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Flights and hotel accommodation

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Adventure Travel Ltd (AT) organises holidays abroad for Irish clients. The company charters planes and books hotels. The charter arrangements are such that the air operators include all Irish transport costs, airport charges and so on in the charter price. The contracts with the hoteliers require them to deal with all local arrangements, including transfers from airports to hotels and local activities. All holidays are booked by clients and paid through Irish travel agents. By having to deal only with airlines, hotels and travel agents, AT is able to be administratively streamlined and, its management believes, efficient and price-competitive.

AT’s holidays are of two types: summer beach holidays and winter sports holidays. The company charges a flat rate for all holidays, distinguishing only between the beach holidays and the winter sports ones. An unusual feature of AT’s holidays is the fact that full payment must be made when booking the holiday. Although this is unusual, AT is able to sustain this policy by being very price-competitive. The management believes that any possible loss of custom through following this policy is outweighed by the knowledge that bookings, once made, are certain from the company’s point of view.

Further information about the company and forecasts for next year is as follows: 

(i) Travel agents deduct a 10% commission from the full price of each holiday before remitting the other 90% to the company at the time of booking. 

(ii) Winter sports holidays have a cost to the customer of €350 each and beach holidays cost €300 each. 

(iii) Flights and hotel accommodation are booked by AT as soon as the booking is received from a customer. Airline charges for both types of holiday are €100 per passenger. Hotel charges are €125 for beach holidays and €150 for winter sports holidays. Both airline and hotel charges must be paid in the month in which the holiday was originally due to be taken. It is not AT’s practice to make any refunds to its clients, irrespective of the date of cancellation. 

(iv) At 31 December 2017 the company has received 660 bookings for winter sports holidays. It is estimated that bookings and cancellations for next year will be as follows:

 

 

 

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Flights and hotel accommodation was first posted on August 14, 2019 at 3:03 pm.
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Flights and hotel accommodation was first posted on August 14, 2019 at 3:14 pm.
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