Finance &Funding in Travel Tourism Assignment
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Added on 2020-06-06
Finance &Funding in Travel Tourism Assignment
Added on 2020-06-06
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Finance & funding intravel and tourism
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................11.1 Significance of costs and volume in financial management of Carnival Corporation .........11.2 Analysing pricing methods that is used in tourism and travel industry................................21.3 Analysing various factors that impact on the profits of tour sector......................................3TASK 2............................................................................................................................................42.1 Different types of management accounting information that can be utilised in Dalata Hotel.....................................................................................................................................................42.2 Use of management accounting information as a decision making tool ..............................5TASK 3............................................................................................................................................73.1 Interpreting financial accounts of Dalata Hotel Group representing its two yearperformance.................................................................................................................................7TASK 4..........................................................................................................................................15
4.1 Sources and distribution of funding for the development of capital projects ....................15CONCLUSION..............................................................................................................................16REFERENCES .............................................................................................................................17
INTRODUCTIONTour and travel sector is gaining momentum throughout the time and carrying out severalset of activities and services in order to meet the demands of customers at greater extent. Cost,volume and profit are considered as important components of all ventures which are operatingunder tour and travel industry. An enterprsie comprises of complex set of activities where indifferent functions are performed for accomplishing the pre - setted aims and objectives. Thepresent report is divided into different sections are completed by considering given scenarios. Infirst section, the importance of costing and volume in managing finance within CarnivalCorporation & plc has been described. This is one of the largest leisure travelling firm in theworld. They are having a portfolio of cruise brands in Australia, North America and Europe. Inother sections, different other data has been discussed in context with management accountinginformation by focusing on the case study of Dalata Hotel group. TASK 11.1 Significance of costs and volume in financial management of Carnival Corporation Appropriate management of financial assets is important in order to gain long termadvantages. Some of the essential parts of the tourism company are restaurants, hotel, bar, touroperations, etc. Carnival plc is operating its business in different countries. They are having asuccessful cruise brands that are holding a strong position in market place. The description ofbusiness volume and costs are stated below:Cost: Costing consists of all direct, fixed, indirect and variable costs that incur whilecarrying out business. Direct cost involves expenditures occurred regarding givingfacilities and services to their clients associated with theme park, accommodation orresorts. Indirect costing includes arrangement of tour guide, management of regional busservices, etc. Thus, cited venture should consider all of its expenses and do propermanagement in order to manage their expenditures. By this way, they can increase theirprofit margins effectively. Business volume: Management of Carnival Corporation ought to focus on its businessvolumes at peak seasons prior to take any decisions. This has been observed that businessof tour and travel is a type of seasonal enterprise as most of the consumers used to makeplan of their holidays at the time of winter and summer vacations. Therefore, managers1
should consider their business volumes in order to formulate strategies for performingoperational activities and for making effecting cost controlling. 1.2 Analysing pricing methods that is used in tourism and travel industrySetting proper prices is a complex job for all ventures. As there is a huge race ofcompetition in travelling and tour industry, therefore, Carnival corporation should adopt someeffective pricing methods for framing various tour packages in order to satisfy their clients. Keypricing methods are stated below:Market led pricing method: In this methodology, company have to analyse the costs ofidentical tour packages that exist in the current market place and are utilised by theirrivalries. Managers ought to evaluate prices of the services or facilities offered by theirchallengers and after that they should set price according to the comparative studybetween their packages of tour and the same provided by other competitors. They shouldset cost of their services lower or higher from the prices of same facilities or products sothat increment in sales can be done and higher profits can be earned. Cost – Plus Pricing: Holland America line is one of the brad of stated corporation cantake use of this pricing strategy for setting expenses of tour packages. According to thismethod, venture can do calculation of costing by taken into consideration about the directas well as indirect expenses. After that they should add particular percentage of profitmargins for them. They also have to compute a break - even point in order to gainsufficient sum of profitability on their investments in business. Return on investment: Firm can also utilise this methodology in designing an idea of theirprofit. Costs should be ascertained on the ground of rate of interest as well as return fromthe investment funds that is invested in formulating travelling packages for visitors.Marginal costing pricing method: Apart from those methodologies, firm should decideits prices on the foundation of marginal pricing process. As per this method, costing ischarge of a product equivalent to the additional expenses that is included in organisinganother package of tour. But this procedure is commonly less used by corporations. Besides this, company ought to concentrate on various factors such as alternation inseasonal variation, economic, social as well as political environment etc. 2
1.3 Analysing various factors that impact on the profits of tour sectorProfit can be simply defined as the financial gain that is being earned from differentoperational actions. It is treated as a focal point for each and every enterprise. Like othercompanies, there are several factors which are impacting on the profit margin of CarnivalCorporation & plc. It is observed that if profitability is affected, then it will also influence on theoverall corporation. These influencing features involve both internal and external factors whichare discussed below:Internal factors:Bed Debts: Commonly, bed debts occur when consumers do pay amount in term of theservices taken by the venture. When those payments are not attained by the venture, thensuch costing become bed debts and being charged by them in profit as well as lossaccount. This in turn minimises the margin level of profit. Expenditures such as wagesand salaries are associated with the workers that would create a major section of cost ofbusiness. If such prices will enhance, then it would surely impact on the total benefit ofthe firm. External Factors :Seasonal variations : Tourist attraction is completely based on the seasons as most of thecivilians plan their tour as per their vacations either in winter or summer holidays. Due tothis reasons, business volumes are changing regularly. Such seasonal or randomalternations greatly affect the income amount of company. Political environment : This involves change in government norms, tax related policies,rules of foreign trades and many other legislative modifications that occurs on continuousbasis. This is impacting on the business operations of Carnival plc. Venture has to plantheir holiday packages by considering those legal policies and rules. Thus, it can be saidthat such rules applied by government is also influencing the profitability of venture. Social environment : It includes changes in social group mobility , their living style,population sociology, attitudes towards leisure or work, education level of communities,etc. These all factors will provide greater impact on the working of Carnival plc.Economic environment : This involves modification in interest rate, exchange rates, etc.This would affect on the monetary dealings of the business which are instantly impactingthe earnings rates. 3
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