This Issue - Icwai

COVER COVER ARTICLE
ARTICLE
have already made investment plans in India in recent
years. A number of cities have blossomed with
suburban”Silicon Valley” type Special Economic
Zones (SEZs). This is mostly driven due to strong
growth in IT, BPO segments, increase in foreign
travelers, emphasized focus on tourism by government,
affordable airlines fares, etc. Bangalore,
Hyderabad, Chennai, Gorgon, Pune and the outer
edge of Mumbai are the areas attracting international
investment and as expected, are the cities with the
largest development pipelines. Combined, these cities
account for 89 of the 161 projects in the pipeline and
16,734 guestrooms, which is 68% of the rooms in
India’s total pipeline
Hospitality segment, just like many other segments
in India is booming at an unprecedented pace. India
faces a huge challenge of being “under roomed” while
the economy is growing rapidly. This provides for a
huge opportunity for hospitality industry. A lot of
large real estate developers are also investing into this
business to bridge the demand-supply gap and
leverage the opportunity.
What is evident from the above is that the
hospitality sector has grown rapidly in the last decade
and is ready to take off from here at a very high speed.
Even though India having very high growth
potentiality and equip with all other requirements in
hospitality industry, yet has such a low percentage in
terms of sector contribution to GDP. Therefore it needs
the help of specialized professionals to fulfill the needs
of the industry as a whole and hotels and restaurants
in particular. In India till now hospitality has been
seen as a much traditionally unique business and was
dealt with the people who have required qualification.
Professionals like CMAs and CAs have not shown a
interest to join this sector so for. By witnessing the
future growth potentiality of this sector, they are
showing keen interest to get into this sector. Of course
CMAs are more equipped to handle nuke and corner
of this sector, because of their expertise and
knowledge.
For the purpose of identifying the pragmatic
position of Cost and Management Accountants in
hospitality industry one has to touch upon at least
three broad areas like —
01. Food service
02. Lodging
03. Traveling
Cost and management accountant have knowledge
and expertise to act all the three types of involvements.
We can discuss this unique role in the following
paragraphs.
In the segment of food service
Cost and management accountant with the
expertise in quality improvement and cost reduction
and strong background in analytical skill can help the
food service segment witha.
Fixing the reasonable and scientific price for
food and beverages at hotels and restaurants.
b. Analyzing and forecasting the short and long
term demand for the products
c. Reducing the overall cost by implementing the
modern operational techniques.
d. Maintaining the standard by Continuous
improvement in quality of food and beverages
e. Maintaining the minimum quality of inputs
used for preparing food and beverages by prepurchase
assessment of the inputs
f. Completely avoiding the uncertain inconveniences
in day to day affairs
In the segment of Lodging
a. Effective management of the rooms in lodges in
such a way that rooms should not be vacant or over
crowded.
b. Effective management of luxury taxes in such a
way that that should not be burden neither to the
customers nor to the lodging houses.
c. Allotment of rooms in such a way that expectations
and availability should be perfectly matched.
d. Reducing the overall cost of activities by
effectively pre - planning the future course of action.
e. Making proper arrangements for providing
overall quality service to the esteemed customers.
In the segment ofTravelling
a. Preparations of relevant cost and financial
reports and submit to the management for taking key
decision and also giving valuable advices in decision
making.
b. Effective planning and management of the taxes
in such a way that total taxable income of the travelling
agencies will be minimum.
c. Adaption and preparations of cost accounts as
per new methods like Activity Based Costing,
Balanced Score Card, Target Costing, value chain
analysis, benchmarking etc.,
d. Recommend and implement the new methods
like unit costing, process costing, job costing, for
calculating cost per kilo meter and cost per passenger
kilometer which will help to fix the charges
scientifically.
Conclusions
We have seen from the above that, the hospitality
746 The Management Accountant |September 2011