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Feasibility Analysis of Briscan Hotel - Case Study Example

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The paper 'Feasibility Analysis of Briscan Hotel " is a good example of a management case study. In Australia, tourism has been on the rise in the past decade. Though domestic tourism has been declining of late, international tourism has provided a major revival. The rate of international arrivals has been increasing for the past five years thereby providing a promising ground for investment…
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Extract of sample "Feasibility Analysis of Briscan Hotel"

Feasibility plan Name Course Lecturer Date EXECUTIVE SUMMARY In Australia, tourism has been on the rise in the past decade. Though domestic tourism has been declining of late, the international tourism has provided a major revival. The rate of international arrivals has been increasing for the past five years thereby providing a promising ground for investment. Therefore, idea to start the hotel will be aiming to take advantage of the growth in the industry. Briscan hotel will be located in the outskirt of Brisbane, a strategic position maximizing the advantage of many tourists’ destinations in Queensland. The hotel purposes to serve both domestic and foreign visitors. The hotel will offer catering services and the accommodation (Timo & Davidson 2005). In addition, it will include several cuisines that will be part of differentiation strategy. It will also serve the whole family by inclusion of children activity and have the fitness centre at the disposal. Table of Contents INTRODUCTION Briscan Hotel will be a hotel structured to serve both the domestic and foreign tourists. It will seek to provide quality services and food that cannot be located elsewhere. The menu in offer will be distinct in terms of ingredients and taste. Well-mannered staff will be behind the excellent customer service and the atmosphere will be unique. It will offer conference rooms among other distinguishable services including an ample parking space. INDUSTRY PERFORMANCE In Australia, tourism is a very important industry that contributes immensely to the national economy. The Gross Domestic Product of tourism is estimated to be about a$35 billion per annum. This is inclusive of both the international and domestic tourism with the latter accounting to more than 70% of the total contribution. It is estimated that the worth of the tourism industry by 2020 will be a$140 billion according to report released by the Australian Government (Ballantyne & Axelsen 2009). TRENDS Hotel and Resort Industry is a major component of tourism in Australia. However, in the past six years the industry has stagnated because of the global financial crisis. This has led to revenue decline in the industry with registered decline of 8.4% in 2008-2009 when the crisis was at the peak. In the midst of these hardships, the operators of resorts and hotels have included additional services to their businesses and cutting the cost. This has led to growth in the industry especially in the last three years. The growth has occurred despite the poor performance of the domestic tourism. However, there has been an increase of the international arrivals (Novelli 2005). The international arrivals are mostly from the Asian countries with China in the forefront. Thus, the revenue in the industry will increase in coming years. This is a boost in the industry and therefore has to take the advantage of the tourism shift from domestic towards international tourism. The Hotels and Resorts industry exhibits an excellent positioning that will maximize the benefits resulting from the tourism paradigm shift to the international arrivals( Pegg & Gariddo, 2012). Growth in the Hotels and Resorts industry is as result of subsequent growth in the overall tourism sector (Tracey & Hinkin1994). Some of the factors behind this growth are the country’s sophisticated infrastructure and landscape. However, several drivers of growth are independent of reduced air travel, increased household income and desire to see the world among other factors. They include the marketing of Australia tourism abroad through international tourism campaign and major attraction sites such as the Great Barrier Reef, which attract over two million people a year and the Sidney Opera house (Authority 2009). PRODUCT & SERVICES Briscan Hotel will mainly provide food and accommodation services. The food offered will be unique in terms of ingredients and taste. It will also include fine wine. Food services offered will be in three faces that is; breakfast, lunch and dinner. The accommodation will comprise of deluxe rooms and various suites. The room facilities will have items such as Hypnos beds, hypo allergic bedding materials, air conditioning, toiletries, laptop safes, flat screen TV, balconies, bath and others. Other services that will be on offer are ample parking space, outdoor dining and concierge services such as luggage storage. On top of the services offered, amenities such as swimming pool, fitness centre, children activities and conferences facilities will be present. Due to many players in the hotel industry, Briscan Hotel will seek to improvise its services in order to have a competitive advantage. Apart from the local menu on offer, the hotel will introduce several types of cuisines on its services. This will include the Asian cuisine, Oceanine cuisine and the cuisine of the America. Inclusion of these cuisines will target the increasing number of tourists from the three regions. The differentiation of the food offered by the Briscan hotel will result to a distinguishing effect in the hotel industry. This is because the hotel will seek to target different kind of markets at the same time once the cuisines are effected. This will reduce the commonality that has been so prevalent in the hospitality industry due to offering of almost similar product. There will be many advantages arising from the differentiation of the hotel product and services delivery. The hotel will serve a larger niche market comprising of diverse cultures all under one roof. Therefore, the hotel will be a preferred choice by many due to the diversity of services delivery thus; it will attract many customers both from within the country and abroad. This differentiation will provide a special appeal to customers that will result from increased degree of satisfaction. This will increase the competitive advantage and create customer loyalty (Patiar & Mia 2009). This in turn will lead to a repeated business, which will lead to generation of more profits. OPERATIONS PLAN OBJECTIVES Our aim at Briscan Hotel will be to establish lasting relationship with our customers and our suppliers. The objectives in place include; delivering the best services to our customers to enhance maximum customer satisfaction, to attain full compliance of the statutory legal requirements and to be the leading hotel service provider in the region. Upholding environmental concerns through reuse and recycling of wastes, and establishing teamwork spirit towards the accomplishment of goals. To attract visitors from around the world, welcoming them, hosting them, serving them and encouraging them to come again (Stevenson & Hojati 2007) LOCATION The hotel will be located in the outskirts of Brisbane, Queensland. Queensland is an ideal place for the hotel as it promises to provide a great deal of domestic tourists by the fact that it is the third most populated state in Australia. It has many tourists’ destinations such as Brisbane, Great Barrier Reef, Whitsunday islands, Daintree rainforest and numerous wildlife parks such as Currumbin wildlife Sanctuary, David Fleay wildlife and Australia zoo among others ( Zeppel & Muloin 2008). The advantage of this location is the guarantee of large numbers of tourists throughout the year due to availability of many tourists’ destinations. The region enjoys sophisticated transport network ranging from highways, railways, airports and seaports. The premise, which the hotel will occupy, will be through leasing. This has been the preferred method in this industry for the last decade. Leasing is preferred method of acquiring premises in the hotel for the last 10 years. This is because it is far much cheaper to lease a building than to construct. The availability of funds to lease is easier to get for this case as compared to those ob building. It is estimated that $ 2.5 million will be used in leasing the building. SERVICE DELIVERY The hotel will offer several services ranging from food, accommodation and other concierge service( Khan 1991). s. All these services are provided at the customer preference. Booking will be done online or through telephone in case of the local tourist. In case of the international arrivals, arrangement will be made with a preferred choice of tour travels to pick the client from the point of arrival. The locals may travel using their own vehicles but that may depend on their choice. The customer will be directed to his preferred choice of suite shortly after arriving. The guest will then utilize all services provided by the hotel upon making a request. Hotel booking transport to the hotel reception catering services in the hotel Transport out the hotel FACILITIES REQUIRED For the hotel to begin its operations, several facilities and equipments are required. Primarily will be the building, which will accommodate all the other facilities of concern. The kitchen facilities will comprise things such as sinks, trays, trolleys, shelves, cup & sauces, plates, bowls, teapots, cutleries like forks, soupspoons, dessertspoons, steak knife. Glassware will have things such as champagne flute, martini, rocks and highball glasses. other things present include; freezes and refrigerators, chilled cabinets, chopping board and rolling pin, coffee machines, dishwashers, ovens, credit card machines, microwave oven, tables and chairs( Poumeyrol, Morelli, Noel & Cornu 2012). The fitness center will comprise of cardiovascular equipments such as treadmill, recumbent bike, upright bike, total body elliptical, cross trainer elliptical, stretch trainer and Stairmaster step mill. The strength training machines will constitute equipments such as leg press, cable cross over, lat pull, functional trainer, preacher bicep curl, lat pull down, seated row, leg curl, chest press and triceps press. The free weights machines will include abs training bench, medicine balls, stability balls, discs, airex balance pad, incline bench, leg press, squat rack, preacher curl bench and portable adjustable bench. The room facilities will have thing such as televisions, hair dryers, tea and coffee making equipments, bathrooms, bathrobes and slippers, smoke detectors, alarms and internet access among others. The conference rooms will comprise of furniture, stage lighting, screens, sound system with things like speakers and stereos. To cater for the parking needs, the hotel is planning to construct a parking lot with a capacity of around fifty vehicles. Security in the hotel is paramount thus; facilities to enhance maximum security will include things such as metal detectors, cctv cameras among others. The hotel will need office facilities such as computers, photocopiers, telephones, printers and all other office paraphernalia’s. This will be used to process various transactions in the hotel especially processing orders. In order to undertake several services the hotel will require two vehicles. The building that the hotel will operate in will be obtained by means of leasing. It is estimated to cost A$2 million per year. All the facilities and the equipments of the fitness center will be leased at a cost of A$ 500,000 per year. Will be purchased at a budgeted cost of A$ 100,000. The office furniture will be purchased at a cost of A$ 15,000. The two vehicles required will be leased at a cost of A$ 70,000 per year. The accommodation facilities will be purchased at a cost of A$ 500,000. The security equipments are expected to be purchased at a cost of A$ 40,000. MAINTENANCE PROCESS In order to maintain high quality services provided by the hotel will have to ensure that all its operating facilities are in excellent conditions. This will begin by training all the employees on basic skills required in maintenance procedures. To enhance proper waste disposal, a garbage area construction will be necessary. This will be at a far distance from the premises. This will restrict insects and prevent odours within the premise. Kitchen utilities should be easily cleaned and all food should be placed on shelves that are about 20 cm above the floor. Kitchen utensils will be promptly replaced. Regular room inspection with daily inspections of the fitness center facilities and hotel rooms applied. This will enhance checking of faulty equipment and thereby fixing those that out of order. The hotel grounds will be maintained on a daily basis. Optimum ventilation for washrooms and other rooms will be put in place. Some of these maintenance processes will require professional expertise and thus a team of experts is required. They will handle machinery that requires technical expertise. MATERIAL AND SUPPLIES Many materials will be required for effective running of Briscan Hotel towards realizing its objectives among them being; creating unique and special benefits to customers and enhancing maximum customer satisfaction. Those to supply these materials will be many each one of them dealing with a specific line of supplies. To select the suppliers a competitive bidding will be used. Application for tenders will be done online or by mail with a non-refundable fee of A$ 1000. To select those who will be our suppliers, quality standards and cost will be a major consideration (Faulkner& Patiar 1997). Those who will qualify to be the hotel suppliers will enter into a 2-year supply contract with the hotel. However, contracts may be cancelled if the supplier fails to meet the set standards of goods and services as stipulated in the contract. On the other hand, the supplier who will keep up to the standard will have their contracts renewed subject to their preference (Surawski & Wilks 2002). INVENTORY MANAGEMENT Inventory management involves pricing forecast, quality management, returning of goods that are defective and availability of space for inventory. Timely making of orders will be followed especially for the food components. This will reduce incidences of food spoiling or delay in delivery. Stock levels will be dependent of the demand variation, which include the peaks and the off-peak. The storeroom will be adequately ventilated and the shelves will be placed above floor by 20 cm. SEASONAL VARIATION In hotel industry, Seasonal variations in demand are not inevitable. The variation occurs in three faces namely peak, off peak and shoulder period. Peak period is when the demand is highest; off peak is when the demand is low while shoulder period is when the demand is at a normal level. The seasonal variations cannot be controlled but measures can be put in place to deal with impact (Lim& McAleer 2001) The basic thing required in managing of variation is primary knowledge of the pattern of demand in the hotel industry. This will guide in provision of a clear blue print that will lead to the whole process of dealing with the situation. The peak seasons occur mostly during the holidays when schools have closed or when there are special days and vents. When it is the peak seasons period the hotel will seek to position itself strategically to reap the maximum benefit thereof. It will ensure that enough stock is available to avoid any interruption in the normal operations. During the low season, the hotel will have to lay of the employees who are on contract basis, lower prices, carryout intensive promotions and offer discounts to customers. LEGAL OBLIGATIONS The premise used by the hotel will require an application from Integrated Development Assessment System (IDAS).this is due to change of use of the premise to a hotel. Another application from the Integrated Development System will be required due to the renovations that will be done on the building. An annual commercial registration for the two hotel vehicles will be sourced from Department of Transport and Main Roads. A music license from Australian Performing Right ASSOCIATION (APRA) will be applied. The music license will be due to the radio and televisions played in the hotel. Food Business License from local council will be required for the hotel to be permitted to sell food to its customers. The hotel will ensure that proper and safe storage of food is achieved. This will be to comply with the food health and safety standards of the Food Regulation 2006, Food Act 2006 and Food Production (safety) Act 2000. A liquor license from office of Liquor and Gaming Regulation will be required in order for the hotel to serve alcohol to customers (Rydon & Beel 1996). PERSONELL PLAN EMPLOYEES NO TERMS OF EMPLOYMENT RENUMERATION RECRUITMENT SOURCE WAITING STAFFS 10 5 will be full time and 5 will be part time Between A$ 15000-20000 Informal (unsolicited applications SUPPORT STAFFS 20 10 will be full time,5 will be part time and 5 will be casual Between A$ 15000-25000 Formal (employment agencies) FOOD PREPARATION 30 20 will be full time and 10 will be part time Between A$ 20000- 30000 Formal (employment agencies) MANAGEMENT 10 All will be full time Above a$ 40000 Formal (media advertisement) All employees will undergo several training such as fire and emergency training, which will be provided by Queensland FIRE and Rescue Services. They will also undergo Safety and workplace health training and pandemic risk Management. All employees should undertake the responsible management of licensed venues (RMLV) training and license. The staff who will be serving liquor will undertake responsible service of alcohol (RSA) training. The Human Resource management will conduct performance assessment of all the employees (Chu & Choi2000). This assessment is important because it will enhance proper communication within the hotel, help in realization of hotel objectives and identification of the need to of training in certain areas of operations. The assessment will be conducted for every six months and will be inform of questions concerning the work position in the hotel (Mayer& Davis 1999) TECHNICAL FEASIBILITY The hotel industry has many players who are involved in services provision. This has lead to serious completion in the industry to the homogeneity of the product being offered. This idea of starting the hotel means that a high competition is expected. However, according to the statistics, the hotel industry has registered growth in the past years and the trend is on the rise. This growth has occurred despite the poor performance of the domestic tourism. However, there has been an increase of the international arrivals. The international arrivals are mostly from the Asian countries with China in the forefront of ensuring steady growth of the industry. Briscan Hotel therefore has a chance of success in the industry. This is because the premise, which the hotel will be located, is readily available. Other materials and equipments of concerns are also within reach even those, which are for lease though the facilities for the fitness center are a bit expensive. Labour is also in plenty due to the growth of sector which has attracted many personnel in the industry. However, the mode of hiring the employees will be a bit expensive. This is because a lot of expertise will be used to arrive at the right staffs for the hotel i.e. those with experiences and competent enough to add value to the hotel business. Transportation will not be a major issue as the mean of transporting supplies will majorly on suppliers. The limiting factor to the establishment of the business will be funds. This is because starting a new business requires high initial capital for acquisition of the premises and the facilities required to start the operation of the business. References Timo, N., & Davidson, M. (2005). A survey of employee relations practices and demographics of MNC chain and domestic luxury hotels in Australia. Employee Relations, 27(2), 175-192 . Patiar, A., & Mia, L. (2009). Transformational leadership style, market competition and departmental performance: Evidence from luxury hotels in Australia. International Journal of Hospitality Management, 28(2), 254-262. Mayer, R. C., & Davis, J. H. (1999). The effect of the performance appraisal system on trust for management: A field quasi-experiment. Journal of applied psychology, 84(1), 123. Lim, C., & McAleer, M. (2001). Monthly seasonal variations: Asian tourism to Australia. Annals of Tourism Research, 28(1), 68-82. Chu, R. K., & Choi, T. (2000). An importance-performance analysis of hotel selection factors in the Hong Kong hotel industry: a comparison of business and leisure travellers. Tourism management, 21(4), 363-377. Tracey, J. B., & Hinkin, T. R. (1994). Transformational leaders in the hospitality industry. The Cornell Hotel and Restaurant Administration Quarterly, 35(2), 18-24. Faulkner, B., & Patiar, A. (1997). Workplace induced stress among operational staff in the hotel industry. International Journal of Hospitality Management, 16(1), 99-117. Stevenson, W. J., & Hojati, M. (2007). Operations management (Vol. 8). Boston: McGraw-Hill/Irwin. Novelli, M. (Ed.). (2005). Niche tourism: contemporary issues, trends and cases. Routledge. Khan, M. A. (1991). Concepts of foodservice operations and management. Surawski, M., & Wilks, J. (2002). Hotel Safety in Australia: Current Legal Issues. Int'l Travel LJ, 164. Authority, G. B. R. M. P. (2009). Great Barrier Reef Outlook Report 2009: In Brief. Great Barrier Reef Marine Park Authority. Authority, G. B. R. M. P. (2009). Tourism themed routes: A Queensland perspective. Journal of Vacation Marketing, 9(4), 331-341. Pegg, S., Patterson, I., & Gariddo, P. V. (2012). The impact of seasonality on tourism and hospitality operations in the alpine region of New South Wales, Australia. International Journal of Hospitality Management, 31(3), 659-666. Zeppel, H., & Muloin, S. (2008). Aboriginal interpretation in Australian wildlife tourism. Journal of Ecotourism, 7(2-3), 116-136. Ballantyne, R., Packer, J., & Axelsen, M. (2009). Trends in tourism research. Annals of Tourism Research, 36(1), 149-152. Rydon, P., Stockwell, T., Lang, E., & Beel, A. (1996). Pseudo‐drunk‐patron evaluation of bar‐staff compliance with Western Australian liquor law. Australian and New Zealand Journal of Public Health, 20(3), 290-295. Poumeyrol, G., Morelli, E., Noel, V., & Cornu, M. (2012). Impact of the method chosen for measuring temperatures on the efficacy of rapid cooling of foods in catering facilities. Food Control, 23(2), 345-350. Read More
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