HND Travel and Tourism: Finance and Funding in Tourism Report

This report delves into the intricacies of finance and funding within the travel and tourism sector. It examines various capital projects such as Tourism Information Points (TIPs), interpretation boards, and infrastructure improvements like pedestrian fingerposts and footpath developments. The report explores different funding sources including equity finance, debt financing, the National Lottery Commission (NLC), and the European Social Fund (ESF). It provides an overview of the advantages and disadvantages of each funding method, offering insights into how these financial mechanisms support and shape the travel and tourism industry. The analysis includes how these financial strategies contribute to the development and sustainability of the tourism sector.

Sources and distribution of funds for capital projects
Various capital projects
Tourism Information Point (TIP)-
TIP is an excellent point which resolves tourists issues up to a high
extent. This means that queries related to destinations can be solved. It is
essentially required as tourists does not about various destinations that are
available in the city. The customer executives assist passengers in resolving
problems and as such, they may roam in the town in effective manner. This
means that executives resolve problem so that customers may be provided with
solutions and they can explore tourist attractions in effective way.
Equity finance-
The finance is raised by issuing of shares to the public so that funds
can be produced in a better way. Shares can be sold to investors and funds can
be attained to do operational tasks. It is useful source as no obligation is raised
to pay to creditors as it is internal generated source of finance. Hence, firm can
effectively use equity finance as they do not have to pay amount to investors
instead dividends are to be paid on profits made.
Advantages
 No obligation to repay funds
 Permanent finance to business
Disadvantages
 Control is diluted as shareholders takes part in management
 High cost of finance in comparison to debt
Small-scale Tourism-
SST is essentially needed so that such tourism may also attract
passengers and achieve higher profits. It implies that grants are provided to
SST for their better upliftment to help them to earn profits quite effectually.
Tourists may explore rural areas and as such, SST may also garner income.
Hence, funds are given to tourism for enhancing overall sector.
Interpretation Boards
The interpretation boards are sign posts
displaying information to passengers or
travellers visiting in the nation. It provides way
to explore sites and as such, more information
can be gathered. The graphic design must be
appropriate so that visitors may easily explore
destinations.
Sources
National Lottery Commission (NLC)-
It is a useful source of finance which is fruitful to
travel and tourism sector as it may be able to perform
operational tasks in a better way. NLC provides protection to
lottery players so that they may be able to play well and
safeguarded from any problems. It is essentially required which
insists on playing fair game and full protection is provided to
them. Furthermore, underage players are prohibited to play so
that they may not land in difficulty. Hence, NLC ensures that
finance is channelized in appropriate manner.
European Social Fund (ESF)-
The ESF is a useful source of obtaining fund. Main
aim of ESF is to impart career opportunities to the workers of
European countries so that they may be able to work well.
Local projects are funded by ESF which crucial part of travel
business is. Better career prospectus is provided to employees
to effectively strengthen European community. Hence, better
allocation of funds are made by ESF which provides good
opportunities to employees.
Pedestrian Fingerposts
The pedestrian fingerposts are helpful for
pedestrians who passes on the road. Network of
fingerposts will be beneficial for the visitors as stations
and car parks can be linked. This will help visitors to
discover the city.
Integrated footpath development and improvement
The footpath development is required so that
pedestrians can walk away. Public can legally travel on
it and improvement is required to be made. The capital
project would require funds so that necessary
improvement can be done.
Non-Public Funding
Debt Financing-
Funds can be generated with the help of getting those from lenders so that operational activities may be achieved in a
better way. Furthermore, indebtedness is found in raising finance from the creditors. This means that firm will have to pay
principal amount and interest as well. Thus, solvency position of business should be strong enough so that it may pay the amount
within stipulated time frame. It is useful as it is not expensive form of raising finance. Hence, firm can use for attaining
operational tasks. Advantages-
 Cheaper source of finance
 No control over the business operations
Disadvantages-
 Principal amount is to be paid along with accrued interest
 In case of default, solvency position is affected.