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Business Success Analysis in Hotel Industry

Evaluate business success of hotels in Serbia listed on the Belgrade Stock Exchange using Kralicek’s methods for estimation. Explore financial statements from 2013-2016 to assess the industry's performance and recommend strategies for improvement.

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Business Success Analysis in Hotel Industry

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  1. BUSINESS SUCCESS ANALYSIS IN HOTEL INDUSTRY Milovan Stanišić, PhD Nikica Radović, PhD Jelena Nikolić, MA

  2. Models for identify Peter Kralicek′s business success Kralicek′s DF indicator DF = 1,5X1 + 0,08X2 + 10X3 + 5X4 + 0,3X5 + 0,1X6 X1 – net cash flow/total liabilities X2 – total assets/total liabilities X3 – profit before interest and taxes/total assets X4 – profit befor interest and taxes/total revenue X5 – inventories/total revenue X6 – operating income/total assets

  3. DF value indicator

  4. Models for identify Peter Kralicek′s business success Kralicek′s Quick Test K1–share of capital in total soursec (capital/total liabilities) K2–ratio between total liabilities minus cash and profit after taxation increased by amortization (total liabilities-cash)/(net profit+depreciation) K3–viability of total assets in relation to operating profit (EBIT/total assets) K4–solvency (net profit+depreciation)/operating income

  5. Estimates of Kralicek′s Quick Test

  6. BUSINESS SUCCESS ANALYSIS IN HOTEL INDUSTRY • The aim of this paper is to evaluate business success of hotels in Serbia listed on the Belgrade Stock Exchange using Kralicek’s methods for business success estimation. • Subject of research • 15 hotels wich are issuers of shares on the Belgrade Stock Exchange, sector I • Financial statement for 2013-2016 business year

  7. BUSINESS SUCCESS ANALYSIS IN HOTEL INDUSTRY

  8. BUSINESS SUCCESS ANALYSIS IN HOTEL INDUSTRY Constraints in research 1.Hotel facilities are owned but they they are leased out, so stopped workingrevenues are no longera matter of accommodation 2. The activity of accommodation and food (activity code 5510) is not the only activity

  9. BUSINESS SUCCESS ANALYSIS IN HOTEL INDUSTRY Research results

  10. BUSINESS SUCCESS ANALYSIS IN HOTEL INDUSTRY Research results

  11. BUSINESS SUCCESS ANALYSIS IN HOTEL INDUSTRY Conclusion • new management of certain hotels decided to take loans for the purpose of reconstructing facilities in order to modernize the equipment for providing services as well as to raise the level of services • investments are important in order to categorize facilities, continue to work, "revive" and improve the business of older hotels in the sector of accommodation in Serbia

  12. BUSINESS SUCCESS ANALYSIS IN HOTEL INDUSTRY Conclusion • the financial stability of analyzed hotels is satisfactory, with noticeably high business liabilities • long repayment periods and low profitability are directly related to low percentage of capacity utilization and long-term indebtedness, which is specific to the current situation in the hotel business in Serbia

  13. BUSINESS SUCCESS ANALYSIS IN HOTEL INDUSTRY Conclusion • In order to improve the business and financial situation, as well as increase the number of hotels, it is necessary to work on the development of business plans and strategies, as well as to adapt to the contemporary trends in the financial and tourist market, while promoting the competitive advantages of Serbia as a tourist destination.

  14. Thank you for your attention!

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