A Project report on

Touring Costs Workout by Thomas Cook

SUBMITTED TO

SOM LALIT INSTITUTE OF BUSINESS MANAGEMENT DR. PARESH SHAH

(AFFILIATED TO THE GUJARAT TECHNOLOGICAL UNIVERSITY) TOWARDS THE PARTIAL FULFILLMENT OF THE INTERNAL EVALUATION FOR THE SUBJECT OF COST AND MANAGEMENT ACCOUNTING IN SEM-2 OF MASTER OF BUSINESS ADMINISTRATION PROGRAMME. 20011-2012 Prepared by

Name: Sahil H Shah 26 Dhairya Trivedi 36 Bilal Ranginwala 22 Bhaumik Patel 5 Niket Patel 3 Vishal Soni 31 MBA-1 DIV-B
1

INDEX
Sr.No. Particulars
1 2 3
4
INDUSTRY INTRODUCTION THOMAS COOK GROUP INTRODUCTION THOMAS COOK INDIA LTD INTRODUCTION COST WORK OUT PROFIT FUNDA BIBLIOGRAPHY

Pg.No.
3 4

6 9 10

5 6

Indian Tourism Industry

Tourism in India is the largest service industry, with a contribution of 6.23% to the national GDP and 8.78% of the total employment in India. The tourism industry in India generated about 100 billion US dollars in 2008 and that is expected to increase to US$275.5 billion by 2018 at a 9.4% annual growth rate. In 2010, 17.9 million foreign tourists visited India. The majority of foreign tourists come from USA and UK. Kerala, Tamil Nadu, Delhi, Uttar Pradesh and Rajasthan are the top five states to receive inbound tourists. Domestic tourism in the same year was 740 million. Andhra Pradesh, Uttar Pradesh, Tamil Nadu and Maharashtra received the big share of these visitors. Ministry of Tourism is the nodal agency to formulate national policies and programmes for the development and promotion of tourism. In the process, the Ministry consults and collaborates with other stakeholders in the sector including various Central Ministries/agencies, the state governments and union territories and the representatives of the private sector. Concerted efforts are being made to promote new forms of tourism such as rural, cruise, medical and eco-tourism. The Ministry of Tourism also maintains the Incredible India campaign. According to World Travel and Tourism Council, India will be a tourism hot-spot from 20092018, having the highest 10-year growth potential. The Travel & Tourism Competitiveness Report 2007 ranked tourism in India sixth in terms of price competitiveness and 39th in terms of safety and security. Despite short- and medium-term setbacks, such as shortage of hotel rooms, tourism revenues are expected to surge by 42% from 2007 to 2017. India's thousands of years of history, its length, diversity and the variety of geographic features make its tourism basket large and varied. It presents heritage and cultural tourism along with medical, business and sports tourism. India has one of the largest and fastest growing medical tourism sectors.

Group Introduction
Thomas Cook Group plc was formed on 19 June 2007 by the merger of Thomas Cook AG and MyTravel Group plc. The new company is one of the worlds leading leisure travel groups with Sales of 8.9 billion 22.5 million customers 31,000 employees A fleet of 94 aircraft A network of over 3,400 owned or franchised travel stores and a number of hotels and resort properties.

The Group operates under six geographical segments in 21 countries, and is number one or two in all its core markets. UK & Ireland, Continental Europe (Germany, Austria, Belgium, France, the Netherlands, Poland, Hungary, Slovenia and Slovakia); Northern Europe (Sweden, Norway, Denmark, Finland) and North America (Canada and USA); India & Middle East; and German airlines operating under the Condor brand.

Company Introduction
Thomas Cook (India) Ltd. is the largest integrated Travel and Travel related Financial Services Company in the country offering a broad spectrum of services that include Foreign Exchange, Corporate Travel, Leisure Travel, and Insurance. The Company launched its Indian operations in 1881 and is celebrating its 130 years of world-class service in India. Thomas Cook (India) operates in the following areas of business, namely:

Leisure Travel & MICE Corporate Travel Management Foreign Exchange Insurance E-Business

Post March 31st 2008, Thomas Cook (India) Limited (TCIL) is a part of Thomas Cook Group plc UK (TCG). On March 7th 2008, TCG announced its decision to acquire TCIL from Dubai Investment Group. Thomas Cook Group plc is one of the largest travel groups in the world with a market capitalization of approximately US$6 Billion. In June 2006, Thomas Cook (India) acquired LKP Forex Limited and Travel Corporation (India) Pvt. Ltd. (TCI). TCIL presently operates in over 78 cities across over 209 locations. The company has overseas operations in Sri Lanka which is a branch of TCIL and Mauritius which is a subsidiary of Thomas Cook (India). TCIL is supported by a strong partner network of 102 Gold Circle Partners and 180 Preferred Sales Agents in over 100 cities pan India. The Company employs over 2,740 resources and is listed on both the Bombay Stock Exchange as well as the National Stock Exchange. Thomas Cook (India), over the years has received several prestigious awards such as the Best Tour Operator by CNBC Awaaz Travel Awards 2009 and the Indias Most Preferred Foreign Exchange Company' by Indian Hospitality Excellence Awards 2010. Recently, the Company won the Most Trusted Tour Operator at the recently concluded Times Travel Honours Event 2011 and was also accredited the P1 rating which is the highest financial rating given by Crisil.

Costs Workout By Thomas Cook

For any travel packages offered by Thomas Cook, it workouts the costs by dividing the cost into 4 major section, namely Ticketing Costs Visa Costs Hotel Expenses Package Expenses (F&B, Sightseeing, Local Travelling, Entry Fees, Etc)

Thomas Cook offers various domestic and international tour packages, the costs for all are workout using the same method. In case of domestic tours Visa Costs are not involved. Let us understand in detail each of the component.

Ticketing Costs
For ticketing there are 2 softwares available namely Galileo Amadeus These are similar to the computer screen for movie ticket booking. As u enter the place of origin and destination it will show you the various airlines offering the service, and the price for each of the airline. This allows the user to compare the prices of various airlines and choose the best out of it. Most companies in India uses the Amadeus Software, while TCIL uses Galileo.

Visa Costs
A visa is a document showing that a person is authorized to enter the territory for which it was issued, subject to permission of an immigration official at the time of actual entry. The authorization may be a document, but more commonly it is a stamp endorsed in the applicant's passport. A visa generally gives non-citizens clearance to enter a country and to remain there within specified constraints, such as a time frame for entry, a limit on the time spent in the country, and a prohibition against employment. The possession of a visa is not in itself a guarantee of entry into the country that issued it, and a visa can be revoked at any time. A visa application in advance of arrival gives the country a chance to consider the applicant's circumstance, such as financial security, reason for applying, and details of previous visits to the country. A visitor may also be required to undergo and pass security and/or health checks upon arrival at the border. The Visa costs are to be paid to the VISA Department of the country you willing to visit. The Visa costs vary from country to country. There are also agents who help you out in procuring Visa. But to avoid the charges of middleman or agents TCIL procures visa by direct consulting the VISA Department of concerned country.

Hotel Expenses
Both the methods Online and Offline method are used for Hotel Booking. Mostly bookings are done by contacting the hotels directly. Hotels are mostly fixed as per destination. For Eg. If a tourist visit Mumbai than he would stay at Hotel TAJ. The hotel costs in the package also depends upon the customer choice for the hotel. i.e 3 Star or 5 Star.

Package Expenses
The Package expense include the expenses related to Food and Beverages, Sightseeing, Local Travelling, Entry Fees etc. The bookings are done mostly through agents as everywhere direct access is not available and it becomes too complex for TCIL. Places where online booking facility is available than the booking is done online to avoid the charges of agent. It also depends upon the customers choice that whether they want and inclusive package or an exclusive package.

Profit Funda
The most important thing for any business is profit. Profit is the lifeblood of business which keeps the business alive and kicking. In this section we will understand that how TCIL makes profit out of the packages Generally TCIL earns a commission 12% to 15% on each of the component. The profit margin in Hotel and Package expenses are much more.

Bibliography
http://www.thomascook.in http://www.economywatch.com/business-and-economy/tourismindustry.html http://en.wikipedia.org/wiki/Tourism_in_India http://www.rncos.com/Report/IM115.htm - RNCOS Industry Research Solution

Interview With Mrs. Munifa Sareshwala Ex Assistant Manager, Thomas Cook (India) Ltd, Ahmedabad Branch