Hospitality Operations Finance and Control: Milestone Hotel Kensington

This report analyzes the financial control within hospitality operations, using Milestone Hotel Kensington as a case study. It begins with an introduction to financial control and its importance, followed by an in-depth presentation of inventory findings, including a detailed inventory sheet and its interpretation. The report reflects on sales performance, the control process, and product wastage, providing insights into the effectiveness of inventory management. It also examines marketing offers, pricing strategies, and supplier choices, offering recommendations for improvement. The report suggests focusing on profitable products, implementing effective marketing strategies, and optimizing purchasing decisions based on inventory levels. Key findings include the importance of inventory analysis for sales, the need for control processes, and the reduction of wastage through effective planning. The conclusion emphasizes the significance of financial analysis and inventory management in maximizing profitability, supported by references to relevant literature.

FINANCE AND CONTROL
IN HOSPITALITY
OPERATIONS

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
(a) Presentation of inventory findings.........................................................................................1
(b) Reflection on sales, control process and wastage of selected products.................................2
(c) Reflection on marketing offers, pricing strategy and supplier choice....................................4
(d) Suggestions to the management team of selected company..................................................5
CONCLUSION-..............................................................................................................................6
REFRENCES...................................................................................................................................7

INTRODUCTION
Financial control is a tool which is very useful in analysing and controlling the finance. It
is very crucial for the for all kind of organisations (Legrand, Chen and Sloan, 2013). It has own
importance for the hospitality operations, because it manages the use of fund in a way which can
generate maximum benefits for the companies. In addition, this consists various financial
statements like balance sheet, income statements, inventory statements etc. All of these are
important for an organisation.
To understand the importance of financial control in the hospitality operations, Milestone Hotel
Kensington is selected. It is a five star hotel which is located in London.
The project report contains information about the inventory statements and its effect on
the sales, control process. In addition, it also includes the pricing and marketing strategy used by
the company as well as required suggestion.
MAIN BODY
(a) Presentation of inventory findings.
Inventory analysis is very important to check the availability of goods and stock available
to sold as well as it helps in identifying what kind of goods needed to produce(Park, K and Jang,
S, 2014). It contains the quantity of closing and opening stock for a particular month or year.
Herein, Milestone Hotel Kensington' s inventory analysis for a month is presented below:
Inventory checking of Milestone Hotel Kensington
Product Purchasin
g units( At
the
starting of
month)
Price
per
unit
(in £)
Amount
(in £)
Sold
units
Price
per
unit(in
£)
Amount(
in £)
Available
stock( At the
end of
month)
Cold drinks 500 units 50 25000 350 60 21000 150 units
Bear 1000 units 500 500000 800 550 440000 200 units
1

Packing
food
350 units 150 52500 100 200 20000 250 units
Pickles
bottle
100 60 6000 40 65 2600 60 units
Non vedge
food
material
500 90 45000 500 100 50000 -
Vedge food
material
400 80 32000 100 90 9000 300 units
2850 units
(Opening
stock)
860
units(Closing
stock)
Interpretation:
On the basis of this inventory sheet of selected company it has been analysed that
selected company is selling various kind of products and getting good revenue(Cetin, G and
Dincer FI, 2014). It is the data of a particular month in which company is having the closing
stock of 860 units of different kind of products. In addition they are having much quantity of
Bear which is 200 units. In the descriptive analysis it can be seen that company is selling a bulk
quantity of Bear which is of 800 units selling but its remaining quantity is high which is not good
sign for the company. They are getting less profit on the Pickle bottles which is of 3400£ with
huge closing stock. One another point to highlight is that company is unable to sell vedge food
material and due to this they are having 300 units in their storage. So eventually, company is
needed to focus on the sell of Bear because it is generating big amount of profit.
(b) Reflection on sales, control process and wastage of selected products.
Inventory management is needed to maintain all the aspects of business in a right way.
This is why because it is linked up with the sales and other functions of organisations( Chon, K S
and Yu L, 2012). It is necessary for the companies to proper management of inventory because it
can effect negatively or positively. The selected company Milestone Hotel Kensington uses the
inventory management system in their stock management which effects them by following:
2

Reflection on sales: On the basis of analysis is seen that company is selling variety of
products in which their selling is different for different products. It helps them in identifying that
which products are having the higher sell and which ones are having less sell. As per the analysis
the company is selling following products-
 Cold drink: They are selling this with profit of 4000 £ on 350 units.
Closing stock of this product is 150 units so herein, company can increase the
sells of this by more efforts in marketing.
 Bear- In this company is getting good profit by selling mostly units. They
are selling 800 units so company can focus on this product's selling.
 Packing food- The company is selling the packing food at 50£ each unit.
In addition company has the 150 units in the stock so in this company may think
to expand of selling.
 Pickle bottles- In this item, company can stop the selling because 60%
item is not sold which is not good for company.
 Non vedge food material: This is the product in which company is
generating 5000£ profit and selling the entire quantity so company has to focus on
this product's selling.
 Vedge food material: Company is having 300 units of this product with just 100
units selling so company can reduce in expand of this product.
Reflection on control process- Inventory system effects on the control process of
products because it provides the data that states which product is needed what kind of control
process. The selected company is engaged in selling of big portfolio of products. They can
prepare different control process for this like they can control on the selling of those products
which are less profitable like vedge food material, pickle bottles because these all are not
profitable for company. In addition they can focus on the selling of those products which are
beneficial.
Reflection on wastage- Due to effective inventory planning organisation can be able to
reduce wastage as much as possible because it gives a framework to analyse that what is the
3

quantity of available products. In the selected company, they are having too much quantity of
following goods:
Product Quantity available
Vedge food material 300 units out of 400 units
Pickle bottles 60 units out of 100 units
Packing food 250 units out of 350 units
So in this situation, company can stop the wastage by not purchasing of these items because
there is large quantity available.
Reflection on popularity of items- Popularity of item refers the goodwill of products.
The inventory system helps in identifying that which products are having higher sells so they
will automatically considered as the popular products(Singal M,2014,Kim) . In the selected hotel
there are different products in which some products are having good sales ratio so it will be
easy to check that those products are popular. Like they have some products in which their sells
is high for example non vedge food material, bear and cold drink.
(c) Reflection on marketing offers, pricing strategy and supplier choice.
The marketing offers, pricing strategy and supplier choice all three elements are related to
the increasing the selling of products and service(S H, Lee K, and Fairhurst A, 2017). Companies
should make effective plan for making all the policies and strategies regarding to these. Herein,
inventory system enables in presentation of effective strategies regarding to the marketing,
pricing and suppliers. Milestone Hotel Kensington' s one month inventory sheet helps them in
proper planning of marketing, pricing and supplier decision by following way:
Reflection on marketing offers- Marketing offers are those offers which are designed to
increasing the sale of products and sell. The selected company uses various marketing strategies
like they give discount on the special day in a week. In addition they expand money on the
marketing of products. With the use of inventory sheet they can make effective marketing offers
on those products which have less selling. Milestone Hotel Kensington sells following products
with lower margin: Vedge food material, Pickle bottles and packing food in this they are needed
to make effective marketing strategies.
4

Reflection on pricing strategy- Pricing strategies are those strategies which organisation
applies to fix the price at the level which is beneficial for company(Dewally M Shao Y, and
Singer D, 2013). The selected company uses premium pricing strategy because this strategy sells
the products at the higher price in the expectation of getting high profit. On the basis of inventory
sheet they sets the price of products like if some products selling is low then they can use
penetration pricing strategy which includes selling of price at low.
Reflection on supplier choice: Suppliers are those who provides the products in huge
quantity to the companies. Basically, companies chose those suppliers who sells goods at lower
price. The selected hotel purchase different products so they need to buy only those products
which are having high sells and they need to buy from those suppliers which sells at low price.
(d) Suggestions to the management team of selected company.
The selected company is involved in the business of hospitality service providing which
offers different food products. On the basis of inventory sheet it can be suggested to the company
that they should expand on those products which are profitable with higher sells. Following
suggestions can be given to the company:
 They should focus on those products which are beneficial like non vedge food,
cold drink and bear..
 Company is needed to apply strong marketing strategies for those products which
are of lower sells like vedge food, packing food and pickle bottle.
 They should by the products on the basis of available stock in the ware houses
Their P&L generating sheet is following
Product Profit(in £) Stock( in units)
Cold drink 4000 150
Bear 600000 200
Non vedge food material 5000 -
Vedge food material -23000 300
Pickle bottles -32500 60
Packing food -3400 250
5

CONCLUSION
From above project report it has been concluded that financial analysis tool and inventory
management are too much important for any kind of organisation because both has the ability to
effect the selling and profitability of company. In addition it is necessary for the companies to
make stock purchasing decisions on the basis of inventory sheet otherwise excess of purchasing
may result in wastage of goods. The selected company makes the inventory and profitability
sheet which reflects the sells, pricing and marketing strategies.
6

7