Page 177 - Tourism The International Business

This book is licensed under a Creative Commons Attribution 3.0 License

Exhibit 66: Break-even chart

• directing appropriate marketing efforts toward potential tourists. This would include a determination of the
type of promotional campaign and selection of the channels of distribution that would most effectively

market the destination to tourists, intermediaries in the channels of distribution, and investors. (The
channel of distribution refers to the link between destination and the market. Intermediaries in the channel
would be those businesses that act as conduits between destination and tourist, such as tour wholesalers,
retail travel agents, etc.).
• coordinating ongoing research and analysis to support market research in both the private and public
sectors.

• coordinating the various public-sector agencies that have some degree of involvement in, and responsibility
for, tourism.
• determination of employee training needs. Tourism is a "people" business. The development of tourism
requires those who can deliver service at a level expected by the tourist. In some cases this may mean the
establishment of training centers at the destination to bring local skills up to the standard expected.
These and other points will be expanded upon in the following chapters.

Overall financial feasibility
A project is economically feasible if it provides a rate of return that is acceptable to the investors in the project.
Most people favor time-value measures. The net-present-value and internal-rate-of-return techniques assume that

money has a time value. A dollar received today is worth more than a dollar received a year from now, since the
dollar received today can be reinvested to produce a higher overall return.
Cash flow projections provide a basis for determining the amount of money available in the future. Future flows
of money are then discounted at assumed rates of return to give an overall estimate of the return on an investment.
Lenders want to know if the project will produce sufficient operating profits and cash flow to cover interest and
principal payments when they become due.
Public officials are principally concerned with a project's impact on:

Tourism the International Business 177 A Global Text