The Sai Kung Inn is a small family-run hotel in the New Territories. As a family-owned business, it relies mainly on traveler recommendations and on visitors to local Sai Kung residents. In particular, it ranks in the top 10% of TripAdvisors accommodations in Sai Kung. The Sai Kung Inn has 12 guest rooms, and to keep the operation running efficiently it employs two full-time reception staff, and three morning housekeeping staff.

Winnie is the hotel manager and the daughter of the property owner. She is considering to adopt a balanced scorecard approach for performance evaluation. She has identified a number of potential performance measures:

1. 1) Number of items on hotel restaurant menu

2. 2) Revenue

3. 3) Percentage of reception staff completing hospitality and customer satisfaction course

4. 4) Customer satisfaction with dining options

5. 5) Average percentage occupancy

6. 6) Number of restaurant staff completing cooking training courses

7. 7) Percentage of cleaning staff completing housekeeping and hygiene courses

8. 8) Average TripAdvisor rating

9. 9) Number of guest complaints about room cleanliness

10. 10) Average number of minutes taken to process guests check-in

11. 11) Total profits

12. 12) Frequency and quality of room cleaning

Required:

1. (a) Using the 12 performance measures suggested above, draw a balanced scorecard diagram for The Sai Kung Inn with the four main categories of the balanced scorecard, classifying each of the performance measures into one of the four categories. Draw arrows between individual performance measures to show causal links and indicate with a + or whether the performance measure should increase or decrease.

2. (b) Winnie believes that The Sai Kung Inns occupancy rate is lower than her competitors because The Sai Kung Inn charges slightly higher prices and does not attract guests who prefer cheaper accommodation. Winnie believes that in order to improve the financial performance of The Sai Kung Inn, the company should focus on improving customer satisfaction to justify higher prices, instead of reducing costs to compete on price. She would like to improve the rank on TripAdvisor to be the top-rated accommodation in Sai Kung, by focusing on operational and staff improvements. Help Winnie develop two new performance measures to build into her balanced scorecard. For each performance measure you suggest, identify which category it would fit into, how to measure it, and how it relates to the organization goal.