Tourism Industry Driving Forces - Coursework Example

Feasibility Analysis Name: Institution: Date: Table of Contents Table of Contents 2 1.0 Business and Industry 4 1.1 Industry Analysis and Future trends 4 1.2 Tourism Industry Driving Forces 4 1.3 Success Factors 6 1.4 Opportunity and Market Gap 6 2.0 Products / Services 7 3.0 Operations Objectives 9 4.0 Physical Presence 9 4.1 Location 9 4.2 Premises 10 4.3 Facilities Expansion and maintenance 11 4.4 Supply Chain Management 12 4.5 Service Process 12 4.6 Inventory Management 13 5.0 Human Resource Planning 14 6.0 Legal Requirements 16 7.0 Technical Feasibility 16 References 18 Appendices 21 Appendix 1: Service Flow Diagram 21 Appendix 2: Organizational Start up Costs 22 Appendix 3: Organizational human Resource Layout 23 1.0 Business and Industry 1.1 Industry Analysis and Future trends The tourism industry is a drastically growing industry in the market. In this case, the industry has over the years registered an increased industrial growth rate. As such, the industry represents an increasing growth rate that attracts increased investments. Investors in the market are attracted to industries with both current and forecasted growth rates in the market. The tourism industry represents such a venture. Cochrane (2008) argued that historically the industry has registered increasing growth rate in the travel, accommodation and restaurants sectors. This increase has led to an increasing investment rates in the market. This has been necessitated by increased cultural integration in the market. Globalization has increased tourists movement in the industry. Globalization is a continuous process that is ongoing and is expected to project into the future. The tourism industry with its heavy reliance on the globalization concept is bound to increase in the future. With increased growth in the tourism industry, profit margins in the industry have increased and are expected to retain this status into the future. Therefore, this has increased the overall market success in the industry. Therefore, the increased profitability levels in the industry make the industry an attractive venture opportunity for investment across the supporting sectors in the economy (Hong, 2008). 1.2 Tourism Industry Driving Forces The tourism industry as established under the industry analysis is an emerging and developing industry. In its development, the industry has experienced its increased development and growth capability from a range of driving factors. Such factors include globalization, technology development and international security. On one hand, Macleod (2004) stated that globalization has played a key role in facilitating increased tourism industry growth. Globalization resulted to increased cultural exchange and integration. As such, the global community has experienced an increased cultural exchange that allows for increased harmony and peaceful co existence. Therefore, cultural misunderstandings and hostilities evident in the traditional societies are no longer existent in the new globalization era. A second driving force in the industry is the establishment of technological development. The technology industry has emerged s one among the drastically evolving aspects in the market. In this case, technological evolution evidenced in the global market has revolutionized the global market. The technology industry is a support industry to other market industries, such as tourism. As such, its industrial development has played a significant growth driving factor in the tourism industry. Modern technology has enhanced safety and speed in tourism travel (Mihajlovic, 2012). Through its application, airlines have developed safer and fast travel options that facilitate increased travelling rates. Moreover, the travel industry has expanded resulting to increased market competition which is a precursor to the development of affordable travel airlines. As such, this reduces overall tourism costs, which increases the overall industry success rates. Finally, the international security enhancement platform has played a significant role in facilitating and enhancing increased tourism industry growth (Bianchi, 2006). The industry is highly sensitive to insecurity. Egypt registered a reduced tourism attraction rate after the terrorist attacks of 1998. This evidences that insecurity implicates on travel destination attractiveness. However, global efforts to fight terrorism serve as a key industry driving force (Wilson, 2009). 1.3 Success Factors The tourism industry as discussed in the analysis sector is increasingly growing and is expected to project this into the future. In this case, the industry has its key success factor in cultural integration. Cultural integration plays a significant role in facilitating peaceful coexistence. Increased integration has reduced on cultural myths and stereotype perceptions. As such, integration has allowed a perception change on cultural diversity, enhancing a culture of cultural diversity tolerance (Baklanoff, 1996). As a result, individuals’ movement and interactions with diverse cultures has been facilitated. Therefore, this has served a key success factor in the industry. 1.4 Opportunity and Market Gap Evaluating the business concept n the tourism industry, reveals that the market is increasingly growing and attracting al large number of investors. However, statistics demonstrate that the accommodation industry sector faces an increased shortage. The existing accommodation facilities are large and expensive. As such, this has negated the reduction in tourism costs concepts. Therefore, this causes an increased market challenge in accommodation for tourists seeking low cost but quality accommodation. The assumption in the industry is that tourists seek for aesthetic value and are willing to pay high accommodation costs (Puri & Chand, 2009). However, this concept is far from reality. Despite their tourism adventures, tourists remain under economic constraints and thus seek out for value for their money and saving opportunities in their travels. Consequently, there exists a market gap for quality but affordable accommodation facilities for tourists. It is this market gap that the proposed business venture seeks to serve (Gautam, 2008). 2.0 Products / Services In providing product services in the market, the proposed business venture aims at providing one key service that is accommodation. In this case, the organization will establish facilities both permanent and mobile to accommodate the tourists. On one hand, the organization will provide accommodation services to foreign tourists in the market. In this case, the accommodation services will be available on booking. As such, tourists will have the opportunity to book accommodation well in advance to reduce on delays and inefficiencies in accommodation shortages. In its service provision, the organization will establish an online platform through which customers can book their rooms well in advance. As Zimanyi, Kozar and Kovari (2010) argued that, uunlike other organizations in the market, the organization will charge no additional fees for early booking and customers will be required to pay amounts equal to the booking period requested. As such, this will relative reduce on the overall accommodation costs on potential tourists. In addition, the organization will offer online applications through which customers can have an overview of the available accommodation rooms in its respective branches. The search criteria for this service will be the branch name. Subsequent to this, consumers will have an opportunity to choose specific accommodation rooms of their preference. This is a unique approach to accommodation sector. Currently, a majority of the accommodation enterprises provide the consumers with a booking opportunity but make the room selection themselves. Consequently, this has over the years resulted to increased consumer dissatisfaction as different consumers have diverse attitudes, tastes and preferences with respect to room choices and location (Wang, Bickle & Harrill, 2010). Therefore, this additional feature will offer the organizational services added market competitiveness over competitors. Besides the permanent accommodation structures offered in designate locations, the proposed venture seeks to introduce mobile accommodation facilities for highly mobile tourists who seek to establish camps deep in their tour areas. In such a scenario, it is relatively hard for such tourists to access the permanent accommodation facilities. Therefore, the organization seeks to venture into this market segment through the introduction of mobile accommodation facilities. In this case, the proposed organization will provide camping facilities on hire. As Grzinic, Zarkovic & Zanketic (2010) argues, a market analysis establishes that a majority of the organizations offering camping accommodation facilities such as the tents and the canvases offer them on purchase bases. However, the target consumers require the facilities for the camping period only. Therefore, the proposed study will develop a new renting approach through which customers hire the facilities for the period of their need. Consequently, this will reduce the overall accommodation expenses which are a key pillar in the proposed organizational business model. The adoption of this approach is a competitive market approach that relatively reduces the overall market accommodation costs. Therefore, the development of these products both the permanent and mobile accommodation service offers a blend of both unique and existing ideas improvements in the accommodation industry. Through this approach, the organization, though a new market entrant I the accommodation industry, expects to pull an increased number of consumers seeking to acquire quality accommodation at reduced costs allowing for savings and maximum utility gains, that leads to value for money realization (Conrady, Buck, Viehl & Tittel, 2011). 3.0 Operations Objectives The proposed organization is developed on a vision to enhance affordability in tourism accommodation. As such, the organization seeks to establish its operations on a mission platform of providing affordable accommodation services. In order to achieve these operational and strategic goals, the proposed organization seeks to establish its operations based on a series of objectives. One, it seeks to target the middle class tourists. The organizational model is based on the realization that a majority of the tourists are middle class earners. Therefore, strategically positioning the organizational activities and service traits to attract this population base. In addition, the organization has an objective of increasing its profitability levels. As such, it will develop quality management systems to enhance efficiency in its service provision efficiency. Such efficiencies in the market will reduce the overall organizational costs while increasing revenue returns (Mohamad & Saad, 2010). Therefore, this will strategically increase the overall organizational profitability levels in the industry. 4.0 Physical Presence 4.1 Location An organizational location is determinant of an organizational perception in the market. As such, organizational location choice is an imperative tool in the market that propagates increased market success. Therefore, the choice of locating the proposed organization is critical and is based on travel destinations preferences. Studies, such as the one developed by Kaynak and Ali (2012), in the tourism industry establish that the Asian and Eastern Europe form key preferential travel locations. As such, these areas provide an increased demand for tourism support services such as accommodation facilities. Thus, this presents a viable opportunity for the industry location. However, the proposed study seeks to establish its headquarters in the Thailand economy. Thailand, an emerging market is popularly known for its increased tourism industry growth due to its rich cultural heritage as well as a vast coastline. Therefore, a number of tourists visit this region in a bid to have a feel of the Thai culture as well as enjoy the leisure beach life. Therefore, locating the organizational premises and permanent accommodation structures in this region offer it increased demand opportunity. Further, common camping activities in the Thai region, due to frequent cultural activities will provide additional demands for its camping facilities (Chaiyakot & Visuthismajarn, 2012). 4.2 Premises The proposed organization is based on two business models, one for permanent accommodation facilities and the other for hiring temporal accommodation facilities. However, the two models will share the overall organizational premises and facilities. In its establishment plan in Thailand, the organization will through invested funds and additional loans, acquire land and establish new accommodation structures. This form of acquisition and business establishment is necessitated by the need to develop structures allowing for increased cost savings. The organization aims to venture the accommodation market through the low cost approach. Therefore, the organization will establish new structures that are of high quality but relatively basic to allow for reduced accommodation costs. In addition, the organization will rent premises in strategic locations both in Thailand and across the Asian market. Therefore, a combination of established newly constructed accommodation facilities as well as acquired offices in the market will increase the organizational overall success (Balotti, 2011). 4.3 Facilities Expansion and maintenance As established under the premises requirements analysis, the start-up margin for the organization is two permanent accommodation facilities as well as diverse temporal accommodation rented premises. However, these infrastructural possessions are insufficient to enhance increased organizational objective achievement. In this case, the organization in recognition for the establishment of an expansion platform has developed a strategic five years expansion plan in the industry. The organization intends to increase its strategic presence in the market through accommodation facilities acquisition. Due to the high costs of developing new accommodation facilities in the market. In this case, the organization has an increased market success strategy through leasing and acquisition of already established accommodation facilities. In addition, in order to increase its temporal accommodation business, the organization seeks to establish increased centres in the market to lend out the hired camping facilities in the market. In addition, the organization seeks to hire contractors for maintenance and repair services. As such, the organizational repair and maintenance contractors will be charged with the responsibility of renovating the organizational acquired structures. In this case, the contactors will customize the organizational acquired facilities to the organizational brand requirements and specifications. Thus, the contractors will enhance acquired premises customization for increased branding services. 4.4 Supply Chain Management The organizational services in the market include accommodation services. As such, the organization will need an increased supply of products such as house lighting and beddings as well as other housing facilities. In this case, the organization will need supply services in the industry. In its development process, the organization has a strategic objective of enhancing efficiency. Therefore, supply chain efficiency form part of this process. In this case, the organization has a strategic objective of enhancing supply chain management efficiency. As such, the organization will select its suppliers on a competitive basis. Thus, in developing this strategic efficiency, the organization will establish a supplier appraisal system (Roylance, 2006). The appraisal system will include the identification of suppliers with a low capacity and developing systems to develop them to attain increased market success levels. Therefore, through developing suppliers’ capacity and the blend of competitive bidding approach, the organization will achieve an efficient supply chain management system. 4.5 Service Process The organizational services will be managed on a sequential basis. The services will be initiated upon customers requesting for a booking opportunity in the organizational accommodation system either for the permanent or temporal accommodation facilities. In this case, the organization will develop a framework through which the bookings are listed in the system. Subsequently, upon the customers checking in, respective customers will be assigned to specific employees’ who will be in charge of providing them with the required services and attend to their other needs. The respective assigned employees will be charged with the responsibility of ensuring customer satisfaction is achieved. In addition, the organization will establish a service administration approach through which it will monitor the levels and quality of services offered to the respective consumers. Through this, the organization will both monitor and evaluate consumer service delivery and satisfaction levels. The established system is expected to establish a market performance efficiency and eventual management success. 4.6 Inventory Management The organizational services provisions in the market are based on the presence and adequacy of enough accommodation facilities. As such, accommodation rooms for the permanent basis as well as the accommodation equipments for the temporal accommodation business unit. As such, the facilities and rooms’ availability form the core of the business inventory. The cost of stock out in this case is very expensive. As such, the organization will institute an inventory management program through the adoption and use of technology management systems to ascertain room availability and bookings. In this case, the organization, through the room check services system will evaluate available rooms allowing for bookings. In such a case, the management will strategically develop operational strategies based on overall bookings. In addition, it will enhance consumer satisfaction due to the avoidance of overbooking that is an existing challenge in the accommodation market. Upon the establishment of 95% permanent facilities accommodation facilities usage and bookings, the management will initiate alternative inventory sourcing mechanisms such as strategic alliances with alternative accommodation service providers who can offer the organizational consumers accommodation at agreed fees. Through this inventory management and sourcing approach, the organization will enhance a mitigation of seasonal variations in demand, especially on peak seasons by providing accommodation facilities for the increased demand. In addition, with regard to the temporal accommodation facilities, the organization will develop an inventory management framework through which upon 95% usage, the organization will itself hire temporal facilities adding up to 15% of its total temporal equipments to reduce on eventual risks on stock out. 5.0 Human Resource Planning The organizational venture, seeks to exert is influence in totality on the global accommodation platform within ten years of operation. However, at its inception, the organization will start off with two permanent accommodation facilities with a fifty room’s accommodation each. In this case, the organization needs enough workforces to manage these facilities. In this case, the organization seeks to start off with a labour number of 30 employees inclusive of the management, but excluding non executive directors. In its employment plan, the organization will employ its executive staff on a permanent basis to allow for increased organizational needs focus (Painter & Holmes, 2012). The total number of the executive staff will comprise of the CEO, and five divisional heads heading the respective organizational divisions on Administration, customer case, hygiene, repair and maintenance, and the supply chain divisions. The executives will be recruited on a competitive basis through an external recruitment panel to enhance objectivity in the selection process. Basic qualifications for these staff members will be post graduate level qualifications with minimum three years experience management at similar or equivalent management positions in their respective professions A second human resource category is the middle level employees who will be charged with the management and supervisory roles in the operations of the organizational daily operations. In this case, due to increased demand fluctuations and the increased permanent employment costs, the organization will employ these employees on casual basis. However, upon three years consecutive working in the organization, employees will be employed on a permanent basis. This approach is aimed at enhancing increased employee motivation and commitment to reduce on turnover and enhance commitment. The employees under this category will be recruited competitively through the use of the organizational administration division that will have a human resource department unit. With respect to minimum qualifications, the employees should possess minimum diploma qualifications in their professions with work experience as an added advantage. Finally, under the human resource categories, the organization will have consultants. These are trained professionals, serving as third parties offering advice on strategic issues. In this case, the organization will employ such experts on contractual basis that will be renewable on a three years basis. Selection will be based on a competitive bidding process and qualifications being three years of related consultancy services in the market (Toppin & Czerniawska, 2005). In its employees training program, the organization will adopt both the financial and non-financial compensation approach. Under the financial approach, compensation will be based on employee level, qualifications and responsibility magnitude. Moreover, the organization intends to introduce call and put stock options for its executive management in the long run. On the other hand, non-financial compensation will comprise of recognition, training programs as well as promotions for employees with extemporarily performance. Finally, with respect to employees training and appraisal programs, the organization will establish a definite training program through which all recruited employees will be subjected to a compulsory three months training program that will not only review the employees professional obligations, but also evaluate the developing trends in the industry. In addition, the appraisal results will evaluate employees’ conformance to requirements in the organisation to allow or corrective measures as stipulated in the recruitment manuals. 6.0 Legal Requirements In establishing accommodation business a few legal requirements come into play. On one hand, the organization will face the safety standards and hygiene policies to guarantee on the consumers safety, security and hygiene. Moreover, the business venture seeks to establish its base in Thailand. As such, it will be subjected to the Thai property acquisition regulations. Such regulations, as Antons and Final Conference (2004) state, include the share ownership revelation and the real estate acquisition laws for foreigners as well as the subsequent property acquisition taxes in the economy. In addition, the organization will be subjected to regular regulations and conformance inspection by the Thai housing and accommodation facilities. It is only upon meeting these basic legal requirements that the organization can be established and strategically expanded in the long run respectively. 7.0 Technical Feasibility In summary, the above feasibility analysis reviews the possibility of establishing an accommodation business in Thailand. In this case, through an inclusive industry analysis, it is apparent that the industry is not only developing, but also has a market gap with regard to affordable accommodation facilities. Further, despite the r=legal and competition levels in Thailand, it is apparent that the increasing tourists population makes the organization a viable alternative. Further, an evaluation of start up costs as demonstrated under the report appendices establish potential for break even and eventual profitability within two years of operation. Further, it is apparent that with the laid down human resource framework, the organization is bound to success. Therefore, this feasibility test establishes that the business venture is viable. References Antons, C., & Final Conference. (2004). Intellectual property harmonisation within ASEAN and APEC. The Hague : Kluwer Law Internat. Baklanoff, E. N. (1996). 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Tarrytown: Marshall Cavendish Corporation. Zimanyi, K., Kozar, L., & Kovari, I. (2010). The role of ICT in Europe particularly in the Hungarian tourism. The Business Review, Cambridge, 16(1), 333-338. Appendices Appendix 1: Service Flow Diagram Appendix 2: Organizational Start up Costs Equipments Costs $000 Buldings 40,000 Leased Offices 6,000 Beddings 7,000 Room Aesthetics 8,000 Motor Vehicles 5,000 Human resource 10, 000 Camping Facilities 33,000 Total 99,000 Appendix 3: Organizational human Resource Layout Read More