School of Hospitality & Tourism Management

BA International Hotel Management

Module Handbook Winter Term 2024

BMIH5007

Financial Management for the Hotel Industry

LEVEL 5

Module Lead:

Tristan Hawkins T.Hawkins@uwtsd.ac.uk

Financial Management for the Hotel Industry – Winter Term 2024

Welcome to this generic overview handbook for the above module. This is a level 5, 20 credit module for Level 5 IHM students in the School of Hospitality & Tourism Management.

It should be read in conjunction with supplementary information and materials available on Moodle and your Teams page together with information and instructions delivered by your module tutor.

To get the best out of this module it is vital that you engage with the themes explored as well as both the online and offline activities during tutorial sessions which are designed to enrich the learning experience as well as to encourage self-directed study together with collaboration and interaction with your peer group.

AIM(S)

·                To develop a critical understanding of the principles of Financial Management, concepts and applications of financial and management accounting within the hotel industry.

·                To encourage and develop the student’s ability to interpret key financial information for budgeting, performance measurement and evaluation techniques

LEARNING OUTCOMES

 Upon the successful completion of this module, the student should be able to:

 Critically analyse and evaluate the informational requirements of management, particularly in relation to decisions involving revenues, costs and other financial criteria using appropriate methods and techniques.

·         Demonstrate a critical understanding of how to monitor and evaluate financial performance within the Hotel Industry.

INDICATIVE CONTENT

·                Accounting for sustainability within the hotel and hospitality industry.

·                Cost volume profit analysis; cost behaviour, marginal v absorption costing, costing for short- and long-term decision making, use of marginal costing, limiting factors/ constraints.

·                Introduction to budgeting, cash budgets and working capital management.

·                Accounting software systems used within hotel/hospitality environments.

·                Sustainable accounting practices.

·                Functional and master budgets, sales, materials, labour and overhead budgets.

·                Introduction to standard costing, identification of criteria for standard setting, types of standards

Study Time Allocation

The study time for the module is divided as follows:

ASSESSMENT

Assessment Component 1

☐            Written exam                ☒     Coursework                  ☐      Practical

Assessment Component 2

☐            Written exam                ☒ Coursework                  ☐ Practical

Assessment Summary

EDUCATION FOR SUSTAINABLE DEVELOPMENT (ESD)

INDICATIVE READING LIST

Assessment 1

Assignment 1 – Due Friday 2nd February 23:59

Report – 2000 words (+/- 10%)

Business Report – Comparison of Corinthia Hotels and Ibis Hotels.

In this assessment, you will be tasked with conducting an in-depth analysis and

comparison of two prominent players in the hospitality industry: Corinthia Hotels and Ibis Hotels. The objective of this report is to evaluate their respective approaches to financial management,

considering various critical areas that impact their financial performance and sustainability.

Task Description: Your task is to write a comprehensive business report that critically appraises the Corinthia Hotel Group and Ibis Hotels in terms of their financial management strategies and practices. The assessment must include comparing these two organizations in the following key areas (although not limited to):

1.    Total Revenue: Analyze and compare the total revenue generated by each organization. Explore the sources of revenue, revenue trends, and the factors driving revenue growth or decline.

2.    Market Position: Assess the market positioning of both hotel groups. Consider factors such as market share, customer demographics, and brand perception.

3.    Growth Potential: Evaluate the growth potential of each organization. This includes examining expansion strategies, market opportunities, and potential barriers to growth.

4.    Financial Commitment to CSR (Corporate Social Responsibility): Analyze the financial commitment of each organization to CSR initiatives. This should encompass sustainability practices, community engagement, and ethical business practices.

Research and Resources: To complete this task successfully, you are expected to incorporate industry-specific terminology, standards, and best practices. Make sure to reference reliable sources, such as academic articles, industry reports, and

financial statements of the two companies. Proper citation and referencing in the Harvard style are essential.

Recommendations: In the final section of your report, provide one well-reasoned recommendation for each of the chosen organizations based on your analysis. Your recommendations should align with the specific areas you assessed (e.g., opportunities for growth, potential for outsourcing). Justify your recommendations with evidence from your research.

References & In-text citations

You must use credible sources for your research from online sources, textbooks, media, and industry journals to support your report.

Assessment Criteria:

Ø  Research Skills

Ø  Referencing

Ø  Report Writing and Planning

Ø  Time Management

NOTE: The guidance offered below is linked to the five generic assessment criteria overleaf.

1.    Engagement with Literature Skills     /10

Your work must be informed and supported by scholarly material that is relevant to and focused on the task(s) set. You should provide evidence that you have accessed an appropriate range of sources, which may be academic, governmental, and industrial; these sources may include academic journal articles, textbooks, current news articles, organisational documents, and websites. You should consider the credibility of your sources; academic journals are normally highly credible sources while websites require careful consideration/selection and should be used sparingly. Any sources you use should be current and up-to- date, mostly published within the last five years or so, though seminal/important works in the field may be older. You must provide evidence of your research/own reading throughout your work, using a suitable referencing system, including in-text citations in the main body of your work and a reference list at the end of your work.

Guidance specific to this assessment: Report should contain a minimum of 20 in text citations – which will be supported by the attached reference list according to Harvard referencing principles.

2.     Knowledge and Understanding Skills     /20

At level 5, you should be able to demonstrate: sound knowledge and critical understanding of the well- established concepts and principles of the subject area and the way in which those principles have developed; knowledge of the main methods of enquiry in the discipline. Knowledge relates to the facts, information, and skills you have acquired through your learning. You demonstrate your understanding by interpreting the meaning of the facts and information (knowledge). This means that you need to select and include in your work the concepts, techniques, models, theories, etc. appropriate to the task(s) set. You should be able to explain the theories, concepts, etc. meaningfully to show your understanding. Your mark/grade will also depend upon the extent to which you demonstrate your knowledge and understanding.

Guidance specific to this assessment: Display an understanding of the financial performance of the two hospitality operations. To be able to evaluate and interpret information gathered using information learned in class as well as supported by independent learning.

3.    Cognitive and Intellectual Skills      /20

You should be able to critically analyse information, and propose solutions to problems arising from that analysis, including the critical evaluation of the appropriateness of different approaches to solving problems. Your work must contain evidence of logical, analytical thinking, evaluation, and synthesis. For example, to examine and break information down into parts, make inferences, compile, compare and contrast information. This means not just describing what! But also justifying: Why? How? When? Who? Where? At what cost? At all times, you must provide justification/evidence for your arguments and judgements. Evidence that you have reflected upon the ideas of others within the subject area is crucial to you providing a reasoned and informed debate within your work. Furthermore, you should provide evidence that you are able to make sound judgements and convincing arguments using data and concepts, with an understanding of the limits of knowledge, and how this influences analyses and interpretations. Sound, valid conclusions are necessary and must be derived from the content of your work. Where relevant, alternative solutions and recommendations may be proposed.

Guidance specific to this assessment: To be able to effectively draw comparisons and establish similarities and differences, both between the hospitality operations, but also when discussing the available literature with use of comparative analysis.

4.    Practical Skills     /40

At level 4, you should be able to use/deploy a range of established techniques within the discipline and apply underlying concepts and principles outside the context in which they were first studied, including, where appropriate, the application of those principles in an employment context. You should be able to demonstrate how the subject-related concepts and ideas relate to real world situations and/or a particular context. How do they work in practice? You will deploy models, methods, techniques, and/or theories, in that context, to assess current situations, perhaps to formulate plans or solutions to solve problems, or to create artefacts, some of which may be creative. This is likely to involve, for instance, the use of real-world artefacts, examples and cases, the application of a model within an organisation and/or benchmarking one theory or organisation against others based on stated criteria. You should show awareness of the limitations of concepts and theories when applied in particular contexts.

Guidance specific to this assessment: Display a clear knowledge and rationale of how the approaches and principles discussed are practically implemented by the two organisations from the context of Financial Management.

5.    Transferable Skills for Life and Professional Practice     /10

Your work must provide evidence of the qualities and transferable skills necessary for employment requiring the exercise of personal responsibility and decision-making. This includes demonstrating: professional development to advance existing skills and acquire new competences that will enable you to assume significant responsibility within organisations; that you can initiate and complete tasks and procedures, whether individually and/or collaboratively; that you can use appropriate media to effectively communicate information, arguments and analysis in a variety of forms to specialist and non-specialist audiences; fluency of expression; clarity and effectiveness in presentation and organisation. Work should be coherent and well- structured in presentation and organisation.

Guidance specific to this assessment: You should write a report in a recognised format. All writing should be academic style, formal, focused, concise and subject specific. It should use a font of Arial 12 point or Times New Roman 12 point, and have 1.5 line spacing. All graphs, charts, and figures in the main body must be clearly referenced beside or beneath. Where possible they should not be on separate pages but should be incorporated within the text.

This section details the extent to which the assessment criteria are demonstrated by you, which in

turn determines your mark. The marks available for each category of skill are shown. Lecturers will use the space provided to comment on the achievement of the task(s), including those areas in which you have performed well and areas that would benefit from development/improvement.

Assessment 2

Assignment 2 – Due Thursday 29th February 23:59

Report – 2000 words (+/- 10%)

Case Study: The Seacrest Lodge

Introduction: The Seacrest Lodge with restaurant, bar and event facilities located on a picturesque coastline, was once a thriving destination for vacationers seeking relaxation and luxury. However, in recent years, the resort has experienced a decline in revenue, occupancy rates, and customer satisfaction. The owner, is concerned about the future viability of the business and has enlisted your expertise to assess if the business can be salvaged through a turnaround strategy.

Market Analysis:

·         The coastal market is highly competitive, with several newer, more modern resorts in the vicinity.

·         Customer preferences have shifted.

·         The Seacrest Lodge's customer reviews indicate declining service quality and outdated amenities.

Scope and Objectives: The primary objectives of this assessment are to:

·         Analyze the Seacrest Lodge's financial performance over the past three years.

·         Identify the key reasons behind the decline in profitability, taking into consideration, real- world events and the current economy.

·         Develop (if possible) a comprehensive turnaround strategy to revitalize the lodge's financial health and restore its reputation as a premier vacation destination or most viable financial outcomes.

Income Statement (in GBP)

Balance Sheet (in GBP)

Additional Financial Information:

·         Average Room Rate (ARR):

·         2021: £260

·         2022: £240

·         2023: £210

·         Occupancy Rate:

·         2021: 65%

·         2022: 60%

·         2023: 50%

References & In-text citations

You must use credible sources for your research from online sources, textbooks, media, and industry journals to support your report.

Assessment Criteria:

Ø  Research Skills

Ø  Referencing

Ø  Report Writing and Planning

Ø  Time Management

NOTE: The guidance offered below is linked to the five generic assessment criteria overleaf.

1.    Engagement with Literature Skills     /10

Your work must be informed and supported by scholarly material that is relevant to and focused on the task(s) set. You should provide evidence that you have accessed an appropriate range of sources, which may be academic, governmental and industrial; these sources may include academic journal articles, textbooks, current news articles, organisational documents, and websites. You should consider the credibility of your sources; academic journals are normally highly credible sources while websites require careful consideration/selection and should be used sparingly. Any sources you use should be current and up-to-date, mostly published within the last five years or so, though seminal/important works in the field may be older. You must provide evidence of your research/own reading throughout your work, using a suitable referencing system, including in-text citations in the main body of your work and a reference list at the end of your work.

Guidance specific to this assessment: Report should contain a minimum of 10 in text citations – which will be supported by the attached reference list.

2.    Knowledge and Understanding Skills    /20

At level 4, you should be able to demonstrate knowledge of the underlying concepts and principles associated with your area(s) of study. Knowledge relates to the facts, information and skills you have acquired through your learning. You demonstrate your understanding by interpreting the meaning of the facts and information (knowledge). This means that you need to select and include in your work the concepts, techniques, models, theories, etc. appropriate to the task(s) set. You should be able to explain the theories, concepts, etc. to show your understanding. Your mark/grade will also depend upon the extent to which you demonstrate your knowledge and understanding.

Guidance specific to this assessment: Display a clear understanding of the key reasons behind the decline in the business, along with the financial implications and create a potential solution/turnaround strategy.

3.    Cognitive and Intellectual Skills     /40

You should be able to present, evaluate and interpret qualitative and quantitative data, in order to develop lines of argument and make sound judgements in accordance with basic theories and concepts of your subject(s) of study. You should be able to evaluate the appropriateness of different approaches to solving problems related to your area(s) of study and/or work. Your work must contain evidence of logical, analytical thinking. For example, to examine and break information down into parts, make inferences, compile, compare and contrast information. This means not just describing what! But also justifying: Why? How? When? Who? Where? At what cost? You should provide justification for your arguments and judgements using evidence that you have reflected upon the ideas of others within the subject area and that you are able to make sound judgements and arguments using data and concepts. Where relevant, alternative solutions and recommendations may be proposed.

Guidance specific to this assessment: accurately analyse the financial performance of the business from the provided data and provide the financial ratios that will enable you to make informed decisions on potential turnaround strategies.

4.    Practical Skills      /20

At level 5, you should be able to apply the basic underlying concepts and principles to evaluate and interpret these within the context of your area of study. You should be able to demonstrate how the subject-related concepts and ideas relate to real world situations and/or a particular context. How do they work in practice? You will deploy models, methods, techniques, and/or theories, in that context, to assess current situations, perhaps to formulate plans or solutions to solve problems, or to create artefacts. This is likely to involve, for instance, the use of real-world artefacts, examples and cases, the application of a model within an organisation and/or benchmarking one theory or organisation against others based on stated criteria.

Guidance specific to this assessment: you will need to consider contemporary trends and themes that are occurring within hospitality industry today, as well as demonstrating an understanding of current socio-economic realities which are currently impacting the UK.

5.    Transferable Skills for Life and Professional Practice     /10

Your work must provide evidence of the qualities and transferable skills necessary for employment requiring the exercise of some personal responsibility. This includes demonstrating that you can communicate the results of your study/work accurately and reliably, and with structured and coherent arguments; that you can initiate and complete tasks and procedures, whether individually and/or collaboratively; fluency of expression; clarity and effectiveness in presentation and organisation. Work should be coherent and well-structured in presentation and organisation.

Guidance specific to this assessment: You should write a report in a recognised format. All writing should be academic style, formal, focused, concise and subject specific. It should use a font of Arial 12 point or Times New Roman 12 point, and have 1.5 line spacing. All graphs, charts, and figures in the main body must be clearly referenced beside or beneath. Where possible they should not be on separate pages but should be incorporated within the text.