Market Analysis, Consumer Details, Existing Market Trends - Australian Tourism Industry - Example

Assessment Part I – Business Concept proposal Name of the Student Name of the University Table of Contents 1. Executive Summary 3 2. Business Concept and Business Environment 4 3. Aims of the Project 5 4. Key Objectives and Deliverables of the Project 6 5. Market Analysis 7 6. Environmental Analysis 9 7. Feasibility Analysis 10 Executive Summary This paper provides the initial market analysis, consumer details, existing market trends and future trends required for a new business proposal to be carried out in an existing company that has been listed in the Australian Stock Exchange. The proposed business idea is one that seeks to convert Heron Island Resort in Queensland, which is an existing resort owned by the GPT group, into a multi cultural tourism resort. This report provides insight into the basic business concept and the business environment, the primary aims of the project, key objectives of the proposal and a detailed market analysis that gives a detailed account of the Australian Tourism industry. This is followed up by a SWOT analysis of the proposed business idea that details the strengths, weaknesses, opportunities and threats that surround the proposal. The last section deals with the feasibility aspect, exploring the viability, justifying the cost and examining the benefits and return on investment and the regulations and legislations that surround the tourism business in AUstralia. 1. Business Concept and Business Environment GPT Group is one of the largest listed diversified property groups in Australia. Listed on the Australian Stock Exchange GPT group has total assets worth $13 billion. The group has an extensive investor base with over 50,000 investors and is one of the top hundred stocks by market capitalization. The group’s main strategy is focused towards ownership, management and development of Australian real estate in the Office, Retail and Industrial/Business Park sectors. (GPT website, Online). GPT further extended their sectors into the Australian Tourism and Hotel sectors, with the acquisition of Ayers Rock Resort in 1997, followed by he Four Points by Sheraton hotel in Sydney and Voyages Lodges. The main business proposal put forth in this paper is to convert the GPT owned Heron Island Resort into a multi cultural tourism resort. Voyages Heron Island is a true coral cay located right on the Great Barrier Reef, off the coast from Gladstone, Queensland (Voyages Hotels & Resorts, Online). The idea of creating a multicultural tourism resort arose from the fact that Australia houses many cultures from across the world. Asian, African, Middle East, Indian, Italian are just some of the many cultures that are now part of the Australian communities. Since tourism is a growing industry in Australia and contributes largely to the Australian economy (Tourism Australia, 2006), and since Queensland is a popular tourist destination, this idea will sell extremely well among tourists as well as the natives of Australia. The GPT group has already extended its arm into the Tourism and Hotel industry as stated previously and owns some very high-end resorts. This proposal of converting an existing resort into a multi cultural resort is in a way combining two industries, namely tourism and hotel. Hence it will fit it well with the existing business of the GPT group. As far as operations in the existing business and organizational structure goes, this multi cultural resort will be a part of the Tourism and Hotel department and will operate and function under the same. 2. Aims of the Project The main aim of this business proposal is to increase profitability to the resort by making it more popular. Turning the existing resort into a multi cultural resort will create curiosity and interest among consumers and increase the number of footfalls to the resort. Since the idea is unique, it will gain a significant amount of popularity thereby increasing profits. Australia is a land housing a wide variety of cultures such as Asian, Indian, Greek, Middle Eastern, Italian etc. About 19.2% of the total population in Queensland are born overseas and belong to a wide range of different countries (Australian Bureau of Statistics, 2006). This will contribute considerably to the increase in popularity of the resort and thus bring about an increase in profit. Combining the hotel sector with the tourism industry is basically a new theme and concept. This is a concept that is aiming to bring a new vision to the entire Australian tourism industry as well as the hotel industry and create a niche category. This proposal will aim to create and bring about a change and revolutionize the Australian Tourism and Hotel industries, which have so far concentrated and developed only their respective industries as opposed to combining the two to give a more unique experience to consumers. Since this category is fairly unexplored, it offers a much wider scope to make a good impression on the consumers and capture a significant market share. This project will aim to capture a good percentage of market shares in a niche market and thus become the market leader. Apart from combining hotel and tourism, the resort will aim to expand its services further to satisfy the consumers to gain market share and become the market leader. Becoming the market leader will be an object to be measured. 3. Key Objectives and Deliverables of the Project There are few key objectives of this proposal. The primary objective is to be unique and different from the competitors in order to offer customers an exclusive multi cultural experience which is unavailable anywhere else. The success of multicultural businesses and enterprises can be seen with the emergence of multicultural hotels and restaurants all over Australia and the enthusiasm with which people have welcomed these undertakings. The success of this objective will be measured by surveys conducted among both the general Australian population as well as the tourist population. Another basic objective is to promote cultural harmony within Australia, as it is a land of different cultures from all over the world. Housing many cultures within one tourism resort can enable people to experience multiple cultures all in one place. The Australian government is already promoting International Cultural Cooperation, by developing cultural contacts and cultural exchange programs with Asia, especially Japan, China, and the ASEAN (Association of South-East Asian Nations) and India (Australian Studies Centre, Online). This proposal will contribute significantly towards cultural harmonization. This proposal also aims to contribute considerably to the Australian Tourism and Hotel Industry. By combing both it aims to open up an arena of possibilities and opportunities and create a niche industry. It will also aim to enhance tourism and bring about revenue to both the industry as well as to the country. One other objective is to increase the number of footfalls to Heron Resort and increase it’s popularity. Queensland is a very common tourist destination with summers as its peak season. Offering a multi cultural experience will bring in much revenue for both the resort as well as the GPT group. This can be measured by keeping tack of the number of visitors as well as gaining feedback from the consumers. 4. Market Analysis Tourism in Australia has been on the rise over the last few years. There is a significant increase in the number of tourists visiting Australia and this has contributed greatly towards the economy. It is a growing industry with a large amount of scope and potential. In 2004-05, international visitors consumed AUD$18.3 billion worth of goods and services produced by the Australian economy. This represented 11.1 per cent of total exports of goods and services (Tourism Australia, 2006). More than half the employment in retail trade, cafes, restaurants and accommodation is generated by tourism in Australia. The inbound tourism contribution to GDP in 2006-07 was $9.9 billion. (Tourism Australia, Online). Queensland is one of the primary centres for tourism. With its shimmering waters and sandy beaches it is the primary target for any tourist, from within or outside Australia. In the year 2006-07, tourism in Queensland contributed more to its economy than one of its most important, traditional industry, Agriculture, Forestry and Fishing. Apart from coal and non-ferrous metals tourism is Queensland largest export earner. Tourism also contributes $8.8 billion to the Queensland economy and accounts for 5 percent of Queensland’s Gross State Product (Tourism Queensland, 2009). Tourism in Queensland also contributes significantly to national employment. The tourism industry alone employs about 6% of the total employed population in Queensland and it creates an additional 97,000 jobs for the people of Queensland. Hence the business proposal would be very lucrative in Queensland. The tourism industry in Australia is quite competitive by nature because of its potential to generate large revenues. Some of the major competitors in the industry include AAPC Limited, Octaviar Limited, Grand Hotel Group, Hilton Hotels of Australia Pvt. Limited, Tourism Asset Holdings Limited, etc. (IBIS World, 2008). These players have a reasonable amount of market share in the tourism and hotel industry. Since this proposal is to combine multiple cultures in an innovative way and since this will be the first initiative of this kind, Heron Island has considerable scope to capture a significant amount of market share and become the market leader. Domestic visitors from within Queensland, Brisbane, New South Wales, Victoria and the rest of Australia are key visitors to Queensland for vacations and are comparatively high in numbers. In the end of the year 2008, there were about 25000 visitors from regional Queensland each staying for approximately 4 days. Queensland had 15000 visitors from Brisbane, 10,000 from New South Wales and 5000 from Victoria each staying for 3 nights, 2 nights and 1 night respectively. The domestic tourism market is quite high and offers large scope for increase in popularity and profit in Heron Island Resort (Tourism Queensland, 2008). Australians are generally a very adventurous group and prefer trying out new things and having interesting experiences. They are open to many cultures since Australia boasts of a multi cultural society with government policies that allow people to practice any religion and culture that they may prefer. Hence this business proposal of converting Heron Island into a multi cultural tourist resort will catch on among both the Australian population as well as populations of other cultures that are part of the Australian community. For Australians this resort will offer a brand new and unique experience and give them an insight into other cultures, apart from their own, within the confines of their own homeland. For other cultures such as Asian, Middle Eastern, Italian, Indian etc, it will give a taste of their own culture, which they don’t otherwise have access to very often, being away from their homelands. Hence as far as target audience are concerned this proposal will become a huge hit and increase the popularity of Heron Island, thus bringing about an increase in revenues. 5. Environmental Analysis The environmental analysis throws some light on the external environment to identify any risks or threats that might confront the company if it adopts the suggested proposal. It aims to identify the opportunities, risks and threats that may surround the proposal through a SWOT analysis. SWOT Analysis is a tool for examining an organization in its environment (Marketing Teacher, Online). Strengths Tourism is a growing industry in Australia and contributes extensively to the Australian economy Queensland is a popular tourist destination. Hence this proposal will turn out lucrative for Heron Island Resort Since Australia is a multi cultural continent, opening a multicultural tourism resort will turn out to be a success among both Australians as well as non-Australians It also brings about cultural harmonization Combining culture and hospitality industry will give a new and unique experience to the target consumers This proposal has the scope to significantly increase and create various job opportunities Brings new vision to the tourism and hospitality industry by creating a new segment Weakness Involves heavy, extensive investment Resale value of the resort may decline owing to conversion to a specific theme Huge expansion of employee base Training costs for the respective cultures for employees May require considerable change in the organizational structure and management processes Opportunities Despite the risk and uncertainty of outcome, this can be used as an opportunity to create a new tourism segment Creation of a new segment widens scope for large market share market leadership Market leadership increases popularity and revenue Increased contribution towards the tourism industry as well as the economy of Queensland Threats Barriers to entry such as legislative and political regulations Failure of proper execution of cultural themes Improper maintenance due to the vastness of project 6. Feasibility Analysis Analyzing the feasibility of the business is a very important part of a new business proposal. The proposed business idea involves extensive investment in the form of infrastructure increase, increase of employee base, change in organizational structure and management processes, training expenditure for employees to suit the multicultural themes, interior decoration costs, suppliers for specific cultural themes, screening room with 100 chairs, DJ expenditure and other expenditure to suit the multicultural resort theme. However despite the extensive investment involved the benefits and return on investment is considerably high because of the current and future trends of the tourism and hospitality industry. Domestic visitors to Queensland come up to about 16 million and International visitors come up to about two 2 million. About 30% of domestic visitors to Queensland use resorts and hotels for accommodation during vacation while almost all international tourists stay in resorts and hotels. Queensland had in all, 78,451 rooms in the year 2008, which was an increase from the previous years because research statistics show that there was a 2% increase in the supply of rooms in 2008. The occupancy rate of these rooms was about 64.4%. (Australian Bureau of Statistics, Online). About 42% of the International visitors to Australia spend at least one night in Queensland. Overall average room occupancy rates and yield experienced a reasonable growth during the year 2008. There was also an overall revenue growth in the accommodation sector. Future trends and forecasts show that the annual average growth rate of domestic visitors to Queensland from the year 2008 to 2017 will be 1.8%. The annual average growth rate of international visitors to Queensland between the years 2208 and 2017 will be 4.3%, if Queensland continues to attract 42% of the International arrivals to Australia (Tourism Queensland, 2008). The above current and future trends of tourism and accommodation rates in Queensland show that there will be high return on investment from this business proposal, despite the heavy investment involved. The potential customers for this proposal include both Australians as well as people belonging to other cultures namely Italian, Indian, Greek, Middle East etc., who are living in Australia, as far as the domestic market is concerned. The International market will bring in customers from various countries and cultures. Since Queensland is a primary tourist location for both the domestic population and the international population, this multicultural resort will generate large revenues. There are several local, state and federal licenses that affect the tourism industry. These licenses include, Accommodation, Integrated Planning Act 1997 (amendments 2003), Development Permit, Home-Based Business Code, Administrative licenses and Goods and Services Tax Registration. This industry is also governed by the Fair Trading Act of 1989 and Privacy Act of 1998. The Anti-discrimination and Equal Opportunity legislation also governs the industry. The Tourism Services Act of 2003 ensures that all tour guides and other internal tour operators function in an ethical and professional manner and in the best interest of consumers. Amendments to the Trade Practices Act 1974, will affect the way the tourism industry advertise their prices. The Liquor Act 1992 and the Amendment restricts the type and quantity of liquor that is served to certain Indigenous groups. Nature Conservation Act 1994, Marine Park Act 1998, Recreation Area Management Act and Aboriginal Cultural Heritage Act 2003 &Torres Strait Cultural Heritage Act 2003 are those that place regulations relating to the conservation of the environment. Despite the many regulations and heavy investment involved, this business proposal of converting Heron Island Resort into a multicultural tourism resort will bring about extensive returns on investment and increased benefit, which will contribute towards the overall revenue increase of the tourism and hotel ventures of the GPT group. References Australian Bureau of Statistics (2007). Queensland Key Statistics. Retrieved 4 April 2009. http://www.abs.gov.au/AUSSTATS/abs@.nsf/ProductsbyTopic/CA0EC6BD9EDFEB92CA2571B60078AB35?OpenDocument#TOURISM Australian Industry Report (2008). Tourism in Australia. Retrieved 4 April 2009. http://www.ibisworld.com/industry/retail.aspx?indid=1903&chid=1&rcid=61 Australian Studies Center Online. International Cultural Cooperation. Viewed 4 April 2009. http://www.petra.ac.id/asc/people/multiculturalism/policy/international.html Marketing Teacher. SWOT Analysis. Retrieved 4 April 2009. http://www.marketingteacher.com/Lessons/lesson_swot.htm The GPT Group Website. About Us. Retrieved 4 April 2009. http://www.gpt.com.au/content.aspx?urlkey=in_overview Tourism Australia. Research & statistics. Retrieved 4 April 2009. http://www.tourism.australia.com/Research.asp?sub=0317#state Tourism Queensland. Research. Retrieved 4 April 2009. http://www.tq.com.au/research/research_home.cfm Voyages Hotels and Resorts Website. Heron Island. Retrieved 4 April 2009. http://www.voyages.com.au/gpt/heron/ Assessment Part II – Business Project Plan Name of the Student Name of the University Table of Contents 1. Project Background 16 2. Project Definition 17 3. Project Stakeholders and Stakeholder Analysis 18 4. Legislative and Ethical Considerations 20 1. Project Background Heron Island Resort is located on the Tropic of Capricorn, 72km northeast off the coast of Gladstone, Queensland and is owned by the GPT group which is a company listed in the Australian Stock Exchange. Set amidst the aquamarine waters and shimmering beaches of Queensland it is a primary tourist attraction. In addition Queensland is a place where almost 50% of the tourists coming into Australia head. The business proposal is to convert Heron Island into a multicultural tourism resort projecting the multiple cultures that are part of the Australian community, namely Asian, Middle East, Italian, Greece, African, and Indian etc. The idea resulted from the fact that Australia has, over time, become a multicultural society with about 22.2% of the total population being born overseas (Australian Bureau of Statistics, 2006). Since it houses many cultures from across the world it will be a lucrative proposal to start a multicultural tourism resort which will give an insight into the different cultures to both domestic as well as international tourists visiting Queensland. This proposal will involve changing the entire look and appeal of Heron Island Resort to suit the multicultural theme. The interiors will be redone according to different cultures and the waiters and the other employees will be dressed in cultural themes in order to bring about and maintain authenticity. Cuisines of each culture will be made available for guests. It will also involve the further expansion of employee base, changing of organizational structure, planning a new management strategy, altering operational processes and in general bettering infrastructure in order to house a project of such a large scale. The proposal overall will give a new and unique multicultural experience to guests visiting Heron Island Resort, by effectively combing the tourism and hospitality industry. 2. Project Definition The primary objective of the proposal is to increase the popularity and revenues of Heron Island Resort. Converting an existing resort into a multi cultural tourism resort will create an interest among consumers and this will increase the number of footfalls to the resort thereby increasing the revenues coming in. This project also aims to bring anew vision to the tourism and hospitality industry by combining the two and creating an innovative new category in this sector. This proposal also aims to effectively unify the different cultures present across Australia and thereby promote cultural harmony. It is also aiming to contribute significantly to the economy of Queensland, as tourism is the largest contributor to the economy apart from agriculture, forestry and fishing which are the traditional industries of Queensland. This project has extensive scope, as tourism is a growing industry in Australia in addition to being the most lucrative industry as well as being the industry that contributes a large percentage to the Australian economy. Tourism in Queensland contributes $8.8 billion to the economy of Queensland, while 50% of the visitors to Australia visit Queensland at least once. And above all of this, since Australia houses many cultures across nations, this project will bring about considerable return on investment. The investment on this project is significantly higher as it aims to integrate many cultures under one roof. But research shows that return on investment is reasonably high. The major prerequisite as mentioned above is the initial high investment and the organizational changes that need to be done in order to assimilate the cultures in an authentic manner. The employee base needs to be widened and certain legal measures need to be taken to finish this project. Current trends show that the tourism industry is on the rise and future trends show that there will be a further rise in the coming years. The assumption made here is that this trend will continue to enable success of this proposal. 3. Project Stakeholders and Stakeholder Analysis Stakeholder Analysis is a technique that assists us to identify the primary people who have to be won over in order to benefit the business. The Stakeholder Analysis is a method of systematically gathering and analyzing data on stakeholders (individuals, groups and organizations) in order to identify stakeholders and the key actors in a system, assess their respective interests (stakes), and predict the potential to influence policy development and implementation (PWASET, 2008) The Stakeholder Analysis involves three steps. Identifying the Stakeholders The first step is identifying whom the stakeholders are in order to ascertain how to win them over or ensure their continuous support. There are two primary stakeholders for the GPT group, which owns Heron Island Resort namely, the investors and the management. The group has over 50,000 investors including large Australian and overseas institutions. The primary organizations that have invested a significant percentage into the group include HSBC, National Limited, J P Morgan Australia, Pan Australian PTY and Citicorp PTY Limited. The management is also considered a very important stakeholder. Prioritizing the Stakeholders This step is very crucial to the stakeholder analysis as it helps ascertain which stakeholder exercises the greatest amount of power and influence over the activities and other steps taken by the organization. It further helps to identify the stakeholder’s interest in the organization. The following power grid will help us identify the power levels of each stakeholder and this prioritize them. The investors are high power medium interest people. They are the main financial source for the business. However their interest levels may not be very high as their interest. They need to be reasonably monitored and kept satisfied. The management is a high interest stakeholder and has a significant amount of power, although the power they exercise is marginally lower than the investors. Understanding the Key Stakeholders The investors are the key stakeholders. The main step in understanding the investors is to ascertain their interest in the company as an investor. The primary investor organizations, namely, HSBC, National Limited, J P Morgan Australia, Pan Australian PTY and Citicorp PTY Limited benefit primarily on the market value and returns of Heron Island Resort. Furthermore investing in a holiday resort such as this will benefit their business enormously. Incentives for both their employees and customers can be given as a holiday package in an arrangement with the resort. Both the resort as well as the investor will benefit from an arrangement of this sort. Advertising and promotions for their companies through Heron Island Resort tie-ups will also be extensively beneficial to them. These stakeholders must be informed of all major decisions taken by the management and printed details of balance sheets, new policies and other particulars must be made available to them on a regular basis. They must be closely monitored and the company has to keep them satisfied at all times to ensure their continuous support and backing. 4. Legislative and Ethical Considerations There are some basic legal considerations that need to be analyzed before investing in the proposal. Licences such as Administrative Licences, Workers Compensation, Workplace Registration etc., have to be obtained from the local, state and federal councils as this proposal involves increase of employee base and infrastructure. The business has to comply with the rules set by the Fair Trading Act (1989), Workplace Health and Safety Act 1995 and Tourism Services Act 2003. The Liquor Act 1992 and the Amendment, which restricts the type and, quantity of liquor that is served to certain Indigenous groups must be carefully followed. The management should ensure that the business proposal does not indulge in discrimination and inequality of any employees or guests. Ethical considerations also have to be identified. Since this is a proposal involving multiple cultures, care must be taken not to offend or degrade any specific group. Care must also be taken to ensure that there is no discrimination or inequality among specific culture groups. The management objective of unifying cultures and bringing about cultural harmony must be a kept in mind. In addition to this certain environmental considerations have to be ascertained. Nature Conservation Act 1994, Marine Park Act 1998, Recreation Area Management Act and Aboriginal Cultural Heritage Act 2003 &Torres Strait Cultural Heritage Act 2003 are certain regulations that govern the environment in Queensland and must be followed in order to prevent any damage to the environment by the organization. 5. Project Management strategy The project management should be done such that the vision and outcome is shared among key stakeholders. The project meetings should be conducted regularly with a pre determined agenda. Workshops can be planned to share the vision with every team member. The team should include multicultural employees catering to the needs of the visitors. The team management should be developed in such a way that each member from differing cultures are gelled together into a cohesive unit. 6. Project objectives 6.1 Operational The operational side will cover how the project will be run in every aspect. 6.2 Financial The financial side will cover the budget aspects needed to carry out the project and will include the detailed development plan of the resort. The project phases will cover the available budget and will give provisions for adding future funds. 6.3 Marketing The marketing aspect of the resort should highlight the multicultarism that the resort is targeting. The Marketing team should be ready to communicate the message clearly and attract more visitors who visit Australia for the first time. The success of an organization in converting new customer to loyal customers and it is the duty of marketing team to provide the initiative. 6.4 Environmental Responsibility Environmental decision will be taken from reception of the resort to the board rooms. Working with organizations in local environment, planting trees and rebuilding environment in every manner possible will form part of the project. Proper waste management will be ensured and minimal use of plastics will be encouraged inside the resort. Proper training will be given to the staff of the resort to facilitate this. Pollution control will be part of resort programme. 6.5 Corporate Social responsibility. Corporate Social Responsibility means that the resort will be responsible and accountable to all stakeholders, government of Australia, social and legal systems, and environment. A step will be taken by which apart of proceeds of the earning will be earmarked for charity. 7. Project schedule The primary task is to prepare a detailed plan of the resort along with conducting of market research .The sub tasks will be A detailed study has to be done to structure the resort in such a way that majority of tourists are attracted. A detailed plan has to be done to attract first time visitors to the resort. A detailed plan has to be undertaken to understand how to convert first visitors to loyal customers. After the plan and research has been completed, then a team of employees should be selected. The subtasks after selecting team will be as follows. After selecting the team, a detailed workshop should be conducted to teach them about multiculturalism and different cuisines followed by different cultural norms. A detailed study should be done for the environmental procedures that has to be followed by the resort. 8.Resources a. Human resources The main thing has to be understood is the number of freelancers and full timers that is required by the organization. Human resource can be classified into following categories-Interns and volunteers, marketing staff, receptionists, room staff and other related staff, kitchen staff and other hotel staff. b. Physical resources The main thing about the resort is the decision pertaining to the land on which the resort is to be built. The resort may be built on leased land or on land that is purchased for this purpose. The interiors, furniture, and architectural the style of the building has to be decided. The rooms that can be opened to reef areas should be designed in such a way that the tourists are happy. Budget (using Excel spreadsheet with calculated cells) 9. Risk management  9.1Risk Planning: Proper risk planning has to be taken to avoid the risks 9.2Risk Assessment The risk can be rated into low and medium risk. High risk can be the idea to enter into resort business as the financial crunch is growing. But that does not mean that tourism is not lucarative.What is meant is there will be high gestation period. There is medium risk of employee layoffs in the context of the recession in the industry. To avoid this, employees of temporary nature should be recruited.  10.  Conclusions It can be said that the resort business is lucrative but proper care should be taken to market and get over the dull season due to financial crunch. References Australian Bureau of Statistics (2007). Queensland Key Statistics. Retrieved 4 April 2009. http://www.abs.gov.au/AUSSTATS/abs@.nsf/ProductsbyTopic/CA0EC6BD9EDFEB92CA2571B60078AB35?OpenDocument#TOURISM Ondee, P and Pannarunothai, S (2008). Stakeholder Analysis: Who are the Key Actors in Establishing and Developing Thai Independent Consumer Organizations? Proceedings of World Academy of Science, Engineering and Technology. Vol 34. Viewed on 24 March 2009. http://72.14.235.132/search?q=cache:Ww_lr8dkqeoJ:www.waset.org/pwaset/v34/v34-127.pdf+stakeholder+analysis&cd=10&hl=en&ct=clnk&gl=in&client=firefox-a Tourism Queensland. Business Development : Info Sheet. Retrieved 4 April 2009. http://www.tq.com.au/tqcorp_06/fms/tq_corporate/industrydevelopment/TQ_Info3_Business_Dev.pdf Read More