Finance and Funding in the Travel and Tourism Sector

Finance and Funding
in the travel and
Tourism Sector

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
1.1 Importance of costs, volume and profit for management decision making in travel and
tourism.........................................................................................................................................3
1.2 Analyse Pricing methods used in travel and tourism sector ................................................4
1.3 Factors influencing profit for tourism business ...................................................................5
TASK 2 ...........................................................................................................................................6
2.1 and 2.2 covered in ppt...........................................................................................................6
TASK 3............................................................................................................................................8
3.1 Interpret financial accounts of Dalata Hotel Group plc for December 2016 highlighting
two years performance ...............................................................................................................8
TASK 4 .........................................................................................................................................16
4.1 Sources and distribution of funding for the development of capital projects of tourism
sector.........................................................................................................................................16
CONCLUSION..............................................................................................................................17
REFERENCES..............................................................................................................................18

INTRODUCTION
Travel and Tourism Plays a very important role in any of the economy as it contributes in
increasing growth and revenue. Along with it, finance and funding of this sector constitute
prominent part. This report highlight importance of cost and volume in tourism business. There
are number of factors that have huge impact on pricing methods and profits of travel and tourism
sector. Management accounting information (MIS) is one of the concept of decision making
element. There are number of ratios that have to calculated in order to measure the financial
performance of any business organisation. This assignment focuses on important role played by
department of culture, sport and media (Buhalis, D., Darcy, S. and Ambrose, I. Eds., 2012). The
institution which is highlighted in this project is Carnival corporation & plc,it is situated in
Ireland consider as largest company and other unit is Dalata Hotel group plc. Both these hotels
have large number of share in market place (Petrova, P. and Hristov, D., 2016).
TASK 1
1.1 Importance of costs, volume and profit for management decision making in travel and
tourism
Cost is something which refers to total expenses incurred in carrying our transaction and
operations of business institution. There are number of work process related to purchase of raw
materials, maintenance, salary etc. all these elements include various finance aspects. Cost is also
of different type and nature, which has to be taken into consideration by every industry in
effective and efficient manner. It plays a very important role in reaching heights in given time
frame. All organisations of tour and tourism sector have to include volume, cost, and profit
which have to be regarded in managing decision making process which is described below:
Cost: This view all those expenditures in the form of indirect, direct, variable and fixed cost.
Direct cost involves any expenses happen in delivering services to customers in form of
accommodation facility, safety measures etc. on the other hand indirect cost incorporate actions
related to arrangement of tourist buses, and guides for visitors so that they do not face any
problem related to travelling places. Hence, this is necessary to formulate outline to minimize
cost and increase profitability. Fixed cost remains rigid throughout the business life, it possesses
cost purchasing in plant or machinery like land, buildings. Carnival corporation & plc have

proper system to calculate cost system which concentrates on cutting extra cost and maximize
their efficiency.
Profit or outcome: This is the basic aim of any business which is set up in the market area. They
exist to earn more and more profits in their life. These net income helps in running their business
smoothly without any hindrance or obstacles. High financial gains should be attained to act in
best effort. It is the result of services that are deliver by this industry to their customers by
fulfilling their demands and wants. There can be cases when profits are not earned to strategic
level. Thus, outcomes should be calculated by the company in appropriate mode (Sharpley, R.
and Telfer, D.J. Eds., 2014) .
Volume: Tourism industry is dependent on climate environment of particular area. It is essential
to look after the business volume in favourable manner. As proper scheme and plans have to be
implemented to excel in their working area. Volume basically involves the amount of finance is
available with the organisation system. It is expressed in monetary terms. Due to characteristic
attached to this sector, it is of seasonal nature. Travellers visit any place according to pleasing
climatic condition of that tourist place.
1.2 Analyse Pricing methods used in travel and tourism sector
Pricing method is a very important concept that has to be taken into consideration to
render final services to prospective buyers. Today's business environment is dynamic in nature
and keeps on changing in frequent time. Hence, in order to keep a apace with these changes it is
crucial to take such methods that will help them to grow in competitive world. Pricing process is
a primary conception of this type of industry as it is directly linked with source of revenue
generation of that particular country. Besides, it contributes some percentage in GDP. Pricing
method involves calculating the prices that involve framing of various packages that this
company delivers to their customers. There are several pricing method, few are mentioned
below:
Cost plus method of pricing: In this, organisation have to adopt such pricing in which value is
measured by pertaining indirect and direct cost together, and after that some percentage of
outcome is added to it. Break even point is also taken into circumstance by them. This point is a
level of no profit and no loss. Every company exist to earn high profits by cutting cost at
maximum level.