Finance and Funding in Travel and Tourism Sector: A Detailed Analysis

This report provides a comprehensive analysis of financial management within the travel and tourism sector, focusing on Carnival Corporation & plc and Dalata Hotel Group Plc. It examines the importance of costs and volume, various pricing methods like seasonal pricing, marginal costing, and absorption costing, and factors influencing profitability, such as events, seasons, social environments, and current trends. The report also explores management accounting information, including variance analysis, and interprets financial accounts to assess the financial health of the tourism businesses. Finally, it analyzes the sources and distribution of funding for capital projects associated with tourism, providing a detailed overview of the financial aspects of the industry.

FINANCE AND FUNDING IN
THE TRAVEL AND TOURISM
SECTOR

Table of Contents
TASK 1............................................................................................................................................1
P 1.1 Explain the importance of costs and volume in financial management of travel and
tourism businesses using Carnival Corporation & plc organisation......................................1
P 1.2 Analysis of pricing method used in Carnival Corporation & plc organisation.............2
P 1.3 Analyse factors influencing profit for Carnival Corporation & plc business...............4
TASK 2............................................................................................................................................6
P 2.1 Explain different types of management accounting information that could be used in
travel and tourism business....................................................................................................6
P 2.2 Assess the use of management accounting information as a decision-making tool for
Dalata Hotel Group Plc..........................................................................................................8
TASK 3............................................................................................................................................9
P 3.1 Interpret travel and tourism financial accounts.............................................................9
TASK 4..........................................................................................................................................11
P 4.1 Analyse sources and distribution of funding for the development of capital projects
associated with tourism........................................................................................................11
REFERENCES..............................................................................................................................13

INTRODUCTION
In this documentation, this assignment defines about to necessity of various costing and
volume n Carnival Corporation & plc company in order to get proper success in travelling and
tourism sector in the UK sufficiently. Apart from it, this assignment also review about various
pricing methods of the company by which they can increase productivity and profitability of the
business in the industry in relevant form. Moreover, this study also refer to utilisation of different
management accounting information tools and techniques in respect to proper management of
financial system in Dalata Hotel Group Plc firm effectively. This assignment also defines about
interpretation of financial statements of Dalata Hotel Group Plc organisation in order to identify
its growth in the market sufficiently.
TASK 1
P 1.1 Explain the importance of costs and volume in financial management of travel and tourism
businesses using Carnival Corporation & plc organisation
Carnival Corporation & plc organisation is a United State based tourism organisation
which is the world's largest travel leisure organisation effectively. Carnival organisation has been
consisted of tow major components of the company which is Carnival corporation and Carnival
Plc. Its global headquarter is located in Miami, Florid in United State effectively. They are
furnishing several kinds of accommodation services is being furnished by the company around
the world towards travelling and tourism sector efficiently (Vanhove, 2017). Cost is one of the
factor in the company which plays major role in order measure different types of expenses and
costing in the firm effectively.
IMPORTANCE OF COSTS:
Direct cost: Direct cost in Carnival Corporation & plc organisation in those cost which is
directly associated with the all expenses of the company which is furnishing by them in form of
various tourism product and services efficiently. There are some direct costing of the entity
which is administration costs, depreciation costs etc.
Fixed cost: This is the fixed form of cost in the company which never get changed even
volume of production and services increase or decrease efficiently (Swarbrooke and Page,
2012). Fixed costs must be paid by the company on regular basis in order to completion of each
work in the company efficiently.
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Variable cost: These are those costs in the company, which never remain same and get
changed in the company as proportion of production level and service provision level fluctuate in
the company efficiently. This costing totally depends on manufacturing level of products in the
company efficiently.
IMPORTANCE OF VOLUME:
Break even analysis: In case of travel and tourism company, break even analysis is also
major factor in order to computing and assessment of the margin of the entity ground on the
revenue collected and associated with the company which has been gathered by provision of
various types of tourism services. This is the stage of the company in which revenue equal to
expenses in the firm effectively (Swanson, and Edgell Sr, 2013). This is most essential for
Carnival Corporation & plc organisation in order to find out a break even point in which
sufficient profitability can be examined by its professionals in the company effectively.
Economies of scale: This is also most crucial factor for the business in order to gaining
proper analysis of profitability of the business in the industry in relevant form. This is used by
Carnival Corporation & plc organisational professionals in order to cost saving with the
increment in the production level of the company in the industry in effective manner. This might
be used in the business in terms of reducing over costing in the company while furnishing
existing tourism services in the corporation efficiently.
Diseconomies of scale: At this stage, the economies of scale in nor working in the
company properly then it could be used in the company in order to reduction of costing and
volume in the company at economic level in sufficient form (Pike, 2012). This must be used by
Carnival Corporation & plc organisational professionals in respect to determine about working
condition of the entity in the tourism industry efficiently.
P 1.2 Analysis of pricing method used in Carnival Corporation & plc organisation
Pricing method is mos essential factor for Carnival Corporation & plc organisation in
order to ascertain the specific pricing of each product and service of accommodation which is
furnished by the company in industry effectively. Varied types of tourist cruise services are
delivering by the company around the world by its numbers of cruise brand in several countries
all they are implementing various pricing methods the workplace in order to examine efficient
development and profitability of the corporation in the industry in sufficient form.
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Seasonal pricing: Various season has been notices in the country and large number of
tourists are implementing this approach form examining proper pricing at the workplace. This is
defines in several season in which particular volume of tourist arrives in the country for spending
their quality of time effectively (Spenceley, 2012). Carnival Corporation & plc firm need to
make set up particular pricing on their variety of accommodation tourist services in the industry
efficiently for gaining more profitability from the market efficiently.
Marginal costing approach: This also one of the crucial pricing method which can be
used by Carnival Corporation & plc firm's manager in order to examine proper costing of each
product and services effectively. The increasing and decreasing in the total cost of production
run for making on additional unit for an item effectively. This could be used in some specific
situation where the beak even pints occurred in the business. This pricing method is being used
by Holland America Line, effectively in order to identification of costing in the company
efficiently.
Absorption costing approach: This is also important costing measurement approach, in
order to know about to profitability of the company in the industry effectively. In this costing
method all the costing associated to the production and accommodation services provision
process is measure on per unit. This involves of direct costing such as direct material and direct
labour and variable costing as well as effectively in order to examining of profitability of the
business in the industry effectively (NaRanong and NaRanong, 2011). This pricing method is
being utilised by Germany; Cost Cruises Genoa effectively in order to determine their overall
profitability in the industry in effective form.
Discount: This is also a most effective pricing method which is being used by Carnival
Corporation & plc organisation in context of offering attractive discounts towards all
accommodation services which is being provided by the company in the market in effective
form.
Commissions: The commission is used in the company in order to raising orders of their
customers in the firm in effective form. There are various tourist agents are working in the
company and generating more commission from the organisation effectively, so commission
basis also increase profitability of the firm in the market effectively and also increase the
effectiveness in the market in relevant manner.
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P 1.3 Analyse factors influencing profit for Carnival Corporation & plc business
There are numbers of effective factors existing in the industry which is increasing the
profitability and productivity of the company efficiently, Some following factors are:
Events: IN today's world, there are numbers of events are being organised in the
company in order to celebrating various types of occasion on some special days. As per modern
trend, event organisation has become of one of the crucial factor for each people in respect to
celebrate several things on specific day (Murphy, 2013). Events affect the travelling and tourism
business in the market in effective form and multiple numbers of people are going for celebration
events in different-different location. So, Carnival Corporation & plc business and its cruise
brands furnishing impressive event accommodation services around the world at different-
different location in appropriate form.
Seasons: Variety of seasons has been noticed in the UK and this is also one of the vital
elements which affect profitability of travelling and tourism business in the industry effectively.
It has been seen that, people wants to go outside for gaining some experience so that, they
looking for particular unique place for getting relaxation and give peace to mind effectively. So
there are several types of season occurred in the company and volume of customer also
increasing in these days. Most of customer of Carnival Corporation & plc business come on
Winter and Summer times in respect to generation of more profitability in the market in
sufficient form. In peak season, Carnival Corporation & plc firm need to furnishing effective
cruise services some special occasion for getting more customer response in specific days which
being cause of increment in profitability of the business in the market in relevant ways.
Social environment: Social environment is also one of the major factor which attract
most of its customer in special days in the nation effectively. In case of Carnival Corporation &
plc business, variety of cultural people are being survived in the nation and celebrating several
social events as per their social and religious norms effectively. So there are various social
festival in being celebrated by numbers of population of UK in effectively (Lemmetyinen, 2010).
These social events are Wedding program, Marriage ceremony, business and social parties at
different-different locations in various countries in the world. So Carnival Corporation & plc's
variety of cruise brands are delivering effective accommodation services and providing all
necessary things to them in relevant form. So this is also being reasons of increasing in
productivity and profitability of the business in the industry in sufficient form.
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Current trends: Varied of current trends has been occurring in the UK effectively and
people of the country prefer to celebrate their current trends of come special occasion effectively.
So it has been said that, these current trends such as Birthday party. Ring ceremony party,
business meetings and several other politics parties in some special places in the country in
effective manner (Hughes, 2013). So it increasing in sales of various accommodation product
and services which is furnishing by Carnival Corporation & plc business in the industry in
sufficient form. So, it could be said that, there are numbers of factors are presented here which is
being cause of generating more profit from the market from their various cruise brand in the
nation efficiently.
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TASK 2
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P 2.1 Explain different types of management
accounting information that could be used
in travel and tourism business
Management accounting is most vital part for
Dalata Hotel Group Plc organisational manager
in order to getting appropriate information
regarding to business's financial performance in
the industry effectively. There are numbers of
management accounting information gathering
and analysis methods presented here by which
manager of the company can assess proper
performance of the company in the industry in
relevant form. Major issues of the company
might find out by these methods in the
organisation effectively and also figure out
effective solution of cost reduction and
profitability increment in the business entity
efficiently.
Financial statements: Financial statements are
also most vital approach of management
accounting in order to proper gathering of
financial information of Dalata Hotel Group Plc
organisation in the industry in relevant form.
These statements of the firm assist the manager
to examined the financial positioning of the
company in the industry and financial
performance as well. There are in the various
forms in the organisation such as income
statements, balance sheets, statement of
retained earning and cash flows, all these
financial statements are being prepared by
Variance analysis: This is also necessary for the
organisation in order to examined proper
variance between actual performance to
forecasting values of the company in relevant
form. This is useful Dalata Hotel Group Plc
organisation in respect to manager its tourist and
hospitality business in the industry in more
relevant form. This could be effective when
organisational professional could review the
amount of a variance on trend line, so that
effective sudden changes can be identified by
organisational manager in relevant manner. With
the helps of various tools of variance analysis in
the company, the manager of the firm can find
out the difference between its outcome values to
its forecasting values in sufficient form. There
are some variance which is necessary for Dalata
Hotel Group Plc business such as purchase price
variance, labour rate variance, labour overhead
spending variance etc. all these variances
furnishing effective values to the business in
order to figure out monetary differences
efficiently.
Budget reporting: This is also most element of
management accounting which might be utilised
by Dalata Hotel Group Plc organisational manger
in order to provision of proper funding of various
accommodation product and services providing
by the firm towards their customers effectively.
Manager of the corporation formulate budget
reporting as per predetermined approach, in case
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management accounts of the entity and they
provide proper financial performance
information towards the organisational manager
to compare the financial execution of the
company form its previous years and make
proper decision towards removing all monetary
issues of the firm in the industry in relevant
form. Accountant of the firm generate these
statements appropriately at the workplace in
order to record all financial transaction of
Dalata Hotel Group Plc organisation, which has
been made in respect to provision of various
hospitality facilities to their customer
effectively.
of future occurrence of expenses in the company
by provision of several accommodation services
by the company's professionals in relevant ways.
There are numbers of tourism and hospitality
services being provided by the company in the
market effectively and budget reporting assist,
the organisational manger in terms of proper
distribution of funding in the company as per
requirements of different departmental functions
at the workplace efficiently.
Forecasting: This is also one of the major factor
of management accounting, by which Dalata
Hotel Group Plc organisational manager can set
up a standard of the financial performance in
predetermined time period, in this time duration,
they have to perform several kinds of its business
function in terms of generating proper revenue
from the market efficiently. As per forecasting
standard of the business, they need to perform
well each task in the company I sufficient
manner. It's all employees do their task according
to predetermined approach, so its expected
outcomes could be gained within given time
period efficiently.
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P 2.2 Assess the use of management accounting information as a decision-making tool for Dalata
Hotel Group Plc
Each business needs of capital in order to proper investing in a firm in order to start-up an
organisation and also gaining effective profitability sufficiently. There are numbers of management
accounting tools and mechanism presented here, which might assist Dalata Hotel Group Plc
business's manager in order to resolution of all financial issues within the firm effectively. In case
of increment in profitability and productivity of the company, its professionals needs to make
utilisation of management accounting tools properly within the current business scenario
effectively, by this they will be able to accomplish predetermined goals and objectives in the
business in sufficient format.
Payback period: This is most vital term of management accounting in order to examine
cash flows of the company and effectively make control on it. This furnishes some values to the
business professionals about to time duration in which the appropriate profitability of amount need
to be recovered by them in sufficient ways. This approach also provides some essential values
about investment and projection an efficient values to gaining proper profitability and also making
sure that, whether to undertake the project of the company in order to meet to their desired
financial goals and objectives in sufficient manner. This is the method which neglect the time
value of money in the firm.
Discount cash flow: Discount cash flow is a management accounting approach which
could be used by business professionals in order to estimation of the attractiveness of an
investment opportunity effectively. This method provides some effective values about to provision
of future cash flows and discount on some specific projection of the company in the industry
effectively. The present values estimation of the company also furnishing effective values about to
the relevant assessment of the potential of investment in sufficient form in effective manner. From
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the analysis, it has been seen that Dalata Hotel Group Plc organisation has been made wrong
decision in the company which being cause of financial falling in the company effectively. So, its
professionals need to utilisation of discount techniques to control cash flows in the company
effectively which can raise the profitability of the company efficiently.
Accounting rate of return: Accounting rate of return classify the average profit by the
initial investment to get appropriate return on investment in the company in sufficient manner.
This is also approached which does not consider time value of money in the organisation in order
to getting sufficient development in the firm in effective manner. The organisational professional
require to make estimation on some effective sections of the business in which they have been
invested effectively. Then compare its future values to its investment in the company efficiently
which furnishing them sufficient knowledge of the profitability of the firm in the industry
efficiently. All financial transaction of the business must be recorded into accounting books in
relevant format which assist the business manager to examine profitability of the company
sufficiently.
TASK 3
P 3.1 Interpret travel and tourism financial accounts
Dalata Hotel Group Plc organisation's financial performance statement on 31 December 2017
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