hosp1
For this assignment, imagine that you are the housekeeping manager for the Xavier Hotel. You are responsible for submitting the annual budget for the department.
For this assignment, you will calculate the hotel’s total annual revenue and then calculate the housekeeping department’s operating expenses for the next fiscal year.
For questions involving calculations, you are not required to show your work.
1.The sales manager has just completed the revised forecast and reports that the hotel’s predicted occupancy for the next fiscal year will be 72%. The Xavier Hotel has 400 rooms, with the average daily rate (ADR) forecasted to be about $157.50 per night.
Your first step is to use this information to calculate the hotel’s total annual revenue.
Follow these steps to work through this calculation:
• Number of guestrooms × Occupancy = Number of guestrooms occupied per day
• Number of occupied guestrooms per day × 365 days = Number of guestrooms occupied per year
• Number of guestrooms occupied per year × ADR = Total annual revenue
2.Your next step is to calculate the operating expenses for the housekeeping department. The total annual revenue serves as a baseline for calculating the hotel’s expenses. Expenses are budgeted based on a percentage of the total annual revenue.
Payroll and related expenses account for 17.8% of the total annual revenue. How much money (in dollars) should be budgeted for payroll and related expenses?
Follow these steps to work through this calculation:
• Total annual revenue × 17.8 ÷ 100 = Budget for payroll and related expenses
3.Linen accounts for 3.75% of the total annual revenue. How much money (in dollars) should be budgeted for linen?
Follow these steps to work through this calculation:
• Total annual revenue × 3.75 ÷ 100 = Budget for linen
4.Laundry accounts for 1.22% of the total annual revenue. How much money (in dollars) should be budgeted for laundry?
Follow these steps to work through this calculation:
• Total annual revenue × 1.22 ÷ 100 = Budget for laundry
5.Contract services account for 0.7% of the total annual revenue. How much money (in dollars) should be budgeted for contract services?
Follow these steps to work through this calculation:
• Total annual revenue × 0.7 ÷ 100 = Budget for contract services
6.
Operating supplies account for 1.42% of the total annual revenue. How much money (in dollars) should be budgeted for operating supplies?
Follow these steps to work through this calculation:
• Total annual revenue × 1.42 ÷ 100 = Budget for operating supplies
7.Your next step is to calculate the total operating expenses for the housekeeping department.
Follow these steps to work through this calculation:
• Budget for payroll and related expenses + budget for linen + budget for laundry + budget for contract services + budget for operating supplies = Total operating expenses for housekeeping department
8.imagine your budget for payroll and related expenses is fixed at $2,950,000 for the year. You learn from the hotel’s sales manager that the ADR has dropped to $138. What percentage of the hotel’s total annual revenue is now taken up by your department’s payroll and related expenses?
Follow these steps to work through this calculation:
• Number of guestrooms occupied per year × ADR = Total annual revenue
• $2,950,000 ÷ Total annual revenue = Percentage of the hotel’s total annual revenue taken up by payroll and related expenses
9.If the hotel’s ADR dropped—and the total annual revenue dropped with it—what changes to the housekeeping department’s schedule would you suggest to reduce your payroll and related expenses in the short-term?
