This Issue - Icwai

COVER COVER ARTICLE
ARTICLE
Hospitality Industry, Hospitality Management
and Role of CMA to develop them
Hospitality is the act of entertaining, providing
comfortable facilities to guests, visitors,
customers or any other associated person at
hotels, motels, resorts, clubs, restaurants, tourist
places, business places, airports, railway station, bus
terminus, shopping malls, amusement parks, theatre
halls etc.
Hospitality is now considered to be a first growing
industry. Hospitality management has to ensure better
services in the following areas.
● Accommodations
● Food and beverage
● Organising events
● Organising games and sports
● Organising cultural functions
● Tourism services
● Information required by visitors.
● Hospitality industry has the manyfold potential
to contribute to the economy by —
● Contribution to GDP
● Employment generation
● Foreign exchange earning
● Earning of tax revenues
The World Tourism Organisation (UNWTO)
forecasts that the international tourism will grow at
the average annual rate of 4% [ Source - Long term
prospects : Tourism 2020 Vision ,World Tourism].
Many countries have attempted to build their
international tourism industry because of its potential
to contribute to the national economy through foreign
exchange earnings. A strong association between
international tourism development and economic
performance is hence generally assumed and has been
found in Taiwan. Research studies reported that the
tourism industry was one of major contributors to
Taiwan’s economic growth. Chen et al. (2009), Kim et
al. (2006) and Jang and Chen (2008) revealed that the
tourism sector has contributed more than the
agriculture sector to the gross domestic product
(GDP) in Taiwan. According to the World Travel and
Tourism Council (2009), the aggregate tourism
earnings accounted for 3.46% and 3.34% of Taiwan’s
GDP in 2007 and 2008, respectively. The World
Economic Forum (2009) indicated that Taiwan’s
foreign exchange earning from tourism was US$5.1
Ashoke Kumar Bothra*
billion in 2007 and represented 1.34% of the GDP,
which is higher than the corresponding figures in the
US, Canada, Germany, Japan, South Korea and
China.Kirn et al. (2006) and Chen and Chiou-Wei
(2009) further showed that international tourism
development in Taiwan could promote economic
growth. [Source- International Journal of Hospitality
Management 30(2011) ]
The growth and development of Hospitality
industry vis-a-vis tourism is intensely dependent on
the advancement and the guiding principles of
Hospitality management. Tourism industry in
repercussion helps to grow —
● Hotel industry
● Air, water and land transports
● Tourism services
● Tourist places
● The domestic and foreign markets of local arts
and crafts
The challenges lying in the growth of tourism is
concerned with huge capital deployment and overall
development of infrastructure, which needs a long
term goal. The economic challenges become
commercially viable and acceptable when the same
is globally competitive by introducing a wide range
of measures to improve operational efficiency. CMAs
have a very big role here. They are capable to apply a
number of Cost and management techniques such as,
● Just-In-Time
● Inventory Management
● Budgeting
● Cost-Volume-Profit Analysis
● Linear Programming
● Queuing theory
● Risk Management
● Activity Based Costing
Just-in-time — This concept is useful in hospitality
industry at the time of organising big events, like a
conference, a meet on festival, a concert, sports and
games etc. If the different activities are well planned in
advance and the requirements of different inputs are
arrangec in systematic way one can minimise the
carrying cost and wastage and thereby saving ir input
cost.
* FICWA, Practising Cost Accountant
The Management Accountant |September 2011 739