Background :

Sri Suria Hotel offered hotel accommodation, dining outlets and on- site event management services to its clients. Recently, the Board of Directors raised concern over minimal profit margin gained through the event managcment activities. The Cost Controller of Sri Suria Hotel was assigned the task to propose effective pricing strategies to the Board. The Controller believed that the most important factor affecting pricing would be costs. However, the Controller was well aware that internal factors such as marketing strategies, cost structure and cost decision mechanisms; and external factors including demand structure, competition, and legal legislation must be taken into consideration in his proposal. If the price is right, Sri Suria Hotel has an edge over its compctitors.

From the about 2 event, discuss pricing (3 method) and costing (3 method) methods that can be used by Sri Suria Hotel to determine the cost of its event management activities.

currelt Ta change I tl vat at the revise the booking should there be a hotels control, including any case of force majeure. The cost controller chose costing for the following two recent events; (I) Manjong Community Aniversary Dinner, and (2) Ruby Care Sdn. Bhd. one-day semina to illustrate existing costing practices L. Manjong Community celebrated its 50th anniversary with an Anniversary ILLUSTRATION OF COSTING AND PRICING PRACTICES Dinner for 600 persons with reservation for 60 tables of 10 person each. The event total revenue was RM 47,280.00 based on the selling price of RMs.80 per person. The price is calculated based on a customized package prepared by the event team in accordance with the client's needs. The brcakdown for event cost and price are as shown in Table 3 Table 3 Breakdown of Event Costs and Prices for Manjong Community Price Iten Cost Per Total Notes Unit Per %of Unit Cost to (RMI) Price (RM) 18.72 40% 11,232.00 1 46.80 28,080.00 1.30 26% 780.00 2 5.00 3,000.00 5.00 50% 3,000.00 3 10.00 6,000.00 (RMI) RM) Food Hall Rental AV & Equipment 4.00 50% 2,400.00 4 8.00 2.10 70% 1,260.00 6.00 100% 3.600.00 6 6.00 3,600.00 19.70 25% 11,S20.00 7 s 300 1,800.00 Salaries Operating Supplies 6.30 8% 13.782.40 8 6.30 8% 3,782 40 9 Total 69.43 41,656.80 78.80 47,280.00 L The percentage of cost is determined by cost controller based on either iten price or total avent revenue Ench item is explained in Table -4 Asian Journal of Case Rescarch (AJCR) Table 4 Notes on Each Item in Table 3 Note I The food price as per package which include appetizer, soup, main course cost ingredients for preparing an item is 40% from total and desert. The food selling price for food Note 2 Beverage item which include chinese tea, cordial punch and mineral water is estimated at a cost of RM5. The cost involved per person is 26 % from selling price of beverage Note 3 The hall rental charge can sometimes be negotiated depending upon food and beverage and audio-visual. For instance, the space utilized for the ceremony and wedding dinner may be discounted or provided complimentary upon the amount of food and beverage contracted. This function is booked for an anniversary dinner cvent, and rental is fixed 50 % from selling price. Note 4 Specific AV nceds for events such as wedding, reception and other gatherings presentations needing similar equipment may be booked concurrently by different guests, thus adding to cost by having to rent extra equipment from the market. The AV and equipment rental fee from market is set at 50 % from selling price of equipment Note 5 Car park is safe under CCTV and floodlighting while guests concentrate on the important business and enjoying the event. With this option the guest have to leave their car in the hotel's car park for the duration of time given. The car park charges per parson is RM300 and 70% will be taken for cost involved. The carpark is under renovation to accommodate additional 40 percent parking space for the guests In addition, automation resulted in 10 percent increase of gross margin Decoration costs vary depending on the location, length of event, types of lighting fixtures, seasonal & planning, theme, etc. Many variables go into determining the exact pricing for an event. Moreover this decoration not borne by the hotel, and fully using outsourcing services. The charges will be imposed on clients according to the quotation given by supplier So 100% of the total revenue from decoration services that hotel charged to guest will be used to pay contracted supplier Note 6 The salary range for this particular event is estimated at 25% from total revenue. Cost of staff salaries that assist with the event, and indirect cost could be allocated on the basis of how much time organization staff spend on the event Note 7 Operating supplies like linen, toweling, dishwasher, chinaware and etc. allocated 8% from total revenue for the event specified by the hotel mianagement Note 8 Calisies imelule electricity, energy, and weter exponses Rotel minagement alocating thus amount according to certain factors fex. surface, usage and duration) For this event the allocation was S% from total revenue of RM 47250.00 per pax charged Note9 56 currelt Ta change I tl vat at the revise the booking should there be a hotels control, including any case of force majeure. The cost controller chose costing for the following two recent events; (I) Manjong Community Aniversary Dinner, and (2) Ruby Care Sdn. Bhd. one-day semina to illustrate existing costing practices L. Manjong Community celebrated its 50th anniversary with an Anniversary ILLUSTRATION OF COSTING AND PRICING PRACTICES Dinner for 600 persons with reservation for 60 tables of 10 person each. The event total revenue was RM 47,280.00 based on the selling price of RMs.80 per person. The price is calculated based on a customized package prepared by the event team in accordance with the client's needs. The brcakdown for event cost and price are as shown in Table 3 Table 3 Breakdown of Event Costs and Prices for Manjong Community Price Iten Cost Per Total Notes Unit Per %of Unit Cost to (RMI) Price (RM) 18.72 40% 11,232.00 1 46.80 28,080.00 1.30 26% 780.00 2 5.00 3,000.00 5.00 50% 3,000.00 3 10.00 6,000.00 (RMI) RM) Food Hall Rental AV & Equipment 4.00 50% 2,400.00 4 8.00 2.10 70% 1,260.00 6.00 100% 3.600.00 6 6.00 3,600.00 19.70 25% 11,S20.00 7 s 300 1,800.00 Salaries Operating Supplies 6.30 8% 13.782.40 8 6.30 8% 3,782 40 9 Total 69.43 41,656.80 78.80 47,280.00 L The percentage of cost is determined by cost controller based on either iten price or total avent revenue Ench item is explained in Table -4 Asian Journal of Case Rescarch (AJCR) Table 4 Notes on Each Item in Table 3 Note I The food price as per package which include appetizer, soup, main course cost ingredients for preparing an item is 40% from total and desert. The food selling price for food Note 2 Beverage item which include chinese tea, cordial punch and mineral water is estimated at a cost of RM5. The cost involved per person is 26 % from selling price of beverage Note 3 The hall rental charge can sometimes be negotiated depending upon food and beverage and audio-visual. For instance, the space utilized for the ceremony and wedding dinner may be discounted or provided complimentary upon the amount of food and beverage contracted. This function is booked for an anniversary dinner cvent, and rental is fixed 50 % from selling price. Note 4 Specific AV nceds for events such as wedding, reception and other gatherings presentations needing similar equipment may be booked concurrently by different guests, thus adding to cost by having to rent extra equipment from the market. The AV and equipment rental fee from market is set at 50 % from selling price of equipment Note 5 Car park is safe under CCTV and floodlighting while guests concentrate on the important business and enjoying the event. With this option the guest have to leave their car in the hotel's car park for the duration of time given. The car park charges per parson is RM300 and 70% will be taken for cost involved. The carpark is under renovation to accommodate additional 40 percent parking space for the guests In addition, automation resulted in 10 percent increase of gross margin Decoration costs vary depending on the location, length of event, types of lighting fixtures, seasonal & planning, theme, etc. Many variables go into determining the exact pricing for an event. Moreover this decoration not borne by the hotel, and fully using outsourcing services. The charges will be imposed on clients according to the quotation given by supplier So 100% of the total revenue from decoration services that hotel charged to guest will be used to pay contracted supplier Note 6 The salary range for this particular event is estimated at 25% from total revenue. Cost of staff salaries that assist with the event, and indirect cost could be allocated on the basis of how much time organization staff spend on the event Note 7 Operating supplies like linen, toweling, dishwasher, chinaware and etc. allocated 8% from total revenue for the event specified by the hotel mianagement Note 8 Calisies imelule electricity, energy, and weter exponses Rotel minagement alocating thus amount according to certain factors fex. surface, usage and duration) For this event the allocation was S% from total revenue of RM 47250.00 per pax charged Note9 56