Finance and Funding in the Travel and Tourism Sector

This presentation discusses the importance of cost and volume in the travel business of Carnival Plc, a leading leisure travel company. It explores different types of costs, such as direct and indirect costs, fixed and variable costs. It also discusses different pricing methods, including rack rates, seasonal pricing, last minute pricing, cost plus pricing, and absorption. The presentation concludes by highlighting the ways to reduce cost functions and maximize investment in the travel and tourism business.

FINANCE AND FUNDING IN THE TRAVEL
AND TOURISM SECTOR

INTRODUCTION
 Analysis of cost, volume and pricing method is the foremost part of
business as it helps the firm in determining growth of services.
 The presentation will outline importance of volume and cost in
travel business of Carnival Plc, a leading leisure travel company.

IMPORTANCE OF COST AND VOLUME IN
CARNIVAL CORPORATION AND PLC.
 It offers monetary evaluation of expenses which helps in
determining the cost effectiveness of business operations.
 Cost and volume evaluation is effective for organisation
because it helps in deriving service, fixed and variable cost.
 It helps in reducing the cost functions in order to manage
profitability of organisational functions.

Types of Costs
 Direct Cost: This is cost on travel and tourism business which can be easily
calculated such as administrative cost, depreciation, etc.
Direct cost for Carnival PLC can be labour, booking for accommodation, air
travel, etc. However, direct cost for Dalata Hotel Group plc will be pricing of
room and accommodation services
 Indirect Cost: It is cost which is not directly implemented to business
operations like electricity, repair, maintenance, etc.
In direct Cost of Plc can be, providing extra accommodation and meal facilities
etc. Apparently, indirect cost for Dalata Hotel Group plc will be extra room
services which are demanded by guest at the time of stay.

CONTINUE
 Fixed cost: It is related to distribution and production of services such as
parking charges, transportation to historical places, room services, etc.
offered by Plc to its guests in order to deliver quality living experience.
Fixed cost for Dalata Hotel Group plc will be room charges which are charged
initially at the time of booking.
 Variable cost: This cost keeps on fluctuation according to travel and tourism
services and requirement of travellers.
The variable cost for Carnival Plc can be accommodation charges of hotel in
different regions and transportation which can be air travel, bus, etc.

DIFFERENT PRICING METHOD
 Rack Rates: It is the complete price offered by travel organisation without
any discount or schemes.
This pricing is presented on companies' brochure and magazines which help
travellers in analysing the firm’s pricing map.
 Seasonal Pricing: Seasons are the base of travel services and in every
season, company offers different trips with changed pricing.
In this, the pricing strategy of Carnival Plc. is based on tourists and travelling
demand of customers.

CONTINUE
 Last Minute Pricing: This pricing varies as per booking of travellers like in
case if customers are booking at the end moment then firm charges relatively
high price in accordance with normal pricing of trip.
 Cost Plus Pricing: In this pricing, tourism business adds certain amount of
percentage on service price which helps the organisation in maintaining
sustainability in pricing strategy.
 Absorption: This method is effective for calculating pricing when the firm
combines fixed, variable, administrative and cost altogether.

CONCLUSION
 The presentation outlined cost and volume which are of
different types and offers several ways of reducing cost function
and maximizing investment of travel and tourism business.
 It concluded pricing methods which are used by Carnival
Corporation and Plc to manage effectiveness of its tourism
services.

REFERENCES
Papatheodorou, A., Rosselló, J. and Xiao, H., 2010. Global
economic crisis and tourism: Consequences and perspectives.
Journal of Travel Research. 49(1). pp.39-45.
Ritchie, J.B., Amaya Molinar, C.M. and Frechtling, D.C., 2010.
Impacts of the world recession and economic crisis on tourism:
North America. Journal of Travel Research. 49(1). pp.5-15.