ABW Simulations - Hospitality

Hospitality Simulation

The ABW hospitality simulation challenges participants to take over and run a full-service hotel. The products that a hotel business sells are the occupancy of its rooms, the rental of its conference spaces, meals and drinks as well as a variety of sundry items. This hospitality model is concerned with occupancy levels and yield per room.

The company has been in operation for two years prior to the takeover. Each company starts with one 200 room full-service hotel and can lease up to another four to make a total of five hotels. The initial hotel contains 170 standard rooms, 20 deluxe rooms and 10 luxury rooms.

All companies take over operation with exactly the same history and run the company usually for the next two years or eight quarters. Each quarter represents a quarter of a year or thirteen (13) weeks. Decisions are made based on the previous quarter’s trading results. Careful analysis of the financial reports is required for future decisions which are submitted within specified timelines.

The objective of the simulation is to have the highest share price each quarter by making the best decisions regarding the operation, marketing and financing of the hotel/s, in competition to the other hotel businesses in the market. This is achieved by maximising the occupancy and yield of the rooms available while taking into account the average hotel occupancy and all costs. Revenue from rooms needs to exceed the cost of making that number of rooms available.

What does the hotel offer?

The company primarily offers the use of its hotel rooms. It also offers guests additional services including food and beverages (from its room service and restaurants) and sundry services such as a gymnasium, health spa, baby sitting and purchase of memorabilia.

What types of markets are there?

The company can select any variance of fit out for a newly leased hotel. They can choose to target the budget hotel market where the hotel will have more standard rooms and less staff providing lower quality service, or they can choose to target the prestige hotel market where the hotel will have more deluxe and luxury rooms and more staff providing higher quality service.

What other considerations are there?

The company also needs to consider advertising and promotions to attract new customers through special deals, attract repeat business, build guest loyalty and extend the use of the hotel’s facilities.

How is the company managed?

Each company elects a General Manager and then Marketing, Operations and Finance department. The key to success is to work together as a team.

Download the ABW Hospitality Simulation PowerPoint