Finance and Funding in the Travel and Tourism Sector

FINANCE AND FUNDING IN
THE TRAVEL AND TOURISM
SECTOR

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P 1.1 The importance of costs and volume in financial management of travel and tourism
businesses....................................................................................................................................1
P 1.2 Analysis of pricing method used in the travel and tourism sector.....................................2
P 1.3 Analyse factors influencing profit for travel and tourism businesses................................3
TASK 2............................................................................................................................................5
P 2.1 Types of management accounting in travel and tourism business.....................................5
P 2.2 The use of management accounting information as a decision-making tool for Dalata
Hotel Group of Plc......................................................................................................................6
TASK 3............................................................................................................................................7
P 3.1 Interpret financial accounts to assist in decision making of tourism and travel business..7
TASK 4............................................................................................................................................8
P 4.1 Analyse sources and distribution of funding for the development of capital project
associated with tourism...............................................................................................................8
REFERENCES..............................................................................................................................10

INTRODUCTION
In this investigation, we would take a look at the importance of management accounting
funding and budgeting of tourism and travel company and Carnival Corporation & plc company
as well. We will discuss about to the importance of costs and volume in financial management of
travel and tourism business in this company and analyse pricing method used in the travel and
tourism sector in the various cruise brands of this company as well. We would analyse the
factors influencing profit for travel and tourism businesses. Moreover, we take a look on
different kinds of management accounting information that could be used in travel and tourism
businesses using Dalata Hotel Group Plc and assess the use if management accounting
information as a decision-making tools for this hotel as well. Nevertheless, we would interpret
financial account of Dalata Hotel Group Plc for the year 31st December 2016 and shows its two
years performances. In the last stage of this investigation, we will analyse source and distribution
of funding for the development of capital projects associated with tourism.
TASK 1
P 1.1 The importance of costs and volume in financial management of travel and tourism
businesses
COSTS: Direct cost: Direct cost defines about to those cost which are directly related to that
prices which is influenced to the production of specific goods and services such as
administrative expenses, depreciation cost etc(Adora, 2010). Fixed cost: Fixed costs are those costs which would never change even increase and
decrease volume of production of goods and services. These are those cost which are paid
by the company. Variable cost: Variable cots are those cost which are fluctuating according to the
proportion with production output. It depends on the production volume of the company
whether it increase or decrease.
 Importance of costs and volume: This is the kind of analysis in which we have to find
out the break even point between cost and volume of the Carnival Corporation & Plc
business. For the aim of this ascertaining this, there are various tools and techniques are
available to find out the best solution. Moreover, several assumptions could be
implemented in terms for finding the cost and volume within the business. There are two
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types of cost fixed and variable which affect to tour and travels business, which are
variable cost are calculated on per unit and fixed cost remained constant. In Carnival
Corporation & Plc business, CVP analysis plays a crucial role in terms of better prepare
their financial plan and effectively control the financial affair of the firm.
In the company there are all the future plan and projects regarding to tour and travel program
must be proper prepared and cost analysis also made in order to make an appropriate decision so
that there would be no scope of generating any loss for the company(Witt, Brooke and Buckley,
2013). This is the most useful tools for the business to figure out break even point of the cost and
volume and make a profitable relation and this technique, ultimately, helps the organisation to
access to all essential information and data regarding to the cost reduction within the business
and this exercises would assist the company to achieve the way in which there profit will be
generated and no chances of loss. For gain positive result in the business, there must be figure
out the best combination among the all cost such as fixed and variable costs and apart from this,
cost, volume and sales financial data are analysed to find out to provide growth and productivity
for the Carnival Corporation & Plc business. This process are not so much difficult to the
financial experts of the company in order to assessment of the financial data and find out the best
cost reduction way in terms of gaining more profit for Carnival Corporation & Plc firm.
P 1.2 Analysis of pricing method used in the travel and tourism sector
For every business it is necessary to analyse their proper pricing method within the
business and for earn profit on the investment on the production and service factors. For
ascertain that element pricing of the product and services is a most essential part to gaining profit
for Carnival Corporation & Plc firm(Diekmann, and McCabe, 2011). There are several processes
which can use in business that are cost oriented pricing, market oriented pricing, transfer pricing,
going rate pricing and so on. Cost oriented pricing method: This pricing method describe about to some margins are
added to the cost price of the product are services of AIDA Cruise in Rostock firm and
this activity would help to derive their profit from business operation as well. This
pricing method are easy to apply on the business and simple to understand the methods as
well. Market oriented pricing method: This approach are concerned about to the pricing
method which is depended on recent competition in the market and according to market
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