Finance & Funding in Travel & Tourism - Carnival Plc & Dalata Hotel
Added on 2020-07-22
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Finance and Funding inTravel and Tourism
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................11.1 Importance of costs and volume in financial management...................................................11.2 Pricing methods used in travel and tourism sector................................................................31.3 Analysis of different factors which influence profitability of travel and tourism................4TASK 2............................................................................................................................................52.1 Different kind of management accounting information which used in tourism sector.........52.2 Assess the use of investment appraisal management accounting information as decisionmaking tool..................................................................................................................................5TASK 3............................................................................................................................................53.1 Interpretation of financial accounts to assist decision-making.............................................5TASK 4..........................................................................................................................................144.1 Different sources and distribution of development of capital projects...............................14CONCLUSION..............................................................................................................................17REFERENCES .............................................................................................................................18
INTRODUCTIONFor a business organisation, financing and funds are required to get effective growth andcapital management for long term period. This is an essential need for a company to manageliquidity in their equity bridge and capital related terms (Evans, Stonehouse and Campbell,2012). Finance and funding is a process of firm that is used to convert short term fixed interestdebts into long term fixed interest debts. This project report is based on two differentorganisations such as Carnival plc London, England and Dalata Hotel Group. Carnival plcLondon is the world’s largest leisure travel company with a portfolio of cruise brands in NorthAmerica, Europe and Australia and they have 10 different global cruise line brands as well.Dalata Hotel Group plc is the Ireland’s largest hospitality firm. They have almost 38 three andfour star hotels with over 7,700 rooms. This in industry is operate Clayton and Maldron Hotelsacross Ireland and UK. This report represents the cost and volume in financial management aswell as importance of revenue in decision making process of organisation. At last, it includes aneffective analysis on different sources and distribution of funds for capital development for traveland tourism.TASK 11.1 Importance of costs and volume in financial managementFinancial management is an effective process that is used for planning, organising,controlling and monitoring of financial resources to achieve organisation's goal and objectiveseasily. These type of practices are used for controlling finance and fund activities such asacquisition and utilisation of funds, management of accounting and payment related activity, riskassessment as well as other money related terms. For Carnival plc, it is required to make planeand control all the financial matters of organisation effectively. Costs and volume in financialmanagement is required to fulfil the future needs that are used to plan and analysed in aneffective manner in travel and tourism industry (Henderson, 2010). This process helps to geteffective and correct decisions so that organisation would not face negative changes for themloss may occur. There are various type of costs as given below- Direct cost – This type of cost includes all the expenses done on manufacturing andproduction process of various goods and services of organisation. For travel and tourism firm1
like Carnival plc, it is an essential requirement to manage all these costs in an effective mannerto gain higher growth and maximum profit easily. Indirect cost – These types of costs are difficult to assign or identify because it is notdirectly calculated on products and services. Indirect cost may be fixed or variable. Theses costare not identify with a specific project and organisation activity but they directly impact onbenefit and sales activities of both terms. Variable cost – These types of costs are changeable according to various alterations ofoutputs. Variable costs are fluctuates every year acceding to various changes in organisation.This is directly affect on financial structure of company and its funds or pricing related terms aswell. Variable cost are increased and decreased according to company's production activity(Heung, Kucukusta and Song, 2011). Fixed cost – These type of cost does not change according to various alteration such asincrease and decrease in amount of goods and services of organisation. Fixed costs are directlyeffect on various expenses of a company that they used to paid. In other hand fixed cost do notchange when quantity of output are changed. Allocation and apportionment – These types of costs are not directly related to labourand material of organisation. This type of overhead can be made in amount of expense areincurred by particular department of cost centres. Volume - This analysis is used to determine amount of products and services in anorganisation. There are various components used to analyse volume effectively such as - ◦Break even analysis – This process is basically used to forecast the cost and sale ofbusiness that will be working for upcoming period. It can be managed on monthly,quarterly and yearly basis. In this process, organisation starts increasing their profitafter covering all costs of the firm (Nielsen and Spenceley, 2011). ◦Economies of scale – This process is basically used to gain competitive advantagesfrom the target market. According to this process, cost of new producing units shouldhave to less when organisation already produce many units at a time. This is dividedinto two specific economic scale such as internal and external. ◦Diseconomies of scale – This process is basically used for economic concept thatrefers to a situation in which economic scale cannot perform for a long time in firm.This is based on managerial cost process in which cost of various products is2
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