Author: Andre Coleman

Space tourism is tourism in which participants pay for flights into space. Space Tourism is the term that’s come to be used to mean ordinary members of the public buying tickets to travel to space and back. Many people find this idea futuristic. But over the past few years a growing volume of professional work has been done on the subject, and it’s now clear that setting up commercial space tourism services is a realistic target for business today.

It’s a distinct category of “space travel” which also includes travel in space for work purposes – to date, mainly by government staff. In recent years it has been observed that, although governmental space agencies are not interested in space tourism, it is an objective of development of space activities and will help considerably in funding the space operations or activity.

A report published by NASA – “General Public Space Travel and Tourism” in March 1998, endorses the idea of space tourism; pointed out that it is going to start sub-orbital flights; that it promises to be a much wider market that space launch.

Although space tourism had come up in a number of science fiction stories, it is an astonishing fact that in almost none of them, tourism is portrayed as more than a small-scale activity greatly overshadowed by government space missions – military operations, scientific research, defence, etc. This is a good example of how the Cold War pattern of space activities has paralyzed the public’s imagination. That is, government organizations carrying out monopoly “missions” in space ostensibly for the benefit of the taxpayer and created a fixed image of what are space activities, which has dominated the imaginations of scientists and engineers, politicians, the media, and the general public for several decades.

The price for a flight to the International Space Station is US$ 20-35 million. The space tourists or the spaceflight participants as called by few, usually sign contracts with third parties to conduct particular research while in orbit. This helps to minimize the expenses.

Infrastructure is being developed for a suborbital space tourism industry through the construction of spaceports in various parts of the world, including California, Oklahoma, New Mexico, Florida, Virginia, Alaska, Wisconsin and Esrange in Sweden as well as the United Arab Emirates. Some prefer to use the term “personal spaceflight” as in the case of the Personal Spaceflight Federation. A number of startup companies have sprung up in recent years, hoping to create a space tourism industry. For a list of such companies, and the spacecraft they are currently building, see list of space tourism companies. Russia halted orbital space tourism since 2010 due to the increase in the International Space Station crew size, using the seats for expedition crews that would be sold to paying spaceflight participants. However it is planned to resume in 2012, when the number of single-use three-man Soyuz launches rises to five flights in a year.

Dispute over the terminology of “space tourists”

Dennis Tito, Mark Shuttleworth, Gregory Olsen, Anousheh Ansari and Richard Garriott have conveyed their desire to be called something other than “space tourist”. The reason accorded was that they carried out scientific experiments as part of their journey. Garriott has expressed his opinion to be called as “private cosmonaut” or “private astronaut. Tito prefers to be known as an “independent researcher” and there are many terminologies proposed by others as well. Charles Simonyi is the only one who seems to have no issues about calling it “space tourism”. However, it is important to note here that even the Outer Space Treaty or the other relevant conventions do not provide with an appropriate definition.

NASA and the Russian Federal Space Agency have agreed to use the term “spaceflight participant” to distinguish space travelers from astronauts on missions coordinated by the two agencies.

There is a notion that space tourism has a potential of being burgeoning industry that could further the development and settlement of space and so a need to settle the objections on terminology.

Growth of an Early Dream: Harnessing Potential

The economic promise of space tourism has been discussed in some detail in earlier papers. Its potential to grow into a large-scale airline-like business was described in 1986 [1] . Based on a wide range of related research that has been published in the intervening 20 years, the potentially important economic benefits were described with detailed supporting evidence in 2006 [2] . The major points are summarized briefly here.

The 2001 orbital flight by Dennis Tito on a “Soyuz” rocket demonstrated the remarkable fact that, despite having spent the equivalent of $1 trillion since the same type of rocket launched the first satellite in 1957, the government space agencies of the OECD have not reduced the cost of getting to space at all in half a century. Soyuz remains the cheapest and safest means of space travel.

The 2004 flights of SpaceShipOne further demonstrated that sub-orbital flights could be made at a cost of about 1% of the expendable rockets used by space agencies, and that commercial passenger services could in principle have started in the early 1970s, if not earlier. From the economic point of view this would have been very desirable, creating new industries and employment. Consequently it is clear that governments’ “space policies” have been responsible for a delay of 40 years so far in exploiting space travel economically.

Studies by Asford and Collins [3] , the Japanese Rocket Society ( JRS) [4] , the Space Transportation Association (STA) and NASA [5] , Ashford [6] , Bekey [7] Futron (for NASA) [8] and others have increasingly showed that space travel could grow into a large new business activity; that it could reduce the cost of traveling to orbit by 99% or more; and that this could lead on to other valuable activities such as CO2-free energy supply from space [9] . Reducing launch costs sharply would also enable large-scale economic development in space, contributing greatly to the resolution of global environmental problems, and removing the justification for “resource wars” by making the limitless resources of space economically accessible. It could also have important cultural benefits [10] .

It is also important to recognize that, from an economic or business point of view, the space industry is today very unhealthy. Employment in rocket engineering in the USA fell from more than 28,000 in 1999 to less than 5,000 in 2002 [11] , while European space industry employment fell by 20% from 1995 to 2005 [12] . The “bottom line” is that, like any other industry, unless the space industry starts to supply services that can grow to be sufficiently popular with sufficiently large numbers of the general public to reach substantial economic scale, it cannot become a major commercial activity, and will continue to impose a heavy burden on taxpayers.

Accruing Benefits: Advantages
Research benefits

For one it is an important to discuss as to why so much emphasis is given on space tourism and the purpose of space tourism. Space development, exploration as well as cultural renewal is the prospect of space tourism. The Space agencies have sufficient justification to contribute greatly to the development of space tourism, since it is their existing legal responsibility or the duty to encourage the commercial use of space. Such agencies could contribute in different ways which are closely related to their existing fields of work, which include appropriate research, technology development, education, and legal activities. The space agencies could possibly contribute through their research to short-term orbital stays by average people, treatment of minor-ailments in gravity and so on. [13]

Till date no government space agency has provided more than minimal support for space tourism-related research, the resistance within space agencies is still far stronger than those favoring such efforts. This reluctance of government space agencies has adversely affected the budgets allocated to such activities which include space tourism. However, this situation is fast changing due to two ongoing trends. First is the worsening economic situation which has led to the increasing need for development of new industries to reduce world-wide unemployment. Thus there is a lot of economic potential in such commercial activities which should be beneficially utilized. [14]

And secondly the participation of private players in space tourism activities is educating the public about such economically very valuable new space activities that could be developed without burdening space agencies’ budgets.

Economic benefits

Under democracy and capitalism, if there is substantial demand for a particular service which is not threatening to some sections of society, people and agencies freely supply it. However, the development of commercial space activities like space tourism services will provide great economic and social benefits for humanity than any business opportunity because of its potential to grow as large as aviation and even more. [15]

It has been reported that many of those involved in government-funded space activities and also politicians view space tourism as “a waste of money and resources” or not worth investing in because the return on investment may be very low. [16] Tragically, space agencies themselves rather than the general public decide what technology is developed. As a result space activities remain a burden on taxpayers instead of a source of profit for the economy and the public loses interest in any kind of space development.

This is a serious fallacy because in future such space tourism services have the potential to become a popular new branch of the leisure and travel industry with the help of advanced aerospace technology, the economic effects of the growth of such activities will be very positive, not only for companies but also for world economic progress and society as a whole. Moreover under its influence, “space development” will resume its natural meaning of economic development in space, instead of its present meaning of development of government-selected technology and there use in space, generally without economic benefit.

Challenges Confronting Space Tourism

Commercial space activities today are mainly limited to communications, broadcasting and observation satellites. The decline in the commercial demand for satellites has lead to contraction of the commercial space industry and also to the need to develop new space markets if the space industry is to grow. Since there is no other space activity that offers any greater potential for growth, space agencies’ anti-space tourism stand is growing increasingly untenable.

Thus in line we have certain challenges that again pose a threat to the development and growth of space tourism. Cost is one of the biggest challenges as such space travel by tourists is limited only to rich people till now. OECD space agencies have spent approximately $1 trillion since 1961 without any reduction in the cost of getting to space at all. This clearly reveals that space agencies have not been trying to cut the cost of getting to space. The fact is that the space agencies do not know how the cost of space flight can fall, because they have not studied the possibility. This strongly suggests that the cost of access to space as performed by space agencies in orders of magnitude is higher than it needs to be. [17] As further evidence of this, NASA is proposing to expend $14 billion for developing an expendable capsule of comparable capability to the Apollo capsule 40 years before, though possibly carrying more passengers. This vehicle would have a cost many times higher than Soyuz and would have no economic value. [18]

As a consequence, unless they accept that there is an urgent need to reduce costs as far as technology allows, and to observe space tourism as the only activity that offers to link the economic energy of consumer spending on space development, space agencies’ role in the future development and exploration of space is likely to shrink progressively. Ultimately, by reducing the cost of space activities, the development of space travel will lead to the permanent and progressive expansion of human culture into space However; this will also require institutional change.

As already discussed that space agencies focus more on development of satellites and the recent decline of commercial demand for satellites has led to rapid contraction of the space industry, of which the annual revenues are now barely 2% of the $1 trillion of cumulative expenditure made by OECD space agencies to date. [19] Thus it has become a strong notion that the agencies spend every year on space activities which are neither profitable nor lead to development of commercial space activities. In summary, space agencies’ negative stance is not economically justifiable; it is based on political calculation. Thus any kind of political considerations as well as stance of politicians play a vital role in discouraging such activities. So all this needs to change and the space agencies should remember their statutory responsibilities.

Insurance Industry and Space Activities Linked

As space tourism matures, it shows a picture of tremendous opportunity for “insurance companies” to offer coverage to space travelers, a much similar activity to what they carry out in airlines. Neither in space law or air law has the contract of insurance been regulated on an international level. Space Insurance has, however been available from private sources from a number of years. Space Insurance concerns especially communication satellites. The first insurance satellite contract, written for Intesat’s Early Bird’ in 1965, provided pre launch coverage. Pre-launch coverage will cover risk associated with the manufacturing and transport of satellites, but cover for the launch itself is also available. The two forms may include the risk of loss or damage to the space object and the risk of loss or damage to the on-board equipment. Regarding the insurance of spacecraft, I would like observe the following: insurers play a very important role, reducing the financial risk, which will make parties more willing to finance spacecraft. The problem is that the companies would like to see the result first [20] .

International conference on space business, was organized as part of Bengaluru Space Expo 2010, where speakers scrutinized that since Yuri Gagarin’s flight in 1961, 38 citizens from all over the globe have flown in space. Most of the individuals till date who have flown either were astronauts, military personnel or scientists who have been expensively and extensively trained, but as of now, one will also see the emergence of ‘space tourism’ with space access for private individuals.

S Ramakrishnan, Director of ISRO’s Liquid Propulsion Systems Centre, said that apart from satellite and space launching sector, personal space flights, space tourism and other space tourism activities are emerging as a possible market for insurance industry.

Ramakrishnan referred to the successful ‘Spaceship-I’ venture, and the Spaceship-II which is expected to take place shortly.

These initiatives are currently being catered to only ‘select people who enjoy the adventure spirit’; they are perhaps ‘paving the way for possible sub-orbital trans-atmospheric passenger and cargo transportation systems with commercial potential in not too distant future’.

At a session on risk management for space ventures, it was pointed out that risk cover in space tourism is possible, and something we can imagine. It was also pointed by Ramakrishnan as to the change in policy direction in USA-NASA in handing over of the earth orbit transportation sector to private sector, which has also been taking separate and promotional initiatives in this regard.

As space tourism matures into personal space transportation system, it can be foreseen that what happened in beginning of the airline business (when insurance players started offering insurance cover for passengers) is taking the same turn in space tourism. Executive vice-president of ISB, Tim Wakeman, speaking on risk and insurance solutions for space ventures in the 21st century, said, within India, the space industry is thriving and contributing around `10,000 crore(`100 billion) per annum to the Indian economy. He said it is a good time to buy insurance for spacecraft as market conditions are favorable with premium rates declining and availability of insurance capacity is going up three-four times the demand.

While space venture promises huge returns with an evolving sector, the execution risks are far too high.

Risks involved in space sector are related to industrial, technological, commercial, financial, legal and in particular, insurance.

Officials said that the time is ripe to share the risks and returns with other stakeholders who plan to enter business in space activities. Also it was said that despite the recent economic depression, the global space industry remains robust and healthy, United States’ decision to emphasize on commercial resupply of the International Space Station and reallocation of fiscal resources from Space Shuttle or manned space to earth observations and exploration.

India’s space industry is registering explosive growth, with many opportunities for indigenous and foreign suppliers to help further develop the country’s communications and positioning, among other things. The above statement was made by Tom Captain, vice-chairman, Deloitte LLP, Global Aerospace & Defence Sector Leader.

A report released by CII-Antrix-Deloitte during the conference said the spending in space activities is expected to increase by an average of 14.8 per cent annually in India over the next four years and estimated to be `10,000 crore (`100 billion) by 2014. India is ranked sixth currently; globally in terms of technological capabilities and space budget, behind the US, Europe, Japan, Russia and China, as mentioned in a New India Space Market Study.

Legal Regulations concerning Commercial Activities in space

In near future space tourism will become the domain of private enterprises. However, commercial activities not necessarily need non-governmental or private participation. But for some reason it is the private enterprises that have supported the idea of space tourism until now. Space Tourism revolves around public interest and public welfare which in turn creates a tremendous need for manpower. Thus the states should support and provide adequate platform to private enterprises.

Now a big that follows is which law will govern such private enterprises carrying out such activities. National law and International law both can be made applicable. Here we will be focusing only on international regulations that govern such entities. However, this takes place in an indirect way i.e. government and non-government bodies sometimes delegate certain tasks on private enterprise, Therefore the legal conditions regarding private activities in outer space have to be examined.

Relevant Space Law treaties, Agreement and Conventions.
Outer Space Treaty of 1967

The Outer Space Treaty is taken as the backbone of international space law. When the said Treaty was created and came to force there was no clue as to direct private activities in outer space. Nevertheless the Outer Space Treaty does not disregard private activities in outer space altogether. Art. VI and IX of Outer Space Treaty can be referred in this context. Moreover Art. I of the treaty mention the freedom principle and include the right of free access, the right of free exploration, and the right of free use. This freedom is only granted to the States. [21]

United Nations has also deliberated on this issue through its resolution 1962(XVIII) of the General Assembly entitled “Declaration on Legal Principles Governing Activities of States in the exploration and use of Outer Space”. On the same lines Soviets have also proposed that “all activities of any kind pertaining to the exploration and use of outer space shall be carried out solely and exclusively by States”. [22]

The Outer Space Treaty also stipulates the principle of “exploration and use of outer space” and so space tourism comes within the scope of “use” in this context. It is important to note here that no provision in the treaty mentions “commercial”. Art. VIII of Outer Space Treaty gives jurisdiction, ownership and control over the space object and its personnel in outer space into state’s hands. Although the Outer Space Treaty mainly discusses States Parties it has a ruling effect on such activities by private enterprises. Art. VI of Outer Space Treaty stipulates a national State responsibility for outer-space-activities carried either by a governmental or private organization. [23] Thus risks of space tourism could finally fall on states and they can be held liable. Such a legal situation is not satisfying for the State Parties or for the private enterprises engaged in space tourism.

Liability Convention

The Liability Convention was created as a consequence of Art. VI Outer Space Treaty i.e. the responsibility-principle. Art. II of the Liability Convention makes the launching state absolutely liable to pay compensation for any kind of damage caused by its space object on the earth surface or to aircraft in flight. [24] Article III of liability convention and IV of Outer Space Treaty provide that if the damage is caused elsewhere other than the surface of the earth, the launching state shall be only liable in case the damage is due to its fault or the fault of persons for whom it is responsible which covers non-governmental entities as well. The launching state is absolutely liable and is liable in different degrees of fault, but in final consequence the state is liable for damage caused by a private enterprise. [25]

This adversely affects space tourism as the states refuse to allow private enterprises to perform space tourism, or that states set up exaggerated requirements. However, the Liability Convention must be considered as insufficient with regard the aspect of settlement of claims. Therefore it is suggested that the potentially unlimited liability of states mentioned in liability convention should be replaced by an international agreement that stipulates a limited and guaranteed maximum-amount-liability for such activities.

Registration Convention 1975

The Registration Convention has two main functions i.e. to coordinate launches and to ensure identification of the launching state in respect of the Liability Convention. Private enterprises that want to carry out space tourism have to comply with this procedure. The problem occurs when a launching state is not a Member State of the Registration Convention. Thus this problem needs to be resolved for avoiding any kind of conflict. [26]

Further in line we have the Moon Agreement and the Rescue Agreement that can also be referred while dealing with the legal issues involved in space tourism. Taking into consideration the present situation where there is no specific law that deals particularly with space tourism and at the same time presence of insufficient laws on outer space make the situation worse. Thus there is an immediate need to enact legislation for commercial activities in outer space such that states supervise the outer-space-activities of their governmental organizations or private enterprises. Another solution is to create an international treaty that grants an equal standardization and leads to more transparency and reliability for private enterprises in space tourism or any other commercial activity in outer space.

Environment concerns

Environmental concerns in case of space tourism cannot be avoided and is a big area of concern. Space-touristic traffic can have an effect on the environment on earth. However, newly-developed transport-systems which resemble more like aircrafts will work more efficiently and therefore less polluting. Art. IX of Outer Space Treaty also talks about the preservation of celestial bodies’ environment that might be interfered by space tourism. Accumulation of debris can also pollute the outer space environment. [27]

Thus keeping in mind the common-heritage-principle space tourism has to comply with environmental standards.

Conclusion

Humans have outgrown the Earth several decades ago. Now it is time to correct the view that deceived both government and the public into believing the myth that space is a barrier rather than being full of opportunities. There are prospects in future for the start of sub-orbital passenger space flight operations from newly- developed commercial spaceports. Thus in order to maximize the benefits of this opportunity the public in many countries have to compel their governments to make relevant institutional changes which are needed to overcome the long stagnation of space activities maintained by the space agencies only and their clients who profit from present arrangements.

Space tourism contains aspects of space transportation, manned space flight, and commercialization of outer space. Considering the loopholes in the existing laws there is an immediate need for a regulation, be it a treaty, to deal and cover conflicts and disputes that may arise. On these lines, there have been efforts made to create an agreement, to mention one, e.g. the Draft Convention on Manned Space Flight. Moreover, the approach of international space law needs to be properly re-defined and reconsidered to enable private enterprises to directly perform such commercial activities.

The time has come to recognize that, far from being an eccentric or even misguided “fringe” activity, space travel and tourism should already be the mainstream – and it would have been but for the huge economic and social deviations caused by the cold war. But instead of being the passive victims of history – specifically of unfortunate incidents such as the cold war which destroyed vast quantities of resources, killed millions of people, and seriously stunned the development of the space industry to turn the focus on missiles and expendable launch vehicles developed from them. Initially this increased the rate of development of expendable rockets capable of delivering heavy payloads to orbit, and thereby increased the rate of first crewed flights to orbit. The after effect of this, was, that, civilian space activities based on expendable vehicles became a victim of cold war politics, and are still dominated by government space agencies’ political agendas, rather than generating economic value.

The growth of “Space Tourism Movement”, which can be reasonably called so, is going to have a huge beneficial cultural effect, which will widen human horizons as appropriate for the 21st century. Under its influence, “space development” is going to resume its original meaning of economic development in space, instead of its present meaning of “development of government-selected technology for use in space”, generally without economic benefit. And the “space age” will have its original meaning of the period when people go to space – as passengers, customers, employees, operators, managers and tenants but for government employees. As such, tourism is not going to be just a small part of future space activity, a small-scale activity even made smaller by government space agencies – it is going to be the mainstream and highlighted space activity. Already it should have been the main focus of the government agencies by now. It is an extraordinary and a non performing idea that private citizens traveling to and from space should not be the main activity in space. The idea that government knows better than the general public as to how their money should be spent is fundamentally a Soviet one [28] . But even after consuming $1 trillion on government space activities with no commensurate economic benefit to taxpayers, it is high time for the general public to insist that this mistaken policy be reframed and their demands be made significant to space development, as they are in aviation industry.

Austria is ranked as the ninth largest tourism market in the world and the sixth largest in Europe . 22.2 billion Euros was generated from international tourism in the year 2007 in Austria. Only few countries can boast of the per capital income from tourist in the same league as Austria. Although Austria is not a big country in central Europe with a population of 8.3 million people, it is one of the top tourist destination in Europe with 20.8 million arrivals in the year 2007 because of it fantastic and extensive cultural history in addition to its interesting customs , artistic tradition and natural environment (Austrian National office, Austrian Tourism Monitor 2006/2007). International tourism expenditure in Austria has increased from $7.6 billion in year 1995 to $14.2 in year 2007. Vienna the capital of Austria attracts major part of tourists that visit Austria.

However, this report is aimed to develop a tourism marketing plan for Austria to attract spa and wellness tourist from United Kingdom and North America particularly Canada and the United States of America . This aim will be achieved through the analysis of the Austria tourism industry environment ,using the available secondary date, identifying and applying theories where it is relevant.

Spa and wellness tourism has developed as a small but important market segment in developed countries such as Scotland, Switzerland, Greece ,New Zealand, Israel ,United States and Canada as well as developing counties such as Cuba, Cameron & mailman, Croatia, Caribbean, India, Singapore and Thailand which result in growth in competitiveness. For any business to succeed, planning is a very important step .The tourism industry in any country including Austria need to have an effective plan to be successful because tourism industry has specific characteristics that will not be found in other industry.(Morrison,2002)

The World tourism Organization projects that tourist to European counties will double by the year 2020, Conferences, business travel, beauty and wellness leading in the growth . The growth in wellness tourism is increasing worldwide with 18 percent per year and over ten percent annually estimated new demand. Ringer (2007) note that according to a research by Hawail Wellness Tourism Association in 2006, the number of travel agencies that specialized in wellness travel as increased from 300 estimated in the last two year to over 500.Consequently,Austria can become the primary tourist destination in Europe for health and wellness travel if well-positioned should these global travel trends persist .Austria can take advantage of its central location in Europe and ease access from other European counties (in less than 3 hours people can get to Austria form any part of Europe). Austria has the potential to attract Spa and wellness tourism from other EU countries who do not want to travel far from home .

According to UNWTO world Tourism Barometer 2008, tourism demand could be hurt by the doubt over the global economic situation that is affecting consumer confidence. The present economic imbalance, particularly the rising cost of transportation and energy are likely to influence what people spend on tourism .However specific demand shift because of factor such as travel budget, disposable income and confidence which are different from country to country and region to region, depending on the labour market and local economies .

Travel Oregon (2005) note that sustainable tourism development and environmental quality is now another critical issue in international tourism. More Pressure is now been put on countries to preserve their natural resources as well balance growth with the possible impacts of tourism development. Consequently, any effort in Austria aim to expand tourism industry into other areas will need to consider environmental, social and cultural impacts and the image it will have on the Austria as a tourist destination .

The tourism market is also faced with the problem of international terrorism, war and H1N1 which make it more complex to attract tourists from a wider market (Videira et al 2006). This has increased the demands for product differentiation as well quality management and also significant market diversification. Austria government can capitalise on the high quality of tourist faculties and amenities in addition to fantastic and extensive cultural history as well as its interesting customs , artistic tradition and natural environment to increase the number of spa and wellness tourist visiting Austria .

3.0 RATIONALE FOR THE SELCTION OF THE MARKET CHOSEN FOR THE DEVELOPMENT AND EXPANSION .

Soukiazis and Pronca (2008) argue that tourism should only be employ has a stimulate to the growth of the economy if the supply characteristics can be enhanced to bring in more affluent tourists. Any move to attract tourists to a destination should focus on major markets, where the population is adequately affluent to increase number of tourist visiting the destination. Consequently, United Kingdom and Canada and the United States of America are the choice naturally because of the high level of per capita income enjoyed in United Kingdom, Canada and the United States of America. Also this countries have a long list of people waiting for spa and wellness product. In addition the cost of spa and wellness this countries are high. Also Americans may begin to look for alternative medical services in other countries because American will likely have the same problem as in England and Canada.

The North America tourist coming to Austria will have to fly a fairly expensive transatlantic flight which will possibly make them stay longer and spend more in Austria to maximise experience. This will make Canada and the United States of America tourist more important than European tourists that will fly low cost airlines and lodge in cheap hotels for a short stay. Vienna the capital of Austria has transatlantic connections flights with major US cities.

4.0 SOME PRODUCTS AND SERVICES OFFERED BY AUSTRIA AND THEIR RELEVANCE TO UNITED KINGDOM AND NORTH AMERICA PARTICULARLY CANADA AND THE UNITED STATES OF AMERICA.

According to Austrian National office, Austrian Tourism Monitor 2006/2007 Austria has fantastic and extensive cultural history in addition to its interesting customs , artistic tradition and natural environment which will make Austria appeal to tourist from United Kingdom and North America particularly Canada and the United States of America who are keen to see more of traditional European culture and the natural environment .In words of Erich Falkensteiner ,Co-owner Falkensteiner Michaeler Tourism Group ” Austria is a small country with an extensive and fantastic cultural history and artistic tradition, interesting customs and a natural environment which can hardly be matched anywhere in central Europe.This makes a visit to Austria so rewarding.”

Every destination claims to have a unique heritage, culture and landscape, in addition describing itself as having the highest standards of customers service, friendliest people and best facilities. As a result, the need for destinations to create a unique identity that will differentiate it from their competitors is more critical now than ever (Ana 2008). Austria has

some of the best tourism offerings. Examples of tourism offerings in some part of Austria are.

Vienna is refers to as the world capital of music .It has 3 opera house ,over 50 theatres and 100 museums. Vienna is describe as a model environmental city with its extraordinarily low rate of population where people can drink mountain spring water from the tap. Tourist can also enjoy a mild climate and diverse landscapes in Burgenland which is refer to has the land of the sun. In addition to some of the best festival and different offering of thermal bathes as well as fantastic wines (Austrian National office, Austrian Tourism Monitor 2006/2007).

Lower Austria house some world cultural heritage site designated by UNESCO and it is also recognized as a splendid location for physical and spiritual regeneration offers a well developed network of biking trails which make it one of the top tourist destination. Carinthia is also a major tourist destination in Austria to Visit because of the 1,200 lakes and ponds,8 golf courses and natural medicinal spring and radon healing galleries among other offerings.

Consequently, all this offerings make Austria suitable destination for health purposes, relaxing, holidays and adventures(Austrian National office, Austrian Tourism Monitor 2006/2007).

5.0 AUSTRIA COMPETENCIES AND SOURCES OF COMPETITVE ADVANTAGE.

Austria has most of the element required to meet the demands of a tourist destination such as well-preserved environment with scenic beauty, natural resources, a well-managed cultural landscape, green meadows and mountain pastures, crystal-clear waters, fresh air and much more. These natural treasures, in addition to the most diverse possible cultural offering, the highest quality of life and the greatest security as well as the best environmental situation give Austria a future as one of the top potential tourism sectors of the world (Austrian National office, Austrian Tourism Monitor 2006/2007).

Falkensteiner 2007 indicate that Austria is not only a beautiful and interesting country but also have good infrastructure for tourism, an exceptional workforce, and attractive business opportunities.

6.0 AIMS AND OBJECTIVES OF THE PLAN AND THE SETTING OF FUTURE OBJECTIVES .

For any business to succeed, planning is a very important step .The tourism industry in any country need to have an effective plan to be successful because tourism industry has specific characteristics that will not be found in other industry (Morrison,2002) . Thus, Austrian need to understands the United Kingdom, Canada and the United States tourism market and its major tourism segments after which different offerings must be develop to appeal to each segments and attract tourists form the market to Austria. As a result, more tourist from those market will develop interest in Austria, which is important in consumer decision making process.

Schultz 2005 argue that AIDA model is more appropriate than the other theories for consumer decision making process in tourism because tourist are likely to only consider destination which they fine interesting and have attracted their attention . Blumberg 2000 supported this view when he said many tourism destination use marketing advert that will focus on putting the destination on people mind, rather than attempting to get them make a decision to visit the destination. This plan aim to increase the interest of tourist from United Kingdom and North America particularly Canada and the United States of America in Austria. When more tourist from United Kingdom and North America particularly Canada and the United States of America are interested in Austria, one of the future objective will be to increase the numbers of tourist coming to Austria for spa and wellness products.

7.0 RECOMMENDATIONS AND CONCLUSION

International tourism are important pillar of many destinations creating much needed employment in the destination and opportunities for the general economy development. Tourism is ranked fourth worldwide in export category after oil, chemicals and automotive products in many developed nations while in some developing counties tourism is ranked number one in export category .

Austria has the potential to attract tourism from other countries but a lot of research have showed that many country possess a significant tourist attraction but they fail to utilize the tourism potential. Inadequate promotional and positioning strategy has been identified by research has part of the reason for this, especially on the part of the government of the country concerned.

In 2003 Kotler ,Dubois and Manceau noted that promotion is a extremely important tool in the positioning of a tourist attraction mainly because of its immobile and intangible nature. According to Awaritefe 2003 “Promotion has an important role to play in the positioning of a country’s tourism potential especially bearing in mind that tourism unlike manufactured products is an experience which cannot be tested before purchase”. Government and private bodies should put together more strategies to promote it spa and wellness markets. For example developing trade relationship with travel agents and airlines based UK,US and Canada .

According to Ana (2008) tourism is like a crowded marketplace where building and maintaining a brand value is the key to business success and as a result, brand management is moving fast from a peripheral marketing concern to the core strategy in business . Government and private hospitals can partner with the major hotels to enhance the standards of medical facilities and also provide discount deals for tourist . Marketing research should also be engaged from time to time to find out what tourist need and how to meet the needs.

Abu Dhabi is the capital city and largest out of the seven emirates of the UAE; it constitutes for 85 of the UAEs total land mass. It is home to just over 613,000 people. However, it is the second largest city after Dubai. Over the recent years, Abu Dhabi has evolved into an international conurbation. It is the epicenter of the UAE’s political and industrial activities. The city is also home to prime officials, such as the royal Emir Family and the United Arab Emirates central, federal government. Abu Dhabi is considered to be one of the world’s largest producers of oil and a pantheon for regional commerce. Abu Dhabi has been recently putting in tremendous effort to actively diversify it economy through multiple investments in financial services as well as the tourism sector. From the tourism perspective, Abu Dhabi is considered to be one of the worlds’ most fastest growing tourism destinations. Also, it is deemed to be a city that offers its visitors an opportunity to experience a combination of culture-rich tradition, modernity, adventure, and utter relaxation. Alongside that, Abu Dhabi is also a place where people can experience aesthetic beauty both in terms of the natural landscapes and contemporary architectural designs. In addition, the Abu Dhabi International Airport has also been ranked among the best airports in the Middle East region. Given its blissful beaches, luxurious hotels, and all-embracing shopping experience, Abu Dhabi is an ideal destination for tourists and visitors.

Destination Mission:

Abu Dhabi has set long-term goals with respect to its tourism plans and priorities. Bearing in mind its initial plans of development and sustainability, the tourism sector in Abu Dhabi plans to achieve certain key strategic goals over the next year. According to the Abu Dhabi Tourism Authority (ABTA), they are aiming to “collectively building a world class tourism destination” (http://www.abudhabitourism.ae, 2012) via developing an extensive range of products that fulfill the needs of their target markets, and by developing some form of awareness with regards to their target market and by creating the necessary level of proficiency in the marketplace. From our standpoint, our mission is to create a marketing plan that will promote Abu Dhabi as an exceptional and globally recognized tourism destination.

Abu Dhabi’s Competitive advantage:

As Abu Dhabi continues its growth, it has managed to gain competitive advantage a customer base as well as on a product/service base and that is through enhancing the city’s infrastructure to reduce traffic, build a more environment friendly city (Masdar City), and the biggest yet to come, the metro.

Abu Dhabi reflects a relaxed yet sophisticated lifestyle. It’s a busy city and a very important business hub but yet maintains a quiet life unlike Dubai which is the city that never sleeps. And it is all in line with Abu Dhabi’s vision. It has become the perfect holiday getaway along with pleasure with business where now a business trip can also mean a good time for the family as well.

Sources of competitive advantage:

Etihad airways UAE’s second national carrier and one of the leading award winning airline, offering the best services for their customers and projecting Abu Dhabi’s true hospitality. Having top notch services in the aviation industry gives tourist their first best experience in Abu Dhabi as soon as they choose them as a way to get there.

Experience:

For these seeking a unique thriving experience these are some of the thing to do while in Abu Dhabi:

Yas Island: just an hour and a half away from Dubai hosting state of the art hotels, F1 races in Yas Marina Circuit, residential area by the beach, and fun family time in Ferrari World.

Get the chance to ride the track in Yas Marina Circuit.

Abu Dhabi islands: Saadiyat Island if relaxation and resorts is what you need, and Sir Bani Yas to explore UAE’s natural preserve and largest island, as well as Delma Island, holding the Gulf’s most important pearl diving centers.

Desert balloon expeditions

Helicopter tours

Cruise tours

Sports and Recreation:

Sports lovers will have a great share of excitement in Abu Dhabi with some out of many of activities for them to do such as:

Golf

Water sports and sailing

Motor Sports and karting

Off-road driving

Shooting

Fishing

Diving

Horse riding

Tennis; with Mubadala’s World tennis championship.

Shopping:

Shopping lovers and fashionistas will indeed have a great shopping experience in Abu Dhabi and these are some of the places and goods they can shop for:

Best buys and bargaining

Shopping malls

Carpets

Art

Arabian and local souvenirs (Sougha)

Luxury retail

Traditional markets and souks

Gold jewelry

Culture and Heritage:

A famous quote is exchanged between people in the middle east and to be specific within the Arabian Gulf region: “one who doesn’t have a past, doesn’t not have a future”, and from there we take on the words of our late leaders and visionaries to illustrate how the Emirates and Abu Dhabi to be exact takes its steps in growing and blooming. Hence, Abu Dhabi’s heritage villages theme park, and archeological sites in Sir Bani Yas illustrate the UAE’s rich culture and heritage.

Other Amazing Must-See Sites:

Masdar City and Masdar institute: a place on almost everyone’s destination’s list to see the completely sustainable building and environment friendly city.

The Grand Mosque: one of the largest mosques featuring amazing Islamic architecture. The grand mosque has the capacity to host 41,000 worshippers, 82 domes, over 1000 columns, 24 carat gold gilded chandeliers and the world’s largest hand knotted carpet.

Emirates Palace

Al Ain Zoo

Arabian Wildlife park in Sir Bani Yas island

Course Project Focus:

In the course project focus we would like to move away from the cliche of Abu Dhabi being a business hub only and home of embassies and consulates, and go beyond that. Abu Dhabi is indeed much more than that. It’s a vacation destination everywhere you look around beginning with Abu Dhabi’s cornice to Al Ain’s Oasis city, and not to mention the western region of the Empty Quarter desert in Al Gharbia for the adventure seekers [1] . We will construct a marketing plan to change our audience perception of Abu Dhabi and gain more attention and tourism attractiveness and shape tourism in Abu Dhabi, as well as to meet the goal of Abu Dhabi’s Economic growth vision in 2030.

Section 3: SITUATIONAL ANALYSIS
Industry Analysis:

For the UAE as a whole, the tourism sector had another good year in 2011, although annual growth in foreign tourists slowed slightly to an estimated 11.0%. BMI anticipates a slowdown in the sector over the short term, with growth in arrivals forecast at about8% in 2012 (raised slightly this quarter). Growth in visitors from Europe to Dubai has been weak in recent years. Continuing favorable opportunities exist for the UAE to exploit regional tourism growth, such as from Saudi Arabia. The tourism industry has also become a notable bright spot for the construction sector. The most recent figures for Abu Dhabi for January-July show the emirate welcomed 1.37mn hotel guests, an 11% increase over the corresponding period in 2011.

The already burgeoning tourism sector appears to have benefited from the Arab Spring, with tourists attracted away from other locations in the region. Given the ongoing instability, there is potential for the industry to benefit further in this regard. Annual tourist visits is expected to rise from 1.8 million visitors in 2010 to 2.7 million by 2013 and to 7.5 million by 2030. Every aspect of the strategy works towards showcasing Abu Dhabi as an exclusive, high-end tourist destination where visitors can engage in world-class business and relax.

SWOT Analysis:
TOURISM IN ABU DHABI
ENVIRONMENT
EVALUATION
INTERNAL
STRENGTHS

Base to a large number of leading corporations in the world

Presence of leading luxury hotels

Easy access worldwide due to close proximity of Abu Dhabi Intl Airport

Well laid out and congestion-free streets

Wide array of destinations and events for a family holiday

WEAKNESSES

Lacks the luster and glamour of neighboring Dubai

Development and implementation of projects is slow

Does not cater much towards young single adults.

EXTERNAL
OPPORTUNITIES

Rising global position of the region

Presence of natural resources (petroleum)

Ever expanding globalization

THREATS

Rise of other oil states like Qatar and Kuwait

Disturbances in the region

Overview of SWOT Analysis:

The SWOT analysis sums up the strengths and weaknesses of the tourism industry of Abu Dhabi. The above table shows us that the tourism industry in Abu Dhabi has the potential to grow and become one of the largest in the region. Being the Capital of the United Arab Emirates has made Abu Dhabi home to most of the head offices of leading global corporations in the region. The large number of luxury hotels makes Abu Dhabi a prime location to host business events and conventions. Abu Dhabi caters to families also by having a variety of cultural destinations as well as those that cater to fun. The Ferrari world in Abu Dhabi, The upcoming Yas Waterpark, The Grand Prix and rock concerts such as Creamfields is an attraction that pulls in lots of fun seeking crowds. Abu Dhabi unlike Dubai lacks certain glamour, with tourism and business not being the prime source of income, the implementation of projects is quite slow. Dubai and other oil states in the MENA region are therefore a competition to Abu Dhabi that cannot be ignored.

Competition:

Competition for tourism in Abu Dhabi involves both local and international level competition. At the local level, it faces tough competition mainly from its sibling Dubai – the ‘Las Vegas of the middle east’. Abu Dhabi has announced new ambitious tourism targets, complemented by a US$30 million marketing budget and huge infrastructure projects, and it is opening up representative offices around the world and attending world travel fairs. The emirate’s ambitions would appear identical to Dubai’s but this sibling wants to be different. However the end product differs from Dubai, Abu Dhabi is now throwing impressive figures into the mix in a bid to attract an estimated U$11 billion in tourism projects by 2015. Ultimately Abu Dhabi may develop a superior tourism product to Dubai, buts its path to achieve this will follow Dubai’s development example, which has shown what you can achieve with a well-coordinated and funded marketing approach.

On the other hand, Abu Dhabi faces solid competition from the other metropolitan cities around the world and renown for tourism. Abu Dhabi has still not turned out to be a popular word among the people around the world and this is what Abu Dhabi needs to aim at. With strong marketing strategies and effective implementation along with determination, Abu Dhabi can definitely reach this goal with top rankings in the world’s best destinations.

Customer Analysis:

The customers in a tourism industry are nothing but the tourists. These tourists visit a county for either of the two purposes – Business or Leisure. Abu Dhabi, being a place which was known for standing up during the recession period and still booming in the market at a good rate with a lot of upcoming projects proves to be a good attraction to business entrepreneurs around the world. Abu Dhabi should definitely focus more on attracting customers who visit for business purposes.

At the same time, families and other people who need to take a trip for fun could satisfy themselves in Abu Dhabi with the numerous attractions. Abu Dhabi has attractions for all the age groups and if people know more about the attractions and events in Abu Dhabi, they’ll definitely not miss out on these. People nowadays are becoming more aware of and interested in tours and Abu Dhabi has very good potential to cater to the interests of all age groups. Abu Dhabi has enough to serve both the types of customers very well and this is what that makes it an effective place for tourism.

Section 4: SEGEMENTATION, TARGETING, AND POSITIONING (STP)
Market Segmentation:

When it comes to tourism planning and strategy formulation, it is of utmost importance to segment the market prior pursuing a course of action or marketing plan. Market segmentation refers to breaking down or classifying the market at hand into submarkets or segments based on certain characteristics or aspects. Such characteristics (demographics and psychographics) may include age, purpose of travel, and opportunities available to them. In our case, promoting Abu Dhabi as the next big tourism destination, the tourism market can be broken down into several segments. The first main segment is families, which consist of parents and children- perhaps also young adults within the household- and even senior members like grandparents. This segment can be further divided into different age groups. For example, this classification can be done as follows: toddlers and children ranging from the age of 5 to 12, teenagers and young adults starting from 13 years of age up to 19, a youth category which encompasses the younger generation (i.e. 20 to 29 years old), and lastly the adults or seniors which are mainly above the age of 30. The second main market segment would be the business travelers. As mentioned earlier in the project, Abu Dhabi is a regional hotspot for business opportunities and investments. Thus, it can attract potential businesspeople. As a result, it is important to consider professionals as a segment within that particular market. Lastly, a third possible segment could be individual/pair travelers such as bachelors, singles, newlyweds (honeymooners), couples without children, and finally, retired or senior couples.

Target Market Identification:

To target a particular segment, a particular destination must prove what is has to offer to be of value to the targeted market. In this case, we believe the predominant target market would be families. There are many reasons why Abu Dhabi would consider promoting itself to families, and conversely, there are many reasons why families might consider Abu Dhabi for their next vacation spot. When firms are marketing a certain product or service, the consumer must understand what the product or service uniquely offers to them compared to that of its competitor and what added value it provides. Similarly, a tourism destination must offer its tourists a unique experience in every regard. It is easy for a family to pick a destination that has amazing parks, state of the art resorts, and large shopping malls, but the question is, what is so different about a beach in Salalah, Oman, a resort in Sharm El Sheikh, Egypt, and a shopping mall in Dubai, with what Abu Dhabi has to offer? What is it exactly that pushes a family to visit one place over another? The answer is value and experience. The experience and joyful memory is what stays with a person, especially after a trip or vacation.

Abu Dhabi is home to many things that a vacationing family would be on the lookout for. There are many activities that one can do both indoors and outdoors. A business man flying to Abu Dhabi to close some deals can worry no more about leaving his family back home. While he’s busy during the day his wife can take away the kids to Ferrari World, or if they’re a couple with no kids, the wife can go out shopping or enjoying a relaxing spa day in Saadiyat island resort. Nevertheless, business and pleasure has become a very do-able thing in Abu Dhabi where business partners can take a cruise along the sea, golf, or competing on the tennis course while discussing work. What makes Abu Dhabi different is that the visitors do not have to worry about getting stuck in traffic while getting from one place to another. The activities venues are very spread out all over Abu Dhabi beginning with Yas Island, just an hour and a half away from Dubai, to Al Gharbia the western region of the Empty Quarter desert. Additionally, Abu Dhabi has beautiful natural preserves and natural islands where the family can enjoy kayaking along and enjoy the natural beauty, and archeological specimens that reveals the rich heritage and culture of the UAE. Abu Dhabi is the destination where modernity and heritage meets, and greet its visitors with warm welcoming Arabian hospitality and traditions were inherited along the years and are carried on from one generation to the next, therefore the special treatment is always given away wherever you go about Abu Dhabi. Worry no more about what can your family can do aˆ¦ because there’s fun for everyone in Abu Dhabi.

Positioning

A quote from His Excellency Mubarak Al Muhairi, director general of ADTA regarding Abu Dhabi’s positioning in the tourism industry says the following: “Abu Dhabi is seeking to attract discerning tourists who will be attracted by a diversified product base of beach, nature, culture, sports, adventure and business tourism. Our mandate is to position Abu Dhabi as an international city of wealth and culture, while maintaining a balanced approach between development and environmental preservation and sustainability. In our five-year strategic plan, 2008-2012, we have prioritized wider international marketing of this destination and we envisage that by the end of this year we will have ADTA representative offices in Australia, Italy and China joining our existing overseas office network which serves our primary markets of the UK, Germany and France.” [2] Thus, Abu Dhabi seeks growth in the tourism industry and position itself within the market using product characteristics and customer benefits as a positioning strategy.

Section 5: MARKETING MIX & MARKETING STRATEGY
Marketing Mix:

The proposed marketing mix for the betterment of the tourism industry of Abu Dhabi consists of four main elements: Product formulation, Pricing, Promotion and Place.

Product Formulation:

Product in the tourism industry is any benefits or quality of experience that meets the needs and wants of the customer. Abu Dhabi needs to ensure that the tourism experience that it provides its guests meets their needs. This can be done by ensuring top performance in four aspects of its product.

Designed Characteristics: The tourism in Abu Dhabi can be given a boost by attracting more customers, this can be done by clubbing together different aspects of its tourism like cultural sites, hotels, leisure activities into single deals and promotions.

Service Component: All tourism staff should undergo special training for interaction with customers. There should be a uniform form of administration for all tourism organizations within the emirate. When customers notice the same uniforms and procedures within different tourist spots within the country, it instills a form of familiarity within them.

Branding/Ambience: Abu Dhabi should create a brand for itself as a top end tourist destination. The brand should consist of a catch phrase as well as a logo. The catch phrase should project in the mind of the traveler an image of the destination and a feel of the people and culture. The logo can include prominent structures of the emirate (eg. Sheikh Zayed Mosque, Leaning Tower of Abu Dhabi). Having a brand and its consequent promotion around the world will give a boost to the tourism industry in the emirate.

Price:

Pricing is a very important marketing strategy as it helps control the sales volume. Abu Dhabi has over 125 hotels, where many of these are five star hotels. The published prices of these hotels tend to be very high and do not attract a lot of customers. The tourism industry could create deals that club together hotels and different leisure activities and charge a promotional price. This way, the customer perceives more value for the cost they are paying. Abu Dhabi could also create seasonal pricing strategies that can cater a specific tourism season.

Promotion:

Promotion is perhaps the most visible of the four marketing mixes and perhaps what Abu Dhabi lacks the most. As a tourist destination, Abu Dhabi needs to send a global message that they are now ready to enter the tourism market. This can be done through hosting tourism exhibitions and signing contracts with international hotel groups and airlines for promotional prices. Publishing magazines and brochures as well as a more interactive advertising in travel websites can help make the consumers more aware of Abu Dhabi as a tourist destination.

Place:

In tourism, place does not refer to the destination alone, rather all points of sale for the destination. This includes travel agents, online booking as well as convenience of access. Abu Dhabi should start a tourism office in major cities around the world offering deals at promotional prices. Etihad Airways already connects Abu Dhabi to different parts of the world, ensuring ease of access to the city.

Marketing Strategy:

A well-developed efficient marketing strategy for the targeted segments is very trivial for growth of the product. This can be achieved by the following means:

Sector Regulation: Work with industry sector stakeholders to enhance overall tourism sector standards. Develop and implement sector licensing and classification.

Visitor Experience: Improved and consistent visitor experiences founded on unique culture & character. Visitor services program – Advocacy with other departments and agencies to meet the traveler’s needs.

Accessibility: Significantly improved access to and within Abu Dhabi.

Stakeholder Collaboration: Champion the development of the tourism industry with stakeholders.

Tourism Product Development: Foster leisure and business tourism attractions and events.

Promote Abu Dhabi: Promotion of Abu Dhabi as an international destination. Produce a steady stream of innovative event and concepts which are aligned to, and reinforce brand Abu Dhabi.

Job Creation: Increase in skilled tourism employment and generate greater levels of Emirati participation.

Organization Excellence: Increase the organization’s effectiveness by operating with a streamlined structure, well-defined and documented processes and using the latest available technology tools.

Workforce Development: Increase the organization’s effectiveness and efficiencies by recruiting and retaining skilled employees and empowering them to the highest levels of professionalism with a customer focus attitude.

Sustainable Tourism: Promote development of a sustainable tourism sector adding value to the local community.

Singapore is a small island city with a total population of about 4.98 million. The local population consists of approximately 74.2% ethnic Chinese, 13.4% Malays and 9.2% Indians. The remainder 3.2% is made up of Eurasians and other foreign workers. It is a relatively young population with only 217,000 or 7% of the population currently over the age of 65 (Singapore Facts and Figures, 2009)

Integrated Resorts is to strengthen the leisure and entertainment options to enhance Singapore’s reputation as a “must-visit” destination for leisure and business visitors. The Integrated Resorts will be part of a larger spectrum of tourism products and are developing to enhance our destination appeal, and will enhance the tourism industry and economy. (Ministry of Trade and Industry, 2010)

The Gross Domestic Product (GDP) in Singapore expanded at an annual rate of 24.00 percent in the last reported quarter. From 2007 until 2010, Singapore’s average quarterly GDP Growth was 7.62 percent reaching an historical high of 45.70 percent in March of 2010 and a record low of -12.50 percent in June of 2008. Singapore along with Hong Kong, South Korea and Taiwan is one of the Four Asian Tigers. Singapore has a highly developed and successful free-market economy. It enjoys a per capita GDP higher than that of most developed countries. (Trading Economics, 2010). The Integrated Resorts are contributing to GDP of the country and it is boosting the economy. (DBS treasures 2010)
Integrated Resorts is in reality nothing new in the world of gaming and Integrated resorts. Singaporeans were requesting international world class developments combining elements already found in other major casino developments such as the Crown Entertainment Complex in Melbourne, Australia; The Venetian and Palazzo in Las Vegas; The Atlantis on Paradise Island in the Bahamas; Genting Highlands outside of Kuala Lumpur in Malaysia. On the other hand Singapore has seen the results of the Integrated Resorts, so they wanted to achieve those benefits as well (Andrew. M & William. R, 2008)
Integrated Resorts

Integrated Resorts (IRs) are resorts with mixed development like hotels, restaurants, convention centre, theme park, shopping centre, casino, (Lee, 2005). As it has a gaming component casino, integrated resorts development has stirred a great controversy among the Singaporeans.

On 18 April 2005, The Prime Minister of Singapore, Mr Lee Hsien Loong announced the cabinet’s decision to develop two integrated resorts in Marina Bay Sands and Resorts World at Sentosa. The Singapore Government stated that the aim of the Integrated Resorts is to boost the country’s tourism industry and economy. There has been very keen competition from the neighboring countries like Malaysia, Thailand and Hong Kong. According to the Government, the Integrated Resorts are expected to create some 35,000 jobs directly and indirectly (Business Times, 08 Nov 2005). There could be a negative social impact of gambling. The Government, however, promised to have a proper and strict safeguard to limit the social impact of gambling, among others exorbitant entrance fee and the casinos would not extend credit to local population (Parliamentary Debate on IR Decision, 2005)

An Integrated Resort is really a very large scale entertainment development based around a casino. The casino component is physically small, but is the primary economic engine which drives overall returns and facilitates investment in other facilities and amenities. Thus the casino element must be of such magnitude and importance that it can generate over half of the development’s annual cash. With capital costs associated with Integrated Resorts at, say, US$4 billion, such a facility would need to generate at least US$500 million in EBITDA (Earnings before Interest, Taxation, Depreciation and Amortisation) to be viable (Andrew. M & William. R, 2008)
1.2. Definition of Socio Economic

In most cases, socio economists focus on the social impact of some sort of economic change, which is basically a study of the relationship between the economic activity and social life

(Davis et al, 2008)

1.3 Objectives of the Research

The objectives of this research are to understand the Socio-Economic impacts of the Singapore Integrated Resorts. This research deals with the socio-economic factors that have potential impact from the Singapore Integrated Resorts and how Singapore is being affected by Integrated Resorts what kind of positive or negative things this can bring to the person such as it would create better and more job opportunities for the people and would it revitalize the Singapore tourism industry. On the other hand how does the Integrated Resorts play a vital role in boosting the economy of Singapore, will the Singapore integrated resorts will be able to attract the potential customers and the tourism industry will grow better and Integrated Resorts would revitalize the tourism industry as there been a drop in the tourism sector. Economy of the Singapore would be affected by the Integrated Resorts how it would play a vital role in booming the economy.

1.4 Motivation

This research deals with the socio-economic factors that have potential impact on the Singapore. The main aim is to focus and to investigate, analyze the socio-economic impact. The motivation for this research is to find out the process and ways the Integrated Resorts of Singapore boost the economy, revitalize the tourism, and change the shape of tourist coming to Singapore and how they create job opportunities for the people of Singapore. Would the Integrated Resorts be able to improve the well-being of the local population by generating jobs and increasing income? Would they will be able to play the role towards Singapore Economy and how they would benefit the local people of the country.

The motivation to do this research is to see that would be able to revitalize the Singapore tourism as it is declining in past few years and what does the IR have to contribute to make a difference and how would the economy of Singapore would be boosted by the IR and what Job opportunities would the IR create for the local people of Singapore. The researcher wants to study how the Singapore Integrated resorts would perform as it has all the same components which the other neighboring Integrated resorts have like Mauritius, Crown Melbourne, and Macau China.

1.5 Research Focus

The Focus of this research is to understand the Socio-Economic impact of the Singapore Integrated Resorts. The main aim to understand how, the impacts of the Singapore Integrated Resorts can play a vital role on both socio and economic these impacts could be positive or negative as well

Revitalize Singapore Tourism (Andrew. M and William R, 2008)

Boost Singapore Economy (R. Nunkoo and H. Ramkissoon, 2010)

Job creation (Andriofis. K, 2008)

1.6 Research Questions

In this report we have to invest the socio economic impacts of Singapore Integrated Resorts and the effects of these socio and economic impacts could be negative and positive.

Revitalize Singapore Tourism.

Boost Singapore Economy.

Job creation

Chapter 2
Literature Review

The purpose of literature review is to make sure that we analyze the Socio Economic Impacts of Singapore Integrated Resorts and the purpose of the literature review is to select promising measure, methods (Mamchak and Mamchak, 1994)

The Integrated Resort (IRs) is undoubtedly a necessary step to Singapore’s future economic viability. As Singapore has no natural advantages, it must capitalize its ability to stay at the front of the global economy, with focus to attract foreign investors, tourists and talent. Surveys have suggested that Singapore is seen as unexciting compared to other travel destinations, and has been labeled as conservative, moderate and stale (Straits Times, 2005)

The Integrated Resorts and casino in Asia has grown significantly across the Asia Pacific region since 1999. The growth of the Integrated Resorts and casino market in Asia over the past 10 years and its continued expansion will have an impact on established casino markets in the region, including Australia, Mauritius and Macau have led the way with the development of integrated casino resorts. These developments have come during a period when both Asian economies and the Asian tourism market have grown significantly since 1999, with further growth in both expected into the future. Integrated resorts can be viewed as “an attempt to provide a carefully planned, controlled and well defined tourism product (Wall, 1997, p. 715)

Macau became the largest casino and Integrated Resorts market in the world, growing from US$2bn 1999 to US$14bn by endaˆ?2008. The sole casino operator in Malaysia, Resorts World, grew revenues from Au $1bn to in excess of Au $2bn by 2007. These integrated resorts have similarities with the resort pioneered by Genting in Malaysia, with meetings, incentives conventions and exhibitions (MICE) facilities, restaurants and entertainment venues, sitting alongside gambling facilities. However, the sheer size and number of these resorts have eclipsed those in most other parts of the world. (Harry. A & Laurie. K, 2009)

Singapore having problems to attract tourist and there was big decline in the tourism industry in the year 2008-09 so Singapore decided to have the two Integrated Resorts in order to race with the other Resorts in the Asia as they were behind in the chase as the other nations were attracting plenty of tourist and the economy of the country is booming like Mauritius, Macau, and Crown Melbourne. Based on the research objectives, the researcher will provide relevant concepts in the review of current literature in this chapter.

Growth in Asia since 1999 and the countries enjoying the benefits of the Integrated Resorts by economic boost to the country, better job opportunities to the people, and improve the tourism of the country. Singapore catches up with the mastermind race.

Revitalize Singapore Tourism (Andrew. M and William R, 2008)

The visitor arrivals to Singapore started to decline from June 2008 coinciding with the economic downturn. September/October saw a slight pickup in arrivals due to the 2008 FORMULA 1 SingTel Singapore Grand Prix. As a result, Singapore ended the year with a marginal decline of 1.6% in arrivals to reach a total of 10.1 million visitor arrivals. Visitor arrivals to Singapore fell by 4.5% year-on-year in July 2009 to reach 881,000 visitors. Visitor’s days were estimated at 4.6% million days, year-on-year decrease of 11.6% in comparison of July 2008 (923,000)

The decline in tourism is certainly a concern for Singapore and the solution is to revitalize Singapore’s tourism and create a unique Singapore niche. There is little point in selling Singapore as a country rich in heritage and culture; rather, the Integrated Resorts will market the modern entertainment, vibrant city life, and a constantly changing environment Singapore can best call her own (Singapore Tourism Board, 2009).

Figure 1 Decline in tourism in 2008C:UsersDickeyDesktopSingapore factsdrop in numbers.png

Source: Singapore Tourism Board, 2010

Arrivals to Singapore dropped by some 4% in 2009, to 9.7mn. An extremely strong performance in the second half of the year was not quite enough to offset the poor start to the year experienced by the tourism industry. Tourism revenue totaled an estimated SGD12.4bn for the year, according to figures released by the Singapore Tourism Board (STB) in February 2010. This represented a decline of 19%, as tourists spent less while in country. Although 2009 was difficult for the Singaporean tourism industry, there are reasons to be positive about the outlook for 2010 as the global economy recovers. In particular, the opening of the two integrated resorts, Marina Bay Sands and Resorts World Sentosa, help the island attract new tourists (STB, 2010)

Integrated Resort developments at the present time might cost US$4 billion or more, and include facilities and amenities that create virtual “cities of entertainment.” These new style resorts also change the landscape around them by spurring complementary developments and even enhancing the interest amongst some to have residences in close by to them. Thus they can become substantial hubs of economic activity, catalysts and improve tourism (Andrew. M and William R, 2008)

Perhaps the most significant economic impact from the development of an Integrated Resort is tourist impact. An Integrated Resorts located in a capital city such as Singapore or Melbourne, IR can generate significant visitor numbers sometimes exceeding ten million per annum (implying an average of upwards of 30,000 visitors per day.) Depending on location and the actual type and range of facilities offered, this may well result in millions of additional tourists visiting the region, resulting in incremental spend in the local communities as these visitors take tours, eat in local restaurants and stay at local accommodations (outside the IR) and spend time and money outside the Integrated Resort. At Genting Highlands in Malaysia, for example, it is estimated that approximately three million people visit the country annually specifically to visit the Resort. This represents around fifteen percent of total international visitors to Malaysia (Andrew. M & William. R, 2008)

International visitor arrivals to Singapore registered 16.2% growth to reach 1,055,000 in January 2011. This is the highest ever recorded IVA for the month of January. Visitor days were estimated at 4.1 million days, a year-on-year growth of 13.3% and arrivals to Singapore have been on an upwards trend throughout 2010 so far. In April, the city-state welcomed 978,339 visitors, a record for the month and a 20% increase on April 2009. Cumulative arrivals for the first four months of 2010 came to 3.63mn. This strong performance reflects the improving global economic environment, as well as the positive impact of Singapore’s new integrated resorts.

Business Monitor International ltd says both resorts will do much too significantly revitalize Singapore’s tourism industry from 2010, as they offer a wide range of entertainment aimed at complementary markets.

Figure 2 Visitors arrival 2009/10/11

C:UsersDickeyDesktopSnag itVisitordec 07,dec08.png

Source: STB 2010

The socio economic impact of Singapore Integrated Resorts have really revitalized the tourism sector of Singapore as shown in the figure above and the tourism industry has grown rapidly as there are a lot of visitors coming to Singapore to check out the new Integrated Resorts, leisure and recreation purpose.

Based on the experience of Las Vegas, when dealing with a true Integrated Resort, it is possible that only about half of the total revenue generated will come from casino operations. The remainder will be driven largely by people staying in the hotels, attending conferences, conventions, events, or theme park activities. The general attractiveness of the venue and its supporting infrastructure, much of the non-gaming spend at the IR will be derived from people visiting from outside of the local area and local people, this will support the direct new investment to the Integrated Resorts and Singapore Integrated Resorts have those same components as the other IR have and the Singapore tourism industry is growing rapidly as the Integrated Resorts are attracting lots of visitors from different countries (Andrew. M and William R, 2008)

Singapore’s tourism offering is being radically altered by the opening of the two new integrated resorts, the SGD 6.6bn Resorts World Sentosa operated by Genting International and the SGD7.6bn Marina Bay Sands operated by Las Vegas Sands Corporation. Resorts World is aimed more at a family audience, with attractions including theme parks and an oceanarium, while Marina Bay Sands is aimed more at the business travel and MICE market, with conference facilities and shopping area, both has casino. (STB, 2010)

The Integrated Resorts brings in entertainment and conventions, hospitality and retail outlets, which will help to increase the demand for hotel services, greater patronage at restaurants and heightened convention and exhibition activities. Singapore had rapid hotel growth and development over the past two years with the openings of The St. Regis Singapore (April 2008), Capella Singapore (March 2009), Integrated Resorts and the Fullerton Bay Hotel Singapore. The hotels are doing very good business as their occupancy rate has really grown up and they are performing well. The new hotel openings come at a time when visitor arrivals numbers to Singapore are seeing an increase. The destination saw visitor arrival numbers increase by 30.3 percent to 946,000 visitors total in May 2010, compared to the same period last year, which saw 726,000 visitor arrivals. May marked the sixth consecutive month during which Singapore saw record tourism arrival numbers. The country expects to reach its goal of at least 11.5 million total visitor arrivals by the end of 2010 (Travel Age West, 2010) Average Occupancy Rate (AOR) posted a 5.2 percentage point increase over September 2009 to reach 82% in September 2010. (STB, 2010)

At the end of 2008, Singapore had 39,289 hotel rooms. In 2009, average occupancy rate (AOR) was 79%, a drop from 81% in 2008. The average room rate (ARR) for the year was estimated by the STB to be SGD191, a 22.3% decline. This reflected the more challenging operating environment for hotel companies during 2009. In April 2010, AOR stood at 85% for the month, an increase of 15 percentages.

In 2010, the integrated resorts at Resorts World Sentosa and Marina Bay Sands added 4,400 rooms to Singapore’s supply. Four of these hotels are already open. In 2009, several major new hotels opened, including the 300-room St Regis Singapore, the 121-roomAmara Sanctuary Resort Sentosa and The Boutique Hotel Tiong Bahru. In mid-2010, Australia’s StayWell Hospitality Group is to open the 200-room Park Regis Singapore (STB, 2010). In April 2010, AOR stood at 85% for the month, an increase of 15 percentage points. ARR was estimated by

The STB to be SGD211, up by 12.2%.

Figure 4 Hotels average occupancy 2009/10/11C:UsersDickeyDesktopSingapore factshotel occupancy in 2010.png

C:UsersDickeyDesktopSingapore factshotel arr.png

STB 2010 Figure 5 Average Room Rate 2009/2010/2011

Average Room Rate (ARR3) increased by 13.1% over September 2009 to reach an estimate of S$233 in September 2010. Average Occupancy Rate (AOR2) posted a 1.0 percentage point increase over January 2010 to reach 82% in January 2011

2.2 Boost Singapore Economy (R. Nunkoo and H. Ramkissoon, 2010)

When Singapore decided to establish two Integrated Resorts in the City-State, did so on the basis of the potential visitor impacts and boost Singapore’s economy as well as its image. Singapore’s goal was to triple its tourist numbers over a period of twelve years and to more than triple the resulting economic impact by attracting higher spending and thus higher value visitors to that country. When they open in 2010 or 2011, the two IRs will be critical in achieving that objective and will likely contribute more than fifty percent to Singapore’s long term goal by 2015

Singapore is on the right track by opening the two Integrated Resorts which will boost the Singapore economy. The Ministry of Trade and Industry (MTI) had earlier forecast the Singapore economy to grow between 7.0 and 9.0 per cent this year. Singapore today doubled its economic growth forecast for 2010, expecting it to expand between 13.0 to 15.0 per cent following a better economic performance in the first quarter. (Bernama Malaysian National News Agency, 2010)

As we have seen in the recent years that Macau has experienced an unprecedented level of economic success of its gambling monopoly. It has created an environment where casinoaˆ?driven tourist investment projects attract industry leaders, while tourist, hotel guest numbers and revenues have grown with the opening of new integrated resorts. Macau’s location is next to a rising and booming Chinese economy.

As well as in recent years Mauritius has experienced a rapid increase in integrated resort developments, which have been intended to secure income from new tourism segments and to boost the economy. (Robin.N &Haywantee. R, 2010) Singapore is also having such an Integrated development so the Integrated Resorts of Singapore are going to boost the economy as well.

This success of Macau and Mauritius has not gone unnoticed, Singapore has followed the footsteps as well and having the Integrated Resorts which will for sure help to boost the economy of Singapore Perhaps the most notable move that illustrates this shift is Singapore. Traditionally conservative, in April 2005 it made the decision to attempt to emulate the success of Macau which has helped them to boost the Singapore economy by the help of the Integrated Resorts. However, in lateaˆ?2004, the Singapore government changed its policy stance in a move inspired by the incredible growth of Macau, the continued success of Genting Highlands and the phenomenal rise of tourism in Asia (Harry. A & Laurie. K, 2009)

There has been a great change from the over the past century. Governments and developers around the world have caught on the race to mastermind, create and develop Integrated Resorts and Entertainment which creates positive value propositions and potential growth to the country’s image and economic strength of Singapore. Between 1993 and 2002, tourism’s contribution to GDP dropped from 6.1% to 3%, and our share of the Asia Pacific tourist flow fell from 8% in 1998 to 6% in 2002.

Figure 6: Assessing the Economic Impacts

Integrated Resort: Assessing the Economic Impacts

Total Revenue of about $ 270 million, of which $212 million are derived from gaming activates

Contribution to GDP of about $500 million, which is 0.4 of Singapore’s 2003 GDP

Source: Forecast by Assoc Prof Winston Koh, Singapore Management University 2010

The positive annual impact from Integrated Resort developments can indeed be substantial. Estimating the economic potential of these IRs will depend on the unique situations established within each locale and legal situation. However, it is often the case that such developments can become the most significant that any locale will have seen from a single activity.

Marina Bay Sands opened its first phase of development in April 2010, offering 963 out of its total of 2,560 hotel rooms, as well as opening part of its shopping mall, restaurants and convention centre. The grand opening for the resort took place in June. BMI believes both resorts will do much too significantly boost Singapore’s tourism industry from 2010, as they offer a wide range of entertainment aimed at complementary markets. Government projections have estimated that each resort could contribute SGD2.7bn to Singaporean GDP by 2015.

Singapore’s two integrated resorts are a major boost to the country’s economy, said Prime Minister Lee Hsien Loong. The Prime Minister said he is glad that visitors are generally happy with the IRs as such attractions make the economy more vibrant and the city more colorful. He added that the IRs have created buzz and both were packed with visitors on their opening days, creating many jobs in the hospitality and tourism sector. According to media reports, nearly 200 bus loads of Malaysian tourists a day are visiting the IRs. (Channel News Asia, 2010)

Singapore’s growth accelerated to a record 18.1 percent pace in the first half of 2010, spurring the currency and putting the island on course to overtake China as Asia’s fastest-growing economy this year. Gross domestic product expanded at a 26 percent annualized pace in the second quarter from the previous three months, after a revised 45.9 percent gain in January to March, the trade ministry said today. Growth in the first half was the fastest since records began in 1975, prompting the government to predict GDP will rise 13 percent to 15 percent in 2010.

(Bloomberg, 2010) Figure 7 Singapore GDP Growth rates 2007/2010C:UsersDickeyDesktopSingapore facts11-10-2010 1-48-36 PM.png

Source: Trading Economics (2010)

This will put Singapore on track to possibly becoming the world’s fastest growing economy, surpassing even China. On an annualized and seasonally adjusted basis, Singapore economy expanded 26.0 per cent in the April-June period (Channel news Asia, 2010). The two Integrated Resorts are now reflected in the GDP data contribution as integrated resorts have contributed SGD 470 million to the economy in the first year.

Figure 7 and 8 Contribution of Integrated Resorts theC:UsersDickeyDesktopSingapore facts12-19-2010 4-53-26 PM.png

C:UsersDickeyDesktopSingapore facts12-19-2010 4-54-59 PM.png

Source: DBS treasures 2010

Contributions derived from the GDP statistics reflect only the direct impact of the IRs. The overall economic gains to the economy are likely to be significantly larger if the spinoffs to other industries are taken into account. (Dow Jones International News, 2010).

Singapore economy will need to create as many as 130,000 jobs next year if the latest economic growth forecast is to be met, economists said. Most of these jobs are set to come from the service sector, although there is likely to be broad-based job creation across most industries, said human resource experts and companies. The two integrated resorts are leading the hiring charge. They look set to continue hiring rank-and-file service staff for restaurants, hotels and tourist attractions in the next two to three years. (Aaron, 2010)

Job creation (Andriotis and Konstantinos, 2008)

Integrated Resorts being constructed with a development involving capital in the billions of US dollars there are going to be a number of wide ranging economic benefits and multiplier effects accruing to the region of Singapore. The first round comes from the construction contracts and the related employment opportunities for the local people (Andrew. M & William. R, 2008)

Integrated Resort is generating the greatest flow of economic benefits. Integrated Resorts tend to be labour intensive, requiring large numbers of staff to service the various facilities and activities on offer to customers and guests in the Integrated Resorts such as in hotels, restaurants, shopping center and gaming components Casinos. This number can exceed ten thousand direct full time equivalent employees, depending on prevailing wage rates and other factors. The casino in particular can be a major contributor to employment with anywhere from five to seven employees per table game. In Asia particularly where table games are the most popular form of casino entertainment an IR casino might have five hundred or more table games with thirty five hundred or more staff just in that department (Andrew. M & William. R, 2008)

The diversity of job opportunities within an Integrated Resort can be very tremendous. However, an IR should be viewed as a small township with a multitude of roles required to maintain its operation. It is not unusual for there to be one to two hundred different positions within the entire complex. Direct employment of this magnitude induces a multiplier effect in the local community with additional jobs created to service the employees of the IR. Depending on the extent of economic development in the region, the increase in jobs and incomes deriving from employment at the Integrated Resort can be very large indeed. An employment multiplier of 1.5, for example, would result in an additional five hundred jobs for every thousand full time jobs created within an Integrated Resort. This sort of impact on a local community job creation can be of great significance and should not be underestimated. (Andrew. M & William. R, 2008)

The Integrated Resorts industry the IRs has been projected to create at least 35,000 jobs and greatly increase household revenue. Many governments have encouraged integrated resort development in an attempt to improve the well-being of the local population by generating jobs and increasing income, and because of the easier control of tourism activities within their boundaries. However, as found jobs offered by the Integrated Resorts are more desirable than local jobs due to higher pay. (Andriotis and Konstantinos, 2008)

Singapore job market soared towards the end of last year, causing a plunge in unemployment and a sharp rise in the employment of local workers. The jobless rate among residents, who include citizens and permanent residents, fell from 5 per cent last September to 3 per cent in December, which meant about 61,400 people being out of work. This drop is the steepest three-month decline in a decade, according to preliminary figures released by the Ministry of Manpower (MOM) yesterday. Accelerated hiring for the year-end festivities and by the two integrated resorts (IRs) made for the improvement. (Straits Times, 2010)

The Integrated Resorts have helped to reduce unemployment, but full potential of IR effect not seen yet Singapore decision to allow integrated resorts (IRs) with casinos to be built here has changed this country for ever – and it is already reaping the benefits. The IRs began hiring well before the opening of the properties; they clearly had a strong role to play in pushing down unemployment to 2.1 per cent, says Leong Wai Ho, an economist with Barclays Capital.

The economic landscape in the Singapore is changing very rapidly making it imperative for Singapore to adapt to an increasingly competitive environment not just to expand its tourism share, but to keep on target of being the ultimate Global City of Asia. Given the huge investment in the Integrated Resorts projects, integrated resorts will deliver significant economic benefits for local companies and businesses in order for the gains to be equitably shared by Singapore society. The key here is how to profit from the expected influx of tourists, and make the most of the opportunities brought about by job creation and benefit to the local people of Singapore (Business Times, 2010)

Singapore has seen the neighbor and not gone unnoticed as The Crown Entertainment Complex in Melbourne, Australia is an example of an Integrated Resort casino opened in 1997 that was one of the largest single site job creators in the Southern Hemisphere. (The case for Integrated Resorts, 2010)

Singapore, when it decided to establish two Integrated Resorts in the City-State, did on the basis of the potential visitor impacts and the positive effects they would have on Singapore’s economy as well as its image. Singapore’s goal was to triple its tourist numbers over a period of twelve years and to more than triple the resulting economic impact by attracting higher spending and thus higher value visitors to that country. Integrated Resorts will be critical in achieving that objective and will likely contribute more than fifty percent to Singapore’s long term goal by 2015. (The case for Integrated Resorts, 2010)

As illustrated in Labour Force Survey the unemployment rate shows a downward trend due to the improving economic conditions over the past few years, from 2003 to 2008. For the year 2007, the strong economic recovery has helped to ease the unemployment rate to less than 2%. Total employment increased by 9.6% in the fourth quarter, December 2007, growing for the fourth consecutive quarter and at an increasing pace due to

Firts of all, Turkey is a country which is rich of historic value and culture. As you know, Turkish Republic was founded on Anatolian land and that land has welcomed many ancient civilizations until Turkish Republic’s creation such as (East) Roman Empire, Ottoman Empire, Alexander Empire, Byzantie Empire and many Turkic civilizations. As a result of this, histories and cultures of these countires are hosted by Turkey. So, Turkey is responsible and proud of remaining this deep history to the present time. Generally, Istanbul, Aegean and Mediterranean sides are favored by tourists. So, In this essay, we will find how Turkey save and imporve their historic values.

Anyway, If we step on general information about Turkish tourism and Istanbul, I can say Turkish Government were so interested to have serious developments in tourism. In early 1980’s, the government set their economic policy to liberal economy and after this the Turkish Government were able to have foreign investments and the government concentrated on the promotion and encouragement of foreign investment in Turkey.

However, according to Ministry of Tourism and State Statistics Institute, the main purposes of foreign visits are holiday and vacation, the second is historical and the rest is business and other visits. So, 60% of the foreign tourists are from Europe; Germany, UK and France are sending important propotion of tourists to Turkey which means they are serious tourist sources for Turkey. Recently, Commonwealth of Independent States(C.I.S) and The U.S.A tourist numbers seriously increased. Therefore, Turkey is normally well known in sun-sea-sand holiday trips and this is the main reason for being in world toursim market. To take more tourist’s attention Turkey offer more reasonable prices to the tourists and as a result of this, foreign tourists stay long but they are not in high-income groups in their own countires. The first aim of taking attentions of tourists is to send them to Mediterranean and Aegean beaches. Fortunately, these coasts have sandy beaches and beautiful sea but at the same time, the unspoilt historical ruins are taken good amount of tourists. The reason is Western European tourists are commonly interested in Graeco-Roman and early Christian heritage of the cities of Western Turkey. However, Islamic Seljuk, Ottoman or Kemalist(Ataturk) Heritage are unknown and because of this there is lack of interest in them. Istanbul, Izmir and Bursa and regions such as Cappadocia and Galatia are leading cities where the historical ruins were located(Ashworth & Tunbridge, 2000).

Anyways, After trying few tourism strategies, Turkey made the program “The 5-Year Development Plan” .In this programme the main aim is to take rich tourists’s attention to Turkey and prodive good offers on nature and alternative tourism. In first step, they tried to resolve main problems of the Turkish tourism sector could be classified as follows; investment, avdertising-marketing, developing alternative tourism varieties, educated personnel, seasonal variations, intercapacity, management, administration, infrastructureurbanisation and lack of coordination. As well as the Southern and Aegean coasts, the high potential of the Eastern Black Sea, East and South-East Anatolian regions of the country are developed and promoted according to these new policies (Dincer & Istanbullu Dincer, 1999). Further, in theareas of environmental sensitivity, social welfare and productivity, the Ministry of Tourism has been trying to realise some projects as follows: projects for infrastructure and diversificati on of tourism, research and evaluation activities, efforts for the allocation of public land, special project s and educational activities (Istanbullu Dincer,2000).

In 2002, 6,812 registered sites or centres(5,278 archeological, 831 natural, 188 urban, 125 historical and 390 other sites or centres) were recorded by the Ministry Of Culture. On the other hand, 64,963 registered “Immovable Culturaland Natural Values” were recorded in the same report. Nine of them are listed in UNESCO World Heritage List, they are ; Istanbul cultural peninsula, Hierapolis Pamukkale, Hattua-Bogazkale, Goreme-Cappadocia, Divrigi Ulu Mosque and its Hospital, Nemrut Mountain, Xantthos-Letoon, Troia Archeoligical city and Safranbolu. As a result of this, the plan was to make the historical places more valueble and noteworthy. So, the country would be heard by many of the people around the world, and it would make the country interesting in foreigners eyes, and in this way, the government tidies up the important locations. Therefore, this procces breaks the thoughts of country, I mean, It shows that Turkey is not just for summer time, it is suitable to discover and enjoy in four seasons.

However, there are really strict laws to protect historical, cultural and natural values in Turkish Republic, and many instutions are involved. Especially, this covers defending against poor urban planning, protection policies, socio-economic problems, ignorance of the public, insufficient control and alternative uses of the land(Tapan,1998). Nevertheless, the poor urban planning and etc have been rapidly disappearing.

Anyway, Istanbul iste biggest city in Turkey, and it is very rich in historical and cultural characteristics as a result of being the capital of the Ottoman Empire and Byzantie Empire. This is why we all can smell the history in every step we make in Istanbul. The main house style in Istanbul is Ottoman, and this style flourished in the eighteenth centuries. These houses of Istanbul and Edirne have always been model styles to Western Asia and Eastern Europe(Eldem, 1993)

The planning experience of Istanbul goes back to the Ottoman Sultan of Selim the Third in the 18th century and continued with the plan of Moltkein the period of the Sultan Mahmut the Second in the 19th century. In the Republic of Turkey, the planning studies were initiated with the help of foreign experts that were i nvit ed from European countries in 1933.

In t he applications of plans until 1958, the plan of Istanbul was prepared around the existing historical city centre. For the first time in 1958, planning studies were initiated for the whole city with a new and extended model. As a result of various plans and experiences, the Marmara Region Development Plan, Urbanization Policy and Istanbul Metropolitan Field Plan were certified in 1980(Keskin & Diren,1994). But after the revision of this plan, its integrity had been altered.Since the mid 20th century, important urbanisation decisionswere taken in Istanbul with the contribution of foreign city planners; however, in the last twenty-five years demographic problems prevented the implementation of the plans and illegal urbanisation sometimes shaped the planning studies (Tapan, 1998b). Today, 65% of the urbanisation area in Istanbul metropolitan area is formed of illegal or unplanned areas(Ekinci, 1998).

Managing and Marketing Tourism

1. Discuss the role and significance of social media in tourism marketing. You must consider the broader context of ICTs, new channels including smartphones, and the implications for the tourism industry and consumer experience.

“Innovation needs to be part of your culture. Consumers are transforming faster than we are, and if we don’t catch up, we’re in trouble.” –Ian Schafer. The whole world is totally dependent on novelties, and in modern world it is necessary always to be up-to-date. However just the awareness of the new trends on its own is not enough. Apart from it, it is essential to be able to get adjusted to them in an appropriate way. That is exactly what is happening in the tourism industry: there has been a comparatively recent breakthrough in technologies, and while the service providers seek to find best solutions of restructuring their marketing strategies and destination management systems, consumers are trying to gain more monetary and experiential benefits. The technologies that are tremendously important for tourism industry in this particular case gave a rise to social media. Social media comprises of a huge variety of tools that make it possible for Internet users to share, exchange or post media files and other types of information using various channels onto web. Basically, the growth in ICTs has already resulted into vast shifts from in consumer and provider sides. Consumers became more sophisticated in terms of searching for the most rational options in accommodation, flights and other issues. With the use of new ICTs (SM platforms such as TripAdvisor, social networks like YouTube and web blogs like Twitter) customers are able to share feedbacks, photos and videos, find what millions of other Internet users’ opinions are. All of the users have an easy access to ratings on the places they are interested in. According to Zhou (2004), travelers prefer to rely on their peers’ feedback rather than on advertisements or opinions of experts. They stick to the belief that their peers have no incentives to be dishonest. The decision making process of customers has become more complicated, and their travel can be split into three phases, with an intensive contribution of social media in each phase. Due to the enlarged ICT use, service providers are forced to offer more elastic and personalised deals to tourists. Tourism industry has become very information-rich, therefore it is a big challenge for destinations to create or maintain their brand. However, with the suitable marketing strategy, social media can turn into an advantage.

The significance of social media in modern tourism industry is very hard to overestimate. Social media are shaping the whole way companies and governments manage their products and services in tourism. First of all, social media open numerous opportunities to service providers. Through social media it became possible to contact a huge audience, which can exchange information with each other. It means that with the right use of social media the message can be spread very quickly and widely. Good associations with the brand can create added PR and extremely wide brand recognition. These methods of advertising are much cheaper than traditional ones. Another positive feature of social media for tourism is that it makes easier for both supply and demand sides to communicate with each other in order to build strong relationships, enhance cooperation and create efficient integrated marketing strategy. It also helps to avoid unnecessary payments to intermediaries in many cases. Apparently, travel agents are still demanded in the market; however the need of them is decreasing constantly.

The survey shows that just 48 per cent of people stick on their initial plan after searching for some details concerning their trip using SM (WTM, 2014). As demonstrated before, social media in recent decades has gained a huge influence on tourists’ decision-making process and the tourism industry as a whole. Therefore the development of new, efficient Information and Communication Technologies and applications for social media is seemed as a necessity. New technologies allow users to have wide range of opportunities necessary to organize their trips. With the use of User Generated Content (UCG) and Web 2.0 there was created an application TripAdvisor which has been downloaded by different users worldwide on various devices more than 82 million times. It has 69 mil attendances every month; the number of trip reviews and feedback exceeds sixty million; less than 10 per cent of issues placed online are not responded in first 24 hours. Applications such as TripAdvisor make the process of planning the travel more conscious, convenient and rational for customers. In terms of the suppliers, they are also able to get benefits of ICTs: social media applications allow service providers to collect data about the customers. It becomes easier to find the target audience and make appropriate offers according to their preferences and expectations. The new technologies even offer virtual travels to some destinations. Usually such trips are free and their purpose is to show the clients a piece of emotions they can experience during the real trip. Moreover, the emergence of new technologies has created a possibility for tourists not only to visit very common places of interest, but also quite special destinations, which they would never be aware of without ICTs (Giaoutzi and Nijkamp,2006).

Buhalis, D. and Law, R. (2008) suggest that there are three phases of travel, and during each of them tourism used to intensively communicate through social media. During pre-travel phase the consumer is being relatively passive while looking for some information rather than posting anything. However, it is not a rare case when people post several specified questions concerning their further trip in order to receive a respond from other users who might probably have a bigger experience or knowledge in the questioned area. Before the travel users commonly review accommodation opportunities, flight options and other less important details such as climate and culture. As mentioned earlier, the opinion of other users plays a vital role in decision making at the first phase. The majority of travelers strongly rely on the recommendations of their peers even if they did not know them before. The second phase happening during the trip is called travel phase. Social media are still extremely useful when the trip has already started. Travelers typically use social media at this phase to find some very specific information on the destination they stay at. Such information includes the materials about upcoming events, places of sightseeing, restaurants, clubs, bars, most visited places and so on. TripAdvisor has numerous advices of where to go in every part of the world; therefore it is possible to be aware of all the trends in the destination without any preparation. In order to improve travelers’ experience, they can also find the e-guide applications which will show them the directions to chosen places. While enjoying the travel most of the tourists tend to share some media files and instant feedback about the place they are visiting. 40 per cent of tourists post reviews on catering places, while 55 per cent ‘like’ posts on Facebook concerning travelling (WTM, 2014). Before the era of social media, travelers used to share their experiences only to a limited group of people. However, now it became possible to post everything online. As soon as the information posted in the web, there is no control over it, so it can be discovered by millions of other users. People when coming after vacations post taken photos, videos, feedback and other information which can influence the view of millions of other people. According to The World Travel Market (2014), 76 per cent of people post vacation photos in the Internet, while 46 per cent post feedback on their accommodation.

Social media has a tremendous effect on the tourism industry, and in some cases in may seem to be contradictory. Along with new opportunities the development of ICTs forced the supply side of tourism to adapt for the changes. Therefore Destination Management Organisations have become very important determinants of success of the strategies. One of the main functions of DMOs is to maintain the sustainability of destinations with a special reference to SMTEs (Sigala, 2009). DMOs have created numerous Internet portals in order to provide tourists with pursued data. Consumers are offered to use the dynamic packaging, which is the mixture of various tourism modules, put together and priced online, as a respond to travelers’ application (Cardoso, 2005). Malta is a great example of a destination which has developed an extremely successful Destination Management System (www.visitmalta.com) that allows tourists to book flights and buy tickets in the Internet. There is also an application for Apple devices that comprises of electronic guide system around Malta, including data, specific details, roads, virtual trips and so on.

With the growing opportunities, the number of players in tourism industry has increased as well. The entry barriers have become much weaker, whereas the volume of the market has grown. Consequently, the emergence of a highly competitive environment seems very logical. In such conditions, the sustainability has become a very significant aspect, which cannot be ignored. The existing business environment implied that in order to be successful it is necessary to maintain brand identity (Vatanasombut, B., Stylianou, A. & Igbaria, M., 2004). Competitive advantage that is one of the objectives for all destinations could be reached by creating and maintaining customer loyalty (Gurau, C., Ranchhod, A. & Hackney, R., 2003). However, self-service environment is contradicting with being loyal to one brand. Hence the autonomy of consumers is both a requirement and a threat.

Social media’s effect on the consumers’ experience and decision-making is astonishing imagination. Its influence even though is complicated, it can be obviously demonstrated. As The World Travel Market (2014) investigations show, 33 per cent of the travelers altered their accommodation due to the use of social media, 10 per cent changed resorts, 10 per cent switched the intermediary, 7 per cent decided to spend the vacations in another country, 5 per sent changed airlines. This numerical data shows that customers’ decisions are very elastic and their experience can be shaped easily. A huge advantage for the service providers is that nowadays they have the possibility to manage consumer expectations and their experience. Joseph Pine IIandJames Gilmore claim that experience economy is the new stage of economy following the service economy. They argue that organizations have to create extraordinary, memorable experiences for consumers to be satisfied. In this sense, it become easier for destinations to prepare some personalized plan for each customer, or at least each type of customer. They now can anticipate the expectations of their clients and try to exceed their expectations what will eventually lead to exciting experience and satisfaction of consumer.

75 % of companies consider that customer relationship management applications they have chosen to be fiascos since the issues they focused on do not improve consumer satisfaction rate or influence adequately the sales (Feinberg, R. and Kadam, R., 2002). The experience shows that developing Destination Management Systems is not always an easy task to perform. There are numerous cases when the DMOs seem to be useless in terms of improvement of customer satisfaction. One of the good examples is the case of India. Tourism there is currently at the development phase, and it has huge opportunities due to the plenty of tourist attractions, cheap flight tickets and large numbers of travelers arriving from all around the world. Nowadays, India is ranked as 61st most attractive destination in the world (UNWTO, 2015), and it is ready to become more and more competitive. However, India is experiencing problems with tourists’ dissatisfaction of ICTs development across the country. The major complaint include: no access to mobile versions of online portals, employees are not trained to offer ICT services, too much reliance on traditional methods, many companies cannot be reviewed through the Internet, the Internet access is in a huge deficit and others.

Although there are several problems in implementing certain strategies such as the openness of information (competitors can easily access and copy each other’s strategies), it is still possible to find effective ways to gain and maintain customer loyalty. One of excellent scenarios is presented by Australian GMO and is based on inspiration of discussions around Australia using a variety of websites and applications such as Instagram, Facebook, Twitter and Google. The Facebook account is constantly posting information about new trends and the photos of the most picturesque views in Australia. They differentiate themselves by taking into consideration the content send privately by visitors and posting the best of it on the Facebook page. Every Friday there are posted best pictures of the week and also added to the guest album. The ongoing conversation is constantly maintained and apparently most of the issues discussed are positive. The Instagram account of Tourism Australia has over 1 million followers and it is also posting the visitors’ experiences which are later being commented on. Accounts on Twitter and Google post more information rather than media content; however they are also very popular since they include unique facts and news about Australia.

Other, more individual methods to gain consumer loyalty include emotional influence, sustainable tourism and philanthropic concerns. First of all, the emotional connection of customers sometimes can be manipulated to become very strong. For example, there is a real life story about a young boy who was strolling next to the barber shop every day for several weeks. After a while, the owner of the barber shop noticed the child and invited him to his shop with the words: “there will be more benefit from you inside than outside”. Few years later the boy grown up, he learned everything about barber shop and became one of the leading hairdressers. Every time he met a new client he was telling him his story, and people experienced extremely strong emotional connection to that barber shop. Moreover, they were spreading the voice about that boy’s story, what consequently brought the barber shop a huge popularity and success. Secondly, it is important for most of the customers to be sure that their service provider is ethical. Therefore, it is important to keep the business “green”, promote charity and other vastly important concerns. ‘‘Product Red’’ (2008) is a good example of a campaign of selling goods colored in red and donate part of the profits to the fond. Dedicated money goes for AIDS treatment development, illnesses in African countries and diseases counted as epidemic.

The discussions around SM are widely spread, however not many organizations can exploit all the offered opportunities. In the real life, the way normal people use social media use quite simple and clear: we exchange information, we often ask for advices to improve something we are not satisfied with. That is what organizations should pay attention to. They should ask questions from users in order to keep improving in the right directions. It is vital not only to ask for people’s recommendations but also to make sure that their ideas if suitable are implemented in reality. The potential of such cooperation supply side with demand side is very big. It is also important for consumers to express themselves; it brings them the sense of belonging. Their ideas might be unique and very useful. When companies receive exceptionally good feedback, they can be lost in their development strategies. Constructive critics of different aspects can become a very valuable piece of recommendations.

The emergence of ICTs and social media has dramatically reformed the organization and priorities distribution in tourism industry. Customers are the ones to gain more than other players of the industry because their bargaining power has become much higher. Nowadays it is dependent on the opportunities that consumers have to go to web and get all the necessary information or discuss anything with service providers, at the same time gaining advantage from saving money. Social media has led to fierce competition between service providers and presented many improvements to the industry. The constant connection of travelers to Internet made it possible to exchange information in the real time and resulted into introduction of new channels of communication which make the processes of distribution more convenient. Internet portals and websites have a bigger and bigger influence on travels. The improvements in social media will be sustained by the launching of fresh ICTs. The existence of new effective technologies will encourage service providers to increase their rationality and take a full advantage of ICTs by restructuring their Destination Management Systems. Although the cases of unsuccessful DMS implementation are happening worldwide, they can be avoided by creating appropriate strategies for dealing with online customers and bloggers. It is essential to gain benefits from the cooperation with the demand side and taking some of the proposed ideas into consideration.

Reference list:

ABTA, 2004. ABTA Travel Statistics and Trends.Association of British Travel Agents. Available at: [Accessed: April 25, 2015].

Bramwell, B. & Lane, B., 2009.Economic cycles, times of change and sustainable tourism,Journal of Sustainable Tourism, 17(1), 1-4

Buhalis, D. and Law, R.,2008.Progress in information technology and tourism management: 20 years on and 10 years after the Internet – The state of eTourism research,Tourism Management, 29. pp. 609-623. 2008.

Cardoso, J., 2005.E-Tourism: Creating Dynamic Packages Using Semantic Web Processes

Feinberg, R. and Kadam, R., 2002.ECRM Web Service Attributes as Determinants of Customer Satisfaction with Retail Websites,International Journal of Service Industry Management 13(5): 432–51.

Giaoutzi, M. & Nijkamp, P., 2006.Tourism and Regional Development: New Pathways,: Ashgate, Aldershot.

Grau, J., 2005. Bargain Hunters Want Service Too.iMedia Connection. Available at: [Accessed: April 25, 2015].

Gurau, C., Ranchhod, A. & Hackney, R., 2003.Customer-centric Strategic Planning: Integrating CRM in Online Business Systems, Information Technology and Management 4(2–3): 199–214, 200.

Mangold, W. G., Miller, F. & Brockway, G. R., 1999.Word-ofmouth communication in the service marketplace,Journal of Services Marketing 13(1), 73—89.

Sigala, M. &, 2009.Destination Management Systems (DMS): A Reality Check in the Greek Tourism Industry,: Amsterdam, The Netherlands.

UNWTO, 2015.Compendium of Tourism Statistics,World Tourism Organization: Madrid, Spain.

Vatanasombut, B., Stylianou, A. & Igbaria, M., 2004.How to Retain Online Customers,Communications of the ACM 47(6): 65–9.

WTM, 2014.The World Travel Market (WTM) Industry and Global Trends Report. Available at: [Accessed: April 24, 2015].

ZHOU, Z., 2004.E-commerceandInformationTechnologyinHospitality and Tourism: Delmar Learning, Canada

The social impact of the cruise industry on the cruises particular destination has a few positive effects. When cruise tourists arrive at ports of destination, interactions between local residents and cruise tourists can benefit both parties. The cruise tourists have the opportunity to gain knowledge regarding the lifestyle and culture of the local people, and vice-versa; residents can learn about the lifestyles of their guests from various places around the world. However, a high interaction level between residents and cruise tourists can have drawbacks. Tourists can limit the personal space of residents, due to the high population of cruise tourists. Eventually, high levels of interaction between cruise tourists and local inhabitants could change the local inhabitant’s unique lifestyles. This brings to light the point of social damage, as social and cultural damage is one of the main arguments against tourism. In the context of tourism, cruise tourists are typically wealthier than locals of popular cruise destinations. This evidently creates social problems; for example, hierarchies are created that can cause tension between cruise tourists and locals. Furthermore, new and unusual ideas brought in by cruise tourists can make locals envious and want to copy the tourists who can seem more wealthy and stylish.

Social damage caused by the cruise industry can also be supported by the idea of “competition of space.” This is triggered when large amounts of cruise tourists, usually two or three cruise ships, arrive at small ports. When large amounts of cruise ships arrive, the number of cruise tourist’s ratio to locals is large. According to Espinal, 2005, Bahamas has 11 cruise guests to 1 local; Aruba has 8 cruise guests to 1 local; Antigua and Barbuda, 7 to 1; and Dominica, 5 to 1 (When was this? Was this the case for the entire year of 2005? Was it an average?). However, this ratio is only true to small parts. Large cities such as Miami, Barcelona, and European countries differ. In fact, highly populated cities have the opposite effect, because cruise tourist numbers are rather small compared to on-land tourists or residents. The competition of space enhances through the fight for cruise ships by neighbouring ports to attract cruise ships for economic benefits. The fight continues between the cruise ship industry and the cargo shipping industry to gain port space. Another dilemma of space continues between on land tourists and cruise tourists. When cruise tourists arrive at destinations, on land tourists are forced to wait in line for attractions such as monuments and museums, and wonder why it is overcrowded at the beach. Finally, the idea of competition of space limits the transportation benefits. What hurts transportation the most is when large amounts of cruise tourists arrive at destinations which causes volatility in the demand for transportation (e.g. taxis).

Environmental Impact of the Cruise Industry

The cruise industry is the fastest growing industry in the travel industry. With enormous growth in the number of passengers, the number of cruise ships at sea, and the increased variety of destinations, followed by bigger and more luxurious cruise ships to keep up with the increase of demand; the substantial growth in the industry follows with increasing impact on the environment. Like many hospitality and travel industries, the negative impacts on the environment outweigh the positive impacts. Even though the cruise industry is relatively small compared to the airline industry, cruise ships and their passengers generate more volume of waste and pollutant emissions while travelling and docked in port. According to the United States Environmental Protection Agency, a one week voyage generates more than 50 tonnes of garbage. During that same week 3.785 million litres of waste water is produced. That is water that is harmful to the ocean life and cannot be dumped back into the ocean without it being treated. Furthermore, 794,850 litres of sewage, 95,000 litres of oil contaminated water, and 568 litres of hazardous waste is produced. These numbers are multiplied by more than 200 cruise ships sailing the world 365 days a year. In comparison to other travel industries, a cruise ship such as Queen Mary 2 emits 0.43 kg of Carbon dioxide per passenger mile, compared to 0.257 kg for a long-haul flight (Climate Care). In comparison to on-land tourists, cruise ship passengers generate 3.5 kg of garbage while 0.8 kg of garbage is generated by on-land tourists. (http://www.uneptie.org/pc/tourism/sust-tourism/env-3main.htm). In addition to pollution, coral reefs are taking significant damages. According to Ocean Planet, there are 109 countries with coral reefs. In 90 of them, reefs are being damaged by cruise ship anchors and sewage. It is said 70% of cruise destinations are in these biodiversity hot spots.

However, it is not the amount of pollution and damages generated by cruise ships that most are concerning, but rather, the way cruise ships dispose their waste. Cruise ship waste disposal is highly unregulated, where waste can be dumped a few short miles off shore, which is later brought back to shore due to ocean currents. In the past, discharge from cruise ships exceeds the water quality standards set by National Authorities in relations to bacteria level, metals, and hydrocarbons and plastic. In most cases, there was no monitoring, no enforcements and no deprivation from local authorities if cruise ships violated the pollution standards. While the cruise industry continues to promote itself as environmentally friendly, the truth is, there are many instances of cruise ships breaking the law. A single cruise company can accumulate hundreds of pollution violations, which have resulted in payments of millions of dollars in environmental fines. However, in some cases, environmental incidents have been accidental, due to simple human and mechanical error, such as fuel discharge from cruise ship loading fuel at ports.

Since the increased harmful effects on the environment have come to light, the cruise industry has done its part by improving their efforts in processing waste onboard. As technology increases, their ability to become more eco-friendly becomes a priority. Holland American Line has invested $1.5 million into a program called Seawater Scrubber Pilot. This program looks for opportunities to reduce engine emission on its ships. The Sea Water Scrubber system uses the natural chemistry of seawater to remove all sulphur oxide. The seawater is then treated to remove harmful components before dumping it overboard (world cruise industry review). Even though recycling and using green materials is only a small step, it makes a big difference. Take Crystal Cruises for example. They are introducing 100% recyclable coat hangers, which prevents 9 billion wire and plastic hangers from being sent to landfills each year. They are also using washable and reusable garment bags instead of plastic laundry bags (world cruise industry review). On the major scale, most cruise ship companies are taking steps to map out global routes where waste discharge will cause the least damage to delicate ecosystems. Another major effort that some cruise ship companies are implementing is scheduling their arrival and departure time so cruise ships use less fuel while docking. Princess Cruises has invested $4.5 million to implement a cold-ironing program in Alaska. This is when ships plug into a ports electricity supply while docked in order to get hydroelectric power on board. This is the same concept as a hybrid car. The cost of equipping each ship is $500,000 where the benefits outweigh the costs. In California, 70% of cancer risk is due to the toxic air contaminants created by diesel. The biggest contribution to these toxins is cargo-handling equipment and the ships use of diesel engines while at port. With the use of the cold-ironing program, ships will not create this harmful pollutant that causes many environmental problems. Companies are taking the next step to keep their ships as cool as possible to eliminate excessive stress on air conditioners in addition to maintaining speeds at fuel efficient speeds. Crystal cruises has begun auditing its ships lighting and energy consumption. They are saving more than 960,000 kW/h per year, which is equivalent to nearly 200 tonnes of fuel a year.

Economic Impacts of the Cruise Industry

Cruise tourism is the fastest growing tourism industry in the last twenty years. Since 1990, the cruise industry has an average annual passenger growth rate of 7.4 percent per year, and in 1980, more than 163 million passengers have taken cruises longer than 2 days. Of the 163 million passengers, 56 percent of the passengers were generated within the last 10 years (CLIA, 2008).

The industry has high potential in providing economic benefits to port states. Conversely, accommodating large cruise ships into ports need a lot of initial investments to build infrastructure and to maintain those infrastructures. With cruise ships growing in size more investments is needed to withstand larger ships. With scenarios of high infrastructure cost, rapid growth in tourism may result in stagflation or even a decline in GDP (Chase, 2001). For small cities, significant foreign investment is needed for these infrastructures, and it is questionable for many whether construction of the ports is cost-efficient.

The majority of the state ports generate economic benefits from cruise ship tourism by generating revenue through passenger spending, person head taxes, dockage fees, and port entry. Passenger spending is the greatest benefit in supporting cruise tourism due to great deal of new money coming into the economy and creation of new jobs. According to an annual study by the International Council of Cruise Lines (ICCL), United States is the primary beneficiary of the Global economic impact of more than 75 percent of the cruise expenditures made with United States based business. U.S. ports account for 75 percent of 10.85 million passengers embankments worldwide. Since, United States is the majority of the Cruise Line industry, we will analyse the economic impact on the United States.

Economic Impact of the Cruise Industry on the United States

The impact of the cruise industry on the United States has both negative and positive results. Reasons for the negative result are due to the increase presence in the European market, and the increase in the Caribbean ports used for cruise embarkment. As a result, United States experienced a decline in its share of the global cruise industry and experiences a decline in the number of passengers embarking for the U.S. ports (CLIA, 2008). Table 1-1 shows that in 2008 United States, passenger embarkment totalled 8.96 million, a 2.4 percent decline from the previous year, with the majority of the global passenger of 69 percent.

Table 1-1

In 2008, decline in its market power is due to hurricanes disrupting destinations to the Caribbean. Hurricanes such as Ike severely damaged retail facilities at ports in Turks and Caicos for nearly a month. In addition, Hurricane Ike consequently shut down cruise terminal ports in Galveston, Texas, for nearly two months due to landfall. The biggest factor in decline of the United States embarkment was the transfer of Pride of Hawaii and the Pride of Aloha by Norwegian Cruise Lines. This resulted in a decline of more than 200,000 passengers, which accounts for 75 percent of net decline of passenger embarking from the U.S. ports (CLIA, 2008). The growth of the industry spending including passenger and crew has slowed to 2 percent to $19.07 billion in 2008. This was the weakest growth in domestic spending since BEA began compiling these statistics (CLIA, 2008). The expenditures by the cruise lines including wages and taxes totalled to $15.67 billion which accounted for 82 percent of spending. This was the weakest growth in the cruise line expenditure since 2001.

The evaluation of the attributes which connect and differentiate the cities around us, give us a better approach in learning trends relative to our human patterns of living. This essay will examine and discuss the similarities and differences among the selected cities of study, and will subsequently draw conclusions based on the facts taken from the statistics Canada website. The essay will focus on the social and economic effects of the specified urban region in relation to the Central business district (downtown Toronto), as well as combine the facts together in order to predict our future outcome in terms of urban living. Moreover, the analysis will commence with the smallest community furthest north, and end with the city core of the GTA.

Table 1: General Characteristics

Variable
Bradford
Newmarket
Aurora
Richmond Hill
Toronto

Population in 2006

24,039

74,295

47,629

162,704

2,503,281

2001 to 2006 population change (%)

8.1

12.9

18.6

23.2

0.9

Population density per square kilometer:

119.6

1,951.00

959.9

1,612.70

3,972.40

Census of Canada (2006). Community Profiles, http://www12.statcan.ca/english/census06/data/profiles/community/Index.cfm?Lang=E

(19 Nov 2009).

Located on the northern outskirts of the Greater Toronto Area (GTA), lies Bradford; a community populated by only 24,000 people. In terms of location, Bradford is roughly 70 kilometers away from downtown Toronto yet not too far from the 400 and 404 highways. As seen on the chart below, the population change from 2001 to 2006 is 8%. The communities just south of Bradford being Newmarket and Aurora hold greater population changes as they are situated closer to downtown Toronto (Central business district) and therefore have the balance between proximity to the CBD and optimal rural location. As seen on table 1, the “population change” increases steadily from Bradford to Richmond Hill, and culminates drastically at Toronto. The reason for this is the direct result of the relationship between population size and proximity to the city for the purpose of work. What can be learned from this figure are the essential characteristics which translate to the expansion of communities where the most sought after location is utterly possible. Richmond Hill being situated in the heart of the GTA between the city core, large neighboring cities: Etobicoke and Mississauga, and Newmarket in the north had the largest population increase of 23%. Moreover, although the population change is significantly less than Richmond Hill, Newmarket has the greatest density per square kilometer following Toronto. The reason for this being the clustering of commodities among the suburbs in order to accommodate the population, so the need to travel to downtown Toronto is not required. Richmond Hill on the other hand is located closer to the core and is more spread out geographically, hence the reason why commodities such as shopping malls and entertainment are scarcer, as people travel to the CBD for these purposes.

Now going back to the city of Bradford, one can notice by “table 3” below that the number of single detached houses is 75% of the overall housing breakdown. This is simply due to the fact that all other dwellings are allocated primarily for busier cities with a higher concentration of citizens and traffic. Moreover, the percentages of buildings with 5 or more stories increases

Table 3: Occupied Private Dwelling Characteristics

Variable
Bradford
Newmarket
Aurora
Richmond Hill
Toronto

Total

7,945

25,090

15,655

51,000

979,440

single detached houses

75.1%

58.8%

60.8%

63.6%

27.3%

semi-detached houses

6.4%

7.6%

8%

4.1%

7.2%

row houses

2.5%

11.8%

16.7%

13.8%

5.6%

apartments, duplex

7.7%

5.5%

3.9%

3.3%

4.4%

apartments in buildings with fewer than 5 storeys

4.3%

10.7%

6.3%

2.3%

16.6%

apartments in buildings with 5 or more storeys

3.5%

5.4%

4.1%

12.7%

38.7%

other dwelling

0.4%

0.1%

0.1%

0.1%

0.2%

number of owned dwellings (%)

82.9

82.5

85.8

86

54.3

number of rented dwellings (%)

17.1

17.5

14.2

14

45.6

Census of Canada (2006). Community Profiles, http://www12.statcan.ca/english/census06/data/profiles/community/Index.cfm?Lang=E

(19 Nov 2009).

Table 4: Income and Industry

Variable
Bradford
Newmarket
Aurora
Richmond Hill
Toronto

Median income in 2005 — all census families

82,836

88,514

98,482

80,121

59,671

Agriculture and other resource-based industries(%

4.2
1.38
1.2
1.05
0.8

Construction (%)

10.6

5.49

6.5

5.6

4.8

Manufacturing (%)

17.5

14.33

12

10.6

11.7

Wholesale trade (%)

6.3

6.04

7.2

6.7

4.7

Retail trade (%)

11.3

12.72

10.6

11.6

9.1

Finance and real estate (%)

4.7

6.63

8

12

10.1

Health care and social services (%)

7.7

8.86

7.8

7.65

8.9

Educational services (%)

6.8

7.45

8.2

6.6

6.7

Business services (%)

16.4
19.57
21.6
23
25.2

Other services (%)

14.4

17.53

16.9

14.9

17.1

Census of Canada (2006). Community Profiles, http://www12.statcan.ca/english/census06/data/profiles/community/Index.cfm?Lang=E

(19 Nov 2009).

progressively from North (Bradford) to south (Toronto), apart from Newmarket which as mentioned before seems to have a more advanced built urban environment. Apartments that have fewer than 5 stories make up 10.7% of all the housing, superseding even the most southern community of Richmond Hill. It is interesting to note also that in terms of Newmarket’s population density per square kilometer (1,951), it has developed the most as a city offering the most commodities compared to Bradford, Aurora and Richmond Hill. Compared to the other communities, retail trade having almost 13% of the workforce surpasses even the city of Toronto. As seen on table 4 below, the third highest division of industry in Newmarket is retail trade. Therefore, bearing in mind Newmarket’s distance from downtown Toronto it is clear that the combination of overall population, population density, and retail trade has made Newmarket the highest developing community in the GTA.

Now taking a look back at the community of Bradford as seen on Table 4, construction, manufacturing and agriculture-based industries are the clear assets which are the direct result of being situated in a more rural, and lesser populated setting. Thus, Bradford’s community was not developed as much as it’s neighboring communities of Newmarket and Aurora, and remained as a small “farm-town” based community over the years. From the business services perspective, the percentages increase in nearly perfect increments from Bradford to Toronto. This demonstrates how business is the highest and most essential in the CBD and gradually decreases the further north the community is situated. This is directly related to capitalization and management since the city is constantly being redeveloped in order to accommodate the growing population. Looking at business and resource-based industries in table 4 is a comprehensive method of understanding the makeup of communities. They are at complete opposite ends of the workforce and are directly correlated with the population size and density of the community. Resource-based industries develop further away from downtown Toronto with communities of smaller population size, while business services increase with the density and higher population closer to the CBD. Manufacturing and construction can also be seen to decrease moving closer to GTA’s core.

In terms of income among all census families, the two communities which are the most different are Aurora and Toronto. Aurora had a median income in 2005 of $98,482, while Toronto only summed up to $59,671. The other three communities have roughly the same median income averaging out to around $84,000. Aurora seems to be a more prestigious and secluded community between Richmond Hill and Newmarket where proximity to the city is still good for homeowners who desire a rural upper class lifestyle away from the busy city life. Toronto on the other hand has the lowest median income since the population is much greater and more diverse in terms of industry and job opportunities. Lower class families often immigrate first to the city core prior to accumulating enough capital to begin a life in the suburbs. This is the sole reason why a large city like Toronto has a relatively low median income since the average is determined among the richest and poorest citizens where the poorest always predominate. A rural city like Aurora is a perfect residential location for wealthy homeowners who want to escape the hectic city life and will give up proximity for location as in EW Burgess’s concentric zone model pictured below.

source: http://yakkersy12geo.blogspot.com/2008/09/burgess-concentric-zone-model.html (19 Nov 2009)

This model can be linked to the present overall setup of the five communities in terms of density and social class. Referring to Table 1, the density of Toronto is nearly 4,000 people per square kilometer and has the lowest median income. This translates to a majority of lower class and minority of upper class residents. As residential suburbs develop on the outskirts of the CBD, the higher class residential communities such as Aurora are pushed even further back where there is more land available to develop more expensive properties. As seen in Table 1, Aurora’s population change between 2001 and 2006 is nearing that of Richmond Hill’s even though it’s half as dense as Newmarket. This is simply because of the prime location and aspiration of homeowners to live in a non-suburbia type environment yet not too far from the city core. Furthermore, property values are lower further away from the CBD as a direct factor of longer time travelling to the CBD for work. Therefore homeowners can invest the same amount of money in a larger property in Aurora than a property in Richmond Hill if accessibility to the city core is not a major concern.

TABLE 2: Age Characteristics of the Population

Variable
Bradford
Newmarket
Aurora
Richmond Hill
Toronto

Median age of the population

36.7

37.2

37.2

37.8

38.4

Percentage of the population under 15 years of age

20.8

21.2

22.2

19.3

16.4

Percentage of the population aged 15 & over

79.2

78.8

77.8

80.7

83.6

Census of Canada (2006). Community Profiles, http://www12.statcan.ca/english/census06/data/profiles/community/Index.cfm?Lang=E

(19 Nov 2009).

The Burgess model depicts “age” decreasing from the outskirts of the CBD into the center, although the five communities in the GTA are the complete opposite. Toronto had the highest median age of the total population as well as the highest percentage of the population aged 15 years and over. Contrary to this, the remaining four communities have a lower median age and younger overall populations. This major difference is representative of the fact that families are gradually migrating to rural areas or suburbs outside of the city, while the city core is progressively transforming into a hub of business, traffic, and commuting. It is also interesting to note that among the five communities, Toronto had the least amount of owned dwellings and the highest number of rented dwellings as seen in Table 3. This is due to the obvious high pricing of condominiums in the city as a result of the limited space available for residential space. People can be forced to live in the city for periodic work or are not financially able to buy a property. This can be also related to the size and density of the population where people are more inclined to buying a property where there is a greater tendency to remain for a longer period of time. Therefore, the percentage of single detached homes in the city core is significantly less than that of the suburbs. From table 3, one can notice the major differences of property layout.

Overall, what can be learned from this analysis are the processes which have developed in each of the communities differently, with their own unique assets. The relationship between work and home, and the urbanization among satellite cities is what distinguishes our unique future. Based on the facts of this essay, one can assimilate their personal lives with that of the specified community and therefore learn the socio-economic trends of our everyday changing lives.

Guangzhou is the largest city in south China. The wealth gap in the city is significant. Therefore, there is inexpensive labour available while high-end customers are willing to pay a profitable price for the services offered.

The pet industry is booming. The dog population in the city has increased by 15% each year [1] . This makes dog boarding one of the most lucrative industries in the city

Financially, it takes three months to reach positive net cash flow, and ROCE is negative in the first year, since the profit is negative, however, in the second year, the company will have substantial increase in profits, the profit will reach ?183,100.

Description of Business
Services Provided

Dog Overnight Boarding: Providing overnight stay to dogs along with a complimentary dinner in the evening.

Dog Day Play Group: Dogs are cared for during the day with play sessions in the morning and afternoon.

Dog Taxi Service: Drivers pick-up dogs at 7 a.m., and brings them home in the evenings. This saves pet owners from the inconvenience of the hectic rush hour traffic. Special taxi booking is available at an additional fee.

In-house shop offers dog products for long-term boarders. Owners can order dog treats over the phone using prepaid cards.

Dogs will follow a structured daily schedule. Following each dog’s stay, a complimentary report of the dog is provided to owners.

Business Ownership

The business will be a Limited Liability Company, as this can reduce tax liability in the long term.

Company location

Guangzhou city is in one of the wealthiest cities in south China. There is a increasing number of middle-class residents, and it is also close to the manufacturing towns where kennel equipment can be manufactured at a low cost.

Woof Hotel is located in the northwest suburb of Guangzhou, near G105 motorway with good transport links. G105 is also linked to tourist resorts in the province where people take their pets on holiday. So, the company can advertise along the motorway to attract potential customers.

The northwest suburb is a mountainous region away from residential areas, as this minimises noise from dogs barking. This particular location is surrounded by farmlands and allows for future expansion. The approximate commute time is 40 minutes from the city centre.

Facilities and Staffing

The maximum capacity is 100 dogs; each kennel measures 2 x 4m. There is a large fenced, grassed outdoor exercise area. There is a small kitchen for preparing dog foods. There reception area sells dog products, and there is also a customer lounge.

Staff to dog ratio is 1:10. There are 24 hour surveillance cameras operating on-site to ensure the safety of dogs and staff. A burglar alarm will be installed to prevent dog thefts.

Expansion Plan
2nd Year

Increase kennel capacity by 50; Purchase agility equipment, a paddling pool and a sand pit for dogs to play in.

3rd Year

Differentiate the kennels by building luxury suites as well as offer budget stays. Provide dog grooming service.

5th Year

Introduce dog training and socialisation classes. Franchise opportunities become available. Build more Woof Hotels in other areas of the province.

Marketing
Market Needs

The number of dogs in the city is growing by 15% each year; however, the pet service industry cannot keep up with the growth. People are unable to find satisfactory pet boarding kennels at reasonable rates. More professionals have pets. However, most people don’t have time to adequately care for their dogs for 365 days a year. Finally, dogs aren’t allowed on any public transport anywhere in China, which makes it difficult for people to travel with their pets.

SWOT Analysis
Strength
Weakness

Management team has expertise in starting a small business

Director has seen many successful pet boarding business overseas

Being the first dog kennel can make the company the industry leader

The idea of boarding kennel has not been tried and tested in the country

Team leaders have no previous experience in pet industry

Lack of skilled workers

Opportunities
Threats

The pet industry is booming

There is increasing demand for boarding kennel

The satisfaction rate for the service offered by competitors is low

Competitors may enter this lucrative market in a few years, this may decrease the market share of the company

Competition

At the moment, there are very few direct competitors – boarding kennels. The indirect competitors are:

Private Veterinary Surgery: These surgeries are small and the housing is in poor condition. As sick dogs are coming in to see the vet and boarders are placed in a cage along with sick dogs. The vet is not responsible if a healthy dog boarder falls ill. The risk being the cost for treatment in case the pet contracts a virus is extremely high. The vet charges a high rate for boarding fees.

Home boarding: There are currently a small number of people offering home boarding. However, they are not regulated; Customers do not know their backgrounds therefore difficult to establish reliability.

It is predicted there will be an increase in the number of both domestic and overseas competitors in the future which will invest in this lucrative market.

Differential advantage

Woof house is aimed toward middle class dog owners, since positioning the company in the middle class makes it easier to move up or down the market. The industry is new; demand from each segment of the consumer market is unknown. In the expansion plan, the company will introduce luxury and budget stays to accommodate customers’ needs.

Promotional Plan

A lot will be invested in advertising during the first year, including:

Sign posts along the motorways G105.

Leaflet distribution: either by hiring commissioned people wearing company tee-shirts to distribute the leaflets in streets,

Discounts offered during low seasons

Advertising in partnerships with pet shops, with free taster boarding vouchers available

The van transporting dogs with the company logo on will be self-marketing when driving in the city

Market Research

The director has conducted desk research on www.goumin.com , a popular networking site for dog owners. The main issues facing them include lack of boarding kennel in the city; no transport which allows pets on hence restricts their movement, and expensive vet fees. The demand for boarding kennel is very high, yet there isn’t any available at the moment.

Since response rate on forums is high. The director has posted a survey on the website (see appendix), in order to find out the monthly spending by dog owners and decide the pricing structure of Woof Hotel. Also, Woof Hotel will also use questionnaire to get feedbacks from owners after their dogs have stayed in the hotel, in return they are given discount towards their next stay.

Customers and Pricing

Woof Hotel is targeted toward middle income people; the rate is set to be low at ?50 per stay in the first year in order to attract customers. However, the vets charge the same rate ?50 at a monopolized price with poor service standards – dogs in cages all day with no exercises at all. The consumer is predicted to be price insensitive, they can accept price increase if it matches the service provided. Moreover Woof Hotel’s rates are at a reasonable level.

Service Operations
Premises and Vehicles

The cost of purchasing land is high, and some land isn’t available for purchase by the government. Therefore, Woof Hotel will rent the site. Since the company is located in the suburbs and rural areas, the cost of renting land for agricultural purposes is low; the rent per m2 is estimated to be 95% less than in the city centre.

IT

The Woof Hotel’s personalised webpage needs to be set-up; there is a cost to purchase the domain. The Internet is increasingly popular today. It also serves as an advertisement of Woof Hotel. The receptionist will be trained to answer all the queries regarding to staying in Woof hotel.

Insurance

Currently, there is few insurance providers for pets in China. The insurance cover for business start-up is expensive; Therefore, Woof Hotel will not purchase any insurance during its first two years. However it may decide to do so in the future, depending on the circumstances.

Local Regulations

Currently there are no laws aimed specifically at dogs. Although a compulsory Dog ID tag was introduced in 2009 [2] , many dogs still remain unregistered. Some unregistered dogs don’t have vaccination certificate even they have been vaccinated. This is the main issue facing Woof Hotel, there is a risk of other dogs contracting the virus, however these owners represent a large proportion of potential clients.

Management and organisation
Team Leaders

Lin Zhang

Financial Director

A Mathematics graduate at University of Warwick, also pursuing a MSc in Finance

A life- long dog lover, having raised puppies and have first-hand experience with caring for dogs, good knowledge on basic dog care

Very business- minded and passionate about starting a pet care business

Multilingual, able to travel abroad to visit and study from other partner boarding establishments.

David Zhang

Managing Director

Experienced as the facility manager at a multinational company for over 10 years

Several years of experience starting and running small businesses

Have excellent local knowledge and business networks in the area.

Team Members

Staff A

Receptionist

Customer Service: answering customers’ enquiries

Staff B and C

Dog Carer

Responsible for looking after dogs and supervising their plays

Staff D

Driver

Responsible for transporting dogs to and from Woof Hotel

Responsible for transporting dog foods and other necessities for Woof Hotel

Staff E

Gardener and Cleaner

Maintaining the landscape and garden of the Woof hotel

Clean dog kennels daily

Remuneration

In the beginning, Woof Hotel will hire low cost labour workers. The market price for an unskilled worker is approximately ?2000 per month. In the future, Woof Hotel may recruit skilled workers such as graduates from the local veterinary college. The wage cost will increase to approximately ?3000 per month, but Woof Hotel hope to retain these skilled workers to increase customer satisfaction.

Recruitment

The recruitment will be advertised. As there are many migrant workers in the city, unskilled labours are easy to recruit. Unfortunately, there is a loophole in China’s laws. People with a history of animal abuse do not have criminal records. There is a risk that staff recruited may abuse animals. In such cases, the person will be dismissed immediately. The presence of surveillance cameras ensures the welfare of all our dogs.

Financial Reports
PROFIT AND LOSS ACCOUNT for Woof Hotel

Unit: ? (?1 = ?0.1 )

Year 1

Price per Dog per day

50

Average No. of Dogs

35

Gross Sales Daily

1750

Gross Sales Annually (365 Days)

638,750

Sales Tax (6%)

38325

Gross Profit

600,425

OVERHEADS

Wages

200,000

Rents

60,000

Utility Bills

70,000

Insurances

0

Dog food

150,000

Staff Vaccination and expenses

1,500

Telephone

2,400

Professional fees and recruitment

24,000

Transport

60,000

Advertising

200,000

Gardening and Cleaning

25,000

Sundries

50,000

TOTAL OVERHEADS

842,900

Net Profit(Loss) Before Tax

-242,475

Corporation Tax (20%)

0

Profit for the year

-242,475

PASTE CASH FLOW STATEMENT HERE

BALANCE SHEET

Unit: ? (?1 = ?0.1 )

Year 1

ASSETS

Fixed Assets

Property-kennels and exercise area

100,000

Property- office & staff accommodation

80,000

E&M

50,000

Equipment

50,000

Vehicle

120,000

TOTAL FIXED ASSETS

400,000

Current Assets

Cash

843,100

Debtors

0

TOTAL CURRENT ASSETS

843,100

TOTAL ASSETS

1,243,100

LIABILITIES

Loans

0

Current Liabilities

0

Tax Payable

0

Overdraft

0

Creditors

0

TOTAL LIABILITIES

0

CAPITAL ACCOUNT

Capital

1,485,575

Reserves (P&L from Yr 1)

-242,475

TOTAL CAPITAL

1,243,100

Analysis

Gross Profit Margin = Gross Profit / Revenue x100

Year 1: 600,425/638,750 = 94.4%

Year 2: 1,441,020/1,533,000 = 94%

Break – Even Units = Total Overheads / (Price of Product – Direct Cost of Product)

Year 1: ?842,900 / 50 = 16,858 units

Year 2: ?1,212,000 / 60 = 20,200 units

Break – Even Sales = Total Overheads /Gross Profit Margin x 100

Year 1: ?842,900/94.5 = ?891,957

Year 2: ? 1,212,000/94 = ?12,893

ROCE = Profit before tax/(Capital Reserve+ long term loans) x 100

Year 1: -242,475/1,243,100 = -19.5%

Year 2: 183,216/ 6,700,037= 2.7%

Assumptions

The utility bill and rents are paid every month

There is no depreciation in the first two years

Dog pays on arrival; the company has no borrowings. Therefore no debtors or creditors.

Utility bill: air-conditioner is used in summer; no heater is needed in winter

Commentary

The number of holidays each month is likely to coincide with the income (see appendix for more details). Since this industry is relative new, the financial reports cannot give a reliable estimate, how people will respond to the business is uncertain, the actual number of dogs may vary. This will affect many figures in the financial reports.

It takes approximately three weeks to reach positive cash flow. There is no gearing ratio since the company doesn’t have any loans. ROCE is negative in the first year since the company is making a loss; however, the company has substantial increase in profit in the second year.

Appendices
Currency

In the business plan, the local currency Chinese Yuan is used, its exchange rate to British Pound is [3] :

?1 = ?0.096 or ?1 = ?10.4

Proposed location of Woof Hotel on Google map

Indicated by the arrow is the proposed location of Woof Hotel, it is close to motorways G105; The label ‘A’ is the city centre., Woof Hotel has good transport links, the driving time is 30 minutes to city centre.

Dog ownership Statistics in Guangzhou City

The number of pet dogs in Guangzhou has increased rapidly since 1995 by official statistics [4] ; it is going to increase by 15% each year, which coincides with the economy boom, as people’s income increases, they are more willing to invest in their pets.

Monthly Spending by Dog owners

A survey was conducted on http://bbs.goumin.com/forum-24-1.html, 32 people have responded, their average spending is calculated to be: ?1,159; with a standard deviation of ? 563. However, this sample is biased; also the spending is likely to double or even triple if the animal needs to veterinary attention, which has not been taken into account.

Statistics of Holidays in China [5]

The chart shows the statistics of the number of bank holidays per month in China, which is likely to coincide with the profitability of Woof Hotel, however, school holidays in February, July and September which are also high seasons have not been included when families are most likely to travel. Thus the high season will be from January to February and from May to August. The low seasons will be March, April and from September to December.

What the paper says

Extract from financial express http://www.financialexpress.com/news/pet-industry-has-never-had-it-so-good-in-china/201045/, titled ‘pet industry has never had it so good in China’:

In some parts of the country, ownership is seen as a must-have accessory for the well-off

The country has 100 million dogs in 2007 and is expected to reach 150 million by 2010.

The market potential is expected to reach $5 billion by 2010.

The recent pet-boom has given birth to a new economics sector in its own right – the ‘pet economy sector’.

In pet food industry alone, the compounded growth rate is averaging 30% per year.

Communication skills

below please explain how each step would be used to provide excellent customer service skills.

Face to face

Face to face helps provide excellent customer service by delivering/developing good interpersonal relationships. It allows the customer to engage with the agent better. In addition it allows the customer to feel important because the agent has given dedicated time to that customer.

By having a face to face it helps the agent gage what the customer needs and provide better customer service as a result.

Telephone e.g. call centre

A telephone call to a call centre allows the customer to discuss their needs as and when it suits them. For example they are not governed by the shop opening times of Monday to Friday 9am – 5pm.

As it can be harder to understand communications via phone it means that the agent needs to listen more meticulously, this should therefore help the customer feel understood and appreciated.

Building rapport

By building a rapport the customer feels as if the agent is interested in what the customer has to say and the customer feels as if they associate with the agent. By the customer feeling understood the customer is more likely to be free coming with information and this will assist the agent in providing the customer a better service.

Effective listening

By the agent demonstrating good listening skills the customer feels as if he/she is important and that the agent wishes to assist the customer.

Affective communication is a two way process you have to listen in order to understand the problem then you have to be able to ask the customer relevant questions to develop as good a relationship as possible.

Questioning

By probing the customer with relevant questions you can show that you have listened. It also assists you in aiding the customer to develop their travel plans. This ultimately gains higher commission levels for the agency.

Developing a dialogue

Verbal communications is a key feature of as a sales consultant. By developing a dialogue you show interest in the customer, you can also show that you care and want to understand the customers individual needs to best serve them

Non-verbal communication e.g. body language, eye contact

All though verbal communication is important, it is not the most used. Non-verbal communication is used around % of the time.

By keeping good eye contact with the customer you help to develop a sense of interest with that customer. In addition by ensuring that you do not cross your arms and leave your body as open as possible. This is because crossed arms demonstrates that you are feeling defensive and this creates an atmosphere of anticipation and potentially physiological discomfort.

Written Communication

It is important to ensure that all written communications are written with good grammatical structure, that there is no spelling issues and that correct punctuation is used.

It is important to use the correct salutations as to not cause offense to the customer.

By ensuring that all documents are correctly structured helps to ensure that the customer is dealing a boni fied professional organisation.

Complaint Handling

Which skills could you show throughout each procedure?

Listening

When dealing with a customer complaint it is important to show that you care. One important part of this to allow the customer to talk. By listening to what the customer has to say you can then start to work out how to deal with this problem. It will also allow you to prepare any questions you need to ask in order to develop the full scenario of the compliant.

Questioning

By asking the customer relevant questions you can help develop a case file you need to best assist the customer. It also demonstrates to the customer that you have been listening to their problem and that you wish to help them resolve it where possible

Empathising

By empathising with the customer you demonstrate to the customer that you care about what has happened and that you wish to do all within you power to help them.

Empathising can help the customer to feel as if they are being taken seriously.

By the customer feeling as if they are being taken seriously it means that they can believe that the situation will be dealt with in a professional manner.

Understanding the problem

By understanding the problem at hand the agent can work out the best solution to resolve the problem. This may mean talking with other colleagues or referring the matter.

The agent can ensure that all segments of the situation are accounted for and dealt with.

Taking control of the situation

By having one member of staff being in charge of dealing with the complaint it helps to ensure that the situation is dealt with correctly.

It also reassures the customer that they will be dealt with in a professional and competent manner.

Agreeing solutions

Once the employee has deemed at least one suitable solution

Follow up

Presentation of yourself

Show how a member of staff should be presented

Presentation of the organisation

Below explain how the environment should be presented

The exterior: The exterior of the store should be clean, this means ensuring that windows and doors are washed and that the path is swept and looks presentable.

Window displays should be structured: – They should be level, crisp and eye catching. The information should be clear and concise.

The interior: The interior should be well lit. The floors should be hovered and kept clear from rubbish and clutter.

The racks should be well stocked and the brochures on display should not be ripped or creased. Those that are ripped or creased should be removed.

The brochures should have a structure for easier allocating, i.e. brochures that are for worldwide travel should be in the worldwide travel section where as brochures that are UK tourism should be located in the UK tourism section. Staff should ensure that when they place brochures on the shelf’s they follow the companies racking policy.

Staff desks should be neat and tidy. This will help customers feel as if they are dealing with professionals.

Teamwork

Please explain the importance of the following when working in a team – ensure you explain each step and the possible outcome.

Motivation

Motivation is important because it helps regulate an organisations productivity. Keeping teams motivated means that everyone feels responsible and helps staff develop a sense of importance and means that they put all there effort into their work.

By developing motivation sales are more likely to be higher and therefore the agent is of more benefit to the agency

Team roles

When roles are defined to staff it helps to develop a structure, in return this helps to define what each employee is responsible for doing to achieve the business goals and objectives.

By developing a clear structure of who is responsible for what role means that employees can do work without necessarily interfering with others work, this means that work is done to a quicker and higher standard.

Delegation of tasks

By delegating staff with tasks means that they have clear objectives and tasks that they must complete in order to be successful.

By ensuring that employees know what is expected of them they can develop a plan on how they will achieve this task and if possible exceed it.

This is then beneficial to the employer as it means that revenue is high, staff and customer moral is also high and will most likely lead to repeat business as the customer is happy with the outcome.

Lines of authority

By having set outlines of authority it helps all subordinates to know who they speak to regarding problems In the long run this assists with ensuring that the organisation maintains effective communication.

By ensuring that clear lines of communication are kept it allows for problems to be dealt with in a quick and easy manner.

This means that a customer can have their problems dealt with in an effective manner. This will ensure that the customer remains satisfied with any problems that may have occurred.

What are the benefits of teamwork to colleagues, customers and the organisation?

The benefit of teamwork for colleagues:

By employees working together it allows them to tackle an issue with multiple views. This can assist them in finding the best outcome for that given situation.

Team work can help employees develop their communication skills. This can help them to become more assertive and feel as if they settle within the organisation.

By ensuring teamwork is a strong ethic it helps to develop a multi-cultural environment where diversity has a strong place within the organisation.

By developing a diverse environment it helps all employees to bond.

The benefit of teamwork to customers:

Good levels of team work means that employees feel happier and this can be sensed by customers.

By ensuring that customers feel good vibrations from customers from employee’s means that a customer is more likely to feel comfortable and purchase.

By employees working as a team it allows the employees to develop their competencies and demonstrates professionalism to customers. This helps to make customers feel more confident with the service they are to be offered.

The benefit of teamwork to organisations:

By an organisation having staff that work well within a team setting it allows the business to develop a good culture that allows for productivity to be at an optimum and in return means that profitability is likely to be higher.

This means that employees are more able to satisfy the needs of the customer and the customer more likely to offer repeat business.

If employees work as part of a team it can help an employer abide with discrimination laws as the employees feel more connected and less likely to discriminate against one and other.

Business Skills

What is the importance of having these skills for an organisation? Where could they help you within your employment?

Completion of documentation e.g. tickets, forms
Use of IT e.g. email, computerised reservations system (CRS), internet
Business standards e.g. accuracy, legibility, business conventions