Hospitality homework(Facility computing)

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HMD 395 –Facilities Management – WEISS Assignment 1 Fall 2016

HMD 395 -WEISS Assignment 1

Name: __________________________________________

Section (circle one) 11:30 a.m. 1:00 p.m. Do not write your name on any other pages of the assignment – only on this cover sheet! The entire package should be stapled. Do not paper clip, clamp, insert in a presentation folder, dog- ear, or attach the pages with chewing gum (yes, someone tried this in the past) or hair clips (someone tried this, too). Just staple it. There are probably staplers in the Student Union, the Library, the computer labs, etc. Or you can be the classroom hero and bring a stapler with you. The classroom is not equipped with a stapler and I will not have one with me. Due date: Submit a HARD COPY by no later than Tuesday, September 27. Electronic submissions will not be accepted.

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HMD 395 –Facilities Management – WEISS Assignment 1 Fall 2016

You will complete this assignment by yourself. You will submit a hard copy of your assignment no later than the beginning of class on Tuesday, September 27. You are more than welcome to turn your assignment in early! Formatting requirements:

• Use the cover sheet provided. This is the only place your name should appear; do not write your name anywhere else on the assignment, or you will lose points.

• Staple your assignment – no paper clips, dog-eared pages, hair clips, chewing gum, etc. If it is not stapled, you will lose points.

• You may type your answers or you may handwrite them – either way, your submission should be neat, professional, and orderly. Your pages should appear in the correct order. If your submission is a mess, I will return it to you without grading it.

1. Fun with financials. A copy of the 2015 edition of Trends in the Hotel Industry, published by

PKF Consulting, is available in the Resources area of our WebCampus site. Please use the metrics provided in this publication and use the percent-of-gross-revenue method (discussed in class) to answer the following questions. Do not answer the questions using the dollars-per- available-room basis.

Let’s say that our hotel, called Hotel Chic, had gross revenues of $10.5 million in 2014. Let’s also assume that the hotel’s property operations and maintenance (POM) expenses were in line with those of other, similar properties. Please calculate our 2014 POM expenses (in dollars), under the each of the following conditions. (Show your work, or you will not receive credit for the question). (5 points each)

a) A suite hotel with food & beverage in the New England & Middle Atlantic region.

b) A limited service hotel in an average rate of $115

c) A convention property with 785 rooms.

d) A resort property in the South Central region. 2. Now we’ll look at Hotel Blue’s Utilities costs. We’ll use the same 2014 gross revenue ($10.5

million). Examine the Utilities expense and determine if it is in-line with, higher than, or lower than this expense compared to other, similar properties. If it is higher or lower, you will need to specify by how much. In all cases, show your work and also explain the answer in a complete sentence. (15 points each)

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HMD 395 –Facilities Management – WEISS Assignment 1 Fall 2016

a) A resort property in the South Atlantic Region region. The Utilities expense was $247,200.

b) A full-service property with 355 rooms – the Utilities expense was $697,500.

3. Estimating renovations costs. Use the JN+A and HVS Design Hotel Cost Estimating Report to

estimate renovations costs for the Hotel Riverside. Show your work.

a) The hotel is an Extended-Stay category property. You decide to perform a full renovation on 80 guestrooms next year -- what will the total cost of the project be? Use the average cost (not the bottom or top end of the range). Do not include the bathrooms. (10 points)

b) Let’s say the property is a Upper-Upscale property and we need to update the pool areas to meet the ADA requirements of adding an ADA Lift to each pool. The property has 2 outdoor pools. While adding the ADA Lift, the property will also update all pool signage Use the high end of the cost range to calculate the total cost. (5 points)

c) Let’s say the property is in the Luxury category and we need to estimate the cost to perform a kitchen renovation, including new kitchen equipment. The kitchen’s dimensions are 45’ x 65’. Calculate the kitchen’s area first, then calculate the total cost for the project, using the high end of the cost range. (10 points)

d) The hotel is an Economy property and will install a new electronic guestroom key system for its 90 guestrooms. Use the average cost provided. (5 points)

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HMD 395 –Facilities Management – WEISS Assignment 1 Fall 2016

4. Capital Budget Planning (10 points each) Using the renovation plans from question 5(a-d), calculate the capital budget. a) If the hotel completes all of the above renovations (5a – 5d), what will the subtotal for our

capital plan be? Show your work.

b) Now calculate an appropriate amount for our capital budget’s contingency fund. Add it to the subtotal and show the grand total for our capital plan. Remember, the contingency should fall between 10-15%.