Finance and Funding in Travel and Tourism

FINANCE AND FUNDING
IN TRAVEL AND TOURISM

Table of Contents
INTRODUCTION.......................................................................................................................................3
TASK 1.......................................................................................................................................................3
1.1............................................................................................................................................................3
1.2............................................................................................................................................................4
1.3............................................................................................................................................................6
TASK 2.......................................................................................................................................................6
2.1............................................................................................................................................................6
2.2............................................................................................................................................................7
TASK 3.......................................................................................................................................................8
3.1............................................................................................................................................................8
TASK 4.....................................................................................................................................................10
4.1 Enclosed in poster............................................................................................................................10
CONCLUSION.....................................................................................................................................10
REFERENCES..........................................................................................................................................12

INTRODUCTION
Finance is life line of every business enterprise as without which the existence of business is not
possible. Funding is that feature which involves in the business in which financial resources are
utilized by an enterprise that assists the entity in cost reduction. The efficiency of the business is
higher with the existence of stockholders and financiers who will give recognition to an entity by
uplifting their existing status. Merlin entertainment is that enterprise whose significance has been
showcase with the help of this report. The following report will give emphasis on the internal
business proceedings of this enterprise as it is related to travel and tourism operations. This
project report is all about describing various needs of the current organizations in order to collect
various kinds of financial resources as per their current business requirement. This report stresses
on different forms of investment taken up by an enterprise. The major objective of this report is
to analyze various skills, tools, knowledge that has been emerged with the help of different
management decision making tools in travel and tourism industry. It also involves various
pricing methods that can be used by the business throughout the report.
TASK 1
1.1
Business is a combination of income and expenses which are incurred in daily routine business
as the owner needs to control their expenses in order to increase the amount of the sales and the
revenues (Ward and Peppard, 2016). Different expenses involved in the business enterprise such
as operating expenses includes material expenses, use of equipments, wages and salaries and
different other expenses which may be fall in the business at particular time interval. There are
different kinds of costs involved in an enterprise which needs to be maintained by preparing
budgets and using different monitoring tools and techniques (Stewart, 2014). The costs can be of
two major categories that is fixed costs and variable costs. The fixed costs is that kind of costs
which will be not be reduces as it is jointly connected with the opening of business such as rent
of the premises and utility bills.
On the other hand variable costs are that costs which may vary according to the changes in the
production level of the business. The nil production unit may doesn’t produce any variable costs
as it is increases or decreases with the changes takes place in the activity level of production of
an entity. Various costs involved in the business of Merlin Entertainment include preliminary
costs involved in arranging funds and financial resources from the external business environment
(Mulley and Walters, 2014). It also involves various costs such as expenses involved for providing
fun and leisure activities for visitors who visits different tourists destinations, ticket booking
services by opening travel centers to facilitate all its customers, booking accommodation facility
which requires costs as the owner will collaborate with different hotels in order to provide this
kind of feature to all their customers who books tickers for various destinations.

The costs should be reviewed and revised periodically in order to attract wide number of
customers as the higher prices will de-motivated various customers and hence reduces the level
of sales and the revenue (Kaplan and Atkinson, 2015). Another perspective involve in revision of
costs is that all the changes are taken into considerations in the price of tickets which includes
increasing fares of flights, increase in the cost of visa services, higher taxation burden such as
service tax, excise duty and value added tax. It helps an enterprise in determining the financial
position by identifying the actual proportion among the income and expense ratio. This ratio
assists an entity in order to increase their overall profitability by collecting income from several
kinds of sources.
This enterprise will also use various techniques that are cost volume profit analysis technique
which is concerned with an entity in order to firm relationship between cost and sales of the firm.
The importance of CVP analysis which is beneficial for an entity for operating in this fast
growing and emerged industry that is travel and tourism sector which are given as below:
 It helps Merlin enterprise in assessing their costs as the burden of fixed costs on the
business will suppress the existing business conditions (WisCombe, 2016). CVP used to
forecast the future sales and specific percentage of sales and also identify that amount of
sales level at which the entity will not earn profit nor loss just top cover their basic costs
involved in the business entity.
 It helps to provide different sales mix which facilities variety of customers as wide
variety of products or services. It also used to carry out analysis in which variety of
activities are conducted by Merlin entertainment plc, such as recruitment of new staff,
buying or selling of existing assets, leasing new machines in order to reduce costs to a
greater extent.
 It assists management to consider all its potential expenses even in the form of small
categories to the higher range of expenses (Stewart, 2014). It includes various expenses
such as maintenance of premises, fuel costs and oiling of the machines to operate the
machines without any kind of stoppage which allows an entity to increase their overall
productivity which in turn increase the sales and revenue of the entity in order to earn
higher amount of profit.
 The basic thing involved in this technique is that it gives emphasis on the division of
costs in tow major categories such as fixed and variable costs (Ward and Peppard, 2016).
This division of cost is essential for the business as the future action of an entity will be
totally based on the division criteria utilized by the business enterprise.
1.2
Integral part of every business is price element which is essential for Merlin entertainment plc
which is operating in the business which deals in different variety of services related to the travel
and tourism (Mulley and Walters, 2014). Price is that attribute of an organization which able to
attract wide number of customers by framing their prices as per the budget and income capability
of an entity. It play crucial role in the current organization as it aids in determining the initial