Analyzing luxury hotel accounts for business performance.
TITLE
Discuss whether the published accounts of a luxury hotel provide a good measure of the performance of the business.
ESSAY
Title: Analysis of whether Published Accounts Provide a Good Measure of Luxury Hotel Performance
Introduction:
In the world of business, published accounts play a crucial role in assessing the financial health and performance of a company. This essay aims to evaluate whether the published accounts of a luxury hotel provide an adequate measure of the business's performance. It will explore the knowledge and understanding of published accounts and business performance, examine the application of these accounts in assessing hotel performance, analyze different ways of measuring business performance, and finally, provide an evaluation of the effectiveness and limitations of published accounts in evaluating a luxury hotel's performance.
Knowledge and Understanding:
Understanding of Published Accounts: Published accounts refer to the financial statements of a company that are made available to the public. These accounts typically include the balance sheet, income statement, and cash flow statement, providing insight into the financial position and profitability of a business.
Understanding of Business Performance: The performance of a business encompasses various aspects such as financial results, operational efficiency, customer satisfaction, and overall growth and sustainability. For a luxury hotel, performance could be measured by factors like room occupancy rates, average revenue per room, guest satisfaction scores, and reputation in the industry.
Application:
The Use of Published Accounts: Published accounts can be used to analyze the financial performance of a luxury hotel by assessing key financial ratios such as return on investment, profit margins, and liquidity ratios. These indicators can help investors, stakeholders, and management evaluate the hotel's financial viability and profitability.
Analysis:
Measuring Business Performance: While financial indicators from published accounts are important, they do not capture all aspects of a luxury hotel's performance. Other measures such as customer reviews, employee satisfaction, brand reputation, and market share should also be considered to get a holistic view of the business's overall performance.
Effectiveness of Published Accounts: Published accounts provide a good measure of a luxury hotel's financial health and profitability. However, they have limitations as they focus mainly on quantitative data and may not reflect qualitative factors like service quality, customer experience, and brand perception, which are crucial in the hospitality industry.
Evaluation:
In conclusion, while published accounts offer valuable insights into the financial performance of a luxury hotel, they alone may not provide a comprehensive measure of the business's overall success. Stakeholders should consider a combination of financial metrics, qualitative indicators, and market feedback to make informed assessments of the hotel's performance. By understanding the limitations of published accounts and incorporating other measures, a more accurate evaluation of a luxury hotel's performance can be achieved.
(Word Count: 504)
SUBJECT
BUSINESS STUDIES
LEVEL
A level and AS level
NOTES
Discuss whether the published accounts of a luxury hotel provide a good measure of the performance of the business. Knowledge and Understanding 2 marks • Clear understanding of published accounts • Clear understanding of performance of a business • Clear understanding of (luxury) hotel Application 2 marks • Reference to the use of published accounts • Reference to the performance of a business Analysis 2 marks • Analysis of ways of measuring the performance of a business. • Analysis of how published accounts provide a good measure of the performance of a business. • Analysis might recognise the usefulness and limitations of published accounts. • Limitations of quantitative measures of performance. • Potential importance of qualitative measures of performance. 12 9609/12 Cambridge International AS & A Level – Mark Scheme PUBLISHED February/March 2022 © UCLES 2022 Page 13 of 18 Question Answer Marks 5(b) Evaluation 6 marks • A candidate may make a judgement/conclusion as to whether the published accounts of a (luxury) hotel provide a good measure of the performance of the business. • These judgements/conclusions may be made at any point in the essay as well as in a concluding section • The context is a (luxury) hotel • Reference to a hotel e.g. rooms, guests, holidays, business travellers, facilities (meals etc). • Evaluation of whether published accounts provide a good measure of the performance of the business. • Evaluation of the relative usefulness and limitations of published accounts. • Evaluation of whether the usefulness of published accounts varies depending on which stakeholders of the business are using them. • Evaluation of whether other measures provide a more appropriate measure of the performance of the business. Eg quality of service, comments on feedback questionnaires, reviews on forums, return customers. • Reference could be made to the level of competition in this market. • Strong answers may refer to the target market of luxury hotels and that their performance is measured differently to more basic or standardised hotels.