Financial Decision Making Report: Analyzing Travel Industry Practices

This report examines financial decision-making within the travel industry, focusing on key aspects such as pricing strategies, cost analysis, and business expansion. It begins by discussing the importance of financial decision-making, the role of internal and external financing, and the significance of short, medium, and long-term financing options. The report then delves into cost behavior and its impact on decision-making, followed by an analysis of various pricing strategies, including the rate parity strategy and cancellation policies. Furthermore, it emphasizes the importance of cost-volume-profit (CVP) analysis as a short-term decision-making tool and concludes with a recommendation on the optimal financial strategies for maximizing revenue within the travel sector. The report also provides a list of the references used to support the analysis.

Financial Decision-making
for travel and tourism

Table of content
 Introduction
 Discussion and recommendation of relevant sources of finance
 Appropriate pricing strategies
 Recommendation of appropriate pricing strategies
 Conclusion
 References

Introduction
In today's context financial decision making play's an effective role in
taking decision that are related to the financing mix of different
sources. Its main objective is to maintain optimal capital structure
that appropriate mixture of various sources of funding in order to
ensure trade off between risk and return to its stakeholders.

Discussion and recommendation of relevant
sources of finance
In toady's era one of the hardest part is to start a business is to raise funds
in order to expand business in to new place. Herein, Travelodge are
planning to expand their business in Qatar for such purpose they need
relevant sources of finance in order to become successful in business
expansion.
 Internal source
 External source

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Additionally they can also raise funds from short term, medium term and
long term in expanding their business at new marketplace.
 Shot term financing
 Medium term financing
 Long term financing

Appropriate pricing strategies
Cost behavior is basically an indicator how cost will change into total
when there is change in some activity.
For example: If in an organization, usage of production line is
approaching with its maximum capacity than relevant cost behavior
would be expected to be large. It indicates that incremental demand
demand level increase with a small addition of amount.

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Importance Cost volume and profit (CVP) analysis as short term
decision making tool:
Cost volume profit analysis is a method of cost accounting that
basically looks at the impact that vary levels of cost and volume on
operating profit. It is also know ans break even analysis that usually
determines the sales volume and cost structure which are useful for
manager in taking short term decision-making.

Recommendation of appropriate pricing
strategies
A hospitality industry can acquire variety of pricing strategy while
selling its product or service. Herein, the main aim of a hotel is to
maximise revenue is a top priority and achieving gaol often
requires right pricing strategy at the right time.
 Rate parity strategy
 Cancellation policy

Conclusion
From the above discussion it has been concluded that financial decision-
making process play's a crucial role in taking effective decision
related to financing mix of an organization. As this process is mostly
denoted with borrowing and allocation of funds that are required for
investment decision.

Reference
Gilad and Kliger 2018. Priming the risk attitudes of professionals in
financial decision making. Review of Finance,12(3), pp.567-586.
Brouthers, Brouthers, L.E. and Werner, 2017. Influences on strategic
decision-making in the Dutch financial services industry. Journal of
Management,26(5), pp.863-883.
Hilary, and Hui, 2019. Does religion matter in corporate decision making
in America?. Journal of financial economics,93(3), pp.455-473.