Advance Diploma Hospitality of Management

Question: Discuss the budget analysis of international Hotel Group. Answer: Budget Analysis of International Hotel Group The budget analysis of the hotel is based on existing budget report and the proposed budgets for improvement are shown below as follows: Existing reflection of the expenses The present budget estimation has total expenditure of $67000. The cost of the various item such as Accommodation, Equipment, Food/Catering, Recreational Hall, Round tables with chairs, Lights on the last day for music carnival, Small stage for speeches and individual performance, small bouquets and transportation facilities provide to the customers comprises of the various costing components in the financial budgeting procedure. It has been observed that the rooms with single bed will cost $200 per night. The total cost for the required 30 beds have been observed as $16000. The equipments required such as projectors, microphones and sound system has further requirements of $2800. The food and catering cost is $19000. These costs include the food which is given in the menu list, dietary requirements and room service related costs. The recreation hall further needs an accommodation capacity of 200 people. This cost has been estimated to be $ 9000. The cost related to the tables and chairs has been estimated to be $ 10000.These items include 15 tables, consisting of 11 table and ten chairs. The expenses of the lighting charges for the purpose of last day celebration on the occasion of carnival and musical night are estimated to be $ 6950. The small stage setup for the purpose of speech and performance of the individual members has been observed as $1900. This particular cost is based on the area of the stage wh ich is 5x7 meters. The cost for the purpose of floral decoration has been observed AS $1700. The several cost components for this purpose includes entry decoration, stage decoration and decoration in the centers and buffet. The costs for 28 small bouquets have been observed as $1850. This component includes selection of the bouquets of orange, red and white color of flowers. The transport of the passengers of the cost has been estimated as $ 49000. This cost includes the cost involved in taking the guest for the purpose of sightseeing. The cost for the aforementioned items has been observed as $57000. This shows that as the budget of the company is $67000 the company will earn a profit of $ 10,000. Recommendation for improvement in the present budget The recommended budget has been suggested to the International Hotel Group for the purpose of improving the present budget activities and increasing the profit aspect of the company. According to the revised budget the accommodation charges for the rooms with single beds has been estimated to be $ 9000 as the cost 30 bed has been considered as $300 per night. The equipment charges related to the projectors, microphones and sound system has been reduced to $ 1000. Based on the revised budget the cost related to the food and catering business has been reduced to $ 5040. The cost of the recreation hall has been observed as $8570. The costs related to the round tables with chairs have been further reduced to $1050. The cost of the small stage for the purpose of speech and individual performance has been reduced to $ 580. The cost associated with the floral decorations has been reduced to $640. The cost of the 28 small bouquets of various colors has been further reduced down from $ 1850 t o $ 560. The transportation cost of the passengers has been brought down from $ 4900 to $ 550. Based on the above discussed cases it has been observes that the present cost of the related items of the Hotel is $30010. Based on the estimated total budget aspect the total profit after the revised budget report has been observed as $ 36990. This shows an increase of more than $ 26000 than the existing budget. The various cost drivers associated has been changed on the basis of prioritizing the importance of the cost component based on the individual activities. For example previous provision of the deluxe rooms in the expected budget has been reduced by providing standard rooms. The cost of the flower decoration has been reduced from the previous estimation of $ 1700 to $ 640. This reduction has been done by considering inferior quality of flowering rather than including superior set of flower in the previous set of budget report. Due to the similar reason the price the small bouquets has also been reduced in compare to the existing budget. It can observe that of the recrear5ion hall has been reduced to a great extent as the charge of recreational hall is more or less fixed in nature. The comparison of the budget report shows that the cost of $ 9000 has been reduced to only $ 8570 in the new budget proposal. Hence we can see that on the basis of new budget, the company is able to increase the profit amount by more than 40%. Reference List Fatahi, S., Nozari, S.M. and Nejad, M.J., 2014. An investigation of the Impact of Performance Audit on Improving the Productivity of (Financial and Budget) Public Sector Capital Resources. Advances in Environmental Biology, pp.512-522. Keating, S.B., 2014. Financial Support and Budget planning for Curriculum Development or Revision. Curriculum Development and Evaluation in Nursing, p.169. SHAN, B. and CAI, J., 2013. Development of Executive Control System of Financial Budget Based on Web in Vocational Colleges [J]. Journal of Tianjin Vocational Institutes, 4, p.022. Wei, F., 2015. Research on Financial Budget Performance Audit Platform Construction By Information System.