Integrating Sustainability into Business - Essay Example

Business Escapes (BE) expects to cater to the discerning business men and women looking for adventurous break with the family. BE is targeting the affluent group and would offer all inclusive package deals both for singles as well as for the family. The differentiating factor would be the quality of service. At the stare of the business it is important to be aware of the critical risks and the pitfalls that are likely to occur in the course of starting a new establishment. Recent death of two British children at a Greek hotel has left the sector devastated. Stern measures have to be taken by the tour operators as far as safety and health assessments are concerned as Controls are not rigorous. This would help to safeguard the agency also against any litigation. Assessments of health and safety should be carried out throughout the tour (Daily Mail, 2006). While tour operators have to rely on the guarantees provided by the hotel authorities, BE should ensure that its terms and conditions of joining the tour are well laid out while setting up the business as tour operators could be subject to civil liability (AHS, 2007). While WTO predicts international travel will grow annually at the rate of 4.1% up to 2020 but various factors pose a risk to tourism. These include economic stability, world terrorism, and global climate changes. The UK travel sector is just recovering from the recent airport chaos and the threat of terrorist attack. Fear of terrorism affects global travel demand and the targets set by BE is a very optimistic figure. Tourism is a very sensitive sector and destination factor is very important. BE intends to focus on the affluent class and predominantly on adventure tourism. The company has not attained any experience in this segment and it would be advisable to have another sector and segment to fall back upon initially till it gets established. The number of holidays on offer should be limited to start with. Security situation puts holiday firms in a difficult situation (Reuters, 2007). Lessons can be learnt from the giants in the industry who have been able bring a turnaround despite the effects of football World Cup, avian flu, terror threats and the hot summer in UK (Mall, 2007). This has required a dual measure of huge investments and cost-cutting in various areas. BE plans to build brand awareness in the first year but would have to consider the consolidation taking place in the UK travel market as big firms are merging. This definitely means less competition but there is an oversupply of packaged holidays especially as more people are planning their own holidays using budget airlines and the internet (Reuters, 2007a). Under such circumstances, BE plans to simultaneously set up an interactive website providing travel counseling as well as booking facilities. Apart from this, BE recognizes that travelers are fanciful today and require exotic and risky destinations. BE would thus offer personal advise based on experience and knowledge. Conflicts between the tour operator and the suppliers are common. The suppliers include the hotels, the ground handling agent in the foreign country, the transport provider. The vast majority of suppliers are Small and Medium-sized Tourism Enterprises (SMTEs) and the tour operator, through vertical integration controls the transport companies and the retailers (Buhalis, 2000). BE would have to face stiff competition in establishing itself as a reliable channel but through advertising and brand awareness expects to overcome this disadvantage. At the same time, BE would be discrete in selecting channel partners or overseas travel agents. They would take into account the past service records and market reputation before associating. Packaged holidays have led to uncontrolled tourism, leading to degradation of the ecosystem. It affects the biodiversity and leads to depletion of resources. BE would remain committed to responsible and sustainable tourism and would align its goals with the rules and regulations laid down by the authorities. Packaged holidays usually include catering services and food and water borne infections are very common (Cartwright, 2003). The tour operator becomes liable in case of complaints and BE would take precautions to safeguard itself against such charges. Tourism is seasonal and there could be a lull immediately after the summer season. This is precisely why BE intends to launch its services during the summer season to capture the market. During the off-season it could promote other destinations or indulge in aggressive personalized relationship marketing which may not be possible at the height of the season. Security and business continuity costs have to be considered. Lapses could occur due to human negligence, natural disasters and intentional acts of espionage by the staff. Be would attempt to scrutinize the staff thoroughly before employment. While computer technology would be extensively employed contingency measures would be adopted to maintain business continuity. Crisis management team would be in place to be applied whenever necessary. Thus the critical risks include the overshooting the budget. Since the largest expense should be optimized, BE would have to be cautious in it. BE would get all its plans validated by an external consultant to ensure success. BE would adopt a strategic route in vendor relationship and not an operational or tactical approach. Vendors would be invited at multiple levels and evaluated across various parameters. Service delivery teams would be formed and attempts will be made to hire staff senior from the existing tour operators. In addition, some of the staff would be fresh graduates who would be trained as per requirements. Caution would be exercised in recruitment as information pilferage is common in the trade. The greatest risk lies in loss from damage to reputation which BE would reduce by demonstrating a proactive stance towards destination towards sustainability and product quality (UNEP, 2005). This can be used as a defense in any litigation. Being sustainable adds value to a tour operator’s brand, strengthens its market position. This strategy would make BE less vulnerable to short-tem market and economic changes. Thus BE is in a position to handle the critical risks that may occur during setting up the business. References: AHS (2007), Tour operators must do more to check holiday safety, 26 May 2007 Buhalis, D., (2000), Relationships in the distribution channel of tourism: conflicts between hoteliers and tour operators in the Mediterranean region, School of Management. Univbersity of Surrey, 2000 Cartwright, R. Y., (2003), Food and waterborne infections associated with package holidays, Journal of Applied Microbiology 2003, 94, 12S–24S Daily Mail (2006), Tour operators must do more to check holiday safety, 26 May 2007 Mall, W., (2007), Thomas Cooks profits take off, icWales, 26 May 2007 Reuters (2007), MyTravel bookings drop as terror threats weigh, 26 May 2007 Reuters (2007a), First Choice to merge with TUI, 26 May 2007 UNEP (2005), Integrating Sustainability into Business, 26 May 2007 Read More