LOWDOWN FOR STUDENTS #hotelNEXT 2018

Deadline for submissions:
APRIL 3, 2017 at 11:59pm EST

University Students

hotelNext doodle

The Lowdown for Students

Imagine this…

You are checking into a hotel and notice that the front desk and lobby are quite outdated.
You head to your room and are disappointed to see that it isn’t much better.

Although the hotel is in average condition, it is clearly showing evidence of wear and tear.
You think to yourself, this hotel could use a facelift!

It’s time for a hotel makeover…

Undergoing a hotel renovation is serious business! Big decisions are made not only with the design, cost of materials, labour and time schedule but also guest disruption- is it possible to keep the hotel open while it’s under construction?  The hotel must continue to provide invaluable operational support to maintain their high level of commitment to their brands and guests.

Here’s where you come in…

If you were the hotel owner of an under-performing hotel, that needs a renovation, what would you do? How would you re-position the hotel? What innovative features would you include? What kind of operational changes would you make? How will your ideas improve the hotel’s performance?  How will you make a return on investment? To get started, read the case competition, choose a market, review the operating history, make renovation recommendations and present a capital plan in 25 pages.

The Canadian hotel industry wants to hear from YOU.

This once-in-a-lifetime opportunity is a chance to share your design ideas with the Canadian Hotel Investment industry! The top three Teams will be flown out to Toronto, all expenses paid, to the Canadian Hotel Investment Conference. You and your Team could compete *on stage* with the exclusive chance to WOW a panel of Canadian hotel investors and owners with your #hotelNEXT redesign!

1ST PRIZE = $5,000!
2ND PRIZE = $3,000!
3RD PRIZE = $2,000!


HERE’S THE CASE!

This year’s challenge focuses on an under-performing hotel and its renovation potential.

The hotel is hypothetical and its operating history appears below.

Using the case study approach each Team will choose one of the following Canadian markets:

  • British Columbia
  • Alberta
  • Ontario
  • Nova Scotia

Once a market is chosen, the Team must make recommendations as to how they would improve the hotel’s performance and increase the ROI to the owner.

MARKET & THE SUBJECT PROPERTY:

  • The market is a mid-sized city and the local economy is strong.
  • Hotel was built in 1980 and is in need of a renovation. The hotel is in average condition but showing evidence of wear and tear.
  • 2-storey hotel with 100 rooms (average room size is 300 sq. ft.)
  • ±750 sq. ft. for the lobby/breakfast room
  • ±1,000 sq. ft. of meeting space
  • There is wifi, a business station, a fitness facility, and a typical complement of back-of-the-house facilities
  • A select-service hotel, operating under an internationally-recognized economy brand.
  • The hotel was acquired for $8 million in 2016 and previous ownership had invested $1 million in capital improvements in the prior 2 years – most of which was spent on building structure and mechanical issues.

THE COMPETITIVE HOTEL MARKET

  • Comprises 7 hotels built between 1980 and 2005 and totaling 1,000 rooms.
  • All competitive hotels are branded and are a combination of limited and select-service properties.
  • All are in good condition having undergone significant renovations within the last two years.
  • All competitors (and subject hotel) are located beside major highways into the city with no clear locational advantage for any hotel.
    • Competitive Hotel 1: This hotel was built in 1999 and has 180 rooms (average room size is 280 sq. ft.).
      There is ±2,000 sq. ft. of meeting space, a fitness room, indoor pool, wifi, and a complimentary hot breakfast.
    • Competitive Hotel 2: This hotel was built in 1980 and has 140 rooms (average room size is 300 sq. ft.).
      There is ±1,250 sq. ft. of meeting space, a fitness room, wifi, and a complimentary continental breakfast.
    • Competitive Hotel 3This hotel was built in 2001 and has 140 rooms (average room size is 300 sq. ft.).
      There is ±800 sq. ft. of meeting space, a fitness room, wifi, and a complimentary continental breakfast.
    • Competitive Hotel 4: This hotel was built in 2005 and has 115 rooms (average room size is 325 sq. ft.).
      There is ±1,500 sq. ft. of meeting space, a fitness room, indoor pool, wifi, and a complimentary hot breakfast.
    • Competitive Hotel 5: This hotel was built in 1988 and has 138 rooms (average room size is 290 sq. ft.).
      There is  ±750 sq. ft. of meeting space, a fitness room, outdoor pool, wifi, and a complimentary continental breakfast.
    • Competitive Hotel 6: This hotel was built in 2003 and has 145 rooms (average room size is 300 sq. ft.).
      There is ±1,000 sq. ft. of meeting space, fitness room, indoor pool,  wifi, and a complimentary hot breakfast.
    • Competitive Hotel 7: This hotel was built in 2005 and has 142 rooms (average room size is 325 sq. ft.).
      There is ±600 sq. ft. of meeting space, a fitness room, indoor pool, wifi, and a complimentary hot breakfast.

 

 

SUBJECT HOTEL’S FINANCIAL OPERATING RESULTS

The following shows the subject hotel’s financial operating results in the last two years. Food & Beverage revenues declined in 2016 as a result of changing from a paid to complimentary hot breakfast for overnight guests, as well as a decline in meeting room use.

*PAR (Per Available Room): A measure of either revenues or expenses calculated by dividing the absolute amount of the revenue or expense line item by the total number of guest rooms in the hotel.

*POR (Per Occupied Room): A measure of either revenues or expenses calculated by dividing the absolute amount of the revenue or expense line item by the number of occupied rooms in a given period (i.e. per year)


HERE’S THE FUN PART! TEAMS WILL BE REQUIRED TO:

Read the case study above.

Your presentation will include:

  • MARKET & POSITIONING
    • Will you re-brand the hotel? Create a new concept? Keep the same brand?
    • How would you market the re-positioned hotel?
    • What role does your hotel play in the competitive market?
  • INNOVATION
    • What physical hotel changes will you recommend to the hotel owner?
    • What innovative features would you include in the hotel guest rooms, lobby, meeting space and overall property?
      What green initiatives have you recommended?
    • Suggest tech-savvy improvements that would make the customers experience more enjoyable.
  • OPERATIONS
    • What operational recommendations will you communicate to the hotel owner?
    • Describe any operational changes and what those changes will achieve.
    • What amazing services will your hotel offer?
    • Provide an estimated timeline for your renovation program.
    • Demonstrate that the changes will have a positive impact on the hotel’s market share and financial performance.
  • FINANCIALS
    • Demonstrate the financial implications of the capital plan – how much will it cost? What is the impact on the hotel’s financial performance? What is the return on investment to the owner?
    • Estimate the capital costs associated with any suggested physical changes. To be clear, the entire hotel needs cosmetic improvements – guest rooms and corridors, lobby, meeting rooms, restaurant etc. You will be expected to discuss the renovations in order to illustrate the extent of changes in the hotel, and to estimate the capital costs.
    • Support the recommendations with detailed analyses, cost/benefit analyses etc. The team must provide enough information to show what the outcome of this renovation program will achieve – i.e. improved occupancy penetration, higher ADR, improved operating efficiency etc.
  • MOST IMPORTANT
    • Contact a mentor – this is required! Reach out to one of our mentors to discuss your project and ideas. The intent here is to put students in direct contact with the industry for further learning and connection