BU L7 The Tourism and Hospitality Industries

Introduction

In business investment, suitability is defined as several areas in which investors are interested in investing their money. In this case, investment suitability mainly depends on the stability of Whitbread. In an organisation, a suitability report is referred to the kind of information that is necessary before investing in a company. Whitbread is considered a famous hotel brand in the UK with around 840 hotels in the country. It is found that Whitbread plc is considered a multinational company which was first founded in the year 1742. This has continued growth in business as it uses the “vertically integrated model”. The model is useful as it improves the daily operation of the hotel along with strengthening the ownership experience. The company business is mainly based on hotels along with proper services are provided to the guests.

External analysis of Whitbread

Table 1: External analysis of Whitbread

(Source: Influenced by Council 2019)

The above table includes information about the external analysis of Whitbread. According to the above table, it can be found that the country is highly stable in terms of culture and finance along with being equipped with new and modern technologies. It can be found from the table that the country is considered a very high-income country with high-level GDP. The overall country is very politically stable with effective policies and laws. The table also depicts that citizens are able to maintain effective culture along with a high standard of living. Worldwide UK is considered a highly powerful nation in terms of security and technology. As per the view of Zhang et al. (2020), the country is able to gain high stability after exiting from Brexit. According to this table, it has been found that the country has high employment opportunities along with considered a high-income country.

Internal investigation of Whitbread

Table 2: Internal analysis of Whitbread

(Source: Influenced by Cuthbert et al. 2021)

The table includes information regarding the internal investigation of Whitbread. According to the above table, it can be seen that the company has different types of strengths that are helpful to developing profitable business in future. This company has a high level of experienced and skilled workforce that is important to deal with daily situations. It has been found that the company is considered a leading industry in the UK. The company has effective coordination in their workplaces which is helpful to develop customer satisfaction. According to the table, it can be clearly seen that the company has the potential of developing new markets in future along with developing customer loyalty. This organisation has maintained a proper track record throughout their business period that has helped them to make a continuous profit. The cash flow of this organisation is very high in comparison to other organisations by which they are able to maintain a competitive advantage. The strengths of this company can be useful to mitigate the weakness and treats along with can be beneficial to deal with critical problems in future. It can be said that the weakness of this company can be mitigated by applying the strengths of the company along with threats that can be mitigated by using the opportunities. This company maintains a diversified business as it is a multinational company.

Whitbread has a very low inflation rate that is useful to develop stability in business along with helping to develop more profit. The company mainly focuses on maintaining customer satisfaction by providing them with a good amount of hospitality. As per the viewpoint of Deschryver and De Mariz (2020), it has been found that every company need to maintain a balance between employees and higher departments. As per the viewpoint of Nakrošienė et al. (2019), in some cases, it has been found that the company is able to achieve a high competitive advantage in future. However, the company faces threats due to changing perception of customers. In recent times it is essential to provide a high level of hospitality to customers along with providing them with a luxurious feel. In recent times it has been found that the company has increased the amount of market share to achieve more profit in future.

Financial analysis of Whitbread

Whitbread has gained a huge amount of business in the last couple of years. It has been found that this hotel is considered a famous hotel in the UK with many branches. According to the financial ratio, it has been found that 22million customers visited in the last couple of years. The overall paper suggested that the company has gained a 14% stake in the last few years. In business efficient ratio is considered a  method to develop more income from marketing and sales. It has been found that effective cash flow is important to deal with future business problems in which inventory is important. According to this paper, it has been found that the efficiency ratio can be calculated by dividing current liabilities by an asset. [Referred to Appendix 3]

The overall ratio is based on the inventory ratio along with increased turnover for the future. In this company, the overall profitability ratio is based on a financial matrix of the company along with maintaining effective revenue and earnings. The overall business processes are based on operating costs and balance sheets. In business, the main profitability ratio is based on the operating margin, total profit margin and overall profit margin. It can be said that the higher the profit the higher will be the profit. As per the viewpoint of Cimini et al. (2020), it has been found that net margin is important to deal with critical profit margin. The overall profit of this company is based on expenses by which increased profit can be made. [Referred to Appendix 1]

In most cases, profitability is important to deal with revenue problems along with increasing the overall profit level. As per the study conducted by Ziegler et al. (2021), it has been found that every company need to maintain long-term profitability along with effective investment for the future. In most cases, it has been found that the efficiency ratio is important to identify critical threats to businesses. It has been found that earnings and sales can be benefited by developing profit from new markets. It has been found that liquidity is also important to deal with critical problems in which operating cash flow and current ratio can be identified in a better way. The liquidity ratio of this company has been calculated by current assets by dividing current liabilities. It has been found that the liquidity ratio is based on the cash and quick ratio. The total working capital is based on subtracting current assets and liabilities. In most cases, it can be found that the overall ratio should be greater than one. The overall ratio is based on short-term obligation and investment. [Referred to Appendix 2]

Summary of different types of strategies and ESG practices

In the context of business, ESG strategies are important to deal with environmental problems. In most cases has been found that sustainable development can be maintained by developing these strategies. As per the viewpoint of Manes-Rossi et al. (2018), it was found that these practices are important to mitigate sustainable related issues. According to several pieces of information, it can be seen that for investors this process is very much useful. These practices are important as it develops new business opportunities along with mitigating market risks. The overall ESG practice is based on social, governance and environment. In most cases, it has been found that these practices are mostly based on sustainable investment, ethical investment and responsible investment. These practices are important as it reflects the organisation’s behaviour along with maintaining effective workflow. As per the viewpoint of Taliento et al. (2019), it was found that in recent times Whitbread is almost independent of ESG practices due to which they have gained huge customer satisfaction. It can be found that these strategies are also important to develop corporate finance and an ethical working environment. These practices are also used by most capital markets to identify the business for the future.

Figure 1: ESG framework

(Source: Maddocks and Hughes 2020)

The above pictures include information about the overall working process of the ESG framework. According to this process, it has been found that the overall process is mainly customer focussed and dependent on the global environment. The picture also depicts that this process helps to develop relationships between stakeholders and employees. It can be revealed from this picture that achieving environmental sustainability and social sustainability can be easier to achieve by applying this method. As per the opinion of Watson (2018), it can be said that the process maintains sustainable growth throughout the business process. The overall process is mainly done by using different types of elements that are based on community, supply chain, employee perception and corporate governance. The main focus of the ESG framework is to identify different risks of an organisation along with developing new opportunities by mitigating sustainability issues. In the UK most companies are adapting themselves to the ESG method as it is important for the decision-making process and to attract experienced employees. This strategy is also useful to reduce the extra cost along with developing a sense of responsibility and trust in customers.

The company has used this process to develop a competitive advantage along with making business growth in the long run. ESG framework is mainly used to develop effective investment strategies along with attracting potential customers. Due to the high amount of industries environment is degrading day by day. This strategy is important to develop corporate policies by which environmental degradation can be reduced to a greater extent. As per the study conducted by Al Breiki and Nobanee (2019), this strategy can be important to make risk management strategies by which more innovative ideas can be developed. In most cases, it was found that companies have experienced high shareholders return by applying these strategies.

Recommendation on investment in Whitbread

Recommendation 1

This company has a very business due to investors can efficiently invest. The company should make more investments in customer accommodation in their hotels. It can be found that in recent times customers are asking for more luxurious accommodation. The employees take good care of their customers to develop proper customer satisfaction. The overall company is committed to providing proper customer experiences. It can be recommended that investors can invest a huge amount of revenue in this organisation as it is considered a flagship hotel company in the UK. It is also recommended that the company’s financial condition it very stable due to which huge amount of investment can develop more profit in future. However, the company needs some improvements in offering more interesting options to their customers. In this organisation, most departments maintain proper coordination. It is recommended that new investments can bring modern technologies and equipment by which customers can get better experiences and accommodation. The investor can develop new markets and services by which the business can effectively grow in future.

Recommendation 2

The company can make investments in different markets to attract new customers along with help generate more revenue. In the future, huge amounts of investments can generate new stakeholders. It is found that the company needs a lot of effective communication by which several operations can be fulfilled. It is recommended that the company need to increase their staff as at weekends there is a huge amount of rush in most branches. The investors can develop new and improved technologies by which the online booking process can be increased in a better way. The employees should get proper facilities and other facilities to develop employee satisfaction. It can be said that effective hospitality should be provided to every customer to get proper customer satisfaction. The main aspect of the hospitality industry is to develop effective communication by which miscommunication and errors can be mitigated.

Conclusion

The overall paper concludes that effective investment is necessary to deal with business-related issues.  It can be concluded that investment in a business is important to mitigate risks of marketing along with suitable marketing strategies can be developed. This investment report is important for most companies as it enables them to identify the gaps in business. It is revealed that the overall report is based on customer and employee perception along with where to invest in future.  It is revealed that the main aspect of an investment is to determine key specific areas in which investment efficiency is required. The overall paper concludes how external and internal analysis can impact business in future. It can be found that the main purpose of suitability is to make standards that are to be followed in future business. It is also revealed that effective investment is required to deal with changing markets and customer perspectives. From this paper, it can be revealed that Whitbread has access to a huge number of shareholders by which they are able to develop effective business for the future.

References

Journals

Council, F.R., 2019. Proposed Revision to the UK Stewardship Code: Annex A-Revised UK Stewardship Code. Financial Reporting Council. Available at:  https://www.frc.org.uk/getattachment/bf27581f-c443-4365-ae0a-1487f1388a1b/Annex-A-Stewardship-Code-Jan-2019.pdf [Accessed on 09^th November, 2022]

Cuthbert, R.N., Bartlett, A.C., Turbelin, A.J., Haubrock, P.J., Diagne, C., Pattison, Z., Courchamp, F. and Catford, J.A., 2021. Economic costs of biological invasions in the United Kingdom. NeoBiota, 67, pp.299-328. Available at:  https://hal.archives-ouvertes.fr/hal-03410332/file/CostsinUK.pdf [Accessed on 09^th November, 2022]

Deschryver, P. and De Mariz, F., 2020. What future for the green bond market? How can policymakers, companies, and investors unlock the potential of the green bond market?. Journal of risk and Financial Management, 13(3), p.61. Available at:  https://www.mdpi.com/1911-8074/13/3/61/pdf [Accessed on 09^th November, 2022]

Manes-Rossi, F., Tiron-Tudor, A., Nicolò, G. and Zanellato, G., 2018. Ensuring more sustainable reporting in Europe using non-financial disclosure—De facto and de jure evidence. Sustainability, 10(4), p.1162. Available at:  https://www.mdpi.com/2071-1050/10/4/1162/pdf

Taliento, M., Favino, C. and Netti, A., 2019. Impact of environmental, social, and governance information on economic performance: Evidence of a corporate ‘sustainability advantage’from Europe. Sustainability, 11(6), p.1738. Available at:  https://www.mdpi.com/2071-1050/11/6/1738/pdf[Accessed on 09^th November, 2022]

Maddocks, J. and Hughes, D.,2020. The impact of Emotional Intelligence in the workplace. Available at:  https://www.crforum.co.uk/wp-content/uploads/2019/10/PSI-Impact-of-EI-in-the-Workplace-white-paper.pdf [Accessed on 09^th November, 2022]

Watson, S., 2018. 7. GREATER LONDON. Britannia, 49, pp.380-388. Available at:  https://www.academia.edu/download/57363404/7_greater_london.pdf

Silva, D.M.D., 2021. Equity research-NH Hotel Group SA (Doctoral dissertation, Instituto Superior de Economia e Gestão). Available at:  https://www.repository.utl.pt/bitstream/10400.5/23191/1/DM-DMS-2021.pdf [Accessed on 09^th November, 2022]

BAŞ, T. and SIVAPRASAD, S., 2020. AN EXPLORATORY INSIGHT INTO THE IMPACT OF COVID-19 ON THE TRAVEL AND TOURISM SECTOR: UK EVIDENCE. Available at:  https://www.researchgate.net/profile/Tugba-Bas-2/publication/361956316_AN_EXPLORATORY_INSIGHT_INTO_THE_IMPACT_OF_COVID-19_ON_THE_TRAVEL_AND_TOURISM_SECTOR_UK_EVIDENCE/links/62cec0a45dc7555897cf3a87/AN-EXPLORATORY-INSIGHT-INTO-THE-IMPACT-OF-COVID-19-ON-THE-TRAVEL-AND-TOURISM-SECTOR-UK-EVIDENCE.pdf [Accessed on 09^th November, 2022]

Cimini, C., Boffelli, A., Lagorio, A., Kalchschmidt, M. and Pinto, R., 2020. How do industry 4.0 technologies influence organisational change? An empirical analysis of Italian SMEs. Journal of Manufacturing Technology Management. Available at:  https://www.researchgate.net/profile/Alexandra-Lagorio/publication/338188294_How_do_Industry_40_technologies_influence_organisational_change_An_empirical_analysis_on_Italian_SMEs/links/60a2113a299bf14769a2c1ee/How-do-Industry-40-technologies-influence-organisational-change-An-empirical-analysis-on-Italian-SMEs.pdf [Accessed on 09^th November, 2022]

Ziegler, T., Shneor, R., Wenzlaff, K., Suresh, K., Paes, F.F.D.C., Mammadova, L., Wanga, C., Kekre, N., Mutinda, S., Wang, B. and Closs, C.L., 2021. The 2nd global alternative finance market benchmarking report. Available at:  https://www.researchgate.net/profile/Rotem-Shneor/publication/355988737_The_2nd_Global_Alternative_Finance_Market_Benchmarking_Report/links/61b9e000fd2cbd7200a150c5/The-2nd-Global-Alternative-Finance-Market-Benchmarking-Report.pdf [Accessed on 09^th November, 2022]

Al Breiki, M. and Nobanee, H., 2019. The role of financial management in promoting sustainable business practices and development. Available at SSRN 3472404. Available at:  https://www.researchgate.net/profile/Haitham-Nobanee/publication/336910755_The_Role_of_Financial_Management_in_Promoting_Sustainable_Business_Practices_and_Development/links/5f03295592851c52d619f9f6/The-Role-of-Financial-Management-in-Promoting-Sustainable-Business-Practices-and-Development.pdf [Accessed on 09^th November, 2022]

Nakrošienė, A., Bučiūnienė, I. and Goštautaitė, B., 2019. Working from home: characteristics and outcomes of telework. International Journal of Manpower. Available at:  https://hammura.com/mi_news/original/1399/02/files/Working%20from%20home.pdf [Accessed on 09^th November, 2022]

Zhang, Z., Pan, S.Y., Li, H., Cai, J., Olabi, A.G., Anthony, E.J. and Manovic, V., 2020. Recent advances in carbon dioxide utilization. Renewable and sustainable energy reviews, 125, p.109799. Available at:  https://dspace.lib.cranfield.ac.uk/bitstream/handle/1826/15339/Recent_advances_in_carbon_dioxide_utilization-2020.pdf?sequence=1&isAllowed=y [Accessed on 09^th November, 2022]

Krueger, P., Sautner, Z. and Starks, L.T., 2020. The importance of climate risks for institutional investors. The Review of Financial Studies, 33(3), pp.1067-1111. Available at:  https://ecgi.global/sites/default/files/working_papers/documents/finalkruegersautnerstarks_1.pdf [Accessed on 09^th November, 2022]

Websites

Whitbread.co.uk, 2022 About us Available at: https://www.whitbread.co.uk/ [Accessed on 09^th November, 2022]

Gov.uk, 2022 About us Available at: https://www.gov.uk/ [Accessed on 09^th November, 2022]

Finance.yahoo.com, 2022 Finacila analysis Available at:  https://finance.yahoo.com/ [Accessed on 09^th November, 2022]

Appendices

Appendix 1: Effency ratio of Whitbread

(Source: https://finance.yahoo.com/ )

Appendix 2: Profiotability ratio of Whitbread

(Source: https://finance.yahoo.com/ )

Appendix 3: liquidity ratio of Whitbread

(Source: https://finance.yahoo.com/ )

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