Financial Management Techniques for Hotel Industry

This presentation explores the financial management techniques for monitoring and evaluating the performance of the hotel industry. It focuses on accounting ratios and their importance in increasing sales and profitability ratios for sustainability in the international marketplace.

INTERNATIONAL
HOTEL
MANAGEMENT

EXECUTIVE SUMMARY
This project is based Gatsby Grange as being the part for small chain of
Boutique situated at United Kingdom and Northern Ireland. In this
project, the financial management techniques of accounting ratios have
been explained for monitoring and evaluating its performance towards
hotel industry. This is most important for organisation to increase their
sales and profitability ratios for being sustainable at international
marketplace.

TABLE OF CONTENTS
 Executive Summary
 Introduction
 Liquidity Ratios
 Turnover Ratios
 Profitability Ratios
 Monitoring financial performance of hotel industry
 Estimating financial performance of hotel industry
 Evaluating financial performance of hotel industry
 Conclusion
 References

INTRODUCTION
The Hospitality sector further involves hotel, restaurants, amusement
parks, casinos, tourism-related services, etc., which encourage visitors
to stay safe and live luxurious and comfortable lifestyle at low cost.
This project is based Gatsby Grange as being the part for small chain of
Boutique situated at United Kingdom and Northern Ireland. This
project monitors and estimates financial performance of hotel industry
from the concept of accounting ratios.

LIQUIDITY RATIOS
The liquidity or solvency ratios that includes current, quick, debt to
equity and interest coverage ratios. It is most important for an
organisation to estimate these concepts within business administration
to minimise the available long-term debts which leads to increase
liabilities. The managers of Gatsby Grange are highly motivated and
inspired in developing good employment relations for achieving their
goals and objectives within certain date that leads company to gain
competitive advantages.

TURNOVER RATIOS
The Gatsby Grange managers emphasize on increasing their
turnover ratios for improving the financial position of company at
competitive market for challenging with rivalries. It is very essential
for hospitality industry to adopt such strategies within the
organisation that consists of Total assets, debtors and fixed assets
turnover ratio. The Company further takes necessary steps to
improve their qualitative services for satisfying the changing
demands of customers by good interior designing with differentiated
amenities, gyms, spas, travel and tourism services, etc.

PROFITABILITY RATIOS
The main aim for managers of hospitality industry is to generate high
profit-margin through enlarging customers by attracting them with
various promotional activities. These include digital marketing, print
and social media, advertisement, events, etc. The managers of Gatsby
Grange further develops competitive strategy through gross profit
margin, operating ratios, return on investment, net profit ratio, etc.

MONITORING FINANCIAL
PERFORMANCE
The managers of hospitality industry further aims to monitor their
financial performance for analysing the current position of company in
this competitive world. It is most important for an organisation to
perform its business activities as per the ability to achieve desired
target that result in growth and expansion of company.

ESTIMATING FINANCIAL
PEROFRMANCE
The main purpose for managers of hotel industry is to estimate that the
financial performance of company describes the true and fair
estimation. It is most important for hospitality industry to notify each
and every expenditure done on every client and the profit or loss
generated from it. The main purpose for managers of Gatsby Grange is
to estimate their budget for revenue and expenditure which minimise
the unwanted expense that affects its profitability ratios.

EVALUATING FINANCIAL
PEROFRMANCE
The basic objectives for managers of hotels and restaurants is to
evaluate that the calculations performed for business are accurate and
determine the best suitable outcome for company. It must be analysed
and evaluated that the financial estimation of company must create
opportunity for company to develop futuristic goals and objectives
effectively that leads to remain stable and competitive. The managers
of Gatsby Grange further emphasize on minimising its expenditure
which results in low cost of service that enlarge customers which
increase sales and profitability ratios.

CONCLUSION
From the prescribed project it have been analysed that it is essential
for an organisation to perform business activities in financial
management as it analyse the current position of company. This project
monitors and estimates financial performance of hotel industry from
the concept of accounting ratios.

REFERENCES
 Mandi, A. K., Onyango, M. and Okelo, B. N., 2017. Influence of service
quality on performance of hotel industry in Busia town, Kenya.
 Martin, A., 2017. An investigation into contemporary hotel general
managers behaviour and activity in the context of private, franchise and
chain ownership/business models (Doctoral dissertation).
 Miteva, N. and Ackovska, M., 2017, March. The impact of hotel chains on
the customer satisfaction and loyalty. In International Scientific
Conference on Economics and Management EMAN. (pp. 856-861).
Association of Economics and Managers of the Balkans, Belgrade, Serbia.

CONTINUE….
 Subramanian, N., Gunasekaran, A. and Gao, Y., 2016. Innovative service
satisfaction and customer promotion behaviour in the Chinese budget hotel:
an empirical study. International Journal of Production Economics. 171.
pp. 201-210.
 Trianasari, N., Butcher, K. and Sparks, B., 2018. Understanding guest
tolerance and the role of cultural familiarity in hotel service
failures. Journal of Hospitality Marketing & Management. 27(1). pp. 21-40.
 Vellas, F., 2016. The international marketing of travel and tourism: A
strategic approach. Macmillan International Higher Education.

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