Special Interest Tourism in Barbados Case Study

Special Interest Tourism in Barbados - Case Study Example At that time, cruise passenger arrivals were about 510,000 with 528 cruise ship calls in 2006. Part of the motivation for this strategy related to the clear indications that Caribbean nations were competing aggressively for cruise ship calls and that the traditionally strong position of Barbados (with its port facilities and long history of tourism activity) would lose market share. As its statistics indicate, there has been an almost 15% decline since 2006. Part of this is the increased competition Barbados expected. In addition, repositioning of cruise ship routes and itineraries has also contributed to the decline. The industry is always looking for new destinations to appeal to its markets (particularly repeat cruisers) and Barbados has the added disadvantage of being one of the oldest cruise destinations in the Caribbean. Of particular interest is the approach Barbados took in developing its cruise strategy. While cruise passenger arrivals declined in 2006, some believe that the partnership approach Barbados took in developing the cruise strategy helped to avoid an even greater decline. The key theme in the Barbados cruise strategy approach was a consultative and partnership oriented relationship with the cruise industry. ... Barbados went into the strategy with a conviction that the cruise industry was good for the country and that management and shaping of its benefits to complement Barbados' expectations for tourism sector benefits was the objective. With the cooperation of the cruise industry, Barbados undertook the following consultations as part of its cruise strategy development: - Interviews with cruise line executives, those responsible for itinerary development, cruise ship directors and tourism industry representatives in Barbados; - Surveys of cruise ship passengers and crew. Some of the key findings shaping the resulting cruise tourism strategy are described below. The following are excerpts from the 2006 Cruise Tourism Report prepared by ARA Consulting Group for the Barbados Tourism Development Programme and report on surveys conducted in 2006. From the point of view of cruise line executives, Barbados gets generally high markets. It enjoys very good market recognition, is well known, gets good reviews from passengers, provides good ground tours, and is above average in terms of safety. It has a good image, a high profile, and is considered a good traditional destination. It has potential for attracting up-market cruise passengers for high quality shore excursions like nature tourism, heritage tourism, golf, and similar activities. The cruise lines believed that services provided by the Barbados Port Authority are more than adequate and that the current cost structure is acceptable, although there is concern about cost increases. In general, they have little concern with congestion problems except for the typical mid-week situation when more than one or two large ships arrive. They were

Financial Management & Analysis Essay Example | Topics and Well Written Essays - 1500 words

Financial Management & Analysis - Essay Example Since a business organization is susceptible to changing economic condition, changing consumers' choice, availability of alternative products in the market, its operational and marketing aspects of performance is dynamic in nature. This non static feature of the functional activities makes capital structure planning one of the most challenging tasks. (Brealey and Myers, 2002) Debt and equity financing vary due to several factors. Since equity entitles one to ownership it demands greater degree of accountability and a much higher degree of risk appetite. On the other hand debt does not give any ownership right and demands relatively lower degree of risk. Debt financing gets some advantage from the standpoint of taxation. In real business situation due to varying degree of complexity associated with payment patterns and more importantly the paying capability, different debt instruments are constructed. A very high degree of dependence on equity financing does not allow the firm to take the advantage of tax benefit; on the other hand too much dependence on debt makes the firm vulnerable to buyout. The buyout threat can come from many ways. For instance, due to very low payment of dividend the share holders may no longer be interested in the continuation of the situation and instigate hostile takeover by other firms. The other type of threat can come in case the company faces default risk. (Brealey, and Myers, 2002) When the firm is unable to maintain a good credit history i.e. a record of timely repayment of interest and principle to the lenders - its possibility of managing a good lender becomes more and more difficult. Higher degree of uncertainty associated with the firms repayment virtually forces it to take loan with several bitter clauses like higher rate of interest, higher sensitivity of term with rate i.e. the firm has to 'buy' duration of the loan payable at a higher cost of interest. So dependence on debt also triggers the exposure to risk. This is the reason for which a leveraged firm (a highly debt dependent firm) usually have high-risk indicating parameter, commonly known as beta. Beta determines the company's risk exposure with respect to overall market. People will take additional risk if and only if they are proportionately paid i.e. paid something more than that they could have got without taking any additional risk. So more the risk involved, in repayment more will be the cos t of debt. So it is very important to determine what fraction of capital will be through equity financing and what fraction will be through debt financing. Optimum capital structure can said to be that combination of debt and equity financing that will maximize their combined positive effect and minimize the negative ones. So the importance of capital structure cannot be overstated for the sustainability of the organization. The financial health of Jessops, the photography retailer of UK is going through a critical stage due to several reasons. Entry of low cost substitute products and overall economic slowdown are the two main apparent reasons behind it. (Jessops: Reports and Accounts", 2008) It is prevalent from the financial structure of the company that it is a debt ridden company. The debt to equity ratio is found out to be around -3.67. Debt-equity ratio is measured by the following formula: total liabilities/ total assets. Here total liabilities is '