Travel Reference
In-Depth Information
Once a company is established, income from sales is
vital for a company to have a healthy cash fl ow and
to be able to trade profi tably. Where a company has
shareholders, there needs to be suffi cient profi ts
generated to be able to pay a reasonable dividend.
Weblink
Check out this website for more
information on sources of fi nance for
businesses.
www.businesslink.gov.uk
Activity 2.4
Supplying products and services
Choose one of the major banks and fi nd out what
services it provides to business start-ups, including
the range of business support, types of accounts,
loans, overdrafts and commercial mortgages.
Travel and tourism organisations supply a wide range
of products and services - from package holidays and
short breaks to tourist attractions and car hire. Products
and services are produced to meet a known demand, or
at least the expectation that a demand exists or can be
created. For example, millions or British people choose
to visit Spain for their holidays every year. To satisfy this
demand, many tour operators, airlines, car hire fi rms,
coach companies, hoteliers, tourist attractions, taxi
operators, etc. offer products and services in order to
make a profi t.
This activity is designed to provide evidence for P2.
Public sector travel and tourism organisations, such as
the National Tourist Boards and local authority tourism
departments, are fi nanced from public sources,
including central government, local Council Taxes and
grants from the European Union (EU).
Most products and services are supplied direct to
customers, e.g. a passenger books a flight direct with
a low-cost airline using the internet. Some travel and
tourism organisations sell their products and services to
other companies, who then sell them on to the general
public. Many tour operators, for example, use travel
agents to sell their holidays. Also, accommodation
providers and transport companies, such as airlines, train
companies and ferry operators, sell accommodation
and tickets to coach companies and tour operators at
discounted rates - they then use these to develop their
own holidays which include accommodation and travel.
These arrangements are known as trade sales. Some
travel and tourism organisations also supply products
and services to government agencies, such as tourist
boards and tourist information centres.
Non-profi t making organisations in travel and tourism
often have charitable status, since they aim to promote
a cause or help individuals rather than make a profi t.
There are fi nancial benefi ts to being registered as
a charity, such as exemption from certain types of
taxation and reductions in business rates. Whether a
voluntary body is very large, as is the case with the
National Trust, or very small, such as a local wildlife
group running guided walks for tourists, the sources of
fi nance open to them are very similar:
•
Income from trading - for example a shop or
restaurant at a National Trust property;
•
Subscriptions from members - English Heritage,
CADW - Welsh Historic Monuments, the National
Trust, RSPB, National Maritime Museum, etc. receive
funds this way;
Financial accountability
•
Grants from central and local government, plus the
National Lottery;
Every travel and tourism organisation is required
to produce accounts on an annual basis, even sole
proprietors and partnerships. Private and public limited
companies have an extra duty since they are required by
law to lodge a set of accounts with Companies House
every year. These accounts are available for inspection
by the public. Many people, inside and outside an
•
Donations and gifts - perhaps part of the estate of
a deceased person.
