To: Andrew Mayd, CEO
From: Chris Mell, CMA
Subject: Analysis to increase occupancy rate
Date: January 15th , 2008
Introduction. The report was prepared for GR Hotels Board of Directors review. It examines current opportunities to increase profitability. Several options were examined and the most plausible solution proposed – Upgrade to upscale both hotels. This measure will increase long term profits and improve position in the core business.
GR Hotels current mission and vision :
MISSION: Clean Comfortable rooms(what), good quality service(how) to business and pleasure travellers(who) in Toronto and Montreal (where) at competitive prices ( how).
VISION: GR Hotels …show more content…
Manny Bluenose Prepares proposal for the bank to request financing.
Human Resources Manager prepares plan to train/hire additional staff
Mat Gleeson contacts 3 leasehold improvements contractors and obtains a detailed estimate of the work need to be done. Board meets and approves all the documents.
A newsletter to employees and meetings at each hotels are organized.
March 1st. Start of the Hotel upgrades. Start of the personnel training. New restaurant chef is hired.
April 1st, Major renovations Complete. Internet and furniture upgrades.
April 15th – April 30th . Heavy discounts and promotion of newly renovated hotels.
May 1st . Service begins at regular flow.
APPENDIX 1. CURRENT FINANCIAL SITUATION RATIO 2007 2006 2005
Gross Profit Margin % = ($21,993-$15,967)/$21,993= ($21,595-$15,814)/$21,595= $19,798-15,123)/$19,798=
Gross Margin/Net Sales 27.40% 26.80% 23.60%
Return on Equity= $971/$1,322= $834/$1274= $603/$1,107=
Net Income/Av. Equity 73.50% 65.50% 54.50%
Return on Assets= $971/$11,471= $834/$11,634= $603/$11676=
Net Income/Total Assets 8.50% 7.20% 5.20%
Operating profit ($1,618+$586+$430)/$21,993= ($1,391+$598+$428)/$21,595= ($1,005+$610+$418)/$19,798=
% of Revenues 12.00% 11.20% 10.30%