Financial Management of Travel and Tourism Business - Report
Added on 2020-07-23
29 Pages4241 Words40 Views
Viorica SecrieruUnit 2Finance and Funding In travel & TourismManagement
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................11.1 Significance of costs and volume in financial management of travel and tourism sector 11.2 Pricing methods used in travel and tourism industry 41.3 Factors influencing profit for travel and tourism......................................................... 6TASK 2 - Covered in PPT 82.1 Explain different types of management accounting information that could be used in traveland tourism businesses2.2 asses the use of management accounting information as a decision -making tool TASK 3..........................................................................................................................................193.1 Travel and tourism financial accounts................................................................................TASK 4 -Covered in Leaflet..........................................................................................................22Analyse sources and distribution of funding for the development of capital projects associatedwith tourismCONCLUSION..............................................................................................................................24REFERENCES..............................................................................................................................25
INTRODUCTIONFinance and funding is a necessary concept which helps in determining a proper amountwhich firm can invest in the development of an economy. Travel and tourism sector is a rapidlygrowing industry which gives high benefits to the business. This given report is based onCarnival plc which is the world's biggest leisure travel and tourism business firm. This companygives its contribution in developing and increasing the economy of United Kingdom. In thepresent report, importance of volume and cost in the financial management of travel and tourismbusiness will be discussed. There is an analysis of pricing methods which are used in travel andtourism industry. This business report covers various kinds of management accountinginformation which could be used in the travel and tourism business (Airey and Chong, 2010).Further, use of management related accounting information as decision making tools and alsotechniques will be assessed. Report will also cover Dalata Hotel Group Plc which demonstratesan interpretation about the financial accounts of an organisation and also comparison of twoyears of financial accounts. Apart from that, distribution and sources of funding for developmentof capital related projects related with tourism will be highlighted here. TASK 11.1 Significance of costs and volume in financial management of travel and tourism sector Carnival Corporation and plc is the largest leisure travel and tourism company in all overthe world. This company has a big portfolio of a cruise brands which is in Australia, Europe andalso in North America. The financial management is concerned with deployment andarrangement of finance in doing business functions of Carnival Corporation in an effectivemanner. It includes business of travel and tourism which is comprised with different costs alongwith expenses necessary in development and growth of travelling packages for customers orvisitors at a large scale. In the business of travel and tourism, cost factor is very important in order to evaluatecost of packages for visitors (Cole and Morgan, 2010). Carnival corporation plc is using manyfactors in context of taking some effective and beneficial decisions in tourism sector. Cost- Cost refers to that money which is incurred from the business related operationsand also activities in an organisation. It is an important element which can affect the business aswell as activities. It is related withto all expenses or price for growth and also developing the1
travelling packages for customers. There are many types of expenses for increasing the demandof tour packages for visitors. Allocation and apportionment- (Under this, over costs are incurred through businessfirm which are apportioned and also allocated. This allocation is related to concerned departmentof in case it is visible to that department which is responsible for this kind of costs. In in case thecost can not allocated in a proper manner then it is an apportioned to all departments.)Overheads expenses are not related with to direct material or labour. Types of costs are given below: Direct cost- It is a cost which can be completely attribute to manufacturing of particularproducts as well as services. This cost impacts on production process of company. This cost ishelpful in the operational planning of the tourism.Example- Direct materials, Direct labour, wages, commissions etc. From direct cost, Carnival Corporation develop its master budget and know about its allexpenses, here we can cite the cost incurred by the company for providing transportations,accommodations and food facilities, all direct expenses.Also, the costs of providing the staffssalaries can be considered like direct costs.Indirect cost- These cost impacts on manufacturing process indirectly such aslabour ormaterial. Those costs can also be called overheads. [In context to this of Carnival Corporationand plc it is necessary for firm to determine its additional labour, rent, administration expensesand cost in providing consumers’ services, energy costs, cleaning costs etc.]Fixed costs are costs that remain unchanged, which does not depend on the volume ofproduction, for example, if in restaurant are served one or more customers, the rentremain fixed. In Carnival Corporation and plc, the fixed cost is the salary for the manager,salary for permanent staff, electricity expenses, insurance, the costs incurred to maintainthe business deals with hotels and airline organisations. (This is a good answer!)Variable cost- This kind of cost is changes according to additional united in producingservices and goods in an effective manner. Expenses can be fluctuated in every month or year. Itis not fixed.For an example-Carnival Corporation is focus on providing memorable as well asunique experience to tourists. The salary wages paid to the staff members are another example of2
variable cost, also we can cite here the food and beverage costs, telephone call charges. Whenthe demand for food increase, the costs of food go up as well.Importance of cost. This is critical for development of an organisation. It plays anecessary role in the failure and success of business. If in case the product cost of given firm willbe higher in comparison to its competitors then in this case, company cannot increase its sales. Ifthe cost of cited firm will be minimum then it can increase its growth and also development. Cost minimization- the cost refers to most necessary factor in a business firm and fromthis it provides the minimization cost in operations as well as business activities and helpful inmaximising profit level in an organisation (Koutra and Edwards, 2012). The cost can bemaximum and minimum which is based on business needs. It is necessary that manager cancontrol cost and manage all financial accounts in a proper manner. Decision making- Cost can be executed in the process of decision making on capitalbudgeting in order to optimise the return on investment.Improving performance of management- Cost is helpful in raising the performance offinancial management and it gives the various cost of all the projects in order to comparefinancial ability of travel and tourism business. Designing of financial structure- A financial structure of a business firm are designed ,managed and also controls with the various kinds of cost in the travel and tourism sector. Volume- Carnival corporation plc provides its effective products and travelling services in allover the world. There are different kinds of techniques and tools which this company used inorder to compute an ideal volumes of travelling packages that develop the more profit like for aninstance break even point, EOQ and many others. Volume refers to the expenses quantity whichdisplays in the monetary term in an organisation. Significance of VolumeBreak even analysis- It refers to the process of evaluating break even point in which abusiness firm covers all the costs which spend on expenses. For the business of travel andtourism sector, it is necessary for firm to measure a break even point in order to perceivecovering period of cost. 3
End of preview
Want to access all the pages? Upload your documents or become a member.
Related Documents
Finance and Funding in the Travel and Tourism Sectorlg...
|17
|3583
|43
Finance and Funding in the Travel and Tourism Sector - Doclg...
|20
|4674
|35
Finance and Funding in Travel and Tourism Sector Assignment - carnival corporationlg...
|20
|4900
|404
Finance and Funding in the Travel and Tourism Sectorlg...
|17
|4459
|96
Finance and Funding in Travel and Tourism Sectorlg...
|17
|5324
|293
(solved)Finance and Funding in Travel and Tourism Sectorlg...
|19
|4388
|299