Http:// Copyright 2005 – Biz/ed Financial Systems in Travel and Tourism BTEC Travel and Tourism.

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Copyright 2005 – Biz/ed

Financial Systems in Travel and Tourism

BTEC Travel and Tourism



Introduction

As with any business, those organisations in the travel and tourism industry need to manage their finances in order to:

• Receive payments• Make payments• Record financial activities• Keep systems secure• Handle currency conversions• Make tax returns



Impact on business

Some of these systems have a direct impact on the activities of the organisation, for example, in currency conversions:

• Ensuring that foreign currency payments and receipts are effectively managed

• Keeping up-to-date with exchange rate movements

• Anticipating demand for travel products and services based on exchange rate movements



Exchange rate movements

Tour operators and travel agencies have experienced the effects of exchange rate movements in recent years in the following ways:

• The fall in value of the US $ compared to UK £• This has meant that a holiday or air ticket priced in US $

is less expensive today than a year ago• If UK travellers want to visit the USA, they will have to

use fewer UK £s to pay for a travel product or service that’s priced in US $

• The Activity associated with this lesson contains more for you to do on this point



Political changes

Large-scale political changes also have an impact on travel and tourism organisations’ financial systems:

• Enlargement of the European Union in 2004

from 15 to 25 members• Causes demand for travel to these new

member states to rise



Political changes

• Travel organisations may have targeted some of these new EU destinations

• For example, low-costs airlines have opened new routes to cities in the new member states

• But changes to the tax systems in some of these new EU states may have a negative impact on demand and supply of travel products and services

Http:// Copyright 2005 – Biz/ed Financial Systems in Travel and Tourism BTEC Travel and Tourism.

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