Analysis of the economic performance of the hotel industry using the break-even method: Case study – Al -Mansour Hotel Company

Abstract

The break-even point is concerned with studying the relationship between revenues, costs and profits at different levels of production, and it means determining the lowest level of production or level of sales that can be achieved for the company in which revenues are equal to costs as it does not achieve losses or profits, so that the lower the volume of sales at the break-even point, the greater the company's opportunities achieving profits. The study deals with a basic problem embodied in the failure to use the break-even method in the management of hotel companies' activity in the context of the scarcity of scientific studies dealing with this problem in the tourism literature in Iraq. The importance of the study was embodied in the possibility of analyzing the factors affecting the break-even point and the extent of the possibility of applying the break-even method in managing the activity of hotel companies to raise economic efficiency and maximize profits. The study aims to raise the efficiency of the economic performance of hotel activity by maximizing profits and to identify the possibility of practical application of this method in hotel companies. The study relied on the descriptive method and the use of mathematical applications and their mathematical equations on the sample of the study, which was represented in the case study of the Mansour Hotel Company for the years (2018, 2019 and 2020). The study ended with proving the main hypotheses developed, which included the lack of know-how for the management of hotel companies in the use of the break-even point analysis method. The analytical and scientific method for the purpose of maximizing the profits of the company