[SOLVED] Royal Caribbean Cruises Ltd. Financial Analysis Report

This report provides a comprehensive analysis of Royal Caribbean Cruises Ltd.'s financial performance, including an evaluation of its HR life cycle, performance management plan, legal and ethical requirements, revenue management principles, budget preparation importance, and financial statement types. It includes references to various books, journals, and online sources for further research.

THE TRAVEL AND
TOURISM BUSINESS
TOOLKIT

Table of Contents
INTRODUCTION...........................................................................................................................1
ACTIVITY 1....................................................................................................................................1
HR life cycle................................................................................................................................1
ACTIVITY 2....................................................................................................................................2
Performance Management Plan...................................................................................................2
ACTIVITY 3 & 4.............................................................................................................................3
Legal And Ethical Practice..........................................................................................................3
ACTIVITY 5....................................................................................................................................5
Principles of revenue management..............................................................................................5
ACTIVITY 6....................................................................................................................................6
Importance of budget for maintaining effective performance.....................................................6
ACTIVITY 7....................................................................................................................................7
Financial Statement documents used by company and its competitors.......................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Hospitality sectors is a segment which offer variety of services such as foods &
beverages services, cruise line, event management, lodging, travelling and many other service
fields. This report explains various stages of HR life cycle. Further, this report develops a
performance management plan. Furthermore, this report includes different legislation related to
Travel and Tourism Industry. Moreover, this report elaborates legal & ethical concerns of
Carnival corporation UK. Further, this report includes different principles of revenue
management. Furthermore, this report explains advantages of budgeting. At last, this report
elaborates type of financial statement.
ACTIVITY 1
HR life cycle
The HR life cycle is an idea that describes the different levels of a worker's time with
Carnival Corporation and the function the human sources branch performs at each stage of
company's HR life cycle. Moreover, this life cycle covers diverse stages within the profession of
a personnel, starting with recruitment and ending with resignation, termination or retirement.
Thus, the cycle consists of five stages which includes:
Recruitment: This level of cruise ship consists of all the methods of hiring of a new
candidate. Moreover, the carnival corporations use various software like talent acquiring
software that allows them to frame and automatize all aspects of the hiring manner, application
monitoring system, pre-employment viewing and setting the interviews with the candidates.
Moreover, skills acquisition software can assist the superiors of the company to form the hiring
technique and retain high skilled candidates (Filimonau and Delysia, 2019).
Onboarding: At this level of HR cycle of the carnival corporation’s personnel who've
joined the work place emerge as a part of the organization's group of workers. Therefore, at this
stage they're furnished with the data and equipment to work more efficaciously and to become
familiar with the company's culture. Moreover, personnel get to know about the organization's
rules, processes and responsibilities that they are supposed to perform in the company.
Development: This level of carnival company consists of techniques wherein employees
are given remarks for their work through overall performance reviews and through meetings and
discussions. However, feedback is a vital feature of this level as it facilitates superiors to
overview into what motivates personnel and it helps personnel to know how nicely they have
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performed to achieve the goals of the company. Thus, the feedback leads to the employee
engagement within the activities of an organization.
Retaining: When the personnel have coordinated with the company's culture and has a
legitimate know-how of his position, the next stage of carnival corporation is to retain the worker
and making sure to improve the employees' performance. Thus, through continuous assessment,
acceptance and grooming are crucial at this level for maintaining employee engagement and
preserving the employee. HR specialists of the cruise ship typically use skills control software to
screen continued studying, as well as planning software that can become aware of candidates for
promoting.
Offboarding: This is the final stage of the HR life cycle of the carnival corporations,
wherein the personnel leaves the company, retirement, closure, personal issues or termination for
not abiding by the company's policies. Thus, at this stage the HR branch follow right strategies
and policies within the off boarding technique (Katsoni, 2019).
ACTIVITY 2
Performance Management Plan
Concern Standard Action Date outcome
Negative
behavior
Every employee
of an organization
should respect the
issues of the
customers and
abide by the rules
and regulations of
the company
The carnival
corporation will
take strict action
against the
employees who
are being rude to
their customers
and provide them
guidelines to
comply with the
companies
policies in order
to maintain the
reputation of the
The company will
achieve this plan
in 3 to 4 months.
The outcome will
be that the
employees
negative behavior
will be changed
into positive
behavior.
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company.
Staff retention Carnival
corporation have
a standard to hold
the employees for
longer period and
reduces the
turnover of
employees from
the company.
For retaining the
personnel
Carnival
corporation will
treat employees
equally without
any
discrimination
and provide them
attractive rewards
for their hard
work.
The company will
achieve this
within the time
period of one
month.
The consequence
of providing
rewards and equal
treatment will
lead to increase in
customer
retention.
ACTIVITY 3 & 4
Legal And Ethical Practice
There are various laws which are followed by the carnival corporation for smooth
functioning of its operations and manage the activities through regulatory framework. Consumer
protection law: The consumer protection is a law that manages the deceptive or false statements
that are given to customers. However, the false and dishonest statements can be made in terms of
vacations, journey preparations and charges. Moreover, the consumer protection law is very
critical which means that if any of the governance are violated it will cause penalties which could
be in money or imprisonment (Ravichandran and Ghosh, 2017).
However, the carnival corporations ensure that the statements and statistics that they
provide to their clients aren't false or deceptive. However, if the company provide specious
statements or mislead customers then the company will be punished for violating the rules. Thus,
it's miles crucial that all statistics is correct and dependable so that there is no false impression
because the effect may be high for the issuer who affords false or deceptive statements. For
instance, dishonest statements regarding the false prices for vacations and the destinations and in
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this case the company is deceptive customers with wrong prices which means that they are
breaking the laws and regulations proposed by the government authorities.
Uberrimae Fidei: Uberrimae Fidei is a Latin word which means “utmost precise faith”.
However, this statement is normally used throughout insurance contracts as it states that every
one event in the coverage agreement have to act in true faith which means that the parties of the
agreement will make a full announcement of all information in the insurance document.
However, this law can be used in other contracts of the company like the cruise ship use
this law that they will provide all the facts in reality primarily based on what they may provide
the purchaser within the holiday plans. Thus, this will additionally assist to prevent deceptive and
false statistics to the client (Morris and Kazi, 2016).
Trade Discrimination Act 1968: This law is a crucial act for those clients who've
suffered from deceptive information. However, the trade discrimination act charge fines from the
company for giving wrong facts to its clients. Moreover, penalties are charged from cruise ships
when they will be misleading their clients when they provide the false facts and at the same time
they are acting careless.
However, it's far critical that no fake information is provided to the consumer. For
example if the Carnival corporation provides a patron with misleading statements about services
like that they have got described as a five star company but in reality the company is a 4 star
company then it'll imply that they are deceptive their customers and thus this will consider as
violating the trade description act 1968 and the owner of the company will send to imprisonment
or will be charged with fine.
Contracts for holiday plans: The contract on holiday plan is formed where the clients of
the company specify their needs and the company make sure that the desires of the company will
be met and when the needs of the customers are fulfilled and simultaneously both parties are
agreed with the contract then it is the duty of the company to make certain that the offerings are
provided. However, the package holiday contract 1992 depicts that a package of plan has to
include a mixture of minimum 2 services before it may be classified as a package holiday.
Moreover, if the company has agreed to abide by the needs of imparting the accommodation then
they should make certain that services are provided to the customers. Thus, the company could
be answerable for any law which is violated by them within the settlement agreement.
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Equality Act 2010: The equality act 2010 facilitates that everybody within the
organisation is being handled equally. The act provides safety for personnel’s inclusive of all that
can be troubled by disabilities. However, the act permits all employees should have equal
opportunities because of that candidates for the roles cannot be handled unfairly.
Cruise ship have to make certain that they're no longer discriminating their personnel's
and they must deal with all their personnel similarly. An instance of this could be that they need
to ensure that each male and female personnel are being dealt with equal work balance and were
given with the same goal and activities to perform according to their capabilities (Combs and
Balkin, 2018).
ACTIVITY 5
Principles of revenue management
Revenue Management is an activity of managing profits & yields of companies by
managing their operations. This concept enables organisations in identifying demand and
expectation of customers so that they can generate higher revenue. Financial Manager of Cruise
Line Sectors of Carnival Corporation & PLC use various principles of revenue management
which helps company in maximising its profits by reducing its cost. It also helps cruise line in
providing quality room at right cost which satisfy needs of customers and enhances customers
base by attracting them. Further, revenue management enable company in offering quality
services. Principles of revenue management are discussed below-
Demand Forecasting- Forecasting demand of products & services offered by cruise line
business operated by Carnival Corporation PLC helps it in enhancing profitability. If company
apply this principle in its business than it offers its services according to the demand which
reduces wastage and eliminate extra cost through which cruise operator can earn more profits.
Inventory Management- Inventory management is a principle which helps company in
managing its raw material and effective management of stock items of cruise line operation
reduces cost of managing supply chain. Effective supply chain management helps company in
smooth functioning of its operations which enhances customers base and performance of
Carnival Corporation & PLC. Thus, application of this tool of revenue management helps firm in
earning high profits.
Pricing strategy- Managing and revising prices of products & services offered by company
according to expectation and demand of customers invites more customers which in turn helps
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Carnival Corporation & PLC in maximising its brand equity. So, application of this principle of
revenue management by cruise line operators benefits it in maximising profits and revenue
(Baum, 2019).
Market Segmentation- Market segmentation is process in which financial manager of
cruise operator divide its target market in different sectors on the basis of character such as age,
gender and culture. This segmentation is beneficial for company as it helps it in offering its
services in an effective and efficient manner which in turn enhances profits of Carnival
Corporation & PLC.
ACTIVITY 6
Importance of budget for maintaining effective performance
Budget is an estimation prepared by financial manager of Cruise line operator which
includes detailed description of income and expenditure is to be done by company for a given
period. Preparation of budget is necessary for each organisation as it helps in operating business
in a given amount of money which further increases profits by managing expenses. Budgeting is
very important for company as it gives a framework of spending. Budget is also important
because with that Carnival Corporation & PLC never go out of cash, company always have
enough cash for meeting contingent requirements. More importance budgeting is discussed
below-
Funding Planning- Budgeting is important as it helps cruise operator in managing its
financials and it enables company in effective utilisation of funds. Thus, with this firm can
reduce irrelevant use of funds and it enhances profitability of carnival corporation & PLC.
Further, if company decide its budget of spending than it is beneficial for it in managing its
financials which in turn provides firm high market growth and profits (Minnis and Sutherland,
2017).
Cash Allocation- Through budget financial manager can decide how much money is to
be spend on a particular service provided by cruise line operator these reduces time and cost in
providing services. Thus, budgeting is important customers are also get attracted if services are
provided to them on time.
Evaluation of Performance- While deciding budget financial manager of cruise line
operator take advice from its employees and also give feedbacks to them regarding their
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performance. In this budget compensation and incentives for employees are also included which
further helps in enhancing performance of company and also enable it in achieving its objectives.
Forecasting Future- Budgeting is also important because financial manager of cruise
operator can forecast company’s future and it also beneficial in achieving future goals &
objectives of company (Berger, Minnis and Sutherland, 2017).
ACTIVITY 7
Financial Statement documents used by company and its competitors
Financial Statements are document prepared by organisations for presenting financial
position of company. It is prepared by financial manager of firms and this includes Balance
Sheet, Income Statement and cash flow statement. Carnival Corporation & PLC prepare this
documents for checking accuracy of accounts and financials of company. Company also prepare
this statement for evaluating amount of tax and for making investment decisions.
Carnival Corporation & PLC prepare following type documents discussed below-
Balance Sheet- Balance sheet is a document prepared by Carnival Corporation & PLC
for assessing value of its liabilities and assets. It shows financial position of company and it also
shows its ability to meet its liabilities. Company also publish its balance sheet in its annual report
through which stakeholder of firm such as shareholder, customers, suppliers, government and
competitors can get detailed financial information of cruise line operator and it is positive than
they invest more in it. Balance sheet of company attracts its shareholders which further helps it
in enhancing its profits and operations.
Cash Flow Statement- A Financial Statement which shows inflows & outflows of cash
with in company is known as Cash Flow Statement. This statement is prepared by Carnival
Corporation & PLC to know expenses and earning of company and it also helps in finding out
liquidity of firm. If cash outflow is less than inflow of cash than company’s financial position is
very good and it shows that Carnival corporation has enough cash for paying its liabilities. This
statement is also important as it is also placed in annual report to give information to
stakeholders and deciding sales target (Akan, Ata and Dana Jr, 2015).
On the other hand, Royal Caribbean Cruises Ltd., competitor of Carnival corporation &
PLC also uses various documents of financial statement to communicate it to its stake holders
and for making budget & deciding sales target, these statements are discussed below-
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Income Statement- Income Statement is prepared by Royal Caribbean Cruises Ltd. For
evaluating position of its financials. By preparing this document company can deliver its detailed
information about sales, expenses and profits & losses to stakeholders. With the help of income
statement firm also can evaluate sales which helps in making decisions in deciding new sales
budget.
Balance Sheet- Company also prepare balance sheet and print it in its annual report so that
stakeholders of Royal Caribbean Cruises Ltd. Can get full information of its assets and liabilities.
With this company can also analyse its liquidity and efficiency (Board and Skrzypacz, 2016).
CONCLUSION
This report outlines different stages of HR life cycle. Further, this report concludes a
performance management plan. Furthermore, this report summarises various types legislation
applied on Travel and Tourism Industry. Moreover, this report outlined legal & ethical
requirements of organisation. Further, this report summarises different principles of revenue
management. Furthermore, this report outlined importance of preparation of budget. At last, this
report concluded different types of financial statement used by company and its competitor.
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REFERENCES
Books and Journals
Board, S. and Skrzypacz, A., 2016. Revenue management with forward-looking buyers. Journal
of Political Economy. 124(4). pp.1046-1087.
Akan, M., Ata, B. and Dana Jr, J.D., 2015. Revenue management by sequential
screening. Journal of Economic Theory. 159. pp.728-774.
Minnis, M. and Sutherland, A., 2017. Financial statements as monitoring mechanisms: Evidence
from small commercial loans. Journal of Accounting Research. 55(1). pp.197-233.
Berger, P.G., Minnis, M. and Sutherland, A., 2017. Commercial lending concentration and bank
expertise: Evidence from borrower financial statements. Journal of Accounting and
Economics. 64(2-3). pp.253-277.
Baum, T., 2019. Does the hospitality industry need or deserve talent?. International Journal of
Contemporary Hospitality Management.
Combs, J.G. and Balkin, D.B., 2018. Making sense of HR in family firms: Antecedents,
moderators, and outcomes.
Morris, S. and Kazi, S., 2016. Planning an accessible expo 2020 within Dubai’s 5 star hotel
industry from legal and ethical perspectives. Journal of Tourism Futures. 2(1). pp.88-94.
Ravichandran, S. and Ghosh, A., 2017. Hospitality managers' importance perceptions of human
resource practices related to employment of foreign workers in the United States. Journal
of Human Resources in Hospitality & Tourism. 16(4). pp.331-348.
Katsoni, V., 2019. Sharing economy perspectives in the tourism accommodation sector.
In Mediterranean Cities and Island Communities (pp. 283-297). Springer, Cham.
Filimonau, V. and Delysia, A., 2019. Food waste management in hospitality operations: A
critical review. Tourism Management. 71. pp.234-245.
Online
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