Australian Tourism - Business Analysis - Coursework Example

Australian Tourism Customer Inserts His/Her Name Customer Inserts Grade Course Customer Inserts Tutor’s Name 30th April, 2014. Introduction In the process of starting a business, a lot of requirements have to be analyzed against the expectations of the business. Some of these requirements include looking at the viability of the business, strategy and other requirements in terms policies and regulations. It is imperative to undertake an analysis of all the possible requirements and come up with a business procedure of starting the business. This analysis is going to look into the procedure and tasks involved in operating and running a new business. This business is going to be a hotel located in Cairns, Australia and we will also analyze factors driving the Australian tourism industry. Industry analysis The tourism industry is a major business in the Australian region with a lot of tourists and employees. In the operation of this business, there are several considerations that we have to analyze including the tourism business in the country. Australia is a big tourism destination and thus we have to analyze the capacity and capability of the industry especially for new business owners. We are interested in opening tourist cottages in the Australian Great Barrier Reef Coast at Cairns located in the north of the country. This location is frequented by lots of tourists from diverse locations in the world. Tourism in Australia is an important economic activity that employees over 500,000 people and contributes over 8% of its total export earnings. Tourism has been growing at a fast pace and several factors have influenced the growth of Australian tourism. These drivers of the Australian tourism industry are mainly external factors such as income, economic growth and desire to travel as analysed; a) Economic growth: Australia has witnessed the growth of its economy and the economy of its neighbours. As a result, a lot of people have a lot of money to spend in terms of touring and visiting different locations. The Australian tourism industry is supported by around 78% from local tourism. The high commodity prices aided the growth of Australian economy and thus a lot of people took the opportunity to invest in tourism and the industry grew tremendously in the year 2012. Chinese visitors were the highest visitors to Australia based on the increased household income in the country due to an industrial boom (Wong, 2012). b) Location: The climate and the close proximity of Australia to Asia have assisted the growth of the tourism in the region. Australia is close to Asian economies of China, South Korea and other countries which have experienced economic boom. As a result, visitors from these countries have contributed to the growth of the Australian tourism. Australia has a lot of tourism attractions such as sunny beaches, wildlife and game attractions and very welcoming people and this makes it easy to market the country as a good tourism destination (Hall, 2010). c) Growing trend of visitors: the global tourism industry experienced growth due to the need for people to travel and see the world. These people are mainly compromised of baby boomers who have retired and they feel like they need to travel to different locations in the world. As a result, there has been growth of tourism especially from several old people who have the time and resources to travel all over the world (Kristin, 2006, p. 45). d) Air Travel: the aviation industry has been changing and this has aided the growth of the Australian tourism industry. The increasing number of passengers and the reduction in air fares has impacted the Australian tourism positively in that it has allowed more people to access tourist destinations in Australia (Young, 2009, p. 79). These locations include Cairn and several other rural areas which are served with air transport. For instance, the recent takeover of Tiger Airways by Virgin Australia has made it easier for South-East Asian tourists to access Australia. Business Analysis There are several considerations that have to be made in the process of starting and growing a business. In the Australian tourism industry, there are several factors that should be analyzed. These requirements are mainly divided into product and operational plans as outlined; a) Licensing: Australian regional authorities in Queensland have come up with relaxed rules which make it easier for people open tourist lodges or operations. Therefore, desire to open a small cottage that offers meals and drinks to tourists would be easier (Hall, 2010). b) Product offering: the small cottage will desire to offer a product mix that includes in-house accommodation coupled with a location for campers. This will allow easy targeting of middle and low tier tourists such as budget travellers and backpackers. This will provide flexibility for tourists to either choose from various accommodation choices unlike facilities which only offer fixed types of accommodations. Moreover, around 70% of travellers who frequent Cairns are budget travellers who prefer flexible accommodations offers. In terms of meals, the hotel will offer varied food choices through local sourcing of foods such as vegetables, fruits and fish from the coastal fisheries (Wong, 2012). Moreover, the hotel intends to offer kitchen for rent for tourists such as backpackers to purchase and cook their meals on a communal kitchen. This would allow for flexibility and lower costs of hiring staff during the low season for the hotel. The hotel would strive to offer an assortment of drinks for all tourists such as alcoholic drinks, fresh fruit juices and packaged drinks. This is because tourists enjoy different meals with their drinks. For instance, the Japanese are fond of taking Saki as with their meals (Tess, 2010, p. 104). Therefore, having a wide variety of drinks would allow visitors and tourists to have a wide choice which will retain them and make them become frequent visitors to the hotel. Apart from product offering, we will have the ability to come up with an operational plan that looks into the different aspects of managing and running the hotel. Having a good operations plan makes sure that we tie the competitive advantage with the activities intended to be pursued by the operational plan as outlined; a) Location: the location of the hotel is an important factor in the process of staring and managing a business operation. Locating the hotel in Cairns within the Queensland Australia is very strategic and advantageous to the operation of the hotel. For instance, Cairns have a large number of visitors who frequent the location. Therefore, locating the hotel in the region is strategic since it will allow the hotel to access the necessary number of visitors coming into the region (Beirman, 2011). Locating the hotel within the Cairns region is strategic in the sense that this region is located along the Great Barrier Reef region and this would allow the hotel to grow and tap on the visitor numbers based on this attraction (Page, 2012). Moreover, the region offers it uniqueness to its visitors and finding qualified staff for the hotel would be easier since a lot tourism professional can be found in the region. However, locating the hotel in the region might be a disadvantage since there is a lot of competition from other hotels and locations in the region (Marianne, 2011, p. 148). b) Premises: the hotel premises will be acquired through a leasing model with a buyout option. This will allow the hotel to have a flexible option since it is quicker to lease rather than build and in terms of costs it is quite easier for a start up rather than building a complete hotel. In terms of costing, leasing premises with the ability to accommodate 40 guests with amenities such as a swimming pool, and grounds for campers will cost around $ 9,000 per month amounting to around $ 108,000. The leasing costs versus building or purchase costs are listed below; Activity Estimate (p.a.) Leased Premises Purchased Built Costs $ 108, 000 $ 3,000,000 $ 2,800,000 Maintenance $ 10,800 $ 12,000 $ 5,000 Total Costs $118,000 $ 3,012,000 $ 2,805,000 Based on the table above; we witness that the costs of leasing a premises are quite affordable compared to building or purchasing premises. Moreover, it is not advisable for a business start-up to put so much capital outlay in premises acquisition since this will leave it at a disadvantaged position to engage in other activities. c) Production process: the service and production process will include the use of systems and other functions such as marketing, booking, meals/drinks and organized tours. The flowchart below will illustrate how the procedures of marketing and how services will be offered at the hotel. d) The chart above highlights the production process that goes on from the point where a visitor/tourist is booked to when he/she checks out. The chart only covers the major processes that are undertaken in the process. Having various checks and balances in the system allows for the efficiency of the system (Yorghos, 2008). For instance, if we look at the use of systems, the production process becomes less hectic and takes into recognition the fact that all these processes will be utilized in undertaking production. Within the process of ordering for food and other services, we make use of systems that checks into factor the re-order levels and it is integrated with the number of visitors who check into the hotel (Medlik, 2012). Incorporating the services of outsourced tour guides and firms in the marketing and undertaking of organized tours assists in reducing burden in the system. e) The facilities that will be utilised in the hotel include the kitchen areas, swimming pool, laundry room and the hotel rooms. These facilities each require simple maintenance such as painting, regular cleaning and replacement of old parts will be planned within a facility management plan. Some of the facilities such as the swimming pool will be maintained through regular cleaning such as weekly, while other facilities will be acquired with a service contract attached to the facilities. This will include generators, kitchen ovens and laundry machines (Franc, 2009, p. 89). Having a service agreement attached to these facilities reduces the maintenance costs that would have been attached to servicing the facilities to unrecognized vendors. The hotel intends to expand capacity within the 5 year period so as to cater for larger visitor numbers. Some of the plans include extending the number of accommodation rooms available (Page, 2012). The anticipated growth of visitor numbers will stand at around 20% and therefore, we intend to expand our facilities by 10% to meet the growth of these facilities. This will include expanding the kitchen and production facilities, opening of tuck store for visitors and construction of another swimming pool. The maintenance procedure for the hotel is outlined below; f) An inventory management system will be deployed within the hotel with considerations on issues concerning ordering, safety stock measures and payment of supplies. The hotel shall engage fresh suppliers of food items under an open order system. This is whereby the supplier will provide supplies upon receiving an order. Then payments will be made at the end of each month and the stock re-order quantities and levels will be set at 30% of all the supplies delivered to the hotel. g) Regulatory framework used by the hotel will look into the Australian law and policies which govern on business regulation especially in the hospitality industry. These laws include liquor licensing laws which govern on sell of alcoholic drinks to guests. However, the two major laws guiding on the licensing of a business in Australia are the Business Names Registration Regulations 2011 and the Corporate Law of Australia. These laws govern on the basic registration and registration as a taxpayer (Ibp, 2012). h) Human resource management is an important activity within the operational framework of managing business operations. Therefore, the management of employees and their welfare is quite important and a legal requirement. The new hotel will employ 16 employees who will undertake different tasks as outlined; Position Remuneration (p.a.) Duties 3 Waiters 3,750 AUD Taking customer orders and serving drinks and meals to guests. 2 Cooks 4,100 AUD Production and preparation of meals 7 3 Housekeepers 2,500 AUD Preparation of rooms and accommodation areas. Taking customers extra orders such as meals, towels or laundry. 1 Reservation Officer 4,000 AUD Making reservations and checking out guests 2 Bartenders 2,500 AUD Mixing drinks for guests at the bar 1 Laundry staff 2,500 AUD Washing, Ironing and cleaning hotel’s laundry 2 Cleaners 2,000 AUD Ensuring cleanliness around the hotel premises and the swimming pool. 1 Accountant 4, 150 AUD Preparation of hotel budgets, financial reports and all financial transactions such as processing of invoices and payments 1 HR Officer 4,262 AUD In charge of ensuring employee’s welfare are taken care of and hiring and terminating employees’ contracts. 1 Manager 6,556 AUD In charge of all the staff in the hotel and he communicates the owners strategies to all employees The payment structure above is based on the average pay for Australian workers in the hospitality industry. It is in line with set laws on minimum wage and other labour regulations. In peak season the hotel will hire temporary workers and pay them on an hourly rate. Most of these workers will be recruited through agencies and referrals from other industry players. These employees will undertake different duties in the fulfilment of their job and thus some of them will require training on how to handle guests or perfect their duties (Ibp, 2012). Some of the training that they will undergo will include; Language classes; the employees will undergo training on different globally spoken languages such as Chinese and French. Since this will enhance their interaction with guests from different global locations. Workplace Safety: It is imperative to ensure that employees practice their jobs in a safe environment. This is a requirement of the law and at the same time it ensures that people are aware of occupational hazards and how to remain when the same occur. The legal requirements that are required for employment of workers include labour laws, work safety laws and other business regulations (Yorghos, 2008). First Aid: In a hotel environment, a lot of incidences occur which might require medical attention and thus all employees should be versed with first aid skills to ensure that these potentially dangerous situations are handled carefully. Conclusion Australia is a growing tourist destination and this growth will be affected by several factors including economic growth, political stability and the attractiveness of the country. Therefore, many business owners will take this opportunity and venture into the tourism industry. We have outlined the various requirements such as operations plans which could be used by a business owner with interest in venturing into the Australian tourism industry. This analysis takes in cognisance human resources, inventory systems and regulatory framework used to operate and run a successful business enterprise. References Beirman, D. (2011). Restoring Tourism Destinations in Crisis: A Strategic Marketing Approach. Canberra: Allen & Unwin Franc, S. (2009). “Emergence of Australia and South East Asia as Tourism Melting Pot.” Journal of Hospitality and Tourism, Vol. 3(1), 88-93. Hall, M. & Page, S. (2010). The Geography of Tourism and Recreation: Environment, Place, and Space. London: Routledge Ibp, U. (2012). Australia Company Laws and Regulations Handbook. Chicago, IL: John Wiley and Sons. Kristin, B. (2006). “Australian Workplace Agreements under Work Choices The Economic and Labour Relations Review.” ELRR, Vol. 16(2), 44-49. Marianne, W. (2011). “Australian Wine Tourism: Establishing a Career Path at the Cellar Door.” Australian Journal of Career Development, Vol. 20 (1), 147-151. Medlik, S. (2012). Dictionary of Travel, Tourism and Hospitality. Sydney: Penguin Books. Page, S. (2012). Tourism Management. Boston, MA: John Wiley and Sons. Tess, C. & Beverly, S. (2010). “Perceptions of Key Success Factors and Key Success Inhibitors in Australian Restaurant and Catering Business Operations.” Australian Journal of Hospitality Management, Vol. 6(2), 102-108. Wong, K. & ‎ Song, Haiyan (2012). Tourism Forecasting and Marketing. Manchester: Ladybird Publishing. Yorghos, A. & Gayle, D. (2008). Island Tourism and Sustainable Development: Caribbean, Pacific, and Mediterranean Experiences. Sydney: Praeger. Young, A. (2009). “Principles of Contemporary Corporate Governance.” Journal of Management and Organization, Vol. 12(3), 78-84. Read More