Impact of Risk Budgeting on Enhancing the Projected Growth of the Hotel Industry under the Conditions of Enduring Uncertainty Related to the COVID-19 Pandemic. Case Study by Republic of Kazakhstan
Abstract
The article considers the possibility of using a risk budgeting approach in forecasting the development of the hotel business in the Republic of Kazakhstan. This study aims at elaborating three budget scenarios for the sales of services provided by accommodations with due regard to the possible risks associated with COVID-19. To attain this end, the authors used a set of budget planning methods, including expert assessments, scenario analysis, and Monte Carlo simulation. The results obtained allow the authors to determine the ranges of probable values and the most probable indicators for the budget items of hotel enterprises in the Republic of Kazakhstan. At the same time, the resulting model does not assess the simultaneous impact of other risks that the hotel industry is exposed to. The authors of the article believe that the construction of multi-factor risk budgeting models for the hotel business is the subject of further scientific research.
References
References
[1] Abbati, C., et al. 2020. Risk analysis, practice, and considerations in capital budgeting: Evidence from the field for the bio-based industry. BioResources, 16(1): 19-45.
[2] Alexander, J. 2018. Budgets, operating plans, and forecasts. In: Financial planning and analysis and performance management, 267-301. John Wiley & Sons.
[3] Asogwa, I.E., and Etim, O.E. 2017. Traditional budgeting in today's business environment. Journal of Applied Finance & Banking, 7(3): 111-20.
[4] Bindra, M.J.S., and Kaur, E. 2022. Budgeting. In: Lean business management guide, 337-62. New York: Productivity Press.
[5] Biryukov, V.A., et al. 2020. Formation of a tourism entrepreneurial environment in the conditions of competition. Journal of Environmental Management and Tourism, 10(8): 1779-84.
[6] Bruder, B., and Roncalli, T. 2012. Managing risk exposures using the risk budgeting approach. SSRN Electronic Journal. DOI: https://dx.doi.org/10.2139/ssrn.2009778
[7] Caldwell, B.J., and Spinks, J.M. 2021. Planning and budgeting. In: The self-managing school, 109-30. London: Routledge.
[8] Costa, B., Pesenti, S. and Targino, R. 2022. Risk budgeting portfolios from simulations. SSRN Electronic Journal. DOI: https://dx.doi.org/10.2139/ssrn.4038514
[9] Dekina, M. 2018. The index method in the analysis of wages. Statistics and Economics, 15: 50-8.
[10] Dogadaylo, Ya.V. 2016. Methods of budget planning at the enterprise. Economics of the Transport Complex, 28: 52-68.
[11] Engels-Lindemann, M., and Sihn, W. 2002. Risk-based maintenance budgeting. Manufacturing Engineer, 81(4): 162–4.
[12] Gasparian, M.S., Kiseleva, I.A., Titov, V.A. and Olenev, L.A. 2021. Simulation and risk management of financial activities in the digital economy era. Nexo Revista Científica, 34(04): 1388-95.
[13] Gombitová, D., and Dokupilová, D.2022. Innovative expert methods in strategic decision making. Quality Innovation Prosperity, 26(1): 90-109.
[14] Goode, М., and Malik, A.2011. Beyond budgeting: The way forward? Pakistan Journal of Social Sciences, 31(2): 207-14.
[15] Jasim, N. 2020. Static and flexible budgets. Retrieved on June 1, 2022 from https://www.researchgate.net/profile/Nisaif-Jasim/publication/347902590_Static_and_flexible_budgets/links/5fe63fd1a6fdccdcb80098b9/Static-and-flexible-budgets.pdf?origin=publication_detail
[16] Kamaletdinov, A., and Ksenofontov, A.2019. Index method of evaluating the performance of economic activities. Finance: Theory and Practice, 23: 82-95.
[17] Kenno, S., Lau, M. and Sainty, B. 2018. In search of a theory of budgeting: A literature review. Accounting Perspectives, 17: 507-53.
[18] Kibor, J.K., and Maina, K.E. 2019. Effect of cash budget budgeting on financial performance of micro and small enterprises at Eldoret town in Uasin Gishu County, Kenya. International Journal of Economics, Commerce and Management, 7(10): 147-59.
[19] Klosterman, R. 2017. Foundations for normative planning. In: Ethics in planning, M. Wachs (ed.), 51-69. New York: Routlwdge.
[20] Koplowitz, S. 2022. Planning your planning budget. In: On Site: Methods for Site-Specific Performance Creation, 102-116. Oxford University Press.
[21] Kuzmishchev, A. 2020. Risk-based budgeting. Finance Director. Available at: https://www.fd.ru/articles/157254-risk-orientirovannoe-byudjetirovanie-na-primere
[22] Libby, T., and Lindsay, R.M. 2010. Beyond budgeting or budgeting reconsidered? A survey of North-American budgeting practice. Management Accounting Research, 21(1): 56-75.
[23] Maillard, S., Roncalli, T. and Teiletche, J. 2010. The properties of equally weighted risk contribution portfolios. Journal of Portfolio Management, 36(4): 60-70.
[24] Mauro, J. 2021. Monte Carlo techniques. In: Materials kinetics, 443-66. Elsevier.
[25] Neuman, M. 2021. Financing and budgeting. In: Sustainable infrastructure for cities and societies, 187-99. London: Routledge.
[26] Olson, K., and Westra, J. 2022. Enterprise budgets. In: Economics of farm management, 272-301. London: Routledge.
[27] Popesko, B., Novak, P., Papadaki, Š. and Hrabec, D. 2015. Are the traditional budgets still prevalent: the survey of the Czech firms budgeting practices. Transformations in Business and Economics, 14(3C): 373-88.
[28] Radionov, Y. 2018. Program-target method of budgeting: Implementation problems and development prospects. Economy of Ukraine, 2: 21-38.
[29] Sardesai, S., Stute, M. and Kamphues, J. 2021. A methodology for future scenario planning. In: Next generation supply chains. Lecture notes in management and industrial engineering, R. Fornasiero, S. Sardesai, A.C. Barros, and A. Matopoulos (eds.), 35-59. Cham: Springer.
[30] Stefanov, I., and Andrianov, A. 2018. Risk-based budgeting. Applied clinical trials. Available at: https://www.appliedclinicaltrialsonline.com/view/risk-based-budgeting
[31] Toma, S., Alexa, I.-V. and Nistor, C.2022. Methods of risk modeling in economic activities. International Journal of Economics and Statistics, 10: 38-42.
[32] Uyar, A. 2009. An evaluation of budgeting approaches: Traditional budgeting, better budgeting, and beyond budgeting. Journal of Academic Studies, 11(42): 113-30.
[33] Xenidis, Y., and Stavrakas, E. 2013. Risk based budgeting of infrastructure projects. Procedia - Social and Behavioral Sciences, 74: 478-87.
[34] Zhilenko, V.Yu., et al. 2021. The impact of COVID-19 pandemic on the global economy and environment. Journal of Environmental Management and Tourism, 12(5): 1236-41.
[35] Agency for strategic planning and reforms of the Republic of Kazakhstan. Bureau of National statistics. 2022. Statistics of tourism. Main indicators. Available at: https://stat.gov.kz/official/industry/22/statistic/7
[36] Ministry of National Economy of the Republic of Kazakhstan. 2020. Forecast of socio-economic development of the Republic of Kazakhstan for 2021-2025. https://www.gov.kz/memleket/entities/economy/documents/details/62731?lang=ru
[1] Abbati, C., et al. 2020. Risk analysis, practice, and considerations in capital budgeting: Evidence from the field for the bio-based industry. BioResources, 16(1): 19-45.
[2] Alexander, J. 2018. Budgets, operating plans, and forecasts. In: Financial planning and analysis and performance management, 267-301. John Wiley & Sons.
[3] Asogwa, I.E., and Etim, O.E. 2017. Traditional budgeting in today's business environment. Journal of Applied Finance & Banking, 7(3): 111-20.
[4] Bindra, M.J.S., and Kaur, E. 2022. Budgeting. In: Lean business management guide, 337-62. New York: Productivity Press.
[5] Biryukov, V.A., et al. 2020. Formation of a tourism entrepreneurial environment in the conditions of competition. Journal of Environmental Management and Tourism, 10(8): 1779-84.
[6] Bruder, B., and Roncalli, T. 2012. Managing risk exposures using the risk budgeting approach. SSRN Electronic Journal. DOI: https://dx.doi.org/10.2139/ssrn.2009778
[7] Caldwell, B.J., and Spinks, J.M. 2021. Planning and budgeting. In: The self-managing school, 109-30. London: Routledge.
[8] Costa, B., Pesenti, S. and Targino, R. 2022. Risk budgeting portfolios from simulations. SSRN Electronic Journal. DOI: https://dx.doi.org/10.2139/ssrn.4038514
[9] Dekina, M. 2018. The index method in the analysis of wages. Statistics and Economics, 15: 50-8.
[10] Dogadaylo, Ya.V. 2016. Methods of budget planning at the enterprise. Economics of the Transport Complex, 28: 52-68.
[11] Engels-Lindemann, M., and Sihn, W. 2002. Risk-based maintenance budgeting. Manufacturing Engineer, 81(4): 162–4.
[12] Gasparian, M.S., Kiseleva, I.A., Titov, V.A. and Olenev, L.A. 2021. Simulation and risk management of financial activities in the digital economy era. Nexo Revista Científica, 34(04): 1388-95.
[13] Gombitová, D., and Dokupilová, D.2022. Innovative expert methods in strategic decision making. Quality Innovation Prosperity, 26(1): 90-109.
[14] Goode, М., and Malik, A.2011. Beyond budgeting: The way forward? Pakistan Journal of Social Sciences, 31(2): 207-14.
[15] Jasim, N. 2020. Static and flexible budgets. Retrieved on June 1, 2022 from https://www.researchgate.net/profile/Nisaif-Jasim/publication/347902590_Static_and_flexible_budgets/links/5fe63fd1a6fdccdcb80098b9/Static-and-flexible-budgets.pdf?origin=publication_detail
[16] Kamaletdinov, A., and Ksenofontov, A.2019. Index method of evaluating the performance of economic activities. Finance: Theory and Practice, 23: 82-95.
[17] Kenno, S., Lau, M. and Sainty, B. 2018. In search of a theory of budgeting: A literature review. Accounting Perspectives, 17: 507-53.
[18] Kibor, J.K., and Maina, K.E. 2019. Effect of cash budget budgeting on financial performance of micro and small enterprises at Eldoret town in Uasin Gishu County, Kenya. International Journal of Economics, Commerce and Management, 7(10): 147-59.
[19] Klosterman, R. 2017. Foundations for normative planning. In: Ethics in planning, M. Wachs (ed.), 51-69. New York: Routlwdge.
[20] Koplowitz, S. 2022. Planning your planning budget. In: On Site: Methods for Site-Specific Performance Creation, 102-116. Oxford University Press.
[21] Kuzmishchev, A. 2020. Risk-based budgeting. Finance Director. Available at: https://www.fd.ru/articles/157254-risk-orientirovannoe-byudjetirovanie-na-primere
[22] Libby, T., and Lindsay, R.M. 2010. Beyond budgeting or budgeting reconsidered? A survey of North-American budgeting practice. Management Accounting Research, 21(1): 56-75.
[23] Maillard, S., Roncalli, T. and Teiletche, J. 2010. The properties of equally weighted risk contribution portfolios. Journal of Portfolio Management, 36(4): 60-70.
[24] Mauro, J. 2021. Monte Carlo techniques. In: Materials kinetics, 443-66. Elsevier.
[25] Neuman, M. 2021. Financing and budgeting. In: Sustainable infrastructure for cities and societies, 187-99. London: Routledge.
[26] Olson, K., and Westra, J. 2022. Enterprise budgets. In: Economics of farm management, 272-301. London: Routledge.
[27] Popesko, B., Novak, P., Papadaki, Š. and Hrabec, D. 2015. Are the traditional budgets still prevalent: the survey of the Czech firms budgeting practices. Transformations in Business and Economics, 14(3C): 373-88.
[28] Radionov, Y. 2018. Program-target method of budgeting: Implementation problems and development prospects. Economy of Ukraine, 2: 21-38.
[29] Sardesai, S., Stute, M. and Kamphues, J. 2021. A methodology for future scenario planning. In: Next generation supply chains. Lecture notes in management and industrial engineering, R. Fornasiero, S. Sardesai, A.C. Barros, and A. Matopoulos (eds.), 35-59. Cham: Springer.
[30] Stefanov, I., and Andrianov, A. 2018. Risk-based budgeting. Applied clinical trials. Available at: https://www.appliedclinicaltrialsonline.com/view/risk-based-budgeting
[31] Toma, S., Alexa, I.-V. and Nistor, C.2022. Methods of risk modeling in economic activities. International Journal of Economics and Statistics, 10: 38-42.
[32] Uyar, A. 2009. An evaluation of budgeting approaches: Traditional budgeting, better budgeting, and beyond budgeting. Journal of Academic Studies, 11(42): 113-30.
[33] Xenidis, Y., and Stavrakas, E. 2013. Risk based budgeting of infrastructure projects. Procedia - Social and Behavioral Sciences, 74: 478-87.
[34] Zhilenko, V.Yu., et al. 2021. The impact of COVID-19 pandemic on the global economy and environment. Journal of Environmental Management and Tourism, 12(5): 1236-41.
[35] Agency for strategic planning and reforms of the Republic of Kazakhstan. Bureau of National statistics. 2022. Statistics of tourism. Main indicators. Available at: https://stat.gov.kz/official/industry/22/statistic/7
[36] Ministry of National Economy of the Republic of Kazakhstan. 2020. Forecast of socio-economic development of the Republic of Kazakhstan for 2021-2025. https://www.gov.kz/memleket/entities/economy/documents/details/62731?lang=ru
Published
2022-12-31
How to Cite
YEMBERGENOV, Ruslan et al.
Impact of Risk Budgeting on Enhancing the Projected Growth of the Hotel Industry under the Conditions of Enduring Uncertainty Related to the COVID-19 Pandemic. Case Study by Republic of Kazakhstan.
Journal of Environmental Management and Tourism, [S.l.], v. 13, n. 8, p. 2122 - 2133, dec. 2022.
ISSN 2068-7729.
Available at: <https://journals.aserspublishing.eu/jemt/article/view/7491>. Date accessed: 23 nov. 2024.
doi: https://doi.org/10.14505/jemt.v13.8(64).05.
Section
Article
Copyright© 2024 The Author(s). Published by ASERS Publishing 2024. This is an open access article distributed under the terms of CC-BY 4.0 license.