QUESTION
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business management
Assessment Information/Brief 2019/20
Module title
Project Management, Leadership and Skills: Planning and Control
CRN
53406 / 53411 / 53413
Programmes
MSc Digital Business
MSc International Events Management
MSc Operations Management
Level
7
Assessment title
Assignment 1 : Project Planning and Control
Creating a detailed business case, project
plan, and schedule including use of Microsoft Project (or equivalent), and discussion of other relevant issues.
Weighting within module
This assessment is worth 50% of the overall module mark.
Submission deadline date and time
Sunday 21st June 2020, 23:59 Zurich time
Module Leader
Stylianos Sapountzis
608f Maxwell Building, 0161 295 4815, email : [email protected]
Assessment set by
Stelios Sapountzis / Kevin Kane
601 Maxwell Building, 0161 295 2239, email: [email protected]
How to submit
A single file is to be uploaded via the campus website of RKC. This should be a Word file to include your business case and project plan. Maximum 3000 words (+/- 10%).
Any diagrams should be included directly in the document as images (not as embedded documents).
ASSIGNMENT BRIEF
You have recently been appointed by an investment company who wish to relaunch the Yang Sing Hotel (see Case Study Introduction below) under a new name after recently buying the building but they have concerns over the problems that caused the Yang Sing Hotel to close.
Your assignment is to write a report on the prospective New Yang Sing Hotel as a project – considering what is likely to go well and what not so well. Your report should therefore focus on the project management aspects including the key risks e.g. loss of money and overrunning its schedule and not meeting the performance requirements expected from a project of this type.
You will need to produce a detailed business case and project plan, and any recommendations to the Project Board that you consider appropriate. You may want to use some of the sub-headings below, but that is entirely up to you: this is not a template.
• Introduction - identify the major planning problems with the Yang Sing project and suggest how project management techniques might have helped to mitigate these problems.
Discuss in your report, the following for your suggested project:
• Project objectives
• Performance Measurement/ Management of quality
• Stakeholder analysis
• Activities to be carried out and scheduling including any milestones: your project plan must include a schedule created with Microsoft Project (MSP) or equivalent.
• Resources to be used including project budget
• Constraints and Risks
• Communications to be used
In addition please discuss the following in your report:
• Possible success/ failure factors for this project
• Considerations concerning future operations
Include a List of References at the end of the document presenting all the sources used.
ASSESSMENT CRITERIA
Please note that you are being assessed on your understanding of Project Management and not the discovery of the ‘correct answer’.
The marking scheme is as follows:
20% of marks for the project plan.
50% of marks for the business case.
20% of marks for the conclusions and recommendations.
10% of marks for presentation, structure and referencing.
ASSIGNMENT CASE STUDY INTRODUCTION
The assignment contains information from news and other sources. We have sought to make this as close as possible to a live project brief. You may wish to conduct relevant research but please do not contact anyone involved without first contacting your module tutor.
The Yang Sing Oriental offers 48 individually designed bedrooms and suites inspired by the cultures of Japan, China, India, Thailand and beyond fused together in a grade II listed building in the heart of Manchester. We offer a level of service never seen before in the city. Guests can tailor make their service using the online booking system, selecting from our extensive personalised menus from pillows and Japanese silk duvets to your complimentary bathroom products and even which scent will fill your room.
A boutique Hotel which was refurbished from a former paper mill, the hotel extends over seven floors and includes 48 individually designed bedrooms, bar, lounges, breakfast and spa rooms and is located in a prominent position on the corner of Princess and Portland streets, close to the China Town area within Manchester city centre. The conversion of the mill to a hotel cost £4 Million.
This building is a Grade II listed “Manchester” warehouse, with cast iron internal columns, timber beams and masonry external walls. The building had been left vacant for a number of years and extensive repair works were required to prevent further deterioration (to remove dry and wet rot, leaking roof, leaning parapet brickwork etc.), before plans to convert into hotel were developed.
Structural conversion works included removing the original central staircase and lift; constructing a new lift and stair-core, repair and strengthening works to timber floor beams; adaption and strengthening works to roof trusses to allow formation of mezzanine floor to top floor suites; formation of new plant room at roof level; repair of cast iron column, and enhancing stability of external masonry walls. The considerable work required meant that rebuilding and redesign work went over budget and over time.
Manchester Evening News, 2/3/2009
Yang Sing Oriental, the luxury Manchester city centre boutique hotel, closed its doors today less than eight months after it opened - victim of the deepening economic crisis. The company will be placed into the hands of a liquidator.
Managing director Gerry Yeung, who realised a long-standing ambition when he launched the £8m project in a listed building in Princess Street last July, said: “It is a tragedy. My team are amazing and one of the saddest outcomes of this is that 30 people will be made redundant. Together we have created the best hotel in Manchester and business was growing. Everyone who stayed here loved it, but we couldn’t have picked a worse time to open a luxury hotel: with a global banking crisis, credit crunch, and the worst recession since the 1930s.”
“I have committed an additional £1m of my personal money to the Yang Sing Oriental since it was launched, but with room rates being massively discounted across the luxury hotel market, and with no end to the recession in sight, the business is just not sustainable.”
The nationally renowned Yang Sing Restaurant, located next door and run jointly by Mr Yeung and his brother Harry for more than 30 years, is unaffected by the hotel’s closure.
The Yang Sing Oriental offered 48 individually designed bedrooms and suites inspired by the cultures of the Far East, with rack rate tariffs ranging from £179 - £569 per night.
A statement on the hotel’s website said: “Gerry Yeung and his amazing team at Hotel Yang Sing Oriental deeply regret to inform you that, despite their hard work and best efforts, Yang Sing Oriental Ltd has been placed into liquidation.
“As a result of this, Hotel Yang Sing Oriental closed its doors on Monday 2nd March 2009.
“We thank you all most sincerely for your support and the generous and wonderful reviews that you have kindly sent to us. It has been an honour and a privilege to welcome you to the hotel over the past eight months. We are so glad that you have enjoyed staying with us.”
Critics were impressed by the hotel after its launch. The international travel website TripAdvisor rated the Yang Sing Oriental Number 1 of 147 Manchester hotels in its Popularity Index.
A newspaper travel writer said: “Manchester is a world class destination and has the accommodation to match. It [Yang Sing Oriental] is incredibly stylish, luxurious and laid back...”
Guest feedback on the Late Rooms website showed that 98 per cent of visitors would recommend the hotel and would return.
The hotel was full at the weekend, but guests were taking advantage of rate cuts of up to 50 per cent which are now becoming commonplace across the industry.
Gerry Yeung, the boss of the city centre boutique hotel, told Manchester Confidential that there were a combination of factors all rooted in the economic crisis which have led to the failure of the business.
“We’re operating at 60% capacity at the moment which isn’t too bad but the problem is we can’t get the room rates we need. Even at 60% we’re discounting. In another economic time I believe we would have been fine, but we opened just as things start to get bad globally. We were ambitious too, we wanted to provide very individual accommodation, with 24 hour room service and five star customer service generally.”
Funding for the hotel was provided by the Yeungs, private investors and Natwest Commercial Banking. Total losses are estimated in the region of £7 Million.
Completing your submission
You will also need to take the following into account when completing your assignment:
• Quality of executive summary (does it give a brief complete summary of your paper for an executive to read?)
• Allocation of credit and sources used (have I included references and citations to the material I have used?)
• Clarity of argument and integration of different components of the report
• Overall report presentation including spelling and grammar
• Word processed (letter size 12, times new roman, 1.5 space), fully referenced (Harvard Referencing System)
You are required to follow the University’s regulations regarding plagiarism and citing sources and references used. Assignments may not be submitted late. Marking penalties for late submission will follow the University regulations for PMC and late submission. Lecturers are not able to give extension.
NB:
• Please add the course name and your student identity number to the title page.
• Ensure you put your word count on your title page as well.
• University lateness and plagiarism rules apply.
Please follow a report format. Therefore, you should have a title page, contents page, sections and sub sections, page numbers, appendix section etc. Please note if you are uncertain on how to present and structure a report then visit the university library website or ask for assistance.
Please do use diagrams, illustrations, tables, graphics etc. wherever these are helpful, and remember that these do not count towards your word limit. If you do use these, please do not put them in the appendices if they are part of your discussion. Appendices are the appropriate places to put supporting material, however, remember if the reader is satisfied with the main points of your discussion, the supporting information within the appendices may not even be reviewed.
Please try to use theory explicitly at all stages, but do not spend too much time describing a theory. While you must be explicit about the theories, models, techniques etc. that you use, you can assume that the reader is familiar with them. What the reader requires is evidence of your ability to understand and apply the theory and learn from in order to support the development of your findings and/or ideas.
You must cite all sources on which you have relied, for example textbooks, journal articles, web pages etc. using the Harvard Bibliographic referencing system. If you do not cite all sources, then you may be accused of plagiarism, and that may endanger your success in passing the module. If you are in any doubt about how to reference your work, please obtain guidance from the library and/or your academic librarian(s) for this module.
Assessed intended learning outcomes: Knowledge and Understanding
On successful completion of the module the student will be able to:
- Apply knowledge of the theory and practice of project planning and control and the use of Project Management methods and techniques.
- Critically evaluate the use of techniques in leading, planning, control and process management.
- Demonstrate a sound understanding of the importance of Project Management in the development and maintenance of sustainable and global organisations operating in complex market environments
- Develop knowledge and application of the techniques of estimating, forecasting and resource management
- Critically appraise project outcomes for the purpose of improvement
Assessed intended learning outcomes: Practical, Professional or Subject Specific Skills
- Leads by example - as high levels of self-awareness, emotional and social intelligence, empathy and compassion, and able to identify mental well-being in others. Work collaboratively enabling empowerment and delegation - acts with humility and authenticity, is credible, confident and resilient.
- Judgement and Challenge - Takes personal accountability aligned to clear values. Demonstrates flexibility and willingness to challenge when making decisions and solving problems - instils confidence demonstrating honesty, integrity, openness, and trust.
- Courage & Curiosity - is confident and brave, willing to innovate, seeks new ideas and looks for contingencies. Manages complexity and ambiguity, comfortable in uncertainty, and is pragmatic.
- Valuing Difference - engaging with all, is ethical and demonstrates inclusivity, recognizing diversity, championing, and enabling cultural inclusion. Empowers and motivates to inspire and support others.
- Professional Reflects on own performance, demonstrates professional standards in relation behaviour and ongoing development. Advocates the use of good practice within and outside the organisation.
Assessed intended learning outcomes: Transferable Skills and other Attributes
- Work independently and with others in analysing and presenting solutions to Project Management planning, control and process problems.
- Locate, synthesise and critically evaluate recent/current information from a wide range of published literature in Project Management
- Communicate effectively through a variety of media to different audiences.
- Make decisions in complex and unpredictable situations using tools and techniques appropriate to the module.
- Use terminology associated with the subject area accurately and in a way, which demonstrates sophisticated knowledge and understanding.
Module Aims
• The overall aim of the module is to allow students to explore approaches and methods required to leading and manage complex projects.
• To develop an understanding of the planning, control and other processes utilised in the effective operation of project management
• To appreciate and develop leadership skills for the management of organisational projects and the change and resource processes required for effective project management
Word count
The maximum word count is 3000 words (+/- 10%). Your word count is from the introduction to conclusion sections. Therefore, it does not include title page, contents page, reference section, appendices etc. If the assignment exceeds these limits; the work in excess of 3000 is not marked.
Late submission:
All work submitted late will be capped at the pass mark of 50%, there is no sliding scale.
Feedback arrangements
You can expect to receive feedback
• Two working weeks (excluding University Seasonal Closing) after the submission date.
• Marks and written feedback will be available on the RKC campus
• You will be informed per email about the availability of the feedback
• Please email your RKC tutor should you require specific feedback following the release of your results.
Support arrangements
You can obtain support for this assessment by attending your module lectures, seminars and drop in sessions. The seminars and drop in session provide you with good opportunities to ask questions to provide clarity and direction on the subject and addressing the assessment brief.
You can e-mail the tutor and visit the module forum for the regular updates that can directly support your learning in the subject and in developing your assignment.
askUS
The University offers a range of support services for students through askUS.
Good Academic Conduct and Academic Misconduct
Students are expected to learn and demonstrate skills associated with good academic conduct (academic integrity). Good academic conduct includes the use of clear and correct referencing of source materials. Here is a link to where you can find out more about the skills which students require http://www.salford.ac.uk/skills-for-learning.
Academic Misconduct is an action which may give you an unfair advantage in your academic work. This includes plagiarism, asking someone else to write your assessment for you or taking notes into an exam. The University takes all forms of academic misconduct seriously. You can find out how to avoid academic misconduct here https://www.salford.ac.uk/skills-for-learning.
Assessment Information
If you have any questions about assessment rules, you can find out more here.
Personal Mitigating Circumstances
If personal mitigating circumstances may have affected your ability to complete this assessment, you can find more information about personal mitigating circumstances procedure here.
Personal Tutor/Student Progression Administrator
If you have any concerns about your studies, contact your Personal Tutor or your Student Progression Administrator.
Level 7 undergraduate Generic Grade Descriptors for ‘Knowledge’
• Outstanding - 100-90: Outstanding knowledge. Theory is linked to practice to an exceptional level and may be used to formulate new questions, ideas or challenges.
• Excellent – 80-89: Integrates the complexity of a range of knowledge and excellent understanding of its relevance.
Excellent depth of knowledge in a variety of contexts. Coherent and systematic application of theory to practice• Very Good – 70-79: Comprehensive knowledge demonstrating very good depth and breadth. Clear insight into links between theory and practice. Demonstrates ability to transfer knowledge between different contexts appropriately. Consistently accurate level of knowledge in depth and breath.
• Good – 60-69: Consistently relevant accurate knowledge with good depth and breadth. Clear and relevant application of theory to practice. Good identification of key themes. Good demonstration of depth and breadth of knowledge.
• Fair – 50-59: Mostly accurate knowledge with satisfactory depth and breadth of knowledge. Sound integration of theory and practice with satisfactory identification of key themes. Fair demonstration of depth and breadth of knowledge.
• Adequate – 40-49: Basic knowledge with occasional inaccuracies appropriate yet basic integration of theory and practice. Superficial depth or limited breadth with unsatisfactory identification of key themes. Basic knowledge demonstrated with some inaccuracies.
• Unsatisfactory – 30-39: Limited evidence of knowledge. Inappropriate links between theory and practice.
Inadequate identification of key themes.• Poor – 20-29: Inconsistent or inaccurate knowledge. Limited and inappropriate or inaccurate links between theory and practice. Poor identification of key themes.
• Very Poor – 10-19: Virtually no relevant knowledge demonstrated. Fails to adequately demonstrate links between theory and practice. Very poor identification of key themes.
• Extremely Poor – 1-9: Totally inadequate demonstration of required knowledge. Not able to link theory to practice. No appropriate themes identified.
Criterion / Mark range
90-100
80-89
70-79
60-69
50-59
40-49
0-39
Overall level (indicative – not for grading)
Standard comparable to journal publication
Standard comparable to conference paper publication
Distinctive work for Masters level
Merit work for Masters level
Acceptable for Masters
Below Masters pass standard
Significantly below Masters pass standard
Scope
Outstanding clarity of focus, includes what is important, and excludes irrelevant issues.
Excellent clarity of focus, boundaries set with no significant omissions or unnecessary issues.
Clear focus. Very good setting of boundaries, includes most of what is relevant.
Clear scope and focus, with some omissions or unnecessary issues.
Scope evident and satisfactory but with some omissions and unnecessary issues.
Poorly scoped, with significant omissions and unnecessary issues.
Little or no scope or focus evident.
Understanding of subject matter
Outstanding with critical awareness of relevance of issues. Outstanding expression of ideas.
Excellent with critical awareness of relevance of issues. Excellent expression of ideas.
Very good with critical awareness of relevance of issues. Outstanding expression of ideas.
Good with some awareness of relevance of issues. Ideas are expressed, with some limitation.
Basic with limited awareness of relevance of issues. Limited expression of ideas.
Poor with little awareness of relevance of issues
Little or no understanding of subject matter is demonstrated.
Literature
Comprehensive literature review. Evaluation and synthesis of source material to produce an outstanding contribution.
Excellent independent secondary research. Sources are evaluated and synthesized to produce an excellent contribution.
Very good independent secondary research. Sources are evaluated and synthesized to produce a very good contribution.
Good secondary research to extend taught materials. Evidence of evaluation of sources, with some deficiencies in choice and synthesis.
Limited secondary research to extend taught materials. Limited evaluation of sources, deficiencies in choice and synthesis.
Little or no extension of taught materials. Poor choice and synthesis of materials.
Poor use of taught materials. No synthesis.
Critical analysis based on evidence
Standard of critical analysis – showing questioning of sources, understanding of bias, independence of thought
Excellent standard of critical analysis – excellence in questioning of sources, understanding of bias, independence of thought
A very good standard of critical analysis. Sources are questioned appropriately, and a very good understanding of bias, showing independence of thought
Critical analysis with some questioning of sources, understanding of bias, independence of thought.
Analysis evident but uncritical. Sources are not always questioned, with limited independence of thought.
Little or no analysis.
No valid analysis.
Structure of argument, leading to conclusion
Well structured, compelling and persuasive argument that leads to a valuable contribution to the field of study, paving the way for future work.
Argument has excellent structure and persuasiveness, leading to very significant insights and relevant future work.
Well-structured and persuasive argument Insightful conclusion draws together key issues and possible future work.
Structured and fairly convincing argument leads to conclusion that summarises key issues.
Argument has some structure and development towards conclusion with limitations in summary of issues.
Argument is unstructured, no recognizable conclusion.
No evidence of argument or conclusion.
In Year Retrieval Scheme
Your assessment is not eligible for in year retrieval.
Reassessment
If you fail your assessment, and are eligible for reassessment, you will need to resubmit in a date that will be notified to you. For students with accepted personal mitigating circumstances, this will be your replacement assessment attempt. Students should be aware that there is no late submission period at reassessment (this includes those students who have an accepted PMC request from a previous attempt). If a student needs to be reassessed, s/he will be given a new assignment brief with a deadline, which will be provided by the School.
ANSWER
The Impact of Risk Management Practices on Project Success: Case of New Yang Sin Hotel Project
The ultimate goal of the New Yang Sin project paper is to review the shortcomings of its predecessor, the Old Yang Sin project and to present a new business case as a necessary intervention to guarantee success of the new project. Subsequently, the focus of the discussion shifts to various risk management practices and how they would have prevented the collapse of the previous project. Additionally, a business case for the new project is presented. The result is intended to facilitate an awareness of risk management practices and to buttress their significance to the success of modern projects. Consequently, this paper seeks to cover the foregoing areas through focused discussion of some aspects of the new project, namely, financial and nonfinancial performance indicators, analysis of pertinent stakeholders, promotional activities and communications, budgetary requirements, feasibility, and recommendations.
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| Subject | Business | Pages | 10 | Style | APA |
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Answer
Table of Contents
5.1 Degree of Impact on Stakeholders 8
5.2 Stakeholder Expectations 8
5.3 Impact on Stakeholder Group 8
5.4 The Degree and Type of Support 9
6.0 Activities to be carried out 9
8.0 Resources and Budgetary Requirements 13
9.0 Analysis and Feasibility 13
11.0 Recommendations and Possible Success and Failure Factors 14
The concept of risk and risk analysis has matured over 2400-year period to become an integral part of project decision making processes (Aven 1). Over this period, principles and methods of project risk analysis are believed to have been refined and are widely credited with impacting it in formulation, evaluation, and management. Indeed, scrutiny of literature by Wang identifies a variety of “economic risks” responsible for collapse of contemporary projects, namely, “static risks, dynamic risks, pure risks, speculative risks, controllable risks, and uncontrollable risks” (205). In the context of the Yang Sin Hotel project, it can be inferred that typical risk management maladies as encased in losses from cost overruns and failure to delineate risk could potentially compromise the project outlook. Further, risks have been traced to failure to satisfy safety laws and regulations (Wang 205). Consequently, scrutiny of extant literature affirms a positive correlation between project failure and poor risk management practices and presents the latter as consequential to the success of the New Yang Sin Hotel project.
Constraints and risks will be deduced from review of underlying reasons for failure of the Old Yang Sing Hotel in the first place. Crucially, discussions of how project management techniques could have prevented these risks are also explored. Risk as an enduring part of projects continues to define the trajectory of modern business. In this regard, particularly in contemporary market-based economies, this trend headlines a desire by firms to alleviate risks (Rakhmetulina and Omurzakov 201; Taherdoost and Abolfazl Keshavarzsaleh 1066-1075). Review of the Old Yang Sin Hotel reveals a number of risks, some of which could have been responsible for its collapse. For instance, risks arising from fire, burglary, theft, food poisoning, and epidemiological threats abound. Incidentally, the preceding risks are referred to as “static risks, dynamic risks, pure risks, speculative risks, controllable risks, and uncontrollable risks” as already pointed out (Wang, 205). In the case of the Old Yang Sin Hotel, a number of incidents involving food poisoning, and burglary featured prominently in the months preceding its collapse. These incidents were interspersed with a fire incident. Since these risks directly affect customers, it is imperative that the new establishment, in this case the New Yang Sin Hotel, should avoid falling into these pitfalls (Rakhmetulina and Omurzakov 201). Avoidance of risks, such as fire are thus necessary and should be preceded by replacement of defective electrical equipment, cabling, and strict adherence to fire and electrical safety regulations. Perhaps even more disconcerting were allegations of epidemiological risks emanating from “infectious diseases” (Rakhmetulina 205 and Omurzakov 201; Taherdoost and Abolfazl Keshavarzsaleh 1066-1075). While we're on the subject, these threats appear to correlate positively with high traffic of people into and out of hotels in general. In the same way, the reported risks of poisoning have been traced to nonconformity to edicts regarding timing of storage and sale of products that do not meet preset standards of “quality and safety”. While it is sensible from the risk management perspective to concede that risks are impossible to completely eradicate, it is prudent to suggest that hotels should make risk reduction a top priority. From the risk reduction perspective, the focus of the new outfit should be to gain control of the supply chain, and the sale and preparation of food. Accordingly, Rakhmetulina and Omurzakov presents these risks in addition to others which can be effectively ameliorated via technical interventions of project management (201). The prevention measures are presented in table 1 below:
Table 1:
How Project management could have prevented these risks (Source: Rakhmetulina and Omurzakov 2015).
|
Name of Risk |
Type of negative effect |
Likelihood of occurrence |
Ways to minimize |
|
Entrepreneurial Risk |
Interruptions arising from downtime |
High |
Business planning, evaluation of financial reporting documents, fidelity to contractual engagements, and maintaining a favorable credit rating. |
|
Investment Risks |
Decrease in returns from dividends |
Medium |
Institution of consistent financial reporting tools, regular evaluation of assets and macro and microeconomic outlooks and potential impact on the business. |
|
Professional Risks |
High employee turnover and uncertainty of tenure, accidents |
Low |
Conformity to occupational safety standards, labor laws, adherence to professional code of ethics, and ratification of human rights charters. |
|
Risk of fire hazard |
Fire outbreaks within the hotel’s precincts. |
Medium |
Implementation of fire safety standards, installation of modern and effective firefighting equipment and warning systems, insurance. |
|
Epidemiological risks |
Epidemics |
Medium |
Execution of professional recommendations by public health experts. These should include access to appropriate services such as sanitary and anti-epidemiological interventions and quarantine when necessary. |
|
Theft and Burglary risk |
Pilferage and burglary Risks |
Medium |
Deployment of appropriate hotel security service |
|
Risk of poisoning |
Poisoning from poor storage and timing. |
Medium |
Procurement from trustworthy and authentic sources, proper handling and technological processing of products. |
The main goal of this project was to relaunch Old Yang Sing hotel afresh and to put it back to profitability. However, the project has other critical objectives which include:
- Increasing access to high quality, budget F&B and accommodation services for travellers and local customers
- To improve the Hotel’s ROI, ROE, and ROA from negative values to positive.
A study by Pnevmatikoudi and Stavrinoudis delineates two broad categories of performance measurement, namely, financial indicators and non-financial indicators (11). The preceding indicators are the basis upon which 10 financial performance indicators are obtained. A similar number of non-financial performance measurements can also be demarcated from literature.
Financial measures of performance for the hotel include 10 measurements as shown in table 2 below:
Table 2
Financial Performance Measurements on the New Yang Sin Project (Canha 52)
|
|
|
Financial Measurement |
|
1 |
Sales/ revenue |
Sales related parameters include: Total revenue per available room (TREVPAR), F&B revenue, Room sales, Total revenues, Average daily rate (ADR), Revenue per bed-night, Extra income per room, and Restaurant, F&B revenue per occupied room |
|
2 |
Profitability |
Gross operating profit per available room (GOPPAR), Profit, Total gross operating profits (ΤGOP), and Gross production margin. |
|
3 |
Return on Invested Capital |
Return on assets (ROA), Return on investment (ROI), Return on equity (ROE), and Return on sales (ROS) |
|
4 |
Hotel Occupancy |
Room occupancy rate, Bed occupancy rate, and Number of reservations |
|
5 |
Cost/ Expenses |
Total operating costs, Cost for F&B, Cost for rooms, other administrative expenses, remunerations, percentage labor cost percentage, and Personnel cost ratio. |
|
6 |
Growth |
Sales/revenue growth, Gain/growth in market share, Wealth creation, Growth in international sales |
|
7 |
Productivity/ Utilization |
Personnel productivity, Level of Productivity, and Total asset turnover (ΤΑΤ). |
|
8 |
Composite indicators |
Overall financial performance score, Malmquist index |
|
9 |
Financial Liquidity and Soundness |
Financial liquidity, punctuality in payment of suppliers, duration of payments, overall financial health of the hotel.
|
|
10 |
Financial Market |
Stock return (SR) & Price earnings ratio (PER), Stock performance, Profit ratio distributed to the shareholders |
Similarly, 10 parameters are considered under the nonfinancial indicators (Pnevmatikoudi and Stavrinoudis 14-15). The performance measurements are shown in table 3 below:
Table 3: Nonfinancial performance measurements of New Yang Sing (Canha 52)
|
|
|
Non-financial Measurement |
|
1 |
Customer satisfaction |
Consumer satisfaction, Customer retention, number of complaints, Customer loyalty, Customer relationship management, Duration of stay, Guest evaluations of benefits gained. |
|
2 |
Employee satisfaction |
Employee turnover, Employee satisfaction, Motivational level, Employee complaints, and Personnel remuneration & rewards |
|
3 |
Employee Job Performance |
Employee expertise, Number of gaming mistakes if any, Number of casino games, Level of experience. |
|
4 |
Continuous Improvement |
Number of new products, Number of innovations performed during the service production process, Number of product & services innovated per year |
|
5 |
Service Quality |
Quality of service to customers, and level of standardization of services. |
|
6 |
Social Responsibility |
Reviews from past customers, responsiveness to social issues, proportion of societal causes undertaken, corporate sponsorships, number of environmental conservation programs & projects, Number of environmental projects completed. |
|
7 |
Competitive Position |
Competitive position, Rate of new product launches, new customer increase rate, Hotel credibility. |
|
8 |
Managers Job Performance |
Competence in complaint handling, ability to develop and execute market strategy & monitoring sales programs, efficiency of communication with juniors and seniors, professional capacity to motivating & modifying behavior, policy execution, decision-making, and delegation of duties and responsibility. Others are capability to control operations, maintenance of quality, planning, Coordinating, Evaluating, Supervising, Staffing, Negotiating, and Representing. |
|
9 |
Flexibility |
Adaptation to customer needs timely response to customer needs, timely delivery of customer’s orders. |
|
10 |
Organizational achievement |
Percentage of targets met at the end of review period, the hotel’s market share in comparison to competitors, and degree of achievement of desired occupancy rates. |
A study by Nguyen, Mohamed and Panuwatwanich delineates stakeholder management (SM) as a critical component of project performance in complex projects (75). Indeed, similar studies have associated project complexity with differences in stakeholder interests and the intricacies of their interactions (Nguyen, Mohamed and Panuwatwanich 75). Drawing from reviews of three hotels, namely, Oceanside Hotel, Taiwan Hotel and Lisbon Journey Hotel, it can be inferred that the New Yang Sin hotel will have fundamentally similar stakeholders (Wang 205-208; Leung 1-14; Nguyen, Mohamed and Panuwatwanich 75). Accordingly, 5 stakeholders, who could potentially have the greatest impact on the project are considered, namely, competitors, suppliers, customers, owners, regulators, and tour operators. It has been suggested in various literatures that the success of the project will depend on the strength of the connection of individual stakeholders to the New Yang Sin hotel project:
5.1 Degree of Impact on Stakeholders
The extent of control that the new hotel project could exert on the stakeholder group is defined as high impact, medium impact and low impact. While it is expected that stakeholders will influence project outcomes, it is also expected that the project will exert some influence on stakeholders as well. However, impacts on competitors could be high among hotels of similar standard due to potential rise in concentration ratio of the industry. Suppliers are expected from increased demand for their products and services.
Stakeholder prospects with regard to the project could be represented as the manner in which the particular stakeholder relates with the project. In principle, every stakeholder could espouse certain attitudes which may be considered as negative, positive, or ambivalent to the objectives of the project. Based on this criterion, the expectations of stakeholders are expected to be negative for competitors, and between moderate to high for competitors, customers, and tour operators. The impact on suppliers and regulators is expected to be high and low respectively.
5.3 Impact on Stakeholder Group
Probable outcomes of the interaction between a particular stakeholder and the course of the implementation and “post-implementation” stages are necessary from the risk management point of view. This possibility could be inferred from the basic definition of stakeholder as an entity whose involvement in a project influences its outcome. By the same token, there is concurrence among several authors that stakeholder actions or inactions tend to impact on the project to varying degrees. Accordingly, Nguyen, Mohamed, and Panuwatwanich emphasize the level of involvement to distinguish stakeholders from participants (12). Thus, the scope of impact remains the single most important criterion for differentiating stakeholders from participants. Whereas impacts of stakeholders on projects have been studied from antiquity, participants generally exert little or no influence on the project. Yet, they remain interested parties to the project. Turing to the New Yang Sin project, it is likely that it will likely exert a moderate to high impact on the competitors. It is also probable that the new project will impact both tour operators and customers moderately. However, the impact on government regulators is projected to be low.
5.4 The Degree and Type of Support
The scope and nature of support needed by the New Yang Sin Hotel from various stakeholders is determined by the latter’s capacity to extend financial support, and budgetary support as may be needed from time to time. For instance, personnel resources will most likely be needed from the general public. Similarly, the project may benefit from certain incentives by government regulators. Suppliers may be pivotal in facilitating credit purchases to the project implementers. However, it is apparent that customers, competitors, regulators, and tour operators may not have the drive to extend support.
A summary of stakeholder analysis of the New Yang Sin Hotel Project is provided in table 4 below:
Table 4: stakeholder analysis of the New Yang Sin Hotel Project (Source: Canha 53)
|
Stakeholder Type |
competitors |
Suppliers |
Customers |
Regulators |
Tour operators |
|
Archetypal Groups |
Hotel chains, Single Unit Hotels, Guest houses, and Lodges |
Supermarket stores, Internet service providers, creditors |
Corporate clients and walk in customers |
Government agencies, licensing departments , standards organizations, |
Local taxi owners body, individual taxi owners |
|
Scope of impact of stakeholder |
Moderate to High impact |
High |
Moderate |
Low impact |
Moderate |
|
Stakeholder expectation |
Negative |
Negative -Indecisive |
Ambivalent |
Moderate |
Medium |
|
Degree of support |
Low |
Medium to Low |
Medium |
Low |
Low |
|
Type of support |
None |
Moderate to Low |
None |
None |
None |
6.0 Activities to be carried out
Activities undertaken at this point will involve prelaunch preparations and will be undertaken in three phases. The first phase will last for 6 months and will involve acquisition of an operating license, interior finishing, and light construction works. The second phase will involve further interior design, and installation of communication equipment for an additional 6 months. The third phase will involve final decoration, procurement of furniture, and landscaping for another 2 months. The second batch of activities will commence upon certification that the building is ready for occupation. The hotel management will initiate contracts with online travel agencies (OTAs) and other travel agents in a process to be concluded in 6 months. Promotional and publicity materials will be produced for mass proliferation. Afterwards, the hotel will ratify agreements with event organizers, during which final decoration will be done culminating in an official launch 6 months later. Finally, mass recruitment and head hunting of suitably qualified individuals, site inspections, team building and official launch will follow in that order. Accordingly, the New Yang Sin Hotel should be operational by the middle of the third year.
The proposed project plan and important timelines are tabulated in table 5 below:
Table 5: Proposed Project Plan
Source’ Own creation
|
|
Year 1 |
Year 2 |
Year 3 |
|||||||||||||||||
|
Operating license |
|
|
|
|
||||||||||||||||
|
Interior finishing |
|
|
|
|
|
|||||||||||||||
|
Light construction |
|
|
|
|
|
|
||||||||||||||
|
Interior design |
|
|
|
|
|
|||||||||||||||
|
Installation of Comm. equipment |
|
|
|
|
|
|||||||||||||||
|
OTAs |
|
|
|
|
||||||||||||||||
|
Publicity |
|
|
|
|
|
|||||||||||||||
|
Site inspection |
|
|
|
|
|
|||||||||||||||
|
Mass recruitment |
|
|
|
|
|
|
||||||||||||||
|
Team Building |
|
|
|
|
||||||||||||||||
|
Official launch |
|
|
|
|
||||||||||||||||
To present the hotel’s value proposition to prospective customers and other stakeholders, the management intends to deploy both “above the line” and “below the line” communication strategies. The former will be actualized by crafting a robust publicity campaign in traditional and social media. To achieve this, the hotel will leverage on high speed as a means of securing “immediate, simple, customizable, and accessible” contact to potential customers (Canha 51). On the other hand, below the line, promotional activities will be attained at the public relations level. Moreover, communication at this level will be attained through “direct and relationship marketing”. The hotel intends to use tailored email services and electronic newsletters developed in accordance to customers’ needs. These are also intended to enable the hotel to internalize and delineate customer needs for purposes of improving products and services.
Table 6: Conventional Communication strategies (Source: Canha 52)
|
|
Main Goals |
Expected Benefits |
|
Business card
This will facilitate introduction of the hotel’s brand image and logo to the public. It is also intended to communicate the hotel’s values and concept. |
To disseminate the hotel’s contact details |
Increases visibility of the Hotel |
|
Press Release
This intended to notify stakeholders of the hotel’s opening. |
To communicate services and activities of the hotel. |
To invite the media to advertise the hotel |
Table 7: Non-conventional Communication strategies (Source: Canha 52)
|
Internet Actions |
Main Goals |
Benefits |
|
Own Website:
A cost-effective, interactive, and effective platform of engagement for stakeholders to engage with the hotel and among themselves. Customers can also use it to make bookings.
Travel Websites
Travel websites such as “Trip Adviser” could be effective for disseminating content on vacation planning and safety. It also presents prospective travelers with the opportunity to find bargains and professional consultancy on travels.
Social Media
The company will create its own pages on Facebook, tweeter, and other social media platforms to engender a large and vibrant following. This is also intended to facilitate referrals from friends and acquaintances.
Online Distribution Platforms
The hotel aims at registering with online distribution channels such as Booking.com, Expedia, Hotelbeds, Transhotel, among others. The preceding sites have proved effective for facilitating comparison and juxtaposing of the hotel’s services and similar services.
Email Marketing
This is intended to reach prospective and repeat clients directly through their personal accounts. It will also facilitate targeted ads and promotional materials for customers. |
To establish the hotel’s online presence
To increase the hotel’s marketing channel. |
The hotel maintains control over key functions such as information flow, pricing, reservations, and payment process.
Provides immediate feedback |
|
To market the hotel online
To obtain feedback and sentiments from customers
|
The firm can benefit from free advertising
Can be a starting point for “word of mouth” publicity.
|
|
|
To advertise the hotel’s services
To advertise the hotel through online |
Presents the hotel as a key player in the Hotel industry
Helps to curve a niche for the Hotel. |
|
|
To proliferate information on the Hotel’s services among loyal customers.
To encourage repeat purchases
To encourage customer loyalty trough continuous campaigns |
Facilitates in depth segmentation and profiling of customers
Helps to bringing in and locking customers
Helps to create a “target pool” for the Hotel. |
8.0 Resources and Budgetary Requirements
The start of the project was marked by the acquisition of the Old Yang Sin Hotel building. Nevertheless, significant investment is still necessary and will be made through landscaping, changes to the interior, installation of communication equipment, as shown in the project plan in table 4. Accordingly, indicative cost of renovation of a modest 3 star hotel with a total floor space of 10,000 m2 is estimated at €180.000- €200,000 (Canha 68). Consequently, owing to the huge capital outlay, it may be necessary to seek funding form an established institution. \
To determine feasibility, key financial indicators can be determined from revenue projections as tabulated in table 8 below:
Table 8: Analysis and Feasibility (source: Canha 69)
|
|
YEAR 1 |
YEAR 2 |
YEAR 3 |
|
Working Capital |
€1,117,046.09 |
€1,297,344.98 |
€1,454, 824.71 |
|
Operating Capital |
€1,115,496.09 |
€1,298,794.98 |
€1, 456,274.71 |
|
|
|
|
|
|
Current Ratio |
5.83 |
5.94 |
6.04 |
|
Quick Ratio |
5.09 |
5.26 |
5.40 |
|
Cash ratio |
4.85 |
5.05 |
5.20 |
|
|
|
|
|
|
Receivable turnover |
38.55 |
0.74 |
4.19 |
|
Payables Turnover |
4.00 |
4.26 |
|
|
|
|
|
|
|
Fixed Assets Turnover |
0.62 |
0.74 |
0.80 |
|
|
|
|
|
|
Total Assets Turnover |
0.35% |
0.39 |
0.41 |
|
|
|
|
|
|
Profit margin |
17.06% |
71.27% |
71.70% |
|
ROE |
6.51% |
30.49% |
32.26% |
|
ROA |
-6.99% |
38.45% |
40.48% |
|
|
|
|
|
The projections above seem to emphasize the significance of stakeholder analysis, particularly the suppliers and clients whose contribution to the hotel will typically involve timely supply of goods and dis expected to drive sales to astronomical levels. High sales tend to return high ROI, ROE, and ROA values.
The foregoing findings have emphasized the importance of sound risk management practices to project management. Specifically, positive forecasts of the ROA, ROE, ROS values from the analysis and feasibility have proved that the New Yang Sin Hotel’s objective of increasing access to high quality, budget F&B and accommodation services for travelers is well on course.
11.0 Recommendations and Possible Success and Failure Factors
Cursory review of the risks that resulted in the collapse of the old Yang Sin project reveals inadequacy at the operational level of the project as the principal cause of failure. As a result, it is recommended that most of the risks be addressed through appointment of a competent project manager to handle interpersonal, technical, and administrative aspects of the project. However, the project leaders may not be sufficient in and of themselves. They will need the unequivocal support of the entire management, and a loyal horde of competent project team members. However, the intended benefits could be rendered ineffectual if sufficient resources are not appropriated in accordance to current and projected future needs. Necessary resources will typically involve money, personnel, and logistical support.
References
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Canha, Nuno Miguel Lira. Business plan of a three-star hotel in the city of Lisbon “Lisbon Journey hotel”. Diss. 2015.
Leung, Rosanna. "Smart hospitality: Taiwan hotel stakeholder perspectives." Tourism Review (2019).
Nguyen, Tuan S., Sherif Mohamed, and K. Panuwatwanich. "Stakeholder Management in Complex Project: Review of Contemporary Literature." Journal of Engineering, Project & Production Management 8.2 (2018).
Pnevmatikoudi, Kyriaki, and Theodoros Stavrinoudis. "Classification of hotel performance measurement indicators presented in international scientific research." European Journal of Tourism Research 12 (2016): 82-98.
Rakhmetulina, Zhb, and А. Omurzakov. "Risks in the Hotel Business and Ways To Reduce Them." (2018): 199-203.
Taherdoost, Hamed, and Abolfazl Keshavarzsaleh. "Critical Factors that Lead to Projects’ Success/Failure in Global Marketplace." Procedia Technology 22 (2016): 1066-1075.
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