Event Venue Management
Answer ALL questions
1. The 200–room Hotel PoshPlace is soon to open in Perth, Australia. It is projected that the hotel will be financed with a loan of $6,000,000 at 12 per cent annual interest, and the owners will invest $2,000,000. The owners will be seeking a 15 per cent annual return on their investment. The hotel will be open 365 days per year, and it is expected that it will achieve a 70 per cent average occupancy. Hotel profits will be taxed at the rate of 40 per cent.
Hotel fixed costs are expected to be:
Insurance $180,000
Depreciation $200,000
Administration $150,000
Information Systems $100,000
Human Resources $ 50,000
Marketing Expenses $140,000
Property Maintenance $200,000
It is estimated that the hotel’s food and beverage department will generate an
annual profit of $150,000 and that variable room cleaning costs will be $12 per
room night sold.
Required:
Calculate the minimum average room rate that PoshPlace will need to charge in
order to provide the hotel’s owners with the 15 per cent return on their investments that they are seeking. For full marks, you must show your workings out, not just the end answer.
2. The Intercontinental London has a total of 250 rooms. The budgeted occupancy
for the month of March 2022 was 80% and the actual occupancy was 92%.
The actual labour expense of £49 569 exceeded the budget by £10509, and the
budgeted room attendant hours of 3100 increased to 3813. Simone Smith, the
executive housekeeper, has difficulty in reporting on the total labour variance
of £10509 for the month of March 2022.
a) Can you assist Simone in calculating the labour volume, efficiency and compound variances that resulted in the total labour variance of £10509?
For full marks, you must show your workings out, not just the end answer.
b) Given your calculations, can you interpret and explain the likely
circumstances that led to the total labour variance experienced by Simone?
3. Many event venues primarily serve B2B market segments, rather than B2C market segments. Detail and describe the three key B2B market segments for event venues and then explain both the online and offline sales and marketing strategies that venues can adopt to reach these audiences. Channel choice and information content should be included in your response, linked to the academic and industry literature. Distinguish between proactive and reactive sales and marketing activities as part of your answer.Indicate citations used to support your answer.
4. How does the consideration of core and non–core activities matter in decision making in companies about outsourcing? Consider the possible implications for venues where commercial events teams generate secondary revenues streams (are part of non–core activities), e.g., Academic Venues, Unusual Venues.
Indicate citations used to support your answer.
5. While one of the true benefits of outsourcing is the transfer of responsibility to an
outside expert who is well equipped to handle the task, clients must put systems in
place to ensure their own satisfaction with the service (contract management). What
are some of the guidelines we can follow for measurement and evaluation? Provide
illustrative examples from venue–related management contracts, e.g. contract
catering, to underpin your answer.
Indicate citations used to support your answer.
6. Characterise and explain the difference between cost orientation and market
orientation in food and beverage operations. Use illustrative examples of each
type of food and beverage operation.
Indicate citations used to support your answer.
