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Financial and Management Accounting - Essay Example

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The hotel group currently has a hotel portfolio embracing 1700 rooms and has three fully owned hotels and 17 franchised hotels operating in nine countries. Its profits have increased to £3.5 million and…
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Financial and Management Accounting
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Download file to see previous pages The franchised hotels performed amazingly in the recent year. The occupancy levels are found to be 72% for the whole previous year and the occupancy levels in the second half of the previous year the rate was 79% (DeFond and Hung, 2003). There was a lower occupancy on Sundays. The average of ADR was observed to be £34 in the financial year and it further increased in the second half of the year to £36.
Intercontinental (IHG) group is a global hotel company whose objective is to create excellent hotels that guests find irresistible. The group is found to hold a strong market position with increasing market share and growth. Total gross revenue of IHGs has increased to 6% and is observed to be $23 billion. The group’s revenue has decreased to 2% that is $1858 million (Nissim and Penman, 2001). The operating profit of the group has decreased by 3% and is observed to be $651 million. There has been 10% increase in dividend of the group as compared to previous year. The key performance indicators (KPI) examine the group’s success in achieving growth strategy. KPI’s such as the net room supply has increased to 710,295, growth in fee revenues has increased by 6.7% and the total gross revenue from hotels under IHG group has increased to $22 billion. The system contribution to revenue has also elevated by 71% in the current year (Carslaw and Mills, 2006).
Easy Hotels owned hotel rooms have mounted in the past three years and the revenue also has gradually increased. The hotel group has implemented key marketing initiatives with digital and customer service focus and is successfully competing with other hotels (Lewellen, 2004). In spite of such performance, the company is facing the threat of increasing competition and oversupply of identical accommodation types within a city. The hotel is also facing operating risks such as increase in operating costs due to inflation (Feng and Wang, 2000). The hotel employed the opportunities to create extended term ...Download file to see next pagesRead More
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