Nobody downloaded yet

Management Buy Outs in the hospitality (hotel) industry - Essay Example

Comments (0) Cite this document
Bruining, Verwaal and Wright (2013) define management buyouts as arrangements involving sale of controlling stakes by the managers, who control a substantial part of the equity, to buyout associations. Management buyout (MBO) is the financial acquisition that leads to potential…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER97.5% of users find it useful
Management Buy Outs in the hospitality (hotel) industry
Read TextPreview

Extract of sample
"Management Buy Outs in the hospitality (hotel) industry"

Download file to see previous pages Most managers need additional financial support from leveraged buyout (LBO) (Ledger, 2015). There are current developments in the hospitality industry involving management buyouts (Wei & Hudson, 2008). This paper examines management buyouts in the hospitality industry, with particular emphasis on hotels, its financial benefits, and possible risks involved.
In leveraged buyouts (LBO), large portion of purchasing funds is a debt financed. Buyout associations privately own the remaining equity. MBO get financial assistance from private equity investors who receive shares in the new company as buyout associates. Managers always have internal information about the enterprise than outside shareholders. That is the advantage they over external bidders. Owing to the prior information related to the business they possess, managers tend to purchase the company with excellent prospects for future development. For example, the buying of Menzies Hotel by its management in 2011 led to the restructuring of the Hotel under a new company called Cordial Hotels. Another significant example is the successful closure of Gulf Capital, one of the most active and investments in the Middle East in Abu Dhabi (Gulf Capital, 2015).
Management buyouts have diverse financial advantages. There are three groups of parties affected by management buyouts from a financial viewpoint. Stockholder the hotel business entity, the managers and employees, all experience the financial implications of management buyouts. Buyouts may imply the sponsor (s) privately acquires the hotel enterprise or company. Shareholders, therefore, cease to own the company or hotel business. Contrary to the case of a merger, shareholders may not have control over the company’s finances. In fact, they may lose their equity in the company (Wilson & Wright, 2013). Should the sponsors fail to acquire the company, ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
(“Management Buy Outs in the hospitality (hotel) industry Essay”, n.d.)
Retrieved from
(Management Buy Outs in the Hospitality (hotel) Industry Essay)
“Management Buy Outs in the Hospitality (hotel) Industry Essay”, n.d.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document
Hospitality Industry Management
...Pacific hotel, pert to elaborate their business associated themselves with different social and sports activities in the city of Perth, The hotel associated themselves as the major hospitality partners for the Australia’s richest road race in the Southern Hemisphere. (PR Consloe, 2013). This partnership was in view of the companies brand promise of creating meaningful and enriching experience for its customers, staffs and local people. Recommendation of Improvement of Product Price Promotion and Partnership: Jones (1999), in his writing pointed out the concept of multi-unit management. According to him, this concept will give a new dimension to this...
3 Pages(750 words)Essay
Hotel and Hospitality industry an opportunity for training them in modern techniques of management as they'll be free of the traditional bias and hence can easily adopt the newer methods. ii. The young breed will be more educated and in touch with more modern techniques. Moreover similar age group people can display better coordination in carrying out the tasks. iii. The hotel group is to come up with 15 more hotels in near future, which leaves lot of room for planning and execution. iv. With customers becoming more and more quality conscious, Angelus can be an attractive destination as it values quality. v. Developing relations with the tourism industry, particularly the proposal...
8 Pages(2000 words)Assignment
Hotel Industry engineer. They contract everything out to firms in China. This is suitable for small and large organizations. The major advantage is the flexibility and the disadvantage is lack of managerial control in key aspects of business. The Boundaryless organization is an organization that seeks to eliminate the chain of command, have limitless spans of control, and replace departments with empowered teams. Stephen P. Robbins, Organizational Behavior, Tenth Edition, Prentice Hall of India. Pg. 425-446 Recommendation TAJ HOTELS can adopt a mix of Matrix Structure and Team structure in its operations. Using a Matrix structure, TAJ HOTELS can have dual lines of authority and this ensures the...
9 Pages(2250 words)Research Proposal
Risk Management - Hospitality Industry
...Business expansion Risk Analysis of hospitality industry Every business entity when initiated will have inherited risk inthem as it has to reach the costumers expectations and has to place itself in a competitive environment or it has to create a market demand to its new product to be launched. With out perceiving the risk of venturing into new market arenas the purpose of making profitability does not arise. All organizations will face some kind of risk proportions in their daily activities of their operations as the sectors demands a standard or particular norms and expectations to be met. The risk is inherited with the unexplored option which may turn in to organization benefit...
12 Pages(3000 words)Essay
Revenue management in Hotel industry
...the accuracy of forecasts and budgets would make planning and execution of operations by management easier. It enables managers understand the past and current demand for their hotel rooms and makes it easier to determine the interventions needed to meet the performance targets of their businesses and make informed decisions when targets are not met. Hayes and Miller (2011) note that accurate forecast enable hotel managers efficiently schedule their staff and purchase the needed supplies in correct quantities. References Hayes, D. K. & Miller, A. (2011). Revenue Management for the Hospitality...
2 Pages(500 words)Essay
Hospitality Management Project- Riu Hotel Chain
...on different aspects pertaining to the hospitality industry. Additionally, the trainings help increase skills amongst the employees. To motivate it employees, Riu provides considerably high salaries in addition to other benefits such as medical coverage as well as life insurance and disability insurances. Additionally, the employees are offered free vacations in different hotels from time to time. There are different hierarchies of management at Riu. The hierarchy of structure includes: The organization structure for Riu can be described as follows: 1) At the top most are two CEO who share the roles. 2) There is a board of Directors headed by the two CEOs. Additionally,...
12 Pages(3000 words)Research Paper
Dynamics of Hospitality Industry Management
...The legal grounds of the hospitality industry The laws affecting the hospitality industry far much outmatch in terms of number and complexity, the regulations governing other business sectors. Hotel managers should therefore have sufficient understanding of these laws in order to be well acquitted with the techniques of developing proper strategies to reduce the vulnerability of a hotel business to potential litigation and equip the hotel staff with adequate knowledge on risk monitoring and control in the work place. Law may be categorized into civil, criminal and international however the most...
3 Pages(750 words)Essay
Hospitality Industry Management
...Hospitality Industry Management Bargaining Power s Number s in the Market s in Scarborough beach, Perth, Western Australia are critical of price changes because of numerous factors. It means establishing a new branch of Ku-De-Ta hotels would require assessing the number of customers to for clear assessment (Alter, 2000). Similarly, recommendations should evaluate the overall implications of other substitutes. Availability of Substitutes Substitutes deal with the RFM (customer value) analysis that attempts to comprehend how customers react to new products (Wearne and Morrison, 2011, 111). This is supported by the bargaining leverage that assist in reducing high fixed costs that characterise most of Ku-De-Ta Hotels around Perth... ...
2 Pages(500 words)Essay
Hospitality industry
...and the Resort Guides act as a pseudo travel agent The Tourism Information Centre and the Resort Guides are also available to travel agency. They provide the necessary information about a place and the prices one will incur on the visit. It is a cheaper way of touring instead of a travel agency. Vertical and Horizontal Integration within the tourism industry, its advantages and disadvantages Vertical integration is the merger between two or more tourist sectors like a hotel and an airline. The hotel and airlines work together to offer visitors transportation of the airlines and accommodation in the hotels. Horizontal integration involves the merger of two or more...
4 Pages(1000 words)Essay
Hotel industry
.... Moreover, the staff employed in my hotel should have adequate training in catering bearing in mind health and safety standards of the organization. However, I do not intend to run the hotel for my entire life. I intend to make it pick and gain popularity within its location then sell it to a new management at a higher price when business hits peak. This, I intend to implement through ample customer relations, providing safe products as well as placing customer preference and quality as my main aim. Service to humanity is service for money. Organization chart Fig 1.1 Organization chart The chart above shows the organization of my hotel service...
2 Pages(500 words)Assignment
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Let us find you another Essay on topic Management Buy Outs in the hospitality (hotel) industry for FREE!
Contact Us