Financial Management in the Travel Industry

This assignment delves into the crucial role of financial management within the travel industry. It analyzes the significance of cost and volume control for a leading travel company, Carnival Corporation & plc. The report explores various accounting tools used to assess financial performance and market conditions in the sector. Furthermore, it provides a concise explanation of financial statements related to Dalata Hotel Group, illustrating practical applications of financial management concepts within the hospitality industry.

Financial Management in Travel
and Tourism Assignment

Table of Contents
INTRODUCTION...........................................................................................................................1
1.TASK 1 ........................................................................................................................................1
1.1 The importance of costs and volume in financial management in tourism businesses using
Carnival Corporation & plc....................................................................................................1
1.2 Pricing method used in Carnival Corporation and plc.....................................................2
P 1.3 Factors affecting profit for Carnival Corporation & plc ..............................................3
TASK 2 ...........................................................................................................................................4
P 2.1 Different types of management accounting information...............................................4
P 2.2 The use of management accounting information as a decision making tool for Dalata
Hotel Group Plc. ....................................................................................................................5
TASK 3............................................................................................................................................6
P 3.1 Interpret travel and tourism money related records .....................................................6
TASK 4 ...........................................................................................................................................7
P 4.1 Sources and circulation of subsidizing for the improvement of capital undertakings
related with tourism ...............................................................................................................7
Conclusion.......................................................................................................................................8
REFERENCES ...............................................................................................................................9

INTRODUCTION
Financial management is an important concept of managing the capital, cost and
expenses along with recording and analysing. The present report is in context of Carnival
Corporation & plc which is the largest travel company all around the world. It has a portfolio of
cruise brands in North America, Australia and Europe. The organisation's portfolio of 10 global
cruise line brands consist of Carnical Cruise Line, Holland American Line, Fathom, Princess
Cruises and Seaborne in North America, Australia and Europe. This report will determine
significance of costs and volume within financial management, it will also identify various
pricing methods which can be used in the travel and tourism industry. Factors affecting profit
and revenue in tourism industry will also be determined along with the methods of managing
information needed for travel and tourism services. The report will focus on analysing
management system related to finance in Dalata Hotel Group Plc. The interpretation defining
financial statements of Dalata Hotel will be also included in this assessment.
TASK 1
1.1 The importance of costs and volume in financial management in tourism businesses using
Carnival Corporation & plc
Carnival Corporation & plc is the world's leading travel company based in United States.
Firm has two major segments i.e. Carnival Corporation and Carnival Plc. Company is
headquartered at Miami, Florida in United States. They provide effective services related to
accommodation and tourism. Cost plays an important role in the success of the company and
therefore, it is important to measure different types of expenses and costing within the business.
Significance of Costs
 Direct cost – The cost which is directly associated with every expense of the company is
known as direct cost. There are few direct costing of the entity which is depreciation cost,
administration cost etc.
 Fixed cost – Fixed cost refers to the expenses which are fixed and do not get affected by
the change in volume of production and services. Fixed cost should be paid by an
organisation on regular basis for completing of each and every business activity
effectively.
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 Variable cost – Variable cost in an organisation may change and fluctuate with regard to
change in volume of production and services offered to the customers. The variable cost
depends upon level of production in the company efficiently.
Importance of Volume
 Break even analysis: If there arise an occurrence of movement and tourism organization,
equal the initial investment investigation is additionally central point to figuring and
evaluation of the edge of the element ground on the income gathered and connected with
the organization which has been assembled by arrangement of different sorts of tourism
administrations. This phase of the organization in which income equivalent to costs in the
firm adequately.
 Economies of scale: This is additionally the most vital factor for the business to increase
appropriate investigation of productivity of business in the organisation in pertinent
shape. This is utilized via Carnival Corporation and plc authoritative experts keeping in
mind the main goal of cost sparing. This may be utilized as a part of the business as far as
diminishing over costing in the organization while outfitting existing tourism benefits in
the company proficiently.
1.2 Pricing method used in Carnival Corporation and plc.
Pricing technique is the most important element for organizations such as Carnival
Corporation and plc. For ensuring specific pricing for each and every product or services offered
to the customers effectively. Various types of tourist cruise services are provided by the
company all around the world by different cruise brand of organisation by adopting different
types of pricing techniques to increase profitability as well as to enable efficient development of
the firm. There are various types of pricing methods which are mentioned as below:
1. Marginal costing approach – The marginal costing approach is an effective pricing
method which can be utilized by managers in Carnival Corporation & plc. For examining
proper cost or price of products and services. The expanding and diminishing in the
aggregate cost of creation keep running for making on extra unit for an action adequately.
This could be utilized as a part of some particular circumstance where the snout even
points happens in the business. This estimating strategy is being utilized by Holland
America Line, adequately with a specific end goal to ID of costing in the organization
proficiently (Vogel and et.al, 2016).
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2. Seasonal pricing : Various season has been sees in the nation and vast number of
travelers are actualizing this approach shape looking at legitimate evaluating at the work
environment. This is characterizes in a few season in which specific volume of vacationer
touches base in the nation for investing their nature of energy adequately. Fair
Corporation and plc firm need to make set up specific estimating on their assortment of
settlement visitor benefits in the business productively to gain greater profitability from
the market efficiently.
3. Absorption costing approach: This is additionally imperative costing estimation
approach, keeping in mind the end goal to think going to benefit of the organization in
the business adequately. In this costing technique all the costing related to the generation
and settlement administrations arrangement process is measure on per unit. This includes
of direct costing, for example, coordinate material and direct work and variable costing
and in addition adequately keeping in mind the end goal to analyzing of productivity of
the business in the business viably(Mohammed and et.al, 2015).
4. Commissions: The commission is utilized as a part of the organization to raising requests
of their clients in the firm in compelling structure. There are different traveler operators
are working in the organization and producing more commission from the association
successfully, so commission premise additionally increment benefit of the firm in the
market viably and furthermore increment the viability in the market in important way.
P 1.3 Factors affecting profit for Carnival Corporation & plc
There are various number effective factors in the tourism industry which helps in
increasing profit and productivity of the company in efficient way, these factors are defined as
below-
 Current Trends – The change in current trends has been occurring in the UK in
effective way and people like to live according to the current trend in the market or
environment. New ways of accommodation and travel services for various new types of
events, parties or occasion needs to be considered by Carnival cooperation & plc.
 Events or occasions: in this day and age, there are quantities of occasions are being
sorted out in the organization keeping in mind the end goal to celebrating different kinds
of event on some exceptional days. According to current pattern, occasion association has
happened to one of the essential factor for every in regard to commend a few things on
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particular day. Occasions influence the voyaging and tourism business in the market in
powerful frame and various quantities of individuals are going for festivity occasions in
various diverse area(Ryan and et.al, 2015).
 Seasons: Variety of seasons has been seen in the UK and this is likewise one of the
fundamental components which influence profitability of voyaging and tourism business
in the business adequately. It has been seen that, individuals needs to go outside for
increasing some experience so that, they searching for specific remarkable place for
getting unwinding and offer peace to mind successfully. So there are a few sorts of
season happened in the organization and volume of client likewise expanding nowadays.
TASK 2
P 2.1 Different types of management accounting information
Administration bookkeeping is most fundamental part for Dalata Hotel Group Plc
authoritative administrator with a specific end goal to getting proper data with regard to business'
budgetary execution in the business adequately. There are quantities of administration
bookkeeping data social occasion and examination strategies exhibited here by which director of
the organization can evaluate appropriate execution of the organization in the business in
important shape.
Budget reporting: This is likewise most component of administration bookkeeping which may
be used by Dalata Hotel Group Plc authoritative trough to arrangement of legitimate financing of
different settlement item and administrations giving by the firm towards their clients adequately
Director of the partnership plan spending detailing according to foreordained approach, if there
should arise an occurrence of future event of costs in the organization by arrangement of a few
settlement benefits by the organization's experts in applicable ways(Dzhandzhugazova and et.al,
2015).
Variance analysis:: This is likewise fundamental for the association keeping in mind the end
goal to inspected appropriate change between real execution to gage estimations of the
organization in significant shape. This is helpful Dalata Hotel Group Plc association in regard to
supervise tourist and hospitality business in the industry in more applicable shape. This could be
viable when authoritative expert could survey the measure of a difference on slant line, so viable
sudden changes can be recognized by hierarchical chief in important way.
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Financial statements: Financial proclamations are additionally most imperative approach of
administration bookkeeping to appropriate get-together of budgetary data of Dalata Hotel Group
Plc association in the business in pertinent frame. These announcements of the firm help the
administrator to inspected the monetary situating of the organization in the business and
budgetary execution too(Xiang and et.al, 2015).
Forecasting: This is additionally one of the main consideration of administration bookkeeping,
by which Dalata Hotel Group Plc authoritative supervisor can set up a standard of the monetary
execution in foreordained day and age, in this time length, they need to play out a few sorts of its
business work regarding creating appropriate income from the market effectively. According to
anticipating standard of the business, they have to perform well each assignment in the
organization in adequate way. It's all employees do their undertaking as indicated by
foreordained approach, so its normal results could be picked up inside given day and age
effectively.
P 2.2 The use of management accounting information as a decision making tool for Dalata Hotel
Group Plc.
Payback period: This is most imperative term of administration bookkeeping to look at money
streams of the organization and adequately make control on it. This outfits a few qualities to the
business experts going to time length in which the proper productivity of sum should be
recuperated by them in adequate ways. This approach additionally gives some basic qualities
about speculation and projection a proficient quality to increasing legitimate profitability.
Furthermore, ensuring that, regardless of whether to embrace the task of the organization
keeping in mind the end goal to meet to their coveted money related objectives and targets in
adequate way.
Discount income: Discount income is an administration bookkeeping approach which could be
utilized by business experts keeping in mind the end goal to estimation of the engaging quality of
a speculation opportunity successfully. This strategy gives some successful qualities going to
arrangement of future money streams and rebate on some particular projection of the
organization in the business adequately. The present qualities' estimation of the organization
additionally outfitting viable qualities going to the important appraisal of the capability of
interest in adequate frame in powerful way(Mason and et.al, 2015).
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Bookkeeping rate of return: Accounting rate of return characterize the normal benefit by the
underlying speculation to get proper degree of profitability in the organization in adequate way.
This is additionally moved toward which does not consider time estimation of cash in the
association with a specific end goal to getting adequate advancement in the firm in viable way.
TASK 3
P 3.1 Interpret travel and tourism money related records
Financial statement of Dalata Hotel Group as on 31 December 2017
Interpretation- Profitablity ratio is used by the managemnt or business manager for measuremnt
of the profitablity. In the assessment The Dalala Hotel Group Plc, there has beeen enahncement
in the gross profit ratio.
The above illustrated financial statement of the hotel conclude that, there are different
factors in which the organization has been giving brilliant exhibitions and furthermore a few
territories in which Dalata Hotel Group Plc association has been giving its weaker execution as
opposed to its earlier year execution in these areas. The organization's non-current resources of
the organization has been expanding step by step in the organization and now it has been come to
42,760 which is sufficient development of the organization from its last year viably(Moutinho
and et.al, 2018).
In the year 2016 was 700,450 and following one year it has been raised and come to
730,124 which is adequate development of the organization frame its last year execution in this
segment. In addition, if there should arise an occurrence of money and money reciprocals, there
are quantities of distinction has been found in the organization which is demonstrating its
negative qualities in these figures proficiently. Organization's aggregate resources was in the
year 2016 is, 785,920 and following one year in 2017 it spans to 773,956 which is not as much as
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its earlier year esteems in absolute resources. So it has been said that, organization has been
diminished its aggregate resources and which makes negative impact on productivity of the
business in given day and age in adequate shape. Next to from it, it has additionally been
expressed that, in the event of value share estimations of the organization, its offer capital
qualities in it was 1,830 and following one year, its esteem raise by 7 guides promotion came to
toward 1,837 which isn't so successful development in share capital of the organization
appropriately. If there should arise an occurrence of aggregate value vales of the organization in
the year 2016 was 494,600 and following one year it has been come to 492,857 which isn't a
positive development of the organization in the business in pertinent frame.
Intrepretaion- Liquidity ratio is dtermined as the variation between liquid asser
and the liablities of the bank intitutions. The accounts instruments assist in measuring the
protential of organization for paid its liabilities.
Effeciency Ratio.
Intrepretataion- ewffieciency ratios assis maanger in determing the way that company
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utilizes its assert and liablities inside. It involves severel ratios such as stock list turnover, fixed
asser turnover.
Asser turnover ratio denotes that the number of time the stock of the busienss is sold out. The
asser turover ratio is hike by .33% in 2017.
Stock turnover is decrease in the storck ratio which shows that time for which the stock has
increased.
TASK 4
P 4.1 Sources and circulation of subsidizing for the improvement of capital undertakings related
with tourism
1. Financial specialists of the association: This is additionally most fitting wellspring of
giving adequate subsidizing to the organization in pertinent shape keeping in mind the
end goal to getting business development in the business in adequate frame. There are a
few key partners are exhibited here in the organization who are outfitting adequate
subsidizing inside hierarchical condition in applicable shape. There are quantities of
issues are looking by organization in regard to producing greater productivity from the
market. If there should arise an occurrence of tourism and voyaging organization,
numerous quantities of key financial specialists re exhibited here in the market who is
keen on giving adequate finances in different vital projection of the organization(Walker
and et.al, 2016).
2. Credits: Loan is additionally a stand out among the most fitting technique for bringing
subsidizing up in the organization in adequate way. There are quantities of money related
establishments are running in the UK, which is putting forth alluring advance
administrations to different associations in the country legitimately. If there should be an
occurrence of voyaging and tourism industry, the organization need to take credit in its
basic conditions in the business and in the event of absence of working capital in the firm
as well.
3. Source: Sources of funds are considered to be as the significant for every company.
These sources off raising funds assist an organisation in execution of several business
operations in systematic manner.
4. Capital projects: The capital projects are applicable with the transaction of public as well
as non-public organisation to provide infrastructural installation to the society.
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Conclusion
The above report concluded that financial management is a very essential element in each
and every business. The report identified significance of cost and volume within a leading travel
company, Carnival corporation & plc. The various types of accounting tools used for analyzing
financial position of the business and market condition are also determined in the report. A brief
explanation of financial statement related to Dalata Hotel Group is also included in the above
report.
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REFERENCES
Books and Journals
Walker, J.R. and Walker, J.T., 2016. Introduction to hospitality management. Prentice
Hall.
Moutinho, L. and Vargas-Sanchez, A. eds., 2018. Strategic Management in Tourism,
CABI Tourism Texts. Cabi.
Mason, P., 2015. Tourism impacts, planning and management. Routledge.
Xiang, Z., Magnini, V.P. and Fesenmaier, D.R., 2015. Information technology and
consumer behavior in travel and tourism: Insights from travel planning using the
internet.Journal of Retailing and Consumer Services, 22, pp.244-249.
Dzhandzhugazova, E.A., Zaitseva, N.A., Larionova, A.A., Petrovskaya, M.V. and
Chaplyuk, V.Z., 2015. Methodological aspects of strategic management of
financial risks during construction of hotel business objects. Asian Social
Science,11(20), p.229.
Ryan, C., 2015. Trends in hospitality management research: a personal
reflection. International Journal of Contemporary Hospitality Management, 27(3),
pp.340-361.
Mohammed, I., Guillet, B.D. and Law, R., 2015. The contributions of economics to
hospitality literature: A content analysis of hospitality and tourism
journals. International Journal of Hospitality Management, 44, pp.99-110.
Vogel, H.L., 2016. Travel industry economics: A guide for financial analysis. Springer.
Chen, Y., Schuckert, M., Song, H. and Chon, K., 2016. Why Can Package Tours Hurt
Tourists? Evidence from China’s Tourism Demand in Hong Kong. Journal of
Travel Research,55(4), pp.427-439.
Sainaghi, R., Phillips, P. and Zavarrone, E., 2017. Performance measurement in
tourism firms: A content analytical meta-approach. Tourism Management, 59,
pp.36-56.
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