Author: Andre Coleman

The tourism industry in the last two decades developed significantly in Malaysia. Malaysia has received 24.6 million tourists from all over the world in the year 2010, (Datuk Seri Dr Ng Yen Yen, Tourism Minister of Malaysia) and in a report conducted by WTO, Kuala Lumpur( the capital city of Malaysia), was among the top 10 Most visited cities by number of international visitors in 2010.

All countries are looking for ways to attract more tourists. Because of this, tourist satisfaction has been a priority subject of research in recent years. Understanding what drives satisfaction for a tourist is one of the most relevant areas of research (Prebensen, 2006), as satisfied tourists tend to transmit their positive experiences to others and to repeat their visit (Alen, Rodriguez & Fraiz, 2007)

Although there are many definitions of satisfaction, Reichel (1978) defines tourist satisfaction as the result of comparison between “a tourist’s experience at the destination visited and the expectation about the destination”. According to Feng (2007) ), satisfaction is one of the most relevant variables when analyzing tourist behaviour, as it influences the choice of destination, the consumption of products and services, and the decision to return.

Many factors are involved in making of a country a tourist preferred destination. Both the government and the private sectors must work hand in hand. The people in the front line must be capable of making the visitors feel that they have chosen the right vacation destination. Thus the emphasis on language proficiency is understandable. Language not only is a means for establishing a communication but also is a tool for fostering relationships.

There are at least 1400 million people who live in countries that English has an official status, so it is not surprising that one out of five portion of the population of the world speak English at the level of competence and the rest are still in demand of learning this language ( David Graddol, 1997)

According to Malaysia’s Government official website, 54366 visitors arrived from Europe from January to September 2011, 14725 visitors from North America and 21445 visitors from Oceania (Australia- New Zealand). Most of these travellers’ mother tongue is English and there are Asian and African tourists, who recognize English as the Language of the world.

If these tourists can communicate in their mother language or any other language which has more usage, they can feel at home in those destination countries. It gives them confidence and makes them feel safe, resulting in increased levels of satisfaction.

1.1 Statement of the problem

As it mentioned, an important component in the tourism industry is tourist’s satisfaction. The level of tourist’s satisfaction plays an eminent role in promoting the image of the country as a top tourism spot.

Many researches reveals that the level of tourist satisfaction with a particular trip is the result of different factors (Peter & Olson, 1996) which are generally assessed as a comparison between the tourist’s perception of the products and services he receives and the expectations generated before and during his trip (Barsky & Labagh, 1992).

The Hotel Industry comprises a major part of the Tourism industry.The hospitality industry has a main goal which is: to provide necessarry or desired products and services to travelers.Tourists do not just come for the facilities and attractions. They want to be treated right and well. That’s why a good command of English language is always regarded as an asset for personnels working in the tourism industry specially in the hotel industry.

The importance of English is undeniable since for so many years English is considered as the most important medium of communication of the world generally.It is the language of power, prestige and success . This language as a global language can open doors throughout the world ( Philipsson, 1996)

Although Malaysia has two official languages, English and Malay, our focus is on English because most visitors do not speak Bahasa Melayu, the national language.Most Malaysian residents, who speak English, speak it as a second language but many tourism interactions occur in English.

Numerous studies have been carried out to measure the degree of tourist satisfaction, but very few papers have focused on analysing the possible relationships that this variable has with application of English language by tourism staff.

Consequently, the main aim of this paper is to question if English language proficiency of the staffs working in the hotel industry has any impact on the level of tourist’s satisfaction with hotels in Malaysia or not.

1.2 Research question

To what extend English language proficiency of the hotel staffs can raise the level of the tourist’s satisfaction in Malaysia.

1.3 Objective of the study

To examine whether the English language proficiency of the staffs working in the hotel industry can change the level of tourist’s satisfaction in Malaysia.

Chapter 2 : Literature Review
2.1 Importance of Tourism

Tourism is a driving force for economic growth in Malaysia. Tourism creates employment opportunities for Malaysian residents and brings money into the economy. Tourism industry in Malaysia creates high effects in the economy of this country as well as developing unity and national integration (Gom , 1991)

If tourism industry growth in Malaysia continues, it could push forward the country’s engine of growth which is manufacturing sector. International tourism can bring high amount of revenue. This earned revenue has a very important role in developing Malaysia’s economy (Sadi and Batels 1997)

Tourism Industry has helped Malaysia in developing its quality of life and its socio-economic status. An evidence of that is the upward trend of tourism and hotel industry in Malaysia until 1997 (Poon & Low 2005) . Today this industry is experiencing a year to year growth in foreign exchange earnings.

In the 70 decade government put lots of efforts to develop several objectives such as growing the earning from foreign exchange , increasing the number of employments and the level of their income, developing regional areas and increasing revenue made by the government (Khalifah and Tahir 1997).

From the tourism receipts (tourism revenue) contribution, there exists a steady growth. For example, tourism receipts increased from RM17.40 billion in 2000 to RM24.20 billion a year later and then increased further to RM25.80 billion (2002), RM29.7 billion (2004) and RM32.00 billion in 2005. In 2006 Malaysia received RM36.3 billion (USD10.4 billion) in tourism receipts. (The Financial Express 2007).

A total of 24.6 million tourists arrived in Malaysia and spent RM56.5 billion in 2010 compared with 23.6 million tourists spent RM53.4 billion in 2009. Tourism is the 2nd largest industry in the country after manufacturing and has been growing since 2000 with international arrivals increasing by 9% per year. (New Straits Times 2011)

The tourism industry in Malaysia is an important foreign exchange earner, contributing to economic growth, attracting investments and providing employment. The focus of the government is to enhance the country’s position as a leading foreign tourist destination, while promoting domestic tourism. (The Malaysia Government’s Official Portal 2012).

2.1.1 Importance of Hotels

The hotel industry in Malaysia is expanding rapidly due to the increase of foreign tourist. Tourism statistics of Malaysia has recorded MYR49.6 billion (about USD14.2 billion) earning from tourists in 2008, with 31.2% of the total tourist expenditures coming from travel accommodations (Euromonitor International, 2009).

Without a dubt one of the main components that will put tourists in a positive mood and also affect their satisfaction is Accommodation.(Ekiz, 2009) .Here, hospitality establishments in general and luxury hotels, is documented well to be very important.(Heung and Lam, 2003).

Malaysian hotels accommodated 68,886,154 guests in 2008 and had an average occupancy rate of 66%. The number of rooms supplied during 2008 increased by 3.4% (total of 165,739 rooms), while the number of hotels increased by 0.6% (total hotels 2,373) as compared to 2007 data.( Malaysia Statistics)

According to Malaysia Tourism Promotion Board (2010) a total of 61,363,396 hotel guests were hosted in 2009, corresponding 60.9% occupancy rate. Hotels and restaurants alone provided employment for 1.7 million people, equivalent to 16% of the total employment in 2009 (Economic Planning Unit, 2010).

Form the data mentioned above it is clear that the average occupancy rate in Malaysia hotel industry is significant even in the years 2008 and 2009 that the world was experiencing a recession period. As a result of the economy recovering , it is expected that this industry will face a strong growth in the number of tourists and occupancy rates .It should be mentioned that ,the growth of this industry has a significant impact on other related activities ,too. Food and beverage, entertainment and also shopping in Malaysia are some of those other activities.(Poon and Low 2005)

2.2 Tourists’ Satisfaction

Oliver (1981) claims that tourist satisfaction can be seen as a tourist’s post-purchase evaluation of the destination. In many studies, satisfaction is distinguished as an antecedent of loyalty ( Kozak, 2001; Jang & Feng,2006). Although Oppermann (2000) states that studies on tourist satisfaction and destination loyalty have not been thoroughly investigated, Chi and Qu (2008, p. 624) claim that “customer satisfaction has always been considered an essential business goal because it was assumed that satisfied customer would buy more.” Although measuring tourist satisfaction is not simple, several studies have been conducted to examine the influence of customer satisfaction on loyalty (Gummesson, 1993; Anderson and Fornell, 1994; Um et al., 2006; Hui et al., 2007). Gotlieb et al. (1994) assert that positive satisfaction has positive influence on tourists’ repurchase intention. Similarly, Baker & Crompton (2000); Petrick et al. (2001), and Jang & Feng (2006) have highlighted that satisfaction is the primary antecedent of revisit intention.

Importantly, there is an agreement among several scholars that satisfaction provide a ground for revisit and positive word of mouth recommendations which are the indicators of loyalty (e.g. Kozak & Rimmington, 2000; Yoon & Uysal 2005; Chi and Qu, 2008). In another view, Um et al. (2006, p. 1141) state that “revisit intention has been regarded as an extension of satisfaction rather than an initiator of revisit decision making process.” Kozak (2001) pointed that level of satisfaction as one of the most dominant variables in explaining revisit intention. Accordingly, in tourism destination’s researches, it has been widely underlined that tourist satisfaction, loyalty and revisit intention have strong relationship (eg. Yoon & Usal, 2005; Awadzi & Panda, 2007), while a few studies disapproved the positive relationship between tourist satisfaction and revisit intention ( e.g. Um et al., 2006).

2.2.1 Other Variables Affecting Tourists’ Satisfaction with Hotels

Tourists’ satisfaction with a hotel is a result of many aspects, such as their perception of product elements experienced as well as their expectations before- and during their stay. People go on holiday to satisfy one or several of their needs, whatever these needs are. To achieve satisfaction people try to behave in a rational way. (Nina K. Prebensen) Some variables which affect tourists’ satisfaction are :

2.2.1.1 Location

When traveling, you’ll find that the locations of your hotels will play a big role in your overall enjoyment of the trip. That’s because a well-located hotel will significantly cut down on the amount of time you waste in traffic or trying to navigate an unfamiliar place. For business travelers, centrally-located hotels will increase productivity by allowing them more time to work and meet with colleagues. “Location” is an important reason for selecting a hotel, especially for economy and mid-scale guests. ( Jonathan Barsky & Lenny Nash : 2003 )

2.2.1.2 Facilities

Comfortable hotels and accommodation facilities play a very important role in popularizing any tourist destination. If a person, who is quite far away from home, gets to enjoy the same facilities and comforts as he enjoys at his home, then he is bound to become attached to the place. On the other hand if the tourist ends up at a place where the hotels and accommodation facilities are not satisfactory, it is quite likely that he might never return to that place. (Suman Ahliya : 2008)

2.2.1.3 Price

In his article, Jerry Garner mentions that more often than not, price is the major factor influencing satisfaction with a hotel. The more money saved on the cost of the hotel, the more you have for other things, such as souvenirs, dining out and even extending your stay.

2.2.1.4 Brand

In hospitality industry, it takes time to get the trust of your target market unless your business is under the umbrella of a well-established name. As you gain trust from your target market, brand loyalty and customers’ satisfaction will follow. This will include loyal customers and sales promotion for your hotel. However, a good reputation is defeated if quality is not included in the purchase. (Joyce Ira : 2010)

2.2.1.5 Cleanliness and Hygiene

Knutson (1988) argued that tourists considered cleanliness as important in selecting a hotel for the first time and revisits. Lockyer (2002, 2005) noted that cleanliness was highly rated by hotel guests as the main hotel selection determinant. Callan (1998) stressed that cleanliness of hotel room has been identified as the most important factor. Dolnicar (2002) further argued that hygiene and cleanliness was one very critical factor influencing tourists’ satisfaction.

2.2.1.6 Guest Experience

The experiences of guests during their hotel stay directly impact repeat visits and recommendations (personal and online reviews, e.g., TripAdvisor). A positive/negative guest experience can impact a hotel’s reputation and may trigger recommendations or reviews about that experience. “Guest experience factors” which include past experience, reputation, recommendations, and online reviews, are critical to selecting a hotel by the majority of hotel guests. ( Jonathan Barsky & Lenny Nash : 2003 )

2.2.1.7 Safety and Security

Knutson (1988) mentioned that leisure travellers were mainly concerned with a hotel’s safety and security. This concern might stem from the idea that leisure trips often involve families, and these travellers have a high sensitivity to what may occur around them when their families are involved. Marshall (1993) and Clow et al. (1994) revealed that security was cited as one of the most important criteria in selecting a hotel. Tourists want to be safe and secure in their accommodation, and are willing to pay for this. The safety and security system may differentiate one property from its competition, hence becoming a competitive strategy that helps a hotel to gain tourists’ confidence and trust. Ananth et al. (1992) found that leisure travelers were likely to express concern with regard to a hotel’s reputation and name familiarity.

2.3 English Language
2.3.1 What is a Global Language?!

When a language develops in such a way that it can be recognised in every country we can say that it has achieved a global status. when a large number of people speak a language and that language is their mother tongue while that language has taken up by other countries across the glob we can say that language has gain a global status. In the case of English, united States of America, Britain, South Africa, Australia, Ireland , New Zealand, Canada, several Caribbean countries and etc. this language has been spoken as their mother tongue and in some countries like Ghana, Malaysia, Nigeria , India , Singapore , Vanuatu and etc. English has a special status.( Crystal, 1997)

According to Crystal there exist 2 ways which we can help a language to be globalised :

Firstly, we can make it the official language of a country and use it as the only medium of communication in every domain such as : courts, media, education , and politics.

Secondly, while a language has no official status we have it as the prior language in the educational system and use it as the language of teaching.

2.3.2 A language in common

In his book, English as a Global Language, Crystal says that :

“the idea of a single, common language emerged in the 20th century, particularly during the 1950s .Around this time, many international agencies and organizations were being formed. With the numerous languages of the member countries, interpreters were a critical element in the progress of these organizations. Crystal states that half the budget of international organizations can easily be consumed on translation and interpretation expenses.”

He also believe that when we have so many languages to translate, we will loose some information with each subsequent translation. He then argues that a global language is very necessary in preserving and conveying important information.

2.3.3 English as a global language

In his book, English as a Global Language, Crystal states that :

“By the beginning of the nineteenth century, Britain had become the world’s leading industrial and trading country .This position allowed the British to spread English around the globe. The power of English was further developed by the growth of the United States.During the twentieth century, this world presence was maintained and promoted almost single-handedly through the economic supremacy of the new American superpower. As English-speaking nations acquired power, so to did their language.English is now the most widely taught foreign language in the world. English currently holds some form of special status in over 70 countries and is spoken fluently or competently by about one quarter of the world’s population “( Crystal ,1997)

2.3.4 English language in Malaysia

Nowadays people in any countries use English, the cause was the United Kingdom Empire and United State of America as a dominance in economic was another cause later on.

This language became the international language because its user had the most political and economic power of the world( Crystal ,1997)

English then became more than just international , it changes to be the global language. International languages existed before speared as a result of settlement , inhabitation, migration and colonalization but some factors make English a different international language such as its prestige in the culture , science , technology and so many fields. This helped English to become globalized.(Leitner 1992)

In Malaysia English language is assumed a second language. A language as a result of British colonisation. During the colonisation , the English language was used by the British who had a long presence in this adopted land . Since then English has existed in Malaysia for more than 150 years in Malaysia. After Malaysia independency in 1957 , Malay Language replaced the English language( Crystal , 2005)

English language together with Putonghua have approximately 1.5 billions of speakers . So these two languages are the two most spoken languages round the world by the greatest number of people . Tourist from countries that English is the official language like United States, Canada, Australia and New Zealand communicate through English. In Europe in 19 countries out of 29 countries, English language was the language which is the most common one( European commission 2006)

Chapter 3 : Methodology

In this chapter our first goal is to collect and record everyday English interactions within the tourism industry. Observation of interactions between tourism staff and tourists will be recorded in some hotels in Kuala Lumpur, Malaysia. 10 hotels will be observed. All interactions will be observed through naturalistic observation and each interaction involves at least one tourism employee and at least one customer. In all the steps the researcher will make use of the advices of at least 3 official tour guides in Malaysia.

3.1 Participants

According to Gay ( 1987):

” Random sampling is the best singe way to obtain a representative sample, No technique, not even random sampling , guarantees a representative sample , but the probability is higher for this procedure than for any other.”

20 (males and females) hospitality staff at ten hotels is going to be observed. Within hotels, front desk staff, concierges, direction assistants, and food and beverage staff will be observed as the interaction between tourists and hotel staff is important for the researcher.

40 tourists (male and female) who stayed at each hotel will be asked to complete a questionnaire.

A linguist will accompany the researcher in every observation makes.

3 official tour guides from MTGC (Malaysia Tour Guide Association) will contribute the researcher for getting more information.

3.2 Setting

Ten hotels (3 to 5 stars) in Kuala Lumpur, Malaysia, will be selected from the www.agoda.com travel and hotel guide website, this site is organized these hotels by rates, price and region of location. The researcher will choose those hotels which are suggested by the official tour guides.

3.3 Instrumentation

Suskie (1996)believes that reliability and validity are very important to design a questionnaire. However it is difficult to develop designing a questionnaire which approaches a consistence level of response.

According to Robson (1993) responses are reliable when they are obtained from the same sets of questions answered by the population

The survey instruments are:

– A paper questionnaire containing questions about the level of satisfaction of the tourist who stayed in the hotels will be administered to all tourists with the same sets of questions.

– A set of 6 open ended questions for the semi-structured interview, will be asked from the hotel staffs, by the researcher.

– A voice recorder device for the linguist, to help her analyze and rate the English Language proficiency of the hotel staffs is needed too.

In addition to the surveys and interviews, as supplements to the information, the author also tries to gather secondary data from tour guides. These include reports , comments, complaints and discussions by official tour guides.

3.4 Design

A mixed method design can be described as a kind of research in which a researcher combines quantitative and qualitative research techniques, methods, approaches, concepts, or language into a single study (Johnson 2004).A mixed method design combines the strength of both quantitative and qualitative research approaches.Connelly (2009, pp.31) believes that “the goal of mixed methods research is to draw on the strengths and minimize the weaknesses of both types of research”.

This research involves both qualitative and quantitative data analyses approaches because the investigation resulted in the gathering of a variety of types of information. To be more specific, quantitative data obtained through surveys ( questionnaire) among tourists and qualitative data obtained through interviews.

For the Research methodology which has been designed to collect data from a specific population or samples selected from that population we typically apply survey. Questionnaires or interviews are commonly used for the instrumentation.(Robinson ,1993).

To get data from individuals surveys are useful .sample surveys are important tools to collect and analyze data obtained from selected individuals .to conduct and apply basic social science, surveys are broadly accepted as a key tool for the research methodology. ( Rossi , 1983)

Questionnaires has some advantages over interviews and other methods of data collecting, they are not expensive and they are much more easier to conduct and to be administered.( Leary 1995)

3.5 Procedure

At each hotel, the researcher together with a linguist will enter the establishment acting as friends and observed the same interactions for 45-90 minutes. Researcher tries to be inconspicuous by either posing as a visitors waiting for someone in the lobby lounge, or by having a food or beverages at the lobby cafe or restaurant.

After the interactions ended, the researcher will introduce himself to the front desk staff with a semi-structured interview he will ask questions about the number of languages spoken at the hotel and the kinds of customers that regularly stay at the hotel. This data will collect so that possible correlations between price range, target audience, and number of languages spoken at the hotel can be analyzed.

Then the linguist will rate the staffs observed. Level of English ratings will be conducted by a speaking rubric which includes six aspects of effective speech: vocabulary, pronunciation, grammatical accuracy, flow, and ability to engage in meaningful conversation. Level of Formality will be determined based on four criteria: degree of honorifics (e.g., sir madam), use of slang and colloquial terms, jokes, and percent of talk related to business. Notes will be taken about the price range of the hotels and the position (e.g., sales associate, concierge, front desk employee) of the tourism staff involves in the interaction.

At the final step, the 3 official tour guides (from Malaysia Tour Guide Association) will check the result and will comment on the findings.

This chapter describes the methods of research and explains the methods used in the present study. This chapter is divided into five parts: objectives of the study and the research questions; description of the research types; data sampling and collection procedures; data analysis of the data collected; reliability, validity, and generalizability of the research methods and findings.

For the purposes of this study, I will classify the English language skills and functions for tour guides into four main categories. The language skills and elements are composed of listening, speaking, reading and writing. Translation, and vocabulary in tourism including grammar and some useful English expressions will be discussed and included into those four main categories.

Objectives of the Study and Research Questions

This study aims to investigate present English language needs and benefits of learning English for Vietnamese tour guides. This studies’ data also hopes to reveal some of the problems foreign tourists face when dealing with Vietnamese tour guides, and the language skills and functions that are useful for tour guides to help overcome them. This research tries to answer two of the four main research questions:

2.What are the English language needs required for Vietnamese tour guides?

3.What are the benefits for English speaking Vietnamese tour guides, when compared to those with only their native language?

The design of research methods for the present study was based on the most effective and efficient way to answer these two research questions.

Research Types

Overview of Research Types and Their Characteristics

There two main types of research: qualitative research and quantative research.

Qualitative research is a research type that is concerned with the study of what goes on in natural settings. The process of this research deals with an inquiry and understanding based on distinct methodologies within the tradition of inquiry that explores a social or human problem. The researcher is the main instrument of data collection to build a complex and holistic picture, to collect words and to analyze this information inductively, and to report detailed views of informants. In designing a study, one works with philosophical assumptions, possible frameworks, problems, and questions; and data collection through techniques such as interviews, observation, documents, and audio-visual materials (Cresswell, 1998). Some examples of qualitative research are: biography, which is a study on a single individual when material is available and accessible; phenomenology, which examines a phenomenon and the meaning it holds for individuals; a grounded theory, which is a study to generate or develop a theory; an ethnography, which studies the behavior of a culture-sharing group; and a case study, which examines a case bound in time and place and looks for contextual material about the setting of the case. To sum up, it can be seen that qualitative research and quantitative research differ in terms of their key concepts, goals, approaches to design, and the types of problems that researchers have. Therefore, the selection of which research approach is appropriate in a given study depends on the problem of interest, available resources, the skills and training of the researcher, and the audience for the research (ibid).

Quantitative research is a type of research that is concerned with an inquiry into an identified problem, based on testing a theory composed of variables, measuring with numbers, and analyzing data using statistical techniques. Reichardt and Cook 1979 cited in Nunan, 1992 suggest that quantitative research is “obtrusive, controlled, generalizable, outcome oriented, and assumes the existence of ‘facts’ which are somehow external to and independent of the observer or researcher”. The main characteristics of quantitative research are the following beliefs: reality is something that can be studied objectively; the researcher should remain distant and independent from what is being researched; research is value-free and is based primarily on deductive forms of logic and theories; hypotheses are tested in a cause-effect order; and the research goals are to develop generalizations that contribute to theory and to enable the researcher to predict, explain, and understand some phenomena Bogdan and Bilken (1982 cited in Maurice et al, 1987).

There are considered to be three general types of quantitative methods:

1. Experiments, which are characterized by random assignment of subjects to experimental conditions and the use of experimental controls;

2.Quasi-experiments, by which studies share almost all the features of experimental designs except that they involve non-randomized assignment of subjects to experimental conditions; and

3. Surveys, which include cross-sectional and longitudinal studies using questionnaires or interviews for data collection with the intent of estimating the characteristics of a large population based on a smaller sample from that population (Maurice et al, 1987).

Research may sometimes incorporate both quantitative and qualitative methodologies as will this study in order to get the reliability and trustworthiness of the research from results obtained from the questionnaire and the interviews carried out.

Type of research in this study

This study employed a qualitative approach utilizing some quantitative techniques in a needs analysis for the study of tour guides in Vietnam. The main method of the study was a survey conducted to explore the use of English of tour guides in Vietnam in order to analyze the present needs of using the target language in their workplace. The participants of the study were selected on a basis of convenience and availability.

A questionnaire, with of a rating scale, was used for data collection. The data was then analyzed based on simple statistics, looking for averages and simple groupings to identify the needs and problems in order to find answers to the research questions.

Sampling procedures in the present study

The participants in this study were tour guides who work in the areas of Central, North and South Vietnam including 50 from areas in and surrounding Hue, Da Nang and Hoi An, 25 from the HCM City and surrounding area and 25 from the Hanoi region. The details of the travel agencies were found from the internet websites and from local knowledge. The method to assess the English language needs and problems of Vietnamese tour guides was a questionnaire.

Several methods were used to make the questionnaire in order to maintain its reliability and validity. The benefits for the tour guides and the tourism industry were assessed from the interviews conducted. The interviews conducted were mostly limited to the local area with 20 participants from Hue, Da Nang and Hoi An although there were 5 interviews done in HCM City.

The Construction of the questionnaire

To create the questionnaire used in this study, I reviewed a number of research studies relating to the needs analysis and English for Specific Purposes (ESP discussed in the literature review Chapter 2), and then I reviewed some examples of questionnaires from similar research to find their outlines. Moreover, a wide range of textbooks about English for tourism were studied to find relevant information to use as content in the questionnaire. The first draft of the questionnaire was written in English and created with the objectives of the study and the research questions. The questionnaire was used in this study to obtain information from the tour guides in Vietnam. The questionnaire, given to the tour guides, had five main parts: General information; general opinions; needs of the English language for tour guides; Problems/difficulties faced with English language; and opinions about the benefits of learning English for Vietnamese tour guides.

1.General Information

The general information was made up of three sections. The first asked the participants some personal information about their age, gender, education, and the amount of time they had worked as a tour guide. The second section asked about the importance of English, the amount of English they needed to use when they guide international tourists and who they use English language with in their daily tasks. The last part was about their English proficiency. The participants were also asked to rank language skills and elements that they used regularly, and problems with English language they had most. The language skills and elements in this questionnaire were composed of listening, speaking, reading and writing. Translation, and vocabulary in tourism including grammar and some useful English expressions will be discussed and included into those four main categories.

2.General Opinions

The second part consisted of two items. Item 1 asked the participants to indicate their feelings about the necessity of English language elements. They were to rank the elements on a scale of 1 to 5 in their opinions:

5=Essential

4=Very necessary

3=Necessary

2=Fairly necessary

1=Unnecessary.

Item 2 was about the difficulty of English language elements. The participants were asked to rate their difficulties of English skills again using a rating of 1 to 5.

5=Very difficult

4=Difficult

3=Fairly difficult

2=Not very difficult

1=Not difficult

3.Needs of the English Language for Tour Guides

The third part was about the needs of tour guides for the use of English skills or elements in the job. The questions covered information with various English language functions for tour guides. The questions were divided into four main domains of language skills: listening, speaking, reading and writing. Questions about translation, pronunciation, vocabulary in tourism, grammar and expressions were also included. Within each skill, the questions were divided into sub items asking about various roles and the functions for the tour guides. The participants had to rate those answers on a 1 to 5 scale as follows:

5 = Most

4 = A lot

3 = Moderate

2 = A little

1 = Least

4.Problems and Difficulties Faced with English Language

For this part the questionnaire was again used, as it was in part three, to discover and confirm problems and difficulties encountered by the tour guides in the daily activities. These questions aimed to point out common issues resulting from miscommunication or lack of understanding when using the English language. Again the participants had to rate those answers on a 1 to 5 scale as follows:

5 = Most

4 = A lot

3 = Moderate

2 = A little

1 = Least

5. The benefits of learning English for Vietnamese tour guides

The questionnaire ended with an opened item, allowing the participants to fill in either their comments or suggestions. Some expected benefits were suggested and offered as choices to agree or disagree with. The participants were also asked to rank those benefits in order of importance to them personally and professionally. This was followed up, where possible, with interviews requesting further clarification of their suggested benefits and those that were suggested to them in the questionnaire.

Putting ticks in boxes and crossing numbers were ways of answering all the parts of the questionnaire. There were yes/no answers, multiple choice questions and ranked questions. The questionnaire used in the present study was written in English and then translated into Vietnamese to avoid any ambiguity, misinterpretation or problems for the participants.

Pilot Study

A pilot study was conducted to test the effectiveness of the questionnaire and to identify and eliminate ambiguity in the questions before it was used in the main study. Five people in different areas of the tourism and hospitality industry from the local area in Hue City were the participants in the pilot study, carried out at the beginning of March 2015. Just over one week was allocated for the collection and review of the pilot questionnaire, but due to conflicting schedules it took just over two weeks to get the results. The return rate and the completed questionnaires was 100%.

In the pilot questionnaire, an item of ‘others and please specify’ was included at the end of every section, where participants could propose any additional questions or English language expressions and functions they thought should have been asked (see Appendix 2). To administer the questionnaire, the researcher firstly handed out the covering letter to the manager of the chosen people where needed to ask for their permission. The cover letter consisted of an introduction of the research study and the university, the aim of the study, the importance of the study, general instructions and words of thanks to the participants and their management. Then, the questionnaires they could complete were given to the participants. This was then followed by arranging a time and date that the questionnaires could be collected and interviews with the participants could be given. The participants in the pilot study were 4 male participants and 1 female participant. The results of the survey showed that the participants were concerned about the importance of English in their tour guide occupations. They all suggested that speaking was the most important skill they needed in their jobs, followed closely by listening. Writing, reading, vocabulary in tourism, translation, grammar and expressions were the least important. However, concerning their difficulties of using English elements in their jobs, the majority of the participants found listening caused the most issues, followed by speaking (including pronunciation errors). Translation, writing, grammar, language expressions and reading were all considered to have fewer problems for them. Vocabulary for Vietnamese tour guides was generally found to be the least problematic and the easiest to overcome.

Main Study

After the questionnaire was revised and created based on suggestions and improvements to the pilot study, it was given to, or sent to, the participants selected for the main study: 100 tour guides from different companies and individuals during the first week of April 2015. They were then returned over the following weeks with the last of them received in late April 2015. Similar steps to the pilot study were taken for the collection of data. Firstly a covering letter was submitted, introducing the study, with reference to the Hue University College of Foreign Languages, to the managers and/or owners of the tour companies to get permission. The return rate within this time was 60% and any that were returned later then than April 2015 were left out of the study; only 50% of these were completed correctly and used for the data analysis.

Data Analysis

The analysis of data in the present study

The questionnaires were checked and analyzed using basic statistics. The procedures in the present study looked for specific repeated trends and used, percentages (%), averages (X), and standard deviation (S.D.). The data was analyzed using the following statistical procedures. First, the percentages were used in the analysis of answers, concerning the general background of participants (Part I). Second, a five-point scale was used to score the levels of necessity, difficulty, needs and problems of English language for tour guides in Vietnam (Part II, III, and IV). Third, the information about the central tendency of the scores and Standard Deviation (S.D.) showing a measurement of the dispersion, giving information on the extent to which a set of scores varies in relation to the average score. Averages were used to calculate the level of necessity, difficulty, needs and problems of English language skills for tour guides in Vietnam. Fourth, scores were weighted to rank the needs and problems of English language elements for tour guides in Vietnam. A specific weight, as illustrated below, was assigned for each specific rank:

RankWeighted Scores

18

27

36

45

54

63

72

81

Finally, the reliability of the responses for those items, which used a five-point scale was tested.

Reliability, Validity, and Generalizability.

Definitions of Reliability, Validity, and Generalizability

Reliability is the extent to which an independent researcher, on analyzing one’s data, would reach the same conclusions and, a replication of one’s study would yield similar results. There are two types of reliability: internal reliability, which refers to the consistency of the results obtained from a piece of research; and external reliability, which refers to the extent to which independent researchers can reproduce a study and obtain results similar to those obtained in the original study (Nunan, 1992).

Validity is the ability of an instrument to measure what it is designed to measure. Researchers and experts in the field are persons who decide that an instrument is observing what it is set out to observe. Two approaches of establishing the validity of a research instrument are logic and statistical evidence. There are three types of validity: face and content validity (the judgment based upon the logical link between the questions and the objectives of the study); concurrent and predictive validity (the judgment based on the degree to which an instrument can forecast an outcome and how well an instrument compares with a second assessment done concurrently); and construct validity (the judgment based upon statistical procedures) (Kumar, 1996).

Generalizability is the way of drawing logical conclusion, or making an inference from certain results which explains some important implications of the results or is related to the research questions.

Reliability, Validity, and Generalizability in the Present Study

Reliability

To check the reliability of the questionnaire, I used an internal reliability check for consistency of the results obtained from the study. The questionnaire used in the pilot study was considered to be more than satisfactory for the purpose of this study.

Validity

To ensure the validity of the questionnaire, the first draft of the questionnaire was constructed and revised based on recommendations from the participants and other people in the field. In the present study, the researcher used face to face interviews about the questionnaire to determine opinions on the validity. I then constructed the questions in the questionnaire based on the objectives of the study and the research question being asked. By checking the validity, each question or item on the scales and the questionnaire content must have a logical link with the objectives. The judgment that the questionnaire and interviews was measuring what it was supposed to, was based upon the relevant inferences the findings had to the study. Moreover, the validity of the questions was also checked by the participants in the pilot study.

Generalizability

This study used a mostly quantitative approach with three established needs including sampling, reliability and validity checking. Therefore, the results obtained could be generalized to the target population, the tour guides in Vietnam. This chapter has dealt with the research methodology and the design of the present study. The objectives of the study and research questions; research types; data sampling and collection procedures; data analysis of the data collected; reliability, validity, and generalizability of the research methods and findings were also discussed. The results of the present study will be presented in the following chapter.

According to the World Travel and Tourism Council (WTTC), the tourism and hospitality industry represents one of the most important sectors of the global economy, which contributes a US $6 trillion business that employs over 230 million people and a significant portion of the world’s workforce. In other word, human resource considered one of the most important resources of the contemporary tourism and hospitality industry. The labour supporting a wide range of jobs in many different service sectors, for instance hotels and restaurants line, theme park and entertainment attractions. Personal service is essential to delivering products and service to satisfy customers especially those served in front line, for example waiters, chiefs, receptionists, etc. Since the business scope is emphasis the customers contact all over the time, the lack of manpower may lead the industry in trouble.

2.2 The research problems

In fact, the contemporary tourism and hospitality industry is facing a HR crisis where the labor turnover rate is relatively higher than other industry. ‘The bulk of service jobs tend to be temporary, held by the people with no career aspirations in tourism and no commitment to the industry.’ () That is no doubt that the contemporary tourism and hospitality industry offers job opportunities for the youth, women and less advantaged groups in society. Other than recruitment problems, employee turnover may cause by employee retirement, death, illness or disability, resignation, organization downsizing or termination. The reasons why employees resign may be avoidable where they may experienced unfair treatment, poor leadership, or lack of challenge. Otherwise they leave from an organization with unavoidable reasons, for example immigrate to another state or country, return to university as well as serious illness. () Employees may also leave an organization because of dissatisfaction to the working conditions, pay and benefit, training and development, the workforce diversity issues, and other potential issue. Consequently, a detailed turnover analysis of why employees leave a hospitality organization is meaningful to arrive at benchmark practices on dealing with the operational and administrative challenges the high level of staff turnover. This research information would represent the factors that influence staffs’ retention or leave from their job in this industry. Moreover, it helps hospitality trade organizations generate strategies to minimize staff turnover rate yet increase staffs’ retention by the means of enhancing recruitment policy, job satisfaction, organizational commitment and finally quality of service.

3.0 RESEARCH QUESTIONS

What cause employees leave the organizations within tourism and hospitality industry?

What are the consequences of high staff turnover to the related service sector organizations?

What corrective action should be taken to tackle high employees’ turnover rate in specify sector?

RESEARCH AIMS

The aim of this study is to identify the reasons of high staffs’ turnover in tourism and hospitality industry. Further, this study seeks to examine the impacts of high employee turnover to the organizations in the industry and how organizations tackle this challenge.

4.1RESEARCH OBJECTIVES

To examine the reasons of high employee turnover rate in tourism and hospitality sector

To evaluate the consequences of high employee turnover in an tourism and hospitality organization

To evaluate how organizations satisfy the employees in order to solve the problem of high employee turnover in tourism and hospitality sector

5.0 RESEARCH METHODOLOGY

5.1 RESEARCH DESIGN

Each method, tool or technique has its unique strength and weakness. () To ensure the validity and reliable of this study, descriptive research design is used since the research problems is not a new issue and had been sought by previous researchers. () Descriptive research is designed to describe characteristics of a population or a phenomenon, where in this research, is to describe the characteristics of the labor turnover within the tourism and hospitality industry. Further, it may help to examine the ways that may reduce such phenomenon.

Therefore, this research will be based on quantitative methods. Quantitative method will be undertaken by distribute survey questionnaires to a large number of respondents in order to obtain accurate information and improving decision making.() Deductive research is the logical process of deriving a conclusion from a known general premise. () Deductive research has been used in this research to test hypothesizes whether certain factors may influence labors’ resignation and whether high turnover rate would lead tourism or hospitality organization into certain dilemmas. Cross sectional studies method also will be used to conduct this study because the duration to conduct the research is limited.

5.2 UNIVERSE OF POPULATION

The population selected to conduct this study will be the employees who engaged in the tourism and hospitality organizations that is high labor turnover rate, for example tourism attractions like Genting Highlands and certain hotels as well as restaurants in Malaysia.

5.3 SAMPLING DESIGN:

5.3.1 SAMPLE SIZE

To conduct this research, the selected sample size will be 200 employees within the tourism and hospitality in Malaysia.

5.3.2 SAMPLE APPROACHES

Since it is difficult to seek the people who experience high labor turnover rate even resignation in the tourism and hospitality organizations, the research are undertaken by snowball sample. Snowball sample is one of the non-probability samples that selects the initial respondents by probability sample and then obtained the additional respondents by referral from initial respondents. The advantages of using snowball sample are economical and make convenience to the researcher as well as respondents. With this approach, this study can conducted by makes initial interview with the small group and then use these to establish contacts with other relevant employees to answer the designed questionnaires.

5.4 RESEARCH METHOD

Secondary data such as journals, textbook, newspapers and website articles also will be utilized when carry through this research. In broad terms, the questionnaires for survey purpose are designed with closed and open-ended questions. The questions designed expect to deliver the reasons of high employee turnover rate together with its consequences to the organizations within tourism and hospitality industry.

6.0 DATA ANALYSIS

The data obtained from survey methods will be analyzed by using SPSS VS.18.0 per window. It is used to obtain the descriptive statistic like frequencies, mean and standard deviations that reveals the outcome of the research problem.

7.0 TIME SCALE

GANTT CHART

November 2010
December 2010
January 2011
February 2011
Chapter 1: Introduction

1.1 Research Questions

1.2 Research Objectives

Rationale of the research chosen

Chapter 2: Literature Review
Chapter 3: Research Methods

3.1 Secondary data

3.2 Focus group

3.3 Case studies

3.4 Survey questionnaires

Chapter 4: Data Analysis and Findings
Chapter 5: Conclusion and Discussion
Binding of Dissertation

People are one of the most significant resources for business, especially in the people-intensive and service- intensive hospitality industry (Kong and Baum, 2006). Additionally, front office plays a role of reception and marketing as well as the “brain” in the hotel, and it is an important factor that has impact on hotel’s image and reputation. An increasing number of research in China and in the world are keen on investigating human resources management about the turnover in hospitality industry (Liu,2002; Baum et al.,2006).

Gustafson (2002) indicated that high employee turnover had been widely accepted and documented in the hospitality industry. The study also showed the relationship between managers’ perceptions and staff turnover. Moreover, Poulston (2008) found the poor training was associated with workplace problems, and improving in the training part is likely to reduce the thorny problems such as under-staffing. The result proved via questionnaires indicated that in the hospitality industry, the employers were not generally looking for hard technical skills, especially in the front line positions, but rather soft skills (Nickson et al., 2005). Such soft skills encompass attitude and it was also the essential parts affect staff aspirations about changing work all the time. In brief, turnover in hospitality is affects not only including psychological factors but also physical factors.

It is clear that China has a bright future in the hospitality industry, and absolutely it is with potential to open the outside world and thus to obtain advanced international management skills as a result. China is still facing the problem of shortage of quality personnel and high staff turnover which might relate to culture of bias to the hotel jobs (Kong et al., 2006). Due to the importance of about turnover in the hospitality industry, some of the psychological and physical factors may similar be all around the world, yet in China, culture differentials also exist about the job nature in the hospitality industry.

2.2 Turnover

KPMG (1991) and Timo (1999) pointed out that high staff turnover rates in the hospitality industry are largely higher than manufacturing industries in Australian labor market. Timo (1999) indicated that hospitality sector employment is always described as a mode of instability and flexible form of employment. In addition, findings in Timo’s survey (2005), a unit of percentage can evidence this statement: only 23.2% of employee respondents had been employed by the hotel 3-5years. It is also worth mentioned that only a little more half or 56.5% of respondents had been employed for less than two years. Similarly, about half of the manager respondents have been employed by one hotel for more or less two years. A survey conducted by Kong and Baum (2006) found that 75% respondents in front office was their first experience of working in hotel sector. Only about 30% respondents indicated that they plan to stay on their job for one to three years. This percentage largely reflects the potential workforce turnover in hospitality environment.

Awareness about staff turnover cannot just stay on the surface, it must recognize that staff instability is not only the loss of talent, but that also would result in more costs in hotels. According to the survey by Mitchell (2001), he indicated that turnover is costly in any kind of operations. Cost here is a general concept. It concluded intangible and tangible factors. The former involved loss of experience, technical skills, relationships knowledge etc. The latter is concerned about adding money to recruitment, training, creating of candidates. Additionally, Hinkin and Tracey (2008) also published a report regarding the cost profiles associated with staff turnover in Cornell Hospitality Quarterly. They divided the turnover cost into hard costs, soft costs and opportunity costs. Meanwhile they listed five cost categories during the recruitment, selection, training and development, and performance. The authors found out that the results that the managers spent a great amount of time and money in recruitment and selection new staff because of the poor quality of the candidates’ pool and high turnover rates existing in the hotels.

The front office is the first place that customers have contact with a hotel, which employees provided the first impression to the customers about the hotel service. In other words, the front office represents the hotel’s image and as a consequence staff in front office must know all the answers concerned in hotel to make customers happy( Kaye, Thomas, 2000,pp24-P25). Meanwhile, the clerks in hotel front office face big challenge on daily work. Working stress is one of the reasons that caused staff turnover can be found (Lo and Lamm, 2005). Pressure caused by working challenge may give rise to staff’s leaving desire and foreshadowing the final turnover in the hospitality.

Moreover, several physical factors have an effect on staff satisfaction about the current job. In Hinkin and Tracey’s (2000) work, they analyzed major causes for turnover arose, poor working environment, low wages, unreasonable management and lacking guiding for employees and poor training is also mentioned in this work. From the literature it is evident that human resource challenges found that there are many regions all around the world are confronted with the same issue about staff turnover and specifically, the problem of seasonal employment in tourist regions trouble the hotel managers a lot. Martin et al. (2006) published a research paper and summarized that the bad image of tourism & hospitality industry, unfavorable working environment, few development and promotional opportunities, these are all the candidates’ perceptions and the most significant factors for managers to improve and in order to attract and retain the workforce.

Specifically, there is an outstanding issue in the hospitality industry that the staff working in hotels is younger and younger and it has closely relationship with turnover issue. According to a New Zealand survey, almost half or 40% of the employees in hospitality sector are less than 25-years-old, the biggest group of the staff being 15-19 year (Whiteford and Nolan 2007).Working in hotel, as well as in front office, the most significant requirement for the staff is not skill levels but service attitude. Selection methods for recruitment can discern such feature, it relied 79% on application forms, 74% on curriculum vitae or/and 89% on interviews and references (60%) (Nickson, Warhurst and Dutton, 2005). A pertinent study conducted by Norris (1995) found that there are low barriers for person to enter most of the hotels, to be front-line personnel. Therefore, low barriers interests young workforce to looking for job in hospitality industry. Meanwhile, the youth staff in front office is one of the reasons for its workforce instability. “Play and work”, this notion may attract those employees to choose jobs in hotel which has low skill barriers to enter as well as opportunities to travel and exciting. (Accirrt, 1996; Chalmers and Kalb,2001)

In other words, with the phenomenon of the seasonal turnover, human resource managers in the hotel cannot ignore the using of the students as a temporary labor pool (Farnsworth, 2003). There is no doubt that the close relationship among the local hospitalities and the hospitality manager schools and the tourism manager colleges, they can help provide potential workforce to the hotels. Also, the author advocates that hospitality operators should provide job related training to the students and improve their working competitive strength.

Organizational commitment, missions, goals and direction

Organization commitment is playing a significant role which as a factor reducing employee turnover in the hospitality industry (Kazlauskaite et al,.). According to Greenberg and Baron (2000, pp.181) definition, organization commitment is an “extent to which an individual identifies and is involved with his or her organization or is unwilling to leave it”. And there are three types of organizational commitment: affective commitment, continuance commitment and normative commitment (Meyer and Allen, 1991). Among these three types of commitment, affective commitment may be considered most desirable for an organization. In addition to the reduction of employee turnover, according to Schuler and Jackson’s research result (1999), they found out that employee organizational commitment was also seen to be important for quality improvement and maintain the importance of such human resource practices as teamwork, appropriate feedback system. Furthermore, employee empowerment as a factor can enhance organizational commitment. Empowerment is a rather complex process and it is hard to definite until now, but Lovelock and Wright (1999) define empowerment in service industry as the authorization of an employee without asking for a supervisor’s approval to help customers to find out service problem solutions and make appropriate decisions. And with regard to the relationship between psychological empowerment and organizational commitment, Sigler and Pearson (2000) found the positive relationship between them and Janssen (2004) indicated that psychological empowerment can be viewed as a way to stimulate an individual’s commitment to the organization.

Basically, empirical evidence suggests that the hotel’s organization mission, goals and direction influence employee retention and job productivity. And the organization development direction and support had a significant impact on employee job satisfaction and overall commitment (Kim, Leong, & Lee, 2005). Susskind et al.’s (2000) research also indicated that perceived organizational support strongly insfluences job satisfaction and employees’ commitment to their organizations. US Department of Labor (1993) on high performance work practices revealed that involving employees in decision-making, goals and the direction of an organization through participation in terms will help reduce turnover rate and produce job employee satisfaction. Furthermore, Cho et al. (2006) also reported that organizations which non-managerial employees are more likely to experience higher turnover rate comparting with which have high-performance work practice in the organization.

Hotel culture and communication

According to Becker and Huselid (1999), hotel culture creates competitiveness since it changes staff’s working behavior by making them act consistently with the hotel’s desired corporate culture, thus influencing employee retention. Most of other researches indicated that there were uncovered similar findings between hotel culture and staff turnover rate and retention. For instance, according to Milman and Ricci (2004), they revealed that among the most powerful indicators to predict hourly staff retention in the hospitality industry were positive experiences with the hotel’s policies and with the hotel’s humane approach to staff.

Work environment and job design

In terms of the working environment and job design, most of the studies found that employees who had positive experience with regards to working hours, sense of fulfillment with their jobs and higher level of job satisfaction are more likely to stay with current employer. Although employees care lots about the monetary rewards which can be a top motivator for employee retention, having a comfortable working environment and flexible working hours were also important motivators (Wildes, 2007).The research work performed by Martin (2004), he pointed out the working situation has a quite important influence on the staff’s perception and working attitudes. Accordingly, the working performance also impacted by the employees’ satisfaction of the working environment. Continuously improving the ethical problem in the hospitality, it will ultimately lead to the lower staff turnover and the successful retention of the talent workforce. What is more, the result that hourly employees’ retention was predicted by self-fulfillment and working conditions, even over monetary rewards was confirmed by empirical studies of lodging properties in Central Florida (Milman & Ricci, 2004).

Hires and promotions

According to the searching result, numerous of the studies examine the impact of hiring and promotion activities on retention and performance (Becker & Huselid, 1999; Cho, Woods, Jang, & Erdem, 2006; Huselid, 1995; Milman, Hourly employee retention in small and medium attractions: the central Florida example, 2003). Based on the Pfeffer (1999) research, hotels which wishing to succeed in today’s global competitive environment must make adequate HR investment and build staff who possess better skills and capabilities than their competitors. In addition, it is important that selective hiring procedures can ensure effective retention of the most qualified employees while lowering staff turnover in the long term (Huselid, 1995).

Customer relationship

The relationship between employees and customers is a connection that cannot be ignored. A theory about employees and customers satisfaction was tested by Heskett (1990), clients’ satisfaction is base on the employees’ satisfaction in the hotel. More precisely, employees in the hotel are the significant factor which is root for hospitality operation. Furthermore, the research study by Dienhart et al. (1992) found that there were positive relationship between customer centeredness and the staff’s constructive views of job involvement, job security and satisfaction. If staff can feel that the hotel takes good cares of them, in return, they will provide a better service to customers to meet and/or exceed their expectation. They are more likely lead a higher satisfaction both staff and customers, also to better staff performance, thus making them less likely to leave (Arnett, laverie, & McLane, 2002), positively influencing staff retention.

Training

High quality level training is one effective measure for staff retention. Several studies show that the close relationship between training activities and productivity and retention. In hotels where staff receives the proper training needed to assume greater responsibility, turnover rates are generally lower (Youndt, Snell, Dean, & Lepak, 1996). And meanwhile Youndt et al. (1996) theorize that human resource practices designed to develop talented and ream-oriented workers improve staff productivity and customer satisfaction. With the same working situation for choosing, to the candidates, they prefer to apply for work at the hotel properties which have done well with the career progression image (Martin et al, 2006). Alexander and Nuchols (1994) also support a positive relationship between high quality level training and employees turnover. Moreover, work by Poulston (2008) investigated that some turnover is redeemable, meanwhile some is inevitable. In such a case, if hotel provides proper training focus on individual development features, employees are likely to stay long, and try their best to enjoy a complex and stressed environment. Obviously, hotels with substantial training opportunities should experience lower turnover rates according to Shaw et al.’s (1998) research. However, an interesting finding also by Shaw et al. (1998) included a positive relationship between training and the discharge rate. They indicated that hotels provide more training opportunities are concerned about staff skills and performance, and therefore experience a high percentage of staff terminations. Conversely, hospitalities that experience a high discharge rate initiate training activities because of lower workforce skill levels.

Employee recognition, rewards and compensation

The most notable among hotels’ retention initiatives is compensation and benefits. Numerous studies have addressed the impact of employee compensation, rewards and recognition on turnover and retention (Walsh & Taylor, 2007). In terms of wages, a survey by Norris(1995) indicated that workforce in hotel are usually low paid, compared with government average wage, staff in hotel earns just about 73% of the whole industry average. Another survey conducted by Choy (1995) pointed out that hospitality employees’ average annual salaried have been found to be about 16.5% to 31.6 % below than the hotel industry average and government average wage. Additionally, highly competitive wage system promotes employee commitment and thus results in the attraction and retention of a superior workforce (Guthrie, 2001). And other further survey noted that staff will remain with an organization as long as it serves their self-interest to do so better than the alternatives available to them elsewhere (Shaw, Jenkins, & Gupta, 1998). Although several study investigated the compensation can strongly influenced the staff turnover rate, also several other research have indicated that compensation in the form of base or variable pay may not be sufficient to attract or retain staff. The most important retention predictors included intrinsic fulfillment and working conditions rather than monetary rewards were confirmed by Milman (2003). Moreover, the absence of opportunity for professional growth and development affects hotels’ turnover rate and retention instead of compensation and work-life balance (Walsh & Taylor, 2007).

Leadership and human resource management partnership

Furthermore, another survey (Gustafson, 2002) found that the frequency of managers in hotel sector filling in for workers has a negative relationship with turnover. If front office’s managers working side-by-side with front-line clerks, teamwork sense developed from staff so that they will recognize that they are needed. At the same time, the managers’ action will lead to a sense of belonging and heightened communication, and therefore they would be less likely to leave. Contrarily, poor management, conflict between manager and front-line employees are all negative for daily operation in front office. It is not only negative for customer satisfactory, but also passive for staff to set career perspective it will lead employees more likely to turnover. A survey by Tutuncu and Kozak (2007) noted that supervision within the hospitality industry can bring job dissatisfaction, and otherwise staff turnover. What is more, Chew et al. (2005) reveals that hotel with a value profile of either elite or leadership, complemented with strategic HRM effectiveness will enhance financial performance. Instead of just focusing on single practice like staffing, the simultaneous use of multiple sophisticated human resource practices was assessed, which was identified as a link between organization-level outcomes and groups of high performance work practices (Huselid, 1995). All the prior work has consistently found that the effective of human resource management initiatives increased staff productivity and retentions. Specially, recruitment and training process, working environment, labor-management and performance appraisal, promotion and incentive compensation system that all been linked with valued firm-level outcomes (Huselid, 1995). Although the effects of human resource management practices on employee turnover and retention of organization-level is significant, many of the research in the hotel industry paid more attention to the individual-level predictors of turnover (Shaw, Jenkins, & Gupta, 1998).

2.3 Turnover in China

According to the statistics from China National Tourism Administration Office(2008), it is shown that China’s current tourism related staff were around 6million, while the actual the need of that are about 8 million or more. Therefore, the talent gap between the practical situation and the expectation is about 2 million. On the other hand, the loss of existing tourism practitioners was very serious. The ordinary turnover rate is 5% to 10% in the general industry, while the turnover rate is as high as 20% or more in the tourism industry, especially the higher qualification, the higher rate of brain drain. (The Yearbook of China Tourism, 2008)

The increased mobility of human resources in the hotel industry was becoming increasingly prominent, the brain drain had become a primary problem troubled hotel mangers. The turnover rate in other industries was about 5% to 10%, while the appropriate turnover rate in hospitality industry was about 8%. However, China Tourism Association, Human Resource Development and Training Center did an investigation in twenty three domestic cities in thirty three of two to five stars hotels’ human resource department, and found that the average turnover rate was 23.95% (Wang, 2009). According to statistics, it can be seen that the hotel staff turnover rate was 3 times more than the appropriate turnover rate, and it showed a gradual upward trend. Zhang and Wu (2004) also indicated that one of the key issues of human resource challenges of China’s hotel was the high staff turnover rates.

A paper published by Zhao et al. (2006) introduced that the high turnover rate in Hospitality industry is a universal existence question which puzzles the managers a lot. The literature concluded some reasons of employees’ turnover: instable work, little chance for promotion, pursuit higher returns and display their values, want to obtain the respect of personality, etc. Additionally, the author Fei (2009) did an investigation on the negative influence of hotel turnover, including cost allowance, undermine the team morale, and reduce the credibility of brand, loss business information, and decline the service quality. After analyzing the reasons that leading to the staff instability in China hospitality industry, Zhao brought forward some countermeasures: improve the staff training, make plans for staff career development, and focus on communication to strengthen the emotional management, improve the hotel and cultural construction to foster people-oriented management concept. Meanwhile Fei analyzed the potential development direction from different angles of social factors, corporate factors and individual factors to elaborate the importance of staff loyalty.

Many hotel staff graduated from hotel management and have quite potential to be outstanding employees in hospitality industry, but all these outstanding staff’s instability was also troubled their corporate managers a lot. Research from Zhang (2006) was focus on investigating the reasons of hotels’ outstanding employee turnover and introduced the ERG theory, after that he tried to solve the core issue in the hospitality industry: how to maintain the outstanding staff and pursue the hotel’s long-term stability and development. In this report, Zhang indicated that the outstanding employees’ outflow from their desire of leaving and the ERG theory used here to analyze the employees’ core requirement to prove that staff advantages should be discovered. Additionally, the author enumerates some positive examples to expound some recommendations for hotel and employees to establish loyalty mutually.

It terms of the human resource management, dynamic management, relative to the static management, is also a research issue in China. Chen (2006) found out that in order to control the mobility of the employees and reduce the turnover and loss, the hotel should carry out the comprehensive, systematic and long-term dynamic management. Additionally, Chen advocated that investigate the hotels’ turnover situation, the searchers would not only investigate the external & internal environment changing but also do some researches about the human resource inflow& outflow and human resource flowing in the corporate at the same time. After that, Chen indicated the most important countermeasure was to establish the warning mechanism.

Zhang and Wu’s (2004) did research about the human resources issues the hotel facing in China. It must mention that the authors analyze challenges the Chinese hotels were facing via hospitality perspectives, travel perspectives and university perspectives, and indicated the hospitality industry’s expectation of education. They found that human resource challenges were playing a negative role in the development of China’s hotel and tourism industry, the critical issue was the staff retention and human resource shortages, at the same time, the education level and the industry’s expectation gap also became a thorny topic. All the organizations and the government would establish communication to enhance the graduates’ skills level and experiences, decrease the gap of expectation and practical operation, in order to enhance the retention rate in hotel and improve the problem of human resource shortage.

According to China’s culture, with the “one-child policy”, there are not enough citizens are born to supply workforce demands. In addition, the country’s relatively outdated educational system cannot lead the colleges and universities to provided outstanding human resources with types of skills in an increasingly globalized economy. One of the most important factors contributing to the high level turnover rate in hospitality industry in China is work-life balance, long hours working shift and heavy workloads instead of the technological working, especially in the front line post (Michael, 2008). The same evidence could be finding out in much of the related western hospitality and tourism industry work. Deery and Iverson (1996), Deery and Shaw (1999) and Ghiselli et al. (2001), all these research investigated the constructs like organization commitment and job satisfaction are significant elements contribute to staff’s intentions to leave an organization. Additionally, work stress and personal attribute plays a decision role on leaving an organization (Deery M, 2008). As mentioned above, work-life balance (WLB) also is one of the influence factors that impact on the staff turnover rate in hotel (Wang and Walumbwa, 2007), while Dagger and Sweeney (2006) focus on life quality and staff turnover relationship research.

2.4 Turnover in Guangdong Province

Based on the related HRM theories, such as learning organization, situational leadership, quality of working life and employee satisfaction, Chen (2007) deeply investigated the human resource management situation in one hotel in Dongguan which is a industrialized city with rapid economic growth, he got the result that no matter an international brand hotel or a local hotel, the issues of staff turnover and management brought out a series of problems in Guangdong Province. On one hand, due to the labor-intensive industry, the hospitalities have to operate with a large number of employees; On the other hand, the staffs that hard recruited were unable to retain. According to the identification of the basic turnover environment, the author analyzed the high turnover rate and the investigating the countermeasures based on the three parts: external environment, staffing department and human resource department.

In Guangdong Province, many of the researchers found that training quality was a significant element on the issue of turnover in the tourism industry, especially in the hospitality industry. Dai (2005) made a hard working on doing the research about the different training approaches and quality between western countries and China, and set the Guangdong’s Hotels as examples, pointed out the differences in terms of the importance of training, investment in training, training contents, training approaches and methods, and the training effectiveness and evaluation. According to Shen (2008), she also focused on investigating the important role of the training in the hospitality industry. She kept her mind on searching the hotel training effect assessment with an instance of Intercontinental Hotel in Guangdong. The author pointed out that the personnel quality would be the big issue during the management. Its meaningful influence not only present on the Human-Resource department, the whole hotel, but also on the employees themselves. One positive effect of training for the hotel, it could have a direct economic benefits, and training as an investment process on the staff. The assessment of the training can provide employees with consciousness of the hotel’s benefit changing based on their capacities and enhance of their senses of achievement, improved employees’ job satisfaction and loyalty to the hotel.

According to the geographical situation in Guangdong province, it’s a developed area with lots of small medium enterprises as well as the hospitality industry provides a great amount of job opportunities to attract workforce from all the other provinces. It must mention that most of the workforces who live in other places go back to their hometown for the Spring Festival and it’s the peak period of labor-turnover (Wang, 2009).

2.5 Conclusion and research question

After searching the literature with the issue of turnover in hospitality industry, and according to comparing among those researches, several similar points about the situation and reasons on the turnover can be found between China’s hospitality industry and other countries’. Although China’s hospitality is developing with many thorny problems including staff turnover accompanied by Chinese culture. In this paper, the author aim to find out the following questions, and analyze the relationship among all the influenced factors.

Accordingly, the author proposes a mode of managerial turnover cognitions set up by Carbery R. et al (Figure 1) with the purpose of helping identify the four sets of variables and define the hypotheses.

The figure showed above, which identified the variables as possible of the hospitality turnover, involve Career Issues, Job Issues, Organizational Commitment and Covariates and so on. Based on the variables listed above, they can be classified into Demographic variables, Human capital variables, and Psychological variables according to this paper specific investigation of the staff turnover in the front office in hospitality.

Demographic variables

Age, gender and marital status are all demographic variables that influence the hospitality industry front office’s staff turnover. There was a phenomenon that the a great amount of staff in front office were youth employees, almost accounts for 40% of the staff were less than 25 years old (Whiteford and Nolan 2007). And in China, in particular the loss of tourism management students of the phenomenon was particularly serious (Dou, 2009). In the research conducted by Hellman (1997), indicated that older staff was more likely represent a lower degree of mobility due to the concerned about the formal and informal benefits associated with age in the work place. On the contrary, it is important to think about what’s the main reason for the highest turnover rate of the youth staff. As a result, it is hypothesized that:

H1: Younger employees represent higher turnover.

Human capital variables

Specifically, in hotel front office, education level, working experience and salary level are related human capital variables that impact the employees’ turnover. Finding from human capital theory would suggest that staff with relatively higher education levels could more cognitive about their career development road relatively and could not change their current job straight away. Wong et al. (1999) found that individuals with relatively higher education levels are better informed of the external labor market and they are relatively good at comparing cons and pros with the current positions. As a result, it is hypothesized that:

H2: Employees with higher levels of education attainment represent lower turnover.

Psychological variables

Thomas (2000) and Lamme(2005) indicated respectively working as a front line employee especially working in the front office, was a stressful job and full of challenge. Hinkin (2000) stressed the influenced factors about turnover were various, concludi

Motivation of employees is not a new phenomenon, however very little attention paid to him. The major and most successful companies are svjestne importance of human factors in their organization, but, unfortunately, is much more smaller and not so successful that profit only the vision, mission and sole objective. Many people are not thinking and not thinking about ways to enable them to profit, and abuse of the man and his knowledge and skills has never been respected, nor will it. Loss of employee loyalty is the result of failure to comply with the individuality of employees, their desires and needs.

How important is the motivation of employees, particularly in the hotel industry, will be explained in the following presentation.

For the poptpunije treatment given topic, will be given an adequate theoretical basis in the first part, where he will talk about motivation as a concept, the process of motivation, original and contemporary theories of motivation, usually applied motivatorima, link between employee motivation and human resource management, and related between the employees’ motivation and leadership.

The second part will be arguments about the specifics of the hotel product and the motivation of employees as a factor of success in the hotel industry.

The third part will respond specifically to the given topic and show how a successful company, Hit Montegro, motivate employees in your hotel, Maestral, which gives an advantage, as the concept develops and determines the business and what this hotel stands out from all others, not only in Montenegro, but also beyond.

Part I – theoretical foundation

1. MOTIVATION – definition, division, the process of motivation

Motivation is a complex area of human behavior. The term motivation comes from the Latin word moves, which means movere; move.

Under the motivation we podrazumijevati sum of factors that influence people to behave in a certain way, and especially to invest a certain efforts to achieve or accomplish something.

The economic system of business motivation is hidden inside the driving force behind overall economic pattern that connects and arranges the target all economic efforts and integrate them into one whole. In the process, motivation is manifested as the main driving force of creation.

Work motivation is a system of methods, procedures and actions which encourages, directs, and reinforces the behavior of certain employees, in order to realize a larger and more favorable results.

Basic assumptions about the motivation:

aˆ? Motivation is a positive – people feel good only if they are motivated.

aˆ? Motivation is one of the factors that influence the behavior of individuals. Other factors: capacity, resources, working conditions …

aˆ? Motivation is always less than sufficient and should be periodically renewed. Time can be lost.

aˆ? Motivation is the means by which managers can relate to offices in the organization.

Motivation can be: subjective and objective.

aˆ? Subject motivation is defined in two forms: moral motivation of workers (conscience, responsibility, pride, ambition, knowledge, etc.). Materjalna and motivation (interest in the job, salary, stimulation, etc.)..

aˆ? Objective motivation occurs at the level of the firm, on its reputation, strengthen, and similar recognition. ie. If you contribute to the reduction of the higher entropy of the system (firm).

Speaking of motivation, we can not to speak about human needs. The need is expressed through a lack of something and is associated with goals. Therefore, the need is internal, external and objective aspects of motivation

The process of motivation – the process of meeting the individual needs of employees, consists of several stages:

aˆ? Employees identify their needs – which is what it lacks and what he wants to achieve?

aˆ? Looking for ways to meet the needs – deficiency creates a kind of anxiety, and he seeks a way to eliminate

aˆ? strives to achieve the goals which reduces the need

aˆ? act appropriately

aˆ? To get the reward or punishment

aˆ? Re-evaluates its needs

Satisfaction is often in the literature and in empirical research identifies with the concept of motivation. These two terms are certainly related in large measure are mutually conditional, but undoubtedly is to be different.

Under the satisfaction of employees involves the subjective evaluation of the degree of satisfaction that derives from the personal assessment of their satisfaction with various aspects of belonging to the organization. And so happy employees pijre primarily related to the perception of employees and the extent to which they met their motives and above all the motives that are perceived as important for their involvement. Best illustrates the differences following chart:

(motivation,result,satisfaction)

Chart 1st The difference between motivation and satisfaction

Source: Developed author

If you are motivated enough for the job you do, it will certainly affect your final performance. After a job well done following the feeling of satisfaction.

2. THEORIES OF MOTIVATION

A large number of theories of motivation which, in fact, complementary to one another. The following table provides a list of major theories.

Table 1 Theories of motivation

Name Type theory theories theorist and /

Theories instrumentalnosti Tejlorizam Teylor (1911)

Theories content theory hijararhije needs Maslow (1954)

ERG Theory Alderfer (1972)

Managerial theories need McClelland (1973)

Two-factor model of Herzberg (1957)

Theory X and Y McGregor (1960)

Theories of goal setting process theory Latham and Locke (1979)

The theory of equality Adams (1965)

Theory expectations Vroom, Porter and Lawer (1964, 1968)

Learning theory Bandura (1977)

Source: Michael Armstrong, Armstrong’s handbook of human resource management, 11th ed., Kogan Page, London, 2009, p.319

As you notice, there are three kinds of theories of motivation in which:

aˆ? Theories instrumentalnosti belong to the original theory of motivation

aˆ? Theories of content are also in the original theory of motivation

aˆ? Theories are in the process of modern theories of motivation

Theories instrumentalnosti bazraju the attitude that people are motivated to work through reward and punishment. One of the major theories instrumentalnosti is called. Tejlorizam, which is named after its founder, Taylor, who wrote:

“It is impossible for any extended period of time, to encourage their employees to work more than others, the ordinary that surround them, if you are not sure to check a large and permanent wage increases.”

This theory is still widespread and can be successful under certain circumstances. However, its use is ignored other human needs and disturb the relations among the employees.

Theories of content based on the attitude that people do to meet their needs. As an important aside the following:

Hierarchy of needs theory (Maslow) – in every human being there are five primary needs that meet the hierarchical order:

aˆ? physiological – food, water, shelter and all. bodily needs

aˆ? security – physical and emotional safety and protection

aˆ? Social – belonging, love, friendship, acceptance by others

aˆ? respect – self-esteem, status in society, recognition of environmental

aˆ? samoaktuelizacija – development and progress, potential exploitation of personal fulfillment and inner satisfaction with them.

The first two groups are the needs of lower-order and meet the external mechanisms (salary), and the other three were of a higher order and satisfy the internal mechanisms (attitudes, values, expectations). The role has motivatora Unmet needs, which, when it takes satisfy the needs. This theory has not been verified numerous empirical studies and criticized because of too much generalization. Namely, different people have different priorities and it is difficult to accept Maslovljevu hijararhiju needs.

ERG Theory (Alderfer) predicts three types of basic needs:

aˆ? existential needs – the basic material necessary Poreba every man for life.

aˆ? the need connection – the desire of people for the realization of interpersonal relations

aˆ? development needs – the desire for personal development, training and advancing

Alderfer abolished the hierarchy of needs and claims that it can simultaneously satisfy multiple needs. When it comes to frustration due to inability to meet the needs on one level, increases the desire to satisfy the needs of another and, often, lower level.

McClelandova theory of needs, the needs of managerial theory – focuses on three types of needs:

aˆ? need for achievement – striving for success and greater achievements in relation to existing standards.

aˆ? the need for power – the desire for influence and control over others.

aˆ? the need for merging – the desire to be loved and accepted by others.

This theory assumes that successful managers who have a high need for power and personal success without the desire for merging.

Two-factor model – Motivation-hygiene theory (Herzberg) – based on the assumption that the individual attitude of employees towards work determines success or failure of work.

Factors that influence job satisfaction and dissatisfaction are the following:

aˆ? Motivatori – related to the work itself (job, recognition, promotion) and meet the needs of the individual to prove their own. These are the factors that cause lack of satisfaction to those that cause pleasure.

aˆ? Kontestualni factors – factors of working environment, environment, hygiene factors, which act as prevention to prevent dissatisfaction. This is a set of factors than those that cause frustration to those who do not cause dissatisfaction.

On the positive motivation may affect only the first group, while another can only reduce dissatisfaction, but not increase satisfaction.

The opposite of satisfaction is not dissatisfaction, but the lack of satisfaction, and vice versa.So, just motivatorni factors contribute to job satisfaction, and only factors contest discontent.

Theory X and Y (McGregor) – starts from two different assumptions about human nature: the negative X-and Y-positive.

Theory X – assumes that the behavior of employees Guided needs of lower order.

aˆ? Employees do not like to work and izbjegavaA‡e work whenever possible

aˆ? must be force to work under the threat of punishment

aˆ? avoid responsibility and seek precise directives from their bosses

aˆ? They have little ambition and their safety comes first

Theory Y – assumes that the behavior of employees Guided needs a higher order:

aˆ? Employees understand the business as a natural need for such leave

aˆ? Dedicated to the tasks and training

aˆ? They are ready to accept responsibility

aˆ? are able to make decisions and they need povjeravati responsible and challenging jobs.

Theories of the process (the modern theory) focus on the psychological processes that affect motivation. Process theories are certainly more useful to managers of the theories of motivation because it gives concrete instructions for the application of motivational methods.

The theory of goal setting (Latham and Locke) – motivate employees three mechanisms:

aˆ? Specific and clearly set goal – difficult but achievable attainable, because it is in human nature and the need to prove self.

aˆ? Feedback on achieving set targets – people want to be informed of how well that worked and the results achieved.

aˆ? Participation of employees in setting goals – increases their motivation, efficiency and confidence.

Equity theory (Adams) – one in the organization expects that efforts to win the same prize as well as his colleagues who performed the same job.

When employees believe that they made wrong comes to the creation of tension (not so much effort into the entrance of their work as before, consider that spend too much time, give notice).

Expectations theory (Vroom, Porter and Lawer) – developed a situational model of motivation that explains why one and the same person makes various efforts in different situations. Vroom argued that there are two factors that determine the effort that employees invest in their work, the first – the value of individual awards that would enable them to meet their needs related to security, autonomy, samoaktuelizaciju, and another – the likelihood that the amount of awards depend, in fact, of individual effort.

Porter and Lawer complement this theory and created a new model where the motivation will, in addition to the effort, the final performance of the employees affected and: knowledge and skills and the expected role (what employees want to work and what is expected of them to work).

Chart 1st Motivation Model – Porter and Lower

Source: Michael Armstrong, Armstrong’s handbook of human resource management, 11th ed, Kogan Page, London, 2009, p.326

Learning theory (Bandura) – emphasis is on learning to adapt behavior. Behavior which withdraws the award will be repetitive, and it pulls you avoid penalty. The consequences of past behavior influence the future actions of employees. Model behavior of employees is reflected in the following: a stimulus – response – a result – future reactions.

Managers can influence employees to change behavior: support, avoidance, lack of support, or punishing, with respect to some rules:

aˆ? Do not reward all equally, but the performance

aˆ? Clearly tell people what to do to be rewarded

aˆ? Be sure to tell what sins

aˆ? Do not punish the others

aˆ? Be fair.

3. Employees’ motivation and human resource management

Link between employee motivation and human resource management best illustrated in the following diagram.

Chart 3rd The influence of individual effectiveness in human resource management

Source: Robert Mathis and John Jacson, Human Resource Management, 11th ed, Thomson South-Western, USA, 2008, p.81

From the individual, negovih knowledge and skills, motivation and support they receive from the company you work for, and the nature of the business depends on the job satisfaction, employee loyalty to the company, productivity, quality and service.

The above variables are used for measuring the effectiveness of human resource management.

Namely, if the employee is not motivated enough, it will first be reflected in his performance, then all other variables, so therefore the effectiveness of human resource management be in the lower level, and vice versa.

4. MOTIVATORI

Motivatori are things that come to pojedninca activities or methods which can reconcile the conflicting needs or to emphasize a need in the way that it is assigned priority over other needs.

They are the kind of instruments that would strengthen the desire for some achievement, and beyond that to achieve satisfaction, and the means through which to influence the behavior of people. Motivatori most commonly used are:

aˆ? Money

aˆ? Security of employment

aˆ? allocation of interesting tasks

aˆ? The public attribution of merit

aˆ? The possibility of training

aˆ? The possibility of progress

aˆ? Participation in decision-making

aˆ? The quality of working environment

aˆ? self etc..

5. Employees’ motivation and leadership

Using different motivatora to successful motivation of employees in the first row is determined motivacijiskim abilities or samomotivacijom manager. Namely, the concept of motivation is closely linked to the notion of leaders, team leaders, organizations, companies. A leader in 21.v. primarily motivator. Howard Gardner, professor at Harvard in his work, “Leading Minds: An Anatomy of Leadership” defines leaders:

“The leader is rarely more individuals, or individuals who significantly influence the thoughts, feelings and / or behavior of a large number of individuals.”

On the other hand, the great leaders of today were not in their positions that they did not have strong enough motivation to constantly improve and successfully build your career.

One of the greatest leaders of all time, Napoleon Bonaparte was said:

“Leadership is the art of motivating a group of people to act towards achieving a common goal”

Leadership = MOTIVATION

LEADER = motivator

PART II – employees’ motivation as a factor of success in a hotel INDUSTRY

“Advance one that gives a little more and a little better.”

Ellsworth Statler (1863 – 1928)

One of the founders of hotel industry, Ellsworth Statler, the success achieved by the introduction of standards in their hotels, which could provide better quality services at a reasonable price. He was a great innovator and racionalizator. The first is to realize the importance of hotel staff: their looks (introduced uniforms), behavior (introduced a Code of Conduct) and knowledge (he founded the Foundation for Education of catering professionals and scientists, and financial help today in the world famous university education hotel administration and hotel management “Cornell Hotel School, Itaca, New York). Stimulate the workers, allowing the purchase of shares of any hotel in a certain amount, with the allowance of the salary.

In addition to the above sentence, which with strong reasons, the author opens his presentation, he often spoke to employees: “The guest is always right! He pays you and me! ”

It is clear that the hotel industry has developed precisely for reasons to satisfy the needs and desires of the guest and can not in any case to ignore its importance. However the question of whether the guest is still a key link in the hotel in 21.vijeku?

Let us start from the well-known marketing concepts:

Needs, requirements, desires and satisfaction of guests in the first place!

Prove that the set theory valid.

Hotel is primarily obliging activity and as such has its own specifics that arise from the specific characteristics of services in relation to the products. And they are:

aˆ? intangibility,

aˆ? indivisibility – an integral part of its consumer services, ie. consumer – a guest of the hotel.

aˆ? Kvarljivost – services can not be stored, empty hotel facilities can not be compensated by good or excellent popunjenoA?A‡u in the following time period.

aˆ? Variability – conditioned by the fact that the subjective factor or a factor crucial for the quality of the man of realization. The service is Neponovljiva, such as the role of actor in theater boards, it can be on the high level of quality that satisfies customers, but never all the elements in the process of delivery and consumption can no longer repeat. Simultaneity consumption and provision of services through the interaction of both sides creates a unique “atmosphere.”

Psycho-physical characteristics of the service providers can significantly cause satisfaction or dissatisfaction with the consumer, regardless of technical, organizational and technological quality of the service segments. Because of this, the focus quality is transferred to vrA?itelje services, catering and hotel management staff. It is important to determine the quality of standards (rules which determine the elements of quality staff in the hotel: the knowledge, skills, experience, appearance, behavior …). But not enough to meet the standards to achieve competitive advantage in a very turbulent market, what is a tourist. Guest looking for something more! Guest search experience! And this is one of the leading trends that says UNWTO – Change from Service to expirience! Interior, exterior, luxury, luxury, artificial smile … are no longer of crucial importance. The main trump card of successful hotel in 21.v. man.

Employees are in the hotel, you love your job and you are satisfied with the performance that you provide? Masters the necessary skills and knowledge? As guests, we will see, feel, that to enjoy and of course, be back again, but this time with “hrpom” friends!

We conclude:

The guest is satisfied if the providers of content services.

These reject the thesis that the home needs, requirements, desires and satisfaction RATING in the first place! Already perform a new conclusion:

Needs, requirements, desires and satisfaction of employees are in the first place.

And from the above results:

Satisfied employees = employees motivated?

And just the motivation of employees is a key factor for success in all spheres of social life and work, especially in idnustriji hotel where guest satisfaction largely depends on the satisfaction of employees in the hotel. Sometimes it is possible and the big technical flaws nadomjestiti beautiful gestures of employees, but the latest and most expensive technology, luxury and grandeur can not nadomjestiti unkindness and “coldness” of the staff will (not) was available during your stay.

A hotel company to motivate its employees, we will see the following example.

PART III – practical EXAMPLE

6.MOTIVACIJA EMPLOYEES AS A FACTOR success HOTEL MAESTRAL

Is the set theoretical foundation found application in the local hotel industry?

The answer we seek in the hotel Mistral and also reveal why years ago Hit Montenegro, which owns the hotel, the leading company in the tourist market in Montenegro and beyond.

Hotel Mistral (hereinafter only the mistral or a hotel) do not have much to present. Just the name tells us a lot.

Mistral is the son of a very good, very good, the luxury, prestige. Accordingly, you will always be able, during your stay at the hotel, meet many people who have reached their professions so. Top of the pyramid.

Question: Why?

aˆ? Why, when only the hotel building, its exterior, interior and not “drawn” luxury?

aˆ? Why, when the accommodation units (rooms) in general are not so large that guests can enjoy?

aˆ? Why, when the rooms still no plasma TVs?

aˆ? Why, when all the rooms still have Internet access?

aˆ? Why, when a cup of coffee “exude” more humility than the refinement?

But the most important issue only follows:

Why, despite the above, all hotel guests coming back again, even for the same amount of money can get a spacious room, more beautiful towels …?

Answer:

Because they are satisfied with experience and “treatment” given to them in the hotel!

Because unlike other hotels, the hotel Mistral has a “soul.”

“Soul” Maestral make its employees, whereby it is important to emphasize – all employees of higijeniA?arke to Executive Director.

We arrive to a new thesis:

Guests of the hotel Mistral are satisfied.

Return to the thesis of the previous section:

The guest is satisfied if the providers of content services.

Satisfied employee = motivated employee!

With certainty we can conclude:

Staff at the hotel Mistral motivated.

The aforementioned conclusion shall be taken as a starting point the thesis that the next exposure to be adequately argued.

7. BUSINESS STRATEGY

As evidence that the employees, their motivation, but considerations when creating a strategy, defining the vision, mission and strategic goals, the next presentation will be separated only fragments of importance for this work.

Business idea of the company as follows:

“With knowledge, marketiA?kim thinking and professional approach we offer a high level of service and make good business results in the hotel complex, which allows our guests accommodation, dice, entertainment, recreation, enogastronomske pleasures and good conditions for business activities.”

Objectives and plans of the hotel were based, and today is based, among others the following setting:

aˆ? attractiveness, innovation, expertise, kindness, and create nadstandarnom offer the advantage ahead of the competition and achieve the return of guests

One of the very high goals and requirements that the company has set before him as follows:

aˆ? the company offers full-time staff employment, adequate wages, the possibility of development, education, training and career

High standard and the company has set a vision and high expectations of the management company and some of them are:

aˆ? Hotel Mistral house will be satisfied, creative, motivated and professionally competent staff, which will continually increase revenues, value additions and visit hotels.

aˆ? Hotel Mistral will represent one of the pearls of the tourist offer of Montenegro and as such would represent an example of successful investments in tourism to the satisfaction of owners, employees, narrower and wider community.

In accordance with the above specified, the company is set by among others the following strategic objectives:

aˆ? permanent investment in staff development (knowledge, motivation, affiliation)

8. COMPANY ETHICS

Nowadays the competitiveness of the organization, its reputation, and thus its business success are inseparable from ethics. It can be said that ethics is the foundation of successful companies and management that relies on trust. Companies in which the rule of justice and fairness are often companies that respect ethical principles. A way that employees see a significant impact on the fairness of the organization. Sense of fairness is associated with greater commitment to employees, the higher degree of satisfaction, which is based on the organization, business, leaders, and conduct that reflects a sense of belonging to the company.

This company is exactly Hit Montenegro. Mistral its reputation gained primarily fostering the right values and good application of the Code of Ethics.

It may sound contradictory, if we note that the largest part of the profits from the casino collected mistral. But I do not need much pojaA?njavati. Ask one why casino players will soon decide to invest their money in Maestralov casino, and not in another, perhaps better equipped.

The answer lies in business ethics, codes of ethics and employees who implement.

Working in such an environment, where you know you will not mislead anyone, where all will be “as clear as day,” is really a big driver of your energy, you surely will not spare to spend in the job at hand.

9. Strict LABOR LAW

Professionalism in the hotel Mistral is reflected, inter alia, in strict compliance with the law on paper. It can happen that you start work, and that you are not previously signed a contract with the employer.

FasciniraA‡e you the following story from practice: Seasonal worker came fully prepared, just in time to his position for the first time. That day was supposed to sign the contract. Through the half-hour lawyer appeared with the words: “Excuse me please, now I saw that the director did not sign a contract, and is absent. Can you come tomorrow he comes today and the contract will be ready in the morning? Sorry again, but I think it’s wrong to do, and do not have a signed contract, you agree? Of course. ”

The said employee is satisfied on the first day that really work for professionals, as his nagovjeA?tavali earlier.

Further.

aˆ? Iplata monthly benefits to all employees every fifteenth of the month. Deviations were not, and there’s not likely that delayed payments to employees or not that month, expressed with one decimal digit, is 0.1%.

aˆ? UraA?unaA‡e you and overtime work, night work, work during the holidays, work on Sundays.You and paid travel expenses and meals at the hotel.

aˆ? If you are a seasonal worker, you will be provided accommodation in nearby hotels.

aˆ? Paid you life and health insurance.

aˆ? Business book you filled and safe.

aˆ? You have two free days a week and the right to annual leave and the right to paid sick leave.

aˆ? All your rights foreseen by the law on work, safety and employment contract have been met at every opportunity.

SloA?iA‡ete is that rare company in Montenegro, especially in the hotel, which apply this system work, which, logically, employees fully responsible. And this is one more reason to stay in Maestral and not iznevjere trust.

10. Fee and gratuity

Results of the survey, which was conducted a few years ago one of the employees in the hotel Mistral, showed that approximately 70% zaposelnih declared that their main motive for work is not salary.

However, should podcijenjivati importance of monetary compensation. Bearing in mind that the hotel has a high occupancy rate throughout the year, and that primarily comes to the casino hotel, the hotel employees are well paid, which gives a good basis for the investment of additional effort and better results.

Wages are not only monetary income of employees in the hotel. From two to three times a year all employees have a raise, as a form of additional stimulus.

If your job requires direct contact with guests, it is quite certain that you will leave a tip, which can sometimes be higher than your monthly salary. It is understood that you will not get a tip if you have left a negative impression on the guests, whether your neljubaznoA?A‡u or non-professionalism. But, as you care to maintain good relations with colleagues, you share tips.This is one of nepisanih rules and actually proved successful in practice. At the end of the day you and your associates happy.

11. OTHER BENEFITS

Public represents an important part of almost every employee compensation and they are determined as indirect monetary or non-pecuniary compensation that employees receive because they continue to work for the company. The financial compensation was the word in the previous chapter, and that all the Mistral provides more benefits to their employees we will see from the next exposure.

The last two years for the new year, all employees had the opportunity to do a certain period of use by one Thai massage. All employees have certain discounts at partner hotels, Montenegro Airlines. Fee in the union, two times a year to receive “packages” with food. Union also provides benefits in some hotels during the winter / summer months.

12. STAND MANAGER TO EMPLOYEES

Peter Drucker says, “They are not workers, they are people.” A manager should be treats people with dignity is respect.

Already during the introduction to your superiors conclude that the word of professionals who know their job well and who is ready to help and to teach. Through a friendly conversation, in his office, in the conference room or an aperitif in the bar, we introduce the vision, m

In 1985 Emirates Airlines was established by Dubai Government with just two aircrafts. Today Emirates has 83 aircrafts files to 78 destinations in 55 countries worldwide. It has a large number of cabin crews from 95 nationalities. It recently made an aircraft orders worth more than $ 26 billion for 45 Airbus A380, which makes the company the world’s largest purchaser of Airbus’s super-jumbo. (About Emirates)

Emirates Airlines recently becomes one of the fastest growing airlines and the fifth-most-profitable airline in the world. It has been growing by more than 20% a year since the last 17 years making a profit of $637 million in 2004-05. (BBC News)

Emirates Airlines is committed to achieve its mission, namely “offering consistently high-quality value-for-money service and to be the best airline on all of its routes”. Accordingly, it is known as an innovative and customer-oriented provider of advanced services, such as offering personal entertainment system in all classes, 18 TV channels, 22 audio channels and online booking service which enables customers to book, search for flights and choose seats. (About Emirates)

Because of that excellence, it gained over 280 international awards, such as the prestigious CAPA airline of the year award 2005 by the Centre for Asia Pacific Aviation.

The airline industry is affected by political situations, namely wars and terrorism. For instance, terrorists’ activities in different areas globally, namely USA (11th Sep), UK, Lebanon and Qatar made the regions unattractive for tourists and business travellers and reduce the passenger’s traffic.

The political instability affected businesses between airlines in Middle East and the world by facing a difficulty to join any international alliances with any of the airlines leaders such as American Airlines. (Growth phenomena, Nora & Byman)

Economical factors

One of the factors behind any success airlines is having modern airports supported with latest technology to meet customer’s requirements. UAE for example plans to invest in developing its main airports in Abu Dhabi and Dubai. The UAE’s total investments on airport development over coming 20 years will exceed Dh 71 billion.

The benefits of developing airports are: enhancing economy, reducing depends on oil revenues by moving into new sector (tourism), increasing tourists’ number and thereby driving profits to airline firms. Globally, alliance is considered as the main factor of many airlines companies success as it reduces the operation costs.

Social factors

Some of those factors are: increasing world’s population, tourists and number of educated people. For instance, the population is growing globally, in UAE the population in 2002 was 3,754,000 people and reached to 4,320,000 in 2004, this is because UAE is a multicultural country. As the number of expatriates is increasing, airlines firms’ profits will increase, because those expatriates need to travel to their homeland sometime. Additionally, many diseases influence the population in many courtiers, like Bird Flu, those killer diseases affect airline industry since they reduce population’s level. (Economic Development)

Technological factors

The new technology affected airline industry negatively and positively. For example, the technology of teleconferencing reduced the need for face to face business meetings which affects on the number of business travellers and on the sales of business tickets. However, e-booking system makes the reservation easier and save many expenses such as reducing the printed tickets. (Current State)

There is a growth in internet usage worldwide. In the UAE, internet accounts are likely to grow from 251,000 in 2001 to exceed 600,000 accounts by 2006. Thus, local airlines industry should provide online services to get competitive advantage ex. Emirates Airline. (UAE to remain on top in Arab Internet market)

Internal Environment
SWOT analysis
Strengths

Member of the Arab alliance, known as Arab Air Carriers Organization promoting cooperation, safety standards among Arab airlines (Arab Air).

First airline in Arab World that offers online booking service.

Offering long-haul flights, like from US to Dubai.

Offering self check-in service for customers at Dubai airport (Emirates expands).

At Dubai Air Show 2005, Emirates made an aircraft order of 45 Airbus by 2012 making it the world’s largest purchaser of Airbus’s super-jumbo.

Providing employees with training, rewards and performance programs, thus reducing labour costs and increasing employees’ loyalty (People).

An official sponsor of 2006 Fifa World Cup, which will increase its brand awareness.

It has its own Frequent Flyer Program known as Skywards Miles that shared with Sri Lankan Airways.

It has recently chosen Dexterra Mobile Platform to enable front-office mobile solutions that will enhance customer service interaction (Unisys).

It offers training service to other airlines in Middle East which increase its profit.

Weaknesses

High Operation costs due to huge investment on buying aircrafts and implementing new technologies.

Known of its high prices of tickets comparing to other airlines.

Not a member of any global alliances (UAE).

It doesn’t have a hub in Abu Dhabi airport (capital of the UAE).

Young airline that was established in 1985

Opportunities

The income per capita is growing in UAE.

Lots of investments will be made by the government of UAE for developing main airports in Dubai and Abu Dhabi.

There is an overall growth in the population of the world and in UAE.

World Travel & Tourism Council forecasts that there will be an annual growth in the number of UAE tourists.

There is an expected growth in internet users’ worldwide and in UAE.

Aviation events such as Dubai Air Show promotes for Middle East airlines among other participates worldwide airlines and show the growing of aviation industry in Middle East.

Threats

It is located in politically instable region and the terrorism activities have been increased in Middle East recently.

Increase of aviation security costs and insurance which increase the operational costs of airlines.

The increase of the fuel prices which raise the operational costs.

The airline industry might face losses of around $ 3 billion if the oil prices did not reduce (IATA).

New entrants and the raise of low cost airlines.

The e-ticking system can be abuse by the hackers or it might be crashed by viruses, this will damage the company database and will cost a lot of money.

Passengers can be a threat to the company, as they have a strong power in the airline industry.

The natural crises such as the earthquake and hurricane. As mentioned by Al-Arabia channel, Dubai is threatened by an earthquake (2005). This will affect the tourism in this region, which will reflect in the Emirates airline.

There is a possibility of rapid spread of new acute diseases such as SARS and Bird Flue that affect tourism and airlines.

Strategic planning models

There is no one perfect strategic planning model for each organization. Each organization ends up developing its own nature and model of strategic planning, often by selecting a model and modifying it as they go along in developing their own planning process. The following models provide a range of alternatives from which organizations might select an approach and begin to develop their own strategic planning process. An organization might choose to integrate the models, e.g., using a scenario model to creatively identify strategic issues and goals, and then an issues-based model to carefully strategize to address the issues and reach the goals.

The following models include: “basic” strategic planning, issue-based (or goal-based), alignment, scenario, and organic planning.

Model One – “Basic” Strategic Planning

This very basic process is typically followed by organizations that are extremely small, busy, and have not done much strategic planning before. The process might be implemented in year one of the nonprofits to get a sense of how planning is conducted, and then embellished in later years with more planning phases and activities to ensure well-rounded direction for the nonprofits. Planning is usually carried out by top-level management. The basic strategic planning process includes:

Identify firm’s purpose (mission statement)

Select the goals your organization must reach if it is to accomplish your mission

Identify specific approaches or strategies that must be implemented to reach each goal

Identify specific action plans to implement each strategy

Monitor and update the plan

Model Two – Issue-Based (or Goal-Based) Planning

Organizations that begin with the “basic” planning approach described above, often evolve to using this more comprehensive and more effective type of planning.

Organizations that begin with the “basic” planning approach described above often evolve to using this more comprehensive and more effective type of planning.

Summary of Issue-Based (or Goal-Based) Strategic Planning

(Note that an organization may not do all of the following activities every year.)

External/internal assessment to identify “SWOT” (Strengths and Weaknesses and Opportunities and Threats)

Strategic analysis to identify and prioritize major issues/goals

Design major strategies (or programs) to address issues/goals

Design/update vision, mission and values(some organizations may do this first in planning)

Establish action plans (objectives, resource needs, roles and responsibilities for implementation)

Record issues, goals, strategies/programs, updated mission and vision, and action plans in a Strategic Plan document, and attach SWOT, etc.

Develop the yearly Operating Plan document(from year one of the multi-year strategic plan)

Develop and authorize Budget for year one(allocation of funds needed to fund year one)

Conduct the organization’s year-one operations

Monitor/review/evaluate/update Strategic Plan document.

Model Three – Alignment Model

The overall purpose of the model is to ensure strong alignment among the organization’s mission and its resources to effectively operate the organization. This model is useful for organizations that need to fine-tune strategies or find out why they are not working. An organization might also choose this model if it is experiencing a large number of issues around internal efficiencies. Overall steps include:

The planning group outlines the organization’s mission, programs, resources, and needed support.

Identify what’s working well and what needs adjustment.

Identify how these adjustments

Model Four – Scenario Planning

This approach might be used in conjunction with other models to ensure planners truly undertake strategic thinking. The model may be useful, particularly in identifying strategic issues and goals.

Select several external forces and imagine related changes which might influence the organization, e.g., change in regulations, demographic changes, etc. Scanning the newspaper for key headlines often suggests potential changes that might affect the organization.

For each change in a force, discuss three different future organizational scenarios (including best case, worst case, and OK/reasonable case) which might arise with the organization as a result of each change. Reviewing the worst-case scenario often provokes strong motivation to change the organization.

Suggest what the organization might do, or potential strategies, in each of the three scenarios to respond to each change.

Planners soon detect common considerations or strategies that must be addressed to respond to possible external changes.

Select the most likely external changes to effect the organization, e.g., over the next three to five years, and identify the most reasonable strategies the organization can undertake to respond to the change.

Model Five – “Organic” (or Self-Organizing) Planning

Traditional strategic planning processes are sometimes considered “mechanistic” or “linear,” i.e., they’re rather general-to-specific or cause-and-effect in nature. For example, the processes often begin by conducting a broad assessment of the external and internal environments of the organization, conducting a strategic analysis (“SWOT” analysis), narrowing down to identifying and prioritizing issues, and then developing specific strategies to address the specific issues.

Another view of planning is similar to the development of an organism, i.e., an “organic,” self-organizing process. Certain cultures, e.g., Native American Indians, might prefer unfolding and naturalistic “organic” planning processes more than the traditional mechanistic, linear processes. Self-organizing requires continual reference to common values, dialoguing around these values, and continued shared reflection around the systems current processes.

General steps include:

Clarify and articulate the organization’s cultural values. Use dialogue and story-boarding techniques.

Articulate the group’s vision for the organization. Use dialogue and story-boarding techniques.

On an ongoing basis, e.g., once every quarter, dialogue about what processes are needed to arrive at the vision and what the group is going to do now about those processes.

Continually remind yourself and others that this type of naturalistic planning is never really “over with,” and that, rather, the group needs to learn to conduct its own values clarification, dialogue/reflection, and process updates.

Be very, very patient.

Focus on learning and less on method.

Ask the group to reflect on how the organization will portray its strategic plans to stakeholders, etc., who often expect the “mechanistic, linear” plan formats.

Managing risk

Risk management is a process used to avoid, reduce or control risks. Some risks can be insured against, others cannot. Organisations deal with their insurable risks but can be applied to all risks. Ignoring the risks which apply to hospitality and tourism business activities or the events business have planned could impact on the following:

the health and safety of employees, customers, volunteers and

participants

reputation, credibility and status

public and customer confidence in the organisation

financial position

plant, equipment and the environment

A systematic approach to managing risk is now regarded as good management

Practice. Following is the best example from International Hilton Group (IHG).

Process and framework

IHG has an established risk management process and framework embedded in all regions. The long-term strategic goals are aligned with the IHG core purpose Great Hotels Guests Love and include these key elements:

safety and security of guests, employees and other third parties

brand strength supported by operational excellence in risk management at all hotels and corporate locations

Maintenance and promotion of the reputation of the Company.

Our approach has been to enable and support hotel owners, staff and corporate functions to manage risk effectively. This is accomplished by giving them a systematic approach and framework to follow and by providing them with tools to do the job.

The Risk Management function aims to share specialist knowledge and capability globally.

Safety and security in hotels

A strategic framework for hotel safety and security has been designed for owned and managed hotels and is illustrated below showing the identified groups of risks and describing the management activities carried out to mitigate the risks.

The red wheel illustrates the groups of risks which IHG’s risk managers around the world work on with IHG general managers and their management teams in order to minimise the risks and keep the hotels safe.

Over the years we have developed risk management strategies to assess and treat individual types of risk. This has involved developing policies, standards and guidelines, raising awareness levels, training staff on the controls and systems which have been developed for their use and reviewing and reporting upon progress and continued risks. These management activities are represented by the purple wheel.Hotel safety framework

Security risks, particularly the threat of terrorism, have increased. In recent years, IHG has developed an increasingly sophisticated response that is intelligence-led and risk-based. The security risk environment is highly dynamic and needs to be managed both centrally and locally in hotels. In common with all risk strategies, there are three elements that must be developed and maintained: physical and technical systems, people capabilities and processes and procedures.

Corporate risk management

The management activities shown above are being adapted and applied to manage corporate risks. This initiative is led by the Executive Committee, facilitated by the Risk Management function and integrated with quarterly strategic reviews.

IHG’s Risk Management function has recently reviewed the way in which corporate risk and the major risks to IHG are managed and are seeking to develop a framework to improve risk management capability further, represented diagrammatically below:Corporate risk management

Each year, risk identification workshops are run with the senior IHG management. The output is a ‘Group Risk Register’, divided into areas of accountability for each member of the Executive Committee.

The Executive Committee uses the findings to identify the major areas of risk for IHG and to assign accountability for cross-functional leadership between them. The Executive Committee prioritises and co-ordinates efforts to optimise the management of major risks to IHG.

Risk ‘owners’ then identify existing controls as well as the ability, benefit and cost to improve them. This work is documented in Risk Action Plans that support the risks that are reported in the Group Risk Register.

Executives review the risks at quarterly strategic reviews as part of their business review with the Chief Executive and strategy team. Global Risk Management also submits periodic incident reports and two major reports each year to the Executive Committee and the Board on hotel safety and security as well as a further report on the major risks to IHG.

The Internal Audit function is separately responsible for providing assurance across the Group. They report their findings to the Audit Committee. This ensures separation of duties between the Risk Management and Internal Audit functions and hence supports good governance.

The Board is ultimately responsible for the Group’s system of internal control and risk management and for reviewing its effectiveness. In order to discharge that responsibility, in 2008 the Board considered the most recent Major Risk Review which involved extensive consultation throughout the business.

Strategy and ethics

The hospitality industry is made up of many companies who are run by business people. Business people who put short-term profits ahead of concern for the long-term health of the company or who make additional profits by failing to spend the money necessary to handle toxic waste or pollution resulting from the manufacturing process, are not professionals and harm the reputation of the industry as a profession . The scandalous behaviour of some business leaders in the past decade has damaged the reputation of business with the community. The former “what is good for business is good for the country” has been replaced with a virulent distrust of big business.

Corporate social responsibility requires organizations to demonstrate responsible business conduct that does no harm in the marketplace, in the workplace, in the community they operate in, and to the natural environment. The actions of business impact the local, national, and global community, so businesses have a responsibility to ensure that the impact is positive.

Corporate Social Responsibility also involves “achieving commercial success in ways that honour ethical values and respect people, communities, and the natural environment”. There is no universally accepted definition of CSR, but most of the definitions have to do with business having a positive impact on the community and meeting or exceeding public expectations of good corporate citizenship.

Ethics in Tourism

Ethical principals apply to all individuals, communities and societies; they also apply to all the bodies in tourism in their respective specific roles. This entails both rights and responsibilities. Concrete and specific ethical standards for behaviour and practises in tourism must follow the broad principles as outlined here.

Solidarity with those who are directly and strongly affected by tourism and who suffer from unjust structures connected with tourism, and solidarity with those who need material or political and philosophical support in defending their interests and rights which are threatened by tourism development or which are ignored in decision making processes;

Justice in a world tourism order, an aim which intends to change all structures of injustice that exists in the fields of economics, politics, social and cultural life;

Respect of diversity in the various areas of life – societies, environment, cultures, religions and politics – which calls for sensitivity to difference and the practice of tolerance.

Authentic information for all people involved or interested in tourism. Such authentic information is a basic need for a just world tourism order. This places a particular responsibility on the media to be objective, fair and truthful when reporting on tourism. Professionals engaged in tourism education should also promote need for authentic research and information to develop sensitised and aware personnel in tourism.

In order to improve the present situation in tourism and to minimize its negative impacts, firms must urge all (nation) those involved to contribute the best of their knowledge, abilities, and skills towards a tourism that is in line with these ethical principles.

The tourist’s board must involve the governments, other public authorities, decision makers and professionals in the field of tourism, public and private associations and institutions whose activities are related to tourism, tourists and local communities to adopt the realistic principles and work towards the mutual objectives.

Strategic VS operational conflicts

Just like any other business, Tourism Business planning always have a ‘strategic’ and an ‘operational’ element to position the strategies. In order to make the intangible and highly sensitive industry firms must be able to balance the different roles and utilize strategic and operational plans.

A Strategic Plan is an organization’s summary of the development process and the presentation of core directions

An Operational Plan is an annual work plan explaining how the goals of the strategic plan will be implemented and what budget and processes are required.

Strategic planning helps the organisation to pull back the lens, get a big picture view and consider future scenarios. It gives you the best opportunity to maintain control, avoid serious pitfalls and capture opportunities. Thinking strategically about business involves creating a vision for where you want to be in 2, 5 or 10 years, Strategic planning is not just for big companies and has benefits no matter what the goals. The defined goals might include increasing the sales or market share. Goals may also include environmental and sustainability targets or to sell the business.

Operational planning focuses tightly on the day to day operations with no more than a 12 month cycle. Depending on the farm’s activities, the manager might want to further break things down to daily, weekly, monthly or seasonal active. Operational planning focuses on adjusting and developing controls, increasing efficiencies and reducing time and investment.

Conclusion and Recommendation

The airline industry is a huge market as there are 900 airlines’ companies internationally with total of nearly 22,000 aircrafts, nevertheless it has a low growth rates as it is in its mature stage of life cycle. (The economic & social benefits of air transport).

For any new entry the airline industry is considered to be unattractive, because the demand is low, the competition is strong and the operation costs are increasing. However, for Emirates Airlines it is attractive as its strategy and market position creates a good defence against its competitor. For example, it created a strong brand name and customer loyalty in the market by implementing the latest technologies in its services to be positioned as a pioneer in the airline field. It also achieves high profits yearly as it focuses proficiently to enhance its market position by differentiating in its strategies that would be used to attract customers such as flyer frequent program.

Also, it has many chances to overcome with all the obstacles that might occur and affect the airline industry such as political or economical problems, etc. as it is a member in Emirates Group which enables sharing resources and reducing the company’s expenses, thus leading the company to protect its position in the market.

Overall, Emirates has a great market position plus it’s a profitable airline which is measured as a competitive advantage, since it has the opportunity to compete and expand its business to gain higher profits.

Emirates Airlines adopts differentiation generic strategy to gain a competitive advantage amongst its competitors by offering the highest quality services in order to be the best company in the market and differentiates from its competitors. For example, Emirates airlines was the first airline that offered TV screen for all aircraft’s classes. Also it was the first company in the Middle East to serve the e-ticketing.

In addition, it gained a competitive advantage by focusing in new segments in the market. For instance, it provides another airline companies such as Qatar Airways with training courses by using the most modern machines, called plane simulator to be the only company in the Middle East that offers such service. The aim of such changes is to be the leader in industry by increasing the brand name awareness regionally and internationally which will increase the demand and the profit as well.

As the Airline industry is in the maturity stage, there is a strong competition between airline firms. Each firm should use offensive strategies besides doing analysis for internal and external factors that may affect its position. The research and analysis for Emirates airlines address following recommendations:

The operational cost is increasing due to huge investments of Emirates on aircrafts and services and increase in fuel prices. Emirates should reduce the costs by making operational improvements, namely improving maintenance processes, maintaining high aircraft utilization and making effective flight scheduling. It could also be reduced by investing technology in distribution channels to reduce labour costs.

In response to the threat of low cost airlines, Emirates shouldn’t lower its fares after years of offering advanced services, instead it has to offer new low cost brand as a subsidiary of Emirates group serving economic travellers who are now customers of new low cost airlines, thus expanding the market share.

Extending routes is recommended especially there is a growth in tourism UAE. There are main regions in the world that Emirates do not have routes in, namely Canada, It has to extend destinations worldwide (especially attractive areas). Joining a global alliance enables increasing its destinations, offering more fare options for customers helping to solve problems of new low cost airline.

Investigating technology is recommended for improving customer service and Emirates has to sign contract with an e-business company that offers airlines technology solutions.

Generally, Emirates should do analysis for internal and external factors and its competitors and develop new strategies to stay competitive in the maturity stage.

Emerging Issues of Tourism Industry in Netherlands

A. INTRODUCTION
Tourism in Netherlands:

Tourism is an integral part of Netherlands. Tourism has contributed a lot to the economy of Netherlands. North Holland and South Holland are the famous provinces in Netherlands for Tourism. NTBC which is the “Netherlands Bureau for tourism and conventions” has taken some initiative to increase the marketing and the promotional strategies to maximize the tourism. Despite the fact that Netherland provides good landscape the adventure tourism has not developed well in Netherland. It is hence a very important thing to clearly know about one’s own policies so Netherland has to focus more on their strengths and their important points to develop their position in the tourism industry. Cultural tourism is not there and it should be developed because cultural heritage is very important in Tourism which can lead to the tourism in Dutch industry but it can only be possible due to the help of the organization which handles the heritage. Other big issue of the tourism industry in Netherland is the use of marijuana which is the drug tourism. It has indeed brought loss in Netherland Tourism industry. Many coffee shop owners offered weed to the foreign tourist and they even fought and said that due to the ban on the weed offering they had a loss in their business (Cecilia, 2013).

The Aims and Objective of this research
Evaluate & manages full event plan.
Analyze complexities in event management.
Making SWOT analysis in terms of environmental development.
Analyze the service quality for event management.
Analyze risk management for events.
Implement SERVQUAL Model for quality of service in events.
Critically Evaluation of Tourism Industry in Netherlands

According to the World Economic Forum’s annual Traveling & Tourist Competitiveness Report which was introduced in the Global Tourist Forum (GTF) in Amsterdam; Netherlands and a few additional nations ended up regarded as the best situation which intended for establishing the tourism and also traveling industries. Tourist often performs an important part in the economy of Netherlands and it performs exactly the same part within Europe. Although, it is arranged by the economic problem in Netherlands, due to the global economic recession. Tourists come to Netherlands to its natural beauty, nevertheless using the continuing strike in several areas of Netherlands; that leads to this progress of vacation in Netherlands nowadays (Remington, 2013).

Our report has measured the different factors that make it beautiful to make that tourism more beautiful along with the tourism industry of Netherlands, according to Jennifer Blanke, director and Economist with the World Economic Forum’s Centre for Global Functionality along with Competition (Remington, 2013). “The best ranks countries Switzerland, Italy, Belgium along with Austria indicate the importance associated with regulatory frameworks along with support organization, coordinated using world-class tourism along with carrying different facilities, as well as a concentrate on rising natural and human resources for growing a place that may be beautiful to make this tourism along with travel sector. Domestic tourism has been carried on struggle through 2013 while Dutch people continued to be remained concerning their particular financial short-run outlook. This specific negative mind-set intended that consumer would just weren’t really wanting to guide domestic tours as many recommended for you to guide reduced, less prices trips plus some made a decision to not to book any tour (Dwyer, Mellor, Mistilis & Mules, 2000).

This kind of research with the cross-country with the drivers regarding competition inside travel and leisure as well as traveling offers helpful relative fine detail to create organization decision and to fit way of measuring to be able to governing bodies having to improve his or her travel and leisure as well as traveling environments. The particular search rankings are entirely in connection with the Take a trip & Tourist Competition Listing (TTCI) during which practically all around 139 places insured. While in 2013, accommodations in the Holland showed the primary actual signs of significant recovery (Remington, 2013). Through the first couple of quarters of 2013, accommodations nonetheless experienced bad expansion while both household in addition to inward bound tourists ended up tentatively to be able to e-book standard hotel rooms in addition to always been serious typically inside particular specials. In addition, the particular bad buyer sentiment between household vacationers recommended in which accommodations continuing to be able to struggle in the first 6 months of the year. Even so, in the second half 2013 there have been constructive signs while the volume of hotel bookings has increased, while it thought this was mainly because of better need between inward bound tourists rather than the domestic tourists (Dwyer, Mellor, Mistilis & Mules, 2000).

Critically Evaluation of Cultural Tourism in Netherlands

When people are free from its routine work, study, Spectating and sleeping individual are to make choice about what an individual like to do in their free time. The tourism services are the only services which are being offering all over the world (Moore, Cushman, Simmons, 1995). Netherlands has been considering the most important tourism region across the world. With the reference of UNWTO in 2006 has stated that around 55 percent of tourists across the world has visited the Netherlands which makes the figures around 475 million. Which means Netherlands has the strongest arms over the urban tourism as because Netherlands has been considered the most beautiful and attractive destination for tourism. Currently, Netherlands has been the biggest tourism spot for tourist in summers. Therefore, coastal and mountains are the segmented and most vulnerable for the change in the environment as Mediterranean has been the most attractive and beautiful or popular region for tourism. According to the stats and it has been shows that the Netherlands has been the most popular spot for visitors and tourists which attracts around more than 120 million visitors each year which are the world’s largest international flow for tourists around the world. Which also resulted in big business growth, every year the economy has been inflate due to the hue growth in tourism industry which inject around 100 billion Euro’s in their economy with this tourism.

Although a lot of research possess pointed out that one ethnicities are visible using firms, there are just couple of research completed about eco-tourism parts along with little has been completed to be able to evaluate exactly how these kinds of ethnicities possess affected the particular efficiency of such tourism industries (Schein, 1990). Conceptualizing organizational culture as the ideals along with methods used in a corporation along with contemplating tourist achievement since intangible efficiency we conducted the survey of tourist location staff situated in the tourist spot

According to (Simmons, 1995) urban tourism has been one of the world largest industries which are growing significantly. An arrival of international tourism worldwide has been grown to 35%. According to one research Europe (Netherlands) has been the bigger funds generator outbound international tourism. According to one research conducted recently, according to researcher in richer countries working hours is steadily decreasing and amount of leisure timings increasing and this trend would remain continue and many people would looking forward to leisure activities. According to WTO report it has been stated that due to this activities there has been a great chance that impacted world economy in recent years and implications of tourism is been taking place (Moore, Cushman, Simmons, 1995).

The purpose of Leisure and tourism industries is to provide their applicants a pleasant experience. Customer’s expectations are getting higher in what they want from leisure and tourism service provided companies (Moore, Cushman, Simmons, 1995). Making decision about how to build up leisure and tourism facilities which needs to consider not only effective and successful ways of completing needs and wants of an individual’s but also but impact of new development may have on the local and community and environment (John Tribe, 2011).

Societal Tourism

Travel and leisure has contributed an excellent total this financial and also interpersonal well-being of the country. Urban Travel/Tourism and leisure incorporates a specific relevance within Travel and leisure which reports a widely recognized and also thriving because contemporary days. Because urban centers are widening and also rapid urbanization has been going on with regard to recent many years, for that reason, it’s increased traveler actions. This specific is among the elements which bring about on the extension associated with elegant tourism in the world. By and large, Downtown Travel and leisure has been examined on the financial standpoint and also earnings in the Traveler marketplace has been this center point of those unfortunate. However, this researchers and also professionals in the field have commenced observing this on the other viewpoints also.

Problem in Urban & Cultural Tourism

The challenge regarding areas as well as heritage has always been to offer a special, particular, as well as participatory tourist knowledge that may provide with it work as well as economic improvement regarding investment decision inside numerous endeavors. The challenge will be additionally difficult by the call to sustain the type with the group and its particular national sources, offer you a genuine knowledge, and respect the particular cultural as well as national standard of living with the host group even while guaranteeing the particular durability as well as authenticity with the tourist product.

The actual supervision has been associated with the history which has been usually seen as a complex method which in turn had to match several storage and also professional demands. The actual advantages has been associated with travel concerns within just history learning resource management and has produced the procedure more stressful, which has a brand-new group, occasionally, inconsistent forces. Although historical sites and also residential areas search for and also pleasant visitors, in addition, they have to endure lots of the adverse impacts associated with travel task. This issue associated with Push provides a watch into the exercise and also difficulties associated with cultural tourism in Netherlands. Most of these difficulties reflect, now and again, what is taking place in the rest on the globe. Dutch resources for history learning managers and also residential areas nonetheless possess lots to find out about travel and also how the biggest industry on this planet may benefit the actual supervision method.

Health and Safety Issue

The particular customer need to be familiar with standard health and safety law which addresses the protection associated with buyers and also personnel in pleasurable and also tourist establishments. The particular customer will likely need to focus on precisely how employees and also site visitors are usually covered by means of all of the using Acts/Regulations (or while amended),

Activity Centre’s (Young Persons’ Safety) Act, 1995

Children Act, 2004
Health and Safety at Work Act, 1974
Fire Precautions Act, 1971
Control of Substances Hazardous to Health (COSHH) Regulations, 2002.

The actual choice for candidate to have an understanding of, and be able to implement familiarity with, safe practices in several doing the job circumstances, like, for example, any preparing food setting. The actual choice will have to recognize possible dangers and also how they may be was able securely within these kind of doing the job circumstances.

Conclusion and Recommendation

Conclusion

As it has been mentioned in above review that tourism can affect country’s economy and with the help of this we can generate more funds which plays bigger role in the economy According to the survey which was conducted by WTO and according to it, following are the few stats which showing facts of different countries earnings. According to reports Europe is the most generator of funds from outbound international tourism, stats are as follows, America generated 22% of expenditure, followed by Asia Pacific 21%, and in the end Africa and Middle East 3%.

How people choose leisure time activities according to what expectations and needs and wants does service providers companies taking that fact into their notice as satisfying customers is the essential part of making business in right path. How consumer select their required destination and, on the basis of what preferences. Every customer has its own preferences and service provider companies take good care of this by offering them good and nice packages which would fulfill its customer needs and wants. As it is mentioned earlier that services of leisure and tourism companies cannot go through without their customers. Successful companies offering services of leisure and tourism must assure that their customers are satisfied with their services offering. Service provider companies must need to satisfy their customers in order to increase their good will.

Recommendation

The irresistible human being want to travel, explore, along with gain completely new experiences will certainly underpin reliable worldwide expansion throughout travel along with vacation, despite completely new carbon along with aviation fees. Globalization will carry on and push business owners for you to giving up household lifestyle for travel, despite expansion connected with teleworking along with digital teams. Small business vacation will mature on a yearly basis in the future 20-30 years, power by means of expansion within growing market segments, though vacation inside the EU along with the US will fairly static. Dutch federation interior as well as worldwide traveling by plane will likely mature easily. Parts of Europe will symbolize over 47% on the worldwide economic climate within Acquiring Electric power Parity by means of 2015.

Reference

Arcodia, C., & Reid, S. (2005, January). Event management associations and the provision of services. InJournal of Convention & Event Tourism(Vol. 6, No. 4, pp. 5-25). Taylor & Francis Group.

Eckerstein, A. (2003). Evaluation of Event Marketing.rapport nr.: Masters Thesis, (2002).

Kose, H., Argan, M. T., & Argan, M. (2011). Special event management and event marketing: A case study of TKBL all-star 2011 in Turkey.Journal of Management and Marketing Research,8, 1-9

O’Neil, M. A., Getz, D., & Carlsen, J. (1999). Evaluation of service quality at events: The 1998 Coca-cola Master Surfin g Event at Margaret River, Western Autralia.Managing Service Quality,9(3), 155-166.

As one of the largest industries, tourism has had an average annual increase of 6.6 per cent over the last half century, with international travel rising continuously and alternative tourism having a main role in this transaction. Nature-based tourism and ecotourism, with accepted definitions through tourism industry will be discussed in this report. Uniqueness and differences of ecotourism from mass tourism will be explained and benefits of ecotourism will be referred as well. An ecotourism destination; Galapagos Islands will be briefly introduced and the strategies being implemented in the specific destination will be indentified. Ecotourism is significant, special nowadays for the environment, the culture and also for the economy. So, what is the future of ecotourism? Will the efficient use of the natural resources and heritage of Galapagos Islands be a sufficient factor to maintain the importance of ecotourism? The future will be discussed as well.

Tourism is a complex sector with many challenges and chances at the same time. I‘ attempt to define tourism and to describe its scope fully must consider the various groups that participate in and are affected by the tourist, such as the tourist, the host community, the government and the businesses providing the product. Charles R. Goeldner defined tourism (2009): ”Tourism may be defined as the processes, activities and outcomes arising from the relationships and the interactions among tourists, tourism suppliers, host governments, host communities, and surrounding environments, that are involved in the attracting and hosting of visitors.” Tourism as an industry deserves significant criticism, not least because in many cases it contributes to the decline of natural areas. A form of tourism inspired by the natural history of an area is ecotourism. Travelling to locations full of natural resources for enjoyment, which at the same time protects the fauna, flora and the ecosystem, as well as the people. Below a more formal definition of ecotourism and nature-based tourism is delivered by Goodwin (1996: 288):

” Nature-based tourism encompasses all forms of tourism-mass tourism, adventure tourism, low impact tourism, ecotourism- which we use natural resources in a wild or undeveloped form- including species, habitat, landscape, scenery and salt and fresh-water features. Nature tourism is travel for the purpose of enjoying undeveloped natural areas of wildlife.”

” Ecotourism is low impact tourism which contributes to the maintenance of species and habitats either directly through a contribution to conservation and/or indirectly by providing revenue to the local community sufficient for local people to value, and therefore protect their wildlife heritage area as a source of income.”

Furthermore, someone could say that ecotourism is an educational travelling that provides great knowledge to its participants. The practices of ecotourism are mentioned below:

Green Tourism, Alternative Tourism, Endemic Tourism, Wildlife Tourism, Adventure Tourism, Geotourism, Nature-based Tourism, Responsible and Sustainable Tourism.

1.2 The importance and the role of the sustainable tourism in eco tourism.

Sustainability is generally an ambition of tourism to have the lowest impact in economy, environment and culture as well. Sustainable development has been proposed as a model for a structural change within society. Sustainable tourism is an extension of the new emphasis on sustainable development (Sadler: 1992). One of the first strategies on tourism and sustainability emerged from the Globe ’90 conference in British Columbia, Canada. At this conference representatives from the tourism industry, government, non-governmental organizations (NGOs) and academe discussed the importance of the environment in sustaining the tourism industry, and how poorly tourism developments, that attract the visitors, destroy the quality of the natural and human environment.

To Tourism Concern (1992), sustainable tourism is:

”Tourism and associated infrastructures that, both now and in the future; operate within natural capacities for the regeneration and future productivity of natural resources; recognize the contribution that people and communities, customs and lifestyles, make to the tourism experience; accept that these people must have an equitable share in the economic benefits of tourism; are guided by the wishes of local people and communities in the host areas.”

Eco tourism is a small, though growing industry. There is much faith in the work that eco tourists do and they face a lot of problems and challenges in achieving a sustainable development. Sustainable tourism includes specific practices such as the carrying capacity, the visitor impact management, the visitor activity and the limits of acceptable change that are used in protected areas.

It is essential to note, here, that if these strategies are implemented successfully sustainable tourism will provide historical development and will increase the environmental awareness. Sustainable development and eco tourism are two terms that match together and try to create a guideline for successful tourism in the eco destinations.

1.3 The importance of ecotourism

The principles ecotourism serves are defined by many sociologists the last years and acknowledge the importance of ecotourism. Firstly, ecotourism minimizes the negative impact to the environment and to the local people. Ecotourism provides a big amount of environmental and cultural awareness to both visitors and hosts. The support of human rights is another principle important to mention. Ecotourism provides direct benefits in economy of the local people and improves the sensitivity of the locals for the environment, culture and heritage. Ecotourism provides benefits to both hosts and local people. Ecotourism generates foreign exchange for the country and injects capital and new money into the local economy.

Ecotourism often takes travelers to undiscovered areas where nature still exists with no transformation at all. It gives to the visitor the advantage of education and discovering new places that are far away from the usual trends. Educational ecotourism offers to the tourists the privilege of being aware of the danger they may cost to the environment, in order to protect it. Resorts and hotels around the world started to go green by reducing their energy use and investing their money to eco friendly products. Ecotourism also protects the threatened wildlife of the ecosystems by bringing local and worldwide awareness. As ecotourism works in a location, it respects the people’s culture and values. It provides a chance for relaxation and exploration and evaluation of self.

2.0 Emerging Issues of ecotourism of Galapagos Islands, Ecuador.

2.1 Brief Introduction of Galapagos Islands

An eco – destination that features inspiring stories about destinations and provides great travelling experiences.

The Galapagos Archipelago is a cluster of some 13 volcanic islands and associated islets and rocks located just under the equator, about 600 miles (1000km) west of Ecuador in South America. The oldest of the islands are about 4 million years old and the youngest are still in the process of being formed. These Islands that tourists visit on Galapagos cruises are considered to be one of the most active volcanic areas in the world. About 95% of the islands are part of the Galapagos National Park system, with the remainder being inhabited by about 14,000 people in four major communities (Puerto Ayora, Puerto Baquerizo, Puerto Villamil and Floreana).

The Galapagos National Park Service and the Charles Darwin Research Station jointly operate the islands. The Park Service provides rangers and guides, and is responsible for overseeing the many tourists who visit each year. The Darwin Station conducts scientific research and conservation programs. It is currently breeding and releasing captive tortoises and iguanas. This group of 13 mayor islands and dozens of smaller islets and rocks – all the result of volcanic activity – certainly appear to be out of this world. They are, in fact, an unpredicted wilderness, filled with extraordinary populations of unique species, which have developed apart from humans and their dominating influence. In an effort to preserve the islands as they were centuries ago, the Galapagos have been declared a World Heritage Site by UNESCO. An eco tourism destination with rich heritage and great experiences to offer.

2.2 Presentation and evaluation of ecotourism strategies implemented by Galapagos Islands

Ecotourism was already practiced since the 1960’s in the islands, with two Ecuadorian inbound tour operators based in Quito, working together with an American outbound operator. The number of vessels was small, two cruise boats, twelve passengers 39 sailing vessel and a sixty-passenger luxury liner. At the same time the companies worked very closely with the Darwin station and the National Park. During the 1970’s tourism infrastructure grew slowly, but from 1974 to 1980 it had a boom that almost double folded the amount of visitors.

The foreign owned floating hotels represents the major activity and they are the strong economic and political influence for the islands. The principles or guidelines for Ecotourism projects in the Islands began to develop in the international arena in the 1990’s.

Internet search engines were used to identify ecotourism cruise operations in the Galapagos Islands using the search times “ecotourism” and “Galapagos Islands.” “Adventure” tours and “nature” tours were not used as search terms. As of November 1, 2009, fifteen company websites identified themselves as “ecotours” in the Galapagos Islands. That showed a big movement through internet for the development of tourism in Galapagos Islands.

Education of the local population and visitors in the natural history of the Galapagos is a goal of the Station and the Park and programs are conducted in the Islands and on the mainland. An intensive course for naturalist guides, which is required to supervise visitors to Park sites, is conducted annually. Educated bilingual naturalist guides and auxiliary guides are taken place at Galapagos Islands, offering valuable information and help to visitors.

Firms are acknowledged to be important actors involved in the deployment of resources available to a tourism destination. In turn, successful tourism firms can contribute to building the competitive advantage of tourism destinations through affecting a destination’s tourism product or service. The present study analyses business performance in urban tourism using networks and entrepreneurial perceptions over a city’s asset base as a framework of competitive performance. Business performance is measured in terms of productive efficiency-that is, technical and scale efficiency. Results indicate that networks and entrepreneurial perceptions of a city’s asset base constitute important determinants of the successful operation of tourism businesses.

INTRODUCTION

Tourism has developed into one of the world’s most important industries, with more than 846 million international tourist trips globally in 2006 (World Tourism Organisation). It is also one of the fastest-growing sectors of the UK economy, worth ?85 billion in 2005 and employing some 2 million people (Star UK). As a result, tourism is associated with the injection of revenue into national, regional and local economies.

Ref: www.forestresearch.gov.uk/fr/urgc-7EEGJR

Urban Tourism: The Visitor Economy or Growth of big Cities, Christopher Law examines the relationship between tourism and urban areas. He distinguishes between primary and secondary, and additional elements of city’s tourism resources. Primary elements provide the reasons why tourists use to visit cities. Secondary elements is accommodation and shopping as well as more elements like transportation or tourist information are also very important for the success of urban tourism, but they are not the main attractor of visitors.

Urbanisation and process of acute city growth due to high productive economic activities around the city, often at the expense of rural and agricultural hinterlands, is largely a product of the 20th Century particularly in the wake of the Industrial Revolution and the arrival of Automobile Industry.

‘Globalization’ is promiscuous, controversial word that often obscures more than it reveals about the geographical, environmental, economic, political, social, and cultural changes. It is good used to denote a multi centric, multi scalar, multiform, and multi causal process, which has much less of explanting and more of explanandum. In recent analysis globalization has found to be about place and scale. This argues is that infiltrating of globalization to cities and identities as challenging paradigm.

According to Castells (1993:247), cities are inherently composite entities. That is why they are the result of changing structural determinants interacting with multiple specificities rooted in history. Capitalist to make a change since the crisis of the 1970s has produced the latest structural determinants, collectively termed globalization, which have created new world cities (Friedmann, 1986) or global cities (Sassen, 1991). However this is only part of story. In addition, the historical and cultural characterizing are not constants; their efects on city development alter as changing economic and political bring forth new meanings for old practices (Taylor & Hoyler, 2000).

In urban planning area it is often difficult to track the origin of some concepts as in the sciences. Theories and ideas are often products of collective to try. It would be very difficult to identify who used the term “globalization” for first time. According to Waters whose book titled Globalization is fine primer, Robertson was one of the early users of term (Robertson, 1983; 1992).

The topic Globalisation and the attendant challenges for politics, economics, culture and humanity in the human society has become a source of big concern for religious leaders and leader of thought around the world. Now when joined with the actuality of Urbanisation and Post Modernity, the challenges become even more typical.

The invention in modern communication technology with emergence of the computer or internet, which have defeat space and contract the world to a global village, the globalisation of the economy and industry, by which a few countries are growing ever more affluent, while the fortunes of the number of people are ever worsening.

That is why the phenomenon of internationalisation as well as urbanization and post-modernity which in many ways influence how people live and relate, should be a matter of concern to leaders of the Christian Church. In this matter therefore we shall think carefully about what the world was like before the era of globalisation and what globalisation has brought upon morality – the good, the bad and the ugly aspect of the fact. We should look at the rising trend in urbanization and what challenges it sets to wholesome human existence. Then we shall look at the complex originality of post-modernity and how it challenges our religious, spiritual and social values. We shall then discuss the way

Urban tourism is the group of tourist resources or activities situated in towns and cities and offered to visitors from elsewhere.

Historic attributes of buildings, neighbourhoods’, and special landmarks emphasize the local character of an area. Historic districts are normally very pedestrian friendly with a mix of attractions and amenities that are not so complex.

Not matter if it is for transportation or entertainment, urban waters have always attracted people out of need or pleasure.

Convention Centres and Exhibitions are mostly called as one of the staples of city tourism. In some cities, up to forty percent of those staying overnight have come for this type of business tourism.

Festivals and Events have become a popular means for cities to boost tourism. They range in size and number from one time events like the World Exhibition or the Olympics to annual events like Folk Music Festivals or Gallery Nights.

Friendliness is also one of the most important cultural features of the tourism industry. Professionalism and excellence of service provided to visitors begins with friendliness. Key factors in visitor’s decision to visit a place are friendly, hospitable people.

MAIN BODY

NEW YORK – In his essay “Taming the Bicycle,” Mark Twain cautiously recommended bicycling: “You will not regret it, if you live.” That has always gone doubly for biking in New York. But the city has undergone a two-wheeled makeover. In the past four years, the New York City Department of Transportation has added more than 200 miles of bikes lanes. The number of cyclists has increased 80 percent in the past decade. The city’s goal is 1,800 miles of total bike lanes by 2030.

Earlier this year, National Geographic Traveller magazine did something that might once have been unthinkable: It ranked New York the second-most bike-friendly city in the country, after Portland, Ore. While biking has exploded for New Yorkers, tourists are quietly following. It is, after all, a great way to experience a new place: Faster than walking so you can cover a lot of ground, but far closer to your surroundings than a car.

In New York, it can be dizzying: rolling past Washington Square Park one moment, breezing along the Hudson River the next. In a city where freedom of movement can often feel gridlocked, on a bike, one sails through the throngs. Musician and New Yorker David Byrne wrote in his 2009 book “Bicycle Diaries” that riding through a city “is like navigating the collective neural pathways of some vast global mind.”

The “neural pathways” of New York, though, are often strewn with potholes, aggressive drivers, unobservant pedestrians and – often the worst of all – pushy cyclists. New York has been significantly tamed when it comes to biking, but it isn’t exactly Amsterdam.

Nevertheless, tourists, having long endured double-decker buses and plodding ferries, are understandably looking for a new vantage point. A number of tours have sprung up and found visitors willing to strap on a helmet.

www.msnbc.msn.com/id/39536483/ns/travel-destination_travel/

Tourism in the United States is a big industry that serves millions of international and domestic tourists. Tourists visit the US to see natural wonders, historic landmarks and entertainment venues. Americans seek same attractions, as well as recreation areas.

Tourism in the United States grew vastly in the form of urban tourism during the late nineteenth and early twentieth centuries. By the 1850s, tourism in the United States was fully established both as a cultural activity and as an industry. New York, Washington, D.C. and San Francisco, all main US cities, attracted a huge number of tourists by the 1890s. By 1915, city touring had marked significant shifts in the way Americans perceived, organized and moved around in urbanisation.

Democratization of travel takes place during the early twentieth century when the automobile changed travel. Similarly air travel changed travel during 1945-1969, contributing greatly to tourism in the United States. By 2007 the number of international tourists had reached to over 56 million people who spent $122.7 billion dollars, setting an all time record.

The travel and tourism industry in the United States was among the first commercial casualties of the September 11, 2001 attacks, a series of terrorist on the US. Terrorists used four commercial airliners as means of destruction, all of which were collapsed in the attacks with 3,000 casualties.

In the US, tourism is either the first, second or third biggest employer in 29 states, employing 7.3 million in 2004, to take care of 1.19 billion trips tourists took in the US in 2005. As of 2007, there are 2,462 National Historic Landmarks (NHL) recognized by the United States government. As of 2008, the most popular tourist attraction in the US is Times Square in Manhattan, New York City which attracts approximately 35 million visitors.

New York, Washington, D.C. and San Francisco, all big US cities, attracted a huge number of tourists by the 1890s. New York’s population raise from 300,000 in 1840 to 800,000 in 1850. Chicago experienced a dramatic increased from 4,000 residents in 1840 to 300,000 by 1870. Dictionaries was first published the word ‘tourist’ sometime in 1800, when it was referred to those going to Europe or making a trip of natural wonders in New York and New England. The absence of urban tourism during the nineteenth century was in part because American cities lacked the architecture and art which attracted visitors to Europe. American cities try to offend the sensitive with ugliness and commercialism rather than inspire awe or aesthetic pleasure. Some tourists were fascinated by the vast growth of the new urban areas: “It is a big thing to watch the process of world-making; both the combination of the natural and the conventional world,” wrote English writer Harriet Martineau in 1837.

By 1915, city touring had marked remarkable shifts in the way Americans aware, organized and moved around in urbanisation. Urban tourism became a earning industry in 1915 as the number of tour agencies, railroad departments, publishers and travel writers grew at a fast pace. The expense of pleasure tours meant that only the minority of Americans between 1850 and 1915 can be experience the luxury of tourism. Many Americans moved to find work, but few found time for enjoyment of the urbanisation. As transportation facilities improved, the length of commuting decreased, and income rose. A growing number of Americans were able to afford short time vacations by 1915.

During the first four periods of the twentieth century, long-haul journeys between large American cities were fulfilled using trains. By the 1950s, air travel was part of every-day life for most of the Americans. The tourism industry in the US experienced remarkable growth as tourists could travel almost anywhere with a fast, reliable system. For some Americans, a vacation in Hawaii was now a more regular activity. Air travel has been changed most of the thing from family vacations to Major League Baseball, as had steam-powered trains in the nineteenth and early twentieth centuries.

File:US International Arrivals 1997-2007 chart.png

Forecast tourism

(in thousands)

Origin

2007[27]

2008[27]

2009[27]

2010[27]

2011[27]

Canada

16,691

17,274

17,847

18,409

18,960

Mexico

13,717

14,127

14,529

14,921

15,304

Europe

10,951

11,407

11,822

12,230

12,632

Asia

6,348

6,710

7,050

7,390

7,730

South America

2,166

2,267

2,367

2,466

2,564

Caribbean

1,277

1,316

1,355

1,394

1,431

Central America

737

768

798

829

860

Oceania

804

838

872

905

937

Middle East

600

622

644

666

688

Africa

270

282

294

306

317

www.zaped.info/Tourism_in_the_United_States

New York’s food culture, influenced by city’s immigrants and large number of dining patrons, is diverse. Jewish and Italian immigrants made city famous for bagels, cheese cake and New York-style pizza. Some of 4,000 mobile food vendors licensed by city, many immigrant-owned, have made Eastern foods such as falafel and kebabs standbys of about the same age New York street food. The city is home to many of finest haute cuisine restaurants in the United States.

Sporting events are tourist events. Major places include Yankee Stadium, Citi Field, and Madison Square Garden. Street fairs and street events like the Halloween Parade in Greenwich Village and New York Marathon also attract tourists

Environmental issues in New York City are affected by city’s size, density, abundant public transportation infrastructure and location at the mouth of Hudson River. New York City also plays an important role in national environmental policy because of its size and position or wealth.

New York’s population density has been environmental benefits and dangers of the city. It facilitates the biggest mass transit use in United States, but also concentrates pollution. Gasoline consumption in the city is at the rate the average was in the 1920s, and greenhouse emissions are a fraction of the national average.

The direct effect is the at the time benefit to persons and companies state away giving goods or services to travellers. Indirect effect is the secondary benefits to suppliers of goods and services to the state away indulged companies. For example a food wholesaler giving goods to a restaurant, the model is careful not to include from the impact calculations.

The study entrust the making of a tourism monitoring unit by the US government to regulate the operation of industry as far as the areas of bio-diversity, culture and environment are concerned. The unit, once made should analyze properly and carefully control the negative impacts. It notes that, infrastructure should be better, insecurity weeded out that is likely to scare tourist away and bettering of tourist facilities like large hotels. It also notes that tourism that involved a number of countries and leaves most of the economic benefit outside country be should be discouraged.

Ecotourism is responsible travel to damage, pristine, and usually saved areas that strive to be low impact and small scale. Its purpose is to educate the traveller; provide funds for ecological conservation; state away beneficial for the economic development and political empowerment of local communities; and cultivate respect for different cultures and for human rights. Since the 1980s ecotourism has esteemed a critical endeavour by environmentalists, so that future generations may be experienced directed relatively untouched by human intervention. Several university programs use this technique as the working definition of ecotourism.

Normally, ecotourism focuses on voluntarily, or volunteerism, personal development and environmental responsibility. Ecotourism typically committed to travel to goals where flora, fauna, and cultural heritage are the primary attractions. One of the destinations of ecotourism is to give tourists seeing into impact of human beings on the environment, and to cultivate a greater appreciation of our natural habitats.

Responsible ecotourism contains programs that compress the negative aspects of conventional tourism on the environment and augment the cultural completeness of local people. Therefore, in addition to calculating environmental and cultural factors, a constituent part of ecotourism is the promotion of recycling, energy efficiency apartment, water conservation, and creation of economic chances for communities. For these reasons, ecotourism often supplication to environmental and social responsibility advocates.

ECONOMIC NEGATIVE IMPACT

Increases price of goods and services

Increases price of land and housing

Increases cost of living

Increases potential for imported labour

Cost for additional infrastructure (water, sewer, power, fuel, medical, etc.)

Increases road maintenance and transportation systems costs

Seasonal tourism creates high-risk, under- or unemployment issues

Competition for land with other (higher value) economic uses

Profits may be exported by non-local owners

Jobs may pay low wages

ENVIO|RNMENT NEGATIVE IMPACT

Pollution (air, water, noise, solid waste, and visual)

Loss of natural landscape and agricultural lands to tourism development

Loss of open space

Destruction of flora and fauna (including collection of plants, animals, rocks, coral, or artefacts’ by or for tourists)

Degradation of landscape, historic sites, and monuments

Water shortages

Introduction of exotic species

Disruption of wildlife breeding cycles and behaviours

SOCIAL AND CULTURE NEGATIVE IMPACT

Excessive drinking, alcoholism, gambling

Increased underage drinking

Crime, drugs, prostitution

Increased smuggling

Language and cultural effects

Unwanted lifestyle changes

Displacement of residents for tourism development

Negative changes in values and customs

Family disruption

Exclusion of locals from natural resources

New cliques modify social structure

Natural, political, and public relations calamities

A goal of developing the tourism industry in a community is maximizing selected positive impacts while minimizing potential negative impacts. First, it is essential to identify the possible impacts. Tourism researchers have identified a large number of impacts. Grouping the impacts into categories shows the types of impacts that could result from developing tourism in a community

Tourism can be improved the quality of life in an area by increasing the number of attractions, opportunities, and services. Tourism offers resident’s offers to meet people, make friendships, learn more about the world, and to show themselves to new perspectives. Experiencing different cultural practices rewarding experiences broadens horizons, and increases seeing and appreciation for different an approximation to living. Often, decreasing interest in host cultures is resuscitated by reawakening cultural heritage as part of tourism development, which use to increases demand for historical and cultural. This interest by tourists in culture and history gives opportunities to help in maintain of historical architecture. By learning more others, their differences became less threatening and more interesting. At the same time, tourism often popularizes bigger levels of psychological satisfaction from opportunities made by tourism development and through interactions with who is going to travel.

CONCLUSION

For clarity, the tourism elements presented in this article have been largely treated separately; however, it is important to point out that there is a high degree of interrelatedness among the elements. They are being developed by cities for a variety of reasons including portraying a positive image, attracting visitors, and stimulating the urban economy.

In the present, some of most popular tourist places in Europe are the big cities. We can say that these are compulsory places for tourists and can be considered advertisements for the respective country. Big towns are important for tourism because they are residences of national or regional governments, possesses monuments and important buildings; they are places which host important events and various ceremonies. They are business and commercial centres, host night life and provide multiple possibilities for fun. They are preferred because they provide a large variety of entertainments and full services in a relatively small area.

However, towns must invest in all or in most of the components that make up the tourism area. It is not enough to invest in one or two components. The main quality of urban tourism does not consist in the fact that the existence of a big concentration of tourists cuts down the costs or increases the business efficiency, but in the fact that a large variety of services is necessary for a limited space, which is very attractive for tourism consumers.

Sustainability interfaces with economics through the social and ecological consequences of economic activity. Sustainability economics involves ecological economics where social, cultural, health-related and monetary/financial aspects are integrated. Moving towards sustainability is also a social challenge that entails international and national law, urban planning and transport, local and individual lifestyles and ethical consumerism. Ways of living more sustainably can take many forms from reorganising living conditions, reappraising economic sectors (perm culture, green building, sustainable agriculture), or work practices (sustainable architecture), using science to develop new technologies (green technologies, renewable energy), to adjustments in individual lifestyles that conserve natural resources.

BIBLIOGRAAPGHY

Castells, M (1993) “European cities, the informational society, and the global economy”, Tijdschrift voor Economische en Sociale Geografie, No. 84, pp. 247-257.

Friedmann, J (1986) “The world city hypothesis”, Development and Change, No.17, 69-84.

Robertson, R (1983) “Religion, global complexity and the human condition” in absolute values and the creation of the new world, Vol. 1, New York: International Cultural Foundation.

Sassen, S (1991) The global city. New York, London, Tokyo, Princeton: Princeton University Press.

Taylor, P J and Hoyler, M (2000), “The spatial order of european cities under conditions of contemporary globalization”, Tijdschrift voor Economische en Sociale Geografie, Vol. 91, No. 2, 176-189.

http://www.forestresearch.gov.uk/fr/urgc-7EEGJR

http://www.msnbc.msn.com/id/39536483/ns/travel-destination_travel/

http://www.zaped.info/Tourism_in_the_United_States

Price elasticity of demand and income elasticity of demand. (Ryan air & British Airways Data)

How are ‘low-cost carriers’ such as Ryan air able to achieve cost savings? Fixed costs and variable costs.

Critical analysis of the issues involved in the following article: ‘ BAA Airports: Notice of release of interim undertaking’

Conclusion

Bibliography

Introduction

Ryanair isaˆ¦aˆ¦aˆ¦.

British Airways isaˆ¦..

This document reports the findings of a review of the economics and business literature on empirically-estimated own-price elasticity of demand for air travel for Ryan air and British Airways. It refers to the data on page two of the assignment handout to both above airlines to illustrate and explain the concepts of price elasticity of demand and income elasticity of demand.

The purpose of this study is to report on all or most of the economics and business literature dealing with empirically approximate demand functions for air travel and to collect a range of fare elasticity measures for air travel provide in the data on the second page of the assignment topic and provide some judgment as to which elasticity values would be more representative of the true values to be found in different airline such as Ryan air and British airways, furthermore will evaluate the accomplishment of cost savings of Ryan air through fixed costs and variable costs as well as writing a critical analysis the article on BAA Airports: ‘Notice of release of interim undertaking'(mmc.gov.uk, 2010).

Price Elasticity of Demand and Income elasticity of demand in the context of air travel demand: (Ryan air & British Airways)

We identified two distinct prices for air travel which are price elasticity of demand and income elasticity of demand from the case study for air travel demand which should distinguish among prices for: Low cost carrier (LCC) example of Ryanair and Full Service Carrier (FSC’s) example of British Airways; business and leisure travel. Accordingly, to examine the sensitivity of the demand for air travel to its price, separate analysing of the price elasticity of demand is gathered for each of these two distinct markets.

Price Elasticity of Demand

Dunnett, A. (1988: 260) define Price Elasticity of Demand as a numerical value which describes the degree of responsiveness of demand to changes in prices.

In addition Sloman (2005) believed that the demand for a particular good or service depends on a variety of factors. Key influences include, the levels of consumer income, the price and quality of the services in question and especially services that are close substitutes.

As a general rule, once other influences on demand stay unchanged, a higher price for a product leads in a lower quantity demanded. However, the price responsiveness of demand varies from one good to another and from one market to another (FitzRoy et al, 1998). Since the availability of alternative modes of transportation that are reasonably close substitutes for air transport such as low cost airlines like Ryanair diminishes with distance travelled, it is expected that the demand for air transport will be less elastic for longer flights typical example of British airways with is a FSC’s than for shorter flights typical example of Ryan air.

Just considering an example where Ryanair (a low cost airline) flight’s to

Milan from ?49.99 return and British Airways from ?628 return. The

problem though with Ryanair is that you can find this cheap ticket if

you book it about it well in advance. But if we try to book it on the same day

before your journey the price has gone up at ?179.99 return when British Airways price will be still remaining the same until a week before your journey. Further, international travel tends to be widening over more time than domestic travel, so that the airfare is a smaller proportion of overall trip costs, which makes international travel less sensitive to changes in ticket prices. In addition, leisure travellers are more likely to postpone trips to specific locations in response to higher fares, or to shop around for those locations offering more affordable fares. Consequently, it is expected that the demand for air transport for leisure reasons will be more elastic than business travel who usually travel with FSC’s. According to Anthony et al (2000) Ryan air prices management is systematically offering different prices to different customer segments in response to demand whereas (Kimes, 1989) suggests that the team in charge of yield management need to identify how changes in price will affect their customers. Within the airline industries customer demand may be higher on week ends, during summer months, or at particular times of a day, (Belobaba, 1987). Managers must be able to forecast time-related demand so that they can make effective pricing and allocation decision to manage the shoulder periods around high demand period. However the corporate business traveller during the week becomes a leisure traveller when on holiday or at week-ends. Different occasion find the same consumer having different expectation and needs, (Buttle, 1986). Such a concept is termed elasticity of demand.

According to the Data from the case study downloaded from Ryan air website, the price of the flight is far more higher than the price of the flight on other following days of the week day. However, when approaching the end of the week-end or school holiday, there is a huge demand and the increased demand drives the price up again as customer are returning from their vacation or family are going on holiday. Closer to the date and time of the scheduled service, the price rises, on the simple justification that consumer’s demand for a flight becomes more inelastic the nearer to the time of the service. The low cost airlines such as Ryan air follow the pricing strategy outlined above. Customers booking early with carriers such as Ryan air will normally come across lower prices if they are ready to commit themselves to a flight by booking early. This gives the airline the plus of important how full their flights are likely to be and a source of cash-flow in the weeks and months prior to the service being provided. People who book late often regard travel to their planned destination as a need and they are therefore likely to be prepared and able to pay a much higher price very close to departure. Airlines call this price discrimination yield management – but despite the consider name, at the heart of this pricing strategy is the straightforward but important concept price elasticity of demand.

Ryanair has a seat pricing policy that causes fares to rise as a flight fills up (Ryanair.com, 2010). Following theory of supply and demand, if customer wants a seat so badly, they will pay more for it than otherwise.

Income Elasticity of Demand

It is defined as numerical values which describe the responsiveness of demand to a change in consumer incomes. (Sloman, 2005)

Because of the recession, demand for low cost flights grew rapidly as family with higher income who were travelling with FSC’s before would prefer low cost than traditional airlines and some current low cost customer with low income may prefer domestic flight or would just prefer not to travel by air.

In air travel, FSC’s are essentially joint products consisting of differentiated service bundles that are identified by fare classes. However the yield management systems employed by FSC’s also create a multifaceted form of inter-temporal price discrimination, in which some fares (typically economy class) decline and some increase (typically full-fare business class) as the departure date draws closer. This implies that ideally, empirical studies of air travel demand should separate business and leisure travellers or at least be able to include some information on booking times in order to account for this price discrimination, and that price data should be calibrated for inter-temporal price discrimination: for example, the use of full-fare economy class ticket prices as data will overestimate the absolute value of the price elasticity coefficient. Within the set of differentiated service bundles that comprise each (joint product) flight, the relative prices are important in explaining the relative ease of substitution between service classes. Given the nature of inter-temporal price discrimination for flights, the relative price could also change significantly in the time period prior to a departure time.

In particular changes in real income and the prices of substitutes or complements will affect demand. Alternative transportation modes (road and rail) are important variables for short-haul flights, while income effects should be measured for both short and long-haul.

Oum et al. (1992) provide valuable tools that occur when evaluating the demand models. Air travel demand can be affected by changes in the prices and service quality of other modes. For short-haul routes (markets) the relative price and service attributes of auto and train would need to be included in any model; particularly for short-haul markets such as low cost airline. Failure to include the price and service attributes of substitutes will bias the elasticity. For example, if airfares increase and auto costs are also increasing, the airfare elasticity would be overestimated if auto costs were excluded. The entry of low cost carriers leads to lower fares for a subset of traffic and competitors will offer a supply of seats to match these fares. Lower average fares should lead to lower demand elasticity estimates, while increases in the number of competitors in the market will lead to higher demand elasticity estimates.

How ‘low cost carriers’ such as Ryan air able to achieve cost savings? Fixed Costs and Variable Costs.

Ryan air’s business model is focus around its general low cost philosophy. That is Ryan air attempts to cut all non value adding activities as it strives to drive costs down to the total minimum. Below are typical examples how it drives it’s downwards which include selling directly to its customer over the internet or over the phone rather than via agents and middlemen, thus saving commission cost and administrative cost. Ryan air is a ticketless as most of it customer buy over the internet, in return for a booking reference that is exchanged at the checking counter at the airport for a boarding pass.

The airline has no in flight meals which is a cost saving measure that cannot be much inconvenience to its customer since all Ryan air flights are short haul. Nevertheless has subcontracted catering services on its flights where customer can buy an in flight meal and drink should they wish which is another way of driving price. Cabin crew double up as cleaner and this helps Ryan air to promise a turnaround time at any airport of 30 min rather than 45-60 min that has FSC’s been the norm.

Another cost cutting device, is the typical example of the UK smaller airports such as London Luton, cheaper to fly to from than bigger airports such as Heathrow which it is use at least as its base as they are less congestion and facilitate turnaround times for aircraft to be a lot shorter.

Fixed Costs

Fixed Costs are defined as the Total costs that do not vary with the amount of output produced (John, S. 2005:82)

Ryan air as a LCC operate in the environment of high fixed cost, fixed capacity in the short term, a perishable product and seasonal demand. Virtually all of airline’s costs can be considered fixed. The cost of the capital tied up in the plane, the fuel it take to fly the route, the crew it will take to staff the ground and flight operations insurance, rent, etcaˆ¦ All these cost are fixed once the company decides to fly a particular route and the variable costs associated with serving another passenger on the flight are figure lively peanuts.

Ryan air generates sufficient revenue through ancillary services such as car rentals, accommodation, currency, travel insurance, transactions, refreshments, to cover variable costs and offset at least some fixed cost. Management believes that providing these services through the internet allows Ryan air to increase sales, while at the same time reducing costs on a per unit basis.

Variable Costs

Variable Costs are defined as the total costs that do vary with the amount of output produced (Sloman, 2005: 82)

The relatively low variable costs associated with many capacity- constrained Ryan air allow for some pricing flexibility and give operators the options of reducing pricing during low demand times.

Ryan air always seeks for low variable costs. Below are factors that help Ryanair to maintain a low variable cost:

One type of aircraft, management believes that its strategy of limiting its fleet primarily to three variants of a single type of aircraft from a single manufacturer enables it to limit the costs associated with personnel training, maintenance and the purchase and storage of spare parts, as well as affording greater flexibility in the scheduling of crews and equipment.

Pricing is based strictly upon revenue maximization process that matches the aims and objectives of prices elasticity of demand

Internet booking which cut paper and administrative costs

No airport sales offices/ no cancellations

Charging a surplus for excessive baggage

Maximization of seat capacity per plane

Use of less expensive airport as ‘Ryan air been offered incentives is a controversial one’ Ryan air director of communications. Ryan air further endeavours to reduce its airport charges by opting, when practicable, for less expensive gate locations as well as outdoor boarding stairs rather than more expensive jet ways. Ryan air has entered into in agreements on competitive terms with third party contractors at certain airports for traveller and aircraft handling, ticketing and other services that management believes can be more cost resourcefully provided by third parties. Management attempts to obtain competitive rates for such services by negotiating multi-year contracts at prices that are fixed or subject only to periodic increases related to inflation. One of the typical example is the price of aviation fuel which is directly related to the cost of oil but Ryan air control this through hedging.

All these factors listed above contributed to a low variable cost of Ryan air, a key component in any successful yield management system and provide an opportunity for leverage against its major competitors.

Critical analysis of the issues involved in the following article: ‘BAA Airports: Notice of release of interim undertaking’