Budgeting practices: a study on Brazilian hotel companies

Paula De Souza,Rogério João Lunkes

doi:10.7784/rbtur.v9i3.851

Paula De Souza, Rogério João Lunkes

Open Access

https://doi.org/10.7784/rbtur.v9i3.851

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Abstract

This study aims to explore the budgeting practices in the hotel companies of Brazil’s main tourist centers. The justification is oriented by the number of foreign tourists received by the top ten Brazilian tourist destinations, which reaches 95% of the country. Another motivation is the lack of research on hotel companies in developing countries, and it should also be considered that Brazil will host the World Cup in 2014 and the Olympic Games in 2016, which requires a suitable hotel structure to receive a large number of athletes and tourists. Thus, in order to achieve the purpose of this study, surveys were sent to the hotels associated with the Brazilian Association of the Hotel Industry (ABIH), with replies by 40 hotel companies. Descriptive statistics were applied to the results, in order to improve the basis for discussions. The results indicate that most of the hotels adopt corporate budgeting with bottom-up as main budgeting process. Research shows that budgets are developed, more frequently, using the results from previous years and economic indicators. In the performance evaluation, the comparative analysis, the analysis of the causes of deviations and adequacy measures are often applied. The analysis of variance is primarily directed at controlling costs/expenses, identifying potential problems and providing feedback for the next period.

Highlights

The budget is seen as the “backbone” of organizations in measuring performance (Jones, 2008a)
The top ten tourist destinations - Rio de Janeiro (RJ), Florianópolis (SC), São Paulo (SP), Salvador (BA), Foz do Iguaçu (PR), Balneario Camboriu (SC), Porto Alegre (RS), Recife ( PE), Fortaleza (CE) and Buzios (RJ) - are the subject of this study and together receive 95% of foreign tourists in the country (Ministry of Tourism, 2010). These data show the importance of such tourist centers for Brazil and, deserve to be studied. Another motivation is the lack of research on hotel companies in developing countries, and it should be considered that Brazil will host the World Cup in 2014 and the Olympic Games in 2016, which requires a suitable hotel structure to receive a large number of athletes and tourists
The results found by Schmidgall, Borchgrevink & Zahl-Begnum (1996) suggest that budgets are reviewed at a relatively high level in Scandinavia, with 28% being reviewed at the corporate level and only 3.5% in U.S hotels

Summary

Introduction

The budget is seen as the “backbone” of organizations in measuring performance (Jones, 2008a). It is considered one of the mechanisms most employed by managers in controlling costs and improving performance (Kin; Clarkson & Wallace, 2010) as well as operations management (Szychta, 2002; Abdel-Kader & Luther, 2006; Uyar, 2009; Sivabalan et al.,2009; Libby & Lindsay, 2010). For Jones (2008a), these affirmations present different aspects, and share many of the concerns inherent to corporate budget. This budget continues to be widely used in organizations (Jones, 2008a; Uyar & Bilgin, 2011, Castro et al, 2012)

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