Finance and Funding in the Travel and Tourism Sector: A Comprehensive Analysis

Finance and Funding in the Travel and Tourism Sector
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Contents
Introduction......................................................................................................................................3
Task 1...............................................................................................................................................4
P1.1 Explain the importance of costs and volume in financial management of travel and
tourism businesses using Carnival Corporation & plc as your case study..................................4
P1.2 Analyze pricing methods used in the travel and tourism sector. You should use relevant
examples from different cruise brands of Carnival Corporation & plc.......................................5
P1.3 Analyze factors influencing profit for travel and tourism businesses using Carnival
Corporation & plc cruise brands as your case study....................................................................7
Task 2: (Poster)................................................................................................................................8
P2.1 explain different types of management accounting information that could be used in
travel and tourism businesses using Dalata Hotel Group plc as your case study........................8
P2.2 assess the use of management accounting information as a decision-making tool for
Dalata Hotel Group plc..............................................................................................................10
Task 3.............................................................................................................................................13
3.1 interpret travel and tourism financial accounts for Carnival Corporation & plc.................13
Task 4.............................................................................................................................................15
4.1 analyse sources and distribution of funding for the development of capital projects
associated with tourism..............................................................................................................15
Conclusion.....................................................................................................................................17
Bibliography..................................................................................................................................18
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Introduction:
Management accounting is primarily used internally by the Carnival Corporation’s management.
The work done in this branch of accounting is much more detailed, so as to allow for a more
organized approach to the Carnival Corporation’s finances. Management accounting purports to
aid viable decision making. In this report, there is analyzing the purpose of attaining the goal of
an organization through management accounting. Furthermore, the report is going to explore
other types and tools of management accounting.
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Task 1:
P1.1 Explain the importance of costs and volume in financial management of travel and
tourism businesses using Carnival Corporation & plc as your case study.
Among the many tools available to entrepreneurs and Carnival Corporation managers of carnival
corporation CVP analysis offers comprehensive and objective ways an entrepreneur can predict
and assess the forecast of their business. Another key advantage of CVP is that it offers a
detailed snapshot of the business’s activity. In return, this can help entrepreneurs determine the
costs needed to produce products or provide services in spite of changing variables such as
material or ingredient costs and transportation expenses. CVP is an essential part of profit
planning that can help entrepreneurs build and sustain a new business. CVP analyzes the
relationship between product cost and product sales volume and how it will affect Carnival
Corporation profit. With using a C.V.P. managers can focus on several levels of a business and
the interactions with other areas. Some of these areas would include the price of their products,
per unit cost, total fixed cost and the mix of products produced. Cost volume profit can also
provide information to the manager about the breakeven point allowing the management team to
project how future spending and production will benefit or harm the Carnival Corporation
(Banker, Basu, Byzalov, & Chen, 2013).
Cost-volume-profit analysis, or CVP analysis, has five different components that are used for
profit planning. Management can use CVP analysis and other formulas, such as the formula for
contribution margin per unit, to help them make important decisions regarding Carnival
Corporation expenses and Carnival Corporation profits. Carnival Corporation can be at a
certain point where it makes no profit yet suffers no loss. This is known as the break-even point.
A Carnival Corporation can find itself at this point if a certain volume of sales is equal to the
Carnival Corporation’s variable costs plus the Carnival Corporation’s fixed costs. The Carnival
Corporation must therefore sell a certain amount of units in order to break even with their
variable costs and fixed costs. If the fixed costs were to decrease, the Carnival Corporation
would then require fewer sales to be able to break even. For example, let’s say that a Carnival
Corporation needed to sell 100 units in order to gain enough revenue to cover the variable costs
and the fixed costs, and the Carnival Corporation would break even. If the Carnival
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