Introduction

Quality Resorts Hotel Group is a quoted company that owns and operates 50 luxury hotels in the country of Italy. Quality Resorts head office is located in Italy's capital city. Italy is a developed country that has a high standard of living. It has a thriving economy. Italy's currency is the . Companies are required to prepare their financial statements in accordance with International Financial Reporting Standards (IFRS). You are a financial manager in Quality Resorts head office. You report to the Senior Financial Manager and she reports to the Quality Resorts Finance Director. Your primary duties are associated with management accounting, but you are often asked to gather information on other matters for your superiors.

Basic hotels	At their most basic, hotels offer simple accommodation in small bedrooms, usually with ensuite bath or shower rooms. Guests would expect their rooms to be clean, with fresh sheets and towels on arrival. Rooms would be cleaned and tidied by housekeeping on a daily basis and sheets and towels changed as required during the guest's stay. Basic hotels may not offer any additional services. They may not, for example, serve food.
Mid-range hotels	Mid-range hotels generally offer larger rooms that are furnished to a higher standard than those offered by more basic hotels. The hotel's housekeeping service would normally visit each room on a daily basis, at the guest's convenience, to make the bed and clean the room. Mid-range hotels generally offer a more extensive range of services, including restaurants and coffee shops that permit guests to take meals in the hotel if they so wish. Hotels generally make their dining facilities open to anyone who wishes to pay to eat there, so they provide a further stream of revenue. Mid-range hotels may also offer business facilities, such as meeting rooms that are equipped for audio-visual presentations and teleconferences. Leisure facilities may also be offered, including gyms and swimming pools
Luxury hotels	Luxury hotels offer still larger and better-furnished rooms, or possibly suites of rooms that enable a guest's family or business associates to stay in a shared space, with individual bedrooms opening onto a shared sitting room. The housekeeping service would normally be expected to visit twice daily, turning down the bed cover in the evening and closing the curtains and switching on the lights. Luxury hotels generally offer a wider range of dining options, with two or more restaurants that give a choice of menu and also of price point. The restaurants in luxury hotels are generally of a sufficiently high standard to attract significant numbers of non-residents to eat there. Luxury hotels offer business facilities, that may include larger meeting rooms that could be used to host conferences or major social events such as corporate dinners. The leisure facilities offered by luxury hotels are generally extensive and of a high quality. In addition to gyms and swimming pools, they may offer beauty spas, saunas and other services.

Some hotels operate independently, as business entities in their own rights, and others are parts of chains. Guests might be attracted to chain hotels when they are travelling to a new destination because chains generally offer a very consistent standard of service and so guests will know what to expect from staying there. Some independent hotels are popular because they offer their own unique style of service that is appreciated by guests who are looking for something more unusual.

The hotel industry is very competitive, although some compete on the basis of quality of service and others more on price:

Business travellers will have their bills settled by their employers and so the cost may be almost irrelevant. In some cases, the higher cost associated with a luxury hotel will be justified by the fact that the better facilities make it easier to work during the stay. Being based at a luxury hotel may also enhance a guest's credibility when meeting with clients or other business contacts. Some companies impose upper limits on the cost of accommodation booked for business purposes, which may force some travellers to select a more basic hotel.

Individual travellers will select hotels on the basis of their willingness to pay for a given standard of service. Some will stay at basic hotels because they are cheaper, while others will be prepared to pay more for mid-range or luxury hotels. Some individuals buy their hotel accommodation as part of a package deal provided by a travel company, which includes flights, hotel accommodation and possibly car hire. The price of the package will be influenced by the cost of the accommodation to the travel company, but the company will undoubtedly be able to negotiate a discount, some of which could be passed onto the guest in order to encourage bookings.

Pricing

Hotels vary their rates to take account of seasonal factors and local demand. For example, a hotel located in a seaside resort will charge more per night during the busy summer season and less in winter, when the resort is quieter. Similarly, a city centre hotel that caters mainly for business guests might charge less for a weekend stay because many business travellers will go home at the end of the working week

Many guests will book their accommodation through travel agents, who generally receive a commission of 10% to 20% from the hotel. Travel agents often pass some of that commission onto guests in order to obtain their business. Online price comparison sites are web-based businesses that enable travellers to input a destination and dates for arrival and departure. This generates a list of the hotels that are available on those dates and their respective prices for the stay. Guests can book their choice of hotel through the site, making an online payment. The hotels generally pay the site a commission on each booking made in order to be listed on this site, some of which may be passed on to the guest if the site's operators so wish. Hotels often discount their rates in order to obtain bookings for rooms that might otherwise be at risk of remaining empty and so these sites can offer considerable savings compared to making a direct booking with the hotel itself.

Many guests will book their accommodation through travel agents, who generally receive a commission of 10% to 20% from the hotel. Travel agents often pass some of that commission onto guests in order to obtain their business. Online price comparison sites are web-based businesses that enable travellers to input a destination and dates for arrival and departure. This generates a list of the hotels that are available on those dates and their respective prices for the stay. Guests can book their choice of hotel through the site, making an online payment. The hotels generally pay the site a commission on each booking made in order to be listed on this site, some of which may be passed on to the guest if the site's operators so wish. Hotels often discount their rates in order to obtain bookings for rooms that might otherwise be at risk of remaining empty and so these sites can offer considerable savings compared to making a direct booking with the hotel itself.

Staffing

Labour is generally the single most expensive cost associated with running a hotel. Even a basic hotel requires cleaning staff to prepare rooms for arriving guests, reception staff and security staff. Better quality hotels offer more services and generally require more people in order to provide them. Mid-range and luxury hotels generally have a number of roles that require skilled staff:

Reception staff	Receptionists staff the reception desk in the hotel lobby. Their duties are primarily associated with assisting guests when they arrive and depart. The reception staff assist arriving guests by checking the details of their bookings, confirming pricing and issuing keys. Departing guests check out of their rooms at the reception desk. That usually involves ensuring that any outstanding payments are made before the guest leaves the premises.
Concierges	Some mid-range and most luxury hotels employ concierges to assist guests. Their duties can include helping guests with their luggage when they arrive and depart, arranging for taxis, providing guests with directions and recommending nearby restaurants. Some experienced concierges in luxury hotels have extensive contacts which enable them to assist with requests, such as obtaining tickets for "sold out" shows, or bookings at exclusive restaurants. The concierge staff also provide a layer of security by being aware of the people passing through the lobby and discouraging potential thieves.
Management team	Mid-range and luxury hotels usually have a small management team. The general manager is in overall charge of the hotel and is responsible for ensuring that all head office policies are complied with. Larger hotels frequently have managers to take responsibility for housekeeping operations such as cleaning and reception. Members of the management team are often graduates and may have studied a topic such as tourism or hospitality management as their degree specialism.
Chefs	Mid-range and luxury hotels generally have at least one restaurant. Chefs are responsible for setting the menu, for skilled cooking operations and for the supervision of unskilled kitchen assistants in the cooking and preparation of meals. Some more upmarket restaurants have an executive chef who takes responsibility for developing the menu. That may not be a fulltime role and the executive chef may be recruited on the basis of being a well known restauranteur.

Skilled staff are often well paid and valued by their employers. For example, the management team could have a significant role to play in ensuring that guests are happy or that revenue sources such as the function suites are kept busy.

Basic hotels will generally have fewer skilled staff. Some budget-price hotel chains offer credit card checking machines that permit guests to check themselves in, identifying themselves with their credit cards and pin numbers. The machine then issues a room key. If there is a staffed reception desk, then the receptionist may also be the hotel manager. Basic hotels do not have concierges or extensive management teams. If they serve food, then they will probably offer a simple menu that does not require skilled chefs.

There are employment agencies that can provide skilled staff on a temporary basis to cover shortfalls in cover. These agencies offer convenience and flexibility, although their hourly rates are generally about three times the rate that would normally be paid to a skilled worker who was employed directly by the hotel.

All hotels require unskilled staff to engage in duties such as room cleaning, assisting with food preparation and dish washing in the kitchen and security. If the hotel has a restaurant that offers table service, then it will also require waiting staff. The hotel industry is generally seasonal and so its needs for unskilled staff will vary according to the time of year and the number of occupied rooms. Hotels frequently recruit staff on short-term contracts to enable them to maintain an optimal staffing level at quiet times. It is common practice to employ college students as cleaners or waiting staff for the duration of their summer vacations, which ensures that the busy summer season is well staffed, with an automatic reduction in staffing at the end of the busy season.

Hotels generally pay their unskilled staff poorly and often ask them to work unsociable hours. Waiting staff and kitchen assistants may have to arrive at work in time to serve breakfast or work until late in the evening if serving dinner. Sometimes staff are asked to work split shifts, which would involve arriving early in the morning to prepare or to serve breakfast and then going home but returning in the evening for the dinner service. Staff turnover amongst unskilled staff is high, although it is usually relatively straightforward to recruit replacements.

Italy has a statutory minimum wage which sets the lowest hourly rate that can be paid. Many hotel companies pay their unskilled staff at that minimum rate.

Hotel's star ratings

Hotel rooms may be furnished to different standards depending on the type of guest the hotel is trying to attract. The price of the hotel rooms will vary depending on these standards. In Italy, a star-rating system is used.

	5	4	3	2	1
Open all year
24-hour reception
Guests have 24-hour access
Restaurant
Licensed bar
Standard of cleanliness guaranteed
Wi-Fi in public areas
Wi-Fi in room
Ensuite shower and toilet guaranteed
Ensuite bath, shower and toilet guaranteed
Internal telephone service
Higher staffing levels
Mini bar
Valet parking, concierge and luggage assistance
Proactive customer service
Room service for drinks and snacks
Room service for dinner, lunch and breakfast

Review sites

Review sites are part of social media. Italiantour.com is Italy's most popular site for dealing with the hotel industry.

Guests can use the Italiantour.com site to leave reviews of hotels that they have visited. The site enables them to search for their hotel. They can then give the hotel a rating from one to five on the basis of each of:

cleanliness

quality of service

location

quality of facilities

value for money

The site then calculates an average score for each of these factors and an average overall score across all factors. If they wish, they can then add a narrative review of their experience.

Prospective visitors can then search for ratings using a location or the name of a particular hotel. If they search by location then they see the scores of all of the hotels in that town or city and they can click on any that interest them. They can then read each previous guest's ratings and review comments.

There are concerns that these review sites might prove misleading. It is, for example, difficult to prove that a review was even written by a guest. Hotel owners and their staff can leave positive reviews for their own establishments, using assumed names. Similarly, competitors can leave negative reviews if they so wish.

Negative reviews can also remain on the site long after the problem has been rectified. A guest's complaint about a badly cooked meal might discourage future bookings, even after the hotel has investigated the complaint and retrained staff to prevent a recurrence.

Hospitality industry in Italy

Italy Tourist Board (ITB)

The ITB is responsible for marketing Italy as a tourist destination. ITB runs advertising campaigns and advises the Italian Government on policies which impact the tourism industry.

ITB awards ratings for hotels on a star system. Basic hotels are given one-star, midrange hotels are given two or three stars and luxury hotels are given four or five stars.

The rating is based on an annual round of hotel inspections, with hotel inspectors arriving unannounced and staying at the hotel without identifying themselves. At the end of their stay, they request a meeting with the hotel manager to discuss their findings. If they raise concerns that could lead to a hotel's rating being downgraded then the hotel may be given an opportunity to rectify matters prior to a re-inspection.

Star ratings are based on a combination of objective factors, such as whether the hotel has a restaurant or whether the reception desk is staffed on a 24-hour basis, as well as more subjective factors such as cleanliness and quality of service. The objective factors can set the upper limit for a star rating. For example, a hotel that does not have a restaurant cannot be awarded more than two stars, even if the hotel is luxurious and well regarded by guests in every other respect.

Italian Health and Safety Administration (IHSA)

The IHSA protects the wellbeing of hotel staff and guests by ensuring that all statutory health and safety procedures are fully complied with. For example, the law requires regular checks on a number of areas, including:

Heating and ventilation systems must be checked to ensure that they do not harbour dangerous bacteria

Portable electrical equipment must be checked to ensure that it is correctly wired

Fire safety equipment must be readily available and serviced to ensure that, say, fire extinguishers are fully charged.

All of the above, and more, must be certified at least annually by independent experts and the hotel manager must display up to date certificates to IHSA on request, or the hotel could face immediate closure

The MHSA also conducts unannounced inspections or kitchens and dining rooms to ensure that food is stored, cooked and served in hygienic conditions.

Quality Resorts background and group structure

Quality Resorts was founded by the Scrivens family, who opened their first hotel, The Principal, in 1940. Since then, the company has grown steadily through the acquisition of hotels as going concerns and also through the construction of hotels. The Scrivens family sold their interest in the company when it was quoted on the Italy Stock Exchange in 2000. Quality Resorts now owns 50 hotels.

Quality Resorts operates at the luxury end of the hotel market, with 44 of its hotels having four stars and the remainder having five stars. Quality Resorts aims to offer a high standard of service and guest comfort at all of its hotels, while remaining within the reach of the travel budgets of business guests and the personal wealth of individuals.

Quality Resorts owns approximately 10% of the luxury hotel rooms available in Italy, measured in terms of the number of rooms in the four to five-star category.

The various hotels all display the Quality Resorts brand and that is reflected in many ways, including hotel signage, the uniforms worn by reception and concierge staff and so on. Quality Resorts also strives to ensure that each hotel has its own unique character. For example, the lobby of the Quality Resorts Principal is still decorated with the same solid oak panelling that was installed when the hotel was first constructed. The hotel's meeting room, which is available for guests to hire, is also oak lined, despite having since been equipped with the latest audio-visual and telecommunications equipment. The nearby Quality Resorts Techno's public spaces are decorated in light woods and feature concealed lighting in the public spaces to create a much more modern style.

All of Quality Resorts hotels have bars and restaurants that are open to both residents and nonresidents. Quality Resorts has 50 hotels, which are organized

	Hotels	Rooms
Quality Resorts City ("Central")	12	2,400	All of Central's hotels are located in city centres, covering all of Italy's major cities. These hotels are used by business travellers and also by individuals, who are generally tourists enjoying city breaks. These hotels cater for business travellers by offering facilities such as meeting rooms that can be used to host face-to-face meetings, incorporating video conferencing if necessary. The hotels also cater for individuals by offering leisure facilities such as indoor swimming pools, beauty spas and gyms. All of Central's hotels have at least one large indoor space that can be hired to host a major function such as a wedding or a conference.
Quality Resorts Southern ("South")	20	4,400	Italy's southern coast is a popular destination for tourists seeking summer beach holidays. All of South's hotels are located in tourist resorts and all overlook sandy beaches and offer sea views. These hotels are designed mainly for leisure. Most guests are tourists, many of whom booked a package holiday with a travel company and were prepared to pay a premium price in order to stay at a good-quality hotel. South hotels usually have several bars and restaurants so that guests on a two-week vacation can have some choice. Some feature a choice between indoor and outdoor dining. These hotels also offer extensive leisure facilities, including outdoor swimming pools, beauty therapies and so on.
Quality Resorts Slopes ("North")	18	2,200	Italy has a mountainous region in its North. That offers scope for adventure holidays, with activities such as skiing and snowboarding available in the winter and hiking and pony trekking in the summer. Quality Resorts North hotels are often converted castles or former mansions that has been extended and adapted to offer guests an atmospheric venue for their vacations. The hotels tend to be designed to offer bases for guests. They provide comfortable and attractive bedrooms and public spaces. Their restaurants offer high quality dining experiences. There is generally little need for leisure facilities within the hotel itself because guests are usually keen to spend much of their stay outdoors, enjoying the scenery and nearby sporting activities.
Total	50	9,000

Extract from the investors' page of Quality Resorts website

Mission statement

At Italy, our mission is to provide authentic hospitality by making a difference to our guests and the environment in which we live.

Aims

Quality Resorts aims are to increase market share until it is the largest luxury hotel operator, by revenue and by room capacity, in Italy.

Objectives Quality Resorts objectives are:

To increase occupancy rates and deliver high guest satisfaction in the process.

To acquire at least one new hotel every three years, ensuring that Quality Resorts delivers excellent value for money to its shareholders in the process.

Our values

Integrity - we promote honesty and respect towards our colleagues, guests, owners and the wider environment.

Attention to detail - we believe that a hotel is only as good as the service it provides.

Excellence - we train our employees to the highest standard in the hospitality trade.

Enthusiasm - we serve our guests with a unique creativity.

Teamwork - we work together to exceed expectations.

Management structure and roles

Quality Resorts has a divisional structure, with a director for each of the three divisions.

The Finance Director and Marketing Director are responsible for the overall strategic management of

their respective areas for Quality Resorts as a whole. For example, Roger Stone is responsible for major

strategic finance issues such as corporate finance and the design of the overall budgetary control system

across the Group. Barry Williams is responsible for strategic marketing initiatives, such as developing

advertising campaigns and the overall design of the Group website.

The divisional directors are responsible for the strategic oversight of operations across their respective

divisions. Each divisional director is supported by a divisional management team that is responsible for:

Operations	Supervision of quality at individual hotels. Monitoring of compliance with formal policies and procedures. Procurement of ingredients and materials that are sourced at divisional level, such as branded bedsheets and towels, brochures and non-perishable food and beverages. Management of local advertising and sponsorship. Monitoring of occupancy levels and room rates.
Finance	Preparation of divisional budgets. Review of monthly and quarterly performance reports on individual hotels in the division. Review of room rates and predicted occupancy.
Human resources	Monitoring of compliance with Group HR policies and with Italian employment legislation. Establishing appropriate wage rates, taking account of local variations in the employment market. Agreeing staffing levels with hotel general managers.

The divisional management teams are all based at Quality Resorts Office in the Capital. They stay in close contact with their respective hotel managers. Each hotel is managed by a general manager, who liaises with their divisional director as appropriate. Each hotel manager has a small team comprising a food and beverage manager, an operations manager and, in North and Central, an events manager.

Hotel management teams are responsible for the daily operation of their hotels, dealing with guests needs and responding to any complaints. Hotel managers also interview staff to fill vacancies.

Hotels require a wide range of goods and products, ranging from cleaning materials to foodstuffs used in the restaurants. Procurement for most items is managed by the operations team at divisional level, with suppliers delivering goods directly to the hotels that require replenishment. Each hotel's food and beverage manager is responsible for ordering perishable foodstuffs, such as fruit, meat and fish. That makes it easier to manage inventories of perishable items and minimize waste. It also enables each hotel's head chef to ensure that the hotel has the necessary ingredients for each day's menu.

The divisional procurement teams coordinate some orders. For example, Quality Resorts issues its staff with uniforms that are embroidered with the company name. It also uses the same style of towels in all of its hotels, again embroidered with the Quality Resorts brand. Quantity discounts mean that it is more cost-effective for the three divisions to maintain a central inventory of such items and to place a single large order as and when necessary when stocks of any given item are running low. There are too few such items to make it worth creating a formal system for such collaborative purchases. There is a storage facility in the grounds of Head Office and operations staff can draw from inventory as and when required by any of their respective hotels. Any such items are treated as being sourced by the division for budget purposes.

The divisions are investment centres for reporting purposes and each hotel is viewed as a profit centre.

Guest booking options and pricing

Most guest bookings are made through these channels:

1. Quality Resorts website

2. Travel Agents

3. Online comparison sites

Quality Resorts website

Guests can book directly with Quality Resorts through the website. Payment is made electronically and a booking confirmation is emailed immediately to the guest.

Travel Agents

Travel agents arrange hotel accommodation with Quality Resorts on behalf of their clients. These clients are Quality Resorts guests. Quality Resorts pays a commission to the travel agent, calculated as a percentage of the total booking value. Commissions are negotiated with each agent and range from 10% to 20%.

Italy Travel, for example, has worked with Quality Resorts for many years and receive 15% commission. Italy Travel specializes in organising hotel accommodation for couples who are prepared to pay a little more to enjoy exceptional service and quieter hotels. Quality Resorts hotels are Italy Travel's preferred choice. 60% of bookings for Quality Resorts South's hotels are made through this agent.

Online comparison sites Online comparison sites are websites that provide guests with a selection of hotel accommodation available in their preferred locations on set dates. Quality Resorts pay 15% commission on the room bookings received through these sites. Quality Resorts find this useful when they have spare capacity and like to fill empty rooms by offering special last- minute deals.

Pricing and billing

Quality Resorts has a centralized IT system that is located at Head Office. That system gathers details from individual hotels and other channels on a real time basis and feeds this into Quality Resorts internal reporting system.

The IT system includes a software package called APAS, which uses an algorithm to set rates for each hotel in real time. APAS takes account of:

Rates offered online by competitors

The number of unsold rooms available for the period of the booking and the until that period commences

The time of year, allowing for the extent to which the specific hotel is affected by seasonal variations

The rate is updated and subject to the usual commission or discount offered to bookings made through that route.

Pricing is also affected by the meal service chosen by the guest at the time of booking.

Guests can charge services to their room accounts. For example, all of Quality Resorts hotels offer a room service menu that enables guests to order snacks or meals to be brought to their rooms at their convenience. Extra charges are usually paid on departure.

Quality Resorts has a policy of asking all guests to supply a valid credit card on arrival. If the guest leaves without paying for any outstanding accommodation or other charges, then the hotel uses the card details to take payment.

Quality Resorts Business model

Internal reporting

Monthly management accounts are prepared by the central finance function and are distributed to each hotel manager at the end of the month, the hotel managers are required to add commentary and then submit this report to their regional manager within three days. The individual hotel reports are consolidated on a divisional basis by the divisional management teams. These consolidated reports are discussed by the Board.

Budgeting process

Each Regional Director prepares a draft budget for each hotel within their geographical area. They consult with the hotel managers to determine the budgeted costs. Budgeted revenue is estimated from information gathered on the online booking system, previous trends and knowledge of events that could impact on the demand for rooms e.g. the build up to the "Year of Culture". Costs incurred by the holding company for support services are recharged to the subsidiaries on a monthly basis and described as 'management recharges' for reporting purposes.

Summary budget for 2020

	Quality Resorts Central	Quality Resorts North	Quality Resorts South	Quality Resorts Total
	000	000	000	000
Available rooms per day	2,400	2,200	4,400	9,000
Occupancy rate	78.90%	85.00%	83.00%	82.40%
Revenue	169,061	156,304	247,744	573,108
Direct costs
Direct goods	35,529	32,026	53,374	120,929
Staff costs	69,349	64,150	108,587	242,086
	104,878	96,176	161,961	363,015
Gross profit	64,183	60,128	85,783	210,093
Gross profit margin	37.96%	38.47%	34.63%	36.66%
Indirect costs
Property costs (note 1)	29,479	32,407	45,946	107,832
Administration expenses	12,328	12,872	11,122	36,322
	41,807	45,279	57,068	144,154
Operating profit (pre recharges)	22,376	14,849	28,715	65,939
Operating profit margin (pre recharges)	13.24%	9.50%	11.59%	11.51%
Management recharges (note 2)	8,453	7,815	12,387	28,655
Operating profit (post recharges)	13,923	7,034	16,328	37,284
Operating profit margin (post recharges)	8.24%	4.50%	6.59%	6.51%

Note 1- Includes Depreciation

Note 2 - Comprises recharge for central functions

Quality Resorts Central management accounts March 2020

An extract from the management accounts of Quality Resorts Central for March 2020 is shown below:

Management Information for March and Quarter 1 (January - March) 2020 Variance

	Mar Actual $ 000	March Budget $ 000	March Variance $ 000	March Variance %	YTD Actual Jan -Mar $ 000	YTD Budget Jan -Mar $ 000	YTD Variance $ 000	YTD Variance %
Actual Rooms in period	74,400	74,400			218,400	218,400
Occupancy Rates	73.10%	78.90%			73.15%	78.90%
Revenue	17,105	18,179	(1,074)	(5.91%)	52,299	54,536	(2,237)	(4.10%)
Direct Cost
Direct goods	3,761	3,774	13	0.34%	10,857	11,459	602	5.25%
Staff costs	8,201	7,817	(384)	(4.91%)	25,331	23,4129	(1,912)	(8.16%)
	11,962	11,591	(371)	(3.20%)	36,188	34,878	(1,310)	(3.76%)
Gross profit	5,143	6,588	(1,445)	(21.93%)	16,111	19,658	(3,547)	(18.04%)
Indirect Cost
Property Cost (note 1)	2,897	3,169	272	8.58%	8,511	9,197	686	7.46%
Administration expenses	993	1,027	34	3.31%	3,140	3,082	(58)	(1.88%)
	3,890	4,196	306	7.29%	11,651	12,279	628	5.11%
Operating profit (pre recharges)	1,253	2,392	(1,139)	(47.62%)	4,460	7,379	(2,919)	(39.56%)
Operating profit margin	7.33%	13.16%			8.53%	13.53%
Management recharges (note 2)	855	909	54	5.91%	2,615	2,727	(112)	(4.10%)
Operating profit (post recharges)	398	1,483	(1,085)	(73.18%)	1,845	4,652	(2,807)	(60.34%)
Italiantour.com average rating	3.8	4.5			4.0	4.5

Note 1 - Includes depreciation

Note 2 - Comprises recharge for central functions

Quality ResortsCentral

Quality Resorts Hotel Group consolidated financial statements

Consolidated Statement of Financial Position as at 31 December 2019

	2019 $ (M)	2018 $ (M)
Non- current assets
Property, plant and equipment	1.985	2,067
Goodwill	6	6
	1.991	2,073
Current assets
Inventory	3	2
Trade and other receivables	47	39
Cash and cash equivalents	188	98
	238	139
Total Assets	2,229	2,212
Issued share capital
Share premium	700	700
Revaluation surplus	100	100
Retained Earnings	209	206
Total equity	518	501
	1,527	1,507
Current liabilities
Bank overdraft	103	99
Trade and other payables	110	104
Provisions	2	2
Income tax payable	6	8
	221	213
Total equity and liabilities	2,229	2,212

Quality Resorts Hotel Group - Consolidated statement of profit or loss and other comprehensive income for the year ended 31 December 2019

	2019 $ (M)	2018 $ (M)
Revenue	499	504
Cost of Sales	(302)	(302)
Gross Profit	197	202
Administration Expense	(79)	(76)
Distribution Expenses	(20)	(17)
Other Operating Expenses	(42)	(31)
Operating Profit	56	78
Finance Cost	(15)	(16)
Profit before tax	41	62
Income tax	(7)	(8)
Profit for the year	34	54
Other comprehensive income
Gains on revaluation of property	3	2
Total comprehensive income	37	56

Additional information

News reports Italy Daily News

Portent Hotels signs Jono Kato Celebrity fitness expert Jono Kato has agreed to become Portent Hotels' Executive Trainer. This role will involve him taking charge of the redesign of the fitness centres at each of Portent's 60 hotels. He will also record a series of exercise videos that will be played on big screen monitors to encourage hotel guests to exercise properly.

Jonjo Dwyre became famous for his association with major film stars. He was recently credited with preparing Montrose Helm to play the part of a heavyweight champion boxer.

The fitness centres will be rebranded "Dwyre Fitness" after their conversion. They will be open to guests and so will be open to non-guests to take out a gym membership with their local Portent Hotel.

It is unlikely that you will bump into Jonjo at your local Portent Hotel, even if you do use its gym regularly. His role as "Executive" Trainer is to ensure that the design of the rooms and the associated fitness equipment meets his standards and also to design fitness programmes for gym users.

Italy Business Daily

Hospitality industry celebrates economic recovery Hoteliers and restauranteurs generally have fond memories of the 1990s and early 2000s because they were generally associated with excess in terms of business travel and entertaining. Corporate entertaining was often lavish and expensive.

The Credit Crunch brought that to a very sudden end. The costs of travel and entertainment were an easy target for senior managers who were concerned about declining revenues.

The recent period of economic stability has encouraged businesses to take a more optimistic view of the economy and there is evidence that corporate expense accounts are less restricted than they were in the recent past. It is becoming more difficult to book tables at expensive restaurants, partly because there are more executives who are keen to impress potential clients by treating them to a nice meal.

Italy Daily News

Pie maker crumbles

Very few tourists visiting Southtown on Italy's South Coast would leave without making at least one visit to Joe's Pies. The shop was established in 1921 and has been owned by members of the Smith family ever since. Sadly, the shop is due to close next month, despite the best efforts of the town's residents to persuade the owner to carry on.

Magda Smith, manager of Joe's Pies and greatgreat-granddaughter of the shop's founder, told the Daily News that the shop was closing because of two words: "all inclusive". She said that most of the large hotels in the town had started to offer their guests all-inclusive deals. These mean that their accommodation charge includes the cost of any and all meals, snacks and drinks that they consume on hotel premises.

"Tourists used to eat breakfast and then leave their hotel for a day on the beach. When they got hungry, they would often come to our shop for one of our pies to keep them going under dinner time. Now they either sit at the hotel pool all day or they go back to the hotel for lunch or a snack. Why wouldn't they? It doesn't cost them anything to eat in the hotel."

Many of the catering establishments in Southtown have either closed or have reduced staff for the same reason. All-inclusive deals generally include a whole range of traditional treats, including ice cream and soft drinks.

Requirements

1.Analysis the environmental Analysis for the country where Quality Resorts is operating in the Hospitality Industry. Introduction to the case and a PEST analysis

2.SWOT analysis for Quality Resorts.

3.Look at the critical Success Factors for Quality Resorts.

4.Identify possible success factors for quality Resorts Limited.