Task 2: (LO4) Understand and critically appraise principles and practices required at the strategic level within a hospitality business

Task 2: (LO4) Understand and critically appraise principles and practices required at the strategic level within a hospitality business.

Hotel Saffron (a 50 room hotel) has an annual occupancy of 64% and generates room revenues of $1,200,000, has staffing costs of $450,000. Their net profit is $80,000. They have no formal cancelation policy and lose 14% of bookings less than 24 hours out, during the winter (which is already very quiet).

What business management strategies can be employed to improve this hotel’s performance?

a) Use industry standards and discuss the performance in actual terms of dollars or percentages where possible.

b) Consider yield management, seasonality and perishability management, productively management, while using any other relevant factors.