Business Report - Seaview Apartments

7/29/2019 Business Report - Seaview Apartments

1/17

Contact: 0405658457

Business Computing 1

Workshop: Wednesday, 1630 1830

Seaview Apartments

Prepared By

Rafiyat Husnain

S3400025

Contact: 0405658457

Business Computing 1

ISYS2056

Wednesday; 1630-1830

Tutors: Illiya Ananiev &

Steven Wolff


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Profitability & Analytical Report 2012

Seaview Apartments

Rafiyat Husnain

S3400025 Page 2

Table of Contents

Introduction ................................................................................ 3

Analysis of Data Using the Spreadsheet Model .......................... 4

Problems Surfaced From Analysis Report ................................... 5

Possible Factors Leading To Observed Problems........................ 6

Research from Secondary Sources ............................................. 8

Analysis of Research ................................................................. 13

Summary of Report .................................................................. 14

Recommendations & Solutions ................................................ 15

Appendix ................................................................................... 17

References ................................................................................ 17


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Introduction

What is this report about?

This report discusses the business data for the year of 2011 and secondary information essential

to the business operations. Analysing the profitability & popularity of each of the 4 types of

units at Seaview Apartments, certain conclusions have been drawn out about the business and its

overall scope and potential.

Also, comparisons have been made among and between the different apartment styles to evaluate

their utilized and un-utilized capacity and identify & suggest changes to the business strategies

and options to maximize the overall profitability and growth of the entity.

While considering the primary information provided about the business, external sources of

information will also be concentrated upon to illustrate and explore various ways and options

available to the business.

Aims For The Business

Customer Outreach: This report will introduce new and efficient methods to attractcustomers from as many backgrounds (e.g. professionals, families, couples, single

holiday makers) as possible.

Strategy Development: This report will suggest improvements and changes to thebusiness current policies and strategies such as price ranges and holiday package

structures to create a framework that increases its long-term sustainability and maximizes

its profits.

Leadership In The Industry: Recommendations to lead this business to the top of itsindustry and achieve greater heights in the long run will also be discussed in this report.


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Analysis of Data Using the Spreadsheet Model

Overall Profitability & Comparability

This section provides a transparent analysis of the reported facts and figures of the performance

of Seaview Apartments in the year of 2011. The reported data is also organized in an appropriate

pivot table in theAppendix. The profitability and comparability of the various kinds of

apartments have been identified and inferred from the spreadsheet model, as shown by the table

organized below.

Data Analysis Apartment Styles

Maximum number of nights booked Deluxe Studio

Least number of nights booked One Bedroom & Two Bedroom

Highest Profit One Bedroom Deluxe

Lowest Profit Two Bedroom

Highest proportion of regular customers One bedroom

Highest Nightly Rate Two Bedroom

Highest % Of Guests Staying >6 Nights

[Thus entitled to 15% discount]

One Bedroom Deluxe

Highest number of bookings Deluxe Studio

Lowest number of bookings Two Bedroom

Highest number of bookings in peak periods One Bedroom

Lowest number of bookings in peak periods One Bedroom & Two Bedroom

Figure 1

Key:

(Peak Periods assumed to be end-of-year [summer] or mid-year [winter] holiday periods)


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Problems Surfaced From Analysis Report

Identification & Discussion

Referring to the information gathered in figure 1 above, I have concluded that the mostprofitable apartment is One Bedroom Deluxe, which, in spite of not having the highest

nightly rate or the highest number of bookings, has managed to fetch the greatest

proportion of the income at Seaview Apartments. This could mainly be due to two

reasons:

The length of stay per customer is the longest as compared to the other types of apartments.

As shown in Figure 1 above, the highest percentage of guests staying longer than six nights is

under the One Bedroom Deluxe apartments.

The difference in facilities between a one bedroom deluxe and an ordinary one bedroom

apartment is assumed to be greater than that of each of their nightly rates ($15). Under this

circumstance, the cost paid is lesser than the benefits gained from the more lavish and greater

equipped deluxe apartment. Thus, customers interested in booking for longer periods (e.g. >6

days) choose the one bedroom deluxe over the one bedroom apartments as they weigh their

benefits associated with the stay.

However, considering the advantages of the one bedroom deluxe apartment, a higher profit level

could be attained. Currently, the number of bookings for this type of apartment during peak

periods is relatively low, leading to a lower income earned from this type of apartments during

holidays than it should earn.

Once again, referring back to Figure 1 above, it can be seen clearly that the two bedroomapartments are the least popular, and the lowest number of customers book this kind of

apartments. Thus, insufficient revenue is collected from the bookings, leading to an

overall loss.

The third piece of information that can be drawn from Figure 1 is that one bedroomapartments are not earning as much as they should even though the majority of customers

arriving during the peak holiday periods book this kind of apartment.


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Possible Factors Leading To Observed Problems

Digging Deeper Into the Stated Problems

The main outlying problems surfacing from the spread sheet model are the relatively low profit

levels from what could be earned given the wide potential of the apartment complex, especially

considering its ideal location for a holiday by the beach, the apartments not being used to their

maximum potential, and the flaws in the nightly rates which lead to an insufficient number of

total bookings at the complex throughout the year. The problems are further specified below:

Under Publicized/Inefficient marketing schemesThe marketing schemes utilized by the business currently (e.g. local newspapers) are not

efficient enough to attract sufficient travellers and holiday-makers to the complex. This results in

a relatively lower profit level than what could be achieved if various different kinds of

advertising methods were put in place to spread the word as far and wide as possible.

Also, apart from the limited variability of the advertising campaigns currently in place, the

business does not yet recognize peak periods of opportunity when it is necessary for the general

public to know of the existence and exciting possibility of staying at Seaview Apartments. Thisis mainly due to the fact that the business is not advertised at the appropriate times of the year

when potential customers are actively searching for ideal vacation spots and lodgings.

Rate charged for the apartment in high demand is too low, and that in low demand toohigh

Under the current list of customers, two bedroom apartments are in low or negligible demand

as they are too expensive ($60 more than the one bedroom deluxe) and redundant for couples or

singles, who seem to make up the majority of customers at Seaview Apartments [Deluxe Studio

took up the highest number of bookings]. Also, while the demand for this kind of apartment is as

low as it is at the moment, such a high nightly rate is unsustainable and will continue to hike

down the total revenue of the business.


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Similarly, as it has been observed throughout 2011 that the maximum number of nights

booked at Seaview Apartments is that of the Deluxe Studio, such a low nightly rate is

inappropriate for the business while the demand for this type of apartments is so high. Also, the

one-bedroom apartments are especially popular during holiday periods, but the constant rates

throughout the year are too low during these periods when the demand for this type of

apartments is observed to be much higher.

Change In Global Travel Patterns due to the appreciation of the Australian Dollar & thefall of the U.S. Dollar

Although not fatally essential, this is a possible external source of problem that may prevent

the number of bookings from being as high as it could be. The appreciation of the Australian

Dollar in the recent years has considerably increased the travel costs of air tickets and

accommodation in Australia for international tourists and holidaymakers, who are still earning in

lower currencies.

This is a reasonable hindrance for these travellers living overseas who may be easily

discouraged from coming to Australia for a holiday as compared to going to another country

such as the USA, where the currency has fallen drastically over the past few years, making their

holiday a lot cheaper than it would be in Australia.


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Research from Secondary Sources

Reaching Out To External Parties

Now that the reported data for Seaview Apartments has been analysed and the problems in the

business identified with relevant factors of contribution to these problems, it is essential that we

consider the trends, practices and patterns of other business in this industry.

I have performed a comprehensive amount of research on businesses in the same industry and

their strategies to attract customers to their motels/hotels.

Industry Competitors & Their Marketing Strategies

We need to compare the approaches and pricing strategies of accommodation business in Rye

itself in order to assess the comparability and competitiveness of the businesses effectively.

1. Aquabelle Apartments

Along with an effective and efficient website to increase the convenience of potential

customers and reach out to a greater number of holidaymakers seeking a seaside holiday around

Figure 1.2- Webpage Of Aquabelle Apartments


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the world, Aquabelle Apartments also includes an informative table of apartment rates

throughout the year in their online booking system on the webpage. The rates are enclosed in the

snapshot of the table below:

Figure 2 - Nightly Rates Of Aquabelle Apartments

As seen in the snapshot above, the nightly rates of the apartments are not constant throughout

the year. Different rates are provided according to different times of the year, suited according to

weekend and weekday rates. It is common for a greater number of bookings to take place during

weekends (Friday/Saturday), which explains the higher nightly rates during those two days of the

week.

Also, it can be observed that the nightly rates at Aquabelle Apartments are generally higher

than those at Seaview Apartments.


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2. Moonlight Bay Resort

Figure 3- Webpage of Moonlight Bay Resorts

Similar to Aquabelle Apartments, Moonlight Bay Resorts also provides a comprehensive and

efficient website with an online booking system for its potential customers convenience.

Moonlight Bay Resorts also includes a table of apartment rates throughout the year in theironline booking system on the webpage. The rates are enclosed in the snapshot of the table below:

Figure 4-Moonlight Bay Resorts nightly rates


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Similar to Aquabelle apartments, Moonlight Bay Resorts also provides different nightly rates

according to a weekday and weekend pattern with the rates being higher during the weekends.

Their nightly rates are higher than those of Seaview Apartments as well.

3. Rye Family Apartments

Figure 5- Rye Family Apartments Webpage

As is made obvious from the name of the accommodation, this particular kind of apartment

complex mainly targets holidaymakers who are families, especially those with children. Their

website, although not as well designed as the other two apartments mentioned, provides a clear

insight to the family-friendly environment at the complex as well.

Figure 6- Rye Family Apartments nightly rates


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Differing from the other two apartments mentioned, Rye Family Apartments provides nightly

rates differing according to seasons and holiday periods instead of weekdays and weekends.

Assuming that holidaymakers prefer seaside holidays more during the summer as compared to

the winter, their rates are higher during the summer.

Also, the nightly rates during winter when the demand is low are lower than that of Seaview

Apartments.

Figure 7- Packages offered at Rye Family Apartments

Apart from setting apart nightly rates according to seasons, Rye Family Apartments also

provides specific customized packages for different types of customers, suiting to their

individual needs accordingly.


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Analysis of Research

Discussing the differences: Price Differentiation

Firstly, Seaview Apartments lacks the function of the variability of nightly rates throughout the

year, which is common in the industry as the businesses adjust their rates according to the

popularity of days such weekdays and weekends or holiday periods and off-peak periods. This is

a great shortcoming for this business due to two reasons:

It deters customers during off-peak periods when the rates are still as high as they areduring holiday periods, while the other businesses attract these customers by providing a

relatively lower rate than their holiday periods, presenting a more sound and reasonable

differentiation of prices to their potential customers.

It brings in lower profits than should be earned during peak periods when there arenaturally a higher number of bookings. This is because the rates are not hiked up to

maximize profits by taking advantage of the high demand.

Discussing the differences: Lack of Packages

Secondly, unlike the other businesses, Seaview Apartments does not provide customized

packages for different groups of customers. This decreases the overall attraction and

marketability of the apartment complex due to the absence of specific incentives for potential

customers. Thus, the business fails to encourage holidaymakers to choose this complex for their

accommodation during their vacation, naturally bringing in a lower number of customers than it

would otherwise bring in.

Discussing the differences: Lack of a Proper Website

Thirdly, unlike the other businesses, Seaview Apartments does not have a proper, functioning

website, which makes its outreach to customers extremely limited and thus greatly reduces the

influx of customers at the complex as potential holidaymakers all over the world are unable to

know of the existence of the complex unless they have relevant contacts in Australia who are

aware of it.


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Summary of Report

Consolidating Ideas & Findings

By analysing the reported data including the facts and figures of apartment bookings, costs and

total revenue collected in the year of 2011 at Seaview Apartments, this report demonstrates and

discusses issues related to the overall profitability, comparability, and profit potential of the

business. It also analyses the approach of other businesses in the industry and evaluates the major

shortcomings that this business possesses, which are also identified as its biggest sources of

problems related to low profit levels and unutilized capacities of apartments.


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Recommendations & Solutions

Referring back to the analysis of profitability and comparability of the apartment styles at

Seaview Apartments, I will now introduce recommendations and solutions for the business

which will overcome the problems that it is currently facing to a great extent and heighten thelevel of profits and maximize its marketability and reputation in the industry.

Suggestive Changes To Advertising & Publicity Procedures

As is evident from the analysis report, Seaview Apartment lacks proper and efficient advertising

methods. It is essential that the business reaches out and establishes a mark of recognition to as

many potential customers around the world as possible, and the only way it can achieve this is

via extensive and effective advertising methods. While certain businesses may prefer

conventional advertising methods such as advertising on television and handing out flyers in

public places, the majority of todays businesses are constantly on the outlook for

technologically advanced marketing schemes. A few suggestions of such schemes are listed

below:

Designing an official website is one of the first and most essential advertising methodsin a business. The internet is such a platform that has the ability to reach out to an infinite

number of people from all over the world. By building a properly designed, graphic and

detailed website for the company and ensuring that it is listed on search engines such as

Google and Yahoo, potential holidaymakers will be able to access information about

Seaview Apartments conveniently. Even if they do not know the name of the apartment

complex, a simple search on accommodation in Rye will ensure that Seaview Apartments

turns up in the results. Also, by setting up a website that looks attractive and is able to be

browsed easily from link to link will present a high level of persuasion to customers who

are hesitant to make a decision. The website should include:

Different categories of information necessary for holiday makers to make a decision about

their accommodation [location, facilities, apartment styles, etc.]


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The choice of online bookings with the availability of units and the comparison of

prices per night listed conveniently for customers. This saves a lot of time, especially for

working adults who are occupied with their jobs and duties all year round.

Having an official website enables the business to reach out to potential customers from all over

the world instead of only those in Australia. This method of global outreach guarantees an influx

of customers from different countries throughout the year as holiday periods vary in individual

countries.

Blog advertising is another form of advertising that enhances the level of informationprovided to potential customers browsing through the internet for a suitable

accommodation option in Rye. Blogging websites are extremely popular in todays world

where a vast number of users are regularly active. By creating and updating a blog with

current and past events in Rye, guest reviews which provide an insight to the kind of

experience customers will gain at Seaview Apartments, touring guides providing

information about what to see and where to go for holidaymakers, and last but definitely

not least, latest promotion packages individually suited for different groups of customers

such as families, couples and singles.

Updating Nightly Rates

Deducing from the research of secondary sources, it can be seen that the other businesses in this

industry do not keep their nightly rates constant throughout the year. They adjust their rates

either according to weekdays and weekends, or seasons and holiday periods. This is mainly

driven by the fact that the demand for these apartments fluctuate throughout the year, thus it is

inappropriate and disadvantageous for the business to maintain the exact same nightly rates all

year long. In order to maximize profits, Seaview Apartments should increase its nightly rates

specifically during peak periods in the summer and winter as well as during weekends.


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Introduction of New Facilities

Since it has been found that a high percentage of the guests stay for a relatively longer period of

time, they should be encouraged to return to the complex for their long stays in the future as

well. Also, new customers should be attracted to the complex knowing that they will have a

complete experience at the complex instead of just being confined to the fully contained

apartments. The best way to do this is to update the facilities at the complex to ensure a more

homely and welcoming environment. Adding facilities such as barbecue pits, a heated swimming

pool and tennis court will give customers the impression that they will enjoy a wholesome

vacation at the complex. Moreover, these facilities will attract more families on the lookout for

vacation spots as the family members will be able to spend time relaxing and participating in

these activities together after coming back from a tiresome day of touring the region.

Appendix

Pivot Table Analysing Data from spread sheet model

References

(Aquabelle Apartments, 2012)

(Moonlight Bay Resorts, 2012)

(Rye Family Apartments, 2012)

Row Labels

Sum of Number of

nights apartment

was rented

Sum of Total

number of

bookings

Sum of Average

number of nights

per booking

Sum of Total Profit

per Apartment

Sum of Percentage of

Total Profit

Sum of Total Revenue

per Apartment

Sum of Av

revenue pe

during 2011 (e Studio 129 16 8.06 7662.5 53% 14162.5

Bedroom 63 14 4.5 1596.5 11% 8096.5

Bedroom Deluxe 125 12 10.42 10452 72% 16952

Bedroom 63 7 9 -5241 -36% 1259

d Total 380 49 31.98 14470 1 40470

Business Report - Seaview Apartments

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