A COMPARATIVE ANALYSIS ON HOTEL FINANCIAL PERFORMANCE
Abstract:
In the market economy, corporate finances are certainly one of the key resources which are limited. The fact that financial resources are limited influences the limitations of a number of operations (acquisition, promotion, and distribution, sales) since there is no department that has no contact with the financial operations. Therefore, the proper allocation of financial assets occupies a very important place in modern business. A final decision on how the company should allocate its funds should be based on good assessment, which should rely on the previously performed analysis. One of the most common and most used methods of financial analysis is the financial statements analysis and ratio analysis. By bringing certain items from financial statements in mutual connection, via simple mathematical formula, it is possible to determine an overall performance of the company, measured through finance. The decision on whether a company should invest into franchise arrangements and management contracts with large international hotel corporations is one of the key dilemmas for the hotel owners. The franchise agreements and management contracts are the most common way of spreading large corporate hotel systems. In addition to the benefits it entails, this type of contract requires large financial investments. Justification of these investments may be the subject to the financial analysis. This paper demonstrates the comparative analysis of financial results between the four city hotels, two of which operate within international corporate hotel chains, while the other two operate independently of corporation standards. The analysis was conducted on a growing market by the number of international arrivals (Belgrade, Serbia). Moreover, this market recorded a noticeable growth of hotel companies operating under the franchise agreement or management contract. The research results are presented under the section Results and Discussion, while the conclusions and recommendations of authors are presented in the summary section.
