Travel and Tourism Financial Management

The assignment delves into the financial aspects of travel and tourism, highlighting the significance of revenue management tools, performance management plans, and HR life cycle in ensuring the success of businesses in this sector. It also emphasizes the importance of budgeting and cash flow in achieving growth and profitability.

Travel And Tourism Business Toolkit

Table of Contents
INTRODUCTION............................................................................................................................3
TASK 1............................................................................................................................................3
P1 Rationale and principles of revenue management in relation to travel and tourism industry 3
P2 Specific sector of travel and tourism industry applies revenue management tool in order to
generate and increase profit........................................................................................................5
TASK 2............................................................................................................................................6
P3 Different stages of HR life cycle and importance for retaining and developing talent..........6
P4 Performance management plan..............................................................................................8
TASK 3............................................................................................................................................9
P5 Legislation which is required for travel and tourism industry to adhere...............................9
P6 Impact of Employment and contract law on business decision making in travel and tourism
industry........................................................................................................................................9
TASK 4..........................................................................................................................................10
P7 Different types of financial statements.................................................................................10
P8 Importance and value of budget for controlling business performance ..............................10
CONCLUSION..............................................................................................................................11
REFERENCES...............................................................................................................................12

INTRODUCTION
Tourism is defined as a function of travelling which is performed by individuals for
pleasure or business purpose. In current scenario, travel and tourism industry is fastest growing
sector throughout the world. In relation with the tourism, it includes various set of activities in
which different kinds of persons travels and stay together at several places instead of usual
environment. This industry is rapidly growing in the market with an objective of serving the
needs of customers along with support government in enhancing their economy and gaining huge
profitability. Taken organisation for this report is Thomas Cook which was founded in 1841
along with headquarters are located in London, UK. Organisation offers a wide range of products
and services to their customers like food, accommodation, travelling etc. As per their visitor's
report of company, company is serving the needs and wants of around 19.1 million customers at
annual basis. This assignment will discuss about the rational and principle of revenue
management with the different stages of HR life cycle. Furthermore, performance management
plan along with various legislations and contract laws will also discussed under this assignment.
In last report includes several kind of financial statement along with value of budget.
TASK 1
P1 Rationale and principles of revenue management in relation to travel and tourism industry
Revenue management is concerned with controlling or monitoring of overall cost and
benefits of industry across the world. In other words, it is an application of disciplined analytics
which predicts the consumer behaviour at micro market level and optimise the availability of
products so that firm can take growth in a particular marketplace. In Thomas Cook, revenue
management is related with providing right product at right time to right customers so as to
earning revenue along with satisfying the potential needs of customers (Wiltshier,2019). For this,
finance managers of Thomas cook has duty to make focus on their airlines, accommodation,
food, entertainment and other services so that profitability would be increased and unessential
activities from different departments in appropriate manner. Management of organisation can
also use this tool for predicting the needs of customers and satisfying them accordingly so that
overall revenue figures of firm will be increased.
Rationale and Principle of Revenue Management

 Revenue management provide huge assistance to management in making new products,
services and attractive pricing range so that business operations of firm should be
conducted in effective manner.
 This tool also helps the managers in identifying unessential activities from the different
departments so that by removing it organisation can provide products to their customers
at affordable prices.
 It also helps the management of firm in adopting effective pricing strategy so that large
number of customers get attracted towards services of firm.
There are some effective principles of revenue management in travel and tourism sector which
are given as below:
Market Segmentation: This principle is mainly related with the consumers as it helps
the management in identifying the customers and serving their needs accordingly. In it,
consumers are divided in two parts such as price sensitive leisure customers and insensitive
business persons so that revenue can be enhanced. Through this segmentation, Thomas cook gain
huge benefits in the form of increasing sales figures and profitability (Taliouris, 2017).
Historical Demand and Booking Patterns: In it, management should have to evaluate
and analyse their past historical data which will helpful for them in forecasting the needs of
customers and developing strategies accordingly. With the help of this principle, management of
Thomas cook will be able in considering the actual demands of customers from the organisation
which will leads the firm towards gaining huge revenue and profitability.
Overbooking: Principle of overbooking is related with providing effective services to the
large number of customers from beyond the total capacity. This principle can provide beneficial
results in the situation when cancellations are less than the reservations. Management of Thomas
cook can use this principle for enhancing the level of overbooking and it also helps them in
enhancing revenue and reducing the risk which can be occur due to high cancellations of
customers.
Revenue Management Tools
Discount Allocation: By using this tool, management of Thomas cook can offer a wide
range of discount schemes to their existing and potential customers. When individuals will
receive discount offers at their advance booking then they automatically attracted towards the
services of organisation which helps the organisation in enhancing the overall profitability.

Company can also use this tool in seasonal days so that large number of customer can be
attracted towards the offerings.
Capacity Utilization: This tool of revenue management should be used by the managers
of Thomas cook so that any loss would be faced by organisation. In a flight, there are fixed
number of seats are available so that, management of Thomas cook have responsibility to fill all
the available vacant seats in given time-frame. Through which, good brand image of organisation
would be formulated in the mindset of customers. For e.g. in a flight, there are 250 seats are
available then it is the prior duty of reservation managers to fill all the vacant seats in a specific
time period so that maximum revenue would be earned by firm (Swart, 2018).
P2 Specific sector of travel and tourism industry applies revenue management tool in order to
generate and increase profit
As Thomas Cook is an important part of Travel and tourism sector so they have
categorise their works in different divisions such as accommodation, food and beverage,
reservation, marketing, HR etc. so that all the tasks should be completed in systematic manner.
For gaining growth and effective support from each divisions of firm, it is very essential for the
managers of Thomas cook to support and control each functions or operations of all sectors so
that better contributions can be received by them for achieving preset goals or objectives. Food
and beverage department's head of Thomas cook have applied revenue management tool so as to
reducing their cost and gaining huge profitability which can be more understood by as under:
Food and Beverage department of Thomas Cook:
In travel and tourism industry, There are various kind of goods and services which are
provided by the food and beverage department to the visitors which increases their satisfaction
level. Food and beverage department is one of the most important part of travel and tourism
sector because it not only satisfies the hunger of customers but also it provides employment to
large number of individuals so that better contribution can be provided in economic development
of UK nation. As the food and beverage division's head has adopted revenue management tool
then they have duty to formulate effective strategies so that profitability of firm would be
increased (Nickson, 2013). For applying this tool they can take advantage of review score
tracking so that good brand image of firm can be maintained in front of customers. Review score
tracking is a tool which is used by the management in identifying their position in marketplace. It
is based on ratings such as when ratings will be higher then it automatically builds the positive

image of organisation but if it is low in the market then it is very hard for the firm in maintaining
customer base in marketplace.
Food and beverage department of Thomas Cook offers a wide range of food products to
the guests so that their needs would be fulfilled in effective manner. But for sustaining in
competition and fulfilling the demands of customers, managers of food and beverages
department have to take advantage of review score tracking tool which will ultimately acts as the
key element for their success. When it will implemented by them in their functions or operations
then all the employees of food and beverage department have duty to provide effective services
like hygiene and good quality of food, cleanliness at the restaurant, impressive style of cuisine in
restaurant, Wi-Fi facilities etc. to the guests so that good review scoring can be gained by them.
For example- if a customer wants to eat food in its room then the employees of food department
have duty to provide all essential things in their room on time so that good image of firm can be
made in the mindset of them. They can also gain positive reviews from their guests through
providing them memento or free postcards for their memories along with solving their problems
in a short time period (Bastenegar, 2018). Hence, it can be said that by performing all these
activities management of Thomas cook can build good customer base and sustainability in the
marketplace.
TASK 2
P3 Different stages of HR life cycle and importance for retaining and developing talent
Human resources are very important in the organisation because without their presence
any operations or functions can't be handled in smooth manner. It also having a unique life cycle
in which various stages are included and each stage have own challenges, benefits and
opportunities and in order to solving these challenges management of Thomas cook have duty to
solve these issues in a given time frame so that firm can take growth in market. Steps of HR life
cycle are given as below:
Recruitment: It is the first stage of life cycle in which managers recruit right applicants
for the right job. This role plays a very essential part through which turnover growth and
profitability of firm can be enhanced within a short time period. In this stage, management
should form effective strategies so that right candidate with having expected skills and
knowledge will be hired for the organisation. As management of Thomas cook wants to hire

highly experienced and knowledgeable candidate for the vacant position of food and beverage
manager then HR managers of firm have duty to formulate attractive job description for this role
so that appropriate candidate will be hired from the large number of candidates. By doing this,
operations or functions of food and beverage department would be managed in easy manner.
Education: It is the second stage in which managers of Thomas cook have duty to
provide effective training and education to their newly recruited manager so that they will
understand their roles and responsibilities in easy manner. For this, management of organisation
should form proper time schedule for providing training to their new joined manager so that their
effective contribution can be gained by managers in a small time period.
Motivation: Motivation factor plays a very important role for raising employee turnover
rate. This factor provides strengthen to its workforce so that their maximum efforts can be gained
for achieving organisational goals. For gaining proper engagement of the employees in each
function, it is very essential to the managers of Thomas Cook to provide support and motivation
to their employees (Jones, 2014). By doing this, problem of conflicts and issues among the
employees have been reduced which leads the organisation towards growth and success.
Evaluation: In this stage, management of Thomas cook should monitor or regulate each
function in effective manner so that actual performance level of employees can be identified
properly. When mangers will identified performance level of their employees then it will easy for
them to retain or terminate the employees. For retaining the employees rewards and incentives
would be provided to them so that better contribution can be taken from them in completing the
task. Apart from that, for terminating the employees they should gave valid reason to them so
that they wouldn't dissatisfied from the policies of organisation.
Celebration: It is the last stage of HR life cycle in which managers have duty to provide
thanking messages to their senior employees for their hard working in order to reenergise them.
For enhancing the loyalty or trustworthiness of the employees, management can form effective
strategies like they can provide incentives and bonuses on their overtime so that their employees
would be reenergize and provide better efforts in completion of tasks.
All these stages will provide effective assistance to the managers of Thomas cook in
making good image of themselves in the mindset of their employees. It will also beneficial for
the firm in retaining their employees for long time duration.

P4 Performance management plan
For performing the activities and objectives in an effective manner, it is very important
for the firm to form effective performance management plan so that future challenges can be
resolved and better prosperity would be achieved. In Thomas cook, it have been seen that the
main problem which are facing by the employees at workplace is long time hours due to which
they are not performing well on the given tasks and their performance level is also decreasing.
These problems leads serious issues among the managers and they are becoming worried about
the high employee turnover rates. For solving these situations, managers of Thomas cook have
decided for framing and implementing the performance management plan that is defined as
under:
Assess current performance management process: In it, this is very important for the
managers of Thomas cook to identify actual strength of their organisational structure. So that
they will get aware from the actual strength of human resources, material and man. For
preventing the issues of working hours, managers have duty to set effective mission so that better
support would be gained from the employees.
Set objectives and Goals: After setting up the missions, management of Thomas Cook
have duty to frame goals and form employees of firm in a team so that their maximum efforts
will be received in a limited time period. Through forming the employees of same skills and
experience in a team, mutual support and coordination among them will be enhanced which
automatically leads the organisation towards achievement of goals.
Create an action plan: After setting the goals and missions next step of the managers of
Thomas cook is to develop effective action plans so that performance level of the employees
would be enhanced. For setting effective action plans they should assign roles and
responsibilities to their employees as per their capabilities so that better contributions will be
received by them. They can also provide flexible working hours to their employees so that
objectives of firm would be achieved in easy manner (Lourenco, 2017).
Keep track of progress: It is also an important step in which managers have to evaluate
the effectiveness of plans. As they have decided to provide flexible working hours to their
employees then they have duty to monitor each activity or function so that they can identify that
their taken decisions are right or not. With the help of this, if any gap will be identified then it
will easily filled which leads the firm in achieving their goals in more effective manner.

All these activities are profitable because by with the help of these, managers of Thomas
cook will be able in resolving problems of their employees. When employees will perform their
duties in flexible working hours then chances of gaining maximum efforts will be higher which
automatically leads the firm towards gaining growth and success. It also provide assistance to the
management in retaining their employees for long time period.
TASK 3
P5 Legislation which is required for travel and tourism industry to adhere
Each organisation have duty to perform their duties as per the legal acts and regulatory
framework which are formed by government of a particular nation so that any difficulty wouldn't
be faced by them. There are some legislations that should be adhere by managers of Thomas
cook because they are operating their functions in travel and tourism sector, these legislations are
given as under:
The Tourism Act 2011: This act was formulated by the UK government for managing or
controlling the activities of tourism sector. Main objective behind forming this law is to
regulating development, marketing activities so that tourism related activities will be performed
by the organisation in effective manner. This law should be adhere by the management of
Thomas cook so as to performing their activities in legal ways.
Food Safety Act 1990: This act is formed for providing proper frameworks about the
food to the travel and tourism industry. This legislation provides obligations to the tourism sector
that they should make food as per the requirement or consumption so that any food waste
wouldn't be generated in nation. Key requirement of this act that food should fill all the
requirements like hygiene and quality purposes when it provided to the customers. As food and
beverage department of Thomas cook offers a wide range of food products to their guests in the
package then it is essential for them to adhere this act in a legal manner so that any difficulty
wouldn't be faced by them in future (Moscardo, 2015).
P6 Impact of Employment and contract law on business decision making in travel and tourism
industry
UK government have framed several laws and legislations for the employment and these
are very compulsory to each firms whether they are operating in any sector to follow so that all
functions or operations would be performed in smooth manner. Top management of Thomas

cook should adhere various kind of laws that are formed by government for providing rights to
the employees like equality act 2010, human right act, 1981. So that, if management should not
provide equal remunerations to their employees or doing partiality on the basis of caste or
gender. Then it can enhance the employee turnover rate which is not beneficial for the brand
image of firm. Therefore, managers of Thomas Cook have duty to adhere these laws in effective
manner so that negative influence would not impact the decision making.
TASK 4
P7 Different types of financial statements
There are various kind of financial statements which are formed by the organisations to
identify the actual financial position which enables the management to make strategic decisions
Income statements: This kind of statement includes income and expenditure of firm and
also provide assistance to the managers of Thomas cook in identifying and controlling the areas
which are spending more from their actual requirements.
Balance sheet: This statement includes current liabilities and assets of a particular firm
and are made at the end of every financial year for identifying the actual financial position of
organisation in market. By forming this statement, managers of Thomas cook can easily identify
their credited amounts and cash reserves for paying debts of organisation.
Cash flow statement- It is a financial statement that gave actual data to the managers
regarding cash inflows which have received by the company from its ongoing operations and
investments. With the help of this, management of Thomas cook can take further decisions for
investment or paying debts.
P8 Importance and value of budget for controlling business performance
Formulation of effective budget provides huge support to organisation in performing their
activities in better manner. By framing proper budget, organisation can handle future financial
difficulties. There are some importance of budget which are given as below:
 Budget is important in every aspect of Carnival Corporation & PLC as it will help them
to effectively prepare for future serious financial turmoil and gain growth in an
continuous way.

 By forming budget, managers of Thomas cook estimate their actual revenue and
expenditure which enable them to control the spendings. This will results in increasing
profitability of firm (Clarke, 2019).
 Budget guides the managers to identifying the cash inflows and outflows so that better
decisions will be taken by them for achieving growth and success in future. It also
provide assistance to the managers in grabbing present investment opportunities so that in
the case of paying debts of firm these cash reserves will be used.
CONCLUSION
From the above report, it has been concluded that, travel and tourism sector is rapidly
growing in the market so the management of organisation which are operating their functions in
these sector has opportunity to gain high profitability and revenue in future. For increasing
revenue figures, management can use revenue management tool so that expenditure can be
controlled in effective manner. Performance management plan and HR life cycle is also
important because it provide assistance to the managers of organisation in gaining maximum
efforts from their employees.

REFERENCES
Books and Journals
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Conceptual model design. Amazonia Investiga. 7(17). pp.541-554.
Dickinger, A. and Lalicic, L., Tourist-driven innovations in social media.
Filosofova, T. and Apostolov, D., 2017. Effects of Tourist Satisfaction: Influence on the
Touristic Flows (Case Russia-Bulgaria).
Jones, P., Hillier, D. and Comfort, D., 2014. Sustainability in the global hotel industry.
International Journal of Contemporary Hospitality Management. 26(1). pp.5-17.
Kapiki, S., 2012. The impact of economic crisis on tourism and hospitality: results from a study
in Greece. Central European review of economics and finance. 2(1). pp.19-30.
Lourenco, F., Sappleton, N. and Lei, W. S., 2017. Teaching sustainability via entrepreneurship
in tourism and hospitality school. CAUTHE 2017: Time For Big Ideas? Re-thinking The
Field For Tomorrow, p.226.
Moscardo, G., 2015. The importance of education for sustainability in tourism. In Education for
Sustainability in Tourism (pp. 1-21). Springer, Berlin, Heidelberg.
Nickson, D., 2013. Human resource management for hospitality, tourism and events. Routledge.
Rogers, T. and Davidson, R., 2015. Marketing destinations and venues for conferences,
conventions and business events. Routledge.
Swart, M. P., 2018. Providing Service Quality and Customer Care in Tourism Businesses. In The
Emerald Handbook of Entrepreneurship in Tourism, Travel and Hospitality: Skills for
Successful Ventures (pp. 191-206). Emerald Publishing Limited.
Taliouris, E. and Trihas, N., 2017. Public Policy for Corporate Social Responsibility and
Governance for Sustainable Tourism Development in Greece.
Wiltshier, P., Griffiths, M. and Clarke, A., 2019. 14 Toolkit: Managing Relationship Marketing
with Sacred and Secular Consumers. Managing Religious Tourism. p.167.
Online
Types of financial statements. 2019. [Online]. Available
through:<https://www.accountingtools.com/articles/types-of-financial-
statements.html>.