Analyzing Finance and Funding in the Travel & Tourism Sector

This report provides an analysis of finance and funding within the travel and tourism sector, focusing on the application of management accounting principles. It highlights the increasing trend of tourism in the UK and the importance of marketing in the domestic tourism sector. The report discusses various management accounting tools such as budgeting, variance analysis, and break-even analysis, emphasizing their role in decision-making for businesses like Merlin Entertainment. It further elaborates on how management accounting information aids in curbing expenses, making product pricing decisions, and implementing activity-based costing. The document concludes by referencing relevant academic articles, providing a comprehensive overview of the financial and managerial aspects of the travel and tourism industry.

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Finance and Funding In
Travel and Tourism
Sector
Task 2

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 Management accounting is the branch of accounting that
deal with the cost of product and service that are produced
at the workplace or made available by the business firm.
By making use of management accounting method cost is
evaluated in many ways.
Management Accounting

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 In future travel and tourism business will increase in the
UK. It can be seen that even nation economy was in
recession mentioned industry was growing at rapid rate.
Global economy is in recovery stage and due to this
reason in upcoming years mentioned industry will
increase at rapid pace. Hence, Merlin entertainment will
get huge benefit of this growth in its business.
Trend of tourism in UK

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 Firms usually spend less on marketing. They commonly
show package values to the people on their websites and
services that they provide to the customers. People who
visit tourist places on domestic land are highly satisfied
from visits they made to the tourist place. Hence, they do
word of mouth marketing about service provided by the
firm and tourist places. Thus, website is the channel of
communication that is commonly used by firms to do
marketing of their product name among the domestic
people.
Trend of marketing in domestic
tourism


Some specific management accounting information’s that can
be used by the business firms for taking business decisions
are as follows:
 Budget
 Variance Analysis
 Break Even Analysis
Different Type Of Management
Accounting Information


 It is the statement that contains an information about the
cash inflow and outflows of the project for a specific time
period. Budget basically reflects the limit within which
expenses must e made in the business so that cost remain
in control of the management.
Budget


 This is another and widely used technique that is used for
making business decisions. In this method actual values of
expenses are compared with the projected value of
expenses. On the basis of comparison it is identified
whether firm performance was good or bad
Variance Analysis


 Break even analysis is the method that reflect that at
specific product price how many units firm needs to sale
in the market so that cost of production get covered. Break
even analysis method helps firm in setting realistic sales
targets for the business.
Break Even Analysis


 Management accounting is the one of the important
discipline that is used by the business firms in making
business decision. Merlin entertainment can make use of
management accounting information in order to make
decisions in easy and effective way.
Management Accounting Information As
A Decision Making Tool


 Curb on elevation of expenses
 Product pricing decisions
 Activity based costing
Management Accounting Information As
A Decision Making Tool


 In today era, main priority of each and every firm is to
control increase in expenses so that maximum profit can
be earned in the business. Management accounting
information is used by the managers to make cost control
related decisions. In order to control expense managers
uses budget
Curb on elevation of expenses


 Decisions related to the product pricing is also taken on
the basis of output given by the break even analysis
method. It is a technique which reflects the sales that
must be made by the firm in order to cover cost of
production. By making change in sales price per unit firm
identify the number of units that it may need to sale to
cover cost of production.
Product Pricing Decisions