Project Management in hospitality and tourism

8/13/2019 Project Management in hospitality and tourism

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MHTP: Managing Hospitality and

Tourism Projects

Level 7 Postgraduate Diploma in

Hospitality and Tourism

Management

West City College


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Table of Contents

Part 1 Discussion Paper..................................................................................................3

Approaches to the Project...............................................................................................3

Theories and Concepts in Project Management.............................................................4Cost Benefit Analysis ............................................................................................4

Project Management oft!are .............................................................................."

#antt$s Chart.........................................................................................................."

Part % Project &eport......................................................................................................'

(ntroduction ...................................................................................................................'

&ossmore )otel* an (ntroduction ..................................................................................'

The Proposed Project .....................................................................................................+

elected Approach to the project , Traditional Approach.............................................+

&ationale -ehind choosing this Project .......................................................................1

Project Aims and /uantifia-le 0-jecties ..................................................................1

&esources re2uired and organiational issues associated !ith project........................11#uest room refur-ishment , Cost Benefit Analysis.....................................................11

easi-ility study ..........................................................................................................1%

5et Present 6alue ................................................................................................13

(nternal &ate of &eturn7........................................................................................14

(mpact of not implementing the Project ..............................................................14

Detailed Project Plan....................................................................................................18

#ant$s Chart ................................................................................................................1+

&is9 and Measures to Control it...................................................................................1+

Measures to control the ris9 ........................................................................................%

&eferences ...................................................................................................................%

Murphy P.: Murphy A.: %4: trategic management for tourism communities7

-ridging the gaps: Channel ie! pu-lications: ;


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Part Discussion Paper

!pproac"es to t"e Project

Project management approaches ena-le organisations to accomplish projects

efficiently: addressing -oth internal constraints and dynamic e>ternal situations in the

interim. Project management ena-les organisations to preent or remoe internal

project constraints and also adapt to unforeseen changes in project scope or goals

?ran9 D.: %1%@. An organisation can: depending on its re2uirements: either adopt a

standard project management approach or com-ine multiple approaches.

Different Approaches to project management are as follo!s

Traditional !pproac"

(n this approach it is assumed that scope and goals of a project !ill remain same till

the project is completed. Planning is done -y the project manager that inoles

identifying the project resources. The phases in the traditional approach are as follo!s Project initiation

Project planning and design

Project monitoring and control

Project e>ecution

Project completion

This approach is not fle>i-le ad there is no scope of change during process. Thus

many companies chose the hy-rid approaches ?


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tage17 Calculation of social costs social -enefits is the first stage in this

analysis. This !ould include calculation of7

Tangi-le Benefits and Costs ?i.e. direct costs and -enefits@

(ntangi-le Benefits and Costs ?i.e. indirect costs and -enefits ,

e>ternalities@

This process is ery important , it inoles trying to identify all of

the significant costs -enefits

tage %7 * Discounting the future alue of -enefits * costs and -enefits accrue oer

time. (ndiiduals normally prefer to enjoy the -enefits no! rather than later , so the

alue of future -enefits has to -e discounted

tage 37 * Comparing the costs and -enefits to determine the net social rate of return

tage 47 * Comparing net rate of return from different projects , the goernment may

hae limited funds at its disposal and therefore faces a choice a-out !hich projects

should -e gien the go*ahead

The shortcomings of this analysis are that all the costs cannot -e determined for

e>ample there are some intangi-le costs to the project that cannot -e measured or

identified. The cost such as la-our cost: material cost can -e measured -ut the alue

attached to destruction of ha-itat is priceless. eryone influenced -y the project may

not -e coered -y the cost -enefit analysis. (n construction projects such as an airport

or a road the enironmental cost is difficult to determine. There are many sta9eholders

that are influenced -y the project. The influence of one group can -e negatie and at

the same time it could -e positie on other group.

&easibility 'tudy

The feasi-ility study inoles studying that project is ia-le financially as !ell as

-eneficially. The feasi-ility study is a-out measuring the financial ia-ility !ith the

help of methods such as pay-ac9 period: internal rate of return: net present alue. All

these analysis tells the financial gains that can -e made -y the project. The financial

gains are measured considering all the aria-le for e>ample cost of finance: present

alue of money. The pay-ac9 method simply considers the period in !hich the


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inestment is coered. The net present alue of the future profits is calculated through

5P6 analysis. These are some of the financial calculation that helps in determining

the feasi-ility of the project

Project Management 'oft(are

ith the help modern technology: soft!are has -een deeloped to record the

information on project or assist them during the different phases. These are the tools

that help to implement the 9no!ledge and information in planning the resources and

schedule of the project !ith the help of graphs: charts and diagrams. These ma9e

reie!ing each stage of project easy !ith the help of reports generation. There are

many project management soft!are aaila-le in the mar9et. The soft!are for e>ample

#antt chart and time sheet trac9ing help in -etter coordination team mem-ers.

ome of the soft!ares are7

P#)T C"art ?Program aluation and &eie! Techni2ue@7 (t helps in trac9ing and

determining the path follo!ed for the project.Time '"eet Trac*ing, This soft!are ena-les different team mem-er to diide their

time and tas9s in the project those go simultaneously. This soft!are records the time

spent on each tas9 !hich can -e reie!ed -y the management at regular interal.

+roup Management, This is an email message centre that helps team mem-ers of

project communicate !ith each other during the project. The project related chat can

-e done using this soft!are as it has function send diagrams: graphs and charts.

+antt,s C"art

#antt Charts ?also 9no!n as #antt Diagrams@ are useful tools for analying and

planning more comple> projects. They help to plan out the tas9s that need to -e

completed and gies a -asis for scheduling !hen these tas9s !ill -e carried out.

hen a project is under !ay: #antt Charts helps to monitor !hether the project is

on schedule. (f it is not: it allo!s you to pinpoint the remedial action necessary to


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put it -ac9 on schedule. According to ield and


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Part . Project )eport

/ntroduction&efur-ishing of hotels is increasing no! days as hotels get the added adantage of the

renoated parts !hile they continue to operate the other parts and 9eeping the inflo!s

of the cash. Thus the money earned in this process can -e spent on the renoations.

)otels !elcome many customers round the year unli9e homes or offices. The guests

of hotel stay for fe! days and as a result the !ear and tear is higher than in homes or

office. The maintenance of the facilities -ecomes ery important for the hotels as they

hae to deal !ith the different guests each time. #uest just !ants eerything perfect in

their room !hile they use the hotel. This ma9es perfect sense for the hotels torefur-ish the some parts or hotel after a regular interal. )o!eer: maintaining the old

furniture or facilities is different than refur-ishing. 5o! a day: hotels prefer to inest

in something ne! rather than spending money on maintenance. The modern

technology has made it 2uite conenient to refur-ish a part !ithout much distur-ance

to other parts. Also it has -ecome 2uic9er. >perts are a-le to refur-ish many rooms

in single day.

This report is -ased on the project underta9en -y &ossmore )otel to refur-ish its

guest rooms. This project is a major project that needs careful planning and e>ecution

!hich is essential in Project Management. (t includes the approach ta9en for the

project: cost and -enefits and a detailed plan of project. (t also comprises the arious

ris9s related to the project and !ay they can -e minimised. This report gies an idea

that !hat project management is a-out in real life. (t is a practical implementation of

arious theories and concepts of Project Management in )ospitality (ndustry.

)ossmore Hotel0 an /ntroduction

&ossmore )otel is situated in an ast Eondon to!n called (lford. (t is a small hotel

haing 88 rooms. (t !as -uilt in 1+'+. (t is ideal for the people !ho don$t !ant to

spend a lot on their accommodation. (t is -ecoming a landmar9 in ast Eondon: and is

perfectly located !here EondonFs reno!ned ast nd meets the City. (t is situated at

1 minutes !al9 from Eondon Tu-e station from !here city can -e reached in %

minutes -y train. (t !as opened 1 years ago and has -een 9no!n for the 2ualityserice and alue for money among its guests. There are + permanent employees in


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the hotel and a-out 1 to 1% employees temporarily hired during the pea9 season. The

organisation structure of hotel can -e seen in the follo!ing figure.

T"e Proposed Project

Refurbishment of guest rooms in the hotel

The )otel management is -een loo9ing for!ard to change the design of guest room in

the hotel. They are thin9ing a-out the project since a long time as many guest rooms

need a through refur-ishment as they hae old design and are !orn out. (nstead of just

fi>ing those particular rooms: management is a-out to underta9e a project to refur-ish

all the guest rooms and change their design according to modern times. This !ill cost

more than just fi>ing the needy rooms -ut: management is e>cepting to raise their

profits as a result of this refur-ishment.

'elected !pproac" to t"e project 1 Traditional !pproac"

Different project management approaches are designed for easily carrying out the

different process in a planned !ay for accomplishing all the re2uirements. ach

approach hae 9ey feature of its o!n !hich 9eeps the actiities in sync !ith the

project plan ?ran9 D.: %1%@.

ince this is a project that inoles construction in the hotel: the -est approach to

carry on the project !ill -e traditional approach. )ere the planning is most important

part for the project. &ather than follo!ing any other approach li9e eent chain

approach in !hich schedule is affected -y the preious eents or the P&(5C%

approach in !hich deiation is o-sered against the plan: the -est approach is

traditional.

The construction in the project !ill re2uire planning and design in a traditional !ay.

Planning is the most important aspect in this project. (n the construction projects there

are not many o-stacles that cannot -e ascertained in the -egging. Thus if is the

planning is good: it can -e assured that the project !ill gie desired outcome.


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)ationale be"ind c"oosing t"is Project

There is lot of competition in the area as many more hotels hae -een constructed

around it. And in order to attract more customers and fight the competition this could

-e helpful. Though this hotel is not a complete lu>ury hotel -ut still: management

!ants to change the design of the rooms according modern needs. According to

Eangdon and erest ?%%@ hotel refur-ishment is important to sustain the position:

hospitality industry once in fie to seen years. The &ossmore hotel !as -uilt %4

years ago. (n this hotel: e>cept fe! fi>ing jo-s: no major redesigning or refur-ishment

jo-s are done until no!. Thus this project is significant and suita-le for the

management to underta9e in this scenario.

The demographic changes and innoations from niche operators has made it

important for the hotels to ma9e the changes in e>isting design. Eangdon and erest

?%%@ says there are three 9ey areas in !hich hotels are responding to changes !hen

it comes to refur-ishing the rooms.

ie

Aesthetics

/uality

Thus in order to meet the re2uirements of current mar9et and ma9e the customers

satisfied: this project is significant.

Project !ims and -uantifiable 2bjectives

&oom sies of % rooms in ground and 1stfloor of -uilding to -e increased

Bathroom in all 88 rooms to -e improed

(T and ntertainment in all 88 rooms to -e improed

&edecorations of all rooms to -e done changing the ceiling and floors

designs


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)esources re3uired and organi4ational issues associated (it"

project

inance and e>pertise in hotel refur-ishment are the t!o main resources re2uired to

accomplish the project. inance re2uired can -e calculated !ith the help of this ta-le

as proided -y a refur-ishment e>pertise company.

0rganisational (ssues pertaining to the resources are o-taining the finance.

There are many specialist companies offering their e>pertise in this area. A detailed

document !as produced mentioning all the re2uirements. These re2uirements !ere

specified -y mem-ers of senior management in a meeting. Then meeting !ith four

companies specialising in hotel refur-ishing projects !as held and 2uotes for the jo-

!as ta9en. 0ne company called Chorus #roup is finalised to carry on the project.

+uest room refurbis"ment 1 Cost %enefit !nalysis

&inancial Cost

lement cost in G

Alterations and demolitions 1:'4

(nternal !alls and partitions 1+:%8

all finishes 183:H8'

loor finishes 111:H"

Ceiling finishes 8%:%'

urniture and fittings 118:H"

anitary fittings 18:

Disposal installations H:

lectrical installations 1++:'"


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Communications installation %1:

Builders$ !or9 in connection H:

Preliminaries and contingencies %H+:"

Total construction cost 1:%%4:1'

5on inancial Costs

5on operation of the rooms under refur-ishment

Distur-ance or inconenience to the guests during the

refur-ishment.

Approal from goernment authorities

%enefits of )efurbis"ment

Major refur-ishment can hae a dramatic effect on the performance of a

hotel. (n the first year of operation follo!ing the completion of a

refur-ishment at the aoy #roupFs Claridges in central Eondon in

1++': turnoer increased -y 3'I and profita-ility -y more than +I.

imilarly: Ee MeridienFs planned G+m ma9eoer of #rosenor )ouse

in central Eondon should see its alue increase -y 'I to G"m

?!!!.-uilding.co.u9@.

(t has -een calculated that hotels sae up to 'I !hen deciding to

refur-ish as the costs re2uired to maintain something older far out!eigh

the refur-ishment ones ?Dalton A: %1%@.

(ncreased customer satisfaction

&easibility study

(n order to analyse the feasi-ility of the study: it has to esta-lished the re2uired

resources are aaila-le. Also: it is to -e ascertained that the project !ill -e -eneficial

to the hotel. The -enefits can -e tangi-le as !ell as non tangi-le. The tangi-le -enefits

can -e in form of monitory gains: increase in the profits. To calculate that the project
http://www.building.co.uk/http://www.building.co.uk/


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!ill -e -eneficial let us first calculate that time period ta9en to pay the inested

money -ac9.

Paybac* Period:

(t is assumed that if the project is financed -y -an9 loan: hotel can get the loan at rate

of interest of HI. e assume for the calculation purpose that the !hole inestment

amount is coming from money lent -y -an9. The aerage cash flo! after deducting

the e>penses !ill increase -y 3: per year according to predictions. ;sing this

information the pay-ac9 period is calculated here.

Pay-ac9 period J 1:%%4:1'.K3 J 4.' years

Thus it !ill ta9e a-out 8 years for project to coer its money. Thus it is a faoura-le

project as time is not ery long to recoer the inestment.

5et Present 6alue

(f !e consider that there !ill -e no major changes in the mar9et in ne>t fie years

after the inestment. ith the rate of interest of HI the cash flo! analysis and 5P6 is

calculated -elo!.

HI

Lear 5et Cash lo! Discounted

Cash lo!

*1:%%4:1'. *1:%%4:1'.1 3. %'3H3.'3

% 3. %"%31."%

3 3. %44''+.3"

4 3. %%''"'.8"

8 3. %13'+8.'8

Totals .789.;


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Detailed Project Plan

Development 'trategy:The planning of the project is ery important asrefur-ishment should not interrupt the -usiness of hotel. All !or9s !ill

-e carried out in the phases: such that !hen one area is -eing

refur-ished: other !ill continue the -usiness. Total rooms !ill -e

diided in four sections. And each of the section !ill -e refur-ished in

one phase. The upper and lo!er floors !ill -e diided in t!o sections.

Thus there !ill -e one four phases in total in the project. (t is sho!n in

the follo!ing figure.

Project &inance7 The finance is planned to -e o-tained partly from

retained earning and partly though -an9 loan. A-out half of the amount

!ill come from the retained earnings. The half of amount is to -e

o-tained form the -an9.

(t is decided payment !ill -e diided and done according to these phase

!hich is agreed !ith the -uilder and mentioned in the contract. (t !ill

-e done in follo!ing manner

Deposit7 8I

Phase 17 %I

Phase %7 %8I

Phase 37 %8I

Phase 47 %8I

P"ase P"ase . P"ase ? P"ase >

)oom 0

.

)oom

?0.>

)oom

.>0?=

)oom

?70


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Legal Agreements and Contracts: There !ill -e three major

contracts in this project.

1. The -uilding contract!ill contain the roles and responsi-ilities

of -uilder and consumer. Also: this contract contains the rights of -oth

consumer and -uilder.

%. The document specification!ill contain the list of all !or9s

that are to -e carried out in this project. (t !ill also list the items to -e

supplied or installed -y the -uilder. There !ill -e some clauses that !ill

specify a-out some !or9s are to -e underta9en in a certain !ay.

3. The dra(ings or plans !ill -e the document that is prepared-y architect. These designs !ill -e approed -y the sureyor of local

-uilding authority and !ill -ear their stamp of approal.

The -uilding contract !ill coer the contractual terms a-out implied

!arranties: cost and deposits: progress and payment: cost escalation

clauses: matters such as delays and e>tension of time.

Construction:in order to 9eep the -usiness running during the project:

the construction !ill -e done in four phases.The renoation !or9

includes the demolition of old rooms: replacing the lights: preparation

of !alls: tile !or9 in -athrooms: replacing the -ath tu-s and toilet seats:

painting and carpeting.

P"ase : Construction !ill -egin from ground floor room

num-er 1*1%. (n this phase these rooms !ill -e emptied and the

area and that area !ill -e closed for guests and staff. That side

!ill -e coered -y the -uilder safety purpose. This !ill ta9e %

days. All the refur-ishment !or9 !ill -e complete in the rooms

of this area in first phase. These rooms !ill -e completely

ready for guests to use. The area !ill -e isolated !ith high

2uality hoardings to minimise the distur-ance.


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P"ase .:Construction phase t!o !ill -e for ground floor

rooms 13*%4. This !ill -e completed in ne>t % days in same

se2uence.

P"ase ?: (n phase three upper floor rooms !ill -e constructed.(n order to do this a temporary !ay to upper floor other than

main staircase used to reach it: !ill -e constructed. Thus this

!ill need %% days to finish the jo-.

P"ase >: The final phase !ill -e refur-ishing the rest of 1+

rooms on upper floor. A diersion !ill -e constructed in order

to reach the other rooms at upper floor. The main staircase !ill

-e used -y the !or9ers and !ill not -e accessi-le to guests and

staff during the construction. This !or9 is scheduled in %8

days.

'c"eduling

Tas* 5ame Duration 'tart &inis"

Phase 1 % days

Ei2uidate 1% &ooms 1 day

Demolition % day

&eplace Do!n lights 3 day

all preparation % day

Tile !or9 % day

Bathroom i>ing 3 day

Painting 4 day

Carpet 3 day

Phase % % days

Ei2uidate 1% &ooms 1

Demolition %

&eplace Do!n lights 3

all preparation %


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Tile !or9 %

Bathroom i>ing 3

Painting 4

Carpet 3

Phase 3 %% days

Construct Diersion %

Ei2uidate 1% &ooms 1

Demolition %


all preparation %

Tile !or9 %

Bathroom i>ing 3

Painting 4

Carpet 3

Phase 4 3

Construct Diersion %

Ei2uidate 1+ &ooms 1

Demolition %


all preparation 3

Tile !or9 3

Bathroom i>ing 8

Painting "

Carpet 4


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+ant,s C"art

)is* and Measures to Control it

(t is found -y the e>perts that in refur-ishment project the condition of

-uilding is the major un9no!n factor. The old hotels hae a comple>

structure that made up of stitched together -uilding. The &ossmore

hotel is also an old hotel and accessing the ris9s inoles rightly

identifying the -uilding structure. The uneen floors leel and comple>

installations are the e>pected ris9s in such projects. The ris9 can -e

compounded if irregular maintenance and technical !or9 is -een done

and is not -een recorded.

There is a ris9 of guests in the hotel -eing distur-ed during the

refur-ishment and hence haing a negatie impact on the profits of

hotel.


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0ne of the potential ris9s is that the !ay in !hich the e>isting structure

can hae on the ne! room layouts. These ris9s affect the desired

outcomes.

These are the potential ris9s that need to -e accessed -efore commencing the project.

Measures to control t"e ris*

According to Aramidou ?%1@: the repairing or reinforcing !or9s of a -uilding ino

les a ris9 that need to -e reduced at the minimum accepta-le leel. The ris9

controlling in the refur-ishment project: according to Mansfield &eyers ?%1@:

depends highly on the e>pert and specialist consultant. They further ela-orated that

the commission agent assesses the ris9 on the -asis of follo!ing points7

1. The e>perience and e>pertise of the organisation carrying out the

refur-ishment project

%. The design team$s reliance on the craftsmanship and specialists

3. The project is commenced !ith the incomplete information and assumptions.

Considering the all these factors can -e a !ay of minimising the ris9.

To mitigate the ris9 usually a -uilding surey is conducted -y the ris9 management

team. (t inoles analysing the -uilding fa-rics and its condition. This helps in

allocating the -udget to the potential difficult areas in the -eginning to -e a-le to stic9

to the plans.

Thus these points mentioned a-oe can -e ery helpful in controlling the ris9.

)eferences

Aramidou: 5 ?%[email protected] of Quality Assurance Systems in the

Rehabilitation of the Architectural Heritage. Hth(nternational

Conference on (nspection: Appraisal: &epairs Maintenance of

Buildings tructures: 11*13 ept %1. 5ottingham: ;nited


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