Hospitality Unit 9 Level 4 UK CBC College

Introdution

The term hospitality management plays vital role in order to provide the best accommodation services to individual. The main aim is to provide improved hospitality services to the guest. This is one of most established industry in the world. The present report will outline the activities of the business activities in relation to hotels, which are providing its services to travellers and backpackers in manner as budget oriented, sociable accommodation in which guest can rent the bad for the specific period (Akroush and et.al., 2016). In addition to this, their product of services as smart hostel and it's providing the shared accommodation to the random travellers. In this the innovative approach about this is to offer concept like share accommodation. The main aim is to provide modern services so that It will remain competitive in the market. They are offering services as self check in system thus, it is helpful in order to have increment in customer satisfaction. In this the customers are need to be targetted between the age of 18 to 35, it is specially for student from school and universities. The services are providing in the attractive packages so that they stay in hotel for the longer time. The present report will be inclusive of activities as are development plan, porters five forces and SWOT and PESTLE analysis.

Chapter 1

Development plan

This is need to be taken in order to bring changes in the features of the product and services of the firm. The strategy is something which define how things are need to get done. A good strategy will be helpful to develop the existing barriers in the firms and will be helpful in relation to meet out the vision, mission and aims. This is helpful in order to taking advantage of resources and emerging the opportunities so that things can be done effectively. There are various kinds of strategy is need to be carried out so that function of the firm can be run in effective manner. The smart hostel is using the product differentiation strategy so that individual to the firm can get attracted towards the working of enterprise.

  1. Product differentiation strategy- It is the kind of marketing process which works as to produce those products which have some unique identity in the market. This will be helpful in relation to capture the long term market share. With the help of this kind of technique the firm is able to earn the large amount of profitability and productivity. The Smart hostel is providing the hare accommodation services to the backpackers and travellers, it is one of the attractive feature about their services in the market.

Chapter 2: Feasibility Plan

To initiate the hospitality activity there will be initial need of funds which will be helpful in meeting the operational requirements. Therefore, there can be adequate development of plans policies which will be fruitful to Smart Hostel as to have unique development of business activities. Moreover, the professionals at Smart Hostel have planned to initiate the business plan with £350 million. Therefore, it has been analysed here that the business must make adequate increment in the plans and policies which will be helpful as per improving the operational activities. Moreover, the following reports are based on forecasted and it has been assumed that the business will have appropriate gains (Financial feasibility, 2018). Similarly, there has been adequate gains and profits which in turn helps in improving the operational feasibility as well as business efficiency. Thus, it has been assumed here that the business will have appropriate gains as per the balancing the costs in a most effective manner.

Inventory schedule (FIFO)

INVENTORY SCHEDULE (FIFO)

Year 1

                   
     

Initial Balance

Acquisition

Consumption

Final Balance

     

Qty

Cost

Qty

Cost

Qty

Cost

Qty

Cost

Beg-packer's

   

1,500

£98.00

980

£100.00

820

£105.00

1,340

£103.00

Single-bed room

   

2,000

£105.00

1,050

£110.00

950

£115.00

1,900

£110.00

Double-bed room

   

2,200

£220.00

1,150

£225.00

1,020

£228.50

2,070

£223.50

restaurant

   

1,800

£250.00

780

£255.00

750

£260.00

1,770

£255.00

bunk bed

   

1,000

£280.00

420

£290.00

400

£300.00

980

£290.00

       

£325.00

 

£880.00

 

£903.50

8,060

£878.50

                     

Year 2

                   
     

Initial Balance

Acquisition

Consumption

Final Balance

     

Qty

Cost

Qty

Cost

Qty

Cost

Qty

Cost

                     
                     

Beg-packer's

   

1,500

£100.00

1,120

£115.00

920

£120.00

1,300

£105.00

Single-bed room

   

2,000

£110.00

1,500

£120.00

1,150

£125.00

1,650

£115.00

Double-bed room

   

2,200

£268.50

1,820

£280.00

1,650

£295.00

2,030

£283.50

restaurant

   

1,800

£320.50

1,320

£330.00

1,250

£335.00

1,730

£325.50

bunk bed

   

1,000

£360.50

976

£380.00

870

£395.00

894

£375.50

       

£1,159.50

 

£1,225.00

 

£1,270.00

7,604

£1,204.50

                     
                     

Year 3

                   
     

Initial Balance

Acquisition

Consumption

Final Balance

     

Qty

Cost

Qty

Cost

Qty

Cost

Qty

Cost

                     
                     

Beg-packer's

   

1,500

£120.00

1,320

£125.00

1,260

£130.00

1,440

£125.00

Single-bed room

   

2,000

£145.00

1,680

£165.00

1,480

£170.00

1,800

£150.00

Double-bed room

   

2,200

£320.00

1,980

£325.00

1,490

£330.00

1,710

£325.00

restaurant

   

1,800

£330.50

1,460

£348.00

1,350

£350.00

1,690

£332.50

bunk bed

   

1,000

£395.00

945

£410.00

932

£420.00

987

£405.00

       

£1,310.50

 

£1,373.00

 

£1,400.00

7,627

£1,337.50

Depreciation Schedule

DEPRECIATION SCHEDULE

           
 

Year 1

Year 2

Year 3

Year 4

Year 5

Gross Asset

£50,000.00

£65,000.00

£78,000.00

£86,000.00

£95,000.00

Depreciation of the Year

£15,000.00

£16,500.00

£18,000.00

£22,300.00

£23,200.00

Accumulated Depreciation

£1,500.00

£1,200.00

£1,400.00

£2,100.00

£2,200.00

Net Asset Value

£33,500.00

£47,300.00

£58,600.00

£61,600.00

£69,600.00

           
           

LOAN SCHEDULE

         
 

Year 1

Year 2

Year 3

Year 4

Year 5

Initial Loan Balance

£12,500,000.00

£14,850,000.00

£18,650,000.00

£20,250,000.00

£23,560,000.00

Amortizarion of the Year

£456,000.00

£358,000.00

£486,000.00

£500,000.00

£600,000.00

Final Bank Loan

£105,000.00

£110,000.00

£120,000.00

£125,000.00

£130,000.00

Interst Charges for the Year

£205,000.00

£312,500.00

£565,000.00

£583,000.00

£622,000.00

Forecasted Cash flow statement

     

Year 1

 

Year 2

 

Year 3

CASH FLOW STATEMENT

 

Initial Balance

 

£350,000,000.00

 

£470,239,000.00

 

£794,298,500.00

               
 

Cash In

           
   

Revenues

£110,000,000.00

 

£285,600,000.00

 

£336,800,000.00

   

Capital Stock

£85,000,000.00

 

£88,000,000.00

 

£92,000,000.00

   

Business Loan

£12,500,000.00

 

£14,850,000.00

 

£18,650,000.00

   

Other

£4,000,000.00

 

£4,980,000.00

 

£5,225,000.00

               
 

Total Cash In

 

£211,500,000.00

 

£393,430,000.00

 

£452,675,000.00

               
 

Cash Out

           
   

Products

£12,800,000.00

 

£1,800,000.00

 

£2,980,000.00

   

Products

£14,500,000.00

 

£2,650,000.00

 

£3,860,000.00

   

Fixed Assets

£4,500,000.00

 

£5,200,000.00

 

£7,850,000.00

   

Salaries

£55,000,000.00

 

£55,000,000.00

 

£55,000,000.00

   

Rent

£2,600,000.00

 

£2,600,000.00

 

£2,600,000.00

   

Amortization of Loan

£456,000.00

 

£358,000.00

 

£486,000.00

   

Interest Charges

£205,000.00

 

£312,500.00

 

£565,000.00

   

Taxes

£1,200,000.00

 

£1,450,000.00

 

£1,650,000.00

               
 

Total Cash Out

 

£91,261,000.00

 

£69,370,500.00

 

£74,991,000.00

               
 

CASH FLOW

 

£470,239,000.00

 

£794,298,500.00

 

£1,171,982,500.00

Forecasted Income statement

     

Year 1

 

Year 2

 

Year 3

               

Income Statement

               
 

Revenues

 

£110,000,000.00

 

£285,600,000.00

 

£336,800,000.00

               
 

Cost of Goods Sold

 

£4,000,000.00

 

£4,500,000.00

 

£5,200,000.00

               
 

Gross Profit

 

£106,000,000.00

 

£281,100,000.00

 

£331,600,000.00

               
 

Salaries

 

£55,000,000.00

 

£55,000,000.00

 

£55,000,000.00

 

Rent

 

£2,600,000.00

 

£2,600,000.00

 

£2,600,000.00

               
 

Operational Profit

 

£48,400,000.00

 

£223,500,000.00

 

£274,000,000.00

               
 

Interest Charges

 

£205,000.00

 

£312,500.00

 

£565,000.00

 

Depreciation

 

£15,000.00

 

£18,000.00

 

£23,200.00

 

Other

 

£12,000.00

 

£14,000.00

 

£16,000.00

               
 

EBT

 

£48,168,000.00

 

£223,155,500.00

 

£273,395,800.00

               
 

Taxes

 

£1,200,000.00

 

£1,450,000.00

 

£1,650,000.00

               
 

Net Profit

 

£46,968,000.00

 

£221,705,500.00

 

£271,745,800.00

Forecasted financial position

BALANCE SHEET

ASSETS

 

LIABILITIES AND EQUITY

Current Assets

             

Current Liabilities

           
 

Cash

£470,239,000.00

 

£794,298,500.00

 

£1,171,982,500.00

               
               

Short Term Liabilities

           
 

Inventory

£7,080,710.00

 

£9,159,018.00

 

£10,201,112.50

   

Bank Loans

£105,000.00

 

£110,000.00

 

£120,000.00

                 

Accounts Payable

£333,563,210.00

 

£479,629,418.00

 

£803,093,212.50

 

Accounts Receivable

£250,000.00

 

£520,000.00

 

£680,000.00

               
               

Total Short Term Liabilities

 

£333,668,210.00

 

£479,739,418.00

 

£803,213,212.50

Total Current Assets

 

£477,569,710.00

 

£803,977,518.00

 

£1,182,863,612.50

               
               

M/L Term Liabilities

           

Fixed Assets

               

Bank Loans

£12,500,000.00

 

£14,850,000.00

 

£18,650,000.00

 

Gross Assets

£50,000.00

 

£78,000.00

 

£95,000.00

   

Other

£4,000,000.00

 

£4,980,000.00

 

£5,225,000.00

 

Depreciation of the year

£15,000.00

 

£18,000.00

 

£23,200.00

               
 

Accumulated Depreciation

£1,500.00

 

£1,400.00

 

£2,200.00

 

Total M/L Term Liabilities

 

£16,500,000.00

 

£19,830,000.00

 

£23,875,000.00

 

Net Fixed Assets

£4,500,000.00

 

£5,200,000.00

 

£7,850,000.00

               

Total Fixed Assets

 

£4,566,500.00

 

£5,297,400.00

 

£7,970,400.00

 

Total Liabilities

 

£350,168,210.00

 

£499,569,418.00

 

£827,088,212.50

                             
               

Equity

           
                 

Capital Stock

£85,000,000.00

 

£88,000,000.00

 

£92,000,000.00

           

Akroush, M. N. and et.al., 2016Aschauer, W., 2010Bellur, V.V., McNamara, B. and Prokop, D.R., 2015Beritelli, P., Strobl, A. and Peters, M., 2013Capacci, S., Scorcu, A.E. and Vici, L., 2015Cave, J. and Brown, K. G., 2012Chang, L. and Zee, R. B., 2013Cheng, T.M. and Wu, H.C., 2015

   

Retained Eranings

£46,968,000.00

 

£221,705,500.00

 

£271,745,800.00

                             
               

Total Equity

 

£131,968,000.00

 

£309,705,500.00

 

£363,745,800.00

                             

TOTAL ASSETS

 

£482,136,210.00

 

£809,274,918.00

 

£1,190,834,012.50

 

TOTAL LIABILITIES AND EQUITY

 

£482,136,210.00

 

£809,274,918.00

 

£1,190,834,012.50

 

Chapter 3

Suitability of new product and service

The analysis is need to be done in order to carried out business operation effectively. With the help of internal and external analysis the various thing in firm can be identified in proper manner (Aschauer, 2010). This five separate forces define the extent of competition in the industry. There are various kinds of factors which is defined in the following manner as are-

  1. Rivalries among the existing firm- in this it can be stated that the rivalries among the hostel business are on the high level it is happened due to cost factor. In UK there are various number of the rivalries in the market. There are various hostels which is providing good services at the lower cost (Bellur, McNamara and Prokop, 2015). Thus, the smart hostel came with the innovation as shared accommodation it is one of the effective service to customers.
  2. Threat of substitute- The one of the major issue in this relation is that there is high chance in order to start the new business in the market. In this manner it is very essential to provide innovation services to the customers so that they are able to attract the customers. With the help of technological advancement like online application to reach wide number of customer will be helpful to have enhancement in the profitability and productivity (Beritelli, Strobl and Peters, 2013). In order to cope up with this they need to offer services to customer in the affordable manner.
  3. Bargaining power of buyers- The activities of smart hostel is need to be produce on the online application so that customer can get attracted towards its services. Due to increment in the bargaining power of the customer the firm need to provide economical services to the buyers (Capacci, Scorcu and Vici, 2015). They need to target the customer between the age of 18 to 35, with the help of this they are able to predicts the ability in relation to elimination of bargaining power to intermediaries. Thus, it can be said that when the customer attracts the firm it deeply impresses the other customer and in this way firm can able to earn maximum amount of market share.
  4. Barrier to entry- The one the major and vital barrier in this relation is differentiation. The firm who can positively differentiate its services in the manner of amenities, accommodation facilities, check in rule system and other kind of activities will be helpful in order to create the differed image in the eyes of the customers. In the case of hostel services the customer can easily change their preference. With the help of providing the better services they are able to create the competitive advantage in market (Chang and Zee, 2013). The innovative services to the customer will be barrier to take enter of other rivalries in the market.
  5. Bargaining power of suppliers- In order to provide effective services to the customer, the employees palsy the major role. Thus, it can be said that the employees are the major supplier to the firm, as they are only responsible in relation to provide the effective services to the clients. In addition to this it is essential to provide effective services to the client (Cheng and Wu, 2015). The excellent staff attract the customer to the market. The smart hostel need to hire the skilled employees so that they are able provide best services to customer in the market. Thus, it can be said that ye skilled employees will always bring prosperity to the firm activities.
  6. Bargaining power of buyers- The activities of smart hostel is need to be produce on the

SWOT ANALYSIS

It is need to be conducted in order to analysis the company position in the market and it is defined in the following manner as are-

Strength-

  • Cheaper accommodation- the smart hostel is providing the facility like rent accommodation services and it is very cheaper, it is attracting the major number of customer in the market.
  • Safe environment- Student can feel safe after knowing that they are professional in order to provide the service and they also provide safe housing opportunity.
  • Innovative business idea- The smart hostel providing the share accommodation services to clients so that they are able to live in the safe environment. It is also helpful in order to have budgetary services (Bellur, McNamara and Prokop, 2015).
  • Low cost set up- They are also providing it services with the help of online application as backpackers panda, so that they are able to attract the customer in the market. The online source is the most minimal and effective set up.

Weakness-

  • No reputation- It is the new start up company in the market, in order to develop the reputation in the market they need to take various initiatives to satisfied customers.
  • The Smart hostel is developing his business chain in the area which are close to the universities and travel areas, this is one of the attractive things in relation to impress the customer in the market (Beritelli, Strobl and Peters, 2013). With the help of this they are able to attract the customer in the market.

Opportunities-

  • International students- In UK there are number of the student comes to have further study and various traveller's comes to capture the beauty of UK. In London there are number of location which are attracting the major number of the customers. There are number of universities in which student can study (Capacci, Scorcu and Vici, 2015). This kind of the things are major source of attraction. Thus, it can be said that there is large number of universities in UK, in this way large number of student are seeking for the accommodation.
  • The most of the student are need to provide the services at the rental cost so that they can live in the comfortable manner.

Threats-

Rental agencies- In this it can be said that these agencies are well established and professional and have good reputations with clients, thus in order to cope up with this they need to provide innovative services so that business activities can grow in market effectively.
Private rentals:
In this it can be said that Private rentals are able to rent their accommodation without any kind of the fees. This kind of rentals may also provide services such as internet, water and general maintenance. These all are the major source of attraction to the clients.

Chapter 4

PESTLE analysis on development of product and services

This is helpful in order to analysis the external condition of the firm and it will be helpful in order to reach large number of customer in the market. These sis define in the following manner as are-

Political- At the time when strategies was implementing, the political factors are having the huge effect on the regulation of firms. The smart hostel is developing their business plan in term to provide share accommodation services, this will be helpful in order to reach large number of customer in the market. The certain political factors has huge impact on the operation of firm.

Economical factor- Due to recession the firm is unable to provide development services. The cost effective services will be helpful to attract the large number of customer in the market. Thus, the firm need to take various initiatives in order to provide satisfactory services to customer in relation accommodation facilities in the affordable cost.

Social- The one of the main disadvantage about the hostel business is that in UK there are various hostels, which are taking initiative in order to provide effective services. Increasing in the use of social media will be helpful to gain information about the product and services.

Technological- The technological advancement is very essential in order to have growth of firm in large manner. Innovation is a process which is helpful to generate large amount of profitability and productivity.

Conclusion

Based on the above report it can be concluded that hospitality management plays vital role in order to provide the best accommodation services to individual. The main aim is to provide improved hospitality services to the guest. This is one of most established industry in the world. The report has covered the following activities as are development plan, feasibility plan, SWOT, PESTLE. This will be helpful in relation to draw business activities in the effective manner. They are offering services as self check in system thus, it is helpful in order to have increment in customer satisfaction. In this the customers are need to be targetted between the age of 18 to 35, it is specially for student from school and universities.

References

  • Akroush, M. N. and et.al., 2016. Tourism service quality and destination loyalty – the mediating role of destination image from international tourists’ perspectives. Tourism Review. 71(1). pp.18–44.
  • Aschauer, W., 2010. Perceptions of tourists at risky destinations. A model of psychological influence factors. Tourism Review. 65(2). pp.4 -20.
  • Bellur, V.V., McNamara, B. and Prokop, D.R., 2015. Factors perceived as important by package tourists: a multivariate analysis. In Proceedings of the 1988 International Conference of Services Marketing. Springer International Publishing.
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