funding tourism projects
TRANSCRIPT
Funding of Tourism Projects
INTRODUCTION
Funding tourism project is aimed at analyzing and identifying possible
sources of funds that most of the projects are making use. It can be taken
as opportunity for project developers because of the difference between
planned funds and actually utilizing funds. There are sections and lists
obtained for possible sources of funds and amount that can be achieved
when planning tourism projects.
Tourism project developers are nowadays dividing their projects into
phases and determining their value and amount of fund that will be
required. This is to ensure exact amount of funds summing up totally
during finalization. The factors that are influencing facts of funding are
importance and sources.
The objectives of funding tourism project are:
To identifying meaning and concept of funding.
To analyze importance and needs of funding tourism projects.
To identify government project and research its information.
To identify nongovernment project and research its information.
The overall purpose is related to the concept of funding and tourism
projects sources of findings. Usually, tourism projects are funded by
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Funding of Tourism Projects
owners of projects and there are possibilities that extra funds are obtained
from banks or investors.
FUNDING
The term project funding is referred to as capital investment in tourism
projects by government or nongovernment bodies. It might include
shortage or surplus of funds in project phases. It is the financial or capital
amount that is invested in tourism projects for managing and obtaining
human or material resources. The possible sources of funding are cash
reserves, sales of assets, borrowing from bank, issuing debentures, raising
share capital, collaborating with other companies, etc. (Lock, Dennis,
2007).
Funding is also known as financing and tourism project financing requires
careful and detailed analysis of financial engineering. This is to overcome
risks and obtain rewards (Finnerty, John, 1996). When there are mistakes
and careless analysis of financial requirements in projects it affects
project continuation. Tourism project owners will make use of sources of
funds for obtaining funds for continuation of projects.
Example:
Dubai Metro is government project and funding of projects by government
are easy and due to their status they will be able to obtain financial
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Funding of Tourism Projects
support when there are financial crisis in continuation of project. There are
various sources that are open for government projects and they can
obtain finance and funds easily. Nevertheless, this might be different in
the case of nongovernment projects.
FUNDING IMPORTANCE
Tourism funding projects are important due to the following reasons
(Leifer, Richard, Christopher M. McDermott, and Gina Colarelli O'Connor,
2001):
Comparing with funds required and potential profit.
Determining possible reserves that are required.
Analyzing project feasibility.
Supporting project for resources requirements.
Completing project operating status.
FUNDING PROJECTS SOURCES AND DISTRIBUTION
Dubai Metro
Dubai Metro is a road and transport authority project which will solve
traffic issues and problems in Dubai. It will include 4 lines (red, green,
purple and blue) of metro network (ABQ Zawya Ltd., 2008).
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Funding of Tourism Projects
The sources of funds for Dubai Metro are from government body funded
by road and transport authority. The funds of Dubai Metro are divided and
distributed into four phased schedule:
Phase Schedule Description
2009 Red Line expected to be completed
2010 Green Line expected to be completed
2013 Purple Line expected to be completed
2014 Blue Line expected to be completed
The funds value of Dubai Metro is divided as per contract value below:
Project Name Contract Value
Dubai RTA - Dubai Metro - Blue Line USD 3,000,000,000
Dubai RTA - Dubai Metro - Green Line USD 1,090,000,000
Dubai RTA - Dubai Metro - Green Line - Extension -
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Funding of Tourism Projects
Dubai RTA - Dubai Metro - Purple Line USD 2,700,000,000
Dubai RTA - Dubai Metro - Red Line USD 2,480,000,000
Dubai RTA - Dubai Metro - Red Line - Depots -
Dubai RTA - Dubai Metro - Red Line - Extension -
FUNDING PROJECTS SOURCES AND DISTRIBUTION
Dubai Snowdome
Dubai Snowdome is one of its first kinds in Middle East that is located in
United Arab Emirates (Dubai). The visitors will experience winter and snow
experience (Ten Real-estate, 2007). It is private tourism project and the
developer is Emirates Star Properties.
Dubai Snowdome is one of the Dubai’s mega tourism projects that are
developed for tourist attraction locally or internationally. The winter
environment is created artificially but with shows complete and real
winter experience with wide range of entertainment activities that is
suitable for all age groups, nationalities, gender, etc. (SkiDubai, 2009). It
can be called as snow city that involves various activities so people can
experience change from desert environment to snow environment. It is
also known as indoor resort of snow activities.
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Funding of Tourism Projects
Dubai Snowdome project is funded and managed by Emirates Star
Properties which is private sector. The funds are provided and invested by
Emirates Star Properties management.
The funds are used for developing various activities: ski dome, residential
towers, hotels, a shopping mall, restaurants, coffee shops and other retail
outlets in Snowdome. The money is used for getting return from it where
visitors will enjoy entertainment and leisure activities.
Dubai Snowdome development will cover an area of 1.4 million square
feet (130 thousand square meters) which is part of fund and money
distribution. The investment and project will contain and ice and snow
activities that is suitable for children and adults (SkiDubai, 2009).
RECOMMENDATION
Funding and sources of funding are important parts of tourism project.
When government or private are not having ability to fund their projects
they usually take support of bank.
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Funding of Tourism Projects
The banks are good sources for funding tourism projects. Most of the
projects are relying on banks but it shouldn’t be the only source because
there are possibilities that the banks will not provide good interest rate
and payback period. This might bring pressure over projects and payback
of funds. The financial sponsors and investors funds are excellent sources
of funds rather than banks because there is no interest rate and
discussions include mutual benefits agreement.
CONCLUSION
We have discussed Dubai Metro and Dubai Snowdome projects and their
sources of funds along with distribution of money in project activities upon
completion. By the end of project, recommendations are provided with
proposed sources of funds which seem more positive than others. Funding
is essential part of project requirements and without it activities cannot be
continued or completed.
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Funding of Tourism Projects
REFERENCES
ABQ Zawya Ltd. 2008. Dubai RTA - Dubai Metro. [WWW]
<URL:http://zawya.com/projects/project.cfm/pid160608082751> [Accessed 16
January 2009.]
Finnerty, John. 1996. Project Financing: Asset-Based Financial Engineering.
New York: John Wiley & Sons Australia, Limited.
Leifer, Richard, Christopher M. McDermott, and Gina Colarelli O'Connor.
2001. Radical Innovation : How Mature Companies Can Outsmart
Upstarts. New York: Harvard Business School P.
Lock, Dennis. 2007. Project Management : 9Th Edition. Grand Rapids:
Ashgate Publishing, Limited.
SkiDubai. 2009. Dubai Sunny Mountain Ski Dome or Snowdome. [WWW]
<URL:http://www.skidubai.com/dubai/mountain-ski-dome/> [Accessed 17
January 2009.]
Ten Real-estate. 2007. Project Developments: Dubai: Dubailand: Snowdome.
[WWW]
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Funding of Tourism Projects
<URL:http://realestate.theemiratesnetwork.com/developments/dubai/dubailan
d/snowdome.php> [Accessed 17 January 2009.]
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Funding of Tourism Projects
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