Phuket Hotel Case

In: Business and Management

Submitted By Arfy
Words 5809
Pages 24
Analisa Studi Kelayakan Proyek Karaoke Pub
Phuket Beach Hotel

MMBM 23 Kelompok 2 1. 2. 3. 4. 5. Arfy Frisnanto Bonishita Pinasthiko Pariwondo Erna Suria Darmawan Yosua Taniasurya 0152112011 0152112013 0152112015 0152112009 0152112010 Corporate Finance Wijantini, PhD, ICBRR

Mata Kuliah Faculty Member

Daftar Isi

I. II. 1. 2. 3. 4. 5. 6. III. 1. 2. 3. 4.

Pendahuluan .................................................................................................................................... 2 Asumsi-asumsi untuk dasar Perhitungan ........................................................................................ 2 Capital Expenses ......................................................................................................................... 2 Asumsi pendapatan atas masing – masing alternatif Proyek ...................................................... 3 Erosion Patronage = Full ............................................................................................................ 3 Relevant Cost .............................................................................................................................. 4 Discount Factor ........................................................................................................................... 4 Unequal Project life .................................................................................................................... 5 Analisa Kasus.............................................................................................................................. 5 Deskripsi Proyek ......................................................................................................................... 5 Perhitungan Discount Factor – Weighted Average Cost of Capital (WACC) ............................ 5 Proyeksi Cash Flow…...

Similar Documents

Hilton Hotel Case Analysis

...purpose of this case analysis is to address the key marketing issue for the Hilton Hotels. The marketing strategies Hilton should pursue in the hotel and gaming markets will be discussed and recommendations will be made. In addition, the use and implementation of the SWOT analysis will be incorporated throughout the discussion. Information will be provided from the case study and the use of secondary resources for support of the marketing strategies recommended for the Hilton Hotels. Market Summary Hilton Hotels is one of the market leaders in the hotel and gaming industry in the United States. Hilton is a well-known and distinguished name in fine hotels across the United States and worldwide. In 1999, Hilton expanded aggressively by acquiring the Promus Hotel Corporation, Hampton Inn and Suites, Doubletree Hotels, Embassy Suites Hotels, and Homewood Suites. Hilton Hotels Corporation has grown to become the world's most recognized and most successful hotel company (Hilton Innovation, 2007). With the 2006 acquisition of Hilton International, Hilton Hotels Corporation became a global force with more than 2,800 hotels in more than 80 countries throughout the world (2007). Market Demographics The demographics for a diverse company such as Hilton offer a wide variety of customers. Hilton's target market includes the everyday business traveler, families on vacation, leisure travelers, and the convention business segment. After the events of September 11, the hotel......

Words: 305 - Pages: 2

Phuket Beach Hotel

...Case 10:Phuket Beach Hotel VALUING MUTUALLY EXCLUSIVE CAPITAL PROJECTS Case Overview Planet Karaoke Pub Project Lives Monthly rental (5% increment for 3rd and 4th year) 4 years 170, 000 (THB) 770, 000 to 1, 000, 000 (THB) 55, 000 (THB) Up front renovation cost (Depreciated over the life of project - straight line method with zero salvage value) Overhead expenses Repair and maintenance cost 10, 000 (THB) / year Case Overview Beach Karaoke Pub Project Lives Up front investment (Equaled depreciation) 6 years 800, 000 to 1,200 000 (THB) 900, 000 (THB) 4, 672, 000 (THB) Other investment (Equipment and chairs) (Depreciated over the life of project - straight line method with zero salvage value) Estimated total sales (1st year) (5% average growth per annum) Operating costs: Food and beverage costs Salaries Other operating costs 25% of sales 16% of sales 22% of sales Repair and maintenance cost 10, 000 (THB) / year Case Overview Beach Karaoke Pub  Capital structure (75% equity & 25% debt)  Debt – loan from Siam Commercial Bank – interest rate 10%  Hotel owners’ cost of equity - 12%  Corporate tax rate – 30%  Future profits – discounted 5%  Risk factor – 25% Conservatism- risk factor (consideration due to the negative factor for pub) Question 1 Assess the economic benefits associated with each of the capital projects.  What is the initial outlay?  What are the incremental cash flows over the life of the......

Words: 1984 - Pages: 8

Hotel Case

...The Royal Hotel Case Study describes a situation where a junior consultant has architected a hotel maintenance management and issue tracking solution for a boutique hotel client. Blake, the consultant, identified a hotel maintenance management package which included a Rapid Response issue logging module, Preventative Maintenance module and the Reporting Module. Blake left the engagement prior to the completion of the change and has been called back because the system has been month balled a few weeks after go live. The hotel GM and Blake’s boss are extremely unhappy. The Cast of characters Blake Cantera > An MBA student with two weeks consulting training. The architect of the solution on his first engagement Royal Hotel GM > A no nonsense, old school hotelier, running a boutique business hotel in New York. The GM wants to eliminate situations where guests discover maintenance issues. Director of Housekeeping > Not a champion for the system and does not take ownership for the maintenance issues at the hotel Director of Maintenance > Roll has a natural conflict with housekeeping – did housekeeping report the issues and maintenance lose it, or did housekeeping just not report it? Director IT Espresso Vendor > Potentially oversold the solution as a panacea Jack Scarso > A colleague of Blake’s with similar experience, who is held in low esteem. Jack was assigned to implement the solution when Blake was transferred off. Jack received virtually no......

Words: 693 - Pages: 3

Phuket Beach Hotel: Valuing Mutually Exclusive Capital Projects

...Using Case Studies in Real Estate and Finance Courses By Su Han Chan Department of Real Estate The Preliminaries Setting expectations Focus is on decision making Requires judgment No “right” answers Setting ground rules The student contract (4Ps) Knowing your participants Selecting cases and readings Using a mix of short (“breather”) and long cases Assigning a term project Case seminar series_Su H Chan A Short Case Phuket Beach Hotel: Valuing Mutually Exclusive Capital Projects* (4 pages) Synopsis Phuket Beach Hotel has an opportunity to lease its underutilized space to a karaoke pub and earn a rental income. Alternatively, the hotel could develop the unused space and create its own pub. The general manager of the hotel must decide which of the two capital projects to recommend to the hotel owners. This case presents sufficient information to build cash flow forecasts for each project and to rank the mutually exclusive projects using various evaluation criteria. *The case is available from HBSP.com Case seminar series_Su H Chan Using the case Undergraduate, graduate, and executive levels Exposes students to a wide range of capital budgeting issues Questions built into the case Student group presentations (2 teams presenting the same case) Class members evaluate team presentations Instructor debriefs case Lessons learned Evaluator__Please write your name on the back__________________ Group ___________________________ Grading Checklist......

Words: 846 - Pages: 4

Phuket Case

...initial outlays of both projects, we see a benefit of choosing the third-party project, Planet Karaoke. The initial investment in renovation of (700,000 to 1 million baht), is much less than that for Beach Karaoke (1.7 to 2.1 million baht), due to the added equipment costs associated with running and managing the night club. Using the previously calculated discount rate of 10.75%, the incremental cash flows for each investment are as follows: CF Planet: Y1) 516,250 Y2) 497,770 Y3) 522,060 Y4) 547,540 CF Beach: Y1) 887,312 Y2) 955,498 Y3) 999,386 Y4) 1,045,445 Y5) 1,125,052 Y6) 1,209,184 In determining the value of capital projects, there are several valuation metrics at our disposal. In this case, we are presented with two mutually exclusive capital projects with different useful lives, and as such, there are certain criteria that are more useful than others. Payback period and discounted payback period both measure the number of years taken for future cash flows to cover the initial costs, yielding a good interpretation of risk and liquidity. We calculated Planet Karaoke’s payback and discounted payback as 1.49 and 1.65 years, respectively, and Beach Karaoke’s payback and discounted payback as 1.85 and 2.15 years, respectively. In general, discounting payback is more relevant, as it takes into account the time-value of money. Nevertheless, both methods fail to account for cash flows occurring after payback is reached, and......

Words: 1497 - Pages: 6

Hilton Hotels Case Analysis

...purpose of this case analysis is to address the key marketing issue for the Hilton Hotels. The marketing strategies Hilton should pursue in the hotel and gaming markets will be discussed and recommendations will be made. In addition, the use and implementation of the SWOT analysis will be incorporated throughout the discussion. Information will be provided from the case study and the use of secondary resources for support of the marketing strategies recommended for the Hilton Hotels. Market Summary Hilton Hotels is one of the market leaders in the hotel and gaming industry in the United States. Hilton is a well-known and distinguished name in fine hotels across the United States and worldwide. In 1999, Hilton expanded aggressively by acquiring the Promus Hotel Corporation, Hampton Inn and Suites, Doubletree Hotels, Embassy Suites Hotels, and Homewood Suites. Hilton Hotels Corporation has grown to become the world's most recognized and most successful hotel company (Hilton Innovation, 2007). With the 2006 acquisition of Hilton International, Hilton Hotels Corporation became a global force with more than 2,800 hotels in more than 80 countries throughout the world (2007). Market Demographics The demographics for a diverse company such as Hilton offer a wide variety of customers. Hilton's target market includes the everyday business traveler, families on vacation, leisure travelers, and the convention business segment. After the events of September 11, the hotel......

Words: 287 - Pages: 2

Good Hotel Case Study

...Case #10- Good Hotel: Doing Good, Doing Well? Jamie Caudle Q: What is the vision/mission behind the Good Hotel concept? A: The Good Hotel is intended to be the first hotel with a conscience. Our philanthropic and positive approach is designed to inspire the "good in us all" (Pearce, 2012, p. 10-2). The Good Hotel is a hip San Francisco hotel that practices philanthropy and believes in doing good for the planet. The eco-friendly hotel décor features reclaimed and recycled construction materials (Pearce, 2012, p. 10-2). I believe the concept is to create a themed based hotel that is catered to a green living approach to life and have some fun doing it. The mission and vision statements for the new owner group of The Good Hotel are as follows: Our Mission At Haiyi Hotels, we endeavor to make a difference in the lives of our guests and associates through a shared passion for life, work and personalized experiences (Haiyi Hotels, 2014). Our Vision To become a recognized boutique hotel management company and develop unique hotels with their own independent character and style (Haiyi Hotels, 2014). Q: What three alternatives is Pam Janusz considering for her recommendation to the new ownership of Good Hotel? Provide pros and cons of each. A: Pam Janusz is considering between continuing, expanding, or discontinuing the current concept that Good Hotel is currently using. Continuing the concept would not involve much interruption in the already set ways of......

Words: 870 - Pages: 4

Phuket Beach Hotel

...Additionally, the guaranteed lease payments indicate a consistent cash flow for the hotel regardless of the success of the pub venture. In comparison, depreciation is also lower from a leasing standpoint due to the lower initial capital expenditure. As the main responsibility of running the business is outsourced to the leasing company, this initiative also incurs less annual costs in terms of raw materials needed to run the business in addition to less operating expenses for the hotel. This situation proves to be a very safe investment for the hotel, as they are taking on minimal costs and have a guaranteed income of capital through the lease payments. Building This initiative proves to be more risky than leasing; nonetheless offers a higher return. The initial capital expenditure is double that of leasing the space, however it does give the hotel full earnings of all future revenue. While incurring additional raw material and operating costs throughout the year, this initiative does prove to be more expensive with a higher degree of labor required. That being said, if run properly the venture is projected to turn a much higher profit when compared with the leasing option. Operating cash flows are projected to double that of the leasing option in the first year alone as well as continue to increase as the years go on. In addition to the immediate profit, by building a business, the hotel will not only has full say over all aspects of the pub, but will also be able......

Words: 1225 - Pages: 5

Phuket Beach Hotel

...Financial Management. EBS ML. 4th course students. Case study. Phuket Beach Hotel. Valuing Mutually Exclusive Capital Projects. Questions 1. Please asses the economic benefits associated with each of the capital project. What is Initial Outlay? What are the incremental cash flows over the life of the project? What is an appropriate discount rate to use for discounting the cash flows of the project? SN 1 and SN 2 - 40% 2. Are the project comparable based on the standard NPV measure, given that they have unequal lives? What adjustment or alternative method is required in comparing such project? - 10% SN 3 3. How sensitive is your ranking to changes in the discount rate? What other "key value drivers" would affect the attractiveness of the project like patronage factor; amount of upfront investment; cost of capital, any of the key value drivers? Please estimate the sensitivity of your result to a change in any of the key value drivers. - SN 4 - 30% 4. Which project should the hotel undertake? Why - 10 % In case of Hotel, I would like to recommend to lease the Bar. First of all because of Payback period is much shorter ib both scenarios (discounted and nondiscounted).secondly Profitability ratio is also much higher, due to the fact that less investments are required to undertake the project. However the main draw back is EAA which is segnificantly lower as well as ROI. In conclusion, I may say that, in short prospective Lease is option is optimal, however in long term......

Words: 3034 - Pages: 13

Phuket Beach Hotel

...Mary Ho prepared this Case under the supervision of Prof. Su Han Chan and Prof. Ko Wang for class discussion. This Case is not intended to show effective or ineffective handling of decision or business processes. This case is part of a project funded by a teaching development grant from the University Grants Committee (UGC) of Hong Kong. © 2001 by The Asia Case Research Centre, The University of Hong Kong. No part of this publication may be reproduced or transmitted in any form or by any means - electronic, mechanical, photocopying, recording, or otherwise (including the Internet) - without the permission of The University of Hong Kong. Ref. 01/108C 1 KO WANG SU HAN CHAN PHUKET BEACH HOTEL: VALUING MUTUALLY EXCLUSIVE CAPITAL PROJECTS Mike Campbell, General Manager of Phuket Beach Hotel, paced his office and considered an offer made by Planet Karaoke Pub. Planet Karaoke Pub was expanding fast in Thailand. It was looking for a venue in Patong beach area for setting up another outlet, and was eyeing an unused space owned by the Hotel. At this point, the space was located on the second floor of the main building and was very much under-utilised. It was reserved for the construction of an alley linking to a new wing for the hotel, which would not be completed until two years later. Planet Karaoke Pub offered to sign a four-year lease agreement with the hotel for renting part of the unused space. It proposed to pay: • a monthly rental fee of 170,000 baht for......

Words: 1781 - Pages: 8

Phuket

...Phuket Beach Hotel Case Analysis Phuket Beach Hotels (PBH) management has been approached by Planet Karaoke Pub (PKP) to lease a vacant space within the hotel. Management is intrigued by the offer because the space is currently not being used. Due to the recent success of karaoke pubs management is also considering creating a pub which they would call Beach Karaoke Pub (BKP). Finally, there is a possibility that the best option will be to seek an entirely different user type where the Karaoke Pub crowd may alienate 25% of the hotel patrons with young children. This paper seeks to use capital budgeting analysis tools; net present value, internal rate of return, equivalent annual annuity and profitability index to definitively say which project has the best financial viability. The data used to generate the key decision metrics were provided by PBH management and are as follows. Planet Karaoke Pub -Four-year lease, monthly 170,000.00 baht for the first 2 years and 5% increase 2 additional years -Upfront costs to PBH range between 770,000.00 baht and 1,000,000.00 baht with zero salvage -Pro-rata allocation of the common area maintenance fee is 55,000 baht -10,000.00 baht will be charged for common area maintenance fees Beach Karaoke Pub -Up-front investment will range between 800,000.00 baht and 1,200,000.00 baht -Furniture, Fixtures and Equipment will cost 900,000.00 baht -Estimated total sales in the first year are......

Words: 1261 - Pages: 6

Hilton Hotel, Case Study

...SUBJECT: Case Study: Hilton Hotels – Brand Differentiation Through Customer Relationship Management List of Key Issues or Problems in the Case * Hilton’s strategy to maintain its leadership position in the US as well as in the international lodging market * Hilton’s focus on profitability and Return on Investment * Personalized customer service and development of Customers Really Matter initiative (CRM) * Implementation of a new enterprise system OnQ and the associated costs * Maintaining competition with other hotel brands Discussion questions 1. What is Hilton’s core business? The case presented in the book describes the evolution of Hilton Hotels Corporation, nowadays known as Hilton Worldwide. It is a public company founded in 1919 by Conrad Hilton. Hilton is one of the leading hospitality companies comprised of over four thousand hotels in ninety-one countries. Hilton’s web site states the following: “Ten brands, more than 4,100 hotels, and more than 300,000 Team Members across corporate offices and owned, managed and franchised properties make us the world’s leading hospitality company.” Hilton’s core business is to provide outstanding customer care of their guests, ensure their one of a kind experience while staying at the hotel. The acquisition of Promus Hotel Corporation in the year of 2000 added additional 1700 hotels to Hilton Worldwide. The company also invests heavily in the new hotel development, franchising and affiliating with......

Words: 880 - Pages: 4

The Regency Hotel Case Study

...------------------------------------------------- Case Assignment 2 The Regency November 7, 2015 Michelle Archibald HRES 1101 November 7, 2015 Michelle Archibald HRES 1101 Case Assignment #2 One of Bangkok Thailand’s most prestigious hotels, The Regency, was established 15 years ago and was operated by a Thai General manager for the entire time. The hotel was sold to a large American hotel chain. When this was announced the current General Manger of the hotel decided to retire early leaving an open position which was filled by an American named John Becker. John Becker believed in the empowerment of employees. He believed that all employees should be empowered to make decisions to the best of their ability to ensure the satisfaction of their guests needs. He was very successful running hotels in America this way, and expected The Regency to be just as successful. This is not however how the hotel was run by the previous management. After Becker introduced this new policy to the hotel, the management seemed to have a mixed reaction to these changes, though no one protested it. Becker also asked that the employees and managers not come to him for minor problems, and to try and resolve them on their own. This request proved to be more difficult for the staff than Becker anticipated, for they found it hard to distinguish a minor problem from a major one. Becker began to get frustrated with the staff and the amount of times they would come to him with problems. ......

Words: 931 - Pages: 4

Regency Hotel Case Study

...Regency Hotel Case Study The Regency Hotel is a beautiful five star hotel that is located in Bangkok. This hotel was established by a local group of investors and was operated by a Thai general manger at the beginning. This Regency Hotel was one of the country’s most prestigious hotels. The employee count for the hotel was around 700 and the moral of the employees was very high. They hotel offered very good employee benefits, above average salaries, plus job security. They also included a great yearend bonus that was not based on the hotels overall performance. After some time the hotel was sold to a very large American hotel chain, after finding out the general manager decided it was time to take an early retirement because of the change of the ownership. For the most part the American company kept all of the Regency’s employees and only did minor transfers of positions. The new general manger was named John Becker, he was an American manager with 10 years of experience in the industry. The decision to choose Becker was easy due to his success in integrating pervious hotels in the past. Becker strongly believed in empowerment, which is a certain degree of autonomy and responsibility for the decision-making regarding the hotels tasks. Becker expects his employees to really go the extra mile. Becker expected the employees to be guest-oriented at all times to drive up the customer service. Becker had a lot of success in his previous positions from empowerment, and found...

Words: 1676 - Pages: 7

Mr Margreiter and Hotel Case

...Kathryn A Pugh Business Law Week 3 1. What are the elements of negligence that Mr. Margreiter will need to prove against the hotel in order to win his case? List the five elements here. (Points: 5) * Hotels have a general duty to exercise "reasonable care" for the safety and security of their guests. * Hotels have a general duty to reasonably protect guests from harm caused by other guests or non-guests. * Hotels have an affirmative duty to make the premises reasonably safe for their guests. * Hotels are not liable for harm to person or property unless "fault" can be established against the hotel. * Hotels may be "vicariously liable" for the NEGLIGENCE of their employees. * Hotel had a keying system for the hotel rooms that were inadequate. 2. Applying the facts you have from the case problem above only, lay out a case for negligence against the hotel. Use the elements to outline the case. Start with the first element, explain what facts you have for or against that element, and then continue through the five elements of negligence. If you do not have enough facts to make your case, explain what facts you would need to have in order to support a case of negligence. (Points: 10) * Hotels have a general duty to exercise "reasonable care" for the safety and security of their guests. When the hotel assistant manager became aware that the security guard went home sick they should have called the company and had a replacement sent out. If it......

Words: 2033 - Pages: 9

Free!: Dive to the Future Episode 12 English Dub | To Love-Ru | Dragon Ball – Bảy Viên Ngọc Rồng chap 484