Funding and Finance in the Travel Tourism Sector: A Detailed Report

This report examines the various sources of funding available for the travel and tourism sector, focusing on how companies like the Dalata Hotel Group can secure financial resources. It explores options such as equity capital, debentures, debt collection, public finance, retained profits, venture capital, and owner's investment. The report highlights the significance of equity shares, allowing companies to raise capital by issuing shares to the public. It also details how debentures function as a debt instrument, and how public finance and retained profits contribute to financial stability. The report underscores the importance of effective fund management and the role of venture capital in supporting business growth. Furthermore, it emphasizes the importance of debt collection and owner's investment as significant financial resources for the travel and tourism sector.

From
Organisations engaged in hospitality sector such as Dalata
group can raise their funds by investing in equity capital or
loan capital.
 Debenture – Debenture is a type of debt instrument
which allows an organisation to issue debenture as a
type of loan to the public. Against debenture, interest
is paid by the organisation.
 Equity share: It is main source of funds for an
organisation providing an opprotuni9ty to investors to
vote, share profits and claim on assets. There are
different types of equity capital such as authorized,
issued, subscribed, paid up, rights, bonus etc.
Therefore, Dalata Hotel Group can raise their funds
through issuing shares to general public in return of
which dividends has been paid to them out of total
profits.
 Debt collection: It is another source of finance from
which the company can raise through recovering
unpaid amount from their debtors. Debtors are the one
who made transactions with the company in exchange
of monetary payment. Due to having good credit
policies, Dalata hotel group are enable to collect funds
from debtors on certain time period.
 Owner's investment: Owner's capital is the capital
which are brought by owners at the time of starting
business in successful manner. Such sources of raising
funds reflect the stakes of business which shows
capital assets owned by an organisation. Dalata Hotel
Group can acquire funds from such source as well.
Funds are the financial resources usually money which is
sourced by various resources. These funds are distributed
among business operations. In order to source funds for
hospitality sector, few sources are listed below:
Capital projects – According to this source of funding, funds
are acquired by capital projects in which a large amount is
invested. This source is considered as the most efficient for
fund raising especially in this industry as it allows to procure a
lot of capital from one source. Examples of these sources are
land acquisition, technological equipment’s etc.
Public finance – Under this source, funds are sourced by
public as a form debt. Major drawback in this method is that
organisation has to comply various legal requirements of
governmental authorities
Retained profit: This is the portion of profit which are kept by
company for future period in order to deal with future
insolvency. It ensures company to have funds which can be
kept to pay dividends to their shareholders.
Venture capital – Venture capital is a form of private equity
which helps a company in obtaining funds.
Finance and Funding in the Travel Tourism Sector
SOURCE AND DISTRIBUTION OF FUNDING FOR DEVELOPMENT OF PROJECT