Questions- This assessment will cover the following questions:
- British Airways is the airline company in the United Kingdom. Explain the major principles of revenue management for the travel and tourism industry and it could apply to generate profit.
- Analyse how to manage budget and maintain statistical and financial records to ascertain the financial performance of the British Airways.
- Examine the Human resource life cycle and evaluate the different stages of the HR life cycle applied in the British Airways.
Tourism industry is more significant as it provides many benefits and helps in increasing the demand as well as growth of more industries. As it is not only limited to the economic contribution as it also creates employment and development. It includes several facilities such as accommodation, transportation as well as drinking services which works according to the visitors or customers requirements. The main aim of hospitality industry is to satisfy the needs of individual's who travelling from one place to another place. British Airways is taken for this report which is the flag carrier airline of UK that headquartered at waterside. Under this report study about the mainly three concepts i.e. sales budget, revenue management, HR life cycle, strategies as well as ethics and legislations. In sales budget and revenue management discuss the principles, budgets as well as maintain statistics records. In HR, discuss about the ways of managing life cycle as strategies. Lastly, focus on the legislation and ethics and its impacts on industry.
PART 1 (Sales budget and revenue management)
Explain the Key Principles of Revenue Management for the Travel and Tourism Industry.
It is considered as an application of analytics information in a detailed or disciplined way which helps in forecasting the behaviour of consumers at a small level and optimise resources appropriately to accomplish the revenue growth (Baumgartner, 2019). Within the context of British Airways, revenue management helps in performing daily operations in an effective way as well as it allows the owner of company to predict future opportunities and demands. This will lead in the effective accomplishment of goals as well as better financial performance.
Rationale revenue management:
It is considered as a most important tool which is in used by the tourism industry in order to earn high revenue for their businesses. Within the context of BA, the management of company implements revenue administration that are discussed as follows:
- Cost reduction: The bookings of travel agency or tickets are totally depends on the several factors that involves the age of travellers, seasonal like holidays, weather circumstances as well as economy of country. It is essential for British Airways to formulate appropriate strategies for the effective management of company's revenue which helps in selling products and services at a best price by minimising the entire cost (Kwok, 2013).
- Attracting guest: Most of the companies of hospitality sector provides their services at a large area so it is essential for the British Airways to increase the bookings of hotels and flights. The company needs to formulate effective strategies so that the satisfaction of customers is raised. This will assist in offering better quality of services to their customers.
Principles of revenue management:
These are the essential part of an business organisation as all needs to develop appropriate principles in order to increase their performance by enhancing revenue for the company as well as industry. Within the context of British Airways, some of the effective and essential principles are discussed as follows:
- Overbooking: It is related to the selling of goods and services is higher than the volume of businesses. Within the context of BA, it is only possible while seats are cancelled by the users or clients the company get a chance to earn revenue. In addition, this principle helps in increasing the profit of company by booking more tickets that is advantageous in order to minimise the management risks (Beirman, 2018).
- Market segmentation: As businesses has diversified into many kinds of market segments and has different customers. All these has varied taste and preferences which are in accordance of their own values and behaviour. So it is a positive symbol for the BA in order to divide whole market accordance of their similar requirements of clients.
Tool for revenue management:
Several tools and techniques are available that can be used by British Airways in order to manage their revenue in an effective as well as efficient manner. Some of these are discussed below:
- Allocation of discounts: Customers loyalty as well as potential customers are major aspects for an organisation which helps in increasing the company's sales as well as revenue. As it enhance the sales and revenue of BA by generating management leads which gives profitable results. The company adopts discount policy as a effective tool that helps in retaining more customers (BRASS Education Committee, 2019).
- Space fulfilment appropriately: This kind of tool helps in utilising the available resources in an appropriate manner and increase their productivity. This will result in that the customers must facilitate appropriate services so that the company's revenue will be enhanced. In addition, British Airways fixed their minimum amount of revenue from the firms on a continual basis like if BA have capacity of 80 persons then it is must be filled up by them effectively.
Impact of pricing strategies:
There are various services which are related to the specific strategies related to its prices which are highly based on the products as well as service quality. Due to the micro and macro environment and geographical as well as weather conditions the prices of goods and services are highly impacted either positively or negatively. As it increases the target of market and reduce the brand value (Lamsfus, 2013).
Implementation of revenue management:
Revenue management is applicable within an organisation as it helps in forecasting the demand and supply flow of goods and services that results in huge sales and profitability of business. The company BA manage the flow of demand and supply by using tools and techniques and able to solve issues in an effective manner. In addition, it is necessary for the company to target their market on the behalf of some factors that includes competitors, customers, prices and so forth. This will help in increasing the chance of getting effective and better results (Bruno, 2019).
To manage budget and maintain statistical and financial records.
Financial statements or records refers to the data representation which provides a clear picture of working performance within the industry or market. By effectively planned, budget as well as predicted the required funds for a specific activity helps an organisation to attain their appropriate financial results and performance (Buijtendijk, 2018). There are numerous methods through which financial, budgets as well as statistical records are appropriately managed and controlled to produce effective results.
Types of financial statements and reporting mechanism:
There are many financial statements that helps in maintaining the financial records effectively. Some of these are as follows:
- Income statement: It is closely related to the receipts and payments of organisation which shows a financial performance of a company. It helps in calculating the net profit of business by considering new income over expenses as income earn from the selling of goods and services and payments treated as an expenses.
- Cash flow statement: It is related to the inflows and outflows of cash within an organisation that is totally related to the cash transactions. If inflow is less then the outflows the company has to pay more to the outsiders. As it includes operating, financing as well as investing activities (Dokic, 2018).
- Balance sheet: It is associated with the statement of actual financial performance or positions which have detailed information about the balances of organisation. This kind of financial statement is prepared at the end of financial year and includes assets and liabilities in order to display current position.
Value and importance of budget:
Budget is closely related to the estimation of income and expenses which is occurred by a business entity during a specific year. It is also known as a pre-plan activity that will help in spending less amount of money or minimise the expenses to perform a business operation functions in an effective and efficient way (Foris, 2018). The effective estimation of budget helps in reducing or control the unwanted expenses of British Airways as well as generate more emergency funds. Along with this, budget prepares a systematic reports which records all the details that helps in discovering all finance i.e. cash inflows and outflows.
Interpretation of financial statements and reports:
- Gross profit ratio = Gross profit/net sales*100
Also Read:- Importance of Tourism on Business and Industry
- Net profit ratio = Net profit/net sales*100
- Current ratio = Current assets/current liabilities
- Asset turnover ratio = Cost of good sold/total assets
- Debt to equity ratio = Total long term debts/shareholders funds
- Inventory turnover ratio = Net sales/inventory
- Return on equity = Net income/shareholders equity
- Quick ratio = Quick assets/current liabilities
- Earning per share ratio = Net profit after tax and preference dividend/no. Of equity shares
Evaluation of business performance:
After analysing all the ratios it has been identified that the company needs to be formulated effective strategies in a proper manner for performing their works accordingly. It results in that the business is capable to fulfil its tasks accordance to the needs of British Airways as well as consider market conditions also (JelinÄiÄ‡, 2018). As per the annual report of an organisation regarding their financial performance shows that better outcomes and profitability as it displays the result of raising 5% each year.
PART 2 (HR life cycle and HR strategy)
To Manage HR life cycle with respect of HR strategies.
There are several phases of human resource life cycle which is to be used by the manager of British Airways in order to retain skilled and talented employees within a business organisation. These can be considered as follows:
Stages of HR life cycle:
- Recruitment: The growth of every business organisation begins with the effective hiring of right individual as it is termed as an essential decision which plays a significant role in growth, turnover and productivity (Kasemsap, 2018). Within the context of British Airways, the management of company manage several tasks in order to recruit right people at a right job position within the required time period by organising appropriate interview process for them.
- Education: It is associated with the awareness of workers towards their specified roles and responsibilities that needs to be followed by all individual in order to accomplish organisational goals and objectives. In respects of British Airways, education plays an important role in retaining talented staff for a long period of time such as most of the staff members belongs to the varied backgrounds which requires effective communication towards the requisites informations like values related to the culture of organisation. So that all workers efficiently perform their own tasks according to the rules and formalities.
- Motivation: Most of the businesses face issues regarding the decrement in company's productivity and performance. So a manager of firm is liable to emphasise on creating the strong as well as positive bonds with workers. For instance, the manager of British Airways motivated and encouraged new staff members by facilitating several benefits and incentives that helps in keeping engaged and they have high level of commitment towards the organisational goals (Papetti, 2018).
- Evaluation: It is termed as a last step of HR life cycle as the supervisor of British Airways analyse and measure workers performance and offer constructive feedbacks to them on a regular basis. Also the company provide training as well as professional developments programmes for increasing their potentiality and performance.
Performance management plan for specific job role:
The plan of performance management refers to the process which is exercised by all organisations in order to design and plan the proper coordination among resources and workers. Main purpose of this is to make sure that the goals and objectives of company i.e. British Airways are accomplished within the specified time and effectively (Samara, 2018). Whereas, in travel and tourism industry the job role of travel agent is essential because they helps in developing individuals as well as organisation by more focusing on research activity. This will assist in the enhancement of workers knowledge and experience and their job roles includes hotel selection, flight booking as well as holiday plans. The proper plan of performance management of travel agent includes:
- Goals and objectives: The main objective of company British Airways is to enlarge working areas according the requirements and goal of company. For this, travel agent is responsible to raise the sales of tickets and puts more efforts towards the accomplishment of objectives.
- Effective consultation: As the travel agent of British Airways company required to consult with the experts towards taking effective decisions as well as attain the huge market growth within the less period of time. This will help in enhancing the customer base along with the satisfaction (Sears, 2019).
- Develop appropriate action plan: The management of company British Airways needs to make appropriate action plan in order to achieve objectives. As the travel agent is liable to facilitate correct opportunities to the required people or customers and delegate entire plan effectively. It will help in increasing the profitability as well as performance of their organisation.
Importance of HR life cycle:
The process of human resource life cycle divided into several stages that is essential for getting appropriate results. It helps in developing individual's at their workplace as it is termed as an investment which will result in the strong and effective team members. As British Airways develops their workers by using these stages, they are strengthening its assets as well as building workers more valuable.
PART 3 (Legislation and ethics)
Potential Impact of legal and ethical Consideration on Travel and Tourism Businesses.
Legal considerations as well as legislations are considered as a most significant aspects of organisations which is to be followed in order to perform tasks in a lawful manner. These includes some specific sets of rules and regulations that are coordinated within a business for the purpose of providing benefits to customers, employees as well as company. All these regulations and laws are followed for the motive of increasing company's productivity as well as profitability and these are sets as per the local boundaries of a particular country as all have different sets of laws and legislations (Sigala, 2018). Legal consideration is essential for the British Airways in order to work in a legal manner and increase their growth as well as success within the marketplace. The legislations as well as regulations of an organisation are connected with each other like if company's followed standards effectively but fails to adopts legislation then it will impact on the company's performance or it may create for British Airways.
The policies and regulations are formulated by the industry authorities and by the government that is implemented in an organisation for the purpose of ensuring the interest of local establishments. This is essential for all businesses of airline industry or tourism industry in order to make favourable decisions regarding business, employees and clients. For example, by setting some standards towards the products and services the management of company able to sale their offerings easily in the market at a competitive value. This will help in leading the competitive market positions (Swart, 2018).
Specific legislations with respect of airline industry:
- The companies needs to be implement Civil aviation authority act, 1991 in order to facilitate authority as well as responsibilities in a equal manner.
- The aviation act, 1992 was formulated effectively by companies in order to protect public interest towards the airline industry.
Employment and contract act for effective decision-making within the airline industry:
There are several laws which is based on the agreement between employer and employees and it is essential for a business organisation because it helps in performing all activities in an effective manner and it is prepared in a written form. As this will assist in reducing the conflicts and issues regarding the future. These are discussed as below:
- Minimum wages act, 1998: This includes the right of individual's who employed in an organisation that must be paid fair and minimum amount of wages according to their working. If any business fails to implement this act within their workplace then they has to suffer from huge penalties or government strictly taken a legal action towards them (Wiltshier, 2019).
- Contract act, 1990: This is a common act which is considers various business establishments and it is essential for all businesses to be followed in order to work according to the agreement. This will assist in working as per the requirements of both the parties this will result in enhancing the company goodwill.
Impacts of Regulations, legislations as well as Standards on Decision-Making:
Every organisations or industries must require to follow some specific rules and regulations to perform organisational working in an effective as well as efficient manner. Some of the decisions regarding rules and regulations related to the law are formulated by the individual's instead of company. It determines that all decisions are related to the many elements such as values, culture, beliefs, structure as well as organisational systems that is not influenced by management decisions and suggestions (Ormond, 2017). So the company British Airways follow these rules and regulations in order to increase company image within the market.
It has been concluded from the above report that the travel and tourism industry is rapidly growing which governs that the hospitality sector also growing at a same speed. As several tools and techniques are implemented by the industry that increase company's sales and revenue. Also, consider the types and modes of financial statements in order to know financial situations of company on a periodical basis. Along with this, human resource also required to manage appropriately to hire right candidate for a right job at a right time. Also, establish businesses in hospitality industry companies must follow some rules, standards, regulations as well as legislations through which corrective actions should be taken and increase entire level of performance.
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