pineapple resort business plan

1. `May 1Pineapple Resort2013This document contains business plan for Pineapple Resort, which includes mission statement, executive summary, strategies, financials, mortgage proposals, graphics and images, and closing statements.Business Plan

2. Table of Contents Pineapple Resort Organizational Chart.................................................................................................................................... 2 Organization Chart ........................................................................................................................................................................ 2 Team Roles ..................................................................................................................................................................................... 2 Pineapple Resort Background History ..................................................................................................................................... 3 Mission Statement.......................................................................................................................................................................... 3 Executive Summary ....................................................................................................................................................................... 3 Descriptions of Products and Services ....................................................................................................................................... 4 Operations and Management ....................................................................................................................................................... 5 SWOT Analysis .............................................................................................................................................................................. 5 Team Strategy ................................................................................................................................................................................... 6 Fall 2012 (Year 0) Strategy............................................................................................................................................................ 6 Spring 2013 (Year 1) Strategy....................................................................................................................................................... 7 Mortgage Proposals ........................................................................................................................................................................ 8 First Mortgage Request ................................................................................................................................................................. 8 Second Mortgage Request ............................................................................................................................................................ 8 Pineapple Resort Franchising Decision ................................................................................................................................... 9 Year One Financials ..................................................................................................................................................................... 10 Pineapple Resort Quarterly Financial Pie Charts ................................................................................................................ 15 Quarter 1 ....................................................................................................................................................................................... 15 Quarter 2 ....................................................................................................................................................................................... 15 Quarter 3 ....................................................................................................................................................................................... 16 Quarter 4 ....................................................................................................................................................................................... 16 Charts ................................................................................................................................................................................................ 17 Hotel Status Based on Occupancy Percentage ....................................................................................................................... 17 Hotel Status Based on Income After Taxes ............................................................................................................................ 18 Action Plan ...................................................................................................................................................................................... 19 Closing .............................................................................................................................................................................................. 201

3. Pineapple Resort Organizational ChartChenee Stone General ManagerYong Park Assistant General ManagerSakura Shu Food and Beverage ManagerJared Ross Housekeeping ManagerRaihan Taleb Engineering ManagerShaniqa Roane Front Desk ManagerTeam Roles Organizer-Sakura Shu Keeps meeting focused and in order, does his/her best to get through the agenda (agenda for the meetings). Encourager- Jared Ross Brings good- humored appreciation to proceedings, able to defuse tensions and revive flagging morale. Facilitator- Sakura Shu Ensures that the quieter members of the group are heard and everyones contribution acknowledged. Recorder- Yong Park Keeps a note of decisions (especially decision as to who will do what before the next meeting) ensures that everyone is aware of them. Time-Keeper and Progress Chaser- Chenee Stone Keeps an eye on the calendar and ensures that everyone is aware of the state of play. Coordinator- Shaniqa Roane Sees the big picture (the strategic overview) with an eye of gaps and overlaps, and presents this to the team. Lookout- Raihan Taleb Visualizes future scenarios, is alert to issues that may be looming over the horizon keeps everyone informed.2

4. Mission Statement The mission of Pineapple Resort is to provide a superior hospitality experience that makes our guests feel at home; every one of us is responsible for ensuring guests maximum satisfaction by delivering exceptional quality service. We will create a positive work environment for all our employees. By continually striving to exceed expectations, we will achieve the results needed to satisfy our guests, employees, and investors. Our company will also adhere to the principles of sustainability and environmental responsibility.Executive Summary Pineapple Resort is a 250 room hotel specializing provide exceptional hospitality service to business and leisure guests. Our objective is to create an exceptional, friendly, and relaxing environment for all guests staying in our hotel. Moderately priced between the high end hotel properties and traditional motel strips, the Pineapple Resort falls into an affordability niche that is unique on its own in Myrtle Beach, South Carolina. Combined with an in-house restaurant, a hotel shop, quick check-in/check-out, we are currently seeking investment funds to renovate our guest rooms, conference rooms, business services, in-room mini-bars, and leisure club. With the new amenities we are adding into our hotel, the Pineapple Resort will build the fundamentals of a highly profitable hotel venture. Pineapple Resorts owners have extensive hospitality backgrounds that will ensure the running a success operation. Each of our partners is specialized in specific areas within the hotel. Together as a team, we will ensure all aspects of the hotel are managed appropriately. It is our ultimate goal to differentiate the type of services offered at our hotel from our competitions, which will assist in building our reputation and attract frequent business and leisure travelers who require a higher level of personal service and recognition that they cannot receive at our competing hotels.3

5. Description of Products and Services Here at the luxurious Pineapple Resort, we offer state of the art products and services. We provide a great lunch, dinner, and dessert menus with our vendors supplying local and fresh ingredients. Some starter menu items include Seafood Pancakes, Avocado Pear with Shrimp, Smoked Scotch Salmon, and Tortellini AllaCarbonara. We also provide a very diverse beverage menu which includes draught and bottled beers, house and varietal wines, sherries, liquors, cocktails, and soft drinks. At the Pineapple Resort hotel we want to provide guests with the best experience possible. Therefore we spend several weeks training our staff members to serve and go beyond most expectations. We hire the best candidates for our staff positions and we make sure that we always have enough staff members around the clock to fulfill any needs a guest may inquire. Our advertising is based on a direct sales force, and posters. We have chosen these methods based on our target market because these specific types of advertising appeals best to families, business, but most leisure travelers. We also understand the importance of the Green Initiative towards the environment, and so we have implemented waste reduction and recycling, water usage reduction for gardens, landscaping, flow control devices, and energy usage reduction for lighting, solar gain, and heat loss in bedrooms. We have refurbished over 100 of our bedrooms and will continue until all renovations are complete. We have also refurbished our full service in house restaurant for 100% guest satisfaction and convenience. For guest comfort we provide quality soaps and shampoos, hairdryer, laundry/dry cleaning service, voice mail/message service, complimentary shoeshine, safety deposit box available, and international direct dial telephone which are all complimentary. Our in room entertainment consists of cable/satellite TV with pay per view movie channel and games, on-line hotel information and guest account status. In addition to these amenities we also provide concierge, and room lounge services so that just about every guest need can be fulfilled in house. At the Pineapple Resort we offer extra facilities to maximize the guest experience at our hotel. We provide fee Wi-Fi, a hotel shop, quick check in/out, and an extra parking area. We are working very diligently to provide room mini-bars, business services, a leisure club, and conference/function rooms.4

6. Operations and Management Since the management of the Pineapple Resort knows how vital hotel operation management is, we strive for the success of the hotel operation through rigorous evaluation, extensive training, and advanced technological implementation. To successfully operate the Pineapple Resort, the management will: Prepare extensive policy and procedures manual and make sure they are utilized by the management and the employees Ensure the direction of the management through the ongoing general manager and key department head meeting Perform continuous employee training and evaluation to monitor Provide safe and pleasant work environment possible for the employees Assign staffs efficiently and analyze payroll daily Prepare annual strategic business plan including marketing plans, budget and cash projections, and capital improvement plans Plan and carefully monitor meaningful cost controls such as energy costs Set up the structured rates using yield management and check them daily through records and reflect the market conditions as needed Establish preventive maintenance programs such as regular Inspection system on major equipment5

7. SWOT AnalysisStrengthWeaknessOpportunitiesThreatLocation High Tourist Attraction Price efficient for all markets Recreational environment Great nightlife Ideal for retirement vacations High staff moral Low staff turnover ratio Very slow off seasons Maintenance of exterior of facility Location No conference room Low capital High renovation cost Tours Conferences Conventions Package deals for groups Weddings/Events Extreme weather concerns Maintenance of exterior of facility Competition during peak season Competition with hotels with brand names6

8. Fall 2012 Strategy Our hotel, the Pineapple Resort, was very successful in last semester in terms of reaching our goal of exceeding 18% occupancy and becoming the hotel with the highest revenue. The Pineapple was in last place the first week and gradually move its place to first by the third week. This was resulted by the variety of ideas our teammates had pitched in and the belief that we can surpass the struggling of being in last week in the beginning. Our strategy for week one is to input room rates that are reasonable based on the location and the description of the hotel. However, this did not work out due the other teams lower rate. Therefore, our team must follow the prices given by other teams. This became a huge disadvantage for us because we had to attract customers with lower rates, which is always dangerous since we didnt have any true value that attracts customers. The shift from last place to second to last in week two boosted our confidence quite a bit. The placement of other hotels made our team realize that anything is possible. As long as we continue to work hard and be careful with all our decisions, we would be able to generate higher revenue. Our decision of making major renovations within the hotel is another factor. It is our teams goal to make sure that the Pineapple Resort is not just an ordinary seaside hotel. However, the decision of major renovation would require a second mortgage. Our occupancy percentage had changed from 3.9% in week one to 20% in week four. Not only did we surpass our goal to reach 18%, but we were also able to surpass it by 2%. One of the positive facts that is shown in our table is not we were able to generate roughly 40% of our total revenue from food and beverage. This proves that our decision in terms of menu and vendor are appropriate for our target markets. We also would like to generate more revenue from food and beverage because we want to keep our guests dining in house.7

9. Spring 2013 Strategy Our semester this spring is to surpass the 50% occupancy and complete major renovations. To increase occupancy level, we are planning to focus more on marketing our hotel using variety of campaign strategies. We also will strategically reduce our expenses by controlling our labor and food and beverage costs. To complete the major renovation, we need another mortgage. At this point, we would like to requests a second mortgage with the amount of $5,000,000 for major renovation within the hotel. The major renovations include rooms, business center, conference center, and extra facilities. We have provided charts and graphs to indicate how the mortgage will be distributed for our renovations. The result of these major renovations is a huge improvement of our hotel appearance. The objective of these renovations is to distinguish our hotel from our competitors. We hope that by proving better facilities, experience and service, we will be able to attract more guests, increase occupancy level, generate more revenue, improve our profit margins, and return your investments. After speaking with our guest speakers, we have made many adjustments in terms of our strategies for the current year. Vira Safai Analysis Our Numbers Understanding Our Revenue Focus on Staff and Guest Satisfaction Michael Anderson Focus on Marketing Direct Sales Force Business Press Sam Malhotra Increase Conference Room Rate Per Guest Room Rate Adjustment to Fit Off-Peak Seasons8

10. Mortgage Proposals We have requested two mortgages for major renovation in the hotel. First Mortgage Request Type of Level Price Per Unit Number of Renovation Units Rooms 3 $17,325.00 195 Business Service N/A $57,750.00 1 Leisure Club N/A $825,000.00 1 Conference Room N/A $500,000.00 1 Mini Bar Hotel Shop Other ExpensesN/A N/A N/A$411.54 $49,500.00 $86,490.00Time of Cost Percent Renovation 67.57% 2 weeks $3,378,375.00 1.16% 6 weeks $57,750.00 16.50% 18 weeks $825,000.00 10.00% 20 weeks $500,000.00250 1 N/A3 weeks 8 weeks N/A Total$102,885.00 $49,500.00 $86,490.002.06% 0.99% 1.73%$5,000,000.00100.00%Second Mortgage Request Renovation Leisure Club Conference Room Others TotalCapital Cost $838,093.74 $501,875.00 $660,031.26 $2,000,000.009Percentage 42% 25% 33% 100%

11. Pineapple Resort Franchising Decision After weeks of discussions and analysis, we have decided to franchise with Hilton Hotels & Resorts. Hilton Hotels & Resorts is one of Hiltons full service brands and also one of the flagship brands of Hilton Worldwide. In search of the perfect brand to franchise, we are trying to find hotel brands with similar concepts and goals as we do. Hilton Hotels & Resorts places emphasis on both business and leisure travelers. Majority of its franchises are located in major cities and vacation spots, fitting our concept perfectly. Since Pineapple Resort is in the process renovating the hotel which includes the addition of conference center, business center, hotel shop, and leisure club, Hilton Hotels & Resorts concept is the one that is most similar to our targeted goals. Some of the benefits of us franchising with Hilton Hotels & Resorts include: Better training for employeesEstablished business modelIncreased capital opportunitiesLow capital overlayBrand recognition10

12. Year One Financials RevenueQuarter 1Quarter 2Quarter 3Quarter 42012 Annual BudgetCurrent Year BudgetRoom Sales $ 319,375.00 $ 48,730.00 $ $ $ $ $ 368,105.00$ 512,125.00 $ 132,990.00 $ $ $ $ $ 645,115.00$ 524,125.00 $ 221,100.00 $ $ $ $ $ 745,225.00$ 402,375.00 $ 90,090.00 $ $ $ $ $ 492,465.00$ 1,758,000.00 $ 492,910.00 $ $ $ $ $ 2,250,910.00$ 3,041,340.00 $ 852,734.30 $ $ $ $ $ 3,894,074.30$ 90,963.00 $ $ 22,020.00 $ $ $ 112,983.00$ 161,172.00 $ $ 978,000.00 $ $ $ 1,139,172.00$ 198,773.00 $ $ 202,980.00 $ $ $ 401,753.00$ 121,363.00 $ $ 63,240.00 $ $ $ 184,603.00$ 572,271.00 $ $ 1,266,240.00 $ $ $ 1,838,511.00$ 990,028.83 $ $ 2,190,595.20 $ $ $ 3,180,624.03Total Beverage Revenue$ 55,561.00 $ $ 55,561.00$ 102,897.00 $ $ 102,897.00$ 131,656.00 $ $ 131,656.00$ 75,987.00 $ $ 75,987.00Total Food & Beverage Revenue$ 168,544.00$ 1,242,069.00$ 533,409.00$ 260,590.00$ 366,101.00 $ $ 366,101.00 $ $ 2,204,612.00$ 633,354.73 $ $ 633,354.73 $ $ 3,813,978.76$ 7,959.00 $ $ $ $ 7,959.00$ 15,139.00 $ $ $ $ 15,139.00$ 19,747.00 $ $ $ $ 19,747.00$ 11,432.00 $ $ $ $ 11,432.00$ 54,277.00 $ $ $ $ 54,277.00 $ -$ 93,899.21 $ $ $ $ 93,899.21 $ -$ 544,608.00$ 1,902,323.00$ 1,298,381. 00$ 764,487.00$ 4,509,799.00$ 7,801,952.27Weekday Weekend Conferences Tours Events Other Total Room SalesFood Revenue Restaurant Conferences Tours Events Room Service Total Food Revenue Beverage Sales Bar Mini-barsOther Sales Telephone Internet Shop Leisure Club Total Other SalesTotal Revenue11

13. Quarter 1Quarter 2Quarter 3Quarter 42012 Annual BudgetCurrent Year BudgetCost of Sales Rooms COS F&B COSTotal F & B Cost of Sales$ 7,097.00 $ 4,252.00 $ 11,349.00$ 160,697.00 $ 60,555.00 $ 221,252.00$ 73,835.00 $ 34,489.00 $ 108,324.00$ 286,816.00 $ 124,846.00 $ 411,662.00$ 496,191.68 $ 215,983.58 $ 712,175.26$ 5,169.00 $ 75,906.00$ 824.00 $ 12,173.00$ 12,831.00 $ 234,083.00$ 7,424.00 $ 115,748.00$ 26,248.00 $ 437,910.00$ 45,409.04 $ 757,584.30$ 1,890,150.00$ 1,064,298. 00$ 648,739.00$ 4,071,889.00$ 7,044,367.97$ 61,814.00$ 62,301.00$ 61,814.00$ 61,814.00$ 247,743.00$ 428,595.39$ 108,600.00 $ 170,414.00$ 108,600.00 $ 170,901.00$ 108,600.00 $ 170,414.00$ 108,600.00 $ 170,414.00$ 434,400.00 $ 682,143.00$ 751,512.00 $ 1,180,107.39$ 84,888.00 $ -$ 84,414.00 $ -$ 84,414.00 $ -$ 84,888.00 $ -$ 338,604.00 $ -$ 585,784.92 $ -$ 84,888.00Beverage Cost$ 45,187.00 $ 25,550.00 $ 70,737.00$ 468,702.00Food Cost$ 84,414.00$ 84,414.00$ 84,888.00$ 338,604.00$ 585,784.92$ $ $ 255,302.00$ $ $ 255,315.00$ $ $ 254,828.00$ $ $ 255,302.00$ $ $ 1,020,747.00$ $ $ 1,765,892.31$ 468,702.00$ 1,890,150.00$ 648,739.00$ 4,071,889.00$ 7,044,367.97$ 170,414.00 $ 84,888.00 $ $ 213,400.00$ 170,901.00 $ 84,414.00 $ $ 1,634,835.00$ 170,414.00 $ 84,888.00 $ $ 393,437.00$ 682,143.00 $ 338,604.00 $ $ 3,051,142.00$ 1,180,107.39 $ 585,784.92 $ $ 5,278,475.66Other COS Telephone COS Total Cost of SalesGross ProfitPayroll & Related Rooms Front Office/Unifor med Staff Housekeeping Total RoomsFood and Beverages F&B Conferences & Banquets Total Food and Beverages Other Staff Costs Total Other Departments Total Payroll & Related Gross Profit Less Wages Gross Profit Less Rooms Less F&B Less Other Total Gross Profit Less Wages12$ 1,064,298. 00 $ 170,414.00 $ 84,414.00 $ $ 809,470.00

14. Quarter 1Quarter 2Quarter 3Quarter 42012 Annual BudgetCurrent Year BudgetCentral Undistributed Costs Payroll and Related General Manager's Office Department Heads$ 36,244.00$ 36,244.00$ 36,244.00$ 144,976.00$ 250,808.48$ 59,568.00$ 59,568.00$ 58,630.00$ 59,568.00$ 237,334.00$ 410,587.82$ 95,812.00Total Payroll and Related Expenses$ 36,244.00$ 95,812.00$ 94,874.00$ 95,812.00$ 382,310.00$ 661,396.30$ 10,366.16 $ 124,124.04Other Direct CostsMaintenance Sales & Marketing (Ads) Printing/Statio nery/menus Credit Card Commissions Cleaning Materials Training Small Equipment Contract Maintenance Refurbishment Costs Market Research & Consulting Costs EMS Spending Energy Costs Water Costs Waste Costs Total Direct Costs$ 1,468.00 $ 8,316.00$ 1,494.00 $ 18,986.00$ 1,542.00 $ 30,286.00$ 1,488.00 $ 14,160.00$ 15,275.00$ 15,765.00$ 15,275.00$ 15,275.00$ 61,590.00$ 106,550.70$ 2,771.00 $ 4,306.00 $ 4,014.00 $ 520.00 $ 8,359.00 $ 19,505.00 $ 117,740.00$ 6,328.00 $ 6,994.00 $ 7,545.00 $ 520.00 $ 15,684.00 $ 36,600.00 $ -$ 10,097.00 $ 7,357.00 $ 9,838.00 $ 520.00 $ 20,155.00 $ 47,028.00 $ -$ 3,720.00 $ 5,464.00 $ 5,606.00 $ 520.00 $ 11,743.00 $ 27,396.00 $ -$ 22,916.00 $ 24,121.00 $ 27,003.00 $ 2,080.00 $ 55,941.00 $ 130,529.00 $ 117,740.00$ 39,644.68 $ 41,729.33 $ 46,715.19 $ 3,598.40 $ 96,777.93 $ 225,815.17 $ 203,690.20$ -$ -$ -$ -$ -$ -$ $ 6,426.00 $ 1,712.00 $ 1,712.00$ $ 7,694.00 $ 2,346.00 $ 2,346.00 $ 122,302.00$ $ 8,516.00 $ 2,757.00 $ 2,757.00 $ 156,128.00$ $ 7,001.00 $ 1,999.00 $ 1,999.00 $ 96,371.00$ $ 29,637.00 $ 8,814.00 $ 8,814.00 $ 566,925.00$ $ 51,272.01 $ 15,248.22 $ 15,248.22 $ 980,780.25$ (74,536.00)Uniforms$ $ 5,992.00 $ 71,748.00$ 1,416,721.00$ 558,468.00$ 201,254.00$ 2,101,907.00$ 3,636,299.11$ 101,998.00 $ 92,902.00 $ 4,306.00$ 101,998.00 $ 91,746.00 $ 6,994.00$ 101,998.00 $ 90,603.00 $ 7,357.00$ 60,393.00 $ 89,476.00 $ 5,464.00$ 366,387.00 $ 364,727.00 $ 24,121.00$ 633,849.51 $ 630,977.71 $ 41,729.33$ 192,124.00Income Before Fixed Charges Fixed Costs Property Taxes & Insurance Depreciation Bank Charges13

15. $ 7,962.00 $ 207,168.00$ 7,660.00 $ 208,398.00$ 7,359.00 $ 207,317.00$ 7,059.00 $ 162,392.002012 Annual Budget $ 30,040.00 $ 785,275.00$ (281,704.00)$ 1,208,323.00$ 351,151.00$ 38,862.00$ 1,316,632.00$ 2,277,773.36$ -$ -$ -$ -$ -$ -$ (281,704.00)$ 1,208,323.00$ 351,151.00$ 38,862.00$ 1,316,632.00$ 2,277,773.36$ (281,704.00)$ 1,208,323.00$ 351,151.00$ 38,862.00$ 1,316,632.00$ 2,277,773.36Quarter 1 Interest Expense Total Fixed CostsGross Operating ProfitOther IncomeIncome Before TaxQuarter 2Quarter 3Quarter 4Current Year Budget $ 51,969.20 $ 1,358,525.75Business Tax Income After Tax14

16. Pineapple Resort Quarterly Financial Pie ChartsQ1 Revenue 10% 1%21% 68%Rooms Food Beverage OtherQ2 Revenue 5% 1% 34% 60%15Rooms Food Beverage Other

17. Q3 Revenue 10% 2%31%57%Rooms Food Beverage OtherQ4 Revenue 10% 2%24% 64%16Rooms Food Beverage Others

18. Hotel Status Based on Room Occupancy 70 Percent Occupancy60 50 40 30 20 10 0Last YearQ1Q2Q3Hotel California017.8834.8436.76Hotel Wisteria020.1649.0565.68BOSS Hotel Group026.3456.7360.62Grove at Georgetown022.4342.2646.02Pineapple Resort026.0937.941.39Carpe Diem022.7944.1456.9517

19. Hotel Status Based on Income After Taxes 1500000Income After Taxes1000000 500000 0-500000 -1000000 -1500000 Hotel California Hotel Wisteria BOSS Hotel Group Grove at Georgetown Pineapple Resort Carpe DiemLast YearQ1Q2Q30$(208,235.00)$318,277.00$259,174.000 0 0 0 0$(478,080.00) $(225,612.00) $(187,465.00) $(104,364.00) $(1,286,794.00$709,285.00 $474,417.00 $737,280.00 $651,522.00 $638,906.00$852,503.00 $1,036,797.00 $683,162.00 $722,820.00 $713,633.0018

20. Action Plan Our Year One Goal: Effectively position our hotel to be successful in the marketplace Maximize sales and profits Achieve both AAA Diamond Ratings and Mobile Star rating Establish a franchise agreement with a major hotel company In order to fulfill these 4 strategies we will do the following:Build rapport with corporate travelers for weekday stays.Offer room upgradesEstablish relationships with groups for conferencesProject group and corporate sales at least 3 months in advanceAppeal to comprehensive needsOffer quality amenitiesAction StepsMaintain physical attributes of propertyMatch rates specifically around events in area.Allow overbooking Build relationships with 3rd party online booking companiesCompare current and previous rates19

21. Closing Overall, working with HOTS was an up and down experience. As a group, we have evolved so much from where we started to today. We the group was very formed, most of us were quiet shy in terms of communicating our thoughts to each other. We were waiting the leaders to emerge within the group and lead us through the process of this simulation. And eventually our group was changed into a team. Unlike most other teams within the class, we make your decisions very quickly; we have the general idea of just make the decision and go with it with no second thought or doubting ourselves. We realized that in order to succeed in HOTS, we have to work as a team with one final goal. Things we learned include: Communicate effectivelyHave FunBe open-mindedAdjust accordinglyBe creativeUse work experienceTake chancesIts ok to failVoice your opinionEducated decisions20