Your All-in-One AI-Powered Toolkit for Academic Success.

+13062052269

info@desklib.com

Available 24*7 on WhatsApp / Email

Company

Tools

Support

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

Verified

Added on 2024/07/29

AI Summary

This report delves into the financial aspects of the travel and tourism sector, examining cost-volume relationships, pricing strategies, and management accounting information. Using Carnival Corporation & plc. and Dalata Hotel Group plc. as case studies, the report analyzes the importance of costs and volume in financial management, explores various pricing methods, and assesses the use of management accounting information for decision-making. Additionally, the report interprets the financial accounts of Dalata Hotel Group plc. for two years, comparing 2017 to 2016, and analyzes sources and distribution of funding for capital projects associated with tourism.

Contribute Materials

Your contribution can guide someone’s learning journey. Share your documents today.

Finance and Funding in the Travel and
Tourism Sector
1

Secure Best Marks with AI Grader

Need help grading? Try our AI Grader for instant feedback on your assignments.

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..............................................................................................................17
Task3..............................................................................................................................................25
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)........25
Task 4.............................................................................................................................................29
4.1 analyze sources and distribution of funding for the development of capital projects
associated with tourism.............................................................................................................. 29
Conclusion:.................................................................................................................................... 31
References......................................................................................................................................32
2

Introduction:
In the changing environment, there is the increasing scope for the tourism and it is required that
it shall be managed in an appropriate manner. There will need to have the understanding of
various aspects which are involved in this. For that, this report is being prepared in which the
cost volume relation will be discussed and also the factors which are affecting the business will
be considered. There will be an evaluation of the strategies by which price will be set. Then the
management accounting information and systems will be undertaken by which decisions will be
made. There will be the calculation of the ratios by which the evaluation of the performance of
Dalata will be made. The last part will be concentrating on the capital projects and the sources
which will be used for their funding.
3

Task 1
Report:
Introduction:
This report will be covering all the elements of the cost and the CVP analysis will be undertaken.
There will be the identification of the methods which will be used for price setting and also the
factors which impact the profitability of the business will be covered.
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 business undertakes various activities and in that cost will be incurred and so it is required
that all the components which are related to it shall be understood and so that is provided below:
Cost: The operations which will be carried out at the carnival corporation will be requiring the
cost to be incurred. In that, there will be various types which will be involved such as the direct
and the indirect cost. The ones which will be incurred in relation to the production in a direct
manner will be covered in direct cost such as the charges of the accommodation and food which
is supplied to the tourist and the cost which is indirectly incurred for the activities will be an
indirect cost. The example of this is the other overheads which are incurred such as the cost of
the fuel and other facilities (Novák and Popesko, 2014). There will be two elements of all the
costs and they are variable and foxed and the further classification will be made in accordance
with that. For that calculation of the total cost they will be used and the formula that can be used
for the same is as follows:
Total cost = Total Fixed cost + (Variable cost per unit * Number of units)
Volume: the total quantity of the activities which is undertaken in any business is identified as
the volume. There will be aa number of the products for the manufacturing concern which are
sold and by which revenue is earned. As the company in the given case is involved in tourism
business so that volume here will be determined on the basis of the number of tourists which
4

Secure Best Marks with AI Grader

Need help grading? Try our AI Grader for instant feedback on your assignments.

avail the services of a carnival. That will be in units and to convert it in values it will be needed
that they shall be multiplied with the value which is charged from them for the facilities that are
provided. This will be calculated by the equation which is provided below:
Revenue/Volume = Sales price per visitor * Number of visitors
The volume in the carnival is also represented in the report which has been made. There are
various aspects which are provided in this. The revenue and the number of the passengers which
are carried by the company have been provided in this for various periods.
Profits: The Company in any sector is required to maximize the profits and this is the main aim.
For that, there is the need to maintain the proper revenue and the cost which is incurred in
relation to it. There is the need to calculate it in the proper manner and for that, the expenses will
have to be deducted from the revenue which is made so that net amount which is earned is
identified (Moaveni, 2014). The same is done by the carnival and it made the income statement
in which the consideration for all is provided and the profit of $2606 is made.
5

In the graph above the relation which exists between the cost, volume and profit are analyzed
and this is done through the use of CVP analysis. It can be noted that there is the interrelation
which exists among them (Cutler, et. al., 2015). The cost and the volume are directly in relation
to one another and due to that, the cost will be raised with the increase in the volume which is
there in the carnival corporation. The profit will also be based on this as the profit will be more if
the cost will be less and the more cost will be resulting in fewer profits.
7

Paraphrase This Document

Need a fresh take? Get an instant paraphrase of this document with our AI Paraphraser

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.
The pricing methods which will be used by the company are as follows:
Cost-based pricing: In the business, the cost is to be identified and in this method, they will be
used for the determination of price that will be set. The company is required to take this and then
add the amount of the profits which are to be made by them. By this, the final amount will be
ascertained and carnival will be charging that on the facilities which are provided by it.
Competition based pricing: In the travel sector it is very necessary that the competition shall be
dealt with in a proper manner. For that, the price which will be set will be by taking all the
competitive factors into consideration (De Toni, et. al., 2017). The price will be set at such an
amount which will be bringing the profits for the Carnival.
Value-based pricing: The services which are provided in the travel sector are of various quality
and in them, it is required that there shall be proper consideration of all the factors which are
included. If the best services will be provided then the amount that will be taken will also be
more and vice versa.
Demand-based pricing: The tourism sector is experiencing growth and in that the demand is
fluctuating. It has to be taken into account in the deciding of the price (Nagle and Müller, 2017).
The company will be analyzing the demand they will be charging the price from the customers.
Rival’s pricing: The policies and the practices which are used by the other rivals will be
considered and then the decision in respect of that will be made. By this, all the factors will be
analyzed and this will be making the proper conclusion and the price which will be selected will
be covering all of those areas by which the additional benefit on the other rival will be taken.
8

P1.3 Analyse factors influencing profit for travel and tourism businesses using Carnival
Corporation & plc. Cruise brands as your case study.
All of the factors by which the profits in the company are affected are as follows:
External factors:
Political factors: The political aspects of the environment will have to be considered and for
that, it is required that they shall be considered so that the negative impact of them can be
controlled. There will be a proper analysis of the laws and the regulations which are applicable
so that the company can deal with them in an effective manner.
Economic Factors: The position in the economy also affects the company. For that, there will
have to be proper evaluation and there is the need that they are considered (Ansari and Riasi,
2016). The recession will be making the profits to reduce as the adverse impact will be faced by
the company due to the reduction in demand and the situation will be reversed in the coming
period.
Environmental factors: The time at which the weather will be favorable will be the period in
which the profits of the company will be rising as the more visitors will be there. There will be a
requirement to consider this while making the decision and offer better facilities in peak season.
Internal factors:
Staff efficiency: The Company shall recruit such staffs which are efficient as then only they will
be dealing with the issues in the business in an effective manner (Dahmash, 2015). They can
resolve the conflicts and make the business a success by meeting the needs of the customers.
Cost of Services: The Company provides various services and the cost which is incurred on
them affects the profitability. This is because of the relationship that exists between the cost and
profit and this has been identified that it is inverse.
9

Conclusion:
The report above explains all the aspects of the profits and cost and the relation among them.
With that, all of the factors that affect profits are also identified and the strategies that are used in
the setting of the price.
10

Secure Best Marks with AI Grader

Need help grading? Try our AI Grader for instant feedback on your assignments.

Task 2
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
Slide 1
11

Slide 2
Table of content is represented in this slide.
12

Slide 3
The training is to be provided in all the businesses and this is because with the help of that
knowledge of all will remain updated. The main aim of this is to provide the required
information to members which will be helping them in the conduction of the business in a
successful manner. for that schedule of the same is also made and provided.
13

Paraphrase This Document

Need a fresh take? Get an instant paraphrase of this document with our AI Paraphraser

Slide 4
The information which the managers and others will be required in the process of management
accounting is collected with the help of various tools and is of many types (Fullerton, et. al.,
2014). In this, all the financial information is acquired from the financial statements and the
budget provides with the targets. The deviation which is made in the performance will be
identified by variance analysis.
14

Slide 5
The various statements which will be made in this will be including the balance sheet in which
the liabilities and assets will be covered and then the data about the incomes and expenses will
be included in this. The cash related data will be provided in the cash flow statement so that the
position of cash in the company is evaluated.
15

Slide 6
In the business, the proper assumptions are made and then the costs and the revenue is estimated
by which the budget is formulated. This will be helping in the proper resource utilization and
also the reduction of the cost will be made as the control will be established by the use of it.
16

Secure Best Marks with AI Grader

Need help grading? Try our AI Grader for instant feedback on your assignments.

P2.2 assesses the use of management accounting information as a decision-making tool for
Dalata Hotel Group plc.
Slide 7
The managers of the company will be requiring the information for various reasons and that will
be including investments which are made, decisions will be made on various aspects. The
forecasts will be made by using all of this and also the launch of the new product will be made
by making the proper evaluation by the available data.
17

Slide 8
The investments are to be made in all the businesses and for that, it is needed that proper
evaluation shall be made in which all of the available options will be considered and then the
decision on the basis of that will be made (Doroshenko, et. al., 2016). By the help of this profits
will be maximized.
18

Slide 9
The decision-making process is the one which will be used by all the companies and in that the
company will be requiring the information. That will be providing the business with the proper
advantage of the best decisions are made.
19

Paraphrase This Document

Need a fresh take? Get an instant paraphrase of this document with our AI Paraphraser

Slide 10
The analysis of the information will be made and with the help of that assumptions and
predictions about the coming period will be made. This will be helping to identify the manner in
which the activities are required to be performed.
20

Slide 11
The launching of the new product is the very important decision and for that proper analysis will
have to be made so that the appropriate results are attained. For this, the available information
about the consumer needs will have to be considered.
21

Slide 12
By the help of this slide, all of the aspects which are covered are identified. This concludes the
understanding that has been provided to all of the required aspects.
22

Secure Best Marks with AI Grader

Need help grading? Try our AI Grader for instant feedback on your assignments.

Slide 13
23

Slide 14
24

Task3
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).
Report:
Introduction:
The report will be covering the ratio analysis in which the evaluation will be made of the
performance of the company. By this the decisions will be made as interpretation will be made.
Content:
The performance evaluation is to be made by all the businesses and in that there are various tools
which are there and with the help of that it will be possible that proper analysis is made. Ratios
will be used for this in which the company will be comparing all of the aspects which are
involved in the business (Goyal, 2016).
Calculation of Ratios:
Particulars 2017 (€'000) 2016 (€'000)
Current
Assets
38214 98771
Quick assets 36449 96954
Current
liabilities
83410 68821
operating
profits
86923 55607
Net profits 68308 34923
Revenue 348474 290551
Debt 363695 364994
Equity 737393 620382
25

Paraphrase This Document

Need a fresh take? Get an instant paraphrase of this document with our AI Paraphraser

Particulars Formula Calculations 2016 2017
Current
ratio
Current assets/current
liabilities
98771/68821 1.44 0.46
Quick ratio Quick assets/Current
liabilities
96954/68821 1.41 0.44
Operating
margin
Operating
profits/sales*100
55607/290551*10
0
19% 25%
Net profit
margin
Net profits/Sales*100 34923/290551*10
0
12% 20%
Debt-equity Debt/equity 364994/620382 0.59 0.49
Current ratio: The Company will be using this so that the ability to meet the obligations is
ascertained. In this, the current aspects of the business will be compared. There is the decline
which has been noted in this from 1.44 to 0.46 from 2016 to 2017 (Dalata Hotel Group Plc,
2017).
Quick ratio: This is also used for the valuation of the liquidity of the business and in this, all of
the liquid assets are considered. This will be comparing the current liabilities with the quick
assets. In this, the ratio was 1.41 in 2016 which reached to 0.44 in 2017 (Dalata Hotel Group Plc,
2016).
Operating margin: The profit which the company is making shall be evaluated and in that one
is operating profits which is considered as that determine the profits which have been earned by
the company from all the operating activities which are undertaken. This is rising from 19% to
25% in one year.
Net profit margin ratio: The amount earned after consideration of all the aspects is the net
profit. This will be after the deduction of the other expenses and taxation. This is also facing the
rise from 12 to 20% between 2016 and 2017 (Dalata Hotel Group Plc, 2017).
Debt to Equity ratio: This determines the ratio of the equity and the debt of the company. In
this, the capital structure will be considered so that further action for this can be taken. It is
identified that there is a decline from 0.59 to 0.49.
26

For the proper analysis it is required that cash is also considered and that will be made possible
with the help of the cash flow statement which is provided below:
The above cash flow statement is representing all of the transactions which took place in the
company in the past financial year in cash. It can be noted that there are three categories in which
the activities are bifurcated. This can be analyzed and the positive balance in the operations is
identified which ensures that there is no issue with that (Dalata Hotel Group Plc, 2017). The
repayments are made and also the purchase of the assets is made which is making the balance in
the financing and investing activities to be negative. There is the closing cash balance in the
company which ensures that no adverse situation is there.
Conclusion:
From the report that is presented above the performance of the Dalata is evaluated and it is
identified that there is the positive growth in the company.
27

Secure Best Marks with AI Grader

Need help grading? Try our AI Grader for instant feedback on your assignments.

Task 4
4.1 analyze sources and distribution of funding for the development of capital projects
associated with tourism.
Leaflet:
In the leaflet that is presented above all of the capital projects which are carried out in the
tourism sector are considered and for that proper understanding with respect to them is provided.
There are various such projects with the help of which benefit will be obtained by the travel
sector. The footpaths will be developed and also the heritage will be developed and by that the
infrastructure will be developed (Williams, 2017). The small-scale businesses will be provided
with the required assistance and also information points and theme parks are taken into account
by which the visitors will be attracted so that the overall growth will be achieved.
29

The various sources are available for the funding purpose and all of them are required to be
identified. For that, the proper evaluation of them is made and they are of two types which are
internal and external projects. In the various aspects are involved which are required to be
considered so that the one which will be providing the maximum benefits is selected. The
advantages and disadvantages which will be received due to the both are taken into consideration
and identified (Klačmer Čalopa, et. al., 2014). They have been presented in such a manner that it
will be possible to make the appropriate decisions.
30

Conclusion:
The report above elucidates all of the cost related elements and also the CVP analysis is made in
which the company is making the evaluation of all the elements which are included in this. With
the help of that, the proper analysis is made. The strategies which are undertaken are also
identified and the factors which will be affecting the profits are taken into account. There is the
presentation for the management accounting information and the uses of that in the company.
The ratio analysis is made which helps in the proper evaluation of the company’s performance.
There is the proper presentation of the capital projects which are to be undertaken and the
sources which are used in them for funding and for that leaflets are made.
31

Paraphrase This Document

Need a fresh take? Get an instant paraphrase of this document with our AI Paraphraser

References
 Ansari, A. and Riasi, A., 2016. An investigation of factors affecting brand advertising
success and effectiveness. International Business Research, 9(4), p.20.
 Cutler, D.M., Jessup, A., Kenkel, D. and Starr, M.A., 2015. Valuing regulations affecting
addictive or habitual goods. Journal of Benefit-Cost Analysis, 6(2), pp.247-280.
 Dahmash, F.N., 2015. Size effect on company profitability: Evidence from
Jordan. International Journal of Business and Management, 10(2), p.58.
 Dalata Hotel Group Plc, 2016. Annual Report. Dalata Hotel Group Plc, 112-116. [Online]
Available At Http://Dalatahotelgroup.Com/Wp-Content/Uploads/2017/03/170330-Annual-
Report.Pdf [Accessed: 2 August 2018]
 Dalata Hotel Group Plc, 2017. Annual Report. Dalata Hotel Group Plc, 102-110. [Online]
Available At http://dalatahotelgroup.com/wp-content/uploads/2018/04/Final-
Dalata_AR17_spreads.pdf [Accessed: 2 August 2018]
 De Toni, D., Milan, G.S., Saciloto, E.B. And Larentis, F., 2017. Pricing Strategies And
Levels And Their Impact On Corporate Profitability. Revista De Administração (São
Paulo), 52(2), Pp.120-133.
 Doroshenko, Y.A., Somina, I.V. and Leonova, O.V., 2016. OPTIMIZATION OF THE
ORGANIZATIONAL STRUCTURE OF THE MANAGEMENT OF INNOVATION AND
INVESTMENT ACTIVITIES OF SMALL BUSINESSES. Journal of Fundamental and
Applied Sciences, 8(3S), pp.1944-1957.
 Fullerton, R.R., Kennedy, F.A., and Widener, S.K., 2014. Lean manufacturing and firm
performance: The incremental contribution of lean management accounting practices.
Journal of Operations Management, 32(7-8), pp.414-428.
 Goyal, P.K., 2016. A Study Of Ratio Analysis As A Technique Of Financial Performance
Evaluation.
 Klačmer Čalopa, M., Horvat, J., and Lalić, M., 2014. Analysis of financing sources for start-
up companies. Management: Journal of contemporary management issues, 19(2), pp.19-44.
32

 Moaveni, G., 2014. Determinants Of Profitability In Tourism Industry: Evidence From
Turkey (Doctoral Dissertation, Eastern Mediterranean University (Emu)-Doğu Akdeniz
Üniversitesi (Daü)).
 Nagle, T.T., and Müller, G., 2017. The strategy and tactics of pricing: A guide to growing
more profitably. Routledge.
 Novák, P. and Popesko, B., 2014. Cost variability and cost behavior in manufacturing
enterprises. Economics and Sociology.
 Williams, T., 2017. The nature of risk in complex projects. Project Management
Journal, 48(4), pp.55-66.
33

1 out of 33

+13062052269

info@desklib.com

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

Contribute Materials

Secure Best Marks with AI Grader

Secure Best Marks with AI Grader

Paraphrase This Document

Secure Best Marks with AI Grader

Paraphrase This Document

Secure Best Marks with AI Grader

Paraphrase This Document

Secure Best Marks with AI Grader

Paraphrase This Document

Secure Best Marks with AI Grader

Paraphrase This Document

Related Documents

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

Finance and Funding in the Travel and Tourism Sector

Finance and Funding in Travel and Tourism Sector

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

Finance and Funding in Travel and Tourism: A Comprehensive Analysis

Finance and Funding in Travel and Tourism: A Comprehensive Analysis