Hospitality and Finance: A close relationship
For a first article, I thought it was a good opportunity to talk about the strong link that exists between two fields that are often considered as being opposed to each other. Furthermore, it is also a chance for me to introduce my job and the reason that has motivated me to choose that path.
During my studies at GIHE I was sharing like many other students the hatred of the accounting and finance classes that were taught to us over the semesters. Always wondering why and how I could use the financial formulas and principles in an industry that is mainly based on service and people, I kept on thinking that it wouldn’t be of any help in my future career.
The truth is that we should have all wondered how can we look credible and make our point if we are not even able to read the financial statements that will reflect the action we took. Nowadays, information technology and software make it possible for us to get accurate figures about our business in real time, but what matters are the components that enable the different systems to generate trustworthy reports. Therefore, I believe that knowledge about financial statements, reporting and basic ratios is required for those that aim to become managers in an industry, like any other, which seeks profitability and return on investment.
Moreover, we shouldn’t forget that hospitality is a particular industry as it is mostly about people and how we can fulfill their needs better. The importance of the human service in that field makes it look like numerical data cannot be part of the equation, but in fact, like any other industry, hospitality needs accountants, financial analysts and directors of finance who will gather, analyze, summarize and provide data that will enable the management team to optimize the product and make the right decisions.
The reason why myself and others chose a finance management program after GIHE is in direct correlation with the industry needs in terms of workforce. Decades ago, when tourism was enjoying its exponential growth, finance was mostly seen as a tool to “manage and maximize profits” whereas today it is the first instrument that helps managers to review the impact of their decisions and enlighten them for future action.
From personal experience, I can testify that I went from one extreme to another. Thinking at the end of my studies that numbers and ratios should be the only components needed to take decisions in this industry. In fact, the truth is that our business is people-oriented and should be profitable; therefore, Knowledge Management (KM), Operational Innovation and Lean are the kind of tools that can bridge the gap between hospitality and finance to bring harmony and variety in the information given to decision makers.
It is hard to say if the relationship between hospitality and finance is stronger or weaker than with any other industry but it is obviously more complicated and subtle to determine and I strongly believe that those who know how to manage and combine both efficiently will become the successful ones.