Working Capital Management of Hotel Industry in India: An Analysis

Abstract

There is a lot of potential for growth of hospitality and tourism industry in India and abroad due to worldwide industrial development, increased earnings of individuals, economic growth of tourists producing nations, improved transport and communication means etc. Further, India hosted Commonwealth Games in 2010 and co-hosted the Cricket World Cup in 2011 and has multiple plans to promote yoga and meditation, rural tourism, sports tourism, medical tourism, adventure tourism etc. Thus, the future of Indian hospitality and tourism industry seems to be very positive. But, the hotel industry in India is facing a number of problems such as low occupancy rate, increasing competition, high taxes, increasing cost, fuel shortage and so forth. All these affect the profitability of the hotel industry adversely. Most of these problems are uncontrollable. Thus, it is necessary for the Indian hotel industry to manage its available resources optimally to enhance the profitability as the management of working capital and fixed assets affect the profitability of a business to a large extent. Thus, it is necessary for the hoteliers to manage their working capital efficiently. The main aim of the paper is to know whether hoteliers are succeeded in managing their working capital efficiently or no in managing their working capital efficiently or not.