A Report on Finance and Funding in the Travel and Tourism Sector

This report delves into the financial aspects of the travel and tourism sector, exploring the crucial role of finance and funding in hospitality businesses. It analyzes the importance of costs and volume in financial management, specifically referencing Carnival Corporation and Plc. The report examines various pricing methods used in the sector, such as cost-led, market-led, marginal costing, return on investment, and absorption costing, while also analyzing factors influencing profit for travel and tourism businesses, including seasonal variations, current trends, political and social environments. Furthermore, it explains different types of management accounting information, including forecasting, budgeting, and variance analysis, and assesses their use as decision-making tools, particularly for Dalata Hotel Group plc. The report also includes an interpretation of the financial accounts of Dalata Hotel Group plc and discusses sources and distribution of funding for tourism-related capital projects.

FINANCE AND FUNDING
IN THE TRAVEL AND
TOURISM SECTOR

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P 1.1 Importance of cost and volume in financial management of Carnival Corporation and
Plc................................................................................................................................................3
P 1.2 Analyse pricing methods used in the travel and tourism sector.........................................4
P 1.3 Analyse factors influencing profit for travel and tourism businesses................................5
TASK 2............................................................................................................................................6
P 2.1 Explain different types of management accounting information that could be used in
travel and tourism businesses......................................................................................................6
P 2.2 Assess the use of management accounting information as a decision-making tool..........7
3.1 Interpret financial account of Dalata Hotel Group plc organisation for the year ending 31
December 207 showing at least two year performance..............................................................9
TASK 4..........................................................................................................................................10
4.1 analyse sources and distribution of funding for the development of capital projects
associated with tourism.............................................................................................................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Finance and funding in travel and tourism sector is one of the crucial factor for
hospitalities business in respect to better management of travelling sector of the business. The
assignment will be discussed about the importance of costs and volume in finance management
of Carnival Corporation and Plc and Analyse factors influencing profit for travel and tourism
businesses. In addition to it, different types of management accounting information that could be
used in Dalata Hotel Group plc and utilisation of management accounting information as a
decision-making tools in firm. Beside from it, the report will be discussed about financial
account of the hotel and sources and distribution of funding for the development of capital
projects associated with tourism.
TASK 1
P 1.1 Importance of cost and volume in financial management of Carnival Corporation and Plc.
Importance of Costs: Costs play an essential role in terms of computing profitability and
expenses of the business. Costing of each activity must be added in the financial report of to
examine exact functionalities of the environment (Adora, 2010). Costing is essential for each
business in order to compute their expenses and profitability within business environment in a
respective manner. Various types of costing are associated with travelling business which are as
follows:
Direct costs: Direct costing are those costing which is directly associated with each
operational activities which is being associated with the costing of production. Varied of direct
costing are associated with Carnival Corporation and Plc. Organisation, which could be
administration expenses, depreciation etc. all these issues must be associated with the help of
some areas where something new development can be gained in relevant form.
Indirect costs: Indirect costs are those costing which is concerned with several types of
fixed and variable costing of the business (Eagles, 2014). Within Carnival Corporation and Plc.
Business, multiple types of indirect costing can be for travelling businesses can be, advertising
expenses. Maintenance of business, security expenses, supervision etc. all these exercises convey
wide range of expenses for the firm.
Volume:
Break even analysis: Break even analysis might be utilised by Carnival Corporation and
Plc. Business manager in terms of making comparison of total variable costs to fixed costs for

total sales revenue of enterprise for examining sales volume of the business in industry. With the
assistance of the break even analysis approach, in order to getting desired profitability within
attaining financial goals and objectives properly.
Economies of scale: Economies of scale that can be used by Carnival Corporation and
Plc. Managers in order to reducing costs per unit that arisen from increased total output of
product. So it can assist the business to boosting up production volume of the business and also
lower per unit costing can come up from bulk orders from suppliers (Goswami, Mattoo and Sáez,
eds., 2012). So economies of scales stage gaining is crucial factor for the firm in context of
getting desired profitability and revenue generation of the travelling business. Its managers need
to must maintain economy of scale.
P 1.2 Analyse pricing methods used in the travel and tourism sector
Pricing methods: Various types of pricing methodologies can be utilised by Carnival
Corporation and Plc. Managers in order to ascertaining the profitability level and also generating
high range of revenue from the marketplace in respective form. Pricing approaches must be
utilised by the business managers in terms of accomplishment of desired profitability within the
industry efficiently.
Cost led: Cost lead pricing method must be associated with its several types of travelling,
accommodation and cruise services which is being furnished by the company in industry. Cost
leading pricing method defines that, overall costing and expenses during production and services
phases, must be involved with proper margin of the company so they will be able to gain desired
and targeted profitability within business environment (Harris and Mongiello, 2012).
Market led: Market leading is one of the crucial factors of pricing method which must be
utilised by Carnival Corporation and Plc. Organisational managers within its pricing strategy in
order to gaining competitive advantages in industry (Buckley, 2012). Financial managers of the
firm require to analysed the market leading travelling companies which is accessing the specific
costing for such kinds of accommodation and cruise facilities within business environment
Marginal costing: This types of pricing can be examined by Carnival Corporation and
Plc. Business managers, where the business has been reached to break even point of the firm
(Hughes, 2013). Marginal costing is concluded some essential types of costing which can be,
direct material costs, direct labour costs, direct expense and variable production overhead costing

etc. all these costing must be computed within marginal costing approaches costing system in
context of identifying their proper profitability and losses of the enterprise.
Return on investment: This is also an effective approach of costing examination, which
can be used by Carnival Corporation and Plc. Financial managers in order to measuring
performances of the business that could be utilised to evaluated the efficiency of an investment
or compare the efficiency of a numbers of different investments within the business. The
outcomes of return on investment can be displayed in the form of percentages or ratio.
Absorption costing: Absorption costing can be implemented by Carnival Corporation and
Plc. Managers in order to examining the manufacturing costs are absorbed by the units of
produced (Massidda and Mattana, 2013). It has been seen that, numbers of finished unit in
inventory including the direct materials, direct labour and both variable and fixed manufacturing
overhead costings. All these costing must be included within the business environment with
respect of identifying expenses and profitability of the business efficiently.
P 1.3 Analyse factors influencing profit for travel and tourism businesses
Profit definition: Profitability is one of the crucial factor for each business on which
business major purpose depends on. Each business run their various types of business
functionalities that can be used in terms of gaining a business activity that might be exceeded
towards expenses of the business. Profitability of corporation review about to business growth
and expansion rate effectively.
Seasonal variation: Hospitality industry totally depends upon the variety of seasonal
variations which incur within industry in respective form. It has examined that, in UK, various
types of seasons are occurring in different manner which increase the demands of hospitality
industrial products and services. Most of Summer and Winter seasons make impact upon demand
and profitability of the business in industry (Mingaleva and Bunakov, 2014). In case of Carnival
Corporation and Plc. Business, wide range of demands of its hotel and cruise services are being
increased within the market which boosting up its products and services consumption level in
better manner. So it makes upon profitability of the business positively.
Current trends: Current trends is also critical factor which is affecting profitability level
of Carnival Corporation and Plc. Business within hospitality industry in effective form. From the
analysis, it was identified that, numbers of current trends are being celebrated by populations of
UK. So it increasing using of hotels and cruise services within business environment

respectively. Variety of current trends such as Ring ceremony, Birthday parties, business parties,
political programs, occasional parties etc. so people of nation prefer to selection of hotel places
to celebrating these events. So it increases the demand of accommodation services which is
being furnished by enterprise, which boosting up profitability level of firm.
Political environment: In UK, various types of political trends are being organised
within nation significantly. So political environment of the country also increasing demand of
hospitality industrial products and services in respective form (Morrison, 2013). Political leaders
of state utilised various types of travelling and hotel services within business environment in
respectively, so in this case, its demands of hospitality facilities raise up frequently, which makes
positive impact upon profitability and productivity level of the business in industry.
Social environment: Varied of social factors are also affecting the consumption level of
hotel and travelling facilities. Multiple types of social customers and norms affecting peoples to
utilisation of hospitality industries in respective manner in order to attaining sufficient amount of
profitability within industry efficiently.
TASK 2
P 2.1 Explain different types of management accounting information that could be used in travel
and tourism businesses
Management accounting information: Management accounting information system can
be used by Dalata Hotel Group plc, in order to computing daily transaction which is being
occurred within business environment during furnishing various types of accommodation and
hospitality services within the hotel (Page and Hall, 2014). It assists the hotel manager to gaining
the detailed information about to daily accounting and enables them to proper decision-making
process. It entitles to utilisation for furnishing provision of relevant financial data to manager's
operations to making efforts to making effective decision for the business by which they can
meet their desired financial and organisation objectives perfectly.
Forecasting: All businesses must conduct strategic planning in terms of stating
competitive within industry. It defines about the process of planning of future operation with the
help of forecasting approach, that can give positive benefits for the organisation and also
attaining its desired goals and objectives efficiently. The major goals and objectives of
forecasting approach is that, to following up prediction process to gaining proper outcomes of
the business within industry in perfect form.

Budgeting: The forecasting process of the company allows the business managers to
building a model of the anticipated future revenue figure. After completion of forecasting
process, the budgeting method tends to begin within business environment. Dalata Hotel Group
plc managers need to determine all future expenses which may be incurred within hotel while
furnishing its variety of accommodation and hospitality services within business operations
(Papatheodorou, Rosselló and Xiao, 2010). They must classify their budgeting according to
various operational department such as Human resource management, production management,
operational activities etc. all the departments must be furnished effective budgeting within
business environment in sufficient form.
Variance analysis: This is also an effective approach that can be utilised by Dalata Hotel
Group plc manager in order to identifying the comparison figure between the actual realised
expenses with the budgeting expenses of the business (Novelli, Morgan and Nibigira, 2012).
Variance analysis must be implemented by its professionals upon business operational
functionalities in terms of gaining ascertain proper differences between forecast and actual value
of performance of the enterprise. With help of it, its manager will recognise those areas in which
they are not performing well as per predetermined forecasting values. It involves man-hour,
machine-hour, raw material consumption and production and other input time.
P 2.2 Assess the use of management accounting information as a decision-making tool
Management accounting information tools and mechanisms can be utilised by Dalata
Hotel Group plc organisational manager in order to gaining efficient knowledge which assist
them to making proper decision in case of attaining desired and expected business goals and
objectives.
Investment: With the assistance of management accounting information system, its
manager will be able to identifying those essential factors of the business which can assist them
to recognise proper investment within business environment in effective form (Sharpley and
Telfer, eds., 2014). Corporation manager can identify those factors which is delivering
competitive advantages for business efficiently. Appropriate proportion of investment mus be
made by its various investors by which decision making process can be made easier.
New product and services: New product and services might be developed by utilising
management accounting information system within its functionalities. Various types of
accommodation and hospitality facilities being delivered by Dalata Hotel Group plc organisation,

with the assistance of MAIS, its manager can identify those sections where new hospitality and
accommodation products and services might be developed efficiently. It can assist manager of
the hotel to making appropriate decisions for business growth in industry.
Meeting budget: Budgeting is an approach which is totally based upon forecasting
approaches of the business. The hotel manager can utilised of management accounting
information's varied of tools which can assist them performing the business functionalities as per
predetermined ways (Petković and Pindžo, 2012). So its expected budgeting goals and objectives
might be accomplished perfectly. Professionals of the hotel can distribute budgeting amount
volume to its various operational and functional departments of the business in appropriate
manner, so expected budgeting goals can be achieved.
Current issues and meeting objectives: Hospitality business faced variety of financial
issues in current times because of competitive industry in the business. Various types of issues
are being faced by Dalata Hotel Group plc organisation (Sharpley and Telfer, 2015).
Management accounting information system tool enables its professionals to examining such
barriers which being major cause against attaining desired success of business. Its tools assisting
them to identifying those areas where business is not performing well as per its business criteria,
so they can identify them and make correction within them, so current issues can be addressed
and business manager can reach out to targeted objectives of Dalata Hotel Group plc
organisation in industry efficiently.
TASK 3

3.1 Interpret financial account of Dalata Hotel Group plc organisation for the year ending 31
December 207 showing at least two year performance

Financial accounts of Dalata Hotel Group plc organisation from 2016 to 2017 shows that,
it has performed well within business environment as expected from its performances. The ration
analysis of the business is displaying that, the business has been formed well from its last years
and also has attained desired success in industry. The above index is showing that, earning per
share figures of the business to alternatively performing measures to showing the underlying
performances of the group excluding the tax adjustment effects of revaluation movements,
goodwill impairment, gains on disposals of assets and to be non-recurring or unusual in nature.
So from the analysis, it can be said that, the gross margin % of Dalata Hotel Group plc business
figure in the year 2016 is showing that which ism 62.2 and after one year later 63.2 which is
showing that, within gross profit margin, business has been gained impressive success within it.
Beside from it, operational income figure of the hotel in 2016 year is displaying that, 56 and after
one year later, the volume has reached to 87, which is a good enough values which has been
earned by organisation during one year. So corporation has gained effective growth in
operational income of the bushiness. Earning per share of Dalata Hotel Group plc in year the
figure is showing that, 0.19 and after one year the value has increased and arrived to 0.36 which
defines that, the organisation has gained impressive volume of growth in case of earning per
share figures. Beside from it, book value per share on the year 2016 is showing that, 3.16 and
after one year the figures has increased and reached to 3.55 which is reviewing that, book value
per share developed within good enough values of the business. Which defines that, its
hospitality and accommodation services has reached out to desired development rate which is
expected by the organisation in duration financial year from 2016 to 2017. Apart from it. It also
has examined that, working capital of Dalata Hotel Group plc business in the year 2016 is
reviewing the figure which is, 30 and after one tear it goes under negative figures which is -45,
that is showing that, the business is getting increment into working capital of business which
refer to better performances of the business within hospitality industry from its past year
performances. So it can be said that, from 2016 to 2017, Dalata Hotel Group plc organisation has
gained good enough growth in hospitality industry.
TASK 4
4.1 analyse sources and distribution of funding for the development of capital projects associated
with tourism

Travel and tourism is
emerging industry in UK, it
needs wide range of capital
budgeting for execution of its
business activities within
industry. It has examined that,
numbers of issues are being
faced by the company in terms
of arranging funding for the
development of capital
projection associated with
tourism.
Media and support: Media
and support is also one of the
crucial factors for a Hotel
Group plc in order to
generating high range amount
of money in case of generation
of wide range of money for the
business environment in
sufficient form. Media assist
the business to making
advertising and promoting its
various types of
accommodation and
hospitalities services which is
offering by the business in
marketplace. Media of support
elements of country making
efforts to contribution in terms
of gathering efficient amount
National lottery commission:
National lottery game made of
draw based games in the
country which offering the
organisational sector to getting
efficient volume of money by
playing the lottery games by
organisational players within
the industry. It has examined
that, numbers of lottery games
delivering opportunities for
tourism business to sourcing
sufficient amount of money
through which they can proper
develop the capital projection
of the business effectively.
Non-government
public bodies: Varied of non-
government public bodies are
operating in the UK and
Regional development
fund: Variety of regional
development funds of various
regions of UK, making efforts
to offering contribution-al
funds towards betterment and
improvement of regional
tourism points of the country.
Governance of the nation is
launching various types of
tourism development program
which is gaining proper
funding from regional
government authorities by
which the projections are being
successful efficiently.

of money which making
support to development of
various capital projection
which is associated with
tourism industry of the nation.
arranging sufficient volume of
the money through public
sector bodies which is
functioning various amount of
profitability within the
business environment in
sufficient form. Various non-
government institutions
making contribution to
gathering efficient money to
development of historical and
tourism places within UK
which people prefer most to
exploration.
CONCLUSION
From the analysis, it is concluded that, consideration of financial aspect within the
travelling and tourism sector is one of the crucial factor to be taken into account in order to
reduce the future risks of business. It is also concluded that, crucial factors influencing profit for
travel and tourism businesses of carnival plc and different types of management accounting
information that could be used in Dalata Hotel Group plc. Apart from it, it is concluded that,
varied of sources and distribution of funding for the development of capital projects associated
with tourism.

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