FINANCE FOR TRAVEL AND TOURISM

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FINANCE FOR TRAVEL AND TOURISM

ASSESSMENT: PRICING AND CVP

INTRODUCTION

In this part of the assignment, which is Pricing and CVP, I have been require to explain three methods with examples for the Travel and Tourism industry. This will able to investigate the complexity of pricing for the Travel and Tourism industry. Using the company ‘My Travel’ as an example and explain all the elements that need to be identified in order to come up with a price for a package holiday. I have also been asked to identify the costs involved in running a conference and exhibition centre. I have been require the answer multiple question, which will enabled me to
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Activity-based costing – this is a flexible method of pricing that is being used increasingly in the travel and tourism industry. Its looks at all cost, fixed and variable and focuses on what drives them in order to arrive at a final price to charge.

Pricing the package holiday

A tour operator’s main source of income is the revenue it receives from its main holiday product, the package holiday or inclusive tour. This revenue may come direct from the customer, if it is direct sell company or more usually through a travel agent who will sell the holiday on behalf of the operator.

A large tour operator such s Airtours may have a number of separate operating divisions, each of which will contribute to overall group profits. Airtours own airline, they runs camping holidays under the Euro Site brand and operates a chain of travel agencies under the Going Places banner. Mass market tour operators offers a wide range of holiday products catering for different sectors of the market. Although this range will vary from time to time in response to fluctuating demand, there is likely to be a series of products, which may include:

A main summer programme
A winter programme
City breaks
Flight only
Programmes featuring particular
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