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    The Chicago Omni Hotel - discuss the relative performance of

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    The Chicago Omni Hotel is a 750-room luxury hotel offering guests the finest facilities in downtown Chicago. The hotel is organized into four departments: lodging, dining, catering, and retail stores. Each of these departments is treated as a profit center. Lodging is the largest profit center and is responsible for room rental, maids , reservations, main lobby, and bell captains. Dining operates the coffee shop, room service, and three restaurants out of a single kitchen. Catering services is separate from the dining operations. It offers banquet services to large parties, weddings, and business meeting and catering coordinate purchasing and staff scheduling. Retail is responsible for leasing space off the lobby to independent store owners (gift shop, car rental agencies, airline ticket counters, jewelry, flowers, toys, liquor, etc.) There are currently 14 independent stores operating in the hotel. Profit center managers are paid a salary and a bonus. The annual bonus depends on a number of factors, including their unit's profits, customer satisfaction, and employee retention. The following table presents budgeted operating data for the first year:

    Lodging Dining Catering Retail Total
    Revenues($millions) $39.20 $9.80 $5.80 $1.90 $56.70
    Separable operate exp $31.10 $6.20 $3.50 $0.30 $41.10
    Square footage (1000) 625 50 125 80 880
    # of employees 1000 140 35 4 1,179
    Besides the separable expenses traced directly to each profit center, the hotel incurs the following additional expense:
    Occupancy costs (interest, taxes, insurance) $5.6 million
    Marketing costs $1.4 Million
    Administration (accounting, human resources, security,
    maintenance, and senior management) $1.1 million
    Total $8.1 million

    Profit center performance is part of each profit center manager's annual bonus. Also to evaluate how each department of the hotel is performing, senior management desires a statement calculating a performance measure.
    a. Design a performance report for the Chicago Omni Hotel. Provide a statement calculating the performance of each unit using your performance report format. This statement should calculate for each unit a bottom line profit/loss, which will be used as part of the performance evaluation and reward systems.
    b. Discuss the rationale underlying the design of the performance report you chose.
    c. Using your report, discuss the relative performance of each profit center. Which ones are the best and which ar the worst?

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    Solution Preview

    Your work is attached in two file, Excel and word. The excel file has the report. Click ...

    Solution Summary

    Your work is attached in two file, Excel and word. The excel file has the report. Click on the cells to see the calculations. Your tutorial discussion is 479 words and includes a discussion of the suggested report, relative performance of the departments, the rationale for the report, and cautions about using the report as the sole measurement of success.