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Finance & Funding in Travel & Tourism Industry

   

Added on  2020-07-22

19 Pages5096 Words36 Views
Finance andFunding in theTravel and TourismSector

Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................11.1 Importance of costs and volume in financial management of travel and tourism businesses................................................................................................................................................11.2 Pricing methods uses in travel and tourism sector...........................................................31.3 Factors influencing profit in travel and tourism businesses.............................................4TASK 2............................................................................................................................................52.1 Various types of management accounting information used in travel and tourismbusinesses...............................................................................................................................52.2 Use of management accounting information as a decision making tool..........................7TASK 3............................................................................................................................................83.1 Interpret travel and tourism financial accounts................................................................8TASK 4..........................................................................................................................................134.1 Sources of funding for the development of capital projects...........................................13CONCLUSION..............................................................................................................................14REFERENCES..............................................................................................................................16.......................................................................................................................................................17

INTRODUCTIONConcept of finance and funding define the amount of funds required by firm to executeits business operations and to achieve sustainability. Sector of travel and tourism is known as oneof the fast growing industry that's why it require huge amount of funds (Papatheodorou, Rossellóand Xiao, 2010). Governments of country also provide funds develop heritage sites so largenumber of tourists can be attracted towards these. One of the main features of this is that it helpnation in earn foreign exchange which contribute in its economic development. As per the givenscenario, Carnival corporation plc one of the biggest firm deal in travel and tourism sector istaken under present study. Importance of cost and volume in travel and tourism sector is allgiven in this. Different pricing methods which can be use by tour enterprises for set final price ofproduct and various elements which affect the profitability of tour organisation is all mentionedin this. Further various type of management accounting system used in travel and tourism sectorwith its importance as a decision making tool is also detailed in this study. In addition to this,interpretation of financial accounts to assist in process of decision making and different sourcesof funds for private and public tourism development is all mentioned in this. TASK 11.1 Importance of costs and volume in financial management of travel and tourism businessesCarnival corporation plc is one of the biggest firm deals in travel and tourism sector. Firmoffer number of services to its customers. Firm has developed a big portfolio of cruise brandlocated in Australia, North America and Europe. Main focus of financial management of firm isto arrange the funds require to carry out business operations in an effective manner. This consistsvarious elements such as expenses and cost as these are necessary to consider for attain success.By consider all these elements firm can formulate better travel packages for visitors. Cost is a factor which is known as one of the most significant element in travel andtourism sector. This provide an opportunity to manager to examine the tour packages designedfor the travellers (Ritchie and et. al., 2010). It is very significant for Carnival Corporation plc toconsider the following factors while take decision for enterprise.Cost: This highlight the funds and money which is invested by enterprises in theirbusiness operations. It is known as one of the most significant factor as this largely affectthe growth and profits of tourism industry. This highlights all the expenses bear byorganisation during formulate travel packages for traveller. Further, tour firm decide the1

final price of tour packages for generate profits. It is very essential for CarnivalCorporation not to charge high prices from visitors otherwise they might lose theircustomers.Importance of costCost is known as one of the most influential factor of every business,. This is the onewhich contribute a lot in success and growth of firm. For example: If Carnival Corporation plcwill set high price of its tour packages as compare to its rivals then in this situation there aremore chances that firm might decrease its market share as customers will buy it at low price. Soit is very important for firm to set a right price of its products. In this way firm can offer value toits customers and at the same time can generate large number of profits. Cost minimisation: It is very important that all efforts should be done by firms to utiliseall its resources at an optimum level and consume less cost so they can offer its products to itscustomers at lower prices(Spenceley, 2012). With help of this Carnival Corporation plc canattract large number of customers which will increase the profits of firm. Decision making: This section highlights that all important decisions for firm such asallocation of resources should be done in an effective manner. For take right decision, it is verynecessary that research should be carry out by Carnival Corporation plc. In this way firm cantake effective decision and can achieve its goals and objectives in better way. Improving performance of management: By take right decision related with cost andallocation of funds Carnival Corporation plc can increase number of its profits and can utilise allresources at an optimum level. Designing financial structure: Different type of cost are involved in managing thefinancial resources of Carnival corporation plc. These can be understood by the following points:VOLUME: Carnival Corporation plc is popular for offering better products and servicesto all its customers. Further, number of tools are there in market which can be used by firm toidentify the exact volume of travel and tourism packages that will be required by firm to achieveBEP (Break even point) and economic order quantity (EOQ). Significance of volume:Break even analysis: This is the situation which indicate no profit and loss for enterpriseand every firm so efforts to reach this. Basically, in this enterprise cover all the cost which it2

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