The Best Hotel: Budget development - Summary Report Current Scenario: It is time to have the hotel budget approval, and a strategic meeting will be happening where the departments of operations, sales & marketing, and Finance will have the primary objective to approve the Budget for the following year.

Some facts: Operations There is a need to hire three more housekeeping members, as the occupancy rate and average guest per room have increased significantly The guests have complained about the amenities, such as soap, shampoo, and hair conditioner offered in the sleeping room. So, it should be considered to purchase other brands with higher quality. The bath towels are old. Also, 50% of the rooms or 100 rooms should have their carpet changed. The Director of Accommodation is requesting approval to hire one more manager, due to the fact the guests have complained about front desk services during the checkout, where it has been taking more time than the standard requires. Sales & Marketing After research made, the team figured out there will be two new hotels opening by April next year, both combined will have 300 modern rooms. The current ADR in the competitive set is CAD 180 YTD. In contrast, the new competitors have said they will enter the market, offering CAD 149 as a Soft Opening rate, as they want to capture new guests as soon as possible. With all this mentioned above, the sales team presented a new budget with a decrease in the occupancy rate of 10pp, from 80% to 70%; additionally, the ADR also dropped from CAD 190 to CAD 170; therefore, the impact on room revenues projected will be significant. (Hotel has 200 rooms). Moreover, the events and banquets revenues had a 15% decrease for the next year budget, or CAD 150,000. The sales team is requesting two more senior professionals to be hired, as they are concerned about the two new competitors which are about to be operating in the market. Finance Team It was made a Budget data analysis, and the main concern is that the GOP decreased by CAD 4,000,000. Mainly because of revenues decreases, payroll increase, and variable costs, such as OTAs commission, rooms divisions due to average per guest/ room that rose from 1.3 to 1.8. The finance team also doesnt want to approve the renovations, as they have said the Net Cash Flow would be detrimental for five months during the next year. Directions provided to build your Summary Report: If you were the General Manager, what solutions and actions would you suggest for each department mentioned above? Please write down a Summary Report to be reported to the board of investors, including the current scenario and your suggestion to manage the situation. Please note you are allowed to change all scenarios above to develop your Budget Summary Report (below), making your solid assumptions in the document. Please develop a Budget SUMMARY REPORT.