Current and Future Trends in Tourism Industry - Case Study Example

Feasibility Analysis Name Institution Course Lecturer Date The business I intend to operate in is a tourism venture. My venture will focus on the travelling sector of tourism. The business will have accommodation houses, restaurants and touring businesses. I intend to set up this venture to deal with the increasing number of vacationers and people on business trips who come to visit the different attraction sites in Australia. Current trends in tourism industry Continued growth in the global travel industry. It is believed that by the year 2020, tourism will be the largest industry in the world. The industry is estimated to generate $ 5trillion in the world’s economy (Novelli, 2005).Since 2000, the industry has undergone changes. The various sectors in the industry have struggling and adjusting to the future market. Internet is another current trend in tourism industry. Many people visit social network sites to check information on travels. The number of consumers buying travels online is increasing. In the other words, the consumers are in control of tourism marketing. Fragile consumer confidence which affect decisions on travels. The consumers’ assessment of the conditions of tourism industry in the present is continuing to grow negatively. The consumers’ confidence is approaching a bottom. Soaring costs of fuel affects all aspects of the industry. This is a major challenge facing the travel industry. The skyrocketing of fuel prices hurt the economy. The failure of just one airline disrupts a large number of travels which could lead to loss of jobs. Future trends in tourism industry Climatic changes affect the flow of tourists across the globe. Considering the weather patterns and natural disasters likely to occur in the future, tourism will be greatly affected. Climatic changes have impact on the purchasing trends of the tourists. Travelling with a mission is another important future trend.Travellers nowadays kook for real experiences in travel to enrich their cultures and let them feel authentic.Travellers travel on missions and as volunteers. Due to this, tour operators are specializing rather than generalizing. New emerging inbound destinations-Competition between destinations is going to grow fiercer in the future. Due to this, each country should seek a competitive advantage to exploit. Green tourism has a high demand and it will continue to grow in the future since many travelers are aware of the negative impacts that tourism might have in the environment. Due to this, travelers have become more responsible when it comes to environmental sustainability. (Novelli, 2005) Key driving forces Driving forces are the factors that influence the performance of in an industry. In the tourism industry, there are driving forces which influences its performance. One of the driving forces of the tourism industry is the increasing household income. Due to this, the number of people visiting tourist attraction sites increases which gives room for more ventures in the industry. The rising number of retired baby boomers with time and money to spend is another driving force. Many retired people like to spend their time and money earned on vacations. Due to this, more people venture in the tourism industry so as to deal with the rising number of tourists. People’s desire to see the world is another major driving force in the tourism industry. People want to go on vacations to different parts of the world to visit the different attraction sites. Due to the desire to see the world, the number of tourists increases which leads to mare people venturing in this industry to deals with the increasing numbers of tourists. Another major driving force in tourism industry is the reducing cost of air travels. Due to this more international tourists visit different tourist attraction sites in Australia. To deal with the increasing number of tourists, there is need to venture in travelling agencies to deal with the transport and accommodation of the tourists. Having considered the factors above, I decided to venture in the industry as a travelling agency to deal with the rising number of people visiting Australia on vacations or business trips. Key success factors Success factors can help agencies that assist in development and venture capitalists to determine the probability that a venture will succeed. This will help them to give guidelines on decisions involving support and investments (Weiermair, 2004). If the success factors are in place, they will help a venture to attract investments which will help in the running of the business. The key success factors for the tourism industry are; Leadership is very important for the success of a tourism venture. The leader of the tourism venture should be able to coordinate those involved in the many stages of development to ensure the venture succeeds. The leader should understand the aspects of the business, build support at community level and negotiate with the actors in government and markets. The leaders should also understand issues that will enable them to secure investments from the public and private sectors of the economy. Risk management is another important factor. The tourism venture that anticipate and plan ahead for risks have easier time adapting to the unexpected problems which may arise. These problems may be; political instability, weather events which may affect the number of tourists visiting the different attraction sites and the length of time taken to obtain licenses to offer services. The success of a tourism business venture also depends on successful engagement of the community. Local stakeholders and beneficiaries should engage to ensure long term success and sustainability of a tourism business venture. In the tourism industry, partnership management is another key success factor. Most of the skills needed for a business start up including legal advice, training, business planning and marketing can come from the partners involved in the business. The knowledge and expertise of the partners will contribute to the success of the venture. Marketing of the venture is a key success factor in the tourism industry. The venture needs to be advertised online for the people who are going on vacations and business trips to have access to the information. This will help them to decide whether the services offered in the venture meets their expectations which will help them to choose. Products There is great competition in the tourism industry. The services I offer should have to be of higher quality than those of the other competitors to attract more tourists and investments into my business venture. The meals and drinks will be of lower prices and high quality to attract more tourists into my venture. The customers will be able to save more money during their visits. To deal with other competitors, travelling agencies, the meals and drinks in my agency will be available at lower prices. My agency will offer higher convenience of the customers in and out of the country. My travelling agency will offer accommodation to the customers at lower prices to deal with the competition from other travelling agencies. The customers will be provided with all the things they need in their rooms be it entertainment to ensure that they enjoy their stay in my agency. The hotel rooms will be spacious and the activities offered will favor people of all ages. To deal with the competition from other hotels, my agency will deploy good marketing strategies so as to gain competitive advantage over the competitors and retain a greater number of customers. On tours, the agency will ensure that there are enough vehicles to take the tourists to the different sites. The available vehicles will be enough to deal with the rising number of tourists. Guides will be allocated to the tourists to show them around. The guides will be hospitable to ensure that they serve the customers in the best way possible. This will give the agency a competitive advantage and it will help retain customers. OPERATIONS PLAN Objective The objectives emphasize on the quality of services and sustainability. The main objective of the venture will be to provide quality services to the customers at lower prices so as to gain competitive advantage over the other competitors. The other objective will be to attract and retain a greater number of customers. Location Travelling agencies should be located in areas where customers can come and meet with you (Næss, 2006). The proposed location of my travelling agency is near airports. This is advantageous as many international tourists will be able to access the agency by travelling for a short distance. The location will also attract many international tourists because the agency will be easily accessible. However, the location of the agency will disadvantageous to some local people. Acquiring of premises The premises for operating the business will be purchased. The necessary procedures will be followed to until the deal is completed and the premises registered by Land Registry. The premises acquired must have enough space to deal with the customers. The estimated cost of purchasing a premise is A$20000. Purchasing is the best option over building and leasing. This is because the cost of building is greater than the cost of building. Leasing too is more costly because payment is on contract basis and at the end of the contract; the premise belongs to the landlord who leased it. Service process The process in the agency will deal with customers who have come make airline and railway reservations. These customers make reservations in the hotels. They make the reservations using credit cards. Facilities One of the facilities needed in the operations of the agency is recreational facilities. The facility should function without disruptions. The recreation managers will ensures that maintenance system is in place to ensure that operations are not disrupted. The recreation facilities to be provided will be swimming pools, volleyball pitch, fitness center, tennis pitch, resort campfire and game station arcade. The swimming pool will be built and its estimated cost is A$30000.The volleyball pitch, and tennis pitch will be purchased at an estimated cost of A$10000.The fitness center and the game arcade station will be built. Their estimated cost is A$40000.To deal with the anticipated growth within the first five years more swimming pools will be built. More volleyball pitches, tennis pitches, fitness centers and game station arcades will be built to deal with the anticipated growth. The other facilities which are necessary for the operations of the agency transport facilities. Transport is very essential for the success of the agency. As a travelling agency, there will be a lot of transport of the customers to the different tourist attraction sites. Vehicles will be necessary for the transportation. Vehicles will be purchased. The number of vehicles to be bought to begin the business will be ten and the cost of each vehicle is estimated to be A$4000.The agency will also hire transport to facilitate transportation of the customers. To deal with the anticipated growth within the first five years, more vehicles will be bought and more transport agencies will be encouraged to invest in the agency to facilitate transportation of the customers to the attraction sites. Accommodation facilities are also necessary for the operation of the travelling agency. There should be no disruptions in the accommodation facility. The customers need to be provided with good and comfortable accommodations. This will help to attract and retain customers. The customers will be accommodated in hotels. The hotel rooms will have the necessary facilities which will attract customers. Room services will be offered to the customers. More hotels will be established and more investors encouraged investing in accommodation to deal with the anticipated growth within the first five years. Processes to be followed for maintenance of the facilities The facilities will need to be maintained regularly to avoid disruptons.Maintenance systems should include planning, work orders and work assignments. Planning will be necessary in the agency to address all the maintenance concerns of facilities and equipment. Planning predicts deterioration, repairs and replacements. Not everything is foreseen and therefore planning addresses unexpected developments when they occur. In order to keep facilities and equipment in the agency functioning properly, there are different things that are built into maintenance planning process. These are inventory, assessment and task identification. The next process is work orders. In the agency, it will be necessary to have an action center that evaluates the problem and makes priorities and then assigns an employee to attend to that problem. The maintenance issue in the agency will be organized through a maintenance work order. After the request has been processed, the administrative manager assigns the job. Work assignments are influenced by the degree of work required, ability and availability of workers, availability of financial resources and the level of demand. Work assignment requires to be managed in order to supervise the work in progress and make sure that it is done correctly and on time. There are options for assigning work. These options are assigning work to specialized crews, units or contractors outside the agency. (Tovar & Lockwood, 2008) Materials and supplies Different facilities need materials and supplies. The materials and supplies required are foods and drinks, computers.They are supplied by different suppliers and sub contractors. In the selection of suppliers and contractors, consideration has to be put on safety performance. The sub contractor with a better safety record or the one taking important measures to improve the records should be awarded the contract (Sonmez, 2006).All bid contracts and documents should contain a section on safety which should have details on safety specifications, requirements and guidelines. After the contractor and supplier have been awarded the contract, they will be required to sign an agreement. As part of the agreement, there will be an agreement on the transportation of the supplies and materials. Inventory management system AIDA (Advanced Inventory and Distribution Application) comprehends all features needed for travel distributors. These features are accommodation, transportation; packages, transfer services and other services.AIDA will be the inventory management system for my agency as it can easily take an agency to the top level distribution competition. It has been built using the most recent technology and is highly flexible. It also permits fast changes to structure of the components according to the rapid variations in the market. AIDA is the best solution for the agency because the agency will deal with selling travel packages to individuals and groups through own travel agents and online websites. Strategies of managing seasonal variations in demand Seasonality is predictable and this enables the managers to anticipate its impacts and implement strategies to change any negative occurrences. The managers should be able to alter the effects of seasonality to their own advantage. To deal with seasonality in the tourism industry, my agency will implement the following strategies Setting lower prices to be charged during those seasons when the number of tourists is fewer to attract the more tourists. Offer facilities that are necessary during the winter and summer. Holding events that will attract more customers. Diversify the market and the services offered in my agency. Develop products that will encourage greater visitation during the periods when the season is low. Legal requirements Land use zoning Approach the municipal council to know whether the Town Planning Scheme allows the activity on the site you have chosen. Licensing Approach the local municipal council in order to register the business. The business also needs to be registered with the District Municipality. If you wish to be involved in selling air tickets, you need to register with IATA.Compliance with Consumer Code for Travel Agencies are also necessary. Regulations and By-laws Your application for a trading license will be circulated to the health and building inspectors. This is to ensure that your plan complies with the regulations before your application for a trading license is approved. (Choi & Sirakaya, (2006) In compliance with the legal requirements; I approached the municipal council to know whether the planning scheme allows any activity on the site I had chosen. I also approached the municipal council to register the business. I also registered the business to the IATA to be allowed to sell air tickets. I also complied with all the requirements of the Consumer Code for Travel Agencies. Staff To deal with the touring and accommodation of the customers, the number of employees in the agency will be 120.The staff will include managers, tour guides, catering staff, hospitality staff, booking personnel and drivers. The manager’s job will be full time. Their work include sales development, management of daily operations and financial and staff management. The tour guides and catering and hospitality and drivers staff jobs are full time. The jobs are full time to deal with the rising number of customers. The recruitment sources for the managers’ post were internet job boards. The recruitment source for tour guides, catering, booking personnel and hospitality staff was national newspapers while the recruitment source for drivers was recruiting firms. Training and performance of employees Employees are trained in order to improve their performance (Murphy & Margulies, 2004).Everyone in the agency must be involved, everyone must accept their responsibilities and look to improve. Rewards must be given to the employees for the improvements made. Training differs from one position to the other in a company. Managers undergo different training from the tour guides. The managers will be trained on how to effectively manage sales, staff and finance. Catering staff will be trained on what is needed to for the customers to get attracted by the meals and drinks they prepare. This is in terms of quality. Hospitality staff, booking personnel and tour guides needs to be trained on how to treat customers so that they want to come back again. Drivers need training on how to treat the customers properly. Training is of great benefit to the staff. It gives more motivation to the staff, it makes the staff more loyal and it gives them a higher level of job satisfaction. Training also improves the expertise of the staff. The performance of the staff in the agency will be assessed by setting up random quality control methods in the agency, surveying the customers about the quality of service offered by the staff and considering the staffs work ethics and their individual achievements. Remuneration packages In a company, there are different positions with different responsibilities. Due to this, the payment and compensation packages are different depending on the position. The payment in the agency will decrease from the managers pay to the drivers pay. The payment for the managers will range from A$800 to A$900.The salary for the tour guides, catering, booking personnel and hospitality staff will range from A$300 to A$400.The salary for the drivers will be A$200. Legal requirements of the employees All the employers must provide a written statement of the terms and conditions of employment of the employees within the first two months of employment. In my agency, I will comply with the legal requirements of the employees by ensuring that every employee in the agency gets a statement with the terms and conditions of their employment (contract) within the first two months after their employment. The employees will also be informed in advance of the process through which the conditions of employment may change. Technical feasibility This assessment is focused on understanding the present technical resources and their applicability to the anticipated needs of the proposed system. After a thorough assessment of the resources available in the tourism industry, I decided that the resources needed to set up a tourism venture were available and decided to go on with the project. References Choi, H. C., & Sirakaya, E. (2006). Sustainability indicators for managing community tourism. Tourism management, 27(6), 1274-1289. Murphy, T. H., & Margulies, J. (2004, March). Performance appraisals. In Presentation, ABA Labor and Employment Law Section, Equal Employment Opportunity Committee, Mid-Winter Meeting. Næss, P. (2006). Accessibility, activity participation and location of activities: exploring the links between residential location and travel behaviour. Urban studies, 43(3), 627-652. Novelli, M. (Ed.). (2005). Niche tourism: contemporary issues, trends and cases. Routledge. Sonmez, M. (2006). Review and critique of supplier selection process and practices. © Loughborough University. Tovar, C., & Lockwood, M. (2008). Social impacts of tourism: an Australian regional case study. International journal of tourism research, 10(4), 365-378. Weiermair, K. (2004, June). Product improvement or innovation: what is the key to success in tourism. In Innovations in tourism UNWTO conference. Read More