Round 2 Analysis-Goodness

Goodness
Gratitude Aspiration Courage Perseverance

EBIT % 22 27 21 29 5

Net income 33 722 51 407 35 246 51 662 7 877

Gross
Operating
Profit Per
31 43 38 46 22
Available
Room
(GOPPAR)

GOP
conversion -161 130 -426 80 -780
(%)

Cumulative
88 359 83 870 91 160 83 476 57 203
Earnings

When we look at the cumulative earnings of team Goodness is very low and even the gross profit
the team Goodness is generating per available room is also very low. The net income of the team
goodness for team Goodness has been drastically declined which may result into more major
consequences in the future run.
Lets find out the reasons behind the low profit achieved by team Goodness.

Gratitude Aspiration Courage Perseverance Goodness

Revenues, $

Average
Daily Rate
(ADR) of 103 109 104 104 105
Rooms
Sold

Revenue 74 80 78 95 79
Per
 Available
Room
(RevPAR)

Total
revenue per
occupied
115 127 118 120 118
room per
night
(RevPOR)

Revenue
per
21 23 23 19 25
restaurant
customer

As we know that, Average daily rate is one of the key performance indicators (KPI), when looking
at the ADR of team Goodness its not bad and its nearly equal to other teams.

Since, ADR does not tell a complete story about a hotels revenue and instance, it does not include
the charges a lodging may charge if a guest does not show up. The figure also does not subtract
items such as commissions and rebates offered to customers if there is a problem. We need to look
at the other section to find out the reasons behind such low profitability.

RevPAR is used in the hotel industry to make an assessment regarding a hotel's operations and its
ability to fill its available rooms at an average rate. Increasing a property's RevPAR means that its
average room rate or its occupancy rate are increasing. Again with team goodness the Revpar looks
fine when compared to other teams.

Lets look at the Occupancy of team Goodness and other factors like room profitability.

Room Profitability.

Perseverance Goodness
Gratitude Aspiration Gratitude Aspiration Courage

Average room-rate,
103 109 104 104 105
staying
Additional revenue per
13 17 14 15 13
room-night
 Total costs per existing 59
49 47 47 63
room per night
Net contribution per
66 80 71 61 55
room

The Average Room Rate, staying, and additional room revenue per night for team goodness seems
to be good when compared with other teams.

But when we look at the total costs per existing room per night seems to be very bad. The hotel is
having very high cost for each room. Moreover, the net contribution margin is very less. This is
due to the fact that the hotel is selling the rooms at low rom rate and at the same time it is giving
much higher level of service. This could be one of the factor foe low room rates and obviously a
bad/wrong decision by team Goodness. When we looked at the occupancy percentage of the hotel
its very good and matching its competitors

There can be other factors for low profitability. Lets analyze the more reason behind it.

Restaurant Operations

Goodness
Gratitude Aspiration Courage
Perseverance

Revenue 64 477 96 995 71 784 51 943 78 493

Costs 59 952 90 371 79 079 51 292 93 654

Contribution 4 525 6 624 -7 295 651 -15 160

When we look at the restaurant revenue of team Goodness its good but at the same time the costs
are very much higher (93654) resulting into very scary contribution margin -15 160 which is very
bad.
 Gratitude Aspiration Courage Perseverance Goodness

Contribution per staff 55

495 415 -433 -949
member
Contribution per
1.47 1.58 -2.35 0.24 -4.83
customer

Contribution per seat 57 83 -91 8 -190

It is highly evident from the above figyre that the contribution margin of the staff member in team
Goodness is very low. This is due to the fact that the the hotel has employed veru high number of
staffs when which is actually not required.

These are some of the reasons for overall low profitability.

Moreover, on detail analysis it has been found that the team Goodness are giving high wages to its
customers.

So as a result, reasons like high operating costs, hiring huge staff than required, giving staffs high
wages at this time and selling the restaurant dishes at very high prices resulted into very low
profitability.