Finance and Funding in the Travel and Tourism Sector

Sources and distribution of funding for the development of capital projects
Finance and Funding
The growth of tourism industry is funded by many
sources which includes government's welfare agencies
which encourages cultural growth and promotions.
These are ministry of media, culture, sports etc. The
ultimate aim is development of economy. The other
sources of funding are various financial institutions
and banks which gives easy funding to companies and
businesses which are involved in crucial sectors like
travel and tourism. These include seed capital, venture
capital, Private equity, angel investors etc. Some of the
international institute are also providing funding for
capital projects in tourism industry these includes
IBRD (International bank for reconstruction and
development), International Development Association
etc.
Capital Projects:
These are projects which requires higher capital
investment, usually company invest in such projects
with a time horizon of at least 5-10 years because the
projects give returns slowly and not immediately
The DALATA group of hotels are investing in capital
projects worldwide with the aim of increasing its
customer base and profitability.
Travel and tourism business has future in rural areas as
well because of the desires of rural people for a better
standard of living is compelling them to travel around
the world. There are some internal or non- public
finance sources as well which can be used for funding
capital projects. These are: -
 Retained Profit: These are the profits which the
company retain every year as reserve to use
them for further business growth and expansion.
Company can use these funds in investment of
capital projects.
 Debt collection: The company may also opt for
factoring which involves selling companies debt
to banks and other institutions to receive
immediate funding for any business project or
investment.
 Promoter or proprietor's funding: Another
source of funds are the owners of the company
itself, they can infuse funds in the company
which will be invested in the capital projects.
The benefits of such types of funding is that
there is no involvement of debt and there is
dilution of ownership in the company.
Distribution and Sources of funding for development of Capital
projects