nemacolin woodlands resort client presentation
DESCRIPTION
This is my groups final presentation in our consulting project for the Nemacolin Woodlands resort. This was presented by our group to about 20 members of the Nemacolin staff and management team. The project dealt mainly with the optimization of the resort\’s ammenities through both market research, consumer insights, and strategic implications.TRANSCRIPT
1
Nemacolin Woodlands Resort & Spa
Amenity Analysis
Project Team
2
Graduate of West Virgina University
2 yrs. experience in banking at Bank of New York Mellon:• Managed billion dollar
corporate trust and pension fund accounts
• Preformed security/derivate trades daily
BackgroundJohnathan Kullman
Graduate of Purdue University
2 yrs experience as a civil engineer at TranSystems • Designing and
implementation of transportation projects
• Provided support to management team in maintaining clientele relations
BackgroundJoseph Nachinson
Graduate of NIRMA Institute of Technology, India
2 yrs experience as technical consultant at Cognizant Technology Solutions • Off-shore teamlead for
ERP Peoplesoft• Software configuration
manager
BackgroundRahul Nihalani
Graduate of European Business School – Oestrich-Winkel, Germany
2 yrs experience as strategic consultant at Geode Advisory, London• FMCG• Aerospace & Defense
BackgroundJan Schlichenmaier
3
Resort Overview
Situated on 3,000 acres, in Fayette County, PA
Located Approx. 70 Miles SE of Pittsburgh ≈ 1.5 Hrs driving time
Owned and operated privately by founder of 84 Lumber, Joe Hardy
Features a total of 335 luxurious guestrooms ; hotel suites, townhomes, & private residences
AAA Five-Diamond hotel “Falling Rock” and restaurant “Latrec”
Host of resort amenities, lodging, and dining options $53M in 2008 Revenue
Nemacolin Woodlands
Pittsburgh
Chateau Lafayette - 124 European inspired guest rooms
4
Strategy Project Overview
Phase I – Project Kick-off, Establish the Baseline
Phase II – Detailed Analysis
Phase III – Consolidate Findings & Present Recommendations
Objective
Scope
Approach
Develop a structured methodology to optimize the strategic management of amenities, specifically to optimize overall profitability
Overarching objective is to determine current resort amenities that will continue to generate room occupancy
Profitability analysis per amenity
Traffic analyses per amenity
Attractiveness analysis per amenity
5
Executive Summary
Financial analysis has determined that off-road driving and wildlife have the highest operating loss from 2006-2008
Our survey revealed that wildlife is only moderately attractive and off-road driving fairly unattractive to customers
Equestrian and off-road driving are the overall poorest performing amenities and therefore yield the highest potential for cost savings
The combined cost savings for wildlife and off-road driving are expected to generate an annual increase $140,000 in the bottom line
6
Agenda
Situation
Challenges
Data Mining & Market Survey
Analysis
Recommendations
Challenges
Situation
Data Mining & Survey
Analysis
Recommendations
List of Analyzed Amenities
Challenges
Situation
Data Mining
Analysis
Recommendations
8
Cash from Operations in Year 2008
Challenges
Situation
Data Mining
Analysis
Recommendations
Spa
Shooting A
cadem
y
Golf Course
Adventu
re Cen
ter
Miniat
ure Golf
Kidz Klub
Off-road
Driving Sk
i
Wild
life-500,000
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
Cash from operations is positive for the majority of the amenities
9
Loss per Amenity for the Year 2008
Challenges
Situation
Data Mining & Survey
Analysis
Recommendations
Kidz Klub
Off-road
Driving Sk
i
Wild
life-250,000
-200,000
-150,000
-100,000
-50,000
0
-$54,999 -$57,520-$80,957
-$191,516
Wildlife & Off-road Driving account for about 65% of the overall cash loss from operations
10
Cash from Operations for 2006 - 2008
Cash from operations shows an inconsistent pattern for some amenities over the last 3 years
Challenges
Situation
Data Mining & Survey
Analysis
Recommendations
Shooting A
cadem
y
Golf Course
Adventu
re Cen
ter
Miniat
ure Golf
Kidz Klub
Off-road
Driving Sk
i
Wild
life-600,000
-400,000
-200,000
0
200,000
400,000
Profit 2006 Profit 2007 Profit 2008
84 LumberGolf Tournament
11
Cash from Operations per Season 2008
Challenges
Situation
Data Mining & Survey
Analysis
Recommendations
Cash generated from operations shows clear cyclicality over the course of a calendar year
* Winter (November – March)**Summer (April – October)
*
**
Spa
Shooting A
cadem
y
Golf Course
Adventu
re Cen
ter
Miniat
ure Golf
Kidz Klub
Off-road
Driving Sk
i
Wild
life-1,000,000
-500,000
0
500,000
1,000,000
1,500,000
2,000,000
WinterSummer
Generates cash
Loses cash
Generates cash
Loses cash
12
Profit ($) vs. Profit Margin (%) in 2008
Challenges
Situation
Data Mining & Survey
Analysis
Recommendations Profi
t ($
)
Profit Margin (%
)
-1,000,000.00
-500,000.00
0.00
500,000.00
1,000,000.00
1,500,000.00
2,000,000.00
2,500,000.00
-40%
-20%
0%
20%
40%
60%
80%
100%
13
The financial analysis raises some complications that need to be resolved
Challenges
Situation
Data Mining & Survey
Analysis
Recommendations
Most amenities are subject to seasonality
Unprofitable amenities might drive traffic in overnight stays
There is no measurement in place to capture traffic data by customer type and lodging facility
Outsourcing and/or contracting is not part of Nemacolin’s company culture
14
Market survey to determine amenity attractiveness
Challenges
Situation
Data Mining & Survey
Analysis
Recommendations
Objective
Approval of questionnaire by marketing professor specialized in the field of market research
After elimination of incomplete/incorrectly filled out questionnaires, results were generated by comparing the means of each amenity
Overall result generated by applying different weightings based on the underlying structure of Nemacolin’s current customer base
Methodology
Identify amenities that are attractive to different types of transient customers and thus generate room occupancy
Scope
Sample of 108 of 650 originally sent out questionnaires (17% response rate) All respondents classified as either adults (no children on stay) or families & by
annual household income level Ranking of the attractiveness of Nemacolin’s amenities on an ordinal scale from
1-14
15
Sample Survey Question
Challenges
Situation
Data Mining & Survey
Analysis
Recommendations
16
Weighted Survey Results
Challenges
Situation
Data Mining & Survey
Analysis
Recommendations
Spa
Adventure
Center Sk
i
Wild
life
Miniature
Golf
Shooting A
cadem
yGolf
Off-road
Driving
Kidz Klub
0
1
2
3
4
5
6
7
8
9
10Ranking of Amenities
17
Evaluation Framework
Wild
life
Off-
road
Driv
ing
Increase in Bottom Line through Cost Reductions
Optimized Amenity PortfolioChallenges
Situation
Data Mining & Survey
Analysis
Recommendations
18
Consolidated Findings of Financial, Traffic and Attractiveness Analysis
Challenges
Situation
Data Mining & Survey
Analysis
Recommendations
19
Spa
Shooting A
cadem
yGolf
Adventu
re Cen
ter
Minitu
re Golf Sk
i
Kidz Klub
Wild
life
Off-road
Driving
0
1
2
3
4
5
6
7
8
9
10
Operational Profitability Threshold
Challenges
Situation
Data Mining & Survey
Analysis
Recommendations
Wildlife and off-road driving are below the operational profitability threshold level
20
Baseline Assumptions for Recommendations
Situation
Equestrian using 22 horses was not being utilized a 100%
We consulted with a horse farm in western Pennsylvania to compute cost saving numbers
Vehicle maintenance costs were included in the profit analysis for off-road driving
Our recommendation for off-road driving is based on a company which offers a similar amenity
Challenges
Situation
Data Mining & Survey
Analysis
Recommendations
21
Potential Equestrian Cost Saving Scenarios
Challenges
Situation
Data Mining & Survey
Analysis
Recommendations
Current Situation
Downsizing Outsourcing
Revenues $ 178,884 $ 130,560 $ 130,560
Profit/Loss $ - 80,388 $ -22,344 $ 25,476
Feasibility quick, simple complexinherent
Costs $ 259,272 $ 104,084$ 152,904
Horses 22 10 10
22
Potential Off-road Driving Cost Saving Scenarios
Challenges
Situation
Data Mining & Survey
Analysis
Recommendations
Current Situation
Cease Operation
Personal Vehicles Only
Revenues
Costs
Profit/Loss
$ 301,448 $ 0 $ 60,290
$ 358,698 $ 35,870
$ - 57,250 $ 0 $ 24,420
Feasibility quick, simplesweeping but
promptinherent
$ 0
23
Current
Recommen
ded0
100,000200,000300,000400,000500,000600,000700,000
Consolidated Recommendation
Challenges
Situation
Data Mining & Survey
Analysis
RecommendationsCurre
nt
Recommen
ded0
100,000
200,000
300,000
400,000
500,000
600,000
Current
Recommen
ded-160,000-140,000-120,000-100,000
-80,000-60,000-40,000-20,000
020,000
Revenues Profit / LossCosts
Total change in revenue $ -289,482
Consolidated Statement of Activities
Total change in costs $ -429,196
Change in Net Income $ 139,714
24
Q&A