Author: Andre Coleman

Tourist attraction is a place of interest to visit that is very popular with tourists whether from local or foreign country. Normally, places of tourist attractions are brings organizations that operate their business in tourism industries tend to overprice their goods and services in order to gain profits. (Viewed 20th December 2009, However in Malaysia, with growing economies in the country, Malaysia rapidly become hotspot for amusement and also developments of theme park in tourism industries. In Malaysia, there are many tourist attractions available for local or foreign tourists to visit; one of the tourist attractions is Genting Theme Park. Genting Theme Park is one of the famous theme parts under Genting Malaysia Berhad which consists of Fist world indoor theme park, outdoor theme park and Water Park.

1.1 The role of Marketing in Helping Genting Theme Park in Achieve Its Objectives

As a leading brand in theme park industry, Genting Theme Park can rarely satisfy everyone in a market. Therefore, Genting Theme Park then decides which segment presents the greatest opportunity in target markets. Its targets in kids and family markets visit to their theme park. In order to achieve theme park objectives to be the leading leisure, hospitality and entertainment organization in the world, which will responsive to the changing demands to customers and excel in providing quality services. As we’re seen the main objectives of an organization is to maximize the revenue and profits, and at the same time also to satisfy needs, wants and demands of customers. The role marketing plays in society is a societal process by which individual and groups obtain what they need and want through offering and freely exchanging products and services of value with each other’s and the role of marketing in helping Genting Theme park to achieve their objectives is plays an important part and efforts of an organization in order to develop satisfying relationship with customers that benefit for the both parties, the organization and the customers. These efforts will lead marketing to serve an important role within organizations. However without a strong marketing effort, unlikely of an organization can survive in the tourism market. Normally what the public or costumers knows more about an organization services that provided is depends on their interactions with marketers. Therefore, it is important of Genting Theme park to do the research and development (R&D) to meet the needs and wants of the costumers in the market because it has direct effect on sales and profitability for Genting Theme Park.

(Viewed 20th December 2009

)

Doing the marketing research and development is very important in order to know what features to design into new services in the theme park, what prices should offer to customers and how much to spend on advertising or sales compare with other competitors. Therefore in marketing point of view, tourism industries commonly would use of four major mass communication tools which is advertising, sales promotions packages, events and experiences, and public relations and publicity for the various customers especially tourists that come from foreign country to knows more about the theme park information about the services, promotions packages and useful massage that provided to their value customers. For example, television advertisements is generally know as the most powerful advertising medium and directly reaches a broad spectrum of costumers. It can be an effective means of vividly demonstrating product and service attributes and persuasively explaining their corresponding consumer benefits.

2. Social element of the macro environment that are currently impacting Theme Park industry

Theme park industry performance could reflect by social issue, social issue either positive or negative is significant role whether difficultly or unhindered to achieve the vision of theme park industry in the future.

2.1 Migration

Firstly, migration from one district to another was become an opportunity for theme park industry to hire local communities manage or operate the theme park facilities. In Malaysia, resident had shift their hometown in order to find job at capital city, such as Kuala Lumpur, the situation causing population of capital city increased, therefore as short distance of Genting from Kuala Lumpur become a perfect geography strength to attract local communities working at Genting Theme Park, cause people apply Genting job and employee shortage condition rare occurred. So Genting often had sufficient employee to serve customers especially during the festival such as Chinese New Year, Deepavali, and Christmas Day and so on.

2.2 Global Crisis

Secondly, social issues such as global crisis would affect consumers visit to theme park, usually national government advice resident reduce go aboard to foreign and visitors may worry accidence occurred when outbreak global crisis. For example, in 2003, Iraq war and Severe Acute Respiratory Syndrome (SARS) breakout causing local visitor and foreigner choose stay away from crowded placed. Through genting has implemented various events to increased number of customers consume in theme park during the difficult period, however the result show that profit before tax of Genting was decreased to RM1, 131 million compare to previous year around RM1, 195 million. (genting, 2003) Consequently, the global crisis would bring negative impact on Genting unavoidable, Genting must expect global crisis may occur in the future and draw up few set of solution to solve these issues.

2.3 Natural Environment Issue

Thirdly, natural environment issue may also affect policy on operating theme park industry indirectly. The nature environment issue such as global warming has became serious in recent years, that would brought various natural disasters around the world. Therefore society has awareness the environment pollution that threaten their life, society will concern about global warming and support companies going green. Hence theme park industry has engaged and practice various method to reduce global warming. For example, Genting theme park has installed water flow restrictor that function was reduce water consumption around 5% each month, the cost of material would reduced. In addition, Genting theme park also installation of energy devices and minimum boiler process to reduce heat and air pollution. Furthermore, Genting corporate has planning and development various conservation programmed in the future. These programmed could brought advantage on reduce resource waste and simultaneously obtain margin profit in Genting corporate. (Nre, 2009)

3.0 Economic element of the macro environment that are currently impacting Theme Park industry

Theme park industry is currently being impact by the economic elements of the macro environment such as currency exchange rate and unemployment rate.

3.1 Exchange rate

The exchange rate affects the oversea tourists coming to their country. In U.K, their British pound exchange rate cost higher than other countries, which makes the tourists unable to afford the expenses to a tour in U.K. A lower British pound exchange rate makes the tourists able to afford the expenses for park experience. A reasonable exchange rate among both countries like U.K and Malaysia, Euro countries and Malaysia will effect on the buying power of the tourists, so the tourist will pay a visit to the park. The currency exchange rate’s policy either limited by government or followed the global economy trend will positively or negatively affects the tourists’ attendance.

(viewed 20th december2009, )

3.2 Unemployment rate

The unemployment rate is one of the major factors that are influencing the theme park industry’s attendance. Unemployment rate in local and oversea will bring different effects to the theme park’s attendance, either fewer tourists with more local visitors or vice versa. (http://www.anderson.ucla.edu/documents/areas/ctr/ccp/ThemeParkAttendance%28b&w%29.pdf) The revenue the people earn will spend part of it with families going to theme park for leisure time to enjoy during the weekend. If the unemployment rate getting higher in the countries, those people normally will not spending their money in the theme park and they will aim for the theme park promotion period for cheaper ticket.

4.0 Customer element of the micro environment that are currently impacting Genting Theme Park

Customer is the person, company,orother entity which buys goods and services produced by another person, company, or other entity. So, customers are playing a very important role in market. Genting Highland Theme Park the first mission is “to be responsive to the changing demands of our customers and excel in providing quality products and services.”

(viewed 2009/12/05 http://www.gentingmalaysia.com/annualreports/2008/rwb2008_missioncontents.pdf)

4.1 The Age and Stage In The Life Cycle

The age and stage in the life cycle concept will impact upon the Genting Theme Park. They come from different group status, such as children, youngsters, adult and elderly customers. This is because consumers are from different group of age stage they will impact Genting to build or create new games to service the consumers when traveling at Genting Threme Park. Genting Theme Park will serve their customers with different age with different game either in indoor or outdoor. Such as the customers from children and teenager the indoor games such as Malaysia’s first 4D Motion Master Theater to give the education movie for them. Because adult customers they will aspire stimulate entertainment and new creative game, Genting Theme Park will build the game in outdoor such as Flying Coaster is the first in Asia. Family life cycle from customers also will impact to Genting Theme Park. In the end of the year holiday season parent will bring their children go to travel therefore family relationship between parent and children when travel at Genting Theme Park. (Philip Kotler and Kelvin Lane Keller, 2009)

4.2 Consumer Consumption Concept

The consumer’s consumption concept changed impacting the Genting Theme Park. Nowadays each customers had basic education and they consider consumption concept not only focus on buying products, that they know their rights and also consist service consumption, therefore customers would spend more money consume on services in entertainment. As service entertainment industry corporate, Genting provide Theme Park either indoor or outdoor to satisfied demand of customers. Customers can enjoy these exciting game simultaneously that improved family relationship between parents and children. Customers consider ticket price of Genting Theme Park was worth to consume, they could going and playing these entertainment facilities with a whole day. But how when the consumers think that what Genting Theme Park provide is not worthy?

5.0 Competitor Element of the Micro Environment That Are Currently Impacting Genting Theme Park

Competitor means a business that provides similar products or services. The presence of competitors in an industry drives down the price of goods and services because consumers have more alternatives from which to choose if the price of a particular good or service is too high. For Genting Theme Park, it also facing different competitor since they joined in this industry.

5.1 Threat of intense segment rivalry

In a business field, the competitiveness between corporate will become very strong if it already contains numerous, strong competitor. In Malaysia, Genting Theme park is not only the one numerous and strong theme park, there still have many different theme park that have the competitiveness to compete with Genting. The competition like frequent price wars, advertising battles and promotion battle between Genting Theme Park and other themes park, all these lead Genting have to constantly compare its marketing strategies, products, prices and promotion with other competitors. Otherwise, this will make it expensive to compete. This happen more frequently especially in the holiday period.

5.2 Threats of High Entrants and Low Exits

In a business field, competitiveness is high when the entry barriers are higher than exit barriers. Firm enter during good times but find it hard to leave during bad time. As the result, this will leads to chronic overcapacity and depressed earnings for all. In this last 10 years, the new entry of other theme park in Malaysia is more than the exit entry. Many firms join and stay in this industry as long as they can get profit from this industry but if they cannot, as long as they keep continued presence, this will cause dampens profit for everyone. In directly, this lead Genting Theme Park has to dealing with even more competitors in order to keep survived in this business field.

5.3 Threat of Substitute Products

A segment is unattractive when there are actual or potential substitutes of the product. If technology advances or competition increases in these substitute industries, prices and profits in the segment are likely to fall. For example, electronic games and theme park is categorized in the entertainment field. Nowadays, the introduced of electronic games like play station, PSP, and computer games becomes a common and necessary amusement tool by the world. People will visit Genting theme park because to have fun, and so that same with playing electronic games-all is about fun. With the introduced of the electronic games, this success attracted the major target of customer of Genting Theme Park, like teenagers. Virtually, this creates a competition between of electronic game business field and Genting Themes Park which in the same business field— entertainment.

6.0 Conclusion

Marketers do not make decision about target market and marketing mix variables in a vacuum. Research and study should be applied in order to further understanding the market. This will help marketer in making the business plan and business decision

Front desk job of any hotel is very important from hotel sales point of view. Marketing and sales department is called revenue generator. Front desk job is part of the marketing department so it’s directly linked with revenue generation activities of a hotel. An employee working as front desk employee is having direct interaction with the guests. So it becomes very important for that employee to have all the chief characteristics of a good salesperson. A good sales person can convert first time guest in to repeat business guest by make him or happy and achieve customer satisfaction. This is the hospitality and customer demand only that can be kept in mind while handling customers at front desk that will bring customer satisfaction. Desired hospitality and less cumbersome process of check in and checkout will bring customer satisfaction. Working as a Front office manager or staff, first of all he or she should consider the available resources of the hotel concerned which need to be focused to the materialization of the business.

Good salesmanship is all about selling own product with acceptance of the customers. Whatever product one have, a good salesperson will sale that product and make feel to the customers that this is the right product he/she was looking for. This is simply quality of a sales person that he or she will find out the budget of a customer while conversation and offer the product that give within the budget feel to the customer. While conversation it is the quality of a salesperson to explain the facilities of the product to the customer that will again give feel of the right product customer was looking for. ( Abbott, P and Lewry, S (1999))

Customer relationship management is new concept in the field of any business. So it is the quality of a good salesmanship that helps in effective implementation and management of customer relationship in the hotel organization. In this competitive world getting new business, is a big challenge, so hotel organization believes in repeated business from the same clientele. With the help of knowledge and smartness in work of a salesperson-customer relationship is possible. These days it is being managed by ecommerce so knowledge of ecommerce to the front desk employee can be added quality of a good salesmanship and it will bring the business from existing clientele.

If an organization utilizes the available resources properly, Implementation of yield management will make major changes in the hotel. It will bring maximum market shares of the city concerned. Guest generally always looks for the comfortable stay and the luxury facilities for their money. It is the quality that always speaks better than any other advertisement. So if front desk employee gives proper feedback to the hotel, hotel can maintains the quality towards the tariff and the interiors which will bring the maximum revenue within a short period. So it is the benefits of the good salesmanship. So as conclusion author would like to say that good salesmanship is very important while performing duty of front office department of hotel industry because it helps hotel not only to get good business but maintaining relationship with customers and feedback to the hotel for up gradation of its quality of product and services as well.

Q.1 (2) Explain, with examples what selling techniques you might use when checking in a guest.

Overall selling technique depends upon salesmanship and kind of guest but in general a front desk person has to apply his or her selling skills keeping in mind normal procedure of check in. Selling techniques for checking guest is nothing but a quality of good salesperson. A salesperson should be very friendly and caring to the guest so that customer will be satisfied. Sales person should use up sell technique first while explaining price of the available rooms, followed by prestigious pricing and cut rate pricing. Along with this salesperson should explain how brilliant the facilities are within the room to justify the price of the room.

There may be a case that same room can be sold at different price. It is the duty of a good salesperson to find out the level of desire of the customer for the product he or she is asking for and charge price accordingly. During heavy demand of the accommodation it totally depends upon front desk employee-salesperson to maximize the yield of accommodation by selling the same product at different prices as per the customer profile and need. Being a good salesman a front office employee can suggest various pricing techniques-top down pricing, prestigious pricing, cut rate pricing etc, to the hotel to maximize its yield. So it is the quality of a salesperson to identify and recognize the level of demand and ability of a customer to pay for the same accommodation and fixed the price accordingly. (Abbott, P and Lewry, S (1999))

For example if there is arrival of guest first of all front desk person should handle the guest with friendly approach, asking for the kind of room he/she is looking for then explain the kind of room available with its pricing. First of all salesperson should try to sell the room at higher price than depending upon the negotiation skill of the salesperson and the budget of customer price can be prestigious or if required and supported by the market sentiment it can be cut rate price be fixed. After this negotiation skill guest should be registered and room should be assigned promptly. As per the situation if needed guest will be assisted in completing registration process. Then there will be verification of method of payment to be made by the guest-whether cheque, cash, card or payment by company etc. and then guest will be escorted to the room

Q.2. Discuss the type of check in system that you would expect to see at the turner Hotel.

Hotel Turner is a big chain of Hotel with 297 rooms hotel located in Central London. It is part of a well reputed group of hotels with 12 hotels running successfully in London and other major European cities. 42% of its clientele is corporate. Only 8% and 14% amount to walk-ins and leisure guests respectively. For this type of hotel, front office system should enable reception staff to make sure of keeping record of all bookings, position of accommodations, detailed about guests and amount billed and received as well. Hotel Turner would also require a system that should provide way to communicate with all travel agents and activity operators linked to the online reservation system.

Hospitality management systems are the applications/ modules that smoothens a hospitality business. From the room service system in a restaurant, to online reservation and an easy and fast check in procedure, it enables efficient communication and management of operation, eventually growing business and revenue. (www.wikianswers.com)

Features that Hotel Turner should possessed are includes:

Date wise arrival and departure reports.

Details of reservation and Guest ledger which should contains notes on special activities etc.

Feature should make sure the availability of printers to print the guest cards to provide to guest.

Provision to arrange different room to the guest.

There should be a perfect system to integrate the bill of different department like-restaurants, spa, gift shop, etc.

While check out all the possible payment option should offer to the guest so that inconvenience could be avoided.

Hotel Turner should have a system that can be efficiently used for online reservation system. This type of software package is essential as per the hotel’s cancellation and Guarantee policy.

Q.3how would the check in procedures differ when dealing with?
(a) A guest with a reservation

Usually guest check in procedure for reserved guest and chance guest is same except for slight variations. Check in procedures for a guest with a reservation will be as follows:

Receive the guest with a smile, and greet according to the time.

Check if he/she is holding reservation

Get the guest registration card and fill it up with all the necessary and required details of the guest.

Fill up the key and the welcome card

If the guest is a foreigner, get the C form and fill it up.

Allot the accommodation

Fill the arrival register

Preparation of information slips and then the same has to be sent to the different departments like telephones, room service and housekeeping etc.

Open guest folio

In case of VIP,etc. inform all the departments

Pre-registration also involves room and rate assignment and creation of guest folio apart from producing registration card.

There are many steps of registration process, because its little differs from hotel to hotel but mainly these are the six steps common to all the hotels:

Course of action that is to be done before registration.

Formality of making registration record.

Offering the room.

Then payment options could offer and fixed as per the convenience of the guest.

Once above has been done then room key can be given.

(b) A “chance” guest

In the case when guest is a chance guest the process of check in would almost be same except some cases. Like as guest is a chance guest so there will be no earlier reservation done for the guest so in this case first of all as process front desk person should check for availability of rooms and there will be efforts to create room for him or her. Rest of the process like fill up the key and allotting the accommodation escorting till the room will be similar. There may be a case that in case of a chance guest a front desk employee has to utilize his or her negotiation skill for the price of the room as per the level of need of the room by the guest. This is the skill of the employee to materialize the opportunities then and there. So overall the difference in check in procedures for a guest with a reservation and a chance guest is not much- the only thing is role of a front desk person becomes very important because while negotiation and first interaction a materialization of an opportunity can happen.

aˆ¦
Q.4. Explain the necessity of overbooking and its legal implications in relation to Turner Hotel.

The term overbooking is concerned with a situation which shows booking of the room have done excessively than the actual available room with the hotel. In general hotel does this because of reaching 100% occupancies. Hotel books over rooms than the available one with historic information and trend which includes unexpected cancellation. It is the synonyms of over commitment and oversold.

“No show has been a major cause of concern for the hotels all over the world. It amounts to major loss of revenue. However, no-shows and the early departures of the guests still continue to cost hotel money. Although reservation guarantee through the credit cards compensates hotels for only one night’s stay in the case of a no-show, but the hotel still needs to recover for a loss of revenue incase that no-show guest had a multiple-night reservation”. (http://www.entrepreneur.com/tradejournals)

Because of this panorama of no-shows and early departures, the hotel turner must unavoidably engage in some level of overbooking to help ensure that those potentially unsold rooms are filled. As we all know, hoteliers who occasionally overbook might have to walk guests once hotel is full. (http://www.entrepreneur.com/tradejournals)

Overbooking is very important element of the yield management. Generally hotels overbook to create backup of cancellations and no-shows. It is a kind of compensating the unexpected loss of the hotel. “For this very reason, it is mandatory to forecast cancellations and no-shows. Inefficient overbooking generally results in unsold and unutilized inventory (rooms) while on the other hand excessive overbooking results in penalty cost which includes both the financial and prospective loss of the future revenue from the same customer and others due to customer dissatisfaction and the subsequent bad word of mouth. The optimal level of overbooking is where the anticipated cost of overbooking for the next unit to be sold is equal to the expected marginal revenue from that unit.” (http://www.decisioncraft.com/dmdirect/revenue_management.htm)

While the hotel industry attempts to portray overbooking as an economic necessity and legitimizes the process by attempts to provide guests with alternative accommodations, the hotels have failed to address the true effect and implicit costs association with the practice. Primarily because it is left to the individual state authority’s to regulate the industry. (http://legaldefinition.us)

As far as Turner Hotel is concerned from the view point of overbooking, it is advisable not to go for overbooking because there will be breach of contract between hotel and its guests. But from the view point of business and maximizing revenue, it the only way to proceed little aggressively to achieve 100% occupancy. This is because after advance booking there is chances of cancellation of reservation as well, even if payment has been made in advance hotel organization has to bear loss for the foregone opportunities in case of booking not done. So keeping in mind these things and profit maximization it can be done equal to the normal trend of cancellation. Hotel Turner must find a room for everyone who has a reservation and shows up on time to save themselves from any legal complications.

Q.5 a) Explain the benefits to a hotel of accepting group bookings?

Group booking is simply acceptance of bulk business. In group bookings both the parties-customers as well as hotel can be benefitted. Customer gets benefit of low rates of the rooms due to the bulk booking and on the other hand hotel gets bulk business at a time so even at a less room cost per person hotel welcomes this kind of deal to get instant business and achieves its 100% occupancies.

A group reservation is for a block of rooms in a hotel. The block of rooms can be for a convention, a meeting, a special event, a tour group (as in present case of hotel turner), or various other reasons. A group reservation can be as small as 5 rooms to thousand rooms depending on the size of the hotel. Usually every hotel has different norms and parameters for considering a booking as group booking, which generally depends on the number of rooms booked. By booking rooms in large quantities, the group receives a lower rate. Hotel is benefitted in this as they get business in bulk and their occupancy percentage increases giving them a competitive edge over their competitors. Group booking also makes the reservation process easy and hassle free for both; the guest as well as the front office associates. Usually when a group reservation is made a code is generated which is specific to that group and each reservation should include this code. To ensure that reservations get coded to the proper group and that correct rates are offered, the person taking the reservation should always inquire if the guest is part of that particular group.

Bulk booking is beneficial to the hotel that is similar to any other business organization where organization gets benefits of bulk business. It is the deal that gives instant cash but per head cost becomes cheaper for the customer and organization both. But from organization point of view it is the instant cash that attracts bulk business and so to the hotel organizations.

Other benefit of bulk booking is that there will be less chances of cancellation. In case of individual business if there is cancellation of the booking it is completely loss to the hotel organization. Buta chance of this kind of loss due to cancellation is very less because of concrete plan of the entire group. In group bookings even if one or two persons are not coming there will be almost no impact to the business because of the compact deal for the entire group-this may depends upon case to case, bulk booking is definitely good for the hotel organization.

Q.5 b) what factors should the turner Hotel Front Office manager consider when deciding whether to accept the reservation request from Excelsior Tours?

Group revenue management is evolving quickly. Revenue managers typically set guidelines for size and rate objectives based upon projected demand for higher – valued transient demand. These criterions should be regularly reviewed and revised in hotel Turner. Even if a group request falls outside the preset parameters of the hotel, managers should still evaluate the request. (http://tutor2u.net/economics/revision-notes/a2-micro-price-discrimination.html)

The basic objective of revenue management is to maximize yields. Acceptance of group bookings would be a great contribution towards achieving the basic objective of revenue management. So first of all Front office Manager of turner hotel should consider the objective of maximizing revenue of the hotel so keeping in mind this objective he or she should accept the offered group bookings.

While deciding whether to accept the reservation request of 40 double occupancy rooms for 3 nights 4 days from Excelsior Tours, Hotel Turner should look into the room rate, which is currently GBP 300 on single occupancy.

Among the major advances in Revenue Management technology is the incorporation of demand price- responsiveness for any property at any time period and for any market segment, including group. Other than the group being considered, front office manager must consider that this hotel might only have transient demand for these three days. Assuming that even if the forecasted demand shows that hotel can pick up 145 transient rooms each day at an average rate of GBP 320, which would give the 95% occupancy. Considering these assumed factors we can plot a line that shows incremental contribution at any given price point. From this hypothetical analysis, one can see that there will be break even (no profit no loss situation) with the group at a GBP 230 rate, and that one could generate an incremental contribution. This approach says all about the factors of accepting a group at a requested rate.

Some more information is required to decide whether group booking should be accepted or not? This information is present occupancy level of the hotel. This information would have very helpful in deciding the acceptance of the deal.

BIBLIOGRAPHY

Abbott, P and lewry ,S (2002). Front Office Procedure, Social Skill, Yield and Management ,2nd edition , Burlington; Elsevier

Hotel Front Office Management By James A. Bardi

Hotel Management and Operations by Michael J. O’Fallon, Denney G. Rutherford,

International Encyclopedia of Hospitality Management by Abraham Pizam

Robert. J, (1993), Marketing for the Hospitality Industry,kent,hodder& Stoughton ltd.

The Cornell School of Hotel Administration Handbook of Applied Hospitality Strategy by Cathy A. Enz, Sage 2010

Verginis, S. and c. wood R. (2002) Accommodation management perspective for the international hotel industry , London (U.K) ;Thomas

Yeomand, I and ingold,A (1997) Yield Management Strategies for the service industries,great Britain.

http://tutor2u.net/economics/revision-notes/a2-micro-price-discrimination.html) accessed on 27/11/2010

http://www.entrepreneur.com/tradejournals) accessed on 02/01/2011

www.wikianswers.com)accessed on 2/01/2011

HOUSE KEEPING Question Part B
Question No. (1) Role, duties and importance of housekeeping department.

Housekeeping department is the most important part of any hotel. Housekeeping is responsible for maintaining the cleanliness, maintenance and the up keeping of all the rooms and the common areas in a hotel. No one wants to live in a hotel which is dirty hence this function has great importance for generating business. Since the hotel industry is highly competitive hence excellent service and cleanliness has an ever lasting impact on the guests and determines whether they will come again. Housekeeping aims to keep the hotel clean and comfortable so that the guests keep coming back again and again. M.N.Ahmed (2005)

A hotel guest spends about one third of his stay in the room. The design and layout of the room and the furniture in the room is very important in comfortable stay and a good impression. Cleanliness of the room, linen, room supplies, comfortable bedding etc. are the main functions of the department. Besides the room housekeeping also has to look after the other area like bathrooms and toilets, stairways, common rooms, floral arrangements, laundries and dry cleaning, maintaining gardens, hotel walls and boundaries and other public areas. Medlik & Ingram (1980)

The layout of the housekeeping department varies from hotel to hotel and it depends on the size and physical space. It also depends on the anticipated business. The largest workforce of the hotel belongs to the housekeeping department. The housekeeping department can have the following staff depending on the size of hotel, executive housekeeper, assistant housekeeper, uniform room supervisor, uniform room attendants, helpers, linen room supervisor, linen room attendant, floor supervisor, public area supervisor,

Executive Housekeepers

Assistant Housekeepers

Linen keeper

Florist

Floor Housekeepers

Assistants

Linen maids

House porters

Valets

Room maids

Staff maids

Cleaners

www.city-of-hotels.com

Executive Housekeeper manages the entire housekeeping function of a hotel. This is a very responsible position. An executive housekeeper has to cooperate with other department heads hence; the person must have a good rapport within the organization and must possess good organizing skills. An executive housekeeper must have an eye for detail and be committed to the various training and development needs of the people working under him. [www.city-of-hotels.com]

The various duties that an executive housekeeper needs to perform are:

Responsible for cleanliness and appearance of hotel rooms and common areas in the hotel. Neat and clean appearance of employees, facilities, corridors, linen, shopping area, gardens and the area outside of the hotels.

Hiring and training of the employees. Maintaining discipline among the employees and motivating the employees so that they perform their job well. Having a good knowledge of labour relations so that the employees do not overburden with work as per the regulations. Proper training of the employees so that they follow all the guidelines and give the best service to the customers.

Executive housekeeper is also responsible for developing the standard procedures which has to be followed in the hotel. A standard procedure helps to prevent confusion, maintain discipline among the employees and also helps in performing all the activities smoothly without error.

Maintaining good relations with other departments. Housekeeping is dependent on other departments like sales to anticipate future demand, purchasing to get the equipment etc. Hence a good relation with other department heads will help in smooth functioning and prevent last minute surprises.

Executive housekeeper is responsible for personally inspecting the entire facility. This inspection has to be on a regular basis withoutfailure. Surprise inspections are also required to keep things in order. He/she is responsible for inspecting all the areas, linen in the hotel. He/she has to pay special attention for maintaining a pest free and hygienic environment.

Executive housekeeper has to work closely with the General Manager and update him on the day to day activities in the hotel and also on the plans for any special events in the hotel.

Executive housekeeper also has to keep a track of the lost and found items in the hotel. These items can be normal to very expensive. These have to safely kept and also handed over to the owner in the best condition.

Executive housekeeper is responsible for preparation of the annual housekeeping budget and then submits it to the general manager for approval.

Executive housekeepers also need to manage the suppliers of the housekeeping items and recommend the good suppliers to the purchasing department.

Apart from the above the executive housekeeper also needs to check the incoming orders, inventory of the items, quickly attend to complaints, having the preventive maintenance of all the housekeeping items, and always motivating his employees to give their best. [Hotel house Keeping training manual, Sudhir Andrews, TMH 2005 ]

Question No. (2)
Summary of the main requirements for- Honeymooners, Retired Couples, Disabled customers, Families, Business travellers.

The needs of the guests in a hotel are very individualistic. They vary from each other. The hotels classify the guests in various segments so as to cater to their specific needs. The hotel must have a good knowledge about each segment and their special needs. This knowledge will help them to have the facilities in place to cater to the needs as and when they arise.

Honeymooners – This segment consist of the couples aged between 25 to 39 years. This segment has their own unique needs. This segment focuses more on the comfort solutions that can be enjoyed by them during their stay with the hotel. [www.tourism.australia.com]. the people in this segment look out for an unforgettable experience. Apart from the stay they also look forward to visiting places and sightseeing. The hotel has to specially plan for this segment like royal room accommodation arrangement, flower decoration, romantic dinner night, access to special recreational facilities, sightseeing city tours and most importantly; taking care that they have minimum disturbance from the housekeeping staffs during their stay. Apart for all these any special needs also have to be catered so that the people have a nice stay. (www.honeymooninindia.com. )

Retired Couples – This segment consist of couples whose age is about 60 years. This segment has specific needs which vary widely from other segments. Although this segment has a good spending power still it is price sensible and wants value for money. They want a good place to stay with peaceful environment. They do not want nightlife instead prefer to have a walk in the morning and evening. The hotel has to take care of their food recreation requirements. They might need special food due to health reasons. They also might need a doctor during their stay. The housekeeping also has to regularly check with them so as to cater to their needs. The facilities also have to be arranged in a different way so that the usage is not a problem.

Disabled customers – This segment has very special needs. They need lot of care and attention. The hotel needs to understand their disability and give respect and great attention to their needs. They might need a wheelchair and a doctor. These customers generally come with family member or helper so the need to the assistant also has to be taken care. The devices like television, washing and toilet equipments might have to adjust so that the customers can use them without any difficulty.

Families – value for money and affordability are the needs of this segment. The customers in this segment consist of husband, wife and kids. The customer looks for good and healthy meal for them and their kids. Recreation facilities for the kids like games and various sports for kids.

Business Travellers – The business travellers represent a large chunk of customers for the hotel industry. This segment includes people who travel on business representing commercial, industrial and governmental organizations. In case of business travellers the peak business demand is experienced from Monday to Friday nights. The reasons for visiting is for conducting business with a local company or for recruiting, training, management meetings, and stopping over between destinations. This segment needs special food, beverage and desserts, nightlife and good facility for meetings and conferences. The hotel also needs to have facilities for video conferencing, Wi-Fi facilities with good bandwidth.

Female business travellers – The needs of female business travellers are similar to the male business travellers. The special need of this segment is around safety. The ladies might have to travel at night. The hotel has to provide a cab which takes them to their destination safely. The hotel staffs also need to have a good idea about the city so that they can guide the lady if she wants to see places. The hotel can also look at having lady staff for catering to these customers. It is generally observed that the housekeeping staffs are common for the hotel rooms. By keeping lady housekeeping staffs for female customers would help in proper differentiation of the hotel. This would help to showcase that the hotel tries to cater to even the smallest of the details.

Question No. (3). Suggest some strategies which the hotel might use to identify the needs and wants of its customers.

Today’s business environment is very turbulent, aggressive and highly competitive. The hospitality industry is characteristized by intense competition, constant changes, and a relatively high incidence of failure. These factors not only decide the firm’s profitability but also decide its survival. There is intense competition in terms of quality, price and market share, and environmental factors. To increase the market share the hotels need additional expenditure. At times the business might need to look at mergers. The hotels have been forced to relook at their existing managerial techniques, assumptions and philosophies. The hotels are not only looking at innovative sales and marketing strategies but are also looking at improving the operational efficiency. During the growth stage the hotels might do well without investing properly in service quality and marketing. The second stage is the maturity stage where the hotels have to deal with intense competitive environment. In this stage the survival requires to deal with intense competition, acquiring customers and to become more effective and efficient. ‘In addition to the increasing concentration, there seems to be a trend towards upgrading quality and maintaining market share, while divesting out of problematic properties. In 1979, Holiday Inns and Sheraton, both among the leaders of the industry, were less concerned with growth and more concerned with improving the quality of properties’. (Wyckoff and Sasser, 1981). This proves that the hotels have to develop innovative strategies to gain market share and redefine competition in terms of brand image and quality.

The few things that a hotel can do to identify the needs and wants of its customers are objective setting, environmental analysis, organizational analysis, assessment, GAP analysis, Strategic choice and implementation. The hotel apart from improving the operational efficiency and marketing also needs to understand the needs and wants of its customers so that it is easier to get these customers.

The hotel experience for a customer starts right from the moment he attempts to do the booking for the stay. The booking can be online or physically at the hotel. In case of online booking there are few important things that must be considered. All the details related to the hotel must be available on the website so that the customer can plan better. The transaction must be safe and quick. The customer must also be acknowledged on confirmation of booking. Every hotel must have CRM enabled s

Kenya Airways was formed as a result of the downfall of the East African Airways Corporation, which was in cooperation owned by the governments of Kenya, Uganda and Tanzania, which together constituted the East African Community (EAC), formed in 1967 as an economic union. As a consequence of the subside of the EAC in 1977 (due to ideological differences: Kenya pursued in essence a capitalist system, Tanzania a socialist system, and Uganda, under Idi Amin, had no economic direction at all; there were also the difficulties of the other governments doing business with Idi Amin, East African Airways Corporation was placed in receivership and its operations were liquidated on January 31, 1977. Following the breakup of the EAC, the Kenyan government embarked on plans to set up its own airline. On January 22, 1977, Kenya Airways was incorporated as a wholly owned government corporation and the flag carrier of the Republic of Kenya.

First chapter is about company background, mission, vision, goals, general strategies and SWOT analysis of the company. Second chapter is about organization structure, leadership and human resources management and rewards. Third chapter talks about management changes and how the transformation of Kenya Airways from a not viable state owned enterprise (SOE) to a very flourishing, lucrative African airline and its relationship with KLM-Royal Dutch Airlines. First, it analyzes the circumstances leading to the creation of Kenya Airways and then discusses the managerial and financial problems it encountered from the period it was set up until it was privatized. It also attempts to explain why and how Kenya Airways has been able to use privatization to avert liquidation. In this regard, it explores the benefits of privatization for the airline and the country as a whole and highlights lessons learned from this experience for the privatization process and strategies in Africa.

EAC East African Community
IFC International Financial Corporation
IOSA IATA Operational Safety Audit
HR Human Resources
HRM Human Resources Management
JKIA Jomo Kenyatta International Airport
KLM Koninklijke Luchtvaart Maatschappij (Royal Dutch Airlines)
Kes Kenyan Shillings

KQ Kenya Airways (IATA airline code)

SSA Sub Sahara Africa
SAA South African Airways
SOE State Owned Enterprises
UK United Kingdom
I NTRODUCTION
CHAPTOR ONE: COMPANY BACKGROUND

In 1977 Kenya Airways is established in February following the breakup of the East African Community and subsequent dissolution of the jointly-owned East African Airways. In 1986, the Government makes the first move towards privatization. The document for the first time, spells out the Government’s intention to divest from corporations which could be run better by the private sector. In 1991 a new board is appointed at Kenya Airways in April with a mandate to commercialize and prepare the airline for privatization. The year 1992 a policy paper on Public Enterprise Reform and Privatization setting out policy objectives is issued in July. The policy paper gives high priority to the privatization of Kenya Airways, where by year 1993/94, commercialization process produces the first profits. An IFC information memorandum is sent to 154 airlines in search of a ‘strategic partner’ culminating in the eventual selection of KLM. This takes place in May 1995. An Initial Public Offer for shares is issued in March in 1996. Year 1997 delivery of the first of four new Boeing 737-300 aircraft dedicated to domestic and African regional services. Year 1999 Voted African Airline of the Year by African Aviation Magazine (UK based publication). Voted Best Regional Airline in Eastern Africa by Travel News (a Kenyan publication). In 2000 named African Airline of the Year for the second year running by African Aviation Magazine. Voted runner-up in the award for the Most Respected Company in East Africa by business leaders surveyed by PricewaterhouseCoopers and Nation Media Group. Year 2003 Kenya Airways acquires 49% shareholding in Precision Air, a Tanzanian carrier. In the year 2003 voted Best User of Information Technology in Kenya by the Computer Society of Kenya .Named African Airline of the Year for third year running by African Aviation Magazine. Year 2004 Kenya Airways scoops triple win as Best Domestic Airline 2003, Best Regional Airline 2002 and 2003 and Best In-flight Magazine 2002 and 2003 by Travel News and Lifestyle Magazine. Delivery of the first state-of-the-art Boeing 777 as part of the airline’s fleet expansion and the 6th Boeing 767 aircraft. In the year 2005 October 2005 – KQ achieves IOSA (IATA Operational Safety Audit) becoming the 1st carrier in sub-Saharan to get this rigorous safety certification.Kenya Airways voted East Africa ‘s Most Respected Company. Kenya Airways launches new route to Lubumbashi, Democratic Republic of Congo in February. Delivery of a second new Boeing 777-200ER in April. Kenya Airways launches new route to Istanbul, Turkey in June. Delivery of a third new Boeing 777-200ER in June. Kenya Airways launches new route to Bamako, Mali and Dakar, Senegal in July, (Kenya airways website)

Year 2006 Kenya Airways voted East Africa’s Most Respected Company for the second year running. Kenya Airways wins the prestigious African Aviation Award awarded by the African Aviation Magazine in March. In January Kenya Airways opened a new ticketing office at the village market in Nairobi

Kenya Airways Limited (Kenya Airways) is the flag carrier airline of Kenya engaged in the operation of international and domestic air services for the carriage of passengers, freight and mail, and the provision of ancillary services. The company principal place of business is Nairobi. In addition to this, the company also provides ground handling services to other airlines and the handling of import and export cargo. As of 31, March 2010, the company operates domestic flights and flies to 44 destinations in Africa, Middle East, Asia and Europe. It had 27 aircrafts in operation, either owned or on operating leases during 2009-2010. The company is headquartered in Nairobi, Kenya. This comprehensive SWOT profile of Kenya Airways Limited provides you an in-depth strategic analysis of the company’s businesses and operations. The profile has been compiled by Global Data to bring to you a clear and an unbiased view of the company’s key strengths and weaknesses and the potential opportunities and threats. The profile helps you formulate strategies that augment your business by enabling you to understand your partners, customers and competitors better.

VISION

To consistently be a Safe & Profitable Airline that Guarantees World Class Service: The Pride of Africa.

MISSION

To maximize stakeholder value by constantly provides the highest level of customer satisfaction, upholding the highest level of safety and security and maximizing employee satisfaction whilst being committed to corporate and social responsibility.

CORE VALUES, PURPOSE AND GOALS

To uphold the highest safety standards, to satisfy our customers and to continuously improve the Quality of our Products and Services.

To contribute to the sustainable development of Africa

To achieve world class standards in service delivery, product quality and operational performance, to be the Airline of choice in Africa, to develop JKIA as a premier hub in Africa and to pursue a business model that will deliver consistent level of profitability. In summary our actions, our behavior and our attitude at work will be driven by safety, customer satisfaction and quality considerations.

GENERA STRATEGY

An important consistent trend about commercial aviation is that it is a fiercely competitive and highly volatile industry, in which fortunes shift continuously. As the drive towards a free, converging and global market gathers momentum, competition within the airline industry is expected to intensify. Increasingly open skies are likely to impact on yields, and extraordinary profits will increasingly be an exception.

Given this potentially turbulent environment, the key to survival in the industry lies in whether an airline is able to clearly anticipate the patterns of change coming, the underlying forces driving these changes, and above all the ability to align its strategies to respond to a changing business and aero-political environment.

With this in mind, Kenya Airways is committed to investing in the development of world-class information gathering capacity, analysis and interpretation so as to facilitate faster and correct business decision-making. This way, Kenya Airways hopes to enhance ability for rapid response to opportunities, threats and challenges in the market place.

In concrete terms, in the next 10 to 20 years, Kenya Airways aims to grow into a decidedly dominant carrier in Africa with notable presence in Asia, Europe and the Americas, while operating a modern fleet of 30 to 40 aircraft. Kenya Airways intends to forge strong partnerships and be a respected member of the global airline community.

SWOT ANALYSIS

It is the study of strengths, weaknesses, opportunities, and threats that are facing an organization (Mullins, 2007).

1.5.1 Strengths

These are positive aspects or distinctive attributes or competencies which provide a significant market advantage or upon which the organization can build for example, through the pursuit of diversification. These are characteristics or the organization such as present market position, size, structure, managerial expertise, physical and financial resources, staffing, image or reputation.KQ strengths lie in the following facts;

KQ is among Africa’s largest and strongest airlines. Dominant in east and central Africa.

Strong Balance Sheet (Sep 30 2008) shows Kes 10bn in cash/liquid assets. Approx 20/- per share.

National airline thus an advantage in getting airport slots in bilateral agreements.

Better management vs government controlled firms.

KQ can survive 2 years of losses while smaller airlines will collapse.

Majority of the revenue is in US$, GBP and Euros.

Aircraft have high fixed costs but deployment is flexible.

Weaknesses

These are those negative aspects or deficiencies in the present competencies or resources of the organization, which limits its effectiveness of the organization.

Single hub Jomo Kenyatta International Airport (JKIA) thus exposure to local politics – see effect on KQ during Nov 08-Mar 09 election period.

Inefficient hub (JKIA) is controlled by the GoK) leading to inefficiencies.

Reliance on government controlled entities for Jet A1 fuel. KQ faces problems sourcing fuel in various countries including Kenya, Ghana, DRC, Zambia, etc.

Over-reliance on Europe for tourists. Credit crunch in Europe will hurt KQ.

Inflexible (high fixed-cost) aircraft.

Higher cost airline with larger, unionized and inflexible contingent of staff.

Opportunities

These are favorable conditions and usually arise from the nature of changes in the external environments. For KQ, these include

Africa, especially Sub-Saharan Africa (SSA), has the lowest airline penetration.

Inefficient government owned/controlled carriers (e.g. Air Tanzania, Air Zimbabwe, SAA) benefits KQ.

Increasing African trade with the Mid-East, Far East, China and India will increase passenger and cargo numbers.

Huge potential in tourism from the increasingly wealthier Chinese, Indians and Middle Easterners.

KQ has become the ‘local’ or ‘regional’ airline for many SSA countries e.g. Lusaka-Lilongwe, Lagos-Abidjan-Monrovia, Accra-Freetown, etc.

Global Financial Crisis will enable 787 deliveries to be made sooner than expected.

Threats

According to Mullins (2007) refers to unfavorable situations that arise from external developments likely to endanger the operations and effectiveness of the organizations. This may include change in legislations, introduction of radically new product by competitors, political or economic unrest, changing social condition and actions of political pressure.

Ethiopian Airlines has a stronger pan-African presence and better global reach vs KQ. And it keeps growing.

Airlines privatizing – or recently privatized – all over Africa including Air Tanzania, Air Uganda, Air Malawi, etc.

New and expanding Low-Cost Airlines (Jetlink, Fly540)

Low purchasing power in SSA means air travel is a luxury for 99% of the population thus limited growth in the next 5 years.

High and volatile oil (fuel) prices.

Low barriers to entry. Anyone can buy a plane (see Fly540, Air Uganda). Both in Kenya and in SSA

CHAPTER TWO: ORGANIZATION STRUCTURE

According to (Mullins, 2007), Organization Structure is the division of work among members of the organization, and the co – ordination of their activities so they are directed towards the goals and objectives of the organization. It is a relationship among positions in the organization and among members of the organization. It makes possible the application of process of management and creates a framework of order and command through which the activities of the organization can be planned, organized, directed, and controlled. It defines tasks and responsibilities, work role and relationships, and channels of communication.

However according to Rollinson (2008), Organization structure is taken to be the fundamental and relatively unchanging features of an organization which are officially sanctioned by those who control it and consist of the way activities and component parts are grouped, controlled and coordinated in order to achieve specific aims and outcomes.

Kenya airways organization structure comprises of seven departments each headed by an executive director reporting to the Group Managing Director. The departments are:

Finance

Information Systems

Commercial

Technical

Human Resources and Administration

Flight Operations

Ground Handling

ORGANIZATION CHART

.According to Mullins (2007), if span of control is too narrow, this may present a problem of coordination and consistency in decision making, and hinder effective communication across the organization structure. Morale and initiative of subordinates may suffer as a result of tool close a level of supervision. Narrow span of control increase administrative costs and can lead to additional levels of authority in the organization creating an unnecessarily long chain of command. Due to that narrower spans of control and more level authority result in a taller hierarchical structure..

However if span of control is too wide, it may become difficult to supervise subordinates effectively. There may be lack of time to carry all activities properly. Planning and development, training, inspection and control may suffer I particular, leading to poor job performance, also may limit opportunity to promotion. Hence wider span of control and fewer level of authority result in a flat Hierarchical structure.

Span control of the organization structure of Kenya airways is broader structure. Therefore the organization structure of Kenya airways is a flat hierarch structure.

Recommendation to the company is that the structure should adapt the matrix one, because matrix structure is a combination of functional departments which provide a stable for specialized activities and a permanent location for member off staff and units that integrate various activities of different function departments on a project team, product and program. However matrix organization establishes a grid or matrix with a two-way flow of authority and responsibility.

LEADERSHIP AND MANAGEMENT

The leadership is crucial in success of any company. It is the responsibility of leaders in an organization to ensure that employees are focused towards the goals of the organization. Good leadership is measured by the ability to enable or lead the employees to attain the firm’s goals at the right time. A leader, should apart from leading the team, be able to solve conflicts, delegate and empower the employees in the organization (Rollinson 2008).

According to Miller et el (pg 285) in Mullins, (2007), by definition there are important distinction between the two concepts of management and leadership. Management involves using human, equipment and information resources to achieve various objectives. On the other hand, leadership focuses on getting things done through others. Thus you manage things (budgets, procedures and so on), but you lead people.

The kind of leadership denoted at Kenya Airways is formal leadership. This is a kind of leadership which is administered by having a defined position within the organization structure. This is a scenario where power comes from the highest authority .For instance in this company the highest authority is the C .E .O who ensures that all the other managers run their various departments with an ultimate goal of accomplishing the general company’s goal. The various managers ensure that the employees in their department are adept and competent to disseminate the quality kind of services that the company preaches. It is also the managers at departmental level that ensure that employees are empowered in terms of new skills and responsibilities.

Through their managers, Kenya Airways empowers its employees by creating a culture of empowerment through training them. After the employees are trained they acquire skills which enable them to develop their personal skills. Thus the employees are empowered which leads to them being motivated intrinsically and thus perform their job to the required satisfaction. In essence it is due to adept leadership skills at Kenya Airways that the employees are influenced persuaded and taught the various skills they manifest in their operations. With this kind of leadership, the employees are left motivated and work tireless towards the goals of the company. At Kenya Airways power is distributed through a logical and rational structure. This kind of power or authority distribution stresses on the responsibility within the organization rather that concentrating on one central figure (Mullins, 2002).

ORGANIZATION COMMUNICATION AND INFORMATION SYSTEM

Due to rapid change of technology Kenya airways tried to combat with those changes. Kenya Airways has invested in an Enterprise Resource Planning (ERP) system in order to ensure computerization of all HR processes. The key processes already implemented include recruitment, training, leave applications and rebate ticket processing through electronic means.

The Learning Management module of this system contains a learning calendar signifying the various programs available. It allows staff to sight and enroll for programs online and facilitates the management of training records. Automation of our recruitment process has translated into a shift from hard copy paper applications to online applications for all vacant positions through the Company website.

The rapid growth and expansion of Kenya Airways and the attendant huge investment in fleet and new routes has made it imperative to equip the Network Planning and Airline Strategy Department with an appropriate Information System to enable it develop, maintain and quickly update an optimal network strategy. The airline has acquired and implemented a network planning system solution from Lufthansa Systems. This solution is capable of addressing fleet planning and assignments, frequency adjustments, capacity rationalization, schedule synchronization, the development of new destinations, alliances and partnerships which are all important aspects in developing an optimal network strategy. The solution, which is referred

to as the Network Planning Tools, has already started strengthening and improving the processes and procedures in the Department by optimizing the key aspects of network planning through analysis and evaluation to improve situation awareness and facilitate decision making.

Kenya airways have increased the mobility of staff working at the airside or in the aircraft on ground at JKIA through the installation of a wireless network on the airside at JKIA which enables them to access KQ systems from their laptops. This has led to an increase in their productivity. The same wireless network is used by our baggage teams which handle baggage scanning on the airside. This has led to more accurate baggage reconciliation and ensures that the right bags go to the right destinations. Another wireless network has been installed in the maintenance hangar which provides engineering staff with the same conveniences when they are working on aircraft in the hangar, (Annual Report 2009)

CHAPTOR THREE: HUMAN RESOURCES MANAGEMENT AND REWARD

Kenya Airways is truly the Pride of Africa. Our global network now reaches 47 destinations, 39 of which are spread across the Africa continent. Our 26 modern aircraft, including four Boeing 777 series, makes us one the youngest fleets in Africa.

Kenya Airways opens a world of opportunity across the continent helping create sustainable development by connecting its people and businesses within Africa and around the world.

At Kenya Airways we believe our greatest asset is our people. When you join Kenya Airways we provide you with training and all the systems and tools you require to perform. And best of all, we provide an environment that enables each and every one of our employees to achieve their full potential.

BRIEF DESCRIPTION

To provide active leadership in partnership with functional teams on HR issues and development of performance based reward and compensation strategies.

Detailed Description

To ensure manpower planning exercise is in line with the business goals of the company

To undertake succession planning for key roles in the organization

Develop a framework to analyze the organization structure, identify ways to make it more effective, evaluate people and jobs to match the right individuals to the right roles, define career progressions both from individual roles and across related job groups.

Ensure that the job grading system reflects the organizational structure and that it has the flexibility to accommodate the subtleties of all jobs across the organization.

Review and implement the performance management system throughout the company.

To design proactive retention strategies, ensure minimal attrition rates for top talent

Develop and implement reward programs that reflect the business strategy and work culture or the organisation.

Participate in selected salary surveys and analyse the data to establish whether grading and remuneration systems are competitive.

Monitor the effectiveness of the compensation guidelines and procedures while recommending revisions as well as new, cost-effective plans.

Develop procedures and reports to monitor compensation throughout the year in all locations in order to maintain internal equity in compensation structures throughout the company.

Lead the implementation of the People Strategy and other major change, within functional areas.

Contribute to the development of the business area’s agenda and strategy and contribute to the leadership of the business area

Challenge and provoke business leaders on how to engage their teams; address resulting people issues and build people capabilities effectively

Initiate, design and execute integrated people solutions that address key functional issues, bringing together the resources within the business areas and HR teams in order to achieve timely resolution of people issues

Core Competencies

Excellent negotiation, communication and interpersonal skills

Excellent organizational, planning and analytical skills

Organizational diagnosis

Influencing (Coaching & Facilitation)

Transformational change management

Commercial management

Delivery management

Human Resources Competencies

Resourcing

Employee Relations

Reward and performance management

Leadership and talent development

Employee communications

Organization development and culture management

CORPORATE SOCIAL RESPONSIBILITY

Apart from dealing with airline transportation but cooperate social responsibility remain unchanged, focusing on the following areas

Kenya airways continue to work with local communities to provide access to sustainable, safe and adequate water supply in arid and semi arid rural community across Africa. However some classrooms, fence, desks and computers are contributed by Kenya airways to different school across Africa in the campaign of promoting education infrastructure.

Moreover Kenya airways involved in the project of plant a future, by planting trees in the operation of promoting environment sustainability.

CHAPTOR FOUR: MANAGEMENT OF CHANGE

According to Hayes (2007), is about modifying or transforming organizations in order to maintain or improve their effectiveness. Managers are responsible for ensuring that the organization (or the part of the organization they manage) performs effectively.

Kenya airways were with very little equipment, also without adequate technical expertise, competent employees, effective management and had no virtually financial base. Its initial problems, however was compounded by persistent unsounded management policies and strategy.

A congregation of other managerial tribulations also contributed to the airline’s decline in service provision. From its inauguration in 1977 until 1995,the airline had ten different government-appointed chief executives. Therefore, each successive holder of the office had insufficient time

to develop and implement effective strategies.

Moreover, because the board of directors consisted mainly of political appointees with no specific experience either in managing a business, in general, or an airline in particular, the airline lacked clear strategic direction. Further, although the airline had the largest market share of East and Central Africa regional routes and a fair share of international routes from Nairobi (e.g., Nairobi-London, Nairobi-Rome, Nairobi-Dubai), the airline was losing customers, particularly in the tourist segment, mainly due to substandard flight services and persistent late arrival and departure times.

By 1991, Kenya Airways was unable to pay its debts, which had run into millions of U.S. dollars. Hence, the government continually had to bail the company out of bankruptcy by paying its foreign loans (which the government had guaranteed). In fact, by 1992, the airline was technically bankrupt, and, hence, the government was searching for a way to improve Kenya Airways’ messy balance sheet and bring it to profitability. This was achieved by commercialization and privatization.

Accordingly, the government set up Committee to investigate the causes of the airline’s problems and to recommend solutions. The Committee subsequently recommended commercialization of the airline, making it clear that Kenya Airways could not become a viable enterprise unless its state ownership was ended. Commercialization here involved restructuring of an organization so as to introduce accountability and economic efficiency into its operations. With respect to Kenya Airways, the aim was to make the company more responsive to its external environment and to expose it to competitive pressures in the industry

The government accepted the recommendations of the committee and subsequently dismissed the airline’s entire board of directors, together with the chief executive, and appointed a new board. The new board’s mandate was to overhaul the airline’s management, create efficient and profitable services, commercialize the airline, and prepare it for eventual privatization (Tiller, 1997).

In order to turn the company around, the new board came to the conclusion that the airline could only become a commercial success if its route and fare structure, fleet acquisition decisions, hiring and promotion practices, and financial systems were based on normal commercial principles, free from political interference. Consequently, in February 1992, the board commissioned Speedwing Consulting (a British firm that was an independent arm of British Airways and had been involved in the privatization of British Airways) to make recommendations on ways and means to improve Kenya Airways’ performance. Speedwing Consulting reported that,

(a)The airline’s management skills, organization, and culture were not suited to commercial, profit-oriented enterprise;

(b) Operational performance was neither measured nor controlled;

(c) Financial control was very weak, with late and inaccurate reporting and poor accountability; (d) Existing computer systems did not support the business adequately;

(e) Marketing and revenue generation were major areas of weakness;

(f) Customer service standards were low, with limited measurement and control of quality;

(g) Productivity was not routinely measured and appeared to be low;

(h) In every function (particularly at middle and lower levels), there existed untapped sources of expertise and enthusiasm.

i) Technical skills were often poorly utilized (Tiller, 1997).

Thus, Speedwing Consulting recommended radical changes in management, personnel, and governance structure; an overhaul of information technology; a new approach to marketing; and a comprehensive program to improve customer service. It singled out the urgent need to adopt a profit-oriented culture. Moreover, it advised the appointment of a chief executive with airline experience, able to effectively implement the recommendations, and a finance director with experience in the airline industry to introduce new financial control and accountability systems. The new leader was also expected to develop proper budgetary planning, control, and reporting systems. It also recommended the appointment of a marketing director with experience in the airline industry to carry out a major overhaul of sales and marketing activities (Yaw, 2005).

CONCLUSION

It vestiges to be seen how Kenya Airways will achieve in the future, known that its memorable performance in the recent past. One aspect that will be vital for assessing its future performance is the political environment in Kenya and the countries in which the airline operates. The political crisis and conflicts in Central Africa create solemn threats to the airline’s growth. More important, the continued success of the airline will depend on the government’s ability to curb the soaring numbers of crimes and criminal activities in the country and tackle terrorist activities such as the 2003 hotel bombing in Mombassa. Failure to do so will have devastating consequences on the Kenyan tourist industry and, consequently, on the growth of

Kenya Airways (Yaw, 2005)

Kenya airways continue to focus on profitable expansion of their network through a combination of direct access and alliances with other carriers. Sustainable improvement in yield will be pursued through a combination of a new revenue management system and better discipline. Management will also place emphasi

INTRODUCTION:

The modern era of business is much complicated than the previous. Any organisation must seek to understand the nature of its competitive environment if it is to be successful in achieving its objectives and in establishing appropriate strategies. For this the organisation and those leading them need to improve their understanding of the nature of the organisational structure, the importance of technology and the role they play in the organisation for improving the performance. This report presents the overall analysis of the tourism industry, achieving, maintaining leadership and implications of the changing business environment with respect to TUI case study.

TUI is one among the largest European tourist operator in the world which is the leading international leisure travel which operates approximately in 180 countries worldwide and serves more than 30 million customers in over 24 source markets. Starting its business as Preussag which was operating in smelting and mining industry, profitability was decreasing in that sector so it gave an exit to that sector and entered tourism industry, a radical decision to change. It started acquiring other tourist operators included its acquisition of major European tourist operators by late 1990s. In 2001, all the brands and firms were put under the ‘World of TUI’. Till 2005 and after that TUI has taken the first position in tourism industry and has worldwide operations. TUI’s strategy was to have its label in almost all parts of the world. Their main objective is to have a strong brand portfolio in all parts of the world and constantly raising the performance of the international tourism industry.

BUSINESS ENVIRONMENTAL ANALYSIS AT TUI:

“Strategic management includes understanding the strategic position of an organisation, strategic choices for the future and managing strategy in action” (Johnson et al, 2008). Strategic position identifies the impact of external environment, strategic capability, expectation and influence of stakeholders on strategy. The business environment can be divided into (refer appendix 11.2): Through the DEEPLIST (Demographic, Economic, Ecologic, Political, Legal, Informational, Social and Technologic) analysis, from a macro level, examining factors within the remote environment and show how they influence tourism industry. Moreover, Porter’s Five Forces, including the bargaining power of suppliers and buyers, potential threats from domestic substitutes and overseas entrants, and the intensity of rivalry, will focus on the structural determinants of the intensity of competition that affect the tourism industry from a micro level (Stubbs, 2000).

Business change due to technology is the transformation of business activities which is not regular and not done all the time. According to Anderson et al (2001) change is catalysed by number of forces that trigger it and these forces start off in the organisation or the marketplace. Change in business is required if core processes, organisation structures, rules and procedures are not efficient enough to achieve the desired goal. Following are the change drivers which triggers change in tourism industry. The Key drivers to be considered here are Political, Technology and Socio-culture/Demographics (refer appendix 11.2).

PESTEL/DEEPLIST ANALYSIS
Demographics:

Social issues can create great problems to business and this can result in business change in the tourism industry. One aspect of social change consists of changes in people’s attitudes, values and beliefs when they visit different places. Other aspects of social change are in the field of culture, social structure and of the patterns of behaviour. Social problems can be anything affecting the nature, social institutions, and community of people or group of individuals. The business might be aiming at developmental change and benefit of the society but it can be taken in negative sense by some group of people who believe the business is eliminating the existing way of living. Thus this may affect the TUI’s operations and market share as customers are the main asset for company’s growth.

Political Issues:

In general form the case study, international tourist arrivals recorded across the world was more than 800 million which was due to the growing annual pace 10 years back in the tourism industry was quoted according to World Tourism Organisation (WTO) in which policy issues are accounted.

Terrorism: We can know that there was 5.5 per cent growth rate and 10 per cent growth in 2004 seemed to be like the tourism industry had taken a boom indicated the rise which was followed by insecurity created after the various terrorist attacks in Newyork (2001), Djerba (2002), Bali (2003) and Madrid (2004) during 2001-2003.

London bomb attacks in July 2005 really did not affect the arrivals in UK. In fact there was a 10 per cent increase on tourist arrivals in the Northern Europe and UK. Usually terrorist attacks at destinations have an adverse effect on tourism industry as people tend not to visit those places out of fear and insecurity.

Security: In 2005 TUI was considered to be the biggest tour operator in Europe. The wholesaler tour offers packaged or ‘all-inclusive’ prepaid and pre planned holidays to its customers which offered security and the value for the vacationer.

Taxation: if any common Value added tax is introduced for every booking made through internet/mobile. Poor people will be affected greatly compared to rich in the society. This may reduce internet transactions.

Social Issues:

Traumatic effect on international travel from 2000 to 2004 is due to global economic downturn and the health crisis, such as the outbreak of SARS in 2003.

We can also consider the Demography, social values which lead to social problems, cultural features wherein people’s attitude for the tour can change accordingly.

Economic Issues:

Financial: The WTO forecasted that the 1 billion arrivals spot would be passed in 2010 and by 2020 there would be 1.6 billion international tourist arrivals, which seems to be the expansion of tourism shaping the future of the world economy and activity.

Exchange Rate: Typically, an income per capita of source countries and the relative price of exported tourist services as the main determinants of demand. Demand has generally been found to be highly income elastic, consistent with international tourism being a luxury good and highly responsive to changes in the relative price of tourist services when measured as the real exchange rate relative to the destination country.

Competition: All the package tours offered through travel agents such as Thomas Cook, My Travel Group, Rewe Touristik and First Choice Holidays are the main competitors for TUI even though in 2005 it took a major market share in European tourism market.

Lodging, food, beverage, leisure, tourist demand spending, channels of distribution leads to weakness and strengths of economic sectors. Tourism is the major trend in economy (Manuel et al, 1999).

Ecological /Environmental Issues:

Carbon is the main affluent which is taken into account when tourism industry is concerned about package tours offered to customers which is composed of air transportation. Even oxides of nitrogen due to the combustion of fuel, packing plastic bags for food preservation by travel industry are hazardous to environment.

Climate change is one of the biggest challenges as a tourism sector. According to the UN World Tourism Organization, travel and tourism contributes around 5% of total global carbon emissions. Along with many other industries, the leisure travel sector is feeling the effects of climate change, and in the future we can see changes in the quality of tourist seasons, an increase in the intensity of tropical storms and rainfall, and more severe droughts (www.tuitravelplc.com, 2009).

Tourism is known as a ‘thirsty industry’, due to the amount of water required for tourism activities such as golf courses, swimming pools and washing of linen. Water scarcity is likely to be an issue for the business in the medium to long-term (www.tuitravelplc.com, 2009). Climatic conditions may influence the decisions of customers effectively in tourism industry (Example change in season or heavy rain pour).

However, tourism sector also has a significant positive impact on the people who live and work in the destinations. Tourism is one of the world’s largest industries, contributing around 11% to global GDP. It is particularly important for developing economies, and is a top five export in 80% of developing countries.

2.1.6 Technological Issues:

In March 2005 TUI launched the virtual tour operator Touropa.com, in Germany, selling travel tours not only online, but also through travel agencies, television and call centres which bolstered TUI’s place as the European head in the direct sale of travel products with a turnover of a‚¬2.6 billion in 2005.

Online transactions and booking include broadband service and internet technology in tourism industry.

2.1.7 Legal Issues:

Issue of online trademark protection, spawning, mouse-trapping spoofing, cyber-squatting, domain name fraud, as well as spyware. Internet Marketing in Hotel industry and Tourism lets us to know that loss of control of a company’s trademark can occur (for example when a third party bids on a trademarked term on search engines), not only may lead to loss in revenues, but also brand confusion by the consumer.

For Example: My Travel Group was under reorganization after several bad years, including 2005 when revenue decreased by 19 per cent, under claims of accounting and mis management.

TUI is active in the shipping business which includes logistics and containers, during shipping legal factors are to be considered with many country’s legal scenarios which have to be met with high terms. Import and export duty are also considered.

International trading is the other part of TUI wherein most of the activities were taken into account other than shipping where in legal terms will have a greater impact on the tourism industry.

PORTER’S FIVE FORCES ANALYSIS:

PORTER’S five forces diagram explains how forces like buyer power and threat of new entry creates competitive rivalry and ultimately leads to business change for the current tourism industry based on the development in the market and detail analysis is carried out in the appendix 11.3 (Porter, 1985).

INTERNAL ANALYSIS OF RESOURCES AND CAPABILITIES AT TUI:

Internal analysis is done to explore the contribution of resources in achieving profits and to analyse how the internal resources of an organization helps in achieving sustainable competitive advantage. The importance of internal resources in adding value to TUI can be analysed using two approaches- the value chains the value system (refer appendix 11.4).

3.2 VALUE CHAIN ANALYSIS
3.2.1 Primary Activities
Inbound Logistics

Preussag, former TUI took more interest on acquisitions of many tour operators (Hapag-Llyod AG, TUI Deutschland, Thomas Cook etc) during early stages. This many acquisitions lead to the formation of TUI tour operator, which has become the first player in tourism industry in European market (refer appendix 11.4).

Operations

Quality and consistency are important attributes in travel and tourism industry for TUI. Thus retaining the brand, TUI transformed its operations by improving product quality and consistency for which people were ready to take the packages. It also enjoyed significant economies of scale.

Outbound Logistics

Setting up different travel agencies across many countries with major presence in Germany, UK and Netherlands and Belgium. By 2005 there were 3500 travel agencies in 17 countries. Acquiring these helped TUI in expanding its boundaries and reaching the world. This helped in building an image over time in international context.

Service

Tourism industries have to ensure that it provides good quality service to consumers because using poor quality raw materials may have major affect on the operator market share. Providing good quality service is a case of social responsibility.

3.2.2 Support Activities
Procurement

Acquiring raw materials locally and importing consisted of inputs in TUI’s value chain. It also procured its inputs used in value chain from the resources it attained from acquisitions (refer appendix 11.4).

Technology Development

Technology includes the product and process development. It used its virtual tour operator Touraopa.com, where in travel tours are sold online and also through travel agents and call centres from Germany in tourism industry to dominate the market share of the world (Johnson et al, 2008).

Human Resource Management

TUI had 58,191 employees by the end of September 2005 across the group and has more than 180 destinations. It gives opportunity to develop, rewards and recognition, work experience and leadership ability within the group and of which some worked in logistics division, trading and sales operations as well. (www.tuitravelplc.com, 2009)

TUI’s Infrastructure

Preussag created TUI management structure was centralised in order to manage the airlines grouping the year 2002(www.tuitravelplc.com, 2009). Resources for managing operations in different countries have lead TUI to have a better infrastructure.

3.3 HUMAN RESOURCES:

TUI deployed its workforce from the expert operational management skills from different operators which were acquired from the firm during mergers and acquisition. Also since its management structure was centralised during 2002; it has human resources from the international context who will be framing its strategy according to the requirements and it is said to have implement resource based view.

PORTER’S GENERIC STRATEGIES:

The firm’s profitability is the primary determinant of the industry and its position within the industry is an important secondary determinant. Above average profitability is the fundamental basis for attaining sustainable competitive advantage. The basic types of competitive advantage are low cost or differentiation. Along with types of advantage and scope of activities for which firm needs to attain them lead to three generic strategies to pull off above average performance in an industry like tourism.

COST LEADERSHIP STRATEGY:

TUI’s ability to offer lower price to powerful buyers. This usually targets a broad market. Firm sells its products either at average industry price to achieve profits further than rivals or below the average industry prices to put on market share (refer appendix 11.6). Low cost firm like TUI finds and exploits all sources of cost advantage like efficient distribution channels involved in the process. TUI has attained overall cost leadership, as it can command prices or near industry average. Hence it is considered to be above average performer in its tourism industry (refer appendix 11.5).

DIFFERENTIATION STRATEGY:

The value added by the exceptionality of the product may allow the firm to change the best price for it. Large buyers have less power to negotiate because of few close alternatives. Customers of TUI get attached to differentiating attributes, reducing threat of substitutes. Corporate reputation is for innovation and quality of service in the case of TUI (refer appendix 11.6).

FOCUS STRATEGY:

It basically aims at narrow competitive range within an industry. The focuser services only a segment or group. Two variants are considered in this: cost focus a firm seeks a cost advantage in its target segment, where as in differentiation focus a firm seeks differentiation in its target partition (refer appendix 11.5). The target segments must either have buyers with strange needs or else the production and delivery system that best serves the target segment must differ from that of other industry segments (refer appendix 11.6).

STRATEGIES TO ACHIEVE COMPETITIVE ADVANTAGE AT TUI

TUI is considered to be more bureaucratic, which is more rigid and it stabilises the decision making progression (Barron et al, 1994). An intrusive firm have more in force and inhibits the choice of more active strategies (Peters, 1992).

Service revolution can happen when industry focuses on people, Optimize technology/processes and empower employees, making service transparent, by delivering invisible excellence, focus on elegant simplicity, adapt and evolve, requirement to achieve best of all which may include society, environment and economy(Silvester et al, 2008).

Well defined centralised process development and structured innovations, framework, with number of fixed points which include high cost innovations whereas most of the functional departments are decentralised and customer feedback helps TUI to obtain competitive advantage(www.tuitravelplc.com, 2009).

Flexible process like running different service for their customer which is usually much diversified in its development of operational units. Whereas in distributed functional departments of TUI primarily were unstructured, emergent process focuses on continuous improvements. This budget may be often taken into operating expenses (Heracleous et al , 2005).

SWOT ANALYSIS:

TUI key issues in the business environment and its strategic capability can be analysed using a SWOT analysis. This will help in identifying the extent to which the current strength and weaknesses of TUI are relevant to and capable of dealing with the changes taking place in a business environment. The table in appendix 11.6 depicts a SWOT analysis of TUI.

GROWTH SHARE OF TUI – A BCG MATRIX ANALYSIS

The BCG matrix analysis will be helpful in determining the relationship between the relative share of the product portfolio TUI and its market growth. The key constitute of TUI’s product portfolio includes its tourism business and also its interests in hotels and shipping industry. Later TUI also expanded its portfolio by adding transportation between airport and hotel, provided local excursions, offered assistance for car rentals etc (www.tuitravelplc.com, 2009). In the tourism sector TUI has to choose whether to concentrate more on its mainstream or the international best segment. However the 2007 annual report of TUI showed that the worldwide trend towards the tourism industry is increasing. The appendix 11.7 depicts a BCG Matrix analysis wherein TUI is marked as Stars (High market share, High market growth).

LIMITATIONS OF TOOLS USED FOR ANALYSIS:

Limitations of PESTEL Analysis

Some corporate strategists comment that since future is uncertain, there is no point in prediction. Therefore while applying PESTEL, factors like economical conditions, lifestyle of the people, etc. should be assumed as static. Also for analysing the strategic position of TUI, a company large by its size and operations and spread in different parts of the world, PESTEL alone cannot help because it only analyses the external environment where as analysing strategic position requires both external and internal environment analysis. Thus, it can be used only in support of other tools.

Limitations of Porters Five Force Analysis

Five Force Analysis demands that all other factors should be static whereas the competitive environment in practice is constantly changing. Also customers and the external environment are given same importance than any other aspect of environment in the analysis whereas customers should be the prime aspect of strategy development for companies like TUI who are selling their products to end customers (shipping, tourism and hotels). Also, a broad analysis of all the five forces makes it very difficult in compound industries with multiple interrelations, product groups, by-products and segments.

Limitations of Market Segment Analysis

Customer needs may vary than predicted about the particular market especially when the target market is large. Another major disadvantage of Market segment analysis is that changes in market conditions will lead to potential threats.

Limitations of Value Chain Analysis

The key actors in the value chain are sometimes affected by certain rules that are set by others like the government. So value chain analysis is influenced by information on these rules. It is difficult for companies like TUI whose business is diversified in different parts of the world for giving specific and meaningful information like fares, quotations, offers, quality standards and environmental standards imposed by tourism places.

Sustainable Supply chain management (SSCM): the main challenge is to apply SSCM. Quality is the most important part of supplier selection by tour operations. Communication between relationship of quality and sustainability to increase market share awareness is the factor evaluating SSCM (Font et al, 2006).

Limitations of Generic strategies:

Risks in generic strategies, inclusion of low-cost strategy. For example if other firms (like My Travel) may also lower the costs due to advancement in technology. Thus, as a result narrow focus groups should be targeted to gain significant market share.

Risks dealt with differentiation strategy are imitation of competitors and change in customer’s tastes. Specialized products and core competency protect against substitutes.

Limitations of SWOT Analysis

The output of SWOT analysis may contain a big list in which some may be more important and some may be less important. Also it is not suitable for more dynamic and insightful analysis.

Limitations of BCG Matrix Analysis

In BCG Matrix analysis it is very difficult to measure market growth rates and relative market shares. Also economical and political factors vary from country to country and BCG Matrix analysis doesn’t take this into consideration.

CONCLUSION

The analysis reveals that TUI is in a very strong position in the tourism industry. TUI’s current strategic position reveals that it has achieved long term growth from developing markets, acquisitions and resources from developed markets. Its expertise gained from many mergers and acquisition from different tourism groups and gradual development of technology in Europe. Years of experience are its greatest resource of sustainable competitive advantage by which it is able to tackle the fearlessness in a turbulent economy. However it also faces some issues like attitude of customer’s behaviour may change due to economic crisis or personal wish which impacts on its operational productivity as every industry faces in the competitive world. In short, TUI has made its strategic choices very efficiently leading to its success. The options are laid and needs to be decided upon which can help TUI in achieving a niche position in the tourism industry (refer appendix 11.1).

Budget airlines have become a trend in aviation industry over a few decades all over the world, however, as a Asian cosmopolitan city- Hong Kong hasn’t have one yet, therefore a research need to be set up to explore on its feasibility. This project proposal aims to assist to accomplish a research by developing a plan beforehand. Firstly, the background of budget airlines and problem statement would be stated out, then a literature review would be carried out in order to find out its research value, after that, the research

aim and objectives could be set up as a research goal, last but not least, research method and project plan could be discussed on how, where and when to carry out this research.

2. Background/ problem statement:

Before Deregulation:

In the United State before 1978, all airline passenger services were regulated and controlled by the Civil Aeronautics Board (CAB). Only 10 trunk airlines were authorized to issue a “grandfather” certificate by CAB at that time. Underneath this certificate, all major scheduled airlines’ route structures and fares were controlled and ruled. For an airline’s route structure, stops and intermediate stops were specified and passengers carrying between stops were limited, a new promoted route needed to go through a lengthy procedure and hearings, even a stoppage of a route service was still needed the CAB’s approval. For an airline’s fare, all fare prices were strictly controlled by the CAB. (John & Clinton, 1984)

After Deregulation:

After passing the Airline Deregulation Act of 1978, CAB no longer had an absolute authority on an airline’s entry, exit, routes and fares. Airlines were given freedom on setting up their own fares within a wide range, route applicant would be submitted and passed easily without any restriction when it performed air transportation properly. (John & Clinton, 1984)

First Successful

budget airline:

In 1967, the first successful budget airline was born and started its business in Texas in America, it named itself as Southwest Airlines (SWA). The company began when the US market was deregulated. Its successful model had been influencing a lot of other following budget airlines. It provides low-cost, high rate of short haul flying and this made itself maintain a most profitable airline through years. (Peter, David, Gillen, Otto and Hans, 2005)

What is Budget Airline?

“A low-cost carrier or low-cost airline (also known as a no-frills, discount or budget carrier or airline) is an airline that generally has lower fares and fewer comforts. To make up for revenue lost in decreased ticket prices, the airline may charge for extras like food, priority boarding, seat allocating, and baggage etc.”

Today’s budget airline:

Nowadays, the value for money is a great emphasis placed by travelers. They are willing to buy cheaper tickets to trade off some other aspect such as leg room during flight. However, to determine whether a budget airline can survive and drive down the cost, it mainly depends on government and major airport’s will to open up the skies. Therefore, different areas are in different cases, but every consumer loves a low price ticket and somehow the developments are very similar in nature and continue in varied ways.

As in US, budget airlines have dominated the market as travelers are price driven; in Europe, more local airports are needed to be opened up to let more budget airlines to fly in; in Asia, there are more opportunities to expand the whole market but the path is not easy, since the market is still dominated by the national flag carriers. Besides, they are also supported by the cargo business. (Scott Lee, 2004)

Problems Statement:

As we can see, budget airlines’ business not only become a trend over the globe, but also bring out more travelers and so to extend the economy of our own country or region, however, there is no budget airline at all currently in Hong Kong, what are the reasons? Few years ago there was once a low cost carrier- Hong Kong Oasis airway which offered “long haul low fare” was bankrupted after 18 months of operation, why would that happen? An Malaysian budget airline- Air Asia already developed its third home base in Thailand, meanwhile, there still aren’t any budget airlines setting up in Hong Kong as a home base, why? What are the success factors for a budget airline to develop? Is there feasibility for a budget airline to set up and form a home base in Hong Kong?

3. Literature Review:

3.1.Business strategy of Budget Airline:

Markus (2005) once said “The business strategy of these low cost airlines to save costs is to offer

no frills, have fast turn-rounds, use only a single-type fleet of planes, and to fly mainly to cheap secondary airportsaˆ¦aˆ¦aˆ¦..They also save a huge amount of administration costs by only accepting credit card payments and thus reducing the paperwork to a minimum” (Markus, p.269, 2005)

In other word, they minimize their cost in management, aircraft maintenance, crew training, landing fee, parking fee, administration work, etc. Any additional cost, they will stay in the air ticket and let the passenger pay for it. This would rise out a question, would the passengers in Hong Kong be willing to pay for a low cost just to get to a destination or a high price to buy a good quality of service?

Budget airline is a trend?

Start from the next two years as announcing in late May, the Singapore airline would establish a subsidiary-a no frill, low cost airline, using wide body aircrafts to serve medium to long haul routes. According to the company after years of markets of extensive review and analysis, they have to admit that there is a large growing demand for low fare travel. The low fare airlines assist to stimulate the growing demand of travel. The company wants to launch this service to push its single-digit growth to a double-digit growth as this low fare market is growing hugely. (Govindasamy, 2011)

This has showed us which the low fare air travel market

is growing and even an Asian state-owned conventional airline want to join in to gain share, therefore there is lots of room for more new budget airlines to be set up and serve the demand.

Budget airline comparing with conventional airline over the globe:

Graham Dunn (2011) state in the airline magazine, “Data from four years of the Airline Business low-cost carrier and world airline ranking surveys shows that while the 10 largest network carriers were highly profitable in 2006 and 2007, seven lost money in 2008 and eight were in the red in 2009 at an operating level. Contrast this with the top 10 lost-cost carriers- only two lost money in 2009, three in 2008 and one apieve in 2007 and 2006.” In this case as we know, during the economic crisis between 2008 and 2009, we can see that the low cost carrier is on a steady growth and earn money, but the conventional airlines are greatly affected.

In fact, the magazine also shows that the budget airlines are growing at a double-digit development around the USA and Europe, and there are still more room for them to rise. In South East Asia, the larger low-cost carriers already expand beneath their home market and set up more home base in other country around the region as there has been a great demand for cheap air travel, such as Airasia has also set up a home base in Indonesia and Thailand beyond Malaysia. (Graham Dunn

,2011)

Therefore, even Hong Kong set up a budget airline, there are still lots of other competitors around the region, and can it survive?

The Background and Success of Air Asia and the Asia region:

Apparently in the 21st century, if the more preferable demography and economic trend persist, Asia would be well focused by the whole world, in other words, more people would be willing to travel in and out of Asia by plane for business and leisure. (Joseph, 2011)

Air Asia now is one of the largest low cost carriers in South East Asia. It used to be built up by the Malaysia government from 1993 and started its own operation as a flag conventional airline in 1996, however, within those five years, it was a “cracked airline” which only have two Boeing 747, 250 staffs, four destination and a debt of $11 million. But in 2001, it was bought by Tune air and turned it and re-launched as a low cost carrier, then it start to become a profitable business. In 2007, Air Asia X was set and launched as a low cost long haul carrier which flies to Europe and Australia. Currently, the whole Air Asia Group has owned 102 aircrafts, flies 150 routes and 68 destinations, it has been still continuing to expand its fleet and market share. In the past two year, it has already accomplished a Double-digit capacity growth. Certainly, there are some advantages that it already fully take, such as

low-price labor, a helpful economical hub at Kuala Lumpur. (Joseph, 2011)

In this case, are there any success factors we can learn from and use in Hong Kong?

The Background and failure of Oasis Hong Kong airway:

Oasis Hong Kong airline claimed to be the first long haul low cost airline based in Hong Kong, Reverend Raymond Lee led a starting capital of $100 million with several Hong Kong investors. It began its operation and launch to serve passengers from October 2006, but after 18 months of operation, it halted all operation and collapsed as financial liquidation. It used to own 4 Boeing 747 and flew two routes, and three destinations: Hong Kong, Vancouver and London. During the operation period of time, the price of jet fuel has jumped from $600 a tonne when Oasis started flying to a current level of around $1,137 a tonne. Besides, the company did not run as an short haul, no service model but provide a full service such as inflight meal and entertainment. (Robin, 2008)

In this case, a rise of jet fuel price can push a company to fall, are there any other critical threats which exist? Or the whole Hong Kong aviation environment is not suitable for an budget airline to exist?

Disadvantages and advantages of budget airlines:

For traveling with budget airline, there are also some disadvantages that you may want to take account for, such as you

may only have a limited meal with probably peanuts at all for the whole flight, you may not choose your own seat, they have less flexibility which you can’t cancel your flight or get a refund, any extra checked bags will be charged, they often land on remote airports with no bus connection and they are usually booked through internet. (Shewanda, 2011)

However, there are also some advantages you may want to consider, such as the fare with budget airline is relatively small which you can save the money for other things, they often fly to more locations and smaller cities that you may interest, and as money are saved, thus more travels will be encouraged and more people can afford it.

(Jennifer, 2011)

Therefore, when the Hong Kong customers compare the advantages and disadvantages of budget airlines, will they still choose budget airline? What is the low fare travel market like in Hong Kong?

Challenges and Background of the local dominant airline in Hong Kong:

The company began in 1946. It was found by two world-war 2 pilots. They first flew to carry passenger to Manila, Bangkok, Singapore and Shanghai. However in 1948, some of the shares was bought by a UK company, Butterfield & Swire (today known as the Swire Group) which took a 45% share. Therefore John Kidston Swire took the leadership work; Butterfield & Swire became wholly responsible for the management

of the airline. And then it has been expanding through time. In 1998, the Cathay City was built, and in 2006, the dragon air was bought to be involved in Cathay Pacific Group. Right now it owns 128 aircrafts and has ordered more than 100 aircrafts. Its route has covered more than 150 destinations in 41 countries. It ranks as the world’s 2nd most profitable airline by net profit and the 7th largest airline in the world by operating profit. Its staffs’ number is 19,850 worldwide. (From Cathay Pacific’s Website)

In this case, its customers do not only include leisure and business travelers but also the regional people. If a budget airline was being set up, this airline would be the biggest local competitor.

Potential low cost carrier that will be set in Hong Kong:

There will be two potential budget airlines setting up in Hong Kong- the Hong Kong express and the Jetstar subsidiary. The Hong Kong Express will transform to a low cost carrier in Jul-2012 or Aug-2012, operating under its new low-cost model to cities in mainland China, South Korea, Japan and Southeast Asia. As a Foreign budget airline- Jetstar is also looking forward to establishing a subsidiary in Hong Kong, it may try to co-operate with Hong Kong Airline. (CAPA, 2011)

This case has showed us that many companies are interested in developing a low cost carrier in Hong Kong, therefore in other words, there is

feasibility for Hong Kong to set up an low cost carrier.

4. Aim:

Through analyzing all the data collected to determine whether it is possible to set up an budget airline in Hong Kong or not.

5. Objectives:

To explore the background information and business model of budget airline

To explore the operation, cost structure, strategy of low cost carrier in Asia

To carry out a case study: the success story of Airasia and the failure story of Oasis

To set up a survey to ask about Hong Kong frequent flyer’s expectations on budget airline’s services

To calculate all operating cost and expense to run this business

To compare the price of flying with an existing conventional airline with a hypothetical budget airline to find out the feasibility

6. Research method:

For this research, I will use the inductive method approach, because my aim is explore the feasibility to set up an successful budget airline which could last for a long time in Hong Kong through observing variety of data such as budget airline business model, cost structure, government policy and so to analyze and find out the answers for it. And I will select the survey strategy for gaining Hong Kong people’s opinion of service they wish to add in without any additional cost for a budget airline service in order to calculate the operating cost of an hypothetical budget airline and so to set up the

best price of a fare to equalize the cost. Then I will pick the memo-method as my unique data collection method, and carry out the cross-sectional study as the data would give me the result. For data collection, I will use questionnaire and the interview.

6.1 Questionnaire

For the Questionnaire, I plan to interview 50 people, they are mostly business travelers and leisure travelers, I will approach them through my friends who are frequent flyers.

6.2 Interview:

For individual interview, I hope that I can make an appointment with some of the staffs who work as an airline accountant and inside the airport authority, and gain financial information of running an airline company.

7. Project Plan:

I would like to spend half a year to complete my project. Here is my work breakdown structure:

A brief history of Ryanair is set out to provide a background of submissions.

Ryanair is Europe’s largest low-fare airline and based in Ireland. This is a public listed company who are trade on Dublin, London and New York (NASDAQ) Stock Exchange stocks. It is committed to low cost airfares and introducing competition to the European flag airlines and air transport market growing alliance. It has the ability to provide passengers with the industry’s lowest fare is dependent to a large extent, the low cost and high efficiency of the airport.(RYANAIR LIMITED 2007)

Ryanair, started operations in 1985, launched 15 flights a day between turbine support and London Gatwick Airport Waterford. The beginning of the company’s commitment to providing low-fare air travel to the Irish public contrast, oligopoly pricing is provided in time for Aer Lingus and British Airways. Ryanair was the first European airline set up a special low fares and competition within the European short-haul routes. In the companies of first year, its 57 employees carried just over 5,000 passengers in this original route.

In 1986, Ryanair routes into Dublin-London, which was jointly owned by the two countries, the airlines, which Aer Lingus and British Airways. In Dublin, London route has been stalled about 1 million passengers each year from 1975 to 1985, when some of the features the highest air fare per kilometer in Europe. Before Ryanair to join this route, the normal flight between Dublin and London in 1985 was ? 209 return. Ryanair began service on May 23, 1986, to introduce the launch of the fare ? 94.99 return. In its second full year of operation, Ryanair has just 120 employees to carried more than 82,000 passengers on two routes.

In the next three years (1987-1989), the rapid expansion of Ryanair routes opening up many new Irish and British, and to improve its fleet. However, while customers continue to flock to Ryanair’s low fares, the cost does not control, and the company’s accumulated losses. By 1990, the company employs 350 people, operating 14 aircraft (4 different types), was carrying 600 000 passengers, but had managed to loss of ?20 million in just 4 years. These losses are mainly due to over expansion and the inability to strictly control costs, the deregulation of the market, and these new cost control is essential to the ability to provide low-cost services of the profits.

1994 also saw the acquisition of Ryanair’s first Boeing 737 aircraft used orders for six second-hand 737-200 series aircraft (130 seats) was purchased directly from Boeing. In the next three years to buy fifteen 737-200 aircraft were to make the fleet to twenty-one 737-200’s. In line with the expansion of the fleet, more new routes form Ryanair is to open up the Irish by the British, increase frequencies, providing a total of all the routes, an the ticket prices were reduced even further. As a result in 1995, the airline’s 10th anniversary, Ryanair has become the largest airline in Dublin-London routes, and they operate in each line on which it operated (in terms of traffic routes), total 2.25 million passengers per year and labor Now more than 600 people.

After 1997, the EU air transport deregulation, the airlines was free for the first time open up new routes to continental Europe. Service was launched in Stockholm from London Stansted and Oslo efficient secondary airports, as well as in Paris and Brussels from Dublin and efficient secondary airports. Similarly, Ryanair to enter these markets fare over 80%, respectively, lower than the most expensive week, and then by the flag carrier airline fares. Positive response and a large number of passengers low fares in these arrived in the European market for the first time. Ryanair was the first low-fare airlines to provide scheduled flights from Britain to Continental Europe and vice versa. 1997 also saw the Ryanair Holdings plc float in Dublin and New York (NASDAQ) stock exchange. At that time, the airline is the capital of IR?300 million in the infrared market value and more than 3 million visitors each year to bring its network of 18 routes.

Despite this success, Ryanair remains committed to lowering fares, increase service frequency, and to maximize the low-fare seats to the number of business and leisure travelers. Ryanair was a direct competition with a lot of Europe’s largest airlines, including British Airways, Scandinavian Airlines, Alitalia, Lufthansa, Sabena, Air France, Aer Lingus, but offer low fares unparalleled of The package, on-time flights, high frequency, and friendly in-flight service, Ryanair is continuing to be successful, winning increasing public and customer support.

In 1999, Ryanair announced an up to 45 new Boeing 737-800 series aircraft for the two billion U.S. dollars next major investment plans. This is the latest and most modern Boeing aircraft. The first five aircraft to be delivered to Ryanair in 1999, and five more scheduled for delivery each year thereafter. Ryanair is the lowest in Europe and is to provide the latest and most modern air fares on Europe. Ryanair announced in 1999, another record performance, operating 35 routes to 11 countries, the carrying almost of the nearly 600 million passengers. Ryanair’s customers to enjoy high-fare competition is the flag carrier airlines from Europe collected 300 million pounds worth of savings. At that time the company employs were more than 1,200 people.

Ryanair launched in early 2000, Europe’s biggest travel website at www.ryanair.com, which launched within 3 months has taken over 50,000 bookings per week, by offering low airfares which start from as little as ? 1 return taxes on Glasgow London plus tax and ?9 return plus taxes on Dublin-London route.In February 2000, Ryanair announced 10 new European routes for the summer of 2000, the service from London (Stansted) to Malmo in Sweden; Hamburg (Lubeck) in Germany; Verona (Brescia), Sardinia (Alghero), and Lamezia in Italy; Provence (Nimes), and Perpignan in France, and Shannon in Ireland. The airline has also introduced two new low fare services from Frankfurt (Hahn) Shannon in Ireland last summer, and to Glasgow (Prestwick) in Scotland.

So far in 2001, Ryanair has launched seven new routes in the UK and to increase the capacity on number of existing lines. In February of this year, Ryanair announced that its first mainland Charleroi in Brussels, the European base would initially be open from its seven destinations in the provision of services. Ryanair will build the airport in Ireland, the base has been the basis of the cost of more competitive and cost-oriented regulation of airport / facility. This year, Ryanair will offer 36 Boeing 737 aircraft fleet and will be about 9 million passengers. Unfortunately, only about 18% will come from the traffic in Ireland as in the regulation of the airport’s competitive cost and inefficient infrastructure.

It have be clear from the background that Ryanair’s rapid growth of routes and traffic will continue to focus on low-cost, high efficiency of the airport, in order to minimize costs and ensure that the airport’s rapid turnaround time and maximum efficiency of the aircraft. This is a major factor in Ryanair’s ability to guarantee the lowest fares in Europe.( RYANAIR LIMITED 2007)

2.Environmental and European airline industry analysis
2.1 External analysis – PESTLE

PESTLE analysis is a short form for political, economic, social, technological, environmental and legal (Channon, 1997). PESTLE analysis has provided a comprehensive detailed list, possibly affects successful or the defeat, especially strategy (Johnson and Scholes, 2007).

Political

Some countries grant preferential treatment to companies from their own country. From the case study also pointed out that ‘the French government attempted to protect Air France-KLM by forcing easyJet and Ryanair to move the staff they employ on French soil from British contracts to more expensive French ones’

Economic

Fuel prices, because they increase the problems caused a major airline industry, if they do not hedge they had to cut corners to save costs in other areas. All the airlines are working to reduce costs and increase their profit margin, they reduce the cost of the effort will have a negative affect on the pilots and staff because as they may have low wages of lack benefits that would otherwise have been there. There are problems, the market increasingly competitive, as in emerging and developing countries have more people hope that have more airlines, so in order to adapt to this, by reducing industry profits. With the current economic crisis may be the demand for flights in the fall, because we are in recession, layoffs and people therefore have less disposable income means that they cannot leave. This may be a favorable low-cost aviation industry for people who can still afford the holiday will be looking for cheaper alternatives.

Social-cultural

Passengers are now not only need the cheapest fares, they also need a comfortable chair, safety and never lose their luggage, and the best facilities and etc.

Technological

Technology has improved, which means that the industry is changing, becoming more environmentally friendly and efficient. More effective infrastructure of airports are means that many airports of the airlines can charge more fall from the sky.

Environmental

There are new laws that say that the airline industry has to be more environmentally friendly therefore the manufacturers, designers and airline companies have to combat this together in order to decrease carbon emissions and make the industry less harmful to the environment in order to comply with EU regulations.

Legal

The whole industry is very strict control laws, but also because they have to constantly adapt to new changes in law, i.e. not allowing the liquid on board. These contracts to the industry has their pilots did not seem to benefit the workers as it contributes to the company soon which may change soon and the company will have to adapt to this.

2.2 Internal analysis – five forces framework

Porter’s five forces is an important tool for analyzing the organizational structure of the process of strategic industries. It is used to understand the strategic business opportunities and threats should be consistent with the organization of the external environment (Dagmar Recklies, 2001).

Threat of entry

aˆ? Some barriers to entry:

aˆ? High capital investment

aˆ? limited availability of slots to make them more difficult to find the suitable airport.

aˆ? instant price wars if erode the existing LCC route.

aˆ? Need low-cost basis

aˆ? Flight Authorizations

In Europe, low-cost carriers were increase in 2006. Although expressed in the European airline industry is a large number of entrants and competitors, but as many as 50 have gone bankrupt, been taken over, missing or had never left the ground. Therefore, the threat of entry Ryanair face is media.

Threat of substitutes

aˆ? Customer are No brand loyalty

aˆ? No close customer relationships

aˆ? No switching costs to customers

aˆ? Other modes of transport, such as Eurostar, high-speed trains, Eurolines, ships, cars, etc.

Passengers will choose the train, because do not want to face the inconvenience and cost of checking baggage, spend more extra time in airport security line. The train is the only alternative of airline to the threat of an alternative airline of Ryanair is low.

Bargaining Power of Customers

aˆ? Customers are Price-sensitive

aˆ? Switch to another airline is relatively simple and does not involve high costs (internet, all airlines are online)

aˆ? Customer understand about the cost of providing services

aˆ? No loyalty

Although the customer’s complaints, they feel disturbed about Ryanair has been trying to sell them something of the aircraft. Although some passengers, they need comfortable seating, security will never lose their luggage, the best such facilities and Ryanair has been graded as the world’s most disliked airline in the survey of Ryanair, but they do not want to change and continue to focus on cutting costs, to provide low fares. Therefore, the buyer bargaining power is low.

Power of supplier

aˆ?Boeing is a major supplier of RA

aˆ? Only two potential suppliers of aircraft – Boeing and Airbus

aˆ? Switching costs from one supplier to another is high, because all the mechanics and pilots must be retrained.

aˆ? Aviation fuel prices is directly related to the cost of oil (Ryanair control these through the hedge).

aˆ? Regional airports have little bargaining power because they rely heavily on an airline

aˆ? A larger airport, where Ryanair’s competitors operate with greater bargaining power

The actual purchases of aircraft, fuel supply, are the two major suppliers of the aviation industry. The supplier cannot control the fuel prices, although Ryanair is so sensitive and cannot affect the fuel suppler to Ryanair. On the actual purchase of the aircraft, Ryanair has a very healthy relationship with the main supplier of the aircraft, the Boeing Company (Brophy and ST. George, 2003). Suppliers cannot bring great results to Ryanair

Competitive Rivalry

aˆ? Intense competition in the LCC market

aˆ? Most of the cost advantage can be copied immediately

aˆ? The current low level of competition as the two major low-cost airlines to avoid a direct face to face competition by choose different routes to service

aˆ? However, if a company does decide to compete on the same basis, as Ryanair has a heavy pressure on prices, profit margins and thus profits

aˆ? there is not much difference between the services. The main difference is the price factor

In the highly competitive aviation industry competition is high. Although Ryanair is a pioneer who performed low-cost airlines, but competitors has also the implementation of low-fare. Beside, they also copied a number of Ryan strategic. For example, Aer Lingus and FlyBE airlines have also introduced charges for hold luggage after Ryanair perform it.

2.3 Scenario analysis
Worst Case:
Increase of Salaries

If the employee be successful, unions can represent the experience of Ryan, to increase wages.

No. Increase of other staff

New employees need in marketing, European Union regulations (such as safety regulations require additional crew on each flight.) Accounting, information technology

Increase of Airport Charges

Airport charges could increase in many Government owned airports. It may be are 100% increase.

Increase of Fuel Prices

Fuel prices may rise by 1% per annum. There may be another war to increase the oil prices.

The increase in average flight distance

The new destination may result in the average flight distance increased by 10% for two years and 5% for three years, followed by 0% per annum

Increase of Marketing Costs

Such of the competition may increase in some routes may need to launch marketing campaign for Ryanair. Eastern Europe may not be a popular route is expected, and may require additional advertising. Low price does not mean low quality. This idea needs to communicate.

Best Case:

In this case, this situation will be re-considered the most optimistic assumption that all possible outcomes into account.

Future energy prices will remain at today’s prices, in the best situation.

The euro is still better than the U.S. dollar against the U.S. dollar.

Load factors will remain stable at a high level for many years benefited from the growing number of passengers to use the entire fleet.

The marketing costs should support the continuous increase of passengers, and should cover the new routes.

Revenue should be increased in the plane’s flight as a better offer / services to enable passengers to spend a few euro on average for each flight.

3.Ryanair’s strengths and weaknesses.- SWOT analysis
Strengths:

aˆ? Brand Name: Ryanair, through its 14-year in LCC market has developed a very good recognized brand name.

aˆ? Benefit from the low airport charges: These low-cost assistance benefits based on Ryanair.

aˆ? The first advantage of the regional airports (such as Charleroi): As a market entry barriers

aˆ? Internet sites (94% reservation) : reducing distribution costs as through the phone booking is more expensive. Eliminates the need of travel agents.

aˆ? High-density seat

aˆ? All of the Boeing aircraft: a unified fleet saving on maintenance and training cost.

aˆ? Fast turn around

aˆ? High service performance: Punctual, flight speed the completion of the high rate and low loss of luggage, these give a good image of the company’s reliability.

aˆ? Modern fleet which resulting in lower maintenance costs: will become more uniform, with only one model (737-800), also a relatively new aircraft will require less maintenance.

aˆ? High aircraft utilization: Ryanair Airlines planes to fly longer to generate more income from its assets.

aˆ? Fuel and other risk hedging.

aˆ? Small headquarters: Low on overheads

aˆ? Point to Point: No hub and spoke, lower cost because not passed the required services

Weaknesses

aˆ? Easy to Bad News: Ryanair was considered arrogant and the slightest incidents have been a lot of news stories.

aˆ? Niche market: the possibility of limited expansion

aˆ? Distance of some regional airports from the advertising objectives: After a period of customers may feel that this is a big inconvenience.

aˆ? Poor quality of services: interpersonal skills.

aˆ? Ryanair is extremely sensitive to changes in charges (increase in value of the fare)

Opportunities

aˆ? EU enlargement: will open many new destinations

aˆ? Significant potential to capture market share: In the LCC market share will more than double

aˆ? Benefit from less exposure to geopolitical risks: As the only real business in Europe

aˆ? Ryanair economic slowdown actually helps to change the corporate culture, ‘stealing’ customers from traditional carriers as they seek lower fares.

Threats

aˆ? Dependent on the oil market: fuel cost depends on the oil market.

aˆ? Dependent on the economic cycle

aˆ? Increase of Low fares competition

aˆ? European Court of Justice ruling: It may make more difficulties and costs of future expansion.

aˆ? Limited growth of the southern European market

aˆ? Regional airports gain bargaining power for “second round”

aˆ? Customers are very sensitive of price

aˆ? Ryanair and Easy Jet limit each other’s growth “rout wise”, need to live peaceful coexistence, or is likely to become the battlefield of the line (such as: London- Rome)

-aˆ? Face increase in air traffic control charges. As more planes fly in the sky.

aˆ? Inability to prevent the introduction of fuel tax and environmental fees: this will reduce their growth potential because it depends on the price of the stimulus.

4.Evaluation of Ryanair’s strategy

Ryanair aims to establish itself as Europe’s leading low-fare scheduled passenger airline through continued improvement and expansion of low-cost services to their products. Ryanair aims to offer low fares, thus increasing the passenger traffic. A continued emphasis on cost control and operational efficiency is a very important part of the Ryanair way of doing things. Here are the key elements which make up Ryanair’s strategy:

Low fare: This is used to stimulate demand, their goal fare conscious leisure or business travelers who do not go, otherwise it will all or use other transport modes, such as car, coach or train. Ryanair to sell seats on the basis of one-way unlike most traditional carriers this change take effect in November 2001. Ryanair set fares based on demand for flights and with reference to the remainder of the scheduled departure date. 70% of the seats are the lowest fares in the sale of tickets can be assigned routes, once the full price of each seat. Ryanair’s Dublin to London (Stansted) is the most popular passenger route in terms of passenger volume; with fares from 19.99 to 169.99 (available in the lower special promotions).In September 2003, Ryanair launched a fare promotion offers a total of two million seats on certain routes for “free” (excluding government taxes and passenger service charges) for travel period from September 2003 to 17th December 2003. These movements are very useful to consolidate Ryanair’s low fares image. (M. Michel Alle ,Ryanair Plc. 2004)

Frequent point-to-point short-haul flight routes. Ryanair provides frequent point-to-point service in the short-haul routes, airports and major population centers in the surrounding areas and tourist destinations. An average of 1.1 hours flying time has been an average line length of 746 kilometers, in 2003. Ryanair flight an average of 1.94 round per day from each line. Short-haul flights only option to allow Ryanair to provide frequent service, while eliminating the need to provide” frill” service customers, or they will no longer flights. Point-to-point flying (as opposed to the service center and spoke the traditional operators used) to avoid the cost of Ryanair’s passengers to connect through service providers, including baggage transfers and transit passenger assistance costs. This is one of the key differences between Ryanair and traditional carriers. (M. Michel Alle, Ryanair Plc. 2004.)

Commitment for safety and quality of maintenance. Ryanair’s commitment to safety is the most important priority for the company and its management. This commitment begins with hiring and training of Ryanair’s pilots, flight attendants and maintenance staff, and includes a policy to maintain its aircraft in accordance with the highest European airline industry standards. Ryanair has not been a single incident or significant damage to passengers or flight crew in the 19 years of operating history. Although Ryanair aims to operate its fleet in a cost-effective manner, management does not seek to extend Ryanair’s low cost operating strategy of the region’s security, maintenance, training and quality assurance. Routine maintenance and repair of aircraft carried out in-house, and the present contract airframe maintenance, engine overhaul services and routing of the maintenance contractor, these contract will be under reviewed.(M. Michel Alle ,Ryanair Plc. 2004)

Ancillary Services: Ryanair offers a range of ancillary, revenue-generating services, including on-board merchandise, beverage and food sales, accommodation booking service, advertising, travel insurance, car rental and rail and bus tickets. Ryanair distribution of car rental, accommodation and travel insurance through its Web site and traditional telephone reservation offices. Management believes that providing these services through the Internet to allow Ryanair to increase sales, while at the same time, reduce cost per unit basis. Ancillary revenues, not including charter flights, increased by 68.1% (2002: 44%) and now accounts for 11.7% of total revenues compared to 9.4% in 2002.

Customer service. Ryanair’s strategy is to provide the best customer service performance of its peers group. According to reports by the Association of European Airlines and the airline announced its own statistics, Ryanair has made good on time, luggage lost less and less to cancel all of the rest group than their European counterparts. Ryanair realized that the strong focus on the implementation of these services and the operation of non-congested airports.

5.Recommendation

To have the largest amount of routes, the lowest fare airline in Europe without any compromise Ryanair’s business model, beyond all the other operators in all aspects, including quality of service. I think Ryanair is also eager to adhere to high growth.

I think Ryanair’s strategy has become a key factor in its great success. Therefore, in the end I applied all of these designed of recommendations to improve their business. The Recommendation of Ryanair are as following:

Continue to look for ways to reduce costs

Although Ryanair has the lowest cost base of any competitor, I believe Ryanair can continue to reduce its cost base, because it although at a lower pace of growth.

Increase the frequency of existing routes

European low-cost airline (LCC) market is not exhausted. Ryanair currently has a average 3.88 fights per capita daily of flight routes. This figure compared with Easyjet airlines and traditional carriers, is very low. This means that, Ryanair is the loss of business passengers who need a more flexible schedule. Ryanair added that if the frequency of some of their routes, they can effectively steal some passengers from the traditional carriers in order to increase market share.

The development of smaller bases in the Continental Operating Bases

With the low cost market saturation from London, Ryanair must to look at their other business base to expand their network. Dublin, Brussels, Hahn, etc … can be developed. Although there is not the same demand, outside London there is sufficient demand to make considerable profits

Open up new routes in Europe

There are many possible routes are still not served by low-cost airlines. To make a viable way there must to at least 32,000 people each year. Research is needed to find out a feasible route before the competition. And the opening route to un-served destination, Ryanair can also open routes where the competition is more expensive traditional carriers to attract customers to the cheaper, no-frills choice

Extended to the Central / Eastern Europe

Eastern Europe is rapidly becoming a hotspot for tourist and business travelers continue to expand as the E.U., but Ryanair does not meet any of the more popular destinations. Other low-cost airlines has been established there, such as Sky Europe, but not all routes have been exhausted. There are still have many opportunities in this field.

To actively seek market share from the Charter Market

The Charter is a huge market of represents 25% of the total traffic in Europe. Ryanair must be aggressive in this market by vigorously promote DIY holidays, rather than group tours. With the increasing popularity of the Internet and the popularity of lower travel agents, which is the market cannot be ignored. Ryanair should be provided to small package destination and aim to strengthen the side of the business.

Customer Service Overhaul

Ryanair has a remarkable performance as’ tangible’ customer service (punctuality, time to complete the flight, etc.) views, but in the ‘softer’ side of the customer service is not always good and have a lot of bad news. With this in mind Ryanair Airlines, while maintaining its strict rules and regulations, must to be adjusted on this area.

About Bandipur National Park

The Bandipur National Park, one of the first Tiger Reserves of India, is situated amidst the gigantic Western Ghat Mountains in Karnataka State, at the foothills of the Nilgiris (eucalyptus). This National Park spreads into the neighboring states Tamil Nadu and Kerala and is called the Mudumalai National Park. An astonishing variety of flora and fauna can be found here due to a moderate climate and diverse geographical condition. Sprawling over 860 sq km in area, the Bandipur National Park is very famous in Asia for its huge elephant herds. A very good internal network of roads meanders through its hilly terrains and breath-taking forested landscape. Wildlife viewing becomes an awe-inspiring experience at the many water bodies and salt lakes.

Fauna Of Bandipur National Park

Wild life abounds in plenty at the park, the rare Tiger being the main attraction. Elephants, Leopards, Bison, Chital, Sambar, Barking Deer, Mouse Deer, Sloth Beer, Black Napped Hare, Wild dog, Langur, Indian Giant Red Squirrel, Bonnet Macaque, 4 Horned Antelope, Porcupines, Slender Loris, Jungle Cat, Rusty Spotted Cat, Leopard Cat, Small Indian Civet, Palm Civet, Otter, Jackal, Wild Boar are just a few of the other inhabitants.

Avian Residents: The Park is also very rich in avi-fauna. Bird watchers would be delighted to spot Shaheen Falcons, Serpent Eagles, Crested Hawk Eagles, Gray Headed Firhings, Ospreys, Honey Buzzards, Malabar Pied Hornbills, King Vultures, Hill Mynas, Malabar Trogon, Gray Partridges, Black Woodpeckers, Paradise Flycatchers, Indian Pittas, Cormorants,

Flora Of The Park

The thick vegetation is watered by the Nagu, Kabini, Mule-hole and Moyar rivers criss-crossing the entire park which include trees like Honne, Sandalwood, Teak, Tadasalu, Mathi, Rosewood, Nandi, Bamboo, Nelli, Kooli, Dindalu, Kadu Tega, Randia and Bende. Stunted trees, interspersed with bushes and open grassy land can also be found on the eastern slopes.

Added Attraction Of Bandipur

Elephant and Jeep Safaris: A quiet Jeep safari can leave you with an invigorating experience of watching wild animals at close quarters. Bird watchers can opt for Elephant safari as it is an absolutely noiseless way to be at close proximity to animals.

Other places of interest are the 3 other reserves of Nagarhole, Mudumalai and Wayanad, the famous Vrindavan Gardens and Shrirangapatna fort of Tipu Sultan. Hot summer months can find people getting away to the enchanting hill towns of Ooty and Wellington.

Best Season To Visit

The park is open from the May to February. The best season to visit the park would be from May to July or in the months of September and October. Warm but comfortable for most of the year, winter from October to January might find the temperature falling to about 16°C. June to September is the monsoon season.

How To Reach Bandipur National Park

By Railways: Nearest railway station is at Nanjangud town (55 km) and Mysore (80 km).

By Airways: Nearest airport at Bangalore (220 kms).

By Roadways: Drive from Bangalore to Mysore and then take the Mysore-Ooty highway via Nanjangud and Gundlupet from where the park is just a half an hour drive.

Aberdeen Tartan Day

This report examines the data from a Market Research Questionnaire presented to visitors of Aberdeen. Awareness of past events is reviewed and, preferences for future events are examined, with various alternatives being explored.

On August 5, 2005 Aberdeen City Council held its second Tartan Day. In an effort to expand this newfound tradition Council wishes to explore levels of interest in different types of potential activities. In the past such activities as the Country Fair, walking tours, a family day at the Union Terrace and special Jacobite displays at Provost Skene’s House were included in the programme.

The data, provided by the client, consisted of 30 respondents to the questionnaire. Although this number is small it is sufficient to extract some general information for Aberdeen City Council to make decisions regarding future events. The raw data were assumed to be correct as well as the methods for collecting the data deemed appropriate.

The raw data were copied to a minitab file (available upon request) and various graphs and statistical tests performed. Means and medians were compared and, in some cases, correlation coefficients were calculated to identify relationships between areas.

Demographically the respondents were evenly split by gender and equally distributed in the three age ranges 15-19, 20-24 and 25-29. Twenty-eight live in Aberdeen City, 23 are college students, one secondary student and six employed full time. All six of the respondents employed had salaries below ?1500 per month.

There was huge variance in the level of awareness respondents had in the events held in Aberdeen last year. Of the 30 people surveyed almost all were aware of the “Free at the Dee” event but less than 25% were aware of ‘Tartan Day’.

Event

Number Aware

Number Attended

Aberdeen Jazz Festival

6

2

Aberdeen International Football Festival

14

1

Aberdeen International Youth Festival

13

1

Free at the Dee

28

14

Tartan Day

7

1

International Traders Fair

4

0

10k Fun Run

8

2

Highland Games

15

3

Apart from the traders fair, the football and youth festivals, the Tartan Day attracted the fewest percent of the people aware of its existence. Free at the Dee seems to have generated the keenest attraction.

How respondents find out about events connected with their hobbies and interests is shown below:

Communication mode

Percent who used this

TV

50%

Press

22%

Posters

18%

Text Message

20%

Internet

60%

e-mail

30%

Word of Mouth

93%

Leaflets

13%

Clearly word of mouth and the internet seem to be the most effective communication modes with traditional print modes (leaflets, posters, press) among the least. A review of the cost effectiveness of e-mail and the internet compared to TV may be worth undertaking. Note that since many respondents make use of more than one media the above percents add to more than 100%.

The pie chart below shows the relative popularity of the five proposed themes for future Tartan Day events. These are based on the number of respondents who chose each activity as either their first or second choice.

The boxplot below poignantly illustrates how the respondents voted. The shaded area shows how the middle half voted with the line in the box showing the median. The broad box for sports indicates the wide range of opinions related to the desirability of sports as a theme but whereas the small shaded area for music indicates a strong consensus (the median is actually 1). The star at 4 for music is a lone dissenter called an outlier. Clearly neither theatre, art nor highland games are very attractive as themes to the respondents. No one ranked theatre or art as number one and a singular champion of highland games voted it a first choice. Both sport and music seem to be popular. Twenty ranked music as number one and 8 ranked it as number 2 where sport received nine votes in each category.

A closer inspection of the data revealed that those that placed music high as an activity tended to place sports low. A similar relationship held between highland games and theatre. This information could be valuable should the committee decide to hold two events concurrently.

Most people who expressed a preference voted for the event to be held at the beginning of July either at the beach or Duthie Park.

Month

Count

Time

Count

Place

Count

June

11

Beginning of month

13

Beach

11

July

16

End of month

1

Duthie Park

14

August

2

No preference

16

Union Terrace

3

September

1

Castle Gate

1

Exhibition Centre

1

Seventy percent of the respondents would like to see a Scottish theme (Haggis, Angus Beef burgers, Whisky and tartan) at the festival. Almost a quarter had no preference.

Two-thirds of the respondents claimed to be willing to pay for this event and, of those, an overwhelming 80% peg ?1 to ?5 as reasonable with the rest willing to pay between ?6 and ?10.

Since a full two thirds of the respondents selected music as the theme they would prefer for future events a review of their preferences might reveal some additional information. The music lovers showed the same generally low level of awareness and participation at the various events held in Aberdeen last year as the complete sample of thirty respondents. The first surprise is the mode of communication for the people who selected music.

Communication mode

Music People

Percent who used this

Full Sample

Percent who used this

TV

50%

50%

Press

75%

22%

Posters

65%

18%

Text Message

20%

20%

Internet

60%

60%

e-mail

30%

30%

Word of Mouth

90%

93%

Leaflets

20%

13%

The group that choose music made use of most media the same as the full cohort with the notable exceptions that the music group made much more use of the printed media: press, posters and leaflets. The planning committee may wish to take this into account when designing their advertising. Advertising in the printed media could place more emphasis on the music aspect and other forms of media target a more general audience.

The music group favoured the beginning of July as did the whole group with an even greater percentage favouring Duthie Park. They also would like to see a Scottish theme added to the festival although whether this is confined to food, drink and dress or includes the music was not indicated.

Last years brochure heralded ten out of its sixteen venues as ‘admission free.’ Two-thirds of the respondents expressed a willingness to pay for the event they chose as a potential theme for Tartan Day (ie. they expressed a willingness to pay for a music event). The committee will need to consider the question of fee from a philosophical view as well as a pragmatic one. Generally the profile of the group willing to pay aligns closely to the whole group of respondents with a few notable exceptions. The potential payers showed greater attendance at both the 10K fun run and the highland games. They relied less on internet for communication and slightly more on e-mail. They showed a significantly greater reliance on TV for communication. None of the potential payers wished to see Tartan Day in August and they favoured Duthie Park very strongly.

The data were reviewed by parsing other subgroups with no startling results. The age groupings and the groupings according to employment status showed no difference from the group as a whole. There were slight gender differences in the choice of media. Females tended to favour the press and posters.

A number of questions emerge naturally from the above results. If music is to be a theme what kind of music would be best received? Could there be two themes like music and sport? The survey did not indicate family status. If Tartan Day is to be a family event this group could be targeted in any follow-up surveys.

The general level of awareness as indicated by the participants of the survey of Tartan Day in the past has been low and the attendance even lower.

Based on the survey results the committee should consider changing the date of Tartan Day to early in July. The majority favour a music theme with the venue at Duthie Park and they are willing to pay a small entrance fee (below ?5).

Depending on the target group a variety of media should be used to communicate the events of the day.

Abacus, Amadeus, and OPERA Reservation Systems (ORS) are the three IT systems that will be discuss in this report.

Abacus is the Asia Pacific’s largest Global Distribution System (GDS) and Computerized Reservations System (CRS) that provides airline reservations, pricing and ticketing, hotel and car bookings, travel insurance and other travel information. One of the travel agency which is using Abacus is Eurotours & Travel Pte Ltd in Singapore.

Amadeus is a Central Reservations System (CRS) which created by Air France, Iberia Airlines, Lufthansa, and Scandinavian Airlines System (SAS) in 1987. AirAsia is one of the airline partner which is using Amadeus as their IT system.

The OPERA Reservation System (ORS) is the industry’s first truly integrated, single image enterprise inventory system. ORS is owned by MICROS Systems, Inc. Loews Hotels has chosen ORS to be their IT systems in all their hotels.

These three different IT systems have its different advantages and disadvantages.

Last but not least, IT systems are very important in tourism and hospitality industry. They play a lot of roles in industry in order to provide more convenience for the companies as well as the customers.

2. Introduction

Information Technology (IT) systems play an important role in tourism and hospitality industry. There are many IT systems appear in the market now for hotels, restaurants, travel agencies, and airlines. Some of the IT systems are Abacus, Amadeus, Gabriel, Fidelio, OPERA Reservation System, Sabre, Worldspan, and many others. These IT systems are created to make reservations, check seat availabilities, food and beverage transactions and controls in hotels, restaurants, airlines, as well as travel agencies around the world.

Abacus, Amadeus, and OPERA Reservation Systems are the three IT systems that will be discuss in this report. Abacus is the Asia Pacific’s largest Global Distribution System (GDS) used in travel agencies. Amadeus is a Central Reservations System (CRS) which majority used in airlines while the OPERA Reservation System used in most hotels in the world.

This report is written and compound to evaluate and analyze how Abacus, Amadeus, and OPERA Reservation System are implemented in three different companies.

3. Abacus logo_Abacus-red_large.gif

Abacus International is the Asia Pacific’s largest Global Distribution System (GDS) and Computerized Reservations System (CRS) that provides airline reservations, pricing and ticketing, hotel and car bookings, travel insurance and other travel information since 1988. The headquarter of Abacus International is located in Singapore.

Abacus International is 65 percent owned by Abacus International Holdings and 35 percent owned by U.S. Based GDS, Sabre Holdings. Sabre is the global leader in the electronic distribution of travel and travel related services.

Abacus International Holdings is jointly owned by several Asia’s leading airlines including All Nippon Airways, Cathay Pacific, Garuda Indonesia, EVA Airways, China Airlines, Malaysia Airlines, Hong Kong Dragon Airlines, Royal Brunei Airlines, Philippine Airlines, SilkAir and Singapore Airlines.

Abacus is typically used in travel agencies and one of the travel agency which uses Abacus as their reservation system is:

Eurotours & Travel Pte Ltd

Eurotours & Travel Pte Ltd was established by Ms. Hedy Mok in 1974. Eurotours & Travel is located at 190 Clemenceau Avenue #05-4/7, Singapore Shopping Centre, Singapore 239924. Eurotours & Travel provides inbound and outbound travel management services. Currently, Corporate Travel bookings comprise 80 percent of Eurotours’ business volume and the remaining 20 percent is from Leisure Travel services.

Every system must have the strengths and the weaknesses in different area. The strengths of Abacus are Abacus has direct link for travel agencies who want to apply Australia visa for their customers. It is more convenience for the travel agencies who use Abacus so they do not to go to Australia embassy to queue for applying visa for their customers who wish to travel to Australia.

Abacus also provides a lot of information about all requirements that travel agencies need to know for their customers who want to travel to certain country.

Some weaknesses of Abacus are the operation of Abacus and the update information in Abacus. The operation of Abacus is not user friendly. For travel agencies who operate Abacus system, they need to give advance training to their employees because Abacus uses a lot of codes in their system. The employees need to learn and memorize hundreds of code in order to make a reservation or check the room availability in a hotel. Abacus also a bit slow in update their new data or information so travel agencies always need to check their new information. logo_Abacus-red_large.gif

4. Amadeus – Your Technology Partner 1009amadeuslogo.jpg

Amadeus is a Central Reservations System (CRS) which created by Air France, Iberia Airlines, Lufthansa, and Scandinavian Airlines System (SAS) in 1987. Amadeus is owned by Amadeus IT Group. The central headquarters of Amadeus are located in Madrid, Spain for its corporate headquarters and marketing, Nice for the development and Erding for the operation.

Amadeus is also a member of International Air Transport Association (IATA), OpenTravel Alliance (OTA), and SITA, and its IATA designator code is 1A.

One of the airline which applies Amadeus as their IT system is:

Air Asia

According to Press Release from Amadeus North America, Inc. (2010) stated:

“Madrid, Spain, September 10, 2009: Amadeus, a global leader in technology and distribution solutions for the travel and tourism industry today, announced that it hasformed a groundbreaking partnership with AirAsia, the World’s Best Low Cost Airline, which for the first time will enable Amadeus-subscribing travel agencies worldwide to book AirAsia flights in the same way they would for a full-service carrier.”

AirAsia is a Malaysian low-cost airline. AirAsia was established in 1993 and commenced operations on 18 November 1996. AirAsia have five subsidiaries which are Thai AirAsia, Indonesia AirAsia, VietJet AirAsia, AirAsia RedTix, and Khmer AirAsia (2012). AirAsia Group operates over 400 flights daily, both domestic and international routes, from Indonesia, Malaysia, Thailand, Kuala Lumpur, Singapore, India, Myanmar, Vietnam, Sri Lanka, Taiwan, South Korea, Laos, Philippines, and United Kingdom. Currently, AirAsia has total 96 fleets including Thai AirAsia, Indonesia AirAsia, and AirAsia X.

Amadeus provides Customer Service Management (CMS) for airlines, sales, reservations, and e-ticketing systems, and corporate self-booking tools for major world leading airlines and travel suppliers. Amadeus also offers services for trains, cars, cruises, and hotel reservations.

There are many benefits for the airlines which using Amadeus. The system of Amadeus is quite fast and efficient. Amadeus also allows the airlines to change their existing bookings or request new time limits. Lastly, Amadeus also will send automatic recognition or acknowledgement to their partner airlines once all the updates are finished.

1009amadeuslogo.jpg

5. OPERA Reservation System (ORS) opera.jpg

The OPERA Reservation System (ORS) is the industry’s first truly integrated, single image enterprise inventory system. OPERA Reservation System is owned by MICROS Systems, Inc. The headquarter of MICROS Systems, Inc. is located in Columbia, Maryland. The ORS hotel reservation system is designed with the entire OPERA product family: OPERA Customer Information System (OCIS), OPERA Property Management System, OPERA Sales and Catering, and OPERA Sales Force Automation.

ORS can be configured to suit any size hotel or Central Reservation Office (CRO) environment. ORS handles all types of reservations started from individual, group and party, company, travel agent, multi-legged, multi-rate, as well as waitlisted.

ORS is typically used in the hotels especially front office and one of the hotel which uses ORS as their IT system is:

Loews Hotels

Loews Hotels headquartered in New York City, offer a comfortable, vibrant, and unique local experience for their guests. Loews Hotels is a wholly owned by Loews Corporation. Loews Hotels operates 19 distinctive luxury hotels and resorts across US and Canada started from: Annapolis, Los Angeles, Lake Las Vegas, Montreal, Quebec City, Miami Beach, Nashville, New York, New Orleans, Philadelphia, San Diego, Tucson, Washington DC, St. Pete Beach, Portofino Bay, Hard Rock Hotel, and Royal Pacific Resort.

The ORS availability display will help the front office officer to check the room rates, types of room, and packages that hotel offer to their guests. ORS also helps hotels to do the complex operations such as frequent flyer and loyalty program memberships, split charges, and rate discounts.

ORS also handles group and block reservations in hotel easier than other systems, for example: room blocking, room sharing, rooming lists, tour series, and deposits.

Last but not least, hotels and chains can also use the ORS to review their business volume and performance by either open or close channel. Open or close channel can be based on property rate or the room type.

6. Conclusion

Nowadays, hotels, airlines, restaurants, and travel agencies use Information Technology (IT) systems in their companies to facilitate the companies as well as their customers in terms of making reservations, checking the seat availabilities, purchasing airline tickets, and many others.

Abacus, Amadeus, and OPERA Reservation System (ORS) is the three IT systems which have discussed in this report. Abacus is the IT systems which used in majority travel agencies, while Amadeus and ORS used in majority airlines and hotels. These three different IT systems have its different advantages and disadvantages.

Last but not least, IT systems are very important in tourism and hospitality industry. They play a lot of roles in industry in order to provide more convenience for the companies and their customers.

LakshwadeepSnorkeling

Snorkeling is one of the favorite water sport activities of Lakshadweep. Bangaram Island offers an excellent locale for snorkeling in its shallow waters. Both Bangaram and Kadmat islands smooth the progress of the diving once the visitors arrive here. The 3 deserted islands Parali-I, Parali-II and Tinnakara can be approached through sailing, boarding and rowing. Wind surfing and Kayaking are the other risky water sport activities at the Bangaram Island.

The coral isle of Lakshadweep are surrounded by unspoiled coral reefs and shallow lagoons with clear blue water and rich marine life, making the region an excellent place for snorkeling. Every island hosts good-looking beaches and tranquil water bodies that make snorkelling in Lakshadweep easy directly from the beach. The local water sports centers and dive shops can provide you with equipment, and snorkeling tours are also available. You can see a great deal of marine life, including sea turtles, manta rays and a great variety of fish and corals. Snorkeling in the Lakshadweep is best outside the monsoon season.

Agatti Island

Agatti Island Beach Resortoffers a spectacular show of spotless coral reefs, turquoise blue lagoons, shiny seashores and verdant green coconut palms. The time comes to a stop here as the nature mesmerises one and all with its sheer purity and spotless beauty. It is one of world’s most spectacular tropical islands untouched by the tourist rush.

The emerald green peaceful palm clothed islands of Agatti; the extensive white beaches; the multicoloured trivial, still lagoon with its numerous life forms; the diamond waves shaped by waves arresting the reef and the deep blue of the Arabian sea are all feasts to the eye and an experience that will last a lifetime. Possibly it is one of the very few places where all hues of blue, green and white are in attendance. In reality, the islands and the coral reefs are so diverse in its corporeal appearance and exterior that no two would look alike. The gentleness and the amity is an enticing experience that makes sure total renewal to the body, mind and soul.

Words would fall short if one has to describe the actual sereneness and beauty of this place. It is like finding something that transcends even the imaginations. The resort is situated in the most tranquil spot of the island which is one of the world’s most stunning sultry islands. Rowing or swimming or diving in bottomless sea or superficial lagoon, screening the underwater world in glass bottomed boat or stopping by an abandoned island- there is not a single moment which is boring or without any hula baloo.

Snorkeling in Andaman and Nicobar

The underwater corals in Andaman island beaches are very colourful. One can experience the live corals atJolly buoy, red skin, North bayand other island beaches. Snorkeling and Scuba diving is a great experience in these marine worlds. People who don’t know swimming also can experience snorkelling.

Jolly buoy island is very well-known for under water corals and the immaculate lucid beach. This place is one hour drive from Wandoor beach. Snorkeling and scuba diving are obtainable here.

To reach Jolly buoy island people have to come up to to Wandoor beach. This is situated in Mahatma Gandhi National Park. Wandoor beach is 30 Kms away from Port Blair by road. This road is same for visiting Red Skin isle also. Both Jolly buoy and Red skin are situated at Mahatma Gandhi National park. The standard time for leaving to Jolly Buoy island is around 9.00am. Ensure to reach there.

Positioned closer to Phoenix jetty of Port Blair, this seashore is also very renowned for underneath water corals. Snorkeling and scuba diving is offered here. All sort of amenities are obtainable for the people like clothes for rent, food, huts for taking rest, lockers, etc… The single day trip comprises of North Bay, Viper Island and Ross Island. Some travellers like better to stay extra time in North Bay to take delight in the sea corals all the way through snorkeling and scuba diving. A regular trip package has going to Viper island first then North bay next followed by Ross island last. Unlike Jolly buoy and Red skin beaches, the mass in North Bay coral beach is more. People throng this place because of the services here being better. There are lockers; Almirahs; and other such arrangements are available for looking after valuables. The tourists who move to North Bay should start for should be ready by 9.00am at the Phoenix jetty.

Kalipur near Diglipur North Andaman, the Island off the coast of Pristine Beach resort (200-300 rupee huts. Best beach snorkeling place I visited in the Andamans. Very diverse too, great coral between on the beach side of the island on the far side are rocks which go down quite deep with lots of fish especially the northeast corner. Saw sting rays, lion fish, sea snake, octopus, several Giant Parrot fish about 1.5 m long, small barracudas, lots of fish of all sizes. Sea turtles are often seen here as well but I didn’t see one.

Havelock, the coral is better at Elephant beach, but not as good as Kalipur of Lalaji, I saw more larger fish out on the right and left side of the lagoon at the end of beach 7 than Elephant. Off beach 7 I saw Giant Parrot fish and a sea turtle, in addition to the usual stuff. Guesthouse plug, full power guesthouse on beach seven is a great place to stay. Really nice owner only has 4 huts though 150-200.

Goa

Snorkeling is yet another popular water sport in Goa. Like scuba diving, it is also meant for undersea exploration. However, it is relatively simpler than scuba diving, as it involves a simple breathing apparatus for breathing. A bent tube provides the diver fresh air as he bends down into the shallow water to observe underwater life. It does not require much training; almost any healthy person can engage in snorkeling.

Bat Island and Navy Island in Goa are known for snorkeling facilities. The facilities for snorkeling in Goa include all the gear you need which will be supplied by the operator. The accessories including wet suit, gloves, masks, and fins are all provided by your operator.

Netrani Island, Murudeshwar, Karnataka

Off Murudeshwar beach lays the Netrani Island. It is in North Kanara district in Karnataka. This place is also known as Pigeon Island. It is by and large unexplored by tourists visiting Murudeshwar and surrounding areas. The nearby Island is used by the Indian Navy for target practice (there is a naval base in nearby Karwar). This Island is a home of the scarce Coral Reefs and unusual maritime existence. It takes on a half an hour boat ride to reach Netrani from Murudeshwar.

Travel Tips
If you are preparing to head out unaccompanied to Netrani Island, formulate a short trip as this Island is a Navy Protected area and they are thought to carry out target practice and bomb-testing activities.
Make sure with the local fishermen about the caution above as they frequently endeavour out in the sea.
It is best if you do it from a club since they will build all the needed arrangements before-hand.