UK College: Travel and Tourism Business Toolkit Report Analysis

This report provides a comprehensive analysis of the Travel and Tourism Business Toolkit, focusing on various aspects crucial for success in the industry. It begins with an introduction to travel and tourism, using British Airways (BA) as a case study. Part 1 delves into the key principles of revenue management, including market segmentation, forecasting, and overbooking, along with the application of revenue management tools and the impact of differentiated pricing. Part 2, though summarized as being covered in a PPT, likely discusses the management of the Human Resources (HR) lifecycle within the context of HR strategy. Part 3 examines the potential impact of legal and ethical considerations, including regulations, legislations, and standards, on business decisions within the airline industry, with specific examples from the Civil Aviation Act and other relevant laws. Finally, Part 4 covers managing budgets and maintaining statistical and financial records, including different types of financial statements like income statements and balance sheets. The report offers a complete overview of the business tools essential for travel and tourism.

The Travel and Tourism
Business Toolkit

Table of Contents
INTRODUCTION...........................................................................................................................3
PART 1............................................................................................................................................3
Key Principles of revenue management for industry.............................................................3
PART 2............................................................................................................................................5
Managing Human Resources (HR) life cycle within context of HR strategy........................5
PART 3............................................................................................................................................6
Potential impact of legal and ethical considerations on business...........................................6
PART 4............................................................................................................................................8
Managing Budgets and maintaining statistical and financial records....................................8
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Travel and tourism is defined as large commercial industry whose aim is to make profit.
Such organisation contribute large amount of money in economic development of nation. There
are number of travel and tourism enterprise running in market (Bayliss and et. al., 2014) . It is
very important to develop such industry in good manner in order to fulfils needs and requirement
of tourist. The given assignment is based on British Airways (BA) which was founded in 1974 at
London Heathrow Airport. It is largest airline having two airport hubs at Heathrow and Gatwick
airport and consists of 183 destinations. The reports covers about principles of revenue
management for travel and tourism along with management of Human Resources (HR) life cycle
with context of strategy. It also discuss about potential impact of legal, ethical considerations and
managing budgets, maintaining statistical and financial records.
PART 1
Key Principles of revenue management for industry
Revenue Management
It is the application of disciplined analytics which predicts behaviour of consumer at
micro level of markets and optimising availability of products and maximizing revenue. This
assists in predicting demand for optimising stocks and availability of price for maximizing
revenue growth.
Yield Management

It is pricing strategy which is based on anticipating, understanding and influencing
behaviour of consumer for maximizing profits or revenue from fixed and time limited resources
like hotel room reservations, airline seats, advertising.
Rationale and Principles of Revenue Management
The rationale of revenue management are as follows:
 It helps in innovation for creation of new goods and services and pricing.
 It aids in maintaining balance among revenue managers, general managers and hospitality
managers.
 This helps in reducing cost and times associated with traditional pricing tactics.
There are various principle of revenue management in travel and tourism industry are as
follows:
Market Segmentation- Customers are classified into qualified and non-qualifies. The
segmentation is based on attributes of consumers which helps in maximizing revenues. As per
segmentation of people, revenue is generated by British Airway which helps in maximizing sales
and profits (Budeanu and et. al., 2016) .
Historical Demand and Booking Patterns- This principle means travel and tourism
industry can assume demand from historical data and accordingly plan their booking pattern. If
customers are provided with all required facilities then they have high chances to earn more
revenue and sustain growth.
Demand Forecast and Displacement Analysis- Demand forecasting impacts on revenue
of hotels. The hospitality industry assume themselves regarding demand of customers occupancy
for future date. If their assumption is accurate then high revenue can be earned and similarly if
assumption fails then profit margins decline.
Overbooking- It means selling more reservations beyond their total capacity. Such
process can be effective when cancellations are made by customers. Main reason behind it is to
encourage overbooking level for maximizing revenue and minimizing risk of refused service.
Information Systems-
Revenue Management Tools

The using of such tools helps in maximizing and generating profits. It should be applied
by airline industry in order to work effectively and earn profits. Some of revenue management
tools are described below such as:
Capacity Utilisation- There are fixed number of capacity in flights which need to be
utilised properly by British Airway for revenue generation. According to capacity, reservation
should be done so that customers can get all required facilities. For example, if BA has capacity
of 60 passengers in flights then they should carry only 60 with them which is called capacity
utilisation.
Discount Allocation- British Airways should use this tools for providing discounts to
their guest who avail their service. Discount is provided on booking of air tickets to their regular
as well as rare user in order to feel them good (Chang, Backman and Chih Huang, 2014). It can
be done on off seasons so that people can plan for their visiting to other place. The main purpose
is encouraging up-selling and protecting airway tickets to sell more.
Duration Control- British Airways can refuse request of reservation made by user for
one day and accept those request who have made multiple flights from one destination to
another. This helps in earning maximum revenue by industry and encourage customers for
various destination. It is duty of manager to control duration of their services provided to user.
Impact of differentiated pricing strategies on revenue management
Differentiated pricing strategies means different prices in market which is based on
various factors such as external environment, geography. The differentiated pricing strategies on
revenue management has impacted on both positive and negative way. The pro impacts can be
targeting large market, increasing revenue and low pressure on production. The cons impacts can
be discrimination and decreasing brand value.
Principle of revenue management
Forecasting – With the help of revenue management forecast of revenue of British
Airways regarding to future perspectives.
Monitor – The principle of monitor helps to maintain all records and information in
systematic way for achieve success.
Control – In this principle control all activities relating cost, analysis of best available
rate, overbooking, last seat value and group pricing.
Application of revenue management

Market Segmentation – According to this airline customers can be categorised in two
parts qualified and non qualified.
Demand forecasting and supply forecasting – Demand forecasting extremely influence
on revenue of British airways (Cohen, 2017).
PART 2
Managing Human Resources (HR) life cycle within context of HR strategy
Covered in PPT
PART 3
Potential impact of legal and ethical considerations on business
Potential impact of the legal and ethical framework
on British airways
Regulations are set of rules which is made by UK government and other authority in the order
to control various activities which is behave by different people. Legislation is law which has
been enacted by a legislature or other governing body or the process of making it. A Standard is
a level of quality or achievement and it is also agreed way of doing something. It can make
more successful of any organization to provide life easier. Regulations, legislations and
standards are part of law because legislation is a directive proposed by legislative body but
regulation are based on special legislations. These all based on rules and regulations which are
decided by UK government in the manner of attain success. These are remaining in legal
boundaries and apply by British Airways to keep ongoing for future growth because it help to
find out a particular way regarding to future perspective. Legislation, regulation and standard
must be inclusive with each other they are connected. They are related to each other and
applying in an organisation in systematic way. If in a company legislation applied in right way
but standard is not good so it is not beneficial for a company and create problem for growth.
Legislation law in the airline industry
 Civil Aviation Act 1982 – It is the act of up to date with all changes which is known
before 26 January 2019. There changes are brought out many forces at a future date.
 Civil Aviation Authority regulations 1991
 Air carrier liability (No 2) Regulations 2009 – Statutory instrument No 41 2009

 Operation of air services in the community regulations 2009 – Statuary instrument no 41
2009
 Civil Aviation Act 2006
Employment and contract law has a potential impact on business decision making in the
airline industry
A contract of employment is an agreement between an employer and employee and it will
depend on the relationship with employment. These contacts are in writing and based on legal
rules and regulations. The contract will be verify by both parties and it is better for them. There
are various rules and regulations which is followed in contract and included in written.
 Minimum wages act, 1998 – According to this act airline industry can hire some
employees have to pay at least the selected amount. It airline industry can not do it so it
will create a problem regarding to legal activities. If British airways applied this act but
can not follow all rules according to law so they have to paid high charges. If Airways
properly follow all rules and regulations so they have attracted many employees for job
as well as it will show effect on customer as a good services.
 Contract Act, 1990 – It is a contract which is based on different business entities. In this
company have to follow the all rules and regulations according to contract deed. If
British airways can not follow every step of act so it will create many legal issues and
also affect to reputation of British airways.
Potential implications of regulations, legislation and standards
These all are important for Airline industry for sunning business smoothly and their decision are
made by people rather than organisations. The decision on the basis of structures, objectives,
culture, systems and incentives. The focus of affecting compliance with laws should therefore
can be affect to behaviour of individuals as well as environment of an organisation.
 Trade description act, 1968 – In this act an organisation provide all information
according to requirement of customer. They can not mislead about their products and
services and giving authentic sites which are running all time. In British airways take
care their customers in effective manner and provide all those information which they
want. It is beneficial for airline because it will affect to image of airline and attract more
customer.
 Consumer protection act, 1987 – According to this act, an organisation can follow set

of rules relating to pricing strategies. This act will work when particular organisation
can provide wrong information to their customer and take much more amount for their
services. So customer can use this act for their right and in British airways have made
pricing strategies according to different customers, sectors. It will help to keep them safe
in the reference of legal problems of pricing of products and strategies.
Potential impacts of regulations, legislations and ethical principles
Regulations, legislations and ethical principles are impact on decision making process in British
airways. These all are interrelated to each other because principles are set according to al rules
and regulations. It will follow by airline to achieve success and for long time survive in airline
sector.
PART 4
Managing Budgets and maintaining statistical and financial records
Different types of financial statements
Financial statements are provided whole picture of a company to shows their
performance in front of manager and owners of the company. These documents are used by
creditors, lenders and management for determine an entity of business.
Income Statement – It is a part of financial statements which is defined financial
performance of an organization. It will start from sales after then less all expenses and get net
profit or loss. It is issued by a public held company and focused on most important financial
statements for showing performance (DeLacy and et. al., 2014).
Balance sheet – It is very important part of financial statement because it shows financial
position of business of particular time period. The information are aggregated into the general
classification of assets.
Statement of cash flows – This reports shows cash in flow and cash outflow of an
organization during the reporting period. These cash flows are categorised into three parts –
Operating activities, financial activities and investing activities.
Statement of changes in equity – This report shows all changes in equity during to
reporting time period. In these changes including issued of dividends, purchase of shares and
profit or losses.

The importance and value of budgets
A budget is an estimation of revenues and expenses in a particular time period. It is a
process of pre plan for spending money. It is important for British airways and their value help to
fulfil requirement of company. There is mentioned importance of budget -
 Stop spending so much – It will help to discovered about money and where it is going.
Without a budget a company can not getting detailed report about money where is cash in
flow and where is cash out flow. It will help to track everything in systematic way.
 It will help to prepare for emergencies like get laid off, serious financial turmoil and
become sick and injured (Du Cros and McKercher, 2014) .
 It helps to keep eye on the values of money
Interpretation of financial statements and reports
There is interpreted of financial statements of British Airways, there is profit before tax
from income statements is 1744, after deducting tax remaining amount is 1403 and there is
Calculations of ratios
Net profit ratio – Net Profit/Net sales*100
Profitability ratio 2017
Net profit 1403
Net sales 12226
0.11
Gross profit ratio = Gross profit/Net sales*100
Profitability ratio 2017
Gross profit 1774
Net sales 12226
0.15
Return on equity = Net income/Shareholders equity
Profitability ratio 2017

Net income 1403
Shareholder's equity 5774
0.24
Current ratio = Current assets/current liabilities
Liquidity ratio 2017
Current assets 4518
Current liabilities 5468
0.82
Quick ratio = Quick assets/Current liabilities
Liquidity ratio 2017
Quick assets 3752
Quick liabilities 5468
0.68
Asset turn over = Cost of goods sold/Total assets
Efficiency ratio 2017
Cost of goods sold 17326
Total assets 16678
1.04
Inventory turn over = Net sales/Inventory
Efficiency ratio 2017
Net sales 12226
Inventory 766

15.96
Debt to equity ratio = Total long term debts/Shareholders fund
Financial ratio 2017
Total equities 5974
Total liabilities 16678
0.36
Earning per share = Net profit after tax & preference dividend/No of equity shares
Investing ratio 2017
Net profit after tax & preference dividend 1403
No of equity shares 5974
0.23
Compare financial performance against strategic targets and objectives
After analysis of ratio analysis it is determine that there is strategies targets for each items
is different and their objectives to fulfil its requirement. According to strategic targets operating
costs in 2017 was 7915 million, Revenue 1226 million and financial performance according
profit after tax 1447 so it will better 5.7% in compare to 2016. After comparing it is getting that
in 2017 all results are improve compare than to 2016 and all strategy are working in proper way
and fulfil all requirements (Höpken and et. al., 2015).
CONCLUSION
As per the above report it has been concluded that Tour and travel business toolkit it
important to show performance of business. There is shows all principles which is related to
revenue management. In revenue management arrange all expenses and revues of all
departments in order to get actual revenues. Legal and ethical consideration are shows impact on
company and mange budgets in statical and non statical records.

REFERENCES
Books and journal
Bayliss, J. and et. al., 2014. The current and future value of nature-based tourism in the Eastern
Arc Mountains of Tanzania. Ecosystem Services. 8. pp.75-83.
Budeanu, A. and et. al., 2016. Sustainable tourism, progress, challenges and opportunities: an
introduction.
Chang, L. L., F. Backman, K. and Chih Huang, Y., 2014. Creative tourism: a preliminary
examination of creative tourists’ motivation, experience, perceived value and revisit
intention. International Journal of Culture, Tourism and Hospitality Research. 8(4).
pp.401-419.
Cohen, S., 2017. Decline, renewal and the city in popular music culture: Beyond the Beatles.
Routledge.
DeLacy, T. and et. al., 2014. Green growth and travelism: Concept, policy and practice for
sustainable tourism. Routledge.
Du Cros, H. and McKercher, B., 2014. Cultural tourism. Routledge.
Höpken, W. and et. al., 2015. Business intelligence for cross-process knowledge extraction at
tourism destinations. Information Technology & Tourism. 15(2). pp.101-130.
Hunt, C. A. And et. al., 2015. Can ecotourism deliver real economic, social, and environmental
benefits? A study of the Osa Peninsula, Costa Rica. Journal of Sustainable Tourism.
23(3). pp.339-357.
Lamsfus, C. and et. al., 2015. Going mobile: Defining context for on-the-go travelers. Journal of
Travel Research. 54(6). pp.691-701.