PORTFOLIO MANAGEMENT OF HOTEL INDUSTRIES OF NEPAL

Abstract

This study examines the portfolio management practices of the hotel industry in Nepal, focusing on how these practices influence financial performance. The objective of the research is to analyze the impact of portfolio diversification on key financial metrics such as Return on Assets (ROA), Return on Equity (ROE), and Return on Investment (ROI). The study is motivated by the need for hotel industries to achieve sustainable growth and profitability through effective portfolio management. The research employs a descriptive and exploratory design, utilizing secondary data collected from the annual reports and financial statements of three major hotels: Taragaon Regency Hotel Limited (TRHL), Soaltee Hotel Limited (SHL), and Oriental Hotel Limited (OHL). Data spanning from the fiscal years 2013/14 to 2022/23 is analyzed using various financial and statistical tools, including mean, standard deviation, correlation, and regression analysis. Findings indicate significant variability in the financial performance of the hotels. Correlation analysis reveals a strong positive relationship between ROA and ROE, while ROI shows a negative correlation with deposits and investments in subsidiaries. Regression results indicate that deposits positively influence ROA and ROE, whereas investments in subsidiaries and other entities have mixed impacts, with the latter showing a positive influence on ROI but a negative effect on ROA and ROE. These results suggest that while portfolio diversification can enhance financial performance, its effectiveness varies depending on the specific financial metrics and investment types. In conclusion, the study highlights the complexity of portfolio management in the hotel industry and underscores the need for a comprehensive approach that considers market conditions and operational efficiency. The findings provide valuable insights for hotel managers and investors aiming to optimize portfolio strategies for improved financial sustainability.