A Plan of Opening a Hotel London Eye in the Heart of London - Case Study Example

?Entrepreneurship Introduction Entrepreneurs are individuals with an idea of a new venture and the desire to open a new business. They have the willingness and capacity to manage, organise and design their own business venture along with the ability to take up and manage the risk involved in starting a business of their own. At the same time, they are also characterised by innovation and plan their operations in such a way that they can face the competition prevalent in the market. This report discusses a plan of opening a hotel named London Eye in the heart of London (Tobin, 2012; Lee-Ross and Lashley, 2009; Morrison, 1999; Hisrich, Peters and Shepherd, 2011). About London Eye London Eye is a hotel and restaurant that will operate in London. The main reason for opening this hotel is that London has always been one of the most attractive tourist destinations for visitors in the United Kingdom. There are several places that attract the attention of tourists, such as Big Ben, Buckingham Palace, Madame Tussauds and many more. The hotel will be easily affordable to every type of visitor irrespective of their purpose, such as individual tourists, tourists in groups and visitors on business purposes. The hotel will have five floors with ten rooms in each. It will also provide restaurant facilities where not only hotel guests but also outside visitors can come in order to dine. The hotel will have conference halls for official meetings, conferences and seminars, as well as banquet halls for parties, marriage ceremonies and other family functions. The hotel will also have its own swimming pool, shopping mall, gym and other entertainment amenities for kids. This total project is expected to incur a cost of ?2 million. Mission of London Eye The main aim of the hotel is to provide their customers with a warm and friendly ambience where they can enjoy alone or with their family. It is a place where the customers can expect to get everything of an optimum quality and at affordable prices. The hotel will attract its customers with its warm, soothing tone and elegant decor. The rooms, along with the restaurant, will have comfortable furnishing. The warm and friendly behaviour of employees as well as the environment of the hotel are expected to offer a pleasant and memorable experience to the customers. Overview of the Whole Plan The construction of the hotel will begin in March 2014. For building the hotel, a renowned construction company has been hired and deals have been finalised. It has prior experience in constructing resorts and shopping malls, and has assured to use quality raw material, advanced technology and skilled labour with sufficient expertise in this field. Its architect has designed the outlay of the hotel considering the preferences and favours of both local and international customers. For the interior of London Eye, professional designers have been hired with prior experiences in designing interiors of hotels of international standards. The hotel will have different categories of rooms for different types of customers. Business suites are rooms with one bed, especially for customers on business trips. Family suites are specially designed for large families who are generally on vacation, mainly consisting of large size beds and special facilities for kids. Honeymoon suites are designed for honeymoon couples with facilities such as a candle light dinner, which is offered to them free of cost for a day. Apart from this, the hotel will have other facilities such as conference rooms, a bowling alley, banquet halls, a swimming pool and a restaurant. The interiors will be designed keeping the purpose of the room in mind. All sorts of modern amenities will be installed for the comfort and pleasure of the customers. The restaurant of London Eye will comprise cuisines of various countries. This is made in order to ensure that international customers visiting the hotel are able to choose from a variety of dishes as per their tastes. This will provide customers with lot of choices under one roof from where they can opt for their desired ones. The Services Offered The hotel will offer unique, creative, friendly and warm services of international standards in order to make everyone feel special and welcomed to the hotel. In case of the visitors who are on vacation, the hotel will offer them the service of tour management free of charge. The hotel has tie-ups with various tour advisors who can arrange trips for visitors. A honeymoon couple can avail this service too, along with which they are offered a complimentary candle light dinner in their own restaurant. The hotel also offers its own cruise on the River Thames (Gilmore, 2003; Sherman, 2007). Moreover, the hotel has designed certain theme events for the entertainment of visitors. These themes are based on the food that the restaurant will offer. There are also special fun-filled events for kids round the year, which will be of special interest to children. During the summer months, the customers visiting the restaurant can sit in the patio with their special summer menus. This garden and patio setting is expected to provide a casual and pleasurable environment for the customers (Prideaux, Moscardo and Laws, 2006). In order to retain the quality of food and services, employees engaged in delivering these services will undergo special training after they join the organisation. Special quality service standards will be set, which the employees must abide by, and the management of the hotel will ensure that these standards are met properly. Special care will be taken regarding the cleanliness of the hotel, and four room-service personnel will be present for catering to each of the five floors (Kandampully, Mok and Sparks, 2001; Mensah and Mensah, 2013). Management Structure The hotel will have a management team under whom the general manager will be working. The general manager will be responsible for monitoring the operations of all the departments that are accountable for smooth operations of the hotel. The departments that will run the hotel are marketing, human resources, finance, information technology, operations and administration. There will be several other employees who will function under these different departments. Human Resources An efficient human resource department provides the ability and structure to an organisation in order to meet its objectives and goals. The most valuable asset of an organisation is its employees. In case of a hotel, the employees occupy a very vital position since they are the people who are engaged in direct interaction with the customers and provide them with their desired services. Therefore, the satisfaction of the employees is very important and at the same time, certain HR policies are also essential for making the employees work efficiently. The HR department of London Eye is responsible for the following areas: Recruitment: For a new venture, recruitment of new employees is vital. The human resource team needs to first list the eligibility criteria for candidates, publish job postings accordingly, screen the applicants, conduct the preliminary round of interviews and finally, coordinate the hiring efforts along with the managers who will be responsible for selecting the candidates. Safety: Workplace safety is another factor that is taken care of by the department. Safety is an area of concern especially for the employees who are working in the kitchen of the restaurant. The human resource department has decided to install fire alarms and sprinklers all throughout the hotel. In addition, separate safety training will also be provided to the employees. The department will maintain a fatality and injury log for its own convenience. Compensation and benefits will also be determined by the department and will be strictly aligned with the industry standards. The team will also ensure that the organisation complies with the labour laws prevalent in the country. In this regard, they will assure that there are no illegal activities in the hotel. Training and development is another important aspect for such service undertaking. The employees, who are fresher or joining this industry for the first time, will be provided with ample training so that they can comply with the set standards of service delivery (Sims, 2006). Marketing The marketing department of the hotel will be responsible for the profitability, organisational growth, increasing the market share and revenue of the organisation. The marketing strategy, for the hotel to follow, will be designed by this department (Hayes, Ninemeier and Miller, 2011). The marketing strategy will be designed in line with the mission of the hotel. The hotel will communicate its service guarantee to customers through its tagline. Besides, promotional strategies will be designed by this team after intensive market research and extracting the means through which the potential customers can be reached efficiently. Product development is also an important aspect of this team and will be closely aligned with the tastes and preferences of the customers. In order to accomplish this, regular feedback will be taken from the customers regarding the services provided by the hotel along with other feedback, if any. The feedback will be properly assessed and improvement will be made based on the same. Loyalty benefits will be given to customers, who regularly visit the hotel or the restaurant, in form of discounts. Moreover, corporate clients will enjoy additional benefits for hosting their seminars and conferences in the hotel. Operations The operations department will be responsible for supervising the overall operations of the hotel. In this context, each floor of the hotel will have a floor manager for supervising the operations that particular floor. The floor manager will be responsible for all visitors in his allotted floor so that they are attended and serviced properly by the staff. The wide range of services includes another manager who will be at the restaurant for checking the quality of dishes being served, behaviour and abilities of the restaurant staff and the decor of the restaurant. The cleanliness and hygiene of the kitchen will also be supervised by him. Apart from these two major responsibilities, the operations department will be responsible for overseeing the hotel administration. Procurement The procurement department is directly linked with the procurement of materials required by the hotel and its restaurant. Such material include the ingredients required to prepare dishes, toiletries, stationeries and other supplies that are required for day-to-day operations of the organisation. This department will also be responsible for checking the requirements of different departments and putting them right accordingly. Finance The finance department will be responsible for taking up all financial decisions related to the organisation. The major decisions regarding investments will be made by the finance manager. The department has planned to manage the cost in all its operations. The main objective of the hotel is to offer quality products and services at affordable prices. Therefore in order to keep its prices affordable, the finance department needs to closely monitor its costs. The financial highlights of the organisation are given below (Cornwall, Vang and Hartman, 2013). The finance team is expecting a start-up cash requirement of about ?2 million (as shown in the Appendix). The details of the revenue, gross margin and net profit are shown in the table below. Even though the hotel will incur loss in the first year, it is expected to make profit from the second year onwards. Particulars Year 1(?) Year 2 (?) Year 3 (?) Revenue 1500000 2000000 2750000 Gross Margin 1000000 1450000 2130000 Net Profit -500000 400000 800000 Figure 1 References Cornwall, J.R., Vang, D.O. and Hartman, J.M., 2013. Entrepreneurial financial management: An applied approach. New York: M.E. Sharpe. Gilmore, A., 2003. Services marketing and management. London: SAGE. Hayes, D.K., Ninemeier, J.D. and Miller, A.A., 2011. Foundations of lodging management. New Delhi: Pearson Education India. Hisrich, R.D., Peters, M.P. and Shepherd, D.A., 2011. Entrepreneurship. 6th Ed. New Delhi: Tata McGraw-Hill Education. Kandampully, J., Mok, C. and Sparks, B.A., 2001. Service quality management in hospitality, tourism, and leisure. New York: Psychology Press. Lee-Ross, D. and Lashley, C., 2009. Entrepreneurship and small business management in the hospitality industry. London: Routledge. Mensah, I. and Mensah, R.D., 2013. Management of tourism and hospitality services. New York: Xlibris Corporation. Morrison, A., 1999. Entrepreneurship in the hospitality, tourism and leisure industries. London: Routledge. Prideaux, B., Moscardo, G. and Laws, E., 2006. Managing tourism and hospitality services: Theory and international applications. Massachusetts: CABI. Sherman, R., 2007. Class acts: Service and inequality in luxury hotels. California: University of California Press. Sims, R.R., 2006. Human resource development: Today and tomorrow. New York: IAP. Tobin, L., 2012. Entrepreneur: How to start an online business. New Jersey: John Wiley & Sons. Appendix I: Start-up requirement ITEMS Amount(?) Beginning inventory 227,500 Building 1,000,000 Land 500,000 Vehicle 10,000 Exterior and Interior decoration 50,000 Telephone & Internet Deposit 2,000 Operating Equip & Machinery 20,000 Furniture & Fixtures & Electronics 100,000 Installing Operating E & M 10,000 Installing Office F & F 10,000 Website 3,000 Office Supplies & Expenses & Services 3,000 Recruitment Expense 5,000 Business Insurance 40,000 Licenses and permits 5,000 Legal Professional fees 1,500 Uniforms 10,000 Miscellaneous Start up Expenses 3,000 TOTAL START-UP COSTS 2,000,000 TOTAL START-UP CASH AVAILABLE Personal Investment 1,500,000 Other Bank Loan 1,000,000 Mortgage 0 TOTAL CASH ON HAND 2,500,000 Less: Total Start-up Costs 2,000,000 OPENING CASH 500,000   Read More