Aim of Unit 2 Finance and Funding in the Travel and Tourism Sector
Travel and tourism sector is run by proper funding and financial support. Thus, the aim of this unit is to make the learners understand costs, profit and volume, information of management accounting and supply of funding in the travel and tourism industry. This also helps the learner to understand the importance of acquiring information regarding cost, profit and volume in the decision-making process of the travel and tourism sector. This unit focuses on the macro and micro level of financial practices to understand the analytical skills for carrying out better decisions. This also helps in better understanding of the financial systems and practices.
On successful completion of this unit a learner will:
1 Understand the importance of costs, volume and profit for management decision making in travel and tourism
2 Understand the use of management accounting information as a decision-making tool in travel and tourism businesses
3 Be able to interpret financial accounts to assist decision making in travel and tourism businesses
4 Understand sources and distribution of funding for public and non-public tourism development.
LO1 Understand the importance of costs, volume and profit for management decision- making in travel and tourism
Decision making plays a major role in better growth of any industry. Therefore, this section sheds light on the importance of costs, volume and profit for carrying out productive decisions. The students will acquire knowledge about direct cost, indirect cost, variable and fixed costs. This section also considers the importance of earning profit by different methods such as cost-plus pricing, market-led, absorption, top-down and marginal costing. This will also provide information regarding the factors influencing profit that include current trends, social environment, seasonal variations, planning and staffing.
LO2Understand the use of management accounting information as a decision-making tool in travel and tourism businesses
In this part, the focus will be given on management accounting information including budgets, financial statements, variance analysis, MIS and forecast. This will also provide information on the current trends, investment, forecasting, raising capital, current issues and new products and services for carrying out better decisions.
LO3 Be able to interpret financial accounts to assist decision-making in travel and tourism businesses
This section will provide information regarding the methods used to understand financial accounts such as cash flows, balance sheet, and profit and loss account of the tour and travel industry. The progress of the industry is analysed by measuring financial accounts. Thus, this section will focus on measuring of different factors such as capital gearing, return on capital employed, acid test ratio, current ratio, creditor’s payment period, debtors’ collection period, net profit per cent, stock turnover ratio and gross profit per cent.
LO4 Understand sources and distribution of funding for public and non-public tourism development
This section provides information regarding financial support for public and non-public tourism sectors. This will help the learners to acquire knowledge about sources of funding such as Department of culture, media and sport, office of deputy prime minister and funding through non-governmental public bodies (NGPB). This also discusses the capital projects that require funding in various aspects such as activities for improvement. Moreover, the learners will also be able to identify the non-public funding that are required for handling the activities of tour and travel industry.
Learning outcomes and assessment criteria
|Learning outcomes On successful completion of this unit a learner will:||Assessment criteria for pass The learner can:|
|LO1 Understand the importance of costs, volume and profit for management decision- making in travel and tourism||explain the importance of costs and volume infinancial management of travel and tourismbusinessesanalyse pricing methods used in the traveland tourism sectoranalyse factors influencing profit for travel andtourism businesses|
|LO2 Understand the use of management accounting information as a decision- making tool in travel and tourism businesses||explain different types of management accounting information that could be used in travel andtourism businessesassess the use of management accountinginformation as a decision-makingtool|
|LO3Beabletointerpretfinancial accounts to assist decision- making in travel andtourism businesses||3.1 interpret travel and tourism financial accounts|
|LO4 Understand sources and distribution of funding for public and non-public tourism development||4.1 analyse sources and distribution of funding for the development of capital projects associated with tourism|
This unit particularly links with:
- Unit 3: The Developing Manager
- Unit 10: Business Health Check.
This unit maps to the following Management NVQ units:
- E1: Manage a budget
- E2: Manage finance for your area of responsibility
- E3: Obtain additional finance for the organization.