Hidden Valley Cabins and Eco Tourism Destination - Case Study Example

Contents Executive Summary 2 Introduction 3 Findings 4 Background Information 4 Opportunities 5 Financial Viability 5 Project Ranking 6 Changes to Current Operations 7 Impact on Existing Customers 7 Resources Required 8 Communication to Stakeholders 9 Conclusions 9 Recommendations 10 Works cited 11 Hidden Valley Cabins. Hidden Valley Cabins: A Sustainable Experience, 2012. Web. 2 August 2012. 11 Tourism Queensland. Sustainability and Climate Change, 2012. Web. 2 August 2012. 11 Tourism Queensland. Destination Tourism Strategy 2012-2016, 2012. Web. 2 August 2012. 11 Tourism Queensland. Queensland Ecotourism Plan: Sustainable Tourism in Queensland’s Natural Areas. Web. 2 August 2012. 12 Diamantis, Dimitrios. Ecotourism :management and Assessment. London: Thomson, 2004. Print. 12 Pholeros, Paul, Michael Tawa, and Nicholas R. Opie. Ecotourism: A South Australian Design Guide for Sustainable Development. Adelaide: The Commission, 1994. Print. 12 Fennell, David A, and Ross K. Dowling. Ecotourism Policy and Planning. Wallingford, Oxon, UK: CABI Pub, 2003. Print. 12 Executive Summary This paper is an examination of the market data and customer and market characteristics in order to determine the viability of proposed marketing changes to current operations at Hidden Valley Cabins an eco tourism destination. The tourism industry has experienced exponential growth over the last two decades. The ecotourism market has also experienced exponential growth with increased environmental awareness. This presents businesses involved in ecotourism with many opportunities to expand their businesses. This paper has established that there exists many opportunities that such as increasing awareness on environmental issues, positive growth forecasts, and increased income in the emerging economies which are driving the growth of ecotourism. It has also been established that it is important that while the business adopt a marketing strategy, it has to take into account its objectives of maintaining the resort as a sustainable eco tourism destination. This would make the project financially and environmentally viable in the long term. The paper also puts forward the logistics and resources which would be required to effect proposed marketing changes. It has also been established that stakeholders form an important aspect to be involved in the implementation of the project. This paper thus makes recommendations for the adoption of a marketing strategy that markets the unique selling points of the resort such as its pioneering solar powered systems and education workshops. The paper also recommends the optimum utilization of its resources such as open spaces for picnics and spare capacity offered by its solar power systems. It is also recommended that changes in current operating systems ought to be changed while taking into account that new operations should not lead to environmental degradation. Introduction Hidden Valley Cabins is one of Australia’s most renowned eco tourism destinations. The resort is located approximately 1.5 hours northwest of Townsville. The resort is strategically located in a picturesque landscape that is full of a wide range of eye catching fauna and flora. The resort is owned by Ian and Bonnie McLennan who acquired it in 1986 and made several changes to it to make it an environmentally friendly resort. Hidden Valley Cabins is a small resort that is composed of four hotel rooms and six cabins as accommodation for all guests (Hidden Valley Cabins). With the increasing awareness on issues of climate change and ecotourism, the resort is presented with a unique opportunity to expand its business through sustainable strategies. One of the greatest achievements of the resort is the adoption of 100% solar power for every aspect of operation. The purpose of this paper is an evaluation of market data, the distinction of characteristics of possible markets and the assessment of the viability of making changes to current operations in order to take advantage of current demographics that would benefit the business. Findings Background Information The market for eco tourism has experienced exponential growth over the past two decades due to a number of factors. According to the World Trade Organization (WTO) eco tourism in the region accounts for 7% of all tourist arrivals and this is set to grow to 10% by the end of 2012. The eco tourism market is driven by a number of factors such as increasing awareness, nearness to large markets from emerging economies such as China, Singapore and Philippines which provide the bulk of eco tourism numbers (Fennell and Rose 78-89). The market is segmented into two categories; there are the main markets such as Europe and North America which are however stagnating while the emerging economies are becoming more important in terms of potential market. There is also the local market which is composed mainly of young adventure seekers from the cities. The market is also influenced by client characteristics such as increased awareness of climate change and the desire to visit exotic places in danger of extinction is fuelling eco tourism. In recent times there has been stiff competition from other eco tourism markets such as Kenya, Thailand and Morocco which are nearer to the markets as compared to Australia (Tourism Queensland). Since the resort is only 1.5 hours drive it could promote nature trails and wildlife watching by daytime visitors. Opportunities There are quite a number of marketing opportunities that Hidden Valley Cabins may exploit in order to cement their business model. Since Hidden Valley Cabins emphasizes on total reliance on renewable energy making use of solar power for all its energy uses, this presents a very good selling point for the resort. With increasing awareness on eco tourism the resort stands to benefit from marketing which will increase the number of guests staying at the resort. The resort may as such increase its revenues by increasing the number of accommodation spaces and even taking advantage of its expansive grounds for alternative accommodation such as tents (Tourism Queensland). With the resort being located in a picturesque location with natural attractions such as gorges and reptiles in their natural habitat, marketing of these features will make result into increased occupation rates. These may be exploited by marketing the resort as a picnic spot where people get to experience nature undisturbed. It is however important that the goal of environmental sustainability is maintained. Hidden Valley Cabins also offers education through workshops on climate change and sustainable use of energy resources such as solar. Education tourism on sustainable eco tourism also offers a potential revenue stream for the business Financial Viability While there exists marketing opportunities that will increase the profitability of the institution due to changing demographics, these have to be looked at from the perspective of their financial viability. The increase in accommodation facilities would increase the amount of revenue collected due to economies of scale. However this has also to be undertaken while analyzing the expected increase in costs associated with more visitors to the resort. With unlimited solar power the resort will benefit from the spare capacity which may be used in the increased accommodation spaces with no increased costs. The increase of tourist numbers would also inevitably result in increase in costs associated with degradation which may be too high. Nature walks and wildlife watching offers a viable financial opportunity by allowing for daytime visitors without increasing accommodation. With increasing awareness on tourism and the great demand for information on sustainable eco tourism the resort stands to gain from taking advantage of their capacity for offering education on sustainable eco tourism (Tourism Queensland). Project Ranking The different opportunities available all present different levels of viability and likely contribution to Hidden Valley Cabins’s business model. Increasing of the number of permanent structures in order to offer accommodation would result in an increase in the amount of energy consumed by the resort. As currently constituted the resort solar power system cannot handle increased needs of new buildings. The increase in the number of people while offering increased revenue stream would first require an upgrade of the solar power system which requires a large capital injection. The setting up of tents on the premises would on the other hand be cheaper and would give a fuller experience to visitors. This however comes with increased risk of environmental degradation thus lowering the desirability of the resort as an eco tourism spot. The promotion of sight seers who do not sleep over in the resort would however be a most viable proposition since it would generate income for the resort while keeping environmental degradation to a minimum (Diamantis 257-265). Changes to Current Operations In order to take advantage of the new marketing opportunities offered by changing demographics, Hidden Valley Cabins has to undertake several changes to its current operations. One of the core aspects that have to be changed in this aspect is the number of accommodation spaces which will call for installation of bigger solar power system. In order to appeal for international visitors the resort will have to set up more cabins in order to cater for the international visitors who will have to be accommodated overnight. With increased emphasis on the number of tourists to the resort, operations will have to be tailored to suit the needs of the high influx and as such there will be increased costs in manpower engagement to cater for the increased numbers (Hidden Valley Cabins). With an increase in the number of people visiting the resort, operations such as planting of trees and shrubs will have to be enhanced so as to restore degraded areas. As at present, visitors to nature trails and wildlife and bird watcher go to the wild on their own. With increase in the number of tourists, it will require guides and protocols in order to ensure wildlife and flora and fauna are not destroyed. The current focus is on six cabins and four hotel rooms; with more visitors innovative means such as tents for accommodation will call for service that is more related to picnicking as opposed to hotel service. Impact on Existing Customers While the expansion of the business due to changed demographics is desirable it will undoubtedly lead to a change in current operations. Even as the business intends to expand its client base, it is important that the quality of service offered to existing clients be maintained at the current standards if these clients are to be retained. Hidden Valley Cabins has so far been successful as a result of returning customers who are drawn back by the quality of service and what is on offer. While it has to be acknowledged that the business as currently constituted is operating at less than its optimal, any changes undertaken must be performed while making sure that the main attractions of the resorts remain intact (Hidden Valley Cabins). With influx of visitors the carefree atmosphere of the resort may be diluted coupled with likely degradation of the environment. The management must therefore ensure that proper protocols are put in place to estimate the optimum capacity of the resort so as to achieve optimum profitability while at the same time ensuring that the natural experience and environmental friendly fundamentals of the resort are maintained. Resources Required In order to implement these changes, the resort will have to have at its disposal certain resources. The marketing plan is an expensive affair and even with the reputation of the resort, there will still be needed a lot of financing of the marketing exercise. While the business has in the past depended on locally available materials such as timber from its estate in the building of its cabins, the proposed expansion of the business is quite massive. This would call for outsourcing of materials which are expensive. The business may thus find that it needs to find a source of financing for the undertaking apart from internal sources (Diamantis 198-211). Resources such as manpower for the running of the various aspects such as educational workshops and management of the large number of tourists as guides and hospitality officers will also be required. Lastly the resort will need to enhance its solar power systems in order to cater for the increased number of people and have spare capacity. Communication to Stakeholders While Hidden Valley Cabins is a privately owned business, there are various stakeholders that need to be taken into consideration before changes in operations are undertaken to the business. Important stakeholders include; existing customers, employees, the Australian tourism ministry, and other related agencies. All of these people play a vital role in the success of the planned undertaking and as such will be included in the process of modification of current operations (Fennell and Rose 187-196). Existing customers would be affected in any instance of changing of current operations since such changes will affect issues of quality of service and as such their input is valuable. Employees will also be included since their input is important in the implementation of any proposed changes. Tourism stakeholders will also be included in order to offer their input on the proposed changes to Hidden Valley Cabins operations since it is important to have the support of such agencies which set policy on tourism. Conclusions It is evident that the business model adopted by Hidden Valley Cabins presents a wide range of opportunities which ought to be taken advantage of in order to make the business more profitable. The growing awareness of environmental issues and combined with a growing desire by people to experience nature through ecotourism presents Hidden Valley Cabins with a viable marketing opportunity. The resort has a variety of opportunities such as picturesque landscapes and naturally occurring flora and fauna, offering of educational workshops on environmental sustainability, and its 100% reliance on solar power that would serve as good marketing points. Current operations will however have to be altered in order to allow for the proposed changes that will see an increase in accommodation spaces and increase of diversity in the nature experience through setting up of tents and picnic spots. All of these will require financing which will have to be outsourced though the project is viable in the long term given that projections on the growth of eco tourism are positive for the foreseeable future (Pholeros, Michael, and Nicholas 134-155). The management of the business will however need to take into account and include the various stakeholders such as existing clients, employees, and government agencies in carrying out the proposed changes. Recommendations Positive forecasts for the growth of ecotourism calls for emphasis of the nature tourism aspect of Hidden Valley Cabins. The focus of the resort on 100% solar power for its energy needs presents a unique selling point which the business ought to take advantage of as a marketing strategy. Increasing awareness on eco tourism and environmental sustainability offers an opportunity that Hidden Valley Cabins ought to take in marketing the resort as a premier education institution for such issues (Diamantis 78). The resort to make use of its expansive spaces to enhance the visitors experience by setting up tents and picnic spots in order to increase accommodation and enhance revenues. It is important that an optimum number of tourists be determined in order to ensure that expansion of the business does not result into degradation of the environment and ultimately the experience at the resort. The resort has to take advantage of the spare capacity of its solar power systems in order to power its increased accommodation at no extra cost. The resort ought to consult all the various stakeholders on the proposed changes in order to ensure that there is a smooth implementation of proposed changes (Fennell and Ross 256-268). Works cited Hidden Valley Cabins. Hidden Valley Cabins: A Sustainable Experience, 2012. Web. 2 August 2012. Tourism Queensland. Sustainability and Climate Change, 2012. Web. 2 August 2012. Tourism Queensland. Destination Tourism Strategy 2012-2016, 2012. Web. 2 August 2012. Tourism Queensland. Queensland Ecotourism Plan: Sustainable Tourism in Queensland’s Natural Areas. Web. 2 August 2012. Diamantis, Dimitrios. Ecotourism :management and Assessment. London: Thomson, 2004. Print. Pholeros, Paul, Michael Tawa, and Nicholas R. Opie. Ecotourism: A South Australian Design Guide for Sustainable Development. Adelaide: The Commission, 1994. Print. Fennell, David A, and Ross K. Dowling. Ecotourism Policy and Planning. Wallingford, Oxon, UK: CABI Pub, 2003. Print. Read More