251. Risk assessment in capital investment
- Author
-
Geoff S. Parkinson
- Subjects
Investment decisions ,Capital investment ,Hospitality ,business.industry ,Financial risk ,Management styles ,Marketing ,Risk assessment ,business ,Profit (economics) ,Brand loyalty - Abstract
That the hotel industry is capital-intensive is rarely challenged. Also, that the profits accruing from the operation of a hotel as a business result from the aggregation of millions of essentially minuscule transactions (compared to the investment made) is without doubt. The ability to generate the millions of transactions is dependent upon a myriad of non-specific and unquantifiable actions and reactions of management and the customer (the guest) – image, fashion, brand and brand loyalty, location, style, comparative price, friendliness, hospitality, critical acclaim, star rating, management style and management skill – all impact on and influence the ability to generate custom and so the level of profit. As a result, the hotel industry is recognized as high-risk by investors and operators alike. However, the assessment of investment risk appears to be little understood or at least rarely applied in the majority of investment decisions.
- Published
- 1998