This report looks at the annual report and accounts for Macdonald Hotels.

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Kelly Marshall

Registration Number 200114751

Hospitality Management Accounting Coursework

Submission Date: Monday 31st March 2003

Lecturer: Mr. Erwin Losekoot


Contents Page

Page 3 Executive Summary

Page 4 History and Background of Macdonald Hotels

Page 5 Company Information

Page 6 Company Directors

Page 7 Profit and Loss Statement

Page 8 Balance Sheet

Page 9 Analysis of Report

Page 12 Summary of Macdonald Hotels

Page 14 Bibliography

Executive Summary

This report looks at the looks at the annual report and accounts for Macdonald Hotels.

The report is split into sections to discuss the background and history of the company and its current trading and operating data. The report then goes on to look at the profit and loss account and the balance sheet and then looks at the analysis of how the companies strategic objectives have influenced the success of the company comparing the years 2001 and 2002.

From the annual reports and from media coverage in publications such as the Caterer, it can be identified that the Joint Venture of Hotels development, has clearly influenced the profits of the company allowing these to be integrated into the company and increasing the brand image of the hotel group. However the company has faced difficult trading markets and from the report it can be identified that the Hotels Groups successes are dependant upon certain locations.

Background & history

 Since its inception in 1990, Macdonald Hotels has grown rapidly from two hotels in Aberdeenshire to become one of the UK’s largest hotel groups, incorporating managed, owned and joint-venture properties.

The company was established 10 years ago with 2 hotels, which were both free hold properties, and in the first set of results showed a profit of GBP 450,000. Securing the companies’ first management contract from a significant Plc, Barratt Construction, who has recorded a profit in excess of GBP 110 million, developed the company further. Barratt had 9 holiday resorts, which were losing a substantial amount of money. Barratts main business was not hospitality and leisure so Macdonald Hotels took over operational management with view to buying a 50% stake in Barratt Construction.

Macdonald Hotels accepted a small initial management fee to secure 50% of Barratt Construction at a high discount once the business was turned around. This opportunity led Macdonald Hotels into other management contracts with 5 of the national clearing banks.

In addition in 2001, Macdonald Hotels formed a 50:50 joint venture with the Bank of Scotland to purchase Heritage Hotels at a cost of £235 million. The addition of 46 Heritage properties significantly strengthened Macdonald Hotels position in the UK market, strengthening the groups presence in the south of England and also ensuring a UK-wide presence.

With the acquisition of Heritage Hotels and Barratt International Resorts in April 2001 the company now receives additional revenue from timeshare sales, lodge rentals and various leisure packages.

Macdonald Hotels is now the UK’s 8th largest hotel and leisure group, operating over 100 hotels and resorts through the UK and Spain. Macdonald Hotels has over 7000 bedrooms and a combined turnover in excess of £250 million, employing approximately 6000 staff.

Financial Overview

Full Year
  1.       2001

Turnover          £139.7m        £108.1m

Pre-tax Profit    £16.1m          £13.8m

Operating Data

Total of 104 Hotels, including

44 Joint Venture Hotels

28 Owned Hotels

22 Managed Hotels

10 Leisure Resorts (six in the UK & four in Spain)


“We remain focussed on our key strategic objective which is to build a high quality portfolio of provincial and city centre hotels in the UK, together with an international resorts business.”

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Source: Interim results 2002


In Scotland there are 13 mainly four- and five-star Macdonald Hotels, three CountryTown Hotels (the economy brand) and four timeshare resorts. The group has hotels throughout the UK.(21)

Work Ethics: 

The company aims to be different and welcomes difference and character in its people and hotels. Facilities are designed to attract a wide clientele.

Training Initiatives:

 A comprehensive training programme includes the company's own Commitment to Excellence in-house initiative, designed to help staff feel confident, valued and respected. The programme came about from research into employees' and guests' experiences. Topics covered include: branding ...

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