Unit 06:Business Decision Making

Introduction Riverside Hotel Ltd in the UK is looking forward to expand its business within London. Rapid developments in transport technology and peoples attitudes about travelling and going on holidays have been accompanied by a rapid growth of hotel industrial. This is one of the growing sectors, because of the open economy policies and European Union. This report contains a scope of expend the operation in London.

Data and information A simple definition of data is that it is a collection of unprocessed information. All the information starts with the data. Information is a collection of processed data. (Ferreira, et al 2009)

Sources of Data Internal

External

Internal data is data which can be obtained within the company network. Internal database usually can be accessed faster and without any cost, than the other data. (Kotler & Armstrong, 2010) E.g. Number of employees working production department Number of units produce in the production department External is data which can be found from other external sources. It may contain more cost for the company E.g. News paper, competitors and market researches
Perinparajah Lakshmanan ID:7211 Page 1 of 20

Unit 06:Business Decision Making

Data Collection The purpose of data collection is to gather information that will help in decision making of the organisation. Types of Data The collection of information on the behaviour of the nature, object and how it is useful for the study, data can be primary or secondary data.

Data

Primary Data

Secondary Data

Primary Data Data which is collected from original sources is called as primary data. There are many ways of collecting the primary data. This data is taken from original sources. Some of the methods that are used to collect primary data are direct interview, questionnaires, and e-mail and telephone interviews. Singh & Mangat (1996) Secondary Data Secondary data is data which has already been taken from some agency and other Medias. Secondary data can be collected from censuses, surveys and organizational records. (Giri & Bannerjee, 2002)

Sampling Sampling is used in business to gather information about population. All the necessary data is gathered from samples. (Black, 2009)
Perinparajah Lakshmanan ID:7211 Page 2 of 20

Unit 06:Business Decision Making

Sample is a good method of obtaining information, but there are some ups and downs, doing a sample can create a high cost for the company, it takes a long time to collect data. On the other hand many advantages are in the sampling. Through sampling we can gather 100 % accurate information from this, and also we can obtain more details from sampling. Sampling can be in two types.

Sampling
Probability Sampling

Nonprobability Sampling

Probability Sampling According to Leon-Guerrero & Nachmias, 2010, this is the kind of sampling which allows the researcher to state for each and every population the probability for its inclusion in the sample. This sampling will be assigned to each unit or group in the population.

Random Sampling This is defined as, sample of measurement from a population; every item in the population has an equal chance of being included. (Francis, 2004) Non-probability Sampling According to Ravindra & Singh, 1996, non-probability is known as sampling is procedure of selecting a sample without using any probability. It is a very easy sampling and convenience sampling.
Perinparajah Lakshmanan ID:7211 Page 3 of 20

Unit 06:Business Decision Making

PEST analysis This PEST analysis to find out, how the external factors will influence the hotel industry, It will help to expand the business in the UK. Hotel and tourism industry are one of the fastest growing industries in the UK. Earnings from overseas residents grew by 5 per cent to 4.3 billion. Tourism is a fifth big industry worth about 85 which is contributing 3.4% of the nation's GVA. (Dale, 2007)

Political Factors Political factors are playing huge influence in the hotel industry. According to finding political factors are more stable in the UK. Government tax policies, increase in VAT may impact on ticket price on airline. This may affect the hotel industries

Economic Factors Economic factors will influence the buying power of customers. Currently the UK is facing problem in an increase in inflation rate 4.0%. In UK unemployment is increasing according to labour market. If unemployment is high spending of the customer also low, this may affect the hotel industry. Social Factors Trend of internet technology and lifestyle changes has been affecting the UK hotel industry. Dual work and busy lifestyles will make everybody take their holiday once a year. That may be a good opportunity to build a strong business.

Technological Factors Development in technology is affecting the hotel business in the UK and all over the world. It will help to get the world at your fingertips within one click. Example internet booking and advance transport facility. Through the internet it is easy to distribute the product and services and availability of transport will bring more tourists to UK or any other part of Europe.
Perinparajah Lakshmanan ID:7211 Page 4 of 20

Unit 06:Business Decision Making

Data was collected from several customers and set of questionnaires were assigned to identify the customer needs in the hotel industry. The questionnaire started with general information and customers personal interest. 12 questions were asked from the customers. Questions were sent to 1000 people from various ways and four mediums were used to send these questionnaires.

Direct Questionnaires 350

Post Questionnaires 350

Web Questionnaires 150

E-mail questionnaires 150

Out of 1000 questions, 200 were unanswered, mostly the e-mail and post questionnaires. This may be because of wrong e-mail addresses, wrong postal addresses. Most of the people did not respond because of time consuming. Out of these 28%, 72 % of questionnaires were fully answered by all the people. Majority of participants were male. 450 male and 265 females participated, 75% were between 18-35 age groups and the rest were between 35-55 age groups. This study shows that mostly males are interested in the travelling.

Perinparajah Lakshmanan

ID:7211

Page 5 of 20

Unit 06:Business Decision Making

Analysis of data Below charts show statistic and analysis details of each question( Appendix i) Questionnaires

How ofte do you travel ? Once a year Twice a year More

450 200 65

How ofte do you travel ?

500 450 400 350 300 250 200 150 100 50 0 Once a year Twice a year More

The above figures show most of the people (62%) go on holidays only once a year, because of high inflation rate and most of them are families. So they cannot afford the two holiday expenditures in a year. Full time work and busy schedule do not allow them to go for holidays twice a year. 28% of the respondents go on holiday two times a year. Main reason for this is, their income rate is high and they are passionate about travelling. 10% of the people like to go for holiday for more than two times. These are frequent travellers who do business. The study shows that most of people go on holiday once a year, due to their family and income status.

Perinparajah Lakshmanan

ID:7211

Page 6 of 20

Unit 06:Business Decision Making

The result of this study shows the age group mostly between 25 to 35 who like to spend their holiday time. This indicates these are people who earn monthly fixed income. Second set of age 18-25, shows 28 % of the people are in this category. Due to low income level and depending on their parents will decide their holiday time. The age group between 35 and above are probably retired from their job. Due to oldness and lower level of income, they do not go out to some far place. They always like to spend their time at home.

Perinparajah Lakshmanan

ID:7211

Page 7 of 20

Unit 06:Business Decision Making

What type of hotel would you like to stay ? Five Star Four Star Normal

150 350 215

What type of hotel would you like to stay ?

Five Star Four Star Normal

30%

21%

49%

Study shows that only 150 people like to stay in a five star hotel. Mostly these people are earning higher income than the normal people, so they always like to go for higher standard places and most of them are single. So they do not need to spend on their families. 350 people cannot afford to stay in four star level hotels. These people mostly married and they're not affordable to send in five star hotels. Remaining 215 people like to spend their holiday in normal hotels. These people mostly teenager, so they always prefer to go to budget hotels.

Perinparajah Lakshmanan

ID:7211

Page 8 of 20

Unit 06:Business Decision Making

Favourite Destination Uk European Countries Asia

450 100 115

450

100 Uk European Countries

115

Asia

The above study shows that most of the people like to visit the UK. Most of them are a visit the UK from other countries. These people always like to visit, because they can go to ancient historical cities and 21 century places. On the other hand most of the British and other European country people like to spend their holiday in other European countries and Asia. They prefer changes rather than spending their holiday in the same place.

Perinparajah Lakshmanan

ID:7211

Page 9 of 20

Unit 06:Business Decision Making

This study shows most of the people like to, book their holiday via online. It is so convenient for them to book their holidays between busy schedules. Increase on ebusiness will help them to choose their package from home. Second set of 250 people answered travel agent. These people are mostly people with families. They would like to go to their holiday with full package. So they can select whole package from a travel agent. 65 of the people answered as direct booking, these are peoples sudden travel, and they always book their holiday direct.

Perinparajah Lakshmanan

ID:7211

Page 10 of 20

Unit 06:Business Decision Making

How long you spend your holidays? Two weeks One months More than one month

300 200 215

Duration of your holiday

350 300 250 200 150 100 50 0 Two weeks One months More than one month

The above study shows that 42 % of the people like to spend their holiday for two. These people mostly are married; due this their budget is not affotable for them to spend more money. Second categories (28%) are mostly single and high class people. Due to this they will enjoy their holiday more than other categories of people. Third category set of people is mostly those people having their own businesses; they do not need to worry about any holiday duration.

Perinparajah Lakshmanan

ID:7211

Page 11 of 20

Unit 06:Business Decision Making

The above study shows that most of the people like to spend their holiday during the summer time, because of the weather. The second category mostly from other countries like Asia would like to spend their holidays during winter and spring times because they want to explore new experiences which may not available in their country.

Perinparajah Lakshmanan

ID:7211

Page 12 of 20

Unit 06:Business Decision Making

Research shows that most of the people like to stay in a standard and family room. Many say rather than spending too much for the room they can spend that money for the site seeing. 40 people answered that they would like to spend their holidays in deluxe room. These are the people who are mostly business owner and high income earners.

Perinparajah Lakshmanan

ID:7211

Page 13 of 20

Unit 06:Business Decision Making

Above statistic shows, equally they choose their packages. 37% said they like bed and breakfast. Most of them mentioned that they only stay only inside the hotel during the night, other time they use to go to site seeing, so they do not have to, waste of money paying for the package, they can have their food outside, rather than having in the same place. Another set of 35% of the people answered they go for full board. Mostly they are from higher profile people, they do not want to be in trouble during the food time. So always prefer for full-board. Third set of people said, they prefer going for half board. Most of them are families. They would like to at least have two meals from the hotel.

Perinparajah Lakshmanan

ID:7211

Page 14 of 20

Unit 06:Business Decision Making

Which travelling methods you use? Own vehicles Taxi Hotel transport

115 224 356

Travelling methods
Own vehicles Taxi Hotel transport

17%

51% 32%

This study shows, 51% them answered that they will use the hotel transport for their, travelling purposes. This is because they do not want to panic at the last minute when there is no transport. 32 % of them are answered that they will use external taxies. These are the set of who do not want to travel that much during the holidays, mostly newly married couples. Third set, which of 17 % of people answered, that they will use their own transport. This set of people locally live near to the hotel and people who like long drives.

Perinparajah Lakshmanan

ID:7211

Page 15 of 20

Unit 06:Business Decision Making

What is your average income level for a year? 12000-24000 24000-36000 36000 and above

265 376 111

Average income
Series1 376 265

111

12000-24000

24000-36000

36000 and above

Out of 715 people, 376 people are from the middle class income level. Mostly these are people from well established families their 24000-36000 income level. 265 people like to go for your holidays from the income level of 12000-24000, mostly these people are young ages, due lower level of income number of people who visit from this level is low and 111 answered from 36000 and above for like to go for their holiday, these people are higher income earners, due to their busy schedule they do not go on holiday often

Perinparajah Lakshmanan

ID:7211

Page 16 of 20

Unit 06:Business Decision Making

The above study shows that most of the people like to spend their holiday with their families. These are people who are married and they are within good income level. Second statistic shows that 28% of the people like to spend their holiday with friends these people are mostly the young age group. 20% of the people answered that they want to spend their holiday on office trip. These are mostly from business class people. They would like to spend their holiday during the business trips Revenue and cost forecast for Riverside Hotel Ltd.
M
Revenue 500000X 6 Months Variable Cost 50

Direct Labour Direct material

Contribution Fixed Cost Profit

4 4
(8) 42 (25) 17

Base in the hotel in London, after all the all the expenses Riverside hotel also able to earn an income of 17 million of profit per year. Investment on a hotel business with will help Riverside hotel to increase their profit and also this will bring more jobs for the peoples as well Perinparajah Lakshmanan ID:7211 Page 17 of 20

Unit 06:Business Decision Making Recommendations and conclusions There are positive signs in the economy at present and the objectives of the company to expend its operation will be able to increase their shareholder value. The present and near future and buying power of the individuals is increasing day by day , because of rapid development in transport technology and peoples attitudes about travelling and going on holidays has been accompanied by a rapid growth of hotel industrial. This is one of the growing sectors, because of the open e economy policies and European Union, therefore Riverside Hotel having a good opportunity to expand their business within London.

Perinparajah Lakshmanan

ID:7211

Page 18 of 20

Unit 06:Business Decision Making

Reference Black, K. (2009) Business Statistics:Contemporary Decision Making. 6th ed. new york :John Wiley and Sons. Dale, G. (2007). BTEC National Travel & Tourism. Oxford: Pearson Education Ltd. Ferreira, E., Erasmus, A, & Groenewald, D. (2009). Administrative Management .2nd ed. Cape Town: Juta and Company Ltd. Francis, A. (2004). Business Mathematics and Statistics (6th ed.). London : Cengage Learning. Giri, & Bannerjee. (2002). Statistical Tools and Techniques. Kolkata: White Hall Computer. Kotler, P., & Armstrong, G. (2010). Principles of marketing .13th ed. London : Pearson Education Ltd . Leon-Guerrero, A., & Nachmias, C. F. (2010). Social Statistics for a Diverse Society.6thed. California : An Imprint of SAGE Publication,Inc . Ravindra, S., & Singh, M. N. (1996). Elements of survey sampling. Dordrecht: Kluwer Academic Publisher. Singh, R., & Mangat, N. S. (1996). Elements of survey sampling. Dordrecht , Netherland : Acdamim Publishers.

Bibliography Bedward, D. (1999). Quantitative methods: a business perspective .1st ed. Butterworth-Heinemann. Donald Waters, C. D. (2008). Quantitative methods for business.4th ed. Harlow: Pearson Education. Dubrin, A. J. (2011). Essentials of Management .9th ed. Mason: Cengage Learning. Jon Curwin, R. S. (2002). Quantitative methods for business decisions.5th ed. London: Thomson Learning. Teale, M. (2003). Management decision-making: towards an integrated approach. London: Pearson Education.

Perinparajah Lakshmanan

ID:7211

Page 19 of 20

Unit 06:Business Decision Making

(Appendix i) 1. How often do you travel? 2. What type of hotel would you like to stay? 3. Which destination is your favourite? 4. Which type of room will you stay? 5. What kind of package would you choose? 6. Which method of booking do you prefer? 7. Which age group are you? 8. Which time do you go your holiday 9. How long you spend your holiday? 10. Which travelling method you use? 11. What is your average income level for a year? 12. With whom would you like to spend a holiday?

Perinparajah Lakshmanan

ID:7211

Page 20 of 20