Financial Decision Making for Travel and Tourism: Kuoni Case Study

This report provides a detailed analysis of Kuoni Travel's financial decision-making processes, focusing on its expansion plans within the travel and tourism industry. It begins with an overview of Kuoni Travel, highlighting its services and market position. The report then delves into the company's expansion strategy, including potential growth through in-store service enhancements, online platform development, and extending holiday offerings to new destinations. A crucial aspect of the report is the market research analysis, examining consumer behavior and trends to inform decision-making. It also explores various sources of funding available to Kuoni Travel, such as operating with financiers, crowd funding, and debt-based financing. Furthermore, the report explains the application of cost-volume-profit (CVP) analysis as a decision-making tool, assessing the benefits and costs associated with the expansion plan. The discussion includes the potential for increased sales, job creation, and access to new markets, while also acknowledging the risks of declining quality, employee turnover, and financial challenges. Finally, the report recommends suitable pricing strategies for the company to maximize profitability and adapt to market dynamics. The report concludes with a comprehensive understanding of the financial intricacies of business expansion within the travel and tourism sector.

Running head: FINANCIAL DECISION MAKING FOR TRAVEL AND TOURISM
Financial Decision Making for travel and tourism
University Name
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Introduction (Profile of the company)
Kuoni Travel can be considered as one of the largest travel and tourism association,
functioning different services counting charter along with scheduled passenger airlines,
holiday packages, different cruise lines along with hotels. The delivery of support, protection
as well as expertise by the company can help in gaining confidence in Kuoni Travel along
with a strong level of trust on members. Essentially, these qualities can be considered to be
central part since they make certain that this remain confident in the experiences they provide
in holidays as well as travel experiences. In addition to this, members of this firm manage
fantastic experiences for millions of travellers. Again after knowing the plans of holidays of
the travellers individuals can relax since travellers can expect higher standards from
members. Also, the company Kuoni Travel can offer expert advice and help to all the
holidaymakers as they work with other destinations world and people working in the
company are aware about what’s happening all around the world (KuoniTravelUK 2018).
The current study elucidates in detail regarding relevant sources of funds along with results of
elaborate market research as regards expansion plans for facilitating process of decision
making. In addition to this, explanation of behaviour utilizing cost volume profit analysis as a
decision-making instrument along with discussion and recommendation of fitting strategies
that is available within the corporation.
Description of the expansion plan of the firm
The company is one of the leading providers of travel services and this company is ready to
take people all around the world. The professionals are the personal travel experts that
provide customized travel plans. There are various stores for booking appointment, service of
travel experts and handling enquiry (this entails listening to travel plans of the customers and
providing advice regarding the same). Various holiday offers that are already in place include

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beach holidays, honeymoon services, tailor made holidays, small group escorted tours, cruise,
first as well as business class and John Lewis travel partner (KuoniTravelUK 2018).
Expansion Plan:
- Management of the firm Kuoni Travel might possibly consider expansion of the in-
store service. Presently, the company possesses around 50 stores throughout the UK
(KuoniTravelUK 2018). In this case, the management of the firm might probably
consider enhancement of the total number of stores and at the same time establish
online support to travellers. For this, the company might consider institution of online
platforms in addition to brick and mortar physical stores (Robinson et al. 2016).
- Management of the firm Kuoni Travel might probably consider extension of the entire
ranges of the holidays offered by the company. As per the reports of the firm, the
corporation offers holidays to around 90 destinations (KuoniTravelUK 2018).
Essentially, the management of the firm can enhance the number of destinations and
go for international expansion (Veal 2017).
Market Research
Analysis of market is vital for tackling plans for expansion. As per survey on behaviour of
consumers, individuals aged between 18 years and 24 years and individuals over and above
the age of 55 years are extremely positive regarding their plans of holidays. Again, number
volumes for international passengers remained at the levels of 2004 in the year 2011. as per
report, the wish list of the Prime minister of the nation include making Britain one of the top
destinations for travelling in the entire world in terms of revenue from inbound tourism and
to lift the entire fraction of what British individuals expend on holiday in the UK to
approximately 50%. To augment business travel, ministers are also committed to building a
high speed rail linkage between some doorway cities whilst assuring to deal with the

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inadequacy of airport facility in the South East of England. According to the report, travel
and tourism group in UK advises clients on present challenges along with opportunities in
specifically travel as well as tourism segment (Mowforth and Munt 2015). Therefore, there
are alterations in strategy, tackling diverse regulators, managing costs of individuals,
restructuring along with refinancing debt, issues associated to security, altering trends of
consumers, issues of tax, sustainability, corporate social responsibility, risk assurance
requirements as well as auditing services (Cárdenas-García et al. 2015).
Discussion and recommendation of pertinent sources of Kuoni Travel
Options for the purpose of financing as management of a firm intends to expand business are
necessarily vast but can possibly fall into one of the three categories:
Operating with financiers:
Based on business size as well as scope of expansion schemes, management can opt for
seeking out venture capital financing, or operate with a private or else angel financier to
finance process of expansion. Financiers can prove to be highly beneficial to various
enhancing small businesses as they offer insights and understanding regarding expansion of
business (Chiu and Yeh 2017). Nevertheless, operating with a financier implies that
sacrificing equity of a business and financier might possibly insist on various ways of
carrying out things that do not match the schemes.
Crowd funding:
In case if there is a dependable network of clientele, who are excited about plans of
expansion can judge whether crowd funding some of the extension arrangements by means of
a platform is feasible. In case if loyal clients are provided a sense of ownership for the
specific brand, then these types of excited micro-financiers can play the role of brand

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ambassadors, assisting to create buzz as regards new location or expanded business model
within the social networks (Baum 2016).
Financing based on debt:
In the end, there are several owners of business that can think about selection of funds for
expansion arrangements of the business by means of little business loans either from a
conventional bank or from an substitute lender (Horner and Swarbrooke 2016). The choice
for debt based expansion financing can be considered to be vast as for need of any other
requirements of business. In case if majority of the expenditures of the firm associated to
expansion will be for buying instruments, namely, computers, manufacturing instruments else
wise commercial kitchen appliances-equipment financing can be regarded to be a suitable for
the needs.
Conduction of market research regarding expansion plan for facilitating decision
making
Market research can assist in the process of appearing at accurate as well as specific
information as regards customers along with competitors that is necessarily a vital part of
expansion of business. The demands of consumers influence and direct different aspects of
actions of business and can ascertain overall success as well as failure of the business. This
market research can aid in the process of better comprehension of different characteristics
along with preference of the travellers, identification of opportunities to enhance sales and
develop the business (Giap et al. 2016). This can help in checking the competition level in the
market, lessen the level of risk in business decisions and develop and complete plans of
business.

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Explanation of behaviour using cost volume profit (CVP) analysis
Cost volume profit (CVP) analysis is essentially a managerial accounting technique and a
decision making instrument that is concerned with influence of volume of sales and costs of
products on particularly operating profit of a specific business (Xiang et al. 2015). The
explanation of behaviour can be analysed using this technique of CVP analysis.
Benefits of expansion plan of Kuoni Travel:
- As per report presented by VisitBritain, the largest share of the present “grey tourism”
markets is mainly British ex-pats. There is a positive perception among people aged
over 55 years and that is evident from the result that around 5.4 million of over and
above the age of 55 visited Britain from foreign lands. Therefore, expansion plans can
help in increasing the sales figure of the firm as the number of visits to the UK has
increased (Wild et al. 2014). Overseas visitors also have the intention to see different
landmarks of Britain and they ever more wanted to leave the crowds.
- According to the reports presented on tourism and travel, tourism expansion through
introduction of new stores can increase jobs and it is witnessed in UK that one person
out of 10 is employed in diverse tourism associated jobs. In this regard, it can be said
that tourism delivers an incredible boost to the community. In essence, an augmenting
number of travellers are also likely to visit destinations and undertake purchases from
diverse travel corporations founded on different sustainable exercises (Armstrong et
al. 2015).
- International expansion can deliver several advantages, counting greater opportunities
for attainment of growth as well as diversification. Management of the Kuoni Travel
might attain the advantages of international business expansion that include
acquirement of new market (Warren 2017). Thus, it can be said that international

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expansion plan by the company Kuoni Travels can help in conquering several new
territories and reach higher number of clients, thereby enhancing sales.
- Business expansion of Kuoni Travel globally for the purpose of diversification of
assets can shield bottom line of the corporation against various unforeseen incidents
(Zhang and Warner 2017). For instance, expansion plan for international operation
and functions can help in offsetting different negative growth in specific markets for
introduction of exclusive products along with services and this can aid in maintenance
of positive stream of revenue.
- Another advantage of international expansion is the benefit of attainment of access to
various new pools of talents. In case of Kuoni Travel, transnational labour can deliver
corporations exclusive advantages in terms of enhanced productivity, attainment of
the skills of proficiency in language, different educational backgrounds and many
others (Luong and Sierra 2015).
- Establishment of online platform besides already existent physical stores can help in
lessening overall influence of geographic barriers, supporting new and simultaneously
diverse business types, online platforms changing the structures of costs of the
business
Costs of expansion plan of Kuoni Travel:
- Business expansion plan of the company Kuoni Travel also direct the way towards
rapid rate of growth that can consequently lead to declining quality (Ward 2016). In
case of expansion of business operations of Kuoni Travel by means of establishment
of more number of stores in and outside UK along with establishment of online
platform can positively affect level of productivity. However, overall quality of the
corporation tends to drop off with overall increase in delivery of firm’s offerings.

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- Expansion plan of the corporation Kuoni Travel can also affect the turnover of
employees (Grant 2016). Essentially, training along with system of hiring becomes
increasingly vital with expansion of operations of firm as several skills of employees
do not necessarily develop with the corporation.
- Furthermore, management can also take into consideration financial challenges
associated to business expansion. Essentially, expansion plan taking into account
institution of new stores opening up in new and more number of destinations together
with usage of online platform can call for the need of major financial investments.
However this can turn sour in case if a corporation cannot maintain and keep up with
ensuing necessities (Grant 2016). Nevertheless, firm’s poor level of sales also plague
individual stores of the corporation and this struggled for repayment of loans of the
corporation.
- In addition to this, business expansion can call for the need of surviving the transition
once the corporation outgrows original engagement. This is when the company tends
to lose control over the operations of the firm (Baum 2016). Again, after many years
of spectacular growth, revenue of the corporation gets stalled and requires loans for
shoring up finances of the firm.
Discussion and recommendation of suitable pricing strategies that is available within
the firm
The corporation need to have appropriate pricing strategy that permits to sell products and
earn profits. Essentially, pricing methods cannot be taken lightly and need to be adapted to
the specific position in the identified market, mindset of target customers and nature and
degree of competition. Reports declared by the corporation Kuoni Travel reflect that the
company has shifted strategies of marketing for instituting itself as a premium holiday
destination. The company has already positioned itself as a premium brand in the market.

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- Management of the firm can take into account setting an appropriate pricing strategy
that can help in covering the costs of entering into a new market or else moving into a
new geography, starting new stores in old destinations and starting new stores in new
destinations (Xiang et al. 2015)
- Management of the corporation can set a specific price known as premium pricing for
its business. This can help the company Kuoni Travel to replicate that they are
introducing a specific product that has distinct competitive benefit over similar
products (Xiang et al. 2015). With the focus of Kuoni on personalization of holidays,
investment in digital presence of the company, novel online design of the company,
the management of the company can completely change the strategy of marketing to
position the same as a premium holiday destination. This is why it can charge
premium prices for its offerings.
- Penetration pricing indicates towards establishing a low price for the purpose of
entering a new and competitive market and thereafter it increases the same (Wild et
al. 2014). This pricing strategy can help the company as the business of Kuoni Travel
is looking for expansion of business in several new markets and therefore there is
need for the company to establish in the market place first. However, for the purpose
of expansion in the international destination Kuoni Travel can set this strategy for
acquiring greater share of the market.
Conclusion
The above mentioned study helps in gaining deep understanding regarding plans of expansion
of the travel and tourism company Kuoni Travel, pertinent sources of finances for satisfying
the plan and requisite arrangements of the firm. In addition to this, the study elucidates in
detail outcomes of elaborate market research as regards expansion plans for facilitating
process of decision making. Moving further, the study also explains behaviour utilizing cost

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volume profit analysis as a decision-making mechanism. Fundamentally, the CVP analysis
also helps in deduction of the costs along with the benefits involved in the project of
expansion of the business. As such, this section outlines the analysis that reflects that the
benefits of the expansion arrangement outweigh the limitations and can be considered to be a
feasible one. In addition to this, the current study also presents discussion together with
recommendation of suitable stratagems particularly pricing that are available within the
corporation.

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