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Group 4 - TGInns - NewVersion
Group 4 - TGInns - NewVersion
Accounting
PROJECT REPORT – TG INNS: NEW BHARAT HOTEL
CONTENTS
1. Executive Summary
2. Introduction
3. Objectives of the study
4. Data Analysis
5. Recommendations
6. Conclusion
Executive Summary
This project aims to understand the practical application of management accounting concepts in
TG Inns: New Bharat Hotel through Cost Sheet Analysis.
The project contains all relevant information related to TG Inns: New Bharat. We collected
information from the various Cost sheets maintained by the management and conducted a cost
analysis for the month of June. We made a Cost Sheet for the June month and segregated the
costs into fixed and variable costs to calculate the Costs for Premium Category rooms in the
Hotel.
The detailed analysis of the results have been explained further.
Introduction
TG inns –New Bharat .Built in 1966 property has been operational for almost 50 years now, In
early days it was designed as a pocket friendly vacation rental home for people fond of spending
summers in a hill station wherein people stayed for a week to two months, it had facility of
independent kitchens with interlinked rooms and dormitories for student & independent
travellers.
Post emergency days: 2 more floors were added which became operational in 1980, business
transformed from long stayers to short stayer’s. Property was renovated as per the need of time.
Business strategy:
No aggressive strategy existed, it was primary through reference and word of mouth. With
commission agents business flourishing the business relied more on these agents on maintaining
occupancy rates and also remain profitable.
Turnaround:
After the new generation took over the business in 2005 property was renovated with basic
upgrades, aggressive marketing started with participation in TTF (Travel & tourism fairs) held in
Indian metros. The Internet platform helped in tapping the market of travelers who look for
Budget options. The sales started growing and thus increasing the revenue and also the
occupancy rates of the rooms. The company was awarded by various online consolidation
platforms like makemytrip.com, travelguru & yatra.com.
Early mover advantage gave the company a steady growth of 15-20% for 7-8 years. The market
dynamics changed with new consolidators like OYO rooms, TG Rooms, ZYO etc. coming in. More
players in budget category entered using these platforms and the pressure was on management
to revisit the room pricing and remain profitable. The new platforms provide greater reach and
an opportunity to grow the business manifold.
Objectives of Study
TG Inns has 3 categories of rooms:
1. Standard Room
2. Premium Room
3. Family Room
Data Analysis
300
250
200
150
100
50
Conclusion
Room Suggested Rack rate Consolidat discount discount discount discount
category daily rate ed with 20% 25% 30% 35%
to cover taxes 13.5%
cost
1. Law of demand is critical in this industry because unlike other managers hoteliers don’t
have luxury to increase the supply of rooms
2. The hospitality business is competitive business and the new aggregators and the Deals
culture involves a lot of competition in each category
3. The cost optimizations can help in quick management decision making and respond to
fast paced environment
4. Owner’s should work on reducing the Idle time of employees which could result in cost
optimizations
5. The owners are enjoying a decent profit during the peak season
6. The data should be used for calculating the off season expenses