Exploring Funding Options for Tourism Development Projects: A Report

This report provides a comprehensive overview of funding sources essential for tourism development projects. It explores both internal and external funding options, with a specific focus on loans, equity, and retained earnings. The report analyzes the advantages and disadvantages of each funding method, considering factors like interest rates, repayment terms, and the impact on company finances. It also discusses the role of financial institutions in providing loans and the importance of collateral. Furthermore, the report delves into the significance of equity financing through the issuance of shares, including the implications of dividend payments and the strategic use of retained earnings for business operations and infrastructure development. This analysis is crucial for understanding how to secure and manage financial resources effectively in the tourism sector.

FINANCE AND FUNDING IN THE TRAVEL AND TOURISM SECTOR
SOURCES IN TOURISM DEVELOPMENT CAPITAL PROJECTS
Company has required funds for not only to run business operation but
also build new infrastructure. For development of infrastructural
company has find out funds sources. Company has two option for
rising funds one is internal fund source and second is external fund
source. For development of capital project some important financial
resource are as follows:
Loan: Loan are external sources of funds. For taking loan firm has
analysis several option available at market place. Many private and
public sector banks are provide loans to an organisation for their capital
appreciation. Company borrowing fund and putting collateral security.
Firm has consider their requirement related to interest rate payment and
accordingly
Loan are two types one is fix interest rate loan and second is variable
interest rate loan. Company has an option to take long term loan and
short term loan. Long term long mean loan those continue for long
time period approx up to 20 years and short term loan mean loan taken
for short period of time approx up to 5 years.
Retain earning: Company has distributing profit margin among their
share holders and their investors. Company has retain this profits some
time and use this for running businesses operations and in
infrastructural.
Equity: Company has generating funds through shares. Company
issue their share to full fill their needs and wants. Through this
activities firm has increase their over all funds. This process are take
time but best way to accumulating funds form market place. In this it
not necessary for firm pay divided amount to their share holders.
Some time company has retain this earring and use for their own
purpose according to rule and regulation.