Principles of Managing and Monitoring Financial Performance in Hospitality Industry

This document discusses the principles of managing and monitoring financial performance in the hospitality industry, with a focus on Crowne Plaza hotel. It covers the importance of financial principles, such as justification, documentation, timelines, and consistency. It also explains the profit and loss statement and trial balance, and their role in financial management. Additionally, it explores the stages of the HR life cycle and the performance management plan used by the hospitality industry to retain the best talent. Lastly, it highlights specific legislation for the hospitality sector, including the Environment Legislation Act, 1974.

Unit 4: The Hospitality
Business Toolkit

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK ..............................................................................................................................................3
P1 Principles of Managing and Monitoring Financial Performance...........................................3
P2 Profit and Loss Statement .....................................................................................................4
P3 Trial balance applying the use of the balance off rule to complete the ledger......................6
TASK 2............................................................................................................................................8
P4 Stages of the HR life cycle that use by Hospitality Industry to retain the best talent ...........8
P5 Performance Management Plan (PMP) ................................................................................9
TASK 3 ........................................................................................................................................10
P6 Specific Legislation for Hospitality Sector .........................................................................10
P7 Analyse the impact of employment and contact law on decision-making process..............11
CONCLUSION .............................................................................................................................12
REFERENCES..............................................................................................................................14

INTRODUCTION
Hospitality industry considers an base of all the industry that include various kinds of
services and facilities like travel and tourism, hotels, restaurants etc. This industry also
associated with the tourism industry and operating business every possible location for the
continence of people. To operate business in hospitality sector it is important to address all the
requirement of the customers and clients so that business can be grow effectively. For this
project, Crowne Plaza hotel which is consider as multinational chain and its headquarter is in
Denham,UK. This hotel founded in the year 1983. The main motive of this project is to
understand the importance of hospitality industry and also how hospitality industry maintain
human resource , financial activities. This project also discuss about the financial transactions,
recording so that organisation can evolve their performance management plan. Lastly, this
project will cover impact of ethical and legal consideration and also analyse the significance of
integration and coordination different practices and functions of hospitality industry.
TASK
P1 Principles of Managing and Monitoring Financial Performance
The role of finance department is valuable because it help to manage all the capital ,
funds and overall accounting of the business. Financial department is mandatory for each and
every country and it helps to managing and controlling all the requirement of the every
department of the organisation. With the help of effective financial performance, company can
gain high market share and growth rate. The importance of financial principle is more because it
can help to managing and monitoring the financial performance of the industry (Kandampully,
Zhang and Jaakkola, 2018). The description of important principle of managing the financial of
Crowne Plaza hotel are given below-
 Justification – This is consider as a most essential principle to manage and monitor the
financial performance of the organisation. This principle consist that all the organisation
are required justified information to manage the financial records in a proper manner so
that each and every transaction are record successful in the books of accounting. With the
help of this principle, manager of the Crowne Plaza hotel can easily analyse the accurate
data which will help in proper decision-making. Crowne Plaza adopt specific principle
because it give impact on the financial performance of the hotel.

 Documentation – This principle is very much concerned about the maintaining and
recording the appropriate information in a detail manner so that organisation can manage
information. Hospitality industry also manage all the legal and financial documents so
that they can full fill all the requirement of the employees and allot all the resources
which are necessary for the hotel. Crowne Plaza maintain all the documentation in a
systematically form so that manager can take decision in a correct manner (Alexakis and
Jiang, 2019). Timelines – This is also consider as the most prominent principle to manage the financial
performance of the industry with the help of proper time management. It is contain that
all the task and activities are accomplished in a given time period so that hotel manager
should meet the all tasks on deadlines. This principle is mainly adopted by the
professional experts of the Crowne Plaza and help the staff members to complete the task
on time.
 Consistency- This principle is mainly used by the every sector because consistency is one
and only principle that helps to maintain financial performance continuously. Manager of
the Crowne Plaza work continuously so that they can maintain consistency to maintain
the financial performance of the hotel also follow monetary policies and procedures
(Guzzo, Abbott and Madera, 2020).
P2 Profit and Loss Statement
The another name of this statement is “Income & Expenditure Statements”. This
statement consider as financial statement that contain all the records of income and expenditure
of the organisation in the financial year. This statement show in a tabular form and demonstrate
all the statement systematically. All the statements are presented on the basis of week, months,
quarters and years. This statement depict gross profit & loss account and present useful figures
for the net profit & loss account on a specific time period. Income statement recorded on left side
as a credit and expenditure recorded on right side as a debit. This statement consider the rules of
double entry system so also book keeping.

Profit and Loss Statement of Crowne Plaza for the year ending December 2020
Recording of Debit & Credit Transactions
This is consider as a specific concept that help to present the particular procedure related
to the financial statement and transaction. All the financial transaction proceed through debit and
credit entries (García-Lillo, Claver-Cortes, Ubeda-Garcia and Zaragoza-Sáez, 2018).Debit and
credit entries also contain as the “ Golden Rules of Accounting System”. There are three types of
debit and credit entries and golden rules of accounting which are as follow-
 Real Account – Debit what comes in
Credit what goes out
 Personal Account – Debit the receiver
Credit the giver
 Nominal Account – Debit the expenses
Credit the gainer
This aspect mainly represent as a plan and procedure that help in entering all the financial
transactions with the help of debit and credit entry system. As per the time and requirement all
the debit and credit system calculate with the help of technologies. In this fast running world,

technologies are taking massive place and these are essential for the development of businesses.
Companies utilise many accounting software so that they can easily calculate, measure and
maintain the financial records and record it in a documents and also mention the income and
expenditure on the basis of hotel financial performance. Technologies and software save the time
of company and also help in quick transition in every location and back transactions (Gursoy,
2019).
P3 Trial balance applying the use of the balance off rule to complete the ledger
Trail balance refer like a book-keeping that maintain records in worksheet and prepare
ledger account and record it in organisation debit and credit system. The prime motive of trail
balance statement is ensure that all entries of the hotel follow book-keeping structure and hotel
analyse and calculate it and also prove it mathematically. This statement mainly created by the
end of the financial year and utilise this to prepare the final statement of the hotel (Altin,
Koseoglu, Yu and Riasi, 2018).
Trial Balance for

Factors of Trial Balance
There are many factors involved in Trail Balance statement of the company like account
number, name of the accountant, debit and credit column of the statement. The financial
department of Crowne Plaza contain all the factors which will help to manage the debit and
credit accounting and also use ledger entries. Some factors listed as a account holder name,
company name , debit & credit entries and analyse the total balance of the hotel (Köseoglu,
Okumus, Dogan and Law, 2019).
Trial Balance useful to investigate the error
Trail balance is useful to recognise and rectification of errors in debit & credit and ledger
account. This statement also helps to analyse the error and useful to resolve those mistakes and
errors so that hotel can take corrective decision to increase the financial performance of the hotel.
Significance of Budget to plan and monitor

The significance of budget to plan and control on the basis of Crowne Plazahotel are
given below- Fixed and Variable Cost – Fixed and variable cost consider as most important cost in
context of business operations. Fixed cost contain as a cost that are fix and not varies on
the basis of situation and changing result situation. It does not matter the output is more
or less. Hotel have to bear the fixed cost even production system is not doing well.
Example of fixed cost like salary, rent and wages. Variable cost consider as those cost
that vary on the basis of their output. Hotel need to bear this cost when all the products go
down and business is not running well. Variable cost consider as electricity cost, raw
material cost (Hassi, 2019). Income Stream – It is consider as a profit that usually generated by the company through
profit margin. Financial manager of the hotel contain all the income and maintain in
records so that manager can take investment decision and also earn the high rate of
interest.
 Pricing strategies & determine goals – To manage the financial performance is
necessary for the organisation. Pricing strategies used specific pricing policies that help
to incurred the cost and useful in production of the products and services that basically
utilised by the clients and customers. Crowne Plaza hotel can set the price on the basis of
customers expectations and demand and also follow those strategies which help to attract
the customers so that hotel can gain more profit advantages.
TASK 2
P4 Stages of the HR life cycle that use by Hospitality Industry to retain the best talent
HR life cycle mainly related to the employees activity , performance. HR manager is the
one who is responsible to follow this life cycle and ensure that they can apply useful practices to
retain the high skilled employees in organisation. The stages of life cycle on the basis of Crowne
Plaza hotel are given below- Strategic Hiring - This is consider as a first stage of the HR life cycle that helps to
appoint the fresh talent in the organisation. With the help of this stage, HR manager of
Crowne Plaza hire those candidates who are interested in hospitality industry and they

have appropriate knowledge about the hospitality industry so that they can retain in
organisation long duration. Orientation & On-boarding – This is consider as the second stage of the HR life cycle
that mainly organised by the organisation. With the help of orientation programs, new
employees become more families with the hotel environment and maintain good relation
with other staff members. Crowne Plaza hotel share all the relevant information related to
the hotel like terms, norms, policies and procedures (Goh and Wen, 2020). Training & Development - In this stage, HR manager of the organisation is responsible
to provide specific training sessions so that they can help the newly appointed employees
to make clear about their roles and job responsibilities. Crowne Plaza hotel also conduct
development sessions to the hotel staff members so that they can boost their personalities
and engage with the clients and customer's effectively. Employee Retention – In this stage, HR manager can try to establish strong relationship
among the employees and also conduct some activities like promotional activities, reward
system, flexible working hours , long refreshment hours etc. with the help of these
activities, Crowne Plaza hotel manager can easily retain the top talent in their
organisation so that they can provide more profit.
 Separation & Termination- This is consider as the last stage of HR life cycle that
determine the reason why employees leaving the organisation. Through this stage,
Crowne Plaza manager can analyse the employees turnover ration.
P5 Performance Management Plan (PMP)
All the appropriate planning is done to maintain and full fill all the requirement of thye
customers. The performance management plan planning is consider to occupy the vacant
position of Customers management manager in Crowne Plaza hotel. The steps of performance
management plan are discussed below- Planning – In this step, manager of the organisation can consider appropriate rules,
regulations and policies that help to obtain the specific tasks. Crowne Plaza hotel should
follow all the rules to make a working and effective plan. Hotel can work on the food
quality and also provide additional complementary services to their clients and customers
(Yu, Lee and Madera, 2021).

 Implementing – After make appropriate plan, manager needs to follow plan that manager
prepare easier. Manager of the organisation can implement all the plan on the basis of
specific guidelines. Evaluate – In this step, manager can evaluate the planning and implementation of the
plan so that they can do some modification on the basis of employees performance.
Crowne Plaza manager can evaluate the performance of employees so that they can
improve their performance and satisfy their customers.
 Feedback- After completion of all the performance management step, feedback comes in
the last. After the evaluation system apply in performance of the employees, all the
employees can evolve their performance level and via review and feedback of the peer
and high management employees. Feedback helps to provide the positive attitude of the
employees (Gupta, 2019).
Hotel can experience many conflicts among employees and other staff members with the
clients and customers so it give adverse impact on the performance of the employees and hotel
goodwill also affected. Crowne Plaza hotel need to maintain the performance of employees
through performance management plan which will lead the high profitability.
TASK 3
P6 Specific Legislation for Hospitality Sector
Laws and legislation is essential to follow to each and every organisation so that they can
prevent their organisation and employees from the outsiders and competitors. Legislation contain
many act, policies, rights, duties and procedures that help to secure all the employees and protect
their data in the organisation. Legislation contain as the regulative statutory body that basically
governed by the UK government. The explanations of legislation in context of Crowne Plaza
hotel are given below-
 Environment Legislation Act, 1974 – This act generally consider the problems related to
the environment like air , pollution, noise and water. It is necessary for the organisation to
measure its effect on the heath and security of individual and other people of the society.
The top management of the Crowne Plaza should focus to reduce the impact of pollutions
in the environment. Through useful applications of this act, hotel can manage the
environment activities.

 Consumer Legislation Act, 2019 – This act is helpful to protect and secure the rights of
the consumers so that they can feel free to ask for suggestions and clear their doubts. UK
government formulate this act for the protection of the consumers rights and authority.
The top management of the Crowne Plaza is responsible to maintain the consumers
protection with the help of this law and legislation so that they can get the high level of
customers satisfactions.
 Food Safety Legislation Act, 1990 - The main motive of this act is to ensure that
organisation need to provide healthy food to their clients and customers so that they can
feel safe and secure. Crowne Plaza can increase their food quality so that they can get
more competitive advantages. Crowne Plaza can use this act to ensure their customers
and clients about the food quality. Hotel can consider the proper guidelines of food safety
which are mandatory to follow by the staff members of the hotel and staff members also
can maintain high hygiene level to attract the customers (Yao, Wang, Yu and Guchait,
2019).
All the laws and legislation are necessary to follow by the Crowne Plaza so that they can easily
imply it in their business operations and generate appropriate relationship to achieve the business
objectives.
P7 Analyse the impact of employment and contact law on decision-making process
Business organisation follow employment laws and contact law to prepare the strategic
policies in the decision-making process of the organisation. Rules and regulations that are
formed by the UK government are essential to consider by the organisation so that they can
obtain the goals of the organisation. Management of the Crowne Plaza hotel can use employment
law and contact law so that they can easily implement all the guidelines to make appropriate
decision for the hotel. The discussion of laws are given below-
 Employment Law - This law mainly useful to monitor all the employees and help to
create the effective employees and employer relationship. This law work like protective
outlines that help to protect the rights of employees . This law very much help in decision
making of the managers. This law show their impact on the hiring time , when HR
manager appoint employees and also involved different activities of all employees.

Crowne Plaza hotel use this law to build strong relationship with employees and
employers.
 Contract Law - This Law consider the agreement that related to the specific legal
objectives and it is important for the organisation to propose and accept all the guidelines
of the agreements. Manager of the Crowne Plaza apply and implement the useful
practices of this law in hotel.
Few legislation are useful to achieve the organisational objectives and help to obtain
higher success at the marketplace. Hospitality industry apply all the law to maintain the business
activities and operations in a right manner. Few law and legislation also provide adverse impact
on the organisation, some example of the organisation got negative impact because of these
legislation are given below-
KFC company is consider the large food chain that also faced few losses and issues in
Stockton Borough Branch which fined £1. Million because 2 employees of their organisation
experienced burn injuries. Wilko is famous retail organisation that operate business related to
home décor. This organisation also charged £2.4 Million because one employee suddenly
paralysed at event. Another example are taken of Jaguar land rover company, this company also
fined because employees lost leg in car accident.
All example demonstrate the huge complexities that occurred in many organisation it also
depicts the direct affect on the organisation performance and decision-making. In context of
hospitality industry, few rules and regulation need to follow so that organisation can create
positive impact on the organisation performance and also apply effective working conditions
which will help in decision making.
CONCLUSION
As per this project it is analysed that hospitality industrial contain both type of
experiences positive and negative which can help to address the customers requirements and
also help to protect their rights and feel comfortable. This report discussed about the financial
performance of the organisation and also explain the importance of debit , credit , trail statement
and profit & loss account. This report also analysed the significance of HR life cycle of the
development of the organisation. Apart from this, report also determined the useful laws and
legislation that are essential to maintain for the organisation.

REFERENCES
Books and Journals
Alexakis, G. and Jiang, L., 2019. Industry competencies and the optimal hospitality management
curriculum: An empirical study. Journal of Hospitality & Tourism Education. 31(4).
pp.210-220.
Altin, M., Koseoglu, M.A., Yu, X. and Riasi, A., 2018. Performance measurement and
management research in the hospitality and tourism industry. International Journal of
Contemporary Hospitality Management.
García-Lillo, F., Claver-Cortes, E., Ubeda-Garcia, M. and Zaragoza-Sáez, P.C., 2018. Mapping
the “intellectual structure” of research on human resources in the “tourism and
hospitality management scientific domain”. International Journal of Contemporary
Hospitality Management.
Goh, E. and Wen, J., 2020. Applying the technology acceptance model to understand hospitality
management students’ intentions to use electronic discussion boards as a learning
tool. Journal of Teaching in Travel & Tourism, pp.1-13.
Gupta, V., 2019. Talent management dimensions and their relationship with retention of
Generation-Y employees in the hospitality industry. International Journal of
Contemporary Hospitality Management.
Gursoy, D., 2019. A critical review of determinants of information search behavior and
utilization of online reviews in decision making process (invited paper for ‘luminaries’
special issue of International Journal of Hospitality Management). International Journal
of Hospitality Management, 76, pp.53-60.
Guzzo, R.F., Abbott, J. and Madera, J.M., 2020. A micro-level view of CSR: A hospitality
management systematic literature review. Cornell Hospitality Quarterly. 61(3). pp.332-
352.
Hassi, A., 2019. Empowering leadership and management innovation in the hospitality industry
context. International Journal of Contemporary Hospitality Management.
Kandampully, J., Zhang, T.C. and Jaakkola, E., 2018. Customer experience management in
hospitality. International Journal of Contemporary Hospitality Management.
Köseoglu, M.A., Okumus, F., Dogan, I.C. and Law, R., 2019. Intellectual structure of strategic
management research in the hospitality management field: A co-citation
analysis. International Journal of Hospitality Management, 78, pp.234-250.
Yao, S., Wang, X., Yu, H. and Guchait, P., 2019. Effectiveness of error management training in
the hospitality industry: Impact on perceived fairness and service recovery
performance. International Journal of Hospitality Management, 79, pp.78-88.
Yu, H., Lee, L. and Madera, J.M., 2021. Collecting repeated data over time: Applying experience
sampling methodology to the hospitality management context. Cornell Hospitality
Quarterly, p.1938965520961061.