Financial Analysis of Hotel Industry



Contents

Executive Summary3

Introduction4

Methodology4

Discussion4

Current Ratio4

Financial Position6

Net Profit and Earning per Share7

Recommendations and Conclusions8

Bibliography9

Executive Summary

How the financials of different hotels are performing and what is the difference between their operations is been looked at in this report. The business prospects of these two hotels are always been looked at and it is also analyzed that which of these two is more bankable investment. The two lower price range hotels that are brought under the discussion are Hyatt Hotels Corporation and Choice Hotels International, Inc. These are two hotels that are on the lower range of price. On the other hand, two other hotels are on the higher price scales are Starwood Hotels & Resorts Worldwide Inc HOT and Marriott International, Inc. Class A are these two hotels that are brought into the discussion to see how are the financial of some of the larger hotels and also get an idea about how financial of both these hotels goes about. Among of the hotels that are on the lower price range, Choice has done rather well. This practice also illustrates to the extent that one does not have to be one of the larger hotels to make it count and one can have strong financial credential even if the prices are on the lower side.

Financial Analysis of Hotel Industry

Introduction

Hotel business is one of the more growing and dynamic business that has been going around for some time, Industry prospects say that this one of the most profitable and dynamic industry and there is always something to learn as far as this business is concerned. The way ratings are been given to some of the hotels and how these ratings can make or break the prospects of the hotel are always a source of intrigue for financial students.

Methodology

The financial statements and the company profiles of different hotels were needed to be looked as far as this report is concerned. For the sake of analysis, there are two hotels that are on the lower price range and they are being looked at. There are many grounds where one can compare these hotels, but the thing that will be seen is the overall financial scale as well as some of the other financial ratios that will help us to determine the actual standing of these two categories of hotels. Some of the peer reviews and industry analysis reports will also be looked at.

Discussion

Current Ratio

The current ratio is the ration between the current assets and current liabilities, looking at the current ratios of the Choice has been hovering around the range of just about 1.1-1.3 for last some years. While on the other hand, the current ratio for Hyatt is in the range of 2.8-2.9 which is shows that as far as the paying off their current liabilities are concerned, Hyatt internationals seems to be in a better position. On the other hand, when one looks at the performance some of the larger food chains which lie on the higher price ...