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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Table of Contents
Introduction:....................................................................................................................................3
Task 1...............................................................................................................................................4
P1.1 explains 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 Analyse pricing methods used in the travel and tourism sector. You should use relevant
examples from different cruise brands of Carnival Corporation & plc.......................................8
P1.3 Analyse factors influencing profit for travel and tourism businesses using Carnival
Corporation & plc. Cruise brands as your case study..................................................................9
Task 2.............................................................................................................................................11
P2.1 explains different types of management accounting information that could be used in
travel and tourism businesses using Dalata Hotel Group plc. as your case study.....................11
P2.2 assesses the use of management accounting information as a decision-making tool for
Dalata Hotel Group plc..............................................................................................................11
Task3..............................................................................................................................................13
3.1 Interpret financial accounts of Dalata Hotel Group plc. for the year ended 31st December
2017 showing at least two years of performance (for example comparing 2017 to 2016)........13
Task 4.............................................................................................................................................17
4.1 analyze sources and distribution of funding for the development of capital projects
associated with tourism..............................................................................................................17
Conclusion:....................................................................................................................................19
References......................................................................................................................................20
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Introduction:
In the global economy the scope for travel and tourism is increasing and due to that, there is the
need have the proper financial management. The aspects which are related to cost and profit will
be discussed in the report below and for that, CVP analysis will be carried. The next part of the
assignment will be covering all the management accounting information and the manner in
which they will be used for the benefit of the company. For that, a poster will be created which
will be describing all of these aspects. There will be ratios analysis in the third part of the report
for which the calculations for Dalata group will be made and also the proper interpretation will
be made. There will be consideration of the capital projects which are to be undertaken and the
sources which are to be used in that respect. This will be presented in an appropriate manner with
the help of leaflets.
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Task 1
Report:
Introduction:
The below-presented report will be containing the CVP analysis and for that, all the elements of
it will be considered. There will be the identification of the methods used for the setting of the
price and also the factors will be determined which affect the profitability of the business.
P1.1 explains the importance of costs and volume in financial management of travel and
tourism businesses using Carnival Corporation &plc. as your case study
The funds will be required to be maintained and for that, all of the aspects which are related to it
will be discussed in the part below:
Cost: The Company is required to identify all the expenses which have been incurred in the
business and for that there will be a determination of all the elements which are involved in this.
All of the parts which are to be involved in the calculation of total cost will be considered in this.
There are two types of costs which are a direct cost that will be related to the product and
services which are provided and are directly related to it (Garvey, et. al., 2016). Another is the
indirect cost in which the cost is not related indirect manner but is required to be incurred for the
completion of the process. There will be a variable aspect of them which will be changing with
them in the company with the fluctuation of the total units. Also, the fixed cost will be included
by the carnival which is incurred and remains the same in all the period. The amount which is
charged for the food and accommodation by the company will be considered as the variable and
that of the fuel and other administrative charges will be fixed.
Total cost = Total Fixed cost + (Variable cost per unit * Number of units)
Volume: In a business, there is the specific limit at which production is made and that is
considered as the volume. This will be the units which are sold by the company and by that
revenue will also be ascertained. This will be considering the price which is charged in this
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respect. The total number of the tourist which is there with the company will be considered as the
volume and buy that revenue will be identified.
Revenue/Volume = Sales price per visitor * Number of visitors
In the below-presented table, the total volume for the past few years has been represented and
also the revenue which is made with the help of that. It can be seen that there is the continuous
increase in this number and this shows that the company is maintaining its position in a proper
manner and providing the customers with proper quality services.
Profits: The Company is required to manage the activities in such a manner that the profitability
is maintained in the best possible manner. This is the amount which will be left after considering
all the expenses from the income which is made. There is the need to maximize this so that long-
term success is maintained and for that proper decisions and actions will have to be taken (Scott,
2017). For the identification of this, there is the need to prepare the income statement and the
same for Carnival Corporation is presented below for the better understanding. The profit is
$2606 for the current financial year.
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All of the elements which are explained above include some interrelation and that will be
identified with the help of CVP analysis so that proper interpretation is made and that will be
helping in the making of the required decisions.
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