Sources and Distribution of Funding for Tourism Capital Projects

This report analyzes the sources and distribution of funding for capital projects within the tourism industry, focusing on the UK context. It examines two primary sources: retained earnings and loans, the latter being further categorized into short-term and long-term options. Retained earnings are discussed as a crucial internal funding mechanism for business expansion and emergency reserves. The report details the characteristics of both short-term and long-term loans, highlighting their respective roles in business development and capital enhancement for tourism companies. The analysis emphasizes the significance of loans as an external funding source, crucial for the sustainable development of tourism businesses. It stresses the importance of strategic financial planning to ensure effective allocation of funds within tourism companies, contributing to their overall success and sustainability in the market. The report references academic sources to support its findings.

There are several sources and
distribution of funding for the
development of capital project for
tour and travel companies in the UK.
So for this purpose it is essential that
would helps to make an effective
tourism company (Song and Lin,
2010). There are several sources of
funding that can enable in make sure
an effective tourism company are as
below:
Loans
There are several companies in the
UK provides the loan services to
their clients at various stage. These
facilities are also using by the
various tourism companies in the
UK who develop their business by
investing the loan fund as a capital
in the business and try to make
successful(Weaver, 2011). This is an
external source of funding for the
business to distribute their business
at various stage to appropriate
development in the tourism industry.
Loan can be further classified into
two categories which are short term
and long terms loan facilities
according to the policies of the firm
and rules and regulation of the loan
authorities.
Short terms loan are those fund which
are taken for the short period for
business development and these is
often taken by the small business and
many times' tourism companies also
need to take short terms loan for
development their business and
enhance their services and capital of
the business. These are often taken as
a bank draft form and there interest
rate are in average because it does not
contain large amount so that there are
interest rate is very low according to
the fund volume. On the other hand,
long term loan are often taken by the
big firms and big tourism
organisations to raise their capital in
the business and also distribute them
at the various departments in the firm
for their sustainable development in
the firm. These are often required by
the most of the big business in
tourism sector for their appropriate
development in several sectors of the
business.
Retained earning
Every business earn profit in the
company and make use of it for
the future growth and business
enhancement so that most of the
tourism business mostly use of
their profit part to reinvest in the
business to business expansion
and some amount are used for
retained in the business which
could be demanded in the future
emergency in the business so that
these types of funding
distribution must be there in each
business to make a proper
strategy in order to appropriate
sustain in the market(Vanhove,
2011).
P 4.1 Analyse sources and distribution of funding for the development of capital project associated
with tourism
TASK 4