Final Board of Directors Report FINAL

Final Board of Directors Report

The Fleur De Lis

SPH-‐R425 May 1, 2015

Final Board of Directors Report Presented by: Haley Vogel, Briana Linville, Hannah Beeson & Maggie Gentry


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Table of Contents

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INTRODUCTION)...................................................................................)3,10)Company!Overview…………………………………………………………………………………………….3!Industry!Overview…………………………………………….………………………………………………..4!Travel!&!Tourism!Commission!Highlights!……………………………………………………………5!Property!Overview!…………………………………………………………………………………………..6A7!Human!Resource!Philosophy………………………………………………………………………………8!Request!For!Proposals……………………………………………………………………………………..…9!Our!Strategy……………………………………………………………………………………………………..10!SWOT)Analysis)...................................................................................)11,12)!!!!SWOT!Diagram……………………………………………………………………………………………….11!!!!!!SWOT!Analysis!…………………………………………………………………………………………..…12!!Balance)Score)Cards………………………………………………………………………..13,20)))))January…………………………………………………………………………………………………………13!!!!!February……………………………………………………………………………………………………….14!!!!!March…………………………………………………………………………………………………………..15!!!!!April………………………………….…………………………………………………………………………16!!!!!May…………………………………………………………………………………………………………..….17!!!!!June……………………………………………………………………………………………………………..18!!!!!!July!…………………………………………………………………………………………………………….19!!!!!!August………………………………………………………………………………………………………..20!5)Criteria)used)for)Evaluation)of)Performance…………………………………21,31)))))Total!Revenue!………………………………………………………………………………………22A24!!!!!Staffing!Competence!…………………………………………………………………………………..25!!!!!Guest!Satisfaction.!…………………………………………………………………………………26A29!!!!!RevPar………………………………………………………………………………………………………30!!!!ADR………………………………………………………………………………………..………………….31!Financial)Analysis………………………..…………………………………..……………32,36)!!!!Revenue!&!Expenses!……………………………………………………………………….……..32A34!!!!!Cash!Flow!&!Inventory!……………………………………………………………………………….35!!!!!Future!Projections!!……………………………………………………………………………………35!!v!Corresponding!Graphs!………………………………………………………………………………36!Recommendations)for)Improvement…………………………………)…………37,38)Future)Goals)&)Objectives…………………………………………………………………39)Conclusions………………………………………………………………………………………40)))!!)

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Company Overview We are a 4 star hotel located in the heart of New Orleans, right on the Mississippi River; minutes from the superdome, historic French quarter, Harrah’s, buzzing

nightlife, museums, the House of Blues, and numerous shopping and dining venues. We have 250 rooms (200 standard 50 premium), 2,000 square feet of meeting space,

and when we took over, existing amenities included a pool, parking structure, exercise facility, room service, restaurant and bar, guestroom internet, telephone,

and entertainment, and guest dry cleaning services.

Mission Statement

Our mission is to exceed the expectations of our guests by providing exceptional service and facilities to business, leisure, tour, contract, and large/small group

segments.

Vision Statement

Our growth will be achieved by continuing to provide our excellent services and amenities with unpretentious luxury and charm. The Fleur De Lis will be know

for their consistency and for integrating only the best in technology and comfort for our guests


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No new hotels have entered the competitive set yet; we are competing against eight existing

full-service hotels similar to our property in footprint and facilities. Improvements and assets

to the city and sector include attracting twelve new companies to move to the area, increased

regional jet services with two new airlines including a discount airline, the regional hospital

is doubling in size, a new city civic conference center is in the final stages of construction,

regional corporate offices, and there are two universities and an abundance of museums and

other tourism resources. Most hotels in the competitive set have very similar facilities and

services; before upgrades, we differentiated ourselves through the unique architecture of our

hotel that combines old and new culture and heritage. We also have the largest guest rooms

in the set, and we have spacious food and beverage facilities with direct street access. We

are the only hotel immediately adjacent to underground public transportation, and we are a

historic landmark meeting place with a set back entrance and home-y feel of arrival.

Industry Overview

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Travel & Tourism Commission Highlights

Demographics

• City PopulaBon: 580,000

•  Regional PopulaBon: 2,150,00

• Annual PopulaBon Growth: 1.5%

• Median age: 42 • Median Annual Income: $53,000

• Median Housing Value: $380,000

Sector Metriccs

• Annual air arrivals down 21%

• Hotel occupanies down 18%

• Event aStendance down 19%

• Restaruant seaBng down 16%

• City-‐wide concenBons down 28%

Sector Assets

• Escellent roadway and bridge access

• Dependeable rail service

• Renovated and expanded air terminal

• Updraded taxi fleets

• City riverfront walk • Seven quality museyms

• Well-‐know city art and restarunt istrict

• Noted Vineyards • Sports stadium

Demand Generators

• Regioanl corporate offices

• Regional service offices: legal and accounBng

• Light industry • Two universiBes • Upgraded and expanded regional healthcare facilites

• Medical specilasit center

• Year-‐round arts, agriculute, and music fesBvals


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Property Overview

Market Profile

§ Lead line: “restore yourself at the city center of culture and heritage” § Market image: Unpretentious luxury and charm,, integrating the best in technology and comfort § 8 years old § Book Value $20M + FFE $11.25 = $31.25 or $125K per room § Full service § City Center- waterfront site § 3-4 star hotel § Servicing: business, leisure, tour, contract, large group, and small group segments § Similar footprint, facilitates and services as competitors

Existing Facilitates

§ 250 guest rooms: 200 standard, 50 premium § 1 restaurant with 150 seats, 50 seat bar lounge adjoining § 2,000 sq. feet of meeting space § 1 exercise room § Small pool and outdoor recreation area

Facilities added under our management

§ Retail shops available Feb Y1 - $3,000/mo. Lease, no operating costs § Travel & Tour Desk available Mar Y1- $2,000/ mo. Lease, no operating costs § Valet Parking available Feb Y1- $400/mo. Lease, no operating costs § Lobby Kiosk available May Y1 – per price, $1,500/mo.

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Existing Services

§ For-free parking ramp § Digital national and international telephone service § Guest laundry and dry cleaning § Guest room digital entertainment § Room service

Services added under our management

§ Foreign Exchange available FebY1, $1000 per month revenue § Mini Bard Food & Beverage available March Y1, Per Price § Concierge available Feb Y1, $500/mo. operating cost § Express Check in/out available Jul Y1- $500/mo. operating costs § Transport Van available Feb Y1- $1,000/mo. operating costs § Turndown Service available Jul Y1- $3,000/mo. operating costs § Music & Entertainment available Feb Y1- $2,000/mo. operating costs

Refurbishments


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Training & Development

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To build the best team we must first recruit the best team possible. Our human resources department specializes in selecting only the most passionate and driven employees to work at the Fleur De Lis.

Human Resource Philosophy The Fleur De Lis

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Recruitment

We feel that happy employees will equate to hefty profits. In order to properly recognize the hard work of our employees we have both intangible and tangible rewards in order to show our appreciation as management.

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Rewards

We take pride in properly training our employees through personal and professional development. We focus on expertly training our management staff as well as our support staff in order to create the best possible experience for our guests.

Strategic Leadership With consistently high ratings in staffing and guest competence, the Fleur De Lis prides itself on having an extraordinary human resources department. We believe that recruitment, training and rewards of our wonderful employees plays a vital role in producing the exceptional results we plan to see. Happy employees will lead to our success by creating a warm and welcoming environment that will appeal to all market segments.

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Request For Proposals Awarded two RFP’s under our management

Increased our revenue while strengthening our reputation Our management team prides itself on responding quickly to each request of proposal.

We have been awarded two RFP’s under our management and we plan to continue to acquire more business through future proposals. Upon responding to RFP’s we first carefully read them multiple times in order to see just what our perspective clients were searching for. We then determined if our property fit the criteria and needs of the specific client, after doing so we highlighted our properties’ facilities and services in a organized fashion. Our ability to create detailed responses that were easy for the meeting planner to navigate led our property to acquire contracts and establish business relationships for repeat business.

RFP 1 ! 3200 Paid Room

Nights

! BID: $575,000

RFP 2 ! 2800 Paid Room

Nights

! BID: $390,000

Future RFPs

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Our management team feels confident that our property will continue to acquire business through RFPs because of our thorough responses

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Our Strategy

Where we compete

• Attracting business, leisure, tour, contract, large group and small group segement markets

• Simliar footprint, facilties and services to competitive set • Other 3 -4 star properties

How we win • Consistently high staffing and guest competence ratings • Ability to implement new services and facilites while keeping a happy

staff and clientele • Exceptionally trained staff among both top level manamgement and

support staff

Engage with primary stake

holders

Form vision & mission

statements

Conduct environmental

analysis

Define goals & formulate strategies

Prepare an annual

business plan

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SWOT Analysis

• Increase market share

• Dominate leisure market while competitors focus on majority business market

• Key Econmoic indicators on the rise (Retail sales, Job growth ,Energy & Equities)

•  Cheaper hotels •  High competition for

business market •  Competitors having

better food quality •  All hotels have simlar

facilties and service •  Hotels competing for

same market

•  No focused target market

•  High Visibility/No room for error

•  Significat amount of rooms out of order during renovations

•  Strong Brand Image •  Focus on Competent

& Well-paid Staff •  Strong Blanket

Advertising

Strengths Weaknesses

Oppurtuinites Threats


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Our focuses will be on creating a new strong brand image and solid positioning within the market

as a hotel with all needed amenities and services with classy and modern luxury that reflects the

culture and heritage of our beautiful waterfront property and the city of New Orleans, all at a

reasonable price. We also pride ourselves on having well paid and well trained staff that will

provide the best service in the industry, as well as being the best known name in the city through

strong advertising and marketing that will lend itself to a strong brand positioning. However, with

a strong market presence comes high visibility; we will have no room for error in our public

image. The public relations agency and a well-trained staff will be crucial in ensuring guest

satisfaction and healthy brand image. Some may say our broad target market is a weakness, but we

believe that by providing an abundance of amenities and services that are attractive to all segments,

we can attract the highest market share across the board, and through the strategies we mentioned,

we will begin to increase our market share and revenue. The threat to our success would be

cheaper hotels in the area with similar services and facilities that lack the luxury and quality of

service that some on a budget may consider unnecessary. We are also concerned with the high

level of competition from other hotels that seem to be focusing their efforts on the business

segment that is dominating the market. To combat this, we will begin to focus additional efforts at

attracting the majority of the leisure crowd that has been neglected by other hotels.

SWOT Analysis

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Balanced Score Card January

We began in January with an average market share and decent RevPar, but low guest satisfaction and financial figures. By upgrading and renovating our amenities,

facilities, and services, as well as training our employees and restructuring our pay schedule, we drastically improved our guest satisfaction and maintained our staffing numbers. Our market figures dropped only slightly, but we also drastically improved

our financial figures.


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Balanced Score Card February

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Balanced Score Card March


Balanced Score Card April

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Balanced Score Card May


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Balanced Score Card June

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Balanced Score Card July


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Balanced Score Card August

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5 Criteria used for Evaluation of Hotel Performance

We focused on measuring five different categories to monitor and maintain a successful hotel. We concentrated on maintaining a high total revenue, a competitive average daily

rate (ADR), a high revenue per available room (RevPAR), all while keeping a high staffing competency and a high level of guest satisfaction.

1. Total Revenue

2. Staffing Competency

3. Guest Satisfaction

4. RevPar

5. ADR


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Total Revenue

Total Revenue

Over the course of eight months, our total revenue experienced a small fluctuation. Our total revenue number consisted of revenues from our hotel rooms, food and beverages, and additional hotel operations. Over the eight-month period that we were in charge of the Fleur de Lis, our monthly total revenues were consistently competitive with other hotels in our market. Each month, the highest source of revenue was hotel room revenue making up an average of 66% of the monthly revenue. Food and beverage brought in around 26% of the total revenue each month, and other hotel operations brought in the last 8%.

Month 1: January

At the beginning of month one, or January, we strived to focus our main source of revenue to come from hotel rooms. We did this by pricing each of our hotel rooms based on our practice rounds prior to month one. We focused on having competitive rates to maximize our revenue potential. We made our lowest rates business standard and corporate contract rooms. We also made the large group room prices low to try and get more groups to stay at our hotel. To maximize food and beverage revenue, we spent the money to renovate both our hotel restaurant and hotel bar. We updated the food and beverage facilities to appeal more to our customers.

At the end of January, we had total hotel revenue of $1,058,666. Our total room revenue was $714,895. We made the most revenue with our business standard rooms, making up 23% or $161,055. With food and beverage in month one, we focused on renovations to the hotel restaurant and the bar to help increase sales and overall revenue. Food and beverage revenue from the restaurant, room service, and bar was $261,359, and made up roughly 25% of the total revenue. Other hotel operations such as the fitness center, parking, guest laundry and dry cleaning, and guest room internet and guest entertainment made up the last $82,412 or about 8% of the total revenue. After month one, we were happy with our overall total revenue.

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Month 2: February

After month one we kept almost everything the same, however, our revenue for month two was less than our total revenue in month one. Our total revenue for month two was $993,647. The $65,000 loss of revenue we had can be due to three less nights that are in the month of February. We can also attribute the decrease in revenue to having 12% of our guest rooms unavailable due to contract cleaning and services. With these rooms unavailable, we possibly missed out on some revenue. Food and beverage revenue was also lower than last month. Our hotel restaurant is still being renovated, which we see is one of the main reasons why our food and beverage revenue has decreased. We kept all of the prices the same, yet we still saw a decrease in revenue in all areas of our food and beverage sector of our hotel. Other hotel operations suffered only a small decrease in revenue by $664.

Month 3: March

From month two to three, we saw more of a decrease in total revenue. Room revenue decreased by $122, 625. We made changes from the prior month to try and increase our room revenue. Month three was the first month we had all rooms available to customers. We also lowered our average daily rates from $162 to $159. Although we lowered our average room price, our occupancy dropped by a staggering 15%. Food and beverage did not have as big as a decrease in revenue as room revenue. We introduced a mini-bar available to guests that created a small amount of revenue for us. We kept the prices of food the same. The restaurant and bar were still under renovation during month three. Other hotel operations brought in revenue of $70,516 or 8% of total revenue.

Month 4: April

The changes we made from month three to four were successful in increasing our total revenue from $850,334 to $898,566. This month, we focused appealing to large groups, small groups, and tour groups. We lowered our prices drastically and because of this, we almost doubled our sales for the tour group. We also had an increase in revenue in the leisure standard and premium rooms. Both premium and standard rooms have all been cleaned, which also helped make our rooms more appealing to customers. Overall food and beverage revenue was less than last month. We changed the average price for food and made it three dollars cheaper. We sold roughly the same amount of food, but at a lower price, so we expected our revenue to decrease from last month. We raised the average price of our room service from $18 to $25 and we saw an almost $9,000 increase in room service revenue. This month was the first month of the meeting rooms being open after a soft goods renovation.

Month 5: May

After the changes we made from month four to month five, we finally saw an overall increase in total revenue in every aspect of our hotel. We lowered our rates for each type of room except small and large groups, and we saw an increase in revenue in every one. This month we focused on increasing room revenue across the board. We kept food and beverage prices the same and the revenue increased. We also introduced a kiosk, which allows guests to purchase snacks and beverages on the go. This brought in an extra $6800 in revenue for our hotel.

Month 6: June


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Month 6: June

We had a small decrease in total revenue. Room revenue stayed roughly the same although we raised the average price of each room slightly. In this month, we stayed focused on maintaining overall room revenue and by experimenting with changing prices, we wanted to see if we could still maintain our occupancy with a higher nightly rate. From month five to six, we saw a decrease in food and beverage revenue. We kept food and beverage rates the same from the previous month. Although we saw a decrease, it was only a loss of $4,800.

Month 7: July

From month six to month seven, we saw the largest increase in total revenue. Total revenue increased almost $68,000. We kept room prices the same across the board and revenue for each room varied. We saw the largest increase in leisure standard rooms from just over $83,000 to almost $177,000. Food and beverage revenue also increased. We increased the average cost of a meal by two dollars and we continued to see roughly the same amount of revenue from each.

Month 8: August

From month seven to eight, we saw a dramatic increase in total revenue for our hotel. We increased our overall revenue by over half a million dollars, from $1,013,096 to $1,587,389. We increased the average rate of leisure standard, business premium and standard and we saw an increase in each. This month, we focused on increasing our leisure premium revenue. We lowered the average price for a leisure premium room $42, and saw a room revenue increase of over $141,000. We almost doubled our revenue in food and beverage. We kept food priced the same and still did extremely successful.

The graph below shows the total revenue broken down by room, food and beverage, and other hotel operations.

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Staffing Competency

Our mission is to exceed the expectations of all of our guests by providing exceptional services, facilities and amenities to business, leisure, tour, contract, and large/small segments. Our four star hotel strives to provide guests with an amazing experience of unpretentious luxury and charm. To be able to provide guests with the best experience possible, our staffing competency must be high. Staff gains competence through time-in-service and training. These two factors combined make up the competency rating.

All eight months at le Fleur de Lis our hotel had staffing competency levels of 98% or higher. Our main focus was to train our employees properly and efficiently to keep competency high and would ultimately keep guest satisfaction high. We take the time and the money to properly train each of our employees to provide the best service in the industry. In each area of our hotel, we employed the proper number of people to maintain optimum guest services. We also pride ourselves on paying our staff well.

The chart below shows our staffing competency compared to other hotels in our market.

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

120.00%

January February March April May June July August

Staffing Competency Percentage

Our Hotel Market Average


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Guest Satisfaction

We strive to provide guests with an amazing experience of our hotel and facilities. We do this by employing an excellent staff that provides optimum services to our guests. We also pride ourselves on our unpretentious luxury and charm hotel. We want to provide guests with only the best in technology and comfort. To do so, we strive to maintain a clean and comfortable hotel. We want our rooms, public spaces, facilities, services, and guest services to be better than any other hotel in the market.

We measured five different aspects of our hotel that our guests rated in regards to how clean and current our hotel was. We measured room refurbishments, public space refurbishments, facilities, services, and guest service. The higher the percentage for each specific aspect, the better. Over the last eight months, we improved our hotel through soft good and full renovations, contract cleanings, and the introduction of new products and services. We measured guest satisfaction on a 1%-100% scale, 100% being full services/ excellent hotel. Month to month, we made improvements to our hotel and we ultimately saw an increase in guest satisfaction percentage.

During month one, our hotel came out on top of other hotels in the market in all of the five aspects. Guest satisfaction was the highest at 99%, followed by public space refurbishments at 70%, room refurbishments was at 60%, services scored 46%, and facilities scored low at 10%. During month one, we began renovations on our front desk, hotel restaurant and bar lounge as well as contract cleaning all of our guest rooms. We also began a soft goods renovation to our lobby and public areas and meeting spaces to update the décor and technology.

After month one, we wanted to increase our guest satisfaction numbers. We received positive comments about our well-maintained facilities and our strong staff numbers. During month two, we remained in the process of renovations and cleaning services. Because of this, the guest satisfaction percentages increased slightly. Guest satisfaction remained at 99%. Month three was very similar to month two. Renovations and cleaning services were in the final month, however our guests still appreciated our facilities and our competent staff and overall guest satisfaction continued to increase.

Month four, all of the renovations and cleaning services had been completed. Guest satisfaction percentage was very similar to the month prior. Over the last four months, guest satisfaction increased. From month one compared to month four, room refurbishments increased from 60% to 63.75%, public space refurbishment increased from 70% to 80%, facilities increased from 10% to 30%, services increased from 44% to 72.5%, and guest service decreased slightly from 99% to 98.75%. This month, our focus was to appeal to small and large groups and tour groups, and the improvements we made to our public areas and meeting spaces helped increase the satisfaction percentage in those areas.

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During month five, six, and seven we saw the same satisfaction percentage in both room and public space refurbishments and guest services. We saw a small increase in facility and services satisfaction. Guests continued to appreciate our services and staff, as well as our close attention to marketing and advertising.

Month eight we saw a slight increase in guest satisfaction percentage in every aspect of our guest satisfaction areas. Over the eight-month period, we made numerous changes that helped increase guest satisfaction. We updated our public areas and meeting spaces, renovated our hotel restaurant and lounge bar, contract cleaned all guest rooms, and introduced new guest services. Our staff aimed to provide optimal services to our guests and it showed through our high numbers. Over the eight month period, guest service percentage was consistently high was a satisfaction percentage of 97.88% or higher. Room refurbishment satisfaction increased from 60% to 64.38%. Public space refurbishment satisfaction increased from 70% to 81.63%. Facility satisfaction increased from 10% to 40%. We saw the biggest increase in service satisfaction percentage from month one being 46% and month eight coming in at 82.25%. We attribute even the slightest increase of guest satisfaction percentage to be successful for our hotel.

0%

20%

40%

60%

80%

100%

120%

January February March April May June July August

Guest Satisfaction Percentage

Room Refurbishments Public Space Refurbishments Facilities Services Guest Service

In the chart above, guest satisfaction percentage is represented by each month.


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Guest Response Service Feedback August-‐January


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RevPar

We monitored our monthly RevPAR, which is the revenue per available room. It is determined by the month’s total room revenue divided by total available rooms. The higher the revenue, the higher the RevPAR. We aimed to have a high RevPAR because it means we were making money.

During months one through three, we maintained the highest RevPAR in our competitive market. Our room revenue was competitive with other hotels and we made the most money based on available rooms. During months four through seven, we maintained an average RevPar of $86. Each month, there was a gradual increase in RevPAR. In the competitive market, we dropped from the highest to second highest RevPar during these months. During month eight, we increased our RevPAR from the previous month by $27. Month eight had the highest RevPAR because of the month’s high room revenue.

The chart below shows the RevPAR of each month.

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Average Daily Rate

From month to month, we focused on keeping our rates competitive with other hotels in our market. The average daily rate is measured by taking the total room revenue and dividing it by the number of hotel rooms sold. We monitored the rates of other hotels, as well as adjusted room rates of our hotel to create an average daily rate that was most successful for our hotel. After adjusting rates, we monitored occupancy and revenue to see where we were making the most money.

During month one, we created an average room rate of $162 a night. We created this price based on our competitors in the market. We want to continue to provide excellent services to our guests while maintaining competitive rates. We ranged our room rates from $130 to $190. Leisure premium and package deal rooms are on the more expensive side, while business standard and corporate contract rooms being on the cheaper end. We also made weekend prices cheaper than weekday prices to try and obtain more business on the weekends.

For month two, we kept the average daily rate the same. Our total room revenue slightly decreased during month two. We had a lot more business in leisure premium and standard rooms and business standard rooms. We lost business in the other rooms.

In month three, to try and increase room revenue, we decreased the average daily room rate from $162 to $159. With this small decrease we expected to have a decrease in revenue as well. Prices across the board stayed roughly the same, but we decreased the prices of leisure standard and premium rooms to try and appeal more to families and those who travel for pleasure.

We had to lower to average daily rate from $159 to $152 during month four. With a lower average room rate, we saw an increase in total room revenue. We lowered the average rate of each type of room, and still saw an increase in revenue. We lowered the small and large group rate as well as the tour group rate the most, and in turn, saw the biggest increase in revenue.

During month five, we dropped the average daily rate two more dollars to $150. We did this because we felt that this price was the most appealing to our target market. We saw an increase in every type of room and had an increase in overall room revenue.

Month six, we raised our average rate from $150 to $154. Our total room revenue slightly increased. We raised our prices to see if we could maintain the same revenue with a slightly higher price. We raised some of the prices of our rooms and we were successful.


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Financial Analysis

Revenues and Expenses

From January to September our Revenue has fluctuated greatly, which is a result of money spent to renovate the restaurant and bar, as well as the result of where we were spending money throughout different departments in the hotel. Another factor was how much we were charging when it came to room rates and the price of meals. We started out strong, bringing in a total revenue of $1,058,666 our first month taking over management.

Throughout the months to come we saw a dip in our total revenue leading to our lowest revenue of $850,384 in April.

However, each subsequent month we saw a steady increase with our highest revenue to date being last month (September) at $1,587,389.

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Our highest departmental revenue consistently week to week was room revenue, which typically

made up at least 2/3 of the total revenue each month. The drops in our revenue occurred when

we chose to do large room renovations, which in the long run proved to be beneficial and

successful. The reason our revenue did begin to incline and was so high in the final month is

because, we not only made an effort to keep our pricing competitive, but we worked hard to win

over the RFPs to gain that business and succeed as a hotel. This proved to work in our favor,

and we saw increase in revenue as a result. Our profits month to month followed a similar trend,

as would be expected, as our revenue. When revenue was down that was reflected in the smaller

net profit. Something that proved to be interesting, in regards to why we were not seeing the

profit that should be coming from our revenue, was our expenses in certain departments,

especially in our restaurant. For example, in the month of June, we had one of our highest

revenues, of $950,070, nearly $55,000 higher than the month before, however we still went

negative in our net profit for the month. As a management team this was upsetting and we

noticed that there was a large discrepancy in the revenue of the food and beverage department vs

the expenses. We addressed this by lowering our food costs but keeping the prices steady and

we saw a huge turn around by August.


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As a management team, we have been successful and identifying where we have room for

improvements when it comes to the expenses and internal spending that is happening within the hotel.

We began by putting a large amount of money in all facets of marketing and advertising, but as the

Months went by and we saw that the large amounts of money in that department were beginning to

show up in our expenses, we chose to funnel money into the areas that needed it most, such as leisure

travelers and groups. This allowed us to target the audience we wanted to bring in more, as well as

save money in that area. We have proven to be financially aware and able to make changes that have

shown successful results.

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Cash flow & Inventory

When it comes to our cash flow reserves, we have to admit that there has been a certain amount of inconsistency

month to month, yet we have been able to stay within $60,000 under and have succeeded in coming back and

ending up $178,000 positive for the year. It is clear that the months that we did go under in the cash flow

situation were the times when we put a lot of money into our staff and spent quite a bit on training and staffing.

While this sometimes leaves us short on cash, it has really made our customer satisfaction scores stay

consistently above the other hotels and our staffing levels have been very solid. Our philosophy of excellent

customer service and luxury makes this slight down turn really a success and as we build, we will continue to

build and make more cash to put back into the guests and our hotel. When it comes to inventory, we are right

there where we should be as far as commodities from week to week not being wasted or left over too much. For

the most part we have seen that where we are spending money, is where it needs to be spent and all of our levels

are right at or just slightly above that 100% mark, making us secure in the decisions we are making as a

management team and hopeful as to what our future with this hotel brings.

Future Projections

As previously stated, the goal of our hotel is to provide the feel and experience of leisure and luxury, except at

an affordable rate. We plan to continue on with this as our main focus, making sure that we are treating our staff

and customers with the highest quality, in order to truly keep with this concept, we will need to keep our prices

at the affordable rate that they are currently. We believe that if we continue on this path we will see it reflected

in our financial situation. We have already begun to see this through our efforts and investment in training for

staff. Customer satisfaction is extremely high and this is bringing our numbers up each month.

We have also been focusing on how we can identify where we need to spend money on marketing and

promotions. This will save us at least 25% and will target those areas that are lower and don’t get as much

exposure. Along with this, we have been looking into how we can cut costs in the food and beverage department

so that we can still have high quality food, but keep the price reasonable.

If we continue on the path we are now, we can truly grow and progress as a hotel and a management team. By

being aware of our situation and what is causing certain issues within the departments, we are able to evolve and

change in order to in the end succeed We are headed in a very good direction and will continue to build from

here.


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This graph shows that we have been able to maintain somewhat similar levels of all financial indicators including ADR, Occupancy, RevPar, etc. even through the change in management, renovations, and rebranding. This shows that through hard work and paying attention to the fluctuations in our numbers, we should be able to steadily increase these figures and be quite successful with a new stable brand and well trained staffed and newly renovated facilities and amenities.

This graph shows that while we imagined our self to be successful at an above average price range, over the months it has become clear that consumers would prefer us to have closer to average price ranges. This graph specifically shows our rates for business standard rooms (our highest revenue source) on weekdays compared to the market price.

This graph shows that clearly our highest source of revenue is business standard; but other than the month of July, we were also able to maintain or increase revenue in all categories of rooms. We have strived to carefully pay attention to the fluctuations in revenue and usage of each room type and cater our services, rates, and advertising accordingly.

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Recommendations for Improvement

Improving Guest Satisfaction

While we currently have exceptional guest satisfaction scores we are always aiming to go above and beyond our guests needs. One way in which we plan on improving our guest satisfaction is to carefully manage our online presence. The use of social media is a growing trend within the hotel industry and can help us connect directly with our target market segments. In the near future we plan on hiring a social media who will be in charge of carefully monitoring online guest feedback on social media, which will allow us to quickly correct any issues our guests may have. Improving our hotel website and making it easier for guests to navigate will help improve guest satisfaction and keep our guests properly informed of pertinent information regarding our hotel’s services and facilities. In addition to managing guest feedback through online reviews and social media it is important we establish a system to properly respond to guests reviews and then analyze feedback. This feedback can then be used to guide future decisions and create suggestions for future growth of the Fleur De Lis.

Networking With Nearby Businesses

The Fleur De Lis is focused on Servicing: business, leisure, tour, contract, large group, and small group segments. In order to increase our overall revenue we feel that reaching out to nearby businesses will help produce more revenue for our hotel by attracting guests. Offering special rates for groups as well as providing discounted tickets on nearby attractions will help us create positive relationships with nearby business all while benefiting our guests.

Increasing Food & Beverage Revenues

In our over financial picture, it is apparent that we struggled with the food and beverage department. After analyzing our sales we have concluded that in order to improve our F&B revenue we need to increase the quality of our food. When taking a look at the percentage of total restaurant sales spent on food products we noticed that our prices did not properly corresponding with the value we were providing. We currently spend 35% of the total restraint revenue on food costs therefore we are lacking in quality. We plan to increase these percentages to 70% in order to increase the quality of our food, which will improve both guest satisfaction and total revenue.


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Recommendations for Improvement

Adding New Facilities

As we continue our success we feel that adding new facilities for our guests will improve both our revenue and guest satisfaction. As revenue continues to increase we plan to take advantage of constructing a business center, lobby bar, executive lounge and spa. While this will be a large capital investment, the addition of these new facilities will attract both business and leisure group segments while enhancing the overall appeal of the Fleur De Lis property.

Refurbishments

We feel that continuing to refurbish the wonderful aspects of our property is a great opportunity for improvement. Under our management we completed numerous refurbishments to the grounds, rooms, front-desk, restaurant and facilities. Over time we hope to complete improve all of our facilities by undergoing complete renovation of all our facilities. For the renovations that are more costly such as the complete renovation of the standard guestrooms ($1,600,000 for 3 months) and complete renovations of the premium guest rooms ($750,000 for 3 months) we plan to purchase soft goods redo in the mean time to make sure our guests needs are always being exceeded. This will give us a chance to build up revenue in order to make the necessary updates and improvements to our property.

Enhancing Our Pricing Strategy

While comparing ourselves to the other hotels in the competitive set, our management team realizes that there is not much differentiation in the pricing strategies. We immediately saw this as an opportunity to improve our revenue while also differentiating ourselves from the competitive set. With changing demands in the market we will be able to improve our hotels pricing strategy by slightly elevating prices where we begin to see more business. We will need to implement a plan in order to properly asses rate optimization because it is always possible that the demands of our target market shift, and we must be flexible as a management team to address these issues.

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Future Goals & Objectives

Facilities and Services We will continue to add new amenities and services to the hotel to make sure that any guest will have anything they need. We will also continue to refurbish and upgrade our current amenities to keep everything up to date and modern. We plan to add a spa and theme restaurant as well as a business center, executive lounge, and lobby bar. We hope that adding and maintaining these services and amenities will not only improve guest satisfaction, but will allow us to charge higher room rates and will also increase employee morale. Staffing When taking over as management we elected to hire a surplus of employees as well as spend a surplus on training and wages to ensure that we were fully staffed, and that our staff was competent and well-paid. Having a satisfied and competent staff will ensure that guests are provided for well and in a hospitable manner. Now that we have settled in and have a better understanding of the market and our guests’ needs, we can lower the number of staff and focus on proper training and continuing to eliminate turnover. We will continue to pay our staff well to ensure satisfaction, low turnover, and proper guest interaction. We would also like to begin focusing on career advancement, management training, and succession planning. Marketing and Advertising We elected to begin this experience with a blanket marketing and advertising strategy; by putting a surplus of money into marketing and advertising our hotel’s name became a household product quite quickly and flooded the market with our information. Now that we are prominent in the industry, we can reduce the blanket coverage and focus spending to specific areas that will attract the most profitable customers. We will continue to employ our PR agency as well as the website, benchmarking service, e-commerce service, guest response service, and loyalty program, as these all aid in bringing in customers as well as making business with our hotel more convenient and satisfying. Revenue and Profit Over the past few months, we have worked to bring in the highest number of customers and create the largest market share in each room category, and our room revenues testify to our success in that category. However, over those months we did not try very hard to keep costs down. We focused on making sure we were well staffed, our staff was well trained, our name was being heavily advertised, our food was of high quality, and that our rooms and facilities were new and plentiful. While we were making a lot of money on rooms, we were spending a lot of money in other departments. Now that we have established and well-working system, we can focus on decreasing our departmental costs and increasing revenue and overall profit. We would like to start with increasing our food and beverage revenue drastically by adjusting our food costs and prices. We also plan to increase overall revenue and profit by decreasing spending on wages, training, and advertising. We would also like to focus on creating more meeting and event revenue. We will also take a close look at our rates and those of our competitors and adjust to cater to more specific market segments rather than blanket coverage as we have been doing; we still wish to cater to all segments, but will focus our rates and marketing on more specific segments which will help to improve market share and revenue.


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Le Fleur de Lis hotel has continued to be one of the most popular and most successful hotels in the

market. We strive for excellence in every aspect of our hotel. We aimed to create and maintain high

total revenue, staff competency, guest satisfaction, a competitive average daily rate all while keeping

our costs and expenses down. It took us a few months to get the hang of things, but the last two

months have shown great improvement and success under our management. As managers of the

Fleur de Lis Hotel, we have created a well-known name in the market that operates at good costs and

high revenue and creates the best guest experience and highest guest satisfaction through well-

trained and well-paid employees and amazing facilities and services. The only thing we have not yet

achieved as managers is creating the perfect balance between cost and revenue. Figuring out how

much needs to be spent on each department to achieve success with the guests but still keep costs

low is not an easy task, and over the last few months we have gotten a good start on that

process. We have done quite well at increasing occupancy and market share in each segment, and

our revenues in all departments have been very high. Now we will focus on lowering costs while

maintaining this success and will become the most profitable and well-known hotel in the industry.

Why keep us?

Final Board of Directors Report FINAL

Documents

Transcript of Final Board of Directors Report FINAL