Topic 8 Period 35 onwards

Probably a reasonable match. However as I have said previously, I am not familiar with the detailed operations of every organisation and suitability is something you need to work for yourself after doing a bit of initial research. You can then mention anything that may affect validity of comparisons in the limitations section (I believe that Shangrila are very upmarket/ luxury and although Mandarin is fairly upmarket it is not quite to the extent of Shangrila

Please I need help choosing my ratios for my hotel industry . They’re so many & I honestly don’t know where to start . Any guidelines that can assist would be much appreciated

I am intending to do rap topic 8, my problem is the companies I want to use in zimbabwe one of the adjusted its financial year from September to December lrading to financial statements for 2015 to be for 15 months. How can I go about this . The comparators accounts are also for 31 December. Should I make adjustments to make them comparable

Given that soft drinks and fruit juices are not included in Food Products, can PepsiCo or Nestle be selected as companies?

Hi Trephena

Can we compare Interccontinental Hotels Group and Mandarin Oriental International for Topic 8?

Kind regards.

@ishika – as I think I explained to someone else, you need to see who the target market is, geographical spread and number of hotels. There is never going to be a perfect match so you explain this in the limitations and when discussing the results

Marks and Specer is a food retailer and although they sell food under their brand name they do not manufacture this. I think Woolworths in S.A. is the same I.e. a food retailer not a manufacturer. Can you find some biscuit or confectionery manufacturers instead?

Possibly, however as I have pointed out I am not familiar with the operations of every company. You need to look at their markets and products and ensure both they and the comparator manufacture the products (as opposed to just marketing or selling them) and there is sufficient to consider them and match them together as competitors. There is unlikely to be a perfect match so you discuss this in the limitations section and where appropriate in your analysis.

Yes this is a bit of a problem. It may depend upon why they have charged their year end – were they recently taken over by another company? If so this might make it unsuitable.

However otherwise you could adjust the financial statements to make this last year 12 months by dividing the income statement by 12/15 which would give you an approximation of Jan to Dec 2015. This also would mean going back to the previous year end Sept 2014(?) and taking 9/12 representing Jan to Sep and adding 3/15 of Oct 2014 to Dec 2015 as this would represent Oct to Dec 2014 so that you ended up with an approximate year Jan to Dec 2014. Similarly you would need to take 9/12 of year end 2013 and add 3/12 of 2014 to get the full figures representing Jan to Dec 2014. Fortunately you could probably use the Balance sheet figures as they are (unless there was a share issue between Oct to Dec 2015).

This all sounds complicated but with a spreadsheet is not as bad as it sounds.

Alternatively choose a different company!

@Obianuju -sorry I missed your query but I have been busy in the day job.

Hotel specific ratios will depend to a certain extent on the hotel size whether it is a chain and whether it is in a group. Room occupancy rate is a key one, average stay per guest, average spend per guest stay (or possibly per day/night) , profit per employee. If information is available there might be others as restaurant and bars will be regarded as business units and there might also be other forms of segmentation e.g. conference and events.

Where the hotel is a chain read through the annual report written section to discover what info is available . With a group where hotels are just part of the overall activities it may be harder to make comparisons as some of the detail may be ‘lost’ in total figures but again read through the written reports (CEO /directors reports to shareholders).

I am not entirely clear what you question is as it mainly comes over as a series of statements!

I have always suggested that SWOT and PESTLE are more appropriate for Topic 8 than Porter’s 5 Forces (and this is even more evident when it comes to looking for a substitute for a hotel!!). SWOT and PESTLE are strategic tools and influence management decisions and impact on results. Good application of these models is vital for a pass and to link the business and financial analyses together. Looking at the CEO and directors’ reports mean that their strategic decisions can be identified and subsequently analysed in the ratio section in terms of whether the financial results show these decisions to have been successful.

I have suggested some potential KPIs in a previous post above.

Note: I am not familiar with this hotel chain and therefore cannot really comment further – my expertise is on putting together a good RAP and not in choosing companies apart from offering general advice

Statements NOT questions: You got that right. Asking the right questions needs skill.

I’m more or less requiring assurance that I’m going on the right track. So I put a statement and a ‘right?’ at the end, to convey my thought process.

There are 38 Hotel PLC. What factors should we consider when choosing the appropriate one?

There is a particular(attractive) brand of hotel. I know under which parent company it is. But, I don’t know under which of the 3 subsidiaries it’s under. Where can I get the information, that which subsidiary owns the particular brand?

When a group of companies has 3 subsidiaries (all 3 of them Hotel PLC) how do we choose the most appropriate subsidiary?

Is it preferable to take the parent company annual reports or subsidiary?

Will I have to reference the news article (mentioning companies fighting for top 3 slots) when I bring in the comparator Hotel company?

I understand that there are no marks for choosing the company and its comparator but the research and analysis is going to be based on them. If down the line we realize that the company is not suitable, it might be too late to turn back.

(Although deliberation is good, it shouldn’t result in paralysis by analysis.)

The usual ‘rule of thumb’ for choosing organisations is like for like, that means either at a group level or individual level company level for both (not group for one and company level for the other). Normally companies have to be registered (by definition) and their ownership details can be found by looking at their registration details (significant shareholders / shareholdings information).

Regarding referencing -I have produced a whole article on our homepage explaining this topic called the ‘Open Tuition Ultimate Guide to Referencing your RAP’ -so please read that.

As I have said repeatedly I do not have any particular experience and expertise in the hotel sector so I can’t really help anyone choose a particular hotel or group as their are literally millions of them out there worldwide!