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Essay / Research Paper Abstract
This 3 page paper looks at a financial issue in the hospitality industry; the performance of the Strategic Hotels and results for the first quarter of 2008, the results which are taking place within a company that is investing during difficult market conditions. The bibliography cites 1 source.
Page Count:
3 pages (~225 words per page)
File: TS14_TEstrhotels.rtf
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Unformatted sample text from the term paper:
conditions that are impacting on that market. Strategic Hotels and Resorts announced their first quarterly results on the 31st of March 2008; they are operating in a market where there
is a high level of competitiveness along with high fixed costs and low marginal costs. The company is also operating in an economic environment which is demonstrating a slowdown, especially
in North America. The way which the company is reported its results, and the way that finances being utilized indicate that the company has a good understanding of the market
conditions. In financial terms the performance of the company saw an increase of funds from operations increasing to $0.31 per share compared to
$0.29 per share for the first quarter of 2007, despite declining market conditions (Hotel Finance Results, 2008). However, market conditions are suffering as a result of increasing costs. Increasing oil
prices are having a knock on effect in both direct and indirect manners. In a direct manner a has been an increase in the transportation costs which impact on the
overall cost of many inputs, in addition to this energy prices have been increasing. These are likely to have an impact, especially when it is considered that there is only
an average 5.5 percent increase in room rates in the North America market and 17.4 percent in European market. Energy and other input prices have been increasing at a faster
rate. Even where there are difficult market conditions a company would need to make investments in order to remain competitive. In order to
protect income streams, as well as generate more income streams when there is an expected slowdown investment can be a major influence on the firms performance, becoming a protective as
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