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Copy of Unit 2: The Business of Travel and Tourism

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David Morris

on 19 May 2014

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Transcript of Copy of Unit 2: The Business of Travel and Tourism

Unit 2: The Business of Travel and Tourism
Recap
P2
Describe the organisational and financial characteristics of different types of travel and tourism organisations.
The aims for today
Activity
Characteristic – organisational
Limited companies
Limited Companies can raise capital, issue shares and limit risks.
There are more regulations governing the way they are run.
Accounts must be filed at Companies House.
Limited companies are controlled by a board of directors and shareholders.
The management is accountable to the board and to the share holders for any decisions they make.
Business structure
Partnerships
Partnerships have a structure of at least two people who share liability for any debt.
There is no requirement for a partnership to be registered at Companies House.
Partners can limit liability for debt by setting up a LIMITED LIABILITY PARTNERSHIP.
Partners share control and the profits.
The Board of Directors
The board of directors is a group of people who are elected by the shareholders of an organisation. They have the responsibility of overseeing the running of an organisation.
Public companies usually have executive directors and non-executive directors. One member of the board will be appointed chairman.
(Sometime the board may be referred to as a board of trustees / governors.
Companies House is an executive agency of the Department of Trade and Industry (DTI) responsible for company registration in the UK. There are more than 2 million limited companies registered in the UK.
Executive Director is usually a full-time employee of the company who also has management responsibilities.
Non-executive director is someone paid on an annual fee to attend a number of board meetings and contribute to decision making. They are invited onto the board because of their experience and skills.
Business organisation
Companies do not stick rigidly to one line of business. They tend to buy or merge with other businesses, always striving for greater commercial success and market dominance. When companies do this it is known as vertical or horizontal integration.
Vertical and horizontal integration
Principal -> Internet -> Consumer
Principal -> Tour operator -> Travel Agency -> Consumer
Principal -> Call Centre -> Consumer
Principal -> Tour Operator -> Television -> Consumer

Vertical Integration occurs when 2 companies at different levels of the chair merge or are bought.
This may be backwards (i.e. a tour operator buys a hotel) or forwards (i.e. a tour operator buys a travel agency).
Horizontal integration is when a tour operator buys another tour operator at the same level in the distribution chain.
December 2009
Virgin Holidays bought Bales Worldwide. This is an example of horizontal integration as both companies are in the tour operator business.
Tour Operators can benefit from having its own airline, hotels or distribution channels. Example: Thomson is vertically integrated as it has its own airline, tour operations and travel shops.
Documentation for business set up
Setting up a limited company requires you to complete several documents and submit them to Companies House.
Articles of Association
This document explains how the company will be run, what rights the shareholders have and what rights the company directors have.
"The Company's 'Articles' give power to the Board to appoint directors, but also to require Directors to retire and submit themselves for election at the first Annual General Meeting following their appointment.
The Articles also contain specific provisions and restrictions regarding the Company's power to borrow money.
Powers relating to the issuing and buying back of shares are also included. The Company is committed with ensuring that it keeps pace with changing legislation and regulation."
Memorandum of Association
This document gives the name and location of the company and describes the nature of its business.
It also shows the amount of share capital (the money raised by selling shares in a business) in a company and how it is divided.
If you are setting up a business you will decide on how many shares each will have and sign the memorandum.
The money paid for shares is kept by the company and does not have to be repaid - although dividends from profits will be paid to shareholders.
Employees are sometimes given shares in a business or an option to buy shares at a preferential price.
Certificate of Incorporation
Incorporation is the means of registering a business as a company with Companies House.
An application is completed and submitted with all the company details.
If the application is successful the Registrar of Companies issues a Certificate of Incorporation - from this point the limited company is formed.

Summer 2009
Lufthansa completed its takeover of Austrian Airlines. A deal was made with the Austrian government to gradually take over share in the airline, resulting in a 90% holding by Lufthansa. Shareholders would get a payout of 166 million Euros. In addition 500 million Euros would be paid to the Austrian state to reduce the airline's debts.
By the end of this lesson you will know the organisational characteristics which include;
Business structure and control
Business organisation
Documentation for business set up
Organisational characteristics include the way the business is structured and controlled and the liability for debt.
This lesson we have looked at the organisational characteristics within business which include;
Business structure and control
Business organisation
Documentation for business set up
Conclusion
Thomson aircraft
Longleat Pvt Ltd
In 1949, Longleat became the first stately home to be opened to the public

In 1966, longleat offered the British public the first drive through safari park

Today, longleats’ attractions include: longest Hedge maize, postman pat village, adventure castle, Dr who exhibition and Longleat railway

In 2005, longleat welcomed 716,000 visitors

Aims & Objectives
Longleat’s stated business aim is:

“To maintain and conserve Longleat House and Estate for Future generations. To maximize Longleats commercial viability at the same time achieving the highest standards of conservation, visitor satisfaction and employee care."

Mission statement:

“to encourage appreciation and awareness of the worlds natural environment and heritage through recreation, education, biological study and conservation.”


Structure and organisation
Longleat is a two-fold business consisting of Longleat Enterprise and the Longleat Estate

The leisure business of longleat is operated by a private limited company-Longleat Enterprise limited

The company has three directors

The directors meet with the trustees annually to make policy decisions about the company


Structure and organisation
The rent paid from the surrounding 1.000 acre park, goes into the other side of the business, The Longleat Estate

Longleat Enterprise limited finances all replacements, improvements in any attractions, purchase of animals and equipment.

Any profits made are ploughed back into the longleat.

Capital Region Tourism: Public –Private Partnership
Established in 2002
Capital Region Tourism (CRT) is one the four Regional tourism partnerships operating in Wales
Responsible for co-ordinating many aspects of the tourism development and marketing in their areas
Working in partnership with public, private and not-for-profit travel and tourism organisations in the region

Aims & Objectives
To oversee the development, implementation and monitoring of the regional tourism strategy for South East Wales.

Structure and organisation
CRT has five permanent members of staff, including its regional strategy director.

The work is controlled by Board of directors made up of local authority representatives working in travel and tourism in the region.

Works in partnership with the local authorities in the region

We will now look at two examples
Use the print outs provided to identify the organisation's aims & objectives and what kind of business they are
Full transcript