Finance and Funding for Travel and Tourism: A Comprehensive Guide

This comprehensive guide delves into the intricate world of finance and funding within the travel and tourism sector. It explores key concepts like cost and volume analysis, break-even points, and economies of scale, using real-world examples from prominent companies like Carnival Corporation and Dalata Hotel Group. The guide also examines various management accounting information systems and their application in decision-making processes, providing insights into financial statement analysis and ratio calculations. Furthermore, it sheds light on different sources and distribution of funding for capital projects in tourism, highlighting the importance of cross-railway projects, tourism information points, and theme park development. This resource is invaluable for students, professionals, and anyone seeking a deeper understanding of the financial landscape of the travel and tourism industry.

FINANCE AND FUNDING FOR TRAVEL AND TOURISM

Finance and funding for travel and tourism
Table of Contents
INTRODUCTION.................................................................................................................................3
TASK 1.................................................................................................................................................4
TASK 2.................................................................................................................................................5
TASK3..................................................................................................................................................7
TASK 4...............................................................................................................................................10
CONCLUSION...................................................................................................................................12
References...........................................................................................................................................14
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INTRODUCTION
The research identified with subsidizing and money related administration will be set up with
regards to movement and tourism segment. The general examination will be prepared in
regard of Hospitality division and two noteworthy inns Carnival Corporation Plc and Dalata
Group. This study will clarify volume and cost conduct and their importance in their
marketing procedures, it will likewise depict gainfulness factor that affects the benefits
related to Carnival Corporation. An appropriate change will be prepared related
administration data frameworks keeping in mind the end goal to clarify and relate
noteworthiness as basic leadership device inside the administration. Utilization if
administration bookkeeping will be characterized for anticipating, deals and creation choices
in the organization. Assist depiction will be influenced identified with Dalata Group and its
money related execution changes in the marketplace. An appropriate proportion examination
will be put forth through a monetary expression of the organization. A legitimate talk and
assessment will be done in this regard identified with an investigation of liquidity and
budgetary position of the organization. Subsequent to talking about monetary changes, this
task will give learning of subsidizing instruments and different sorts of budgetary alternative
for the sources and dissemination of financing to create capital undertakings.
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TASK 1
Report:
The assignment regarding this study will incorporate an appropriate investigation of business
identified with cost examination, volume investigation, volume connection and cost. This
study will likewise clarify about the significance of cost and volume with regards to Carnival
Corporation. Investigation of volume will be clarified through analysis of break even, scale of
economies and scale of diseconomies.
1.1 Significance of volume and cost of monetary explanations:
Cost:
It is the price which is considered as the total of aggregate costs of the organization.
Organization use to quantify its aggregate cost at its ideal level with respect to creation price
per unit. Average price can be figured by a dividing absolute cost of the organization by the
quantity of the items. Average price can be quantifiable by the amount of the item. The
aggregate price can be characterized as total of every single general head including settled
and variable costs.
TC = TFC + TVC
(Source: Blanco et al., 2016)
Total price is the aggregate monetary price which can be estimated at the season of creation
and compensated for cost which is variable. It shifts different sorts of factors including the
quantity of merchandise, delivered as data sources, work, crude material and so on. It
likewise incorporates portion of cost related to opportunity identified with generation as
variable and fixed cost.
Cost behaviour:
Opportunity cost:
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This can be reviewed as inevitable viewpoint or loss in different options when any of the
choices would be picked. It speaks to those costs which are discretionary surrendered when
any choice can be made.
Fixed cost:
It is the price which is kept unaltered or steady when another inconsistent variable is in
fluctuated form. Fixed price essentially protected in short run process when a portion of the
factors or factor stay steady, for example, land, constructing and doesn't roll out any
improvements with the variance of creation.
Variable cost:
It is the price which is absolutely alterable and in shifted frame with the progressions
happened underway level.
Cost importance:
Relevancy:
A choice of price ought to be taken successfully and deliberately with a specific end goal to
[present important sources identified with cost]. Price based selections are our referencing
that is important to be taken into consideration by the administrator to review on subcontract
and speculation reasons for Carnival Corporation organization (Delacote et al., 2014).
Volume of generation:
The sort of cost additionally effects the administrative choice. In this way, a chief should
make culminate examination while esteem and finding out cost. For example, settled cost is
absolutely unaltered and free in estimating a volume of creation. Higher creation of the
organization would bring about a lack and diminishment as price per unit and settled price
would be a matter of consideration. Thus, the cost is important in the administrative basic
leadership process and identified with expanding the ideal creation status of Carnival
Corporation Plc.
Process of decision-making:
As price conduct is worried about precision and adaptability, price examination is
fundamental to gauge cost-adequacy and importance for each task. For example, factor cost is
important to be estimated for control in budget and getting ready for monetary systems. Price
is fundamentally connected with machine limit through bunch handling. Appropriate
examination of cost permits Carnival Corporation Plc. to abstain from surpassing costs and
breaking points of expenses (Baldi et al., 2014).
Volume analysis:
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Volume examination is the idea in which organization is occupied with imagining and
assessing its all procedures identified with deals volume, generation volume, buy and
anticipating and so forth. Volume investigation is managed by a specialized and operational
examiner and also numerous components of volume permits to settle on exchanging choices.
Corporation named Carnival can settle on gainful business choices identified with value
developments, venture, stock, and changes in operable exercises. Analysis of break-even,
economies and scale diseconomies are used to enable the organization to investigate viability.
1. Analysis of break-even:
(Vahlne and Johanson, 2017)
Analysis of break-even is the idea which enables the organization to comprehend and assess
those circumstances where volume in sales and income would be equivalent and organisation
achieves no benefit no misfortune. It portrays such circumstance where organization's deals
and income would be equivalent. It screens the connection amongst deals and aggregate cost
which computes the limit of the company named Carnival to oversee volume deals in the
extent of income. In the depicted chart, it is demonstrated the benefit when the business
volume is above than add up to cost. When these expenses intersect that point is called point
of break-even.
2. Scale economies:
Scale economies is the circumstance in the finance where organisation has an advantage of
assessing every circumstance and increment its advantages. In this circumstance, corporation
named Carnival are able to expand its profitability and work the business to the huge degree.
3. Scale diseconomies:
Scale diseconomies is very distinct from scale economies. It characterizes organization's
perplexing and basic circumstance so as to diminish inadequacy and expanding unwavering
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quality at business extension level. At the point when corporation named Carnival is in
analytic condition, it screens and follows organization's exercises to keep away from hazard
and it makes high weight for the organization to dodge similar things in not so distant future.
1.2 Different costing processes used in Tourism and Travel sector:
Different costing processes of company Carnival:
Types of
pricing
Denotation Costing oriented policy of
company Carnival
Pricing
based on cost
Cost-based evaluating goes under those
estimating techniques in which organization
needs to gauge and cost-adequacy and assets
necessities. It is completely in light of a
precision of the venture and administrations,
costs are resolved through price-based costing
that includes a wide range of cost settled cost,
managerial cost, changeable cost and aberrant
cost.
Cost based estimating
systems are used by
company Carnival
Corporation when valuing
is controlled including all
prices for example settled
cost, factors cost and so on.
A organization can get
benefits on ROA and ROE
through value evaluating
systems (Rout et al., 2017).
Pricing
based on
demand
Request based costing is utilized as a part of
the Carnival Corporation organization to set
costs of the administrations according to
market and client's requests.
Estimating skimming systems, infiltration
valuing and evaluating group in view of
market request are incorporated into this
request based valuing.
Because of season changes,
company Carnival uses to
mark their item and
administrations costs
according to market requests
to pull in more customers.
Pricing
based on
competition
This estimating is the valuing which is
utilized by the organization to break down
aggressive situation. Costs are resolved
In this valuing procedures,
company Carnival uses to
mark costs equivalent to
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according to adversary's circumstances by
making aggressive techniques through this.
their rivals to draw in more
guests and make greater
benefit.
This is relied upon the
aggressive examination
which enables the
organization to know
contenders' procedures and
look after competency.
Pricing
based on
value
This evaluating is dictated by any association
to decide esteem and nature of the item which
they are going to present their clients.
Company Carnival set
diverse costs of their items
and administrations in this
methodology.
This procedure enables
administrators to set diverse
costs for the items of various
qualities.
1.3 Various variables affecting benefit for tourism and travel organizations:
Economic factors: The variables which effect to the benefit of company Carnival with the
progressions in monetary patterns and pictures. The changes are expansion rates, remote
monetary standards, exchange direction and so on.
Seasonal changes: These are changes that occur due to season and inclinations of the clients
because of such variances. It rolls out tragic effects in the business procedures and benefit of
the organization. It influences deals and income of the organization positive and negative
forms.
Environment factors: Ecological variations denotes changes in climate and environmental
conditions which swings the mood of the guests to visit.
Political factors: These denotes variations in those elements which effects benefit of the
organization because of political strength and insecurity. Different reasons are legislative
guidelines, standards and directions, variations of political gatherings and their strategies.
This decreases the benefit of tourism and travel segment. In this circumstance company
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Carnival use to embrace delicate attractiveness approaches to hold potential clients and
increment benefits.
Socio-cultural factors: The social and cultural factor changes are identified with convention,
actualities, traditions and convictions of the general population. Such sorts of changes more
often occur because of changes in celebrations, traditions and so forth which influences the
benefit of the tourism corporations.
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Finance and funding for travel and tourism
TASK 2
P2.1 explain different types of management accounting information that could be used
in travel and tourism businesses using Dalata Hotel Group plc as your case study
P2.2 assesses the use of management accounting information as a decision-making tool
for Dalata Hotel Group plc.
Poster presentation:
Explanation:
The information system for any kind of management is applied in various business as the tool
of making any decision instantly in any organization of travel and tourism such as Dalata
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hotel group plc. In the above representation a research has been organized to keep in mind
about the requirement of management information system (Chuma,et al. 2013). This
management information system has described an essential observation and also described a
lot of useful points to consider. This information system of management is used for
maintaining the sheet of balance, the statements which are related to the flow of cash and also
the statement of income for making more profit or outcome in case of any decision making.
Type of management information systems:
1. Balance sheet: The management information system is required in the Dalata Group. This
Dalata group applies this management information system to maintain or prepare their sheet
of balance (Ramirez et al. 2013). This balance sheet contracts all the changes which are
related to this Dalata Group such as the liabilities, the relation between debt and equity and
also the assets. It also improves all the factors or changes which are related to their
management.
2. Budgets:In any organization the budget is the main thing. The information system of the
management distributes all the information which are related to the finance. It also provides
the expenses in the flow of cash and the costs of any kind of provisions. This budget helps to
manage all the expenses regarding to the business (Vohnoutet al. 2014). It also helps to
reduce the cost for producing any product or service in any organization such as Dalata
group.
3. Cost sheets: The sheets of cost which are also related to the objectives of the company
regarding to the finance. Dalata Group prepares the cost sheet which is more useful in the
accuracy of the business (Shahbaz et al. 2017). It also reduces the additional or extra cost of
the business in company.
II Decision-making tools:
The tools for making any decision is used in the information system of management. This
tools are needed to obtain the prices. It also requires for making any decision which are
related to the forecasting and requires to obtain the volume of the sales in Dalata hotel plc.
The systems for management helps to achieve the profit or outcome within a large time.
1. As forecasting decision: In the company, the information system for management is required
to predict the sales(Airey et al. 2015). This systems also helps to promote the business
through online and helps to increase the demand of the organization at a certain level to take
correct decision for the development of the business in Dalata hotel plc. It also is used to take
any decision which are related to the forecasting.
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2. Pricing decisions: Dalata group always make proper decision for setting the particular price
in the product or service in the business. The information system for management allows to
make the decision of any price according to the requirements or demands as well as the
status.
3. To understand sales and revenue relation: It is always necessary thing to understand about
the relations between the revenue and the sales (Peng et al. 2015). The information system
for management helps Dalata group to utilize the exact relation between the sales and the
revenue for the proper observation in the business environment at any situation or at any kind
of demand or .requirements.
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Finance and funding for travel and tourism
TASK 3
1.1 Interpret financial accounts of Dalata Hotel Group plc. For the year ended 31st
December 2016 showing at least two years performance.
The statements of finance to the ratio of calculation for the year of 2017, 2016 and 2015 are
given in the following chart on the basis of Dalata Group.
Calculation and analysis:
Analysis based on above calculation:
1. Debt Equity Ratio:
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The ratio of debt and equity relation is nothing but the relation between the debt and the
equity in the company. It provides the exact capacity of the finance in the business according
to the equity. It helps to measures the funds which are in available in the current market of
the business. It also helps to meet the needs of the obligations which are relatively large. It
can be said the in this analysis of the ratio between the debt and the equity, the Dalata group
can be more profitable and manage all the assets in their organization by earning more profit
or outcome (Manganet al. 2013). In the year of 2014 the ratio between the debt and the equity
was 0.60% and 0.59% was in the year of 2016. It was observed that the ratio between the
debt and the equity in the year of 2017 was around 0.495 which is nearly equal to the average
of the industry which describes the exact capacity of the company to manage the business.
2. Operating Ratio:
The operating ratio in Dalata hotel group describes the ability of the company to obtain the
activities of the operation in a different way (Paramatiet al. 2017). It can be observed that the
operating ratio of the Dalata group in the year of 2015 the operating ratio was around 16%
then it was 195 and in the year of 2016 the operating ratio was 24% and it was 2917. The
Dalata group hotel can be able to choose their proper efficiency in the operation of the
business. This operating ratio shows the improvement of the capacity of the production.
3. NetProfit Ratio:
This ratio of net profit describes the efficiency of the company to fulfill the margin of net
profit. In the year of 2015 the ratio of the net profit was 9.5%, in the year of finance in 2016
the ratio of the net profit was 12.01% and in the year of 2017 the ratio of the net profit was
about 19.6%. It can be said that the overall ratio of the net profit has increased gradually day
by day. It shows that the amount of net profit is high in the year of 2017. It highlights the
demand of the organization to fulfill all the obligations at very short time (Sparkset al. 2013).
4. Quick Ratio:
It is the ratio which is applied to indicate the ability of the company such as Dalata group
hotel. This quick ratio helps to obtain the level of performance of the finance of the current as
well as recent (Dickinsonet al. 2013). It ensures the Dalata group to access in a rapid way on
the basis of the activities which occur regularly to fulfill the requirements after making out it
properly. With the help of the above chart it can be said that the quick ratio has decreased
gradually. It also presents the working capital of the company.
5. Current Ratio: This ratio helps to obtain and maintain the obligations regularly for the
improvement of the level of productivity (Steven et al. 2013). In the year of 2015 the current
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Finance and funding for travel and tourism
ratio was 2.885 and it was around 1.55%. In the year of 2017 it was 0.43%. This current ratio
is decreased gradually.
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Finance and funding for travel and tourism
TASK 4
4.1 analyse sources and distribution of funding for the development of capital projects
associated with tourism.
Leaflet:
Explanation
This leaflet is about the different sources and the distribution of funding to develop the
capital projects. It has focused on the capital projects such as the cross railway project,
tourism information points and the theme projects. It also covers the all the contribution in
the sector of tourism and travel
Theme Parks:
Theme parks basically include schools, gardens, hospitals, malls, parks and marts etc. This
project has been developed as a property of public and it helps to attract the customers and
the visitor (Moutinhoet al. 2018). The infrastructure of the theme parks requires a huge
amount of costs for the investment. In present day’s institutes of commercial and also banks
give a large amount of loans and approaches very easily by lowering the rate of interest for
serving their huge contribution in the improvement of the capital of this project.
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TITLE: Source and distribution of funding for the development of capital projects
Introduction: This leaflet
is about the different
sources and the distribution
of funding to develop the
capital projects. It also
covers the all the
contribution in the sector
of tourism and travel. It has
focused on the capital
projects such as the cross
railway project, tourism
information points and the
theme projects.
Theme project: These projects are commonly
interrelated to the resources which are public and
this project requires a lot of costs as investment.
This theme project can be done with the help of
loans from bank. The areas, the theme projects
are done such as garden, schools, hospital, parks
and malls etc.
Conclusion: There are
various kinds of sources
and distribution of funding
to develop the capital
projects. The projects of
capital are hugely applied
in tourism.
Tourism information point:
There have a lot of information
points regarding to the tourism
and travel. From the information
points the consumers can ask
their questions or doubts which
are related to the tourism.
Cross railway project: This is
the largest project among the
entire project. This project
helps to improve the path of
the railway. This improvement
of railway path is done for
attracting all the visitors. It
works as the medium for
collecting as well as attracting
the fund. This project of cross
railway has built a scheme to
increase the development
where near about 1.37 million
to 5 millionis invested as a
capital.

Finance and funding for travel and tourism
Railway Park Development:
For visiting one location to the other location the improvement of the projects of cross
railway is important. It provides better electricity and connectivity, a lot of facility. It is
always effective to attract the visitors in the sector of travel and tourism (Huanget al. 2013).
It considers to improve the path of the railway for attracting and for increasing the number of
visitors.
Information point for visitors: It is very essential tools in tourism and travel management. It
builds relation between the visitors and the travel agencies. It always encourage to track the
location of the visitors and they can ask any question or doubt easily by using this
information point (Xianget al.2017).
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Finance and funding for travel and tourism
CONCLUSION
The main aim of this project is to study the knowledge regarding to the finance in the travel
and tourism sector in Dalata group plc. It provides a lot of facility to the customers or the
visitors. In this project report the volume of relation, the costs and the various kind of
strategies are explained in terms of the Dalata group plc. The different types of ratio such as
quick ratio, net profit ratio, debt-equity ratio, current ratio and operating ratio are described in
this report. Various kind of decision making tools have been described such as cost sheet,
balance sheet and also budget.
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