Exploring the budgetary operations of a hotel

Shaharu B.

Order the writing of a tailor-made Finance Term papers

Free quote online

Thesis Format .doc

Exploring the budgetary operations of a hotel

Download

Read an extract

Reader
Abstract
Contents
Extract

Abstract

World War II marked a milestone in the explosive use of service industry. There has been an impressive increase in personal spending in the last few decades. Individuals are spending a major chunk of their income on travel, restaurants, better quality health, education services, and leisure services, to improve the quality of their lives. This, in fact, reflects a more dynamic and fast moving environment.
The tourism industry is a collection of diverse products and services sold by highly fragmented industry sectors through a complex distribution chain. Besides lodging operations, tourism is generally said to include transportation services (airlines, rail, motor car, bus, etc), sightseeing and other services, to mention a few.

Tourism is a part of the "service revolution" that is dramatically changing the local national, regional, and global economy. It has been the world's most consistently growing industry over the past 30 years. Governments in many countries are playing a stronger role in encouraging both domestic and international tourism as a means of job creation and economic diversification, income redistribution within national boundaries, and a source of foreign exchange.

Introduction
International chain operations
Levels of service
Classification of hotels
1. Categorization by location
2. Categorization by number of rooms
3. Categorization by type of plan
4. Categorization by length of guest stay
5. Categorization based on the facilities provided
The sheraton corporation
1. A unique opportunity for developers
Front office
1. Organization of the front office
2. Front office manger
3. Reservation department
4. Modes of reservation requests
5. Reception department
6. Registers and forms maintained
7. Functions of reception department
8. Work performed by front office assistants
9. Departments the front office coordinates with
Accounts
1. Front office cashier
2. Night auditor
3. City ledger
Room service
1. Arrivals and departures
2. VIP procedures
3. Engineering
4. Handling enquiries
5. Repeat business
Budgeting
1. Budget
2. A Budget is a plan
3. Budgeting
4. Objectives of budgetary control
5. Essentials of effective budgeting and budgetary control
6. Setting up of a budget committee
7. Budgeting for operations
8. Forecasting room revenue
9. Refining budget plans
Daily operations report
Occupancy ratios
1. Revenue per available room
2. Average rate per guest
3. Room revenue analysis
Hotel income statement
1. Rooms division income statement
2. Rooms division budget reports
3. Operating ratios
4. Ratio standards
Key terms
Conclusion

Get this table of contents for free after login.

Extract

[...] In determining the average price per room, this approach considers costs, desired profits, and expected rooms sold income statement - a financial statement that provides important information about the results of hotel operations for a given period of time market condition approach - an approach to pricing that bases the prices on what comparable hotels in the geographical market are charging for a similar product multiple occupancy percentage - the number of rooms occupied by more than one guest divided by the number of rooms occupied multiple occupancy ratio - a measurement used for forecasting food and beverage revenue, clean linen requirements, and for analyzing the daily revenue rate. [...]

[...] It was in Europe that the birth of an organized hotel industry took place in the shape of chalets and small hotels that provided a variety of services and were mainly patronized by the aristocracy of the day. The real growth of the modern hotel industry took place in the USA, beginning with the opening of the City Hotel in New York City in 1794 - this was the first building specially erected for hotel operations. This eventually lead to great competition between cities and resulted in frenzied hotel-building activity. [...]

[...] For a person who enjoys the changes and fast movements, the hotel front office offers a window of opportunity to view the workings of a hotel from the heart of its operations - the hotel worked spins fast and the front office crew must have skills to spin with it. Organization of the front office The staff is supervised by the front office manager who is assisted by an assistant front office manager. The main functions for the front office are handled by front office clerks, night auditors, and front desk cashiers. [...]

[...] The hotel accounting division is also responsible for coordinating the budget plans of individual department managers into a comprehensive hotel-wide operations budget for top management review. The general manager and controller typically review departmental budget plans and prepare a budget report for approval of the hotel owners. If the budget is not satisfactory, elements requiring change may be returned to the appropriate division managers for review and revision. The primary responsibilities of the front office manager in budget planning are forecasting room revenue and estimating related expenses. [...]

[...] Yield Statistic = Actual Room Revenue Potential Room Revenue Hotel Income Statement The hotel income statement provides important financial information about the results of hotel operations for a given period of time. The period may be one month or longer, but should not exceed one business year. Since a statement of income reveals the amount of net income for a given period, it is one of the most important financial statements used by management to evaluate the overall success of operations. [...]

doc