Hotel Trading - Sample Essay
Hotel Trading conditions during the year appear from research and from the company accounts to be dependant on location. Hotels outside the M25 recorded a 5 increase in revenue per available room to ï¿½45.85. However this has been identified as although being an increase, not being enough because of the disappointing results earlier in the year. Revenue Per available room at Macdonald London Hotels fell by 12% during the 2002 period to ï¿½59.99. However, revenue per available room across the Macdonald Group increased by 1% to ï¿½48.05 supporting the opinion that Macdonald Hotels are dependant on location, which may explain why some hotels in less popular and fashionable regions are being sold.
Macdonald Hotels continuous to make strategic progress in relation to its aims and objectives, even though there have been difficult trading conditions experienced in 2001/2002. The Hotel Group has shown successes with the integration of the Joint Venture Hotels, which was acquired in 2001. Some locations have been affected more so than others, for example the Lake District during the foot and mouth epidemic experienced a dramatic loss of business as did the Midlands, which experienced a dramatic reduction in U.S visitors because of September 11th.
Trading in some areas has been difficult, which can be identified in the reports as some hotels, especially the three star ones were sold off as part of the joint venture portfolio. For example several key areas around the M25 had seen occupancies down by 7% to 59.4% and rates down 13% to ï¿½89.27. However the report shows that the company’s wholly owned hotels increased by 5%, with a 3% increase in room yields to ï¿½40.98 and a 5% increase in total revenues per room to ï¿½93.44.
Recent Media coverage of Macdonald Hotels in the Caterer 24 February 2003 warns of lower than expected profits in the next six months. However the on going development and acquisition of joint venture properties has to be taken in to consideration. Results show an encouraging start with revenue per available room increasing by 2% in the four months since 3 October 2002 compared with the same period a last year. However it has been identified that trading has since declined, with profits therefore lower than the company would have forecasted. However Macdonald Hotels has always maintained that the “company has always traded well through difficult times.”
It is clear that the company strategy of Macdonald Hotels, which is to build a portfolio of high quality hotels and resorts is central to every development and investment, to ensure that it fits in and can be integrated into the group. The group believe that they still need to further develop the brand. The company believe that their product today is as good as full service as Marriott or Hilton. However the Hotel Group is not fully known yet. Macdonald hotels believe that because at the moment they are small and agile the company enables them to be more flexible to changing needs, unlike maybe Marriott who have a formula and a format that they don’t move from.
Report and Accounts 12 months to 3 October 2002 Macdonald Hotels Plc www.caterer.com