Assignment 3: HOTS Strategic Plan

Submission Information

Introduction

The process of determining the vision for the future and also identification of goals and objectives for the organization is known as the process of a strategic plan. This process and procedure also involve establishing and developing the sequence in which those goals should fall so that the business corporation is enabling d to reach its stated vision (Bakker, 2014). A strategic plan can also be considered as a document that can be used to communicate with the business corporation and the organizational goals, the actions and the activities needed for attaining those goals and all of the other critical elements developed during the planning exercises. Moreover, a strategic planning is also considered as an organizational management practice that can be used for setting and establishing priorities, focusing energy and resources. After analyzing the concept it has been understood that exertion that produces principal choices and activities that shape and guide what an association is, who it serves, what it does, and why it does it, with an attention on what’s to come. Compelling key arranging explains not just where an association is going and the activities expected to gain ground, yet in addition how it will know whether it is effective (Barney & Hesterly, 2010). The below-executed analysis has been made focused on the strategic plan that has been presented for Hilton in Australia. The business entity is a multinational corporation and is a making use of HOTS simulation for providing training sessions to give them learning on various aspects within the hospitality sector.

Review of the key indicators

A key performance indicator is a measurable value that depicts the effectiveness of the business corporation that can be used for attaining the business goals and objectives. Organizations use KPIs at multiple levels to evaluate their success at reaching targets. High-level KPIs may focus on the overall performance of the enterprise, while low-level KPIs may focus on processes in departments such as sales, marketing or a call center (Buckingham, 2011). The concept of balance scorecard is considered as a strategic planning and management system that can be utilized by the business corporation for communicating the objectives that are required to be attained by the business corporation, alignment of the routine activities and practices that are to be executed by every individual with strategy, prioritize, projects, products and services etc. The below mentioned are the main key indicators that are required to be.  

Strategic Priorities Save Time On Research and Writing Hire a Pro to Write You a 100% Plagiarism-Free Paper. Get My Paper		Objectives	Measures	Targets	Initiatives
Financial		ROCE	ROCE
Customer
Internal
Learning & Growth

Learning Outcome/s

REVPAR

Revenue per available room is a metric used to measure the performance of the hotel industry. The calculation of the REVPAR is done by multiplying the average daily rate of the hotel by the occupancy rate (Carroll, Primo & Richter, 2014). It may also be calculated by dividing the total revenue of the hotel by the total number of the rooms which are available for a particular financial period.

                                             

The average daily rate of the hotel Hilton from the above graph can be seen as 109.27. This average daily rate is multiplied by the revenue per rooms available which will actually give the exact amount of the REVPAR (Cassidy, 2016).  

Calculation of Gross Profit Ratio
	2016	2017
Particulars
Gross Profit	7615	7854
Net Revenue	11663	9140
Gross Profit Ratio	65%	86%

Gross profit Ratio

The gross profit ratio is the profitability ratio which determines the relationship between gross profit and the revenue earned by an organization. The revenue earned by the hotel Hilton was roundabout $7854. This ratio determines the ability of the firm to perform the operations of the business. From the above table, it can be determined that the gross profit ratio of the company is 86% in the current financial year and last year it was 65%. A sound gross percentage is one where the company can cover all of its costs and is able to give a competitive return on the investment in the business (David, 2011).

                                                                

ROCE

Return on Capital Employed is a kind of a financial ratio which is used to measure the company’s profitability and the level of the efficiency with which the capital is invested in the business. The ROCE of the company can be calculated by using the formula of ROCE= Earnings before Interest and Tax divided by the capital Employed

Calculation of Return on Capital Employed Ratio
	2016	2017
Particulars
EBIT	1255	930
Capital Employed	5985	5899
Return on Capital Employed	21%	16%

Return on Capital Employed

The return on capital employed or ROCE is a profitability ratio that measures how much a company can make profits in relation to the capital invested. The return on capital employed shows the value of each dollar invested (Foss & Knudsen, 2013). The return on capital employed is 16% of the current year.

                                                                 

Assignment Instructions

Market share

Market share of the can be referred to as the total volume of sales in the market which is earned by the company over a specified period of time (Rothaermel, 2015). This information is typically used in determining the size of the firm in the context of its competitors. The market share of the Hilton Hotel is usually used for the investors and analysts. Both of them evaluate the jump and fall of the market share deeply.

                                        

From the graph above the trends show that the market shares of the hotel Hilton for the existing room as well as the rooms which are under the construction.  Under the global system, the percentage is 4.5. The market share of the company determines the strength of the company on how to stabilize themselves (Horn & McGee, 2012). Though the presence of the Hilton’s operation is concentrated in the U.S. it is trying to capture the market internationally as well.

Guest satisfaction

Hilton’s takes great pride in ACSI customer satisfaction. A roundabout 74000 team members are involved in the working and management of the operations of all the properties which are owned and managed to deliver the best guests services and experience to the customers (Vasarhelyi & Halper, 2018).

Staff satisfaction

As of December 31^st, 2017 more than 174000 people were employed. About 30% of our employees were covered by various agreements which require bargaining agreements which are generally addressing the rates of payment, the working hours of the employees, the other employee benefits and orderly settlement of labor disputes. (Wiek, Withycombe & Redman, 2011)

ADR

ADR is the measure of the average rate paid. It is calculated by dividing the revenue by rooms sold (Perkins, Grey & Remmers, 2014). This type of index typically determines the ADR performance which is very much relative to an aggregate grouping of the hotels.

Occupancy rate

The occupancy rate is usually used with relevance to the statistical units. The two statistical units are the average daily rate and rooms per revenue to measure the hotel’s performance. The occupancy art can be calculated by applying the formula of rooms sold divided by rooms available.

Public awareness

Under the World Travel and Tourism Council, there is a committee of the members known as the Executive Committee whose focus is to drive the attention of the public towards the awareness about the hotel to the general public in advance (Gibbons & Kaplan, 2015). Although there are certain members of the board who try to establish the relations and enhance the collaborative efforts.

Review of the Key Indicators

Hotel quality index

Hotel index has completed five years. In the first quarter of 2017, the global index is equivalent to the quality of the services. The index remains constant at 8.3 points. The quality index is determined on the basis of the facilities, cleanliness, and price per room paid by the customer, Recommendation, and the feedback from the customers (Phillips & Moutinho, 2014).

                                                 

Annual staff turnover

Annual staff turnover refers to the number of employees who left the organization in the period of 12 months (Lawrie, Kalff & Andersen, 2015). Employee retention of the hotel corporation is a global hospitality company. The annual staff turnover of the company has reduced by 10% as compared to the previous year.

Explanation of key indicators

Financial Performance is an indicator of the firm which determines the financial position of the company and the ability of the firm to use the assets and to generate the revenues. For the three and nine months which ended on September 2017, The REVPAR of the company escalated by 1.3 % and 2.3% percent respectively. This happened due to increase in the ADR and occupancy. Also, the management fee and the franchise fees paced up in both periods as a result of the increase in the RevPAR of 1.0 percent and 2.0 percent.

For the three months ended, diluted earnings per share were $0.55 compared to $0.37 in the year 2016.  Income from continuing the operations and the net taxes was $180 million for the three months whereas the income was $122 million in the year 2016. Also, the above EBITDA increased by 13% which amounts to $524 million and it was $471 million. Further, the EPS was $1.28 in the financial year 2017 and $1.45 in the year 2016. Therefore, from the above analysis, it can be concluded that the financial performance of the Hilton hotel is improving consistently.

Development

In the third quarter of 2017, Hilton opened around 99 hotels which consist of 14500 rooms, which enables to achieve the net unit growth of 12000 rooms? As a result of this in the month of the September, Hilton’s development pipeline totaled for more than 3,35,000 rooms spread across 2191 hotels in roundabout 104 countries. Hilton continues to grow its newest brands with 18 percent of room openings for the year 2017 under the category of the Curio, Tapestry, Home2 Suites and a lot more. The hotel is trying to perform consistently and is revamping the development phase of the hotel Hilton.

Market positions

During the fourth quarter of 2017, the Hilton repurchased 3.5 million shares which cost about $266 million and an average price per share was $74.67.  Right from the first initiative to purchase the shares in the March 2017, till December 2017, Hilton repurchased 13.5 million shares for approximately $891 million has an average price of the shares $65.76. The dividend is $0.15 per share on the shares of the common stock. The members of the board of the directors declared a cash dividend of $0.17 on the common stock in March 2018. The above-market position of the hotel can declare that the hotel is stable and can stabilize its market structure with the use of new policies and strategies (Harrington, Chathoth, Ottenbacher & Altinay, 2014).

Customer Satisfaction

The customer satisfaction is the top priority of the hotel. By use of different mechanisms and schemes, the hotel is giving good packages to the customers (Leonidou, Leonidou, Fotiadis & Aykol, 2015). The facilities and then experience so provided can be analyzed from the feedback and response received.

Strategic plan

Setting up and building up the grouping in which those objectives should fall with the goal that the business organization is empowering d to achieve its expressed vision. A key arrangement can likewise be considered as an archive that can be utilized to speak with the business enterprise and the hierarchical objectives, the activities and the exercises required for accomplishing those objectives and the greater part of the other basic components created amid the arranging works out. In addition, a vital arranging is additionally considered as a hierarchical administration hone that can be utilized for setting and building up needs, centering vitality and assets. In the wake of investigating the idea, it has been comprehended that effort that produces main decisions and exercises that shape and guide what an affiliation is, who it serves, what it does, and why it does it, with a consideration of what’s to come (Cooper, Ezzamel & Qu, 2017). Convincing key orchestrating clarifies not exactly where an affiliation is going and the exercises anticipated that would make strides, yet moreover how it will know whether it is successful. Strategic planning is a formatted and formalized organizational management mechanism that can be adopted by the business organization for analyzing the current situation, setting priorities and focusing on the resources and energy for the attainment and maintenance of competitive advantage for the organization. The below mentioned are the benefits that will be attained by the business corporation after making adoption of the strategic plan in the organizational structure:

• This plan will be making Cognitive `Software group perform the operations in a proactive manner rather than reactive (Cassidy, 2016). This means that Strategic planning will enable the business entity in foreseeing the future and that will aid in the development of the future plans and prepare them accordingly.
• These plans will also aid the organization in establishing and developing a sense of direction. Definition to the directions of the business corporation is provided and this will aid in the development process of realistic objectives and targets and that are in line with the mission and vision of the firm will be facilitated (Wolf & Floyd, 2017). A strategic plan will offer the much-needed foundation to Cognitive Software and due to which the firm will be experiencing a boost in the growth and also evaluation of the success will be made possible.
• It will also enhance the operational efficiency and this will be done as this mechanism will offer a roadmap that will align the organization’s functional activities and operations in order to make attainments of the desired outcomes and targets (Kang, Chiang, Huangthanapan & Downing, 2015).  

The below presented is the strategic plan that can be developed by the various departments of the Cognitive Software group:

The strategic plan of Cognitive Software Group has been segmented into three major sections for the mentioned departments:

The below presented is the segmented strategic plan that is required to be implemented by the front desk officers and staff for bringing required improvements and advancements in the performance level.

For instance: This arranging incorporates setting destinations, conceptualizing territories for advancement, assessing options, drawing up spending plans, and building up an assessment instrument for criticism. Without an arrangement, a point – of – deal front office will have a minimal possibility of being effective (Haines, 2016). This arrangement ought to be created in discussion with lodging administration, office chiefs, and cutting-edge workers from different divisions. Colleagues are chosen to help with guaranteeing that a workable, gainful arrangement is produced.

Activities / Department	Objectives	Strategies	Time duration	Concerned Authorities
Front desk	Attending maximum number of visitors and guests to the hotel (Albrechts, 2015)	Keeping staff on rotational shifts so that the staff is available for attending the visitors and guests and also maintaining the entrance area presentable for attracting the visitors	2 Months	Front desk managers and leading authorities
Housekeeping	Maintaining rooms and hygiene in the hotel at the maximum level	Rotational shifts and performance evaluation should also be done so as to motivate them	2 Months	Housekeeping and maintaining manager
F&B	Providing high quality of food dishes with maintaining hygiene and variety in the dishes	Installation of new and upgraded appliances and cooking  techniques and taking suggestions from professionals (Channon `& Jalland, 2016)	3 Months	Chef and professional Cook
Marketing	Increasing the number of occupancy of rooms in hotel, and brand awareness and recognition		4-5 Months	Marketing heads and marketing managers
Human Resource	Recruiting of professional and skilled individuals and retaining the existing one	Making provisions for training sessions	3 Months	HR managers and management staff

Conclusion

After summing up the above-executed analysis it has been concluded that the strategic plan is one of the signed document for any of the business corporation and the same should be developed with a greater level of efficiency and effectiveness. The strategic plan will be developed so as to develop an understanding of establishing future plans and strategies. The above report is developed for establishing the strategic plan for Hilton as the business entity desires to bring improvements in the current operational plans and strategies and this leading towards the high peaks of growth and success. The report is executed after considering the approach of HOTS simulation and the same has been adopted by the business firm in providing various types of learning skills and techniques. Balance scorecard is also developed for measuring the financial and non-financial perspective and this mechanism is also presenting the difference between the current and the desired performance. Furthermore, the report also comprises of a strategic plan that in order to plan for the future.