Business Process Management in Tourism Sector - Dissertation Example

 Business Process Management in Tourism Sector Introduction “The customer is the king or queen” (Tracy, 2006, p.110). This holds truth for almost all sectors irrespective of the country of origin or their field of operation. This realisation has become all the more conspicuous in the present world, where companies are trying to gain competitive position in the market by improving the level of customer satisfaction. Contemporary customers are becoming increasingly aware of different products and services available in the market. They use different sources for gathering the required information on various the product or services. The strong competition among different brands in the markets has resulted customer loyalty to decrease at an equally faster rate making it imperative for the companies to update their business process to make it more effective in satisfying customer’s needs. The present project will deal with the travel & tourism sector. This is one such sector that had been growing at a fast rate until the economic recession engulfed almost all the developed nations. Even the developing nations were no strangers to it. However, with the world now coming out from the shadow of recession, the travel & tourism sector is soon expected to regain its momentum. As per UNWTO, the global tourism sector is expected to revive by 2010. The Governments of G20 nations are taking special initiatives to assist the performance of travel and tourism sector. The data of the first four months in 2010 (January to April) has revealed that international tourist arrival has increased by 7 percent. In the month of April exclusively, growth in international tourist arrival was more than three percent. There are many companies that offer package holiday to the customers. With the improvement in the economic condition, the purchasing power of people in developing country is also increasing at a fast rate. These people now have sufficient money to invest in recreational activities, and exciting holiday packages is one such option. Success of package holiday greatly depends on the experience and creativity of the tour operator. Tour operation is one of the most vital activities that holds key to the success in this business. Hence, the tour operator should have a comprehensive understanding of the customer requirements while designing the tour packages. Travel & tourism is one such sector that has the potential to outperform in the coming years. This project has been developed keeping in mind this unique attribute. Hence, it will deal with tour package development activity. All the activities related to this business operation will be analysed and then suggestions will be provided pertaining to the manner in which it can be made more effective in fulfilling the demand of the customers. Outlook of tourism sector in 2010 The market experts suggest that in 2010, travel and tourism sector will outperform and this sector will assist many nations to revive their economic growth. There are many nations that specifically rely on their tourism industry as their major source of revenue. After considering tourist arrival (per capita), it appears that in San Marino 18,421.1 tourists arrived per 1000 people (Nation Master, n.d.). UNWTO reported that in 2010, tourism industry will grow noticeably in the Asia Pacific region whereas it will be slower in the European nations as they haven’t yet come out of the effects of recession. However, there are many challenges to this sectors that needs to be taken care of. UNWTO has anticipated that unemployment may be one such factor that can hinder this industry. Moreover, the governments of different nations are pulling back the stimulus package by reducing public spending and subsidiaries, and increasing the lending rates, the tax rates and other duties. This will bound to reduce the purchasing power of the customers and they will have to cut down investment on travel and tourism (eTurboNews, 2010). Activities related to tour operation The world has become a global village and people are more interested in exploring new adventurous place located in different parts of the world. However, often these globe-trotters do not have enough time to gather all the information required to plan a holiday. This need was capitalised by the industry people and thus the concept of package holiday came into existence. The concept of package holiday revolutionised the travel and tourism sector and assisted the tourism industry to set a new identity in the international market. The first package holiday concept was introduced by Thomas Cook on July 05, 1841 when he arranged a tour of twenty miles for a group of people. This concept gained wide acceptance in Britain and by the end of 1970 the concept of package holiday was in vogue. The objective of the package was to include a wide array of services like transportation facility, lodging facility along with food and other basic requirements. The travel operator takes all the responsibilities of deciding the places to be visited, the hotel to be booked and the vehicles to be hired. The customers are just required to pay the stipulated money to the operator while booking the tour. Till date the concept of package holiday is quite common in developed nations like US and UK. This is because of the high degree of convenience that it provides to the customers, as they neither have to take the pain of gathering information, nor do they have to contact different hotels and the corresponding people. However, many customers feel that these packages are less flexible, costly, and prefer to arrange their own holidays. Growing use of internet makes it easy for people to collect information regarding different places, hotels and other basic services. The performance of the tour operator is quite vital to ensure success in the business of package holiday. The tour operating department first conducts a market research to identify the external factors that is affecting the market condition. On basis of the information collected from market research, the company decides the nature of customers that needs to be targeted. The past data helps one to understand customer behaviour, i.e., their purchasing power, their budget on holiday celebration, the frequency of visits, the kind of places that draws them most, their food habits and other requirements. The package developer department then starts collecting information on different hotels, the facilities provided by them and the payment to be made to avail these services. The operating team also develops contacts with several transportation service providers, restaurants and other such service providers whose involvement would be required in developing the holiday package. All this information is then coordinated to develop different holiday packages for different customer groups. With changes taking place in the external environmental, the tour operating department needs to incorporate the same in the structure of holiday packages. For example, if the economic condition of the country deteriorates, then the cost associated with different services needs to be reduced. As the purchasing power of the customer base reduces, they prefer less costly holiday packages which is adjusted with reduced budget. Therefore, the tour operating team needs to modify the available packages. They should then avoid the too costly places and replace them with more economical ones. Generally they cut down on the cost associated with different entertainments included in the package. When the number of customers decline, the tour operating team are required to come up with some innovative and attractive marketing strategies to attract customers. It is the responsibility of the head of tour operating department to ensure that all the activities function in the predetermined and well coordinated manner. It is the head of the holiday package operating department, who is liable to the customer for any trouble or problem faced during their holidays. He is the one who bears the risk and is accountable to the people touring with his company. Project for improving the performance of tour operation As per market experts, the tourism industry is expected to flourish in the years to come as people will have more money to invest. However, the easy access of internet has made it easier for people to gather information on different places which they coordinate with other service providers to develop their own holiday package. This might pose as a major risk to those companies who are in the business of designing holiday package for the customers. Therefore this project aims to enhance the performance of package holiday operation business. The whole project will be segregated into three distinct parts: the first phase is planning where in-detailed information needs to be collected. Information regarding the external market condition, social & financial condition of the customers and the availability of different services within the country will be gathered. The prevailing practices followed in the tour operating department will also be analysed to detect the factors affecting the performance of this business process. Based on the information, a plan will be framed that will deal with the manner in which the project should be implemented and monitored. The main aim of this project is to enhance the performance of holiday package operating department. The effectiveness of this business unit depends on its ability to understand customer’s requirement and to develop holiday packages that possess the ability to satisfy customers in the best possible manner. It is only possible if the company can build its own database that can be shared with other departments. Initiation This is the first stage of the operation management, so success of the operation greatly depends on success of this stage. In the initiation stage, a group will be formed that will take the whole responsibility of collecting information, developing the plan of introducing the change and implementing it. Once the group will be formed, it will be easy to assign responsibilities among the members and the process will move in a more coordinated manner. The next step will to collect information from different departments. The finance department will provide information regarding cost incurred and revenue gained by the company which will be stored in the database. From the marketing department, information regarding customer behaviour, their purchasing power, frequency of acquiring the holiday package and other information regarding the market condition will be gained. The HR department, operation department as well as the customer care department will also share their information with this common database. The common database will help to minimise the redundancy of information, hence the cost and labour associated with data management will also be reduced. Investigation After the initiation stage, the next stage is to investigate and to find out whether this database will be effective in minimising the hurdles faced by the tour operation department. Investigation will also be required to collect information from different departments that what is their expectation from this database. It was investigated that while developing the holiday package, the operation department can avail information regarding the costs associated with different services directly from the common database. Information regarding customer behaviour can be accessed from the database which has been provided by the marketing department. To improve the service quality, it is very essential to determine the satisfaction level of clients who have already experienced the holiday package offered by the company. Information regarding their past experience and the problem faced remains with the customer care department and can be easily accessed by the operation department from the common database. The design of the database will be discussed with the company’s employees and with other stakeholders to find out their suggestion. Later on, this concept of database will be discussed with the some of the customers of the company who often purchase the holiday packages. These customers will be asked to suggest any special requirement they have which can be incorporated while developing the database. Developing the database While developing the common database the below given steps are required to be followed The size of the company will determine the complexity of the database. Before developing the database, people working in different department should be interviewed. This will assist in understanding the nature of work they perform and what they expect from the database. All this information will help to identify the problems, limitations and bottle necks existing in the company. Different management reports, inventory list and documents should be collected because this will help in developing the database. The key entities or the entities that will be managed by the database should be identified. These objectives can be tangible (product and persons) and intangible (pay roll period and business transactions). For each distinct item (object) a unique table in the database needs to be developed. After all the above mentioned activities are over, the type of information to be stored in the data base will have to be identified. For each objective, a distinct column needs to be introduced. Some common type of information that needs to be stored in the database are- 1. Raw data columns for storing tangible forms of information acquired from outside sources. 2. Categorical columns for storing limited section of data such as married/unmarried or true/false. 3. Identifier columns are effective in identifying each item stored in the tables. These have some identification numbers like the employee ID, supplier ID, customer ID and so on. 4. Relational columns develops link between information stored in one table with the information stored in another table. As for example, the table that contains information regarding sales needs to be linked with the table that have information about the customer. Such linkages help one to get information about the customer as well as the package purchased by him. Effectiveness of the database depends on its ability to relate information regarding different elements with each other. While developing the relation, various aspects like the manner in which the tables should be looked at, how they are related with each other and also with the objects, should be pre-determined. (MSDN, n.d.) Measure Once the final design of database is made, the process of implementation will start. For smooth progress of the implementation process, the progress should be evaluated on time to time basis. For this, different operation measurement tools and techniques can be introduced. As for example milestone chart or Gantt chart is quite effective in monitoring the rate of progress. If required, variance analysis will be conducted to find out whether the process of implementation is progressing as per the predetermined plan and if some variance are being noticed, then the required changes should be introduce in the implementation process. Completing and monitoring The concept of common database is expected to standardise the activities of almost all the departments. In the initial stage this changed format might create some basic problems to the internal customers (employees and management). Therefore the employees should be motivated to participate actively in developing and implementing the database in their respective department. This will help them to develop a good understanding of the new concept. If required the employees should be trained through on-job training programmes to work with modified system. For implementing and monitoring of the project properly, changes should be introduced in part by part manner. For example, at first the marketing department should be connected to the database. After this implementation is done successfully, next work should be to incorporate the finance department and so on. This part by part implementation concept will assist in monitoring the project is a more comprehensive manner. While implementation, existent loopholes should be rectified. This will save the cost and time associated with the rework. Once all the departments are connected to the common database, it will be easy for the operation department to develop holiday packages that can fulfil the requirement of different target customers. Conclusion In the years to come, the tourism industry is expected to perform well above its current situation. Such anticipation has been fuelled by increased purchasing power, improved economic state and high desire for quality holidays. Time constraints have forced people to rely more on the package holidays offered by different travel and tourism companies. Success of the holiday package depends on the efficiency of the tour operating department. If the people involved in the business operation can identify the changing customer needs and behaviour, they will be able to develop such holiday packages that will address the requirements of a wide array of customers’ demands. To assist the tour operating team, a project was suggested. This project has attempted to connect all the departments through a common database. While developing a holiday package, information pertaining to the cost associated with different services, the purchasing pattern of the customers and the past experience of the customer can be easily availed through this database. It will facilitate the operation department to develop and monitor the holiday packages in a much more effective manner. Reference eTurboNews. June 29, 2010. International tourism: recovery confirmed, but growth remains uneven. [Online]. Available at: http://www.eturbonews.com/16982/international-tourism-recovery-confirmed-growth-remains-uneven [Accessed on August 04, 2010]. MSDN. No date. Developing a Database Plan. [Online]. Available at: http://msdn.microsoft.com/en-us/library/ms177460.aspx [Accessed on August 04, 2010]. Nation Master. No date. Statistics. Available at: http://www.nationmaster.com/graph/eco_tou_arr_percap-economy-tourist-arrivals-per-capita [Accessed on August 03, 2010]. Tracy, B. 2006. Million Dollar Habits: Proven Power Practices to Double and Triple Your Income. Entrepreneur Press. Read More