Finance in the Hospitality Industry Assignment Example | Topics and Well Written Essays - 3250 words

Finance in the Hospitality Industry - Assignment Example It is worth mentioning in this regards that the borrowing percentage depends on the size of the industry. For instance, small-scale hospitality players, such as Queens Hotel London often borrow funds from whereas medium-sized hospitality organizations are observed to source funds from the small investment bodies, as to continue with their business processes (Hsyndicate, 2014). Â  As already discussed above, there can be various methods through which, income can be generated within a business or service operation. However, the levels of the contribution made by these income generation sources might vary to a substantial extent. For instance, in case a hotel plans to purchase laundry equipment from an electronics equipment manufacturer, on behalf of the contract made, the laundry equipment manufacturer can charge the hotel either in terms of full payment or in terms of credit purchase. The contribution of both these methods in this context can be justified with reference to the fact that if the purchase can be completed through credit, the financial burden on the hotel is also quite likely to curve down or to get reduced to a substantial extent, in the short-run. However, this will increase the liability of the organization and likewise, may not prove to be a good source of funding in the long run. Nevertheless, through the credit sales opportunity, the hot el and the equipment manufacturer will also get the opportunity of establishing the long-run business relationship with each other. Given the goodwill of the hotel on the basis of its regularity to pay back the credited amount this relationship may yield significant advantages to aid the financial needs of the organization further adding to its financial health. Thus, the purchase technique can also be recognized as a major contributor to generating income for both the business bodies.