a r
5 0.72 1.08 1.35 1.50 1.62 Return on Total Assets Ratio 70
Debt/Equity Ratio:
A debt to equity ratio greater than 1 in the 1 st two years does show that most of the assets are financed by debt and finally from the third year ratio is less than one means equity provides a majority of the financing.A higher ratio signifies that company is risky but in our case we have overcome this problem by 3 rd year.
Year 1 Year 2 Year 3 Year 4 Year 5 161% 131% 70% 30% 5% Debt/Equity Ratio 71
OCF 1 st Year 2 nd Year 3 rd Year 4 th Year 5 th Year
EBIT
249,053,80 9
704,563,075
917,285,844
1,024,105,608
1,130,684,812
+ Depreciatio n
234,742,25 2
234,742,252
234,742,252
234,742,252
234,742,252
-Taxes
(14,954,44 2)
(121,698,338 )
(185,515,169 )
(217,561,098)
(249,534,859)
OCF
468,841,61 9
817,606,989
966,512,92 7
1,041,286,762
1,115,892,205
CASH FLOWS
72 Project Cash flow 0 th Year 1 st Year 2 nd Year 3 rd Year 4 th Year
Assumption: We are assuming that project will require -2,052,657 in NWC investment and it will remain the same also business will not end after five years rather it will continue to operate.
73 FINANCIAL ANALYSIS ON EXCEL:
74
75
76
77
FUTURE STUDY DIRECTIONS: Income Statement Analysis:
The Income statement channels a company's financial concert over a particular accounting period. The forecasted income statement of our hotel shows increasing trend in revenues .The revenues have been increasing due to an increase in the marketing efforts. More rooms are occupied and entertainment services are being consumed. There is an increase in the frequency of the services being rented like people renting the halls for marital and corporate meetings purposes. More shops are being rented over the time. Income from the other sources is from the marketable securities that have also added to the total revenue.
Looking at the expenses the major direct expense item is the cost of goods sold and other supplies because over the time more rooms and other hotel services are being occupied therefore the need for supplies and inventories has considerably increased over the course of five years. Interior Design and Decoration Expense has been recorded on the first year only because in the next 4 years no addition to the dcor has been made. The indirect expense consists of the property tax that has to be paid on the annual basis and the insurance expenses that also has to be paid on the annual basis. Marketing, general administrative maintenance and energy costs have increased over the five years .The depreciation expense have been calculated for five years. The interest expense on the long term loan that the company has acquired has also been included in the total expenses therefore there is an increasing trend in the total expenses. The expenses after 30 % taxes are more than the revenue in the first year therefore the net income is also a negative figure indicating a negative retained earnings in the balance sheet where as the net income is positive in the next years and has an increasing trend indicating that the hotel is making sales
Balance Sheet Analysis:
Looking at 5 years forecasted balanced sheet of our company we observe an increasing trend in the current assets have increased. The cash balance, most liquid asset has an increasing trend in five years. Since the company is making sales and the net income has increased over the five years therefore the company has invested in more marketable securities to secure income from a secondary source. The inventory and the accounts receivables figure has also increased in five years therefore increasing the currents assets total. Looking at the fixed assets the fixed assets the value of land remains the same over the five years since the company has not purchased more land during five years. The value of 78 machines and other Equipments is also the same during the five years since the hotel has not expanded its capacity therefore the value has not changed however the accumulated depreciation has been calculated by the straight line method dividing the cost of the machine and equipment by five years. Since the depreciation expense is the same for five years but the accumulated depreciation is increasing by the same amount each year. So the value of the net fixed assets is decreasing in five years. So looking at the overall picture of the total assets, the value is increasing due to an increase in the current assets and in the currents assets section the inventory has a considerable rise. The total short term liabilities have increased because there is a considerable increase in the amount of the accounts payable .The company is purchasing more inventory so payments to the suppliers as increased on the other hand the loan the company took for initiating its operations has decreased showing the capability of company to pay off the debt through significant earnings. So looking at the overall value of the total liabilities has decreased during the five years since the hotel has managed to pay off its long term debt. There is an increase in the total equity figure due to the increase in the retained earnings. The retained earnings has increased because of the increase in the net income .The share holder equity has remained the same since the hotel did not issue shares to the public. So the value of the total liabilities and the owners equity has increased over the five years in accordance with the total assets.
Positive NPV of Rs. 4,284,565 shows that the company is able to generate more cash inflows as compare to the present/ current value of cash outflows.
IRR:
13.45
PAYBACK PERIOD:
3.65 years
DISCOUNTED PAYBACK:
4.99 Years 4.100 PROFITABILITY INDEX:
Profitability index = 1 + NPV . Initial Investment 79 Profitability index = 1.001
Learning Reflections &Future Forecast:
We expect that the business will aggressively expand during the first three years of operation. We will intend to implement marketing campaigns that will effectively target individuals with children within the target market.
Future Expansion:
As the social environment, community around us and our business are in a state of continual change, hence its important that we plan to ensure our future sustainability. We know that new information and technologies will emerge, and that a range of possible environmental, political and social changes may occur. To survive in this complex environment we need to be flexible and look outside our traditional roles.
La Dolce Vita is great and unique hotel and has a very bright future, together as a community looking ahead in meeting new challenges and goals. We believe our strategic direction offers the best pathway to safeguard and progress our communitys future.
In planning for the next 2 to 3 years we have identified five key directions that will guide future activities and decisions:
Service quality and continuity Sustainable resource management Business health Community leadership Speed of Responsiveness
Future Activities:
We believe that by the third year of business we will be able to add some other branches of our hote in big cities like Karachi, Islamabad. We plan to increase the target market of our hotel in the future. Future Obstacles:
We will have to explore the ideas of hiring new employees rather than have free labour from volunteers. We will have to purchase more land and equipment in order to accomplish our future plans. The Govt. policies and social changes may cause hurdles in our way to fulfill our goals.
CONCLUSION: This project is favourable if we look at the value of NPV which is positive 4,284,565, payback period which is 3.65 years and discounted payback period which is 4.99 years. All these factors seems good enough to accept the project but 80 the only area of concern is profitability index although it is above 1 but .0.1 percent of return on initial investment which turns out to be 2,930,411,260. But still as we are earning positive profits also we are getting back our investment considering the time value of money in 4.9 years and our net income is increasing with every passing year so we will accept this project.
For the purpose of our project, we have moved towards with the idea of establishing a 7 star hotel in the vicinity of Lahore city. Keeping in mind the demographics of the city, the weather and amiable environment, the diverse streams of food culture and a relatively better political and security situation, Lahore could be the best city to open up the chain of hotels. For beginning our project, we are requiring a general public opinion regarding this project. For this we need your corporation and shall be appreciatively thankful to you for giving us your opinions and suggestions. Here are a some of the optional questions; you are requested to tick the best option that suits you
5 Reason for Hoteling: (a) Business/official/Govt. Meetings. (b) Function /Ceremony attending (c) Political / Religious / social gathering (d) Recreation / Entertainment /Refreshment
6 Expense rang per Visit: (a) Rs. 10K (b) Rs. 25K (c) Rs. 100K (d) In Foreign Currency
7 Staying at hotel duration: (a) One Day Trip (b) weekly stay (c) Monthly stay (d) or Long
8 Area you like to Stay: (a) Posh areas (DHA, Gulberg, Model town etc) (b) Peripheries of Lahore (c) Congested Area (Johar Town, Allama Iqbal Town etc.) (d) Cantonment area
9 Services you like the most: (a) Laundry (b) Room Services (c) Restaurant/Bar etc. 83 (d) Pick n Drop
10 While selecting a hotel you go for? (a) Economy (b) status (c) stars (d) Pomp n show
11 Where you find the hotel for? (a) Internet (b) Newspaper / magazines / publications (c) Friend Recommendations \ (d) others
12 Does it matters for a 7 star Hotel? (a) Security system (b) Parking system (c) Electronic facilities (d) all above.
13 In which Time do you like the most for hoteling? (a) Seasonal (b) Festivals / Events / ceremonies (c) Annual/Biennial /Quarterly meetings (d) Family Functions