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Finance in the Hospitality Industry Assignment - Bluebird Hotel

   

Added on  2020-12-18

15 Pages4427 Words125 Views
FINANCE IN THEHOSPITALITY INDUSTRY

TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1A. Sources of funds available for Hotel Bluebird........................................................................1B. Range of methods for generating income in Hospitality organization ...................................2TASK 2............................................................................................................................................3A. Elements of cost and profit and role of setting selling prices in the service businessenvironment.................................................................................................................................3B. Methods of controlling stock and cash....................................................................................4TASK 3............................................................................................................................................4A. Trial balance and its sources and structure and also evaluate business accounts, adjustmentsand notes......................................................................................................................................4B. The purpose and process of budgetary control and budgetary variance relating to hotel bluebird...............................................................................................................................................5TASK 4............................................................................................................................................6A. Calculating and analysing business performance ..................................................................6B. Recommending appropriate future management strategies....................................................8TASK 5............................................................................................................................................8A. Categorising and explaining costs as variable, fixed and semi-variable.................................8B. Calculating per product contributions and relationship between cost/profit and volume.......9C. Discussing and justifying use and significance of Break-Even analysis for short-termdecision-making.........................................................................................................................10CONCLUSION..............................................................................................................................10REFERENCES..............................................................................................................................11

INTRODUCTIONFinance in the hospitality industry is related to managing the sources of funds availablefor each organization. Bluebird Hotel will be included in this assignment which is located atScotland. The Hotel is having three main departments for operations which includeaccommodation, contract services and restaurant and bars which presented 52%, 38 % and 10%of sales in 2017. This study will include different sources of funds available for hospitalitybusiness. Furthermore, it will include different methods used for generating incomes. Moreover,it will include elements of cost and profit for determining the selling price. Also, it will includedifferent methods of controlling stock and cash. It will also evaluate trial balance and sourcesand structure for hospitality organization. This assignment will provide the purpose of budgetarycontrol in hospitality organization.TASK 1A. Sources of funds available for Hotel BluebirdFunds are required by hospitality organization to perform various operations of thebusiness. Finance is required for acquiring assets of the firm, restructuring of firm and to meetthe cash requirement for business to perform various operations(Qi and et.al., , 2018). Bluebirdhotel require finance to perform its various activities to provide quality services to its customerssuch as high infrastructure facility etc.There are various sources of funding available for businesses such as:Internal source and external sources Internal sources of funds are acquired from with the organization to perform various operation ofbusiness. Internal sources of funding includes Retained earnings, sale of fixed assets, owner’scapital, debt collection etc.Retained earnings: Retained earnings are the profits of the organization which the firmuses to perform its various operation rather than giving it to the shareholders asdividends.Sale of fixed assets : sale of fixed assets is used as an internal source of funding for theorganization as it assist in removing the unused machinery and plant to get funds toperform various operations(Beck, J2017). Fixed assets includes plant and machinery,building, furniture etc. 1

External sources of funds are acquired by organization from the outside to perform its differentfunctions. External sources of funding includes bank loans, debentures, trade credit etc.Bank loans: Bank loans are the external sources of funding available to theorganization to perform its various operations. Bank provide loans but the organizationhave to pay interest to acquire loan from bank.Debentures: Debentures are the external sources of finance. Company issue debentureto the public on which firm have to pay interest (Chong, 2015). Debenture is redeemableafter completion to the period.Hotel Bluebird in order to perform its various operations acquire different sources offunding which helps the firm in operating its various activities. Hotel Blue bird acquire bank loanwhich is an external sources of funding to perform its various activities.B. Range of methods for generating income in Hospitality organization There are various methods through which income for the hospitality organization can beincreased. Income methods include income generation by sales, commission, sub- letting,sponsorship, grants, tracking mechanisms.Sales: Sales is a method through which hospitality organization can increase its revenue.Hospitality organization can provide high quality products and services to customers in order toincrease customer base.Commission: Commission is the method of generating income. Commission is providedby third party for completing a particular work (Dogru, 2017). Hospitality industry can acquirecommission by completing the particular task. Sub – letting: It is the option through which hospitality organization can generate moreincome by sub- letting its property to different individual to perform various activities atdifferent location.Social media: Social media are the method through which hospitality organization cangenerate more revenue. Company by increasing its online presence can attract customers fromdifferent regions through which brand image of organization also get increased and also assist inincreasing its profitability. Social media sited include Facebook, Instagram etc. through whichhospitality organization can provide its customers various hotel packages and discounts.2

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