Hotel Management and Operations

The aim of this report is to bring out the feasibility of the rising rates of hotel occupancy all over the world with the ‘Exec Hotel ’being our reference case. There has been a continuous increase in occupancy rate this year, marked with increased average daily rates. While the situation poses a challenge to many hotel programs, if well managed, it can be so beneficial to the economic future of such hotels. Cities like Paris and London enjoy occupancy rates of more than 85% locally calling for hotels to adjust their programs to meet the high numbers and other challenges which come along with the high occupancy rates (Michelli 2008, p. 68). It is a crucial requirement for the hotels to ensure availability of resources to meet the high supply while at the same time meeting the negotiated marked rates.  Moreover, new entrants to the market bring about the incentive for the hotels to compete harder on their services and price especially in the highly demanding markets.

The highly sensitive market type situation leaves the management of these entities to experience many challenges thus the need to come up with backup plans strategies to meet the demands of the high occupancy markets, type of room services provided and the fluctuating market rates. This report is out to discuss the challenges faced by the ‘Exec Hotel’ in its capacity to accommodate both local and international customers, its capacity to accommodate families in its rooms, market competition from other local hotels, the fluctuating exchange rates  and  the irregular occupancy rate. There are several factors that have to be considered in order to succeed in the hotel investment with financing development and economic prosperity being the primary concerns.  In order to meet these primary requirements, the paper will provide some recommendations on how the Exec Hotel can better its operations. 

Background

Our reference hotel, the ‘Exec Hotel’, is a chain of entities mainly specializing in hotels situated in central London.  The chain is made up of six hotels that are medium sized having approximately thirty to fifty rooms. Giles Baker who is the Managing director of the business faces the challenge of having the business expand to other cities in the United Kingdom where hotel business is blossoming. He also has plans of starting other pilot hotels in other capitals in Europe. Before achieving all these, he has to first address the challenges his current entities are facing.

Most hotels in the UK are assuming a comeback trail. In London, the market has been stormed by hotels with the trend expected to strengthen even further (Michelli 2008, p. 70). This can be associated with the increased levels of conferences booking, high transient travelers’ levels, and the slow return of travelers taking part in businesses around the city. These hotels are however faced with challenges from the economic environment as well as the reliance on the domestic business that is dwindling instead of making adjustments in their businesses to accommodate international market. The paper acknowledges these challenges facing hotels in London and tries to analyze how these realizations will influence the economic future of business and the possible ways of dealing with such issues.

Work plan/ Methods and Procedures

The research was mostly compiled from already existing reports, articles and studies published on United Kingdom hotels forecast and high hotel occupancy rates. Notable studies consultation settled at Statistics from London, other provinces in the UK, and other capitals in Europe including Sydney and Paris. The internal audits and records from the business also played a crucial role as they served as references in observing business progress of the hotels.  Newspapers, articles and the web were used to monitor the exchange rate which kept on fluctuating. The regional hotel profile provided information on the local market situation especially on the competitors. Initial steps were put into consideration in order to determine the pre-feasibility studies’ scope.  Studies from other hotels both in UK and international chains and in consultation with professionals from reliable sectors were involved in the study so as to ascertain the information to be included in the report. The research was finally complied, giving room for additional avenues of the report to come to light.

Findings

 London being the engine driving the economy of the United Kingdom hotels in the route to economic recovery, the forecasts were more optimistic. The findings indicate that the economic situation is getting better and the capitals put in the hotels earn the expected profits.  The stability of the hotels operations depend mostly on the economic growth and over than fifty five percent of the managers remain confident that the stability will continue to rise. The rise was recorded at seventy eight percent in 2011 a better percentage compared to the previous year. The London industrial opinion is in support of this hotel forecast as the hoteliers have high expectations considering that flat occupancies in London and other parts of the United Kingdom are experiencing a remarkable growth of over 2.5 percent. This is a positive sign as it will lead to a booming business (Nebel 1999.p. 70)

The findings also indicate a varying trend in the way the rooms are occupied with some enjoying more business during the weekend while others over the week depending on the location and type of services offered. With such prediction, hotels are expected to adjust their strategies to meet the irregular trends. In the last five months, hotels in London have experienced a consecutive occupancy growth.  The increase in growth has resulted to most hotels having sufficient volume to adjust the room rates and the exchange rates. Statistics have it that the rates have gone up by 3.5 percent this year (Nebel 1999, p. 112). The gain can be interpreted as to result from the customer mix changes because of the return of business travelers but not the raising of prices by hotels.

Conclusion

The findings on Exec Hotel indicate that the hotel was facing the same challenges witnessed by most the hotels in London and the rest of Europe. It was observed that most of its chain hotels operate at capacity only in the course of the week with the weekends experiencing a drop in the occupancy rates going below 20 percent. The hotel is also faced with another dilemma of adjusting its strategies to accommodate tourists though this comes with a major challenge expecting the management to retrain its staffs to enable them learn the other languages used by the tourists a part from English. The training will be an extra cost to the already set aside staffing budgets (O’Fallon and Rutherford 2011, p 79).

The hotel rooms work to the disadvantage of the hotel as they are not enough to accommodate double beds thus the hotels are not in a position to host families. This situation limits the hotels capacity to accommodate tourist thus submitting to the market competition from other hotels in London. The fluctuating exchange rates have led to unpredictable accommodation all over the world. Exec Hotel is no exemption as it is expected to deal with such fluctuation. Hotels around London have proved major competitors to the running of the hotel forcing the management to adjust its prices.