BSBFIM601: Hotel Future Group Finances Report Analysis

This report analyzes the financial performance of the Hotel Future Group, focusing on the period of 2018-19. The analysis examines the hotel's revenue streams, including room occupancy, and the corresponding staff costs across various departments such as rooms, food, banquets, room service, mini-bar, and bar. The report highlights the impact of staff costs on profitability, suggesting strategies to control these costs for better financial outcomes. It also addresses the importance of manpower management and efficient resource allocation to maximize profitability, especially as the hotel approaches full capacity. The report emphasizes the need for detailed data on manpower, attendance, and time booking to identify areas for improvement. Additionally, it underscores the significance of controlling other expenses to achieve budgetary goals and target profitability.

Running head: MANAGE FINANCES
Manage Finances
Name of the Student:
Name of the University:
Author’s Note:

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MANAGE FINANCES
Table of Contents
Task 2...............................................................................................................................................2
Part 1............................................................................................................................................2
Part 2............................................................................................................................................2
References and bibliography...........................................................................................................4

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MANAGE FINANCES
Task 2
Part 1
In the given case study the budget for the Hotel Future Group has been given with a
detailed breakup of revenues from various sources and expenses for various departments. It can
be observed that the at 100% room availability and with a room occupancy rate of 80.70%, the
total revenue for the year 2018-19 is coming to $10.95 million. It can be observed that the staff
cost for the room budget is only 17% of the total room revenue. Staff cost for the food budget is
almost 56% of the total food revenue, staff cost for the banquet budget is 36%, staff cost for the
room service is almost 55%, staff cost for the Mini bar budget is 38% and lastly the staff cost for
the Bar budget is 41% of the total Bar revenue. Therefore, the staff cost is higher for the food
and room service department. The increased staff cost for the year 2018-19 may result into an
increase in total costs and as a result the profitability will be decreased. Hence, it can be
suggested look into the staffing and manpower related activities and to apply a proper control
over the staff related costs so that the staff costs can be minimized thereby increasing the
profitability of the hotel (Miller 2018).
For successful implementation of the budget and to adopt a control over the staff costs,
the company details of manpower employed in each of the departments are required. The daily
attendance and time booking of each of the manpower can help in further analyzing and
identifying the reason behind such increase in manpower related costs (Balogun, Mamidu and
Owuze 2015).

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MANAGE FINANCES
Part 2
When the hotel reaches the full accommodation capacity with the hundred percent
occupancy rate, the revenue from the room will be increased. On the other hand, the expenses
related to the cost of goods sold will also be increased in the same rate. Therefore, the hotel
should considers the staff costs and other expenses for better management and control so that it
do not increase with an abnormal rate. Proper utilization and management of manpower should
be ensured to minimize the manpower costs so that the efficient utilization of the manpower is
achieved thereby minimizing the total costs and maximizing the profitability. As the staff costs
comprise a significant portion of the total costs and it do not depends directly on the increase in
capacity and occupancy rate, there is a scope of better management of the staff and manpower
related activities so that the wastage in manpower utilization is eliminated and an efficient
manpower utilization is made possible. Other expenses is another important part of the total
expense for the Hotel. Hence, simultaneously the hotel should also impose of the activities which
drives such other expenses for better implementation of the budget as well as achieving the target
profitability (Akeem 2014).

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MANAGE FINANCES
References and bibliography
Akeem, L.B., 2014. Budgeting and Budgetary Control in the Manufacturing Sector of
Nigeria. Research Journal of Social Science & Management, 4(1), pp.7-19.
Balogun, A., Mamidu, A.I. and Owuze, C.A., 2015. Budgetary Control and Organizational
Performance. Journal of Education Research in Natural and Sosial Sciences (JERNASS) Vol,
(1).
Miller, G., 2018. Performance based budgeting. Routledge.
Sandalgaard, N. and Bukh, P.N., 2014. Beyond Budgeting and change: a case study. Journal of
Accounting & Organizational Change.