Detailed Implementation Plan of the Eagles Nest Hotels - Essay Example

?Eagle’s Nest Operations Overview Purpose The scenario is a bit challenging for the hotel as it is not the original expansion plan that it originallywas. The venture has been modified (rather forcefully). We (Eagle Nest Hotel) were opening a new branch in Amsterdam Metropolitan Area. We are facing a challenge of minimizing the loss that is evident. The government has made it mandatory to construct special exit lifts in our hotels. And we have to build new lifts in our hotel and that alone will cost US $20 million. But things are more complicated than that as our old system of lifts cannot be modified that easily. Some special arrangements need to be made to meet the requirements of the government policy and to fix that an additional cost of US $30 million is required. The original budget was $125 million but that has been reduced to US $75 million. This reduction in our budget is all across the portfolio. How it will affect the operations, let’s take a closure look. Here at our Eagle Nest operations department we have to act accordingly to cope with this challenge. Our plan of action includes budgeting (cost reduction) in the following. The building rented will be hosting a room quantity 120-150 commercial Target Date Even though we are starting the business in January but our target is July to capture the mass tourists market. When they will be coming to visit the Amsterdam Metropolitan in crowds. So we have ample time to get things fully running. Our key areas to focus on are 1) Food production, products purchase technology, menu card planning, supply and consumption control, and occupational hygiene. 2) Food and Beverage Service (rendering services to clients, wines and beverages purchase, meeting visitors, orders fulfillment) 3) Housekeeping 4) Front office operations (reception and accommodation of visitors and further service rendering). 5) Interior Product description It is a modern fashionable motel in the heart of Amsterdam Metropolitan. Target customers We are catering people from all walks of life. They can be from the enterprise management, IT, advertisement, financial worker, independent pioneer, young people, tourist, merchant. Manufacturing process The manufacturing process is only the food processing. That includes all the food and beer beverages. Key risks and mitigation The key risk that we face is the competition. We don’t need to worry about the reputation or the brand loyalty. There are many huge hotel giants already operating there. Our original budget of $125 million was sufficient to compete with them. But now the budget has been rescheduled. We were aiming for advertisement at a grand level but the budget being reduced has forced us to rethink on that strategy. We will spend very little on TV advertisement. We are taking the route via the internet. Impact on operations Department Just like the other departments, the impact on the operations department will be quite severe. We will be forced to cut down on cost. In terms of percentage, it will be round about 40% of our total original budget. The biggest challenge is to cope with the legal requirements as those cannot be avoided. We are looking for very efficient plans in cost reduction. As we simply cannot compete in such a high profile area such as the Amsterdam Metropolitan without having our arsenal filled with the top quality armoury. Time plan The operations procedure will commence as soon as we get the contract for having the building on rent. Starting with the interior of the hotel. Furniture, china, linen, Kitchen ware, furniture are the major things to get our motel running. Given the area of Amsterdam Metropolitan, we are expecting a very high competition. The key thing to keep in mind is that we cannot start with the state of the art interior and the building outlook. Probably it is very much noticeable at this stage that the budget getting reduced by 40% is very favourable for us. People in the metropolitan area of Amsterdam prefer the culture of that place. Our target guests will include a major percentage of the tourists and less of the locals. Provided the flexibility of our hotel chain of Eagle, we can definitely merge in the cultural architecture of that area. We will need less money for the renovation and modification of the building area. The definitive activity list The key activities are the Cutting down on suppliers (Using our own unused furniture from our other branches), Installing the air conditioning unit, The fire proof cables and the exit lifts lobby, corridors and meeting rooms. The operations department will start work by renovating the building. The one that we have at our disposal needs some modification on the outside to strike a balance between the cultural styles of the other buildings of the area and to bear our Eagle Nest trade mark. For the modification we are starting right now. Our financial department has informed us that the rights of the property have been transferred (temporarily) as the building is on rent (at least for now). Food Production We are in constant touch with the finance department to hire local cooks. We are searching for local experts as we will be catering the local food (our major food product). Keeping in view that the budget is low, we are searching for local talents, as we will train them in hygiene and top notch food quality to meet our expected standards. The interviews of the chefs will be held on site. Later on more time will be given to them during their training process. This will be done during the first week. As we are already a well functioning chain of hotels so we don’t need to waste time on developing job descriptions. The table below will be helpful in understanding the how and when. Activity Duration Start End Slack Job descriptions NA NA NA NA Advertising 3 wks Week Week 16 5 days Processing CVs 2 wk Week 1 Week 3 0 days Interviews 1 wk Week 3 Week 4 0 days Links and Dependencies Finances The operations department first needs clearance from the finance department to start the operations activities. The first and foremost is the legal transfer of the rights of the building (temporary basis). After that we can start the operations and installment. The department that needs to be in constant touch with us is the HR department. The hiring of the local chefs, their interviews, selections and training needs to be done in constant coordination with the HR department. Other activities which must be completed before we start our operations Purchase of land (on rent) Fund Clearance Equipment (Interior) availability Resource Requirements The financial planner is supposed to provide us with a good to go signal to start the operations procedure. We need to have the air-conditioning unit available along with the electricians and mechanics to start installing the machinery and get it running. Financial Plan Total Budget US $16.45 million We require urgent funds for the operation to commence. The finance department had allocated us a budget of US $16.5 million and we need to get half of that immediately to purchase the interiors and the furniture as it will take time to buy and modify those interiors. We can store them somewhere else even if the building is not available yet. To incorporate different staff positions, the following chart will refer to the share of every one. We have three different plans of action which will be implemented accordingly. The cost section of the hotel operations includes the furniture, linen, kitchen ware, interiors, local staff, local entertainers and local chefs To answer the question as to how will we go about our targets we have summarised the following plan of actions. Now taking a look at the revenue section, the graphs clearly show the plan for payoff for the next four years. The basic finances needed for the hotel stuff can be summarized in the table below. Project Detail Budget funds Air conditioning 70% total area 30000 square meters $2 million Elevator 7 $4 million Kitchen facility Bottom building kitchen $1 million Fire prevention facility 20per square meter $6 million Electrical power system Network, telephone, television, monitoring $500,000 Electric appliance Computer, refrigerator, safe cabinet and so on $300,000 Furniture decoration SPA Guest room, dining room, bar, SPA $2.5 million Room thing Quilt ,bath towel $100,000 Other Clothing, plant, tableware, $50,000 Milestones There are few milestones that can help the staff to remain focused on the goal and think like a team. The short term milestones will be on the weekly basis to fight the competition. One of the major milestones is to get 100% profit or in financial terms, the revenue can be 200%. It is possible by all means. To act much revenue, we need to retain the customers. A repeated customer means pure profit and no advertisement and marketing cost. And a satisfied customer always recommends the same thing to his friends and loved ones. So the people getting our services here at the Eagle Nest Hotel on the recommendation of our repeated customers also don’t cost us anything additional. To achieve that, we have developed a strategy to achieve the customer retention milestone. Customer retention The following are our trusted strategies for customer retention. Kids Club We will focus more on the families and their kids. We are building very lovable and playful kids club. So parents can even drop off their young ones there and they can have their own private time while the kids will be having the fun of their lives. Make it feel like home That is the key to a satisfied customer. We will be training all of our staff in hospitality, even the janitors and the drivers. The more comfortable our customer will be, the more they would want to come back again. When the guests think that they are part of a big hotel family then they sure do want to come back and stay at the same place. Creating a feeling of community We are focusing on creating an environment for our guests where they feel as they are living in one community. The repeated guests will be getting free tee-shirts. That would be our way of saying thank you. Rewarding repeat customers with a 10% discount We will be rewarding our repeated customers with a 10% discount. This also creates a financial incentive for the customer. Great food and great service Of course who can deny the main course of our operations? Top notch hospitality and service fused with mouth watering food will be a killing combination and we will be able to compete very comfortably. And that will be achieved through very tough training and maintenance. A brief chart for other milestones is as follow Milestone Date Lead Responsibility Revenue 200% (Operations) April 2011 Operations Manager Total Market Share (13%) June 2011 Marketing Manager Reviews (stats) In Top 5 position Sep 2011 Top Management Acquisitions (One local Hotel) December 2011 CFO Customer retention (60%) July 2011 Marketing Manager Most searched 3 star motel (SEO) January 2012 Top Management Risk Plan The Key risks and threats facing this venture of the Eagle’s nest Hotel are 1) Operational –Internal Business Processes 2) Financial -Accounting risk 3) Forensic Risk - Identity theft and computer Fraud 4) Strategic Risk- External Forces: competitors, suppliers, customers, agents, advisers 5) Knowledge Risk- CDP-Employees 6) Compliance risk 7) Income Variability 8) Increasing Rent 9) Power expenses 10) Legal requirements (Land, building) 11) Need for extra Advertisement Actions to be taken should the risk materialise 1) Extra funds 2) Loan 3) Internet Marketing Actions that can reduce the likelihood of the risk occurring are Minimizing expenses in every way possible. Every dime spent will be for the milestones. Saving the power as much as possible will give us some incentive of efficient cost saving. And finally we have intended to tap in the market of financial derivatives and hedge funds for generating stable Income (Financial Investment planning). Risk Description Priority Pre-warning signs Action To avoid Action To mitigate Operational A Visible Control Management Financial A Not Visible Control Financial Scrutiny Forensic A None CCTV Police Strategic A Complaints Deadlines Weekly Report Middle Manager Top Management new Plan of Action Compliance B Complaints Complaints Department Scrutinize the Infrastructure Resource Requirements Real estate We have allocated a fixed amount in the development and acquisition of the real estate. And we will also hire the real estate expert of the Amsterdam Metropolitan. Getting the best possible price is extremely crucial for us in achieving the milestones. Construction and refurbishing contractors As described above, for the time being, the outlook of the hotel won’t be the state of the art given the limited budget. But there is no compromise on the interiors. We are promoting our hotel chain through advertisements. We are not focusing on the TV advertisement; we are benefiting form the internet and putting our ads at different social websites. As it saves a lot of cost and is highly effective. This way we will be appearing more appealing to the contractors and the customers as well. Operational procedures The local staff would constitute our major staff. We are hiring locals. We are actually trying to find diamonds in the rough as the potential can be polished through training. And with our expertise of running the Eagle’s Nest Hotels for almost 50 years is extremely helpful as we will not have to spend extra money on the training and coaching classes. Works Cited Catrersearch.com, Angela Frewin, Crime watch (Updated on Wednesday 26 March 2003) Available at: [Accessed 8 January 2011] Risk and Business Advisors, Available at: [Accessed 8 January 2011] Rob Warlo, Woodridge Hotel Management Articles, Available at: [Accessed 8 January 2011] Jackson Hospitality Services. Available at: [Accessed 8 January 2011] Read More