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Hotel Operation Management BS2321

Coursework 1

This test is focused on the range of hotel financial operations and personal and business finance covered within the module. It is an open book test and you may bring any appropriate notes. You are expected to bring a calculator. You may use a mobile phone as source of calculator.

You will have 2.5 hours to complete the test.

ENSURE YOUR FULL NAME (PRINTED) AND STUDENT NUMBER IS ON EVERY SHEET YOU SUBMIT. SHEETS WITH NO NAME/NUMBER WILL NOT BE MARKED.

NAME: - STUDENT No:-

· Provided below is the “Turnbull Towers” hotel financial information for the month of December (years 2017 and 2018. Please ensure you which figures are for 2017 and which are for 2018). There is also an incomplete profit & loss account for both these years. Use this information to answer part one of the coursework which requires you to:-

· Provide the appropriate financial ratios in the template provided

· Complete the profit & loss account

· Answer the relative variance questions

Month

Available Rooms

Occupied Rooms

Total Room Revenue

Total

Non-room Revenue

Total Guests

Maximum

Potential Room Revenue

Room Expenses

Dec 2017

1860

1581

£102,238

£130,938

2845

£120,280

£18,972

Dec 2018

1860

1154

£90,210

£101,865

1938

£120,280

£10,386

Month

Gross Operating Profit

Food Revenue

Beverage Revenue

C&B

Revenue

Leisure Revenue

Total Labour Costs

Dec 2017

156875

£65,435

£48,365

£11,648

£5490

£34460

Dec 2018

134468

£34,884

£33,818

£23,183

£9980

£23226

1. Complete the provided “ratio template” for December 2017 and December 2018.

2. Complete the provided profit and loss account for December 2017 and December 2018.

3. Answer the relative variance questions below, which are an aspect of part one of the coursework. All relative variances are for the month of December, (2017 and 2018).

1. The relative variance for room department sales revenue

-11.76%

2. The relative variance for F&B department revenue

-39.63%

3. The relative variance for F&B department profit

-53.1%

4. The relative variance for F&B department payroll expenses

-31.49%

5. The relative variance for C&B department profit

176.71%

6. The relative variance for leisure department profit

172.57%

7. The relative variance for gross operating income

-14%

8. The relative variance for gross operating profit

-14.28%

Profit & Loss Account	Dec-18	Dec-17

Room Department
Sales Revenue	90210	102238
Payroll Expenses	7800	12670
Other Expenses	2586	6302
Total Expenses	10386	18972
Department Profit	79824	83266

Food & Beverage Department
Food Revenue	34884	65435
Beverage Revenue	33818	48365
Total Revenue	68702	113800
Food Expenses	15690	17630
Beverage Expenses	7947	8459
Payroll Expenses	12086	17640
Other Expenses	1268	2460
Total Expenses	36991	46189
Department Profit	31711	67611

C&B Department
C&B Revenue	23183	11648
Payroll Expenses	2600	3100
Other Expenses	1800	1760
Total Expenses	4400	4860
Department Profit	18783	6788

Leisure Department
Leisure Revenue	9980	5490
Payroll Expenses	740	1050
Other Expenses	1540	1615
Total Expenses	2280	2665
Department Profit	7700	2825

Gross Operating Income	138018	160490

Undistributed Operating Expenses
Admin and General	800	780
Marketing	1470	320
Utlities	1200	1470
Property & Maintenance	940	1045
Total UOE	3550	3615

Gross Operating Profit (GOP)	134468	156875

Answer Template (For Question 1)

RATIO	Dec 2017	Dec 2018
Average Daily Rate	£64.67	£78.17
Sales Revenue per Available Room	£54.97	£48.50
Total REVPAR	£125.36	£103.27
Sales Revenue per Available Customer (REVPAC)	£81.96	£99.10
Room Occupancy Rate	85%	62%
Average Occupancy per room	1.80	1.68
Yield Percentage	85%	75%
Cost per Available Room (CostPAR)	£10.20	£5.58
Gross Operating Profit per Available Room (GOPPAR)	£84.34	£72.29
Mix of Sales Ratio (Rooms)	44%	47%
Mix of Sales Ratio (Food)	28%	18%
Mix of Sales Ratio (Beverage)	21%	18%
Mix of Sales Ratio (Leisure)	2%	5%
Mix of Sales Ratio (C&B)	5%	12%