Author: Andre Coleman

Time has changed now, no one want be static people like to travel abroad to explore the world. It is in human nature to find more and more place to entertain him. The main reason behind this all revolution is; the life is becoming materialistic day by day. This trend is helping the many countries to grow their economic condition as well. Like in any country have historic places; now they are making these places more attractive to get more people visit those monuments. People visit different areas according to their on liking. Every city and country has various types of attraction for the visitors. As we can say people go to Egypt to see mummies. If we talk about London, London has lots historic and cultural places like museum, art galleries, monuments and forts.

Keeping in accounts all these points tourism has become a growing industry now and every country is trying to promote its tourism industry. In this assignment we would try to analyse the definition of urban tourism and its impact. How the tourism industry is growing in the urban area. We selected the Edinburgh the city of Scotland. We would try to elaborate the history of tourism industry of Edinburgh. How they are planning to make it more attractive for future. We also tried to cover all the attraction of Edinburgh and all statistics regarding industry. Our main focus on the problem of tourism in Edinburgh. In this assignment, we shall try to find out problems and will give the conclusions and recommendations.

2. Urban Tourism:-

The concept of urban tourism is very broad and it consists of all kinds of entertainment activities that are held in cities. “The improvement of urban environment and the perfection of all kinds of services and facilities are all great attractions to tourists” It consists of good and suitable transport links, well-blooming market, better trade and good atmosphere for shopping, latest and developed information and technology, great service and leisure, modern urban land rich urban culture. Therefore a lot of people decide different types of cities as a destination to spend their holidays and the urban tourism in those cities are well-known. (Zou and Tian, 2002)

According to Colantonio and Potter (2006) the tourism that is held in urban area of the city is known as urban tourism. Urban tourism consists of different types of the activities. Different people visit urban cities for different purposes. They like to visit historical buildings, tourist attractions, landscapes, art galleries, special events, to see culture and heritage and for leisure purposes. Urban city also offers a lot of activities to increase tourism and attract the people. All those things are the characteristics of urban tourist. The image of the city is very important for all types of visitor, they (visitors) have a lot of expectations like the behaviour and attitude of the community. If it is positive, it attracts the visitors again and again. In this way, the tourism growth increases of that city.

The cities change in public culture, architecture and design, education, urban planning, parks and leisure and public party which resulted from dramatic redevelopment of the city’s central business and historic district. Urban tourism increasingly generates images of heritage and identify that are consumed as much by residents as by visitors. The cities where the tourism infrastructure and marketing are largely build up. (Chambers, 1997)

2.1 Impacts of Urban Tourism:-

According to Law (2002) now a day, the urban tourism is growing rapidly in every country of the world. It is providing a lot of advantages to local people in many different ways. The tourism growth in urban areas has caused economic, socio cultural and environmental. They have both positive and negative impacts.

According to Mak (2004) urban tourism has a wide range of economic impacts in urban areas. The community plays an important role to create more and more tourism in their city and in this their economies go up and they are the people who get benefits. The tourism and community depends on each other. When the growth of tourism increases, the more people who come to visit the city, they spend their money in different ways like accommodation, food, transportation, shopping etc.

The positive impacts of urban tourism help to increase in local economy of the city and also increase the living standard of the people. The numbers of job created in local area in different sectors e.g. hotels, travel agencies, restaurant etc. It also helps to improve infrastructure of transportation and created much business opportunity in that area. There are some negative impacts of economy is in urban cities as well. In such type of city, it is very difficult to live because the living cost is too much because the rate of land and houses are very high. Sometime it causes the unemployment because of season tourism in urban city. People do not get minimum wages because of a lot of manpower is available. (Theobald, 2004)

According to Holden (2008) when we talk of the environment, we talk of the surroundings such as soil, water, air, vegetation, wildlife and other scare resources. Everyday we are made aware of the environmental issues in the newspapers, on television or by observing our own surroundings. Pollution of the land, air, rivers and seas are just come of the issues that we are faced with. Tourism and environment are closely linked. When tourist visit urban area, they come to experience the environment and its natural beauty such as the sea, beaches, ancient sights, the wild life and the flora and fauna (vegetation). It makes sense to protect it. The positive impacts of urban tourism are as follows:

All the natural environments attract the visitors to come in urban cities.
The local authority tries to improve more and more natural resources in the city and improves the look of city as well.
The negative impacts of environment on urban cities are given below:
Every type of pollution increases in urban cities e.g. air pollution, noise distortion and water pollution.
Natural lands are converted into the commercial areas; it is difficult to find landscapes and natural beauty.
Shortfall of natural resources like water.

According to Smith (2003) urban tourism has also impact socially. When a lot of visitors come to visit a particular area they leave social impacts on the region. The relation between visitors and residents get closer and when you go close to some one, you obviously influence to person which can be both positive and negative nature. The growth of tourism in urban city, attract but force as well to community to accept their culture and standard. The positive impacts of social and culture are as follows:

It helps to improve living standard of people. The urban city provides a lot of attractions and well managed infrastructure of tourism. When tourists come to visit urban city they belong to different ethnicity and urban tourism provides a lot of resident opportunities e.g. get together with good and friendly people, to explore the knowledge about their countries or cities. The tourists encourage their historical sights and culture.

Due to urban tourism, the local community learn a lot of positive things like the knowledge about world, different languages. Its helps people to understand different civilisation.

The negative impacts of social and culture:

In some countries drinking is not allowed but in tourism case people do drinking and it effect badly.
It also indulges under age people in drinking.
It disturbs the family structure of the place.
Many negative changes take place in values and customs.
Urban tourism also increases in crimes, usages of drugs and prostitution.
3. Edinburgh:-

Edinburgh is Scotland’s capital and most successful tourist destination. The Edinburgh is divided into Old Town and New Town. There are a lot of tourist’s attractions, rich museum collections, arts galleries. Edinburgh is the home to three national art collections and a number of galleries (Wordsworth, 2002).

Edinburgh City (Source: www. travel.webshots.com)

According to Shelby,(2007)Edinburgh is a beautiful and historical city of Scotland. Most of the traveller says that if you want to visit two cities of the Great Britain, one is London and second is Edinburgh. The city is known as for festivals. There is a lot festivals that held in the Edinburgh like films, books, comedy, drama, music, dance etc.

Famous Edinburgh residents include Harry Potter author J.K. Rowling, who has become one of the best-selling writers in history and wrote her first book in one of the city’s coffee shop. (Shelby, 2007) According to Parlett, Fletcher and Cooper (1995) “Edinburgh is going through a process of change and centre of attention. This city plays a vital role in refocusing of tourism in Scotland. The main thing in Edinburgh is its attractions and heritage”

3.1 Attractions of Edinburgh:-

The main purpose of destination is to provide leisure and facilities to the visitors. A tourist destination needs to have variety of attractions, events and entertainment that are value for money and keep an eye on the requirements of the visitors. (Blackman and Stewart. 2005)

Attractions have the ability to draw people to them and they are often the main motivation for travel. For example, if you think to about travelling to a destination, what is that makes it worth visiting? The beach? The shopping? All these examples of tourist attraction.

There are many sightseeing attraction in Edinburgh that are given below;

1) Edinburgh Castle 2) National Gallery of Scotland

3) Royal Museum of Scotland 4) Edinburgh Zoo

5) National Gallery Complex 6) St. Giles Cathedral

7) Royal Botanic Garden 8) National War Museum

9) Scottish Parliament Visitor Centre 10) Our Dynamic Earth Calton Hill

11) Prince Street Garden 12) Georgian House

13) Museum of Childhood

3.1.1 Edinburghh Castle:-

Edinburgh Castle Source: (www.michaelp.org, 2003)

Edinburgh castle is situated in the centre of the city. Edinburgh castle is one of the most famous historic and most visited attractions. Ever year million of people come to see this historical attraction. If you go to Scotland and you do not visit this castle, it means that your trip is not complete. There are a lot of events held in this castle like fireworks, World Heritage Day and many more. (Wordsworth, 2002)

3.1.2 National Gallery of Scotland:-

National Gallery of Scotland (Source: www.edinphoto.org.uk)

This gallery is designed by William Playfair in 1850-1857. The gallery has a good collection of paintings, prints, drawing, photographs and books of history. The gallery displayed chronological are complemented by appropriate period furniture and sculpture. Everyday most of the visitors come here to visit this gallery. (Dailey, 2005)

3.1.3 Royal Museum of Scotland:-

Royal Museum of Scotland (Source: www.nms.ac.uk)

The royal museum of Scotland is one of the most visited attractions. This museum displays of arts and science in the grand victorian cast iron building. Exhibits include natural history, archaeology, costumes and decorative art from all around the world. There are some new galleries that provides the vast collection of Scotland and it people. (Blackman and Stewart. 2005)

3.1.4 Edinburgh Zoo:-

Edinburghh Zoo (Source: www. travel.webshots.com)

It was built by “Royal Zoological Society of Scotland in 1913”. Edinburgh Zoo is one of the most visited places in Edinburgh. There are lots of things to see inside the zoo like birds, mammals, reptiles and many more. The zoo has different types of animals that have come from different parts of the world. It attracts all types of age group. (Shelby, 2007)

3.2 Tourism Statistics of Edinburgh:-

Edinburgh is the 2nd most visited destination in the U.K. every year a lots of domestic and international visitors come to visit Scotland and of course their first priority is to visit Edinburgh.

Approximately 45% international tourists visit to Edinburgh if the come to Scotland.

Many people visit Edinburgh because of its history and nearly 4 million people visit every year. The main reason behind this huge number of visitors the different type of festivals.

Edinburgh is the second city in UK and fifth in Europe to generate revenue per room.

Rooms to let in hotels are very high in UK is likely 76%.

The tourism industry has a big contribution in the employment, the industry providing job approximately 31,000 people.

(Source: www.edinburghguide.com. 15 April 2009)

3.4 The Edinburgh Festivals:-

The Edinburgh festivals are well known in all over the world. “It was started in 1947”. There are a lot of festivals that held whole year. Million of people come to attend those festivals from all part of the world. (Whyte, 1998)

According to Dailey (2005) the first three weeks of august is very important for international festivals. This month is filled with performers and entertainer that come from different areas of the world to perform and entertain the visitors in Edinburgh. Those festivals offer “exhibitions, music, theatre and dance” the famous musicians, artists, actors, singers, dancers and comedians come to Edinburgh to perform.

Some of the most festivals are given below;

The Festival Fringe

Edinburgh Military Tattoo

Hogmanay

Science

Jazz

3.4.1 The Festival Fringe:-

Fringe festival is the world largest art festival. This festival held in August and presents dance, theatre and music shows that are preformed by good performers. The Fringe festival is a great gathering of artists, musicians, actors and comedians.

3.4.2 Edinburgh Military Tattoo:-

Edinburgh Military Tattoo held in the “castle Esplanade” every year in August. It offers the music of the massed pipes and drums. Near about 0.2 millions people come to watch this festival.

3.4.3 Edinburgh’s Hogmanay:-

Edinburgh’s second great festival is Hogmanay. The festival takes place Dec-Jan. Near about 0.5 million people attend this festival. It is the Scottish New Year celebration with a spectacular Fire Procession and fireworks, a carnival and open-air concerts running for several days.

4. Problems of Edinburgh:-

There is no country or city in world that has not any problem. Those problems are directly affected to economy. The best way to sort out those problems and improve as much as we can. Edinburgh is a nice place to visit. It is a developed tourist’s destination Although Edinburgh has not too many problems but still some problems exist that are given below;

4.1 Edinburgh and Crime:-

Security is very important for the growth of tourism. The regions where the tourism is very high, there would be also a negative aspect that it will also increase the criminality from. Prostitution, pick-pocketing, drugs and petty crime are very common problems in major tourist destination. Crime has always been a threat to travellers because people are vulnerable when they are away from their home. They may be carrying a lot of money and expensive things. They do not know too much about the area and surroundings. Tourist have always made easy picking for thieves, the thieves, know that when they will go back home, they will reclaim the theft on their insurance. (Blackman and Stewart, 2005)

UK has many places to visit and Edinburgh is one of them. It seems very safe and quiet place for visitors actually, it is not that safe because it has lots of clubs and pubs in that area. It is safe to walk in this area but do not go in alley street. If you want to go there must be some people to around you. Ever tourist place has same negative factor with its all positive factors like Edinburgh. It is very clear tourism is a growing industry in Edinburgh, according to the statistics of Edinburgh tourism authority. But with the passage of time like other tourist place some fatal diseases are also coming to see. It is not only Edinburgh almost every tourist place. Like particularly. If we talk about Edinburgh people are being addicted to use of drugs. Due to open environment many other diseases like HIV also has been reported. Not only HIV been reported it is also going into dangerous figures. Moreover, the usage of cocaine and heroine has been come into records. There are well stable bodies who are managing all these activities. It is not only terrible for the people but also a challenge for the police as well to control all this. Source: (www.news.scotsman.com, 13 April 2010)

According to Hanna (10 March 2010) recently, near about 60 people arrested which were involved in suspicious activities and the concerned bodies seized the assets of ?400.000 of those criminals. They had some drug and weapon too.

The new town of Edinburgh is considered the high criminal area. This town is classified as the second in terms of crime in Scotland. It is situated behind the Amberdeen Union street. There are a lot of bars and nightclubs are increasing the numbers of crimes in this area. Due to high crime rate, 5274 offences have recorded in this area.

Source: (www.edinburghhnews.scotsman.com, 14 September 2009)

4.2 Transport Problems in Edinburgh:-

Transport plays very vital role in tourism industry. The good facilities of transport help to maximize the industry’s potential. The transport links is very important in success of tourism product. The international visitors depend on the transport to get in the cities and attractions because they do not know about the destination too much. So, the first priority of the destination management is to provide good transport facilities and services. In this way they can explore more and more about destination. Most visitors have not too much time to spend in destination; they want to get in destination as quickly as possible. (Blackman, Smith, Rowe and Stewart, 2005)

Infrastructure and transportation plays an important role in tourism of a particular area. Edinburgh is the second most visited city in United Kingdom. Every day a lot of people come to visit this city. The traffic growth is increasing day by day and it is creating more problems in Edinburgh. The economic growth of Edinburgh is increasing very rapidly from last a few years. This economic improvement has made a lot of positive and negative changes. The positive changes are, it created thousands of jobs, which are why lots of people travel to Edinburgh on a daily basis. They travel in cars and buses. The main roads of Edinburgh are very busy. Most of the travellers from different cities come to Edinburgh from different source of travelling like trains, cars, buses and aeroplanes. Most of them come in cars and buses which is causing congestion on the roads. That is why the congestion on the road has been increased and nearly it increased up to 60%.

Source: (www.scottish.parliament.uk, 21 August 2002)

The Scottish Govt took a step to resolve the diversion tram issues. This was a good step to handle all the traffic issues. But, there are some issues between the Scottish Govt. and the construction firm. The work has been suspended till the problem is resolved. All the utilities works mostly completed but the laying of tram are suspended.

Source: (www.transportxtra.com, 10 March 2010)

4.3 Tourist’s Problems in August:-

There is a lot of tourist’s attraction in Edinburgh. Tourists come to visit whole year. There is no particular time period for tourists. There are lots social and cultural festivals in the august of every year. These are very big festival and lots people come to attend these festivals form the whole world because of this massive attendance of people the tourism board of Edinburgh is unable to control the number of people that is why they close most of the tourist points and open them in Sundays. (Dailey, 2005)

The second main problem is many people visit Edinburgh in August and they book the hotel and travel tickets. In the result the price of hotel rooms and tickets automatically goes up. Not only prices goes up but also unable to book room and travel ticket. The prices of other tangible item goes up as well. (Wordsworth, 2002)

5. Conclusions and Recommendations:-

In conclusion and recommendations we need would focus to resolve the problem which the destination facing in the tourism industry. There are lots problem which need special attention to rectify for the enhancement of tourism. Although, tourism is growing in Edinburgh but the problems are also. The main problem is transport. The numbers of tourist are increasing day bye day but the transportation facilities are not enough to meet all the requirements. Infrastructure need to improve to provide better transport facilities. They can handle the traffic problem to apply the congestion charges on busy area. They should encourage visitors and local people to use public transport.

The second main issue is crime, although, the crime is not high enough but when more tourist visit Edinburgh they have different nature and the nature can be any type. People are being addict of drugs. Tourists come to these places for maximum entertainment. When they come to these places they use alcoholic drinks and drugs. With all these issues the prostitution is also increasing and is becoming common. The pubs and night clubs open till late night and they cause problem for local residents. In August they arrange some international festival in Edinburgh and these event gives help to criminals to promote their activities.

Edinburgh attracts the people to visit Scottish history. There are lots forts and monuments which represent the Scottish history. Every age group visit the Edinburgh like 10 to 70. There are many other attraction points are as well should be identified to visitors like Edinburgh castle and National gallery of Scotland. A big population of the world is consisting of senior people and they should do some thing to attract them as well.

6. Bibliography:-

Whyte, D. (1998) Landmark visitors guide (Scotland), Landmark Publishing Ltd., Derbyshire

Martine, R. (2008) Edinburgh, Apa Publication, Singapore

Reid, D. (2002) The rough guide to Edinburgh, 3rd edition, Rough Guides Ltd., London

Yeoman. I., Robertson, M., Ali, J. and Durmmond, S. (2003) Festivals and events management: an international arts and culture perspective, A Butterworth-Heinemann, Oxford

Maclellan, R. and Smith, R. (1998) Tourism in Scotland, Thomson Learning, London

Stevenson, R., L. (2009) Edinburgh, Bibliolife LLC, U.K.

Howie, F. (2003) Managing the tourist destination, Thomson Learning, London

Vanhove, N. (2004) Economics of tourism destination, Butterworth-Heinemann, Oxford

Universal Studio is 20 hectares in size, occupying the easternmost part of the 49-hectare Resorts World Sentosa. There are a total of 24 attractions, of which 18 are original or specially adapted for the park. The park consists of seven themed zones which surround a lagoon. The park is currently divided into seven themed areas: Hollywood, New York, Sci-Fi City, Ancient Egypt, The Lost World, Far Far Away and Madagascar, each zone is based on a blockbuster movie or a television show, featuring their own unique attractions, character appearances, dining and shopping areas. The park features the world’s tallest pair of dueling roller coasters that are based on the popular television series, Battlestar Galactica; a castle from the world of Shrek and Monster Rock, a live musical show featuring the Universal Monsters. Universal Studio has over 30 restaurants and food carts, together with 20 unique retail stores and carts located around the park. Attractions premiering are marked “Premiere” and dining outlets that are certified Halal are marked with “Halal”.

3. What are the current services provided?

Universal Studio has a number of recreational facilities, Breathtaking and stimulate, so impressive. The following six not to be missed: Transformers, Battlestar Galactica, Sherk 4D theater, Steven Spielberg’s special effects studio, the Crate adventure of Madagascar, Hollywood dreams.

Firstly, Transformers.

Transformers this project in Universal studio opened in December 2011.The process itself is not only thrilling but also fun.

Secondly, Battlestar Galactica.

It is one of the highest of the two-track roller coaster in the world, if you enjoy the stimulation, you absolutely cannot miss it.

Thirdly, Sherk 4D theater.

This is the sequel “Shrek” won the Academy Award for best animated feature, in this original three-dimensional movies, everyone can enjoy whole-heartedly of surprises in the movie world without leaving the seat.

Fourth, Steven Spielberg’s special effects studio.

It is chaired by Steven Spielberg, designed specifically for Singapore, with the magic of the movie, you can enjoy a different charm of New York City.

Fifth, the Crate adventure of Madagascar.

This is a popular indoor amusement projects, very interesting and exciting.

Finally, the Hollywood dreams.

14 Magnificent floats, together with the special effects, tailored music, as well as the widely popular characters, plus more than 100 performers chic luxury apparel, and add unique charm to Universal Studios of Singapore.

4. What are your experiences when using such services? How do you feel? Any areas to improve

Personally, I feel that it is an extraordinary and enjoyable to experience such wonderful things. When you are undergoing these by yourselves, you would feel extremely not only amazing but also unforgettable. And in my opinion, I suggest that controlling the amount of people to visit the place every day is necessary because that could make the tourists feel more relaxed.

5. Do you feel the staff needs training to further improve their service?

I would like to say that I do feel the staff needs training to further improve their service; it is because it will help a lot in some ways. For example, it will help to enhance customer’s satisfaction. Also, it will encourage the staff to improve themselves and make them feel self-confident thus they can service the tourists better. Moreover, it will indirectly affect the economic efficiency and popularity of Universal Studio.

6. If you are the director of Marketing of this attraction, what are some of the ideas you would like to introduce? You may ignore the budget but use wild ideas to impress the Lecturer.

We can build one of the largest ecological playgrounds, which are not only large recreational projects, Zoo, Underwater World, a Singapore plant-based forest landscape health district will also be build. According to the plan, the area of the ecological playground on acres of rides inside the top equipment are imported from abroad, we could accept visitors of five million people per year after the completion .

Or,

We can build a water park; there are a lot of different kinds of game projects, stimulating, risky, relaxing, and suitable for children and the elderly. We need to find some young people to work inside the park; they can make sure the security, meanwhile they also able to bring vitality and young’s atmosphere to the park.

7. In each of your idea, you have to identify what kind of income you think the attraction can get?

In my opinion, I think the mainly income is from young people. It is because that young people nowadays are becoming more relaxed about life, they do things they want to do in order to enjoy their lives, and they spend much more money to things that attracts them compared to the past. So it will be easier to get money from the young.

8. Another challenge will be how to get the visitor spend $100 or more on that day?

We can charge for the ticket when they enter the door, and then charge a reasonable price for each programme, and we can also provide places to sell some snacks and drinks, restaurant prices due to increase a little, at the same time ask some staff to do promotional activities so that visitors to buy souvenirs conveniently.

in the short termi??less than 1 yeari?‰i??what do you think the attraction can boost their marketing effort?in the long term(3 years and beyond),what do you think the Marketing Dept should create to make the attraction sustainable?

Universal Studios Singapore is Southeast Asia’s only Universal Studios theme park. It covers an area of about 20 hectares, including 21 amusement and performance project, the main theme of the Universal Pictures to create, such as Jurassic Park, Shrek and mummies, also including Battlestar two-track roller coaster and the world’s first to Madagascar the theme of the indoor rafting attractions. Sentosa Resorts World is the second phase of the project, from the third quarter of this year, after another debut, including the aquarium and marine life park. So keep the attractions will attract more tourists come to visit and play.

Universal Studios recently new facilities enabled, every 28 seconds there is a “wooden box”, each can carry 20 passengers. To 0:15, it’s queuing time is also 85 minutes, with the Universal Studios other popular facilities about 90 minutes waiting time, not far off. Madagascar: A Crate Adventure is the first design based on the movie “Madagascar” rides. Visitors ride in a “wooden box”, drift with the flow, you can visit the water on both sides follow the example of Alex the Lion, zebra Horseshoe River Magnus LuoLiya, giraffes Mailman School of movie characters 89 moves the robot visitors rendered movie screen 12 feature from Dream Works Animation film shooting, especially animated fragments for rides. Each adult costs $ 60, children and the elderly fee are 30 In short, this facility enabled a significant increase in the curiosity of tourists, so bring a substantial income. So, in the next 1 to 3 years, this facility will inject fresh blood into the Universal Studios. Because the managers of innovation, create the facility, in order to ensure that the Universal Studios excess funds in the next few years, and is ready to buy the new facilities adequate preparation

Conclusion

Universal Studios Singapore began trial operation in March last year to attract tourists to the first nine months of about 200 million people. Universal Studios Singapore this year, is expected to attract 400 million visitors, management said. Sentosa Resorts World correspondingly increase the number of visitors is expected to increase from 15 million passengers to 16 million passengers. Resorts World Sentosa president Chen Qide, Universal Studios Singapore visitors, foreigners accounted for 75%, Chinese tourists accounted for about 10-15%. I would like to Universal Studios in a few years after the market is growing, it is possible to open other branches in other countries such as China

The United Kingdom is one of Europes most influential country. United Kingdom is a sovereign state positioned near the north-western coast of continental Europe (Appendix 1), comprising of England, Scotland, Wales and Northern Ireland. The UK is surrounded by the Atlantic Ocean, the North Sea, the English Channel and the Irish Sea.

The UK is one of the 27 member states of the European Union and is spread across about 243,000 sq. km (about 94000 sq. miles). The UK has the world’s seventh largest economy by nominal GDP and eight largest economy by purchasing power parity. It was the world’s first industrialized country Mathias (2001).

Tourism is one of the foremost industries in the UK size wise. According to statistics by Wikipedia, the UK is the world’s 7th biggest tourist attraction behind France, USA, China, Spain, Italy and Turkey, with approximately 29.2 million visiting in 2011. In 2011 15.3 million visitors spent time in London with an estimated spending of over ?9.4bn that represents 52% of all inbound visitor spending calculated by VisitBritain in 2011. (Appendix 2)

It is predicted that UK tourism could grow to ?188b within the next decade that is 60% by 2020 and the number of jobs related to tourism could increase 264,000 to 2.89 million, according to VisitBritain.

Recently however, the UK tourism industry though having a great potential of growing faces some challenges and a serious competition from other most visited tourist destinations.

CRITICAL ANALYSIS:

UK tourism industry can easily be analysed critically with the help of Michael Porter’s five forces model. Porter in his five forces model refers to an organization but can be applied to a certain industry via which we can determine the competitive strength and weaknesses of that particular organization/industry. (Appendix 3)

PORTER’S 5 FORCES:

Porter’s five forces include:

THREAT OF NEW ENTRANTS:

When it comes to tourism, people want to explore new fascinating countries and that is why new entrants catch the attention of travelers. The UK tourism industry faces threat by new entrants such Turkey, Germany and Egypt while Malaysia and Mexico have attracted many tourists in 2011.

The estimated number of international tourist arrivals in the UK till June 2012 were around 29.2 million which was 28.3 million in 2010 and the change from 2010 to 2011 had an increase of +3.2% according to UNWTO (2012).

In 2011, Turkey climbed up in the most visited tourist destination above the UK to become the 6th most visited tourist destination in the world with an estimated number of 29.3 million tourists which was 27 million in 2010 and showed a massive +8.7% changed from 2010 till 2011 mentioned in Tourism Highlights by UNWTO (2012).

The UK is facing a serious competition from Germany, which had 28.4 million visitors in 2011 and has shown +5.5% change from 2010 until 2011.

THREAT OF SUBSTITUTES AVAILABLE AND COMPETITIVE RIVALRY WITHIN THE INDUSTRY:

Most of the tourists look for alternative destinations when they face problems in getting visas, bookings etc. and that is when substitutes get the upper hand. In Europe, Spain, France and Italy have been the biggest competitors of the UK tourism industry from the beginning, attracting huge amount of interest from tourists all over the world.

France, which has been the most visited tourist destination and a country with a romantic image, still leads the raking of tourists visiting with approximately 79.5 million and is third in receipts with US $54 billion. Spain is second on the earners list with US $60 billion with approx. 57 million arrivals in 2011. Italy, ranks 5th with 46.1 million tourists in 2011 and receipts of $43 billion in 2011 UNWTO (2012).

BARGAINING POWER OF BUYERS AND SUPPLIERS:

There is a lot of influence of buyers and suppliers on a tourism industry. In this report, buyers are the main tour operators of the product here, which is tourism. There are many tour operators working in the UK that offer competitive prices to tourists and discounts such as Thomas cook. They identify new locations/places and possess the power of convincing tourists to visit those destinations that has a lost cost attached to it.

For every tourism industry, three “A’s” are very important and this similar is the case with suppliers. The three A’s are:

Attractions

Amenities

Access

Attractions include those places that are either famous for their natural beauty or are built in such a way that attracts tourists. If such places are owned by the government/owners, tourist should be allowed to visit them and the owners should always welcome them. There are many places in the UK that attracts a lot of tourist just because of their natural beauty or the way they are being constructed like

The Tower of London, Windermere Boat Cruises, Flamingo Land Theme Park and Zoo, Royal Botanical Gardens, Stonehenge, Eden Project etc. Amenities include basic conveniences for tourist such as hotels, guesthouses, motels etc. A lot of funding is needed for this and there has to be a proper look after of these facilities. Last but not the least, Access includes means of travelling. The UK has an excellent transportation system that includes airports, railways, busses, motorways etc. London is famous for its magnificent underground tube system, which serves almost 3.22 million; people daily UNWTO (2012).

PEST ANALYSIS:

UK tourism industry can also be analyzed by doing PEST analysis. Which comprises of Political Factors, Economic Factors, Social Factors and Technological Factors.

POLITICAL FACTORS:

Political factors are those in which there is governmental interference such as laws, policies, tariffs, good and services, education, infrastructure etc. When we talk about businesses, political factors plays an important role in the regulation and operation of it. Political environment of the UK is fairly stable.

There have been minor ups and downs with the issues regarding the UK joining EU and accepting Euro plus European Union’s expansion and the UK supporting USA in its terrorism campaign, which has adversely affected its political stability. Other key issues includes the Visa Processing by the UKBA, VAT on tourism services, Air Passenger Duty etc.

VISAS:

Over the past few years, there has been a lot of new rules and regulations by the UKBA because of which many tourists face problems in getting their visas even after paying a hefty sum in visa fees. A short term visa to the UK costs ?78 which is ?25 more than that of a Schengen Visa (?53) that gives an access to 25 counties and this is why 50% more visitors from India travel to the UK via France. From 2000 till 2009 the revenue generated via tourists from other countries has increased by 37.4% (in USD) which when compared to France (49.7%) and Germany (85.6%) is very low, according to Tourism Alliance (2012).

Those tourists that come from counties other than the EU or those who require a visa are about 11% of all tourist that visit the UK (3.4m) and spend a lot on their travelling expenses per trip that contributes to an approx. ?3 billion to UK’s economy, Tourism Alliance (2012).

VAT:

According to recent statistics by Tourism Alliance (2012) , the UK is one of the only four (others include Denmark, Slovakia and Lithuania) out of 27 EU member countries that charges full rate VAT to tourist on accommodations which is the second highest rate of VAT in Europe. This can be in a sense harmful to the UK tourism industry when compared to other tourist destinations across Europe. If the UK reduces taxes on accommodations and famous tourist destinations, it could result in a profit of ?2.6 billion over the next 10 years according to Deloitte/Tourism Respect. Other locations that have a full rate VAT in the UK includes amusement parks, museums, theaters, shows and cinemas and the UK also charges full rate VAT on restaurant meals which in EU countries averages up to 8.8%., while the average rate of VAT on accommodation in Europe is 10.3% as per statistics of Tourism Alliance (2012). When we look at competitors of UK, France in a couple of years after reducing VAT on restaurant meals from 19.6% to 5.5% showed that there were about 62,700 new jobs in that sector Tourism Alliance (2012) which is a clear indication of what other countries are trying to achieve and change in their tourism sector.

AIR PASSENGER DUTY:

IATA predicts by looking at the current figures that in 2014 there will be an estimated 3.3 billion tourist travelling via airplanes of which 2 billion will be travelling domestically. In November 2010, the UK Government increased APD of up to 55% and statistics from Tourism Alliance study in 2012 shows that APD has jumped to 650% for passengers travelling in economy class and 750% for those travelling in business class in the previous 5 years that contributes approx. ?2.2 billion yearly in revenue to the Government. A report by Oxera for Airport Operations Association in 2010 showed that if the government replace APD with that of EU, the Gross Value Added would show an increase of ?4 billion and there will be approximately 100,000 more jobs.

ECONOMIC FACTORS:

Economic factors are those due to which the spending of tourists can be affected. It includes inflation in the country, employment/unemployment statistics, Exchange rates, GDP etc.

At the beginning of inflation that started to take place in second quarter of 2008, shortage in arrivals was reported and the inbound tourism of UK fell by 5% according to the Euromonitor International Figures. When the inflation struck in 2009, it affected a lot of business and tourism industry was one of those. People living in the UK preferred to spend their holidays domestically and the number of tourists from abroad also shown a decline. The Euromonitor International Figures that were recorded in 2009 showed that there was an approx. 12% decline of people travelling abroad from the UK. The inflation rate of the UK, which was last recorded in November 2012, was 2.70% according to ONS. (Appendix 4)

In a report published by UKCES in 2012, it is mentioned that tourism accounts for approximately 6% of UK’s GDP and has given employment to approximately 2.5 million people. Each UK nation has a tourism strategy that aims to ‘raise the ambition of tourism over the next decade’ (People 1st, 2010a).

Exchange rate and the fluctuations in currencies also play an important role in the spending patterns of tourists. The comparison of pound sterling versus euro has contributed a lot in the Britons spending more when they travel to other European destinations and Experts have noticed that the euro being cheaper than pound sterling has made it cheaper for the Britons to travel on holidays to European countries (Hall, 2012). The total UK tourism spend by sector can easily be seen in this image. (Appendix 5)

SOCIAL FACTORS:

The style of living of people and the cultural aspects that mainly comprises of population, growth, trends, careers, how safe the place is where they are living and being cautious about their health are generally considered as social factors. Tourists from other countries may not know much about the traditions and customs of the country they are visiting that may prove to be a problem at times.

Some impacts of such social factors mentioned in a report of Travel and Tourism by Ann Rowe, John Smith and Fiona Borein in 2002 suggests that it will be good for the local people as well as the tourists to get together and learn more about different lifestyles which can be beneficial to both the parties as there is a room for improvement in the sectors of infrastructure, health and education, sports, traditions, heritage etc., as London is main hub of people for across the globe.

In recent time’s people of the UK and the tourists are concerned about their safety and when travelling to the UK the riots of 2011 served as a minus for the tourism industry at that time. According to the Daily Mail UK, in India the editor of a magazine warned his followers in twitter that they should avoid coming to the UK at all. Due to these riots, many questions were raised on the safety and security procedures for the upcoming 2012 Olympics.

TECHNOLOGICAL FACTORS:

Technology plays an important role in the development of any business or industry and when a certain business provides facilities and are equipped with latest technology it creates a better relation between them and the customers. Bookings tickets and online holiday bookings have really excelled as the time progressed. According to ONS (2011), wireless hotspots in the UK were accessed by approximately 4.9 million users and 77 per cent of households had internet access.

OPTIONS AVAILABLE TO THE UK TOURISM INDUSTRY AND RECOMMENDATIONS:

If the UK wants to compete with the other famous tourist destinations across Europe and on the list, first of the few recommendations would be to reduce the visa application charges and restrictions along with the APD and bringing them on the same level as that of other European destinations because a family comprising of 4 members from India/China pays a hefty sum of ?612 as their Visa and APD charges when travelling to the UK, Tourism Alliance (2012).

Tourism Alliance (2012) in their report show that when in 2009, Taiwanese visitors were granted visas to the UK, visitors grew by 39% and the revenue obtained from them increased by 155%.

Another report by Tourism Alliance in which it is clearly mentioned that APD has already cost 23000 people their jobs in last seven years and if it continues to increase at this level by 2017 it would have resulted in ?1.1 billion loss and 6000 more jobs.

Secondly the high VAT that the UK charges to its tourists, Tourism Alliance in 2011 predicted that if VAT on tourism is reduced to and brought in alignment with that of European nations, the UK tourism could earn approximately ?1.3 billion per annum that is 7% increase and since this report looks at the upcoming three years the short term losses in VAT receipts would be recovered in short span of three years.

CONCLUSION.

There has to be a better investment and marketing plans, events like the Olympics 2012, managing them successfully so that tourist get value for the money they paid, about which a report by Deloitte and Forecasting organization Oxford Economics has predicted that tourism sector is likely to grow by 3.5% per annum between 2010 and 2020. Together all the governing bodies and agencies should work in collaboration and every one of them can play their part in making the UK a better place to visit and explore.

Annotated Bibliography

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Deloitte (2010). The Economic Contribution of the Visitor Economy: UK and the Nations. [Online] 4-47. Available from: http://www.visitbritain.org/Images/Economic%20case%20for%20the%20Visitor%20Economy%20-%20Phase%202%20-%2026%20July%202010%20-%20FINAL_tcm29-14561.pdf [Accessed 22 December 2012].

Euro Monitor International (2012) Travel and Tourism in the UK. [Online]. Available from: http://www.euromonitor.com/travel-and-tourism-in-the-united-kingdom/report [Accessed 23 December 2012].

Eurostat (2012) Tourism Trends. [Online]. Available from: http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Tourism_trends [Accessed 23 December 2012].

Eye for Travel (2012) Tough Times: The Top Five Challenges Facing UK Travel. [Online]. Available from: http://www.eyefortravel.com/revenue-and-data-management/tough-times-top-five-challenges-facing-uk-travel [Accessed 23 December 2012].

Hall, J. (23 Aug 2012) Cheap ‘Staycations’ Cost More than Foreign Holidays. The Telegraph. [Online] Available from: http://www.telegraph.co.uk/news/uknews/9494459/Cheap-staycations-cost-more-than-foreign-holidays.html [Accessed 20 December 2012].

Mathias, P. (2001). The First Industrial Nation: the Economic History of Britain, 1700-1914. London: Routledge

ONS (2011). Internet Access-Households and Individuals, 2011. [Online]. 1-5. Available from: http://www.ons.gov.uk/ons/dcp171778_227158.pdf [Accessed 21 December 2012].

People 1st (2010a). State of the Nation Report 2010. Uxbridge: People 1st. [Online]. Available from: http://www.people1st.co.uk/research/state-of-the-nation-2011/state-of-the-nation-2010 [Accessed 19 December 2012].

Payne, E. (9 Aug 2011) Fears for London Tourism and the Olympic Games after another Night of Intense Rioting. Daily Mail. [Online] Available from: http://www.dailymail.co.uk/travel/article-2024085/London-riots-Fears-tourism-Olympics-night-violence-looting.html [Accessed 21 December 2012].

Rowe, A., Smith, J and Borein, F. (2002), Travel and tourism. [Online]. Available from: http://assets.cambridge.org/052189/235X/sample/052189235XWS.pdf [Accessed 21 December 2012].

Swarbrooke, J. (Nov 2003) Corporate Social Responsibility and the UK Tourism Industry. Tourism Insights. [Online]. Available from: http://www.insights.org.uk/articleitem.aspx?title=Corporate+Social+Responsibility+and+the+UK+Tourism+Industry [Accessed 23 December 2012].

The UK Tourist (2010). Statistics 2009. [Online] 2-13. Available from: http://www.visitbritain.org/Images/UK%20Tourist%202009_tcm139-191452.pdf [Accessed 22 December 2012].

Tourism Alliance (2012). UK Tourism Statistics 2012. [Online] 1-4. Available from: http://www.tourismalliance.com/downloads/TA_327_353.pdf [Accessed 18 December 2012].

TravelMole. (2012). UK Travel and Tourism Industry in 2009 and Outlook for 2010. [Online]. Available from: http://www.travelmole.com/news_feature.php?id=1142130 [Accessed 20 December 2012].

Trimetric. (2011). The UK’s inflation problem – rates compared internationally. [Online]. Available from: http://byline.timetric.com/2011/06/14/the-uks-inflation-problem-rates-compared-internationally/ [Accessed 19 December 2012].

Tourism Alliance (2012) Tourism Accounts for Third of New UK Jobs. [Online]. Available from: http://www.tourismalliance.com/downloads/TA_341_366.pdf [Accessed 23 December 2012].

Tourism Alliance (2012) UK Losing Over ?1bn Each Year by “Putting Off” Tourists: New Research by the Tourism Alliance. Fair Tax on Flying Alliance [Online]. Available from: http://www.tourismalliance.com/downloads/TA_312_344.pdf [Accessed 23 December 2012].

Tourism Alliance (2012) Tourism for Growth. [Online] 1-7. Available from: http://www.tourismalliance.com/downloads/TA_294_327.pdf [Accessed 23 December 2012].

UNWTO (2012). Tourism Highlights. 2012 Edition. [Online] 3-6. Available from: http://mkt.unwto.org/sites/all/files/docpdf/unwtohighlights12enlr_1.pdf [Accessed 18 December 2012].

VisitBritain. (2012). Inbound Tourism Facts. [Online]. Available from: http://www.visitbritain.org/insightsandstatistics/inboundtourismfacts/ [Accessed 18 December 2012].

VisitBritain. (2012). Visitor Economy Facts. [Online]. Available from: http://www.visitbritain.org/insightsandstatistics/visitoreconomyfacts/ [Accessed 20 December 2012].

VisitBritain (2011). Tourism Trends Quarterly. [Online] 1-5. Available from: http://www.visitbritain.org//Images/TTQ%20Feb11_tcm29-22078.pdf [Accessed 22 December 2012].

Wikipedia. (2012). Tourism in the United Kingdom. [Online]. Available from: http://en.wikipedia.org/wiki/Tourism_in_the_United_Kingdom [Accessed 21 December 2012].

Williams, M., Luanaigh, A.N. & Garrett, R. (2012) Sector Skills Insights: Tourism. UKCES. [Online] 1-30. Available from: http://www.ukces.org.uk/assets/ukces/docs/publications/evidence-report-55-tourism.pdf [Accessed 23 December 2012].

Globalization of the world market brings new possibilities as well as enormous hurdles for both established and young businesses. With the emergence of international entrepreneurship, entrepreneurs are concentrating on specific issues that they face operating in complex environments affected by diverse national cultures and institutional influences (Johanson & Vahlne, 2009). New global entrepreneurs depend on global networks for resources, distribution, and designs for growth. International entrepreneurs realize that success in a new marketplace requires agility, ingenuity, and certainty with a global viewpoint to acquire sustainability. Thus, global thinking is beneficial since foreign business clients can choose ideas, products, and services from many countries and cultures. However, entering into a foreign environment and culture can also become an obstacle psychologically in and of itself for the individual international entrepreneur (Mitchell et al., 2002). This paper will examine two areas that focus on the importance of cultural understanding in international entrepreneurship. The first will comprise of how entrepreneurs who expand into international markets must know how to think globally in order to design and adopt strategies for different nations as a business ventures into an uncertain market. The second part will explore how psychological adaptation of the individual entering a foreign culture is interconnected with the international entrepreneur.

Entrepreneurs can expand their business by participating in the global market; as every year thousands of small business enterprises are actively engaged in the international field. International entrepreneurship studies have started to focus on specific topics that confront entrepreneurs as they expand their new ventures (Zahra, Korri, & Yu, 2005). The definition of ‘international entrepreneurship’ in this paper will focus on the process of creatively discovering and exploiting opportunities that lie outside of a firm’s domestic markets in the pursuit of competitive advantage (Zahra & George, 2002); across national borders, to create future goods and services (Oviatt & McDougall, 2005). This meaning incorporates the process aspect of international entrepreneurship, which focuses on a central issue of why some individuals exploit international opportunities while others equally well placed do not act on them (Zahra, Korri, & Yu, 2005). Globalization is a process fuelled by increasing cross border flows of goods, services, money, people, information, and culture (Held et al., 1999, p. 16). However, the use of this term will refer to Guillen’s (2001) definition of globalization as a process leading to greater interdependence and mutual awareness among participants in general. Guillen (2001) combines the understanding of globalization as the intensification of consciousness of the world as a whole, and as the ‘diffusion of practices, values and technology that have an influence on people’s lives worldwide’ (Guillen, 2001).

Noticing opportunities is normally more difficult in international settings, and the level of uncertainty that the potential entrepreneur must undergo will also be greater. Entrepreneurs able to function successfully in international settings may be both more skilled at noticing opportunities and have a greater capacity to endure the uncertainty associated with international entrepreneurship (Lu & Beaamish, 2001). Noticing opportunities is normally more difficult in international settings, and the level of uncertainty that the potential entrepreneur must endure will also be greater (Coviello, 2006).

Oviatt and McDougall (2005) emphasized that international entrepreneurs display the intention to compete in multiple locales at the inception of the firm to exploit existing international opportunities and would have the intention to do so when they started their firms (McNaughton, 2003). Starting a firm is a difficult process under the best of circumstances. International business scholars have traditionally argued that internationalization is difficult because firms had to overcome a liability of foreignness, although Johanson and Vahlne (2009) have recently acknowledge that being part of an effective network and prior knowledge can greatly accelerate the international entrepreneurship process. This liability of foreignness was based on the fact that firms and entrepreneurs lacked knowledge about doing business in other countries, which meant they had to endure the costs of learning and the discomfort of uncertainty (Lu & Beaamish 2001). However, by positioning themselves in relevant networks, or because of their past experience, many entrepreneurs have high levels of operational knowledge about foreign markets. In this manner, the traditional approaches for dealing with the liability of foreignness of either imitating local firms or by transferring unique organizational or managerial competences to their foreign unit (Sapienza et al., 2006) have been supplemented with a knowledge component, which is more related to uncertainty. There has been an acknowledgement that firms could begin to internationalize sooner and Sapienza et al. (2006, p. 915) suggest that “the earlier a firm internationalizes, the more deeply imprinted its dynamic capability for exploiting opportunities in foreign markets will be.” Others have pointed out the benefits of internationalizing earlier, or at least exporting at an earlier stage (Kundu & Katz 2003). This may be because although there is a cost to learning, early entrants begin this process sooner (Autio, Sapienza, & Almeida, 2000) and at least some suggest they should do this before they actually start the firm (Coviello, 2006).

An entrepreneur who would like to take advantage of international markets may have to study a foreign language, may have lived abroad and may be face with culture shock. Entrepreneurs must realize their company’s competitive advantage such as: technology, price, financial superiority, or marketing, product innovation, an efficient distribution network or possession of exclusive information about the foreign market (Sapienza et al., 2006). Declining market conditions at home may cause entrepreneurs to seek foreign markets to help their business. Successful global entrepreneurs should have the following characteristics: a global vision, international management experience, innovative marketing or technology processes, a strong international business network, and effective organizational coordination worldwide (Lee, Peng, & Barney, 2007).

When global opportunities occur, entrepreneurs are likely more open-minded about internationalizing. The advantage of international trade is that a company’s market is expanded much and growth prospects are greatly raised. Other advantages include minimizing seasonal slumps, reducing idle capacity, getting knowledgeable about products not sold in target markets, technology used in other countries, and learning about other cultures (Johnson, Lenartowicz, & Apud, 2006). Before going to a foreign market, it is essential to study the unique culture of the potential consumers. Concepts of how the product is used, psychographics, demographics, and political norms as well as legal normally differ from an entrepreneurs’ home country (Miller & Parkhe, 2002). De Tienne & Chandler (2004) suggest that entrepreneurs must consider five factors relative to the country and cultures that the business venture will inhabit. First, they must study foreign government regulations: patent, import regulations, trademark laws, and copyright that affect their products. Second, they must know political climate: relationship between business and government or public attitudes and political events in a given country affect foreign business transactions. Third, they must consider infrastructure: packaging, distribution system, and shipping of their export product. Fourth, they must research distribution channels: accepted trade both retail and wholesale, service charges and normal commissions, distribution agreements and laws pertain to agency. And fifth, they must study competition: number of competitors in target nations and their market share, as well as their price, place, product and promotion. Additionally, they must find market size: of their product stability, size, country by country, and know what nations are markets expanding, opening, maturing, or declining (De Tienne & Chandler, 2004). Eventually, entrepreneurs must understand culture of their products. Small businesses can study international cultures by business travel, participating in training programs, reading the current literature, and undertaking formal educational programs. Small business, who wants to sell product on a worldwide basis must realize different standardization in each country. In some cases, goods must be adapted for different local markets if it is to be accepted and consumer goods always require much more adaptation (Johanson & Vahlne, 2009).

One issue related to international opportunity is why individuals in home countries are not the ones that take action on these opportunities, which would seem logical, as they are better positioned to notice. This question is especially important because research indicates that local firms usually have higher levels of performance than do foreign firms (Miller & Parkhe, 2002). While the matter of liability of foreignness is present in some cases, this relates to firms competing in the same industry. Thus, when locals begin to imitate the foreign firm, they may in fact end up with higher levels of performance, because of factors such as lower lawsuit awards (Mezias, 2002). However, national average levels of entrepreneurship to uncertainty, opportunity, and cognition uncertainty avoidance are not identical across countries (Hofstede, 2001). This suggests that although it is possible that both a local and foreigner notice a specific opportunity at the same time, the local may not act for both the fear of failure and stigma attached to that failure in certain cultures (Lee, Peng, & Barney, 2007). Thus, the potential entrepreneur must also be willing to endure the uncertainty associated with acting on these opportunities.

To gain insight into effective professional task performance across cultures, an understanding of effective communication and psychological adaptation has to be complemented by an exploration of the effect of culture on task process. Over the last few years studies on cross cultural competencies in different professional fields have started to emerge.

Examining the relationship between national culture and entrepreneurship is an important emerging subject matter in international entrepreneurship (Hayton, George, & Zahra, 2002). The sociological viewpoint on entrepreneurship proposes that entrepreneurs are intertwined in a social framework and their cognitive process and behaviours are shaped by the interactions between the environment and entrepreneur (Zahr, Korri, & Yu, 2005). There is also evidence of the impact of national cultural values on the characteristics and behaviour of individual entrepreneurs (Mitchell et al., 2002). Mitchell et al. (2002) confirmed that entrepreneurs share a set of cultural values, regardless of their national origin or cultural background. However, it appears that whilst some core values are shared across different countries and cultures, some of the behaviours of individual entrepreneurs reflect the value system of their respected national culture.

With regards to adaptation in international entrepreneurship, entering into a foreign environment is not a transition for the business venture alone. The actors, international entrepreneurs, involved are also plunging into same the foreign environment (Hofstede, 2001). Entering a new culture means commencing to share a pattern of thinking, feeling, reacting, and problem-solving (Saee, 1999). Cross-cultural psychology argues that unfamiliar cultural territory negatively affects an individual’s affective, both the sense making and cognitive mechanisms, and undermines the appropriateness and effectiveness of their behavioural responses (Maznevski & Lane, 2004). This happens when individuals are unable to accurately perceive and interpret the alien cultural environment, nor explain or predict the behaviour of people with different cultural backgrounds (Maznevski & Lane, 2004). Evidence suggests that exposure to a foreign cultural environment can cause ‘culture shock’, a psychological condition which adversely affects psychological and affective states (Johnson et al., 2006). Saee (1999) contends that opportunity identification competencies developed in an entrepreneur’s home cultural environment may not be sufficient to perceive a high level of entrepreneurial self-efficacy about performing the task of identifying opportunities across borders and cultures.

Cross-cultural studies have explored the challenges that a foreign cultural environment poses to human behaviour, cognition, and professional performance. Human behaviour is considered the coping mechanism that individuals consequently develop. Some researchers suggest that building this coping mechanism, in individuals, amounts to developing a global mindset or cultural intelligence (Maznevski & Lane, 2004; Early & Mosakowski, 2004). According to Maznevski and Lane (2004, p. 172), a global mindset is ‘the ability to develop and interpret criteria for personal and business performance that are independent from the assumptions of a single country, culture, or context’; then to adequately implement those in different countries, cultures, and contexts. Cultural intelligence is seen as the ability to interpret the foreigner’s behaviour the way the foreigner’s countryman would (Earley & Mosakowsi, 2004). Cross-cultural competence is defined as the appropriateness and effectiveness of one’s behaviour in a foreign cultural environment (Mitchell et al., 2000). Psychological adaptation is considered the centre point of personal traits and attributes that help generate internal responses in an unfamiliar environment by managing stress (Saee, 1999). Successful adaptation to a host cultural environment requires the abilities to be mindful, to tolerate ambiguity, and the ability to explain and make accurate predictions of strangers’ behaviour (Saee, 1999). This also includes the levels of anxiety and uncertainty that affect the intercultural encounter (Saee, 1999).

CONCLUSION:

International entrepreneurs actually face greater uncertainty than is generally common in more established businesses, which benefit from learning and experience, because international entrepreneurship is about the implementation of a new innovative business. There is an uncertainty to entrepreneurship and the role it plays in initiating the process. Mitchell et al., (2000) observes that entrepreneurial action is a result of overcoming and paralysis that is caused by the uncertainty that precedes the entrepreneurial act. Guillen (2001) adds that the key concept that entrepreneurs create new combinations, which become the innovations that are the engine of economic growth. The entrepreneur is likely to see the opportunity as relatively certain. This is important with regards to international entrepreneurship in that exploiting an international opportunity requires more than dealing with operational certainty; there is also a high level of cultural uncertainty that the entrepreneur has to endure to ensure the new venture’s prosperity. The volume of research on international entrepreneurship supports the notion that a period of domestic development is no longer necessary for many firms and that international entrepreneurship is possible at the time the firm is established or shortly thereafter. However, consideration must be taken with respect to the foreign culture a venture will go into and the psychological affects upon the entrepreneurs joining in the venture.

Effective operation in the globalised economy requires that entrepreneurs develop new skills and competencies. Some of these skills and competences are needed to deal with national and regional cultural differences that are becoming intense with the continuance of globalisation (De Tienne & Chandler, 2004). (Authors) believe that current and future international entrepreneurs need to develop cross-cultural competence to successfully identify business opportunities.

A tour operator combines tour and travel components to create a holiday, it designs travel routes for tourists and offer perfect arrangements of the airlines and hotels. In a word, a tour operator offers package holidays. A travel agent is a kind of retail business which is a buyer of tour operator, it sells travel-related products and services to customers on behalf of tour operators, airlines, hotels and other entities. Nowadays, tour operators and travel agencies are closely related to each other. Some tour operators own the distribution channel, they set up retail shops selling products and services directly to the final customers, or they establish close relationships with travel agencies under contracts. The development of the industry should be attributed to the development of transportation in the early age. With the invention of aircraft, the demand for travel increased rapidly. But in recent years, situations become more complex than ever before in such a changeable economic climate, UK’s tour operator industry are fluctuated in growth. This part of report focuses on the market and development during the year 2005-2008. The Association of British Travel Agents (ABTA) was formed in 1950 by 22 leading travel companies, now represents over 5,300 travel agencies and nearly 1000 tour operations. Its Members range from small, specialist tour operators and independent travel agencies through to publicly-listed companies and household names; from call centres to internet booking services to high street shops, occupy more than 90% of the British market. Thus statistics of ABTA can be used to conduct this report. According to the annual report of ABTA, during the year 2005-2006, bookings through ABTA members were 6% down on the prior year. The package holiday market continued to decline but specialist holidays, cruise tours and flight-only bookings all grew significantly. Company failure level rose substantially from 33 in the previous year to 47 this year. The industry structure changed a lot: independent agents turned to favour dynamic packaging with concentration on niche markets including long-haul, cruising, UK holidays and self-packaging. Big operators drove bookings online and through their own retail networks. 2006 is one of the most challenging years in the industry’s history, with traditional business model under great pressure and uncertain future for many others. During the year 2006-2007, 32.8A million overseas visitors who came in 2007 spentA ?16.0A billion in the UK, the volume remained stable but spending fell in cash terms for the first time since 2001. Financial statuses of ABTA members were quite positive: total net current assets of ?5.11 million (6% up) and total income of ?5.70 million (13% up). Company failure levels fell dramatically from 47 to 32 compared to the previous year. Several weaker players in the industry have been winnowed out of the market but the figures are still very encouraging. The industry remained in good health. Consolidation and merger activity has been a key feature of the outbound tourism market in 2007. New business models had made that the differences between the tour operator and travel agency become increasingly blurred. 2008 is again a challenging time for the industry: at one time the fuel price had reached $150 a barrel which is the double of the price in 2007; sterling lost a large amount of its value against most currencies; what makes things worse is that the credit crunch caused the world’s economic downturn, consumers changed their spending patterns, companies struggled to survive. In spite of these factors, UK outbound visits remained increase by 1.5 million from 69.2 million last year to 70.7 million this year. The number of company failures fell from 32 to 30 compared to the previous year. But unfortunately, because of the high cost of fuel, the UK’s third largest travel group-XL Leisure Group collapsed on 12 September 2008 leaving 85000 passengers still on their holidays. This failure resulted in one of the most extensive repatriations in the UK travel industry’s history with 85,000 passengers being flown home in a joint action by TUI, Thomas Cook and Virgin orchestrated by the CAA. Another important issue happened in 2008 is the merger of ABTA and the Federation of Tour Operators (FTO) which represents the continuing integration of travel agency and tour operator within the industry. The industry will benefit greatly from the combined different strengths that both organisations offer. The FTO’s experience and expertise in operational issues fit ideally with ABTA’s traditional functions.

PEST analysis of the remote environment
(P)olitical/Legal
3.1.1 Political instability and Terrorism

Political instability is described as a condition of a country where a government has been toppled, or is controlled by factions following a coup, or where basic functional pre-requisites for social-order control and maintenance are unstable and periodically disrupted (Cook 1990). It is clear that the political instability in a certain country is negatively influencing travelers’ decision making with prospective travelers seeking substitute travel plans. It will reduce the demand for travel significantly as tourists concern about the safety first and nobody wants to travel in a dangerous environment that strikes, wars and terrorists attacks happen. Among all the factors influencing political instability, terrorism is the most significant one that affecting tourism in UK in recent years. After the heart-broken event of terrorist attack on 11th September 2001, the concern about safety in travelling is increasing rapidly. A series of coordinated suicide bomb attacks on London’s public transport system during the morning rush hour happened on 7th July 2005. The discovery of two car bombs set to detonate in London’s bustling theater and nightclub district Friday, June 29th, 2007 has encouraged residents to remain alert. Following that case, a jeep rammed into a Scottish airport in Glasgow on June 30th, forced Britain to raise the threat level to “Critical” -the highest alert status. All of the events listed above had negative influences on tourism in UK and businesses of UK’s tour operators. Report said that 15% of the advanced bookings were cancelled during the summer peak travel time in 2007.

Government and Tourism

Government always participates in tourism activities through several kinds of ways: government makes policies for the development of tourism industry; government makes policies that will have impacts on tourism industry. In this part, the report will address issues like the carbon tax influences on the industry, VAT effects on the industry and financial incentives government used on the industry.

According to Conservatives 2007, aviation contributes just 5.5% of the UK’s CO2 emissions but emissions from UK aviation increased significantly by more than 90% between 1990 and 2004. Government urged to take measures to reduce the negative impact of carbon emissions on environment: from 2001 to 2007, the original APD which is at a rate of ?5.50 on flights from the UK to elsewhere in the European Union and the European Economic Area and ?22.00 for other flights was introduced; a new tax which doubled these charges was introduced from February 2007. These changes in carbon taxation would result in changes in prices of travel products using aviation and finally affect the demands for travelling and sales for tour operators. According to Karen Mayor and Richard S.J. Tol, due to the changes in February 2007, countries near the UK would see a small drop in visitor numbers, and the UK itself would see a larger drop (1.2%). The recent doubling of the boarding tax will reduce arrivals by some 528,800 people in 2010, this is a 1.3% reduction (Karen Mayor, Richard S.J. Tol, 2007).

UK government applies a rate of 15% VAT (Value Added Tax, temporary cut from 17.5%) which is the standard rate on tourism products, while most other EU countries apply reduced rate of VAT around 5% on tourism products. Report said that a cut to the 5% UK reduced VAT rate on tourist attractions admission and accommodation will boost employment and result in gains of up to ?760 million savings in increased income and corporation tax. It also predicts an additional ?440 million will be injected into the industry supply chain.

The Government had announced an 18% cut in funding for VisitBritain over the next three years on October 2007. Tourism Alliance Chairman, Ros Prichard OBE, stated “This cut in funding means that, in real terms, the Government will have reduced VisitBritain’s funding by around 50% between 1997 and 2011.” That is a catastrophe for UK’s tourism industry, VisitBritain will be lack of funding to advertise and promote UK’s attractions, financial incentives to the industry had been withdrawn and other capital allowances had been reduced, while funding for VisitBritain had been cut back just at the time when they were needed the most, the growth in sales of the industry will suffer.

(E)conomic
3.2.1 National economy and disposable income (impact of economic recession)

The world is now suffering from the economic downturn caused by financial crisis, businesses collapse, jobs are destroyed, UK’s economy is significantly influenced by the crisis. According to National Statistics Online, UK’s GDP contracted by 1.6% in the fourth quarter of 2008 when the crisis started. It is now 2% lower than the fourth quarter of 2007. For the year 2008 as a whole, GDP rose by 0.7 per cent with a down trend of 3% in the previous year. UK’s economy is experiencing the worst recession in over a century. The recession is a disaster for employment in UK, unemployment rate rose to 6.7% (0.6% higher than the last quarter and 1.5% on last year). 29.3 million people were in work in the period December to February according to the labour force survey (LFS). The number of people employed fell by 126,000 this quarter and down by 227,000 on the last year. All the situations listed above lead to the decrease of national income and disposable income. Tourism is sensitive to economic uncertainty and downturn: most travel activities involve disposable income, as total income drops, disposable income drops, people would conserve their money to cover the cost of life essentials, food, shelters and family necessities. The demands then decrease making tour operators suffer.

3.2.2 Fuel price

Fuel cost is a major cost of airline companies, the cost will be paid by customers as fuel surcharge. Tour operators will raise the price of their products, especially for long-haul products when fuel price goes up. The travel enterprises will then be in danger of losing customers. When international crude oil price hit the record of $148 a barrel in September 2008, both airline companies and travel enterprises struggled to make ends meet. The fuel surcharge of some long-haul flights was even same as the ticket price, this might change customers behaviour at some degree, people may stay closer to their home or switch to other entertainments. The economic crisis UK encounters leads to a substantial decrease of oil price which could possibly boost travel industry to some extend though the major influence is negative.

3.2.3 Exchange rate

The exchange rate, or the value of the British Pound relative to the currencies of other countries, has had a significant effect on both inbound tourism and outbound tourism. In 2007, the weak dollar makes UK accommodation and food more expensive for visitors from America, the exchange rate put London 15th in its popularity table in July 2007 – down from number seven a year earlier according to Cheapflights. Due to the recent Pound depreciation, visitors from other European countries or America can expect to pay around 30% less than they would have done a year ago. British Tourist Authority (BTA) produced a study on ‘The Price Sensitivity of Tourism to Britain’, the findings show that overseas visitors are highly sensitive to changes in the cost of staying in Britain: for every 1% movement in the exchange rate which increases the cost of staying in Britain, the UK’s international tourism earnings will decrease by 1.3% (?160m). Research also found that more fixity in the exchange rate arrangements generates a positive effect on tourism and the more fix the exchange regime is, the greater the impact on tourism (Maria Santana-Gallego, Francisco J. Ledesma-Rodriguez, Jorge V. Perez-Rodriguez, 2007).

(S)ocial

Social factors like age, changing life style affect the industry through changing consumer behavior.

3.3.1 Age and tourism

According to United Nations Statistics and National Statistics Online, for the whole world, since 1950 the proportion of older persons has been rising steadily, passing from 8 per cent in 1950 to 11 per cent in 2007, and is expected to reach 22 per cent in 2050; For UK, the percentage of the population of state pensionable age exceeded the percentage of the population under 16 for the first time in history in 2007. The industry now is facing an older growing society due to rising life expectancy, marketing of the industry should focus more on older persons: the advertising and products should target more at older persons.

3.3.2 Changing lifestyle

There is a growing trend of buying online which could reduce a person’s shopping trip frequency, the access to the world’s products through internet reduces the flows of shopping tourists from one city to another or cross countries. More and more people tend to prefer clubs or watching TV at home rather than going out for a trip at weekends.

3.3.3 Growing concern about environment

Tourism is one of the largest industries in the world with incredible developments each year, it contributes a lot to the world’s economy while the huge infrastructural and resource demands of tourism (e.g. water consumption, waste generation and energy use) can have severe impacts upon local communities and the environment if it is not properly managed. A concept: sustainable tourism which is defined as ” tourism which leads to management of all resources in such a way that economic, social and aesthetic needs can be fulfilled while maintaining cultural integrity, essential ecological processes, biological diversity and life support systems” by World Tourism Organisation becomes more and more popular. People concern more about the environment, they tend to favour ecotourism products. When developing new tourism products, tour operators should design their trips to be environmentally, culturally and socially friendly.

(T)echnological
3.4.1 Technology development of transportation

With the development of piston engine aircraft, the mass tourism boomed in 1950s. Transportation technology is always regarded as crucial in the development of tourism, places inaccessible before by car or train can be accessed swiftly by air. It is largely due to the improvement of transportation that tourism has expanded. The highlight of a trip is usually the experience in destination, visitors often neglect the process of getting to the destination. In this case, the faster the visitor can reach the destination, the more attractive the destination will be. The development of transportation especially the speed of the transportation tool will have a major impact on long-haul travel.

3.4.2 Internet and the industry

The world enters a new information era with the development of internet technology. The world’s internet users are increasing sharply. According to Internet World Stats, there were 43,800,000 internet users in UK in March 2009 which represents 70.9% of the population, that is a 180% growth from the year 2000. Internet has become an essential part of people’s life. For tour operators, internet provides tour operators platforms of advertising and transaction, which can make their products more accessible to the customers thus bring more sales and profits. Moreover, it is cost-effective and time-efficient using the internet. For customers, internet makes it easier for them to browse the products and make bookings. More and more people are now booking their holidays on the internet, tour operators need to focus on the website design as well as the security of the transaction system.

The internet technology makes it possible for meetings online, different companies can communicate or negotiate with their counterparts more efficient through videoconference. Face to face contact is not compulsory anymore. Business travel will suffer from that, there might be a decline in business travel sales for tour operators.

3.4.3 Virtual Tour

Another developing technology which will have a strong impact upon tourism is virtual reality (VR), which is a technology allows a user to interact with a computer-simulated environment. Most current virtual reality environments are mainly visual experiences, displayed either on a computer screen or through special stereoscopic displays. According to Chemistry & Industry technology news (March 2009), recently, Mobile aroma recreation system (MARS) devices, developed by researchers at the University of Warwick, UK, could be used to recreate these detected odours for VR users in real-time with the help of electronic noses. Electronic noses could one day be incorporated into virtual reality (VR) systems to add realism to simulations of holiday experiences. The new technology will make VR much more real than ever before, enable customers to experience the whole “live” holiday at home. On one side, virtual reality leads to the risk of diminishing the interest for travel; On the other side, “Virtual Reality can be used to recreate historic sites and events for such purposes as education, special project commissions and showcase features at national and World Heritage visitor centres. VR technologies are also being used to provide a means of protecting the fragile state of some heritage sites, helping to educate visitors not so much about their history but in how to explore, interpret and respect them,” says Professor Bob Stone, Scientific Director of Virtual Presence Limited, based in Manchester, UK.

Though tour operators can’t change the remote environment, they should change their strategies to adapt to the environmental changes.

Porter’s 5 forces Analysis of the competitive environment

UK’s tour operator market is a quite mature market with four major players. After a long history of consolidation, Thomson Holidays (part of The World of TUI group), Thomas Cook, MyTravel Group (formerly Airtours) and First Choice dominate the tour operator market in UK. The industry is full of vertical and horizontal integration, vertical integration includes forward integration-acquisition of the retail network namely travel agencies, backward integration-acquisition of suppliers like airlines, hotels and transportation companies. Horizontal integration includes mergers between big companies and mergers between big and small tour operators.

Michael Porter (1980) developed a framework for industry competitive analysis, consisting of five different competitive forces which refer to microenvironment. The frame work is shown in the figure below:

4.1 Threat of new entrants

Tour operator industry is an industry which has relatively high entry barriers. UK’s tour operator market is quite mature and its vertical integration had finished in the 1990s. Today all major tour operators in UK are highly vertically integrated and operate their own travel agencies, airlines, hotels and resorts, transportation companies and so on. Some of the tour operators become quite large multinational enterprises, they can reduce transaction cost due to large amount of orders, they enjoy the benefits of quantity discount and economies of scale. They always have esteemed reputation for organizing good tours. When people have demands for travel, they turn to those tour operators, people recognize their brand thus will be loyal to the companies. All of the factors mentioned above reduce the threat of industry entry, however, the threat still exists. With the individualistic change of demands and the changeable nature of tourism environment, new players are entering the tour operator industry focusing on niche markets. They supply special products designed for customers with special needs. The new players always rely on product quality to gain competitive advantage as well as filling gaps between new demand and supply. Ecotourism and adventure tourism was introduced by those new players. In order to expand the market share and cope with the threat new player had brought, major player began to purchase the niche operators, series of mergers happened within the industry: Headwater is a tour operator specialized in organizing cycling holidays and walking holidays which enables customers to explore at their own pace. Simply Travel is a leading specialist tour operator in UK offering an off-the-beaten-track alternative to the package holiday, creating inspirational holidays and providing a high-level of personal service. Thomson acquired both of the two companies as departments of Thomson Holidys; Panorama used to be the largest tour operator in Ireland for Winter Sun departures from Ireland and Irish Ski holidays, it became one part of MyTravel Group and was given the responsibility of managing Manos Holidays after it was also acquired by MyTravel; First Choice took control of Meon Holdings specialized in villa holidays and Sunsail which is a tour operator specialized in watersports clubs, Yacht charter and Flotilla sailing. Large players can enhance their brand name attractiveness and achieve a long-term sustainable competitive advantage through acquiring new specialist players.

4.2 Rivalry among existing competitors

The industry competitive environment has changed due to industry’s horizontal integration, which is a tour operator offering one or several travel products takes over another that offers very similar travel products or services. The industry’s competitive environment among existing competitors used to be full of disordered competitions, players competed with each other focusing on low price, they cut their price as much as possible to gain market shares, the whole industry became profitless and all the players suffered from that. In addition, their product quality was quite low due to the reduction on cost, they tried to keep their profits at a certain level while the prices they offered must be low. After industry horizontal integration, situation has changed: mergers and take-overs not only take place among small and large tour operators but also happen among large tour operators. According to Air Travel Organisers’ Licensing (ATOL) 2007 figures, the four big players in the industry occupy more than 80% of the tour operator market shares: Thomson accounts for 28% of total market shares while MyTravel Group has 21%, followed by Thomas Cook with 19% and First Choice with the proportion of 17%. All the four big tour operators offer full-range products from domestic holidays to outbound holidays, from business travel to leisure travel, from normal sight-seeing holidays to specialist holidays, differences among the four players are not significant. Companies compete with each other mainly based on brand identity and creating brand loyalty, a good brand offers distinctiveness and consistency to its target customers, thus branding strategy becomes dramatically important in companies marketing strategy to expand market shares. MyTravel Group launched “freedom card”-a kind of bonus card offers its members discounts bonus points and upgrades in order to maintain customer purchase and loyalty; Thomson also sought a way to keep their customers loyal to the company by setting up Founders Club – new shareholders were given membership in the “Thomson Founders’ Club” which offered a 10% discount on Thomson holidays. Exit barriers of the industry are high due to some reasons listed below: Though investments on non-transferable fixed assets are quite low, redundancy costs are very high because those large travel companies often have a large number of employees thus it costs a lot to dismiss employees, in addition, there will be significant social problems if such large companies go bust. Those large tour operators usually have close relationships with their suppliers and buyers under restricted contracts, the penalty costs would be significant if they break the contracts.

4.3 Threat of substitutes

The development of information technology especially internet has brought new opportunities and threats to the tour operator industry. Through using computerized reservation system (CRS), tour operators can obtain efficient information distribution systems and networks. Internet plays an important role in purchasing holiday products in terms of provision, accessibility and flexibility.

With the emergence of internet technology, a kind of online holiday booking website was created. It can be seen as a kind of substitute to the traditional tour operators. Online holiday booking websites like Expedia.co.uk and Lastminute.com offers designed holiday routes, air tickets booking, hotel booking and so on just like what traditional tour operators do but in another much more efficient way. Customer can gain great benefits through using the new technology on booking, they have more choices and have easier access to the holiday products. The major tour operators are not resistant to the technology and are now investing heavily on their own virtual networks: MyTravel Group announces its intention to launch a new interactive digital television channel to be called ‘Going Places TV’ and finally it was launched on channel 669 in February 2003; Thomson, recently enhanced its main website with a series of new features and content, in an attempt to retain customers and encourage them to book through the site. It also introduced additional editorial content to help consumers, as well as to enable the site to be picked up by Google in natural searches. Takeovers and merger are quite common: MyTravel Group acquired WorldChoiceTravel.com (WCT), a fast growing, US based provider of travel reservation services in March 2001; Thomson acquired a teletext operator – Travel House in order to gain control of the virtual marketplace.

The technology of internet makes information shared much easier and more widely than ever before, people can gain knowledge about the destination, the way to get there and accommodations there by easily clicking on the relevant websites. Information asymmetry no longer happens in recent years, the usage of tour operator becomes less and less. Cheap budget airline companies and online hotel booking websites provide travelers opportunities to get low-price air tickets and accommodations, these are really threats to tour operators. People tend to organize their own trips, they choose their own destinations, drive their own cars, book hotels from hotel websites or booking websites or even live in their own houses, they will experience more freely holidays through doing that. There is a growing trend of using this do-it-yourself (DIY) approach in travelling which could be a substitute of tour operators. Most travelers concern about price when making decisions, when there is no price advantage booking from tour operators, travelers tend to favor DIY travel. Major tour operator like Thomson, MyTravel, Thomas Cook, First Choice offer a range of products featured with free concept, with only air tickets and hotel bookings at a low price with their popular trusted brand names.

4.4 Bargaining power of suppliers

The bargaining power of the industry’s suppliers should be described as low. On one hand, there are few tour operators in the industry to bargain with: suppliers like independent hotels and airline companies widely exist in recent times while only few tour operators are operated due to the consolidations within the industry, the suppliers don’t have too much power bargaining with the major tour operators but still have certain degree of bargaining power on smaller tour operators. On the other hand, vertical integration with the hotels, airline companies and other transportation companies makes the bargaining power of suppliers at the lowest point. The backward integration enables tour operators to establish close relationships with their suppliers by signing contracts of cooperation or even the purchase of the suppliers: First Choice launched its own airline quite early in 1987 which represents the beginning of forward integration, in 2000 a joint venture with Royal Caribbean Cruises Ltd is announced and later a company called Island Cruises was set up and put into operation in 2002; MyTravel Group acquired Europe’s biggest resort complex, the Bellevue Hotel in Majorca, which comprised of 17 blocks of apartments and 8 swimming pools in January 2000. In June 2001 the company announced strategic alliance with Aqua Sol Hotels Limited, a leading hotel group in the Eastern Mediterranean. The Group’s in-house airlines – Airtours International and Premiair – begin to trade as “MyTravel Airways” in May 2002. Thomas Cook owns Thomas Cook Airline and has a fleet of 45 aircrafts, the company has a partnership with SENTIDO Hotels & Resorts – the international hotel chain based on a franchise concept with 4-star plus beach hotels. The major tour operators all participant in the dynamic areas of tourism, there are few needs to bargain with suppliers, in a simply word, tour operators are “self-sufficient”.

4.5 Bargaining power of buyers

The bargaining power of buyers should also be described as low. The buyers being discussed here stands for travel agencies not the ultimate customers due to the nature of the industry. The most important factor that affects bargaining power of buyers is forward integration between tour operators and travel agencies. According to Bloomsbury Business Library – Business & Management Dictionary, forward integration is a means of guaranteeing distribution channels for products and services by building relationships with, or taking control of, distributors. Forward integration can free the supplier from the threat or influence of major buyers and can also provide a barrier to market entry by potential rivals (Business & Management Dictionary, 2007). Through forward integration, major tour operators take control of the distribution channel, they can sell their products in a more efficient and cost-effective way. Forward integration of tour operators and travel agencies makes it increasingly difficult for smaller independent tour operators who can’t reach their customers through high street travel agencies. As major tour operators all have their own travel agencies, independent tour operators rely on independent travel agencies. The number of independent travel agencies is declining because they can’t offer customers the same discount as the integrated chains, in this case, independent tour operators can’t compete with major tour operators on price, the number of smaller independent tour operators also decreases. The development of internet technology also has an important impact on the bargaining power of buyers, it has changed the pattern of traditional distribution, shocking the market by the rapid transformations which it generates across the whole industry. These days, the online travel market is experiencing a profound evolution. Trends in overall online travel market size are shown below:

Now the bargaining power of buyers is being threatened by “disintermediation” – the elimination of intermediaries, for example, the wholesalers found in traditional retail channels, in favor of direct selling to the consumer (Bloomsbury Business Library – Business & Management Dictionary, 2007). The disintermediation is caused mainly by the development of internet. Major tour operators have embraced the growth of online travel systems and the need for fast and efficient distribution systems and networks, they have built their own online distribution channels like websites and

There is a saying , “Customer is God” which means customer’s needs should be fulfilled by the goods or service provider so that the customer can become your loyal customer. As to the hotel industry, it is also very true that hotel staff should try the best to satisfy all demands and requests from the guests so as to keep the guests come back often and introduce their friends and relatives to step in the hotel. However, not all customers are easy going and sometimes customers may bring up difficult requests which are not able to be met by the hotel, thus it will pose a great challenge for the hotel staff to handle.

In this way, the relevant hotel department, here referred as the front office under the room division will often be responsible for processing such requests and complaints. The way how the customer’s requests and complaints are handled is very important for the hotel’s development regarding its reputability and sustainability in this field. Therefore, the aim of this report is to highly focus on the reasons of such difficult requests and complaints and the solutions which will properly get the issues handled without offending the customers and making them satisfy with the services of the hotel. It also addresses the significance for the hotel to be able to handle the complaints and requests in a proper way. In the final part, the report has drawn a proper conclusion for such challenge discussed and analysed.

Table of contents

Introduction 4

Discussion about the reasons and forms of the difficult requests and complaints brought up by customers 4

The ways how the Front Office staff should face and handle such challenge 6

Significance for the hotel to handle the challenge in a proper way 7

Conclusion 9

References 10

Introduction

With the development of various businesses and tourisms, different types of hospitality industries such as business hotels, holiday inn hotels, have been rapidly developed and expanded in the cities all around the world. Since the massive expansion in this hospitality sector, the competition between hotels with the same level is becoming more and more intensified. Therefore, to improve the service trying to satisfy every customer whenever stepping into the hotel to the best is becoming vital in the hotel management (Kandampully, Mok & Sparks, 2001). However, no matter how well the hotel staff made the preparation and how much efforts they made for trying to meet the customer’s needs, there are still many challenges in terms of handling the actual incidents in the real situation. With the consideration of addressing the challenges which might be encountered by the hotel staff, this report picks one typical challenge that the hotel room division department will occasionally face to analyse. The challenge is identified in the report is how the difficult customer’s requests and complaints are processed by the relevant staff. Usually the requests and complaints are handled by the front office staff under the room division department of the hotel. Such difficult requests and complaints from customers are very common for the hospitality industry. In the report, it is to write about such typical challenge to be handled by the front office staff in a business hotel.

Discussion about the reasons and forms of the difficult requests and complaints brought up by customers

In hospitality industry, it is very hard for the hotel not to have any incidents occur since the hospitality sector is dealing with different types of people. Take a Business Hotel as an example, one large Business Hotel will receive thousands of customers each year. All of the customers are with different characteristics or from different countries with obviously different cultures. Even the best and most reputable hotel may not be able to make every customer satisfy with its service. Usually, it is more occasional for the Front Office under the Room Division Department to contact the customers directly. And more often requests or complaints from customers will be delivered to the Front Office and the staff is responsible for handling such incidents.

The reasons why sometimes customers will propose some hard requests or even sometimes they directly make complaints about the hotel is not difficult to understand. From the perspective of customer, he/she spends money on the food and services in the hotel, therefore, customer may think he/she should deserve more convenient and better service. And the more money he/she spends in the hotel, the much higher expectation with respect to the services he/she will have for the hotel. This is the psychological reaction of human being. During the hotel service process, if the customers feel the actual experience of the service is not up to the expectation they set in their mind, it will cause customer’s dissatisfaction (Bardi, 2010). Although most of them will not reveal this mood and leave the hotel without a word, some of the customers will complain to the Front Office. Also since different customers are greatly different in their living background, behaving methods, characteristics, they will reflect a different needs for the hotel services. Meanwhile, as the evaluation of hotel services by each customer is subjective, evaluation of the same services may vary from person to person. Thus not all the customer’s needs can be fulfilled and nothing is perfect, the diversity of the lodging customers absolutely ensure that there will be difficult requests and complaints (Hsu & Powers, 2001).

During the hotel service, a hotel may confront many forms of difficult customer’s requests and complaints. There are difficult requests such as late room service, asking for some facilities which are not equipped in the hotel etc. Typical complaints are like unclean room, unreasonable phone price, poor facilities, bad-quality food, language misunderstanding, unhelpful staff and so on (Ahmed, 2005).

The ways how the Front Office staff should face and handle such challenge

When encountering the difficult customer requests and complaints, Front Office staff may feel great stress for handling such incidents especially when dealing with some hard customers. It is a great challenge for the employees to handle the requests and complaints properly without offending the customers and to ensure Hotel’s interests at the same time. To handle these incidents in a proper way, the staff should firstly have a right attitude about the challenge. To deal with such unprepared incidents is one position’s responsibilities. Requirements and complaints made by customers should be regarded as gifts to hotel. Customer’s requests and complaints not only reflect the needs of customers are not fulfilled by hotel, but also provide an opportunity for the hotel to evaluate its service quality and management quality in various aspects (Barlow & Moller, 1996). It actually provides a good chance to improve hotel in many ways, which will eventually enables the hotel with an outstanding performance and to be very competitive in the lodging industry.

For Front Office staff, it is a knowledge to well handle the difficult customer’s requests and complaints. Normally the staff can resolve the incidents with reference to the following guidances according to different complex situation.

When customers ask for some hard requests which may not be achieved within the hotel’s limit, customers may feel frustrated and disappointed. Usually customers will not deliberately make some unreasonable requests, therefore, when the staff face such requests, they should firstly try to satisfy their customers if the requests are not ridiculous. If hotel can not meet the customer’s requests, the staff should make apologies to customers in a polite way. The staff should keep the requests down on the notebook and assure the customers that the hotel will improve its service or add the requests in the service range (Malhotra, 1997). Actually the requests are also the advice for the hotel. It can make the hotel perfect its services. For instance, now there are more and more women business travellers, women have more requirements than men in terms of lodging and food and so on. Women customers may ask hotel to prepare better hairdryer and healthy meals. In other situations, hotel may have some disabled persons who will demand more special requests from the hotel. Normally if customer’s difficult requests can not be provided by the hotel and the staff refuse them in a very polite way, most of the customers will not be annoyed. However, if the customer’s requests are refused by the staff without any explanation, customer will make complaints because they feel his self-esteem is devalued.

When dealing with the complaints, the staff should be very careful because if the complaints are not handled properly, the hotel will lose not only one customer. When customer complains, the hotel should handle the complaints immediately and take the complaints seriously. Hotel staff should carefully listen to the customer with complaints with a wholehearted attitude and deal with the complaints after being agreed by customer. After investigation, if it is found fault with the hotel, apology and proper compensation shall be made in order to get forgiveness from the customers and make them satisfy with the hotel again. The staff shall keep in mind avoiding conflicts with customers. For the serious incident, the staff shall comfort the customers firstly then report to the manager and handle it according to the complaints procedure. Every complaint should be integrated in a file and analysed so that it can become a material for training as typical cases (Heung & Lam, 2003). After the complaints are resolved, hotel staff should appreciate the customers for pointing out the improper ways of the hotel, which makes the hotel improve itself. Then the customers will feel good impression about the hotel again and will come back for next time.

Significance for the hotel to handle the challenge in a proper way

To properly deal with the difficult requests and complaints is crucial for hotel’s success and development. There are plenty of hotels established in the city, why the customers would come back if they feel they are not treated in a good manner. For hotel, to offer a good service is one thing, to resolve requests and complaints in a good manner is another key factor for its reputation. Resolving the problems effectively has a strong impact on the customer satisfaction and loyalty. Customers will possibly satisfy with the hotel based on the recovery efforts made by the hotel (Liao, 2007). There are numbers of hotels becoming good players in the lodging industry because they know how to deliver their services to customers and how to ensure guest satisfaction about their services or even how to handle the guest complaints successfully and gain back the customer’s trust about their hotels. Therefore, these hotels survive in the competitive accommodation area.

Especially at present, technology develops fast and Internet is used by most people around the world. If one hotel failed to handle the guest’s requests or complaints, the offended customer may spread bad words via Internet, which will greatly destroy the hotel’s fame and potential customers may choose the other competitor by viewing these comments (Piccoli, Spalding & Ives, 2001). Besides this, once the customer feel negative opinion about the hotel, he/she will deliver this message to his/her friends and relatives. For example, when we check the hotel information via Internet, we will occasionally see some messages or comments made by other people. These bad words will definitely make us feel not good about the hotel, although some of them may not be true.

While on the other hand, if the hotel can try to fulfill the requests of the customers, hotel will gain considerable profits and will definitely build a good reputation in the hospitality industry. Take London Hilton in Park Lane as an example. Since now there are more and more women business travellers who have specific needs and requirements different from those of male guests. These women guests highlight good health diet and fitness facilities and they require more appropriate facilities in their rooms, such as padded hangers, good lighting and full-length mirror. Therefore, London Hilton refurbished the 30 rooms on its 22nd floor to become an all-women zone and offers a private section for them and enhance the security. The rooms are facilitated according to women taste including fashion magazines, powerful hairdryers and others (Carysforth, 2003). As a result, the London Hilton Hotel is popular by most of the women travellers. Proper handling customer’s complaints and make the complaining customer feel he/she is respected also helps the hotel to build its reputation and win back customer’s loyalty.

Conclusion

In conclusion, the hospitality industry most often deal with people. In order to survive in today’s intensively competitive business environment, it is very essential for hotels to ensure to achieve customer’s satisfaction. As people’s increasing sense of protecting his consumer rights, many complaints occur in the hotel service. Also because hotels provide products and services which may be perceived in different ways by different people, different people will have varied levels of opinion in responding to the same or similar service and product consumption. Complaints sometimes do good to the hotel if the hotel is able to solve the problem in an effective way. If not, complaints will contribute a very bad influence to the hotel. However, for the Hotel Room Division sector, it is very challenging for them the properly deal with the matter. The persons for undertaking such position should be experienced and well-trained in this area. The capability of handling the complaints and difficult situation is not only about personal traits but also about tacts and strategies. The hotel staff should be familiar with the relevant strategies or procedures when handling the difficult and complex issues. It is also the hotel’s fortune to have such excellent staff being capable of solving complaints.

The tour operating sector of the travel and tourism industry is an important but frequently overlooked influence on many issues relating to tourism studies. Marketing, tourism planning and development, financial management and consumer behavior are among those areas to feel such influence. Tour operations forms a dynamic industry sector characterized by expansion, intense competition, mergers and acquisitions, all of which have been pivotal to industry development and product offerings over the past 20 years. Many operators have looked to other countries for business expansion. There have been several mergers and take-over between tour operators in the UK, Germany, Scandinavia and elsewhere in Europe, which have brought both advantages and disadvantages for many industry players. For several years, the UK travel industry has been characterized by intense competition which has resulted in many mergers and acquisitions.

The emergence of a sophisticated and innovative travel industry was a key factor in the growth and development of international mass tourism, with the tour operating sector in particular leading the way in both creating and meeting the needs of tourists. More recently, of course, a variety of factors, including the increasing supply of ‘no-frills’ flights, advances in information technology, widespread use of the Internet, and a more confident and experienced travelling public, have all contributed to an increase in independent travel. However, the continuing role and influence of tour operators should not be underestimated, particularly the pivotal position they occupy within the tourism system.

1.2 Types of Tour Operators
Outbound Operators

Outbound operators are travel from the generating country to another country this means who are residents of a country visiting other countries and travel for tourism purposes. This type of tourism also known as international visitors A high exchange rate for the pound sterling means lower costs for tour operators buying services in foreign currency. It also encourages UK outbound tourists but discourages inbound tourists.

Inbound Operators

This type of tourism is also known as International visitors and Incoming operators who are residents of countries other than that being visited and travel for tourism purposes. The Incoming tourism helps the country to gain more income

Domestic Operators

This type of tourism is also known as residents visiting destinations within their own country’s boundaries who travel for tourism purposes. Estimates of the size of this sector of the market vary because in many countries domestic tourism is not adequately measured at present. Within the total volume of domestic tourism, same-day visits are the most difficult to quantify. In most developed countries the frequency of day visits is already so great that it is not easily measured by traditional survey techniques, because people find it hard or impossible to remember the number of trips they have taken over a period of months or even weeks.

To summarize, the total market for travel and tourism comprises three main elements: international visits inbound to a country; outbound international visits made by a country’s residents; and domestic visits including day visits from home. The total market has grown rapidly in recent years and is now very large, encompassing the great majority of the population of economically developed countries. Frequent, repeat purchases of travel and tourism products in a year are already a normal experience for many people. Share of voice Compares an organization’s advertising spend to the total market spend on advertising. In the UK, domestic tourism and inbound tourism have a small share of voice compared to outbound tourism. Individually, micro-businesses are insignificant as players in international and domestic tourism and recreation. In practice they are often ignored in national and regional tourism policy developments. Collectively, however, they provide the bulk of the essentially local ambience and quality of visitor experiences at destinations on which the future growth of overseas and domestic visits depends. They also comprise a seed bed of entrepreneurial and enterprise ‘culture’ that is highly relevant for destination marketing.

Direct Sell Operators

There are few tour operators who use to sell their holiday package using the tour agent. The tour operators have sold their package to public directly, because this can offer great value. The consumer can think that this will cost than buy the package directly from the tour operators. But the truth is they will not add any commissions to their package. The consumer can buy cheaply from the tour agent.

1.3 Current Trends and Development

The big challenge in tourism is that it is difficult to define the typical travel, tourism and hospitality organization. This is, in part, because tourism is an amalgam of subsectors such as transport, accommodation, attractions, services and tourism facilitation, each of which consists of a number of different groups.

Tourism organizations also vary greatly across national boundaries. There are some emerging global or multinational companies in tourism, and the sector is affected by trends towards globalization in business, for example, the major airline alliances such as Star and Oneworld. However, the vast majority of operators are greatly influenced by the political, economic, socio-cultural and technological context within which they are located, generally at a national or local level. They are subject to variation as a result of differing political conditions, varying company and consumer laws and the influence of cultural considerations, for example, attitudes to alcohol in Islamic countries. Tourism organizations also operate within a highly volatile demand environment, primarily exhibited through seasonality but also through demand fluctuation within the week (business hotels and airlines at weekends face a major downturn) and within any working day. This characteristic demand curve imposes significant constraints on the management of human resources within tourism

Tourism organizations belong within the service sector of the economy. They are, therefore, very different in the way they operate and how they are organized from organizations which focus on the processing and production of manufactured goods. There are particular features of service organizations, and the services that they provide for their customers, which differentiate them from the manufacturing sector. These features establish the parameters within which people work and are managed in tourism.

In the short term it seems likely that the battle among the larger operators for market share will continue and the smaller independents will have no respite from their perpetual struggle to survive. Presumably, existing competition legislation will prevent more mergers that compromise the consumer’s interests.

1.4 Special Interest Holidays

There are number of tour operators provide number of special holiday packages. By searching on Internet we have identified that there are many organization in UK providing special holiday packages.

ABTA The Travel Association provides many offers to their customer. For an example “3 nts New Yorker Hotel New York” which allow the tourist to stay for 3 days in New Yorker Hotel with the standard facilities.

Figure 1.1 The Holiday offer given by ABTA

ResponsibleTravel.com: This organization provides family holidays for their customer. It has number of packages. Eg: Self Catering Accommodation for 2 or 3 people

Figure 1.2: Self catering accommodations for 2 or 3 people

Travel Navigator: this site helps the tourists to find packages in various sites. This site includes the sites for holiday packages for tour operators, general tour operators, specialist tour operators and for dynamic packaging.

AITO: This site also providing number of holiday packages. Eg: Taj Express with on the go tours

FTO: Federation of tour operators also provide holiday packages for long term planning

BITOA : The British Incoming Tour Operators Association providing tour operators and tourism supplies to UK.

First Choice: This operator provides holiday packages for family and adults.

Thomson: This operator also provide holiday packages in different level such as, luxury holidays, family holidays, spa holidays, and cheap holiday. This allow the consumer to select their desire package

ABTA: providing package for travel to Maldives

2.0 Task 2
2.1 Developing Package Holidays

According to Richard, S “A package holiday is simply defined as the pre-arranged combination of two or more components of a holiday, such as transport, accommodation and other services (for example, local sightseeing tours)”. Thus, although package holidays (and, hence, tour operations) are most commonly thought of in terms of charter flights to summer-sun destinations, it is important to recognize the enormous variety of types of package holiday.

The rapid growth in online sales (e.tailing) has not only further complicated the chain of distribution but also served to limit the power of intermediaries. Many online businesses (dot.coms), such as expedia.com or lastminute.com, sell a variety of travel and tourism products (allowing customers to create their own package holiday), while principals themselves, such as budget airlines, also offer links on their websites to other products, such as accommodation, car hire, insurance and entertainment. They can be categorized by:

Mode of transport: package holidays include transport by air (ITX or ITC), sea, rail, road or car/bicycle hire.

Type of accommodation: any type of accommodation may be component of a package holiday.

Services included: from basic flights and transfer to the ‘all-inclusive’.

International vs domestic: numerous tour operators cater to domestic markets.

Distance to destination: while short haul destinations account for the majority of package holidays by air, there is an increasing demand for long haul packages.

According to Richard, S There are three stages in the construction of a package holiday:

First Stage: Research must be under taken into market trends, existing products and competitive supply, and destination research to establish the feasibility of developing a new product in a new destination.

Second Stage: This involves the actual creation of the package, broadly embracing four areas of activity:

capacity planning, including both setting target capacity figures and contracting accommodation and aircraft seats

financial planning, including the critical process of pricing holidays

sales and marketing, particularly brochure production

Administration, including establishing reservation systems, recruiting resort-based staff and processing initial bookings.

Third Stage: During the first full season, a variety of activities occur, including:

holiday management

customer care

account payment to suppliers

2.2 Different Components of the Package Holiday and Different Type of Tour Operators

Principals in the travel industry, such as hotels and airlines have various choices for distributing their products. They may, for example, deal directly with the customer through the Internet, sell through a tour operator or use other methods.

Tour operators choose the accommodation, the range of excursions, the routes, the choice of airline and the prices. The better the balance between the interests in the exchange process, the smaller the marketing expenditure will need to be as a proportion of sales revenue, and vice versa. For example, if a tour operator has accurately designed, priced and judged the capacity of a programme, sales will be achieved at a relatively low promotional cost. If, for whatever reason, the price is too high, the product design uncompetitive or the capacity excessive for the available demand, only massive promotional expenditure and discounting will bring supply and demand back into balance.

There are many types of package holidays available in the world. And the each package can be suit for different type of tour operators. We have seen that there are domestic tourism, inbound tourism, outbound tourism, and direct sell available. Currently 4 biggest tour operators are available. Those are, Thomson, First Choice, MyTravel, and Thomas cook.

These package holidays are structured by tour operators. It also sold by travel agent to the consumer. Package holidays are available for domestic purpose which create packages for the tourists who want spent their holidays within their country. For this kind of tourists the tour operators create packages such as, luxury train tour, wildlife holidays, adventure holidays, yoga & meditation, luxury cruises, houseboat tour, luxury tour and so on.

The inbound tourism, residents of countries other than that being visited and travel for tourism purposes. This kind of tourism helps the country to gain more income. To attract this kind of tourists, it is the tour operator’s responsibility to create attractive package holidays. This package has to provide all the facilities to the tourists. Such as accommodations. Summer holidays, family holidays and a tour to taj can be categorized under this inbound packages

The outbound tourism, travel from the generating country to another country this means who are residents of a country visiting other countries and travel for tourism purposes. The outbound packages include summer holidays. This packages has to satisfied the own country’ tourists who plan to visit some other places.

2.3 Costing of the Package Holiday

In order for a business to survive over the long run, the average prices charged must be high enough to generate sufficient revenue to cover all fixed and variable costs and provide an acceptable return on the assets employed. Operating costs, expressed as average costs per unit of production, are therefore a primary input to all pricing decisions and they provide at least a nominal target floor for prices, below which they should not fall.

Tour operators have to create packages for different costing, because people cannot buy the same packages. The below figure shows an cost details of the package holiday.

2.4 Major Tour Operators in UK

In UK there are number of tour operators are available. Such as Association of British Travel Agents (ABTA), Association of Independent Tour Operators (AITO), Federation of Tour Operators (FTO), British Incoming Tour Operators Association (BITOA) Civil Aviation Authority (CAA), etcaˆ¦

AITO (The Association of Independent Tour Operators)

AITO is one of the best tour operator in UK.

The aim of AITO members is to provide the premier level of customer satisfaction by concentrating on three main pillars: Choice, Quality and Service, enshrined in the association’s Quality Charter.

Companies admitted to AITO are all vetted and fully bonded for client’s protection, in compliance with UK and European regulations. They are also bound by AITO’s own Code of Business Practice. AITO’s tour operating sector has undergone a process of integration. At AITO this has occurred in two directions.

Horizontal integration: where tour operators purchase/take over other organizations at the same level within the chain of distribution (i.e. other tour operators).

Vertical integration: where tour operators purchase/take over other organizations either higher up the chain of distribution (i.e. principals, such as airlines or hotels) or further down the chain (i.e. travel agencies). These are sometimes referred to respectively as backward and for ward integration.

Horizontal integration provides a tour operator with:

economies of scale

increased market share

the opportunity to strengthen through expansion

The opportunity to strengthen through diversification.

Vertical integration provides a tour operator with:

economies of scale

continuation of supply

the ability to control quality

Control over distribution and merchandising.

Task 3

3.0 Brochures and Methods of Distribution

3.1 Brochures

Promotion is a key aspect of event marketing. The brochure is the most important promotional toll in tourism. .A full rage of brochures and printed material is explaining different aspects of the products. Brochures plays a role in attract new business tourism events to the country. The brochure commitment is inescapable, and so also is the retail agency support system to achieve the given volume of sales.

Brochures such as those provided by tour operators are designed to stimulate customers and motivate them to buy. They identify needs, demonstrate in pictures and words the image and positioning of products and organizations, and carry the key messages. In this role they act in the same way as advertising. They also perform a vital display function in the racks of distribution outlets, such as retail travel agents, where they serve in lieu of physical products. In the typical self-service shops run by most travel and tourism retailers the display role, and the customer appeal of brochure covers and contents, are vital to marketing success.

The brochure is the product at the point of purchase, especially for first-time customers. It establishes expectations of quality, value for money, product image and status that must be matched when the product is delivered.

When preparing a brochure we have to find answer for the following.

Identify the purpose of this brochure.

Identify for which product that this brochure suits.

Identify the target audience

Define the style, contents, color themes for the brochure.

3.2 Methods of Distribution

Distribution comprises ‘access’, points of sale and convenience for customers. Travel and tourism is one of the few ‘pure’ global information industries. Intangibility at the point of sale places great weight on the role of information provision and the industry is especially well placed to profit from the new developments in ICT. From exposure to advertising messages, through the selection of information and evaluation of options and prices; from the placing of a booking, payment and receipt of confirmation and tickets, right up to the point of departure on a visit, all the processes are conducted by exchanges of information. Currently, and increasingly, the exchanges take place between computers that also finalize the settlement of bills and store information about customers on databases. Distribution channels provide:

Points of sale and convenient customer access, either for immediate purchase or for booking in advance.

Display and distribution of product information such as brochures and leaflets – or multi media information that may be accessed and down-loaded via the Internet (providing choice for customers).

Sales promotion and merchandising opportunities, especially special deals on prices responding to yield management programmes.

Advice and purchase assistance, e.g. itinerary planning, suggestion of options and helpful product knowledge.

Arranging transfer of title to a product through ticketing and travel documentation, or provision of a unique reference number that can be presented at the point of delivery.

Receiving and transmitting sales revenue to principals.

Possible provision of ancillary services, e.g. insurance, advice on inoculations, passport assistance.

Sources of marketing intelligence for producers, often including building up consumer databases.

May be used as part of a principal’s advertising and PR campaigns.

A route for receiving and assisting with complaints from customers, or directing them to another source.

Call centers:

Sophisticated ‘call direct’ telephone information and booking systems, often employing dozens or hundreds of people in places where property prices and staff costs are relatively low. India has become a key destination for such centers that can provide services all around the world. Call centers are used to deal with enquires and bookings directly from consumers and are the core response mechanism for advertising campaigns offering direct access via phone numbers. Increasingly linked with Web sites to process information requests and e-commerce, call centers are also used to create and manage consumer databases.

Website:

A site created on the Internet by a business to provide motivating information and possibly e-commerce facilities for customers. Each Web site has a unique address that may be accessed direct or by ‘search engines.’

Internet:

Internet into the distribution pattern makes a fundamental difference since it both adds a flexible new low cost channel of almost limitless capacity and joins up seamlessly what previously were essentially discrete operations. Principals that dealt exclusively in the past with tour operators/wholesalers may open their own Web site and deal with some customers direct. The Internet and call centers will be the linked routes for privileged cardholders.

Travel Agents:

Travel agents or retailers are, along with tour operators, intermediaries in the tourism system – in fact, in the UK at least, a significant proportion of travel retail outlets are owned by tour operators. Travel retailers have, for many years, played a vital role in the supply of travel and tourism products and, despite the significant challenges posed by the Internet and the consequential threat of disintermediation, continue to do so. Therefore, the role of travel retailers within the travel and tourism chain of distribution is to sell a variety of travel products to the general public or, in the case of business travel agencies, to corporate clients. Typically, travel retailers have sold airline tickets, rail/bus tickets, package holidays and hotel rooms, as well as a variety of ancillary products, such as car hire, travel insurance and foreign exchange. For all products sold, retailers receive a commission payment from the principal although, more recently, there has been a move towards reducing levels of commission, particularly for airline tickets.

Direct Sell:

Direct selling means the ‘selling of goods and services, which involves direct communication between the producer and customers, without the use of retail outlets, distributors, wholesalers or any other type of middleman’. This form of selling, a forerunner of modern methods, was always more significant in UK but it was effectively used as a way to shift products more cheaply than using alternative third party forms of distribution.

Task 4

Strategic and Tactical Decision Making

Successful marketing in travel and tourism depends upon balancing tactical and strategic marketing. For airlines, hotels and tour operators, tactical marketing (utilizing tools such as yield management) is a vital activity to ensure remaining capacity is sold. At the same time, however, long-term strategic marketing is also necessary to develop new products or brands so that the organization remains competitive.

Strategic Decisions

Strategic decisions are focusing on long-term product development, such as introducing new destinations in winter-sun program. The strategic decisions involved in five main elements:

Forecasting demand.

Finding ways to reduce costs

Building corporate product and brand strengths.

Relationship.

Strategic linkages.

The strategic decisions will vary for each tour operators. Since the domestic tour operators has define decisions for their purpose. The tour operators have to define the strategic decisions according to their level. The tour operators has to make following strategic decisions.

estimates of future traffic flows will always be surrounded by risk because of the unpredictable nature of the business environment. But the better the operator’s knowledge of customer profile and behavior, the better the chance of reducing the risk.

Determining the size, profile and needs of the target audience

Paper quality, choice of colors, density of copy, graphics, and the style and density of photography are varied in practice to match chosen images to selected target audiences. Up-market target groups respond better to heavier quality paper, lower density per page, pastel colors and thematic photographs. Down-market target groups are more influenced by bold colors, direct and straightforward copy and are not put off by greater density per page. Web site and multimedia design decisions are similar in principle having regard to the possibilities of the new medium rather than print.

Specifying brochure/Web site objectives.

Deciding the method of distribution.

Tactical Decisions

Tactical decisions are focusing on short-term problems and solutions, such as reducing the price of a holiday to maintain sales. According to Middleton,V Clarke, J Passenger transport marketing responds to seven specific external factors over most of which the operators have only very limited control and not much influence. These factors are listed and four of them are briefly discussed below:

Vehicle technology (major innovations).

Information and communications technology.

Regulatory framework.

Price of fuel.

Economic growth or decline (national and international economy).

Exchange-rate fluctuations.

Environmental issues.

Tactical decisions includes

Focus to secure on a daily basis

Segment specific promotions: The success of promotion is directly related to the knowledge that marketing managers achieve of the profile, needs and the probable behavior of the customer segments with which they deal.

Tactical pricing

Managing crisis

According to The World Tourism Organization (WTO), Tourism is currently the largest industry in the world. The World Tourism Organization (WTO) is expected there is going to be 1.6 billion worldwide tourists by 2020, compared to 2002, there is only 715 million worldwide tourists in 2002. Therefore, a lot of countries, no matter under developed and developing, tourism main source of foreign currency earnings and creating job opportunities for people.

According to McIntosh et al, tourism can be classified as the figure of the phenomena and relationships take place from the dealings of tourists, hospitality service provider, business dealer, the host governments, the origin of the governments and local communities in the process of attracting and hosting these tourists and other visitor.

According to Page, tourism as a consumer activity is continuously being developed by the tourism industry and person businesses, as marketing is used to develop new concept, products and services and destinations. This reflected in the international interest in developing niche products: holiday days focused on specific interest and activities.

Murphy argue that, as the tourism grew in size and scope it become obvious that this industry, like others, vie for limited resources and capital, that its non-consumptive attributes did not necessarily avoid the corrosion or modification of attractions.

2.2 Sustainable Tourism

Sustainable tourism model is related to the ethic of sustainable development, which in conjecture supported that people struggle to meet their own needs, most probably measured against the standard of living currently enjoyed (World Commission on Environment and Development, 1987). Sustainable development can defined as the sum of the trade-off between the need s and objective of the present, and those of the future (Archer and Cooper, 1994). According to Butler (1993), he challenges the use of the term sustainable tourism, in spite of its currency, arguing that it implies the maintenance of tourism itself, whatever its impacts, rather than the maintenance of the human or physical context within which the tourism occurs.

According to Butler et al supported the term sustainability tourism development, involving tourism which is development and in such a way that area (community and environment), in such a scale, it will remain practical in an inaccurate term, not reduce or change the phenomena (human and physical), of which there is such a level, its success development and prohibited activities and processes as well as other benefits.

Clarke (1997) suggested that the development of the idea of sustainable tourism involve four approaches which are polar opposite, whereby sustainable tourism and mass tourism were seen as polar opposites; a range, whereby sustainable tourism and mass tourism were no longer seen as polar opposites, but rather it was acknowledge that there were different shades of sustainable and mass tourism, which would merge at the middle; movement, an approach which suggested that positive action could make mass tourism mare sustainable; convergence, is the idea that all types of tourism can strive to be sustainable. (J. Swarbrooke, 1999)

2.3 Ecotourism

Every researchers and authors have the different description and definition on the term of ecotourism. Out of the variety of definition about ecotourism, there is one of the most quoted definition came from Hector Ceballos-Lascurain (1987:13). He defined that, the ecotourism or also known as ecological tourism can classify as a kind of tourism that involves travelling relatively without interruption. Ecotourism also can defined as travelling to pure natural areas with the main purpose of studying, admiring, and take pleasure in the natural landscape and its wild flora and fauna as well as any obtainable cultural aspects (both past and present) that can be found in these area.(Luck, 2003)

Ceballos-Lascurain (1990) also argued, nature-oriented tourism means scientific, aesthetic and philosophical move toward to take a trip, even though ecological tourist is not a skilled scientist, artist or philosopher. The most important reason is that the individual who carry out ecotourism has the opportunity of getting closer with natural environment in a manner usually not existing in the city life that normally full of pressure. (Weaver, 2009)

Based on Stanford Research Institute (1990), the ecotourism characterized as the fastest growing sector of the whole international tourism industry, it has increased rate of 30 per cent per year. Ecotourism observed the impacts, both positive and negative, of domestics and international tourism. Other than that, ecotourism is also a kind of tourism product that promotes protection and support sustainable development whilst having a minimum impact on the environment. Ecotourism also involves travelling to distant locations to learning the flora, fauna and wildlife animal in their native habitats. It also gives the chance to see how local people live and work. (Abraham, 2010)

According to Hundloe, to summarize, good understanding of services, cultural sensitivity and involvement with the local community are the three main issues which differentiate ecotourism from its cousins – green tourism and sustainable tourism.

2.3.1 Significance of Ecotourism

Sierra et all (1999) believed, ecotourism can be describe as ‘one of the most potential tools in the arsenal of the contemporary conservationists’. Ecotourism is an environmentally friendlier and potentially more sustainable alternative to extractive activities. For example, logging, farming, mining, or hunting of wildlife. Local people may have an opportunity being away from a cycle of poverty and, by sharing their information among local people and tourist about the local topography and ecology, which can helps to build up a stronger awareness of community pride and a wider, more global perspective that is aware of the importance of biodiversity to human being in the future.

Ecotourism provide a prospect for long-term protection of the environment and its resources. The hot spot of biological diversity is mostly the least developing country which is the economy of the country is particularly in drive people to destroy the natural environment. Ecotourism also provide an opportunity to protect the environment and biological diversity that almost extinct. Whereby, this is also chance to generate more income to hold research efforts. An eco-tourist attractions, the program registration fee can be further directed to the scientific knowledge about the ecological environment; support captivity, rehabilitation or reforestation; or man-made impact monitoring, to ensure that does not reduce access resources.

According to Sierra et al (op cit), to further verify the growth of global tourism, the relationship sandwiched between tourism and the environment is requires being clearly management to reduce the harmful and capitalize on valuable impacts. The appearance of ecotourism gives emphasis to the need for future professionals to develop suitable skills in tourism and ecological management.

2.3.2 Ecotourism in Malaysia

Malaysia is one of the countries from South-East Asia and it is well-known as a multicultural country. Multicultural has not only made the country as a food paradise, it has also made Malaysia place to holding hundred colorful festivals. Malaysia was also famous with the warm and friendly local people.

According to Smith, In Malaysia, tourism sector is currently the second-largest industry after the manufacturing was the largest industry in Malaysia. The government organization responsible on promoting tourism industry in Malaysia is Tourism Malaysia or also name as Malaysia Tourism Promotion Board.

Because of the geographical background, Malaysia is as miscellaneous as its culture. The country is separated into two parts, peninsula of Malaysia with eleven states and two states on the northern part of Borneo which is Sabah and Sarawak. The country is covers a total area of 329 758 km2 in South East Asia. The typical weather of the country is always warm and humid all through the year. Malaysia was listed as one of the most botanically diverse countries in the world. Malaysia is an amazing country with numerous abundance of biodiversity. The area of the country is granted with many natural destination and attraction such as flora, fauna and wildlife, beautiful coast, exotic marine aqua life, large rain forests and the biggest and oldest caves in the world. (Daud, 2010)

A unique natural and cultural asset diversification is what Malaysia really had. Therefore, eco-tourism in Malaysia was very favorable, feasible, sustainable and long-lasting form of tourism. In the year of 2008, Malaysia has won The Best Ecotourism award by TravelWeekly (Asia) during the Industry Award 2008 which’s held in Singapore. It is the second time that Malaysia was honored after 2007. It was an important accomplishment for Malaysia that proved itself for its natural environment as an attraction for tourism and unique geographical layout.

Malaysia was grouped as one of the twelve mega-biologically diverse countries in the world. Around the whole Malaysia, there have a minimum of 15,000 species of flora, 286 species of mammals, 4,000 species of marine aqua life, 150,000 species of invertebrates in addition to the numerous micro-organisms. There is 75% of land area in Malaysia remains forested and 60% of the area is virgin rainforest. The virgin rainforest is the habitat or home for the diverse group of flora and fauna and other living organism. The ecology scientists believed there may still be a number of other floras and faunas that have not been discovered living beneath its canopy.

There are beautiful oceans with several of marine aqua life that rely on the delicate balance of an unharmed environment surrounding Malaysia. From the other side of the world’s sea turtles make nests on the coast of Malaysia pilgrimage thousands of miles. Likewise, the visitors from all corners of the world visit our shores every year just to witness the magical underwater world. The a variety of activities such as jungle trekking, caving, hiking, river cruising, rock climbing, diving water rafting and bird watching was offered to the tourists by Malaysia. The Malaysia government concerned about the natural and cultural assets therefore, they have organized and create the event to let people more aware of the importance of preservation-based ecotourism. The examples of event consist of the Tabin Wildlife Conservation Conquest which located in Sabah, Fraser’s Hill International Bird Race in Pahang and Taman Negara Eco-Challenge competition in Pahang.

Malaysia’s been categorized as one of the top ecotourism destinations to visit in the world. The region is further growth by the enclosure of the Kinabalu Park in Sabah and Mulu National Park in Sarawak listed in UNESCO’s World Heritage sites list. UNESCO (United Nations Educational, Scientific and Cultural Organization) has also been recognized Langkawi Island or Pulau Lankawi which is situated in Kedah one of the northern states of the Peninsular Malaysia as a Geopark which mean a destination that contained outstanding geological landscapes in the world. Proudly, Langkawi Island is the one and only Geopark in the South East Asia and one of 50 among the whole world. In the meantime, there is two other destination which is Taman Negara National Park in Pahang, Batang Ai National Park in Sarawak and the Lanjak-Entimau Wildlife Sanctuary also been submitted by Malaysia Government as the nominations for UNESCO’s World Heritage Sites for future consideration .

The Malaysia Government was promoting the ecotourism of their country to worldwide; meanwhile they also create awareness to minimize the impact on the importance of sustainable development tourism and of balancing maintenance and development. The Ministry of Tourism Malaysia wants to provide the policies and guidelines for the reliable development of ecotourism. Therefore, they have officially taken on the National Ecotourism Plan (NEP) to ensure the policies and strategy for the conscientious development of ecotourism in the country itself.

2.3.3 Ecotourism in Penang

Penang or Pulau Pinang is one of the states in Malaysia with the covers a total area of 1,048 km2 (404.6 sq mi). It has been a long time that Penang described as Pearl of the Orient and is one of the most romantic and picturesque cities in all of Asia.

Penang was one of the top holiday destinations in Malaysia. The state was combination of an island and a narrow piece of land. The area of the island is 285km2 and it is separated from Seberang Prai (formerly Province Wellesley) – a hinterland of 737km2 on the mainland. It is connected by The Penang Bridge, which is listed as one of the longest bridge in Asia with the length of 13.5 km. Ferry service also available to connect the island and the mainland.

Georgetown is the capital of Penang. On July 2008, Georgetown was listed by United Nations Educational, Scientific and Cultural Organization (UNESCO) in the World Heritage List. The achievement of Penang was based on the certain sections of Penang has a large amount of pre-war buildings among the South East Asia country which are still undamaged. As a result, Penang Island is currently known as Penang Heritage City.

There are several of attractions around Penang, foods and shopping, from heritage to eco-tourism, and from beautiful beach to health tourism. In the year of 2009, Penang was ranked 22nd between the 44 top places to go of New York Times. Penang is one of the two destinations in Southeast Asia in this ranking.

Due to Penang having a tropical climate, it offers some ecotourism products in its state. The Botanical Gardens and the Tropical Spice Garden, both of the attractions were the ecotourism products of Penang. While the Penang’s National Park (Taman Negara Pulau Pinang) consist of a lot of eco attraction such as the immaculate Pantai Kerachut beach and also a beautiful lake which is the sea water and fresh water that do not mix up together. The park also provided the place for picnics, fishing, swimming and jungle trekking. Another ecotourism product in Penang is The Butterfly Farm which located at Batu Feringghi is a place where various types of colorful butterflies allocated in one destination and it is also a breeding research centre.

In Penang Island there is a Taman Negara Pulau Pinang (Penang’s National Park) at the northwest corner. The National Park covers the total area of 1,266 hectares of mangroves, coastal hill dipterocarps, beaches, and rocky shores. Among the Peninsular Malaysia, Penang’s National Park ranks second in size to Pahang National Park.

As a city national park, Penang National Park has probability to be listed in the UNESCO world heritage listing. It is because there was numerous species of flowering plants and animals- together with rare and endangered ones – it just takes around 45 minutes starting from the city centre, Georgetown. Meticulous planning and infrastructure will strengthen the park’s potential for ecotourism. Inside the park, there are only trails, footpaths, walkways and no roads. Penang National Park has created awareness for Penangites about the impacts of ecotourism and also the importance of sustainable development.

Penang was also famous with the beautiful and adventures beaches around the island. Batu Ferringhi is famous and it is one that can visit. In Batu Ferringhi and also Teluk Bahang, every part of these area are surrounding by the beaches and now the beach is getting cleaner compared with last few years where most of the tourist complaint about the cleanliness at the beach area. Along the coastline of Batu Ferringhi and Teluk Bahang, there was a lot of international resort available with the standard service and offering a host of water-based recreational sport facilities. Rasa Sayang Resort and Spa, Hard Rock Penang, Park Royal Hotel and Holiday Inn are the international resorts that available along the coastline.

Although there is quite a lot of ecotourism products in Penang but, the Chief Minister of Penang Lim Guan Eng has defended his suggestion to start a tiger park in Relau, This is because he wanted that the state to have a new ecotourism plan. The purpose of Penang Tiger Park is to become a new ecotourism product in Penang that can use to attract more international and domestic tourists to visit to Penang. (Looi, 2009)

2.4 Tiger Park in other Countries

Tiger Park was defined as a place to protect the endangered tiger as well as breeding herds of tigers. There are just a few of destinations categorized as Tiger Park in the whole world. Based on the research, there are only a few countries have Tiger Park existing as tourist destination which is Siberian Tiger Park, Harbin China, Tiger Kingdom Chiang Mai, Thailand and India which have the biggest amount of Tiger Park in the world.

2.4.1 Siberian Tiger Park

Siberian Tiger Park is the world’s largest Siberian tiger breeding base in Harbin, China. Once the human being spoiled the natural environment, many animals threatened with extinction, and a number of species have become extinct. The Siberian tiger is one of the endangered. It is the largest category of felid in the world and also known as the King of the Forest. Siberian Tiger was listed by the China Government as one of the first-class national protected animals of China other than panda in the year of 1980s. Siberian Tiger Park is built in the year of 1996 by the government to preserve this precious species.

The Siberian Tiger Park is situated at Songhua River which is located at the northwest of Harbin, with the total area of 1,440,000 square meters (355.8 acres). The Tiger Park has covered with 500 rare breed Siberian tigers, with 100 of the tiger are visible to visitors. Other than Siberian Tiger, lynx, black pumas, white tigers, lions, and leopards as well as Bengali tigers also can be seen inside the park.

The park was divided into ten different areas, which together with the young tiger area, the mature tiger area, and the king tiger area. There is also a walking area and a platform for visitor for tigers seeing. It is different compared to other common zoos, because the Siberian Tiger Park exchanges the roles of human being and animals.

According to Foxnews.com (2007), the number of Siberian tigers has kept on increasing at Siberian Tiger Park China. Which was good news because of Siberian tigers is one of the world’s rarest animals. In the other hand, there are also some serious cases happened in the park. Based on My Daily News.com (2011), a Siberian tiger killed a tour bus driver in the park. The tiger attacked the bus driver when he got out of bus to check on the bus that got stuck in the snow at Siberian Tiger Park which is a violated park safety rule. The tourists watched helplessly in horror. The management of the tiger park is expecting most of the bus drivers to understand the danger of the animals.

2.4.2 Tiger Kingdom Chiang Mai, Thailand

The Tiger Kingdom Chiang Mai (The Tiger Temple) or Wat Pha Luang Ta Bua is a Theravada Buddhist temple that located in Thailand. It has been a refuge for numerous of species of endangered animals especially tigers. The tigers were always walking around the temple once a day and the visitors can get really closer to see or maybe touch them. (http://www.hemmy.net/)

According to Alexander (2009), Abbot Pra Ajarn Phusit the monk teacher of the temple has been taking good care of the abandoned tigers and also the other animals in Kanchanaburi Temple which is the famous Tiger Temple since 1990s. Once he found the abandoned tiger cubs in the provinces nearby the forest, he will bring them back to the temple and provide a proper care for them.

Pra Ajarn is a very kind person and also an inspirational man who doesn’t mind been snapped pictures by the visitor’s cameras. Once the visitors have been visit to the temple, most of the visitor can feel the lovely relationship among the tigers and Pra Ajam. They are always staying close with each other. Pra Ajam won’t feel scare when facing the tigers. After year by year, the amount of tigers kept on increasing to 75 tigers living at the temple in the year of 2008. However, there was some critics to the temple because of the population growth of the tigers is a main problem, generally because the people commented the temple is employing tactics which are illegal.

In the year of 2008, Jachinthe Bouchar, the world renowned animal trainer had stopover to the tiger temple for her second time. She was staying there for two and a half weeks to trains the staffs and the monks about the techniques of training the Tigers. A planned new animal enclosure will be used for training clubs to take care themselves, and giving them the necessary skills to continue to exist in the wild.

2.5 Penang Tiger Park

Penang Tiger Park is a future plan as an ecotourism product in Penang which suggested by Lim Guan Eng, the Chief Minister of Penang.

P1–Describe the travel and tourism component industries and provide examples of domestic, inbound and outbound organisations within them.

Inbound Tourism: Tourists (non-residents) coming into a country e.g. The French coming into the UK.

Outbound Tourism: People leaving their country for another country e.g. Russians going over to China.

Domestic Tourism: Residents of one country travelling within it e.g. New Yorker travels to Los Angeles.

Accommodation:

It’s the place you stay at for your holiday or tour; accommodations can be both serviced and non-serviced, serviced is when the room or place you’re going to stay at is fully furnished and provided with cooking facilities, fresh meals, modern technology such as a flat screen TV and internet (Wi-Fi). For instance the Hilton hotels has its network in 78 countries across 6 continents[1]. The Hilton hotels are highly branded, stylish with excellent services, having over 92 years of experience proving their professionalism. Even the guest room itself has an original design which is well organised and undoubtedly accommodating. Thus inbound and outbound tourism would use serviced accommodation. On the other hand, non-serviced means only the accommodation itself is provided; the Sykes cottages organisation has over 5,000 cottages across the UK and Ireland. Nearly three decades of experience[2] indicates the company’s efficiency and credibility. Therefore non-serviced accommodation would be used for domestic tourism.

Transport Provision:

Irrespective of your destination, transport will be essential to get there; regardless of its form whether it’s by air, rail, road or sea. To get to and from your destination and around to explore the area coach or car travel is recommended. Coach travel are offering low cost prices if the tickets are booked in advance. Megabus offers prices as low as ?1. National Express is one of the largest coach companies that travel to more than 900 destinations across the UK[3]. Over the last 50 years, car travel has grown rapidly and it is by far the most popular type of transport used by the tourists in Britain. There are a variety of different worldwide companies, such as Avis that specialise in private car hire. Therefore both coach and car travel is suitable for domestic tourism. Rail travel is a more environmentally friendly mode of travelling. Virgin trains is a very popular train company that is popular with the tourists. Virgin trains have been around for over 15 years[4] therefore they are one of the most experienced train companies around Britain. Virgin trains travel all over the country. Thus rail travel being used for domestic tourism too.

When travelling by sea, it’s usually by ferries or cruising. Ferry companies operate services between the UK and Ireland, France, Belgium and a few other destinations. For example P&O Ferries, Irish Ferries and Stenaline. Since the Channel Tunnel was opened in 1994, ferry services have fallen dramatically[5]. However, cruising is also a type of travel using the sea and it is growing steadily and it is attracting lots off different types of tourists. In the past, cruising was seen more for the rich, famous and the elderly but cruising today, it is attracting families, young people and groups of people. Royal Caribbean Cruises is an example of a cruise service. This company holds the largest cruise ship ever built[6]. Sea travel would be used for all three types of tourism; inbound, outbound and domestic.

Air travel is the most popular type of travel used all over the world. This includes; scheduled–planes that operate to a published timetable. These planes have to follow routes and they are under government licence e.g. British Airways or the low-costs such as Ryanair. Tickets purchased from the company’s website, operating year round[7]. Charter–an airline ticket for a charter flight will be purchased from a tour operator. In this way, charter flights differ from scheduled flights, generally operate only during the summer months (May to October) or November to April for ski flights. Tour operators who put holiday packages together will charter or lease an aircraft from an airline such as Monarch or Thompson. Air travel is to be considered mostly for inbound and outbound tourism.

Ancillary Services:

Ancillary services are all the extras that come along side a holiday that tourists may need. These are things such as; travel insurance, foreign exchange, airport parking, car hire, luggage check-in, tour guiding, equipment hire, passport and visa services. Without Ancillary Services the holiday wouldn’t be complete. Many Travel Agents offer ancillaries to their clients and they make good commission on these products and services. Eurochange is the foreign exchange expert within the UK, which will allow tourists to exchange their currency with outstanding rates, one of the best foreign exchange companies in the UK such as The Money Shop. Therefore making their holiday alot cheaper; suits the inbound and outbound tourism.

Tour Operators:

A Mass Market tour operator are companies such as Thomas Cook and Thomson who deal with any type of holiday and they are able to arrange packages that suit the customers. A mass market tour operator also supplies their customers with accommodation, transfers, transport and extra services. Specialist operators are businesses such as Cox and Kings. These type of tour operators are a lot more personal to the customer. This is because these tour operators are able to cater and specialise to what the tourists interest are for example, someone wants to go on a cycling holiday, they can tell the operator what they want in their holiday and the operators can do their best to satisfy the customers’ needs.

Attractions:

The tourist boards have estimated that there are around 6,400 tourist attractions in the UK. In the travel and tourism sector, attractions are vital as they are what attracts all the tourists from around the world. The Lake District is one of the popular natural attractions in the UK[8], a natural attraction is an attraction that has been created by nature. Many of these areas have been given a status to protect their environment and provide facilities so that the public can enjoy the sights. There are attractions such as caves, waterfalls, seashores and any other scenic view interest that haven’t been created by mankind.

Attractions that are old and have been in place for many years and are now historical–heritage attractions. These are attractions such as canals, railways, battlefields. These attractions are in place so that people can gain an appreciation of the past. The Stone Henge is a popular hertiage attraction owned by English Heritage and is Located in Wiltshire.

Purpose-built attractions–attractions that have been built purposely to attract tourist into that area. When people hear the term ‘tourist attraction’ it makes people think automatically about the purpose-built attractions that are fun and enjoyable and designed for many different reasons. In the UK there are many purpose-built tourist attractions like Blackpool Pleasure Beach, Buckingham Palace and Alton Towers.

Events–attractions that attracts tourists to the area. These are small events like the Blackpool Illuminations or huge events like the Olympics and the Paralympics. Events play a significant part in the tourist attractions because in different parts of the country, some places can’t offer a large amount of natural or purpose-built attractions therefore the events may be the only reason people visit that certain area. Also Events bring in a lot of income which creates jobs and wealth in the area.

Tourism development and Promotion:

Tourist boards play an important role by helping destinations and co-ordinating the work of tourism businesses. Tourist boards get their money from the government (National and Local) and it is said to operate in the public sector. Public sector bodies play an important role in Travel and Tourism the UK, because they promote tourism and attract domestic and inbound tourists to the UK this in return will create income and jobs for local business and have a positive effect on the GDP.

Tourist boards are websites such as Visit Bolton, Visit England etc. These websites show people who are visiting that area what is happening during the period of time they are there and when and where the events and occasions are taking place. These websites give you information locally, nationally and regionally.

National–either a day trip of for a short break away. For example, the Visit Scotland website has information about the events that are taking place in Scotland and it also has their time and place that it is taking place. The national websites are usually available in a variety of different languages which means they are accessible for visitors from overseas who want to find out information about the UK.

Local–local destinations such as the Visit Bolton website. This website provides information such as train and bus times, events, accommodation around Bolton and also in Bolton there would be a Tourist Information Centre that would help out the tourists.

Finally, Regional–websites such as Visit England’s North West. This would be helpful for people who are overseas and they want to come and visit an area like the North West of England, it would give them information about what happens around this area and what type of activities and events are held in the Lake District.

Trade associations and Regulatory bodies:

A trade association is an organisation which works in the shared interests for either a particular industry or the customers in general; the difference between ATOL and ABTA is that they both exist for different kinds of operators. ATOL stands for Air Tour Operators Licence. ATOL is managed by the CAA (Civil Aviation Authority) and it is for the tour operators selling flights. ABTA stands for Association of British Travel Agents. ABTA is for the tour operators who aren’t involved with selling flights[9]. AITO is another association. This stands for Association of Independent Tour Operators. AITO was set up for the smaller travel companies[10]. These companies are in place just in case anything goes wrong whilst you are on holiday, all your money is protected. Also if any of the companies go bust whilst you are away, you will be refunded and brought home by the relevant organisation. If a tourist books a holiday through a company which is a member of AITO or bonded by ABTA they can be sure that the company is reliable and if the company should suffer from financial problems they will be protected. The traveller would be brought home from their holiday if the company failed whilst they were away.

Travel Agents:

Retail travel agent–advise people when they are travelling, about different hotels around the area they are travelling to and about the weather conditions and the different currency exchange. Business travel agent–travel services for companies, they focus mostly on short notice trips where the timing of the flight is alot more important than the price of the flight for the tourist. Call Centre travel agent–sells products over the phone and every day they have to reach a certain number of sales they make per day. Web Based travel agent–sells holidays over the internet. An example of these websites would be Expedia. This website allows you to create your own holiday trip and also looks at hotels and other extras that you might want with your holiday.

Types of business travel

Travelling on business can take many forms. Individuals may be travelling to meetings, to exhibitions to make sales calls to customers.

There are also a lot of occasions when high amount of groups of people travel individually, or together, to take part in a conference or corporate. Companies that organise business travel are operating in a different market to those who organise conferences and events and are often different companies. However, overlap does occur, for example Kuoni is a well known tour operator, yet has an arm of its company which specialises in event management.

Incentive Travel

The incentive travel is offered by the employer(company) to the employee which is like a entertainment gift for them as they are travelling for free. This will make the employee very happy as they can rest at the same time as well as having fun which overall it effects the work rate of the employee when they are back as it will make them much more motivated to work harder in the future as they may gain another reward.

What effect incentive travel gives to the employee

Facilitating communication and networking opportunities, especially in senior management
cheering the company’s socially
Having a better company loyalty
Creating eagerness for upcoming company period
Strengthening the relationship between the employee and the company

Advantages for employees

Every employee will feel very special and be satisfied in their job as the company has given them an fantastic opportunity to go for an great holiday which they have gain the award. It automatically changes the employees feelings in work by making them feel successful and thinking they are the best in that work place because they were rewarded an incentive travel. That may also mean they had one of the best performance in the sales team for that business because they were rewarded as not many people experience this trip because it’s not often many people being offered an incentive travel by their company.

Exhibitions and trade fairs

There are exhibitions and trade fairs for just about every type of product. Business people attend trade fairs to keep up-to-date on the latest development in their industry which shows they are competing with each other as the find suppliers for products and services and to network with colleagues.

There are two aspects of the organisation of fairs and exhibitions. Firstly, there are companies who organise the exhibitions and sell stands to exhibitors. An example is Reed Exhibitions. They have a division, Red Travel Exhibitions, who focus on travel events. Lastly, there are many of business to be gained in organising travel to exhibitions and accommodation for attendees.

Conferences and meetings

The meetings industry Association (MIA) is the largest association for meetings industry for the UK and Ireland, providing support for venues and suppliers in the meetings environment. A company who wants to organise a large meeting, or conference, could approach the MIA to find out about companies who can make the arrangements for them.

Corporate events

Corporate events and hospitality is a specialist industry within travel and tourism that focuses on providing events, hospitality and entertainment to business clients. It can be know as a an incentive to an consumer because they have place a business with a different employer or to persuade businesses that may have not yet customers to an arrangement with the business. It is also seen as a good way for a company to network and make new business contacts. Corporate events take many forms – from lavish events at Wimbledon or the Henley Regatta to the owner of a business inviting his or her bank manager for a meal in a local restaurant. Many corporate hospitality functions are centred on sports events, such as golf championships, cricket, tennis, rugby and football matches. There are many specialist companies that handle all the arrangements for corporate events, from sending our invitations and ‘meet and greet’ services to providing catering and entertainment.

Business Agencies

This section is the role of business travel agents and the different types of agents operating in the industry.

Role

Business travel is concerned with providing products and services for business people travelling to meetings, attending conferences and conventions, and taking part in trade fairs and exhibitions. It also includes incentive travel, where holidays, short breaks and other travel services are offered to members of staff as an incentive to reach work targets.

big business travel agencies are regularly performing on behalf of two parties when they take on their job. They are providing help needed by their customer, referred to as the consumer, on whose behalf they are making the travel schedules. They are also an agent for the corporation that is supplying the product. These companies are recognized as ‘principals’ and comprise airlines, hotels and car hire companies.

Business travel is an increasingly important industry, since it is often ‘high value tourism’, earning hoteliers, caterers, transport providers, travel agents and a host of other companies’ signii¬?cant income. Business travel is considered a high value industry because:

Clients often have to travel at short notice, meaning that they are not able to take advantage of discounted advance purchase rates;
Business people often use high quality accommodation;
Business travel invariably includes an element of entertaining business clients
Travel is often in upgraded services, e.g. business class or i¬?rst class.

Business travel agencies can be divided into i¬?ve distinct types:

1. Independent agencies

2. National agencies

3. Global agencies

4. Implant

5. E-agent.

Each type has its own particular characteristics and products.

Independent agencies

Across the UK, there are many independent travel agents that offer business travel arrangements. They are not part of a national chain and are often managed by the owner and a small team of staff. They may be companies that deal exclusively with business travellers, but are more likely to deal with both leisure and business clients. Unlike national agents (see below), independent travel agents are free to offer their business clients travel services from a wide range of suppliers. Independent business travel agents trade on their ability to offer their clients a very personal service, relying on word-of-mouth recommendation from satisfied customers for extra business. As well as being members of ABTA – The Travel Association, many independent business agents join consortia such as Advantage Travel or World choice in order to benefit from supplier discounts, make useful business contacts and to have their voices heard.

National Agencies

These are UK-based companies that are part of a national chain of travel agencies, such as Thomas Cook, Co-op Travelcare and Thomson. These agencies deal primarily with holidays and other leisure travel products, but can meet the needs of business travellers as well. Agencies that are located in parts of the country with high concentrations of companies and a large business community often generate a sizeable proportion of their turnover from business clients. Organisations of all sizes and in all sectors of the economy often need their staff to travel on business. Sole traders, members of partnerships, company directors, public sector staff, junior and senior managers, all travel from time to time on business. This could be in their local area, elsewhere in the UK, to countries in continental Europe or further afield.

Implants

Implants are agents operating within a business premises, so that they are on hand to look after travel requirements as needed. The agent may often work alone and is employed by a business travel agency, not by the company in whose premises they are based.

E-agents

As in leisure travel, there is an expanding demand for online business travel services. Some of them may be familiar with the website offering travel services, Expedia. Expedia claims that is corporate travel business, launched in 2002, is the fifth largest by turnover worldwide.

Products and services

Business travel agents may be dealing with small companies sending individuals on business trips to corporate clients who want all of their business travel managed.

Basic services will always include:

Accommodation bookings
Flight bookings – either scheduled or low-cost, business, first or even economy
Transfer
Cars hire or rail tickets
Ancillary sales, such as car parking or insurance.

The agency will book accommodation for a customer and that is to find where they will stay, arrange travel such as flight bookings on specific dates, transfers to the hotel etc. Ancillary services such as insurance and parking.

Management of a customer’s travel expenditures

This means analysing data so that a corporation knows exactly what is being spent on business travel and where. The travel management company manage the data and make it available to the customer 24-hours a day in a spreadsheet or database.

Negotiation with suppliers

The agent negotiates terms on the customer’s behalf with airlines, care hire companies and hotels for accommodation which this is for the agency to find the best deals for their consumers.

Products and services provided by suppliers

All hotels and airlines want to tap in to the lucrative business travel market and constantly bring out new products and services to entice business travellers.

Hotels offer Wi-Fi and business centres as a matter. Business customers may choose executive rooms. Even cheaper hotels, such as the premier Inn chain, offer wireless internet and meeting rooms which is what the business customers expects to have.