(Solved) Finance and Funding in Travel and Tourism Sector
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Added on 2020-10-22
(Solved) Finance and Funding in Travel and Tourism Sector
Added on 2020-10-22
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Finance and Funding inthe Travel and TourismSector
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................3TASK 1............................................................................................................................................31.1 Importance of costs and volume in the travel and tourism business.....................................31.2 Discussing various pricing methods to used by travel sector...............................................51.3 Determining factors which are directly or indirectly impacting travel and tourism sector. .6TASK 2............................................................................................................................................72.1 Management accounting information along with its different types on basis of DalataHotel Group Plc..........................................................................................................................72.2 Uses of management accounting information in terms of decision making tool..................8TASK 3............................................................................................................................................93.1 Calculation and interpreting financial ratio of Dalata Hotel group plc.................................9TASK 4..........................................................................................................................................114.1 Justifying various sources and distribution of funds in tourism for capital projects..........11CONCLUSION..............................................................................................................................13REFERENCES..............................................................................................................................14
INTRODUCTIONTravel and tourism business is giving huge contribution in economy as its trend isincreasing on daily basis among whole population. Finance and funding is termed as basicconcept which is mandatory for every business for growing in better aspect and for economy aswell. The present report is giving brief understanding of concept of travel and tourism byreferring Carnival Corporation Plc and Dalata Hotel group plc. The Carnival corporation ismaking plans for a trip and accordingly cost volume profit analysis has been prepared byselecting appropriate strategy. This report is also signifying importance of cost and volume incontext of financial management. It is also elaborating various methods of pricing whoseapplicability with reference to travel and tourism sector. The report is also identifying factorswhich are impacting to margin of specific business. Further it has been discussed about uses ofmanagement accounting information along with its types. The financial information of DalataHotel Group Plc has been stated along with its proper analysis of financial ratio. In the sameseries, different sources of fund has been identified with reference to capital projects.TASK 11.1 Importance of costs and volume in the travel and tourism businessCosts are required to be controlled in a better way so that it may not exceed over revenue.It leads to loss for the company if costs incurred are more in comparison to the profit generated.This means that expenditures should be less leading to enhancement in profits and volume. In
relation to this, CVP (Cost Volume Analysis) is used to assess cost of sales and then measuresare taken to implement that price by which sales are maximised and profits as well. Carnival Plcwhich is engaged in tourism business has 10 cruises in many nations. It can be said that CVPanalysis will be helpful in pricing tour packages and thus, it will try to achieve break-even pointso that it may enjoy adequate profits in hand. It would provide clarity to Carnival Plc to formpackages and take relevant decisions leading to more income (Morrison, 2013).Volume of sales are to be assessed so that it may be able to have clarity with regards toprices to be implemented and thus, desired income may be garnered. The importance of CVPanalysis in business is listed below-Expenditures like cost of administration, overheads can be estimated helping in attainingsales with much ease. Furthermore, break-even point is also helps company to at leastreach the mark so as to accomplish no profit no loss situation.Sales volume is effectively kept up because of Margin of Safety is used. It is a differencebetween actual sales and break-even sales. Hence, volume is maintained in desired wayso that it may not lead to decrease in overall profits.Carnival Plc will be able to initiate proper control over costs and can quote better price oftour packages of its various cruises. It will be helpful in attaining volume of sales andprofits would be attained quite effectually. There are various costs such as direct, indirect, variable, fixed and semi-variable whichare to be incurred in order to have sales volume generation. However, it is required that itshould be controlled quite effectively so as to inject overall sales and profits. Furthermore, contribution margin is useful term in CVP analysis in which firm subtractsfixed and variable costs from sales volume and thus, profit is calculated. Sales arerequired to be enhanced so that profit may be maximised and good quantum of revenuemay be produced leading to more productivity. Hence, CVP analysis is significant intravel business.It provides crystal clear image with regards to services sold by Carnival Plc. This helpsmanagement to take viable decisions if any of the services are deficient or not. Hence,improvement can be easily made with regards to the products and services. Profit levelcan be maintained by firm and packages may be sold to passengers leading to enhancedprofits.
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