Traditional Culture Encyclopedia - Hotel franchise - What are the risks of hotel management?

What are the risks of hotel management?

financial risk

Financial risk is closely related to financial leverage. Because the financial leverage of liabilities is based on the fact that the investment income is higher than the cost of capital, in actual business activities, it is likely that income will exceed expenditure or losses will occur. Therefore, under the condition of constant debt amount, the more losses, the lower the ability of hotel assets to repay debts, and the greater the financial risk.