Importance of Budgeting in Business Management

The assignment discusses the significance of budgeting in managing a travel and tourism business, such as Carnival Plc & Corporation. It covers revenue management plans, legal laws, and the importance of financial planning in ensuring the organization's growth and success.

Unit- 4
The Travel and
Tourism
Business

Table of Contents
INTRODUCTION...........................................................................................................................1
P1 Discuss rationale and principles of revenue management with respect to travel and tourism
industry........................................................................................................................................1
P2 Examine the specific sector of travel and tourism industry in which revenue management
tools in order to increase profit.................................................................................................3
P3 Review various stages of HR life cycle and importance in retaining and developing talent.4
P4 Develop performance management plan by applying different techniques...........................5
P5 Explore legislation which travel and tourism industry adhere to..........................................6
P6 Illustrate impact of employment and contract law on decision making process within travel
and tourism industry....................................................................................................................7
P7 Different types of financial statements within travel and tourism industry...........................7
P8 Explicate importance and value of budget for controlling business performance ................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
At present scenario, travel and tourism industry is fastest as well as leading business.
Different activities along with operations where people visit other places which is different from
their usual environment is included within tourism. The commercial organisations are rapidly
enhancing their business with an aim to enhance their profit as well as assist government to
create an affirmative impact on their economy. Carnival Corporation & Plc which is a leisure
organisation. It is a British-American cruise operator. Carnival Plc is listed on London Stock
Exchange and Carnival Corporation on New York Stock Exchange. They provide wide range
products which vary from accommodation, entertainment, shore excursions, events, food, bars
and many others. This report comprises of principles associated with revenue management,
various stages associated with HR life cycle. Furthermore, performance management plan is
provided, legislation and contract laws are discussed. Along with this, financial statements are
analysed in context to importance of budget.
P1 Discuss rationale and principles of revenue management with respect to travel and tourism
industry
A process of sales of right product to accurate client at precise time frame at correct price
through appropriate distribution channel is known as revenue management. It is associated with
controlling entire cost and benefits within industry (Budeanu and et. al., 2016). Within Carnival
Corporation and Plc, revenue management is associated with measuring complete cost and
benefits in their extra booking in accommodation in world. Furthermore, it comprises of
assessment of accessibility of services, ADR & evaluation that standardized rates are maintained
by which revenue can be increased. In context of, finance manager needs to concentrate on
accommodation, food, cruise services, etc. to acquire more profit base. Apart from this,
evaluation of customer's behaviour as well as optimal accessibility of services and products will
assist Carnival Corporation and Plc to enhance their entire locale.
Rationale and Principle of Revenue Management
 This efficaciously facilitates in creation of new goods, services & provides captivating
prices that will assist organisation to carry out their operations in effective manner
(Chang, Backman and Chih Huang, 2014).
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 Revenue management plan facilitates organisation to minimise cost that is linked up via
conventional pricing tactics.
There are different principles associated with revenue management in travel and tourism
industry. Some of these are provided beneath:
Market Segmentation:
According to this principle, customers are divided into qualifies as well as partitioning
and non-qualifies is entirely supported on characteristics of customers so that revenue can be
maximised. Carnival Corporation & Plc makes full use of this by which they can enhance their
sales as well as profit.
Booking Patterns and Historical Demand :
As per this, analysis & evaluation of historical data Carnival Corporation & Plc can
formulate plans in effective manner which will assist them to carry out their booking plan is
appropriate manner and without any kind of clashes. This will facilitate organisation to take into
consideration actual requirements as well as needs of customer, this will lead to enhancement in
chances by which revenue can be maximised (Cohen, 2017).
Overbooking:
This principle is associated with providing more number accumulation to customers even
more than entire susceptibility. A process seems more beneficial when customers make
cancellations. By this Carnival Corporation & Plc can enhance their revenue along with this
eliminate the risks associated with denial to services.
Revenue Management Tools
Discount Allocation:
Through assistance of this tool, Carnival Corporation & Plc provide broad ambit of
diminution schemes for their existing as well as potential customers. Discounts in advance
reservations are given, by this they can enhance overall range of their sales. They also provide
their customers with seasonal discount schemes by which they can captivate customers from
various geographical locations (DeLacy and et. al., 2014).
Capacity Utilization:
Within cruise there exists rigid capacity which is available, Carnival Corporation & Plc
needs to ensure that it is filled up so that they can maximise their entire revenue. This is
necessary within organisations manager to analyse reservation capability in appropriate manner
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within cruise so that they can provide services to their customers in effectual manner. Consider
an example to understand this aspect, if Carnival Corporation & Plc have capacity of 140
passengers then they need to make sure that there all the seats are filled up, this means that there
capacity is utilised completely (Du Cros and McKercher, 2014).
P2 Examine the specific sector of travel and tourism industry in which revenue management
tools in order to increase profit
Different sectors within this industry exists which includes accommodation, travel trade,
tourism services, events and conferences, food & beverages, etc. to remain competitive within
market and attain enhanced growth as well as advancement which is essential for Carnival
Corporation & Plc to carry out their operations in appropriate manner. Furthermore, revenue
management tools sector within Carnival Corporation & Plc are illustrated below:
Food and Beverage industry of Carnival Corporation & PLC:
Various types of industries which also include travel and tourism industry like fast food,
lounges., bars, clubs and pubs. This sector is one of the ample growing industry. This sector
satisfies the requirements of customers and it also provides individuals with large options of
employability which also leads country towards economic development (Höpken and et. al.,
2015). It is necessary for revenue manager of Carnival Corporation & Plc manages their food
and beverage sector by making use of various revenue management tools and execute strategies
by which profitability of organisation can be increased. Manager within Carnival Corporation &
Plc is makes use of Tracking tools for generation of maximum income in best possible manner.
This industry of Carnival Corporation & Plc provides broad extent of luscious nutrient
for customers by which they are able to satisfy them in appropriate manner. For being
competitive within the market, it is necessary to accomplish demands of customers within
impulsive environment. Revenue manager of this organisation takes vantage from score tracking
tools which at the same time that are key driver for occurrence (Hunt and et. al., 2015). They
provide their customers with an option or facility where they give scores to Carnival
Corporation & Plc on the basis of products and services provided by them with respect to
experience in cruise place. Therefore, in order to attain affirmative results in form of revenue
Carnival Corporation & Plc need to opt for various measures by which they can fascinate more
number of customers like they provide them with Wi-Fi and free postcards by which they can
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attain significant scores from customers. This will facilitate for maximising their market share
and profitability rate.
P3 Review various stages of HR life cycle and importance in retaining and developing talent.
Human resources have their own life cycle which comprises of different set of stages.
Each stage has their own benefits, challenges and opportunities. HR life cycle needs to carry out
various steps through which problems can be resolved thereby, leads to growth of business
(Lamsfus and et. al., 2015). The dislocation structure of Carnival Corporation & Plc is provided
below:
Recruitment:
It is standard way in which recruitment of suitable & appropriate candidate is carried out
for required profile. This role plays an important role within organisation which leads to
enhancement of turnover, productivity and growth of organisation. With respect to Carnival
Corporation & Plc, it is necessary to have appropriate policies and strategies by which they can
have skilled as well as effective Food and Beverages Manager within voyage. For this
organisation is looking forward towards an individual for this role with mesmerizing command
within this section and possess relevant experience along with education degree within
Hospitality management. This will assist them to render their services in enhanced way.
Education:
Elementary process in which suitable instructions are rendered for employees aft they
have initialised working within their new job in Carnival Corporation & Plc. In this context
organisation has build up various strategies which they render to their candidates with necessary
knowledge of their current job, roles, responsibilities and their expectations (Bayliss and et. al.,
2014). Apart from this, Carnival Corporation & Plc provide essential information related with
values and culture which are possessed within Food & Beverage sector. This will lead to
improvisation in their efficiencies with respect to future.
Motivation:
For increasing the turnover rate within organisation, the effective tool which can be sued
to fortify their workforce is motivation factor as it will automatically leads towards advanced end
profitability within organisation (Budeanu and et. al., 2016). With respect to Carnival
Corporation & Plc, it is necessary for providing appropriate action by Manager while carrying
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out every day meetings on travel boarding as well as render them with enhanced compensations
and benefits which will assist them to remain impelled.
Evaluation:
It is crucial for a manager to provide training along with development sessions through
which their level of performance can be enhanced.
Celebration:
Last stage within life cycle of HR that is necessary within organisation to reenergise
employees & appreciate for carrying out their tasks. With respect to this, Carnival Corporation &
Plc they opted for different schemes where they provide their employees with extra amount when
Food & Beverage Manager work for extra hours for empowering them as well as acknowledge
sense of responsibilities in them (Chang, Backman and Chih Huang, 2014).
All these stages within HR life cycle assists them to create a consciousness of
belongingness & their value among other staff that will facilitate organisation to retain their
employees for longer period of time and thereby generate high productivity.
P4 Develop performance management plan by applying different techniques.
In order to carry out activities in effective manner, it is necessary that organisation must
create appropriate performance management plan by which they can overcome challenges which
may occur within future and this will lead to gain increased prosperity. With reference to
Carnival Corporation & Plc it has been analysed, waitresses as well as waiters within cruise line
are facing problems. These problems are related with working conditions as they refuse to carry
out extra tasks which makes uncooperative. This leads to tension related with high turnover rate
of employees. To handle this situation they have created performance management plan, it is
described below:
Assess current performance management process:
It is necessary for organisation to identify exact strengths and structure which comprise
of resources, material and man to analyse the existing management process which they have
formulated to accomplish their mission (Cohen, 2017).
Set objectives and Goals:
Aft identification of their mission, Carnival Corporation & Plc to formulate their finish
and decide group for determining their potential. This will lead to collaboration among managers
and employees thereby results in enhancement in their performance.
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Create and action plan:
Unify perspectives as well as develop formative action plan by which they can broaden
their scope of high performance. They have divided their responsibilities as well as roles in break
down manner.
Keep track of progress:
Effectiveness of plan can be monitored by reviewing the productivity by analysing the
gap and acknowledge problems to ensure accomplishment of goals in appropriate manner
(DeLacy and et. al., 2014).
These actions will allow firmness in these troubles within different manners i.e.
affirmative and assorted. By this they will be able to engage their employees in appropriate
manner in food and beverage sector which also contains waitresses and waiters.
P5 Explore legislation which travel and tourism industry adhere to.
Every industry needs to carry out their work according to appropriate set of legal
framework. With respect to this, some regulations and legislations are mentioned below which
must be followed by while they are carrying out their operations as well as activities within this
industry.
The Tourism Act 2011: In 2011, Act no. 28 was constituted with an aim to develop,
carry off, regulate and market actions which are associated by services within tourism sector.
This is mandatory to be followed by organisation which they can modulate their voyage
activities in the world in possible legitimate manner.
Food Safety Act 1990: It furnishes legislations that are associated with food (Du Cros
and McKercher, 2014). As Carnival Corporation & Plc is rendering their services in food and
beverage within their travel, necessary to comply this law by which they can address the
requirements of their customers in best possible way (Lamsfus and et. al., 2015).
P6 Illustrate impact of employment and contract law on decision making process within travel
and tourism industry
These laws creates effective consequences on decision making process of Carnival
Corporation & Plc while carrying out their functionalities within travel and tourism industry
(Höpken and et. al., 2015). All these regulations and rules needs to be arillate within this sector
by Carnival Corporation & Plc. By properly making use of this law organisation can carry out
their operations in ethical and legal way.
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P7 Different types of financial statements within travel and tourism industry.
There are various kinds of financial statements which interpret performance of
organisation and are effectively used by creditors, lenders and management to identify
skilfulness of commercial enterprise:
Income statements: This section comprises of existent fiscal execution of Carnival
Corporation & Plc. These statements are given by public organisations that depicts essential
perspectives associated with financial performance of organisation.
Balance sheet: This statement comprises of entire influx and discharge of Carnival
Corporation & Plc within defined reportage time interval. In this aspect, cash flow is classified in
threesome assorted parts which comprises of financial activities, investing activities and
operating activities (Hunt and et. al., 2015).
Statement of changes in equity: It comprises of alterations which occurs within equity in
given instance frame. Alterations comprises of losses, profit, issued dividends as well as
purchase of share.
P8 Explicate importance and value of budget for controlling business performance
Effectual & appropriate funds facilitates for carrying out services within trenchant
manner without going through distinctive kind of fiscal troubles in future. It's certain values as
well as value of budget, it is depicted below:
 Appropriate budget facilitates Carnival Plc & Corporation to keep an eye on every sector
in which they render their services like accommodation, food & beverages and many
more (Lamsfus and et. al., 2015).
 Budget is essential facet of Carnival Plc & Corporation as this assists them to
efficaciously build up financial turmoil and attain growth within future in uninterrupted
manner.
CONCLUSION
From above, it has been observed that travel and tourism business plays critical role to
manage overall performance of organisation. This report comprises of revenue management plan
which will assist them to carry out their operations and manage their resources. Apart from this,
legal laws are covered which must be acknowledged by travel and tourism industry to complete
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their functions in desired manner without any legal troubles and carry them in efficacious
manner.
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REFERENCES
Books and journal
Bayliss, J. and et. al., 2014. The current and future value of nature-based tourism in the Eastern
Arc Mountains of Tanzania. Ecosystem Services. 8. pp.75-83.
Budeanu, A. and et. al., 2016. Sustainable tourism, progress, challenges and opportunities: an
introduction.
Chang, L. L., F. Backman, K. and Chih Huang, Y., 2014. Creative tourism: a preliminary
examination of creative tourists’ motivation, experience, perceived value and revisit
intention. International Journal of Culture, Tourism and Hospitality Research. 8(4).
pp.401-419.
Cohen, S., 2017. Decline, renewal and the city in popular music culture: Beyond the Beatles.
Routledge.
DeLacy, T. and et. al., 2014. Green growth and travelism: Concept, policy and practice for
sustainable tourism. Routledge.
Du Cros, H. and McKercher, B., 2014. Cultural tourism. Routledge.
Höpken, W. and et. al., 2015. Business intelligence for cross-process knowledge extraction at
tourism destinations. Information Technology & Tourism. 15(2). pp.101-130.
Hunt, C. A. And et. al., 2015. Can ecotourism deliver real economic, social, and environmental
benefits? A study of the Osa Peninsula, Costa Rica. Journal of Sustainable Tourism.
23(3). pp.339-357.
Lamsfus, C. and et. al., 2015. Going mobile: Defining context for on-the-go travelers. Journal of
Travel Research. 54(6). pp.691-701.
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