Companies in the tourism sector such as travel agencies, hotel operators, or amusement parks owners have one thing in common: Both sides, in- and outgoing payments, are subject to strong fluctuations. Many external factors like seasons, weather conditions or changes in the business frameworks can affect their cash flow and turns cash flow management into a real challenge. Additionally, there is often a relatively high level of fixed outgoing payments to settle the fixed costs (e.g. either for renting or paying off the hotel building
Incoming payments are strongly influenced by fluctuations, e.g. in the number of hotel bookings. As more and more people tend to book last-minute or start their holiday spontaneously, it becomes more and more difficult to calculate revenues. But outgoing payments are becoming more and more unpredictable as well. In tourism, large investments in real estate and equipment are required and also maintenance and operating costs are comparatively high. And although tourism companies try to reduce staff costs with seasonal workers or flexible contracts, in the end it is always hard to calculate, how much staff and exactly when it is needed. Thus, it is getting harder and harder to reliably and consistently generate enough incoming cash flow to cover the mixture of a high level socket of fixed outgoing payments combined with the sometimes wild swings of the variable part of outgoing payments.