Academic journal article Business and Economics Research Journal

Level of Accommodation Enterprises in Using Modern Financing Techniques: A Study on Managers of 4 and 5 Star Hotels Operating in Alanya

Academic journal article Business and Economics Research Journal

Level of Accommodation Enterprises in Using Modern Financing Techniques: A Study on Managers of 4 and 5 Star Hotels Operating in Alanya

Article excerpt

1. Introduction

Today the importance of rapidly growing tourism sector is increasing both nationally and internationally. Tourism involves numerous activities simultaneously by its nature. In other words, an accommodation enterprise offers services such as food-beverage, travel agency, souvenirs, etc. as well as accommodation service. Therefore, investments will be increased in line with the number of activities offered by an accommodation enterprise. In this sense, investments made by accommodation enterprises should be large-scale investments, and this requires a strong financial support.

Today, tourism enterprises are constantly renewed in order to have competitive advantages and put in an appearance at international level. Investment decisions also play an important role within this renewal process. One of the most important elements of tourism sector is accommodation service, and therefore, accommodation enterprises have a considerable amount of shares within this field of industry (Met et al., 2013). Accommodation enterprises continuously endeavor to improve their operations in order to gain competitive advantages in today`s competition environment. Therefore, enterprises are required to make investments and generate profits from investments on continuous basis. However, they would not generate the desired income, if they fail to determine the techniques to be implemented for investments.

Today, the products known as modern financing techniques, which provide advantages in cash management, risk management, and receivables management. The objective of this study is to measure the level of accommodation enterprises in using modern financing techniques, since they require high level of financing. In addition, it has been set as another objective to determine which financing techniques are used and why these are used by the accommodation enterprises.

2. Financing and Modern Financing techniques in Accommodation Enterprises

Accommodation enterprises are known as building blocks of the tourism sector. Accommodation enterprises grow, change, and are renewed in line with the current developments such as economic, social, technological, etc. developments. However, financing needs should be met in order to adapt all of such circumstances under challenging competitive conditions.

One of the most important matters is to find the capital required for establishing an enterprise. Therefore, the individuals who intend to establish an enterprise or make a new investment should determine the amount of the required fixed capital and working capital and they should consider necessary procedures for financing this capital need (Kölük and Dilsiz, 2008).

Investments of accommodation enterprises that provide services in tourism industry are known as capital intensive and fixed-assets intensive (Met et al., 2013). Tourism enterprises face with financing requirements at three stages as in other enterprises. The first one of these stages is known as investment stage. This stage is known to be as the sources, which will be used for such transactions as buying the land that has a funding requirement and is necessary for the investment through such fund, project designing, plant construction and installation, and will be considerably needed. Other stage is related to there sources required for expansion, modernization investments, and repair works at a larger scale. This stage is required after the commencement of operational period. The final stage is known as financing required for paying operational expenditures and capital expenditures of an enterprise out of tourism season (Engin, 2005).

In developing countries, equity capital shortage is known as an important problem encountered by enterprises. Enterprises require additional financial support in order to solve this issue. In addition, it is also known that it is quite challenging process to meet the financing requirements which must be met by the enterprises, particularly at their establishment and development stages. …

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