Information from the spreadsheet was analyses and solutions to problems were given. Key findings such as the revenue and profits were reviewed. Mistakes were also made on the spreadsheets given that have already been remedied. In conclusion, this business report analyses all the data given and there was an attempt to solve the problems identified. Body Why create the spreadsheet? The purpose of creating the spreadsheet is to allow users to analyses raw data more efficiently. It allows the performance of analytical decisions, understand problems, cake decisions and implement solutions.
The spreadsheet can be used to analyses all the information and construct a profit analysis table to analyses how healthy the business is. It also allows the user to view the information in a more organized, formatted and structured way. The spreadsheet allows us to give more informed and accurate information, and from there we can better guide the owners of “Montage Bay Apartments”. The creation of the spreadsheet allowed the owner, Miranda Ho, to process data easily compared to her previous system of manually recording bookings based on when they were received.
The recording of details manually compared to a spreadsheet is far less efficient as higher chances of human error occurring is much higher. Processing of data would be very difficult and time consuming compared to analyzing data on a spreadsheet. Isolated data such as viewing bookings based on dates can also be viewed more accurately and easily due to the functions that excel offers. In comparison, more information can be accessed using a spreadsheet compared to a manual system of recording information.
What the spreadsheet says. The information provided in the given excel had errors in the discount given to customers, the total revenue and the profits collected per apartments. After analyzing and remedying the errors, conclusions were made regarding the business forecast for “Montage Bay Apartments”. The spreadsheet helps us to compress all the raw data provided by the manually recorded bookings which we can use to analyses and then use the information obtained to implement solutions to help improve the business.
From the spreadsheet, it tells us that the least profitable apartment is the One Bedroom apartment which had a total profit of $1,727. It only brought in 6. 84% f the total profits for the year 2011. The most profitable apartment is the One Bedroom Deluxe apartment which brought in a total profit of $10,452. It brought in 41. 39% of the total profits from the year 2011; a significant amount compared to the lowest amount brought in. The profit level for “Montage Bay Apartments” is low for the year 2011 due to a few factors that have negative impacts on the profit.
Factors that affected the low profit are the high overhead, high charges of cleaning, low nightly charges on each apartment and the high discounts that were offered to customers. The charges for ACH apartment can be argued to be significantly low but this could be because charging too high of a price cause customers to find cheaper alternatives and cause even lower profits. The profits of One Bedroom apartments of $4. 73 per day already show the decline of business. The high charges for overheads and cleaning are also major factors for low profits.
Overheads for the year 2011 were $6,500 which is quite high. As a result of the rather high overheads, the profit margin is very low. Another crucial factor is the high discount rates tottered to customers Witt who stayed longer than 6 days. The high discount rates affected the overall profits. However, these discount rates could be the reason existing customers return due to the cheaper rates. The benefits of having a high discount rate compared to a lower discount rate would have to be compared with existing data from previous years to analyses if discount rates have a significant impact on overall profit.
The total revenue for “Montage Bay Apartments” for the year 2011 was $51 ,252. 50. However, due to the factors mentioned above, the profit was reduced to $25,252. 50. Profit is only about 49% of the total revenue, and the imagining 51% were losses such as overheads, discounts, and other charges. Thus, profit level is low. The nightly rate of Montage Bay Apartments ranged from $130-$220. Silos Beach Resorts consist of Costa Sands Resort and Capable Resort. The price for each resort is $1 54 and $180-$220 respectively.
Goldfish Beach Bay Resort consist of Goldfish Beach Resorts, Santa Grand Hotel East Coast and Grand Mercury Rosy Hotel. The price for each resort is $168-$228, $160-$250 and $235-$550. Silos Beach Resorts has a night rate that starts from $154 and Goldfish Beach Bay Resorts ranged from $168-$550. Comparing this to nearby resorts such as Silos Beach Resorts and Goldfish Beach Bay Resorts, it is rather low. As we can see, the minimum nightly rate is $154, $24 more than Montage Bay Apartments. If Montage Bay Apartments closed the gap between the difference, higher profits can be made.
However, that is if Montage Bay Apartments can differentiate itself from its competitors. In the long run, the profits generated by closing the gap would eventually be a significant figure. The 3-night minimum rule is also a factor affecting profitability. By turning away customers who wish to stay for less than 3 nights, they are turning away extra venue that could increase their profits. By doing this, it reduces their target market. With a reduced amount of customers, revenue will definitely drop because they are not fully utilizing the rooms that are available.
From the spreadsheet, it can also be seen that they had a fixed rate per night. By only having fixed rates per night, it would reduce their profits for some periods of the year. They should adjust their rates per night based on the seasons and holidays throughout the year. Holiday periods such as Chinese New Year, Christmas and school holidays will have a tendency of having more bookings. If there is an increase in the rates during these periods, revenue would increase substantially.
Without making changes to the way they charge customers, future decline would be inevitable due to competitors adopting these strategies and “Montage Bay Apartments” lagging behind in terms of strategic marketing. From the spreadsheet, we can also analyses the popularity of each apartment. Both the One Bedroom and Two Bedroom apartments were the least popular with them being booked for 63 days only throughout the year. However, in terms of the number of times booked, the Two Bedroom apartment was booked 7 times only compared to he One Bedroom apartment booked 14 times throughout the year.
The deluxe studio was the most popular apartment booked with a rental of 129 days and 16 bookings. Basing popularity based on the average tot nights booking, the least popular apartment would be the One Bedroom apartment and the most popular would be the One Bedroom Deluxe. However, the apartments were not fully utilized because throughout the year, the apartments were only booked for 380 days when the combination of the 4 apartments had a total of 1460 days available for booking. About only 26% of the apartments were booked over the year.
With the poor utilization of the resources available, revenue would be lower which results in less than expected profitability that could have been achieved. Advertising can affect profitability based on how the advertising is conducted. Advertising cost can be expensive and if not done properly, could result in increasing losses. To have proper advertising, Miranda should seek consultation from marketing experts regarding these issues. Although some costs might be incurred from this, it is better than doing it wrongly because of the lack of knowledge.
Without advertising, people will be unaware of your services and will result in lower profits. The lack of advertising could have resulted in the low occupancy rate of 26% throughout the year. Advertising ways Miranda could adopt would be company advertising campaigns, word-of-mouth and the media. Overhead would increase in the short run because of advertising but could prove successful for Miranda in the long run.. There are many marketing ideas that will assist Miranda in increasing profitability, such as, capturing value from customers, understanding the marketplace and customer wants, building customer relations.
These strategies provide Miranda with a greater customer satisfaction, greater customer loyalty and retention and a proper understanding of the customer needs. The What If Analysis The what if analysis is a provisional function available in the spreadsheet, allowing changes in variables that allows a hypothetical value to be reflected. With this function, critical reasoning can be made rapidly and easily. It also allows us to attain achievable goals by using hypothetical figures to project what is required. Practice of this function allows for greater ease of problem comprehension, implementation and 15 14 13 cession-making.