Decisions
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What can you do?
In the game you have a number of possibilities to influence your hotel.
- The Team File which you have a private login link to. In this file you present your strategy and the links to your website and social media. In this file you also do all your decisions and explanations.
- Your Team Finances spreadsheet: only accessible with your private link via your Team File, any hotel has its own. None of this is visible on the platform. In this file each hotel can follow:
- The social media, websites etc. (on the first page of your Team File there should be links to all your social media and website(s) used)
- Other live actions of your team: sometimes required, like the Trade Fair but maybe also at your own initiative.
We now look at the decisions, made in the Team File.
Your hotel's Team Finances
Look at the screenshot below: this is what you will see: your hotel's private Team Finances tab Results.
This is an example of the spreadsheet as it looks like as you take over. During the years all results will be filled out automatically. The history, the prologue is filled out with decisions from the past made by Christina Bergman will always be available and is your first point of reference. As you can see she didn't spend anything on the group of costs we now call Costs:Team decisions. They are marked n/a, not available, so not used in the past.
Outlines on decisions
Christina Bergman has decided that she only wants to be informed of the main outlines of your choices. Therefore the number of items you can make decisions on is limited. These decisions need to be filled out in the Team Finances spreadsheet and explained by you in your Team File. These decisions form the backbone of your new policy in running the hotel. The historical figures to be found in the Team Finances are the so called prologue, so the year before you take over, so Christina's last year. She did not spend any money on some of the expenditure groups, like marketing expenses. So you will see the indication N/A not available.
Rules on the decisions and further information on their limitations.
- Please take into account that your hotel has 364 days and nights per year (52 weeks * 7 nights)
- The basic occupancy rate of your hotel used to be 50%
- The number of rooms in your hotel is 100
- The weekend days are 43% of the total number of nights (rounded-up)
- The weekday days are 57% of the total number of nights (rounded-up)
- The average number of guest in a room is in the weekend days is 1,7
- The average number of guest in a room during the weekdays is 1,0
- We completely refrain from (adding) VAT and or other taxes on profit for now
- You can not change the number of rooms of your hotel
- You can not sell the property
- You can not 'spend' or use profit (or cash flow) or do other or bigger investments then indicated
- The effects of all of your decisions only last for one year!
List of the decisions
Underneath you will find the list of financial decisions you will have to make each year in your Team File: there might be some small differences in your competition. Adapt the decisions to your new plans and strategy each year. On filling them in in the Team File, they will automatically be put in your Team Finances spread.
Each year at the end of your Team File there is a place to give some extra explanation to Christina and your coaches. The explanations are very important and account for the biggest part of your occupancy and so results. And they contribute heavily to your mark. Make these calculations to justify your choices.
The above situation is the situation as you take over the hotel and shows Christina Bergman's decisions last year. After each year the next column will be filled out by your team in the Team File.
- Ranges
In all decisions made there are a few ranges built-in to make it possible for you to make your decisions appropriately and to prevent you from going bankrupt. Running this hotel consists of more than just filling out numbers in a spreadsheet, therefore you have to explain things in the Team File and we encourage you to behave like an entrepreneur throughout the entire game.
- Price systems, rates
You can use psychological pricing, flex prices, dynamic pricing, revenue management or whatever system you want to use in your decisions. The better your explanations in your Team File (and especially your calculations) are, the better your company's results will be, the higher your entrepreneurship mark, and so the more customers you get by a higher occupancy rate. In hospitality, we see the concept 'rates' more frequently then prices. We strongly recommend you never to change prices by more than + or - 20% per year.
- Euros
Only make your decisions in euros, don't use cents or other currency. In filling out the amounts do not mix up comma (,) just use the numbers also do no use decimals!
Team decisions on prices
As you can see in the example: if you mouse over the description of the decision (like cell xxx in this example) you will get more information what the decision is all about. You are allowed to fill out the blue cell according to this instruction. You will get a warning in red if you exceed the amounts or fill out something wrongly.
You will have to decide what prices you will charge (per room per night) for hotel's weekdays or weekend days which serve the two current markets. There is not much information on the past yet. In the pages on room you can read a bit more as well as in the page on prices. Depending on your performance as a team and your choices made, you will get a certain occupancy rate and so a number of guests. These guests prices will bring your revenues in each of the five categories, depending on the prices decided upon.
→ Limitations
Strongly recommended: never change any price more than + or -20% per year to protect your hotel from high impact of too extreme changes.
- 1. Weekend last-minute room-price (rate) per night
In the past, the average price was € 80. We strongly recommend you never to change prices by more than + or - 20% per year. This is to protect your hotel from too radical changes. The last-minute price is the minimum price you will accept to fill up the empty rooms, the gaps in your occupancy.
- 2. Weekend rack rate room-price (rate) per night
In the past (prologue) the average price was € 100. We strongly recommend you never to change prices by more than + or - 20% per year. This is to protect your hotel from too radical changes. The rack rate price is the highest price you will get.
- 3. Weekdays last-minute room-price (rate) per night
In the past (prologue), the average price was € 100. We strongly recommend you never to change prices by more than + or - 20% per year. This is to protect your hotel from too radical changes. The last-minute price is the minimum price you will accept.
- 4. Weekdays rack rate room-price (rate) per night
In the past (prologue), the average price was € 140. We strongly recommend you never to change prices by more than + or - 20% per year. This is to protect your hotel from too radical changes. The rack rate price is the highest price you will get.
You can make a decision on an average room-price. This will not be the price published, that's up to your marketing approach and you can elaborate on that in your explanations. For any price chosen, let's say € 80, it means that there will always be an average of € 10 in there for the breakfast. So, in fact, you would get an average of € 70 for the room-use.
You can not influence how many people will stay in the room.
- 5. Banqueting price (rate) per person per day
In the past (prologue) the average price was € 25 - € 30. You can not skip this activity totally, so price 0 is not allowed. The occupancy rate of the rooms also has impact on the numbers of booked banqueting arrangements.
Team decisions on expenses
Other things you will have to make decisions upon decisions 07 till 13. On mouse over in the file you'll get more info on these choices. All these decisions bring extra costs compared to the past, as Christina did not spend money on these elements the years before you take over. You can only explain the costs you are going to make. So if there is something very specific, you can make additional calculations explaining the profit it might bring. If you explain pro's and con's and the costs and the results and the expected additional profit of a specific action,
your coach might reward this with a bonus. A bonus is netto, it is directly added up to your profit in a year.
In case you think you have an idea like this, please also explain this to your coach at the end of your Team File.
- 6. Marketing expenses
No expenses made on this in the past: N/A means not available.
This is the total spending for all paid marketing actions in the past: maybe this is on the shy-side? There was very little going on at the Emerald Forest Hotel, especially nothing on social media or affiliates and also not in bartering. So this part is also aiming at distribution and partners. You could also include expenses related to clear air, to green energy, to social responsibility, ecological footprint etc.
All above the minimum required by legislation.So probably this is a decision you can not afford to leave out.
→ Limitations
You can use any amount between € 0 and € 200,000 per year, to protect your hotel from high impact of too extreme changes.
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- 7. Staff development
No expenses made on this in the past: N/A means not available.
Apart from the salaries, extra costs can be made for this. This can be spend on necessary skills and resources to support the staff member's career goals and the organization's business needs. This will be things like training, developing skills or for instance courses on hospitality.
→ Limitations
You can use any amount between € 0 and € 100,000 per year, to protect your hotel from high impact of too extreme changes.
.
- 8. Extra depreciation of new investments
No expenses made on this in the past: N/A means not available.
You start off a new company: so, in the past, this was € 0. These are the depreciation costs related to your NEWLY planned investments And, as you can see on the footage available the hotel is in need for some additional investments in the rooms, facilities etc.
Check the specific investments page on this. You can only explain expenses, not investments which you probably will make. So be sure to check the page on investments!
→ Limitations
You can do any investment with a maximum of € 900,000 each year. So over four years you can invest a maximum of 4 x € 900,000 = € 3,600,000. The costs of this will be the depreciation, automatically calculated and always linear over four years (a simplification, but still). The maximum is built in to protect your hotel from too extreme changes and costs.
- 9. Market research expenses
No expenses made on this in the past: N/A means not available.
These are the cost for buying information from Top Research which will be analysing the past year and it will be visible, if bought, on your results page after any year. It will give you a benchmark on the prices asked in the market (small package) as well as the costs made in the market (large package).
→ Limitations
You can use chose the amount from the choice box so € 0 buys you no information, € 25,000 buys you for the small package and € 50,000 gets you the large package. Elements not paid for will show up in your operating review as 'Not bought'. Make sure you explain very clearly in your explanations why you think buying this will benefit your company. The company Top Research will carry out the research and report to you.
- 10. Other expenses
No expenses made on this in the past: N/A means not available.
This could be anything apart from the groups mentioned above. So things like supporting the distributions chain, good courses or maybe costs on legal issues and governmental- or city-fees. Maybe contribution to tourist information offices activities.
→ Limitations
You can use any amount between € 0 and € 100,000 per year, to protect your hotel from high impact of too extreme changes.
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No decisions or no explanations
If any team fails in delivering the decisions or explanations before the deadline this is a serious problem. This will end in a low entrepreneurship mark and as this is an essential part of the algorithm bringing you clients, also jeopardizing your occupancy rate. If there are no decisions filled out, the decisions from last year will be filled out.
Costs and results
If a year has passed, you will see the results, only after the time communicated. With the costs mentioned above and the revenues made in the past, the results of Emerald Forest Hotel were realized. You can find this in the dashboard and at the tab Results in your Team Finances and more explanations here in the file results. So, if you change the costs (increase the expenses), understand that you have to earn these extra costs back (or your profit will go down rapidly)!
Compensating for the extra expenses or benefiting from them can only be done in a few ways:
- Make costs that -by making them- bring down other costs (for instance, in using ICT, less staff is needed);
- More revenues by choosing higher prices, so a higher profit per sold product;
- More revenues by achieving a higher occupancy-rate, so more sales.
So fill out the decisions and explain clearly what you are aiming for in doing so. Do stick to the deadlines!
All the costs which you have made extra through your decisions will be brought directly to the results of the year you are playing and will be immediately visible there. This will be at the end of each playing year.
Spending the maximum on all possible costs looks like a bad idea! You have to earn back all these expenses, so you will have to make clear choices and keep the profit in mind!
So the numbers mentioned are not a gift, nor a budget: it just gives you an indication of the (maximum) possibilities without getting in serious financial trouble. So, if you would decide to spend to the maximum on all options you could have in extra costs (per year):
- Decisions 1-6 are no expenses but bring revenues
- Decisions 7 maximum € 100,000
- Decisions 8 maximum € 100,000
- Decisions 9 maximum € 125,000 year 01 up to € 500,000 in year 04 as depreciations. Depending on your new investments.
- Decisions 10 maximum € 100,000
- Decisions 11 maximum € 100,000
- Decisions 12 maximum € 50,000
- Decisions 13 maximum € 100,000
The maximum grand total on expenses is € 800,000 (and in year 04 after maximum investments in all the years € 1,225,000). Keep in mind that the profit in history (the prologue) was € 486,307! To the total costs was € 2,430,595. Creating all expenses will raise the costs by more than 33%! You probably will make a loss now as the additional costs exceed the profit you made in the past. So think of all the expenses well over and elaborate in the Team File on how your decisions will keep the company healthy. Hopefully the additional costs you make will also bring higher prices or a higher occupancy rate: but still be careful to go too far up with the costs without compensation in a higher price for instance.
Once again, these are the maximum and any euro spend you have to earn yourself.
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