This Summary Has Been Prepared To
This summary has been prepared to explore the different costs and funding options within InterContinental Hotels group (IHG) recognising which of these help towards reducing said costs and controlling expenditure. Sixty years down the line and IHG are a fast growing business with over 60,000rooms globally, spread across 180 hotels and 51 future developments (IHGplc 2014).
“We’re also expanding our brands into new markets – and in 2013, we opened the first Hotel Indigo in Israel, Spain and Hong Kong and launched the Holiday Inn brand in Ecuador, the Cayman Islands and Mauritius”. Solomons, (2013).
Monitoring expenditure and costing is vital in such a large business in order for a profit to be made.
Within IHG there are lots of different costs that they use in order for the business to be as successful as it is.
“Fixed costs are expenses that have to be paid by a company, independent of any business activity. It is one of the two components of the total cost of a good or service, along with variable cost”. (Investopedia, 2014). Within IHG, fixed costs are in place regardless of any kind of any expenditure or profit made throughout the year. These fixed costs include permanent staff, (including maintenance staff), utility bills, monthly or annual rent on the property in which the hotel is set in and different types of insurance covering fire, theft and staff. “Over $374m on admin expenses annually”, IHG Annual Report (2013). These fixed costs are indirectly proportionate to the hotels occupancy at that current time. One of the permanent staff roles in IHG linking directly to the successful running of the business is an Accounts Manager. He or she helps the company to make better decisions about the day-to-day operation within the hotels. The Accounts manager works out the fixed costs of the organisation.
“Variable costs are those costs that vary depending on a company's production volume; they rise as production increases and fall as production
“We’re also expanding our brands into new markets – and in 2013, we opened the first Hotel Indigo in Israel, Spain and Hong Kong and launched the Holiday Inn brand in Ecuador, the Cayman Islands and Mauritius”. Solomons, (2013).
Monitoring expenditure and costing is vital in such a large business in order for a profit to be made.
Within IHG there are lots of different costs that they use in order for the business to be as successful as it is.
“Fixed costs are expenses that have to be paid by a company, independent of any business activity. It is one of the two components of the total cost of a good or service, along with variable cost”. (Investopedia, 2014). Within IHG, fixed costs are in place regardless of any kind of any expenditure or profit made throughout the year. These fixed costs include permanent staff, (including maintenance staff), utility bills, monthly or annual rent on the property in which the hotel is set in and different types of insurance covering fire, theft and staff. “Over $374m on admin expenses annually”, IHG Annual Report (2013). These fixed costs are indirectly proportionate to the hotels occupancy at that current time. One of the permanent staff roles in IHG linking directly to the successful running of the business is an Accounts Manager. He or she helps the company to make better decisions about the day-to-day operation within the hotels. The Accounts manager works out the fixed costs of the organisation.
“Variable costs are those costs that vary depending on a company's production volume; they rise as production increases and fall as production